Executive Summary

Record Q4 production of 40.9 MBoe/d (+14% y/y; +6% q/q) drove Adjusted EBITDA to $141.2M; management said Q4 beat consensus on production, Adjusted EBITDA and DCF, and total return of capital was $0.49/share (dividend $0.41 + buyback $0.08) .
Operational momentum underpinned by 8.3 net TIL wells (up 9% q/q) and 44.9 net LOS wells exiting Q4; three late-2024 acquisitions (~$140M) added ~3,300 NRAs, primarily Delaware Basin, and were immediately accretive to cash flow per share .
2025 outlook: average production 38.25–41.25 MBoe/d (oil 17.75–19.25 MBbl/d); Cash G&A $36.5–$39.5M; production taxes 7–9%; estimated cash taxes $26–$30M (no acquisition contribution included) .
Balance sheet/liquidity steady: $1.1B total debt at 12/31/24 (revolver $487.8M; notes $600M), liquidity $440.5M; 1H25 hedges include 1.1 kbpd oil swaps at $74.65 and 2 kbpd collars ($60–$93.20) plus 11.6k MMBtu/d gas collars ($3.31–$10.34) .

What Went Well and What Went Wrong

What Went Well
- Record production and solid organic/LOS pipeline: “record high production…40.9 MBoe/d” with 8.3 net TILs; LOS wells totaled 44.9 at year-end, supporting visibility into 2025 .
- Accretive M&A and active asset management: closed three deals (~$140M) in Q4 adding ~3,300 NRAs (mostly Delaware), “immediately accretive to cash flow per share” and aided by proprietary systems that “captured $19 million of missing revenue payments” in 2024, offsetting >2/3 of cash G&A .
- Capital returns and efficiency: Q4 total ROC $0.49/share (65% of DCF); 2024 repurchases $118.1M; “cumulative return of capital…exceeded $840 million,” and management expects cumulative to surpass $1B in 2025 at current prices .
What Went Wrong
- Realized pricing headwind: combined unhedged realized price fell to $39.82/BOE in Q4 (vs $41.65 in Q3 and $46.36 in Q2), weighing on revenue/EBITDA versus earlier quarters (hedges partially offset) .
- Oil mix drift lower: Q4 portfolio oil mix at 47% (vs ~50% in Q2/Q3), driven by acquisition mix and basin trends; management noted Midland Basin oil percentage is trending down over time .
- Cash G&A up y/y (absolute dollars) as the company invested in people/systems; management framed increases as small in absolute terms on a ~$4B enterprise and scalable with volumes .

Financial Results

Headline quarterly operating/financial metrics

Metric	Q2 2024	Q3 2024	Q4 2024
Average daily production (BOE/d)	39,231	38,585	40,874
Oil % of production	50%	50%	47%
Adjusted EBITDA ($USD Millions)	$151.6	$135.4	$141.2
Discretionary Cash Flow ($USD Millions)	$129.3	$109.6	$116.9
Net Income ($USD Millions)	$29.0	$27.9	$19.3
Total Revenues ($USD Millions)	$168.5	$149.4	— (not disclosed in Q4 release)
EPS – Basic (Class A)	$0.16	$0.15	— (not disclosed in Q4 release)
Dividend per share	$0.30	$0.28	$0.41
Share repurchase equiv. per share	$0.41	$0.19	$0.08
Total return of capital per share	$0.71	$0.47	$0.49

Realized prices and cost metrics

Metric	Q2 2024	Q3 2024	Q4 2024
Combined realized price (unhedged) $/BOE	$46.36	$41.65	$39.82
Combined realized price (hedged) $/BOE	$47.13	$42.85	$41.20
Oil realized price (unhedged) $/Bbl	$79.85	$74.67	$69.98
Gas realized price (unhedged) $/Mcf	$1.01	$0.45	$1.42
NGL realized price (unhedged) $/Bbl	$20.32	$17.11	$18.09
Production taxes (% of royalty revenue)	7.5%	6.9%	7.5%
G&A $/BOE	$3.77	$4.05	$3.69
Cash G&A $/BOE	$1.98	$2.20	$1.90
Interest expense $/BOE	$6.36	$6.34	$5.73
DD&A $/BOE	$23.95	$21.97	$21.38

