2025 Highlights
Completed the previously announced termination of the long-standing management agreement with Rife Management Ltd. (formerly Rife Resources Management Ltd.).
Achieved record annual production of 16,294 boe/d, a 9% increase from 2024;
Total annual crude oil and natural gas liquids production of 10,730 boe/d(1), a 12% increase from 2024;
Generated total revenue of $313 million;
Bonus and leasing revenue contributed $8 million, an increase from $3 million in 2024;
Delivered $235 million in funds from operations ($1.43/share),(2)(4) a 2% increase from 2024;
Returned $177 million ($1.08/share)(3) to shareholders through monthly dividends during the year, reflecting a dividend payout ratio(4) of 75%;
Reduced long-term debt by $18 million, ending 2025 at $283 million;
Well productivity improvements of 35% in Canada and 10% in the U.S. compared to the average type curves in 2024 as industry innovations continue to deepen our portfolio;
Proved and probable reserves in the United States increased from 2024, with a reserve replacement ratio of 103%; and
Corporate proved and probable reserves totalled 63 MMboe, a 3% decrease from 2024 reflecting continued weakness in Canadian natural gas prices and lower Canadian drilling activity.
Fourth Quarter Highlights
16,294 boe/d of total production, a 6% increase from the fourth quarter of 2024;
10,765 bbls/d of total crude oil and natural gas liquids production, a 9% increase from the fourth quarter of 2024;
Fourth quarter production includes approximately 400 boe/d related to adjustments on the U.S. assets acquired in late 2024. These adjustments were recognized once Freehold was acknowledged by the operator, revenues were paid and remaining estimates updated;
U.S. production of 7,700 boe/d, a 31% increase from the fourth quarter of 2024 reflecting the impact of the U.S. acquisitions completed in December 2024;
$51 million in funds from operations ($0.31/share) (2)(4) a decrease of 17% primarily reflecting the 16% weaker WTI benchmark pricing; and
Gross drilling of 235 wells, comprised of 71 wells in Canada and 164 in the U.S., with operators pacing activity levels in the current commodity price environment.
President's Message
In 2025, Freehold delivered our fifth consecutive year of annual production growth at 16,294 boe/d, representing a 9% increase from 2024, led by a 33% increase in U.S. production. The Company's 2024 U.S. acquisitions, combined with continued development across our U.S. portfolio contributed to the higher production and the increase in our liquids weighting to 66% from 64% in 2024. Our liquids portfolio, comprised of crude oil and natural gas liquids, accounted for 90% of our revenue in 2025. Natural gas contributed 7%, while potash and lease bonuses made up the remaining 3%. In Canada, heavy oil production increased by 13% compared to 2024, partially offsetting the impact of reduced natural gas directed drilling activity in Canada during this multi-year period of weakness in natural gas prices.
Annual funds from operations of $235 million is an increase of 2% from 2024 primarily due to a 12% increase in crude oil and natural gas liquids production, offset by a 14% decrease in WTI benchmark pricing. We continue to benefit from productivity improvements on wells drilled on our lands. In Canada, average well performance improved by approximately 35% due to operators targeting premium acreage and optimizing well design. In the U.S, productivity increased by 10% as operators pursue longer lateral well lengths alongside continued improvements in well placement and well completion designs across our operating areas.
Activity levels, particularly in the second half of 2025, were impacted by lower commodity prices, and generally cautious capital deployment as broader macroeconomic headwinds and uncertainty in outcomes of ongoing geopolitical tensions led some operators to scale back their capital programs. In the U.S., drilling activity declined by 20% from the first to the second half of 2025, and Canadian drilling activity decreased by 25% in the fourth quarter of 2025, compared to the same periods in 2024. Accordingly, we expect production to moderate through the first half of 2026 and return to growth in the second half of the year.
