STR Sitio Royalties Corporation

Fourth quarter production up 14% Y-o-Y to Company record 40.9 MBoe/d

Full year pro forma production exceeded high end of Company guidance(1)

Closed three acquisitions in late 2024 for aggregate cash consideration of approximately $140 million; primarily located in the Delaware Basin and immediately accretive to cash flow per share

Fourth quarter total return of capital of $0.49 per share, comprised of declared cash dividend of $0.41 per share and an equivalent $0.08 per share in common stock repurchases

Since Falcon merger closed in June 2022, cumulative return of capital to shareholders has exceeded $840 million, representing nearly 30% of current market capitalization(2)

Company issues 2025 outlook including forecasted average daily production of 39.8 MBoe/d (18.5 MBbls/d oil) at the midpoint, 3% above reported full year 2024 production, underpinned by consistent, robust activity levels from premier operators

Sitio Royalties Corp. (NYSE: STR) (“Sitio”, “STR” or the “Company”) today announced fourth quarter and full year 2024 financial and operating results. In addition, the Company provided its 2025 outlook. Supplemental slides have been posted to Sitio’s website, www.sitio.com. A conference call and webcast is planned for 7:30 a.m. CT / 8:30 a.m. ET on Thursday, February 27, 2025. Participation details can be found within this release.

FOURTH QUARTER 2024 HIGHLIGHTS

• Achieved record high production in the fourth quarter of 40.9 thousand barrels of oil equivalent per day (“MBoe/d”), up 6% quarter-over-quarter, attributable to strong performance across the Company's legacy assets as well as contributions from acquisitions
• Operators remained active across the Company's assets; 8.3 net wells were turned-in-line across Sitio's acreage, up 9% quarter-over-quarter; net line of sight (“LOS”) wells totaled 44.9 as of December 31, 2024
• Closed three high return and cash flow accretive acquisitions for aggregate cash consideration of approximately $140 million, which added approximately 3,300 net royalty acres ("NRAs"), primarily located in the Delaware Basin
• Net income of $19.3 million and Adjusted EBITDA(3) of $141.2 million, up $111.0 million and $6.2 million (or 5%), respectively, compared to fourth quarter 2023
• Continued to return cash to shareholders and create value on a per share basis; Sitio to return $0.49 per share of Class A Common Stock for the fourth quarter, comprised of $0.41 per share cash dividend (payable March 28, 2025) and an equivalent $0.08 per share of common stock repurchases
• Repurchased $118.1 million of common stock in 2024; 3% reduction in total shares outstanding year-over-year; $81.9 million of authorized repurchases remaining as of December 31, 2024

"We delivered across the board in 2024 with stronger-than-expected results. Sitio’s fourth quarter production was up by more than 14% over the prior year, while our share count decreased 3% year-over-year. Over the course of the year, we closed on 16 immediately accretive acquisitions totaling about $350 million, with expected returns above our target threshold – another solid demonstration of our ability to deliver sustainable growth and capital returns to shareholders,” said CEO Chris Conoscenti. “The backdrop for 2025 is very similar to early 2024 – operators remain active on our premium land positions in the Permian, DJ, Eagle Ford and Williston basins and we continue to see attractive opportunities to consolidate fragmented minerals ownership. We remain a uniquely active manager of minerals. Our team will continue to focus on driving top-line and bottom-line improvements – enhancing revenue recovery with proprietary technology to audit and capture missing payments and leveraging our asset management systems to support our growth as well as meaningful reductions in Cash G&A per Boe as we scale our minerals position."

FOURTH QUARTER 2024 FINANCIAL RESULTS

Sitio's fourth quarter 2024 average unhedged realized prices including all expected quality, transportation and demand adjustments were $69.98 per barrel of oil, $1.42 per Mcf of natural gas and $18.09 per barrel of natural gas liquids, for a total price of $39.82 per Boe. During the fourth quarter of 2024, the Company received $5.2 million in net cash settlements for commodity derivative contracts and as a result, average hedged realized prices were $72.09 per barrel of oil, $1.64 per Mcf of natural gas and $18.09 per barrel of natural gas liquids, for a total price of $41.20 per Boe.

For the fourth quarter of 2024, consolidated net income was $19.3 million and Adjusted EBITDA(3) was $141.2 million, up $111.0 million and $6.2 million (or 5%), respectively, compared to fourth quarter 2023, primarily due to 14% higher production over the same period.

