CALGARY, Alberta, July 29, 2026 (GLOBE NEWSWIRE) -- Freehold Royalties Ltd. (Freehold or the Company) (TSX:FRU) announced results for the three months ended June 30, 2026.

Second Quarter Highlights

• Total production was 15,622 boe/d (1), including crude oil and natural gas liquids production of 10,277 bbls/d, representing a 66% liquids weighting in the quarter.
• Revenue was $100 million, with crude oil and natural gas liquids production accounting for more than 95% of royalty and other revenue.
• Funds from operations totaled $78 million, or $0.47 per share (2)(4), up 32% from Q1-2026.
• Net debt was reduced by $24 million, ending the quarter at $251 million.
• The company returned $44 million, or $0.27 per share (3), to shareholders through monthly dividends, representing a payout ratio (4) of 57%.
• Freehold invested $9 million in acquisitions and related expenditures, focused on strategic, inventory-rich mineral title and royalty lands in the core of the Permian basin.
• Gross drilling across the portfolio totaled 300 wells, up 35% from Q1-2026 as operators increased activity in a strengthening oil price environment.
• The company continued an active leasing program, signing 48 new leases that contributed $1.6 million of bonus consideration and lease rental revenue.
• Freehold achieved an average realized price of $69.11/boe, including $74.91/boe in the U.S. and $64.26/boe in Canada.

President’s Message

Freehold said its second quarter reflected a constructive commodity price environment that supported strong revenue generation and a return to oil-focused drilling activity across North America.

Production averaged 15,622 boe/d (1) with a 66% liquids weighting, reflecting the moderated activity levels seen in the latter half of 2025 when commodity prices were low. Combined with higher realized pricing, the company generated more than $100 million of royalty and other revenue and $78 million of funds from operations, a 32% increase from Q1-2026.

The company said it continued to see a meaningful increase in operator activity on its lands. Gross drilling rose 35% from Q1-2026 and 11% from Q2-2025, led by strong U.S. activity and continued investment in Canadian oil-weighted plays. For a royalty business, that kind of drilling activity matters because Freehold’s results are tied to third-party capital spending on its lands rather than operating wells directly.

Freehold said it continues to see significant activity in the Permian, where large operators have been investing in technologies that support longer lateral lengths as well as the use of surfactants and lightweight proppants to improve well productivities. In the Permian, natural gas egress constraints at the Waha hub are expected to ease as more than 4 Bcf/d of additional takeaway capacity comes into service over the next three quarters. The company said the additional capacity is expected to alleviate production constraints and improve market access for producers. While higher activity supports future production and cash flow growth, those benefits are expected to primarily materialize in late 2026 and early 2027 as new wells are brought on production.

Freehold returned $44 million to shareholders through dividends, representing a 57% payout ratio (4), and invested $9 million to expand its crude oil-focused royalty position in the core of the Permian basin. The company said it maintains strong financial flexibility, with net debt down more than $24 million, or 9%, from Q1-2026, resulting in 1.0x trailing net debt to funds from operations (5).

Looking ahead, Freehold said it is well positioned due to its exposure to the most economic oil-weighted developments in North America, a well-financed operator base, and a strong balance sheet. The company said it expects this combination to continue supporting its dividend, funding growth opportunities and delivering attractive long-term value.

David M. Spyker
President and Chief Executive Officer

Operating and Financial Highlights

Dividend Announcement

The Board of Directors of Freehold declared a monthly dividend of $0.09 per share, payable on September 15, 2026, to shareholders of record on August 31, 2026. The dividend is designated as an eligible dividend for Canadian income tax purposes.

Drilling and Leasing Activity

Third-party investments on Freehold’s royalty lands resulted in a total of 300 gross wells (2.7 net) drilled on Freehold’s lands, all primarily targeting crude oil properties.

Canada

In Canada, most of the 74 gross locations (1.8 net) were drilled on crude oil-weighted plays, including Clearwater (25 gross wells), southeast Saskatchewan (17 gross wells), and Mannville heavy oil (13 gross wells). Gross activity remained consistent with Q1-2026 despite spring break-up.

Freehold entered into 45 new leases with 8 counterparties during the quarter, driven largely by leasing activity in southeast Saskatchewan. Several private companies have communicated plans to advance drilling programs in the area, with associated wells expected to start production later this year.

U.S.

During the second quarter, 226 gross wells (0.9 net) were drilled on Freehold’s U.S. lands. Activity was focused on crude oil properties, with approximately 82% of drilling activity in the Permian basin.

Freehold entered into 3 new leases in the U.S., where operators continue to focus on deeper rights that include the Barnett and Woodford formations in the Permian basin. Freehold’s largest U.S. payors include ConocoPhillips, ExxonMobil, Occidental Petroleum and Diamondback Energy. Along with the company’s private royalty payors, these operators remained active with ongoing drilling programs.

Conference Call Details

A webcast to discuss financial and operational results for the period ended June 30, 2026, will be held for the investment community on Thursday, July 30, 2026, beginning at 6:30 AM MT (8:30 AM ET).

