Company Performance - Kimbell Royalty (KRP) reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, and showing a significant increase from earnings of $0.04 per share a year ago, representing an earnings surprise of 33.33% [1] - The company posted revenues of $84.21 million for the quarter ended March 2025, which was 4.56% below the Zacks Consensus Estimate, but an increase from $82.23 million in the same quarter last year [2] - Over the last four quarters, Kimbell Royalty has surpassed consensus EPS estimates two times and topped consensus revenue estimates only once [2] Stock Performance and Outlook - Kimbell Royalty shares have declined approximately 26.8% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $80.53 million, and for the current fiscal year, it is $0.30 on revenues of $332.35 million [7] Industry Context - The Oil and Gas - Royalty Trust - United States industry, to which Kimbell Royalty belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Kimbell Royalty's stock performance [5]

Company Overview - Kimbell Royalty Partners offers a unique annualized cash distribution yield of 15.2%[10] - Kimbell has interests in over 131,000 gross wells across over 17 million gross acres in the US[17] - Since its IPO in 2017, Kimbell has completed over $2 billion in M&A transactions and grown run-rate average daily production by over 8x[17] - Kimbell has returned 68% of the $18 per unit IPO price via quarterly cash distributions since 2017[17] Financial Highlights - Kimbell's Net Debt / TTM Adjusted EBITDA is 0.9x as of March 31, 2025[20] - Q1 2025 run-rate oil, natural gas and NGL revenues reached a record of $88.6 million[25, 29] - Q1 2025 consolidated Adjusted EBITDA was a record $75.5 million[23, 29] Asset Base and Drilling Inventory - Kimbell has a shallow PDP decline rate of approximately 14%[19] - The company possesses a net royalty acre position of approximately 158,350 acres[19] - Kimbell has identified 11,510 gross / 77.71 net total upside locations on major properties alone as of December 31, 2024[45] - Kimbell estimates that only 6.5 net wells are needed per year to maintain production, reflecting over 14 years of drilling inventory including major and minor locations[45] Tax Structure - Approximately 70% of the distribution to be paid on May 28, 2025, is estimated to constitute non-taxable reductions to the tax basis of each distribution recipient's ownership interest in Kimbell[13, 35, 67]

[Q1 2025 Performance Overview](index=1&type=section&id=Q1%202025%20Performance%20Overview) Kimbell Royalty Partners achieved record Q1 2025 revenues, Adjusted EBITDA, and cash available for distribution, driven by strong production and strategic capital structure enhancements [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) Kimbell Royalty Partners reported record Q1 2025 revenues, Adjusted EBITDA, and cash available for distribution, with production exceeding guidance and an 18% increase in quarterly distribution Key Financial and Operational Metrics | Metric | Q1 2025 Value | Note | | :--- | :--- | :--- | | **Oil, Gas & NGL Revenues** | $90.0 million | Record High | | **Net Income** | $25.9 million | - | | **Consolidated Adjusted EBITDA** | $75.5 million | Record High | | **Run-Rate Daily Production** | 25,841 Boe/d | Including full-quarter impact of acquisition | | **Cash Distribution per Unit** | $0.47 | 18% increase from Q4 2024 | - The company simplified its capital structure by redeeming **50%** of its outstanding Series A Cumulative Convertible Preferred Units[2](index=2&type=chunk)[6](index=6&type=chunk)[8](index=8&type=chunk) - The borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from **$550 million** to **$625 million**[2](index=2&type=chunk)[6](index=6&type=chunk)[8](index=8&type=chunk) - Activity remains robust with **90 active rigs** on Kimbell's acreage, representing a **16% market share** of the U.S. land rig count as of March 31, 2025[2](index=2&type=chunk)[6](index=6&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) CEO Robert Ravnaas highlighted record Q1 2025 results, emphasizing strategic milestones, robust drilling activity, and a bullish outlook for the U.S. oil and gas royalty sector - Management emphasized several 2025 milestones: a highly accretive Permian acquisition, an increased credit facility to **$625 million**, and the redemption of **50%** of Series A preferred units to simplify the capital structure[6](index=6&type=chunk) - The Q1 2025 distribution of **$0.47 per unit** represents an **18% increase** from Q4 2024 and an annualized yield of **15.8%**; approximately **70%** of this distribution is expected to be a non-taxable return of capital[7](index=7&type=chunk) - The company remains optimistic about its future, citing its position as a leading consolidator in the U.S. oil and natural gas royalty industry and its potential to generate long-term unitholder