Sitio Royalties Corp. (STR): History, Ownership, Mission, How It Works & Makes Money

As a seasoned investor, how do you defintely value a mineral and royalty aggregator like Sitio Royalties Corp. (STR) when they are consolidating a fragmented market and navigating a major merger? You need to look past the passive income model and see the scale they've built, evidenced by a combined Adjusted EBITDA of $267.6 million across the first half of 2025, showcasing the cash-flow power of their oil and gas interests. This is a company that has attracted serious institutional conviction, with a massive 89.47% institutional ownership as of mid-2025, even as it manages $1.1 billion in total debt and works to close its all-stock merger with Viper Energy, Inc. Understanding Sitio Royalties Corp.'s history, business model, and the unique risks of its royalty-only structure is crucial right now, especially as the energy sector shifts.

Sitio Royalties Corp. (STR) History

You want to understand the DNA of Sitio Royalties Corp. (STR), and honestly, it's a story of relentless consolidation, not a slow build. The company you know today is the result of a series of strategic, high-stakes mergers that rapidly built a mineral and royalty giant. It wasn't born as a public company; it was engineered into one through a series of smart, aggressive deals to become a premier consolidator of oil and gas mineral and royalty interests, primarily in the Permian Basin.

This strategy of acquiring high-quality, non-operated assets is why the company's Q1 2025 Adjusted EBITDA hit a strong $142.2 million, proving the model works even with commodity price volatility.

Given Company's Founding Timeline

The roots of Sitio Royalties Corp. trace back to a private entity focused on mineral and royalty aggregation, a business model that avoids the heavy capital expenditure (capex) of drilling and production.

Year established

The original entity, a predecessor to the current public company, was established in 2011.

Original location

The company has consistently maintained its headquarters in Denver, Colorado.

Founding team members

The initial team included key figures who would drive the early strategy, such as Chris Conoscenti, Curtis MacEwan, and Mike Party.

Initial capital/funding

The initial capital commitment to the original entity in 2011 was a substantial $100 million from Quantum Energy Partners.

Given Company's Evolution Milestones

The company's history is best understood as a timeline of major mergers and acquisitions (M&A) that dramatically increased its scale and asset quality, culminating in the 2025 merger with Viper Energy, Inc.

Given Company's Transformative Moments

The most transformative moments for Sitio Royalties Corp. were its back-to-back, large-scale mergers in 2022 and the final, massive combination in 2025. This wasn't incremental growth; it was a rapid-fire consolidation strategy.

Here's the quick math on the scale: as of June 30, 2025, just before the final merger, the company had accumulated over 275,000 net royalty acres (NRAs) through more than 200 acquisitions. That's a lot of deals.

The decision to merge with Viper Energy, Inc. in 2025 was the ultimate move, creating a dominant player in the mineral and royalty space. The deal structure was an all-stock transaction, where Sitio stockholders received 0.4855 shares of the new entity for each Sitio Class A share they held.

• The 2022 'Roll-Up': The back-to-back mergers with Falcon Minerals and Brigham Minerals in 2022 were the true inflection point, turning a private aggregation strategy into a major public entity. This scale gave them a durable free cash flow profile, noting a 12-month Adjusted EBITDA margin of 90% as of Q1 2025.
• Shareholder Return Focus: The company defintely prioritized returning capital. For Q1 2025, the total return of capital was $0.50 per share, split between a cash dividend of $0.35 per share and $0.15 per share in stock repurchases.
• The Final Act: The merger with Viper Energy, Inc. was the capstone, creating a larger, more diversified entity with substantial scale and low leverage, which is what the market demands now. This move solidified the company's position, even as it ceased to exist as a standalone ticker.

If you want to dive deeper into the financial mechanics that drove these decisions, you should check out Breaking Down Sitio Royalties Corp. (STR) Financial Health: Key Insights for Investors.

