Earnings release
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NEWS RELEASE Sitio Royalties Reports First Quarter 2025 Operational and Financial Results 2025-05-07 First quarter total average daily production above high end of full year guidance range More than 30% quarter-over-quarter increase in net wells turned-in-line First quarter total return of capital of $0.50 per share, comprised of declared cash dividend of $0.35 per share and an equivalent $0.15 per share in common stock repurchases Share repurchase program extended, with additional $300 million authorized Since June 2022, cumulative return of capital to shareholders has exceeded $915 million, representing approximately 35% of current market capitalization(1) DENVER--(BUSINESS WIRE)-- Sitio Royalties Corp. (NYSE: STR) (“Sitio”, “STR” or the “Company”) today announced rst quarter 2025 operational and nancial results. 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, May 8, 2025. Participation details can be found within this release. FIRST QUARTER 2025 HIGHLIGHTS Delivered rst quarter 2025 production of 18.9 MBbls/d oil and 42.1 MBoe/d total, exceeding the midpoint of full year Company guidance by 2% and 6%, respectively Reported rst quarter net income of $26.3 million and Adjusted EBITDA(2)of $142.2 million. Financial results 1
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re ected strong production volumes from legacy assets and recent acquisitions, as well as expenses in line with or better than the midpoint of our full year guidance ranges Operators turned-in-line 11.1 net wells across Sitio's acreage position, up 34% quarter-over-quarter, as the Company's assets continue to attract signi cant drilling capital Net line of sight (“LOS”) wells totaled 48.6 as of March 31, 2025, up 8% quarter-over-quarter, including 28.9 net spud wells and 19.7 net permitted wells Increased estimated inventory by 40 net locations, based on 2024 operator drilling activity; represents a 10% quarter-over-quarter increase and equates to a little more than a year of drilling at current average drilling pace Closed $20.6 million of immediately accretive acquisitions located in the DJ and Midland Basins, adding approximately 1,350 net royalty acres (“NRAs”) Repurchased $22.3 million, or 1.1 million shares, of common stock in the rst quarter 2025 Continued to return cash to shareholders and enhance value on a per share basis; rst quarter total return of capital of $0.50 per share of Class A Common Stock, comprised of a $0.35 per share declared cash dividend (payable May 30, 2025), and $0.15 per share of stock repurchases Subsequent to the rst quarter, on May 7, 2025, Sitio's Board of Directors extended the Company's share repurchase program with authorization of an additional $300 million, bringing remaining share buyback capacity to approximately $350 million “With solid momentum exiting the rst quarter 2025, our conviction in the quality of our assets and operators has never been stronger,” said Sitio CEO Chris Conoscenti. “Consistent with our view of the long term value of our assets compared to our market valuation, our Board has authorized an additional $300 million of share buybacks and we will continue to take advantage of the current dislocation. The recent period of macro volatility highlights the bene ts of minerals and royalties as an asset class, and Sitio speci cally. With no obligatory capex, no operating costs and LTM Adjusted EBITDA margin(2) of 90%, our cash ow is remarkably resilient. Our well-capitalized operators have historically had some of the most durable and consistent capital programs in the upstream industry. Further, we have no direct tari exposure and our diversi ed portfolio of perpetual real assets o ers owners an attractive hedge to in ation. We continue to generate signi cant free cash ow to support our dividend, opportunistic share buybacks, debt paydown and accretive acquisitions. We are well-positioned to continue to consolidate the fragmented minerals market and we will continue to be judicious allocators of our shareholders' capital.” FIRST QUARTER 2025 FINANCIAL RESULTS Sitio's rst quarter 2025 average unhedged realized prices including all expected quality, transportation and demand adjustments were $70.39 per barrel of oil, $2.30 per Mcf of natural gas and $24.57 per barrel of natural gas liquids, for a total price of $41.75 per Boe. During the rst quarter of 2025, the Company received $0.4 million in 2
