Supply Rock Royalties Declares Month-to-month Dividend

Unaudited ⁽¹⁾ annual outcomes for fiscal 2023 had been:

Royalty Manufacturing – 208 boe/d (93% oil & NGLs)
Royalty Income – $6.6 million

As well as, for fiscal 2023 Supply Rock additionally benefited from 12 boe/d (100% oil & NGLs) of manufacturing from newly acquired property, and roughly $0.4 million of royalty income referring to such manufacturing, which was accounted for as a purchase order value adjustment.

Unaudited ⁽¹⁾ outcomes for This fall 2023 had been:

Royalty Manufacturing – 218 boe/d (94% oil & NGLs)
Royalty Income – $1.7 million

As well as, for This fall 2023 Supply Rock additionally benefited from 29 boe/d (100% oil & NGLs) of manufacturing from newly acquired property, and roughly 0.2 million of royalty income referring to such manufacturing, which was accounted for as a purchase order value adjustment.

Royalty manufacturing averaged 243 boe/d (95% oil & NGLs) in December 2023 .

Audited Annual and This fall 2023 Monetary Statements and Administration Dialogue and Evaluation, in addition to oil and gasoline reserves data as of December 31, 2023 , will probably be filed on SEDAR+ ( www.sedarplus.ca ) and introduced by information launch on or earlier than April 29, 2024 .

President’s Message

2023 was a transformational yr for Supply Rock. We followed-up on our November 2022 S.E. Saskatchewan acquisition for $3.5 million with three further royalty acquisitions in central Alberta and S.E. Saskatchewan . In whole, $13 million was deployed in 2023 and $16.5 million of acquisitions have been accomplished since our IPO in March 2022 . These acquisitions grew our royalty lands by roughly 100%, materially rising each Supply Rock’s current royalty manufacturing and our publicity to undeveloped drill areas.

Regardless of the expansion achieved, our company value construction didn’t improve materially, and our acquisitions plus the constant drilling exercise on our royalty lands led to robust monetary outcomes. This monetary power allowed us to transition to a month-to-month dividend and improve the dividend by 10% in April 2023 and a further 9% in October 2023 (for a 20% whole improve throughout the yr). Since our IPO at $0.90 per share, we now have paid $0.15 per share in dividends. Since 2014, we now have paid cumulative dividends of $16.9 million .

Given the strong charges of return being achieved by sure operators on our oil centered royalty lands, we count on constant drilling exercise in 2024 on our newly acquired Clearwater royalty lands and periodic drilling of each improvement and exploration wells on parts of our S.E. Saskatchewan royalty lands. With expanded base manufacturing following our 2023 acquisitions and powerful drilling exercise throughout the yr, present oil costs present Supply Rock with robust base income from our current royalties.

Supply Rock’s working capital as of February 29, 2024 was roughly $2.2 million ( $0.05 per share), and we now have no debt or future monetary obligations referring to any of our property. 2023 was Supply Rock’s 11 ^th yr in enterprise, and the alternatives to develop our royalty companions, and develop and diversify our portfolio of oil royalties, stay very enticing. We proceed to determine and consider a number of potential royalty acquisitions and intend to execute on additional development in 2024. We’re centered on persevering with to construct a scalable and sustainable enterprise that maintains a excessive revenue margin and pristine stability sheet, and balances development with offering a powerful yield to shareholders.

Brad Docherty , President & CEO

Recap of Acquisitions & Updates

Clearwater , Alberta ( December 2023 Transaction)

Buy value: $8,000,000
Royalty lands: 60,800 acres (95 sections) of largely contiguous Clearwater lands in Central Alberta
Royalty fee: 1.5% gross overriding royalty (“GORR”) till cumulative royalty income acquired by Supply Rock equals the acquisition value, at which period the royalty fee reduces to 1.0%
Preliminary royalty manufacturing: ~40 bbl/d (100% heavy oil)
Drill dedication: 59 horizontal wells previous to June 30, 2026 (3 wells glad)

S.E. Saskatchewan ( June 2023 Transaction)

