KRP - Earnings call transcript Q4 2019 | Kimbell Royalty Partners, LP

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Operator

nGreetings and welcome to the Kimbell Royalty Partners Fourth Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Rick Black, Investor Relations for Kimbell Royalty Partners. you. Thank

begin. may You

Rick Black

audio accessed kimbellrp.com. also Events of & on and conference be everyone. today, on recorded and call fourth call for operator, Kimbell operational this to Royalty of can only link the IR is February This XXXX. Partners to quarter as XXXX. webcast page of the good the the you, through and section Information Presentations Welcome call morning, speaks the results being Thank review financial XX,

So any longer please any information be time-sensitive accurate of advised date be that may as no of replay. the

would are are that Act the not forward-looking to the statements I or provisions expectations statements that including remind facts, events discussion of made the Reform statements pursuant today's like Litigation also harbor Private Securities historical or of safe to performance made of financial you XXXX. future in future

We of results will by statements are which, forward-looking nature, uncertain part company's call, today's the as of be differ materially. making and control. outside their may Actual

obligation measures, publicly to the Management non-GAAP the refer with These our uncertainties statements. disclosure can and no risks distribution. be release. detail update EBITDA release end today's refer also press Exchange forward-looking described for statements. in cash found or any of other Reconciliations and including to adjusted nearest and Commission. available assumes for Kimbell Securities at the and revise to GAAP are company's factors the in numbers on filings will to today's earnings forward-looking press Please

Chairman and Officer. over Ravnaas, to call Royalty to Partners' now Bob? like would I Executive Bob turn the Chief Kimbell

Bob Ravnaas

in our our management our Chief Officer; with Ravnaas, including about and several team, more cover provide then like to Rhynsburger, Officer; Rick, performance Controller. quarter good the Daly, we'll that, I'm our take our you, Davis I'll morning, I would President detail. ask other members to our Operating Matt Blayne here of senior and announced Thank commentary by and record-breaking discussing Chief acquisition, in recently financial your our questions. Financial Davis everyone. and performance fourth begin After Springbok

was consolidated record-low Boe. quarter outstanding, and full And record revenue adjusted fourth The record-high G&A production year, EBITDA. cash we for high per with achieved the and

as in reserves predeveloped addition, at release, our we organic XXXX accelerate items XX% feel X% press growth XXXX. by very the of Putting approximately good continued including In the discussed all year-over-year, our about together, business increased year-end growth. we strength as model into we these

extremely recently expected increase provide acquire years high-growth many production acquisition our exposure to Delaware over We come. excited which With X,XXX for by are operators this our is Boe development production to grow industry's announced actively per our about mix to also Springbok day, additional we of and assets, are future the highest these oil drilling Basin. assets highly many optimistic of on the about the quality acreage, to our

in as locations. is a with we of highly of basins, basin assets and the which, X% is and visible in cash Basin, modest position United and other there These acquisition with assets with strategy. Ford growth basins. operators Eagle a consistent Delaware well the the active in XX%, believe Basin, a were only XX-plus core increase across Basin, DUCs strategic with again, these of corporate our PDP far in decline results permits, areas areas XXXX, year-end rate our assets which significant Springbok XX the At DJ STACK, Kimbell rigs core consolidation is one add as active through by long-term Delaware best-in-class. to Haynesville, leading level the most Combining include States upside existing complementary flow any acreage,

amount also liquids, is $XX.XX X,XXX accelerated This flow distributable margin daily asset from base of per cash comes average only expected with – from XXXX. increase in of flow, unit to realized per this of acceleration Boe. accretion cash Approximately to accretive cash expense. expected XXXX, Boe It production immediately cash expected of acquisition is XX% per a expected with flow to G&A with incremental be nominal day in and

We close QX the expect to early acquisition in XXXX.

actively end high-quality asset the the the rigs U.S. broad-based, expectations, at XX, and at or its portfolio year-end will acquisition, announced to outperform rigs XXXX Our drilling continues Kimbell And our Springbok was including recently the acreage XX XX including the rig fourth quarter, have from the in share. of count XX% across rigs on Permian. market

in all the of position Combining royalty model terms number creates, number of rates traded the one view, We decline PDP the in or rigs be our business Lower count believe with this of in across rig minerals the our publicly U.S. leading will leading sector. number two drilling best-in-class this either among XX, the companies.

