Company reports production above guidance range
with strong operator activity in Permian and DJ Basins
2024 outlook enhanced through legacy asset
outperformance and impact of five acquisitions closed in third
quarter
Line of sight wells increased 11% Q-o-Q with
higher operator activity and permitting in the Midland and DJ
Basins
Long-term debt reduced by approximately $56.5
million during the quarter
Third quarter total return of capital of $0.47
per share, includes $29.0 million in common stock repurchases and
planned payment of $0.28 per share dividend
Sitio Royalties Corp. (NYSE: STR) (“Sitio”, “STR” or the
“Company”) today announced third quarter 2024 operational and
financial results. Robust production, coupled with strong
year-to-date performance and the positive impact from five recent
acquisitions, allowed the Company to enhance its 2024 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, November 7, 2024. Participation
details can be found within this release.
HIGHLIGHTS
- Posted third quarter net income of $27.9 million and Adjusted
EBITDA of $135.4 million. Financial results reflected strong
production volumes from legacy assets and recent acquisitions
- Recorded third quarter production above full year guidance
range, 38,585 barrels of oil equivalent per day (“Boe/d”) (50%
oil)
- Reduced long-term debt by approximately $56.5 million during
the period with the Company’s quarter-end credit facility balance
at $403.0 million and liquidity of $455.5 million
- Ongoing benefit of diversified asset base, exposure to quality
operators across top domestic basins and track record of value-add
acquisitions. Line of sight (“LOS”) wells increased 11%
quarter-over-quarter and there were 7.7 net wells turned-in-line,
providing high confidence in sustainable business model
- Continued to return cash to shareholders and enhance value on a
per share basis; Sitio to return $0.47 per share of Class A Common
Stock, comprised of a $0.28 per share cash dividend (payable
November 27, 2024), and $0.19 per share of stock repurchases;
Year-to-date, the buyback program has reduced outstanding shares by
3% and total return of capital (including dividends and stock
repurchases) is $1.67 per share
- Repurchased 1.4 million shares of Class A Common Stock during
the quarter ($21.47 per share avg. price); Repurchases year-to-date
total $105.2 million with $94.8 million authorization remaining as
of September 30, 2024
“We continued our streak of sound results, beating expectations
for the third consecutive quarter. This allowed us to strengthen
our full-year 2024 outlook with higher volumes and cash costs that
are down by approximately 4% year-over-year,” said Sitio CEO Chris
Conoscenti. “We are proving the resiliency of our business model
and offer investors an attractive option to own quality and high
margin oil and gas assets across several of the best basins in the
U.S. Through disciplined acquisitions and effective management of
our resources, we are differentiating Sitio from its peers. The
recent expansion of our line-of-sight wells and healthy operating
activity levels today provide us with high-confidence in our
ability to deliver value for our shareholders.”
THIRD QUARTER 2024 FINANCIAL AND OPERATING RESULTS
Net income in the quarter was $27.9 million and Adjusted EBITDA
was $135.4 million. Financial performance benefited from robust
production from legacy assets and the impact of recent
acquisitions.
Third quarter production exceeded full year 2024 guidance,
averaging 38,585 Boe/d (50% oil and 72% liquids). Oil production
for the period was 19,134 Bbl/d and was positively impacted by
strong revenues from the Delaware, Midland and DJ Basins.
Average realized commodity prices during the third quarter were
$74.67 per Bbl for oil (98% of NYMEX WTI and Midland Oil), $17.11
per Bbl for natural gas liquids, and $0.45 per Mcf for natural gas
(21% of NYMEX Henry Hub; $0.90 per Mcf above Waha). Total average
realized price for the period was $41.65 per barrel of oil
equivalent ("Boe") on an unhedged basis. Realized prices benefited
from approximately $4.3 million in net cash settlements for
commodity derivative contracts and total average realized price for
the period was $42.85 per Boe on a hedged basis.
General and administrative expenses was $14.4 million and Cash
G&A in the period was in-line with expectations at $7.8
million, or $2.20 per Boe. With Sitio’s diverse asset base and
exposure to multiple operators, the Company benefits from
industry’s continued innovation and operational efficiency gains.
Sitio believes that many of these gains are sustainable and will
positively impact future margins.
