Announces Definitive Agreement to Acquire
13,062 NRAS in the DJ Basin for $150 Million(1)
Announces $200 Million Share Repurchase
Program and Updated Return of Capital Framework
Closed on Previously Announced Sale of
Anadarko and Appalachia Assets for $114 Million
Declared $0.51 Dividend Per Share of Class A
Common Stock for Fourth Quarter 2023
Issues Full Year 2024 Financial and
Operational Guidance, With Pro Forma Production Range of 35,000 –
38,000 Boe/d (49% – 51% Oil)(2)
Sitio Royalties Corp. (NYSE: STR) (“Sitio”, “STR” or the
“Company”) today announced operational and financial results for
the quarter and year ended December 31, 2023. Unless the context
clearly indicates otherwise, references to “we,” “our,” “us” or
similar terms refer to Sitio and its subsidiaries.
FOURTH QUARTER 2023 OPERATIONAL AND FINANCIAL
HIGHLIGHTS
- 4Q 2023 average daily production volume of 35,776 barrels of
oil equivalent per day ("Boe/d") (47% oil); Pro forma 4Q 2023
average daily production volume of 36,623 Boe/d (49% oil)(3)
- Declared 4Q 2023 dividend of $0.51 per share of Class A Common
Stock, an increase of $0.02 per share, or approximately 4% higher
compared to the 3Q 2023 dividend
- Record high pro forma net line-of-sight (“LOS”) wells of 53.4
as of December 31, 2023, comprised of 34.4 net spuds and 19.0 net
permits; Approximately 78% of pro forma net LOS wells are in the
Permian Basin and 14% in the DJ Basin(4)
- 4Q 2023 net loss of $91.7 million, compared to 3Q 2023 net
income of $0.3 million; decrease primarily driven by a $144.5
million non-cash loss on sale of assets in the Appalachian and
Anadarko Basins, decreased average daily production volumes of
1,124 Boe/d and a $1.06 per Boe decrease in realized hedged
commodity prices
- 4Q 2023 Adjusted EBITDA(5) of $134.9 million, down by 5.3%
sequentially from 3Q 2023 Adjusted EBITDA, primarily due to
decreased average daily production volumes of 3.0% and a 2.3%
decrease in realized hedged prices per Boe
- 4Q 2023 Pro Forma Adjusted EBITDA(6) of $143.6 million,
including contribution from the DJ Basin Acquisition(1) and 4Q23
Stock Acquisition(7) assets for the entire quarter
- During 4Q 2023, reduced long-term debt by $131.1 million,
resulting in liquidity of $588.2 million as of December 31,
2023
RECENT DEVELOPMENTS – DJ BASIN ACQUISITION HIGHLIGHTS
- In January 2024, signed definitive agreement with an
undisclosed third party to acquire 13,062 NRAs in the DJ Basin (the
"DJ Basin Acquisition"), of which approximately 77% are in the
Wattenberg Field in Weld County, for $150 million, subject to
customary closing adjustments; Effective date of October 1, 2023
and expected to close in early 2Q 2024
- Expected to fund acquisition with cash on hand, cash generated
from operations and revolving credit facility borrowings
- Represents a 4.0x purchase multiple of asset level cash flow
for the twelve months ending September 30, 2024
- Resulted in $0.04 per share increase to 4Q 2023 return of
capital and is expected to be 6% accretive to Sitio's standalone
2024 return of capital per share
- 4Q 2023 average daily production volume of 2,609 Boe/d (41%
oil) and asset level cash flow of $8.6 million
- Top operators by production volumes are Chevron Corporation,
Civitas Resources and Occidental Petroleum Corporation
- As of February 19, 2024, approximately 75% of rigs in the
entire DJ Basin were on the DJ Basin acquisition acreage, an
increase of 3x relative to rigs on Sitio's legacy DJ Basin
acreage
- Net LOS wells of 5.1 as of December 31, 2023, comprised of 3.4
net spuds and 1.7 net permits; Strong visibility of activity
through 1Q 2030 because approximately 21% of NRAs have exposure to
multi-year Comprehensive Area Plans ("CAP") or Oil and Gas
Development Plans ("OGDP")
- Estimated remaining inventory of 9.6 net locations, with 73% in
the Wattenberg Field and approximately 26% in CAPs or OGDPs as of
December 31, 2023
UPDATED RETURN OF CAPITAL FRAMEWORK
- On February 28, 2024, Sitio’s Board of Directors authorized a
$200 million share repurchase program, which has no expiration date
and is expected to commence in early March 2024
- New return of capital framework creates additional flexibility
for the Company to maximize long-term value for shareholders
- The Company is revising its return of capital framework to
include both cash dividends and share repurchases effective 1Q
2024, with no impact on 4Q 2023 distributions:
- Minimum of 65% of Discretionary Cash Flow (“DCF”): Allocated to
total return of capital (minimum cash dividend and mix of
additional cash dividends and/or share repurchases)
- Minimum of 35% of DCF: Allocated to cash dividends; Represents
an approximate 5% yield based on 4Q 2023 Pro Forma DCF
- Minimum of 30% of DCF: Allocated to additional cash dividends,
share repurchases or a mix of both
- Up to 35% of DCF: Allocated to balance sheet management and
opportunistic cash acquisitions; no changes from previous return of
capital framework
4Q 2023 and 2H 2023 RESULTS RELATIVE TO 2H 2023
GUIDANCE
The table below shows fourth quarter 2023 and second half 2023
results relative to financial and operational guidance for the
second half of 2023 that was issued on November 8, 2023.
