Sitio Royalties (STR) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 average daily production of 39,231 BOE/d (50% oil), up 11% sequentially and 13% year-over-year, with 8.5 net wells turned-in-line and significant acquisitions totaling $188.5 million and 14,996 NRAs across DJ, Delaware, and Midland Basins.

• Returned $0.71 per share to shareholders in Q2 2024, a 45% increase from Q1, via $0.30 dividend and $0.41 share repurchases, representing 85% of discretionary cash flow.

• Total revenues reached $168.5 million, up 24% year-over-year, and net income attributable to Class A stockholders was $12.9 million, with adjusted EBITDA at $151.6 million.

• Maintained a disciplined, returns-driven acquisition and minerals management strategy, with significant exposure to the Permian and DJ Basins.

• Repurchased over 2.5 million shares/units in Q2 2024, including a large block trade, under a $200 million share repurchase program.

Financial highlights

• Adjusted EBITDA reached $161.6 million in Q2 2024, with discretionary cash flow of $129.3 million and 85% returned to shareholders.

• Oil, natural gas, and NGL revenues rose to $165.5 million, with average realized price per BOE at $46.36.

• Net income for Q2 2024 was $29.0 million, up 55% sequentially.

• Net debt as of June 30, 2024, was $1.06 billion, with $406 million in liquidity.

• Cash G&A per BOE was $1.98, and production taxes were 7.5% of royalty revenue.

Outlook and guidance

• Raised full-year 2024 pro forma average daily production guidance to 36,000–38,000 BOE/d, up 500 BOE/d at midpoint.

• Lowered cash tax guidance to $9–$15 million, a $21.5 million decrease at midpoint.

• Annual cash G&A guidance remains $31.5–$33.5 million; production taxes expected at 7.5%–9.5% of royalty revenue.

• Acquisitions closed in Q2 2024 expected to add ~200 BOE/d to full-year 2024 production.

• Management expects continued growth through acquisitions and increased production from existing interests.