As of December 31, 2024, the Company had $1.1 billion principal value of total debt outstanding (comprised of $487.8 million drawn on Sitio's revolving credit facility and $600.0 million of senior unsecured notes) and liquidity of $440.5 million, including $3.3 million of cash and $437.2 million of remaining availability under its $925.0 million credit facility.

2025 OUTLOOK

The table below includes Sitio's financial and operational guidance for full year 2025 and reflects the Company's expectations for operator development activity on its acreage. Sitio does not forecast acquisitions; however, it expects to remain active on the M&A front given its robust deal pipeline.

Guidance Metric

2024 Full Year Results

2025 Full Year Guidance

Production

 

 

 

 

Average daily production (Boe/d)

38,517

38,250

–

41,250

Average daily oil production (Bbls/d)

19,128

17,750

–

19,250

 

 

 

 

 

Expenses and Taxes

 

 

 

 

Cash G&A ($ in millions)(3)

$29.5

$36.5

–

$39.5

Production taxes and other (% of royalty revenue)

7.6%

7.0%

–

9.0%

Estimated cash taxes ($ in millions)(4)

$18.1

$26.0

–

$30.0

RETURN OF CAPITAL FRAMEWORK

Sitio is committed to returning capital to shareholders while maintaining a balanced and durable capital structure. Since becoming public in 2022, Sitio's cumulative return of capital to shareholders has exceeded $840 million, including cash dividends and share repurchases, with more than $330 million attributable to 2024.(2)

Sitio’s Board of Directors declared a cash dividend of $0.41 per share of Class A Common Stock with respect to the fourth quarter of 2024. The dividend is payable on March 28, 2025 to the stockholders of record at the close of business on March 14, 2025. During the fourth quarter of 2024, the Company repurchased an aggregate 0.6 million shares of Class A Common Stock at an average price of $20.06 per share, representing 11% of fourth quarter 2024 Discretionary Cash Flow(3), or an equivalent $0.08 per share. As of December 31, 2024, the Company had repurchased a total of 5.1 million of Class A Common Stock shares and Sitio OpCo Partnership Units, representing approximately 3% of shares outstanding prior to the Board's authorization of Sitio's $200 million share repurchase program. The Company had $81.9 million of authorized repurchases remaining as of December 31, 2024. In total, Sitio will return an aggregate $0.49 per share of capital for the fourth quarter of 2024, which represents 65% of fourth quarter 2024 Discretionary Cash Flow.

CONFERENCE CALL INFORMATION

Sitio plans to host a conference call at 8:30 a.m. ET on Thursday, February 27, 2025. Participants can access the call by dialing 1-833-470-1428 in the United States, or 1-404-975-4839 in other locations, with access code 552754, or by webcast at https://events.q4inc.com/attendee/778319394. Participants may also pre-register for the event via the following link: https://www.netroadshow.com/events/login?show=1131dee8&confId=76348. The conference call, live webcast, and replay can also be accessed through the Investor Relations section of Sitio’s website at www.sitio.com.

(1)

Includes production from the DJ Basin Acquisition as if it was owned on January 1, 2024 (transaction effective date of 10/1/23); the DJ Basin Acquisition is defined as the all-cash acquisition of approximately 13,000 NRAs in the DJ Basin from an undisclosed third party that closed on April 4, 2024. Refers to Company guidance issued on November 6, 2024.

(2)

Includes dividends declared with respect to 4Q24 (payable March 28, 2025). Market cap is based on Sitio's share price as of February 25, 2025 and share count as of February 24, 2025

(3)

For definitions of non-GAAP financial measures and reconciliation to their most directly comparable GAAP financial measures, please see "Non-GAAP financial measures"

(4)

Estimated cash tax guidance range is based on expectations at NYMEX forward strip pricing on February 26, 2025 and for the assets owned on February 26, 2025. Note: 2024 estimated cash taxes reflect full utilization of a non-recurring Brigham merger overpayment credit carryforward

OPERATOR ACTIVITY

The following table summarizes Sitio's net royalty acres, net average daily production and net LOS wells by basin as of December 31, 2024.

