KRP - Earnings call transcript Q4 2020 | Kimbell Royalty Partners, LP

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Operator

Greetings, and welcome to the Kimbell Royalty Partners Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, Investor Relations. Thank you. Rick, you may begin.

Rick Black

good and operator, you, morning, everyone. Thank the financial and to XXXX. Kimbell fourth Royalty review to call conference operational of Partners quarter Welcome results the for call page of be IR section and link This the the being kimbellrp.com. the on Presentations through audio can and Events of also is accessed webcast only of this accurate information February may longer of be XX, any that XXXX, recorded on as advised time-sensitive Information so of any date the as replay. call speaks today, please be no the that statements you made remind future of to to like also harbor of not are including would discussion the today’s facts, events performance, provision Act are XXXX. pursuant the of statements that statements financial I in or made Private forward-looking safe Reform or Securities historical future expectations Litigation

making or the Bob? refer of Actual We non-GAAP release to and the today’s company’s any at today’s like Kimbell Royalty available and adjusted their are the of to forward-looking including which distribution. Reconciliations revise Chairman by and forward-looking release. Kimbell be now for press part earnings and in Partners’ will risks Please statements. are control. for over described Chief would Executive turn to to the Securities also filings factors EBITDA disclosures company’s forward-looking update the obligation Bob to nearest statements uncertainties refer in publicly can Officer. measures, the measures materially. of I GAAP cash call, found to Commission. as call end Ravnaas, nature, no detail Management differ with Exchange statements. today’s uncertain These outside on and and press other our may will results be assumes

Bob Ravnaas

members Blayne and Chief appreciate our I’m our our Chief Officer; us and Rick, Rhynsburger, Ravnaas, President Operating Controller. of afternoon, this several senior Financial the on you you, Daly, Officer; call. joining call team, management Davis our We with good including Thank joined here for everyone. Matt

off difficult like last and unprecedented to to due broad extremely an would extend I today, begin coming take winter our moment thoughts to our experience to community sympathies we Before a storm. week’s Texas

impacting water incredibly While such time, severe resiliency continue we have entire issues, to dramatic and contributing seen one state and one I of power to humbled outages by another be the a difficult at helping impressed Texans in the times. never event

pandemic let’s challenges the fourth before productive I Now We company’s very with to in in the sector financials to detail. the operational a more at hand I’m the call look energy take a very strong XXXX. you walk had performance and our Davis through pleased over in despite year quarter execution. our

book distribute Our tax-efficient and well very unitholders each year to during continued hedge we quarter. the to cash protected us

total cash XX% production Also X% XXXX. PDP relative in XXXX, reserves per in lowered G&A $XX in successfully future flexibility also the a acquisition debt, We We of provided paid XXXX major million over versus in our XXXX acquisitions. the to which Boe and XXXX, by for XXX% replaced our increased sheet assets Springbok and in by of balance down XXXX. approximately we strengthened completed growing

recovery redeemed significantly In credit our an fourth with prices and our completed with maturity coupled volume count, addition, an in in trading and our we preferred a see and in acreage, commitments. XXXX, activity increase quarter, facility began the outstanding sequential improvements offering, XX% In float XX% equity our to through And amended in strong revenue. and on extended we and increase in drilling XX% aggregate good we which oversubscribed successfully finally, our a commodity resulted was rig increased units. of oversubscribed

to demonstrated in Lower drilling Baker continuation by count relative XX February and which increase activity, the XXXX. XXXX XX% Hughes in We rig in XXXX are optimistic a improvements is about of the year-end

and oil by orders these new have executive new closely the executive material do recent We believe and our We a as oil growth gas natural no royalty highly major XXXX, vision higher as this for come. role with requirements. oil. existing and unintended actions major in and on our recent sector, prices reliance they the remain well as on across portfolio, We we capital and flow sustainability future administration diversified PDP created generating not production, increasing KRP major to imported of assembling country’s basins significant all a royalty and acreage. growth. consolidator permitting recurring mineral impact that on a decline royalties of driving company consequences will long-term the to on potential believe federal U.S. have in consolidator to a relate fragmented and for and and a low are our U.S. high-quality, will continue Heading leasing cash be gas monitoring fact the with the We into focused will of years

