分组1 - Sitio Royalties reported quarterly earnings of $0.08 per share, missing the Zacks Consensus Estimate of $0.13 per share, and down from $1.12 per share a year ago, representing an earnings surprise of -38.46% [1] - The company posted revenues of $155.1 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.09%, and up from $149.35 million year-over-year [2] - Sitio Royalties has surpassed consensus revenue estimates three times over the last four quarters [2] 分组2 - The stock has added about 1.6% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.15 on $151 million in revenues, and $0.61 on $615.33 million in revenues for the current fiscal year [7] - The Zacks Industry Rank for Oil and Gas - Royalty Trust - United States is currently in the top 1% of over 250 Zacks industries, indicating strong industry performance [8]

Revenue Sources and Dependence - Sitio's revenues are primarily derived from royalty payments based on the prices of crude oil, natural gas, and NGLs, which are subject to significant volatility[53]. - A substantial majority of Sitio's revenue is dependent on unaffiliated E&P operators for exploration, development, and production activities[53]. - Sitio's revenue is primarily dependent on unaffiliated E&P operators, and any reduction in production or drilling activities could adversely affect its cash flows[53]. - A substantial majority of Sitio's revenues are derived from royalty payments based on the prices of crude oil, natural gas, and NGLs, which are subject to volatility[53]. Growth Strategy and Acquisitions - Sitio's growth strategy includes acquisitions to increase reserves, production, and cash flows, with potential risks associated with identifying and integrating these acquisitions[53]. - Sitio relies on acquisitions to grow reserves and cash flows, and failure to successfully identify and integrate these acquisitions could materially impact its operations[53]. Regulatory and Environmental Risks - The company faces risks related to environmental regulations, particularly in Colorado, which may lead to increased costs and operational delays[57]. - The Inflation Reduction Act of 2022 could impose new costs on Sitio's E&P operators, potentially affecting their operations[57]. - The company may face increased costs and operational delays due to recent regulatory changes in Colorado affecting oil and natural gas permits[57]. Financial Risks and Market Conditions - Changes in general economic conditions and inflation may adversely affect Sitio's financial position and results of operations[53]. - Sitio's debt levels may limit its flexibility to obtain additional financing and pursue growth opportunities[57]. - The company may enter into derivative contracts to manage price fluctuations, which could expose it to financial risks[53]. - The company has entered into derivative contracts to manage cash flow predictability, which may expose it to financial loss under certain circumstances[53]. - A significant portion of Sitio's outstanding shares may be sold into the market soon, potentially causing a drop in the market price of its Class A Common Stock[57]. - Investment in new business ventures could disrupt ongoing operations and present unforeseen risks[53].