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net cash settlements for commodity derivative contracts and as a result, average hedged realized prices were $70.52 per barrel of oil, $2.34 per Mcf of natural gas and $24.57 per barrel of natural gas liquids, for a total price of $41.86 per Boe. For the rst quarter of 2025, consolidated net income was $26.3 million and Adjusted EBITDA(2) was $142.2 million, up $7.6 million (or 41%) and $6.9 million (or 5%), respectively, compared to rst quarter 2024, primarily due to 18% higher production over the same period. As of March 31, 2025, the Company had $1.1 billion principal value of total debt outstanding (comprised of $486.2 million drawn on Sitio's revolving credit facility and $600.0 million of senior unsecured notes) and liquidity of $440.5 million, including $1.7 million of cash and $438.8 million of remaining availability under its $925.0 million credit facility. FIRST QUARTER 2025 RESULTS VS. FULL YEAR 2025 GUIDANCE Sitio is updating its previously issued full year 2025 estimated cash taxes guidance to re ect lower anticipated commodity prices than originally forecasted. At the midpoint, current estimated cash taxes for 2025 are $5 million less than the original estimate. The table below shows rst quarter 2025 results relative to the Company's current full year 2025 guidance. Sitio does not forecast acquisitions; however, it expects to remain active on M&A given its robust deal pipeline. Guidance Metric 1Q 2025 Reported ResultsFull Year 2025 Guidance Production Total average daily production (Boe/d)42,136 38,250 - 41,250Oil average daily production (Bbls/d)18,868 17,750 - 19,250 Expenses and Taxes Cash G&A ($ in millions)(2) $8.6 $36.5 - $39.5Production taxes and other (% of royalty revenue)8.2% 7.0% - 9.0%Estimated cash taxes ($ in millions)(3) $5.8 $21.5 - $24.5 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 $915 million, including cash dividends and share repurchases, with approximately $75 million attributable to the rst quarter 2025. Sitio’s Board of Directors declared a cash dividend of $0.35 per share of Class A Common Stock with respect to the rst quarter of 2025. The dividend is payable on May 30, 2025 to the stockholders of record at the close of business 3
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on May 20, 2025. During the rst quarter of 2025, the Company repurchased an aggregate 1.1 million shares of Class A Common Stock at an average price of $20.19 per share, or an equivalent $0.15 per share. In total, Sitio will return an aggregate $0.50 per share of capital for the rst quarter of 2025. Subsequent to the rst quarter, from April 1, 2025 through May 2, 2025, Sitio repurchased 486,680 shares of Class A Common Stock at an average price of $16.17 per share for a total of $7.9 million. As of May 2, 2025, the Company had repurchased a total of 6.7 million of Class A Common Stock shares and Sitio OpCo Partnership Units, representing approximately 4% of shares outstanding prior to the Board's authorization of Sitio's share repurchase program. On May 7, 2025, Sitio’s Board of Directors extended the share repurchase program(4) with an additional authorization of $300 million, resulting in $500 million total authorization. Re ecting repurchases through May 2, 2025, remaining share buyback capacity is approximately $350 million. UPCOMING INVESTOR CONFERENCES Sitio executives will attend the RBC Capital Markets Global Energy, Power & Infrastructure Conference in New York on June 3-4, 2025 as well as the Citi Natural Resources Conference in Las Vegas on August 12-14, 2025. CONFERENCE CALL INFORMATION Sitio will host a conference call at 8:30 a.m. ET on Thursday, May 8, 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 435140, or by webcast at https://events.q4inc.com/attendee/207226218. Participants may also pre-register for the event via the following link: https://www.netroadshow.com/events/login?show=9fa7173e&confId=80085. 