3Q 2024 AND YTD PRO FORMA RESULTS VS. PRIOR 2024 FY
GUIDANCE
The table below shows third quarter 2024 and pro forma 2024
results for the three months ended September 30, 2024 relative to
the prior full year guidance previously issued on August 7, 2024.
Primarily as a result of our legacy asset outperformance and the
impact of recent acquisitions, we are providing updated full year
guidance later in this press release under "Updated 2024 Full Year
Financial and Operational Guidance."
Metric
3Q 2024
Reported Results
YTD24
Pro Forma Results(1)
Prior 2024 FY
Guidance(1)
Average daily production (Boe/d)
38,585
38,595
36,000 – 38,000
Oil %
50
%
50
%
49% – 51%
Cash G&A ($ in millions)
$
7.8
$
22.6
$31.5 – $33.5 (annual)
Production taxes (% of royalty
revenue)
6.9
%
7.7
%
7.5% – 9.5%
Estimated cash taxes ($ in
millions)(2)
$
4.6
$
13.9
$9.0 – $15.0 (annual)
(1)
Includes production from the DJ Basin
Acquisition as if it was owned on January 1, 2024; 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
(2)
Cash tax guidance is based on strip
pricing when guidance was issued; Estimated cash taxes for YTD24
Pro Forma Results represents the estimated cash taxes used in the
calculation of Discretionary Cash Flow and is not pro forma for the
DJ Basin Acquisition
UPDATED 2024 FULL YEAR FINANCIAL AND OPERATIONAL
GUIDANCE
The table below includes Sitio's updated guidance for full year
2024 and includes impacts from the DJ Basin Acquisition as if the
transaction had closed on January 1, 2024 for pro forma average
daily production. Sitio today enhanced its full-year 2024 outlook
and raised the midpoint of its pro forma average daily production
range by 1,000 Boe/d due to robust legacy production year-to-date
and expected impacts from five recent acquisitions. The midpoint of
2024 guidance for cash taxes increased by $7.0 million based on
latest estimates.
Full Year 2024 Guidance
August 7, 2024
November 6, 2024
Change at Midpoint
Pro Forma Average Daily
Production(1)
Pro forma average daily production
(Boe/d)(1)
36,000 - 38,000
37,000 - 39,000
1,000
Pro forma average daily production (%
oil)(1)
49% - 51%
49% - 51%
-
Expenses and Taxes
Cash G&A ($ in millions)
$31.5 - $33.5
$30.0 - $32.0
$
(1.5
)
Production taxes (% of royalty
revenue)
7.5% - 9.5%
7.5% - 9.5%
-
Cash taxes ($ in millions)(2)
$9.0 - $15.0
$17.0 - $21.0
$
7.0
(1)
Includes production from the DJ Basin
Acquisition as if it was owned on January 1, 2024
(2)
Cash tax guidance range is based on
expectations at strip pricing when guidance was issued
OPERATOR ACTIVITY
The following table summarizes Sitio's net average daily
production and net line-of-sight ("LOS") wells by area.
Delaware
Midland
DJ
Eagle
Ford
Williston/Other
Total
Average Daily
Production (Boe/d)
for the three
months ended
September 30,
2024
As reported
20,167
8,446
5,648
3,386
938
38,585
% Oil
50
%
57
%
37
%
54
%
45
%
50
%
Net LOS
Wells
as of
September 30, 2024
Net spuds
11.1
8.9
5.8
1.4
0.3
27.5
Net permits
11.4
5.1
2.8
1.9
0.2
21.4
Net LOS
wells
as of September
30, 2024
22.5
14.0
8.6
3.3
0.5
48.9
FINANCIAL UPDATE
Sitio's third quarter 2024 average unhedged realized prices
including all expected quality, transportation and demand
adjustments were $74.67 per barrel of oil, $0.45 per Mcf of natural
gas and $17.11 per barrel of natural gas liquids, for a total price
of $41.65 per Boe. During the third quarter of 2024, the Company
received $4.3 million in net cash settlements for commodity
derivative contracts and as a result, average hedged realized
prices were $75.96 per barrel of oil, $0.78 per Mcf of natural gas
and $17.11 per barrel of natural gas liquids, for a total price of
$42.85 per Boe.
