PrairieSky Royalty Q4 2025 PrairieSky Royalty Ltd Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 PrairieSky Royalty Ltd Earnings Call
Speaker #1: thank you for standing by. Welcome to PrairieSky Royalty Ltd Q4 and Year-End call. At this time, all participants on finished. 2025 financial results conference Good day, and speaker's presentation, there will be a the list and only mode.
Speaker #1: your speaker host, Sir Andrew Phillips, President and CEO. Please go ahead, today's conference is being sir. Thank you, Operator, and good morning, everyone, and thank you for dialing into the PrairieSky Year-End will then hear an automated message advising 2025 conference call.
Andrew Phillips: On the call from PSK are Pam Kazeil, CFO, Dan Bertram, CCO, and Mike Murphy, VP Geosciences and Capital Markets, as well as myself, Andrew Phillips. Before we begin, there's certain forward-looking information and statements in our commentary today, so I would ask listeners and investors to review the forward-looking statements qualifier in our press release and MD&A, which can be found on our website. 2025 was a successful year for PSK on all fronts. We achieved 6% oil growth over the year, reaching a record 13,940 royalty oil barrels per day. We expect further records in 2026. Our PDP reserves grew alongside our oil production at over 7% year-over-year. Leasing activity remained robust. The company entered into 189 lease arrangements with 90 distinct counterparties. Leasing continues this year at a similar pace.
Andrew Phillips: On the call from PSK are Pam Kazeil, CFO, Dan Bertram, CCO, and Mike Murphy, VP Geosciences and Capital Markets, as well as myself, Andrew Phillips. Before we begin, there's certain forward-looking information and statements in our commentary today, so I would ask listeners and investors to review the forward-looking statements qualifier in our press release and MD&A, which can be found on our website. 2025 was a successful year for PSK on all fronts. We achieved 6% oil growth over the year, reaching a record 13,940 royalty oil barrels per day. We expect further records in 2026. Our PDP reserves grew alongside our oil production at over 7% year-over-year. Leasing activity remained robust. The company entered into 189 lease arrangements with 90 distinct counterparties. Leasing continues this year at a similar pace.
Speaker #1: from PSK, our Pam Kazeil, CCO; and Mike Murphy, VP Geosciences Andrew Phillips. Before and Capital Markets; as well as myself, After the today. So I would ask listeners and we begin, there are certain forward-looking On the call qualifier in our press release and MD&A, successful year for PSK on all fronts.
Speaker #1: We achieved 6% oil growth over the year, reaching a record 13,940 royalty oil barrels per day. We which can be found on our expect further records in grew alongside our oil production, at over 7% year over year.
Speaker #1: Our PDP reserves On the capital allocation front, we executed on a $100 million of acquisitions with excellent we canceled $2.6% of the projected returns.
Speaker #1: Leasing activity remained website. robust. The company entered into a $189 lease arrangement with 90 distinct 2025 was a counterparties. Leasing continues this 2026. year at a similar pace.
Andrew Phillips: On the capital allocation front, we executed on CAD 100 million of acquisitions with excellent projected returns. In addition, we canceled 2.6% of the outstanding shares of PrairieSky while paying CAD 243.4 million in dividends. Looking into 2026, the team will continue to focus on leasing our leading undeveloped land base to qualified counterparties across the basin. Over the year, numerous discoveries and pool extensions were found across our extensive portfolio, with decades of remaining inventory on some of North America's most economic plays. With 98% operating margins and unmatched duration, we're in a position to provide strong returns to our owners in the coming years. We're pleased to announce a 2% increase to our annual dividend to CAD 1.06 per share per year, and our first quarterly dividend will be CAD 0.265 effective 31 March 2026.
Andrew Phillips: On the capital allocation front, we executed on CAD 100 million of acquisitions with excellent projected returns. In addition, we canceled 2.6% of the outstanding shares of PrairieSky while paying CAD 243.4 million in dividends. Looking into 2026, the team will continue to focus on leasing our leading undeveloped land base to qualified counterparties across the basin. Over the year, numerous discoveries and pool extensions were found across our extensive portfolio, with decades of remaining inventory on some of North America's most economic plays. With 98% operating margins and unmatched duration, we're in a position to provide strong returns to our owners in the coming years. We're pleased to announce a 2% increase to our annual dividend to CAD 1.06 per share per year, and our first quarterly dividend will be CAD 0.265 effective 31 March 2026.
