KRP - Earnings call transcript Q4 2024 | Kimbell Royalty Partners, LP

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Operator

Greetings, and welcome to 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 Mr. Rick Black, Investor Relations. Thank you, Mr. Black.

begin. may You

Rick Black

December and the Royalty operator, section operational everyone. to and can of ended Welcome for also page call Thank webcast Presentations link being conference good kimbellrp.com. on call of Kimbell and on that XXXX Partners' fourth accessed and IR XXXX. to the This the is through you, be quarter morning, XX, audio review the results Events financial the

February call Information only speaks XX, recorded today, XXXX. of this on as

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

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

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

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

Bob Ravnaas

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

We by year outstanding production, year at has continues which the acquisition are marked in EBITDA. acquisition another This success to year, pleased $XXX well. This yielded the in Kimbell, recall record in significant growth portfolio XXXX. prior closed and QX and that might made you substantial from to was perform a extremely report million revenue we

a during common year, As XXXX very in result this productive credit paid paying Kimbell our $X.XX of to down addition quarterly advantage out on distributions in facility. per tax unit

remains last all rigs number Basin drilling for us confidence wells above acreage, XX% rigs strong During XXXX. to on activity of month. rigs closed the our Line-of-Site in well of the with of XX. in our actively the Lower rig acquisition, maintain including flat which count production, be This fourth Midland to the from quarter, continue drilling resilience share represents drilling XX added needed production giving Wells the the market

Our maintain PDP superior including X.X X-year rate net production. acquired annually of flat estimated decline only the requires to wells annual an XX% average production

And today, million a last offering. Kimbell. introduced guidance expected level guidance successful XXXX we we a off production strong for at a as is acquisition primary a start has month, new its closed XXXX that completed highly midpoint, $XXX record equity to

the positioned to continued we value growth believe unitholder enhance for Finally, well we as into is Kimbell continue future.

I'll now call turn the Davis. to over

Davis Ravnaas

good and everyone. Bob, Thanks, morning,

our quarter this fourth financial Kimbell. start Bob results for I'll As another now quarter. for excellent is reviewing mentioned, the by

our all BOE of share acreage, XX% approximately the $XX.X the rigs we NGL quarter, Including revenues in States. represents the and run rate actively land exited which the per we which with United acquired totaled drilling drilling continental production acquired during XX,XXX production, gas million of quarter market and day, had record production. XX natural the Oil, rigs excludes on

which of and the acquired administrative general $X.X excludes was BOE. million the expense which $X.XX Total million, side, fourth production. or quarter On EBITDA consolidated G&A fourth $XX.X quarter were million, adjusted was expense cash expenses per $X.X

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

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

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

We strong undrawn our XXXX. maintain We comfortable We conservative with very the to flexibility. support syndicate to adjusted XX-months XX, remain debt of financial our secured X.Xx. of approximately a under million with in capacity trailing net financial balance EBITDA $XXX.X approximately our as revolving expanding credit consolidated continue facility December sheet position, bank had of and the

guidance incremental releasing record and also production daily guidance production per high our with day our the a are XXXX which reflects XX,XXX of at we includes midpoint. acquisition associated the Today, BOE latest

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

moment achievements that Since have X,XXX Board this to our to then, years an KRP before turning team, and successfully ago and day, to now Kimbell production IPO. questions, day we the I'd our per thank success. Directors our Lastly, over advisers XXX%. the our the completed of month, BOE XX,XXX take all to contributed call company's at to increase like per recognize X from of have grown BOE a

United fragmented handful major public expect role continue of we entities we U.S. estimate and are a which size. in billion multi-basin acquisition of network technical in to be large-scale oil stated acquisitions. Canada, ongoing in sector, past, a we activity, the gas our royalty And the complete States highly as by our to have as infrastructure, evidenced the over $XXX have As resources, the in track record to financial expertise and and only there consolidator

We for are very ready excited in deliver expand the the about to value to opportunities are operator, years and we With future for to that, now unitholder questions. come.

Operator

line Instructions] question Dingmann the of Truist with Securities. comes The [Operator Neal first from

Unknown Analyst

where This is to opportunity for to just an seeing Jack Neal. particular acreage? on ] of start, [ any there Maybe basins you're abundance Wilson are add

Davis Ravnaas

Davis. United X where target specific the seeing out in now. where the for be the I obvious, being we're the States, is the Continue Jack, most occurring. across deal seeing most than right look wouldn't which other basin this that point to is consolidation to the few to we're said, continues big is across market the opportunities packages a That are Permian the There out United place States. flow

than certainly Some are of that we're each specific others, interesting at them. basin moment. out no a look more I But taking at single but the would

Unknown Analyst

that still kind Okay. a just know Have regulatory maybe been from that flow. is of a That in opportunities the of been lot headlines? Or just then good. sounds more you present? I news there's perspective, seeing I guess, And

Davis Ravnaas

on Can you expand please please? question, the

Unknown Analyst

still the changes. all? at regulatory that the just seeing lot Have affecting Or you just you that been So headline? administration new potential more is is discussing in of a

Davis Ravnaas

very No, Energy our us all. very mineral that new say, across not increased. diverse owner a at to Other would and been benefit the administration here supportive obviously, as than has domestically, of output obviously footprint.