During 2025, we integrated the assets acquired in the late 2024 U.S. acquisition. These assets are primarily located within the core of the Midland basin and exhibit both higher natural gas production and higher natural gas liquids yields. Fourth quarter production includes approximately 400 boe/d related to adjustments on these late 2024 U.S. acquisitions. These adjustments relate to the higher natural gas and natural gas liquids yields and were recognized once Freehold was acknowledged by the operator and revenues were received. All remaining estimates were updated to reflect this new data.
Lower drilling activity in the second half of 2025 is expected to impact production in the first half of 2026. As a result, we expect production to average between 15,500 and 16,300 boe/d in 2026, premised on annual average commodity price assumptions of US$65.00/bbl WTI, $3.50/mcf NYMEX and $2.00/mcf AECO. This range is supported by our current inventory of drilling licences, permits and drilled, uncompleted wells, which provides a solid foundation in our portfolio while acknowledging the potential for weaker commodity prices.
In 2025, Freehold declared and paid $177 million in dividends to our shareholders, reflecting a payout ratio of 75%. Remaining funds from operations were used to acquire $38 million of additional crude oil-focused royalty interests comprised of mineral title lands in undeveloped drilling areas in the core of the Permian basin and gross overriding royalty interests in Canada. These lands are in the early stages of development and continue to build on the depth of drilling inventory we have in our portfolio.
We significantly enhanced our business in 2025 with the integration of the $378 million in U.S. acquisitions that were completed in 2024, the restructuring and streamlining of the business alongside the termination of the long-standing management agreement.
We continue to expect that our liquids-weighted North American asset base will generate meaningful cash flows through evolving commodity markets and broader macroeconomic conditions, supporting the Company's ability to sustain its dividends and deliver robust, long-term shareholder returns.
David M. Spyker, President and Chief Executive Officer
Dividend Announcement
The board of directors of Freehold has declared a monthly dividend of $0.09 per share to be paid on April 15, 2026, to shareholders of record on March 31, 2026. The dividend is designated as an eligible dividend for Canadian income tax purposes. Our dividend remains supported down to US$50.00/bbl WTI.
Operating and Financial Highlights
Three Months Ended
Twelve Months Ended
FINANCIAL ($ millions, except as noted)
Q4 2025
Q3 2025
2025
2024
West Texas Intermediate (US$/bbl)
59.14
64.93
64.81
75.72
NYMEX natural gas (US$/Mcf)
3.68
3.18
3.55
2.35
AECO 5A Monthly Index (Cdn$/Mcf)
2.23
0.63
1.68
1.46
Royalty and other revenue
69.8
74.4
313.5
309.5
Funds from operations
51.1
58.9
234.6
231.0
Funds from operations per share, basic ($) (2)(4)
0.31
0.36
1.43
1.53
Dividends paid per share ($) (3)
0.27
0.27
1.08
1.08
Dividend payout ratio (%) (4)
87%
75%
75%
70%
Long-term debt
282.9
283.6
282.9
300.9
Net debt (5)
268.3
263.3
268.3
282.3
Net debt to funds from operations for the trailing 12 months (times) (5)
1.1x
1.1x
1.1x
1.2x
OPERATING
Total production (boe/d) (1)
16,294
16,054
16,294
14,962
Canadian production (boe/d)(1)
8,594
8,680
8,911
9,430
U.S. production (boe/d)(1)
7,700
7,374
7,383
5,532
Crude Oil and NGL (%)
66%
65%
66%
64%
Petroleum and natural gas realized price ($/boe) (1)
45.88
48.92
51.07
55.68
Cash costs ($/boe) (1)(4)
7.26
5.58
6.80
7.10
Netback ($/boe) (1) (4)
37.42
42.82
43.94
47.77
ROYALTY INTEREST DRILLING (gross / net)
Canada
71 / 2.3
83 / 3.2
291 / 10.5
403 / 17.0
U.S.
