On August 7, 2024, Sitio Royalties Corp (STR, Financial) released its 8-K filing detailing the company's financial and operational results for the second quarter of 2024. Sitio Royalties Corp is a pure-play mineral and royalty company focusing on investing in mineral and royalty interests in the Permian and other productive U.S. oil basins.
Performance Overview
Sitio Royalties Corp reported a record high average daily production volume of 39,231 barrels of oil equivalent per day (Boe/d), a significant increase from the previous quarter. This performance is crucial as it demonstrates the company's ability to enhance production efficiency and capitalize on its acquisitions.
Net income for the quarter was $29.0 million, a 55% increase from the first quarter of 2024. This growth was driven by higher revenues from oil, natural gas, and natural gas liquids, coupled with lower commodity derivatives losses.
Financial Achievements
Sitio Royalties Corp achieved an Adjusted EBITDA of $151.6 million, up 12% from the previous quarter. This increase was primarily due to higher average daily production volumes and improved unhedged realized oil prices. The company also raised its full-year 2024 production guidance to 36,000 – 38,000 Boe/d, reflecting confidence in its operational capabilities.
Return of capital for the second quarter was $0.71 per share, comprising a $0.30 cash dividend and $0.41 per share from stock repurchases. This represents a 45% increase from the first quarter of 2024, highlighting the company's commitment to returning value to shareholders.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 |
|---|---|---|
| Net Income | $29.0 million | $18.7 million |
| Adjusted EBITDA | $151.6 million | $135.1 million |
| Average Daily Production (Boe/d) | 39,231 | 35,349 |
Balance Sheet and Cash Flow
As of June 30, 2024, Sitio Royalties Corp had $1,060.0 million in total debt and liquidity of $406.3 million, including $16.3 million in cash. The company maintained a strong financial position, enabling continued investment in high-quality mineral rights and shareholder returns.
Operational Highlights
During the second quarter, Sitio Royalties Corp closed seven acquisitions, adding 14,996 Net Royalty Acres (NRAs) across the DJ, Delaware, and Midland basins. These acquisitions are expected to contribute significantly to the company's production volumes and overall growth.
Chris Conoscenti, Chief Executive Officer of Sitio, commented,
Our strong second quarter results are a reflection of flush production from recently completed wells on our legacy assets combined with production volumes contributed from our disciplined acquisition program."
Analysis
Sitio Royalties Corp's performance in the second quarter of 2024 demonstrates its ability to effectively manage and grow its portfolio of mineral and royalty interests. The company's strategic acquisitions and increased production volumes have positioned it well for continued success in the oil and gas industry. The raised production guidance and increased return of capital further underscore the company's commitment to delivering value to its shareholders.
For more detailed financial information and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Sitio Royalties Corp for further details.
