NEWS RELEASE TSX:FRU
Freehold Royalties Ltd. Announces Closing of $49.6 Million Royalty Acquisition
CALGARY, Alberta, January
17, 2012 -
Freehold Royalties
Ltd. (Freehold)
announces it has
closed today the
previously announced
acquisition of royalty
interests on certain
producing and
non-producing lands in
Alberta, British
Columbia, and
Saskatchewan for $49.6
million before closing
adjustments. The
acquisition was funded
through Freehold's
existing bank line
of credit.
Acquisition Highlights:
Royalty production of
approximately 530
barrels of oil
equivalent (boe) per
day for the
remainder of 2012
(90% natural gas)
from over 400
producing wells.
Average 4% contractual
gross overriding
royalty on over
250,000 gross acres
(including over 51,000
undeveloped acres
valued at $1.3
million).
Based on the purchase
price (net of
undeveloped land
value) the cost
of acquired production
is $93,146 per
boe per day
and for proved
plus probable reserves
is $16.06 per
boe.
The acquisition provides
exposure to:
o the Alberta Deep
Basin, with future
growth potential from
multiple zone gas
development that
utilizes both vertical
and horizontal
wells.
o the British Columbia
Montney, characterized
by long life
gas production from
horizontal well
development with
significant future
potential.
o a diversified
package of smaller
properties, located
primarily in Alberta,
with a variety
of producing
formations and play
types, characterized
by low risk,
established, and
consistent production
history from over
300 wells.
Proved plus probable
reserves of
approximately 3.1
million boe, based
on an independent
engineering report
prepared by GLJ
Petroleum Consultants
and effective as
of November
30, 2011.
The assets have a
long reserve life
of 15.9 years
on a proved
plus probable basis.
Freehold assumed in
its analysis that
the majority of
future drilling would
occur in 2016.
As a result of
the acquisition, we
have increased our
production guidance
for 2012 by
7% to
7,600 boe per day;
all other operating
assumptions (provided
in our third
quarter report) remain
unchanged. The
acquisition did not
contribute to 2011
production or
reserves.
Cautionary Statement Regarding
Forward-Looking Information
- This news
release offers our
assessment of
Freehold's future
plans and operations
as at January
17, 2012 and
contains forward-looking
information including
Freehold's expectations
for reserves,
production (including
production guidance
for 2012), timing
for drilling, and
future prospects on
the acquired lands.
This forward-looking
information is
provided to allow
readers to better
understand our
business and prospects
and may not
be suitable for
other purposes. By
its nature,
forward-looking information
is subject to
numerous risks and
uncertainties, some of
which are beyond
our control, including
the impact of
general economic
conditions, industry
conditions, volatility
of commodity prices,
currency fluctuations,
imprecision of reserve
estimates, environmental
risks, taxation,
royalties, regulation,
competition from other
industry participants,
the lack of
availability of qualified
personnel or
management, stock
market volatility, and
our ability to
access sufficient
capital from internal
and external sources.
Risks are described
in more detail
in Freehold's
annual information
form for the
year ended December
31, 2010 which
is available under
Freehold's profile
on SEDAR at www.sedar.com.
With respect to
forward-looking information
contained in this
news release, we
have made assumptions
regarding, among other
things, future oil
and natural gas
prices; future capital
expenditure levels;
future production
levels; future
exchange rates; the
cost of developing
and producing our
assets; our ability
and the ability
of our lessees
to obtain equipment
in a timely
manner to carry
out development
activities; our
expectation for
industry drilling
levels; and our
ability to obtain
financing on
acceptable terms.
You are cautioned that
the assumptions used
in the preparation
of such information,
although considered
reasonable at the
time of preparation,
may prove to
be imprecise and,
as such, undue
reliance should not
be placed on
forward-looking information
or statements. Our
actual results,
performance, or
achievement could
differ materially from
those expressed in,
or implied by
such forward-looking
information. We can
give no assurance
that any of
the events anticipated
will transpire or
occur, or if
any of them
do, what benefits
we will derive
from them. The
forward-looking information
contained herein is
expressly qualified by
this cautionary
statement. Except as
required by law,
Freehold does not
assume any obligation
to publicly update
or revise any
forward-looking information
to reflect new
events or
circumstances.
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 six
thousand cubic feet
of natural gas
to one barrel
of oil (6
Mcf = 1
bbl). The 6:1
boe ratio is
based on an
energy equivalency
conversion method
primarily applicable
at the burner
tip. It does
not represent a
value equivalency at
the wellhead and
is not based
on either energy
content or current
prices. While the
boe ratio is
useful for comparative
measures and observing
trends, it does
not accurately reflect
individual product
values and might
be misleading,
particularly if used
in isolation. As
well, given than
the value ratio
based on the
current price of
crude oil to
natural gas is
significantly different
from the 6:1
energy equivalency
ratio, using a
conversion ratio on
a 6:1 basis
may be misleading
as an indication
of value.
Freehold's primary focus
is on acquiring
and managing oil
and gas royalties.
The majority of
production comes from
royalty interests
(mineral title and
gross overriding
royalties). Freehold's
common shares trade
on the Toronto
Stock Exchange in
Canada under the
symbol FRU.
For further information,
contact:
Freehold Royalties Ltd.
Karen Taylor
Manager, Investor Relations
and Corporate
Secretary t.
403.221.0891
f. 403.221.0888
tf. 1.888.257.1873 e. ktaylor@rife.com
w. www.freeholdroyalties.com
distribué par | Ce noodl a été diffusé par Freehold Royalties Ltd. et initialement mise en ligne sur le site http://www.freeholdroyalties.com. La version originale est disponible ici. Ce noodl a été distribué par noodls dans son format d'origine et sans modification sur 2012-01-18 02:24:00 AM et restera accessible depuis ce lien permanent. Cette annonce est protégée par les règles du droit d'auteur et toute autre loi applicable, et son propriétaire est seul responsable de sa véracité et de son originalité. |
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