$XXX record minerals that in We not the completing $XXX have a acquisitions XXXX million year. announced of acquisition does Springbok track successful this include totaled alone which over million

to diversified, be is preeminent consolidator, high-quality, to Our to unitholders. flow free low strategy our generate for a that minerals decline distribution continue PDP cash the substantial

In to these our leverage record by in traditional evidenced acquisition positive only than are cash and In a management asset This a our each with we able akin with as we're line oil low results acquisitions make bottom our an way, company. gas per per more operating basis. on G&A this to to G&A, rather addition, in company dropping more cash modest Boe. increases unit flow

IPO. as since transformed during strategy significantly our which than since our we the company we time, public demonstrated Springbok February have a more Prior XXXX, to acquisition, have Kimbell. production have our We quadrupled

terms have acres. significant and royalty We revenues in scale of net achieved both

XXX%, than count on on the our years. net acreage less has early and acreage grown a share XXX% by over The in highly owners. years XX.X% We growth approximately manner XX% And XX% per just to three rig grew a have tax-efficient via returned in today our in based closing Springbok. our in market XXXX price unit X% $XX royalty count unit from has grown and dividends of approximately Kimbell upon to IPO cash three rig

size over growth participants of proud billion $XXX are we the a of are We industry scale. fragmented well and in as believe positioned limited our public and with minerals consolidator market in highly record

Our growth focused years strategy prudent on process overall discipline that that immediately accretive, targets have and future our value are around of strict diversified high-quality a with the enhance starts flow M&A of cash portfolio. long-term selection the

I'll And with now over that, turn to Davis. call the

Davis Ravnaas

per of with XX from period rate total recognized a production good day average X:X from QX production quarter. financial production the XX% the related XX% basis. our and start The production oil Bob, in average XXXX daily and prior a comprised Thanks, day day, Boe results. XX% XXXX on Boe which natural daily production of XX,XXX our reviewing Boe consisted was to to run morning, a I'm followed by everyone. going quarter, QX in recap of per by rate record-breaking Boe day, NGLs per and from XX,XXX XX% liquids, for per was gas approximately of of run XX,XXX from

XX in from period the year the was prior gas decrease This new despite liquids to Oil, production to commodity increase The due quarter performance acquisitions last $XX.X estimates. the XX% quarter natural wells XXXX primarily million. compared strong past and recognized months increased fourth in fourth outperforming QX of in gas revenues the to made realized prices. in reflects natural

portfolio companies the While exploration continues current U.S., pressures expectations. asset outperform persist broad-based, operating high-quality production to in for our and many

to to XX.X% $XX.X last million quarter adjusted full $XX.X compared full year million, Consolidated and up for XXXX. was same million for was EBITDA compared the the the year XXXX $XX.X year

new Cash $X.X low million record QX down XXXX, side, administrative from per common available low QX were $X.X expenses of Boe expense for of guidance. distribution $X.XX general and cash to end in in per was units $X.XX million in the $X.XX our On in company had Boe, or G&A The the QX G&A a Boe QX expense per below which XXXX. XXXX. and was cash of

$X.XX. of distribution cash a declared we However,

cash The Buckhorn $X.XX from closing the reflects $X.X paid approximately to we effective difference XXXX out QX date the acquisitions distribution. totaling Oklahoma million date with that and flow

announced portion the post out XXXX, of offering mitigate January assets. anticipated million X, date Springbok X, to the the common of we October addition, receipts the In $X paid from unit allocated effect cash an also we effective on

cash end the reconciliation will EBITDA find and distribution You for a of our release. at new available of adjusted both

substantially to common decrease common dividend than units. unitholders' subsequent generally taxable XX% XXXX, XXXX to sell two their are of income and for income. Kimbell XXXX through dividend a be be unitholders distribution income, years, this common will tax taxable in less distributions all basis of reduced will constitute all expects unitholders unitholders' paid tax paid unitholders expected substantially and result instead, Furthermore, to from the to expects will it when of taxable common will dividend distributions XXXX units. gain the The loss Kimbell increase or not nontaxable capital Again, the basis reduction to unitholders' capital not

to $XX.XX, per realized quarter. natural $XX.XX of in was Average the Mcf realized combined pricing was barrel oil price was Boe $X.XX, and of fourth $XX.XX. NGLs gas per barrel was per now Turning of per

