Sitio Royalties Corp. (NYSE:STR) Q2 2023 Earnings Conference Call August 8, 2023 8:30 AM ET Company Participants Ross Wong - VP, Finance and IR Chris Conoscenti - CEO Carrie Osicka - Chief Financial Officer Jarret Marcoux - EVP of Engineering and Acquisitions Conference Call Participants Tim Rezvan - KeyBanc Capital Markets TJ Schultz - RBC Capital Markets Nate Pendleton - Stifel Noel Parks - Tuohy Brothers Operator Good morning and thank you for attending Sitio Royalties Second Quarter 2023 Earnings Call. ...

• Employee base and Board reflective of a culture that values diversity • Sitio's differentiated nature of operations results in lower scope 1 and scope 2 emissions than E&P operators(1) • E&P operators bear 100% of the environmental liabilities of operations | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------|-----------|-------------------------------|----------|-------|--------------------- ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financials reflect the impact of recent mergers, with lower net income on higher revenue due to commodity prices and expenses [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities slightly decreased to $5.09 billion and $1.26 billion respectively as of June 30, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $348 | $18,818 | | Total current assets | $165,315 | $192,191 | | Total property and equipment, net | $4,876,826 | $4,950,857 | | **Total Assets** | **$5,090,705** | **$5,170,902** | | Long-term debt | $893,665 | $938,896 | | Total current liabilities | $18,657 | $26,412 | | **Total Liabilities** | **$1,259,347** | **$1,284,307** | | **Total Equity** | **$3,831,358** | **$3,886,595** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q2 2023 net loss of $3.0 million, a significant shift from prior-year income due to impairment and higher costs Statement of Operations Summary (in thousands) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $136,466 | $87,804 | $287,292 | $154,167 | | Total operating expenses | $124,266 | $34,908 | $214,164 | $60,078 | | Impairment of oil and natural gas properties | $25,617 | $0 | $25,617 | $0 | | Net income (loss) | ($2,973) | $72,013 | $44,746 | $110,535 | | Net income (loss) attributable to Class A stockholders | ($796) | $6,160 | $21,857 | $6,160 | | Diluted EPS | ($0.01) | $0.39 | $0.26 | $0.39 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased significantly to $232.7 million in H1 2023, while investing and financing activities used cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $232,677 | $88,431 | | Net cash used in investing activities | ($12,277) | ($390,648) | | Net cash (used in) provided by financing activities | ($238,870) | $305,456 | | **Net change in cash and cash equivalents** | **($18,470)** | **$3,239** | | Cash and cash equivalents, end of period | $348 | $15,618 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting impacts from recent mergers, debt facilities, and a $25.6 million impairment charge - The financial statements reflect the historical results of the Predecessor (Kimmeridge Mineral Fund, LP) prior to June 7, 2022, and the consolidated results of Sitio Royalties Corp. thereafter, including Brigham's results from December 29, 2022[56](index=56&type=chunk) - The Brigham Merger in December 2022 was an all-stock transaction valued at approximately **$2.15 billion**, adding 86,500 NRAs, with a preliminary purchase price allocation[70](index=70&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The Falcon Reverse Merger in June 2022 was valued at **$638.8 million** and added approximately 34,000 NRAs in the Eagle Ford and Appalachian Basin[75](index=75&type=chunk)[76](index=76&type=chunk) - A **$25.6 million impairment charge** was recognized in Q2 2023 related to proved properties in the Appalachian Basin due to declining natural gas and NGL prices[93](index=93&type=chunk)[184](index=184&type=chunk) - As of June 30, 2023, the company had **$486.0 million** outstanding under its **$750.0 million** borrowing base revolving credit facility and **$416.3 million** outstanding on its 2026 Senior Notes[107](index=107&type=chunk)[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes production growth to acquisitions, though lower commodity prices impacted profitability, while liquidity remains strong [Results of Operations](index=54&type=section&id=Results%20of%20Operations) Q2 2023 revenue rose 55% on surging production, but a 45% price decline and higher expenses led to a net loss Q2 2023 vs Q2 2022 Production and Pricing | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Average Daily Production (BOE/d) | 34,681 | 12,402 | +180% | | Average Realized Price (per BOE) | $42.01 | $76.65 | -45% | | Crude Oil Price (per Bbl) | $70.90 | $109.87 | -36% | | Natural Gas Price (per Mcf) | $1.53 | $6.55 | -77% | - The increase in DD&A expense to **$74.2 million** from $19.9 million was due to a **180%** increase in production and a higher depletion rate, which rose from **$17.48/BOE to $23.48/BOE**[240](index=240&type=chunk) - G&A expense increased by **110% to $14.1 million**, primarily due to **$4.4 million** in additional share-based compensation, increased headcount, and higher professional services fees[241](index=241&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of $264.3 million, primarily from its credit facility, after funding acquisitions and dividends - Total liquidity as of June 30, 2023, was **$264.3 million**, comprising **$348,000** in cash and **$264.0 million** of availability under the Sitio Revolving Credit Facility[269](index=269&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $232,677 | $88,431 | | Net cash used in investing activities | ($12,277) | ($390,648) | | Net cash (used in) provided by financing activities | ($238,870) | $305,456 | - Financing activities in H1 2023 included **$88.9 million** in dividends to Class A stockholders and **$91.2 million** in distributions to noncontrolling interest holders[273](index=273&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are commodity price volatility and interest rate changes on its variable-rate debt - A **$1.00 per Bbl** change in realized oil price would have changed H1 2023 oil revenues by **$3.2 million**[303](index=303&type=chunk) - A **$0.10 per Mcf** change in realized natural gas price would have changed H1 2023 natural gas revenues by **$1.1 million**[303](index=303&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt; a **1.0%** increase in the average interest rate would have increased H1 2023 interest expense by an estimated **$4.6 million**[307](index=307&type=chunk) - The company uses derivative instruments like collars and swaps to partially mitigate commodity price risk, but these instruments may also limit potential gains from price increases[304](index=304&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2023[309](index=309&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended June 30, 2023[310](index=310&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal claims not expected to have a material adverse impact - The company states that it **does not believe the resolution of current legal matters will have a material adverse impact** on its financial condition, results of operations, or cash flows[195](index=195&type=chunk)[311](index=311&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last annual report filing - **No material changes** in risk factors have occurred since the company's Annual Report filed on March 8, 2023[313](index=313&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 97,711 shares to satisfy tax obligations from vested employee compensation Issuer Purchases of Equity Securities (Q2 2023) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - April 30, 2023 | 0 | N/A | | May 1 - May 31, 2023 | 0 | N/A | | June 1 - June 30, 2023 | 97,711 | $27.19 | | **Total** | **97,711** | **$27.19** | - The shares were repurchased to satisfy tax withholding obligations upon the vesting of share-based compensation awards for employees[314](index=314&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter - **No director or officer adopted or terminated** a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2023[317](index=317&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including amendments and officer certifications - Key exhibits filed with this report include the **Second Amendment to the Note Purchase Agreement** and required **CEO/CFO certifications** (302 and 906)[319](index=319&type=chunk)

