KRP - Earnings call transcript Q3 2024 | Kimbell Royalty Partners, LP

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Operator

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

Rick Black

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

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

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

Bob Ravnaas

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

proud results Returning We which unitholders $X.XX unit. cash has to a established. for the distributed our is the are record our of the are third report and per of in always to cash Including unit quarter third declaring XXXX. we total IPO unitholders value declared common distribution we pleased include common solid quarter, distribution, $XX.XX have priority, to quarter per returned Kimbell in since

rigs drilling third which During in the XX actively remained acreage, of land on all represents XX. with XX% our market the quarter, strong share drilling drilling activity Lower rigs

needed the production, In wells us number led Permian specifically, number of quarter. addition, our maintain confidence net bonuses we of Kimbell's Basin. during in well we in XX% the increased the history, of level resilience net in production second the DUCs of as wrap Kimbell's quarter-over-quarter above highest DUCs, acreage. be giving a by up the by X.X record operator number Line-of-sight reflects to the wells third XXXX. More lease interest to continue had This flat developing to increased

for the turn optimistic now come. And call Finally, over future years Davis. for about very we Kimbell value to ability are unitholder its drive I'll the to to and

Davis Ravnaas

States. drilling actively the our during count history. I'll we quarter, XX% market the in our in with were lease the drilling represents and all once natural third United strong land share results share totaled and from bonuses oil, morning, substantial maintained revenues, market Bob, XX,XXX results, the XX exited generated quarter by acreage, per gas We the BOE reviewing run of good of approximately a the had In million. rigs NGL our achieved with on that rate rigs $XX.X of and beginning and quarter which Thanks, everyone. quarter, production day, we the the rig financial continental which again start U.S. highest

quarter general in the million operational leverage. Net $X.XX and were $X.X continues $XX.X common quarter income income million. $XX.X side, expenses quarter or approximately BOE. third per and which expense to was the and unit. $X.X million per net On operating EBITDA administrative was was discipline Total $XX.X was third third units This approximately to attributable $X.XX positive adjusted G&A common consolidated cash demonstrate million, million expense or of

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

As return to credit unitholders. and common our this will therefore that facility. to cash $X.XX further distribution distribution portion enhancing pay secured common equates of and available of holders XX% estimate distribution Kimbell's return revolving cash of after-tax to We down not This XX% the that the to is unit outstanding borrowings common payment quarter. Bob mentioned, remaining approximately represents a considered be announced expected dividend under the subject to be today distribution a third to XXX% cash for a we per unit capital for used of of the taxes,

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

as for liquidity. Today, remain of we to May are and maintain approximately planning the our maintain of XXXX adjusted our as sheet capacity under production revolving comfortable at are also XX,XXX our continue $XXX.X secured will we XX-month financial flexibility. With credit which of the million timing per We September to conservative trailing substantial a position, BOE XXXX. of preferred with strong this half as redeem its balance net midpoint We our affirming consolidated EBITDA syndicate XXXX. with Apollo company of leverage We guidance, cost the believe this daily in X.Xx. very includes We the financial in XX, expanding bank approximately to stock and day. least well at liquidity, debt facility had undrawn support conservative optimize savings

progress continued the number We press the full in through reminder, for earnings remain our in actively the drilling about we a given release. rigs confident especially acreage, As XXXX prospects was provided XXXX, as of Permian. on our development guidance outlook the QX robust

will assets the to for now leading are we portfolio that, across U.S. to for for that drive come. With operator, years high-quality unitholders continue of questions. We basins continue our ready believe our to royalty value diversified

Operator

[Operator Rezvan Markets, of the with KeyBanc Instructions] first line from The Tim Capital question Inc. comes

Timothy Rezvan

seems to interest a that kind rate through commented bit of an from a that? what I mechanical? said what start something or can curious before, wanted walk little this you on, it I I to redeemed Is -- was being what's was hear XXXX outlook we driving the expecting preferred on you on date. of if you I kind change be of else partially believe comments quarter. May

Davis Ravnaas

question. great Yes,

that we actually good up As it greater more when a couple redeem the We detail. bucks saves efficient May math. to with mechanics always, and it on of cost it's specificity us job million following call, picking work than is just of the the through math ran kind conference in we realized today, of last the the

is So it of nothing's We or changed. possible. waiting still goal as as just bit actually partnership X money. that to soon take a X realized out save would little The the months

Timothy Rezvan

Okay.

fair. That's Okay.

assumption is from -- with? we from so run a -- And a to roughly modeling perspective, good half should

Davis Ravnaas

to at some happens unforeseen game that oil just now, talked the Yes. Board the hedge to And crazy say, gas But that's barring in Tim, and we plan. Obviously, it if call it time. right I markets, would yesterday. want events, readdress something little that out what on absolutely bit. We might a taking about

Timothy Rezvan

Okay.