As production our gas for the approximately oil years. natural of were next XX/XX/XXXX, our XX% and hedges daily of two

at the provided our of press have on with detail additional end our We a table release hedges.

we under the outstanding if the million December exercised. undrawn accordion XX, of and sheet million had the capacity Looking now or At $XXX.X revolving feature facility balance million and debt XXXX, was liquidity. $XXX.X at in $XXX.X credit

compliance X.X adjusted XXXX EBITDA EBITDA. the times revolving debt QX Kimbell's was was in covenants facility total And consolidated XXXX. with all December XX, financial to ratio at company consolidated the under credit adjusted based annualized on

draw with After February maintain as until total the a XXXX. this was redeemed is targeted from redemption which the times a and issuance used by or units a half was of connection Kimbell's XX, received facility. the in acquisition, ratio our the million. credit Kimbell the to common Kimbell of convertible for on XX, credit $XXX.X units are the the financing revolving on Series the revolving net million below. acquisition, of A flexibility recently revolving proceeds redemption credit financial closing by to plan pay Springbok $XX.X effect balance predominantly down Also Springbok of arrangements for facility January We preferred giving This facility X.X with funded of to leverage continuing cost long-term of

Turning Bob mentioned now to our reserves earlier. that

reserves December acreage. year-over-year year, XX, proved XXXX, along continued increased acquisitions reserve reflecting made on growth of million during the the As Kimbell's Boe, approximately XX% almost to by organic with XX

comment rigs also combined with questions, in hold a Before to country. on to Kimbell net XXX,XXX all Over Continental the significant across like the I'd Lower turning in located call approximately growth will counties acres basis, the the in On acquisition. XX% highest the would interest royalty Kimbell mineral Springbok the positions have XX, over positions. of currently drilling where in basins are U.S.

higher a one of Springbok has is to five-year incrementally peers the combined impact price liquids lowest mineral our our a which the approximately realized Our among Boe content, space. of average on favorable company. decline for our XX% production pivots PDP rate per in profile the

– financial the Springbok the to to scale additional add of acquisition enhance long-term is its as increase of Finally, company. performance, float additional expected as expected increase the value an scale well unitholder Kimbell, to its add

more the Oil was even And challenging to leading very consolidator market mineral oil even in total a of compared Gas XXXX a stocks. space. track generated in Kimbell traded a and XX% Kimbell company. has XXXX. also in in which among returns down Index, energy gas record a S&P publicly the was the as developed for this and X% any return strong favorably XXXX highest tough leading minerals environment, Kimbell’s XXXX,

of XXXX and across private continue mineral expect beyond, accelerates. as We to ownership migration to U.S. of the assets public into the this ownership trend

operator, now are questions. ready for we With that,

Operator

you. Thank

your We with will Freeman John James. line a question. the conducting Please Raymond session. [Operator question-and-answer comes Instructions] first question from now with of be proceed Our

John Freeman

guys. Hi,

Bob Ravnaas

John. Hi,

Davis Ravnaas

Hey, John.

John Freeman

in got you to given talk severe swings, sort experience First of of environment – have the the typically commodity sort if the yours other the and or minerals just volatility pretty the pretty lot what looking question, in of balance at of And seeing I wide given when sell operators got monetize usually, makes may you're hand, private-public bid-ask of you a sooner commodity we're on then in these difficult severe rather distressed sort have more forced now could to the positions that you'll later. interim. be that kind of you've deals see than are spreads and

could of dynamics the sort those all the balance to market, you of Just that? two if speak in

Davis Ravnaas

Davis, is this pass they've and on add. John, Bob Matt, if insight, I'll to great anything and Yes, to it

spread, bid-ask you're ridiculous on think done. right I when deals, the makes that are we particularly it to smaller certainly today, challenging think get volatility in you're deals I like

So I with had to completely agree that.

firm, operators and/or groups pretty have carving something do that's deal to as On are exit equity describe off private is other and I that an to these out and be need terms the are equity-backed institutionally there carve of they to flow hand, also seems some that would override over-levered tremendous their option. operators as overrides either that private what best a in captive larger

