Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company is a corporation and is subject to U.S. federal income tax. The tax implications of the Falcon Merger, the Brigham Merger and the tax impact of the Company’s status as a taxable corporation subject to U.S. federal income tax have been reflected in the accompanying consolidated financial statements.

The Company’s income tax obligations are significantly affected by the portion of the Company’s consolidated net income attributable to the holders of Sitio OpCo Partnership Units, which is not taxable income to the Company. As the Company’s ownership interest in Sitio OpCo is 52.2%, only tax attributes allocated to the Company are reported, except for Texas Gross Margins tax which is imposed on Sitio OpCo and reported here as such.

The Company's income tax provision consists of the following components:

	Years Ended December 31,
	2024		2023		2022
Federal income tax expense (benefit)
Current	$	20,953	$	25,753	$	2,343
Deferred	(6,705)		(40,822)		1,631
State income tax expense (benefit)
Current	$	3,684	$	2,909	$	1,707
Deferred	3		(2,124)		—
Total income tax expense (benefit)	$	17,935	$	(14,284)	$	5,681

A reconciliation of the statutory federal income tax expense, which is calculated at the federal statutory rate of 21%, to the income tax expense from continuing operations for the periods presented is provided below:

	Years Ended December 31,
	2024		2023		2022
Income (loss) before income taxes	$	112,864	$	(60,979)	$	189,812
Income tax (benefit) expense at federal statutory rate	$	23,702	$	(12,806)	$	39,861
Income attributable to predecessor	—		—		(16,536)
Income attributable to noncontrolling interests and temporary equity	(11,336)		7,346		(19,154)
Overpayment of federal income taxes	—		(6,956)		—
Return to provision adjustments	1,091		(1,694)		—
Warrant liability adjustment	—		(619)		(769)
Non-deductible transaction costs	—		239		452
State taxes, net of federal benefit	2,376		(270)		1,707
Share-based compensation and 162(m) limitations	1,639		—		—
Other, net	463		476		120
Income tax (benefit) expense	$	17,935	$	(14,284)	$	5,681

The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are provided below:

	2024		2023		2022
Deferred tax assets:
Capital loss carryforward	$	5,271	$	—	$	—
Total deferred tax assets:	$	5,271	$	—	$	—
Deferred tax liabilities:
State oil and gas properties	$	2,641	$	—	$	—
Federal outside basis in Sitio OpCo	246,053		247,140		297,795
State outside basis in Sitio OpCo	10,355		12,730		15,812
Total deferred tax liabilities	$	259,049	$	259,870	$	313,607
Net deferred tax assets (liabilities)	$	(253,778)	$	(259,870)	$	(313,607)

As of December 31, 2024, the Company had approximately $24.0 million of U.S. federal and state capital loss carryovers, expiring in 2028. The Company has evaluated the positive and negative evidence and sources of future taxable income and believes that all deferred tax assets are more likely than not to be realized prior to their expiration date.

The 2021 through 2024 tax years remain open to examination by the tax jurisdictions in which the Company is subject to tax. In some instances, state statute of limitations are longer than those prescribed by United States federal tax law.

As of December 31, 2024, the Company has not recorded a reserve for any uncertain tax positions.