2H 2023 Guidance Metric
4Q 2023 Results
2H 2023 Results
4Q 2023 Pro Forma(3)
2H 2023 Guidance (November 8,
2023)
Average daily production (Boe/d)
35,776
36,338
36,623
35,000 – 37,000
Oil %
47
%
47
%
49
%
49% – 51%
Gathering and transportation ($/Boe)
$
1.58
$
1.47
$
1.52
$1.25 – $1.50
Cash G&A ($ in millions)
$
6.6
$
14.0
$
6.6
$27.0–$28.0(annual)
Production taxes (% of royalty
revenue)
9.8
%
8.8
%
9.6
%
6% – 8%
Reported cash tax rate (% of pre-tax
income/loss)(8)
NM
NM
NA
2% – 4%
Chris Conoscenti, Chief Executive Officer of Sitio commented,
“In the fourth quarter, we continued to advance our strategic
efforts through active portfolio management and returns-focused
capital allocation. We are already off to a great start in 2024 as
we entered into an agreement to acquire over 13,000 NRAs in the DJ
Basin for a compelling price that is accretive for our
shareholders. As we reallocate capital from the recently closed
divestiture of assets in the Appalachia and Anadarko Basins into
these higher returning assets, we will have transformed our current
DJ Basin position into a leading position with enhanced exposure to
the Greater Wattenberg Field. Additionally, I'm excited to announce
that the Board of Directors has authorized a $200 million share
repurchase program as part of our new return of capital framework,
which provides us with another method to enhance long-term
shareholder value. This repurchase program is a reflection of the
confidence we have in the fundamentals of our business. We still
plan to allocate at least 65% of DCF to return of capital and
utilize the remainder of DCF to pay down debt and make
opportunistic cash acquisitions. Under our updated return of
capital framework, we intend to allocate a minimum of 35% of DCF to
cash dividends and at least 30% of DCF to additional cash
dividends, share repurchases or a mix of both.”
(1) Definitive agreement to acquire DJ Basin assets from an
undisclosed third party signed in January 2024 and is expected to
close in early 2Q 2024; $150 million purchase price and final NRAs
subject to customary closing adjustments
(2) Includes production from the DJ Basin Acquisition for full
year 2024 as if the transaction had closed on January 1, 2024
(3) Represents 4Q 2023 metrics plus 4Q 2023 metrics from the DJ
Basin Acquisition and 4Q23 Stock Acquisition (collectively the
“Oct’23 Effective Date Acquisitions”) as if they were owned on
October 1, 2023 and excludes 4Q 2023 metrics from the Appalachian
and Anadarko Basin assets that were divested on December 22, 2023;
Metrics include production volumes, gathering and transportation
costs, and production taxes, as appropriate
(4) Includes net wells from the DJ Basin Acquisition as of
December 31, 2023
(5) For definitions of non-GAAP financial measures and
reconciliations to their most directly comparable GAAP financial
measures, please see “Non-GAAP financial measures”
(6) 4Q 2023 Pro Forma Adjusted EBITDA represents 4Q 2023
Adjusted EBITDA plus Oct’23 Effective Date Acquisitions(2) EBITDA,
which reflects as if Sitio had owned the Oct’23 Effective Date
Acquisitions since October 1, 2023
(7) The 4Q23 Stock Acquisition is defined as the acquisition of
522 NRAs in the Permian Basin for shares of Sitio’s Class C Common
Stock and a corresponding number of common units representing
limited partner interests in Sitio Royalties Operating Partnership,
LP, a controlled subsidiary of the Company ("OpCo" and such units,
"OpCo Units") that closed on December 8, 2023
(8) Calculated as cash taxes paid of $8 thousand divided by net
loss before taxes of $112.9 million for the three months ended
December 31, 2023. Calculated as cash taxes paid of $465 thousand
divided by net loss before taxes of $112.2 million for the six
months ended December 31, 2023. Shown as "NM", or "not meaningful"
because the implied reported 4Q 2023 and 2H 2023 cash tax rates are
negative
OPERATOR ACTIVITY
The following table summarizes Sitio's net average daily
production, pro forma net average daily production, as reported net
wells online, pro forma net wells online, as reported net LOS
wells, pro forma net LOS wells, as reported net royalty acres by
area, and pro forma net royalty acres by area as of December 31,
2023.
