Sitio Royalties Reports First Quarter 2025 Operational and Financial Results

First quarter total average daily production above high end of full year guidance range

More than 30% quarter-over-quarter increase in net wells turned-in-line

First quarter total return of capital of $0.50 per share, comprised of declared cash dividend of $0.35 per share and an equivalent $0.15 per share in common stock repurchases

Share repurchase program extended, with additional $300 million authorized

Since June 2022, cumulative return of capital to shareholders has exceeded $915 million, representing approximately 35% of current market capitalization⁽¹⁾

Sitio Royalties Corp. (NYSE:STR) ("Sitio", "STR" or the "Company") today announced first quarter 2025 operational and financial results. Supplemental slides have been posted to Sitio's website, www.sitio.com. A conference call and webcast is planned for 7:30 a.m. CT / 8:30 a.m. ET on Thursday, May 8, 2025. Participation details can be found within this release.

FIRST QUARTER 2025 HIGHLIGHTS

• Delivered first quarter 2025 production of 18.9 MBbls/d oil and 42.1 MBoe/d total, exceeding the midpoint of full year Company guidance by 2% and 6%, respectively
• Reported first quarter net income of $26.3 million and Adjusted EBITDA⁽²⁾ of $142.2 million. Financial results reflected strong production volumes from legacy assets and recent acquisitions, as well as expenses in line with or better than the midpoint of our full year guidance ranges
• Operators turned-in-line 11.1 net wells across Sitio's acreage position, up 34% quarter-over-quarter, as the Company's assets continue to attract significant drilling capital
• Net line of sight ("LOS") wells totaled 48.6 as of March 31, 2025, up 8% quarter-over-quarter, including 28.9 net spud wells and 19.7 net permitted wells
• Increased estimated inventory by 40 net locations, based on 2024 operator drilling activity; represents a 10% quarter-over-quarter increase and equates to a little more than a year of drilling at current average drilling pace
• Closed $20.6 million of immediately accretive acquisitions located in the DJ and Midland Basins, adding approximately 1,350 net royalty acres ("NRAs")
• Repurchased $22.3 million, or 1.1 million shares, of common stock in the first quarter 2025
• Continued to return cash to shareholders and enhance value on a per share basis; first quarter total return of capital of $0.50 per share of Class A Common Stock, comprised of a $0.35 per share declared cash dividend (payable May 30, 2025), and $0.15 per share of stock repurchases
• Subsequent to the first quarter, on May 7, 2025, Sitio's Board of Directors extended the Company's share repurchase program with authorization of an additional $300 million, bringing remaining share buyback capacity to approximately $350 million

"With solid momentum exiting the first quarter 2025, our conviction in the quality of our assets and operators has never been stronger," said Sitio CEO Chris Conoscenti. "Consistent with our view of the long term value of our assets compared to our market valuation, our Board has authorized an additional $300 million of share buybacks and we will continue to take advantage of the current dislocation. The recent period of macro volatility highlights the benefits of minerals and royalties as an asset class, and Sitio specifically. With no obligatory capex, no operating costs and LTM Adjusted EBITDA margin⁽²⁾ of 90%, our cash flow is remarkably resilient. Our well-capitalized operators have historically had some of the most durable and consistent capital programs in the upstream industry. Further, we have no direct tariff exposure and our diversified portfolio of perpetual real assets offers owners an attractive hedge to inflation. We continue to generate significant free cash flow to support our dividend, opportunistic share buybacks, debt paydown and accretive acquisitions. We are well-positioned to continue to consolidate the fragmented minerals market and we will continue to be judicious allocators of our shareholders' capital."

FIRST QUARTER 2025 FINANCIAL RESULTS

Sitio's first quarter 2025 average unhedged realized prices including all expected quality, transportation and demand adjustments were $70.39 per barrel of oil, $2.30 per Mcf of natural gas and $24.57 per barrel of natural gas liquids, for a total price of $41.75 per Boe. During the first quarter of 2025, the Company received $0.4 million in net cash settlements for commodity derivative contracts and as a result, average hedged realized prices were $70.52 per barrel of oil, $2.34 per Mcf of natural gas and $24.57 per barrel of natural gas liquids, for a total price of $41.86 per Boe.

For the first quarter of 2025, consolidated net income was $26.3 million and Adjusted EBITDA⁽²⁾ was $142.2 million, up $7.6 million (or 41%) and $6.9 million (or 5%), respectively, compared to first quarter 2024, primarily due to 18% higher production over the same period.

As of March 31, 2025, the Company had $1.1 billion principal value of total debt outstanding (comprised of $486.2 million drawn on Sitio's revolving credit facility and $600.0 million of senior unsecured notes) and liquidity of $440.5 million, including $1.7 million of cash and $438.8 million of remaining availability under its $925.0 million credit facility.

