PrairieSky Royalty Ltd.

PrairieSky reported record total production of 27,479 BOE per day in Q2 2026, up 4% from Q2 2025, with oil volumes up 3% and NGL volumes up 15%. Total production revenue was CAD 167.1 million, other revenues added CAD 10.9 million, and funds from operations were CAD 133.1 million, or CAD 0.57 per share, up 38% year over year. Realized price averaged CAD 109.87/bbl, NGL pricing averaged CAD 55.30/bbl, and the company said U.S. dollar WTI averaged $92.80 in the quarter. PrairieSky declared CAD 61.6 million of dividends in the quarter for a 46% payout ratio, invested CAD 1.8 million in minor acquisitions, and reduced debt by CAD 71.1 million; net debt was CAD 186.6 million at June 30. No formal revenue or production guidance for the next quarter or full year was given, but management expects Q3 and second-half oil production to benefit from Duvernay wells, continued completion activity, multilateral growth, and ramping Lindbergh thermal volumes.

Andrew Phillips framed the quarter as evidence of a still-healthy Canadian oil environment, saying the company is seeing stronger activity across the basin and that 215 rigs are active versus 170 a year ago. He emphasized that the combination of multilateral drilling, improved technology, and weak Canadian dollar economics is supporting continued leasing and drilling interest across PrairieSky’s lands. His tone was upbeat and confident, and he went further by saying PrairieSky expects to be net cash by this time next year.

Pam Kazeil highlighted record Q2 operating results and cash generation, citing total production of 27,479 BOE/d, revenue of CAD 167.1 million, other revenues of CAD 10.9 million, and funds from operations of CAD 133.1 million, or CAD 0.57 per share. She noted that liquids accounted for 93% of production revenue, with realized pricing of CAD 109.87/bbl and NGL pricing of CAD 55.30/bbl, while bonus consideration was CAD 6.4 million in the quarter and CAD 18.7 million year to date, up 39% versus the prior year. On capital allocation, she said PrairieSky paid CAD 61.6 million in dividends, had a 46% payout ratio, spent CAD 1.8 million on minor acquisitions, and used CAD 71.1 million to reduce debt, leaving net debt at CAD 186.6 million.

The main analyst question focused on whether the increase in activity was mainly driven by higher commodity prices or by the quality of PrairieSky’s land base. Andrew Phillips answered that it was a combination of commodity strength, multilateral drilling, technology improvements, and attractive Canadian FX economics, and he pointed to the Viking competing well against more capital-intensive plays. In a follow-up, the analyst asked which other plays could surprise on the upside; management said activity is broadening beyond the core growth areas into more conventional plays across Saskatchewan and eastern Alberta, including renewed interest in waterfloods and multilaterals.