Annual Highlights
Record annual oil royalty production volumes averaged 13,940 barrels per day, a 6% increase over YE 2024(1). Total royalty production averaged 25,855 BOE per day, a 3% increase over YE 2024.
Royalty production revenue totaled $441.7 million and combined with other revenue of $36.5 million to bring total revenues to $478.2 million for YE 2025(1). Other revenue included bonus consideration of $22.6 million earned on entering into 189 new leasing arrangements.
Funds from operations totaled $353.0 million ($1.50 per share), a decrease of 7% from YE 2024 primarily due to the 14% decline in US$ WTI benchmark pricing.
Corporate proved plus probable reserves totaled 63,932 MBOE as compared to 63,653 MBOE at December 31, 2024. Proved plus probable oil reserves totaled 28,373 Mbbl, a 6.6% increase over the prior year, including a 42% increase in Clearwater oil reserves due to drilling extensions and improved recovery from waterflood expansion.
Declared cumulative annual dividends of $243.4 million ($1.04 per share), representing a dividend payout ratio of 69%.
Purchased and cancelled 6,239,507 common shares under the Company's normal course issuer bid ("NCIB") for $158.5 million.
Completed acquisitions for $99.9 million, primarily of producing and non-producing fee lands, lessor interests and gross overriding royalty interests targeting light and heavy oil plays in Alberta and Saskatchewan.
Fourth Quarter Highlights
Oil royalty production increased 3% over Q4 2024(1) averaging 13,750 barrels per day and combined with average NGL royalty production of 2,915 barrels per day, a 17% increase over Q4 2024 to drive a 4% increase in total royalty production which averaged 25,965 BOE per day.
Royalty production revenue totaled $102.9 million and combined with other revenue of $8.8 million to bring total revenues to $111.7 million for Q4 2025(1). Other revenue included bonus consideration of $4.3 million earned on entering into 46 new leasing arrangements.
Funds from operations totaled $80.5 million ($0.35 per share), a decrease of 19% from Q4 2024 primarily due to a 16% decline in US$ WTI benchmark pricing.
Declared a fourth quarter dividend of $60.5 million ($0.26 per share), representing a dividend payout ratio of 75%.
Completed acquisitions for $19.9 million, primarily of producing and non-producing gross overriding royalty interests targeting light oil plays in Southern and Central Alberta, including the Basal Quartz and the Duvernay in the West Shale Basin(2).
Net debt totaled $276.5 million at December 31, 2025, a decrease of $5.2 million from September 30, 2025.
Dividend Increase and Dividend Declaration
PrairieSky is pleased to announce a 2% increase in its annual dividend policy to $1.06 per common share to be paid on a quarterly basis ($0.265 per share quarterly). The first quarter 2026 dividend of $0.265 per share is effective for the March 31, 2026 record date.
President's Message
PrairieSky's diversified royalty portfolio delivered a 6% increase in annual oil royalty production which averaged 13,940 barrels per day with Q4 2025 oil royalty production averaging 13,750 barrels per day. The Clearwater and Mannville Stack(2) heavy oil plays combined with the Duvernay light oil play to drive the annual oil royalty production increase. The Clearwater heavy oil play reached 2,600 barrels per day in Q4 2025, representing a compounded annual growth rate of 20% since 2022 with ongoing primary development and decline mitigation through waterflood expansion. Mannville Stack activity finished the year strong with 21 spuds in Q4 2025 at an average royalty rate of 8.0%, with overall oil royalty production in the play increasing 10% year over year. The Duvernay light oil play delivered average royalty production of approximately 1,175 BOE per day in 2025 (80% oil and liquids), an increase of 90% year over year, driven by third party activity in the West Shale Basin(2).
