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As our results demonstrate, we continue to benefit from activity on our oil-weighted asset base, and from relatively strong, if somewhat volatile, crude oil pricing. Of significance, natural gas accounted for 36% of production volumes in the fourth quarter (Q4 2011 - 35%), but only 11% of gross revenue (Q4 2011 - 10%). Clearly, we would benefit from any improvement in natural gas prices. However, despite a significant decline in revenue from natural gas, we have been able to maintain a steady monthly dividend rate of $0.14 ($1.68 annually) per share since January 2010.

Recognizing the cyclical nature of the oil and gas industry, we continue to closely monitor commodity prices and industry trends for signs of deteriorating market conditions. We caution that it is inherently difficult to predict activity levels on our royalty lands since we have no operational control. As well, significant changes (positive or negative) in commodity prices (including Canadian oil price differentials), foreign exchange rates, or production rates may result in adjustments to the dividend rate. In particular, our 2013 forecast for Western Canada Select pricing assumes an improvement in the second half of the year, but it is possible that the North American infrastructure constraints will become a longer-term issue for western Canadian production.

Based on our current guidance and commodity price assumptions, and assuming there are no significant changes in the current business environment, we expect to maintain the current monthly dividend rate through 2013, subject to the Board's quarterly review and approval.

Succession Planning

After more than 16 years with Freehold and 29 years with Rife Resources Ltd. (the Manager of Freehold), Mr. William O. Ingram has announced that he plans to retire as President and CEO in May 2013. Mr. Ingram will step down as a director of Freehold but will continue to serve on the boards of Rife and Canpar Holdings Ltd. As well, Dr. P. Michael Maher, who has been a director of Freehold since 1996, will be retiring from the Board in May. The directors of Freehold thank Dr. Maher and Mr. Ingram for their many years of service to Freehold, and wish them both well in their retirement.

Following the retirement of Mr. Ingram in May, the Board plans to appoint Mr. Thomas J. Mullane as President and CEO, and he will stand for election as a director of Freehold at the annual meeting of shareholders to be held on May 15, 2013. Mr. Mullane joined Freehold in 2012 as Executive Vice-President and Chief Operating Officer, and brings a solid background of industry experience and knowledge at a senior level that will be an asset to Freehold in the years to come.

Land and Reserves

Freehold is unique in that the majority of our assets are royalty interests. However, under National Instrument 51-101, royalty interests cannot be included under gross reserves. This causes our gross reserves to be lower than our net reserves and makes it difficult for investors to compare our reserves and finding and development costs to others in our industry. We believe the most appropriate measure of reserves and finding and development costs for Freehold is on a net basis.

As at year-end 2012, our undeveloped land was independently valued at $80.2 million by Seaton-Jordan & Associates Ltd. Our total land holdings encompass approximately three million gross acres, 94% of which are royalties. Of this, our mineral title lands (including royalty assumption lands), which we own in perpetuity, cover more than 630,000 acres; all but approximately 107,000 gross acres of which are currently leased to third parties. In addition, we have gross overriding royalty interests in nearly 2.2 million acres.