Average Daily Production Volume of 12,402
Boe/d and Pro Forma Average Daily Production Volume of
15,149 Boe/d Including Falcon Minerals Volumes for the Entire
Second Quarter 20221
Asset Footprint Increased by 65% to 173,800
Net Royalty Acres2
Declared $0.71 Dividend Per Share of Class A
Common Stock
Active Quarter of Acquisitions, Including
Closing Merger With Falcon Minerals, Closing Acquisitions of
Approximately 22,000 Net Royalty Acres and Signing
Acquisition of Approximately 12,200 Additional Net Royalty
Acres
Additional Scale Significantly Enhances
Profitability on a Per Boe Basis
Sitio Royalties Corp. (NYSE: STR) (“Sitio”, "STR" or the
“Company”) today announced operational and financial results for
the quarter ended June 30, 2022.
SECOND QUARTER 2022 OPERATIONAL AND FINANCIAL HIGHLIGHTS AND
RECENT DEVELOPMENTS
- Average daily production volume of 12,402 barrels of oil
equivalent per day ("Boe/d"), (52% oil), up 9% sequentially from 1Q
2022; pro forma average daily production volume of 15,149 Boe/d
(50% oil) including Falcon Minerals volumes for the entire second
quarter 2022
- Net income of $72.0 million, up 87% sequentially from 1Q 2022
and cash flow from operations of $43.8 million, down 2%
sequentially from 1Q 2022
- Adjusted EBITDA of $76.7 million3, up 29% sequentially from 1Q
2022 and Discretionary Cash Flow ("DCF")3 of $75.5 million, up 29%
sequentially from 1Q 2022
- Pro forma Adjusted EBITDA of $92.7 million and pro forma
Discretionary Cash Flow of $91.4 million, including Falcon Minerals
results for full 2Q 2022
- Declared 2Q 2022 dividend of $0.71 per share of Class A Common
Stock4; implied annualized dividend yield of 10.3% based on STR's
Class A Common Stock closing price of $27.55 on August 5, 2022
- 126.8 net producing wells online as of June 30, 2022 including
net wells on acquired acreage from Momentum Minerals
- Including activity on the acquired acreage from Momentum
Minerals, 5.2 net wells turned-in-line ("TIL") during 2Q 2022,
approximately 88% of which were in the Permian Basin
- Including net line-of-sight (“LOS”) wells on acquired acreage
from Momentum Minerals, 26.8 net LOS wells as of June 30, 2022,
comprised of 14.4 net spuds and 12.4 net permits, with
approximately 94% of total net LOS wells in the Permian Basin4
- Completed all-stock merger with Falcon Minerals Corporation
(“Falcon Merger”) for over 34,000 net royalty acres ("NRAs") and
cash acquisitions of approximately $357 million for an additional
22,000 NRAs
- Signed agreement to acquire 12,200 NRAs from Momentum Minerals,
which closed in July of 2022 (“Momentum Acquisition”)
In January 2022, first half 2022 guidance was provided for
Desert Peak and Falcon Minerals as if they were combined since
January 1, 2022. Pro forma first half 2022 combined results for
Sitio, which includes results from Falcon Minerals for the entire
period, but does not include pro forma adjustments for the
Foundation Acquisition and Momentum Acquisition, are shown in the
table below.
1H 2022 Guidance Metric
Pro Forma 1H 2022
Results(1)
1H 2022 Guidance(2)
1H 2022 Average daily production
(Boe/d)
15,317
13,500 - 14,500
1H 2022 Average daily production (%
oil)
50.4
%
50.0% – 53.0%
1H 2022 Implied average daily oil
production (Bbl/d)
7,720
6,750 - 7,685
1H 2022 Average daily production (%
Permian)
74.9
%
73.0
%
Annualized Cash G&A ($ in
millions)
$
13.1
$
12.0
(1) Includes Falcon Minerals results for the six months ended
June 30, 2022. (2) Guidance issued in January 2022 for pro forma
combined company (Desert Peak Minerals and Falcon Minerals).