FIRST QUARTER 2025 RESULTS VS. FULL YEAR 2025 GUIDANCE

Sitio is updating its previously issued full year 2025 estimated cash taxes guidance to reflect lower anticipated commodity prices than originally forecasted. At the midpoint, current estimated cash taxes for 2025 are $5 million less than the original estimate. The table below shows first quarter 2025 results relative to the Company's current full year 2025 guidance. Sitio does not forecast acquisitions; however, it expects to remain active on M&A given its robust deal pipeline.

RETURN OF CAPITAL FRAMEWORK

Sitio is committed to returning capital to shareholders while maintaining a balanced and durable capital structure. Since becoming public in 2022, Sitio's cumulative return of capital to shareholders has exceeded $915 million, including cash dividends and share repurchases, with approximately $75 million attributable to the first quarter 2025.

Sitio's Board of Directors declared a cash dividend of $0.35 per share of Class A Common Stock with respect to the first quarter of 2025. The dividend is payable on May 30, 2025 to the stockholders of record at the close of business on May 20, 2025. During the first quarter of 2025, the Company repurchased an aggregate 1.1 million shares of Class A Common Stock at an average price of $20.19 per share, or an equivalent $0.15 per share. In total, Sitio will return an aggregate $0.50 per share of capital for the first quarter of 2025.

Subsequent to the first quarter, from April 1, 2025 through May 2, 2025, Sitio repurchased 486,680 shares of Class A Common Stock at an average price of $16.17 per share for a total of $7.9 million. As of May 2, 2025, the Company had repurchased a total of 6.7 million of Class A Common Stock shares and Sitio OpCo Partnership Units, representing approximately 4% of shares outstanding prior to the Board's authorization of Sitio's share repurchase program. On May 7, 2025, Sitio's Board of Directors extended the share repurchase program⁽⁴⁾ with an additional authorization of $300 million, resulting in $500 million total authorization. Reflecting repurchases through May 2, 2025, remaining share buyback capacity is approximately $350 million.

UPCOMING INVESTOR CONFERENCES

Sitio executives will attend the RBC Capital Markets Global Energy, Power & Infrastructure Conference in New York on June 3-4, 2025 as well as the Citi Natural Resources Conference in Las Vegas on August 12-14, 2025.

CONFERENCE CALL INFORMATION

Sitio will host a conference call at 8:30 a.m. ET on Thursday, May 8, 2025. 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 435140, or by webcast at https://events.q4inc.com/attendee/207226218. Participants may also pre-register for the event via the following link: https://www.netroadshow.com/events/login?show=9fa7173e&confId=80085. The conference call, live webcast, and replay can also be accessed through the Investor Relations section of Sitio's website at www.sitio.com.

OPERATOR ACTIVITY

The following table summarizes Sitio's net royalty acres, net average daily production and net LOS wells by basin as of March 31, 2025.

COMMODITY DERIVATIVE CONTRACTS

The following table summarizes Sitio's commodity derivative contracts as of March 31, 2025.

FINANCIAL RESULTS

Non-GAAP financial measures

Adjusted EBITDA, Adjusted EBITDA margin, 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 and/or share repurchases 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 natural gas properties, (f) gains or losses on unsettled derivative instruments, (g) loss on debt extinguishment, (h) merger-related transaction costs (i) write off of financing costs and (j) loss on sale of oil and gas properties.

We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenues.

We define Discretionary Cash Flow as Adjusted EBITDA, less cash and accrued interest expense and estimated cash taxes.

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.

Merger-related transaction costs for the three months ended March 31, 2024 have been recast to conform to the current period presentation.

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, Adjusted EBITDA margin, Discretionary Cash Flow and Cash G&A may differ from computations of similarly titled measures of other companies.

This release does not include a reconciliation for 2025E Cash G&A because certain elements of the comparable GAAP financial measures are not predictable in this situation, making it impractical for the Company to forecast.

The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure for the period indicated (in thousands).

The following table presents a reconciliation of Discretionary Cash Flow to the most directly comparable GAAP financial measure for the period indicated (in thousands).

The following table presents a reconciliation of Cash G&A to the most directly comparable GAAP financial measure for the period indicated (in thousands).

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 270,000 NRAs through the consummation of over 200 acquisitions, as of March 31, 2025. 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 certain future plans, expectations and objectives for the Company's operations, including statements about our return of capital framework, our share repurchase program and its intended benefits, financial and operational guidance, strategy, synergies, certain levels of production, future operations, acquisitions, 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 and market volatility related to changes in U.S. trade policy, including the imposition of tariffs, slowing growth and demand, especially from China, the conflict in Ukraine and associated economic sanctions on Russia, the conflict in the Israel-Gaza region and continued hostilities in the Middle East including heightened tensions and conflict with Iran, Lebanon and Yemen, actions by OPEC+ and others, including any removal of oil production curtailments or the duration thereof, increased global oil, natural gas and natural gas liquids supply 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, 2024, Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, 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.

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