Sitio Royalties Announces Closing of Acquisition From Momentum Minerals

Rhea-AI Summary

Sitio Royalties Corp. (NYSE: STR) has finalized its acquisition of over 12,200 net royalty acres in the Permian Basin from Momentum Minerals. The $191 million transaction follows a $22 million deposit made in June 2022. Funding for the acquisition was sourced from a $175 million draw on Sitio's 364-day unsecured term loan, alongside borrowings from its revolving credit facility and available cash. Post-acquisition, Sitio has a total of $425 million drawn on its term loan, continuing its strategy of consolidating oil and gas mineral interests to enhance shareholder returns.

Positive

• Acquisition of over 12,200 net royalty acres strategically enhances Sitio's portfolio.
• Sitio continues its strategy of large-scale consolidation to increase cash flow.
• Strong funding structure with a significant amount available in cash and credit.

Negative

• Total of $425 million drawn on unsecured term loan raises debt concerns.
• High acquisition cost of approximately $191 million may strain financial resources.

DENVER--(BUSINESS WIRE)-- Sitio Royalties Corp. (NYSE: STR) (“Sitio” or the “Company”) today announced it has completed the previously announced acquisition of over 12,200 net royalty acres (“NRAs,” when normalized to a 1/8th royalty equivalent) in the Permian Basin from Momentum Minerals, a Houston-based portfolio company of funds and accounts managed or advised by affiliates of Apollo Global Management, Inc. (the “Momentum Acquisition”). The Momentum Acquisition was funded by an approximately $22 million deposit paid in June of 2022, and the remaining approximately $191 million, after giving effect to purchase price adjustments, was funded utilizing a $175 million draw on Sitio’s 364-day unsecured term loan, borrowings on the Company’s revolving credit facility and cash on hand. Following the Momentum Acquisition closing, Sitio had a total of $425 million drawn on its 364-day unsecured term loan.

About Sitio Royalties Corp.

Sitio is a shareholder returns-driven company focused on large-scale consolidation of high-quality oil & gas mineral and royalty interests across premium basins, with a diversified set of top-tier operators. With a clear objective of generating cash flow from operations that can be returned to shareholders and reinvested, Sitio has accumulated over 173,000 NRAs through the consummation of over 180 acquisitions to date. More information about Sitio is available at www.sitio.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220726005836/en/

IR contact:

Ross Wong

(720) 640–7647

IR@sitio.com

Source: Sitio Royalties Corp.

FAQ

What is the significance of Sitio's recent acquisition in the Permian Basin?

Sitio's acquisition of over 12,200 net royalty acres is significant as it strengthens its asset base and supports its strategy of consolidating high-quality oil and gas interests.

How was the Momentum Acquisition funded?

The Momentum Acquisition was funded through a combination of a $22 million deposit, a $175 million draw on Sitio's term loan, and additional borrowings from its revolving credit facility.

What are the potential impacts of the $191 million acquisition on Sitio's financials?

The $191 million acquisition may increase Sitio's leverage, as it results in a total of $425 million drawn on its term loan, potentially affecting financial flexibility.

How many net royalty acres does Sitio now own after the acquisition?

After the acquisition, Sitio Royalties Corp. owns over 173,000 net royalty acres in total.