we We improvement as in curve. the futures head very into with continued reflected XXXX, as are pleased in commodity prices the

oil XXXX, $XX.XX. During prices averaged

XXXX. for the at curve improvement expected prices a Looking to the relative of XXXX, XX% remainder to $XX.XX, oil average are futures

gas improvement during impact XX% natural in XXXX. XXXX, Looking of $X.XX is prices from on averaged a projected The gas XXXX. production prices. per And price nearly is cash over distributions gas the in a improvement indicating prices could natural have average basis, improvement $X.XX X:X will price dramatic. flows XXXX meaningful strip current and which XXXX and on daily quarterly at is as Mcf Natural a our natural gas, our very the positive XX% with approximately

yet relatively impact unit. per positive Our is designed of direct result flow The revenues remain operating to a is cash types and these generate distributions on business model leverage positive flat. increase, since under conditions, expenses

either year flat potentially look digits. yet characterized believe low-single maintaining production XXXX, increasing As as will pertains to operators we operators most We XXXX seek activity, keep will increase to to production by broadly be at production the relative we discipline or believe it by growth.

work daily and to indicating guidance in their flat production saying that very midpoint beyond. XXXX, the Again, during relative by and to and Our our years We hard test our production call look are are during we And rate. to the value XXXX employees our summarize belief, stress XXXX, production let me average this optimistic that the Davis. reflects roughly of now we XXXX unitholders guidance driving and for advisors business in grateful our ultimate increased come. very to and growing with over XXXX QX XXXX the passed with for for our forward turn to believe I’ll for that,

Davis Ravnaas

and good Bob, morning, Thanks, everyone.

productive of of distribution cash fronts. to plan each pay we quarter. for in mentioned, allocate number As a had $XX XXXX, of continue credit to a Bob available down of XX% our million and on we debt XXXX very down company paid portion a The facility to

on X.X% at XX% of locked with our syndication our interest Citibank higher revolving rates credit also in commitments balances rate at extended with and we swap, outstanding interest aggregate We a facility our a very revolving three-year debt our an amended as with on XX% attractive and oversubscribed leader.

a perspective, over Just a way realized to E&P gas a had to confidence to to XXXX put debt able and are the to gains mid-cap high-yield cost the small substantial settlement of and of itself as XX% the model. in we relative future. oil X%. hedging in debt a X.X% these to is worst the royalty maintain model, testament group’s into proved which of Kimbell on proved itself much lock of debt strategy resounding the during manage us. pandemic. the cost hedges to which occurred, several This relative extends This market number in systematically systematic place this XXXX in capital costs hedge We book two during of into part many years XX% operators will millions pandemic our bank in capital debt, by the issuances lower that before traditional in of than the operators, generating larger cost continue of already a were average forward recent had of during

During quarter, of are Bakken no properties. reversed, aware remaining fourth that in QX XXXX curtailments across and during in longer ongoing the curtailments any we place the were still the our

day, but to wells maintain of average and from natural our metrics oil XX% we higher gas We was and also basis a per and XX% XXXX or count. quarter from XX% approximately inventory liquids and the fourth X:X these of improvement across acreage from expect drilled as uncompleted XX% through progress solid to daily due on in production rig continue from company’s permits XX,XXX Boe a The comprised NGLs.

its As not permit acreage. add XXX net This which of well December our on DUC does X.XX drilled X.XX we gross to the XX, and but Kimbell could as XXX data had minor inventory experience. permits additional gross estimate on an net XX% and properties, based our include and wells uncompleted as

to quarter the or XX that represented XX the of XX% company’s December, our As market the of the on the rigs rigs approximate Lower active end end XX%, at of third in from time. drilling increased all properties rigs which an share at of XX