 

 

Delaware

 

Midland

 

DJ

 

Eagle

Ford

 

Williston/Other

 

Total

Net Royalty Acres

(normalized to 1/8th royalty equivalent)

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2024

 

156,543

 

 

45,626

 

 

41,681

 

 

21,047

 

 

8,206

 

 

273,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Average Daily Production

(Boe/d)

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2024

 

20,570

 

 

8,353

 

 

6,619

 

 

4,540

 

 

792

 

 

40,874

 

% Oil

 

47

%

 

52

%

 

42

%

 

47

%

 

54

%

 

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net LOS Wells

(normalized to 5,000' laterals)

 

 

 

 

 

 

 

 

 

 

 

 

Net spuds

 

11.3

 

 

7.8

 

 

4.1

 

 

1.0

 

 

0.3

 

 

24.5

 

Net permits

 

11.2

 

 

3.9

 

 

1.9

 

 

3.2

 

 

0.2

 

 

20.4

 

Net LOS wells as of December 31, 2024

 

22.5

 

 

11.7

 

 

6.0

 

 

4.2

 

 

0.5

 

 

44.9

 

PROVED RESERVES

The following tables set forth information regarding the Company’s net ownership interest in estimated quantities of proved developed and undeveloped oil and natural gas reserves and the changes therein for each of the periods presented. The reserves presented herein are based on a reserve report prepared by Sitio and audited by Cawley, Gillespie & Associates, Inc.

 

 

 

 

 

 

 

 

 

Oil

(MBbls)

 

Natural Gas

(MMcf)

 

Natural Gas Liquids

(MBbls)

 

Total

(MBOE)

Balance as of December 31, 2023

38,832

 

 

150,270

 

 

21,416

 

 

85,293

 

Revisions

(1,270

)

 

9,381

 

 

863

 

 

1,157

 

Extensions

6,297

 

 

22,066

 

 

3,132

 

 

13,106

 

Acquisition of reserves

5,209

 

 

41,587

 

 

6,131

 

 

18,271

 

Production

(7,004

)

 

(23,360

)

 

(3,174

)

 

(14,071

)

Balance as of December 31, 2024

42,064

 

 

199,944

 

 

28,368

 

 

103,756

 

Proved developed and undeveloped reserves:

Oil

(MBbls)

 

Natural Gas

(MMcf)

 

Natural Gas Liquids

(MBbls)

 

Total

(MBOE)

Developed as of December 31, 2022

27,407

 

133,489

 

15,169

 

64,824

Undeveloped as of December 31, 2022

7,650

 

25,953

 

3,190

 

15,165

Balance at December 31, 2022

35,057

 

159,442

 

18,359

 

79,989

 

 

 

 

 

 

 

 

Developed as of December 31, 2023

30,537

 

127,170

 

18,167

 

69,899

Undeveloped as of December 31, 2023

8,295

 

23,100

 

3,249

 

15,394

Balance at December 31, 2023

38,832

 

150,270

 

21,416

 

85,293

 

 

 

 

 

 

 

 

Developed as of December 31, 2024

36,384

 

179,056

 

25,368

 

91,595

Undeveloped as of December 31, 2024

5,680

 

20,888

 

3,000

 

12,161

Balance at December 31, 2024

42,064

 

199,944

 

28,368

 

103,756

COMMODITY DERIVATIVE CONTRACTS

The following table summarizes Sitio's commodity derivative contracts as of December 31, 2024.

 

 

Oil (NYMEX WTI)

 

 

1H25

Swaps

 

 

Bbl per day

 

 

1,100

Weighted Average Price per Bbl

 

$

74.65

 

 

 

Collars

 

 

Bbl per day

 

 

2,000

Weighted Average Ceiling Price per Bbl

 

$

93.20

Weighted Average Floor Price per Bbl

 

$

60.00

 

 

 

 

 

Gas (NYMEX Henry Hub)

 

 

1H25

Collars

 

 

MMBtu per day

 

 

11,600

Weighted Average Ceiling Price per MMBtu

 

$

10.34

Weighted Average Floor Price per MMBtu

 

$

3.31

 

FINANCIAL RESULTS

Production Data

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Production Data:

 

 

 

 

 

 

 

Crude oil (MBbls)

 

1,782

 

 

1,558

 

 

7,001

 

 

6,344

Natural gas (MMcf)

 

6,749

 

 

5,923

 

 

23,557

 

 

23,136

NGLs (MBbls)

