Franco-Nevada and its predecessor companies have been active investing in oil & gas for over 25 years. We actively manage our business with an objective that precious metals represent at least 80% of our business over the long term while non-precious metals activities including oil & gas are no more than 20% of our business. In 2016, precious metals represented 94% of Franco-Nevada’s revenues so there is further scope to increase Franco-Nevada’s non-precious metals investments including oil & gas. Similar to the gold industry, the oil & gas sector has many active participants from senior to junior companies which provides a broad range of royalty opportunities. Our experience is that when precious metals investments are expensive, the oil & gas sector can provide an attractive alternative for new royalty investments.
Franco-Nevada manages its oil & gas division with three dedicated employees. Until 2016, Franco-Nevada’s focus was limited primarily to the Western Canadian sedimentary basin. In late 2016, Franco-Nevada began to increase the scope of its oil & gas royalty investment activities to include the Anadarko and Permian basins in the U.S.