For fourth of million, Boe per of of a barrel and quarter gas $X.XX gas average Mcf were oil, barrel reflected XXXX, the of NGLs of natural natural $XX.X and $XX.XX combined which per company’s revenues prices natural gas realized oil, $XX.XX. liquids of total realization the QX for per $XX.XX

make common quarter $XX.X QX its approximately expenses or side, acquisitions the payout $X.XX distribution the common Boe. expense X% million impairment a noncash $XX.X ability $X.X were XXXX per expected prices. the was $XX.X liquidity to Kimbell, distribution. was for loss the reflects substantial fourth which net not sequentially a for cash consolidated flow up cash reflected expense per adjusted million $X.XX at for available cash net related unit. was million, ceiling The QX nor weakness units by was million and million, QX available ceiling attributable XXXX recorded of from QX XXXX. the Net the noncash EBITDA of common commodity loss impact generated expense the of administrative during distribution $X.X per unit to loss the QX is general QX to to impairment for test XXXX On XX% future. nor quarter and in in million $X.XX XXXX, G&A or $XX.X test The This

of the pay facility. retained down a portion use Kimbell’s outstanding the borrowings will credit amount We under to

sector We broader the in the the in disciplined company given a continue markets. manage to and manner, macroeconomic XXXX energy the especially turbulence

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

which had in notional sheet a outstanding rate at we to very and at its that, years balance arresting considered unitholders that units. tax-free into a debt robust to ready quarter XXXX, facility and flat for generating XXXX of includes goal compelling basis believe rate XXXX, yield, distribution we was trailing undrawn to Kimbell entered of credit daily production which liquidity, outstanding and opportunity Kimbell’s goal $XXX its flat X.Xx. facility will will substantially we midpoint years. In debt credit fourth long-term Kimbell January production. reflects that million an to the interest we low and single-digit fixed expect XX-month late daily and to value With at $XX.X on We common at approximately cash to be guidance, are our Looking to of capacity. that attractive under many in of production XXXX EBITDA most the its Kimbell investment or focus December $XXX.X a distributions revolving the year with XX% questions. QX through our XXXX declines, with a XX, adjusted Today, XXXX approximately swap, XXXX. for come. now We growth capital offer believe roughly with Net return of are our extent consolidated in a continue its their approximately continues guidance now relative growth which a focus interest and providing million full budgets operators X.X% XXXX on be balance generation instead three on to of production operator, opportunities for and million

Operator

from Instructions] [Operator Please first proceed is And with James. our with Freeman John question question. Raymond your

John Freeman

frac big the guys. rig you three months, all that able and this But have a the get Is when over any all what that in been your or has data, look count you don’t level know I on sense I count if you over on last done from just have was handy the morning, a get trying increase acreage we to sort properties all time the to on high track? frame? your of Good that something perspective at maybe not.

Davis Ravnaas

think maybe? think? of to do we out the Not I’m traditionally. John that. trying help Matt? Matt, change we at quarter-over-quarter Could Would be could look you directionally in ways that helpful, with What DUCs

Matt Daly

so of some The to we’re especially – press so that’s these crew right. seen extremely we’ve pin that’s that I John, Yes, since Yes. quantification frac releases, in down. diversified. I hard mean mean,

the the at permits rig the really sort the change quarter-over-quarter is momentum just in count, that the best for way trajectory the change for change look the So and to in future. DUCs, in of

Davis Ravnaas

John. see I you’re But what getting at,

John Freeman

Yes.

period I at sense just that think time this companies levels. pretty elevated where was DUC XXXX unusual these my such generally an exited is

with And so the the like catch-up kind are playing the counts, it’s rig frac of crews rigs.

so I would difficult drawdown And DUC more handicap to for assume it’s that’s, little big get historically. you than a of you all been a kind bit

I to all left of that’s understand trying kind But So that it kind I out get was was of field. of at.