 

854

 

 

746

 

 

3,170

 

 

2,742

Total (MBOE)(6:1)

 

3,761

 

 

3,291

 

 

14,097

 

 

12,942

Average daily production (BOE/d)(6:1)

 

40,874

 

 

35,776

 

 

38,517

 

 

35,457

Average Realized Prices:

 

 

 

 

 

 

 

Crude oil (per Bbl)

$

69.98

 

$

77.91

 

$

75.26

 

$

75.80

Natural gas (per Mcf)

$

1.42

 

$

1.40

 

$

1.02

 

$

1.77

NGLs (per Bbl)

$

18.09

 

$

18.72

 

$

18.99

 

$

19.21

Combined (per BOE)

$

39.82

 

$

43.65

 

$

43.35

 

$

44.39

Average Realized Prices After Effects of Derivative Settlements:

 

 

 

 

 

 

 

Crude oil (per Bbl)

$

72.09

 

$

80.68

 

$

76.46

 

$

78.62

Natural gas (per Mcf)

$

1.64

 

$

1.66

 

$

1.33

 

$

2.06

NGLs (per Bbl)

$

18.09

 

$

18.72

 

$

18.99

 

$

19.21

Combined (per BOE)

$

41.20

 

$

45.43

 

$

44.47

 

$

46.30

 

Selected Expense Metrics

 

 

Three Months Ended December 31,

 

 

2024

 

 

 

2023

 

Production taxes and other

 

7.5

%

 

 

9.8

%

Depreciation, depletion and amortization ($/Boe)

$

21.38

 

 

$

20.85

 

General and administrative ($/Boe)

$

3.69

 

 

$

3.60

 

Cash G&A ($/Boe) (3)

$

1.90

 

 

$

1.95

 

Interest expense, net ($/Boe)

$

5.73

 

 

$

6.59

 

 

Consolidated Balance Sheets

(In thousands, except par and share amounts)

 

 

December 31, 2024

 

December 31, 2023

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

3,290

 

 

$

15,195

 

Accrued revenue and accounts receivable

 

123,361

 

 

 

107,347

 

Prepaid assets

 

6,760

 

 

 

12,362

 

Derivative asset

 

1,811

 

 

 

19,080

 

Total current assets

 

135,222

 

 

 

153,984

 

 

 

 

 

Property and equipment

 

 

 

Oil and natural gas properties, successful efforts method:

 

 

 

Unproved properties

 

2,464,836

 

 

 

2,698,991

 

Proved properties

 

2,941,347

 

 

 

2,377,196

 

Other property and equipment

 

3,737

 

 

 

3,711

 

Accumulated depreciation, depletion, amortization, and impairment

 

(818,633

)

 

 

(498,531

)

Total property and equipment, net

 

4,591,287

 

 

 

4,581,367

 

 

 

 

 

Long-term assets

 

 

 

Long-term derivative asset

 

—

 

 

 

3,440

 

Deferred financing costs

 

8,525

 

 

 

11,205

 

Operating lease right-of-use asset

 

5,940

 

 

 

5,970

 

Other long-term assets

 

2,746

 

 

 

2,835

 

Total long-term assets

 

17,211

 

 

 

23,450

 

 

 

 

 

TOTAL ASSETS

$

4,743,720

 

 

$

4,758,801

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable and accrued expenses

$

46,385

 

 

$

30,050

 

Operating lease liability

 

1,646

 

 

 

1,725

 

Total current liabilities

 

48,031

 

 

 

31,775

 

 

 

 

 

Long-term liabilities

 

 

 

Long-term debt

 

1,078,181

 

 

 

865,338

 

Deferred tax liability

 

253,778

 

 

 

259,870

 

Non-current operating lease liability

 

5,462

 

 

 

5,394

 

Other long-term liabilities

 

1,150

 

 

 

1,150

 

Total long-term liabilities

 

1,338,571

 

 

 

1,131,752

 

 

 

 

 

Total liabilities

 

1,386,602

 

 

 

1,163,527

 

 

 

 

 

Equity

 

 

 

Class A Common Stock, par value $0.0001 per share; 240,000,000 shares authorized; 83,205,330 and 82,451,397 shares issued and 78,980,516 and 82,451,397 outstanding at December 31, 2024 and December 31, 2023, respectively

 

8

 

