What factors drove the changes in Kimbell Royalty's revenue and profit?

What is the revenue and EPS growth rate for Kimbell Royalty year over year?

What is Kimbell Royalty's gross profit margin?

What does Kimbell Royalty do and what are its main business segments?

What is Kimbell Royalty's latest dividend and current dividend yield?

What guidance did Kimbell Royalty's management provide for the next earnings period?

Did Kimbell Royalty beat or miss consensus estimates last quarter?

What were the key takeaways from Kimbell Royalty’s earnings call?

- **Production Resilience**: Q3 2025 at 25,530 BOE/day, +1% QoQ, despite industry slowdown.
- **Strong Financials**: $62.3M EBITDA, 1.6x net debt ratio, $0.35/unit distribution (100% return of capital).
- **Strategic Positioning**: 16% U.S. rig market share, 50% gas exposure, and 6.5 net DUCs (declining over time).
- **Growth Catalysts**: Mid-Con gas demand, Haynesville inventory, and selective M&A.

**【CEO Summary Section】**
- Q3 2025 production increased 1% QoQ, exceeding the midpoint of 2025 guidance at 25,530 BOE/day.
- 86 active rigs (16% U.S. land rig market share) support flat to growing production, with line-of-sight wells exceeding maintenance needs.
- Cash G&A per BOE was $2.51, below the midpoint of guidance, reflecting operational efficiency.
- $0.35/unit distribution declared, with 100% return of capital and 25% used to reduce debt.

**【CFO Financial Commentary】**
- Q3 revenue: $76.8M; adjusted EBITDA: $62.3M.
- Balance sheet: $448.5M debt, 1.6x net debt/EBITDA, $176.5M undrawn revolver.
- Reaffirmed 2025 guidance despite industry slowdown, citing diversified portfolio and operator activity.

**【Q&A Key Highlights】**
- **Production Outlook**: 2026 expected to be flat or increasing, driven by Mid-Con and Haynesville gas demand.
- **Marketing Expenses**: Q3 spike due to Mid-Con growth; expect normalization near historical averages.
- **M&A Strategy**: Focused on large, accretive deals; Boren acquisition (Jan 2025) outperforming expectations.
- **DUCs**: Maintenance level of 6.5 wells likely to decline as portfolio matures.
- **Gas Exposure**: 50% production from gas, with upside in $4+ gas price environment.

Kimbell Royalty Partners, LP Common Units (KRP) Q3 2025 Earnings Call Transcript

- **Resilient Growth**: 88 rigs actively drilling (Permian +4, Haynesville +5) vs. 7% U.S. land decline; 17% market share. Net DUCs +9% QoQ.
- **Financial Strength**: $63.8M EBITDA, $0.38/unit distribution (100% return of capital). Debt reduced to $462M (1.6x net debt/EBITDA).
- **M&A Focus**: Targeting <$500M deals; Permian focus due to historical PE activity, but exploring all basins. 12+ years of inventory for organic growth.
- **Cost Efficiency**: G&A per BOE at $2.36 (below guidance), with sustained efficiency expected.

**【CEO Summary Section】**
- **Q2 2025 Highlights**: Solid cash flow, $462M debt reduction, and $0.38/unit distribution (100% return of capital). Rig count remained resilient at 88 (Permian +4, Haynesville +5), outpacing U.S. land rig decline of 7%. Net DUCs increased 9% QoQ, driven by Permian. G&A per BOE was $2.36, below guidance.
- **Market Position**: 17% U.S. land rig market share, highest in industry. Permian focus due to historical opportunity set, but exploring all basins for M&A. 12+ years of inventory for organic growth.

**【CFO Financial Commentary】**
- **Revenue & EBITDA**: $75M in oil, gas, and NGL revenues; adjusted EBITDA of $63.8M. Cash available for distribution: 75% to unitholders ($0.38/unit), 25% to debt reduction.
- **Balance Sheet**: $462M debt (1.6x net debt/EBITDA), $163M undrawn credit. Borrowing base increased to $625M in Q2. Series A preferred units redeemed (50% reduction).
- **Liquidity & Flexibility**: Conservative financial position with strong bank support; 2025 guidance reaffirmed.

**【Q&A Key Highlights】**
- **Partnership Strategy**: Exploring operator partnerships but prioritizing M&A (<$500M deals). Permian focus due to historical PE activity, but open to other basins if accretive.
- **Rig Activity Resilience**: Higher-quality, diversified acreage attracts sticky drilling activity. Permian rig count growth (+4) vs. basin-wide decline.
- **Gas Growth Outlook**: Natural gas production mix may increase if prices outperform oil, but growth remains lumpy. Haynesville rig additions suggest near-term potential.
- **G&A Efficiency**: Q2 G&A per BOE ($2.36) below guidance due to lower professional fees. Expect sustained efficiency at low end of guidance ($2.45/BOE).

