Form 4: Sitio Royalties EVP Reports Merger-Related Stock Changes

Jarret Marcoux, EVP of Sitio Royalties, reported the disposition and acquisition of company securities following the consummation of the all-equity merger with New Viper.

Summary

• Jarret J. Marcoux, Executive Vice President, Operations, reported changes in beneficial ownership of Sitio Royalties Corp. securities.
• The transactions occurred on August 19, 2025, due to the consummation of the merger agreement dated June 2, 2025, where New Viper acquired Sitio Royalties Corp. in an all-equity transaction.
• Marcoux disposed of 330,176 shares of Class A Common Stock and 38,732 shares of Class C Common Stock of Sitio Royalties Corp., resulting in 0 shares beneficially owned directly.
• Performance Stock Units (PSUs) and Restricted Stock Units (RSUs) for Sitio Class A Common Stock, totaling 221,999 units, immediately vested in full (PSUs at target performance) and were converted into the right to receive New Viper Class A common stock at an exchange ratio of 0.4855.
• Sitio Class C Common Stock, including those tied to Sitio Opco units, were canceled with no consideration.
• Sitio Opco units, totaling 38,732, immediately vested and were converted into Viper Opco units and New Viper Class B common stock at the same 0.4855 exchange ratio.
• This Form 4 specifically reports the disposition of securities pursuant to the merger agreement and does not reflect any direct sales by the reporting person.

Sentiment

Score: 7

Explanation: The filing reports the successful completion of a pre-announced merger, which is a positive for the strategic direction of the combined entity. The vesting of PSUs/RSUs is beneficial for the reporting person. The cancellation of Class C stock without consideration is a negative for those specific holders, but overall, the consummation of a major corporate action is generally viewed as a step forward.

Positives

• Performance Stock Units and Restricted Stock Units immediately vested in full upon merger completion, providing liquidity or conversion rights to the holder.
• The all-equity nature of the merger suggests a strategic alignment and continuity for shareholders of the acquired entity, converting their holdings into the acquiring entity's stock.

Negatives

• Sitio Class C Common Stock was canceled with no consideration delivered in exchange, indicating a complete loss of value for these specific shares.
• The reporting person's direct beneficial ownership of Sitio Royalties Corp. Class A and Class C Common Stock became zero following the merger, as expected due to the acquisition.

Future Outlook

The filing details a completed merger and the resulting changes in beneficial ownership. It does not provide forward-looking statements or guidance beyond the effective date of the merger.

Management Comments

• The reporting person's disposition of securities is solely due to the merger agreement and does not reflect personal sales.

Industry Context

This merger represents a consolidation within the oil and gas royalties and mineral interests sector, where companies like Sitio Royalties and Viper Energy operate. Such all-equity transactions are common strategies for growth, achieving economies of scale, and enhancing market position in a capital-intensive industry.

Stakeholder Impact

• Shareholders (Sitio Royalties Corp.): Class A shareholders received New Viper Class A common stock at a 0.4855 exchange ratio. Class C shareholders received no consideration.
• Employees (Sitio Royalties Corp.): Employees holding PSUs and RSUs saw their awards immediately vest and convert into New Viper Class A common stock.
• Management (Sitio Royalties Corp.): Management, like the reporting person, had their equity holdings converted or canceled as per the merger terms.

Next Steps

• Integration of Sitio Royalties Corp. and Sitio Opco into New Viper and Viper Opco, respectively.
• Ongoing operations of the combined entity under the New Viper structure.

Key Dates

Recommendation

This Form 4 reports the consummation of a merger where Sitio Royalties Corp. was acquired by New Viper in an all-equity transaction. As a result, Sitio Royalties Corp. stock has been converted into New Viper stock or canceled. For investors who held Sitio Royalties Corp. shares, their position has now transitioned to New Viper. A 'hold' recommendation is appropriate for the now-defunct Sitio Royalties Corp. stock, as the transaction is complete. Any future investment decision would pertain to New Viper, requiring a separate analysis of its fundamentals and outlook.

Keywords

Sitio Royalties Corp., STR, Viper Energy Inc., New Viper, Merger, Acquisition, SEC Form 4, Beneficial Ownership, Stock Units, Equity Transaction, Corporate Action