Segment/basin production (Q4 2024)

Basin	Net Avg Daily Production (BOE/d)	Oil %
Delaware	20,570	47%
Midland	8,353	52%
DJ	6,619	42%
Eagle Ford	4,540	47%
Williston/Other	792	54%
Total	40,874	47%

KPIs and activity

KPI	Q2 2024	Q3 2024	Q4 2024
Net TIL wells (quarter)	~8.5	7.7	8.3
Net LOS wells (end of period)	44.1	48.9	44.9
Acquisitions (quarter)	6 deals; ~$38.5M (+DJ deal closed Apr 4)	5 deals (DJ)	3 deals; ~$140M; +~3,300 NRAs
Total debt (end of period)	$1,049.3M (6/30/24)	$1,003.0M (9/30/24)	$1,100.0M (12/31/24)
Liquidity (end of period)	$406.3M (6/30/24)	$455.5M (9/30/24)	$440.5M (12/31/24)

Notes: Q4 quarterly revenue and EPS were not disclosed in the press release/8‑K; STR provided annual financial statements and detailed operating metrics, non‑GAAP reconciliations, and realized pricing/expense metrics for Q4 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Avg daily production (Boe/d)	FY 2025	n/a (first issuance)	38,250–41,250	First issuance
Avg daily oil (Bbl/d)	FY 2025	n/a	17,750–19,250	First issuance
Cash G&A ($M)	FY 2025	n/a	$36.5–$39.5	First issuance
Production taxes (% of royalty revenue)	FY 2025	n/a	7.0%–9.0%	First issuance
Estimated cash taxes ($M)	FY 2025	n/a	$26.0–$30.0	First issuance
Dividend (per share)	Q4 2024	—	$0.41 (paid 3/28/25)	Declared
Total return of capital (per share)	Q4 2024	—	$0.49 ($0.41 dividend + $0.08 buyback)	Announced

Reference: Prior full‑year 2024 guidance was raised in Q3 (production midpoint +1,000 Boe/d; cash taxes midpoint +$7M) but pertains to 2024, not 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/tech in asset mgmt	Highlighted proprietary systems; raising 2024 guide; strong LOS pipeline	“Missing payments” recovery approach; operational efficiency gains	Processing 99% revenue check data; AI models to interpret contracts; $19M missing revenue captured in 2024	Scaling; increasing impact on cash G&A and collections
M&A pipeline/returns	7 acquisitions in Q2 (incl. DJ); capital allocation returns-driven	5 DJ deals; raised guide; disciplined IRR mid/high-teens target	3 deals (~$140M) Q4; strong 2025 pipeline; next-12mo cash yield >25% for 2024 deals	Consistent small/mid deals; robust pipeline into 2025
Capital returns	$0.71/share ROC in Q2; buybacks opportunistic	$0.47/share ROC; at least 65% of DCF to shareholders	$0.49/share ROC; cumulative $840M+ since 2022; targeting >$1B in 2025 at current prices	Sustained high payout; mix depends on valuation
Production/LOS visibility	Record Q2 production; LOS 44.1	38.6k Boe/d; LOS 48.9; visibility from operator scale	40.9k Boe/d; LOS 44.9; guidance underpinned by spuds/permits (~45 net LOS wells)	Stable LOS supports 2025 plan
Macro/gas/infrastructure	Commodity agnostic; willing to buy gas at right returns	Midstream adding capacity (Matterhorn; Blackcomb pipeline outlook)	Positive gas macro tailwinds; midstream projects (Blackcomb/“Warrior”) support basis; portfolio gas mix rising in some basins	Constructive on gas; infrastructure improving
Oil mix trends	50% oil mix in Q2	50% oil mix in Q3	~47% oil mix; Midland oil% trending down; Delaware less affected	Slightly gassier mix over time