Operator

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

Jonathan Mardini

line-of-sight quarter rate. you compared you Can seeing just it, of you're -- on fourth frame how across do led increase wells This we following the guide to acquisition. talk forma Tim. the your, is call XXXX about acquired footprint Jon And just We assets the that your rest portfolio? your for of what to below pro run saw

thought might just a see little we bit this we year. of growth So

Davis Ravnaas

Yes.

guidance our to likely, is that growth imply occur. So does not if the probable,

on you almost including midpoint exit rate, of our production, our the run look we're acquired guidance. at If XXXX dead the

reflects growth which the guidance the put year. for we flat So at midpoint,

I We conservative with in to of the peers, with in interest the in our working what think like line and space guidance. our be at. mineral looking that's most both we're

was slightly year. less than actual realized for from last volumes just XXXX guidance Our

done guidance. that having and continue time improve quite some out just to for the put So this refine which we in way

great feel about XXXX. our I guidance So for

We than have Line-of-Site we a inventory better ever have.

long-term as Our has is inventory into as future basis strong on the ever a well. it as been

in terms of that, those We have activity. meaningful contributor on Basin. After is the in the about our the of acreage, operating Permian XX most XX rigs Mid-Con

on feel for So our good we catalysts long-term both acreage. near- and about growth very

knows who largest wonderful [indiscernible] be the a And bought. born that medium-term frankly. your the It's question, clause of that it. assets that loves happier development drilling outstanding operator insures acquired couldn't asset. future, assets, the on we its by future, near Anyone second the acquisition it property There's continuous in with a part

feel really that. we will good bear fruit for portfolio asset it key think will to very a that years be nice So And about in our stout come.

Jonathan Mardini

just second the couple as portion acquisition of update the present plan consider you months an it's say, in Great. quarter preferreds of opportunity Appreciate an would to those? itself, Okay. you redeeming and details. give you still whether to the Can next a to your redeem were in

Davis Ravnaas

Yes.

the Apollo So to May. the half is about plan of take out press in

now. right track on are We that for

a in we've the that think I to last row. couple of quarters alluded

on options and the of that's look still about of acquisitions will course, track. all That present possible overall consider for those. balance So themselves, half be we, as financing

don't the line the reloading we of think simplifying the by and framework way, press, in future. look the acquisitions I redemption in more that and time sheet our balance So to any forward for the affected acquisition is, and

Operator

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

Noah Hungness

in should For pay press bit. my a think half rest of it? pay how on little expand the you of of I of down kind plans the the do your question, to May, guys kind wanted press down Once first about about we to

Davis Ravnaas

question. Great you, Thank Yes. Noah.

on will we'll our continue to and draw cash of down to the We going on into revolver take revolver out incrementally continue portions press future. going pay XX% to debt our to forward flow use the a down then of

it's at we've balance dividend debt easy of a a keeps paying threaten sheet and through that this and the gone leverage that acquisitions financing and So then up any level doesn't the know, equity history scenario. draconian the have debt mix as at of pretty shore sort down under our you And those of and and right looking process. a at long before

yes, So plan. the game that's

Noah Hungness

question down would would you be it your like should think doing in be pref clarification on we pay X chunks as you of large the of do capacity kind a you down Or paydown? have Just more May? you paying extra revolver, guys is in debt and ratable

Davis Ravnaas

nature. in delevering absent I would ratable accretive acquisition a that be more equity-driven say meaningful would

So back that fact, look through if done acquisitions that I our units leverage of balance. the And process. delevered the would if on would think, which good imagine rate the we've history, remaining were accelerate redeeming we've make to job, and using increasing you to occur, balance our obviously at to then that we accretive a in preferred without sheet

Noah Hungness

question, like it's $X.XX. moved 'XX Makes then for comparing versus that there sense. other drove the moving of for and marketing kind It what And lower? expenses second down just of about guidance your you kind seem your 'XX. Could the talk of about parts my does

Davis Ravnaas

over a response. give Blayne can you to Controller, Rhynsburger, Sure. that I'll who our detailed more turn

R. Rhynsburger

moves commodity prices. Yes. It little bit a depending typically on

varies, checks another different that the way little the so -- marketing it and that operators moves on receive that so And we a actually put bit. our

being we say going to conservative we would So be is our out think that would say And the probably in there were prior I going what -- have forward. now guidance. guidance overly current is reflective of we I that that

Operator

of Next from [ ] Capital. the comes Texas Pitfield with question line Derek

Unknown Analyst

With to I for on M&A. my landscape the in lean first competitive question, wanted

change we that backdrop to Given of or amount relative focus the your more you're gas natural gas basins? attention the constructive providing have, does