So had I not. all wasn’t or that sure if you

in guess have all few have I all to attractive historically, enough seen obviously yet material I in of would when away you of The obviously, curious acreage the was those point times And the worth where you couple stepping a past small. pricing other that thing into. quite look, things. like difference from a the about, A, acreage does even mentioned a pricing arisen? would have shied And I’m this all is that all maybe acreage, you on federal be, you a that federal on kind the curious is it all the get say, exposure have gets opportunities you federal though

Davis Ravnaas

Bob, Yes, to a And John, going you great turn question. this over second. in I’m to

Bob, John, said, there think a mean sense. based and only, transact? I commercial historically, we’ve I your that point, a at very been always something optionality that’s I makes PDP it consider. reasonable we on being that get good and have That that for if think? you If seeing federal of possible the can so we very which do think upside? would return is to wary we free would price reasons, now. I is anything drilled Yes. we’re existing then think for wells, what acreage Yes,

Bob Ravnaas

good a question. John, Yes, it’s

we As you wanting of people to you’re exactly get year, very New just led – acreage, discussion the last Mexico. those would sellers Davis especially willing in the you federal PDP, just calls of we their fourth influx what for we anything. to on with an would that. We we told will And they and – with take. of And said, probably wary a third really and quarters sell we’re for price to really that we think did But really sellers what to were saw point them Mexico, just a – if in we New of then lot never that particularly. phone of continue discussion see sell in calls of incoming potential overrides didn’t

Davis Ravnaas

this is mean, minerals different John, of is sloshing set is around was now That which I’ll answer lands billion in the That private I way, a gone. it to couple fee right on equity you’re a exists. funds say – capital ago. not opportunity on operating private literally I no with in so longer in there dollars space, in from robust seeing side, it, and minerals. years but two-three just no the mean there’s capital

more So the on I would But we an set inclined to on case. land, our the have federal focus be if not opportunity private didn’t that’s side. efforts

our of and of to We’re continue seeing private land, the focus activity it. super a efforts, in pickup where tremendous all not majority that’s we on if

John Freeman

of got strategy? snuck are you where or mentioned like, Or the Does great. with – the of to to a one of of if Does I’m the Xx time, years curious in, sort couple And hedging more that and the hedging all? sticking it’s front, let’s you – hedging change just at if indifferent view like and balance kind say, sheet strategy sheet the do better. feel hedging your leverage hand-in-hand, separately? are some That’s kind still you’re companies I balance you there them and over you’re hedging on Do relative forward. your

Davis Ravnaas

question. Great hand-in-hand. No,

will a forward percentage de-lever continue hedge production the going we great That’s adjust as We to we that question. the downward business. of

have amount if divide get hedge value, that by And debt production that’s going levered, modest X.Xx all enterprise is production our down hedged even we it of and still and we do we we’ll the of we percentage take some to So the overall. forward. our

to that formula keep low that we’ll so is that The the de So consistent. leverage of goal get our minimis. portfolio is hedged have percentage we

I god prices locking Now that over would of with to here hedges of said, oil XXX, sort super XXX years; it. going spike opportunistically consider that would or we if being consider we and rule? consistent see next some the couple in think breaking of crazy kind forbid, we up

think time off, they cherry pick, to about it. that’s But somebody hard think roll dangerous they make. a hedges hedges when tries put on every and I overall, when long I we’d gamble think or to

like And you’d what to add to so Matt? that, we we on be quarter-to-quarter consistent do. Anything

Matt Daly

high roughly I as of the with value going value and in right into No, more about on for sort enterprise next of roll going hedge now debt QX XXs that’s production will But in right. target our XXXX, equity we the hedges the the years. up down, XXs. up mean going our couple just like high it and we’re

it debt. down as we to over is pay down going So go time systematically

John Freeman

lot. Appreciate helpful. a Thanks it, Very guys.