Delaware
Midland
DJ
Eagle Ford
Williston
Appalachia
Anadarko
Total
Average Daily
Production (Boe/d) for the three months ended December 31,
2023
As reported
18,566
8,242
3,737
2,789
646
986
810
35,776
% Oil
48
%
59
%
30
%
53
%
62
%
3
%
28
%
47
%
Pro forma(9)
18,600
8,242
6,346
2,789
646
-
-
36,623
% Oil(9)
48
%
59
%
35
%
53
%
62
%
NA
NA
49
%
Net Well Activity
(normalized to 5,000' laterals)
Net wells online as of September 30,
2023
127.1
62.2
37.1
35.7
9.4
3.8
9.9
285.2
As reported net wells online as of
December 31, 2023
131.8
65.4
38.9
36.0
9.5
-
-
281.6
Pro forma net wells online as of December
31, 2023(10)
131.8
65.4
57.4
36.0
9.5
-
-
300.1
Pro forma net wells online increase
(decrease) since September 30, 2023(10)
4.7
3.2
20.3
0.3
0.1
(3.8
)
(9.9
)
14.9
Net LOS Wells as
of December 31, 2023
As reported net LOS wells
27.4
14.2
2.5
3.4
0.8
-
-
48.3
Pro forma net spuds(4)
17.6
9.0
4.7
2.6
0.5
-
-
34.4
Pro forma net permits(4)
9.8
5.2
2.9
0.8
0.3
-
-
19.0
Pro forma net LOS wells(4)
27.4
14.2
7.6
3.4
0.8
-
-
53.4
Net Royalty Acres
(normalized to 1/8th royalty equivalent)
September 30, 2023
152,268
45,366
24,973
21,783
8,202
12,676
9,872
275,140
As reported December 31, 2023
152,664
45,380
24,973
21,077
8,203
-
-
252,297
Pro forma December 31, 2023(11)
152,664
45,380
38,035
21,077
8,203
-
-
265,359
Pro forma NRA increase (decrease) since
September 30, 2023(11)
396
14
13,062
(706
)
1
(12,676
)
(9,872
)
(9,781
)
(9) Includes 4Q 2023 reported production volumes plus 4Q 2023
production volumes from the Oct’23 Effective Date Acquisitions as
if they were owned on October 1, 2023 and excludes 4Q 2023
production volumes from the Appalachian and Anadarko Basin assets
that were divested on December 22, 2023
(10) Wells currently online and producing, based on well
designations in public data as of December 31, 2023. Pro forma for
net wells from the DJ Basin Acquisition as of December 31, 2023 and
excludes wells from the Appalachian and Anadarko Basin assets that
were divested on December 22, 2023
(11) Includes NRAs from the DJ Basin Acquisition, subject to
closing adjustments
MERGERS AND ACQUISITIONS
On December 8, 2023, Sitio closed on the acquisition of 522 NRAs
in the Permian Basin (the "4Q23 Stock Acquisition") in exchange for
shares of its Class C Common Stock and OpCo Units. The acquired
assets produced an average of approximately 46 Boe/d (62% oil) and
generated approximately $0.2 million of asset level cash flow for
the three months ended December 31, 2023 as if they were owned on
October 1, 2023. The 4Q23 Stock Acquisition has an effective date
of October 1, 2023 and 4Q 2023 cash flow attributable to the NRAs
acquired is included in Sitio's 4Q 2023 Pro Forma DCF.
On December 22, 2023, Sitio closed on the divestiture of all of
its mineral and royalty interests in the Anadarko Basin in Oklahoma
and the Appalachian Basin in Pennsylvania, Ohio and West Virginia
to an undisclosed third party for $114.0 million (the “Appalachian
and Anadarko Basins Divestiture”).
In January of 2024, Sitio signed a definitive agreement to
acquire 13,062 NRAs primarily in the core of the DJ Basin for
$150.0 million, subject to customary closing adjustments. The
transaction enhances the Company's DJ Basin footprint, adding
high-quality acreage in the Greater Wattenberg Field at a
compelling price with visible growth through the first half of 2025
from spuds, permits and acreage in several multi-year CAPs and
OGDPs with leading operators such as Chevron Corporation,
Occidental Petroleum, and Civitas Resources. Monthly net production
on the DJ Basin Acquisition acreage has grown by 89% from December
2022 through December 2023, versus a 7% decline on the divested
assets over the same time period. As of December 31, 2023, the DJ
Basin Acquisition assets had approximately 18.4 net wells online
and 5.1 net LOS wells, comprised of 3.4 net spuds and 1.7 net
permits. The transaction is expected to close in early 2Q 2024 with
an effective date of October 1, 2023; therefore, DJ Basin
Acquisition 4Q 2023 asset level cash flow is included in Sitio's 4Q
2023 Pro Forma DCF. Sitio plans to fund the DJ Basin Acquisition
with cash on hand, cash generated from operations and revolving
credit facility borrowings.
FINANCIAL UPDATE
Sitio's fourth quarter 2023 average unhedged realized prices
including all expected quality, transportation and demand
adjustments were $77.91 per barrel of oil, $1.40 per Mcf of natural
gas and $18.72 per barrel of natural gas liquids, for a total
equivalent price of $43.65 per barrel of oil equivalent. During the
fourth quarter of 2023, the Company received $5.9 million in net
cash settlements for commodity derivative contracts and as a
result, average hedged realized prices were $80.68 per barrel of
oil, $1.66 per Mcf of natural gas and $18.72 per barrel of natural
gas liquids, for a total equivalent price of $45.43 per barrel of
oil equivalent. This represents a $1.06 per barrel of oil
equivalent, or a 2.3% decrease relative to hedged realized prices
for the three months ended September 30, 2023.
Consolidated net loss for the fourth quarter of 2023 was $91.7
million, compared to consolidated net income of $0.3 million in the
third quarter of 2023. This decrease was driven primarily by a
$144.5 million non-cash loss on sale from the divestiture of assets
in the Appalachian and Anadarko Basins, and lower revenues from
decreased average daily production volumes of 1,124 Boe/d, or 3.0%
and a $1.06 per Boe decrease in realized hedged commodity prices,
offset partially by a non-cash unrealized gain in derivatives of
$12.2 million. For the three months ended December 31, 2023,
Adjusted EBITDA was $134.9 million, down 5.3% sequentially from
third quarter 2023 Adjusted EBITDA, primarily due to decreased
average production volumes of 3.0% and a 2.3% decrease in realized
hedged prices per Boe.
