ABOUT Caledonian

Caledonian Royalty Corporation (“Caledonian”) was established to provide investors with attractive tax-effective income paid monthly from Gross Overriding Royalties (“GORR”) that have limited risk and are not subject to capital and operating expenses associated with operated oil & gas assets.

 

Caledonian investors receive their returns in the form of monthly cash distributions on royalty units.  The royalty units are essentially a direct royalty interest on the oil and gas interests held by Caledonian.

 

KEY ADVANTAGES OF CALEDONIAN FOR WCSB INVESTORS

This video provides investors with information on the proposed liquidity transaction with Caledonian Royalty Corporation.


Caledonian was formed in 2009 and concluded the acquisition of a 5% GORR on substantially all the assets of Compton Petroleum Corporation (“Compton”) including approximately 600,000 net acres of undeveloped land for gross proceeds of $100 million in 2010The Compton GORR was structured as an interest in land ahead of Compton’s lenders and the purchase price of the GORR was based upon an independent engineering appraisal.  

 

Compton’s production is approximately 85% natural gas so that there is considerable upside in distributions, which are currently 7¢ cash per royalty unit paid monthly (providing an annualized return on invested capital of 8.4%).  Compton has subsequently sold properties and farmed out a portion of its undeveloped lands to reduce bank debt.  These properties remain subject to the GORR to Caledonian and, as a result, Caledonian is now receiving GORR payments from several companies including Compton.

 

Caledonian is presently considering other acquisition opportunities, including opportunities to acquire royalties and non-operated oil and natural gas properties.  

 

Caledonian is currently a private Alberta company.  Management has provided Caledonian royalty unit holders with an undertaking to provide a source of liquidity within three years of the formation of the Company in late 2009.

 

Caledonian is managed by Kinnear Financial Limited (“KFL”), which is controlled by James S. Kinnear, who was the founder, Chairman and CEO of Pengrowth Energy Trust.  For over 20 years, Pengrowth provided investors with compound average returns of over 14% per annum. KFL is a Calgary-based merchant bank that initiates structures and finances innovative financial solutions for the resource sector. As a merchant bank, KFL commits and invests its own capital alongside investors in commodity-related investments that provide attractive cash yields with limited downside risk.  KFL and Mr. Kinnear presently hold 45% of the outstanding royalty units of Caledonian.