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)Cumulative return since becoming public in June 2022 through March 31, 2025. Includes dividends declared with respect to 1Q25 (payable May 30,2025). Market capitalization is based on Sitio's share price and share count as of May 2, 2025(2)For de nitions of non-GAAP nancial measures and reconciliation to their most directly comparable GAAP nancial measures, please see "Non-GAAP nancial measures"(3)Estimated cash tax guidance range is based on expectations at NYMEX forward strip pricing and for the assets owned on May 7, 2025(4)Repurchases may be made from time to time through various methods, including but not limited to open market transactions, privately negotiatedtransactions, and by other means in accordance with applicable state and federal securities laws, certain of which may be made pursuant to tradingplans meeting the requirements of Rule 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The timing of repurchasesunder the share repurchase program, as well as the number and value of shares repurchased under the program, will be determined by theCompany at its discretion and will depend on a variety of factors, including the market price of the Company's Class A Common Stock, oil and gascommodity prices, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements,applicable legal requirements and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and theprogram may be modi ed, suspended, or discontinued at any time without prior notice. The Company is not obligated to purchase any dollaramount or number of shares under the share repurchase program OPERATOR ACTIVITY 4
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The following table summarizes Sitio's net royalty acres, net average daily production and net LOS wells by basin as of March 31, 2025. DelawareMidlandDJ Eagle FordWilliston/ OtherTotalNet Royalty Acres(normalized to 1/8th royaltyequivalent) As of March 31, 2025156,60345,68543,11921,047 8,203274,657 Net Average Daily Production(Boe/d) Three months ended March 31, 202523,772 8,132 6,126 3,433 673 42,136% Oil 44 % 50 % 39 % 48 % 58 % 45 % Net LOS Wells(normalized to 5,000' laterals) Net spuds 11.8 8.7 5.3 2.9 0.2 28.9 Net permits 12.7 3.7 1.6 1.6 0.1 19.7 Net LOS wells as of March 31, 202524.5 12.4 6.9 4.5 0.3 48.6 COMMODITY DERIVATIVE CONTRACTS The following table summarizes Sitio's commodity derivative contracts as of March 31, 2025. Oil (NYMEX WTI)2Q25 Swaps Bbl per day 1,100Weighted Average Price per Bbl $74.65 Collars Bbl per day 2,000Weighted Average Ceiling Price per Bbl $93.20Weighted Average Floor Price per Bbl $60.00 Gas (NYMEX HenryHub)2Q25 Collars MMBtu per day 11,600Weighted Average Ceiling Price per MMBtu$10.34Weighted Average Floor Price per MMBtu $3.31 FINANCIAL RESULTS Production Data Three Months Ended March 31, 2025 2024 Production Data: Crude oil (MBbls) 1,698 1,662Natural gas (MMcf) 7,082 5,016NGL(MBbl) 914 719 5
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NGLs (MBbls) 914 719 Total (MBOE)(6:1) 3,792 3,217 Average daily production (BOE/d)(6:1) 42,136 35,349 Average Realized Prices: Crude oil (per Bbl) $ 70.39$ 76.60Natural gas (per Mcf) $ 2.30$ 1.15NGLs (per Bbl) $ 24.57$ 20.71Combined (per BOE) $ 41.75$ 46.00 Average Realized Prices After E ects of Derivative Settlements: Crude oil (per Bbl) $ 70.52$ 77.62Natural gas (per Mcf) $ 2.34$ 1.53NGLs (per Bbl) $ 24.57$ 20.71Combined (per BOE) $ 41.86$ 47.12 Selected Expense Metrics Three Months Ended March 31, 2025 2024 Production taxes and other 8.2% 8.1%Depreciation, depletion and amortization ($/Boe)$ 20.43$ 23.72General and administrative ($/Boe) $ 4.16$ 4.04Cash G&A ($/Boe) $ 2.27$ 2.36Interest expense, net ($/Boe) $ 6.14$ 5.75 Condensed Consolidated Balance Sheets(In thousands except par and share amounts)March 31, 2025December 31, 2024 (Unaudited) ASSETS Current assetsCash and cash equivalents $ 1,741$ 3,290Accrued revenue and accounts receivable126,426 123,361Prepaid assets 6,576 6,760Derivative asset 472 1,811 Total current assets 135,215 135,222 Property and equipmentOil and natural gas properties, successful e orts method:Unproved properties 2,419,3852,464,836Proved properties 3,003,3372,941,347Other property and equipment 3,720 3,737Accumulated depreciation, depletion, amortization, and impairment(896,112) (818,633) Total property and equipment, net 4,530,3304,591,287 Long-term assetsDeferred nancing costs 7,724 8,525Operating lease right-of-use asset 5,604 5,940Other long-term assets 2,713 2,746 Total long-term assets 16,041 17,211 TOTAL ASSETS $ 4,681,586$ 4,743,720 LIABILITIES AND EQUITY Current liabilitiesAccounts payable and accrued expenses$ 55,868$ 46,385Operating lease liability 1,719 1,646 Total current liabilities 57,587 48,031 Long-term liabilitiesLong-term debt 1,077,1191,078,181Deferred tax liability 236,529 253,778Non-current operating lease liability 5,111 5,462Other long-term liabilities 1,150 1,150 Total long-term liabilities 1,319,9091,338,571 Total liabilities 1,377,4961,386,602 6