 

 

8

 

Class C Common Stock, par value $0.0001 per share; 120,000,000 shares authorized; 73,443,992 and 74,965,217 shares issued and 73,391,244 and 74,939,080 outstanding at December 31, 2024 and December 31, 2023, respectively

 

8

 

 

 

8

 

Additional paid-in capital

 

1,710,372

 

 

 

1,796,147

 

Accumulated deficit

 

(146,792

)

 

 

(187,738

)

Class A Treasury Shares, 4,224,814 and 0 shares at December 31, 2024 and December 31, 2023, respectively

 

(96,910

)

 

 

—

 

Class C Treasury Shares, 52,748 and 26,137 shares at December 31, 2024 and December 31, 2023, respectively

 

(1,265

)

 

 

(677

)

Noncontrolling interest

 

1,891,697

 

 

 

1,987,526

 

Total equity

 

3,357,118

 

 

 

3,595,274

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

$

4,743,720

 

 

$

4,758,801

 

 

Consolidated Statements of Operations

(In thousands, except per share amounts)

 

 

 

Years Ended December 31,

 

 

 

2024

 

 

 

2023

 

 

 

2022

 

Revenues:

 

 

 

 

 

 

Oil, natural gas and natural gas liquids revenues

 

$

611,070

 

 

$

574,542

 

 

$

355,430

 

Lease bonus and other income

 

 

13,344

 

 

 

18,814

 

 

 

14,182

 

Total revenues

 

 

624,414

 

 

 

593,356

 

 

 

369,612

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Management fees to affiliates

 

 

—

 

 

 

—

 

 

 

3,241

 

Depreciation, depletion and amortization

 

 

320,297

 

 

 

291,320

 

 

 

104,511

 

General and administrative

 

 

54,725

 

 

 

49,620

 

 

 

42,299

 

Production taxes and other

 

 

46,383

 

 

 

46,939

 

 

 

25,572

 

Impairment of oil and gas properties

 

 

—

 

 

 

25,617

 

 

 

—

 

Loss on sale of oil and gas properties

 

 

—

 

 

 

144,471

 

 

 

—

 

Total operating expenses

 

 

421,405

 

 

 

557,967

 

 

 

175,623

 

 

 

 

 

 

 

 

Net income from operations

 

 

203,009

 

 

 

35,389

 

 

 

193,989

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Interest expense, net

 

 

(85,240

)

 

 

(93,413

)

 

 

(35,499

)

Change in fair value of warrant liability

 

 

—

 

 

 

2,950

 

 

 

3,662

 

Loss on extinguishment of debt

 

 

—

 

 

 

(21,566

)

 

 

(11,487

)

Commodity derivatives gains (losses)

 

 

(4,905

)

 

 

15,199

 

 

 

39,037

 

Interest rate derivatives gains

 

 

—

 

 

 

462

 

 

 

110

 

Net income (loss) before taxes

 

 

112,864

 

 

 

(60,979

)

 

 

189,812

 

 

 

 

 

 

 

 

Income tax benefit (expense)

 

 

(17,935

)

 

 

14,284

 

 

 

(5,681

)

 

 

 

 

 

 

 

Net income (loss)

 

 

94,929

 

 

 

(46,695

)

 

 

184,131

 

Net income attributable to Predecessor

 

 

—

 

 

 

—

 

 

 

(78,104

)

Net income attributable to temporary equity

 

 

—

 

 

 

—

 

 

 

(90,377

)

Net (income) loss attributable to noncontrolling interest

 

 

(53,983

)

 

 

31,159

 

 

 

51

 

Net income (loss) attributable to Class A stockholders

 

$

40,946

 

 

$

(15,536

)

 

$

15,701

 

 

 

 

 

 

 

 

Net income (loss) per share of Class A Common Stock

 

 

 

 

 

 

Basic

 

$

0.49

 

 

$

(0.20

)

 

$

1.10

 

Diluted

 

$

0.49

 

 

$

(0.20

)

 

$

1.10

 

 

 

 

 

 

 

 

Weighted average Class A Common Stock outstanding

 

 

 

 

 

 

Basic

 

 

80,621

 

 

 

81,269

 

 

 

13,723

 

Diluted

 

 

80,856

 

 

 

81,269

 

 

 

13,723

 

 

Consolidated Statements of Cash Flows

(In thousands)