Sitio Royalties Corp. (STR) Ownership Structure

The ownership structure of Sitio Royalties Corp. has fundamentally changed as of November 2025, transitioning from a publicly traded entity to a wholly owned subsidiary of a larger combined company. This shift means the former Sitio Royalties Corp. shareholders now hold a minority stake in the new parent company, New Cobra Pubco, Inc. (New Viper), which is the entity that continues trading publicly.

Given Company's Current Status

Sitio Royalties Corp. is no longer an independent, publicly traded company. The company's merger with Viper Energy, Inc. was approved by stockholders and anticipated to close on August 19, 2025, effectively making Sitio Royalties Corp. a private, wholly owned subsidiary of the combined entity, New Cobra Pubco, Inc.. This all-equity transaction resulted in the suspension of Sitio's Class A common stock from trading on the NYSE prior to market open on August 19, 2025.

The strategic rationale was scale, but the immediate effect for former STR investors is a change in the security they hold and the end of public liquidity for the Sitio ticker. You now own a piece of the larger entity, which is the key to understanding your investment going forward. For a deeper dive into the new shareholder base, you can check out Exploring Sitio Royalties Corp. (STR) Investor Profile: Who's Buying and Why?

Given Company's Ownership Breakdown

Prior to the merger, the ownership was heavily concentrated among institutional investors, which is typical for a mineral and royalty company of this scale. The table below reflects the final public ownership percentages for Sitio Royalties Corp. Class A Common Stock as reported in the lead-up to the August 2025 merger.

Post-merger, the former Sitio Royalties Corp. stockholders received approximately 20% pro forma ownership in the new, combined public company. This means that while Sitio Royalties Corp. as a legal entity is now private, its former shareholders hold a significant minority stake in the parent company, New Cobra Pubco, Inc.

Given Company's Leadership

The leadership team that steered Sitio Royalties Corp. through its significant growth phase and the subsequent merger with Viper Energy, Inc. was composed of seasoned energy and finance veterans. The core executive team was responsible for executing the strategy of large-scale consolidation of mineral and royalty interests, a strategy that led to Q1 2025 Adjusted EBITDA of $142.2 million.

The key executives leading up to the merger included:

• Christopher L. Conoscenti: Chief Executive Officer (CEO). He signed the final SEC filings related to the merger in August 2025.
• Carrie L. Osicka: Chief Financial Officer (CFO) and Principal Accounting Officer. She took on the additional accounting officer role in February 2025, demonstrating an expanded financial oversight role during the critical merger period.

The merger in August 2025 created a new organizational structure, and while these executives were instrumental in the success of Sitio Royalties Corp., their roles transitioned into the new, larger entity, New Cobra Pubco, Inc. Governance is now directed by the board and executive team of the combined parent company.

Sitio Royalties Corp. (STR) Mission and Values

Sitio Royalties Corp. (STR) was fundamentally a shareholder returns-driven business focused on being the permanent home for high-quality mineral interests, guiding its strategy with core values of integrity and disciplined capital allocation.

You're looking for the DNA of a company that was a major consolidator in the mineral and royalty space. Their purpose went beyond simple asset aggregation; it was about building a durable, perpetual portfolio for long-term shareholder benefit, a strategy that ultimately led to its acquisition by Viper Energy, Inc. in August 2025. This focus on decades-long value creation, not just quarterly gains, is what defined their culture.

Given Company's Core Purpose

The company's core purpose was to maximize shareholder value through the strategic and efficient management of its mineral and royalty interests, all while maintaining a commitment to ethical operations and sustainable practices in the natural resources sector.

This core purpose translated into clear, actionable priorities for the management team, which you can see in their operational results. For example, the company returned over $915 million to shareholders since becoming public in 2022, demonstrating their commitment to capital return.

• Acquire and manage high-quality mineral and royalty assets across premium US basins.
• Generate sustainable cash flow and superior returns for shareholders.
• Operate with integrity and transparency in all business dealings.
• Maintain a disciplined approach to capital allocation and risk management.