Consolidated net income for the third quarter of 2024 was $27.9
million, which is $1.2 million, or 4.0% lower than consolidated net
income in the second quarter of 2024. This decrease was primarily
driven by $17.7 million lower oil, natural gas and natural gas
liquids revenues and $1.5 million lower lease bonus and other
income, partially offset by $8.4 million higher commodity
derivative gains, $7.4 million of decreased depreciation, depletion
and amortization, and $2.2 million of decreased severance and ad
valorem taxes. For the three months ended September 30, 2024,
Adjusted EBITDA was $135.4 million, down 10.7% compared to the
second quarter 2024 Adjusted EBITDA of $151.7 million, largely due
to lower unhedged realized oil prices.
As of September 30, 2024, the Company had $1,003.0 million
principal value of total debt outstanding (comprised of $403.0
million drawn on Sitio's revolving credit facility and $600.0
million of senior unsecured notes) and liquidity of $455.5 million,
including $8.5 million of cash and $447.0 million of remaining
availability under its $850.0 million credit facility.
Sitio did not add to or extinguish any of its commodity swaps or
collars during the third quarter of 2024. A summary of the
Company's existing commodity derivative contracts as of September
30, 2024 is included in the table below.
Oil (NYMEX WTI)
2024
1H25
Swaps
Bbl per day
3,300
1,100
Average price ($/Bbl)
$
82.66
$
74.65
Collars
Bbl per day
—
2,000
Average call ($/Bbl)
—
$
93.20
Average put ($/Bbl)
—
$
60.00
Gas (NYMEX Henry Hub)
2024
1H25
Swaps
MMBtu per day
500
—
Average price ($/MMBtu)
$
3.41
—
Collars
MMBtu per day
11,400
11,600
Average call ($/MMBtu)
$
7.24
$
10.34
Average put ($/MMBtu)
$
4.00
$
3.31
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 has returned more than $765 million
to owners, including year-to-date returns of $245 million.
Sitio’s Board of Directors declared a cash dividend of $0.28 per
share of Class A Common Stock with respect to the third quarter of
2024. The dividend is payable on November 27, 2024 to the
stockholders of record at the close of business on November 19,
2024. During the third quarter of 2024, the Company repurchased an
aggregate 1.4 million shares of Class A Common Stock at an average
price of $21.47 per share, representing 26% of third quarter 2024
Discretionary Cash Flow, or $0.19 per share. As of September 30,
2024, the Company had repurchased a total of 4.5 million in Class A
Common Stock 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. In
total, Sitio's return of capital for the third quarter of 2024 is
$0.47 per share.
CONFERENCE CALL INFORMATION
Sitio will host a conference call at 7:30 a.m. CT / 8:30 a.m. ET
on Thursday, November 7, 2024. 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 296060, or by webcast at
https://events.q4inc.com/attendee/861493711. Participants may also
pre-register for the event via the following link:
https://www.netroadshow.com/events/login?show=3a129c74&confId=71395.
The conference call, live webcast, and replay can also be accessed
through the Investor Relations section of Sitio’s website at
www.sitio.com.