As of December 31, 2023, the Company had $877.0 million
principal value of total debt outstanding (comprised of $277.0
million of borrowings outstanding under Sitio's revolving credit
facility and $600.0 million aggregate principal amount of senior
unsecured notes) and liquidity of $588.2 million, including $15.2
million of cash and $573.0 million of remaining availability under
its $850.0 million credit facility.
Sitio had approximately $0.4 million of realized gains during 4Q
2023 from its interest rate swap, which had a $202.5 million
notional amount during the quarter and expired on December 31,
2023. Sitio did not add to or extinguish any of its commodity swaps
or collars during the fourth quarter of 2023. A summary of the
Company's existing commodity derivative contracts as of December
31, 2023 is included in the table below.
Oil (NYMEX WTI)
2024
1H25
Swaps
Bbl per day
3,300
1,100
Average price ($/Bbl)
$
82.66
$
74.65
Collars
Bbl per day
—
2,000
Average call ($/Bbl)
—
$
93.20
Average put ($/Bbl)
—
$
60.00
Gas (NYMEX Henry Hub)
2024
1H25
Swaps
MMBtu per day
500
—
Average price ($/MMBtu)
$
3.41
—
Collars
MMBtu per day
11,400
11,600
Average call ($/MMBtu)
$
7.24
$
10.34
Average put ($/MMBtu)
$
4.00
$
3.31
2023 YEAR END PROVED RESERVES
Estimated 2023 year end proved reserves of 85,293 MBOE
attributable to Sitio's interests in its underlying acreage are
based on a reserve report prepared by the independent petroleum
engineering firm of Cawley, Gillespie & Associates, Inc. in
accordance with Standards Pertaining to the Estimating and Auditing
of Oil and Gas Reserves Information promulgated by the Society of
Petroleum Evaluation Engineers and definitions and guidelines
established by the SEC. Of these reserves, approximately 82% were
classified as proved developed reserves and 18% were classified as
proved undeveloped (“PUD”) reserves. PUD reserves for Sitio
included in these estimates relate solely to wells that were spud
but not yet producing as of December 31, 2023. The largest driver
of year-over-year changes to reserves was extensions of 9,257 MBbls
of oil, 26,710 MMcf of natural gas, and 3,723 MBbls of NGLs.
Acquisitions increased 2023 year end reserves by 5,803 Mboe;
however, the Appalachian and Anadarko Basins Divestiture decreased
2023 year end reserves by 5,340 Mboe, resulting in an overall net
increase in 2023 year end reserves from acquisitions and
divestitures of 463 Mboe. The following table sets forth
information regarding the Company’s net ownership interest in
estimated quantities of proved developed and undeveloped oil and
natural gas quantities and the changes therein for each of the
periods presented.
Oil (MBbls)
Natural Gas (MMcf)
Natural Gas Liquids
(MBbls)
Total (MBOE)
Balance as of December 31, 2022
35,057
159,442
18,359
79,989
Revisions
(994
)
(289
)
1,394
352
Extensions
9,257
26,710
3,723
17,431
Acquisition of reserves
2,682
9,572
1,525
5,803
Divestiture of reserves
(826
)
(22,029
)
(843
)
(5,340
)
Production
(6,344
)
(23,136
)
(2,742
)
(12,942
)
Balance as of December 31, 2023
38,832
150,270
21,416
85,293
Proved developed and undeveloped
reserves:
Oil (MBbls)
Natural Gas (MMcf)
Natural Gas Liquids
(MBbls)
Total (MBOE)
Developed as of December 31, 2022
27,407
133,489
15,169
64,824
Undeveloped as of December 31, 2022
7,650
25,953
3,190
15,165
Balance at December 31, 2022
35,057
159,442
18,359
79,989
Developed as of December 31, 2023
30,537
127,170
18,167
69,899
Undeveloped as of December 31, 2023
8,295
23,100
3,249
15,394
Balance at December 31, 2023
38,832
150,270
21,416
85,293
2024 FULL YEAR FINANCIAL AND OPERATIONAL GUIDANCE
The table below includes Sitio's guidance for full year 2024 and
includes impacts from the DJ Basin Acquisition as if the
transaction had closed on January 1, 2024. The 36,500 Boe/d
midpoint of the pro forma average daily production range is in-line
with pro forma average daily production of 36,623 Boe/d for 4Q 2023
and reflects the Company's current expectations for operator
activity on its acreage. Full year 2024 Cash G&A guidance is
inclusive of a 25%+ increase in headcount since the end of 2022 and
technology development and enhancement projects that are expected
to further streamline the Company's large-scale minerals
acquisitions and management.
Full Year 2024 Guidance
Low
High
Pro Forma Average Daily
Production(2)
Pro forma average daily production
(Boe/d)(2)
35,000
38,000
Pro forma average daily production (%
oil)(2)
49
%
51
%
Expenses and Taxes
Cash G&A ($ in millions)
$
31.5
$
33.5
Production taxes (% of royalty
revenue)
7.5
%
9.5
%
Cash taxes ($ in millions)(12)
$
30.0
$
37.0
(2) Includes production from the DJ Basin Acquisition for full
year 2024 as if the transaction had closed on January 1, 2024
(12) Cash tax guidance range is based on expectations at current
strip pricing
RETURN OF CAPITAL
The Company's Board of Directors declared a cash dividend of
$0.51 per share of Class A Common Stock with respect to the fourth
quarter of 2023. The dividend is payable on March 28, 2024 to the
stockholders of record at the close of business on March 15, 2024.
