Q4 2025 Freehold Royalties Ltd Earnings Call

March 12, 2026

Speaker #1: Good day, and thank you for standing by. Welcome to the Freehold Royalties Fourth Quarter 2025 webcast. At this time, all participants are in a listen-only mode, after the speaker's presentation there will be a question-and-answer session.

Operator: Good day, and thank you for standing by. Welcome to the Freehold Royalties Q4 2025 webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Spyker, President and CEO. Please go ahead.

Speaker #1: To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Spyker, President and CEO.

Speaker #1: Please go ahead.

Speaker #2: Good morning, everyone, and thank you for joining us today. On the call with me is Shana Morihara, our CFO. And Todd McBride, our Manager of Investor Relations.

David Spyker: Good morning, everyone. Thank you for joining us today. On the call with me is Shaina Morihira, our CFO, and Todd McBride, our Manager, Investor Relations. Before we get started, please be advised that certain statements on this call are considered as forward-looking information, and we caution the listener to review the advisory on forward-looking statements in the news release at MD&A found on our website. In 2025, we achieved our fifth consecutive year of record annual production, delivering 16,294 BOE a day from our North American royalty portfolio. Over this five-year period, we have grown our liquids weighting from 55% to 66%. This high-value liquids production component contributed 90% of our total revenue in 2025.

Speaker #2: Before we get started, please be advised that certain statements on this call are considered as forward-looking information. And we caution the listener to review the advisory on forward-looking statements in the news release and MDNA found on our website.

Speaker #2: So in 2025, we achieved our fifth consecutive year of record annual production, delivering 16,294 BOE a day from our North American royalty portfolio. Over this five-year period, we have grown our liquids weighting from 55% to 66%.

Speaker #2: This high-value liquids production component contributed 90% of our total revenue in 2025. Our 2025 oil and natural gas liquids production was 10,730 BOE a day.

David Spyker: Our 2025 oil and natural gas liquids production was 10,730 BOE a day, an increase of 12% from 2024. Our North American portfolio is very well balanced with 55% of our production coming from Canada and the other 45% from the US. As our US portfolio benefits from premium pricing and a higher liquids weighting, the US accounted for 53% of our revenue. During 2025, our US royalty volumes received a 35% pricing premium compared to our Canadian production. Our US natural gas received an 80% premium over our Canadian natural gas price due to the proximity to US Gulf Coast LNG facilities and significantly more egress options than in Canada. In 2025, we generated CAD 235 million of funds from operations or CAD 1.43 per share.

Speaker #2: An increase of 12% from 2024. Our North American portfolio was a very well-balanced with 55% of our production coming from Canada, and the other 45% from the US.

Speaker #2: As our US portfolio benefits from premium pricing and a higher liquids weighting, the US accounted for 53% of our revenue. During 2025, our US royalty volumes received a 35% pricing premium, compared to our Canadian production.

Speaker #2: Our US natural gas received an 80% premium over our Canadian natural gas price due to the proximity to US Gulf Coast LNG facilities and significantly more egress options than in Canada.

Speaker #2: In 2025, we generated $235 million of funds from operations, or $1.43 per share. With this funds flow, we paid $177 million in dividends to our shareholders, we reduced our long-term debt by $18 million, and we invested $38 million in oil-focused royalty interest assets comprised of mineral title land in undeveloped drilling areas in the core of the Permian Basin, and gross overriding royalty interests in Canada.

David Spyker: With this funds flow, we paid CAD 177 million in dividends to our shareholders. We reduced our long-term debt by CAD 18 million, and we invested CAD 38 million in oil-focused royalty interest assets comprised of mineral title land in undeveloped drilling areas in the core of the Permian Basin and gross overriding royalty interests in Canada. These lands are all in early stages of development, with mineral title lands held in perpetuity and are in areas that have significant undeveloped resource and drilling inventory. Activity levels, particularly in the second half of 2025, were affected by lower commodity prices and generally cautious capital deployment as broader macroeconomic headwinds and uncertainty in outcomes of geopolitical tensions led some operators to slow their activity.