The live audio webcast will be accessible through the link below and on Freehold’s website under “Events & Presentations” at www.freeholdroyalties.com. To participate in the live webcast in listen-only mode, register using the following link:

For sell-side analysts intending to ask questions on the webcast, register in advance at:

Once registered, participants will receive a unique PIN to access the call.

For further information contact:

Freehold Royalties Ltd.
Todd McBride, CPA, CMA
Investor Relations
t. 403.221.0833
e. [email protected]

Forward-Looking Statements

This news release reflects Freehold’s assessment of its future plans and operations as of July 29, 2026, and contains forward-looking statements intended to help readers better understand the company’s business and prospects. These forward-looking statements include expectations that natural gas egress constraints at the Waha hub will ease as more than 4 Bcf/d of additional takeaway capacity comes into service over the next three quarters; that the additional capacity will alleviate production constraints and improve market access for producers; and that the benefits will emerge on the anticipated timeline. They also include the company’s view that Freehold is well positioned because of its exposure to the most economic oil-weighted developments in North America, supported by a well-financed operator base and a strong balance sheet; expectations that Freehold will continue supporting its dividend, funding selective growth opportunities and delivering attractive long-term value; and expectations regarding certain private companies’ plans to advance drilling programs in southeast Saskatchewan and the expected timing of production from associated wells.

These statements are subject to numerous risks and uncertainties, many of which are beyond the company’s control, including general economic conditions, volatility in market prices for crude oil, NGL and natural gas, risks and impacts of tariffs or retaliatory trade measures imposed by Canada, the U.S. or other countries, uncertainty following the July 1, 2026 joint review of the United States-Mexico-Canada Agreement (USMCA), inflation and supply chain issues, the impacts of the ongoing U.S., Israel and Iran war and other Middle East conflicts, the Russia-Ukraine war and associated sanctions, actions taken by OPEC+, geopolitical and political instability, industry conditions, future production and capital expenditure levels, currency fluctuations, reserve estimate imprecision, royalties, environmental risks, taxation, regulation, changes in tax or other legislation, competition, inaccurate assumptions about supply and demand, drilling activity on royalty lands, acquisition timing and terms, closing conditions for acquisitions, the availability of qualified personnel or management, stock market volatility, the ability to agree with third parties on prospective opportunities, and the ability to access sufficient capital from internal and external sources. Additional risk details are available in the company’s Annual Information Form for the year ended December 31, 2025, available at www.sedarplus.ca.

Freehold said it has made assumptions regarding future commodity prices, capital expenditures, production levels, exchange rates, tax rates, legislation, development and production costs, counterparty quality and plans, equipment availability, marketing ability, the performance of current and future wells, crude oil and natural gas consumption, industry drilling levels, completion of drilled wells, financing terms, shut-in production, audit-related production additions, execution of prospective opportunities, and the ability to add production and reserves through development and acquisition activities.

The company cautioned that these assumptions, although considered reasonable when prepared, may prove inaccurate and that actual results may differ materially from those expressed or implied. It said it does not undertake to update forward-looking statements except as required by law. Freehold also noted that financial statements prepared under IFRS require management to make judgments and estimates that may change as new information becomes available and as the economic environment changes.

Conversion of Natural Gas to Barrels of Oil Equivalent (boe)

For analytical purposes, natural gas production and reserves volumes are converted to barrels of oil equivalent (boe) using the industry-accepted conversion of 6 Mcf = 1 bbl. Freehold said the 6:1 ratio is based on an energy equivalency method primarily applicable at the burner tip and does not represent value equivalency at the wellhead or current price relationships. The company said the ratio is useful for comparative measures and trend analysis, but may be misleading if used in isolation.

Non-GAAP and Other Financial Measures

This news release includes references to industry measures that do not have standardized meanings under Canadian GAAP. Freehold said netback, cash costs, dividend payout ratio and funds from operations per share are useful non-GAAP or supplementary financial measures for management and investors to analyze operating performance, financial leverage and liquidity, and to help compare results across periods. The company noted these terms may not be comparable with similar measures used by other entities.

The release also includes capital management measures, including net debt and net debt to funds from operations for the trailing 12 months, as defined in note 12 to the unaudited interim condensed consolidated financial statements as at and for the three months ended June 30, 2026.

Netback, calculated on a boe basis, is average realized price less production and ad valorem taxes, operating expenses, general and administrative expense, cash-based management fees, cash-based interest charges and share-based payouts. Freehold said it uses netback to benchmark how changes in commodity pricing, net of taxes, and its cash-based cost structure compare with prior periods.

Cash costs, also calculated on a boe basis, consist of recurring cash-based costs, excluding taxes, reported on the statements of operations. For Freehold, cash costs include operating expense, general and administrative expense, cash-based interest charges, cash-based management fees and share-based compensation payouts. The company said cash costs help benchmark changes in its manageable cash-based cost structure versus prior periods.

Dividend payout ratio is calculated as dividends paid as a percentage of funds from operations and is commonly used by dividend-paying oil and gas companies to assess dividend levels relative to funds from operations that may also be used for debt repayment and/or acquisitions.

Funds from operations per share is calculated as funds from operations divided by weighted average shares outstanding during the period and is used to assess whether changes in commodity prices, cash costs and/or acquisitions were accretive on a per-share basis.