Kimbell Royalty Partners' Q4 2024: Conflicting Signals on Haynesville Production, M&A Strategy, and Debt Management

These are the key contradictions discussed in Kimbell Royalty Partners, LP's latest 2024 Q4 earnings call, specifically including: Haynesville production expectations, M&A strategy and opportunities, drilling activity and well results, M&A activity and plans, and debt management strategies:



Production and Revenue Growth:
- Kimbell Royalty Partners reported record run rate production of 25,946 Boe per day in Q4, with oil, natural gas, and NGL revenues totaling $69.1 million.
- This growth was driven by the successful integration of a $455 million acquisition made in Q3 2023 and strong drilling activity on their acreage.

Financial Performance and Distribution:
- The company's adjusted EBITDA was $59.8 million, and they paid a cash distribution of $0.40 per common unit for Q4, with approximately 100% of this being considered return of capital.
- The distributions and financial performance were supported by the acquisition's performance and the company's conservative financial management.

Drilling Activity and Acreage Development:
- There were 91 rigs actively drilling on Kimbell's acreage in Q4, representing approximately 16% market share in the Lower 48.
- This increase in rig count was attributed to the Midland Basin acquisition and strong producer interest in developing existing acreage.

Acquisition and Growth Strategy:
- Kimbell closed a $230 million acquisition in January 2025, and completed a primary equity offering, positioning them for continued growth.
- The acquisition strategy is focused on consolidated and fragmented royalty markets, with opportunities expected to grow as the market consolidates.

Regulatory and Administrative Environment:
- The company noted no significant impact from regulatory changes under the new administration, but expressed support for increased energy output domestically.
- The stable regulatory environment and supportive administration contribute to Kimbell's growth and development strategies.