Sitio Royalties Corp. (NYSE:STR) Q1 2023 Earnings Conference Call May 10, 2023 8:30 AM ET Company Participants Ross Wong - VP, Finance and IR Chris Conoscenti - CEO Conference Call Participants Tim Rezvan - KeyBanc Capital Markets TJ Schultz - RBC Capital Markets John Annis - Stifel Noel Parks - Tuohy Brothers Operator Good morning and thank you for attending Sitio Royalties First Quarter 2023 Earnings Call. My name is Felicia, and I'll be your operator today. All lines will be muted during the presentati ...

May 9, 2023 1Q 2023 Earnings Presentation Disclaimer FORWARD-LOOKING STATEMENTS INDUSTRY AND MARKET DATA BASIS OF PRESENTATION NON-GAAP MEASURES 2 Record high average quarterly production volume of 34,440 boe/d (51% oil) Reduced long-term debt by $33.7 million 3 This presentation relates to Sitio Royalties Corp. (the "Company" or "Sitio") and contains statements that may constitute "forward-looking statements" for purposes of federal securities laws. Forward-looking statements include, but are not limited t ...

Table of Contents OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41585 FORM 10-Q (Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 WASHINGTON, DC 20549 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extend ...

Sitio Royalties Corp. (NYSE:STR) Q4 2022 Results Conference Call March 9, 2023 8:30 AM ET Company Participants Ross Wong - Vice President of Finance and Investor Relations Chris Conoscenti - Chief Executive Officer Carrie Osicka - Chief Financial Officer Conference Call Participants Tim Rezvan - KeyBanc Capital Markets Jeanine Wai - Barclays Noel Parks - Tuohy Brothers Operator My name is Nadia, and I'll be coordinating the call today [Operator Instructions]. I will now hand you over to your host, Ross Wong ...