Based on a 65% payout ratio of fourth quarter 2023 DCF and not
including the pro forma impacts from the Oct’23 Effective Date
Acquisitions, Sitio's quarterly dividend would have been
approximately $0.47 per Class A common share; however, the
Company's Board of Directors approved a fourth quarter 2023
dividend of $0.51 per Class A common share, which equates to a 65%
payout ratio including pro forma DCF for the full three months
ended December 31, 2023.
On February 28, 2024, the Company's Board of Directors also
authorized a share repurchase program up to $200 million, and
updated its return of capital framework to include share
repurchases. The Company has revised its return of capital
framework to allow more flexibility to maximize shareholder returns
based on market conditions, business outlook, and stock price. The
Company plans to continue to allocate a minimum of 65% of DCF to
return of capital, comprised of a minimum of 35% of DCF in cash
dividends and at least 30% of DCF comprised of additional cash
dividends, share repurchases, or a mix of both.
Repurchases may be made from time to time through various
methods, including but not limited to open market transactions,
privately negotiated transactions, and by other means in accordance
with applicable state and federal securities laws, certain of which
may be made pursuant to trading plans meeting the requirements of
Rule 10b5-1 and 10b-18 under the Securities Exchange Act of 1934,
as amended. The timing of repurchases under the repurchase program,
as well as the number and value of shares repurchased under the
program, will be determined by the Company at its discretion and
will depend on a variety of factors, including the market price of
the Company's Common Stock, oil and gas commodity prices, general
market and economic conditions, available liquidity, compliance
with the Company's debt and other agreements, applicable legal
requirements and other considerations. The exact number of shares
to be repurchased by the Company is not guaranteed, and the program
may be modified, suspended, or discontinued at any time without
prior notice. The Company is not obligated to purchase any dollar
amount or number of shares under the repurchase program.
FOURTH QUARTER 2023 EARNINGS CONFERENCE CALL
Sitio will host a conference call at 8:30 a.m. Eastern on
Thursday, February 29, 2024 to discuss its fourth quarter and full
year 2023 operating and financial results. Participants can access
the call by dialing 1-833-470-1428 in the United States, or
1-404-975-4839 in other locations, with access code 911248 or by
webcast at https://events.q4inc.com/attendee/149886582.
Participants may also pre-register for the event via the following
link:
https://www.netroadshow.com/events/login?show=8838c4a3&confId=59569.
The conference call, live webcast, and replay can also be accessed
through the Investor Relations section of Sitio’s website at
www.sitio.com.
UPCOMING INVESTOR CONFERENCES
Members of Sitio's management team will be attending Piper
Sandler's 24th Annual Energy Conference from March 18 - 20, 2024
and KeyBanc Capital Markets' Minerals Spotlight virtual event on
March 26, 2024. Presentation materials associated with these events
will be accessible through the Investor Relations section of
Sitio's website at www.sitio.com.
FINANCIAL RESULTS
Production Data
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Production Data:
Crude oil (MBbls)
1,558
892
6,344
2,861
Natural gas (MMcf)
5,923
3,049
23,136
9,531
NGLs (MBbls)
746
341
2,742
1,100
Total (MBoe)(6:1)
3,291
1,741
12,942
5,550
Average daily production (Boe/d)(6:1)
35,776
18,925
35,457
15,204
Average Realized Prices:
Crude oil (per Bbl)
$
77.91
$
81.84
$
75.80
$
93.05
Natural gas (per Mcf)
$
1.40
$
4.33
$
1.77
$
5.50
NGLs (per Bbl)
$
18.72
$
26.44
$
19.21
$
33.51
Combined (per Boe)
$
43.65
$
54.68
$
44.39
$
64.05
Average Realized Prices After Effects
of Derivative Settlements:
Crude oil (per Bbl)
$
80.68
$
87.21
$
78.62
$
95.65
Natural gas (per Mcf)
$
1.66
$
4.35
$
2.06
$
5.46
NGLs (per Bbl)
$
18.72
$
26.44
$
19.21
$
33.51
Combined (per Boe)
$
45.43
$
57.48
$
46.30
$
65.33
Selected Expense Metrics
Three Months Ended December
31,
2023
2022
Severance and ad valorem taxes
9.8
%
7.9
%
Depreciation, depletion and amortization
($/Boe)
$
20.85
$
21.37
General and administrative ($/Boe)
$
3.60
$
10.44
Cash G&A ($/Boe)
$
1.99
$
2.27
Interest expense, net ($/Boe)
$
6.59
$
10.00
Consolidated Balance Sheets
(In thousands except par and share
amounts)
December 31,
December 31,
2023
2022
ASSETS
Current assets
Cash and cash equivalents
$
15,195
$
18,818
Accrued revenue and accounts
receivable
107,347
142,010
Prepaid assets
12,362
12,489
Derivative asset
19,080
18,874
Total current assets
153,984
192,191
Property and equipment
Oil and natural gas properties, successful
efforts method:
Unproved properties
2,698,991
3,244,436
Proved properties
2,377,196
1,926,214
Other property and equipment
3,711
3,421
Accumulated depreciation, depletion,
amortization, and impairment
(498,531
)