Speaker #1: outstanding shares of PrairieSky, while paying $243.4 million in In addition, 2026, the team will continue to dividends. focus on leasing our leading Looking into undeveloped land base to qualified counterparties across the basin.
Speaker #1: Over the year, numerous discoveries and pool extensions were found across our extensive portfolio, with North America's most economic decades of remaining inventory on some of plays.
Speaker #1: With 98% operating margins and unmatched duration, we're in a position to provide strong returns to our owners in the coming 2% increase to our annual dividend to $1.06 per first quarterly dividend will be $0.26.50, effective March 31, share per year, and our call over to Mike to further discuss activity on
Andrew Phillips: I will now turn the call over to Mike to further discuss activity on our lands. Thanks, Andrew. 2025 drilling activity was strong for PrairieSky, with an estimated CAD 2 billion of gross third-party capital spent on our lands. This represents an estimated 8.3% of total industry conventional capex in the basin, and this is up from 6.9% in 2024. Activity was especially strong in our key oil growth plays, including Clearwater spuds up 9% year-over-year, Mannville Stack up 11%, and Duvernay up 67%. Multilaterals continue to drive increased productivity per well, with 80 multilat spuds in Q4 and 285 spuds in all of 2025, representing 40% of all drilling activity on PSK lands, up from 36% in 2024. We now estimate half of our Clearwater volumes are under water flood support, providing for a highly sustainable, low-decline production base.
Andrew Phillips: I will now turn the call over to Mike to further discuss activity on our lands. Thanks, Andrew. 2025 drilling activity was strong for PrairieSky, with an estimated CAD 2 billion of gross third-party capital spent on our lands. This represents an estimated 8.3% of total industry conventional capex in the basin, and this is up from 6.9% in 2024. Activity was especially strong in our key oil growth plays, including Clearwater spuds up 9% year-over-year, Mannville Stack up 11%, and Duvernay up 67%. Multilaterals continue to drive increased productivity per well, with 80 multilat spuds in Q4 and 285 spuds in all of 2025, representing 40% of all drilling activity on PSK lands, up from 36% in 2024. We now estimate half of our Clearwater volumes are under water flood support, providing for a highly sustainable, low-decline production base.
Speaker #2: Thanks, Andrew. 2025 drilling
Speaker #2: activity was strong for PrairieSky. With an
Speaker #2: of gross third-party capital spent on our lands, this represents an total industry conventional capex in estimated $8.3% of our lands. $6.9% in 2026. 2024.
Speaker #2: strong in our key oil growth Activity was especially 9% year over year, Mandel plays, including Clearwater Spuds up Stack up 11%, and the basin, and this is up from 67%.
Speaker #2: Multilaterals continue to DuVernay up drive increased productivity per in Q4 and 2025, representing 40% of all drilling, 285 spud in all of activity on PSK lands, up from wealth, with 80 multilat spud, 36% in 2024.
Speaker #2: We now estimate half of our Clearwater volumes are underwater flood support, providing for a highly sustainable, low-decline production base. Improved recovery increase in Clearwater 2P reserve contributed to a 42% Clearwater royalty oil production has grown at a compound annual growth rate of 20% since 2022, and we expect double-digit growth from the play again in volumes year over year.
Andrew Phillips: Improved recovery contributed to a 42% increase in Clearwater 2P reserve volumes year-over-year. Clearwater royalty oil production has grown at a compound annual growth rate of 20% since 2022, and we expect double-digit growth from the play again in 2026. In the Duvernay, royalty production increased 90% year-over-year, with growth primarily attributed to activity in the West Shale Basin. With sizable third-party operator budgets in this part of the play this year, we expect the Duvernay to once again represent the fastest-growing play for PrairieSky in 2026. I'll pass it over to Pam to discuss the financials. Thank you, Mike. Good morning, everyone. PrairieSky's 2025 oil royalty production reached a record annual average of 13,940 barrels per day, a 6% increase over 2024, with Q4 volumes averaging 13,750 barrels per day.