Production and Revenue - For the year ended December 31, 2022, Sitio's average net daily production was 30,782 barrels of oil equivalent per day (BOE/d), consisting of 15,662 Bbls/d of oil, 53,452 thousand cubic feet per day (Mcf/d) of natural gas, and 6,211 Bbls/d of natural gas liquids (NGLs) on a pro forma basis[74]. - Sitio's pro forma revenue from mineral and royalty interests was approximately $756.6 million for the year ended December 31, 2022, compared to $389.6 million for 2021[90]. - Approximately 80% of Sitio's 2022 revenue was derived from the sale of oil and NGLs on a pro forma basis[90]. - Sitio's total revenue for 2022 was primarily driven by crude oil, natural gas, and NGL sales, which accounted for 96% of total revenue[124]. - The average realized price for crude oil in 2022 was $93.05 per Bbl, while natural gas averaged $5.50 per Mcf, and NGLs averaged $33.51 per Bbl[124]. - Sitio's production for 2022 included 2,861 MBbls of crude oil, 9,531 MMcf of natural gas, and 1,100 MBbls of NGLs, resulting in a total production of 5,550 MBOE[124]. Reserves and Assets - As of December 31, 2022, Sitio's estimated proved reserves were 79,989 MBOE, with 67% classified as liquids (44% crude oil and 23% NGLs)[97]. - Approximately 81% of the proved reserves were classified as proved developed reserves, while 19% were classified as proved undeveloped reserves[97]. - Sitio's estimated proved undeveloped reserves (PUDs) as of December 31, 2022, were 7,650 MBbls of crude oil, 25,953 MMcf of natural gas, and 3,190 MBbls of NGLs, totaling 15,165 MBOE[118]. - The company identified 50,358 undeveloped locations across its gross DSU acreage as of December 31, 2022, with 89% located in the Permian Basin[121]. - Sitio's total net mineral acres amounted to 143,189, with a total of 260,607 net royalty acres[95]. Acquisitions and Growth Strategy - Sitio completed a total of 187 acquisitions since its formation in November 2016, with 19 transactions larger than 1,500 NRAs accounting for approximately 93% of its NRAs[76]. - Sitio expects to continue adding to its mineral and royalty asset base through acquisitions that meet its investment criteria for geologic quality and rate of return[74]. - The company completed the Falcon Merger, contributing 34,000 net royalty acres (NRAs) in the Eagle Ford and Appalachia Basin[189]. - The Brigham Merger added approximately 86,500 NRAs, including 30,300 NRAs in the Delaware Basin and 13,200 NRAs in the Midland Basin[190]. - For the year ended December 31, 2022, Sitio completed additional acquisitions totaling approximately 26,800 NRAs in the Delaware Basin and 7,700 NRAs in the Midland Basin[191]. Financial Position and Risks - The company reduced its indebtedness from $66.0 million as of March 31, 2020, to $25.0 million as of March 31, 2021, utilizing free cash flow[76]. - Sitio's revenues are significantly dependent on royalty payments from crude oil, natural gas, and NGLs, which are influenced by volatile market prices[195]. - A substantial decline in crude oil, natural gas, and NGL prices could materially adversely affect Sitio's business, financial condition, and cash flows, potentially leading to downward adjustments in estimated proved reserves[199]. - The company relies on external debt and equity financing, which may be adversely affected by rising interest rates and inflationary pressures[229]. - Sitio's financial results have been adversely impacted by the COVID-19 pandemic, with ongoing uncertainty affecting business operations and liquidity[234]. Environmental and Regulatory Compliance - The company has no environmental liabilities and minimal Scope 2 emissions, reflecting its commitment to responsible environmental practices[101]. - Sitio's operations are subject to stringent environmental laws and regulations, which could materially adversely affect its business and prospects[130]. - The Resource Conservation and Recovery Act (RCRA) imposes requirements on waste management, and changes in regulations could increase capital and operating expenses for Sitio's properties[132]. - The Clean Water Act (CWA) and related regulations impose strict controls on pollutant discharges, with potential legal challenges affecting compliance costs for Sitio's operators[134]. - Climate change regulations are evolving, with potential federal and state initiatives aimed at reducing greenhouse gas emissions, which could impact Sitio's operations[140]. Market Conditions and Competition - The crude oil and natural gas industry is highly competitive, with Sitio competing against larger public and private companies for mineral and royalty interests[181]. - The price of WTI light sweet crude oil has fluctuated from a historic low of negative $36.98 per Bbl in April 2020 to a high of $123.64 per Bbl in March 2022, indicating significant market volatility[198]. - The Henry Hub spot market price for natural gas ranged from a low of $1.33 per MMBtu in September 2020 to a high of $23.86 per MMBtu in February 2021, reflecting extreme price fluctuations[198]. - The company faces intense competition for acquisition opportunities, which may increase costs or limit its ability to complete acquisitions[216]. - Negative sentiment towards the oil and gas sector among certain investors may reduce the availability of capital funding for Sitio's development projects[271]. Operational Challenges - The company faces risks related to title defects that could impair its mineral and royalty interests, potentially leading to financial losses[201]. - The unavailability or high cost of drilling rigs and services may restrict E&P operators, impacting Sitio's financial condition[248]. - Seasonal weather conditions can disrupt drilling activities and affect the demand for natural gas, particularly in winter[183]. - The company cannot predict the impact of new legislation on its operations, as current sales of crude oil and natural gas are made at market prices without regulation[160]. - The development of Sitio's properties may require higher capital expenditures than currently anticipated, affecting future cash flows[231].

February 27, 2023 Investor Presentation This presentation relates to Sitio Royalties Corp. (the "Company" or "Sitio") and 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," "ex ...

| --- | --- | --- | |-------|---------------------------------------------------------|-------| | | | | | | | | | | | | | | 3Q 2022 Earnings Presentation | | | | | | | | A Leading Mineral and Royalty Business November 8, 2022 | | . Disclaimer FORWARD-LOOKING STATEMENTS This communication contains statements that may constitute "forward-looking statements" for purposes of federal securities laws, including communication relating to proposed business combination transactions (the "Merger") between Brigham and ...