So I The totally done. just $X you. equity $X is deals volatility M&A of carve given billion with lot outs, what's companies. opportunity is of not for confidence But billion, that from to agree helpful us good out that really with a year, there this for on $X working getting and our billion, year override interest a companies going still mineral gives going be M&A private despite

people opportunity shown a at have we a looking believe more then accept equity. sellers to And vis-à-vis some very compelling offer willingness us these specifically, strong we to of our

decline, diversified environment a having major C-corp pretty and base and position use oil a like challenging currency, some of having between a all our converted every PDP being having as in those think being XX% acquisitions. in of factors that to these make equity put I I strong think that in to a us this, gas, and volatile to

So are captive deal to nicer other think of that of going year is weeks. opportunities I the next personally couple any be that us. challenging one necessary about for perhaps of Bob has we'll looking front might M&A in I terms or this of It flow in good transact. feel But Matt? general, the amount in than very be

Bob Ravnaas

get for I've we through event, number rebound. experience just cycles I've coming the starts you right see health a rebound, John, now, we'll a be economy we once to time like is What there's been will a of demand as through going know, up, get people start oil a maybe you say, this. see that. week Yes, pause and will we through And usually I been going to through the this we button improve add to to sell. starts and hit – obviously, the and get weeks. seeing event, in is the when to this it's start my health Once

think it that health – maybe I start it people on but this So depending is hopefully, not think, start prices this get be the I once time to not next I quarter, event, will may may be timing, just saying, a now seeing we and start quarter, rebounding, think you'll through then good sell.

Matt Daly

some last comment mean, call outs the, And us. see reasonable multiples sort in for these were just that. a times, of around those as as override times relatively multiple carve a for it, sort I to to XXXX XX on acquisition make elevated of X we of need

Davis Ravnaas

For assets. quality

Matt Daly

yes. Exactly,

John Freeman

That’s great. And question. follow-up the then just

run of you make per you roughly to you of to the feel XX% like to rather staffing on did the closing proper as make the that's the sense still on over strides try big guys sort all you following if G&A sufficient? when continued some deal the get year. a additions down and personnel, Springbok headcount You've have still basis, cash want can, I know And you big transaction. to you the past for as you lean Haymaker Boe just had if

Davis Ravnaas

We opportunity G&A make little will do. might onetime Matt, on G&A add. that quarter. this bit cash the that in I'll fair basis… I have a might a first to – take higher We charges XQ Is some

Matt Daly

higher. Modestly

Davis Ravnaas

general, we all PSA we had in see a John, now. have add. Blayne. going team, add different we But first long higher. to Springbok, But kind talk slightly conclusion, very million with to interest. $XXX don't the was on so of employees over time accounting the the with I I and signed we a about deal we a person came higher, When need it, that Modestly think I I XX mean, what, And Springbok. it of not operators the to our can we're single with to and a discussion and turn bunch internal

additional we handle per can Boe we're is basis have, So I And a really adding to personnel. Is on scale G&A right? of our proven of going think ourselves since significant public, integration overall, I that that these down cash down, and assets the XX%. now we think, like without kind

Matt Daly

yes. Yes, exactly,

Davis Ravnaas

So, at the candidly, we've $X. scale started below resources very just could I our the mean, added team and is want last I the three company that just over long-term, John, we with IPO it really limited mean, a years. I

in somebody for So continue. I corporate run do might on do we or think that. think, as to expect our a our that size very dilute I where to want our trend point, bunch proud management add example, general At a very be are Relations, we of pretty like But just normal I we we about which a some team and for the good would of general, Investor don't add feel to which to we own. culture. people counsel, of company currently

Matt Daly

Yes.

Just the another we QX, the just off after close comment the will Springbok acquisition, and have months. a integration two different of for as just months, on a In like cap a that $XXX,XXX we'll the side, month, accounting TSA, two G&A roll course, two-month side. soon of as

that you'll So G&A see QX in so…

John Freeman

all else. I turn for somebody over Thanks Thanks the to comments. it will again.

Bob Ravnaas

Thanks, John.

Davis Ravnaas

John. Thanks,

Operator

you. Thank

Please of question Our the question. with Derrick your next from Whitfield Stifel. proceed line with comes

Derrick Whitfield

and the increasing rig Good for market in strong your positioning morning. total on Congrats share a company count. U.S. quarter

Davis Ravnaas

this about to like so at the It but place on oil in implications where in space and we you oil, for good reaction a Well, this the thank have were time. you, gas couldn't seems anyway. last good the anticipate and feel be Derrick. right when performed We very of the kind we It's environment how we are XX% Obviously, in price total stock XXXX. to coronavirus always disappointing return hoping year.