Speaker #2: These lands are all in early stages of development, with mineral title lands held in perpetuity, and are in areas that have significant undeveloped resource and drilling inventory.

Speaker #2: Activity levels, particularly in the second half of 2025, were affected by lower commodity prices and generally cautious capital deployment, as broader macroeconomic headwinds and uncertainty in outcomes of geopolitical tensions led to some operators to slow their activity.

Speaker #2: We were also impacted by continued multi-year weakness in Canadian natural gas prices, which has reduced the gas-directed drilling on our Canadian royalty lands. We expect production to average between 15,500 and 16,300 BUE a day in 2026.

David Spyker: We were also impacted by continued multi-year weakness in Canadian natural gas prices, which has reduced the gas-directed drilling on our Canadian royalty lands. We expect production to average between 15,500 and 16,300 BOE/d in 2026. This outlook reflects the slowdown in activity experienced in 2025, the continued weakness in Canadian natural gas prices, and the potential production impacts of the late January winter storm in the southern United States, all of which are expected to moderate volumes in the first half of 2026. However, we expect a ramp up in the second half of the year, supported by existing well licenses and permits, active, current drilling programs, and an inventory of drilled but uncompleted wells.

Speaker #2: This outlook reflects the slowdown in activity experienced in 2025, the continued weakness in Canadian natural gas prices, and the potential production impacts of the late January winter storm in the southern United States.

Speaker #2: All of which are expected to moderate volumes in the first half of 2026. However, we expect a ramp-up in the second half of the year, supported by existing well licenses and permits, active drilling current active current drilling programs, and an inventory of drilled but uncompleted wells.

Speaker #2: To be clear, our guidance range does not consider the impacts of the recent geopolitical events in the Middle East. We recognize the potential for a significant oil supply response if oil prices remain elevated.

David Spyker: To be clear, our guidance range does not consider the impacts of the recent geopolitical events in the Middle East, and we recognize the potential for a significant oil supply response if oil prices remain elevated. Although our message is muted to start off 2026, we are excited about the resource expansion that is occurring in our core operating areas. In the Permian, operators are deploying surfactants to improve inflow characteristics and are using lightweight proppant to enhance frac stimulations. None of these initiatives existed even a few years ago, and now they are having material impact to production type curves. Our average production type curve in the US has shown a 10% year-over-year improvement as operators continue to perfect their craft. We are also seeing more activity targeting the deeper formations that underlie the Permian, namely the Barnett and Woodford formations.

Speaker #2: Although our message is muted to start off 2026, we are excited about the resource expansion that is occurring in our core operating areas. In the Permian, operators are deploying surfactants to improve inflow characteristics and are using lightweight propan to enhance frac stimulations.

Speaker #2: None of these initiatives existed even a few years ago, and now they are having a material impact on production type curves. Our average production type curve in the U.S. has shown a 10% year-over-year improvement as operators continue to perfect their craft.

Speaker #2: We are also seeing more activity targeting the deeper formations that underlie the Permian. Namely, the Barnett and Woodford formations. This has been one of the drivers of a record levels of leasing in 2025, where we had $8 million total in leased route bonus revenue, which was up from $3 million the previous year.

David Spyker: This has been one of the drivers of our record levels of leasing in 2025. We had CAD 8 million total in lease bonus revenue, which was up from CAD 3 million the previous year. In November, we had our first four-well pad permitted on one of these new leases targeting this Barnett Shale. In Diamondback Energy's Q4 earnings call, they estimate they have 900 Barnett drill locations. Just gives you an idea of the scope of this opportunity set. We see several other operators also targeting the Barnett, including Ovintiv, who announced they will be drilling their first well in 2026. Sometimes it's easy to forget that it was only 15 years ago, a successful combination of horizontal well drilling with multi-stage fracturing would grow the Permian to over 5 million barrels per day of oil. The equivalent of adding another Canada.

