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 all-time highs in the Delaware and Eagle Ford basins.

• Returned $0.71 per share to shareholders in Q2 2024, a 45% increase over Q1, via $0.30 dividend and $0.41 in share repurchases.

• Completed 7 acquisitions totaling $188.5 million, adding 14,996 NRAs across DJ, Delaware, and Midland Basins.

• Net income attributable to Class A stockholders was $12.9 million for Q2 2024, with total net income of $29.0 million, up 55% sequentially.

• Maintained a disciplined, returns-driven acquisition and minerals management strategy, with significant Permian Basin exposure.

Financial highlights

• Adjusted EBITDA reached $151.6 million in Q2 2024, up from $127.2 million in Q2 2023 and $135.1 million in Q1 2024.

• Discretionary Cash Flow was $129.3 million, with 85% returned to shareholders.

• Oil, natural gas, and NGL revenues rose to $165.5 million in Q2 2024 from $132.6 million in Q2 2023.

• Realized oil prices averaged $79.85–$80.21 per barrel, up from Q1 and Q2 2023.

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

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 full-year 2024 cash tax guidance to $9–$15 million, a $21.5 million decrease at midpoint.

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

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

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