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Sitio Royalties Corp (NYSE:STR)., a Denver-based company specializing in crude petroleum and natural gas with a market capitalization of approximately $3 billion, announced on Monday a significant amendment to its credit agreement, which resulted in an increased borrowing base and aggregate commitment from its lenders. The amendment, effective as of December 16, 2024, elevates the borrowing base to $925 million, matching the aggregate elected commitment of the company.
The Fourth Amendment to the Third Amended and Restated Credit Agreement, involving Sitio Royalties Operating Partnership, LP as the borrower, and JPMorgan Chase (NYSE:JPM) Bank, N.A. as the administrative agent, also revised certain terms of the original credit agreement. This strategic financial move follows the scheduled redetermination of the borrowing base, which was intended to be effective around November 1, 2024.
The increase in the borrowing base and the aggregate commitment suggests a strengthened financial position for Sitio Royalties Corp. and provides the company with a larger financial cushion for its operations and potential investments.
The company, formerly known as Snapper Merger Sub I, Inc., operates under the SIC code for Crude Petroleum & Natural Gas and is incorporated in Delaware. It is publicly traded on the New York Stock Exchange under the ticker symbol STR.
In other recent news, Sitio Royalties Corp. reported a strong performance in the third quarter of 2024. The company highlighted strategic acquisitions and improved production guidance, which contributed to its growth. Sitio also managed to reduce its total debt by $60 million, decreasing interest expense by 18% year-over-year.
The company completed five acquisitions in the DJ Basin, adding 2,300 net royalty acres, and raised its 2024 production guidance midpoint by 1,000 BOEs/d. Sitio's commitment to returning at least 65% of discretionary cash flow to shareholders was also emphasized, with total returns exceeding $765 million since its IPO in June 2022.
Despite concerns about infrastructure and fluctuating gas prices in the Permian, Sitio remains optimistic, with plans to leverage its advantages into 2025. The company's active acquisition strategies primarily focus on the DJ Basin due to superior rate of return opportunities.
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