Sitio Royalties Corp.

In Q1 2025, Sitio reported production averaging over 42,000 BOE/day, up 3% quarter over quarter, adjusted EBITDA of $142 million, up 1% sequentially, and net income of $26 million, up 36% year over year. Net wells turned in line were up 34% from Q4 2024, acquisitions totaled over $20 million and added 1,315 net royalty acres, and the company said results beat consensus from production through net income. The board declared a $0.35/share cash dividend payable May 30, and the company repurchased 1.1 million shares for $22 million in Q1, plus about 487,000 more shares for $8 million through May 2 in Q2. For 2025, management updated cash taxes guidance to a midpoint of $23 million, $5 million below the original estimate; no other formal quarterly or full-year financial guidance changes were given on the call.

Chris Conoscenti emphasized that minerals and royalties are a high-margin, low-cost business with no direct operating costs, no required capital spending, and limited exposure to tariffs and inflation. He said Sitio’s LTM adjusted EBITDA margin was 90% and framed the stock as a “call option” on long-term oil and gas fundamentals with a 11.5% return-of-capital yield today. His tone was confident on long-term durability, stressing asset quality, operator quality, diversification, and continued consolidation opportunities.

Carrie Osicka highlighted the new quarterly preview reporting format aimed at giving investors key operational metrics sooner after quarter-end. She reported $142 million of adjusted EBITDA, $26 million of net income, production above 42,000 BOE/day, and $1.1 billion of debt outstanding with $439 million available on the revolver at March 31. She also noted that Sitio funded over $20 million of acquisitions and annual taxes with organic cash flow, that adjusted net debt to free cash flow was about half of peer group average, and that 2025 estimated cash taxes were revised to a midpoint of $23 million.

Analysts focused on whether production would remain resilient for the next two quarters, and management said the bulk of 2025 is underpinned by existing producing wells and wells already spud, with no sign yet that drilled wells are being left uncompleted. On buybacks versus M&A, Chris Conoscenti said both remain attractive, but he sees a compelling value proposition in repurchasing stock, especially amid volatility; he also noted the M&A market is different from 2020 because asset underwriting is now less opaque. On guidance, management said the full-year production outlook is unchanged for now because it is still early in the new price environment and they expect to reassess after more data comes in, similar to last year.