value[7](index=7&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance) Kimbell's Q1 2025 financial performance was marked by increased revenues, net income, and record Adjusted EBITDA, supported by favorable commodity prices [Key Financial Results](index=3&type=section&id=Key%20Financial%20Results) Kimbell's Q1 2025 saw total revenues of $84.2 million, net income of $25.9 million, and record Consolidated Adjusted EBITDA of $75.5 million, benefiting from strong commodity prices Key Financial Results Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $84.2M | $82.2M | | **Net Income** | $25.9M | $9.3M | | **Net Income per Common Unit (Basic)** | $0.20 | $0.04 | | **Consolidated Adjusted EBITDA** | $75.5M | $74.1M | Average Realized Prices | Commodity | Average Realized Price (Q1 2025) | | :--- | :--- | | **Oil** | $70.34 / Bbl | | **Natural Gas** | $3.68 / Mcf | | **NGLs** | $26.02 / Bbl | | **Combined** | $38.61 / Boe | [Distributions and Capital Management](index=3&type=section&id=Distributions%20and%20Capital%20Management) The Board approved a Q1 2025 cash distribution of $0.47 per common unit, with 25% of cash available for distribution allocated to debt repayment, maintaining a healthy leverage ratio - A cash distribution of **$0.47 per common unit** was declared for Q1 2025, payable on May 28, 2025[9](index=9&type=chunk) - The company will use the remaining **25%** of cash available for distribution, about **$16.9 million**, to pay down outstanding borrowings on its credit facility[9](index=9&type=chunk) - As of March 31, 2025, Kimbell had **$299.0 million** in debt outstanding and **$251.0 million** in undrawn capacity on its credit facility[14](index=14&type=chunk) - Post-quarter end, after the preferred unit redemption and planned debt paydown, net debt to TTM Adjusted EBITDA is expected to be approximately **1.5x**[15](index=15&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Q1 2025 total General & Administrative expense was $9.6 million, comprising $5.8 million in cash G&A and $3.9 million in non-cash unit-based compensation General & Administrative Expense | G&A Expense (Q1 2025) | Amount | Per Boe | | :--- | :--- | :--- | | **Total G&A** | $9.6 million | - | | **Cash G&A** | $5.8 million | $2.52 | | **Unit-based Compensation (Non-cash)** | $3.9 million | $1.68 | [Operational Performance](index=4&type=section&id=Operational%20Performance) Kimbell's Q1 2025 operational performance featured strong run-rate daily production and significant drilling activity across its acreage [Production](index=4&type=section&id=Production) Q1 2025 run-rate average daily production was 25,501 Boe/d, with pro-forma production at 25,841 Boe/d, maintaining a balanced liquids and natural gas mix Production Metrics | Production Metric | Value | | :--- | :--- | | **Q1 2025 Run-Rate Production** | 25,501 Boe/d | | **Pro-Forma Run-Rate Production** | 25,841 Boe/d | | **Liquids Mix** | 52% (33% Oil, 19% NGLs) | | **Natural Gas Mix** | 48% | [Drilling and Development Activity](index=4&type=section&id=Drilling%20and%20Development%20Activity) As of March 31, 2025, Kimbell's acreage had 90 active drilling rigs, representing a 15.7% U.S. land rig market share, with substantial DUC and permitted locations - As of March 31, 2025, there were **90 active rigs** on Kimbell's acreage, representing a **15.7% market share** of all U.S. land rigs[18](index=18&type=chunk) Net DUCs and Permits by Basin | Basin | Net DUCs | Net Permits | Total Net Locations | | :--- | :--- | :--- | :--- | | **Permian** | 2.64 | 2.55 | 5.19 | | **Mid-Continent** | 0.91 | 0.41 | 1.32 | | **Haynesville** | 0.37 | 0.16 | 0.53 | | **Bakken** | 0.31 | 0.22 | 0.53 | | **Eagle Ford** | 0.32 | 0.08 | 0.40 | | **Other** | 0.12 | 0.01 | 0.13 | | **Total** | **4.67** | **3.43** | **8.10** | [Outlook and Hedging](index=5&type=section&id=Outlook%20and%20Hedging) Kimbell maintains a strategic hedging position to mitigate commodity price risk and has reaffirmed its full-year 2025 guidance [Hedging Position](index=5&type=section&id=Hedging%20Position) Kimbell employs a fixed-price swap strategy to manage commodity price risk, with hedges for oil and natural gas extending through Q1 2027 Hedging Summary | Period | Oil Volume (BBL) | Avg Oil Price ($/BBL) | Nat Gas Volume (MMBTU) | Avg Nat Gas Price ($/MMBTU) | | :--- | :--- | :--- | :--- | :--- | | **2Q 2025** | 140,686 | $67.64 | 1,310,127 | $3.52 | | **3Q 2025** | 136,068 | $74.20 | 1,261,964 | $3.74 | | **4Q 2025** | 146,372 | $68.26 | 1,291,680 | $3.68 | | **Full Year 2026** | ~600k | ~$67.75 | ~5.2M | ~$3.69 | | **1Q 2027** | 151,470 | $63.75 | 1,321,920 | $4.46 | [2025 Guidance](index=2&type=section&id=2025%20Guidance) Kimbell has reaffirmed its previously disclosed financial and operational guidance ranges for the full year 2025, indicating confidence in its performance trajectory - The company affirmed its full-year 2025 financial and operational guidance, which was previously provided