Sitio Royalties (US:STR)2025-05-07 21:54Financial Performance & Returns - Sitio reported solid financial performance, exceeding consensus estimates for 1Q25 production at approximately 42 MBoe/d and Adjusted EBITDA at approximately $142 million[10] - The company boasts high Adjusted EBITDA Margins, exceeding 87%[10] - Sitio's cumulative return of capital since becoming public in 2022 is greater than $915 million, representing over 35% of the company's market capitalization[10, 34, 35] - The company returned $0.50 per share to shareholders in 1Q25, comprised of a $0.35 per share cash dividend and $0.15 per share of stock repurchases[11] Capital Allocation & Debt - Sitio is committed to returning at least 65% of Discretionary Cash Flow (DCF) to shareholders through dividends and share repurchases[37] - The board authorized an additional $300 million for share repurchases, bringing the total remaining buyback capacity to approximately $350 million[10, 37] - Sitio's Adjusted Net Debt to 2024 Free Cash Flow (FCF) ratio is approximately 0.3x, which is about half the peer group average of 4.7x[42] Acquisitions & Asset Management - The company closed 3 transactions in 1Q25 for approximately $21 million, adding approximately 1,350 NRAs[10, 11] - Missing payments captured in the last twelve months (LTM) ending March 31, 2025, amounted to $15 million, offsetting approximately 40% of the midpoint of the 2025 Cash G&A guidance[10, 74] Production & Outlook - Average daily production for 1Q25 was 42.1 MBoe/d, including 18.9 MBbls/d of oil production, representing a 19% year-over-year increase in total production[8, 11] - The company's 2025 full-year guidance projects average daily production between 38,250 and 41,250 Boe/d, and average daily oil production between 17,750 and 19,250 Bbls/d[45] Market Positioning - Sitio's Free Cash Flow (FCF) margin is greater than 3.5x higher than the E&P average[13] - The company has a large, diverse asset base with active operators and over 10 years of remaining development[56]