Freehold Royalties Ltd. Announces Cost Reductions and Adjusts Dividend for April 2020

CALGARY, Alberta, April 09, 2020 (GLOBE NEWSWIRE) -- Reflecting sustained weakness in crude oil prices, Freehold Royalties Ltd. (Freehold) (TSX:FRU) announces that its Board of Directors (the a??Boarda??) has declared a dividend of Cdn. $0.015 per common share to be paid on May 15, 2020 to shareholders of record on April 30, 2020, which is reduced from the previous monthly dividend level of Cdn.$0.0525.
At the revised dividend level, Freeholda??s funds from operations are forecast to exceed dividend outflows for the remainder of 2020 and remain positioned at or below the low end of our payout range of 60%-80%. Adjusting the dividend at this time, preserves the strength of our balance sheet and enhances optionality to pursue value enhancing acquisitions for our shareholders as they are presented.Reinforcing the alignment with the shareholders of Freehold, the employees of Rife Resources Ltd. will be subject to graduated salary reductions based on level of seniority with the Chief Executive Officera??s salary and benefits reduced by 15%. Annual retainers for members of the Board will also be reduced by 15%. Collectively, general and administrative (G&A) expenses are projected to be reduced by 21% for the remainder of 2020. The reduction in G&A is the result of a detailed review reflecting not only reductions in salaries and Board fees, but all categories within G&A, including travel, software spending, contract rates and consulting fees.The current outlook for oil prices remains challenged. The COVID-19 pandemic has crippled global demand for crude oil, with no immediate relief on the horizon. Coupled with this weakened demand environment, supply has not been curtailed to balance the market, creating a historic low period for prices. While the near-term outlook for crude oil remains challenged, the Board and Management remain confident that the underlying price environment will slowly improve, with the expectation we will remain within our dividend payout strategy as funds from operations improve.Freehold also believes that with the change in the underlying business environment, including the potential for increases in shut-in production and future regulatory production curtailments, its previously released 2020 guidance is no longer applicable and is therefore withdrawing all previous guidance. We expect to provide a revised update on our 2020 forecasts at a time of increased stability associated with the commodity price environment and our royalty payors capital programs.
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