Andrew Phillips: Improved recovery contributed to a 42% increase in Clearwater 2P reserve volumes year-over-year. Clearwater royalty oil production has grown at a compound annual growth rate of 20% since 2022, and we expect double-digit growth from the play again in 2026. In the Duvernay, royalty production increased 90% year-over-year, with growth primarily attributed to activity in the West Shale Basin. With sizable third-party operator budgets in this part of the play this year, we expect the Duvernay to once again represent the fastest-growing play for PrairieSky in 2026. I'll pass it over to Pam to discuss the financials. Thank you, Mike. Good morning, everyone. PrairieSky's 2025 oil royalty production reached a record annual average of 13,940 barrels per day, a 6% increase over 2024, with Q4 volumes averaging 13,750 barrels per day.
Speaker #2: 2026. In the DuVernay royalty production increased 90% year over year, with growth with sizable third-party operator budgets in this part of the play this year.
Speaker #2: We primarily attributed this to activity in the West Shale Basin; expect the DuVernay to once again represent in 2026. I'll pass the fastest-growing play for PrairieSky over to Pam to discuss the financials.
Speaker #3: Thank you, Mike. 2025 oil royalty production reached a record annual Good morning, average of $13,940 barrels per day, a 6% increase over 2024, with $13,750 barrels per Q4 volumes averaging day.
Speaker #3: Growth in oil royalty production was focused in the Clearwater, Mandel Stack, and DuVernay oil plays, which now represent 29% of our oil royalty production, up from 25% also achieved 17% growth in NGL royalty production in in the prior year.
Andrew Phillips: Growth in oil royalty production was focused in the Clearwater, Mannville Stack, and Duvernay oil plays, which now represent 29% of our oil royalty production, up from 25% in the prior year. We also achieved 17% growth in NGL royalty production in Q4, with production averaging 2,915 barrels per day. This growth was driven by Duvernay and Montney volumes and positively impacted our NGL realized pricing, as pentanes and condensate made up approximately 35%, or over 1,000 barrels per day of these volumes. With a strong fourth quarter, NGL royalty production grew 5% year-over-year. Total royalty production was 64% liquids for the year. Royalty revenue totaled CAD 102.9 million in the quarter and CAD 441.7 million for the year, which was 94% liquids. Other revenues added an incremental CAD 8.8 million in the quarter and CAD 36.5 million for the year, driven by bonus consideration of CAD 22.6 million.
Andrew Phillips: Growth in oil royalty production was focused in the Clearwater, Mannville Stack, and Duvernay oil plays, which now represent 29% of our oil royalty production, up from 25% in the prior year. We also achieved 17% growth in NGL royalty production in Q4, with production averaging 2,915 barrels per day. This growth was driven by Duvernay and Montney volumes and positively impacted our NGL realized pricing, as pentanes and condensate made up approximately 35%, or over 1,000 barrels per day of these volumes. With a strong fourth quarter, NGL royalty production grew 5% year-over-year. Total royalty production was 64% liquids for the year. Royalty revenue totaled CAD 102.9 million in the quarter and CAD 441.7 million for the year, which was 94% liquids. Other revenues added an incremental CAD 8.8 million in the quarter and CAD 36.5 million for the year, driven by bonus consideration of CAD 22.6 million.
Speaker #3: Q4, with production averaging $2,915 barrels per DuVernay and Motney volumes and positively impacted our NGL realized pricing, as pentanes and condensate made up approximately 35%, or over 1,000 barrels per day of these volumes.
Speaker #3: With a We strong fourth quarter, NGL royalty production grew 5% year over year. Total royalty production was $64% liquids for the year. Royalty revenue totaled $102.9 million in the quarter, and $441.7 million for the year, which was 94% liquids.
Speaker #3: Other revenues added an incremental $8.8 $36.5 million for the year, driven by bonus consideration of $22.6 million. During the quarter, PrairieSky settled the million in the quarter, and deferred share units for directors who retired last year, of $7.2 December 15, 2025, to exercise their DSUs.
