Financial Data and Key Metrics Changes - Total revenues from oil, natural gas, and NGLs reached $75 million in Q2 2025, with a run rate production of 25,355 Boe per day [7] - General and administrative expenses for Q2 were $9.6 million, with cash G&A expenses at $5.4 million or $2.36 per BOE, reflecting a decrease in costs [8][10] - Consolidated adjusted EBITDA for the second quarter was $63.8 million, indicating strong cash flow [8] - The company announced a cash distribution of $0.38 per common unit, equating to 75% of cash available for distribution [9] Business Line Data and Key Metrics Changes - The overall rig count decreased by 2% to 88 rigs actively drilling, while the US land rig count dropped by 7% [5] - In the Permian Basin, the rig count increased by four rigs, and in Haynesville, it increased by five rigs, indicating localized growth despite broader declines [5] Market Data and Key Metrics Changes - The company’s market share of US land rigs actively drilling increased by 1% to 17% [5] - Net DUCs (drilled but uncompleted wells) rose by 9% quarter over quarter, primarily driven by the Permian Basin [5] Company Strategy and Development Direction - The company remains focused on organic growth opportunities and is exploring M&A opportunities, particularly for deals under $500 million [15][16] - The management emphasized a conservative approach to acquisitions, with a focus on maintaining a strong balance sheet and financial flexibility [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for continued robust development through 2025, supported by active drilling on their acreage [11] - The company noted a slowdown in Permian packages coming to market, which may affect future acquisition opportunities [27] Other Important Information - The company redeemed 50% of the outstanding Series A cumulative convertible preferred units, simplifying its capital structure [10] - Approximately 100% of the announced distribution is expected to be considered a return of capital, enhancing after-tax returns for unitholders [9] Q&A Session Summary Question: Inquiry about potential upstream partnerships - Management indicated that while exploring partnerships is an option, it is not a top priority due to a strong organic growth pipeline [15][16] Question: Discussion on rig activity resilience - Management attributed the resilience of rig activity to the quality and diversified nature of their asset base, which has shown more stickiness compared to the broader market [33] Question: Expectations for natural gas growth - Management anticipates a slight increase in natural gas production, with a potential shift towards a gassier production mix if natural gas continues to outperform oil [35][36] Question: Changes in M&A market valuations - Management noted that acquisition valuations are likely to decrease as sellers adjust expectations in response to a less favorable growth environment [44] Question: Factors driving lower G&A expenses - Lower professional fees contributed to reduced G&A expenses, with expectations to maintain costs at the lower end of guidance moving forward [46]

Company Overview - Kimbell Royalty Partners offers a 10.1% annualized cash distribution yield[6] - The company has interests in over 131,000 gross wells across over 17 million gross acres in the US[13] - Kimbell has completed over $2.0 billion in M&A transactions since its IPO in 2017[13] - Kimbell has grown run-rate average daily production by over 8x since IPO[13] - Kimbell has returned 71% of $18.00/unit IPO price via quarterly cash distributions[13] Financial Performance - Kimbell generated $74.7 million in Oil, Natural Gas and NGL Revenues in Q2 2025[16] - Consolidated Adjusted EBITDA was $63.8 million in Q2 2025[16] - Q2 2025 run-rate average daily production was 25,355 Boe/d (6:1)[16] - Net Debt / TTM Adjusted EBITDA was 1.6x as of 6/30/2025[15] Asset Base and Strategy - Kimbell estimates that approximately 100% of the distribution to be paid on August 25, 2025 is estimated to constitute non-taxable reductions to the tax basis of each distribution recipient's ownership interest in Kimbell[10] - The company has a shallow PDP decline rate of approximately 14%[15] - Kimbell has a net royalty acre position of approximately 158,350 acres[15] - Kimbell estimates that only 6.5 net wells are needed per year to maintain production[38] - Kimbell has 88 active rigs drilling on its acreage, representing approximately 17% market share of U S land rig count[18]

[Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Kimbell Royalty Partners reported strong Q2 2025 results with **25,355 Boe/d** production, **$74.7 million** in revenues, **$63.8 million** Adjusted EBITDA, and a **$0.38** cash distribution per common unit, maintaining **88** active rigs | Metric | Value | | :--- | :--- | | **Run-Rate Daily Production** | 25,355 Boe/d (6:1) | | **Oil, Natural Gas & NGL Revenues** | $74.7 million | | **Net Income** | ~$26.7 million | | **Consolidated Adjusted EBITDA** | $63.8 million | | **Cash G&A per BOE** | $2.36 | | **Active Rigs on Acreage** | 88 (17% U.S. market share) | | **Q2 2025 Cash Distribution** | $0.38 per common unit | - The company announced a Q2 2025 cash distribution of **$0.38 per common unit**, representing a **75% payout ratio** and a **10.3% annualized yield**. The remaining **25%** of cash available for distribution will be used to repay outstanding borrowings[4](index=4&type=chunk) - As of June 30, 2025, Kimbell's major properties had **7.99 net DUCs** and permitted locations, exceeding the estimated **6.5 net wells** required to maintain flat production[4](index=4&type=chunk) [Management Commentary and Shareholder Distributions](index=2&type=section&id=Management%20Commentary%20and%20Shareholder%20Distributions) Management emphasized resilient operational performance, including increased U.S. land rig market share and a **$0.38** per common unit cash distribution, with remaining cash flow allocated to debt reduction - The CEO emphasized the company's strong operational position, with its market share of U.S. land rigs increasing to **17%** and net DUCs growing by **9%** quarter-over-quarter, indicating near-term production growth[5](index=5&type=chunk) - Cash G&A per BOE was below the low end of guidance, which management attributes to operational discipline and positive operating leverage[5](index=5&type=chunk) | Distribution Metric | Value | | :--- | :--- | | **Q2 2025 Distribution** | $0.38 per common unit | | **Payout Ratio** | 75% of cash available for distribution | | **Debt Paydown** | ~$13.6 million (remaining 25%) | | **Payment Date** | August 25, 2025 | | **Record Date** | August 18, 2025 | - Kimbell expects approximately **100%** of the Q2 2025 distribution to be considered a non-taxable return of capital for U.S. federal income tax purposes, which reduces the unitholder's cost basis[6](index=6&type=chunk)[7](index=7&type=chunk) [Financial and Operational Performance](index=2&type=section&id=Financial%20and%20Operational%20Performance) Kimbell achieved Q2 2025 revenues of **$86.5 million**, net income of **$26.7 million**, **25,355 Boe/d** production, maintained **7.99 net DUCs**, and managed debt at **$462.1 million** with a **1.6x** leverage ratio [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Q2 2025 Realized Prices | Commodity | Average Realized Price | | :--- | :--- | | **Oil** | $63.48 / Bbl | | **Natural Gas** | $2.54 / Mcf | | **NGLs** | $24.10 / Bbl | | **Combined** | $33.04 / Boe | Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | **Total Revenues** | $86.5 million | | **Net Income** | ~$26.7 million | | **Net Income (to common units)** | ~$2.0 million ($0.02/unit) | | **Consolidated Adjusted EBITDA** | $63.8 million | - As of June 30, 2025, Kimbell had **$462.1 million** in debt outstanding, with a net debt to TTM consolidated Adjusted EBITDA ratio of approximately **1.6x**[11](index=11&type=chunk) - The company increased its borrowing base from **$550 million** to **$625 million** and redeemed **50%** of its Series A Preferred Units to simplify its capital structure[12](index=12&type=chunk) [Production](index=3&type=section&id=Production) Q2 2025 Production Breakdown | Metric | Value | | :--- | :--- | | **Average Daily Production** | 25,355 Boe/d (6:1) | | **Production Mix** | | |    Natural Gas | 47% | |    Liquids (Oil & NGLs) | 53% | |       Oil | 33% | |       NGLs | 20% | [Operational Update](index=3&type=section&id=Operational%20Update) - As of June 30, 2025, Kimbell had **88 rigs** actively drilling on its acreage, representing an approximate **16.5%** market share of all U.S. land rigs[15](index=15&type=chunk) DUCs and Permits by