Prairiesky Royalty (PSK) Q2 2025 earnings summary

Executive summary

• Achieved record oil royalty production of 14,376 barrels per day, up 8% year-over-year, with total royalty production averaging 26,457 BOE per day, a 4% increase over Q2 2024.

• Holds 18.5 million acres of royalty lands, the largest fee simple mineral title portfolio in Canada, with 93% of YTD 2025 royalty production revenue from oil and liquids.

• Funds from operations totaled $96.7 million ($0.41 per share), down 9% year-over-year, impacted by lower US$ WTI pricing despite record production.

• Maintained 235 million shares outstanding while significantly increasing production since 2018.

• Business model features no maintenance capital, operating costs, or environmental liabilities, resulting in high margins and low inflation sensitivity.

Financial highlights

• Q2 2025 royalty production revenue was $111.2 million, with total revenues of $123.6 million and oil revenue at $95.7 million.

• Funds from operations in Q2 2025 were $96.7 million ($0.41/share), and net earnings were $56.3 million ($0.24/share).

• Net debt at June 30, 2025 was $242.0 million, down $16.8 million from March 31, 2025.

• Royalty operating margin for the six months ended June 30, 2025 was 99%.

• Operating netback per BOE was $40.16, down from $46.05 in Q2 2024.

Outlook and guidance

• Positioned for continued funds from operations and dividend growth over the next decade, supported by a low payout ratio and organic production growth.

• 10-year funds from operations projections range from $2.4 to $7.1 billion depending on commodity prices.

• Expects continued third-party drilling activity and initial royalty production from multiple Duvernay wells in Q3 2025.

• No capex requirements allow all funds from operations to be returned to shareholders.

• Anticipate continued activity and long-duration oil projects from new discoveries and SEG D projects.