Third-party operators spud 200 wells on PrairieSky's royalty acreage during Q4 2025, relatively consistent with the 205 wells spud in Q4 2024. The average royalty rate for wells spud in the quarter was 5.4% (Q4 2024, 6.2%). Multilateral drilling on our lands continued to increase with an estimated 80 spuds in the quarter and representing 40% of the activity on our royalty lands for YE 2025 versus 36% in YE 2024. Increased multilateral drilling activity and waterflood expansion helped drive the 6.6% increase in proved plus probable oil reserves to 28,373 Mbbl.
Total royalty production volumes averaged 25,965 BOE per day and generated royalty production revenue of $102.9 million during Q4 2025. Royalty production revenue and resulting Q4 2025 funds from operations of $80.5 million were negatively impacted by the 16% decrease in average US$ WTI benchmark pricing from Q4 2024. Further, a 14% decrease in annual average US$ WTI benchmark pricing impacted YE 2025 royalty production revenue and funds from operations which totaled $353.0 million, 7% below YE 2024. Strong third-party leasing added $22.6 million of bonus consideration for the year, earned on entering into 189 leases with 90 separate counterparties. Annual bonus consideration was bolstered by an active fourth quarter where PrairieSky generated $4.3 million on entering 46 new leases with 36 separate counterparties.
During Q4 2025, PrairieSky declared a dividend of $0.26 per share or $60.5 million with a resulting payout ratio of 75% with funds from operations after payment of the dividend allocated to acquisitions totaling $19.9 million. Acquisitions in the quarter included incremental gross overriding royalty interests primarily targeting light oil in the Basal Quartz and Duvernay plays and brought total acquisitions for the year to $99.9 million. During YE 2025, PrairieSky returned $243.4 million to shareholders as dividends and repurchased and cancelled 6,239,507 common shares for $158.5 million. We are pleased to announce a 2% increase in our annual dividend policy. The first quarter dividend of $0.265 per share will be payable to shareholders of record on March 31, 2026. At December 31, 2025, PrairieSky maintained a strong balance sheet with net debt of $276.5 million.
The level of activity on our land base and the growth in oil and NGL royalty production underscore the benefits of our strategy of investing in low-cost oil plays and the optionality of owning fee mineral title acreage. I am very pleased with our 2025 annual results and the trajectory of our business for 2026 and beyond. I would like to thank our staff for their hard work throughout the year and our shareholders for their continued support.
Andrew Phillips, President & CEO
ACTIVITY ON PRAIRIESKY'S ROYALTY PROPERTIES
Third-party operators spud 200 wells on PrairieSky's royalty acreage at an average royalty rate of 5.4%, as compared to 205 wells spud in Q4 2024 at an average royalty rate of 6.2%. Spuds were comprised of 127 wells on gross overriding royalty acreage, 48 wells on fee lands and 25 unit wells. There were a total of 187 oil wells (94% of wells) spud during the quarter which included 51 Mannville light and heavy oil wells, 44 Clearwater wells, 39 Viking wells, 24 Mississippian wells, 8 Duvernay wells, and 21 additional oil wells across Alberta, Saskatchewan and Manitoba. There were 13 natural gas wells spud in the quarter, including 6 Mannville wells, 4 Montney wells, 1 Duvernay well and 2 other natural gas wells. 2025 annual spuds on PrairieSky's royalty properties totaled 718 wells, as compared to 741 wells in 2024, with an average royalty rate of 5.6% (2024 - 5.9%).
PrairieSky estimates that $2.0 billion (net - $97 million) in third-party capital was spent drilling and completing wells on PrairieSky's royalty properties in YE 2025, an increase from $1.9 billion (net - $93 million) in YE 2024. Activity on PrairieSky's lands drove the increase in proved plus probable oil reserves as discussed further below.
DIVIDEND INCREASED 2%; DIVIDEND DECLARATION
PrairieSky is pleased to announce a 2% increase in its annual dividend policy to $1.06 per common share in 2026, to be paid on a quarterly basis(3). In determining changes to the dividend policy, the Board of Directors considers a number of factors including current and projected activity levels on PrairieSky's royalty lands, the current commodity price environment, the working capital and bank debt balance and net earnings of the Company.