in its Q4 2024 earnings release[8](index=8&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) The financial statements provide a detailed overview of Kimbell's assets, liabilities, equity, operational results, and non-GAAP reconciliations for Q1 2025 [Condensed Consolidated Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of March 31, 2025, Kimbell reported total assets of $1.33 billion, with $1.22 billion in net oil and natural gas properties, and total liabilities of $322.2 million Condensed Consolidated Balance Sheet (as of March 31, 2025) | Balance Sheet Item | Amount (in thousands) | | :--- | :--- | | **Total Current Assets** | $99,381 | | **Total Oil and Natural Gas Properties, net** | $1,216,414 | | **Total Assets** | **$1,325,868** | | **Total Current Liabilities** | $16,522 | | **Long-term Debt** | $298,996 | | **Total Liabilities** | **$322,201** | | **Total Unitholders' Equity** | **$687,270** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, Kimbell reported $84.2 million in total revenues, a significant increase in operating income to $33.6 million, and improved net income attributable to common units Condensed Consolidated Statements of Operations | Income Statement (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Oil, natural gas and NGL revenues** | $89,951 | $87,499 | | **Total Revenues** | $84,209 | $82,234 | | **Operating Income** | $33,577 | $17,561 | | **Net Income** | $25,853 | $9,337 | | **Net Income Attributable to Common Units** | $17,862 | $3,169 | | **Diluted EPS** | $0.20 | $0.04 | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) Supplemental schedules reconcile GAAP net income of $25.9 million to Consolidated Adjusted EBITDA of $75.5 million and Cash Available for Distribution of $57.2 million for Q1 2025 Reconciliation to Adjusted EBITDA | Reconciliation to Adjusted EBITDA (Q1 2025, in thousands) | Amount | | :--- | :--- | | **Net Income** | $25,853 | | (+) Depreciation and depletion | $31,118 | | (+) Interest expense | $6,622 | | (+) Income tax expense | $1,090 | | (+) Unit-based compensation | $3,861 | | (+) Loss on derivatives, net of settlements | $6,989 | | **Consolidated Adjusted EBITDA** | **$75,533** | Reconciliation to Cash Available for Distribution | Reconciliation to Cash Available for Distribution (Q1 2025, in thousands) | Amount | | :--- | :--- | | **Adjusted EBITDA attributable to KRP, LP** | $65,387 | | (-) Cash interest expense | $4,051 | | (-) Cash distributions on Series A preferred units | $4,163 | | **Cash available for distribution on common units** | **$57,159** | - The calculated cash available for distribution was **$0.61 per common unit**, while the declared distribution was **$0.47 per unit**; the difference is primarily being used to repay outstanding debt[36](index=36&type=chunk)

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Asset and Reserve Information - As of December 31, 2024, the company owned mineral and royalty interests in approximately 12.2 million gross acres, with 54% located in the Permian Basin and Mid-Continent[87] - The estimated proved oil, natural gas, and NGL reserves attributable to the company's interests were 67,541 MBoe, with 49.6% classified as liquids (29.6% oil and 20.0% NGLs)[88] - The company holds a total of 12,220,516 gross acres and 101,340 net acres across various basins, with an average leasing percentage of 99.0%[108] - The company has significant mineral interests in the Permian Basin (3,003,486 gross acres), Mid-Continent (3,663,657 gross acres), and Terryville/Cotton Valley/Haynesville (1,301,662 gross acres) with high leasing percentages[108] - The Bakken/Williston Basin is noted as one of the largest oil developments in the U.S., with the company holding 1,214,446 gross acres[108] - The Appalachian Basin, which includes the Marcellus and Utica plays, has 434,116 gross acres under the company's interest[108] - The company has a well count of 129,363 across various basins, with the Permian Basin having the highest count at 50,604 wells[113] - The company’s overriding royalty interests (ORRIs) total 4,726,337 gross acres, with a producing percentage of 99.6%[111] - The Eagle Ford shale formation is highlighted for its economic productivity, with the company holding 476,193 gross acres[108] - The company’s mineral interests in the Illinois Basin are fully leased at 100%[108] Production and Revenue - For the year ended December 31, 2024, revenues were generated 71% from oil sales, 16% from natural gas sales, and 13% from NGL sales[92] - Oil and condensate production increased to 2,836,913 Bbls in 2024, up 18.6% from 2,392,622 Bbls in 2023[126] - Natural gas production rose to 27,586,460 Mcf in 2024, a 17.5% increase from 23,384,021 Mcf in 2023[126] - Average daily production reached 24,868 Boe/d in 2024, compared to 20,265 Boe/d in 2023, reflecting a 22.5% growth[126] - The average price for oil was $75.48 per Bbl and for natural