Buy value: $3,300,000
Royalty lands: 5,800 acres (9 sections) of land producing from the Frobisher formation
Royalty fee: 2% GORR & various payment title mineral pursuits in 320 gross acres of land
Preliminary royalty manufacturing: ~10 bbl/d (100% mild oil)
Drill dedication : 12 horizontal wells previous to Could 31, 2025 (totally glad in January 2024 )

Alberta Gentle Oil Waterflood Properties ( March 2023 Transaction)

Buy value: $1,600,000
Royalty lands: 15,000 acres (23 sections) of land in Central Alberta
Royalty fee: 5% GORR
Preliminary royalty manufacturing: ~20 bbl/d (100% mild oil)
Capital dedication: $3.2 million previous to December 31, 2024

S.E. Saskatchewan ( November 2022 Transaction)

Buy value: $3,500,000
Royalty lands: 6,400 acres (10 sections) of land producing from the Frobisher formation
Royalty fee: 2% GORR
Preliminary royalty manufacturing: ~10 bbl/d (100% mild oil)
Drill dedication: 15 horizontal wells previous to December 31, 2024 (totally glad in September 2023 )

Supply Rock is a pure-play oil and gasoline royalty firm with an current portfolio of oil royalty pursuits concentrated in southeast Saskatchewan , central Alberta and west-central Saskatchewan . Supply Rock targets a balanced development and yield enterprise mannequin, utilizing funds from operations to pursue accretive royalty acquisitions and to pay dividends. By leveraging its area of interest business relationships, Supply Rock identifies and acquires each current royalty pursuits and newly created royalties via collaboration with business companions. Supply Rock’s technique is premised on sustaining a low-cost company construction and reaching a sustainable and scalable enterprise, measured by rising funds from operations per share and sustaining a powerful netback on its royalty manufacturing.

(1) Unaudited Info: All monetary data contained on this information launch for the yr ended and fourth quarter of December 31, 2023, resembling royalty income, is predicated on estimated unaudited monetary data which has been disclosed in accordance with typically accepted accounting rules in Canada and has not been reviewed by Supply Rock’s auditor. These estimated outcomes are topic to vary upon completion of the audited monetary statements for the yr ended December 31, 2023, and adjustments could possibly be materials. Supply Rock anticipates submitting its audited monetary statements and associated administration’s dialogue and evaluation for the yr ended December 31, 2023 on SEDAR+ on or earlier than April 29, 2024.

Ahead-Trying Statements

This information launch consists of forward-looking statements and forward-looking data inside the that means of Canadian securities legal guidelines. Usually, however not at all times, forward-looking data could be recognized by means of phrases resembling “plans”, “is predicted”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (together with destructive and grammatical variations) of such phrases and phrases, or state that sure actions, occasions or outcomes “might”, “might”, “would”, “would possibly” or “will” be taken, happen or be achieved. Ahead-looking statements on this information launch embrace statements concerning Supply Rock’s dividend technique and the quantity and timing of future dividends (and the sustainability thereof), the potential for future drilling on Supply Rock’s royalty lands, expectations concerning commodity costs, Supply Rock’s development technique and expectations with respect to future royalty acquisition and partnership alternatives, the power to finish such acquisitions and set up such partnerships, and the estimated prices for Supply Rock to run its enterprise. Such statements and data are primarily based on the present expectations of Supply Rock’s administration and are primarily based on assumptions and topic to dangers and uncertainties. Though Supply Rock’s administration believes that the assumptions underlying these statements and data are affordable, they might show to be incorrect. The forward-looking occasions and circumstances mentioned on this information launch might not happen by sure dates or in any respect and will differ materially on account of recognized and unknown danger elements and uncertainties affecting Supply Rock. Though Supply Rock has tried to determine vital elements that would trigger precise actions, occasions or outcomes to vary materially from these described in forward-looking statements and data, there could also be different elements that trigger actions, occasions or outcomes to vary from these anticipated, estimated or supposed. No forward-looking assertion or data could be assured. Besides as required by relevant securities legal guidelines, forward-looking statements and data converse solely as of the date on which they’re made and Supply Rock undertakes no obligation to publicly replace or revise any forward-looking assertion or data, whether or not on account of new data, future occasions or in any other case.

Neither the TSX Enterprise Change nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Change) accepts accountability for the adequacy of this launch.

SOURCE Supply Rock Royalties Ltd.