Sitio Royalties (STR) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 production averaged 38,585–38,600 BOE/d (50% oil), exceeding guidance and driven by strong operator activity and five acquisitions, with the midpoint of full-year production guidance raised by 1,000 BOE/d.

• Closed five acquisitions totaling $21.5–$22 million, adding over 2,300 NRAs in the DJ Basin and expanding the asset base.

• Returned $0.47 per share to shareholders in Q3 2024 through $0.28 per share dividend and $29 million in share repurchases, with $94.8 million buyback authorization remaining.

• Reduced long-term debt by $56.5–$60 million in Q3, increasing liquidity to $455.5 million and improving balance sheet strength.

• Proprietary data management systems enabled recovery of $25 million in missing payments over the past year, nearly covering annual cash G&A.

Financial highlights

• Q3 2024 net income was $12.6–$27.9 million, with Adjusted EBITDA of $135–$135.4 million and discretionary cash flow of $110 million.

• Adjusted EBITDA margin reached 91% for the quarter; 3Q24 annualized Adjusted EBITDA was $542 million.

• Revenues for Q3 2024 were $149.4 million, down 5% year-over-year due to lower realized prices and lease bonus income.

• Average realized price per BOE in Q3 2024 was $41.65, with depletion expense at $21.97 per BOE.

• Returned over $765–$768 million to shareholders since June 2022 via dividends and buybacks.

Outlook and guidance

• Full-year 2024 pro forma average daily production guidance raised to 37,000–39,000 BOE/d, with cash G&A guidance lowered to $30.0–$32.0 million and cash tax guidance increased to $17.0–$21.0 million.

• Management expects continued growth through acquisitions and aims to return significant cash flows to stockholders.

• Q4 2024 dividend declared at $0.28 per share, payable November 27, 2024.

• Formal 2025 guidance to be released early next year, with continued focus on high-quality asset acquisitions and capital returns.

• Expectation to exhaust tax credit from Brigham merger in 2024, simplifying tax forecasting for 2025.