Prairiesky Royalty (PSK) Investor Day 2025 summary

Strategic Overview and Portfolio Evolution

• The royalty land base has expanded to 18.5 million acres, nearly doubling per-share land ownership since IPO, with major additions in Saskatchewan and the Mannville Stack since 2021.

• Focus remains on long-duration, low-decline royalty assets, with operating margins of 98–99% and a strong record of capital returns via dividends and buybacks.

• Asset value is underpinned by a vast undeveloped land base, now supporting 34,000+ future drilling locations and a 42-year inventory at current drilling pace.

• Strategic acquisitions and leasing during commodity cycle lows have positioned the business for countercyclical growth and capital deployment.

• Diversification into CCS, helium, lithium, potash, and a major carbon sequestration hub is underway, creating new revenue streams.

Key Play Developments and Technology

• Clearwater is Canada's largest conventional oil play, with 1.4 million acres, over 1 billion barrels discovered, 20% y/y royalty oil production growth in 2024, and a 23-year development inventory.

• Mannville Stack has seen 70% y/y royalty oil production growth in 2024, a 30-year drilling inventory, and multilateral drilling unlocking previously uneconomic resources.

• Duvernay Shale is positioned for rapid growth, with 55% y/y royalty production growth in 2024, 1,060 future development locations, and recent wells showing 50–100% productivity improvements.

• Montney and SAGD assets are expected to double royalty production over five years, with over 2,000 future locations in Montney and SAGD volumes projected to exceed 2,000 bbl/d by decade's end.

• Technology and secondary recovery, including waterfloods and polymer floods, are driving increased recovery rates and lower declines, with waterflood now representing 30–33% of Clearwater production.

Financial Performance and Guidance

• Over CAD 3 billion in free cash flow has been generated since IPO, with over CAD 2.2 billion returned to shareholders through dividends and buybacks.

• 2024 funds from operations reached CAD 380.5 million, supporting CAD 239 million in dividends and a 39% net debt reduction.

• Annual dividend is CAD 245 million, with a quarterly dividend of $0.26 per share and a 71% payout ratio in Q1 2025.

• Maintains a strong balance sheet with 0.5x D/EBITDA and a $350 million credit facility, providing flexibility for future growth.

• High operating margins and low sensitivity to inflation due to the royalty model and absence of capex requirements.