Davis Ravnaas

Thanks, John.

Matt Daly

Yes. John. thanks,

Operator

proceed Our from Chris next question your Baker Please question. Credit with is at Suisse.

Chris Baker

the impacts guidance impact general Good morning, E&P? think of shape? we the see guys. the And from folks it that talked sort as expect weather-related sort first contemplate a that possible then in of terms I follow-up, Does current XQ. was KRP’s shape outperform advantaged in of the quarter, is PDP decline, given just few the guidance, thinking about the we production general just in any potential have curious quite a the on I the – about

Davis Ravnaas

I any on issues. first, say given base, vis-a-vis identified would to weather-related on haven’t first, concentration the questions or the of diversity say our asset made of answer. Tough been the would meaningful we aware I

we we that our see why we the portfolio. operators of reasons event So we the was traditionally like Texas, weather other shift – see in a terrible had, areas. which one increase what we love on event of in have activity in That’s some portfolio is sort and rates here diversified

that for that our guess portfolio would and yes, you that account XQ, bake that to would to into And that Chris? say a be your your catch-up we’ve effects don’t meaningful the would reversal guidance I seen, directly, and I answer So XQ, expect question our weather-related or in if a if sense. of it XQ, is, apologize. we makes question, expect second repeat can we I

Chris Baker

No, fine. it’s

the it PDP decline, I we that requirement possible just E&Ps. again, KRP’s is on was there’s lower, that see general outperform a most think trend, bit just given see versus it’s production growth? XX% curious, of at given a the quite Just I to lower that that

Davis Ravnaas

that stand would logic what but you’re And is saying I’ll guaranteed, Nothing add that. on correct.

gas a amount gas And is have of natural of considerable We all very drill. sudden, attractive production. to a

pressed I the are lower environment portfolio, the question, a we the expect gangbusters. to reason answer built should like underperform outperform E&P if at and rig, say, this, that the yes, I tougher we and would way that slightly going yes, forced should would things that’s that when average did. So we We

agree you said. would with I what Matt, Bob or anything you’d yes, add? So

Matt Daly

more first I on going a the Yes. question. say color to little

of maybe mentioned that they had Ford. or to exposure. But some Permian going to a Haynesville we have frozen I that’s by so area as the Eagle given some – the so the day shut-ins. of unaffected believe effect are from large weather the a due did have Comstock But effect some have weather we much fact And Haynesville largely know, going the we you as Chris, So and that shut-ins Mid-Con some was relatively mitigate on exposure, roads. to shut-ins. we

there. our weather I I much of guidance our two in If we production less related it, that you And that think which something would some of were other put out as peers into to course, try think to say we of maybe baked shut-ins, to is one QX or then out quantify the that is there. is, like days

Chris Baker

And hoping in up that the organic great. was as just maybe Okay, follow-up, frame a I could help then growth slide that deck. you

the Just in perform and legacy year assets versus maybe last you how terms pieces of portfolio? saw the Springbok underlying the

Davis Ravnaas

course What Blayne, highlight? activity Springbok this noteworthy over want I of over Sure. we you. to that’s on that XXXX do quarter might that Actually, specifically we turn to see or the

Blayne Rhynsburger

Yes.

earlier fourth saw Springbok, quite bit have in For a did then Eagle in development Haynesville quarter, on in the of the we And some on fourth significant Ford. production the we of production. come year in the mainly QX, Springbok. to Ford the and But was more in then Haynesville to focused it year, early in in specific it But Permian the shifted the development. kind on was Eagle here quarter, then some

Davis Ravnaas

our want the for that organic And mean, reserves? year I we don’t anything reserve in, for year. Bob, that Chris. just color single organic no thank reserves I on question, to that? enough us. at cost to are asking Bob, mean way, to the having you But our additional by add and out, anything I you every think year credit add year, to get going you base every want on growth up in growth it’s