Official mission statement

Sitio Royalties Corp. did not publish a single, formal mission statement, but their corporate communications and actions clearly defined their mandate. The mission was to be a highly efficient manager of perpetual real assets (mineral and royalty interests), ensuring that the value created was consistently returned to the owners of the company.

Here's the quick math on their execution: their Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin was a remarkably high 90% on a last twelve months (LTM) basis as of Q1 2025, which is higher than 99% of companies in the S&P 500. That's a lean cost structure defintely built for maximum cash flow.

• Focus on asset quality, operator strength, and asset/operator diversity.
• Prioritize returning capital to shareholders through dividends and opportunistic share repurchases.
• View the asset base as a multi-decade investment, with returns realized over decades, not quarters.

Vision statement

The company's vision was to be the undisputed leader in its niche-the leading consolidator of mineral and royalty interests in the United States. This vision was built on a few key pillars of operational excellence and scale.

They wanted to be recognized not just for size, but for the quality and resilience of their portfolio, especially in the face of commodity price volatility. Their assets were considered an attractive hedge to inflation because they had no obligatory capital expenditure (capex) and no operating costs.

• Achieve scale and diversification of assets across key basins like the Permian and Eagle Ford.
• Demonstrate operational excellence and efficiency in asset management.
• Commit to sustainable value creation for all stakeholders.

To be fair, this vision was largely fulfilled through the merger, creating an even larger, more diversified entity with Viper Energy, Inc. You can read more about what drove this corporate philosophy here: Mission Statement, Vision, & Core Values of Sitio Royalties Corp. (STR).

Given Company slogan/tagline

Sitio Royalties Corp. did not maintain an official, public-facing slogan or tagline. Their communications, however, consistently emphasized the durability and financial resilience of their business model, which is the real message.

A phrase that captures their operational ethos would be something that highlights their focus on long-term, low-cost cash flow generation. The business model itself was the tagline: a perpetual asset with a high margin.

• No obligatory capex, no operating costs.
• High-quality mineral interests, permanent home.

Sitio Royalties Corp. (STR) How It Works

Sitio Royalties Corp. operates as a pure-play oil and gas mineral and royalty company, generating revenue by acquiring and managing non-cost-bearing interests in top-tier US basins. The core business is simple: collect royalty checks on production from acreage that other companies, the operators, drill and develop.

Sitio Royalties Corp.'s Product/Service Portfolio

You need to see the assets as the product here. Sitio Royalties Corp. does not drill wells or sell oil directly; its product is the passive, high-margin cash flow stream derived from its mineral and royalty interests (MRIs). This model is defintely a low-overhead way to gain exposure to commodity prices.

Sitio Royalties Corp.'s Operational Framework

The operational framework focuses on two things: smart, large-scale consolidation and meticulous asset tracking. The company's value creation is driven by acquiring mineral rights at a favorable price and then benefiting from the drilling activity of high-quality third-party operators.

• Acquisition and Consolidation: Continually acquire mineral and royalty interests, primarily through large-scale, negotiated deals. For example, in Q1 2025, Sitio closed over $20 million of acquisitions, adding approximately 1,350 net royalty acres (NRAs).
• Asset Management (Non-Operated): Monitor operator activity to forecast future cash flow. Key metrics tracked include net wells turned-in-line (TIL), which reached 11.1 net wells in Q1 2025, a 34% quarter-over-quarter increase.
• Inventory Tracking: Maintain a robust inventory of line-of-sight (LOS) wells-those permitted or already being drilled-which totaled 48.1 net LOS wells as of June 30, 2025. This visibility helps project future royalty income.
• Post-Merger Status: You should know that as of August 19, 2025, Sitio Royalties Corp. was acquired by Viper Energy, Inc. in an all-stock transaction. This means the operational and financial reporting is now integrated into Viper Energy, Inc., a subsidiary of Diamondback Energy, Inc. The assets and the royalty collection process remain, but the corporate structure has changed.

