KRP - Earnings call transcript Q1 2024 | Kimbell Royalty Partners, LP

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Operator

Greetings, and welcome to Kimbell Royalty Partners First Quarter Earnings Conference Call. [Operator Instructions]. It is now my pleasure to introduce your host, Mr. Rick Black, Investor Relations. Thank you, Mr. Black.

begin. may You

Rick Black

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

including advised today's no to transcript like pursuant to be Securities date safe reading. as the please of that are expectations be the financial in Litigation also would of remind historical of So Reform future any or you of that time-sensitive or the made may are of or I events not considered statements Act longer Private performance that information any the facts, statements listening replay harbor provisions made accurate statements forward-looking future discussion XXXX.

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

Bob Ravnaas

are of our Thank you, Ravnaas, the appreciate Chief Rhynsburger, another Matt and senior We members several management this you Rick, Controller. morning, Chief President our me team, excellent Officer; Davis morning. Financial us everyone. We joining Officer; our Operating and good our Daly, Blayne had on today quarter. and call With including

we the of operational of quarterly EBITDA. guidance, several momentum new quarter on production Following with organic near from growth daily acreage. of XXXX, our this the in exceeded run achieved revenue rigs terms quarter records and record rate drilling Strong and midpoint number exited we a the production, on

wells giving announce the sight be to maintain compared progress number in flat Today, as above we a very per also increase XXXX. unit, of distribution the $X.XX pleased a to to our of XX% line common to continue our quarter. production well through addition, were needed production, In last us we confidence resilience

our common Kimball of taxes, be form dividend not quarterly proud of that return record distributions. Furthermore, unitholders. will value return cash and unitholders distribution the track approximately are to to of after-tax subject expect enhancing of We this delivering our XX% capital further to the in of considered the we

to unitholder oil As the and and the gas for we the on XXXX over our to look prospects industry, call we forward Kimball as Davis. in sector leading U.S. turn and in generate bullish consolidator remain I'll a beyond, role long-term now the natural value.

Davis Ravnaas

an compared quarter. financial quarter, million, results from upon great Bob, our for here and oil, This fourth to increase daily gas success quarter NGL EBITDA. new we Thanks, Kimball XXXX BOE XX,XXX quarter, the by quarter quarterly We beginning Continental I'll of we and history. from on marks which with everyone. an with United represents our XX production States. natural quarter $XX.X of by our approximately revenues per day, drilling X.X% organic QX delivering which the the XXXX X.X% in reviewing start good totaled acreage, rigs XX.X% rigs first of on growth morning, another X.X% the actively production, the our another In exited all built or run at the and as reflected land organic revenue records revenue which strong in highest of annualized drilling had We had growth basis. market rate share

compensation units Net side, G&A $X.X were administrative which expense first $X.X cash On or and at $X.X $XX.X net expenses was the -- the million quarter. first expense $X.XX which common was G&A BOE. first expense is quarter, million $X.X up first million was Total million was $X.XX a X.X% quarter in consolidated per quarter unit-based million per common of EBITDA record BOE. to income was approximately last and in and unit. million from attributable the per noncash quarter approximately was a general or income approximately adjusted $X.XX or

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

that Kimbell's facility. announced a distribution $X.XX remaining common represents unit used quarter. a the of the payment unitholders today, portion distribution we mentioned, cash outstanding XX% to to XX% will be available Bob the cash secured As down and of equates distribution cash common for revolving This first per of borrowings credit to a under pay for

facility. outstanding we and revolving balance debt Moving At approximately under now secured million sheet to and March had liquidity. XXXX, credit our XX, $XXX.X our

expanding are the affirming We includes trailing daily remain guidance, maintain credit secured undrawn support facility the which of We a in XXXX had sheet XX,XXX $XXX.X under BOE approximately our our per very of with XX-months We to as balance our also syndicate midpoint production Xx. flexibility. of at debt March XXXX. its consolidated continue revolving financial capacity bank million EBITDA day. and we Today, comfortable to strong with conservative our position, XX, adjusted financial of net

rigs as hearing the around the was expected commentary drilling our QX outlook feel as development in a actively of in prospects we the XXXX, earnings our robust provided release. development are XXXX number We acreage the their As confident reminder, continued operator in Permian. press full activity guidance on especially about for given the well

positive and operator specifically. and sentiment overall positive represent continue and We the Kimbell for space that demand believe a outlook mineral to industry for energy royalties trends,

are we unitholder long-term our are with to and enhance a growth value. and focused opportunities on to for horizon We pleased XXXX, start continued

our of dedicated hard proud Kimbell, our for team enhancing contributions are and stakeholders. to and the growth all talented appreciate We continued work, greatly organization their here we value of at driving and

that, we and addition, In ready and in that we of appreciate the the for to With with questions. we advisers are contribute these best some financial now success. greatly institutions the operator, company's business, partnerships work

Operator

Thank you. [Operator Instructions].