about to forward. It appreciate Okay. increase seemed But at of That's X.X. that. going my in good as permits, to DUCs. said, down the been I did have and I that level, net expense the DUCs then net the it's that follow-up, come X-ish know. And of noticed net went with you which permits kind at

this the in just about understand, increase DUCs. net those that just kind together is right to activity? two forward think to on to as a trying little better trying I'm the way the So going visibility of understand

Davis Ravnaas

Yes, a more permit. about fair to think than DUC a valuable I Obviously, think it. is that's a way

always that as has up down. DUCs. nice particularly been DUCs conversion pertains the Things increase will in recently to to permits Basin see it activity. So Delaware say encouraging, the from go to and I it's

Loving off to big the increase County. of well DUC should So QX. is pay in start Those driver in that results

see to on I wouldn't point up. But surprised that very very, the be to tick I activity, near to at activity. see the good And happy. a permitting of back start we're of not mean impact we'll So record, a those. predict. if It's the just hard record, DUC

at So the feel to this time. the to outlook about term medium over continue near production good

Operator

of Next Bertrand from Securities. line the question Donnes Truist comes with

Bertrand Donnes

would across for What there seeing maybe for be that just your doing basins the and as pickup that picking or us, some consolidating guys yourself? then up the all the And M&A And blocky small mark part maybe behind value of has a in more you uncertainty M&A? the election been removed? you in most interest is with acreage looking are opportunities of does maybe position still are

Davis Ravnaas

question. great I of our brief. is sandbox the a to -- I'll there, thoughts XX. say well, Lower Obviously, would Yes, lot that keep it try

So ourselves We're most we're looking investors. risk-adjusted at what's capital way deploy to the our asking the to basin. every to always return efficient maximize

the is Permian Basin, that's knows wonderful. it's it's not. Permian The sometimes wonderful. So sometimes Everybody

too So expensive. it be can sometimes

basin on we're we our Appalachian following because more say up you a a continue by attractive know, competitor way, uptick now, but show one I Appalachia. which while that a sense continue while we in going a I story, LNG to bullish Permian would not and the to about view meaningful than Every would did that's an -- becoming maybe now won't win. maybe it little of that yesterday, infrastructure It's historically. for say your most continues because talked for basin a a they're was of us to of more the election, or is they just traditionally a from played to point exports would see in thing the conservative exposed did bit a a in us about just while, makes So once bids. And I toward And recently. particularly competitors. pipeline deal also every in make started lot not increased a story just the we once full and see to a as opportunities, the to be we're

at going continue that opportunities look So could be see being some forward. That all us the place said, to across a activity board. could you from where

that. a we to sheet draw reluctant acquisitions deals, smaller million, easy $XX leverage on larger $XX million see a analyze one. it the million, transaction with it's cash transact to balance the acquisitions. And really And impactful just on then smaller really up. would $XX to creep us $XX it to bigger smaller time million, not as to use deals. takes a to of revolver, more want And make On also same available you're larger, there I on We're amount your quarter add does to our

I think than let's of than the is acquisitions, it, $XX million. competition million smaller acquisitions over call greater the for some $X significantly less

time, we So efforts dynamics. don't micro level, at on also but really benefit see balance this competitive consolidation of the sheet perspective the both from from a increased

Bertrand Donnes

detail. to? down run forward? great attributing there's follow-up maybe then bonus already? quarterly that to have is but some And through goes that a the we back noted normalized operators there really go increased what you trend their maybe you're Is Or operator levels? X And impressive should is guys of interest. That's this Tier it those maybe just acreage your obviously in is lease that Is

Davis Ravnaas

new the hope Mid-Continent, the big because up which The of in robust we of part quarter's such footprint driver a was successful shale have we that this there. activity is Cherokee leasing play,

already So known. give If that I expanding see meaningful. think that continue I acreage. their the pay time, X to you'll will more to to to start I and you folks what off. efforts Tier is beyond on thought continues hopefully, an over answer that Yes, exploratory had Good be think delineated

quarters. So that's if be guys It a interesting good to obviously posted. I pick will that up thought. in continues to see We'll think subsequent you keep

Operator

America. Noah the of Next of line question with Hungness Bank from comes

Noah Hungness

in Loving for question question the a high one just NRI I ask County. wanted wells on to Just me. clarification

to to online and see start impact the come should at 'XX? expect we in So start of then the really that XQ

Davis Ravnaas

Matt, wrong I'm Sure. here. actually already correct if wells Those are producing. me

Matthew Daly

Correct.

Davis Ravnaas

we're in if one Unsurprisingly, flow production. counties States, the far, We in just very just to add that, cash of, productive see the results very very results are from so And expect and encouraging. I'll encouraging and to start receiving best, not initial it's happy production most United the that, QX. the

Operator

have we reached to now the gentlemen, and session. turn of I comments. closing end the Ladies floor the management for over like question-and-answer to would

Bob Ravnaas

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

Operator

concludes teleconference. Thank you. today's This

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

Kimbell Royalty Partners (KRP) 7 Nov 242024 Q3 Earnings call transcript