Speaker #2: In November, we've had a first four well pad permitted on one of these new leases targeting this Barnett shale. In Diamondback's Q4 earnings call, they estimate they have 900 Barnett drill locations.

Speaker #2: Just gives you an idea of the scope of this opportunity set. We see several other operators also targeting the Barnett, including Ovintiv, who announced they will be drilling their first well in 2026.

Speaker #2: Sometimes it's easy to forget that it was only 15 years ago that successful combination of horizontal well drilling with multi-stage fracturing would grow the Permian to over $5 million barrels per day of oil, the equivalent of adding another Canada.

Speaker #2: So today, longer lateral lengths and drilling efficiencies are driving costs down across the industry. And operators are consistently talking about the capital efficiency gains they realize year after year.

David Spyker: Today, longer lateral lengths and drilling efficiencies are driving costs down across the industry. Operators are consistently talking about the capital efficiency gains they realize year after year, while continually recovering more oil for less dollars. This longer lateral length theme is also showing up in the Eagle Ford, where ConocoPhillips will be drilling over 20 3-mile wells on our royalty lands in 2026. Those 3-mile wells will be double that of what the historical average drill length has been. They're also pursuing a refrac program this year, so targeting wells completed prior to 2016 that were understimulated when initially drilled. Freehold has a royalty interest in approximately 500 wells that would be refrac candidates. We're super excited to see how these major operators will further enhance efficiency and productivity, with these improvements expected to be quickly adopted by industry.

Speaker #2: While continually recovering more oil for fewer dollars. This longer lateral length theme is also showing up in the Eagle Ford, where ConocoPhillips will be drilling over 2- to 3-mile wells on our royalty lands in 2026.

Speaker #2: So those three-mile wells will be double that of what the historical average drill length has been. They're also pursuing a refract program this year.

Speaker #2: So, targeting wells completed prior to 2016 that were under-stimulated when initially drilled. Freehold has a royalty interest in approximately 500 wells that would be refrac candidates.

Speaker #2: So we're super excited to see how these major operators will further enhance efficiency and productivity. With these improvements expected to be quickly adopted by industry.

Speaker #2: For Freehold, having high-quality assets in these premier basins places us in an excellent position to benefit from these tailwinds. On the Canadian side of our portfolio, capital continues to be directed toward our oil-weighted assets in heavy oil.

David Spyker: For Freehold, having high-quality assets in these premier basins places us in an excellent position to benefit from these tailwinds. On the Canadian side of our portfolio, capital continues to be directed toward our oil-weighted assets in heavy oil, both the Clearwater and Mannville Stack, and in Southeast Saskatchewan, targeting light oil. In Q1 of this year, we've seen a return of Viking light oil drilling activity, which was absent for the last half of 2025. On the natural gas side, Ovintiv has licensed 23 Montney wells on our Northeast BC royalty lands. In Canada overall, our average well performance improved by approximately 35% year-over-year as operators are targeting premium acreage and optimizing well design.

Speaker #2: Both the Clearwater and Manville stack, and in Southeast Saskatchewan, targeting light oil. In Q1 of this year, we've seen a return of Viking light oil drilling activity, which was absent for the last half of 2025.

Speaker #2: And on the natural gas side, Ovintiv has licensed 23 Monty wells on our Northeast BC royalty lands. In Canada, overall, our average well performance improved by approximately 35% year over year as operators are targeting premium acreage and optimizing well design.

David Spyker: Our portfolio offers investors exposure to premier oil and natural gas basins across North America, including our growing heavy oil segment in Northern Alberta, the lighter oil plays in Southeast Saskatchewan, exposure to Gulf Coast pricing with our Eagle Ford assets, and growing light oil and natural gas production from the Permian. Industry innovation continues to deepen our portfolio as we continue to benefit from operators' ingenuity. We are looking ahead to another strong year for Freehold as we continue to deliver long-term value for our shareholders. Before closing 2025, I would like to thank our staff for their tremendous efforts in successfully transitioning from the long-standing management agreement with Rife Management to becoming a fully independent Freehold. With that, we're pleased to take your questions.

