Freehold Royalties Ltd. recently closed a $58 million acquisition of a package of U.S. multibasin royalty assets from a private seller.
The Canadian company said in a Jan. 5 release that the acquired assets, which include royalties in the Permian Basin and Eagle Ford, will play a key role in strengthening the resiliency of its portfolio while also enhancing the near-term and long-term sustainability of Freehold’s dividend.
Freehold had entered into a definitive agreement with a private seller in November to acquire the U.S. royalty package. The acquisition was funded by a bought deal financing led by RBC Capital Markets and TD Securities Inc. and Freehold’s existing credit facility.
The transaction included 400,000 gross acres of mineral title and overriding royalty interest across 12 basins in eight states. The package is predominantly weighted towards high quality, commodity price resilient areas of the Permian Basin and Eagle Ford Shale, which continue to see active drilling and development, according to a company release from November.
Approximately 70% of the near-term development is underpinned by DUCs. Production of 1,150 boe/d (62% liquids) is forecast from the acquired assets for 2021.
Additionally, Freehold said in November it expected the acquired assets to generate funds from operations of $12 million in 2021.
Freehold is a dividend-paying oil and gas royalty company based in Calgary, Alberta. The company’s assets are located predominately in western Canada.
According to the company’s website, Freehold has one of the largest independently owned portfolios of royalty lands in Canada, with land holdings totaling more than 6.7 million gross acres.
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