Freehold Takes ORRI In Alberta, British Columbia, Saskatchewan Acres

Acquired 4% contractually ORRI in lands on more than 250,000 gross acres in AB, BC & SK, featuring more than 400 wells & targeting Alberta Deep Basin, Montney shale & other properties, gaining approximately 530 BOE/d, 2.1 MMBOE 2P.

Freehold Royalties Ltd., Calgary, (Toronto: FRU) has closed the acquisition of royalty interests on certain producing and nonproducing lands in Alberta, British Columbia, and Saskatchewan from an undisclosed seller for C$49.6 million.

The deal values production at C$93,146 per barrel equivalent per day and proved and probable reserves at C$16.06 per barrel equivalent, according to Freehold.

The assets include an average 4% contractual gross overriding royalty on more than 250,000 gross acres (including more than 51,000 undeveloped acres valued at C$1.3 million). The properties feature exposure to the Alberta Deep Basin, the British Columbia Montney and a diversified package of smaller properties, primarily in Alberta, with a variety of producing formations and play types.

Upside in the Alberta Deep Basin includes future growth potential from multiple zone gas development that utilizes both vertical and horizontal wells. The British Columbia Montney features long-life gas production from horizontal well development with significant future potential.

Royalty production is approximately 530 barrels of oil equivalent per day for the remainder of 2012 (90% gas) from more than 400 producing wells. Proved and probable reserves as of Nov. 30, 2011 were 2.1 million barrels equivalent.

Freehold funded the deal through its existing bank line of credit.