(223,214
)
Total property and equipment, net
4,581,367
4,950,857
Long-term assets
Long-term derivative asset
3,440
13,379
Deferred financing costs
11,205
7,082
Operating lease right-of-use asset
5,970
5,679
Other long-term assets
2,835
1,714
Total long-term assets
23,450
27,854
TOTAL ASSETS
$
4,758,801
$
5,170,902
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses
$
30,050
$
21,899
Warrant liability
—
2,950
Operating lease liability
1,725
1,563
Total current liabilities
31,775
26,412
Long-term liabilities
Long-term debt
865,338
938,896
Deferred tax liability
259,870
313,607
Non-current operating lease liability
5,394
5,303
Other long-term liabilities
1,150
89
Total long-term liabilities
1,131,752
1,257,895
Total liabilities
1,163,527
1,284,307
Commitments and contingencies (see Note
16)
Equity
Class A Common Stock, par value $0.0001
per share; 240,000,000 shares authorized; 82,451,397 and 80,804,956
shares issued and 82,451,397 and 80,171,951 outstanding at December
31, 2023 and December 31, 2022, respectively
8
8
Class C Common Stock, par value $0.0001
per share; 120,000,000 shares authorized; 74,965,217 and 74,347,005
shares issued and 74,939,080 and 74,347,005 outstanding at December
31, 2023 and December 31, 2022, respectively
8
7
Additional paid-in capital
1,796,147
1,750,640
Accumulated deficit
(187,738
)
(9,203
)
Class A Treasury Shares, 0 and 633,005
shares at December 31, 2023 and December 31, 2022, respectively
—
(19,085
)
Class C Treasury Shares, 26,137 and 0
shares at December 31, 2023 and December 31, 2022, respectively
(677
)
—
Noncontrolling interest
1,987,526
2,164,228
Total equity
3,595,274
3,886,595
TOTAL LIABILITIES AND EQUITY
$
4,758,801
$
5,170,902
Consolidated Statements of
Operations
(In thousands, except per share
amounts)
Years Ended December
31,
2023
2022
2021
Revenues:
Oil, natural gas and natural gas liquids
revenues
$
574,542
$
355,430
$
118,548
Lease bonus and other income
18,814
14,182
2,040
Total revenues
593,356
369,612
120,588
Operating expenses:
Management fees to affiliates
—
3,241
7,480
Depreciation, depletion and
amortization
291,320
104,511
40,906
General and administrative
49,620
42,299
12,998
Severance and ad valorem taxes
46,939
25,572
6,934
Impairment of oil and gas properties
25,617
—
—
Deferred offering costs write off
—
—
2,396
Loss on sale of oil and gas properties
144,471
—
—
Total operating expenses
557,967
175,623
70,714
Net income from operations
35,389
193,989
49,874
Other income (expense):
Interest expense, net
(93,413
)
(35,499
)
(1,893
)
Change in fair value of warrant
liability
2,950
3,662
—
Loss on extinguishment of debt
(21,566
)
(11,487
)
—
Commodity derivatives gains
15,199
39,037
—
Interest rate derivatives gains
462
110
—
Net income (loss) before taxes
(60,979
)
189,812
47,981
Income tax benefit (expense)
14,284
(5,681
)
(486
)
Net income (loss)
(46,695
)
184,131
47,495
Net income attributable to Predecessor
—
(78,104
)
(47,495
)
Net income attributable to temporary
equity
—
(90,377
)
—
Net (income) loss attributable to
noncontrolling interest
31,159
51
—
Net income (loss) attributable to Class
A stockholders
$
(15,536
)
$
15,701
$
—
Net income (loss) per Class A common
share
Basic
$
(0.20
)
$
1.10
—
Diluted
$
(0.20
)
$
1.10
—
Weighted average Class A common shares
outstanding
Basic
81,269
13,723
—
Diluted
81,269
13,723
—
Consolidated Statements of Cash
Flows
(In thousands)
Years Ended December
31,
2023
2022
2021
Cash flows from operating
activities:
Net income (loss)
$
(46,695
)
$
184,131
$
47,495
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and
amortization
291,320
104,511
40,906
Amortization of deferred financing costs
and long-term debt discount
5,534
6,546
440
Share-based compensation
18,867
9,250
—
Change in fair value of warrant
liability
(2,950
)
(3,662
)
—
Loss on extinguishment of debt
21,566
11,487
—
Impairment of oil and gas properties
25,617
—
—
Commodity derivative gains
(15,199
)
(39,037
)
—
Net cash received for commodity derivative
settlements
24,613
7,104
—
Interest rate derivative gains
(462
)
(110
)
—
Net cash received (paid) for interest rate
derivative settlements
781
(209
)
—
Loss on sale of oil and gas properties
144,471
—
—
Deferred tax (benefit) expense
(42,946
)
1,631
—
Deferred offering cost write off
—
—
2,396
Change in operating assets and
liabilities:
Accrued revenue and accounts
receivable
33,564
(25,313
)
(27,697
)
Prepaid assets
19,550
(616
)
(97
)
Other long-term assets
2,089
(3,652
)
—
Accounts payable and accrued expenses
8,810
(88,558
)
1,673
Due to affiliates
—
(380
)
325
Operating lease liabilities and other
long-term liabilities
(1,030
)
1,837
488
Net cash provided by operating
activities
487,500
164,960
65,929
Cash flows from investing
activities:
Acquisition of Falcon, net of cash
—
4,484
—
Acquisition of Brigham, net of cash
—
11,054
—
Predecessor cash not contributed in the
Falcon Merger
—
(15,228
)
—
Purchases of oil and gas properties, net
of post-close adjustments
(170,545
)
(557,569
)
(38,470
)
Proceeds from sale of oil and gas