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EquityClass A Common Stock, par value $0.0001 per share; 240,000,000 shares authorized; 83,321,153 and83,205,330 shares issued and 77,993,512 and 78,980,516 outstanding at March 31, 2025 and December31, 2024, respectively 8 8Class C Common Stock, par value $0.0001 per share; 120,000,000 shares authorized; 73,443,992 and73,443,992 shares issued and 73,391,244 and 73,391,244 outstanding at March 31, 2025 and December31, 2024, respectively 8 8Additional paid-in capital 1,683,0971,710,372Accumulated de cit (136,509) (146,792)Class A Treasury Shares, 5,327,641 and 4,224,814 shares at March 31, 2025 and December 31, 2024,respectively (119,376) (96,910)Class C Treasury Shares, 52,748 and 52,748 shares at March 31, 2025 and December 31, 2024,respectively (1,265) (1,265)Noncontrolling interest 1,878,1271,891,697 Total equity 3,304,0903,357,118 TOTAL LIABILITIES AND EQUITY$ 4,681,586$ 4,743,720 Unaudited Condensed Consolidated Statements of Operations(In thousands, except per share amounts)Three Months Ended March 31, 2025 2024 Revenues: Oil, natural gas and natural gas liquids revenues$ 158,314$ 147,971Lease bonus and other income 5,201 3,420 Total revenues 163,515 151,391 Operating expenses: Depreciation, depletion and amortization 77,479 76,318General and administrative 15,762 13,011Production taxes and other 12,982 12,026 Total operating expenses 106,223 101,355 Income from operations 57,292 50,036 Other income (expense): Interest expense, net (23,268) (18,510)Commodity derivatives losses (908) (10,050) Income before taxes 33,116 21,476Income tax expense (6,831) (2,784) Net income 26,285 18,692Net income attributable to noncontrolling interest(16,018) (10,224) Net income attributable to Class A stockholders$ 10,267$ 8,468 Net income per share of Class A Common Stock Basic $ 0.13$ 0.10Diluted $ 0.13$ 0.10 Weighted average Class A Common Stock outstanding Basic 78,351 82,404Diluted 78,544 82,404 Unaudited Condensed Consolidated Statements of Cash Flows(In thousands) Three Months Ended March 31, 2025 2024 Cash ows from operating activities: Net income $ 26,285$ 18,692Adjustments to reconcile net income to net cash provided by operating activities:Depreciation, depletion and amortization77,479 76,318Amortization of deferred nancing costs and long-term debt discount1,395 1,294Share-based compensation 6,974 5,104Commodity derivatives losses 908 10,050Net cash received for commodity derivatives settlements431 3,593Deferred tax bene t (17,250) (4,238)Change in operating assets and liabilities:A d d i bl (3065) (6228) 7
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Accrued revenue and accounts receivable(3,065) (6,228)Prepaid assets 120 6,813Other long-term assets 345 343Accounts payable and accrued expenses 10,113 9,295 Operating lease liabilities and other long-term liabilities(254) (296) Net cash provided by operating activities103,481 120,740 Cash ows from investing activities: Purchases of oil and gas properties, net of post-close adjustments(16,858) 1,909Deposits for property acquisitions — (15,000) Other, net (33) (167) Net cash used in investing activities(16,891) (13,258) Cash ows from nancing activities: Borrowings on credit facilities 80,500 59,000Repayments on credit facilities (82,100) (76,000)Debt issuance costs (53) (48)Distributions to noncontrolling interest (30,143) (38,157)Dividends paid to Class A stockholders (31,977) (41,950)Dividend equivalent rights paid (403) (362)Repurchases of Class A Common Stock (22,987) (12,668) Cash paid for taxes related to net settlement of share-based compensation awards(976) (746) Net cash used in nancing activities(88,139) (110,931) Net change in cash and cash equivalents(1,549) (3,449) Cash and cash equivalents, beginning of period3,290 15,195 Cash and cash equivalents, end of period$ 1,741$ 11,746 Supplemental disclosure of non-cash transactions: Decrease in current liabilities for additions to property and equipment:$ (369) $ (87) Supplemental disclosure of cash ow information: Cash paid for income taxes: $ 18,000$ 11Cash paid for interest expense: 9,821 5,180 Non-GAAP nancial measures Adjusted EBITDA, Adjusted EBITDA margin, Discretionary Cash Flow and Cash G&A are non-GAAP supplemental nancial measures used by our management and by external users of our nancial statements such as investors, research analysts and others to assess the nancial performance of our assets and their ability to sustain dividends and/or share repurchases over the long term without regard to nancing methods, capital structure or historical cost basis. Sitio believes that these non-GAAP nancial 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 de ne 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) loss on debt extinguishment, (h) merger-related transaction costs (i) write o of nancing costs and (j) loss on sale of oil and gas properties. We de ne Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues. We de ne Discretionary Cash Flow as Adjusted EBITDA, less cash and accrued interest expense and estimated cash taxes. We de ne 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. 8