Production and Revenue - Fourth quarter production increased by 14% year-over-year to a record 40.9 MBoe/d, with a 6% increase quarter-over-quarter[4] - Full year pro forma production exceeded the high end of company guidance, with average daily production forecasted at 39.8 MBoe/d for 2025, representing a 3% increase from 2024[2][8] - Average daily production rose to 40,874 BOE/d in Q4 2024, compared to 35,776 BOE/d in Q4 2023, reflecting a 14.8% increase[19] - Crude oil production increased to 1,782 MBbls in Q4 2024, up 14.4% from 1,558 MBbls in Q4 2023[19] - Total revenues for 2024 reached $624.414 million, a 5.5% increase from $593.356 million in 2023[23] Financial Performance - Net income for the fourth quarter was $19.3 million, and Adjusted EBITDA was $141.2 million, reflecting increases of $111.0 million and $6.2 million (5%) respectively compared to Q4 2023[7] - Net income for 2024 was $94.929 million, a significant recovery from a net loss of $46.695 million in 2023[23] - Adjusted EBITDA for Q4 2024 was $141,249,000, compared to $135,037,000 in Q4 2023, reflecting a year-over-year increase of approximately 8.2%[35] - Discretionary Cash Flow for Q4 2024 was $116,872,000, up from $115,401,000 in Q4 2023, indicating a stable cash generation capability[38] Shareholder Returns - Sitio returned a total of $0.49 per share to shareholders in Q4 2024, consisting of a cash dividend of $0.41 and $0.08 from stock repurchases[10] - Cumulative return of capital to shareholders since the Falcon merger in June 2022 has exceeded $840 million, representing nearly 30% of current market capitalization[2][10] - The company repurchased $118.1 million of common stock in 2024, resulting in a 3% reduction in total shares outstanding year-over-year[4] Debt and Liquidity - As of December 31, 2024, total debt outstanding was $1.1 billion, with liquidity of $440.5 million[7] - Long-term debt increased to $1.078 billion in 2024, up 24.7% from $865.338 million in 2023[22] - Cash and cash equivalents at the end of the period were $3,290,000, down from $15,195,000 at the end of 2023[26] - The company reported a net change in cash and cash equivalents of $(11,905,000) for the year, indicating a decrease in liquidity[26] Acquisitions and Investments - The company closed three acquisitions in late 2024 for approximately $140 million, adding about 3,300 net royalty acres primarily in the Delaware Basin[4] - The company completed over 200 acquisitions, accumulating over 270,000 net royalty acres (NRAs) as of December 31, 2024[40] - Total cash used in investing activities was $329,959,000, compared to $59,726,000 in 2023, highlighting increased investment in oil and gas properties[25] Operational Costs - General and administrative expenses for the year ended December 31, 2024, were $54,725,000, an increase from $49,620,000 in 2023[39] - Cash G&A for Q4 2024 was $7,159,000, compared to $6,431,000 in Q4 2023, reflecting a rise in operational costs[39] - Production taxes and other expenses as a percentage of revenue decreased to 7.5% in Q4 2024 from 9.8% in Q4 2023[20] Market Risks and Forward-Looking Statements - The company emphasizes that forward-looking statements may include projections about expected results of operations, cash flows, and future dividends[41] - Risks impacting forward-looking statements include commodity price volatility, global economic uncertainty, and market volatility related to U.S. trade policy changes[41] - The company acknowledges potential impacts from slowing growth and demand, particularly from China, and geopolitical conflicts such as the situation in Ukraine and the Israel-Gaza region[41] - The accuracy of oil and gas reserve estimates is contingent on data quality, interpretation, and price assumptions made by reserve engineers[41] - Reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered, affecting future production schedules[41] - The company does not undertake any obligation to publicly update forward-looking statements unless required by law[41]

We are currently offering a free two-week trial to Distressed Value Investing . Join our community to receive exclusive research about various companies and other opportunities, along with full access to my portfolio of historic research that now includes over 1,000 reports on over 100 companies.Sitio Royalties Corp. (NYSE: STR ) increased its full-year production guidance by 1,000 BOEPD due to asset outperformance as well as some additional minor acquisitions. The asset outperformance appears to account fo ...