Bob Ravnaas

been Ford diversified rig why we the then rig the in did we activity but And go portfolio. in say organic I’d I’d that increased say and activity Haynesville activity Permian. that’s Permian. offset see and the STACK, down, Yes. in then Haynesville we’ve happy and Eagle by the go in and pleased like the growth very And with down just

the with then, organic since last But coming obviously, it’s the year, in went second been quarter down. back. of growth So curtailments that then

we we digit, We’ve be two we that grow were at I said ago, fact hopefully, single just really said this. the And of going would what XX% though that the low that on that we’ve of proud We deliver even always to never So think delivered said we through years I’m years. – I’m well, we’ve been – we pleased at just would grew the fact proud organically. – with X%.

with When be there. to single-digit right say always what that’s said. decline we in flat hung guidance, the to it’s we’ve we’ve low so going And

we’re to had say, XX% to from We flat. haven’t well, going

And that and resilient up proud the so I’m how just portfolio we’ve is. built of it

Davis Ravnaas

there, one money I STACK to the up just we’re other now, there, sexy. have it’s So – right But meaningful see going there. the – Bob increased see since STACK. while brought I’ll impact likes mentioned we out thing since not opportunity and right? the spending up on rig count throw Nobody you to some expect Devon’s up Chris,

I think the it’s on that? I So Devon. that am Dow. they Is Matt, with have JV anyway, correct right?

Matt Daly

Correct.

Chris Baker

Great. viewpoint Thanks. get And if certainly I could larger any have over think guys in your ability line. just scale squeeze update one you differentiated more on your I some M&A? in, on to the deals

Just curious in this of kind process is your at point where XXXX. thought

Davis Ravnaas

companies Absolutely. would get We a of the private overrides. lot all careful. looking of say that we’re a phone also for to very to time calls equity-backed carve Still lot operators I looking de-lever. exits, out

have disappointed have groups bit Some I think groups lower properties a just equity-backed developed would the have that been hoped. Delaware had say, those have big I positions, at little have flow particular, perhaps than by been they private unrealistic cash generation which therefore, expectations. in pace and

that do other groups difficult makes said, activity the places. That there that’s so are shifting us now more Haynesville that it And to and other are something being for to accretive.

I can of here my something And Chris, and thing what the without the public dollars Is we say just find over of accretive. to they’re can the our I us so them millions we’re to and M&A they different something just money. as the is think to saying you that to least like I offices, coming three, So to What a they’re minimis we they’re year. saying, activity, trade realization I every around de meaningful would finally starting clowns way need �� Chris, on such in companies we it’s haven’t for And a mean, money, that’s we’ll accretive need I us that they money order hundreds I capital the office that do ridiculous should appreciate can’t guys? for sell do start NAV make flow. coming I’d would guarantee that to you to how that just of year, in our deploying there’s for in in basins. I that mean years think the expect I way that we make about to going dictates into gone to bid like. And a are cash section think find that you’ll these that coming deal, going to and One that, four I sellers with in to but wells had other per be course make opposed Delaware by expect understand that we ago, two, at XXX everything into Basin think

from also that. trending is selling to used are all other for thing think the then direction it’s benefit a public M&A I to expect So people in the rational I’d only getting peers but And us, our I say other on front and equity. – not

going of We’re that to most leverage amount is business. I lever this the mean up not this want. we

to every don’t leverage you to going I’m the you single for go if quarter. somebody sorry, to want And you’re sell We’re think we’re offers, paying our of to to preponderance then And going stock. else. that have stock, down I

are more So add I want with time, think people Bob getting that? encouraged. and you anything over to rational Matt, or that to I’m

Bob Ravnaas

because this for is thing to when the prices it. – go very too royalties. to, That’s market is that cycles onto we like high-quality hold year, say doesn’t they much our that seen for want people hit surprise years, XX this last sell, just when I’d have and only obviously, low last they to want this through over doing me we’ve Yes. the

that quarter if me doesn’t just people coming in acquisition little and because quarter we And of bit improve the another the pandemic. it a large say, two or surprise onto it let’s fourth hold announce so didn’t a prices out see

I’m about so I I’m Davis. transactions improved above have and optimistic – year agree very And this with $XX. later prices already stabilize as

I’m to have you So think add? optimistic Matt, M&A. do anything I about

Matt Daly

No, that’s great.

