Sitio Royalties Corp. (NYSE:STR) Q4 2023 Results Conference Call February 29, 2024 8:30 AM ET

Company Participants

Ross Wong - Vice President of Finance and Investor Relations

Chris Conoscenti - Chief Executive Officer

Carrie Osicka - Chief Financial Officer

Dax McDavid - EVP of Corporate Development

Conference Call Participants

Tim Rezvan - KeyBanc Capital Markets

Neal Dingmann - Truist

Derrick Whitfield - Stifel

Noel Parks - Tuohy Brothers Investment

Operator

Hello, everyone. And welcome to the Sitio Royalties Q4 2023 Earnings Call. My name is Chet, and I'll be the coordinator for this call today [Operator Instructions]. I'd now like to hand over to Ross Wong, Vice President of Finance and Investor Relations, to begin. Ross, please go ahead.

Ross Wong

Good morning, everyone. Welcome to the Sitio Royalties fourth quarter and full year 2023 earnings call. If you don't already have a copy of our recent press release and updated investor presentation, please visit our Web site at www.sitio.com or you will find them in our Investor Relations section. With me today to discuss fourth quarter and full year 2023 financial and operating results is Chris Conoscenti, our Chief Executive Officer; Carrie Osicka, our Chief Financial Officer; and Dax McDavid, our EVP of Corporate Development and other members of our executive leadership team. Before we start, I would like to remind you that our discussion today may contain forward-looking statements and non-GAAP measures. Please refer to our earnings press release, investor presentation and publicly filed documents for additional information regarding such forward-looking statements and non-GAAP measures. And with that, I'll turn the call over to Chris.

Chris Conoscenti

Thanks, Ross. Good morning, everyone. And thank you for joining Sitio's fourth quarter and full year 2023 earnings call. Before discussing fourth quarter results, I want to provide an update on our return of capital framework, which going forward, will include dividends and the ability to layer in share repurchases, and I would like to share some exciting news regarding our first acquisition of 2024. Regarding repurchases, our Board has authorized a $200 million share buyback program, which provides an additional avenue to maximize long term value for our shareholders. We remain confident in the outlook for our business and believe there is a compelling opportunity to repurchase our shares given this outlook. Under this updated framework, which is effective immediately and applies starting with the first quarter of 2024, we still plan to return at least 65% of discretionary cash flow to our shareholders and to retain up to 35% of discretionary cash flow for balance sheet management and opportunistic cash acquisitions. However, instead of allocating the full 65% of discretionary cash flow exclusively to cash dividends like we've done historically, we intend to pay a minimum dividend equal to 35% of discretionary cash flow and allocate at least 30% of discretionary cash flow to additional cash dividends, share repurchases or a mix of both.