Freehold Royalties (FRU) Q4 2025 earnings summary

Executive summary

• Achieved record annual production of 16,294 BOE/day in 2025, up 9% year-over-year, with liquids weighting increasing to 66% and contributing 90% of total revenue.

• North American portfolio balanced: 55% production from Canada, 45% from the US; US accounted for 53% of revenue due to premium pricing and higher liquids weighting.

• Transitioned to a fully independent operating model after ending the management agreement with Rife Management.

• Integrated $378 million in U.S. acquisitions from 2024, streamlining operations and boosting U.S. production.

• Pure play royalty model with no capital, operating, or abandonment costs, providing low-risk exposure to the oil and gas sector.

Financial highlights

• 2025 revenue totaled $313 million, with funds from operations of $235 million ($1.43/share), up 2% from 2024.

• Paid $177 million in dividends, reflecting a 75% payout ratio, and reduced long-term debt by $18 million to $283 million.

• Invested $38 million in oil-focused royalty assets in the Permian Basin and Canada.

• Lease bonus and leasing revenue rose to $8 million in 2025 from $3 million in 2024.

• Maintained a monthly dividend of $0.09 per share, yielding approximately 6%.

Outlook and guidance

• 2026 production expected to average 15,500–16,300 BOE/day, with a slower first half and ramp-up in the second half.

• Guidance based on US$65/bbl WTI and C$2.00/mcf AECO; does not include potential impacts from recent Middle East geopolitical events.

• Dividend is sustainable down to US$50/bbl WTI, supported by multi-decade drilling inventory.

• US production projected to grow 5–7% through 2026, with Canadian volumes impacted by gas price weakness and expected to recover late in the year.

• ExxonMobil’s Permian growth plan could add ~1,000 BOE/day by 2030, a 25% uplift from current Midland production.