Chris Conoscenti, Chief Executive Officer of Sitio commented,
“We are excited to announce strong results for our first quarter as
a public company. Active operator development of our assets,
incremental royalty revenue from acquired assets, and favorable
commodity prices contributed to a successful inaugural quarter. We
continued to execute well on our large-scale, Permian-weighted
consolidation strategy. This was our most active quarter in our
Company’s history with the closing of the Falcon Merger, the
closing of the acquisition of Permian assets from Foundation
Minerals, LLC ( the “Foundation Acquisition”) and two other all
cash acquisitions, and the announcement of the Momentum
Acquisition. In aggregate, these acquisitions increase our
footprint by 65% to over 173,000 NRAs. In addition, I'm pleased to
announce our inaugural dividend of $0.71 per share for the second
quarter, which is based on cash flow for legacy Desert Peak
Minerals and Falcon Minerals as if both entities had been combined
for the entire quarter and is not burdened with transaction fees
from the Falcon Merger. Our second quarter dividend per share is
nearly 99% of the split adjusted dividend per share that was paid
to Falcon Minerals stockholders for the first quarter of 2022, even
though our target payout ratio of 65% of Discretionary Cash Flow is
lower than Falcon Minerals' historical payout ratio of
approximately 100%, which gives Sitio significantly more financial
flexibility to protect the balance sheet and pursue accretive
acquisitions.”
OPERATOR ACTIVITY AND MERGERS AND ACQUISITIONS UPDATE
During the second quarter of 2022 and inclusive of the NRAs
acquired from Momentum Minerals, the Company estimates that there
were 5.2 net wells turned-in-line with an average net royalty
interest (“NRI”) of 0.7% and that as of June 30, 2022, there were
26.8 net LOS wells comprised of 14.4 net spuds and 12.4 net permits
on the Company's acreage. Daily production volume averaged 12,402
Boe/d, which includes 24 days of production from assets acquired
from Falcon Minerals and 7 days of production from assets acquired
from Foundation Minerals, LLC. Second quarter 2022 pro forma
combined daily production volume averaged 15,149 Boe/d including
production from assets acquired from Falcon Minerals for the entire
quarter but excluding additional adjustments for assets acquired in
other acquisitions.
Sitio completed the all-stock merger with Falcon Minerals on
June 7, 2022 and closed three all cash acquisitions during the
second quarter of 2022, increasing NRAs by approximately 56,300. In
June of 2022, the Company also signed a purchase agreement for
approximately 12,200 Permian Basin NRAs from Momentum Minerals for
approximately $224.0 million5, which closed on July 26, 2022. In
aggregate, these acquired assets (including those acquired from
Momentum Minerals) are expected to make a substantial impact to
near-term production and cash flow, and as of June 30, 2022, these
assets acquired from Foundation Minerals and Momentum Minerals had
9.0 net LOS wells, comprised of 3.4 net spuds and 5.6 net
permits.
The following table summarizes Sitio's net production, net wells
and net royalty acres by area:
Delaware
Midland
Eagle Ford
Appalachia
Total
Average Daily
Production (Boe/d)
As reported for the three months ended
June 30, 2022
8,875
2,658
667
202
12,402
% Oil
47
%
71
%
57
%
1
%
52
%
Pro forma including Falcon Minerals
volumes for the three months ended June 30, 2022 (1)
8,875
2,658
2,760
856
15,149
% Oil
47
%
71
%
57
%
4
%
50
%
Net Well Activity
(normalized to 5,000' laterals)(2)
Pro Forma net wells online as of June 30,
2022
70.5
20.1
33.1
3.1
126.8
Pro Forma net wells TIL for the three
months ended June 30, 2022
2.4
2.2
0.6
-
5.2
Pro forma net LOS wells as of June 30,
2022
14.6
10.5
1.7
-
26.8
Spuds
6.4
7.4
0.6
-
14.4
Permits
8.2
3.1
1.1
-
12.4
Net Royalty Acres
(normalized to 1/8th royalty equivalent)
March 31, 2022
83,600
21,700
-
-
105,300
June 30, 2022
102,200
25,200
21,800
12,400
161,600
Pro forma June 30, 2022 including NRAs
acquired from Momentum Minerals
110,300
29,300
21,800
12,400
173,800
NRA Increase since March 31, 2022
26,700
7,600
21,800
12,400
68,500
(1) Does not include pro forma adjustments for Foundation
Acquisition and Momentum Acquisition (2) All well counts give pro
forma effect to all acquisitions completed in the quarter, in
addition to the Momentum Acquisition
FINANCIAL UPDATE
Sitio's second quarter 2022 average unhedged realized prices
including all expected quality, transportation and demand
adjustments were $109.87 per barrel of oil, $6.55 per Mcf of
natural gas and $42.29 per barrel of natural gas liquids, for a
total equivalent price of $76.65 per barrel of oil equivalent.
