TSX:FNV 82.53 -0.90 -1.08%
Volume 967,041
September 21, 2018
NYSE:FNV 63.95 -0.66 -1.02%
Volume 1,891,366
September 21, 2018
Gold 1,200.30 -8.03 -0.66%
Volume
September 21, 2018
Contact Share

Location: Oklahoma
Operator: Newfield Exploration Company, Devon Energy, Continental Resources, Others
Royalty: Various Royalty Rates

In the fourth quarter of 2016 Franco-Nevada purchased royalty rights in the STACK shale play in Oklahoma’s Anadarko basin for $100 million. STACK is an acronym for Sooner Trend, Anadarko Basin, Canadian and Kingfisher counties, and the play has been gaining momentum over the past couple of years due to its status as one of the most economic shale plays in North America. The current focus is on the Meramec formation, although the royalties have exposure to multiple horizons at depth, including the Woodford and Osage formations.

In the second quarter of 2017, Franco-Nevada announced an acquisition of mineral title and royalty interests for $27.6 million, which added to its existing position in the STACK and provided new exposure to the SCOOP shale play to the south. SCOOP is an acronym for South Central Oklahoma Oil Province. In total, the lands consist of GORRs and mineral title rights which apply to approximately 1,100 acres (net after royalties).

The top three operators of the acreage are Newfield Exploration, Devon Energy, and Continental Resources. All three companies have made the SCOOP/STACK a major focus of their capital spending, a portion of which will be on the royalty lands. Full field development had begun in both plays at the end of 2017, with operators expected to ramp up activity in 2018.

In 2017, Franco-Nevada recorded revenue of $3.4 million. Revenue is expected to increase as full-field development continues.

ASSET HIGHLIGHTS:

  • Royalty acreage positioned in the core of the SCOOP/STACK resource play
  • SCOOP/STACK represents one of the highest return plays in North America
  • Revenues to ramp-up with full-field development

2017 2016 2015
Revenue to Franco-Nevada ($ million)1 $ 3.4 $ 0.9 $ -