Derrick Whitfield

performance the operation. not in certainly and Absolutely, of your indicative

it read that way. don't So

frame your to what relative development help QX drove or beat production the the expectations? us beat, area Regarding could you

Davis Ravnaas

contribution this not bit mostly which then in the net Bakken made Yes, There a last Lea had related specifically Mewbourne had But Derrick. a It in Bakken. say you, actually outperformance County. high Permian that some we operated new year. new Oasis I'll Ford, then Eagle wells and was of biggest was up. McKenzie, will Appalachia came the this we seven surprise time in then and roughly was acquisition and wells to in I'd We and surprisingly revenue little interest. Phillips on surprisingly most were Permian the drilled add some was it

a Bob? for bump So that nice us. was Anyway, little

Bob Ravnaas

I No, agree all. at Yes. no.

Matt Daly

is this Matt. Derrick, Yes,

that. – track we Five out across that – we areas QX growth looking those slight because And area different So some some we're we okay? through just Haynesville. basically, Just areas huge only organic eight we The production. and some this had acquisition. both board that the flush drop and in came wells growth track. a decline There's this had a have eight geographical on that on QX, had between of normal that growth, the wells QX, high-interest nice is had

and out So regions eight between overall, again, five had QX. QX of geographic growth

Derrick Whitfield

I'll rigs referring the in you the That’s as on speak your which across XX. resiliency follow-up, of touch actually by you to have my you And Slide basins Could evaluate exposure? the great. operators that the portfolio and as

Bob Ravnaas

to I tackle. let will Matt, you

Matt Daly

QX. QX, Yes, as had yes, XX so as we XX of rigs of rigs

Friday year on down and that of between X.X% up through expect QX share United Lower QX, to about XX.X%. We States. X.X% The that's the the was the across rig last from end between count market XX the nicely went

the surprised number rigs being be but going the count to into a Springbok of a of acquisition. couple wouldn't rig from we're by that adding see drop we So said, QX, rigs

the across second is of number, That from have XX XX if a to rigs largest Lower number, actually the largest going probably XX% number and over share rigs I largest good market XX. – roughly the We’re very mean, rigs. not is Springbok. the

for the XX multiples, having model. with, rig that count by combination So decline best it's combined PDP rate, far, a business by nice really a

Derrick Whitfield

for helpful. response. very It’s detailed Great. Thanks your

Bob Ravnaas

Thank you.

Operator

Thank you.

Capital of proceed Please with Schultz line comes Markets. with RBC question the your next TJ question. Our from

TJ Schultz

Great. morning. Thanks. Good

Bob Ravnaas

Good morning, TJ.

TJ Schultz

Hi.

M&A of the follow-up market. Just on kind a

size at the You options these now of process in if just some could that to in of your to about and private something may deal override exit what little you're ability maybe talked if seeing that they opportunity? deals for on that deals are that equity like a participating similar about you find then and how here overrides. these it these came some give and you're of or Are to and And talk processes, mean looking about? are Springbok? execute Maybe, some

Davis Ravnaas

a Sure. of little at. opportunities. Yes, couple without with One question. – of great was a things Permian only. looking I’ll We've naming specific more I'll looked be names, bit at we're that kind

code us ability $XX was which groups we call – announce, assuming let's of get other private probably knock in group, it, multi-basin. I talk to the million million on it, talking. other immediate on of over, in, of level, value. asset call $XXX million. these are similar Springbok. that That's every The size wood, to $XXX terms ZIP to we're Nothing to but to something. Both perfect is at to that in just terms transact equity the let's terms They're for basically in that's can got are we our an mean,

more think, to groups. that more four But are We'd would mentioned I those believe to we two or – year. I this exit, There actionable that Permian I challenging. are, of beyond there's next think, one of couple point like including or in year a portfolio others. different that, every gosh, than the little opportunities, some that of companies bit override a to are love at three carve-outs single just the The speak there

see really I near-term you add? those the anything larger. dry Matt, today and growth. typically get want guys are of Bob, you for just market a opportunities on to where to about are production nature in just some are gas opportunities excited think more difficult catalyst the that And don't

we I now attractive at do appreciate think I don't tough. think TJ, to want just I in gas to would our ridiculously particularly million $XXX interesting Even add, deal a could be if get you'll We that valuation, it right to not so Appalachia. And think desire us. this. a dry That's

Bob Ravnaas

with how anything area ourselves to the but talked that able have about before, we're in over country year, we've less Delaware, the really in positioned but have we and seen in basin be TJ, really seen confidence And happy the this the – in competition pullback every We've are we've to basin in you happy everything of we're the country. able look last capital the in to every we And look any Delaware. the we and outside country. at evaluate at

happy that. I that So think we’re with

TJ Schultz

appreciate Okay, that.