FINANCIAL RESULTS
Production Data
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Production Data:
Crude oil (MBbls)
1,760
1,617
5,219
4,786
Natural gas (MMcf)
5,900
6,203
16,808
17,214
NGLs (MBbls)
806
744
2,316
1,996
Total (MBOE)(6:1)
3,549
3,395
10,336
9,651
Average daily production (BOE/d)(6:1)
38,585
36,900
37,725
35,349
Average Realized Prices:
Crude oil (per Bbl)
$
74.67
$
80.21
$
77.07
$
75.11
Natural gas (per Mcf)
$
0.45
$
1.54
$
0.85
$
1.90
NGLs (per Bbl)
$
17.11
$
18.14
$
19.32
$
19.39
Combined (per BOE)
$
41.65
$
45.00
$
44.63
$
44.65
Average Realized Prices After Effects
of Derivative Settlements:
Crude oil (per Bbl)
$
75.96
$
82.21
$
77.95
$
77.95
Natural gas (per Mcf)
$
0.78
$
1.84
$
1.21
$
2.20
NGLs (per Bbl)
$
17.11
$
18.14
$
19.32
$
19.39
Combined (per BOE)
$
42.85
$
46.49
$
45.66
$
46.59
Selected Expense Metrics
Three Months Ended September
30,
2024
2023
Severance and ad valorem taxes
6.9
%
7.9
%
Depletion ($/Boe)
$
21.97
$
23.74
General and administrative ($/Boe)
$
4.05
$
3.55
Cash G&A ($/Boe)
$
2.20
$
2.18
Interest expense, net ($/Boe)
$
6.34
$
7.77
Condensed Consolidated Balance
Sheets
(In thousands except par and share
amounts)
September 30,
2024
December 31,
2023
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
8,507
$
15,195
Accrued revenue and accounts
receivable
118,635
107,347
Prepaid assets
8,023
12,362
Derivative asset
9,066
19,080
Total current assets
144,231
153,984
Property and equipment
Oil and natural gas properties, successful
efforts method:
Unproved properties
2,514,348
2,698,991
Proved properties
2,752,715
2,377,196
Other property and equipment
3,688
3,711
Accumulated depreciation, depletion,
amortization, and impairment
(738,232
)
(498,531
)
Total property and equipment, net
4,532,519
4,581,367
Long-term assets
Long-term derivative asset
—
3,440
Deferred financing costs
8,887
11,205
Operating lease right-of-use asset
4,949
5,970
Other long-term assets
2,778
2,835
Total long-term assets
16,614
23,450
TOTAL ASSETS
$
4,693,364
$
4,758,801
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses
$
56,364
$
30,050
Operating lease liability
1,605
1,725
Total current liabilities
57,969
31,775
Long-term liabilities
Long-term debt
992,854
865,338
Deferred tax liability
248,005
259,870
Non-current operating lease liability
4,511
5,394
Other long-term liabilities
1,150
1,150
Total long-term liabilities
1,246,520
1,131,752
Total liabilities
1,304,489
1,163,527
Equity
Class A Common Stock, par value $0.0001
per share; 240,000,000 shares authorized; 82,871,009 and 82,451,397
shares issued and 79,288,976 and 82,451,397 outstanding at
September 30, 2024 and December 31, 2023, respectively
8
8
Class C Common Stock, par value $0.0001
per share; 120,000,000 shares authorized; 73,730,215 and 74,965,217
shares issued and 73,677,467 and 74,939,080 outstanding at
September 30, 2024 and December 31, 2023, respectively
7
8
Additional paid-in capital
1,720,293
1,796,147
Accumulated deficit
(153,853
)
(187,738
)
Class A Treasury Shares, 3,582,033 and 0
shares at September 30, 2024 and December 31, 2023,
respectively
(83,896
)
—
Class C Treasury Shares, 52,748 and 26,137
shares at September 30, 2024 and December 31, 2023,
respectively
(1,265
)
(677
)
Noncontrolling interest
1,907,581
1,987,526
Total equity
3,388,875
3,595,274
TOTAL LIABILITIES AND EQUITY
$
4,693,364
$
4,758,801
Unaudited Condensed Consolidated
Statements of Operations
(In thousands, except per share
amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues:
Oil, natural gas and natural gas liquids
revenues
$
147,858
$
152,766
$
461,345
$
430,887
Lease bonus and other income
1,517
3,944
7,969
13,115
Total revenues
149,375
156,710
469,314
444,002
Operating expenses:
Depreciation, depletion and
amortization
78,093
80,716
239,896
222,718
General and administrative
14,382
12,044
40,849
37,786
Severance and ad valorem taxes
10,196
12,124
34,655
32,927
Impairment of oil and gas properties
—
—
—
25,617
Total operating expenses
102,671
104,884
315,400
319,048
Net income from operations
46,704
51,826
153,914
124,954
Other income (expense):
Interest expense, net
(22,511
)
(26,373
)
(63,709
)
(71,735
)