Financial Data and Key Metrics Changes - Sitio Royalties reported robust financial results for Q3 2024, with production reaching nearly 38,600 BOEs per day, half of which was oil [17] - The company closed five new acquisitions totaling approximately $22 million, adding over 2,300 NRAs in the DJ Basin [15][16] - Total debt was reduced by nearly $60 million over the last quarter, and interest expense on a barrel of oil equivalent basis is 18% lower than one year ago [12] Business Line Data and Key Metrics Changes - The company has seen strong performance from both legacy assets and recent acquisitions, enhancing the 2024 production outlook by raising the midpoint of production guidance by 1,000 BOEs per day [16] - The average market cap of the top five public company operators on Sitio's acreage has more than doubled since the end of 2022, indicating improved operational efficiency [18] Market Data and Key Metrics Changes - The bulk of activity on Sitio's assets was in the Permian and DJ Basins, with a solid 11% increase in net line of sight wells compared to the second quarter [27] - The company has 9,000 gross line of sight wells expected over the next 12 to 18 months, providing high confidence in near-term operator activity [39] Company Strategy and Development Direction - Sitio's strategy focuses on identifying high-quality acquisitions with the highest expected returns, maintaining a strong capital structure, and returning capital to shareholders through dividends and share buybacks [14][30] - The company is well-positioned to capitalize on the ongoing consolidation in the mineral sector, enhancing returns and smoothing volatility from commodity price fluctuations [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of the business model, emphasizing disciplined capital allocation and the ability to weather commodity price cycles [12][29] - The M&A market remains active, with a robust flow of opportunities, particularly in the DJ Basin, where rate of return has been superior recently [34][41] Other Important Information - Sitio has recovered approximately $25 million in missing payments over the last 12 months through proprietary data management systems [11] - The company has committed to returning at least 65% of discretionary cash flow to shareholders, with a cash dividend yield significantly higher than the S&P 500 [45][47] Q&A Session Summary Question: How does Sitio view the M&A market? - Management indicated that the M&A market is exciting, with active outbound business development efforts and a robust flow of marketed processes [32] Question: What drove the increase in Line-of-Sight wells? - The increase was attributed to diverse activity across multiple basins, including the Permian and DJ, with a significant number of gross wells being spun and permitted [36][38] Question: What are the thoughts on acquisitions in the DJ Basin? - The DJ Basin has shown superior rate of return opportunities, leading to directed capital investments there, while the Permian remains the largest opportunity set [41][42] Question: How does Sitio balance buybacks and debt reduction? - The company has committed to returning at least 65% of discretionary cash flow to shareholders while retaining 35% for balance sheet protection and opportunistic acquisitions [45][46] Question: What regions are driving cumulative production outperformance? - Management highlighted that acquisitions are performing in line or better than underwriting assumptions, with no significant outperformance or underperformance noted [50][52] Question: What is the outlook for cash tax guidance? - The company expects a more straightforward tax situation going forward, reverting to estimated tax rates based on statutory rates [56][57] Question: How does consolidation affect asset portfolios? - Management noted that as assets change hands, they become a priority for operators, leading to improved performance and efficiency [63][64]

3Q24 Earnings Presentation November 6, 2024 Disclaimer FORWARD-LOOKING STATEMENTS This presentation relates to Sitio Royalties Corp. (the "Company" or "Sitio") and 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," "beli ...

Core Viewpoint - Sitio Royalties reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.14, but down from $0.23 per share a year ago, indicating a 7.14% earnings surprise [1][2] Financial Performance - The company posted revenues of $149.38 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.40%, and down from $156.71 million year-over-year [2] - Over the last four quarters, Sitio Royalties has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Sitio Royalties shares have declined approximately 3.7% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $151 million, and for the current fiscal year, it is $0.56 on revenues of $623 million [7] - The estimate revisions trend for Sitio Royalties is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Oil and Gas - Royalty Trust - United States industry is currently in the bottom 6% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8]