Speaker #2: So our portfolio offers investors exposure to premier oil and natural gas basins across North America. Including our growing heavy oil segment in Northern Alberta, the lighter oil plays in Southeast Saskatchewan, exposure to Gulf Coast pricing with our Eagle Ford assets, and growing light oil and natural gas production from the Permian.

Speaker #2: Industry innovation continues to deepen our portfolio as we continue to benefit from operators' ingenuity. We are looking ahead to another strong year for Freehold as we continue to deliver long-term value for our shareholders.

Speaker #2: Before closing 2025, I would like to thank our staff for their tremendous efforts in successfully transitioning from the long-standing management agreement with Rice Management to becoming a fully independent Freehold.

Speaker #2: And with that, we're pleased to take your questions.

Speaker #1: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Operator: Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Patrick O'Rourke of ATB Cormark. Your line is open.

Speaker #1: Please stand by while we compile the Q&A roster. And our first question comes from Patrick O'Rourke of ATB Coremac. Your line is open.

Speaker #3: Guys, good morning, and thank you for taking my question. I guess just going to the guidance here, you've talked about a little bit of a lower first half, higher second half.

Patrick O'Rourke: Guys, good morning, and thank you for taking my question. I guess just going to the guidance here, you've talked about a little bit of a lower first half, higher second half. Maybe to unpack that a little bit, sort of how the cadence of production growth looks, and then where you expect exit volumes to be and sort of the pads specifically that you're watching that give you confidence there.

Speaker #3: Maybe to unpack that a little bit, sort of how the cadence of production growth looks and then where you expect exit volumes to be in sort of the pad specifically that you're watching that give you confidence there.

Speaker #4: Yeah, Patrick, I think how we're thinking about it internally here, we kind of think the lower end of guidance for the first half of the year and the higher end of guidance for the second half of the year.

David Spyker: Yeah. Patrick, I think, you know, how we're thinking about it internally here, you know, kind of think the lower end of guidance for the first half of the year and the higher end of guidance for the second half of the year. What that's driven by is just, you know, the slower drilling activity coming out of last year takes a bit to, you know, regain that momentum. Of course, we're dealing with spring breakup in Canada, which is always a bit slower time for a Canadian side. What we're really looking at to support the back half volumes is some of the big pad activity that we've got under Diamondback and Exxon in the Permian.

Speaker #4: And what that's driven by is just this lower drilling activity coming out of last year takes a bit to regain that momentum. Of course, we're dealing with spring breakup in Canada, which is always a bit slower time for a Canadian side.

Speaker #4: But what we're really looking at to support the back half volumes is the some of the big pad activity that we've got under Diamondback and Exxon in the Permian.

David Spyker: Also those Three Mile wells and those refracs that we're talking about in the Eagle Ford, you know, the insight that we're getting from Conoco is that that production will be coming on in the second half of the year. In Canada, we've got the Montney drilling that Ovintiv is doing that we see coming on in the back half of the year, as well as, you know, we have some exposure under Spartan Delta in the Duvernay that we expect to come on in the back half of the year as well. We've got, you know, clear line of sight to those back half year volumes.

Speaker #4: Also, those three-mile wells and those refracts that we're talking about in the Eagle Ford, the insights that we're getting from Conical is that production will be coming on in the second half of the year.

Speaker #4: And in Canada, the we've got the Montney drilling that Ovintiv is doing that we see coming on in the back half of the year, as well as we have some exposure under Spartan Delta in the Duvernais that we expect to come on in the back half of the year as well.

Speaker #4: So we've got clear line of sight to those back half-year volumes. And, like I said before, that's based on our view coming out of Q4 2025 and does not take into account any potential increase in basic capital deployment in this current price environment.

