PrairieSky Announces Third Quarter 2026 Results

Andrew Phillips, President & CEO of PrairieSky Royalty Ltd.

“PrairieSky's quarterly funds from operations totaled $127.9 million, 42% higher than Q3 2025, driven by liquids royalty production growth and strong US-denominated WTI benchmark pricing which averaged $85.79 per barrel. Oil royalty production averaged 14,739 barrels per day, a 4% increase over Q3 2025, and generated $135.8 million in oil royalty production revenue. The Clearwater, Mannville Stack and West Shale Duvernay drove royalty production growth in the quarter and continue to be amongst the most active plays for third-party operators on our royalty properties. Average NGL royalty production of 2,647 barrels per day increased 20% over Q3 2025 and average natural gas royalty production of 57.3 MMcf per day increased 2% over Q3 2025. Continued strength in NGL royalty production volumes was a result of Montney and Duvernay activity. Total royalty production averaged 26,936 BOE per day, an increase of 1,249 BOE per day over Q3 2025, and generated total royalty production revenue of $153.4 million. Clearwater heavy oil royalty production averaged over 3,200 barrels per day in the quarter, an increase of 25% over Q3 2025. With elevated levels of third-party activity and an estimated 60% of production supported by waterflood operations mitigating declines in the play, we anticipate continued growth in royalty production into 2027. Activity in the Mannville Stack play included a record 25 well spuds in the quarter, with heavy oil royalty production averaging more than 1,150 barrels per day, up 41% over Q3 2025. YTD 2026, multilateral drilling on our royalty lands continues to be strong with an estimated 208 spuds as compared to 205 spuds in YTD 2025. YTD 2026 Duvernay royalty production has increased 37% over YTD 2025 to average approximately 1,500 BOE per day as new well pads came on production. Oil royalty production volumes were also positively impacted with the ramp-up of thermal oil volumes in the quarter. Leasing activity remained elevated in the quarter as third-party operators continue to add acreage to their drilling inventories. PrairieSky entered into 49 new leasing arrangements with 41 separate counterparties in the quarter earning bonus consideration of $7.9 million and bringing YTD 2026 bonus consideration to $26.6 million. Third-party operators spud 230 wells on PrairieSky royalty properties in Q3 2026 with an average royalty rate of 6.5% (Q3 2025 - 5.1%). Drilling activity spanned across PrairieSky’s core growth plays and extended across light oil plays and liquids-rich natural gas plays. There were 30 Duvernay wells spud in the quarter bringing YTD 2026 spuds to 81 wells as compared to 46 in YTD 2025. A number of these wells are expected to be completed post year-end 2026, positioning PrairieSky for continued royalty production growth into 2027. PrairieSky generated funds from operations of $127.9 million ($0.55 per share) in Q3 2026. PrairieSky declared a dividend of $0.265 per share or $61.6 million, representing a payout ratio of 48%, during Q3 2026 and completed complementary acquisitions totaling $1.0 million for incremental royalty interests targeting heavy oil. Funds from operations after payment of the dividend and acquisitions were directed toward reducing net debt. Net debt has decreased by $153.5 million or 56% during YTD 2026 and totaled $123.0 million at September 30, 2026. We were pleased with the level of third-party leasing and drilling activity on our royalty properties during the quarter and anticipate this momentum to continue throughout the remainder of the year and into 2027. I would like to thank our shareholders for their support and our staff for their continued efforts.”