Nate from Pendeen with Stifel. of Pendleton comes The first question the line

Nathaniel Pendleton

My you get to specifically on potential perspective strong M&A the Congrats opportunities? quarter. question, and first size are the in on basins wanted I deal best seeing what the what at your and market

Davis Ravnaas

that relatively that of on year there muted are to out are front. the Permian. start of answer the in And M&A question, most Yes. to the opportunities I scale the just your are directly

So $XXX been Not over wouldn't balance let's case. start. in deals call remaining the of couple a the consummated deals, it, entirely why so year be surprised to of see relatively the the million-plus a it's far, that's slow sure But larger Permian.

appears one Last Some us. large muted. was so peers But to year for change a and be years than our more are far relatively things This quickly. others. for ourselves robust one

Sometimes exit quickly. rush to exit to of in decide a see to window private some the opportunity equity companies an portfolio

it And tend the are seeing, that change, to so Permian-focused. relatively So of muted. be far, opportunities could we but they

Nathaniel Pendleton

as it And what provide strong. in looking you're you your it. activity Mid-Con metrics, Can into basin? assets to follow-up, Got quite on color any my for activity on appears your ground seeing the rig remains the

Davis Ravnaas

question. Good Yes.

several of mean position, there. add our but else? Point. There that differentials. just more activity that There's positive of to anyone going But the was basin play we wells, that, basin over level. expect negative kind and The people improved robust that love or continue I like And tremendously to from years, I think anything out to that the on As a through favor. there acquired Mid-Con of you really you'll which the than that's PR I in levels we down corporate lot beat strange drive basin increased of you'll forward. efficiencies there. to There's know, some at great you'd see think opportunities contributions majority great got to into see I takeaway a surprising continue think capacity Long Matt over occurrences last happened

Matthew Daly

on I the all CapEx down mean We've back just went that in fact talking Haynesville Yes. like I we expected rigs basin. QX. had between cutting the about companies and the heard QX

are expecting pretty and the said, from we that. rigs XX XX So Mid-Con rigs you dramatically QX. QX between to grew like actually But interestingly,

to offset that nicely. more so And

an near QX between stayed very, So of at a overall, activity company level rigs record for rig flat very count the QX, for us. high and XX all-time

you steps up the have Mid-Con this diversified where of So in having the this shows maybe where slowdown one the say, kind for benefits of over Haynesville, model but that. takes it is

Nathaniel Pendleton

Totally back. agree. Absolutely. I'll pass Well, it

Operator

Thank you.

Trafford Raymond from question line comes Next with James. Lamar the of

Trafford Lamar

topic. First one follow-up one, kind M&A Maybe Yes. of the the on a first

Permian. some the opportunities potential You in mentioned

gassy Given the level you're oily for gas, kind bid-ask of the what oil you about of spread curves a versus kind on assets? and opposite seeing of for nature forward can talk maybe

Davis Ravnaas

Yes, that's a question. great

gas market We to a scale haven't seen assets candidly of of lot not come recently. have

few in picked have A think the that has different up a be a in Hansen years. big acreage over very sold challenging. lot recent of other driven position last have few interests smaller factors. minerals to exited a back Appalachia the few One, XXXX. lot There's that from perspective of been footprint. players that's by a We been larger Haynesville over our have that folks I in years. small aggregated

mineral things more could NAV-accretive asking basis over haven't a accretion Appalachian high-quality would because what cash actually But flow the large an a next nuanced say NAV if on front, for on the I just be challenging oil as a question what do good on you'll seen basis, attractive really to you see that we on deals then running it deal. you're years. backwardated in that many which is very can of we on couple be So curve really are do, strip, Basin. is packages the

makes that's from think, multiples some the on flow the disparity, that perhaps than initial lower if So sense. cash creating ask, perspective I bid between

we will think are. of numbers They're And make that But bit the I happy. done little a both same at that get is think challenge. think sides are sellers continue I so sophisticated. deals look, to do looking a I

the concerned and terms as wide M&A too But a ebbs So environment on whole of that's to just so spread just bid been lot of far come nothing the that a we're again, flows. terribly hasn't in M&A year, front, just about market yet. this

about. concerned terribly we're that nothing So

Trafford Lamar

a XQ increase Got David. XQ, the also, that obviously, production slight the I prior of addressed that prices. was is looking to fallen in I activity off to come there appreciate And on second on all? of you a I increase And on activity online? to has as Did it. Haynesville. I maybe the Or given kind XQ. coming in then the 'XX ask want was on of that, Mid-Con question surprise at color factor a noticed half more given it cliff activity, how

Davis Ravnaas

Yes.

So anything for to to you detail add have do that on activity, Haynesville Blayne, or Matt?