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Merger-related transaction costs for the three months ended March 31, 2024 have been recast to conform to the current period presentation. These non-GAAP nancial measures do not represent and should not be considered an alternative to, or more meaningful than, their most directly comparable GAAP nancial measures or any other measure of nancial performance presented in accordance with GAAP as measures of our nancial performance. Non-GAAP nancial measures have important limitations as analytical tools because they exclude some but not all items that a ect the most directly comparable GAAP nancial measure. Our computations of Adjusted EBITDA, Adjusted EBITDA margin, Discretionary Cash Flow and Cash G&A may di er 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 nancial 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 nancial measure for the period indicated (in thousands). Three Months Ended March 31, 2025 2024 Net income $ 26,285$ 18,692Interest expense, net 23,268 18,510Income tax expense 6,831 2,784Depreciation, depletion and amortization 77,479 76,318 EBITDA $ 133,863$ 116,304 Non-cash share-based compensation expense6,974 5,104Losses on unsettled derivative instruments 1,339 13,643Merger-related transaction costs — 181 Adjusted EBITDA $ 142,176$ 135,232 The following table presents a reconciliation of Discretionary Cash Flow to the most directly comparable GAAP nancial measure for the period indicated (in thousands). Three Months Ended March 31, 2025 2024 Cash ow from operations $ 103,481$ 120,740Interest expense, net 23,268 18,510Income tax expense 6,831 2,784Deferred tax bene t 17,250 4,238Changes in operating assets and liabilities (7,259) (9,927)Amortization of deferred nancing costs and long-term debt discount(1,395) (1,294)Merger-related transaction costs — 181 9
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Adjusted EBITDA $ 142,176$ 135,232 Less:Cash and accrued interest expense 21,873 17,210Estimated cash taxes 5,750 8,375 Discretionary Cash Flow $ 114,553$ 109,647 The following table presents a reconciliation of Cash G&A to the most directly comparable GAAP nancial measure for the period indicated (in thousands). Three Months Ended March 31, 2025 2024 General and administrative expense $ 15,762$ 13,011Less:Non-cash share-based compensation expense6,974 5,104Merger-related transaction costs — 181Rental income 184 141 Cash G&A $ 8,604$ 7,585 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 diversi ed set of top-tier operators. With a clear objective of generating cash ow 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 March 31, 2025. 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 ows, nancial 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 bene ts, nancial and operational guidance, strategy, synergies, certain levels of production, future operations, acquisitions, nancial 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 10
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predictions depend on a number of risks and uncertainties that could cause our actual results, performance, and nancial condition to di er 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 tari s, slowing growth and demand, especially from China, the con ict in Ukraine and associated economic sanctions on Russia, the con ict in the Israel-Gaza region and continued hostilities in the Middle East including heightened tensions and con ict with Iran, Lebanon and Yemen, actions by OPEC+ and others, including any removal of oil production curtailments 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, Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, and other publicly led 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 di er 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. IR contact: Alyssa Stephens (281) 407–5204 IR@sitio.com Source: Sitio Royalties Corp. 11