 

 

Years Ended December 31,

 

 

2024

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

Net income (loss)

$

94,929

 

 

$

(46,695

)

 

$

184,131

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

Depreciation, depletion and amortization

 

320,297

 

 

 

291,320

 

 

 

104,511

 

Amortization of deferred financing costs and long-term debt discount

 

5,259

 

 

 

5,534

 

 

 

6,546

 

Share-based compensation

 

23,836

 

 

 

18,867

 

 

 

9,250

 

Change in fair value of warrant liability

 

—

 

 

 

(2,950

)

 

 

(3,662

)

Loss on extinguishment of debt

 

—

 

 

 

21,566

 

 

 

11,487

 

Impairment of oil and gas properties

 

—

 

 

 

25,617

 

 

 

—

 

Commodity derivative (gains) losses

 

4,905

 

 

 

(15,199

)

 

 

(39,037

)

Net cash received for commodity derivative settlements

 

15,803

 

 

 

24,613

 

 

 

7,104

 

Interest rate derivative gains

 

—

 

 

 

(462

)

 

 

(110

)

Net cash received (paid) for interest rate derivative settlements

 

—

 

 

 

781

 

 

 

(209

)

Loss on sale of oil and gas properties

 

—

 

 

 

144,471

 

 

 

—

 

Deferred tax (benefit) expense

 

(6,702

)

 

 

(42,946

)

 

 

1,631

 

Change in operating assets and liabilities:

 

 

 

 

 

Accrued revenue and accounts receivable

 

(16,014

)

 

 

33,564

 

 

 

(25,313

)

Prepaid assets

 

5,666

 

 

 

19,550

 

 

 

(616

)

Other long-term assets

 

2

 

 

 

2,089

 

 

 

(3,652

)

Accounts payable and accrued expenses

 

14,231

 

 

 

8,810

 

 

 

(88,558

)

Due to affiliates

 

—

 

 

 

—

 

 

 

(380

)

Operating lease liabilities and other long-term liabilities

 

216

 

 

 

(1,030

)

 

 

1,837

 

Net cash provided by operating activities

 

462,428

 

 

 

487,500

 

 

 

164,960

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition of Falcon, net of cash

 

—

 

 

 

—

 

 

 

4,484

 

Acquisition of Brigham, net of cash

 

—

 

 

 

—

 

 

 

11,054

 

Predecessor cash not contributed in the Falcon Merger

 

—

 

 

 

—

 

 

 

(15,228

)

Purchases of oil and gas properties, net of post-close adjustments

 

(329,885

)

 

 

(170,545

)

 

 

(557,569

)

Proceeds from sale of oil and gas properties

 

—

 

 

 

113,298

 

 

 

—

 

Other, net

 

(74

)

 

 

(2,479

)

 

 

(840

)

Net cash used in investing activities

 

(329,959

)

 

 

(59,726

)

 

 

(558,099

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Borrowings on credit facilities

 

474,400

 

 

 

644,500

 

 

 

348,895

 

Repayments on credit facilities

 

(263,600

)

 

 

(877,500

)

 

 

(209,000

)

Issuance of 2026 Senior Notes

 

—

 

 

 

—

 

 

 

444,500

 

Repayments on 2026 Senior Notes

 

—

 

 

 

(438,750

)

 

 

(11,250

)

Issuance of 2028 Senior Notes

 

—

 

 

 

600,000

 

 

 

—

 

Borrowings on Bridge Loan Facility

 

—

 

 

 

—

 

 

 

425,000

 

Repayments on Bridge Loan Facility

 

—

 

 

 

—

 

 

 

(425,000

)

Debt issuance costs

 

(598

)

 

 

(22,060

)

 

 

(24,889

)

Debt extinguishment costs

 

—

 

 

 

(12,176

)

 

 

—

 

Distributions paid to Temporary Equity

 

—

 

 

 

—

 

 

 

(115,375

)

Distributions to noncontrolling interest

 

(112,421

)

 

 

(158,968

)

 

 

(13,318

)

Dividends paid to Class A stockholders

 

(121,272

)

 

 

(161,951

)

 

 

(18,165

)

Dividend equivalent rights paid

 

(1,165

)

 

 

(1,048

)

 

 

(579

)

Repurchases of Class A Common Stock

 

(95,216

)