During the second quarter, the Company paid $420,000 in net cash
settlements for commodity derivative contracts and as a result,
average hedged realized prices were $109.35 per barrel of oil,
$6.49 per Mcf of natural gas and $42.29 per barrel of natural gas
liquids, for a total equivalent price of $76.28 per barrel of oil
equivalent. This represents a $12.90 per barrel of oil equivalent,
or 20% increase relative to hedged realized prices for the three
months ended March 31, 2022.
Consolidated net income for the second quarter of 2022 was $72.0
million, an increase of 87% relative to the first quarter of 2022.
Consolidated net income was positively impacted by a $20.4 million
non-cash hedging gain from Sitio's commodity derivative contracts.
For the three months ended June 30, 2022 Adjusted EBITDA was $76.7
million, up 29% from the three months ended March 31, 2022
primarily due to increased production volumes and commodity
prices.
As of June 30, 2022, the Company had a cash balance of $15.6
million, $505.0 million of total debt (comprised of $255.0 million
drawn on its revolving credit facility and a $250.0 million 364-day
unsecured term loan) and liquidity of $60.6 million. In July of
2022, the Company drew an additional $175.0 million on the 364-day
unsecured term loan and $10.0 million on the revolving credit
facility to fund the closing of the Momentum Acquisition. Sitio is
evaluating long-term debt financing options to repay the $425.0
million 364-day unsecured term loan. Sitio added hedges related to
recent cash acquisitions, which are reflected in the summary table
of Sitio’s commodity hedges.
Oil (NYMEX WTI)
2H22
2023
2024
1H25
Swaps
Total volume (Bbls)
404,800
1,113,250
1,207,800
199,100
Average price ($/Bbl)
$
106.31
$
93.71
$
82.66
$
74.65
Collars
Total volume (Bbls)
—
—
—
362,000
Average call ($/Bbl)
—
—
—
$
93.20
Average put ($/Bbl)
—
—
—
$
60.00
Gas (NYMEX Henry Hub)
2H22
2023
2024
1H25
Swaps
Total volume (MMBtu)
92,000
182,500
183,000
—
Average price ($/MMBtu)
$
4.63
$
3.83
$
3.41
—
Collars
Total volume (MMBtu)
1,104,000
3,102,500
4,172,400
2,099,600
Average call ($/MMBtu)
$
9.69
$
7.93
$
7.24
$
10.34
Average put ($/MMbtu)
$
6.00
$
4.82
$
4.00
$
3.31
SECOND HALF 2022 GUIDANCE UPDATE
After reviewing completed second quarter 2022 results, the
Company is lowering the second half 2022 guidance ranges for
gathering and transportation and cash taxes and reiterating all
other guidance metrics that were previously disclosed on June 27,
2022.
Low
High
Average Daily
Production
2H 2022 Average daily production
(Mboe/d)
18.0
19.0
2H 2022 Average daily production (%
oil)
50
%
53
%
Revenue
Deductions, Expenses and Taxes
Gathering and transportation ($/boe)
$
1.15
$
1.65
Annual Cash G&A ($ in millions)
$
15.0
$
16.5
Production taxes (% of royalty
revenue)
7
%
9
%
Cash tax rate (% of pre-tax income)
2
%
4
%
SECOND QUARTER CASH DIVIDEND
The Company's Board of Directors (the "Board") declared a cash
dividend of $0.71 per share of Class A Common Stock for the second
quarter of 2022. The dividend is payable on August 31, 2022 to all
eligible stockholders at the close of business on August 18, 2022.
Based on a 65% payout ratio of second quarter 2022 Discretionary
Cash Flow, Sitio's quarterly dividend would have been $0.58 per
Class A common share; however, the Company's Board of Directors
approved a 2Q 2022 dividend of $0.71 per Class A common share,
which equates to an approximate 65% payout ratio including pro
forma Falcon Minerals Discretionary Cash Flow for the full three
months ended June 30, 2022.
