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Operator: Good day, and thank you for standing by. Welcome to the Freehold Royalties Third Quarter 2025 Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, David Spyker, President and CEO. Please go ahead.
David Spyker: Good morning, everyone, and thank you for joining us today. On the call with me is Rob King, our COO; Shaina Morihira, our CFO; and Todd McBride, our Manager of Investor Relations. So before we get started, I just want to advise everyone that certain statements on this call are considered as forward-looking information, and we caution the listener to review the advisory on forward-looking statements in the news release and MD&A found on our website. So for the quarter, we achieved production of 16,054 BOE a day with a liquids weighting of 65%. This represents a production increase of 10% from Q3 2024, reflecting the contribution from our Permian Basin acquisition in late 2024, in addition to continued drilling activity across our asset base. With the acquisition work, we have shifted to a much more balanced portfolio where 45% of our production in the first 9 months of 2025 is from the U.S., now representing 53% of our revenue. This is a material shift from the first 9 months of 2024, where 36% of our production was in the U.S. This balanced approach allows us to take advantage of stronger U.S. pricing with a realized oil price of $93.25 a barrel for the first 9 months of the year compared to $79.03 a barrel for our Canadian oil. It is a similar story on the natural gas side, where U.S. realized pricing was $2.72 an Mcf over the same period, twice that of our Canadian gas price of $1.34 an Mcf. So with a liquids-weighted North American portfolio, we're delivering best-in-class operating margins. In Canada, our heavy oil production grew 13% compared to the same quarter last year as producers continue to actively develop our lands in the Mannville heavy oil and Clearwater plays. Drilling activity in Canada picked up after spring breakup with 83 wells drilled this quarter. In addition to the heavy oil drilling, we are seeing an uptick in drilling activity related to the Belly River, Cardium and the light oil and liquids-rich Mannville section in Western Alberta. A number of our operators are having success in these plays with horizontal drilling applications. On the gas side, we see production down 6% compared to the third quarter of 2024, as the weaker gas pricing in Canada, it was $0.63 an Mcf AECO in the third quarter has kept gas-directed drilling rigs on the sidelines. As we head into winter with a stronger Canadian gas price outlook, we are seeing licensing activity and drilling activity pick up. Drilling activity on our U.S. lands continues to be concentrated in the Permian Basin with 92% of the quarter's activity focused there. Activity has been steady year-over-year as our large investment-grade payers such as ExxonMobil continue to execute their capital programs. ExxonMobil plans to grow their Permian production from about 1.6 million oil equivalent barrels daily to 2.3 million by 2030. Given Freehold's mineral title position in the Permian, this would reflect approximately 800 BOE per day growth from our ExxonMobil-operated lands, which is approximately a 20% increase from our current overall Permian production levels. This quarter, we have 4 large well pads, 63 gross wells in total on those 4 pads drilled in the Permian and all currently in various stages of completion. These large pads are operated by investment-grade operators and are a good reminder of the scale and scope of drilling and completion operations in the Permian. In the Eagle Ford Basin, as we've seen in previous years, production was lower quarter-over-quarter due to timing of drilling activity from our largest payer, ConocoPhillips. Exciting things that is going on in the U.S. right now is that we're seeing considerable infrastructure build-out underway to improve gas takeaway capacity out of the Permian Basin to feed the rapidly expanding Gulf Coast LNG export capacity and data center growth. Gas production from the Permian is growing at a faster pace than any other U.S. basin with the next phase of pipeline expansion expected to be in service late next year. Freehold has 11 million cubic feet a day of gas production in the U.S. and is well positioned to participate in the ramp-up of gas required to feed LNG demand and the data center power requirements. In support of the strong leasing activity we've seen year-to-date, particularly in the U.S., we just had a 4-well pad permitted on one of those leases, targeting the deeper Barnett Shale in the Permian, as operators continue to look to unlock the multiple reservoir benches in this resource-rich basin. Both sides of the border, we're seeing operators focusing on optimizing well placement in the reservoir, advancing drilling efficiencies and lateral lengths and enhancing completion designs. We continue to see a shift to longer horizontal wells in the U.S. with our average horizontal well length increasing 12% year-over-year. In 2025, almost 40% of the wells drilled on Freehold's lands in the Midland Basin are 3 miles or longer compared to only 30% in 2024. These continued improvements in accessing the reservoir have resulted in a 15% improvement on average production rates when compared to last year's averages. Similarly, in Canada, average well performance is up 25% compared to 2024 across our lands. So turning to our financial results. We generated $59 million of funds from operations in Q3 2025 or $0.36 a share. With this funds flow, we paid $44 million in dividends to our shareholders, we reduced our long-term debt by $9 million and we invested $5.8 million in acquisitions focused on purchasing undeveloped lands in the Permian Basin and select Western Canadian operating areas. Freehold continues to advance its ground game strategy of acquiring mineral title lands in the U.S. ahead of the drill bit. This approach enables us to acquire lands that are held in perpetuity in areas that have significant undeveloped resource and drilling inventory. On the Canadian side, we continue to partner with talented technical teams to fund their drilling programs in exchange for a royalty and a drilling commitment. So our portfolio offers investors exposure to the premier oil and gas basins across North America, including our growing heavy oil segment in Northern Alberta, the lighter oil plays in Southeast Saskatchewan, exposure to Gulf Coast pricing with our Eagle Ford assets and the growing light oil and natural gas production contribution from the Permian. Our U.S. portfolio is driving 33% higher pricing when compared to our Canadian asset base, benefiting from light sweet oil production, close to markets and strong U.S. natural gas pricing supported by the aforementioned LNG build-out and growing demand for natural gas-fired power generation to feed data centers. We continue to deliver a monthly dividend of $0.09 per share with a payout ratio of 72% through the first 9 months of 2025 and sustainable to prolonged USD 50 WTI price levels. So with that, we're pleased to take your questions. Thank you.