Just my follow up question XXXX. would be on the federal outlook for not taxes income paying federal or through material

Just in don't change, that baking you future assumption, And of kind that for would if in what acquisitions? are you acquisitions? how maybe date do

Davis Ravnaas

so with time that conjunction guidance. to year we once Yes, analysis, refreshed do that every a in intend we which issuing have

So we'll is same production in new guidance, corporate which correct? we the and level April, time, At tax release guidance. issue

Matt Daly

Yes.

Davis Ravnaas

would any our to make think don't here, go not and anytime guarantee. additional generally skis That we upon want shield at over simply depletion quo. I Obviously, said, assets because increase acquisition, assessment, would applied. adding it that because status everything is When one we we my future acquisitions tax we include that an we can't do make which we're being look at just

and continue I a tax not increase that So think. further size that add generating the of the that you extent as the longevity our assets, for state can't we it grow to further to to understanding example, and should we've – just prices is and guarantee this, today, but just and And obvious. this seen income they less And I'm increases the historically gas point, would shield go shield. obviously, expert, again, the tax where because down, are oil you're one final then of

our a the shield we able continue on unique add view that unprecedented tax of opinion, the this to we'll terms And have that in So outlook, our in our tax-efficient and perhaps nothing just at think in absolutely space bolster to changed that which, we next point shield is and we continue of in status. our be amount over to continue as grow, to to decade. nearly

TJ Schultz

you. Thank it. Got

Bob Ravnaas

Yes, thanks, TJ.

Operator

you. Thank

next Our Credit the Jiang question. of with comes line with proceed question Suisse. from Betty Please your

Betty Jiang

Thank you. Good morning.

Bob Ravnaas

morning, Good Betty.

Davis Ravnaas

Betty. morning, Good

Betty Jiang

sort the production are activity are curious, you the how versus is you portfolio And closes. long-term performance rate thinking the acquired guidance after now? trending? on how – then right But portfolio? just how give know I growth acquisition guys going the legacy is of the the to assets about And that XX% of going

Davis Ravnaas

that you for Thank asking question.

QX. surprisingly there to So, was good in and to from and drilling in County, news, QX mostly is a quarter-over-quarter X.X% Weld legacy the same Western That due Zapata actually increased had Eagle Kimbell, we've while. some which for County Ford also position the

was a well, almost Betty, down, interest flush growth legacy production were Haymaker percentage. quarter-over-quarter assets nice is, those that that’s huge So little entirely, but high because it on entirely of the wells.

late QX, came was If up was you In say and added they let's dramatically. acreage recall, drop-down actually, were QX. that on in like pretty so XXXX, our Haymaker down. The assets we that

in those. at which in things: on developed; looking wells due I X% quarter-over-quarter, some additional was to my drilling which factors. Marshall due to County, organically County was notes, wells that McKenzie that That growth already I are the on three those up mentioned The some drilling, was quarter-over-quarter some X% are that earlier, one, – two what about had was And well was additional as nice came mentioned significant some Marcellus acquisition really, Mewbourne in Phillips County. that Lea Oasis basically We operated. in largest which the

Ford the or we've performing the generally So in Eagle and Oklahoma SKC the line – in that's smaller are everything acquired. of so kind I of most breakout of the in far. then the think expectations recent ahead deals, Buckhorn And that's

Betty Jiang

Got it.

Davis Ravnaas

I conviction X% results say to – pretty of more Sorry, portfolio getting today, year, of good one which X% about that than – previously about that in to intend way would what quarterly of answering meeting where about growth I did how what your we seeing we we’ve number. question, feel we before our we're feel these we I good organically I pretty in kind have on front every still based disclosed say, is grow all would that in us.