properties
113,298
—
(137
)
Other, net
(2,479
)
(840
)
(136
)
Net cash used in investing
activities
(59,726
)
(558,099
)
(38,743
)
Cash flows from financing
activities:
Borrowings on credit facilities
644,500
348,895
147,000
Repayments on credit facilities
(877,500
)
(209,000
)
(46,500
)
Issuance of 2026 Senior Notes
—
444,500
—
Repayments on 2026 Senior Notes
(438,750
)
(11,250
)
—
Issuance of 2028 Senior Notes
600,000
—
—
Borrowings on Bridge Loan Facility
—
425,000
—
Repayments on Bridge Loan Facility
—
(425,000
)
—
Debt issuance costs
(22,060
)
(24,889
)
(1,588
)
Debt extinguishment costs
(12,176
)
—
—
Distributions paid to Temporary Equity
—
(115,375
)
—
Distributions to noncontrolling
interest
(158,968
)
(13,318
)
(60,882
)
Dividends paid to Class A stockholders
(161,951
)
(18,165
)
—
Dividend equivalent rights paid
(1,048
)
(579
)
—
Issuance of equity in consolidated
subsidiary
—
—
1,467
Capital contributions
—
—
8,000
Distributions to partners
—
—
(67,500
)
Cash paid for taxes related to net
settlement of share-based compensation awards
(3,444
)
—
—
Deferred initial public offering costs
—
(61
)
(2,335
)
Other
—
(1,180
)
—
Net cash (used in) provided by
financing activities
(431,397
)
399,578
(22,338
)
Net change in cash and cash
equivalents
(3,623
)
6,439
4,848
Cash and cash equivalents, beginning of
period
18,818
12,379
7,531
Cash and cash equivalents, end of
period
$
15,195
$
18,818
$
12,379
Supplemental disclosure of non-cash
transactions:
Increase (decrease) in current liabilities
for additions to property and equipment:
$
(12
)
$
(379
)
446
Oil and gas properties acquired through
issuance of Class C Common Stock and common units in consolidated
subsidiary:
70,740
3,348,216
—
Oil and gas properties acquired through
issuance of equity in consolidated subsidiary:
—
—
572,166
Oil and gas properties acquired through
deemed distribution in connection with common control
transaction:
—
—
37,459
Temporary equity cumulative adjustment to
redemption value:
—
706,940
—
Supplemental disclosure of cash flow
information:
Cash paid for income taxes:
$
9,276
$
1,866
$
25
Cash paid for interest expense:
77,310
29,030
1,268
Non-GAAP financial measures
Adjusted EBITDA, Pro Forma Adjusted EBITDA, Discretionary Cash
Flow, Pro Forma Discretionary Cash Flow and Cash G&A are
non-GAAP supplemental financial measures used by our management and
by external users of our financial statements such as investors,
research analysts and others to assess the financial performance of
our assets and their ability to sustain dividends over the long
term without regard to financing methods, capital structure or
historical cost basis. Sitio believes that these non-GAAP financial
measures provide useful information to Sitio's management and
external users because they allow for a comparison of operating
performance on a consistent basis across periods.
We define Adjusted EBITDA as net income (loss) plus (a) interest
expense, (b) provisions for income taxes, (c) depreciation,
depletion and amortization, (d) non-cash share-based compensation
expense, (e) impairment of oil and gas properties, (f) gains or
losses on unsettled derivative instruments, (g) change in fair
value of warrant liability, (h) management fee to affiliates, (i)
loss on extinguishment of debt (j) merger-related transaction
costs, (k) write off of financing costs, and (l) loss on sale of
oil and gas properties.
We define Pro Forma Adjusted EBITDA as Adjusted EBITDA plus (a)
Oct’23 Effective Date Acquisitions EBITDA from October 1, 2023 to
December 31, 2023 that is not included in Adjusted EBITDA for the
three months ended December 31, 2023 and (b) Brigham Minerals
EBITDA October 1 to December 28, 2022.
We define Brigham Minerals EBITDA October 1 to December 28, 2022
as the EBITDA from October 1, 2022 through December 28, 2022 of the
assets acquired from Brigham Minerals on December 29, 2022.
We define Discretionary Cash Flow for time periods prior to 2024
as Adjusted EBITDA, less cash and accrued interest expense and cash
taxes.
We define Discretionary Cash Flow in 2024 as Adjusted EBITDA,
less cash and accrued interest and estimated cash taxes.
We define Pro Forma Discretionary Cash Flow as Discretionary
Cash Flow plus (a) Oct’23 Effective Date Acquisitions Discretionary
Cash Flow from October 1, 2023 to December 31, 2023 that is not
included in Discretionary Cash Flow for the three months ended
December 31, 2023 and (b) Brigham Minerals Discretionary Cash Flow
October 1 to December 28, 2022.
We define Brigham Minerals Discretionary Cash Flow October 1 to
December 28, 2022 as the DCF from October 1, 2022 through December
28, 2022 of the assets acquired from Brigham Minerals on December
29, 2022.
We define Cash G&A as general and administrative expense
less (a) non-cash share-based compensation expense, (b)
merger-related transaction costs and (c) rental income.
We define Loss on sale of oil and natural gas properties as the
non-cash losses incurred from the Appalachian and Anadarko Basins
Divestiture in December 2023.