Basin (as of June 30, 2025) | Basin | Net DUCs | Net Permits | | :--- | :--- | :--- | | **Permian** | 3.27 | 2.15 | | **Eagle Ford** | 0.22 | 0.08 | | **Haynesville** | 0.35 | 0.13 | | **Mid-Continent** | 0.78 | 0.39 | | **Bakken** | 0.36 | 0.10 | | **Appalachia** | 0.02 | 0.02 | | **Rockies** | 0.10 | 0.02 | | **Total** | **5.10** | **2.89** | [Hedging Update](index=4&type=section&id=Hedging%20Update) Kimbell implemented fixed-price oil and natural gas swaps through Q2 2027 to stabilize cash flow by locking in future production prices Fixed Price Swaps as of June 30, 2025 | Period | Oil Volume (BBL) | Nat Gas Volume (MMBTU) | Wtd. Avg. Oil Price ($/BBL) | Wtd. Avg. Nat Gas Price ($/MMBTU) | | :--- | :--- | :--- | :--- | :--- | | **3Q 2025** | 136,068 | 1,261,964 | $74.20 | $3.74 | | **4Q 2025** | 146,372 | 1,291,680 | $68.26 | $3.68 | | **1Q 2026** | 146,880 | 1,296,000 | $70.38 | $4.07 | | **2Q 2026** | 148,512 | 1,310,400 | $70.78 | $3.33 | | **Full Year 2026** | 605,680 | 5,256,000 | ~$67.70 | ~$3.69 | | **Full Year 2027 (H1)** | 304,623 | 2,658,528 | ~$62.65 | ~$3.96 | [Financial Statements](index=7&type=section&id=Financial%20Statements) Q2 2025 unaudited financial statements report total assets of **$1.28 billion**, liabilities of **$483.5 million**, revenues of **$86.5 million**, and net income of **$26.7 million**, driven by derivative gains [Condensed Consolidated Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Balance Sheet Summary (as of June 30, 2025) | Account | Amount (in thousands) | | :--- | :--- | | **Total Current Assets** | $88,249 | | **Total Assets** | **$1,284,936** | | **Total Current Liabilities** | $16,185 | | **Long-Term Debt** | $462,096 | | **Total Liabilities** | **$483,533** | | **Total Unitholders' Equity** | **$643,008** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (Three Months Ended June 30) | Account (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Revenues** | $86,548 | $76,573 | | **Operating Income** | $37,786 | $23,892 | | **Net Income** | $26,672 | $15,187 | | **Net Income Attributable to Common Units** | $2,007 | $8,410 | | **Diluted EPS** | $0.02 | $0.11 | [Supplemental Schedules (Non-GAAP Reconciliations)](index=9&type=section&id=Supplemental%20Schedules%20(Non-GAAP%20Reconciliations)) This section defines and reconciles non-GAAP measures, showing Q2 2025 Consolidated Adjusted EBITDA of **$63.8 million**, **$47.1 million** cash available for distribution, and a net debt to TTM Adjusted EBITDA ratio of **1.6x** [Definition of Non-GAAP Measures](index=9&type=section&id=Definition%20of%20Non-GAAP%20Measures) - Adjusted EBITDA is used by management to evaluate operating performance and cash flow available for distributions, excluding items like depreciation, interest, taxes, and unrealized derivative gains/losses[28](index=28&type=chunk) - Cash G&A and Cash G&A per Boe are used to measure cash costs relative to production, providing a metric for operational efficiency[29](index=29&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Cash%20Available%20for%20Distribution) Q2 2025 Reconciliation Summary (in thousands) | Metric | Value | | :--- | :--- | | **Net Income** | $26,672 | | **Consolidated Adjusted EBITDA** | $63,844 | | **Adjusted EBITDA (attributable to KRP)** | $55,268 | | **Cash Available for Distribution (on common units)** | $47,121 | | **Cash Available per Common Unit** | $0.50 | | **Declared Distribution per Common Unit** | $0.38 | - The difference between cash available for distribution (**$0.50/unit**) and the declared distribution (**$0.38/unit**) is due to the company allocating **25%** of cash to repay debt on its revolving credit facility[33](index=33&type=chunk) [Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA Calculation](index=13&type=section&id=Net%20Debt%20to%20Trailing%20Twelve%20Month%20Consolidated%20Adjusted%20EBITDA%20Calculation) Leverage Ratio Calculation (as of June 30, 2025) | Metric (in thousands) | Value | | :--- | :--- | | **Long-Term Debt** | $462,096 | | **Cash and Cash Equivalents (capped)** | ($25,000) | | **Net Debt** | $437,096 | | **Trailing Twelve Month Adj. EBITDA** | $279,816 | | **Net Debt / TTM Adj. EBITDA** | **1.6x** |