SECOND QUARTER 2022 EARNINGS CONFERENCE CALL
Sitio will host a conference call at 8:30 a.m. Eastern on
Tuesday, August 9, 2022 to discuss its second quarter 2022
operating and financial results. Participants can access the call
by dialing 1-888-440-5983 in the United States or 1-646-960-0202 in
other locations with access code 5570483 or via webcast at
https://events.q4inc.com/attendee/537881978. The conference call,
live webcast and archive of the call 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 the 2022
Citi One-on-One Midstream / Energy Infrastructure Conference on
August 16, 2022 and the Barclays CEO Energy-Power Conference from
September 6 - 7, 2022. 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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Production Data:
Crude oil (Mbbls)
588
230
1,123
420
Natural gas (Mmcf)
1,871
929
3,565
1,954
NGLs (Mbbls)
229
100
436
180
Total (MBOE)(6:1)
1,129
485
2,153
926
Average daily production (BOE/d)(6:1)
12,402
5,337
11,897
5,112
Average Realized Prices:
Crude oil (per Bbl)
$
109.87
$
62.79
$
101.37
$
59.19
Natural gas (per Mcf)
$
6.55
$
2.74
$
5.64
$
3.22
NGLs (per Bbl)
$
42.29
$
25.99
$
40.17
$
27.44
Combined (per BOE)
$
76.65
$
40.39
$
70.33
$
38.98
Average Realized Prices After Effects
of Derivative Settlements:
Crude oil (per Bbl)
$
109.35
$
62.79
$
101.10
$
59.19
Natural gas (per Mcf)
$
6.49
$
2.74
$
5.60
$
3.22
NGLs (per Bbl)
$
42.29
$
25.99
$
40.17
$
27.44
Combined (per BOE)
$
76.28
$
40.39
$
70.14
$
38.98
Selected Expense Metrics
Three Months Ended June
30,
Six Months Ended June
30,
2022
2022
Severance and ad valorem taxes
7.9
%
7.0
%
Depreciation, depletion and
amortization
$
17.64
$
16.39
General and administrative
$
5.91
$
4.99
Interest expense, net
$
1.72
$
1.44
Condensed Consolidated Balance
Sheets
(In thousands except par and share
amounts)
June 30,
December 31,
2022
2021
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
15,618
$
12,379
Accrued revenue and accounts receivable,
net
69,997
36,202
Prepaid assets
1,553
235
Derivative asset
7,099
—
Total current assets
94,267
48,816
Property and equipment
Oil and natural gas properties, successful
efforts method:
Unproved properties
1,489,217
817,873
Proved properties
829,736
447,369
Other property and equipment
3,102
8,187
Accumulated depreciation, depletion and
amortization
(153,989
)
(121,536
)
Net oil and gas properties and other
property and equipment
2,168,066
1,151,893
Other long-term assets
Deposits for property acquisitions
22,428
—
Long-term derivative asset
12,217
—
Deferred financing costs
4,498
2,145
Other long-term assets
643
—
Total long-term assets
39,786
2,145
TOTAL ASSETS
$
2,302,119
$
1,202,854
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses
$
15,444
$
4,140
Due to affiliates
—
442
Bridge loan facility payable
243,286
—
Total current liabilities
258,730
4,582
Long-term liabilities
Long-term debt
255,000
134,000
Warrant liability
3,306
—
Deferred tax liability
2,731
—
Deferred rent
1,117
1,129
Total long-term liabilities
262,154
135,129
Total liabilities
520,884
139,711
Temporary equity
1,664,677
—
Equity
—
—
Class A Common Stock, $0.0001 par value;
240,000,000 shares authorized; 12,700,770 and 0 shares issued and
outstanding at June 30, 2022 and December 31, 2021,
respectively
1
—
Class C Common Stock, $0.0001 par value;
120,000,000 shares authorized; 71,140,064 and 0 shares issued and
outstanding at June 30, 2022 and December 31, 2021,
respectively
7
—
Additional paid-in capital
116,550
—
Retained earnings
—
—
Partners' Capital
—
560,622
Noncontrolling interests
—
502,521
Total equity
116,558
1,063,143
TOTAL LIABILITIES, TEMPORARY EQUITY AND
EQUITY
$
2,302,119
$
1,202,854
Unaudited Condensed Consolidated
Statements of Income
(In thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenue:
Oil, natural gas and natural gas liquids
revenues
$
86,507
$
19,616
$
151,458
$
36,069
Lease bonus and other income
1,297
55
2,709
650
Total revenues
87,804
19,671
154,167
36,719
Operating expenses:
Management fees to affiliates
1,371
1,870
3,241
3,740
Depreciation, depletion and
amortization
19,912
8,936
35,297