gas was $2.13 per MMBtu as of December 31, 2024[123] - The top purchaser accounted for approximately 9.1%, 6.7%, and 11.3% of the company's oil, natural gas, and NGL revenues for the years ended December 31, 2024, 2023, and 2022, respectively[531] Financial Performance - Net income for 2024 was $11,069,736, a significant decrease from $83,005,570 in 2023 and $130,794,286 in 2022[541] - Adjusted EBITDA for 2024 reached $262,832,363, up from $212,059,364 in 2023, indicating a growth of approximately 23.9% year-over-year[541] - Cash available for distribution on common units was $180,665,429 in 2024, compared to $140,781,292 in 2023, reflecting an increase of about 28.4%[541] - Depreciation and depletion expense increased to $135,123,177 in 2024 from $96,477,003 in 2023, marking a rise of approximately 40.1%[541] - Interest expense for 2024 was $26,696,018, slightly higher than $25,950,600 in 2023[541] - Impairment of oil and natural gas properties significantly rose to $62,118,433 in 2024 from $18,220,173 in 2023[541] - Unit-based compensation increased to $16,384,668 in 2024, compared to $13,111,522 in 2023, representing a growth of about 24.5%[541] - Net cash provided by operating activities for 2024 was $250,916,075, up from $174,267,667 in 2023, indicating a growth of approximately 43.8%[542] - Cash distribution on Series A preferred units increased to $16,223,494 in 2024 from $4,551,746 in 2023[542] - The company reported a loss (gain) on derivative instruments of $12,211,660 in 2024, compared to a gain of $(26,371,058) in 2023[542] Capital Structure and Financing - The company has a $550.0 million secured revolving credit facility and repaid $56.5 million in outstanding borrowings during the year, impacting cash available for distribution[96] - The company has total borrowings of $239.2 million under its secured revolving credit facility as of December 31, 2024[532] - A 1% increase in interest rates would result in an additional $2.4 million in annual interest expense[532] - The company has entered into commodity derivative contracts to mitigate price volatility, with counterparties being unrelated third parties[525] Regulatory and Compliance Challenges - The company faces intense competition in the oil and natural gas industry, impacting its ability to acquire additional properties[133] - Regulatory and environmental compliance costs are increasing, which may adversely affect the company's operations and financial condition[138] - The EPA and Army Corps of Engineers issued a final rule in December 2022 that restored many elements of the 2015 WOTUS definition, which may lead to increased compliance costs and monitoring for facilities[143] - The Supreme Court's decision in Sackett v. EPA in May 2023 clarified federal jurisdiction under the Clean Water Act, potentially impacting compliance costs for the company[145] - The implementation of the final methane rule in May 2024 may increase compliance costs for oil and natural gas producers, affecting production from the company's mineral interests[148] - The Inflation Reduction Act, signed in August 2022, includes hundreds of billions of dollars in incentives for renewable energy and imposes a federal fee on GHG emissions, which could accelerate the transition away from fossil fuels[152] - The company faces potential financial challenges as certain financial institutions restrict investments in oil and natural gas activities due to climate change concerns[153] - Increased regulatory scrutiny on hydraulic fracturing could lead to additional permitting requirements and increased operational costs for the company[161] - The company is subject to extensive regulations from federal, state, and local authorities, which may increase operational costs and delay projects[162] - The availability and cost of transportation significantly affect the sales of oil and natural gas, with federal regulations governing interstate transportation impacting the company's operations[164] Workforce and Management - The company has approximately 28 employees, with women representing 36% of the workforce[181] - The company recognizes the importance of attracting and retaining qualified employees in a competitive marketplace[180] - The company has a management services agreement with Kimbell Operating for operational services, with compensation indirectly paid by the company[179] Capital Efficiency - The average unit cost per Boe decreased to $2.24 in 2024 from $2.76 in 2023, indicating improved cost efficiency[126] - The average estimated yearly decline rate for proved developed producing (PDP) reserves is 13.2% during the initial five years[89] - The company benefits from continued development of its properties without the need for additional capital investment, leveraging technological advances and third-party producer interest[99] - The company maintains a conservative capital structure, requiring a supermajority vote for certain actions, ensuring long-term financial flexibility[98]