David Spyker: Like I said before, that's based on, you know, our view coming out of 2025 and does not take into account any potential increase in basic capital deployment in this current price environment.

Speaker #3: Okay. And I think that's probably a great segue into my second question here. And I guess as you think about the environment we're in and it's very volatile and I think this is all speculative as well, but to the extent that you see potentially an acceleration of production from your underlying royalties and stronger pricing, if cash flow outstrips your current expectations on the somewhat conservative deck that you've used, do you sort of lay out where your free cash flow priorities would lie for any of that excess cash flow?

Patrick O'Rourke: Okay. I think that's probably a great segue into my second question here. I guess as you think about the environment we're in, and it's very volatile, and, you know, I think this is all speculative as well. To the extent that you see potentially an acceleration of production from your underlying royalties and stronger pricing, if cash flow outstrips your current expectations on the, you know, somewhat conservative deck that you've used, can you sort of lay out where your free cash flow priorities would lie for any of that excess cash flow?

Shaina Morihira: Hi, Patrick. It's Shaina. I can answer that question. I mean, I think what you said at this point, it is fairly speculative. We're kind of 12 days into this elevated pricing environment, so we're not getting too attached to it yet. If we start to be in a period of longer, higher pricing, we would certainly look to obviously continue to pay our dividends, and that would obviously bring down our payout ratio a bit. Then for any incremental cash flow, we would look to offset and apply that to the balance sheet. We'll continue to be patient in terms of looking at acquisition opportunities. I think if you're in a period of elevated commodity prices, there could be a bit of a larger gap between, you know, buyers and sellers. We'll remain disciplined around that.

Speaker #5: Hi, Patrick. It's Shayna. I can answer that question. I mean, I think what you said—at this point, it is fairly speculative. We're kind of twelve days into this elevated pricing environment.

Speaker #5: So we're not getting too attached to it yet. But if we start to be in a period of longer, higher pricing, we would certainly look to, obviously, continue to pay our dividends, and that would obviously bring down our payout ratio a bit. And then, for any incremental cash flow, we would look to offset and apply that to the balance sheet.

Speaker #5: We'll continue to be patient in terms of looking at acquisition opportunities. I think if you're in a period of elevated commodity prices, there could be a bit of a larger gap between buyers and sellers.

Speaker #5: So we'll remain disciplined around that. But yeah, I think it's too early to tell how long this higher pricing environment will last.

Shaina Morihira: Yeah, I think it's too early to tell how long this higher pricing environment will last.

Patrick O'Rourke: I guess if I could just quickly follow up, the one thing I didn't hear is, you know, any sort of context around a potential for any share buybacks. I just wonder if you get to a target debt level, if that would come into play at all.

Speaker #3: I guess if I could just quickly follow up—the one thing I didn't hear is any sort of context around the potential for any share buybacks.

Speaker #3: And I just wonder, if you get to a target debt level, if that would come into play at all.

Speaker #5: Yeah. So I don't think we put out publicly that we have a target debt level that would initiate share buybacks. We have a target of being below one and a half time.

Shaina Morihira: Yeah, I don't think we've, you know, put out publicly that we have a target debt level that would initiate share buybacks. We have a target of being below 1.5 times. We'll continue to look at share buybacks. Obviously, we have the NCIB in place. As we've mentioned previously, I think if we've got alternatives in terms of reinvesting in the business and continuing to acquire those undeveloped acres in the Permian or even within Canada, that's where we would look to deploy capital. We see the benefit investing long term in the business.

Speaker #5: And we'll continue to look at share buybacks. Obviously, we have the NCIB in place. But as we've mentioned previously, I think if we've got alternatives in terms of reinvesting in the business and continuing to acquire those undeveloped acres in the Permian or even within Canada that's where we would look to deploy capital.

Speaker #5: We see the benefit investing long-term in the business.

Speaker #3: That's great clarity. Thank you.

Patrick O'Rourke: That's great clarity. Thank you.