Production and Revenue - As of September 30, 2024, the company owned mineral and royalty interests representing approximately 270,000 NRAs, with average net daily production of 38,585 BOE/d, including 19,134 Bbls/d of oil, 64,130 Mcf/d of natural gas, and 8,763 Bbls/d of NGLs [111]. - For the three months ended September 30, 2024, total revenues were $149.375 million, a decrease of 5% compared to $156.710 million for the same period in 2023 [123]. - Crude oil production for the three months ended September 30, 2024, increased by 9% to 1,760 MBbls compared to 1,617 MBbls in the prior year [125]. - Natural gas production decreased by 5% to 5,900 MMcf from 6,203 MMcf in the same period last year [125]. - Total revenues for the three months ended September 30, 2024, decreased by 6% to $469,314,000 compared to $444,002,000 in the prior year [138]. - Oil revenue for the three months ended September 30, 2024, increased by 12% to $402,226,000, driven by a 9% increase in production volumes [138]. - Natural gas revenue for the three months ended September 30, 2024, decreased by 56% to $14,361,000 due to a 71% decrease in average realized prices [138]. - NGLs revenue for the three months ended September 30, 2024, increased by 16% to $44,758,000, attributed to an 8% increase in production volumes [138]. Pricing and Market Conditions - The average realized price for crude oil was $74.67 per Bbl, for natural gas was $0.45 per Mcf, and for NGLs was $17.11 per Bbl, resulting in an average realized price of $41.65 per BOE, down from $45.00 per BOE in the prior year [117]. - Average realized price for crude oil decreased by 7% to $74.67 per Bbl compared to $80.21 per Bbl in the prior year [125]. - Average realized price for natural gas decreased significantly by 71% to $0.45 per Mcf from $1.54 per Mcf in the same period last year [125]. - The company anticipates continued lower price realizations for natural gas due to pipeline capacity constraints in the Permian Basin [117]. - The prices of oil, natural gas, and NGLs can fluctuate considerably due to supply and demand in the marketplace [179]. Financial Performance - Net income from operations for the three months ended September 30, 2024, was $46.704 million, down 10% from $51.826 million in the prior year [123]. - Net income for the nine months ended September 30, 2024, increased by 68% to $75,600,000 compared to $45,021,000 in the prior year [138]. - Operating expenses for the three months ended September 30, 2024, totaled $102.671 million, a decrease of 2% from $104.884 million in the same period of 2023 [123]. - Impairment of oil and natural gas properties decreased to $0.0 million for the nine months ended September 30, 2024, compared to $25.6 million for the same period in 2023 [149]. - Interest expense decreased due to a lower average interest rate on the 2028 Senior Notes, resulting in reduced costs compared to the 2026 Senior Notes [150]. - Income tax expense increased due to a rise in net income before income tax expense compared to the prior period [153]. Cash Flow and Liquidity - Cash flows from operating activities were $356.7 million for the nine months ended September 30, 2024, a slight increase from $354.8 million in the prior year [158]. - Cash flows used in investing activities totaled $191.2 million, primarily due to acquisitions of oil and gas properties, compared to $172.1 million in the prior period [159]. - Cash flows used in financing activities decreased to $172.3 million from $200.2 million, with net borrowings under the Sitio Revolving Credit Facility increasing by $35.0 million [160]. - As of September 30, 2024, liquidity was $455.5 million, consisting of $8.5 million in cash and cash equivalents and $447.0 million available under the Sitio Revolving Credit Facility [157]. Shareholder Returns and Stock Activity - The company repurchased 3,582,033 shares of Class A Common Stock at a weighted average price of $23.20 during the nine months ended September 30, 2024, with remaining authorization of $94.8 million [115]. - The company does not expect to engage in upstream activities that would incur capital costs, maintaining a focus on returning cash flows to stockholders [112]. Acquisitions and Growth Strategy - The company evaluated over 1,000 potential acquisitions and completed 206 acquisitions to enhance cash flow per share [116]. - As of September 30, 2024, the company had 45,397 gross (333.1 net) producing horizontal wells and 5,503 gross (27.5 net) horizontal wells in various stages of drilling or completion [118]. Risk Management - The company is exposed to market risk from adverse changes in commodity prices and interest rates [183]. - The company may enter into derivative instruments to partially mitigate the impact of commodity price volatility [186]. - The process of estimating crude oil, natural gas, and NGLs reserves is complex and subject to significant revisions over time [177]. - The company does not explore, develop, or operate the properties, thus incurring no associated costs [179]. - The company recognizes lease bonus revenue when the lease agreement has been executed and payment is determined to be collectible [180].

