High Peak Royalties Ltd (ASX:HPR) is on target for a record financial year of royalty receipts on both the revenue and cash front, having received more than A$800,000 in cash royalty receipts for the financial year to date to May 31, 2022, with June royalties still to be received and accounted for.
The company is well funded with around $1 million in cash following its strong YTD performance of operating activities and continued focus on minimising operational costs.
HPR continues to actively review opportunities to purchase or generate royalties with particular emphasis on both conventional and renewable energy and will keep the market updated as material developments continue across the portfolio’s underlying assets and revenue/royalty receipts.
Production royalties
Receipts of the Planet Gas (ASX:PGS) royalty for the months of April and May 2022 were A$140,000 on a cash basis which places the June quarter receipts from this royalty alone to be in excess of A$200,000 on a cash basis.
The company was previously advised that its share of royalty receipts over PL101/ATP525 (the Peat project) was A$70,000 for the March quarter and is pleased to note that these funds have since been received.
The remainder of the US production royalties has performed steadily and generally increased across the portfolio of smaller US production royalties that the company holds on a YoY basis in line with increases generally seen across the other royalties receipted.
Non-production royalties
HPR notes that there has been a positive development in the Dukas and Mount Kitty projects operated by Central Petroleum (CTP) over which HPR has a royalty interest.
CTP revealed in mid-May that joint venture approvals had been provided for Santos as operator to carry out certain key exploration activities, such as rig contracting, ordering long-lead items and environmental and land access approvals.
This is related to the planned drilling of three sub-salt exploration wells in 2023, of which HPR has a royalty over two, being the Dukas prospect (EP112) and the Mt Kitty prospect (EP125).
CTP has advised that these wells have been programmed to be drilled under the Peak Helium farm-out transaction and that satisfaction of conditions precedent for the Peak Helium farm-out agreement is progressing towards completion.
HPR will continue to monitor the progress of the Peak/CTP farm-out agreement and advise the market of its progress as relevant to its royalty interests over EP112 and EP125.
In Queensland, the company continues to monitor progress over its PL171 and ATP574P royalties operated by Shell.