Andrew Phillips: During the quarter, PrairieSky settled the deferred share units for directors who retired last year of CAD 7.2 million. Directors had until 15 December 2025 to exercise their DSUs. Funds from operations totaled CAD 80.5 million or CAD 0.35 per share in the quarter and CAD 353 million or CAD 1.50 per share for 2025. Looking forward, PrairieSky's 2026 annual pricing sensitivities, which are all net of G&A and taxes, are as follows. A $5 per barrel change in US dollar WTI would increase or decrease funds from operations approximately CAD 24.5 million. A $1 USD change in the light or heavy oil differential will increase or decrease funds from operations approximately CAD 5.5 million. A CAD 0.25 per MCF change in AECO would increase or decrease funds from operations approximately CAD 4 million, and a 0.01 change in the US to Canadian FX rate would increase or decrease funds from operations approximately CAD 4 million.
Andrew Phillips: During the quarter, PrairieSky settled the deferred share units for directors who retired last year of CAD 7.2 million. Directors had until 15 December 2025 to exercise their DSUs. Funds from operations totaled CAD 80.5 million or CAD 0.35 per share in the quarter and CAD 353 million or CAD 1.50 per share for 2025. Looking forward, PrairieSky's 2026 annual pricing sensitivities, which are all net of G&A and taxes, are as follows. A $5 per barrel change in US dollar WTI would increase or decrease funds from operations approximately CAD 24.5 million. A $1 USD change in the light or heavy oil differential will increase or decrease funds from operations approximately CAD 5.5 million. A CAD 0.25 per MCF change in AECO would increase or decrease funds from operations approximately CAD 4 million, and a 0.01 change in the US to Canadian FX rate would increase or decrease funds from operations approximately CAD 4 million.
Speaker #3: Funds from operations totaled $80.5 million or million, directors had until $353 million or $1.50 per share for 2025. Looking forward, PrairieSky's 2026 annual pricing sensitivities, which are all net of G&A and taxes, are as follows: a $5 per barrel change in US dollar WTI would increase or decrease funds from operations approximately $24.5 million.
Speaker #3: A light or heavy oil differential will $1 US change in the increase or decrease funds from operations approximately $5.5 million. A $0.35 per share in the quarter, and or decrease funds from operations approximately $4 million and a $0.01 change in the US to Canadian FX rate would increase or decrease funds from operations approximately $4 tax pools of $1.18 billion to shelter future taxability at million.
Andrew Phillips: Entering 2026, we have tax pools of CAD 1.18 billion to shelter future taxability at approximately 10% per year. This means that in 2026, the first CAD 118 million of cash flow is tax-free, with incremental cash flow tax at 23.5%. We've prepared our 2025 US tax information, and our 2025 dividends will be a 44% return of capital for US investors. This information can be found on our website. We will now turn it over to the moderator to proceed with the Q&A. Thank you. Ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star 11 on your telephone and wait for your name to be announced. To read your question, simply press star 11 again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Michael Harvey with RBC Capital Markets. Yeah, sure.
Andrew Phillips: Entering 2026, we have tax pools of CAD 1.18 billion to shelter future taxability at approximately 10% per year. This means that in 2026, the first CAD 118 million of cash flow is tax-free, with incremental cash flow tax at 23.5%. We've prepared our 2025 US tax information, and our 2025 dividends will be a 44% return of capital for US investors. This information can be found on our website. We will now turn it over to the moderator to proceed with the Q&A. Thank you. Ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star 11 on your telephone and wait for your name to be announced. To read your question, simply press star 11 again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Michael Harvey with RBC Capital Markets. Yeah, sure.
Speaker #3: Approximately 10% per year. This means that in 2026, the first—entering 2026, we have $118 million of cash flow that is tax-free, with incremental cash flow taxed at 23.5%.
Speaker #3: We've prepared our 2025 US tax information and our 2025 information can be found on our proceed with the
Speaker #4: you. Ladies and gentlemen, as a reminder to ask a question at this time, you will need to dividends will be a 44% return of press star 11 on your telephone and wait for your name to be 11 again.