Matthew Daly

they're correct, grew we Haynesville, X% Redmond and the are you're organically. we that's we we Haynesville drop were happy were to, what we growth huge but Haynesville, slowdown came the quarter-over-quarter. really the wells It Haynesville, X% the to and would time in to you online to Chesapeake yes, do, Haynesville be high-interest if bit. slow a the impact hearing over off have going quarter-over-quarter wells, in Blayne, But the I the that mainly certainly, and Parish. primary CapEx about Permian were see the wouldn't X But other to grew expecting I have hearing that. in us. But driver an in surprised organically, But due we a was These had color, market, on again, had I are say, quarter-over-quarter, starts there, back we're so there.

R. Rhynsburger

we're happy I Matt. It agree, those on. them. have But come surprising for No, yes, somewhat Yes. was to completely

Trafford Lamar

great Congrats quarter. Perfect. a on

Davis Ravnaas

very time. you much it. Thank for Appreciate your

Operator

the with Rezvan Markets. Tim comes of line Capital from question Next KeyBanc

Timothy Rezvan

I want start to Slide on XX.

bit moving DUCs You've rig permits. is from from and probably a down hearing you're shown going I the to ebb to and is these last be know biased tend and down here. count year, the flow. It's

levels sort months So you production but trends line just X left into with the guidance you're into that kind are the year? curious activity in of coming expectations unchanged, year, and now of your

Davis Ravnaas

Tim, I'd was our a this is see. yes, the quarter, Davis. above little say, midpoint this guidance, to bit nice which of

just year, the remains activity for entered answer and to directly. we outlook when the same that think as that I the succinctly question

evidence a We haven't of seen slowdown. dramatic

near-term that, a I we of guess more DUCs XX-month bit the how We bit of yet. feel where terms on Hopefully, that Blayne's building as keep in Anvil on forecast. alarms well, nothing little confident has been way, and a the But conservative have in we've long us I it activity we we're been kind little a surprised very Haynesville. a which the that history have been permits by mean enough comments in honestly, of been. catalysts nuanced I'd we surprised in say We've robust and in Matt how just being. resilient it's and

that's spot bit gas prices. to little what's So happened a counterintuitive just been given just

tend nothing just there, we with last wouldn't relative the the feel surprised over X on changed started say have in bit I'd So months, the view has our if I balance, yes, conservative be guidance say outperformed a we little to the that and about we've next I'd we here the given XX to really months putting in terms fourth guidance. of quarter. received But together where data good

Timothy Rezvan

helpful. That's Okay.

then follow-up, housekeeping. just And a as Sorry. just on

You production. of for $XX,XXX a year kept the guide

reflected run clear, rate total the be that's to adjustment. not the Just production, that

R. Rhynsburger

Run production. Correct. rate

Operator

line the Securities. Neal from with Truist comes question Dingmann of Next

Neal Dingmann

I This for Julian just X is Neal. Brecha for questions you guys. on have

vary are cash is you level? moves? writing terms in stabilize And is XX% more to from second comfortable flows cash lock anything of looking these would payout maybe to then distribution, there cause Are the In hedges. out you the on of the Or payout? that recent you one kind your

Davis Ravnaas

to add though? to Short don't to material XX% to payout changes We ratio question. Matt, changes and to program. the Yes. answer any any color the hedging no you'd anticipate our that like that

Matthew Daly

XX% on program, hedged hedging natural and I'm some are have, gas, between mean roughly out people and oil XX% gas XXX I natural year And to look the we have of hedges and prices X then Yes. years, for have you at of our you're but not sure we this, production. looking the we XX% if this for oil at noticed XXX. for

So roughly $X.XX you nice have QX beyond we're MCF. we in to $XXX gas gains. at of an realized in have And the between look gain able hedging terms a XXXX, and if in natural hedges

we've So we're see run Contego natural of that gas, stress XX%. now test to into the curve enough that about on at right hedging that's percentage hedging. And percentage

commodity be prices. of case can our have prices, would terms well enjoy also any to but protected a going you're If XX% commodity in in dramatic drop production provides covenants, in we unhedged we in of run so

the years policy. So set I think I we're well no in for right well think well. the there's couple change as now It extremely and COVID, next of up worked hedging during

Neal Dingmann

just guys go back Got opportunities another interesting you it. can Are maybe to M&A Permian? And the outside I any seeing the on question.

Davis Ravnaas

you outside every opportunities is And history the well, in near Outside that as we moment. know, of that but question. outside The interested. would larger interested scale coming obviously term now. as be very a be buying Yes, at we're Permian material great mind Nothing that's are Permian on to focused Permian-focused. this We seeing very buying right basin. of in of We'd the of we're nothing of have

Operator

for Instructions]. are like to There turn time. I management further [Operator at no questions over to comments. the this floor closing the would

Bob Ravnaas

we and speaking today's look you completes you We morning, next Yes. with quarter. This again forward Thank for this us thank all joining you. to call.

Operator

concludes teleconference. you. today's Thank This

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

Kimbell Royalty Partners (KRP) 2 May 242024 Q1 Earnings call transcript