Sitio Royalties, Brigham Minerals to merge in $4B all-stock deal

Sep. 06, 2022 8:23 AM ETSitio Royalties Corp. (STR), MNRLBy: Carl Surran, SA News Editor13 Comments

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Brigham Minerals (NYSE:MNRL) +8.1% pre-market on Tuesday after agreeing to merge with Sitio Royalties (NYSE:STR) in an all-stock deal with an aggregate enterprise value of ~$4.8B.

The merger will create one of the largest publicly traded mineral and royalty companies in the U.S., with complementary high quality assets in the Permian Basin and other oil-focused regions.

The combined company will have nearly 260K net royalty acres, pro forma Q2 net production of 32.8K boe/day and 50.3 net line-of-sight wells operated by a well-capitalized, diverse set of E&P companies.

The deal is expected to generate $15M of annual operational cash cost synergies and reduce Sitio's (STR) Q2 pro forma cash G&A per boe by 19% to $1.72 for the combined company.

Sitio (STR) and Brigham (MNRL) shareholders will receive 54% and 46% of the combined company, respectively, on a fully diluted basis.

Sitio Royalties (STR) recently reported Q2 net income of $72M on revenues of $88M.

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