Davis Ravnaas

at We We're way reasonable question. great prices. other. more high-quality a is The on on be commodity can or one answer short properties focused movements that not to position no. try That's acquired finding the price take a

-- But wouldn't that are I the properties gas-heavy lost tailwinds right obviously, refocusing gas us. nature. just we're prices we not more in now on higher are natural because So not are gas efforts say natural on

focusing we fact, would are argue I when and doing perhaps prices properties In lower. opposite the that be on should

price. look quality and at the try We impartial and asset we to commodity at on agnostic depends it strip. just and we'll really So and to remain valuation, everything, look

Unknown Analyst

for Makes M&A both business, operators about competitive across could of for the the your these that sense. are I we've a it also have given witnessed from that And working competing your also thoughts on And I'm interest a to considerable ask then impacts Permian, this from the wanted from consolidated given minerals. on many thinking operator more operator perspective, a and perspective. perspective,

Davis Ravnaas

time say And Yes. examples they traditionally a would for very We time. rare. from large are it's I there generally to do operators mean see when compete that out I are few it's there. packages. competing,

So haven't range lot range, it's competition $XX it's just we seen of a from very million but it's not operators $XXX let's and, it, million million $XXX because for to to million a good question, whole call so them, meaningful. small $XXX

positive. it And for operators add be our, there's occurs M&A of what to I'd if on development when what, us, years that for XX look that, across net to friction I'd doing that assets. our say consolidation a almost overall, always between this, does But back tends mean we and some

a better efficient. their in can to be acre schedules such way have larger with a companies now sheet. where footprint more even They drilling they You have larger balance organize

So short-term back create overall, positive including in consolidation, over when time, outcome mineral but term, owners, noise, almost ourselves. we always longer a it can for look some results

Operator

Next line from Diamond question comes of with Paul Citi. the

Paul Diamond

some set how that will dialogue, deals Should your think million how bigger some the have in about swings opportunity taken, we more $XX as gotten your have increasing bigger deals? or bigger, Or we M&A the the you but going then guess, Does you -- we I that swings? BOE scale XX,XXX think should should obviously, day. been take sizable about on guys think linearly appetite, there's grown of million eclipsing the should $XXX a kind grow to forward? with Staying

Davis Ravnaas

asking on larger are obviously for thanks really and us. No, very that that We question. thoughtful, something It's lost acquisitions. it's focused isn't on

the deal that concern equity smaller is you think meaningful I a can't that. with like have of something structure we a deals doing around handful

just leaning our time. And up over that, smaller quarter-over-quarter end with revolver and so increases you casually of up with deals it they add into to kind start leverage

I focus would say is on that So our million-plus $XXX deals.

over opportunity it. ownership if think worked quite neutral and we of with a the on the to our that's for group, higher revolver That's swing could right recipe mix been equity I we found used a leverage well us time. right finance

But mean, I you're have right. larger. we gotten

newly mineral market then over bigger terms the mean, that, that mineral saw So and say, size deals would back grown bigger. I the available I'd gosh, acquisition continues size. rarely in there when deals we $XXX you I add opportunity size. with guess just in given I royalty getting deal million of time. in tandem has of seemingly that, of further the in dozens at space are $XX set to consolidate, just in the to that And us to as just public now plus the are and were million XXXX, But any keeps

hands. up private consolidators into and the have into larger their more going as and public opportunities space, capital more simply So grown, institutional that's resulted in attracted they've

and look small really that So plays billion, on when early we're and of overall it's captured market. size at very public how market out. mineral nice I you percentage mean, I $XXX a the thing is still this by to a just think very the of see,

So this snowball. that to we trend expect continue a is to

Paul Diamond

Understood. then of a ] I question. more [ just And appreciate the one bit wonky clarity.

far read the your that on is through -- or in outside not stable of -- the patient? gross that? seems through or larger we your wrong growth read way on release So a look on operations, that between but gross the Haynesville. Should of pretty to and Haynesville, think as ratio to kind permits, about in weakening as kind notable decent sustainability if DUCs of just I production your a Or is

Davis Ravnaas

the read start time. trend more us. of obviously. that. gas be read Permian. And Haynesville, No, go about very be. much tends it's environment, a be through course, new [indiscernible], too I something change wouldn't of I to would overly If to and that that notice we bullish this the But much wouldn't DUCs wouldn't very significant place down over basin, -- on meaningful into quarter-over-quarter. could and on that easily in to ratio Still ratio But That particular would it up the too to that bullish price I of natural

Operator

you. Thank

are further we end there closing gentlemen, to and I reached questions, now session. of ladies would no like the the for to As floor over have management question-and-answer comments. turn the

Bob Ravnaas

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

Operator

Thank you. teleconference. This today's concludes

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

Kimbell Royalty Partners (KRP) 27 Feb 252024 Q4 Earnings call transcript