/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S./
CALGARY, AB, Aug. 31, 2026 /CNW/ -- Source Rock Royalties Ltd. ("Source Rock") (TSXV: SRR), a pure-play oil and gas royalty company with an established portfolio of oil focused royalties and Crown mineral leases, announces results for the three and six month periods ended June 30, 2026.
Second Quarter Highlights:
-- Record quarterly royalty revenue of $2,134,983, an increase of 40% over
Q2 2025.
-- Quarterly royalty production of 220 boe/d (94% oil and NGLs), a decrease
of 7% over Q2 2025.
-- Quarterly adjusted EBITDA(1) of $1,932,155 ($0.042 per share), an
increase of 49% over Q2 2025.
-- Quarterly funds from operations(1) of $1,623,372 ($0.036 per share), an
increase of 39% over Q2 2025.
-- Declared three monthly dividends of $0.0065 per share, resulting in a
payout ratio(1) of 55%.
-- Achieved an operating netback(1) of $96.51 per boe and a corporate
netback(1) of $81.09 per boe.
-- 8 gross new horizontal wells began producing on royalty lands in central
Alberta, all of which were Clearwater wells.
-- Acquired a 0.5% gross overriding royalty in producing lands in
Saskatchewan.
-- Acquired a 50% interest in 16.75 sections (10,720 acres) of Crown mineral
leases in Alberta for a purchase price of $402,073, increasing total
leases to 50.75 sections (32,480 acres).
-- Working capital(2) of $4,899,871 (0.11 per share) as at June 30, 2026,
compared to $4,567,435 (0.10 per share) as at March 31, 2026.
Year-to-date Highlights:
-- Royalty revenue of $3,440,390, an increase of 7% over the same period in
2025
-- Royalty production of 203 boe/d (93% oil and NGLs), a decrease of 13%
over the same period in 2025.
-- Adjusted EBITDA(1) of $2,951,766 ($0.065 per share), an increase of 7%
over the same period in 2025.
-- Funds from operations(1) of $2,555,631 ($0.056 per share), an increase of
4% over the same period in 2025.
-- Declared six monthly dividends of $0.0065 per share, resulting in a
payout ratio(1) of 70%.
-- 19 gross new horizontal wells began producing on royalty lands in central
Alberta (15) and S.E. Saskatchewan (4).
-- Acquired a 50% interest in 31.75 sections (20,320 acres) of Crown mineral
leases in Alberta for a purchase price of $698,621.
-- Sold a 50% interest in 2 sections (1,280) of Crown mineral leases for
$225,000 ($110,000 lease cost) and retained a 1.75% gross overriding
royalty in the lands.
-- Achieved an operating netback(1) of $80.33 per boe and a corporate
netback(1) of $69.55 per boe.
Financial and Operational Results
Three months ended June 30, Six months ended June 30,
FINANCIAL ($) 2026 2025 Change 2026 2025 Change
Royalty revenue 2,134,983 1,526,025 40 % 3,440,390 3,202,413 7 %
Adjusted
EBITDA(1) 1,932,155 1,299,095 49 % 2,951,766 2,759,535 7 %
Per share
(basic) 0.042 0.029 49 % 0.065 0.061 7 %
Funds from
operations(1) 1,623,372 1,168,154 39 % 2,555,631 2,460,369 4 %
Per share
(basic) 0.036 0.026 39 % 0.056 0.054 4 %
Total
comprehensive
income 873,950 201,716 333 % 1,224,304 557,097 120 %
Per share
(basic) 0.019 0.004 333 % 0.027 0.012 120 %
Per share
(diluted) 0.018 0.004 347 % 0.026 0.012 123 %
Dividends
declared 888,863 888,863 - 1,777,726 1,777,726 -
Per share
(basic) 0.0195 0.0195 - 0.039 0.039 -
Payout ratio(1)
(%) 55 % 76 % -28 % 70 % 72 % -3 %
Cash and cash
equivalents 4,086,350 5,158,312 -21 % 4,086,350 5,158,312 -21 %
Per share
(basic) 0.090 0.113 -21 % 0.090 0.113 -21 %
Average shares
outstanding
(basic) 45,582,727 45,582,727 - 45,582,727 45,582,727 -
Shares
outstanding
(end of period) 45,582,727 45,582,727 - 45,582,727 45,582,727 -
OPERATING
Average daily
production
(boe/d) 220 237 -7 % 203 234 -13 %
Percentage oil &
NGLs 94 % 93 % 1 % 93 % 93 % -
Average price
realizations
($/boe) 106.54 70.88 50 % 93.87 75.55 24 %
Operating
netback(1)
($/boe) 96.51 60.23 60 % 80.33 65.15 23 %
Corporate
netback(1)
($/boe) 81.09 54.16 50 % 69.55 58.09 20 %
(1) This is a non-GAAP financial measure or non-GAAP ratio.
Refer to the disclosure under the heading "Non-GAAP
Financial Measures & Ratios" for more information
on each non-GAAP financial measure or ratio.
(2) Working capital refers to "current assets" less "current
liabilities", as these terms are defined by Canadian
GAAP.
About Source Rock Royalties Ltd.
Source Rock is a pure-play oil and gas royalty company with an existing, oil focused portfolio of royalty interests concentrated in southeast Saskatchewan, central Alberta and west-central Saskatchewan, as well as ownership in oil sands and petroleum and natural gas leases in Alberta. Source Rock targets a balanced growth and yield business model, using funds from operations to pursue accretive royalty acquisitions and to pay dividends. By leveraging its niche industry relationships, Source Rock identifies and acquires both existing royalty interests and newly created royalties through collaboration with industry partners. Source Rock's strategy is premised on maintaining a low-cost corporate structure and achieving a sustainable and scalable business, measured by growing funds from operations per share and maintaining a strong netback on its royalty production.
Forward-Looking Statements
This news release includes forward-looking statements and forward-looking information within the meaning of Canadian securities laws. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative and grammatical variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements in this news release include statements regarding increased drilling activity on Source Rock's royalty lands given the higher oil price environment, including on Source Rock's Clearwater royalty lands, increased enhanced oil recovery activities on Source Rock's royalty lands given the higher oil price environment, including on Source Rock's Clearwater royalty lands, Source Rock's ability to complete additional royalty acquisitions in a high or low oil price environment, Source Rock's dividend strategy and the amount and timing of future dividends (and the sustainability thereof), expectations regarding commodity prices, Source Rock's growth strategy and expectations with respect to future royalty acquisition and partnership opportunities, the ability to complete such acquisitions and establish such partnerships, Source Rock's intention to pursue additional Crown land leases, Source Rock's ability to enter into farm-out transactions for the development of the land leases on terms acceptable to Source Rock or at all, and the potential for future drilling on Source Rock's royalty lands, including pursuant to such farm-out transactions. Such statements and information are based on the current expectations of Source Rock's management and are based on assumptions and subject to risks and uncertainties. Although Source Rock's management believes that the assumptions underlying these statements and information are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this news release may not occur by certain dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Source Rock. Although Source Rock has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement or information can be guaranteed. Except as required by applicable securities laws, forward-looking statements and information speak only as of the date on which they are made and Source Rock undertakes no obligation to publicly update or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures & Ratios
This news release uses the terms "funds from operations" and "Adjusted EBITDA" which are non-GAAP financial measures and the terms "payout ratio", "operating netback" and "corporate netback" which are non-GAAP ratios. These financial measures and ratios do not have a standardized prescribed meaning under GAAP and these measures and ratios may not be comparable with the calculation of similar measures disclosed by other entities.
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