15,801
General and administrative
6,675
1,105
10,662
1,278
General and administrative -
affiliates
—
1,050
74
3,217
Severance and ad valorem taxes
6,950
1,453
10,804
2,574
Total operating expenses
34,908
14,414
60,078
26,610
Net income from operations
52,896
5,257
94,089
10,109
Other expense:
Interest expense, net
(1,942
)
(218
)
(3,110
)
(524
)
Change in fair value of warrant
liability
3,306
—
3,306
—
Commodity derivatives gains
20,010
—
18,895
—
Income before income tax
expense
74,270
5,039
113,180
9,585
Income tax expense
(2,257
)
(20
)
(2,645
)
(90
)
Net income
72,013
5,019
110,535
9,495
Net income attributable to
Predecessor(1)
(39,582
)
(5,019
)
(78,104
)
(9,495
)
Net income attributable to temporary
equity
(26,271
)
—
(26,271
)
—
Net income attributable to Class A
stockholders
$
6,160
$
—
$
6,160
$
—
(1) The Falcon Merger was accounted for as a reverse merger and
a business combination for accounting purposes using the
acquisition method of accounting with Desert Peak Minerals as the
accounting acquirer. As such, the historical financial information
included herein are based on the financial statements of Desert
Peak Mineral's predecessor, Kimmeridge Mineral Fund, LP (“KMF” or
the “Predecessor”) prior to our corporate reorganization. KMF is
the entity where the Company's historical financial statements were
generated. Prior the Falcon Merger, Desert Peak Minerals was
consolidated into the results of KMF.
Unaudited Condensed Consolidated
Statements of Cash Flow
(In thousands)
Six Months Ended June
30,
2022
2021
Cash flows from operating
activities:
Net income
$
110,535
$
9,495
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and
amortization
35,297
15,801
Share-based compensation
978
—
Change in fair value of warrant
liability
(3,306
)
—
Commodity derivative gains
(18,895
)
—
Losses on settled commodity
derivatives
(420
)
—
Deferred tax expense
133
—
Change in operating assets and
liabilities:
Accrued revenue and accounts receivable,
net
(21,741
)
(2,696
)
Other prepaid assets
(734
)
(25
)
Other long-term assets
350
—
Deferred financing costs
—
141
Accrued expenses and other liabilities
(13,374
)
(310
)
Due to affiliates
(380
)
1,279
Other long-term liabilities
(12
)
(23
)
Net cash provided by operating
activities
88,431
23,662
Cash flows from investing
activities:
Acquisition of Falcon, net of cash
4,484
—
Predecessor cash not contributed in the
Merger
(15,229
)
—
Purchases of oil and gas properties
(356,799
)
(1,918
)
Proceeds from sales of oil and gas
properties
—
(63
)
Purchases of other property and
equipment
(676
)
—
Deposits for property acquisitions
(22,428
)
(2,325
)
Net cash provided by (used) in
investing activities
(390,648
)
(4,306
)
Cash flows from financing
activities:
Borrowings on credit facility
156,895
—
Repayments on credit facility
(79,000
)
(23,600
)
Borrowings on bridge loan facility
250,000
—
Bridge loan facility issuance costs
(6,281
)
—
Issuance of equity in consolidated
subsidiary
—
1,467
Contributions of partners' capital
received in advance
—
1,463
Distributions to noncontrolling
interests
(13,318
)
—
Payments of deferred financing costs
(2,830
)
(29
)
Deferred initial public offering costs
(10
)
—
Net cash provided by (used) in
financing activities
305,456
(20,699
)
Net change in cash and cash
equivalents
3,239
(1,343
)
Cash and cash equivalents, beginning of
year
12,379
7,531
Cash and cash equivalents, end of
period
$
15,618
$
6,188
Non-GAAP financial measures
Adjusted EBITDA, 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.
We define Adjusted EBITDA as net income (loss) plus (a) interest
expense, (b) provisions for taxes, (c) depreciation, depletion and
amortization, (d) non-cash share-based compensation expense, (e)
impairment of oil and natural gas properties, (f) gains or losses
on unsettled derivative instruments, (g) change in fair value of
the warrant liability, (h) write off of deferred offering costs,
(i) management fee to affiliates, and (j) one-time transaction
costs. Adjusted EBITDA is not a measure determined by accounting
principles generally accepted in the United States of America
(“GAAP”).
