Freehold Royalties Ltd. · TSX:FRU
Freehold Royalties — Q2 2025 Earnings Presentation
43 slides from Freehold Royalties's earnings presentation, Jul 31, 2025
Slide 1: Freehold Royalties
Freehold Royalties July 2025 UNIQUELY NORTH AMERICAN FREEHOLDROYALTIES.COM | TSX FRU
Slide 2: North American Portfolio Overview
DEEP BASIN CLEARWATER Freehold’s Value Proposition North American Portfolio Overview MANNVILLE HEAVY OIL CARDIUM VIKING SE SASKATCHEWAN ▪ Exposure to major conventional oil and shale basins with more than 360 royalty counterparties N. DAKOTA BAKKEN ▪ ~6.1 million gross acres in Canada, and ~1.2 mill
Slide 3: Why Own Freehold
A Uniquely North American Energy Royalty Company Why Own Freehold Dividend Focused 8.0% Dividend Yield Coverage down to ~US$50/bbl WTI Target a payout ratio of ~60% Liquids Weighted ~11,050 bbls/d 16% CAGR on liquids production since 2020 Liquids1 ~97% of Revenue Improving natural gas outlook (~34 M
Slide 4: Snapshot of Freehold
Balanced North American Portfolio; Oil Weighted; Best-in-Class Operators Snapshot of Freehold Freehold’s 3 key areas (boe/d) Production 55% 45% Midland 3,600 Q2 2025 46% of Total Eagle Ford 2,600 Heavy Oil 1 1,500 68% Oil Weighted Revenue 48% 52% Q2 2025 Plus ~34 MMcf/d of corporate gas exposure 67%
Slide 5: Freehold's Strategy
Freehold’s Strategy Income Growth and Durable Returns, the Results Creating Value Enhancing Value Delivering Value Production per million Funds from operations, and Total shareholder shares outstanding dividends per share return since 2019 (boe/d/mm shares) ($ per share) 2020 – 2024 per Share Growth
Slide 6: Oil Growth
More Oil, More Cash Flow Oil Growth ▪ Freehold’s oil growth far Relative oil growth since Q1-2022 outpacing broader WCSB 40% ▪ Freehold’s positioning in 30% Permian and Eagle Ford basins has positioned it 20% to also exceed overall U.S. oil growth 10% ▪ Freehold’s oil growth has been driven through
Slide 7: High Margin Barrels – Best in the Business
Freehold’s Value Proposition High Margin Barrels – Best in the Business 2026E cashflow per boe1 Freehold realized pricing Q2-2025 ($/boe) $40 US US +16% premium oil Canada Cdn. $30 $0 $20 $40 $60 $80 $100 ($/bbl) $20 US US +31% premium boe $10 Cdn. Canada $0 $20 $40 $60 $80 ($/boe) $0 Peers1 FRU Exp
Slide 8: Evolution of a Freehold BOE
Freehold’s Value Proposition Evolution of a Freehold BOE ▪ The shift in product mix over the 9,781 boe/d 15,800 – 17,000 boe/d last 5 years to higher value oil 70% 55% Liquids ~66% Liquids and liquids results in each BOE 60% generating almost 20% more revenue than in 2020 50% ▪ In 2025, Freehold exp
Slide 9: Decades of Inventory
Portfolio of Oil-Weighted Areas Provide Growth and Optionality Decades of Inventory Asset Book highlights Development inventory by region (years) 40 Canada United States 35 ~40 years ~18,000 ~24,000* 30 25 ~30 years development locations development locations 20 ~$10.3 billion ~$6.3 billion* 15 undi
Slide 10: Conservatively Balancing Dividends with Leverage
Finance and Dividend Strength Conservatively Balancing Dividends with Leverage ▪ Low cost structure provides robust Dividend Payout Ratio Net debt to last funds from operations to support (dividends paid/funds from operations) twelve months funds dividend from operations 80% 1.5x Conservative levera
Slide 11: Disciplined Investment Framework Drives Profitable Growth
Track Record of Capital Discipline Disciplined Investment Framework Drives Profitable Growth FRU’s Return on Average Capital Employed1 FRU vs. Peers – Return on Average Capital Employed1 30% 30% 25% Average ROACE 12% 20% 20% 10% 15% ROACE 10% 0% 5% -10% 0% ROACE ROACE Avg -20% -5% 2020 2021 2022 202
Slide 12: Returns Continue to Grow as Freehold Grows
Finance and Dividend Strength Returns Continue to Grow as Freehold Grows ▪ Freehold’s dividend has Cumulative dividends paid ($ millions) been a permanent feature through all $2,500 commodity price cycles $2.3 $2,000 billion dividends paid ▪ Current monthly since inception (>$36/share) dividend of 9
Slide 13: Dividend Resiliency
Finance and Dividend Strength Dividend Resiliency 2026E WTI breakeven pricing1 (US$/bbl WTI) Blue bars denote peers with a $70 dividend yield above 5% $60 $50 $40 $30 $20 $10 $0 FRU Peers1 Peer 1 2 3 4 5 6 8 9 17 22 10 11 12 13 14 15 16 18 19 20 21 23 24 25 26 FRU Freehold’s dividend is sustainable
Slide 14: Key Item Sensitivities & Guidance
