CALGARY, Alberta, July 15, 2024 (GLOBE NEWSWIRE) -- PrairieSky Royalty Ltd. ("PrairieSky" or the "Company") (TSX:PSK) is pleased to announce its second quarter ("Q2 2024") operating and financial results for the three-month period ended June 30, 2024. Second Quarter Highlights: Oil royalty production volumes averaged 13,312 barrels per day, another quarterly record, and a 6% increase over Q2 2023. Total royalty production averaged 25,320 BOE per day, an 8% increase over Q2 2023. Revenues totaled $135.6 million for Q2 2024, comprised of royalty production revenues of $125.5 million and other revenues of $10.1 million, including bonus consideration of $6.7 million earned on entering into 55 new leasing arrangements primarily targeting Mannville oil and Duvernay light oil. Generated funds from operations of $106.1 million ($0.44 per share, basic and diluted), a 16% increase over Q2 2023. Declared a second quarter dividend of $59.7 million ($0.25 per common share), representing a payout ratio of 56%, with excess cash flow allocated to $12.3 million of royalty acquisitions related primarily to exploration projects in the Mannville Stack and the balance to reducing net debt, which totaled $174.6 million as at June 30, 2024.   President's Message It was another strong quarter of leasing activity across PrairieSky's royalty properties as third-party operators look to expand their drilling inventory. During Q2 2024, PrairieSky entered into 55 new leasing arrangements with 46 different counterparties and generated $6.7 million in lease issuance bonus consideration. Leasing was most active in the Duvernay light oil play and Mannville oil plays in Alberta and Saskatchewan with incremental leasing across our lands. Year to date, leasing remains on pace with 2022 and 2023, PrairieSky's most active leasing years. During Q2 2024, there were 115 wells spud on PrairieSky's acreage at a net royalty rate of 6.6%, despite the rainy conditions and resulting impacts of seasonal spring break-up on third-party activity in the field. The lower spud count relative to Q2 2023 was offset by a higher average royalty rate and improved producer capital efficiencies resulting in strong royalty oil volume additions. Multilateral wells are having an increasing contribution to royalty production and have accounted for approximately 32% of wells drilled year to date in 2024, compared to 10% in 2019. The Clearwater oil play was particularly active with 42 wells spud and we continue to see early-stage success in waterfloods at Nipisi and Marten Hills. We anticipate waterfloods and polymer floods will lead to increased recoveries and lower declines at no incremental cost to PrairieSky. In addition, there were 23 Mannville heavy oil wells spud in Q2 2024 with activity focused in the Cold Lake area of Alberta. PrairieSky is also receiving an improved netback on heavy oil as the WCS differential narrowed, averaging US$13.60 per barrel in Q2 2024 versus US$19.33 per barrel in the first quarter of 2024, following completion of the Trans Mountain Pipeline expansion. Third-party operators in the Mannville Stack and Clearwater continue to execute on their drilling programs, providing strong growth in PrairieSky's oil royalty production. Oil royalty production reached 13,312 barrels per day, another record quarter, representing a 6% increase over Q2 2023 and a 1% increase over Q1 2024. Natural gas royalty production and NGL royalty production increased 8% and 19%, respectively, over Q2 2023 but were down from Q1 2024 as lower natural gas pricing has slowed third-party drilling activity on PrairieSky's lands year to date. Total royalty production averaged 25,320 BOE per day in Q2 2024, 8% ahead of Q2 2023 and 3% below Q1 2024. Year to date, PrairieSky's total average royalty production averaged 25,665 BOE per day, 6% ahead of the first half of 2023. Oil royalty production revenue totaled $111.1 million, representing 89% of total royalty production revenue of $125.5 million in Q2 2024. NGL royalty production revenue totaled $10.0 million in the quarter and natural gas royalty production revenue totaled $4.4 million due to continued weak natural gas benchmark pricing. Other revenues added $10.1 million bringing total revenues to $135.6 million in the quarter which drove funds from operations of $106.1 million or $0.44 per share (basic and diluted). PrairieSky declared a dividend of $0.25 per share or $59.7 million in the quarter with a resulting payout ratio of 56%. Excess funds from operations were used primarily to reduce PrairieSky's net debt which totaled $174.6 million at June 30, 2024, with $12.3 million used to acquire fee lands and gross overriding royalty interests that are complementary to PrairieSky's existing asset base and primarily targeting Mannville heavy oil. PrairieSky marked its 10 year anniversary on May 29, 2024. Over our first ten years we have worked