Sitio Royalties Corp.'s Strategic Advantages

Sitio Royalties Corp.'s success comes from a business model that strips out the high costs and risks of drilling, leaving a nearly pure exposure to commodity prices and operator efficiency. That's the whole game.

• Superior Margin Profile: The mineral and royalty model is a natural hedge against inflation because it has virtually no direct operating costs, leading to an extremely high LTM Adjusted EBITDA margin of approximately 90% as of Q1 2025.
• Diversified Risk: The company intentionally spreads its exposure. No single operator represents more than 10% of its line-of-sight wells, and its assets span nearly 50,000 wells across five major basins.
• Operator Quality: The portfolio is concentrated on acreage operated by well-capitalized, top-tier companies like Exxon, Chevron, Conoco, and Oxy, which ensures drilling programs are durable even during commodity price volatility.
• Shareholder Returns: The high free cash flow margin allows for a strong return of capital to shareholders, totaling $0.42 per share in Q2 2025, comprised of a $0.36 per share cash dividend and stock repurchases. For a deeper look at the owners, you can check out Exploring Sitio Royalties Corp. (STR) Investor Profile: Who's Buying and Why?

Sitio Royalties Corp. (STR) How It Makes Money

Sitio Royalties Corp. generates revenue almost entirely by collecting passive royalty payments from oil and natural gas production on its owned mineral and royalty interests, primarily in the Permian and DJ Basins. The company's business model is simple: it owns the land's mineral rights, so when an exploration and production (E&P) company drills a well and sells the oil or gas, Sitio Royalties Corp. gets a cut of the revenue without incurring any capital expenditures (CapEx) or operating costs.

This structure means the company's cash flow is highly dependent on two variables: the volume of oil and gas produced by the operators on its acreage (drilling activity) and the prevailing commodity prices for oil, natural gas, and natural gas liquids (NGLs).

Sitio Royalties Corp.'s Revenue Breakdown

The company's revenue is overwhelmingly driven by the sale of hydrocarbons, with oil being the most significant component due to its higher price per barrel of oil equivalent (Boe) compared to natural gas and NGLs. Based on the most recent quarterly data for Q2 2025, the total revenue was $145.7 million.

Here's the quick math: In Q2 2025, the company's average daily oil production was 19.3 thousand barrels per day (MBbls/d), realizing an unhedged price of $63.03 per barrel. This oil stream alone accounted for approximately 76% of total commodity revenue, even though oil only represented about 46% of the total production volume (41.9 MBoe/d). The remaining revenue comes from natural gas liquids (NGLs) and dry natural gas, plus a small amount from lease bonuses, which are non-recurring payments for the right to drill on the acreage.

Business Economics

The core economic advantage of a mineral and royalty company like Sitio Royalties Corp. is its high-margin, low-cost structure, which is why the company's Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin is exceptionally high. You get the upside of production without the burden of drilling costs.

• Pricing and Volatility: Royalty payments are a direct percentage of the commodity's price at the wellhead. This means revenue tracks oil and gas price volatility almost perfectly. In Q2 2025, the unhedged realized price per Boe was $36.95, down from $41.75 per Boe in Q1 2025. This price drop is the primary driver of the sequential revenue decline from the Q1 2025 total of $163.5 million to the Q2 2025 total of $145.7 million.
• Cost Structure: The business has virtually no operating expenses (OpEx) or capital expenditures (CapEx). This is the 'no obligatory capex' advantage. The main costs are General and Administrative (G&A) and production taxes, which were reported at 8.8% of revenue in Q2 2025. This lean structure translates directly into high cash flow conversion.
• Growth Driver: Growth is purely inorganic (acquisitions) or organic (new wells drilled by third-party operators on the company's land). As of June 30, 2025, the company had 48.1 net line-of-sight (LOS) wells, which are wells either spud (drilling started) or permitted. This is the defintely most important near-term volume indicator.

The business model is a pure-play bet on production volumes and commodity prices, full stop.