Speaker #4: Please stand by while announced. To withdraw your question, simply press star
Speaker #4: first question coming from the line roster. And our
Speaker #4: Markets. of Michael Harvey with RBC Capital Yeah, sure.
Andrew Phillips: Sure. Good morning, guys. Just a couple of quick ones. First, on the West Shale Duvernay, volumes almost doubled this year. It looks like this year you could be in a position where you kind of get broadly similar growth percentage-wise numbers. Just wondering if you would generally agree with that or take another view. And then second, on the return of capital program, maybe just remind us the philosophy on the buyback. How sensitive is it to your share price, or is it just more of a sweep if there's looking to be excess cash at the end of a particular quarter? Yeah, good morning, Mike, and thanks for the questions. Yeah, on the Duvernay, we don't obviously provide specific guidance for plays or guidance in general, but there will be strong growth associated with the Duvernay.
Andrew Phillips: Sure. Good morning, guys. Just a couple of quick ones. First, on the West Shale Duvernay, volumes almost doubled this year. It looks like this year you could be in a position where you kind of get broadly similar growth percentage-wise numbers. Just wondering if you would generally agree with that or take another view. And then second, on the return of capital program, maybe just remind us the philosophy on the buyback. How sensitive is it to your share price, or is it just more of a sweep if there's looking to be excess cash at the end of a particular quarter? Yeah, good morning, Mike, and thanks for the questions. Yeah, on the Duvernay, we don't obviously provide specific guidance for plays or guidance in general, but there will be strong growth associated with the Duvernay.
Speaker #2: a couple of quick ones. First, on Sure. Good morning, guys. Just DuVernay, volumes almost doubled this year. It looks like this year you could be in a Q&A.
Speaker #2: position where you kind of get broadly similar growth view. return of capital program, maybe just remind us the philosophy on the buyback. How sensitive is it to your share price, or is it just more of a sweep if there's looking to be excess cash at the end of a the West Shale particular
Speaker #5: Questions. Yeah, on the DuVernay, we don't obviously provide specific—yeah. Good morning, Mike, and thanks for the— but there will be strong growth associated with guidance for plays or guidance in general. See, there is a little bit more volatility in terms of the— saw substantial— that in Q3, we actually had production volumes given a big bump in our volumes.
Andrew Phillips: I think one of the things you'll see is a little bit more volatility in terms of the actual production volumes, given that in Q3, we saw a substantial pad that came on, and we had a big bump in our volumes. But I think overall, over the years, you'll get some significant growth out of that. I don't know that it'll be just under 100% growth this year, but it will be very strong growth, and it really depends on when those volumes actually come on, how they're staggered throughout the year. And then on the return of capital, we obviously have the dividend, which we increased a couple of percent. And then on the buyback, we will buy back stock this year. We have a buyback in place currently.
Andrew Phillips: I think one of the things you'll see is a little bit more volatility in terms of the actual production volumes, given that in Q3, we saw a substantial pad that came on, and we had a big bump in our volumes. But I think overall, over the years, you'll get some significant growth out of that. I don't know that it'll be just under 100% growth this year, but it will be very strong growth, and it really depends on when those volumes actually come on, how they're staggered throughout the year. And then on the return of capital, we obviously have the dividend, which we increased a couple of percent. And then on the buyback, we will buy back stock this year. We have a buyback in place currently.
Speaker #5: But I think, overall, over the years, you'll get some significant growth out of that. I don't know that it'll be just under 100%.
Speaker #5: growth this year. But it will be very quarter? on when those volumes actually come strong growth. on, how they're staggered throughout the year. And then on the return And it really depends of capital, we obviously have the dividend, which we increased a couple of buyback, we will buy back stock this year.
Speaker #5: We have a buyback in place currently. And when we think about the business and we look at kind of terminal values, etc., we come to a share price that's a multiple of our current share price.
Andrew Phillips: When we think about the business and we look at kind of terminal values, etc., we come to a share price that's a multiple of our current share price. So we believe there's good value anywhere in these ranges. So we will be active buying back shares when we come out of blackout. Great. Thanks, Andrew. Thanks. Have a great day. Thank you. And our next question coming from the line of Jamie Kubik with CIBC. Your line is now open. Yeah, good morning. Thanks for taking my question. Can you just talk a little bit about the trend that we saw in the quarter with respect to oil volumes checking back a little bit and how we should think about the profile for PrairieSky in 2026?
