8-K: Sitio Royalties Reports Q2 2025 Results Amid Merger

Sitio Royalties Corp. announced its second quarter 2025 operational and financial results, reporting $14.5 million in net income and $125.4 million in Adjusted EBITDA, while confirming its merger with Viper Energy is on track for Q3 2025.

Summary

• Second quarter 2025 production reached 19.3 thousand barrels per day (MBbls/d) of oil and 41.9 thousand barrels of oil equivalent per day (MBoe/d) total.
• Net income for Q2 2025 was $14.5 million, with Adjusted EBITDA at $125.4 million.
• Operators turned-in-line 8.7 net wells across the company's acreage position.
• Net line of sight (LOS) wells totaled 48.1 as of June 30, 2025, comprising 27.6 net spud wells and 20.5 net permitted wells.
• Acquisitions totaling $6.0 million were closed, adding approximately 430 net royalty acres (NRAs) in the Delaware and DJ Basins.
• The company repurchased $8.9 million, or 0.5 million shares, of Class A common stock during the second quarter.
• Total return of capital for Q2 2025 was $0.42 per share of Class A Common Stock, consisting of a $0.36 per share cash dividend and $0.06 per share from stock repurchases.
• The previously announced all-stock merger with Viper Energy, Inc. is expected to close during the third quarter of 2025, following stockholder approval and other closing conditions.
• Due to the pending merger, Sitio has discontinued providing guidance and long-term outlook information.
• As of June 30, 2025, total debt outstanding was $1.1 billion, with liquidity of $437.2 million (including $0.4 million cash and $436.8 million remaining availability on its $925.0 million credit facility).

Sentiment

Score: 4

Explanation: The financial results for Q2 2025 show a notable decline in key profitability metrics (net income, Adjusted EBITDA, revenue, EPS) compared to the prior year, despite increased production volumes. While the merger progress is a strategic positive, the standalone operational performance for the quarter is weaker, leading to a moderately negative sentiment.

Positives

• Increased average daily production to 41,879 BOE/d in Q2 2025, up from 39,231 BOE/d in Q2 2024.
• Successfully closed $6.0 million in acquisitions, adding 430 net royalty acres in key basins.
• Repurchased $8.9 million of Class A common stock, demonstrating commitment to shareholder returns.
• Declared a cash dividend of $0.36 per share, contributing to a total return of capital of $0.42 per share for the quarter.
• Cumulative return of capital to shareholders since 2022 has exceeded $980 million.
• Average realized natural gas and NGLs prices increased year-over-year.
• Depreciation, depletion and amortization per Boe decreased to $19.92 in Q2 2025 from $23.95 in Q2 2024.
• Net interest expense per Boe decreased to $6.05 in Q2 2025 from $6.36 in Q2 2024.

Negatives

• Net income decreased to $14.5 million in Q2 2025 from $29.041 million in Q2 2024.
• Adjusted EBITDA decreased to $125.4 million in Q2 2025 from $151.733 million in Q2 2024.
• Total revenues declined to $145.659 million in Q2 2025 from $168.548 million in Q2 2024.
• Net income attributable to Class A stockholders decreased to $7.273 million in Q2 2025 from $12.854 million in Q2 2024.
• Basic and diluted earnings per share (EPS) decreased to $0.08 in Q2 2025 from $0.16 and $0.15, respectively, in Q2 2024.
• Average realized crude oil price decreased to $63.03 per barrel in Q2 2025 from $79.85 per barrel in Q2 2024.
• Combined average realized price per BOE decreased to $36.95 in Q2 2025 from $46.36 in Q2 2024.
• General and administrative expense per Boe increased to $5.27 in Q2 2025 from $3.77 in Q2 2024.
• Production taxes and other as a percentage of revenue increased to 8.8% in Q2 2025 from 7.5% in Q2 2024.

Risks

• Commodity price volatility, including oil, natural gas, and natural gas liquids.
• Global economic uncertainty and market volatility related to changes in U.S. trade policy, including tariffs.
• Slowing growth and demand, particularly 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 other producers, including any removal or duration of oil production curtailments.
• Increased global oil, natural gas, and natural gas liquids supply.
• Risks and uncertainties associated with the proposed merger, including the likelihood that conditions to the merger will be satisfied on a timely basis or at all, and the ability of Viper or Sitio to consummate the merger.

Future Outlook

Due to the pending all-stock merger with Viper Energy, Inc., the company has discontinued providing guidance and long-term outlook information regarding its results of operations. The merger is expected to close during the third quarter of 2025, subject to stockholder approval and other closing conditions.

Management Comments

• Sitio Royalties Corp. announced its second quarter 2025 operational and financial results.
• The company has discontinued providing guidance and long-term outlook information regarding its results of operations and does not intend to update previously issued guidance, as those forward-looking statements were estimates only as of the date provided and subject to specific risks and uncertainties.
• As a result of the pending merger, there will not be an investor conference call.

Industry Context

The announcement reflects the ongoing consolidation trend within the oil and gas mineral and royalty interest sector, with Sitio Royalties Corp. actively pursuing large-scale acquisitions and now entering a definitive merger agreement. The company's focus on returning cash flow to stockholders aligns with a common strategy for royalty companies in a volatile commodity price environment.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: Impacted by the pending all-stock merger with Viper Energy, Inc., the declared cash dividend of $0.36 per share, and the share repurchase program ($8.9 million in Q2 2025).
• Creditors: The company maintains $1.1 billion in total debt outstanding and $437.2 million in liquidity, which impacts its ability to service debt.

Next Steps

• Closing of the definitive merger agreement with Viper Energy, Inc. during the third quarter of 2025, subject to Sitio stockholder approval and other closing conditions.
• Payment of the Q2 2025 cash dividend on August 19, 2025, to stockholders of record as of August 14, 2025.

Key Dates

Keywords

Oil and Gas, Royalties, Mineral Interests, SEC Filing, Earnings Report, Q2 2025, Sitio Royalties Corp, STR, Viper Energy, Merger, Production, Net Income, Adjusted EBITDA, Share Repurchase, Dividend, Delaware Basin, DJ Basin