Financial Performance - Third quarter net income was $27.9 million, with Adjusted EBITDA of $135.4 million, reflecting strong production volumes from legacy assets and recent acquisitions [2]. - Total revenues for the three months ended September 30, 2024, were $149,375, a decrease of 4.3% from $156,710 in the same period of 2023 [26]. - Net income for the nine months ended September 30, 2024, increased to $75,600, compared to $45,021 for the same period in 2023, representing a growth of 68% [27]. - Net income for the three months ended September 30, 2024, was $27,867,000, compared to $275,000 for the same period in 2023 [38]. - EBITDA increased to $132,582,000 for the three months ended September 30, 2024, up from $107,747,000 in the prior year [38]. - Adjusted EBITDA for the same period was $135,441,000, a decrease from $142,542,000 year-over-year [38]. - Cash flow from operations was $138,679,000 for the three months ended September 30, 2024, compared to $122,141,000 in 2023 [40]. - Discretionary Cash Flow for the three months ended September 30, 2024, was $109,627,000, down from $117,391,000 in the previous year [40]. Production and Operations - Average daily production for the third quarter was 38,585 Boe/d, exceeding the full year 2024 guidance range of 36,000 – 38,000 Boe/d [8]. - Crude oil production for the three months ended September 30, 2024, was 1,760 MBbls, an increase of 8.8% from 1,617 MBbls in 2023 [23]. - Average daily production increased to 38,585 BOE/d, up 4.6% from 36,900 BOE/d in the same period last year [23]. - NGL production increased to 806 MBbls for the three months ended September 30, 2024, up 8.3% from 744 MBbls in 2023 [23]. - Line of sight wells increased by 11% quarter-over-quarter, indicating higher operator activity and permitting in the Midland and DJ Basins [2]. Financial Position and Debt - Long-term debt was reduced by approximately $56.5 million during the quarter, with a quarter-end credit facility balance of $403.0 million and liquidity of $455.5 million [2]. - Long-term debt increased to $992,854, up from $865,338 at the end of 2023, reflecting a rise of 14.7% [25]. - Total liabilities rose to $1,304,489, compared to $1,163,527 at the end of 2023, indicating an increase of 12.1% [25]. - Total assets as of September 30, 2024, were $4,693,364, a decrease from $4,758,801 as of December 31, 2023 [25]. - Total equity decreased to $3,388,875 as of September 30, 2024, down from $3,595,274 at the end of 2023 [25]. Shareholder Returns - The company returned a total of $0.47 per share to shareholders, which includes a $0.28 per share cash dividend and $0.19 per share from stock repurchases [20]. - Sitio has returned over $765 million to shareholders since going public in 2022, including $245 million year-to-date [19]. - The company repurchased 1.4 million shares of Class A Common Stock at an average price of $21.47 per share during the quarter, totaling $105.2 million year-to-date [20]. - The company plans to continue its share repurchase program and maintain its return of capital framework [43]. Pricing and Market Conditions - Average realized prices during the third quarter were $74.67 per barrel of oil, $17.11 per barrel of natural gas liquids, and $0.45 per Mcf for natural gas, resulting in a total average realized price of $41.65 per Boe on an unhedged basis [5]. - Average realized price for crude oil decreased to $74.67 per Bbl, down 7.4% from $80.21 per Bbl in 2023 [23]. - The average realized price for natural gas fell to $0.45 per Mcf, a significant decrease of 70.6% from $1.54 per Mcf in the previous year [23]. - The company reported a decrease in severance and ad valorem taxes as a percentage of revenue to 6.9% for Q3 2024, down from 7.9% in Q3 2023 [24]. Acquisitions and Growth Strategy - The company completed four acquisitions in July and August 2023 for approximately $181 million, contributing to its pro forma financial metrics [30]. - The company has completed over 200 acquisitions, accumulating over 265,000 net royalty acres (NRAs) to date [42]. - The updated full-year 2024 guidance raised the midpoint of pro forma average daily production range by 1,000 Boe/d due to robust legacy production and recent acquisitions [9]. General and Administrative Expenses - Cash G&A expenses were $7.8 million for the quarter, or $2.20 per Boe, aligning with expectations [6]. - General and administrative expenses were $14,382,000 for the three months ended September 30, 2024, compared to $12,044,000 in 2023 [41]. Forward-Looking Statements - Forward-looking statements indicate potential impacts from commodity price volatility and global economic uncertainties, including conflicts in Ukraine and the Middle East [43]. - The company emphasizes a shareholder returns-driven strategy focused on cash flow generation and reinvestment [42].

We are currently offering a free two-week trial to Distressed Value Investing . Join our community to receive exclusive research about various companies and other opportunities along with full access to my portfolio of historic research that now includes over 1,000 reports on over 100 companies. Aaron Chow, aka Elephant Analytics has 15+ years of analytical experience and is a top rated analyst on TipRanks. Aaron previously co-founded a mobile gaming company (Absolute Games) that was acquired by PENN Entert ...