Freehold Royalties Ltd. Enters Into Agreement to Acquire Royalty Production and Mineral Title Lands

Freehold Royalties Ltd. Enters Into Agreement to Acquire Royalty Production and 
Mineral Title Lands 
NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Freehold Royalties Ltd. 
TSX SYMBOL:  FRU 
APRIL 14, 2014 
Freehold Royalties Ltd. Enters Into Agreement to Acquire Royalty Production and
Mineral Title Lands 
CALGARY, ALBERTA--(Marketwired - April 14, 2014) - Freehold Royalties Ltd.
(Freehold) (TSX:FRU) announced it has entered into a purchase and sale
agreement to acquire royalty interests on certain producing and non-producing
lands in southeast Saskatchewan and Manitoba for approximately $111 million,
prior to normal closing adjustments. The effective date of the transaction is
January 1, 2014, with closing expected to occur on or about May 2, 2014,
subject to regulatory approval. Total proceeds associated with the purchase and
sale agreement will be funded through Freehold's existing bank credit
line. The acquisition further adds to Freehold's land position within
southeast Saskatchewan while enhancing the company's near-term growth
profile. Based on the outlined transaction price, the deal is accretive both on
a debt and equity-adjusted basis.  
In addition, as part of the proposed transaction, Canpar Holdings Ltd., a
wholly-owned subsidiary of CN Pension Trust Funds, has also agreed to purchase
from the Vendor certain undeveloped mineral title lands for approximately $30
million.  
Acquisition Highlights: 
/T/ 
--  2013 average production of 470 barrels of oil equivalent (boe) per day 
(99% oil weighted), from over 400 producing wells. Revenue is derived 
from a combination of Lessor Royalties and Non-Convertible Overriding 
Royalties, offering Freehold enhanced netbacks. 
--  2013 net operating income of $15.0 million. 
--  Increased land exposure comprised of 71,700 acres of Mineral Title 
Lands. This includes 15,200 acres of developed, 42,000 acres of unleased 
undeveloped and 29,300 acres of leased undeveloped currently not tied 
with production (acreage in certain lands may be included in both 
developed and undeveloped acreage counts due to zonal development with 
balance of rights being undeveloped). 
--  Proved plus probable reserves of approximately 1.5 million boe, based on 
an independent engineering report prepared by Trimble Engineering 
Associates Ltd. as of December 31, 2013. 
--  37 gross new wells drilled within the acquired acreage through 2013. 
--  The acquisition also provides Freehold exposure to:  
--  A stable oil weighted revenue stream.  
--  The ability to grow royalty volumes through future year drilling 
programs.  
--  Increased percentage of mineral title ownership relative to 
Freehold's existing acreage.
--  Upon closing, Freehold estimates 2014 year-end net debt of approximately 
$140-$145 million (which would leave $65-$70 million in available 
capacity on our existing credit line), while implying approximately 1.0 
times debt to funds flow (based on guidance provided in our fourth 
quarter news release). 
/T/ 
After completing the transaction, we expect to increase our production guidance
for 2014 by 6% to 9,100 boe per day; all other operating assumptions (provided
in our fourth quarter news release) remain unchanged. As we have in the past,
we expect to update shareholders on 2014 guidance for other key operating
assumptions when we release our first quarter results, after market May 14,
2014. 
Cautionary Statement Regarding Forward-Looking Information - This news release
offers our assessment of Freehold's future plans and operations as at
April 14, 2014 and contains forward-looking information including, as to the
expected completion of the acquisition and Freehold's expectations for
reserves, production, year-end debt and future prospects on the acquired lands.
This forward-looking information is provided to allow readers to better
understand our business and prospects and may not be suitable for other
purposes. By its nature, forward-looking information is subject to numerous
risks and uncertainties, some of which are beyond our control, including the
impact of general economic conditions, industry conditions, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, taxation, royalties, regulation, competition from other
industry participants, the lack of availability of qualified personnel or
management, stock market volatility, and our ability to access sufficient
capital from internal and external sources. Risks are described in more detail
in Freehold's annual information form for the year ended December 31, 2013
which is available under Freehold's profile on SEDAR at www.sedar.com. 
With respect to forward looking information contained in this news release, we
have made assumptions regarding, among other things, future oil and natural gas
prices; future capital expenditure levels; future production levels; future
exchange rates; the costs of developing and producing our assets; our ability
and the ability of our lessees to obtain equipment in a timely manner to carry
out development activities; our expectation for industry drilling levels; and
our ability to obtain financing on acceptable terms. 
You are cautioned that the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking information. We can give no assurance that any of the events
anticipated will transpire or occur, or if any of them do, what benefits we
will derive from them. The forward-looking information contained herein is
expressly qualified by this cautionary statement. Except as required by law,
Freehold does not assume any obligation to publicly update or revise any
forward-looking information to reflect new events or circumstances. 
Conversion of Natural Gas To Barrels of Oil Equivalent (BOE) 
To provide a single unit of production for analytical purposes, natural gas
production and reserves volumes are converted mathematically to equivalent
barrels of oil (boe). We use the industry-accepted standard conversion of six
thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The
6:1 boe ratio is based on an energy equivalency conversion method primarily
applicable at the burner tip. It does not represent a value equivalency at the
wellhead and is not based on either energy content or current prices. While the
boe ratio is useful for comparative measures and observing trends, it does not
accurately reflect individual product values and might be misleading,
particularly if used in isolation. As well, given that the value ratio, based
on the current price of crude oil to natural gas, is significantly different
from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be
misleading as an indication of value. 
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FOR FURTHER INFORMATION PLEASE CONTACT: 
Freehold Royalties Ltd.
Matt Donohue
Manager, Investor Relations
403.221.0833 or tf. 1.888.257.1873
403.221.0888
mdonohue@rife.com 
INDUSTRY:  Energy and Utilities - Oil and Gas  
SUBJECT:  RLE 
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-0- Apr/14/2014 23:35 GMT
 
 
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