Freehold Royalties Ltd. announces the closure of its royalty activities in the United States

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR
BROADCAST IN THE UNITED STATES.

CALGARY, Alberta, Sep 24, 2021 (GLOBE NEWSWIRE) – Freehold Royalties Ltd. (Freehold) (TSX: FRU) announces closing of previously announced transaction for the acquisition of a high quality U.S. royalty asset located in the Eagle Ford Texas Oil Basin (the Acquired Assets) for $ 180 million US before closing adjustments (C $ 227 million) (the US royalty transaction). The acquired assets are expected to significantly improve the quality of Freehold’s North American royalty portfolio, improving both the short- and long-term sustainability of the Freehold dividend while providing additional option value to return capital to our shareholders. over several years of growing free cash flow. . The US Royalty Transaction advances Freehold’s strategy of positioning itself in the highest quality development areas in North America, delivering attractive low-risk growth and returns to our shareholders.

The acquired assets were partially funded by a previously purchased bought deal financing whereby Freehold issued 19,067,000 subscription receipts (the subscription receipts) at a price of $ 9.05 per subscription receipt for gross proceeds of approximately $ 173 million, which included the full exercise of the over-allotment. option granted to the underwriters.

Upon closing of the US royalty transaction, the net proceeds from the sale of the subscription receipts were placed in escrow at Freehold to partially fund the purchase price of the acquired assets, the remainder of the purchase price. being funded by drawdown on Freehold’s credit facilities. In addition, following the closing of the US Royalty Transaction and in accordance with the terms of the Subscription Receipts, each Subscription Receipt was exchanged for one Common Share of Freehold. Trading in the subscription receipts on the Toronto Stock Exchange is expected to cease today and the subscription receipts to be delisted after the close of trading today.

Following the exchange of Subscription Receipts for Common Shares of Freehold, former holders of Subscription Receipts will be entitled to receive the dividend which will be paid to registered holders of Common Shares on September 30, 2021 (provided that ‘they did not transfer the ordinary shares before that date) with a payment occurring on October 15, 2021.

Increase in credit facility
Concurrent with the closing of the U.S. royalty transaction, Freehold amended its credit facility agreement with a syndicate of four Canadian banks, increasing the committed revolving facility to $ 285 million and maintaining the operating facility at $ 15 million. millions of dollars. The amended credit facility agreement includes an authorized increase in the committed revolving facility of up to $ 360 million. The committed revolving and operational facilities expire on September 28, 2024.

As previously announced, after giving effect to the royalty transaction in the United States, Freehold forecasts a production forecast range for 2022 of 13,500 to 14,500 boe / d, with the midpoint representing a 26% increase over Q2-2021 average production volumes.

Freehold’s common stock trades on the Toronto Stock Exchange in Canada under the symbol FRU.

Forward-looking statements

This press release sets out our assessment of Freehold’s future plans and activities as at September 24, 2021 and contains forward-looking information, including, without limitation, forward-looking information regarding Freehold’s expectations that the assets acquired will significantly improve the quality. from the northern Freehold area. US royalty portfolio, enhancing both the short- and long-term sustainability of Freehold’s dividend while providing additional option value to return capital to our shareholders through several years of free cash flow growth; the expectation that the U.S. royalty transaction will advance Freehold’s strategy of positioning itself in the highest quality development areas in North America, providing attractive low-risk growth and returns for our customers. shareholders; and Freehold’s average royalty production forecast for 2022.

This forward-looking information is provided to provide readers with a better understanding of our business and outlook and may not be suitable for other purposes. By its nature, forward-looking information is subject to many risks and uncertainties, some of which are beyond our control, including the impact of the COVID-19 pandemic on economic activity and demand for oil and natural gas. , general economic conditions, industry conditions, raw material price volatility, currency fluctuations, imprecision of reserve estimates, royalties, environmental risks, taxation, regulations, changes in tax or other legislation, competition from other industry players, lack of availability of qualified personnel or management, stock market volatility, our ability to access sufficient capital from internal and external sources and other risks associated with Freehold’s business, as further described in detail in Freehold’s annual information form for the year ended December 31, 2020, which is available under Freehold’s profile on r SEDAR at www.sedar. com.

With respect to the forward-looking information contained in this press release, we have made assumptions regarding, among other things: future prices of oil and natural gas; future exchange rates; that unfinished drilled wells will be completed in the short term and brought into production; that wells associated with the acquired assets that have been authorized will be drilled and completed within a customary time frame; expectations for additional wells that will be licensed, drilled, completed and brought into production in 2021 and 2022 based on Freehold’s review of the geology and economics of the areas in which Freehold has an interest; expected production performance of the wells to be drilled and / or brought into production in 2021 and 2022; the ability of our royalty payers to obtain materials in a timely manner to complete development activities; the ability and willingness of royalty payers to finance development activities; and other assumptions as identified herein. You are cautioned that the assumptions used in the preparation of this information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, one should not place undue reliance on forward-looking information. We cannot guarantee that any of the anticipated events will or will occur, or if any of them occur, what benefit we will derive from them.

The forward-looking information contained in this document is expressly qualified by this cautionary statement. Our policy to update forward-looking statements is to update our key operating assumptions on a quarterly basis and, except as required by law, we do not undertake to update any other forward-looking statements.

For more information, contact:
Freehold Royalties Ltd.
Matt Donohue
Manager, Investor Relations and Capital Markets
t. 403.221.0833
F. 403.221.0888
tf. 1.888.257.1873
e. mdonohue@rife.com
w. www.freeholdroyalties.com

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