Andrew Phillips: When we think about the business and we look at kind of terminal values, etc., we come to a share price that's a multiple of our current share price. So we believe there's good value anywhere in these ranges. So we will be active buying back shares when we come out of blackout. Great. Thanks, Andrew. Thanks. Have a great day. Thank you. And our next question coming from the line of Jamie Kubik with CIBC. Your line is now open. Yeah, good morning. Thanks for taking my question. Can you just talk a little bit about the trend that we saw in the quarter with respect to oil volumes checking back a little bit and how we should think about the profile for PrairieSky in 2026?
Speaker #5: So we believe there's good value anywhere in these ranges. So we will be active buying back shares when we come out of blackout.
Speaker #2: Great.
Speaker #2: Thanks, Andrew. Thanks.
Speaker #5: Have a great
Speaker #5: day. Thank
Speaker #4: you. And our next question coming from the line of Jamie Kumik with CIBC. Your line is now open.
Speaker #6: the trend
Speaker #6: that we saw in the quarter with respect to oil volumes checking back a little bit? And how we should think my question. Can you just talk a little bit about about the profile 2026.
Speaker #6: for PrairieSky in And then lastly, can you just talk a little bit about the average royalty rate being drilled in the profile right now and what that might mean for 2026 and onwards?
Andrew Phillips: And then lastly, can you just talk a little bit about the average royalty rate being drilled in the profile right now and what that might mean for 2026 and onwards? Thanks. Yeah, you bet, Jamie. On the first question, on the trending again, you saw that big pad come on in Q3, so we had a substantial spike in our volumes, and so we're well ahead of our own internal estimates and analyst estimates. And then, of course, those wells come on with a very high decline. So you saw those declines in Q4. We have a number of new pads coming on throughout the year in 2026, so you will see those kind of a little more volatility, I guess, in the volumes. But I think on average, we'll see similar growth rates. So on the trending, I guess that's just one thing to expect.
Andrew Phillips: And then lastly, can you just talk a little bit about the average royalty rate being drilled in the profile right now and what that might mean for 2026 and onwards? Thanks. Yeah, you bet, Jamie. On the first question, on the trending again, you saw that big pad come on in Q3, so we had a substantial spike in our volumes, and so we're well ahead of our own internal estimates and analyst estimates. And then, of course, those wells come on with a very high decline. So you saw those declines in Q4. We have a number of new pads coming on throughout the year in 2026, so you will see those kind of a little more volatility, I guess, in the volumes. But I think on average, we'll see similar growth rates. So on the trending, I guess that's just one thing to expect.
Speaker #5: Yeah, you bet, Jamie. On the first question, on the trending again, you saw that big pad come on in
Speaker #5: Q3. So we had a substantial spike in our volumes. And so we're well ahead of our own internal estimates and analyst estimates. And then, of high decline.
Speaker #5: So you saw those declines in Q4. We have a number of new pads coming on throughout the Thanks. kind of a little more volatility, I guess, in the year in 2026.
Speaker #5: volumes. But I think on average, we'll course, those wells come on with a very So you will see those on the trending, I guess that's just one thing to expect.
Speaker #5: In the past, if you go see similar growth rates—very rateable growth, mostly. So, due to very kind of predictable pads coming on, back three years, you've seen throughout the Clearwater and the Mannville stack.
Andrew Phillips: In the past, if you go back 3 years, you've seen very reliable growth, mostly due to very kind of predictable pads coming on throughout the Clearwater and the Mannville Stack and very predictable volumes. And then with the Duvernay adding to that and being a big part of the growth, you get these very substantial volume spikes and then some substantial declines, of course, that come alongside with it. So I think you'll see volatility, but in the end, it's a good news story because it'll smooth out over the year. And then the second question. Sorry, what was the second question again? On the average royalty. Oh, yeah. Yeah, on the average royalty rate, it's down like 0.2%, I think, on the well spud in Q4.