Operator: [Operator Instructions] And I have a question. Our first question will be coming from Jamie Kubik of CIBC.
James Kubik: I just had a couple of questions for you on the U.S. business. It looked like net drilling was down year-on-year despite the increase in asset heft, I suppose, after the acquisition that you completed last year. Can you just talk about some of the nuances in that? And then can you also talk about the NGL volumes in the U.S., what you're seeing on that side? It looked like a pretty big number again this quarter.
Robert King: Jamie, it's Rob here. I'll answer the first part, and Shaina will answer the second part. So on our U.S. drilling in Q3, I think a lot of it was probably more related to our Eagle Ford asset. When we look at our Permian drilling, which was clearly the key focus of our acquisition activity in 2024, that we've sort of certainly seen the expectation in the drilling results sort of in line with, say, what our expectations were. On the Eagle Ford side, that's probably more of a timing issue that we've observed with our key payer in the Eagle Ford being ConocoPhillips in that activity that we expected to see in Q3 looks like it's been pushed into Q4. And then on the NGL question, Shaina will touch on that.
Shaina Morihira: It's Shaina. So just a little more color around the NGL volumes that we are seeing. So we have seen an increase in the NGL yields that we're recognizing on some of those 2024 acquisitions. The challenge is the timing of when we get recognized by some of our operators for those assets. So there is a bit of a lag in the U.S. compared to what we would see here in Canada. So we did have some adjustments that came through tied to those higher NGL yields. We're not expecting that to continue going forward, as we trued up a lot of those balances in the third quarter.
James Kubik: Okay. And then maybe a bit of a different question here. But can you just talk about the capacity increase in your credit facility? What you look to do with the increased capacity, and how you're thinking about capital allocation here?
Shaina Morihira: Sure. So I can take that one, Jamie. So yes, we did increase our existing credit facility to $500 million from $450 million, just to provide greater financial flexibility. We still plan to live within cash flow, but I think having that extra capacity makes sense for Freehold. We also extended the credit facility by a year to a tenure to November of 2028. So I feel that it gives us options, and as I said, that additional kind of financial flexibility going forward.
James Kubik: Okay. And then maybe last one from me is just on the NCIB. I didn't see any activity from Freehold in the quarter. How are you thinking about that capital allocation option going ahead?
Shaina Morihira: Sure. I could take that one as well. So I think, first and foremost, we are -- we remain committed to our current dividend. And so we see that as being sustainable kind of through a prolonged USD 50-barrel environment. So with the lower commodity prices, we have increased our payout ratio, so sitting around 72% year-to-date. So that does exceed our target dividend payout ratio of 60%. However, we still believe kind of under mid-cycle pricing, 60% remains competitive. So in terms of alternate uses of capital for the available funds from operations, we continue to be excited about our Permian ground game and other Canadian opportunities where we can get kind of high-teen, low-20 return. So in terms of the NCIB, it continues to remain in place as an option, but it is a tool available to us, not something we've initiated on at this point.
Operator: And I'm showing no further questions at this time. I would like to turn the call back to Dave for closing remarks.
David Spyker: Okay. Well, thank you all for joining our call today and allowing us to share with you our enthusiasm for business and all the things that we have going on in our business today. So thanks again, and have a good weekend.
Operator: And this concludes today's program. Thank you for participating. You may now disconnect.