These non-GAAP financial measures do not represent and should
not be considered an alternative to, or more meaningful than, their
most directly comparable GAAP financial measures or any other
measure of financial performance presented in accordance with GAAP
as measures of our financial performance. Non-GAAP financial
measures have important limitations as analytical tools because
they exclude some but not all items that affect the most directly
comparable GAAP financial measure. Our computations of Adjusted
EBITDA, Pro Forma Adjusted EBITDA, Discretionary Cash Flow, Pro
Forma Discretionary Cash Flow and Cash G&A may differ from
computations of similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted EBITDA
and Pro Forma Adjusted EBITDA to the most directly comparable GAAP
financial measure for the periods indicated (in thousands).
Three Months Ended December
31,
2023
2022
Net income (loss)
$
(91,716
)
$
4,585
Interest expense, net
21,678
17,403
Income tax (benefit) expense
(21,168
)
475
Depreciation, depletion and
amortization
68,602
37,209
Impairment of oil and natural gas
properties
—
—
Loss on sale of oil and natural gas
properties
144,471
—
EBITDA
$
121,867
$
59,672
Non-cash share-based compensation
expense
4,393
4,303
Losses (gains) on unsettled derivative
instruments
(12,194
)
19,017
Change in fair value of warrant
liability
—
180
Loss on debt extinguishment
20,096
—
Merger-related transaction costs
745
9,922
Write off of financing costs
—
—
Adjusted EBITDA
$
134,907
$
93,094
Brigham Minerals EBITDA October 1 to
December 28, 2022
—
76,367
Oct'23 Effective Date Acquisitions
EBITDA
8,705
—
Pro Forma Adjusted EBITDA
$
143,612
$
169,461
The following table presents a reconciliation of Discretionary
Cash Flow and Pro Forma Discretionary Cash Flow to the most
directly comparable GAAP financial measure for the periods
indicated (in thousands).
Three Months Ended December
31,
2023
2022
Cash flow from operations
$
132,682
$
(6,115
)
Interest expense, net
21,678
17,403
Income tax (benefit) expense
(21,168
)
475
Deferred tax benefit (expense)
27,839
1,014
Changes in operating assets and
liabilities
(25,610
)
71,522
Amortization of deferred financing costs
and long-term debt discount
(1,259
)
(1,127
)
Merger-related transaction costs
745
9,922
Adjusted EBITDA
$
134,907
$
93,094
Less:
Cash and accrued interest expense
19,628
15,641
Cash taxes
8
—
Discretionary Cash Flow
$
115,271
$
77,453
Brigham Minerals Discretionary Cash Flow
October 1 to December 28, 2022
—
66,799
Oct'23 Effective Date Acquisitions
Discretionary Cash Flow
8,705
—
Pro Forma Discretionary Cash
Flow
$
123,976
$
144,252
The following table presents a reconciliation of Cash G&A to
the most directly comparable GAAP financial measure for the periods
indicated (in thousands).
Three Months Ended December
31,
2023
2022
General and administrative expense
$
11,834
$
18,182
Less:
Non-cash share-based compensation
expense
4,393
4,303
Merger-related transaction costs
745
9,922
Rental income
135
—
Cash G&A
$
6,561
$
3,957
About Sitio Royalties Corp.
Sitio is a shareholder returns-driven company focused on
large-scale consolidation of high-quality oil & gas mineral and
royalty interests across premium basins, with a diversified set of
top-tier operators. With a clear objective of generating cash flow
from operations that can be returned to stockholders and
reinvested, Sitio has accumulated over 250,000 NRAs through the
consummation of over 190 acquisitions and portfolio management to
date. More information about Sitio is available at
www.sitio.com.
Forward-Looking Statements
This news release contains statements that may constitute
“forward-looking statements” for purposes of federal securities
laws. Forward-looking statements include, but are not limited to,
statements that refer to projections, forecasts, or other
characterizations of future events or circumstances, including any
underlying assumptions. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,”
“might,” “plan,” “seeks,” “possible,” “potential,” “predict,”
“project,” “prospects,” “guidance,” “outlook,” “should,” “would,”
“will,” and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. These statements include, but are
not limited to, statements about the Company's expected results of
operations, cash flows, financial position and future dividends; as
well as future plans, expectations and objectives for the Company’s
operations, including statements about our return of capital
framework, our share repurchase program, the implementation thereof
and the intended benefits, financial and operational guidance,
strategy, synergies, certain levels of production, future
operations, financial position, prospects, and plans. While
forward-looking statements are based on assumptions and analyses
made by us that we believe to be reasonable under the
circumstances, whether actual results and developments will meet
our expectations and predictions depend on a number of risks and
uncertainties that could cause our actual results, performance, and
financial condition to differ materially from our expectations and
predictions. Factors that could materially impact such
forward-looking statements include, but are not limited to:
commodity price volatility, the global economic uncertainty related
to the large-scale invasion of Ukraine by Russia, the conflict in
the Israel-Gaza region and continued hostilities in the Middle
East, the collapse of certain financial institutions and associated
liquidity risks, announcements of voluntary production cuts by
OPEC+ and others, and those other factors discussed or referenced
in the "Risk Factors" section of Sitio’s Annual Report on Form
10-K, for the year ended December 31, 2023 and other publicly filed
documents with the SEC. Any forward-looking statement made in this
news release speaks only as of the date on which it is made.
Factors or events that could cause actual results to differ may
emerge from time to time, and it is not possible to predict all of
them. Sitio undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future development, or otherwise, except as may be required by
law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227439081/en/
IR contact: Ross Wong (720) 640–7647 IR@sitio.com
Sitio Royalties (NYSE:STR)
過去 株価チャート
から 11 2024 まで 12 2024
Sitio Royalties (NYSE:STR)
過去 株価チャート
から 12 2023 まで 12 2024