Sitio Royalties Corp.'s Financial Performance

Sitio Royalties Corp. has maintained strong profitability metrics, even as revenue softened in Q2 2025 due to commodity price headwinds. The company's focus on shareholder returns is a key part of its financial profile.

• Adjusted EBITDA: For the second quarter of 2025, Adjusted EBITDA was $125.4 million. This is a massive conversion rate from the $145.7 million in total revenue, underscoring the high-margin nature of the royalty business.
• Net Income: Q2 2025 consolidated net income was $14.5 million. The significant difference between Net Income and Adjusted EBITDA is largely due to non-cash charges like depreciation, depletion, and amortization (DD&A), and interest expense on debt.
• Debt and Liquidity: As of June 30, 2025, the company carried $1.1 billion in total debt. This leverage is used to finance its aggressive acquisition strategy, which is critical for growth. Liquidity was strong at $437.2 million, providing a buffer against price drops.
• Capital Returns: The company returned an aggregate of $0.42 per share to stockholders in Q2 2025, comprised of a $0.36 per share cash dividend and $0.06 per share in stock repurchases. This commitment to returning capital is a central tenet of the royalty model. You can get a more detailed look at the balance sheet here: Breaking Down Sitio Royalties Corp. (STR) Financial Health: Key Insights for Investors.

The biggest near-term action for investors is the recently approved merger with Viper Energy, Inc., which was expected to close in Q3 2025. This move will create a larger, more diversified royalty giant, but it also introduces integration risk and a change in the combined entity's capital allocation strategy. You need to assess the new entity's post-merger financials, not just the legacy Sitio Royalties Corp. numbers.

Sitio Royalties Corp. (STR) Market Position & Future Outlook

Sitio Royalties Corp. (STR) is no longer a standalone entity; its future is now fully integrated into Viper Energy, Inc. (Viper) following the completion of their all-stock merger in August 2025. This combination creates a dominant, scaled mineral and royalty company, significantly improving its Permian Basin footprint and access to investment-grade capital.

The strategic move immediately positions the combined entity as the largest publicly traded pure-play mineral and royalty company by Permian Basin net royalty acres (NRAs), and it is expected to be immediately accretive to cash available for distribution per share by 8-10%. Breaking Down Sitio Royalties Corp. (STR) Financial Health: Key Insights for Investors

Competitive Landscape

The mineral and royalty sector is highly fragmented, but the merger of Sitio Royalties and Viper Energy, Inc. has created a clear leader among the major publicly traded players. To be fair, this table shows the relative market share based on the combined production of the three largest public royalty companies, not the entire $682 billion market.

Here's the quick math: the combined entity's Q4 2025 average production guidance midpoint of 126 MBoe/d (thousand barrels of oil equivalent per day) dwarfs the Q3 2025 production of its next two largest public peers, Black Stone Minerals, L.P. at 36.3 MBoe/d and Kimbell Royalty Partners, LP at 25.5 MBoe/d. Scale matters a lot in this business.

Opportunities & Challenges

The new Viper Energy, Inc. is now focused on realizing the benefits of the merger, which fundamentally changes the risk and opportunity profile from when Sitio Royalties was a standalone company.

Industry Position

• The combined Viper Energy/Sitio Royalties entity is the undisputed leader in Permian Basin mineral and royalty ownership among public companies, boasting approximately 85,700 net royalty acres in the basin.
• This scale, plus the relationship with Diamondback Energy, Inc., gives the combined company a defintely unique advantage in sourcing new acquisitions and securing favorable development terms.
• The Q3 2025 revised guidance for the combined entity's total production of 104,000-110,000 Boe/d solidifies its position as the largest pure-play mineral and royalty producer by volume.
• The company's non-cost bearing revenue model is a significant structural strength, giving it an estimated 90% Adjusted EBITDA margin as of Q1 2025, which is materially higher than traditional exploration and production (E&P) peers [cite: 3 in step 1].