Kimbell Royalty Partners, LP Common Units (KRP) Q2 2025 Earnings Call Transcript

- **Record Q1 Performance**: $90M revenue, $75.5M EBITDA, 17.5% distribution hike.
- **Debt Management**: 1.5x EBITDA target; 25% cash flow to debt reduction.
- **M&A Focus**: Equity-driven deals to deleverage and scale; Permian, Appalachia, Mid-Con opportunities.
- **Tax Efficiency**: 70% tax-free distribution; sustained by diversified production.
- **Gas Market Resilience**: Permian DUCs stable; Mid-Con Oklahoma underappreciated growth driver.

**【CEO Opening Remarks】**
- Q1 2025 records achieved: oil, natural gas, and NGL revenues, adjusted EBITDA, and cash available for distribution.
- Key milestones: Permian Basin acquisition, $625M borrowing base increase, 50% redemption of Series A preferred units.
- Operational strength: 90 rigs drilling on acreage (16% Lower 48 market share), 17 new wells permitted in legacy Texas asset.
- Distribution: $0.47 per unit (17.5% QoQ increase), ~70% return of capital tax-free.

**【CFO Financial Review】**
- Q1 revenue: $90M (includes 74 days of acquisition impact), 25,841 BOE/day run rate.
- EBITDA: $75.5M (record), cash G&A: $2.52/BOE.
- Debt: $299M (0.9x trailing EBITDA); post-redemption, net debt ~1.5x EBITDA.
- 2025 guidance reaffirmed: focused on deleveraging and M&A.

**【Q&A Highlights】**
- **M&A Strategy**: High bar for accretive deals; 6-18 month outlook for equity-based transactions.
- **Debt Target**: Maintain 1.5x EBITDA leverage; 25% of cash flow to debt paydown.
- **Gas Market Dynamics**: Competitive in Haynesville vs Appalachia; Mid-Con Oklahoma offers underappreciated growth.
- **Tax Structure**: ~70% distribution tax-free; runway extended by production/diversified portfolio.
- **DUCs Update**: 4.67 net DUCs at Q1 end; activity stable across basins.
- **Hedging**: 20% gas hedged; methodical, non-speculative approach to price risk.

Kimbell Royalty Partners (KRP)-8 May 25-2025 Q1 Earnings call transcript

- **Record Growth**: 2024 production up 733% since IPO, driven by $455M 2023 acquisition requiring only 6.5 wells/year to maintain flat output.
- **2025 Guidance**: Flat production at 25,500 Boe/d midpoint, supported by 91 rigs (50 in Permian) and 16% U.S. market share.
- **Financial Discipline**: 25% of cash flow used to reduce debt, with $310M undrawn on revolver. Plan to redeem 50% of preferred units in Q2.
- **M&A Focus**: Targeting $100M+ deals to avoid incremental leverage, capitalizing on $700B fragmented royalty market.
- **Natural Gas Optimism**: Bullish on Haynesville despite DUC/permit ratio noise, benefiting from higher gas prices.


**【CEO Opening Remarks】**
- **2024 Year-Over-Year Growth**: Achieved record production of 25,946 Boe/d, up 733% since IPO in 2017. 2024 distributions totaled $1.75/unit, with $230M acquisition closed in Q4 2024.
- **Acquisition Impact**: $455M 2023 acquisition performed exceptionally, requiring only 6.5 net wells/year to maintain flat production. 2025 guidance midpoint of 25,500 Boe/d reflects flat growth.
- **2025 Outlook**: 91 rigs drilling on acreage (16% U.S. market share), with line-of-sight wells exceeding maintenance needs. Permian Basin activity driving 50 of 91 rigs.

**【CFO Financial Highlights】**
- **Q4 2024 Results**: Adjusted EBITDA $59.8M, cash G&A $2.53/Boe. Distributed $0.40/unit (100% return of capital), with 25% of cash flow used to reduce debt.
- **Balance Sheet Strength**: Net debt/EBITDA 0.8x, $310.8M undrawn on $550M revolver. 2025 guidance reflects $230M acquisition and record production.
- **Debt Management**: Plan to redeem ~50% of Apollo preferred units in Q2 2025, with remaining redemption contingent on equity-driven M&A.

**【Q&A Key Takeaways】**
- **M&A Strategy**: Focused on $100M+ deals to maintain leverage discipline. Permian Basin consolidation benefits mineral owners long-term.
- **Regulatory Environment**: New administration supportive of domestic energy production, no material impact on operations.
- **Marketing Expenses**: 2025 guidance reflects more accurate commodity price assumptions, reducing prior over-conservatism.
- **Haynesville Activity**: DUC/permit ratio fluctuations not indicative of basin-wide trends; bullish on natural gas price environment.


Kimbell Royalty Partners, LP Common Units (KRP) Q4 2024 Earnings Call Transcript

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