Speaker #1: Thank you. And our next question comes from Jamie Kubik of CIBC, whose line is open.

Operator: Thank you. Our next question comes from Jamie Kubik of CIBC. Your line is open.

Speaker #6: Yep. Good morning and thanks for taking my questions. Can you offer a bit more color on the production profile of the Canadian portfolio and the trend you've seen over recent quarters?

Jamie Kubik: Yep. Good morning, and thanks for taking my questions. Can you offer a bit more color on the production profile of the Canadian portfolio and the trend you've seen over recent quarters? Can you also maybe comment a little bit on the activity that you're seeing on the Canadian side to start 2026 and maybe contrast that to what you saw at the beginning of 2025? Thanks.

Speaker #6: And can you also maybe comment a little bit on the activity that you're seeing on the Canadian side to start 2026 and maybe contrast that to what you saw at the beginning of 2025?

Speaker #6: Thanks.

Speaker #4: Yeah, so on the Canadian side, we can break it down in a couple of different ways. Kind of walk through some of our core operating areas.

David Spyker: Yeah. On the Canadian side, you know, we can break it down in a couple different ways, you know, kind of walk through some of our core operating areas. You know, we just start with the Viking. We mentioned that one earlier. You know, what we saw was that, you know, Viking Capital went away after Q1 last year, and so that was an area of production decline in the portfolio. We see in Q1 activity back again. I think that's generally operated by Teine as a private co. You know, we're seeing kind of Q1 activity levels from them, and then a tapering off of activity for the rest of the year. In the Clearwater.

Speaker #4: We just start with the Viking. We had mentioned that one earlier. What we saw was that Viking capital went away after Q1 last year.

Speaker #4: And so that was an area of production decline in the portfolio. And we see in Q1 activity back again, but I think that's generally operated by Tine as a private co, and we're seeing kind of Q1 activity levels from them and then a bit of a tapering off of activity for the rest of the year.

Speaker #4: In the Clearwater, I'll do Clearwater/Manville heavy together. Those two areas have shown consistent growth for us over the past couple of years, and we see that continuing this year, with that part of the portfolio growing.

David Spyker: Well, I'll group Clearwater and Mannville heavy together. You know, those two areas of kind of consistent growth for us, you know, over the past couple years, and we see that continuing this year with that part of the portfolio growing. On the Southeast Saskatchewan, again, we're seeing that growing. It's been growing year-over-year as operators are you know testing out multilateral technology in a number of different ways in Southeast Saskatchewan with some pretty encouraging results. We see capital continuing to be directed there. Some of the other plays that you know would be a little bit more gassy for us would be the Deep Basin and Cardium.

Speaker #4: On the Southeast Saskatchewan, again, we're seeing that growing. It's been growing year over year as operators are testing out multilock technology in a number of different ways in Southeast Saskatchewan with some pretty encouraging results.

Speaker #4: And so we see capital continuing to be directed there. Some of the other plays that will be a little bit more gassy for us would be the deep basin and Cartium.

Speaker #4: And the deep basin, we're seeing that come off just a function of the gas prices. That decline in deep basin has been ongoing for the last three years.

David Spyker: You know, the Deep Basin, you know, we're seeing that come off just a function of gas prices. That decline in Deep Basin has been ongoing for the last three years and you know, since we had the weakness in gas pricing, you know, starting in 2023. We would expect that to continue. If we do get some stronger oil pricing, you know, we may see that come back a little bit because there is some liquid there that can be quite attractive both in the Deep Basin and in the Cardium.

Speaker #4: And since we had the weakness in gas pricing, starting in 2023. And so we would expect that to continue. If we do get some stronger oil pricing we may see that come back a little bit because there is some liquid there that can be quite attractive both in the deep basin and in the Cartium.

Speaker #4: Probably the other bright spot that we can talk about in Canada right now is kind of the Manville section we call west of Highway 2, that kind of Garrington, Caroline, up into that Farrier area.