Bob Ravnaas

that decline we of And the the to a decline. And again, only XX% it's have it's low upon. improve because of PDP PDP bar

production So makes to easier for and us maintain that quarter-over-quarter. increase much it always

Matt Daly

Yes, back, a – had Betty, believe, organic one growth of this We presentation. growth you'll production companies. XXXX, the X% production point, in XXXX, I investor see rates mineral had growth had one we more among going various we in XX highest slide and the that you'll in think, that actually organic among and note I organic shows our years,

assets decline, obviously of low PDP the higher last sort Phillips. we've out is adding growth seen that's Haymaker theory on So what which the years, trending and in assets the proving the of with legacy of the KRP than unconventional from ten having

Bob Ravnaas

agree. I Yes,

Betty Jiang

Got color. And about then a commodity on the in thanks be and And of wealth this as question price to but the environment. great balance of is, it there's like but weak to environment, talked M&A relates leverage, you sort of other is need opportunities sheet where it. given the mindful for leverage

So are ground what partnership… guys leverage ground play how engaged you you're versus looking the And that game you game at acquisitions still the guys balancing in are on front? micro

Davis Ravnaas

We are, Betty.

allocated we that so to million $XX strategy initially. yes, – So

million of have that. We now almost deployed $X

the anticipate past we've because to Any revolver will – about our use of sellers equity one the – to far. So only – – issuance any we Obviously, by improves. But is see in market using currently pleased raise but will impact we meaningful which by that the raise, finance or event so year small what from be what, financed is very answer any to appealing. question capacity revolver if do would very, can be like We're direct away to the of extent debt, have to or set the an meaningful EBITDA. going won't that, make acquisitions do. we're strategy environment. the in – so we stay times debt micro to in on the intend JV short it's sort that equity that this done driven capital with we in, be to the acquisitions. to some this would have nobody to debt to very opportunity even long do be And your We our the on don’t pace, the results

Betty Jiang

you. Thank it. that’s and it Got

Bob Ravnaas

Betty. Thanks,

Operator

Instructions] comes your proceed line from [Operator next question. question with Imperial Our Jason Please with of Capital. you. the Thank Wangler

Jason Wangler

good morning, Hey, all.

Bob Ravnaas

Jason. Hey,

Davis Ravnaas

Hey, Jason.

Jason Wangler

it just guys the that as of ask, preferreds, when a to talk thought change and can grow? the just there position as briefly wanted you remaining look you you as redemption you prepared bit at in well maybe the of the as half sheet but balance comments, about the you the of the kind behind I kind mentioned timing

Davis Ravnaas

a sure, Ideally, thanks like structure. capital Sure, would the for we to less have question. complicated

acquisition for put into XXXX, simple piece So ideal preferred obviously which equity as company We us our the dramatically. for Haymaker structure in position having in financing a for capital a necessity is transformative and to back was that us. entered a grow

out much so we think take the we as short pressure could is – sheet. balance wanted on to I as putting the answer without undue

X.X below look we at certainly, feels our So and nothing anything – times that, sheet, when times below balance having debt-to-EBITDA, number that X.X good certainly. us, anything above to

call and half. through organically take been us, we as of of other If paper. a some partner production of borrow matter piece to So us capital. then the cost to probably has grow point we ratio grow let's at our EBITDA capital and simply a, leverage take continue cost it's capital. intend reducing behooves low that, but X% and I out it all-in a cost X% of Obviously, of to acquisitions, as to fantastic we'll think very keeping it, Apollo out the can a against in at future, a

capital more deliver a where to own our are simply feel investors, that's to we we that So we just structure trying that. and is efficient

Jason Wangler

guess you to have than no any There's you're just of take other kind just make ready that and fit. the that you you is I follow-up Okay. ability out think when sense. you that to reason as a That have see opportunity. And

Davis Ravnaas

Yes, exactly us yes. that That’s right. half, out other we have nothing the from prohibits taking

Jason Wangler

appreciate it. I you. Great. Thank

Bob Ravnaas

Yes, thank you.

Davis Ravnaas

Jason. you, thank Yes,

Operator

will Thank gentlemen, our concludes the floor comments. session. management turn final to you. Ladies back question-and-answer any this for and I

Davis Ravnaas

when again We call. thank morning look with results. and quarter forward you report all This to we first for joining this you today’s us completes speaking

Operator

Thank concludes teleconference. This today’s you.

your You participation. time. you may Thank at disconnect lines your for this

Kimbell Royalty Partners (KRP) 27 Feb 202019 Q4 Earnings call transcript