164 / 0.7
199 / 0.7
819 / 2.8
737 / 3.0
(1) See Conversion of Natural Gas to Barrels of Oil Equivalent (boe)(2) Calculated based on the basic weighted average number of shares outstanding during the period(3) Based on the number of shares issued and outstanding at each record date(4) See Non-GAAP and Other Financial Measures (5) Net debt is a capital management measures; see Non-GAAP and Other Financial Measures
Drilling and Leasing Activity
During 2025, a total of 1,110 gross wells (13.3 net wells) were drilled on Freehold's royalty lands compared to 1,140 gross wells (20.0 net) in 2024. The decrease reflects the pullback in oil directed drilling activity as WTI benchmark prices decreased 17% from the first quarter of 2025 to the fourth quarter and Canadian natural gas prices (AECO 5A Monthly Index) remained below $1.70/mcf for the second year in a row.
On a gross basis, approximately 26% of new wells were drilled in Canada and 74% were in the U.S., primarily targeting crude oil production.
In 2025, there was an estimated $11.3 billion in gross third-party capital spent on Freehold's royalty lands compared to $10.1 billion in 2024. Spending was comprised of US$7.7 billion on U.S. lands and $630 million on Canadian royalty lands.
Three Months Ended
Twelve Months Ended
Q4 2025
Q3 2025
2025
2024
Gross
Net(1)
Gross
Net(1)
Gross
Net(1)
Gross
Net(1)
Canada
71
2.3
83
3.2
291
10.5
403
17.0
United States
164
0.7
199
0.7
819
2.8
737
3.0
Total
235
3.0
282
3.9
1,110
13.3
1,140
20.0
(1)
Equivalent net wells are aggregate of the numbers obtained by multiplying each gross well by our royalty interest percentage; U.S. wells on Freehold's lands generally come on production at approximately 10 times the volume that of an average Canadian well in our portfolio.
Canada
In Canada, 291 gross locations (10.5 on a net basis) were drilled on Freehold's lands during the year. Drilling was focused on our crude oil weighted plays including southeast Saskatchewan (62 gross wells), Viking (52 gross wells), Mannville heavy oil (48 gross wells), and Clearwater (25 gross wells). In the fourth quarter, Canadian drilling was down compared to the previous quarter due to weaker AECO benchmark prices curtailing natural gas drilling activity levels. During the year, 13 gross Montney and Duvernay wells were drilled, with an additional 16 wells licenced.
Freehold entered into 91 new leases with numerous counterparties during 2025, totalling approximately $2.4 million in bonus and lease rental revenue for the year. The majority of the new leasing was in southeast Saskatchewan.
U.S.
A total of 819 gross locations (2.8 net wells) were drilled on Freehold's U.S. lands in 2025, a 12% increase from 2024. Drilling activity was focused on crude oil locations with approximately 87% of drilling in the Permian basin and 9% in the Eagle Ford basin.
In the fourth quarter of 2025, 164 gross (0.7 net) wells were drilled on Freehold's lands, slightly down from the third quarter of 2025 on a gross basis, however drilling remained flat on a net basis (0.7 net).
During 2025, Freehold entered into 25 new leases in the U.S., totalling approximately $5.6 million in bonus and lease rental revenue over the year. Notably, 15 of the new leases contained deeper rights, including the Barnett and Woodford formations. Leasing activity was primarily in the Permian basin.
Freehold's most significant U.S. payors include ConocoPhillips, ExxonMobil, Occidental Petroleum and Diamondback Energy and all remain active with their ongoing drilling programs.
2026 Guidance
Overall production is expected to average between 15,500 and 16,300 boe/d for 2026, weighted approximately 66% crude oil and natural gas liquids (42% light and medium crude oil, 9% heavy oil (an increase from 8% in 2025) and 15% natural gas liquids) and approximately 34% natural gas. This guidance range is based on annual average commodity price assumptions of US$65.00/bbl WTI, $3.50/mcf NYMEX and $2.00/mcf AECO.
This guidance range reflects ongoing weakness in Canadian natural gas pricing into 2026, production downtime associated with the late January winter storm that impacted much of the southern ...
