We are advising Sitio Royalties on the transaction

Davis Polk is advising Sitio Royalties Corp. on its all-stock merger with Brigham Minerals, Inc., with an aggregate enterprise value of approximately $4.8 billion based on the closing share prices of STR and MNRL on Friday, September 2, 2022. Under the terms of the definitive merger agreement, Brigham shareholders will receive a fixed exchange ratio of 1.133 shares of common stock in the combined company for each share of Brigham common stock owned on the closing date, and Sitio’s shareholders will receive one share of common stock in the combined company for each share of Sitio common stock owned on the closing date. Upon completion of the transaction, Sitio shareholders will own approximately 54.0% and Brigham shareholders will own approximately 46.0% of the combined entity on a fully diluted basis. The board of directors of the combined company will consist of nine total directors, including five directors nominated by Sitio and four directors nominated by Brigham. The current Sitio management team is to run the combined company, which will retain the Sitio Royalties Corp. company name. The closing of the transaction, which is expected to occur in the first quarter of 2023, is subject to customary closing conditions, including regulatory clearance and approvals by the shareholders of Sitio and Brigham.

Sitio is a shareholder returns-driven company focused on large-scale consolidation of high-quality oil and gas mineral and royalty interests across premium basins, with a diversified set of top-tier operators. With a clear objective of generating cash flow from operations that can be returned to stockholders and reinvested, Sitio has accumulated over 173,500 NRAs through the consummation of over 180 acquisitions to date.

Brigham Minerals is an Austin-based company that acquires and actively manages a portfolio of mineral and royalty interests in the core of some of the most active, highly economic and liquids-rich resource basins across the continental United States. Brigham Minerals’ assets are located in the Delaware and Midland Basins in West Texas and New Mexico; the Anadarko Basin of Oklahoma; the DJ Basin in Colorado and Wyoming; and the Williston Basin in North Dakota.

The Davis Polk corporate team includes partners William H. Aaronson and Michael Gilson and associate Alex Yang. The tax team includes partners David H. Schnabel and Kara L. Mungovan and associate Kendra Simpson. The executive compensation team includes partner Jeffrey P. Crandall and counsel Kevin A. Brown. The capital markets team includes partner Michael Kaplan and counsel Jeffrey S. Ramsay. The finance team includes counsel Robert F. Smith. All members of the Davis Polk team are based in the New York office.