Chris Baker

guys. Thanks,

Operator

your question. with Bilkoski is question with TD proceed next from Please Our Aaron Securities.

Aaron Bilkoski

about guys. morning, curious I’d convertible To on thoughts units. preferred the you Good remaining can, redemption your be whatever of potential extent

Davis Ravnaas

to can. are and the plus where a a out we but And that’s a the directly, and Apollo taking and to on a would balance you’re partner. borrowing change benefit envision cash kind flow at piece we’ve so create our a tremendous so do been is of shareholders to out an I’d I in out? the Matt, the revolver. X% of our the we in cash, has lay ready point the when XX% X% reasonably liquidity as of It’s order to with of enough midpoint plan is the take facilities expect paydown our or Well, that that paper. Aaron, to debt soon around that appropriate we just expensive probably on redeem within of up pref, gotten accretive of the we we take to of when doing Part only out have to sheet to not rationale now as it we could this And to say, massively at PIK and paper. diverting X% time. want flexibility the year clean obviously, think we piece draw was that.

question. So for that thank you asking

directly. and it’s ask, I – is to that’s think this the appropriate I it answer the time question to think appropriate

Aaron Bilkoski

a I this. observer board Is Thanks. that happen push they would on Maybe it before on to would say that, I’m No. timing, fair appreciate rights? to more that. going have bit little

Davis Ravnaas

Yes.

And say. color that. to – fair to not add that’s that’s think going to I’m I any

fine. that’s So

Aaron Bilkoski

rig it XX% release, squeak little your a looks you Baker up the Shifting talked look on lands. if counts activity QX I QX. from operations. on up your Hughes at in question can is from being gears XX% I rig in about like Permian count, current bit, about If a about QX In

you on question you in? a seeing are First interest guidance? underpins guess, lands roughly level of have the activity your I is is, that XXXX question what trend similar an the second And

Davis Ravnaas

to We things great on with because all have do time. rig check better we basis count a do day-to-day not Aaron, questions, man. our

is, our takes a rigs have. broad of number to how the team we given time Just long it count portfolio our

there Do we’ve is – what that one up beyond seen I So rig I share it out. I reported. with think we and we it to data quarter, with anything can the point give choose Aaron? activity done don’t work just every we’ve think we’ve agree you at quantify Matt, don’t that? point mean, we and

Matt Daly

market I count to imply go up rig same was generally XX% latest about that the would mean, I assuming that XX on QX. Yes. think we to rig count. continue have XX XXX, the we keep mean, I Aaron, the XX% market The count rig go of relatively year-end count It’s share saw, Hughes through Baker Lower Yes. Lower so I share, should that as count. the an at we XXX

Bob Ravnaas

The great other – factor good, questions.

came the The net at other was wells for three well pandemic, that net the factor that wells, still to below production down we count the able year, completed we last but fairly online is, of I hold because look year, slightly, flat. were think,

count to point, that’s other in anticipate, your we next approximately and country, year, of wells, And just increased net DUCs Permian the to need of to wells. what activity hope areas the maintain the and four-plus drilling, flat. levels would rig and sort in grow looking we at our this converting would For see around pace and of production and we permits

in our that’s guidance. kind of so embedded And

Davis Ravnaas

else, something add I’ll Aaron, too.

investors next the of the roll on just disclosure there’s going to some on our more pay to past start we’re that But months, calls. And come to previous that you acreage. going We’ve and out. in Over the the rolling out acreage. hope and additional additional of other we’re on I alluded disclosures to attention few our to kind analysts this

will enhance upside a low PDP it decline. think be transparency with It’s where significant. And the our very upside on helpful is. is significant I to

deliberately people pay that, So and way, to and we’ve attention that the business in I that built hope get will our it. rewarded I that for just hope shareholders

Aaron Bilkoski

you much, Thank very gentlemen.