Andrew Phillips: In the past, if you go back 3 years, you've seen very reliable growth, mostly due to very kind of predictable pads coming on throughout the Clearwater and the Mannville Stack and very predictable volumes. And then with the Duvernay adding to that and being a big part of the growth, you get these very substantial volume spikes and then some substantial declines, of course, that come alongside with it. So I think you'll see volatility, but in the end, it's a good news story because it'll smooth out over the year. And then the second question. Sorry, what was the second question again? On the average royalty. Oh, yeah. Yeah, on the average royalty rate, it's down like 0.2%, I think, on the well spud in Q4.
Speaker #5: And at very predictable volumes. And then with the DuVernay adding to that and being a big part of the growth, you get these very substantial volume spikes.
Speaker #5: And then some substantial declines, of course, that come alongside with it. So I think you'll see it's a good news story because it'll smooth out over the year.
Speaker #5: And then the second
Speaker #4: On the
Speaker #5: Oh, yeah. Yeah, on the average
Speaker #5: Royalty rate is down, like 0.2%, I think, on the well spud in average royalty, Q4. We do expect some volatility in that as well.
Andrew Phillips: We do expect some volatility in that as well, but as per usual, I think it'll kind of average north of 6 throughout the year. We just don't know exactly how that'll come on. It depends on the seasonality of drilling and where those wells are drilled. With some of the longer laterals you're seeing in the Duvernay, they're slightly lower, but again, we have a high royalty rate there, so those should come on at slightly higher royalties. And then the Viking, of course, in Q3 will add to that when they're mostly 17.5% royalties. But again, I think you can expect similar average royalty rates to 2025. Perfect. Thanks. And could you also talk a little bit about the outlook, perhaps, that you might have for the Mannville Stack and the Basal Quartz for 2026? Obviously, good growth in the Duvernay and Clearwater in 2025.
Andrew Phillips: We do expect some volatility in that as well, but as per usual, I think it'll kind of average north of 6 throughout the year. We just don't know exactly how that'll come on. It depends on the seasonality of drilling and where those wells are drilled. With some of the longer laterals you're seeing in the Duvernay, they're slightly lower, but again, we have a high royalty rate there, so those should come on at slightly higher royalties. And then the Viking, of course, in Q3 will add to that when they're mostly 17.5% royalties. But again, I think you can expect similar average royalty rates to 2025. Perfect. Thanks. And could you also talk a little bit about the outlook, perhaps, that you might have for the Mannville Stack and the Basal Quartz for 2026? Obviously, good growth in the Duvernay and Clearwater in 2025.
Speaker #5: But as per usual, question, sorry, what was the second question again? of 6 throughout the year. We just don't know I think it'll kind of average north exactly how that'll come on.
Speaker #5: It depends on the seasonality of drilling volatility in the end. and where those wells are drilled. With the some of the longer laterals you're seeing in DuVernay, they're slightly lower.
Speaker #5: But again, we have a high royalty rate there, so those should come on at slightly higher. Q3 will add to that, when they're mostly 17.5% royalties.
Speaker #5: But again, I think you can rates to royalties.
Speaker #6: Thanks. expect similar average royalty And then the Viking, of course, in 2025. Perfect. bit about the outlook, perhaps, that you might have for the Manville stack and the Basil Quartz for 2026?
Speaker #6: Obviously, good growth in the DuVernay and Clearwater in 2025. Can you just talk a little bit about the Manville stack and Basil
Andrew Phillips: Can you just talk a little bit about maybe what has you excited in the Mannville Stack and Basal Quartz? Thanks. Yeah, you bet. So in the Mannville Stack, we were about 200 net royalty barrels in 2022. That's grown all the way to just under 1,000 net royalty barrels. We are seeing very robust programs throughout that area from a number of privates, including Lineup Resources, Caltex Trilogy, as well as Canadian Natural Resources' licensed number of wells on our lands that haven't come on yet. So we are expecting pretty strong growth in the Mannville throughout the year. Don't know exactly what that number looks like, but it'll be substantial. And then the Basal Quartz, for the first time, we added it as a segregated play in our corporate presentation, and you can see the volume has been roughly flat.