 

 

—

 

 

 

—

 

Repurchases of Sitio OpCo Partnership Units (including associated Class C Common Shares)

 

(22,141

)

 

 

—

 

 

 

—

 

Cash paid for taxes related to net settlement of share-based compensation awards

 

(2,361

)

 

 

(3,444

)

 

 

—

 

Deferred initial public offering costs

 

—

 

 

 

—

 

 

 

(61

)

Other

 

—

 

 

 

—

 

 

 

(1,180

)

Net cash (used in) provided by financing activities

 

(144,374

)

 

 

(431,397

)

 

 

399,578

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(11,905

)

 

 

(3,623

)

 

 

6,439

 

Cash and cash equivalents, beginning of period

 

15,195

 

 

 

18,818

 

 

 

12,379

 

Cash and cash equivalents, end of period

$

3,290

 

 

$

15,195

 

 

$

18,818

 

 

 

 

 

 

 

Supplemental disclosure of non-cash transactions:

 

 

 

 

 

Increase (decrease) in current liabilities for additions to property and equipment:

$

343

 

 

$

(12

)

 

$

(379

)

Oil and gas properties acquired through issuance of Class C Common Stock and common units in consolidated subsidiary:

 

—

 

 

 

70,740

 

 

 

3,348,216

 

Temporary equity cumulative adjustment to redemption value:

 

—

 

 

 

—

 

 

 

706,940

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for income taxes:

$

3,135

 

 

$

9,276

 

 

$

1,866

 

Cash paid for interest expense:

 

83,074

 

 

 

77,310

 

 

 

29,030

 

 

Non-GAAP financial measures

Adjusted EBITDA, Discretionary Cash Flow and Cash G&A are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others to assess the financial performance of our assets and their ability to sustain dividends and/or share repurchases over the long term without regard to financing methods, capital structure or historical cost basis. Sitio believes that these non-GAAP financial measures provide useful information to Sitio's management and external users because they allow for a comparison of operating performance on a consistent basis across periods.

We define Adjusted EBITDA as net income (loss) plus (a) interest expense, (b) provisions for income taxes, (c) depreciation, depletion and amortization, (d) non-cash share-based compensation expense, (e) impairment of oil and natural gas properties, (f) gains or losses on unsettled derivative instruments, (g) change in fair value of the warrant liability, (h) management fee to affiliates (i) loss on debt extinguishment, (j) merger-related transaction costs (k) write off of financing costs and (l) loss on sale of oil and gas properties.

We define Discretionary Cash Flow for the three months ended December 31, 2024 as Adjusted EBITDA, less cash and accrued interest expense and estimated cash taxes.

We define Discretionary Cash Flow for the three months ended December 31, 2023 as Adjusted EBITDA, less cash and accrued interest expense and cash taxes. We revised our definition of Discretionary Cash Flow following this period to reflect our anticipated accrual of taxes period-to-period due to the runoff of tax credits associated with the Brigham merger.

We define Cash G&A as general and administrative expense less (a) non-cash share-based compensation expense, (b) merger-related transaction costs and (c) rental income.

Merger-related transaction costs for the three and twelve months ended December 31, 2023 have been recast to conform to the current period presentation.

These non-GAAP financial measures do not represent and should not be considered an alternative to, or more meaningful than, their most directly comparable GAAP financial measures or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Non-GAAP financial measures have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. Our computations of Adjusted EBITDA, Discretionary Cash Flow and Cash G&A may differ from computations of similarly titled measures of other companies.

This release does not include a reconciliation for 2025E Cash G&A because certain elements of the comparable GAAP financial measures are not predictable in this situation, making it impractical for the Company to forecast.

The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure for the period indicated (in thousands).

 

Three Months Ended December 31,

 

 

2024

 

 

2023

 

Net income (loss)

$

19,329

 

$

(91,716

)

Interest expense, net

 

21,531

 

 

21,678

 

Income tax (benefit) expense

 

6,202

 

 

(21,168

)

Depreciation, depletion and amortization

 

80,401

 

 

68,602

 

Loss on sale of oil and gas properties

 

—

 

 

144,471

 

EBITDA

$

127,463

 

$

121,867

 

Non-cash share-based compensation expense

 

6,278

 

 

4,393

 

Losses (gains) on unsettled derivative instruments

 

7,254

 

 

(12,194

)

Loss on debt extinguishment

 

—

 

 

20,096

 

Merger-related transaction costs

 

254

 

 

875

 

Adjusted EBITDA

$

141,249

 

$

135,037

 

 

The following table presents a reconciliation of Discretionary Cash Flow to the most directly comparable GAAP financial measure for the period indicated (in thousands).

