Sitio Royalties Corp. (STR) Update from Stifel - Aug 9
Posted: Tue Aug 09, 2022 12:14 pm
Sitio Royalties Corp. (STR, $27.39, Buy; Target $35.00)
- Delivers strong quarterly results and line-of-sight wells continue to grow - Derrick Whitfield
- We view this release as positive. The positives include: i) a total equivalent and oil production beat
(7.9% and 5.1% above Stifel, respectively), ii) an adjusted EBITDA beat (3.2% above
Stifel) driven by higher than expected volumes and realizations, and iii) an increase
in line-of-sight wells (0.4 net spud and 1.4 net permit increase since July 5th). If we
stretch, the only negative was a slightly lower than expected dividend (4.3% below
Stifel), albeit the dividend was 3.2% above consensus, was ~99% of the split-adjusted
dividend per share paid to Falcon Minerals shareholders in Q122, and represents a
10.4% annualized yield. Net-net, Sitio delivered strong results in its first quarter post
its combination with Falcon Minerals and active operator development continues to
grow.
- Delivers strong quarterly results and line-of-sight wells continue to grow - Derrick Whitfield
- We view this release as positive. The positives include: i) a total equivalent and oil production beat
(7.9% and 5.1% above Stifel, respectively), ii) an adjusted EBITDA beat (3.2% above
Stifel) driven by higher than expected volumes and realizations, and iii) an increase
in line-of-sight wells (0.4 net spud and 1.4 net permit increase since July 5th). If we
stretch, the only negative was a slightly lower than expected dividend (4.3% below
Stifel), albeit the dividend was 3.2% above consensus, was ~99% of the split-adjusted
dividend per share paid to Falcon Minerals shareholders in Q122, and represents a
10.4% annualized yield. Net-net, Sitio delivered strong results in its first quarter post
its combination with Falcon Minerals and active operator development continues to
grow.