Company Overview - Kimbell Royalty Partners offers a unique 101% annualized cash distribution yield[7] - Kimbell has completed over $20 billion in M&A transactions since its IPO in 2017, growing run-rate average daily production by ~8x and returning 66% of $1800/unit IPO price via quarterly cash distributions[15] - Kimbell's net royalty acre position is approximately 158,350 acres[17] Financial Highlights - Kimbell generated $688 million in oil, natural gas, and NGL revenues in Q4 2024[19] - Q4 2024 consolidated Adjusted EBITDA was $598 million[19] - Kimbell's Net Debt to TTM Consolidated Adjusted EBITDA is 08x as of 12/31/2024[17] Asset Base and Operations - Kimbell has interests in over 130,000 gross wells across over 17 million gross acres in the US[15] - Approximately 97% of all onshore rigs in the Lower 48 are in counties where Kimbell holds mineral interest positions[15] - Kimbell has identified 11,510 gross / 7771 net total upside locations on major properties alone as of December 31, 2024[48] Future Outlook - Kimbell estimates that approximately 100% of the distribution to be paid on March 25, 2025, is estimated to constitute non-taxable reductions to the tax basis of each distribution recipient's ownership interest in Kimbell[11] - The minerals industry presents a significant consolidation opportunity with approximately $742 billion in market size[17] - Kimbell estimates that only 65 net wells are needed per year to maintain production, reflecting over 14 years of drilling inventory including the major and minor locations[48]

Financial Data and Key Metrics Changes - Kimbell Royalty Partners reported oil, natural gas, and NGL revenues of $69.1 million for Q4 2024, excluding acquired production, with record run-rate production of 25,946 BOE per day [14][15] - Consolidated adjusted EBITDA for Q4 2024 was $59.8 million, excluding acquired production [15] - The company announced a cash distribution of $0.40 per common unit for Q4 2024, equating to 75% of cash available for distribution [16] Business Line Data and Key Metrics Changes - The company maintained a strong drilling activity with 91 rigs actively drilling on its acreage, representing approximately 16% market share of all land rigs in the continental U.S. [10][14] - The five-year annual average PDP decline rate is 14%, requiring only an estimated 6.5% net wells annually to maintain flat production [11] Market Data and Key Metrics Changes - Kimbell Royalty Partners has a conservative balance sheet with net debt to trailing twelve-month consolidated adjusted EBITDA of approximately 0.8 times [17] - The company had approximately $310.8 million in undrawn capacity under its secured revolving credit facility as of December 31, 2024 [17] Company Strategy and Development Direction - Kimbell aims to continue as a major consolidator in the U.S. oil and gas royalty sector, which is estimated to be over $700 billion in size [20] - The company is focused on larger acquisitions, targeting $100 million-plus deals, to avoid increasing leverage from smaller transactions [73][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for continued robust development in 2025, supported by the number of rigs actively drilling on their acreage, especially in the Permian Basin [19] - The new administration's support for increased domestic energy output is seen as beneficial for the company as a mineral owner [30] Other Important Information - Kimbell has grown production from 3,116 BOE per day to 25,946 BOE per day since its IPO eight years ago, an increase of 733% [20] - The company plans to redeem about half of its preferred shares in May 2025, while continuing to use 25% of cash flow to pay down debt [44][50] Q&A Session Summary Question: Are there any particular basins where you're seeing an abundance of opportunity to add acreage? - Management noted that while the Permian continues to see the most consolidation, opportunities are being explored across the U.S. without targeting a specific basin [25][26] Question: Has the new administration's regulatory changes affected opportunities? - Management indicated that the administration has been supportive of increased domestic energy output, which benefits the company [30] Question: Can you discuss the 2025 guidance and the quality of acquired assets? - Management stated that the guidance reflects flat growth, with a strong line of sight inventory and confidence in the quality of acquired assets [38][41] Question: What are the plans for redeeming preferred shares? - Management confirmed plans to redeem about half of the preferred shares in May and will consider financing options for future acquisitions [44][50] Question: How does the competitive landscape for M&A look? - Management emphasized a focus on high-quality properties regardless of commodity price movements, and noted that consolidation tends to be a net positive for mineral owners [62][67]