Management Commentary

“We delivered across the board in 2024 with stronger‑than‑expected results... closed on 16 immediately accretive acquisitions totaling about $350 million... enhancing revenue recovery with proprietary technology to audit and capture missing payments...” – CEO Chris Conoscenti .
“For the fourth quarter, our results beat consensus estimates for production, adjusted EBITDA and discretionary cash flow... total return of capital of $0.49 per share.” – CFO Carrie Osicka .
“At current commodity prices, we expect [cumulative return of capital] to exceed $1 billion in 2025.” – CEO .
“Our guidance… is underpinned by the spud and permits… we don’t include any acquisitions in our published guidance.” – CEO on 2025 outlook .

Q&A Highlights

M&A discipline and returns: Management reviewed evaluating >160 transactions, executing ~10% with weighted average unlevered IRR >15% and next-12-month cash yield >25%; focus on small/mid non‑marketed deals sourced via relationships; 2025 pipeline “every bit as promising” .
2025 production visibility: Guidance underpinned by existing spuds/permits (≈45 net LOS wells), implying ~3% y/y production growth at the midpoint without assuming M&A .
Gas macro and oil mix: Constructive multi‑year gas demand (power/data centers); Permian oil percentage drifting lower (~1% per year since 2021, more in Midland), with Delaware less affected; Q4 oil mix modestly lower partly due to acquisitions .
Capital allocation: Priority is returning capital (minimum 65% of DCF) while retaining 35% to maintain balance sheet and fund accretive deals; liquidity >$400M; bond yields near ~6% vs >10% in 2022 .
Cash G&A: Up y/y due to investments in people/systems; framed as small dollars; “cash G&A for the entire year is effectively paid for by the first three weeks of royalty revenue” .

Estimates Context

S&P Global (Capital IQ) consensus data for EPS/revenue/EBITDA was unavailable via our feed for STR at this time (SPGI mapping not returned).* Management stated Q4 “beat consensus” for production, Adjusted EBITDA and DCF on the call, but did not quantify the Street numbers .
Implication: Street models may need to reflect higher production exit rate, slightly lower oil mix, lower combined realized prices q/q, and lower per‑BOE interest costs and cash G&A trajectory into 2025 .

*Values retrieved from S&P Global

Key Takeaways for Investors

Operational execution strong: record Q4 volumes, stable LOS backlog, and Q4 Adj. EBITDA resilience despite lower realized prices provide confidence into 2025 .
Capital return cadence intact: 65% DCF payout framework delivered; dividend stepped up to $0.41 and buybacks ongoing with $81.9M authorization remaining .
Returns‑driven consolidation: Pipeline robust; history of mid‑teens+ IRR and 25%+ near‑term cash yields on acquired assets should continue to be a free cash flow lever without stressing the balance sheet .
Mix and pricing watch‑items: Oil mix ticked down to ~47% and combined realized prices fell again in Q4; hedge book offers near‑term downside protection (1H25) .
2025 setup: Midpoint production +3% vs 2024 actuals with visibility from spuds/permits; no M&A included, leaving room for upside from incremental deals .
Trading lens: Near‑term catalysts include dividend/buyback pace, incremental M&A prints in Permian/DJ, and updates on AI‑driven revenue recovery and cash G&A efficiency on upcoming calls .

Appendix: Balance Sheet and Hedges (as of 12/31/24)

Total debt $1.1B (Revolver $487.8M; Notes $600M); liquidity $440.5M (cash $3.3M; RCF availability $437.2M); borrowing base raised to $925M .
1H25 hedges: Oil swaps 1.1 kbpd at $74.65; oil collars 2.0 kbpd ($60–$93.20); gas collars 11.6k MMBtu/d ($3.31–$10.34) .

Citations: Q4’24 8‑K/press release and exhibits ; press release mirror . Q4’24 earnings call . Q3’24 8‑K . Q3’24 call . Q2’24 press release/call .

Sitio Royalties Corp. (STR)·Q4 2024 Earnings Summary