CALGARY - PrairieSky Royalty Ltd. has revealed its fourth quarter and year-end operating and financial results for the period ended Dec. 31, 2024. The company also announced a four per cent increase in its annual dividend policy to $1.04 per common share ($0.26 per common share quarterly).
Oil royalty production volumes averaged 13,317 barrels per day, a four per cent increase over the fourth quarter in 2023, driven by strong third-party activity in the Mannville Stack and Clearwater formations. Total royalty production averaged 24,982 barrels of oil equivalent (BOE) per day, a two per cent decrease from Q4 2023 due to declines in natural gas and natural gas liquid (NGL) production.
Royalty production revenue of $115.6 million combined with other revenue of $20 million to generate total revenues of $135.6 million for the fourth quarter last year. Other revenue included bonus consideration of $15.8 million earned on entering into 60 new leasing arrangements focused on light and heavy oil targets across a number of different plays.
Funds from operations totalled $99 million or $0.41 per share, 11 per cent below the fourth quarter for 2023, primarily due to lower natural gas benchmark pricing.
Declared a fourth quarter dividend of $59.9 million ($0.25 per common share), representing a payout ratio of 61 per cent.
Completed $31.5 million of both producing and non-producing royalty interest acquisitions primarily targeting light and heavy oil plays in Central Alberta and Saskatchewan. Acquisitions of producing assets closed in late December 2024.
As for annual highlights, record annual oil royalty production volumes averaged 13,125 barrels per day, a six per cent increase over year-end 2023. Total royalty production averaged 25,186 BOE per day, a one per cent increase over 2023 as the company said higher oil royalty volumes were partially offset by lower natural gas and NGL royalty volumes due to shut-ins and declines related to weak benchmark natural gas pricing.
Royalty production revenue of $465.8 million combined with other revenue of $43.4 million to generate total revenues of $509.2 million for the year-end for 2024. Other revenue included bonus consideration of $30.8 million earned on entering into 219 new leasing arrangements focused on light and heavy oil targets across a number of different plays.
Funds from operations totaled $380.5 million or $1.59 per share, one per cent below YE 2023.
Declared cumulative annual dividends of $239.0 million ($1.00 per common share), representing a payout ratio of 63 per cent.
Completed $57.3 million of both producing and non-producing royalty interest acquisitions primarily targeting light and heavy oil plays in Central Alberta and Saskatchewan.
Net debt totaled $134.9 million as of Dec. 31, 2024, a decrease of $87.2 million or 39 per cent since Dec. 31, 2023.
PrairieSky announced a four per cent increase in its annual dividend policy to $1.04 per common share, to be paid on a quarterly. Subject to the approval of the board of directors, the first quarterly dividend of $0.26 per common share is expected to be effective for the March 31 record date.
"The level of activity on our land base and cash flow generation underscores 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 2024 annual results and the trajectory of the business," said president and CEO Andrew Phillips.
Third-party operators continued to be active across PrairieSky's land base in the fourth quarter. There were 205 wells spudded (97 per cent oil wells) in the quarter.
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