Change in fair value of warrant
liability
—
8
—
2,950
Loss on extinguishment of debt
—
(687
)
—
(1,470
)
Commodity derivatives gains (losses)
7,785
(24,125
)
(2,872
)
(3,250
)
Interest rate derivative gains
—
9
—
456
Net income before taxes
31,978
658
87,333
51,905
Income tax expense
(4,111
)
(383
)
(11,733
)
(6,884
)
Net income
27,867
275
75,600
45,021
Net (income) loss attributable to
noncontrolling interest
(15,304
)
12
(41,715
)
(22,877
)
Net income attributable to Class A
stockholders
$
12,563
$
287
$
33,885
$
22,144
Net income (loss) per share of Class A
Common Stock
Basic
$
0.15
$
—
$
0.41
$
0.26
Diluted
$
0.15
$
—
$
0.41
$
0.26
Weighted average Class A Common Stock
outstanding
Basic
80,142
81,712
81,095
80,984
Diluted
80,278
157,260
81,263
80,984
Unaudited Condensed Consolidated
Statements of Cash Flows
(In thousands)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities:
Net income
$
75,600
$
45,021
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and
amortization
239,896
222,718
Amortization of deferred financing costs
and long-term debt discount
3,925
4,275
Share-based compensation
17,558
14,474
Change in fair value of warrant
liability
—
(2,950
)
Loss on extinguishment of debt
—
1,470
Impairment of oil and gas properties
—
25,617
Commodity derivatives losses
2,872
3,250
Net cash received for commodity
derivatives settlements
10,582
18,730
Interest rate derivative gains
—
(456
)
Net cash paid for interest rate derivative
settlements
—
403
Deferred tax benefit
(11,984
)
(15,107
)
Change in operating assets and
liabilities:
Accrued revenue and accounts
receivable
(11,288
)
26,188
Prepaid assets
4,402
13,187
Other long-term assets
961
1,866
Accounts payable and accrued expenses
24,984
(3,131
)
Operating lease liabilities and other
long-term liabilities
(777
)
(737
)
Net cash provided by operating
activities
356,731
354,818
Cash flows from investing
activities:
Purchases of oil and gas properties, net
of post-close adjustments
(190,834
)
(172,070
)
Purchases of other property and
equipment
—
(19
)
Other, net
(319
)
—
Net cash used in investing
activities
(191,153
)
(172,089
)
Cash flows from financing
activities:
Borrowings on credit facilities
329,000
588,500
Repayments on credit facilities
(203,000
)
(497,500
)
Repayments on 2026 Senior Notes
—
(33,750
)
2026 Senior Notes issuance costs
—
(351
)
Debt issuance costs
(144
)
—
Distributions to noncontrolling
interest
(91,512
)
(121,924
)
Dividends paid to Class A stockholders
(99,087
)
(121,555
)
Dividend equivalent rights paid
(943
)
(982
)
Repurchases of Class A Common Stock
(82,619
)
—
Repurchases of Sitio OpCo Partnership
Units (including associated Class C Common Shares)
(22,142
)
—
Cash paid for taxes related to net
settlement of share-based compensation awards
(1,819
)
(3,432
)
Payments of deferred financing costs
—
(9,214
)
Net cash used in financing
activities
(172,266
)
(200,208
)
Net change in cash and cash
equivalents
(6,688
)
(17,479
)
Cash and cash equivalents, beginning of
period
15,195
18,818
Cash and cash equivalents, end of
period
$
8,507
$
1,339
Supplemental disclosure of non-cash
transactions:
Increase in current liabilities for
additions to property and equipment:
$
42
$
224
Oil and gas properties acquired through
issuance of Class C Common Stock and Sitio OpCo Partnership
Units:
—
66,256
Supplemental disclosure of cash flow
information:
Cash paid for income taxes:
$
3,080
$
9,268
Cash paid for interest expense:
51,144
68,249
Non-GAAP financial measures
Adjusted EBITDA, Pro Forma Adjusted EBITDA, Discretionary Cash
Flow, Pro Forma 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 plus (a) interest
expense, (b) provisions for 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) loss on debt extinguishment, (i)
merger-related transaction costs and (j) write off of financing
costs.
We define Pro Forma Adjusted EBITDA as Adjusted EBITDA plus Cash
Acquisitions EBITDA from July 1, 2023 to September 30, 2023 that is
not included in Adjusted EBITDA for the three months ended
September 30, 2023. Cash Acquisitions is defined as the four
acquisitions that closed in July and August 2023 for approximately
$181 million.