Financial Data and Key Metrics Changes - Kimbell Royalty Partners reported oil, natural gas, and NGL revenues of $69.1 million for Q4 2024, excluding acquired production, with record run-rate production of 25,946 BOE per day including acquired production [14][15] - Consolidated adjusted EBITDA for Q4 2024 was $59.8 million, excluding acquired production [15] - The company announced a cash distribution of $0.40 per common unit for Q4 2024, with approximately 100% expected to be a return of capital [16] Business Line Data and Key Metrics Changes - The company maintained a strong drilling activity with 91 rigs actively drilling on its acreage, representing a 16% market share of all land rigs drilling in the continental U.S. [10][14] - The five-year annual average PDP decline rate is 14%, requiring only an estimated 6.5% net wells annually to maintain flat production [11] Market Data and Key Metrics Changes - Kimbell Royalty Partners has a conservative balance sheet with net debt to trailing twelve-month consolidated adjusted EBITDA of approximately 0.8 times [17] - The company had approximately $310.8 million in undrawn capacity under its secured revolving credit facility as of December 31, 2024 [17] Company Strategy and Development Direction - Kimbell aims to continue as a major consolidator in the fragmented U.S. oil and gas royalty sector, which is estimated to be over $700 billion in size [20] - The company is focused on larger acquisitions, targeting $100 million-plus deals, while remaining agnostic to commodity price movements [73][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for continued robust development in 2025, supported by the number of rigs actively drilling on their acreage, especially in the Permian Basin [19] - The company believes it is well-positioned for continued growth and enhancing unitholder value in the future [12] Other Important Information - Kimbell completed a $230 million acquisition last month and introduced 2025 guidance with expected production at a new record guidance level [11][18] - The company plans to redeem about half of its preferred shares in May and will continue to use 25% of cash flow to pay down debt [44][50] Q&A Session Summary Question: Are there any particular basins where you're seeing an abundance of opportunity to add acreage? - Management noted that while the Permian continues to see the most consolidation, they are looking at opportunities across the U.S. without targeting a specific basin [25][26] Question: Has the new administration's regulatory changes affected opportunities? - Management indicated that the new administration has been supportive of increased domestic energy output, which benefits them as mineral owners [30] Question: Can you discuss the 2025 guidance and the quality of acquired assets? - Management stated that the guidance reflects flat growth for the year, with a strong line of sight inventory and confidence in the quality of acquired assets [38][41] Question: What are the plans for redeeming preferred shares? - Management confirmed plans to redeem about half of the preferred shares in May and will consider financing options for future acquisitions [44][50] Question: How does the competitive landscape for M&A look? - Management emphasized that they focus on high-quality properties at reasonable prices and do not plan to shift focus based on commodity price movements [62][63] Question: What is the opportunity set for future acquisitions? - Management indicated a focus on larger acquisitions, with a preference for $100 million-plus deals, as the mineral market continues to consolidate [75][78]

Core Viewpoint - Kimbell Royalty (KRP) reported a quarterly loss of $0.10 per share, missing the Zacks Consensus Estimate of $0.19, and showing a significant decline from earnings of $0.14 per share a year ago, resulting in an earnings surprise of -152.63% [1] Financial Performance - The company posted revenues of $66.72 million for the quarter ended December 2024, which was 16.93% below the Zacks Consensus Estimate and a decrease from $99.2 million in the same quarter last year [2] - Over the last four quarters, Kimbell Royalty has surpassed consensus EPS estimates only once [2] Stock Performance - Kimbell Royalty shares have declined approximately 3.8% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $0.23 for the coming quarter and $1.01 for the current fiscal year, alongside expected revenues of $86.41 million and $364.26 million respectively [7] - The estimate revisions trend for Kimbell Royalty is currently favorable, leading to a Zacks Rank 1 (Strong Buy), indicating expected outperformance in the near future [6] Industry Context - The Oil and Gas - Royalty Trust - United States industry is currently ranked in the top 1% of over 250 Zacks industries, suggesting a strong performance potential compared to lower-ranked industries [8]