Topic: How To Invest

Spinoffs & Takeovers Hotline – Friday, July 7, 2023

Article Excerpt

FREEHOLD ROYALTIES LTD., $13.68, symbol FRU on Toronto, holds the oil and natural gas rights on 6.4 million acres of land, mostly in Alberta and Saskatchewan, but also in British Columbia, Manitoba and Ontario. It has 900,000 acres of land in North Dakota, Louisiana and Texas. The company collects royalties from over 380 oil and gas producers operating over 18,000 wells on its land. It also holds royalty interests in eight potash mines in Saskatchewan. As a royalty interest owner, Freehold does not pay any of the capital costs to drill, complete and equip the wells for production on its properties, nor does it incur costs to operate the wells, maintain production, or ultimately abandon the wells and restore the land to its original state. All of these costs are paid by its royalty payors. Freehold receives royalty income from gross production revenue (revenue before any royalty expenses and operating costs are deducted) resulting in strong returns. In the three months ended March…