We define Discretionary Cash Flow as Adjusted EBITDA, less cash
interest expense and cash taxes.
We define Cash G&A as general and administrative expense
less (a) non-cash share-based compensation expense and (b) one-time
transaction costs.
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, 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
to the most directly comparable GAAP financial measure for the
period indicated (in thousands).
Three Months Ended June
30,
2022
Net income
$
72,013
Interest expense, net
1,942
Income tax expense
2,257
Depreciation, depletion and
amortization
19,912
EBITDA
$
96,124
Non-cash share-based compensation
expense
978
Gains on unsettled derivative
instruments
(20,429
)
Change in fair value of warrant
liability
(3,306
)
Management fees to affiliates
1,371
One-time transaction costs
1,979
Adjusted EBITDA
$
76,717
Falcon Minerals EBITDA April 1 to June
6
15,938
Pro forma Adjusted EBITDA
$
92,655
The following table presents a reconciliation of Discretionary
Cash Flow to the most directly comparable GAAP financial measure
for the period indicated (in thousands).
Three Months Ended June
30,
2022
Cash flow from operations
$
43,828
Interest expense, net
1,942
Income tax expense
2,257
Deferred tax expense
(133
)
Changes in operating assets and
liabilities
25,473
Management fees to affiliates
1,371
One-time transaction costs
1,979
Adjusted EBITDA
$
76,717
Less:
Cash interest expense
826
Cash taxes
428
Discretionary Cash Flow
$
75,463
Falcon Minerals Discretionary Cash Flow
April 1 to June 6
15,938
Pro forma Discretionary Cash
Flow
$
91,401
The following table presents a reconciliation of Cash G&A to
the most directly comparable GAAP financial measure for the period
indicated (in thousands).
Three Months Ended June
30,
2022
General and administrative expense
$
6,675
Non-cash share-based compensation
expense
978
One-time transaction costs
1,979
Cash G&A
$
3,718
Footnotes
- Average daily production volume includes actual production for
the three months ended June 30, 2022 of legacy Desert Peak Minerals
and Falcon Minerals from June 7, 2022 through June 30, 2022, which
represents the time period subsequent to the closing of the Falcon
Minerals merger. Pro forma average daily production includes actual
three months ended June 30, 2022 average daily production plus
average daily production from Falcon Minerals from April 1, 2022
through June 6, 2022 (the day before closing of the Falcon Minerals
merger). Pro forma average daily production does not include
volumes associated with the Foundation Acquisition prior to the
closing date of June 24, 2022 or any production associated with the
Momentum Acquisition.
- Net royalty acres includes Momentum Acquisition, which closed
on July 26, 2022.
- Adjusted EBITDA and Discretionary Cash Flow are non-GAAP
financial measures. For definitions of such measures and
reconciliations to their most directly comparable GAAP financial
measures, please see “Non-GAAP financial measures.” Implied 2Q 2022
dividend of $0.58 per share of Class A Common Stock based on a 65%
payout ratio of Discretionary Cash Flow for 2Q 2022. Sitio
Royalties Board of Directors approved a 2Q 2022 dividend of $0.71
per share of Class A Common Stock based on pro forma Discretionary
Cash Flow, which includes Falcon Minerals cash flows for the full
three months ended June 30, 2022.
- Net wells normalized for 5,000 foot lateral length.
- Excludes customary closing adjustments which reduced the
purchase price.
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 173,000 NRAs through the
consummation of over 180 acquisitions to date. More information
about Sitio is available at www.sitio.com.
Forward Looking Statements
This new 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 expected benefits of acquisitions
as well as future plans, expectations and objectives for the
Company’s operations, including statements about strategy,
synergies, 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. See “Risk Factors” in the Company’s definitive proxy
statement filed with the U.S. Securities and Exchange Commission
(the “SEC”) on May 5, 2022 for a discussion of risk factors related
to the Falcon Merger. See also Part I, Item 1A “Risk Factors” in
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 and Part II, Item 1A “Risk Factors” in any
subsequent Quarterly Reports on Form 10-Q, each filed with the SEC
for a discussion of risk factors that affect the Company’s
business. 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/20220808005226/en/
IR contact: Ross Wong (720) 640–7647 IR@sitio.com
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