PrairieSky Royalty Ltd.

Good day and welcome to Prairie Sky Realty Limited announced the first quarter 2020 cloud financial results. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Andrew Phillips, President and CEO. Please go ahead.

Thank you, Michelle, and good morning, everyone, and thank you for dialing in to the Prairie Sky Q1 2025 conference call. On the call from Prairie Sky are Pam Cazell, Dan Bertram, Mike Murphy, and myself, Andrew Phillips. Before we begin, there's certain forward-looking information and statements in our commentary today, so I'd ask listeners and investors to review the forward-looking statements qualifier in our press release in MD&A, which can be found on our website. Prairie Sky achieved record oil volumes of 13,502 barrels per day of net royalty production in the first quarter of 2025. Over 200 wells were spud in Q1, an increase of 26 wells from the same period in 2024. The average royalty rate on these new wells was 6.9% versus 6% last year. 52 new leases with 39 counterparties were signed, generating $5 million in lease issuance bonus. Notably in the quarter, we closed the Petro-Canada fee title package in southeast Saskatchewan for $50 million. This asset is only 20% leased, which represents an opportunity for the team to lease the asset and achieve leasing percentage similar to our corporate average. We also acquired 3.4 million Prairie Sky shares prior to the 26 cent dividend, giving remaining shareholders an additional 1.4% interest in the business. We view this as an acquisition of 259,000 royalty acres in the best parts of the basin. We have also quietly added well over 100,000 acres of oil sands leases over a three-year period, well below where current values sit at Crown land auctions. This has added years of new economic drilling inventory on a two to three times recycle ratio heavy oil asset. Subsequent to quarter end, oil prices have declined and there has been significant market volatility. Our well-capitalized counterparties and strong balance sheet will allow us to be resilient and take advantage of further disconnects in value. There's an advantage to owning hard assets with long duration profiles at all parts of the cycle. With decades of economic inventory and 98% operating margins, short-term price swings both up and down have less of an effect on Prairie Sky's value. Our investor day is on May 14th in Calgary at the Brookfield Building and will be available via webcast as well. We will publish our new royalty asset book, which details known asset values based on today's discovered resource. We will also provide owners with a range of outcomes for the next 10 years. Thank you to our investors for their support and our employees for their continued execution and hard work. I'll now turn the call over to Pam to walk through the financials.

Thank you, Andrew. Good morning, everyone. Prairie Sky's royalty production averaged 25,339 BOE per day in the quarter. Our percentage of liquids royalty production has been steadily climbing over the last three years from 58% in Q1 2022 to 63% today. It was another record quarter of oil royalty production, which averaged 13,502 barrels per day and included 177 barrels per day of production from our $50 million acquisition of Fee Lands and Gore Intra that closed on January 10th. As Andrew mentioned, it was an active quarter with 200 spuds in our lands at an average rate of 6.9%. Activity was focused in the Clearwater, Duvernay, and Manville heavy and light oil plays. We've seen a decline in natural gas volumes, which averaged 55.9 million a day as compared to Q1 2024. Q1 2025 volumes included an estimate of cold weather downtime in the quarter of 1.1 million a day. There were 14 natural gas wells spud in the quarter, primarily in the Montmey, which we anticipate will come on production later in the year. Juvenile and Viking wells will also provide incremental solution gas volumes. Royalty production revenue totaled $119.9 million and was 93% from liquids. With narrowed heavy oil differentials, our realized price for oil increased to 87% of Edmonton from 84% in Q1 2024. Other revenue totaled $8.2 million and included $5 million of bonus consideration. Leasing was primarily focused in the DuVernay Light Oil and Manville Heavy Oil Plays. During the quarter, Prairie Skies funds from operations totaled $85.8 million, and we declared dividends of $61.2 million, or $0.26 per share, with a resulting payout ratio of 71%. We repurchased and canceled 3.4 million shares in the quarter for $90 million. Our current NCIB expires in early June, and we intend to apply to the TSX to renew it. Prairie Sky's balance sheet remains strong with net debt at March 31st of $258.8 million. We will now turn it over to the moderator to proceed with the Q&A.