We define Discretionary Cash Flow and Pro Forma Discretionary
Cash Flow for the three months ended September 30, 2024 as Adjusted
EBITDA, less cash and accrued interest expense and estimated cash
taxes.
We define Discretionary Cash Flow for the three months ended
September 30, 2023 as Adjusted EBITDA, less cash interest expense
and cash taxes.
We define Pro Forma Discretionary Cash Flow for the three months
ended September 30, 2023 as Discretionary Cash Flow for the three
months ended September 30, 2023 plus Cash Acquisitions
Discretionary Cash Flow from July 1, 2023 to September 30, 2023
that is not included in Discretionary Cash Flow for the three
months ended September 30, 2023.
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 months ended
September 30, 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, Pro Forma Adjusted EBITDA, Discretionary Cash Flow, Pro
Forma Discretionary Cash Flow and Cash G&A may differ from
computations of similarly titled measures of other companies.
The pro forma financial data is presented for illustrative
purposes only and should not be relied upon as an indication of the
financial condition that would have been achieved if the
acquisitions had taken place on the specified dates. In addition,
future results may vary significantly from the results reflected in
such pro forma data and should not be relied on as an indication of
future results.
The following tables present a reconciliation of Adjusted EBITDA
and Pro Forma Adjusted EBITDA to the most directly comparable GAAP
financial measure for the period indicated (in thousands).
Three Months Ended
September 30,
2024
2023
Net income
$
27,867
$
275
Interest expense, net
22,511
26,373
Income tax expense
4,111
383
Depreciation, depletion and
amortization
78,093
80,716
EBITDA
$
132,582
$
107,747
Non-cash share-based compensation
expense
6,251
4,368
Losses (gains) on unsettled derivative
instruments
(3,518
)
29,497
Change in fair value of warrant
liability
—
(8
)
Loss on debt extinguishment
—
687
Merger-related transaction costs
126
251
Adjusted EBITDA
$
135,441
$
142,542
Cash Acquisitions EBITDA1
—
1,144
Pro Forma Adjusted EBITDA1
$
135,441
$
143,686
(1)
Cash Acquisitions closed in 2023 and are
reflected in the full results for the three months ended September
30, 2024
Three Months Ended June
30,
2024
Net income
$
29,041
Interest expense, net
22,688
Income tax expense
4,838
Depreciation, depletion and
amortization
85,485
EBITDA
$
142,052
Non-cash share-based compensation
expense
6,203
Losses on unsettled derivative
instruments
3,329
Merger-related transaction costs
149
Adjusted EBITDA
$
151,733
The following table presents a reconciliation of Discretionary
Cash Flow and Pro Forma Discretionary Cash Flow to the most
directly comparable GAAP financial measure for the period indicated
(in thousands).
Three Months Ended
September 30,
2024
2023
Cash flow from operations
$
138,679
$
122,141
Interest expense, net
22,511
26,373
Income tax expense
4,111
383
Deferred tax benefit
4,490
7,686
Changes in operating assets and
liabilities
(33,154
)
(12,810
)
Amortization of deferred financing costs
and long-term debt discount
(1,322
)
(1,482
)
Merger-related transaction costs
126
251
Adjusted EBITDA
$
135,441
$
142,542
Less:
Cash and accrued interest expense
21,189
24,694
Estimated cash taxes
4,625
457
Discretionary Cash Flow
$
109,627
$
117,391
Cash Acquisitions Discretionary Cash
Flow1
$
—
$
1,144
Pro Forma Discretionary Cash
Flow1
$
109,627
$
118,535
(1)
Cash Acquisitions closed in 2023 and are
reflected in the full results for the three months ended September
30, 2024
The following table presents a reconciliation of Cash G&A to
the most directly comparable GAAP financial measure for the period
indicated (in thousands).
Three Months Ended
September 30,
2024
2023
General and administrative expense
$
14,382
$
12,044
Less:
Non-cash share-based compensation
expense
6,251
4,368
Merger-related transaction costs
126
251
Rental income
183
136
Cash G&A
$
7,822
$
7,289
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 265,000 NRAs through the
consummation of over 200 acquisitions to date. 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 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, 2023 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106907897/en/
IR contact: Ross Wong (720) 640–7647 IR@sitio.com
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