Core Insights - Kimbell Royalty Partners reported a strong operational performance with 88 active rigs, representing a 17% market share of the U.S. land rig count, despite a 7% decline in overall U.S. land rig activity [1][3][4] - The company announced a cash distribution of $0.38 per common unit for Q2 2025, reflecting a 10.3% annualized yield based on the closing price on August 6, 2025 [4][8] - Kimbell's financial results for Q2 2025 included total revenues of $86.5 million and net income of approximately $26.7 million, with a consolidated Adjusted EBITDA of $63.8 million [10][11][35] Operational Performance - The active rig count on Kimbell's acreage decreased by only 2% quarter over quarter, while the overall U.S. land rig count dropped by 7% [3] - The company experienced a 9% increase in net DUCs (drilled but uncompleted wells) quarter over quarter, primarily driven by the Permian Basin [3][8] - Kimbell's average daily production for Q2 2025 was 25,355 barrels of oil equivalent (Boe) per day, with approximately 47% from natural gas and 53% from liquids [16] Financial Highlights - Kimbell's Q2 2025 revenues from oil, natural gas, and NGLs totaled $74.7 million, with a net income attributable to common units of approximately $2.0 million [10][35] - The company reported cash G&A (general and administrative) expenses of $9.6 million, with cash G&A per BOE at $2.36, reflecting operational discipline [12][35] - As of June 30, 2025, Kimbell had approximately $462.1 million in debt, with a net debt to trailing twelve-month consolidated Adjusted EBITDA ratio of approximately 1.6x [13][36] Distribution and Debt Management - The Board of Directors approved a cash distribution payment of 75% of cash available for distribution for Q2 2025, amounting to $0.38 per common unit [6][33] - Kimbell plans to allocate the remaining 25% of cash available for distribution to pay down approximately $13.6 million of outstanding borrowings under its secured revolving credit facility [6][33] - The distribution is expected to be considered a return of capital, enhancing after-tax returns for unitholders [4][7]