to grow our royalty lands, tripling our land base during that time, with a focus on investing in low-cost oil plays which we believe will provide short, medium and long term growth in royalty production volumes and drive our future cash flows. We thank our staff who have worked hard to create a company we are all proud of and our shareholders for their support. We look forward to continuing to develop our differentiated business and believe we are well positioned to generate strong returns over the next decade and beyond. Andrew Phillips, President & CEO ACTIVITY ON PRAIRIESKY'S ROYALTY PROPERTIES Seasonal spring break-up results in a slow down in industry capital activity in Western Canada as melting snow and frost cause the ground to become soft and muddy leading to ensuing road bans and limiting lease access. As a result, third-party operator activity tends to slow down during the second quarter as compared to winter months. During Q2 2024, PrairieSky had 115 wells spud (96% oil wells) on its royalty acreage which included 57 wells on our GORR acreage, 52 wells on our Fee Lands, and 6 unit wells. There were a total of 110 oil wells spud during the quarter which included 42 Clearwater wells, 33 Mannville light and heavy oil wells, 14 Viking wells, 8 Mississippian wells and 13 additional oil wells spud in the Bakken, Belly River, Cardium, Duvernay and Triassic formations. There were 5 Mannville natural gas wells spud in Q2 2024. PrairieSky's average royalty rate for wells spud in Q2 2024 was 6.6% (Q2 2023 - 5.8%). AUTOMATIC SHARE PURCHASE PLAN PrairieSky intends to enter into an automatic share purchase plan ("ASPP") with its designated broker. The ASPP has been pre-cleared by the Toronto Stock Exchange (the "TSX") and is expected to be implemented no earlier than July 17, 2024. The ASPP is intended to facilitate repurchases of common shares at times under the Normal Course Issuer Bid ("NCIB") when the Company would ordinarily not be permitted to make purchases due to regulatory restriction or customary self-imposed blackout periods. Before the commencement of any particular trading black-out period, PrairieSky may, but is not required to, instruct its designated broker to make purchases of common shares under the NCIB during the ensuing black-out period in accordance with the terms of the ASPP. Such purchases will be determined by the designated broker at its sole discretion based on purchasing parameters set by PrairieSky in accordance with the rules of the TSX, applicable securities laws and the terms of the ASPP. The ASPP will terminate on the earliest of the date on which: (a) the maximum annual purchase limit under the NCIB has been reached; (b) the NCIB expires; or (c) PrairieSky terminates the ASPP in accordance with its terms. The ASPP constitutes an "automatic securities purchase plan" under applicable Canadian securities law. Outside of pre-determined blackout periods, common shares may be purchased under the NCIB based on management's discretion, in compliance with TSX rules and applicable securities laws. The Corporation's NCIB commenced on June 4, 2024, and will remain active until June 3, 2025, or such earlier date as the NCIB is completed or is terminated at PrairieSky's election. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. FINANCIAL AND OPERATIONAL INFORMATION The following table summarizes select operational and financial information of the Company for the periods noted. All dollar amounts are stated in Canadian dollars unless otherwise noted. A full version of PrairieSky's management's discussion and analysis ("MD&A") and unaudited interim condensed consolidated financial statements and notes thereto for the fiscal period ended June 30, 2024 is available on SEDAR+ at www.sedarplus.com and PrairieSky's website at www.prairiesky.com.               Three months ended   Six months ended     June 30   March 31   June 30   June 30   June 30 ($ millions, except per share or as otherwise noted)   2024   2024   2023   2024   2023 FINANCIAL                               Revenues   135.6     120.7     117.4     256.3     243.5                                   Funds from operations   106.1     83.0     91.3     189.1     177.6   Per share - basic and diluted(1)   0.44     0.35     0.38     0.79     0.74                                   Net earnings   60.3     47.5     48.0     107.8     104.8   Per share - basic and diluted(1)   0.25     0.20     0.20     0.45     0.44                                   Dividends declared(2)   59.7     59.7     57.3     119.4     114.6   Per share   0.25     0.25     0.24     0.50     0.48                                   Dividend payout ratio(3)   56%     72%     63%     63%     65%                                   Acquisitions - including non-cash consideration(4)   12.3     8.8     15.2     21.1     20.6   Net debt(5)   174.6     208.3     275.9     174.6     275.9