David Spyker: Probably the other bright spot that we can talk about in Canada right now is the kind of the Mannville section we call kind of west of Highway Two, that kind of Garrington, Caroline, up into that Ferrier area, where operators like TAQA, Whitecap, Pine Cliff has been drilling some wells. Tourmaline have been active in there. You know, targeting Mannville Sands. There's a number of different in there, whether it's Glauconite, Ellerslie. We've seen some pretty interesting results there. Finally, with our Montney position under Ovintiv in Northeast BC, they drilled, you know, 3 wells last year. They've got 23 wells licensed this year. Those are high impact wells in our portfolio.

Speaker #4: Where operators like TACA and White Cap, Pine Cliff has been drilling some wells, Tourmaline have been active in there. Targeting Manville Sands is a number of different in there whether it's Glock or Ellers Lee.

Speaker #4: And so we've seen some pretty interesting results there. And then finally, yeah, with our Monty position under Ovintiv in Northeast BC, they drilled three wells last year.

Speaker #4: They've got 23 wells licensed this year. And those are high-impact wells in our portfolio. So that's where we that's how we see Canada right now shaping up in a bit of a kind of play-by-play breakdown.

David Spyker: That's how we see Canada right now shaping up in a bit of a kind of play-by-play breakdown.

Speaker #6: Okay. Thanks. And maybe just to ask a specific, but given the Monty wells would be impactful, are those assumed at a 5% royalty rate or lower on freeholds acreage or can you talk a little bit about that?

Jamie Kubik: Okay, thanks. Maybe just to ask a specific, but given the Montney wells would be impactful, like are those assumed at a 5% royalty rate or lower on Freehold's acreage? Or can you talk a little bit about-

David Spyker: Three, three and a half percent.

Speaker #3: 3.5%. That's 3.5% royalty. Yeah. So it's a meaningful number. On a 20 million a day or 30 million a day well.

Jamie Kubik: 3.5.

David Spyker: That's 3.5% royalty. Yeah. It's a meaningful number.

Jamie Kubik: Okay.

David Spyker: On a CAD 20 million a day.

Jamie Kubik: Okay.

David Spyker: million a day well.

Speaker #6: Okay, thanks. And then maybe just quickly—apologies if this isn’t in your presentation somewhere—but can you talk about the guidance split between Canada and the U.S., on what you would expect from a production basis in 2026?

Jamie Kubik: Okay, thanks. Maybe just quickly, and apologies if this is in your presentation somewhere, but can you talk about maybe the guidance split between Canada and the US on what you would expect from a production basis in 2026?

Speaker #4: Yeah, I think how we're thinking of the US—that the US would be, I would say, we're probably seeing throughout the year, if we go from quarter-end to quarter-end of this year, that's probably seeing 5 to 7 percent production growth.

David Spyker: Yeah. I think how we're you know thinking of the US. The US would be, I would say we're probably seeing throughout the year, if we go from quarter end to quarter end of this year, that that's probably seeing 5 to 7% production growth. The decline is coming out of Canada a little bit. Those Montney volumes really show up in Canada late in the year, is how we're modeling it right now. Whereas you know the drilling of the big pads in the US are really starting to show up kind of middle of Q3 and growing into year-end.

Speaker #4: And so the decline is coming out of is coming out of Canada a little bit. So those volumes, those Monty volumes really show up in Canada late in the year is how we're modeling it right now.

Speaker #4: Whereas the drilling of the big pads in the US are really starting to show up kind of middle of Q3. And growing into year-end.

Speaker #6: Okay, thanks. Maybe last question for me is, you said your budget at $65, and I know you mentioned this a little bit already, that you set your budget at $65 a barrel WTI.

Jamie Kubik: Okay, thanks. Maybe last question for me is, you know, you set your budget at $65, and I know you mentioned this a little bit already, that you meant you set your budget at $65 per barrel WTI. Obviously, we're much higher than that right now. Freehold hasn't historically hedged. Would you look to layer in hedges in 2026 to

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