2025E Range of 15,800 – 17,000 boe/d – Higher Liquids Drives FFO Improvement Key Item Sensitivities & Guidance $0.02/sh 2025E Range +/- US$1/bbl WTI $3.6mm 15,800 – 17,000 boe/d $0.02/sh +/- $0.01 FX $3.4mm ~10% YoY Production Growth $0.01/sh 2% increase in liquids weighting increases +/- 100 BOE/d
Slide 15: US Portfolio
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Slide 16: US Portfolio Overview
US Portfolio Overview Freehold US asset map Production summary Summary Q2 2025 (Q2 2025) (boe/d) Midland 3,750 Eagle Ford 2,750 Delaware 500 Other 480 0% 25% 50% 75% 100% Total ~7,480 Oil NGLs Gas Revenue summary US M&A lookback (Q2 2025) $975 million deployed over 20 unique transactions has generat
Slide 17: Drilling Activity Led by Top Operators
Drilling Activity Led by Top Operators Net quarterly activity on Freehold’s US lands Freehold’s top US drillers (2024-2025 YTD)1 3.0 As at Q2 2025 60 other 2.5 2.4 net permits operators 2.2 net spuds/DUCs 23% 2.0 31% 1.5 5% 6% 1.0 10% 24% 0.5 0.0 1Q21 1Q22 1Q23 1Q24 1Q25 Permits Spuds TILs (turn-in-
Slide 18: FRU's Midland Basin Position
~$392mm of Midland focused acquisitions in 2024 has reshaped FRU’s position FRU’s Midland Basin Position ▪ 2024 acquisitions focused on building out Midland Production (% of Corporate Production) “wall to wall carpeting” in the Midland basin 2025E 2025E Doubled since 2023 ▪ Market share has grown 20
Slide 19: U.S. Investments Providing Significant Returns
Why Multi-Basin Exposure Is Important U.S. Investments Providing Significant Returns Cumulative US royalty revenue Freehold’s US royalty production ($ millions) (boe/d) 7,480 boe/d $600 8,000 ~$550 million $500 7,000 6,000 5,532 $400 5,102 $300 5,000 4,395 78% 4,000 liquids $200 3,000 2,169 $100 2,0
Slide 20: Midland – Staggering Efficiency Gains
Best Place to Find Oil…..Is Where There is Oil…. Midland – Staggering Efficiency Gains ▪ Average lateral feet drilled Midland rig efficiencies per rig has increased by (total lateral length drilled LHS, rig count RHS) over 200% since 2015 and 10,000 200 over 60% since 2019 9,000 180 8,000 160 ▪ Effi
Slide 21: Positioned In Front of the Drill Bit
Why Freehold Likes the US Positioned In Front of the Drill Bit Midland Basin activity heatmap1 ▪ 60% of basin activity is concentrated in the Midland, Martin and Howard counties, where the majority of Freehold’s acreage is positioned – represents ~60% of Freehold’s Midland production ▪ Operator comp
Slide 22: Midland Basin Bench Overview
Resource Expansion Midland Basin Bench Overview Clearfork 7,000 ▪ Significant running room Upper Spraberry in the 1st Generation and 7,500 Middle Spraberry 2nd Generation benches Jo Mill 8,000 ▪ Emerging benches are Lower Spraberry being tested with results 8,500 Dean thar are on par with Wolfcamp A
Slide 23: Midland Production Evolution
Resource Expansion Midland Production Evolution Emerging Benches Midland Basin oil production by bench generation ~15,000 bbls/d from 380 wells (mmbbl/d of oil) 2.5 Second Generation Benches ~600,000 bbls/d from ~6,000 wells 2.0 First Generation Benches 1.5 ~1,700,000 bbls/d from ~23,000 wells 1.0 0
Slide 24: Concentrated Footprint in the Core of the Eagle Ford
Resource Expansion Concentrated Footprint in the Core of the Eagle Ford ▪ 20 years1 of prospective development inventory Lower Eagle Ford development since 2010 ▪ Freehold’s inventory locations are split evenly between the Lower Eagle Ford and upper zones ▪ Freehold acreage mostly in core Karnes Cou
Slide 25: Canadian Portfolio
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Slide 26: Canadian Portfolio Overview
Canadian Portfolio Overview Freehold Canadian asset map Production summary Summary Q2 2025 (Q2 2025) (boe/d) Viking 1,100 SE Sask 1,100 0% 25% 50% 75% 100% Heavy Oil 1,000 Oil NGLs Gas Clearwater 500 Revenue summary Cardium 925 (Q2 2025) Deep Basin 2,750 Mannville 825 Other 900 0% 25% 50% 75% 100% O
Slide 27: Multilateral Adoption in Canada
What Freehold is Excited About Multilateral Adoption in Canada ▪ New technology continues to unlock substantial Multilateral Spuds on Freehold Lands resource that may have been marginal under 120 40% previous drilling techniques 100 30% Multilateral Spuds (#) ▪ Exposure via the Clearwater and Mannvi
Slide 28: Robust Position Across Multiple Exploration Plays
Clearwater Developments Robust Position Across Multiple Exploration Plays Net Clearwater royalty production Basin summary (boe/d) Peace River 600 500 Peavine Nipisi 400 300 Marten Hills 200 West Marten & McLeod Lake Figure Lake 100 Clearwater Wells Greater Jarvie Exploratory Region 0 Developing Regi
