Freehold said the transaction is accretive to present and future cash flow per share, free cash flow per share and total production and oil production per share. (Source: Shutterstock/ Freehold Royalties)
Calgary, Alberta-based Freehold Royalties has closed on a transaction for Midland Basin mineral and royalty interests for at CA$259 million (US$182 million), up from the original price tag of US$152 million.
The acquisition from a private seller includes 1,500 boe/d to 1,600 boe/d of light oil weighted production (~950 bbl/d oil), Freehold said. The company said it expects approximately CA$37MM (US$26 million) in 2025 of net royalty income at US$70/bbl WTI prices.
Freehold said the transaction is accretive to present and future cash flow per share, free cash flow per share and total production and oil production per share.
The company said about 95% of the production is operated by Exxon Mobil Corp. and Diamondback Energy, where 16 rigs are currently active on the acquired assets.
In connection with the acquisition, Freehold increased its credit facilities by CA$50 million (US$35.13 million) to CA$450 million (US$316.18 million). The committed revolving credit facility increased from CA$380 million (US$267 million) to CA$430 million (US$302 million) while the operating facility remained unchanged at CA$20 million (US$14 million).
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