On February 9, 2026, PrairieSky's Board of Directors declared the first quarter dividend of $0.265 per common share to shareholders of record on March 31, 2026 and payable on April 15, 2026. This quarterly cash dividend is designated as an "eligible dividend" for Canadian income tax purposes.
2025 RESERVES INFORMATION
PrairieSky's proved plus probable oil reserves increased 6.6% to 28,373 MBOE at December 31, 2025, as drilling extensions, technical revisions and improved recoveries related to waterflood expansions outpaced annual production. PrairieSky's corporate proved plus probable reserves totaled 63,932 MBOE at December 31, 2025 (December 31, 2024 - 63,653 MBOE). Year over year, proved plus probable reserves increased modestly as strong growth in oil reserves outpaced declines in natural gas and NGL reserves. Lower forecast pricing for crude oil offset the increase in oil proved plus probable reserves resulting in a reduction in before-tax net present value of total proved plus probable reserves, discounted at 10%, to $1.84 billion (2024, $1.93 billion). Changes to proved plus probable reserves comprised of additions related to third-party drilling and improved recovery (7,569 MBOE), positive technical revisions (2,200 MBOE) and acquisitions (927 MBOE) less 2025 royalty production volumes of 9,439 MBOE and economic factors (978 MBOE). PrairieSky's proved plus probable reserves include only developed assets (developed producing and developed non-producing properties) and do not include any future development capital on undeveloped lands.
PrairieSky's YE 2025 reserves were evaluated by independent reserves evaluators GLJ Ltd. The evaluation of PrairieSky's royalty properties was done in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities. PrairieSky's reserves information is included in the Company's Annual Information Form for the year ended December 31, 2025, which is available on SEDAR+ at www.sedarplus.ca and PrairieSky's website at www.prairiesky.com.
NOTES AND REFERENCES
(1) In this press release, the financial reporting periods are referred to as follows: "Q4 2025", "the quarter" or the "the fourth quarter" refers to the three months ended December 31, 2025; "Q4 2024" refers to the three months ended December 31, 2024. "YE 2025" or "the year" refers to the year ended December 31, 2025. "YE 2024" refers to the year ended December 31, 2024.
(2) For further details on the "Mannville Stack" and "West Shale Basin", we refer you to PrairieSky's most recent Corporate Presentation contained on PrairieSky's website at www.prairiesky.com.
(3) PrairieSky's dividends are declared on a quarterly basis and are subject to Board of Director approval.
Unless otherwise indicated or the context otherwise requires, terms used in this press release but not defined above are as defined in the Company's Annual Information Form for the year ended December 31, 2025 which is available on SEDAR+ at www.sedarplus.ca and PrairieSky's website at www.prairiesky.com.
FINANCIAL AND OPERATIONAL INFORMATION
The following table summarizes select operational and financial information of the Company for the periods noted. All dollar amounts are stated in Canadian dollars unless otherwise noted.
A full version of PrairieSky's management's discussion and analysis ("MD&A") and audited annual consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024 are available on SEDAR+ at www.sedarplus.ca and PrairieSky's website at www.prairiesky.com.
Three months ended
Year ended
December 31
December 31
December 31
December 31
($ millions, except $ per share or as otherwise noted)
2025
2024
2025
2024
FINANCIAL
Royalty production revenue
102.9
115.6
441.7
465.8
Other revenue
8.8
20.0
36.5
43.4
Revenues
111.7
135.6
478.2
509.2
Funds from operations
80.5
99.0
353.0
380.5
Per share - basic and diluted(1)
0.35
0.41
1.50
1.59
Net earnings
44.4
60.2
205.0
215.3
Per share - basic and diluted(1)
0.19
0.25
0.87
0.90
Dividends declared(2)
60.5
59.9
243.4