Slide 29: Serious Exploration Potential
Clearwater Developments Serious Exploration Potential Freehold Clearwater asset development stage ▪ Continuous evaluation size of circle denotes number of Nipisi of new pools within the 12 development locations ▪ Waterflood expansion greater fairway ▪ Infill drilling Marten ▪ Step-out exploration Hi
Slide 30: The Mannville Cornerstone
Early Innings of Mannville Growth for Freehold The Mannville Cornerstone Mannville oil royalty Mannville fairway net Mannville Mannville land map volumes heavy oil wells spud ownership (bbls/d) stats 1,400 Mannville oil volumes 4 up >20% since mid-2023 975,000 acres 1,200 3 1,825 heavy 1,000 oil loc
Slide 31: Southeast Saskatchewan Resurgence
Canadian Resource Expansion Southeast Saskatchewan Resurgence ▪ Significant momentum in activity with >25% YoY increase SE Sask. net drilled wells in spuds on Freehold’s acreage 3.5 3.0 ▪ Dominant position with 525,000 gross acres of royalty 2.5 lands (including 300,000 gross acres of mineral title
Slide 32: Supplemental Slides
Supplemental Slides 32
Slide 33: Second Quarter 2025 Results
Second Quarter 2025 Results Q2-2025 Q1-2025 Q2-2024 WTI crude oil US$/bbl $63.74 $71.42 $80.57 Production boe/d 16,584 16,248 15,221 Liquids Production bbls/d (% liquids) 11,047 (67%) 10,635 (65%) 9,801 (64%) Funds from operations C$ millions $57 $68 $60 Netback C$ per boe $42.68 $53.01 $49.44 Divid
Slide 34: The Royalty Advantage
Minerals and Royalties Represent a Simple Asset Class The Royalty Advantage High Margin Return of Balance Sheet Model Capital Strength Operating Margin of 85% in H1-2025 Consistent, sustainable dividend Capacity to fund future growth with no operating or capital cost with >$36/share or ~$2.3 billion
Slide 35: Q2-2025 Royalty Drilling
Q2-2025 Royalty Drilling NORTH DAKOTA BAKKEN Deep Basin Clearwater Mannville Viking MIDLAND Cardium DELAWARE EAGLE FORD SE Saskatchewan CANADA TOP CANADIAN PLAYS UNITED STATES TOP US PLAYS GROSS WELLS NET WELLS GROSS WELLS NET WELLS Viking 1 0.0 Midland 148 0.3 SE Sask & Manitoba 10 0.4 Eagle Ford 2
Slide 36: Deep Knowledge of our Land Base Drives Value
Strong Leasing Activity in Canada and the US Deep Knowledge of our Land Base Drives Value Number of leases issued Canadian production Canadian leasing activity breakdown per year from leasing activity since 2020 since 2020 (Leasing & (boe/d) Privates Juniors Small Caps Mid Caps Large Caps (Leases is
Slide 37: Net Debt to Funds From Operations
Strong Balance Sheet 5.0x 4.5x ▪ Freehold’s net debt to trailing funds from operations is ~1.1x 4.0x Net Debt to Funds From Operations ▪ At current commodity price levels 3.5x and dividend level, Freehold has capacity to pay down debt or pursue 3.0x acquisitions with free funds from 2.5x operations
Slide 38: Advisories
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Slide 39: Advisories
Advisories Non-GAAP Measures Within this presentation, references are made to terms commonly used as key performance indicators in the oil and gas industry. We believe that net revenue, cash costs, netback, dividend payout ratio, funds from operations per share and return on capital employed are use
Slide 40: Advisories
Advisories Third Party Information and Public Information This presentation contains information regarding lands and interests from which Freehold Royalties Ltd. ("Freehold", "FRU", the "Corporation", "us", "we" or "our") collects or may in the future collect royalties and associated revenues. It al
Slide 41: Advisories
Advisories our expectation to continue as we see growth in oil weighted plays like Midland, Mannville Stack, Clearwater and SE Saskatchewan – in addition to growth through value enhancing acquisitions; our expectation there will be increased licensing activity in the Mannville; estimated future dril
Slide 42: Advisories
Advisories Advisory Relating to Presentation of Oil and Natural Gas Reserves, Revenue and Production Information This presentation contains information relating to crude oil, natural gas and NGL reserves and other information prepared in accordance with the requirements of Canadian securities laws i
Slide 43: Advisories
Advisories Conversion of Natural Gas to Barrels of Oil Equivalent (boe) To provide a single unit of production for analytical purposes, natural gas production and reserves volumes are converted mathematically to equivalent barrels of oil ("boe"). We use the industry-accepted standard conversion of s