PrairieSky Royalty (TSX:PSK) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Access the full call at https://edge.media-server.com/mmc/p/tegjt8ik
Summary
PrairieSky Royalty reported Q1 2026 funds from operations of $94.9 million, reflecting an 11% increase from the previous year due to higher production and stronger bonus consideration.
Total production grew by 4% year-over-year, with oil production increasing by 2% and record highs in condensate and pentane production as part of the NGL stream.
The company entered into 48 new leasing arrangements, which contributed to elevated bonus consideration, and anticipates reducing debt levels significantly by the end of 2026.
The Duvernay and Clearwater plays continue to drive production growth, with Duvernay expected to be the fastest growing play in 2026.
PrairieSky Royalty declared Q1 dividends of $61.6 million, corresponding to a 65% payout ratio, and announced a second quarter dividend of 26.5 cents per share.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the PrairieSky Royalty First Quarter 2026 Financial Results Conference Call At this time, all participants are in a listen-only mode. After the speaker’s presentation there will be a question and answer session. To ask a question during the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised to withdraw your question. Please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Andrew Phillips, President and CEO. Please go ahead.
Andrew Phillips (President and CEO)
Thank you. Daniel Good morning and thank you for dialing into the PSK Q1 2026 conference call. On the call from PSK are Pam Cazale, Dan Bertram, Mike Murphy and myself Andrew Phillips. Before we begin, there is 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 and MD&A which can be found on our website. Funds from operations totaled 94.9 million, an 11% increase from Q1 2025 resulting from higher production and stronger bonus consideration. Total production grew 4% from Q1 of 2025 with oil production showing 2% growth year over year. Condensate and pentane production reported as part of the NGL stream remains at record highs for PrairieSky at approximately 35% of the NGL stream. Elevated bonus consideration was the result of 48 new leasing arrangements with 37 distinct oil and gas companies. Given the lower rig count year over year, we are pleased with the 201 Spuds on PrairieSky lands versus the 200 in prior year. With the increased pricing for oil and a continued weak Canadian dollar, we are observing early indications of higher planned activity levels post breakup. Based on strip pricing, we’re anticipating a material reduction in debt levels by the end of 2026. A number of our recent leasing arrangements are for exploration rather than pure development, which is a positive trend. Rising capital cycles can help unlock the vast optionality inherent in an 18.6 million acre land base. In addition to this, more operators in the Clearwater are exploring for oil up and down hole where they already have an existing producing horizon. We expect this will unlock numerous new developments over the next 10 years. With the current development inventory on land, we can replace the approximate 9.5 million barrels of royalty production on our lands for 61 years. New discoveries have the potential to unlock more inventory. I will now turn the call to Mike to further discuss activity on our lands.
Mike Murphy
Thanks Andrew The first quarter saw a record number of Duvernay wells spud at 26, including 20 in the West Shale Basin. First West Shale completions from this program are currently underway with new wells expected to be on production starting in mid May and driving light oil growth through the back half of …
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