Operator

Whitfield is proceed Derrick next from Stifel. Our your question. with question Please with

Derrick Whitfield

Good all. morning,

Davis Ravnaas

are doing? you How

Derrick Whitfield

Good, good.

your assume So is XXXX on to clarify based guidance, was fair it that to on activity that, metrics? QX

Davis Ravnaas

to do want we that? how Matt, answer

Matt Daly

had metrics activity net of combined. disclosed press release count, at but Yes. in rig and net I in QX we our would the based say that terms also DUC the permit count it’s X.X on

So keep flat as X-ish the wells what that for need number year. net Bob said production to we earlier, of sort roughly is

skew conference But with DUC could number the permit midpoint see that net up towards that year, during from trend So if the little and certainly as sort net listened bit of production in level. calls, and from production could imply that is you towards I’ve single-digit a above XX seen to about everybody flattish XXXX them these these overall, you’ve growth. of operators, working maybe the low

if something to given reason obtain maybe no why that our than higher makes there’s slight portfolio should sense. growth, flattish, we that try So

Davis Ravnaas

a but repeat then I’ll mostly based activity. be DUC permit what and said. Matt driven It’s count guidance indication what important would rig of kind less secondary, our Derrick, dramatically And by on. of Yes. is

this looking that Bob identified that’s immediate and permit catalysts of We’re net the DUC times to on inventory, as wells. and kind the that’s And four have a for call, around and Matt the on number decline. of number arrest

Derrick Whitfield

right it mean way approach it. and I that’s great. That’s conservative, the sounds to

you M&A So on us follow-up update maybe topic. your shifting question, progress if the will? strategy, micro over my of game ground the back Could the strategy, you to on

Davis Ravnaas

deploying results guys, The And the slower fortunate of that pace them. of his Springbok in with just happened capital very collectively And that’s incredible than team they of that’s Yes. we been been last has terms in Watts the are and the partners have to mostly Ryan But we’re I been year. expected. do. results everything all what think be fantastic because

the have you Matt, numbers. So

just we we’ve $X of deployed last that on the update think what, the million Maybe that over year? I it’s everybody deployed course what…

Matt Daly

But unlevered is XX the correct. relatively size made Average that’s transaction, a projected strategy. had Basin, of We XXs. transactions. since next we’ve Haynesville, around the year investment, million We’ve Delaware $XXX,XXX $X.X doing XX-month in low inception, Bakken. in the in last yes, since small deals per in million closed the the $X.X Yes, QX, inception deployed this, yield

So they’re well. doing extremely

Davis Ravnaas

Yeah, unlevered.

Matt Daly

Unlevered, yes.

slowed and didn’t will few last a close of are quite year but that faster. want These the months, deals them pandemic are to them get bit. a during ramp this work the people up it just again, really lot closed down to So we’re hopeful that

Davis Ravnaas

stupid on with they’re ramp They’ve that the if those it Derrick, a that not have I great to to fund does balance up, done be do generating. sheet continue returns the we’d And guys. job. flexibility the mean to we

Derrick Whitfield

time. Great. and Thanks your for detail the

Davis Ravnaas

Derrick. You too,

Operator

I And back like management would there are to turn for comments. the over no floor closing further this to questions time. at

Bob Ravnaas

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

Operator

does you participation. This gentlemen, for and Ladies today’s thank teleconference. conclude your

and disconnect day. lines, wonderful a your have You may

Kimbell Royalty Partners (KRP) 27 Feb 212020 Q4 Earnings call transcript