 

Three Months Ended December 31,

 

 

2024

 

 

 

2023

 

Cash flow from operations

$

105,698

 

 

$

132,682

 

Interest expense, net

 

21,531

 

 

 

21,678

 

Income tax (benefit) expense

 

6,202

 

 

 

(21,168

)

Deferred tax benefit

 

(5,282

)

 

 

27,839

 

Changes in operating assets and liabilities

 

14,180

 

 

 

(25,610

)

Amortization of deferred financing costs and long-term debt discount

 

(1,334

)

 

 

(1,259

)

Merger-related transaction costs

 

254

 

 

 

875

 

Adjusted EBITDA

$

141,249

 

 

$

135,037

 

Less:

 

 

 

Cash and accrued interest expense

 

20,196

 

 

 

19,628

 

Estimated cash taxes

 

4,181

 

 

 

8

 

Discretionary Cash Flow

$

116,872

 

 

$

115,401

 

 

The following tables present a reconciliation of Cash G&A to the most directly comparable GAAP financial measure for the periods indicated (in thousands).

 

Three Months Ended December 31,

 

 

2024

 

 

2023

General and administrative expense

$

13,876

 

$

11,834

Less:

 

 

 

Non-cash share-based compensation expense

 

6,278

 

 

4,393

Merger-related transaction costs

 

254

 

 

875

Rental income

 

185

 

 

135

Cash G&A

$

7,159

 

$

6,431

 

Year Ended

December 31,

 

 

2024

 

 

2023

General and administrative expense

$

54,725

 

$

49,620

Less:

 

 

 

Non-cash share-based compensation expense

 

23,836

 

 

18,867

Merger-related transaction costs

 

710

 

 

3,970

Rental income

 

680

 

 

512

Cash G&A

$

29,499

 

$

26,271

About Sitio Royalties Corp.

Sitio is a shareholder returns-driven company focused on large-scale consolidation of high-quality oil & gas mineral and royalty interests across premium basins, with a diversified set of top-tier operators. With a clear objective of generating cash flow from operations that can be returned to stockholders and reinvested, Sitio has accumulated over 270,000 NRAs through the consummation of over 200 acquisitions, as of December 31, 2024. More information about Sitio is available at www.sitio.com.

Forward-Looking Statements

This news release contains statements that may constitute “forward-looking statements” for purposes of federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “seeks,” “possible,” “potential,” “predict,” “project,” “prospects,” “guidance,” “outlook,” “should,” “would,” “will,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements include, but are not limited to, statements about the Company's expected results of operations, cash flows, financial position and future dividends; as well as certain future plans, expectations and objectives for the Company’s operations, including statements about our return of capital framework, our share repurchase program and its intended benefits, financial and operational guidance, strategy, synergies, certain levels of production, future operations, financial position, prospects, and plans. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties that could cause our actual results, performance, and financial condition to differ materially from our expectations and predictions. Factors that could materially impact such forward-looking statements include, but are not limited to: commodity price volatility, the global economic uncertainty and market volatility related to changes in U.S. trade policy, including the imposition of tariffs, slowing growth and demand, especially from China, the conflict in Ukraine and associated economic sanctions on Russia, the conflict in the Israel-Gaza region and continued hostilities in the Middle East including heightened tensions and conflict with Iran, Lebanon and Yemen, voluntary production cuts by OPEC+ and others, including any additional extensions of such voluntary production cuts or the duration thereof, increased global oil, natural gas and natural gas liquids supply and those other factors discussed or referenced in the "Risk Factors" section of Sitio’s Annual Report on Form 10-K for the year ended December 31, 2024 and other publicly filed documents with the SEC. Any forward-looking statement made in this news release speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible to predict all of them. Sitio undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future development, or otherwise, except as may be required by law. Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any oil and gas reserve estimate depends on the quality of available data, the interpretation of such data, and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226878178/en/

IR contact: Alyssa Stephens (281) 407-5204 IR@sitio.com