PrairieSky Royalty reported an 11 per cent increase in oil royalty production in the third quarter, helping to steady results despite weaker WTI and natural gas prices. The Calgary-based company declared a dividend of $60.5 million and continued its share buyback program as it looked to capitalize on its strong balance sheet and asset base.
BNN Bloomberg spoke with Andrew Phillips, president and CEO of PrairieSky Royalty, about the company’s performance, emerging opportunities in the Clearwater and Duvernay plays, and how technological advances and new drilling methods are driving growth across its land base.
Key Takeaways
- Oil royalty production rose 11 per cent year-over-year, led by growth in Clearwater and Mannville heavy oil regions.
- Multilateral drilling and improved basin egress are accelerating output and supporting low decline rates.
- Total third-quarter revenues reached $114.8 million despite softer benchmark pricing.
- PrairieSky repurchased more than six million shares, creating value for remaining shareholders.
- Leasing activity remains strong, with about 200 new agreements expected across Western Canada this year.
Read the full transcript below:
ROGER: Shares of PrairieSky Royalty are up today. The Calgary-based energy company reported an 11 per cent increase in oil royalty production since last year and declared a third-quarter dividend of more than $60 million. Here to tell us more is Andrew Phillips, president and CEO of PrairieSky Royalty. Andrew, thank you very much for joining us today.
ANDREW: Good morning. Thank you for having me.
ROGER: Let’s talk about that 11 per cent increase in oil royalty production since last year. What’s driving it?
ANDREW: The main drivers are the heavy oil regions of the Clearwater and the Mannville Stack. We’re seeing really strong growth in both of those areas thanks to new technological advancements.
ROGER: And how were you able to take advantage of that?
ANDREW: We bought a lot of those lands five to 10 years ago, so we were early in recognizing the potential for heavy oil. Now, with additional egress out of the basin, better differentials, and new multilateral drilling technology, growth in those regions has accelerated significantly.
ROGER: Let’s talk a bit about acquisitions. You’re up to about eight and a half million acres, correct?
ANDREW: We actually have just under 19 million acres across Western Canada, including all of our fee, mineral title and gross overriding royalty lands.
ROGER: Where have the latest acquisitions come from? What have you been focusing on?
ANDREW: The Ontario Teachers’ Pension Plan had a large fee mineral title position in eastern Alberta and western Saskatchewan that we purchased right after COVID. That gave us a big position there. We also bought Canadian Natural Resources’ mineral title in 2015 for $1.8 billion, and together those two positions gave us a large mineral title footprint in the heavy oil region.
ROGER: Are you feeling optimistic about how it’s all come together?
ANDREW: Yes, I am. With narrower differentials and Canada’s massive heavy oil reserves—the largest on Earth—we have a great opportunity to supply the crude needed by refineries around the world.
ROGER: We’re seeing a bit of a drop today with some mining and other companies taking a hit. Any concern about the TSX and whether that could become a trend?
ANDREW: The materials sector has performed well, and the financial sector has done well this year too. Energy has been a bit weaker because of lower WTI and natural gas prices. But overall, we’re optimistic. There’s more egress coming out of the basin, and producers have strong balance sheets. We think the next five to 10 years will be a great period for growth.
ROGER: You’ve also had new wells drilled in a renewed area of the Duvernay. How do you see that performing?
ANDREW: The West Shale Duvernay is a newer play. It’s seen exceptional well results and lower costs, and it’s a light oil play with a huge resource base. Drilling is ramping up substantially, and we expect 2026 to be even stronger.
ROGER: Would you say as things go for you, so goes the broader basin and industry?
ANDREW: I think in general Canadian producers are in good shape. Balance sheets are strong and operations are profitable, even with $57 crude and weak gas prices. When commodities recover, the whole sector should perform very well.
ROGER: You’ve bought back about two and a half per cent of your shares. What’s the reasoning behind that?
ANDREW: We’ve repurchased just over six million shares this year. Given the intrinsic value of our business is higher than the current share price, we’re creating value for remaining shareholders. It’s a great opportunity to own more of Canada’s largest mineral title position.
ROGER: Where do you go from here? What’s the next focus?
ANDREW: Over the next three, five and 10 years, we’ll focus on leasing undeveloped land—almost half our land base is still undeveloped. We’ll keep working to get it into the hands of top producers and grow the business in the mid-single digits.
ROGER: Have you had much interest so far?
ANDREW: A lot. This year we’ll probably lease to about 100 oil companies in 200 separate leases. It’s been a very active year with great operators, including private firms, on our lands.
ROGER: Andrew, thank you very much for joining us today.
ANDREW: Appreciate you having me.
ROGER: Andrew Phillips is president and CEO of PrairieSky Royalty.
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This BNN Bloomberg summary and transcript of the Oct. 21, 2025 interview with Andrew Phillips are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