Group 1 - Kimbell Royalty (KRP) has surpassed resistance at the 200-day moving average, indicating a long-term bullish trend [1] - KRP shares have increased by 5.8% over the past four weeks, and the stock is currently rated as Zacks Rank 2 (Buy) [2] - Positive earnings estimate revisions support the bullish outlook, with no estimates decreasing and two increasing in the past two months [2] Group 2 - The combination of the technical indicator and positive earnings revisions suggests that KRP should be considered for a watchlist [3]

Group 1 - Kimbell Royalty (KRP) shares have increased by 4.4% over the past four weeks, closing at $14.6, with a mean price target of $18.6 indicating a potential upside of 27.4% [1] - The average price targets range from a low of $12.00 to a high of $24.00, with a standard deviation of $4.98, suggesting variability in analyst estimates [2] - Analysts show a consensus that KRP will report better earnings than previously estimated, which historically correlates with stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for KRP's current year earnings has risen by 45.9% over the last 30 days, with two estimates moving higher and no negative revisions [12] - KRP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting the extent of KRP's gains, they can provide guidance on the direction of price movement [14]

Core Viewpoint - Kimbell Royalty (KRP) shares have increased by 3.9% recently, with a mean price target of $18.6 suggesting a potential upside of 30.7% from the current price of $14.23 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $4.98, indicating variability among analysts [2] - The lowest estimate is $12.00, suggesting a 15.7% decline, while the highest estimate is $24.00, indicating a potential increase of 68.7% [2] - Analysts' price targets can often mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10] Earnings Estimates and Analyst Agreement - Analysts have shown increasing optimism regarding KRP's earnings, with a strong consensus on higher EPS estimates, which correlates with potential stock price increases [11] - Over the past 30 days, one estimate has increased, leading to a 34.4% rise in the Zacks Consensus Estimate for the current year [12] - KRP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Conclusion on Price Movement - While the consensus price target may not be a reliable measure of KRP's potential gains, the direction indicated by these targets appears to be a useful guide for investors [14]

Technical Analysis - Kimbell Royalty (KRP) has recently reached a key level of support and has overtaken the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average (SMA) is a popular tool among traders as it smooths out price fluctuations and can signal trend reversals more effectively than longer-term averages [2] Performance Metrics - KRP has moved 8.4% higher over the last four weeks, suggesting potential for further gains [4] - The company currently holds a Zacks Rank 2 (Buy), indicating positive market sentiment [4] Earnings Estimates - There have been two upward revisions in KRP's earnings estimates for the current fiscal year, with no downward revisions, leading to an increased consensus estimate [4][5] - The combination of positive technical factors and earnings estimate revisions may attract investor interest for potential gains in the near future [5]

Core Viewpoint - Kimbell Royalty (KRP) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][3] Earnings Estimate Revisions - The trend of rising earnings estimate revisions reflects growing analyst optimism about Kimbell Royalty's earnings prospects, which is expected to positively impact its stock price [2] - For the current quarter, Kimbell Royalty is projected to earn $0.12 per share, marking a +9.09% increase from the previous year [6] - Over the last 30 days, the Zacks Consensus Estimate for Kimbell Royalty has risen by 25%, with one estimate moving higher and no negative revisions [6] - For the full year, the expected earnings are $0.55 per share, indicating an +83.33% year-over-year change [7] - The current year's estimate revisions show a positive trend, with one estimate increasing and no negative revisions [7] Zacks Rank and Performance - Kimbell Royalty currently holds a Zacks Rank 2 (Buy), indicating favorable conditions for investment based on earnings estimate revisions [8] - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8] - The stock has appreciated by 6.1% over the past four weeks due to strong estimate revisions, suggesting potential for further upside [9]

Core Viewpoint - Kimbell Royalty (KRP) shows potential for further upside, with a mean price target of $18.6 indicating a 27.3% upside from its current price of $14.61, following an 11.7% gain over the past four weeks [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $4.98, indicating variability among analysts; the lowest estimate is $12.00 (17.9% decline), while the highest is $24.00 (64.3% increase) [2] - A low standard deviation suggests a high degree of agreement among analysts regarding the stock's price movement direction, although it does not guarantee the stock will reach the average target [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about KRP's earnings prospects, with a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has risen by 34.1%, with one estimate moving higher and no negative revisions [12] - KRP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for near-term upside [13] Caution on Price Targets - While price targets are often sought after by investors, they can mislead; empirical research shows that they rarely indicate actual stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]