Andrew Phillips: Can you just talk a little bit about maybe what has you excited in the Mannville Stack and Basal Quartz? Thanks. Yeah, you bet. So in the Mannville Stack, we were about 200 net royalty barrels in 2022. That's grown all the way to just under 1,000 net royalty barrels. We are seeing very robust programs throughout that area from a number of privates, including Lineup Resources, Caltex Trilogy, as well as Canadian Natural Resources' licensed number of wells on our lands that haven't come on yet. So we are expecting pretty strong growth in the Mannville throughout the year. Don't know exactly what that number looks like, but it'll be substantial. And then the Basal Quartz, for the first time, we added it as a segregated play in our corporate presentation, and you can see the volume has been roughly flat.
Speaker #5: Yeah, you bet.
Speaker #5: So in the Manville stack,
Speaker #5: we were about 200 net Quartz?
Speaker #5: That's grown all the way to just under Thanks. are seeing very robust 1,000 net royalty barrels. programs throughout that area, from a number We of private including lineup in Caltex maybe what has you excited in Trilogy as well as Canadian Natural Resources as licensed a number of wells on our lands that haven't come on yet.
Speaker #5: So we are expecting pretty strong growth in the Manville throughout the year. Don't it'll be substantial. And then the as a segregated play. In see the volume has been roughly flat.
Speaker #5: We have done a number of acquisitions just given the know exactly what that number looks like, but really high-quality operator that we're dealing with there, as well as the robust plants that they've acquired throughout the area, they have a lot of excess capacity now and have a very strong program coming out economics. of breakouts.
Speaker #5: We have done a number of acquisitions just given the know exactly what that number looks like, but really high-quality operator that we're dealing with there, as well as the robust plants that they've acquired throughout the area, they have a lot of excess capacity now and have a very strong program coming out economics.
Andrew Phillips: We have done a number of acquisitions just given the really high-quality operator that we're dealing with there, as well as the robust economics. And just given the gas processing plants that they've acquired throughout the area, they have a lot of excess capacity now and have a very strong program coming out of breakouts. So we're expecting some pretty strong growth from that play as well. It'll certainly be in the double digits, but don't know exactly what that'll look like. And that's a light oil play with liquid-rich gas. So that's a play that we think will show growth over the next five years. Okay. Thanks for the color. That's all for me. Thank you. Appreciate the questions, Jamie. Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr.
Andrew Phillips: We have done a number of acquisitions just given the really high-quality operator that we're dealing with there, as well as the robust economics. And just given the gas processing plants that they've acquired throughout the area, they have a lot of excess capacity now and have a very strong program coming out of breakouts. So we're expecting some pretty strong growth from that play as well. It'll certainly be in the double digits, but don't know exactly what that'll look like. And that's a light oil play with liquid-rich gas. So that's a play that we think will show growth over the next five years. Okay. Thanks for the color. That's all for me. Thank you. Appreciate the questions, Jamie. Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr.
Speaker #5: And just given, we'll show growth over the next five—the gas processing certainly will be in the double digits, but don't know.
Speaker #5: Pretty strong growth from that play as well. So we're expecting some—exactly what that'll look like. And that's a light oil play with liquids-rich gas.
Speaker #5: years. Okay.
Speaker #6: Thanks for the color. That's all for me.
Speaker #6: Thank you. Appreciate the questions,
Speaker #4: Thank you. And I'm showing over the questions. Thank you at this time. I will now turn the call back over to Mr. Andrew Phillips for any closing remarks.
Andrew Phillips: Andrew Phillips for any closing remarks. Thank you very much, everyone, for dialing into the PrairieSky year-end and conference call. Please feel free to call Pam, Mike, or myself with any questions you have, and have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Andrew Phillips: Andrew Phillips for any closing remarks. Thank you very much, everyone, for dialing into the PrairieSky year-end and conference call. Please feel free to call Pam, Mike, or myself with any questions you have, and have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Speaker #5: dialing into the PrairieSky year-end and conference Thank you very much, everyone, for call. Pam, Mike, or myself with any questions you have. And And please feel free to call have a great day.
