Sitio Royalties Corp. (STR) Q4 Results

[dan_s]

FOURTH QUARTER 2024 HIGHLIGHTS

> Achieved record high production in the fourth quarter of 40.9 thousand barrels of oil equivalent per day
(“MBoe/d”), up 6% quarter-over-quarter, attributable to strong performance across the Company's legacy
assets as well as contributions from acquisitions < Beat my forecast of 39,000 Boepd.
> Operators remained active across the Company's assets; 8.3 net wells were turned-in-line across Sitio's
acreage, up 9% quarter-over-quarter; net line of sight (“LOS”) wells totaled 44.9 as of December 31, 2024
> Closed three high return and cash flow accretive acquisitions for aggregate cash consideration of
approximately $140 million, which added approximately 3,300 net royalty acres ("NRAs"), primarily located in
the Delaware Basin
> Net income of $19.3 million and Adjusted EBITDA of $141.2 million, up $111.0 million and $6.2 million (or
5%), respectively, compared to fourth quarter 2023 < Beat my Net Income forecast of $13.8 million.
> Continued to return cash to shareholders and create value on a per share basis; Sitio to return $0.49 per
share of Class A Common Stock for the fourth quarter, comprised of $0.41 per share cash dividend (payable
March 28, 2025) and an equivalent $0.08 per share of common stock repurchases
> Repurchased $118.1 million of common stock in 2024; 3% reduction in total shares outstanding year-over
year; $81.9 million of authorized repurchases remaining as of December 31, 2024

"We delivered across the board in 2024 with stronger-than-expected results. Sitio’s fourth quarter production was
up by more than 14% over the prior year, while our share count decreased 3% year-over-year. Over the course of
the year, we closed on 16 immediately accretive acquisitions totaling about $350 million, with expected returns
above our target threshold – another solid demonstration of our ability to deliver sustainable growth and capital
returns to shareholders,” said CEO Chris Conoscenti. “The backdrop for 2025 is very similar to early 2024
operators remain active on our premium land positions in the Permian, DJ, Eagle Ford and Williston basins and we
continue to see attractive opportunities to consolidate fragmented minerals ownership. We remain a uniquely
active manager of minerals. Our team will continue to focus on driving top-line and bottom-line improvements
enhancing revenue recovery with proprietary technology to audit and capture missing payments and leveraging our
asset management systems to support our growth as well as meaningful reductions in Cash G&A per Boe as we
scale our minerals position."

Everything looks good for STR. My valuation increases by $1 to $28/share, which compares to TipRanks' consensus price target of $29.50. < My updated forecast/valuation model has been posted to the EPG website.