Part I [Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) For the first quarter of 2025, the company reported a significant increase in net income to $25.9 million, up from $9.3 million in the prior-year period, driven by higher natural gas revenues and the absence of property impairment charges. Total assets grew to $1.33 billion, primarily due to the $230.4 million Boren Acquisition, which was funded through an equity offering and increased debt. Cash flow from operations decreased to $54.2 million from $69.0 million year-over-year Consolidated Balance Sheets Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $35,627,785 | $34,168,424 | | Total current assets | $99,380,622 | $85,267,081 | | Total oil and natural gas properties, net | $1,216,414,461 | $1,024,822,208 | | **Total assets** | **$1,325,867,709** | **$1,119,914,763** | | Total current liabilities | $16,522,371 | $12,745,863 | | Long-term debt | $298,996,274 | $239,159,776 | | **Total liabilities** | **$322,201,380** | **$256,420,228** | | **Total unitholders' equity** | **$687,269,543** | **$547,492,392** | Consolidated Statements of Operations Consolidated Statements of Operations Highlights (Unaudited) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Oil, natural gas and NGL revenues | $89,951,203 | $87,499,509 | | Total revenues | $84,208,766 | $82,233,944 | | Depreciation and depletion expense | $31,118,095 | $38,166,806 | | Impairment of oil and natural gas properties | $0 | $5,963,575 | | Operating income | $33,576,732 | $17,560,837 | | **Net income** | **$25,853,195** | **$9,336,939** | | **Net income attributable to common units** | **$17,862,084** | **$3,168,956** | | **Basic EPS** | **$0.20** | **$0.04** | | **Diluted EPS** | **$0.20** | **$0.04** | Consolidated Statements of Cash Flows Consolidated Cash Flow Highlights (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$54,152,677** | **$69,045,616** | | Net cash used in investing activities | ($222,949,985) | ($91,368) | | Net cash provided by (used in) financing activities | $170,256,669 | ($60,267,298) | | **Net increase in cash and cash equivalents** | **$1,459,361** | **$8,686,950** | - Investing activities in Q1 2025 were dominated by a **$222.6 million** purchase of oil and natural gas properties[21](index=21&type=chunk) - Financing activities in Q1 2025 included **$163.6 million** in net proceeds from an equity offering and net borrowings of **$59.8 million** on long-term debt[21](index=21&type=chunk) Notes to Consolidated Financial Statements - The Partnership's business model is to own and acquire mineral and royalty interests in oil and natural gas properties, entitling it to revenue from production without the obligation to fund drilling, completion, or operating expenses[23](index=23&type=chunk) Disaggregated Revenue (Q1 2025 vs Q1 2024) | Revenue Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Oil revenue | $51,934,492 | $61,627,873 | | Natural gas revenue | $25,637,994 | $14,554,573 | | NGL revenue | $12,378,717 | $11,317,063 | | **Total** | **$89,951,203** | **$87,499,509** | - On January 17, 2025, the Partnership completed the Boren Acquisition of mineral and royalty interests in the Midland Basin for approximately **$230.4 million**[40](index=40&type=chunk) - The Partnership did not record an impairment on oil and gas properties in Q1 2025, compared to a **$6.0 million** impairment in Q1 2024 which was attributed to a decline in the 12-month average commodity prices[53](index=53&type=chunk) - Subsequent to the quarter end, on May 1, 2025, the Partnership increased its credit facility's borrowing base to **$625.0 million** and on May 7, 2025, redeemed **50%** of its outstanding Series A preferred units for **$182.3 million**[100](index=100&type=chunk)[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 2.9% year-over-year increase in Q1 2025 oil, gas, and NGL revenues to significantly higher natural gas prices, which offset a 9.6% decrease in realized oil prices and an 8.1% decline in total production volumes. The company completed the $230.4 million Boren Acquisition and a $163.6 million equity offering. Adjusted EBITDA remained stable at $75.5 million, while cash available for distribution to common unitholders increased to $57.2 million. The company's liquidity is primarily sourced from operating cash flow and its revolving credit facility, which was expanded subsequent to the quarter Overview and Recent Developments - As of March 31, 2025, the Partnership owned interests in approximately **17.0 million gross acres** across **28 states**, with ownership in over **131,000 gross wells**[112](index=112&type=chunk)[113](index=113&type=chunk) - In January 2025, the company completed a **$163.6 million** equity offering to partially fund the Boren Acquisition, which added properties in the Midland Basin[116](index=116&type=chunk)[117](index=117&type=chunk) - A quarterly cash distribution of **$0.47 per common unit** was declared for Q1 2025[118](index=118&type=chunk) Results of Operations - Oil, natural gas, and NGL revenues increased by **$2.5 million** (**2.9%**) in Q1 2025 compared to Q1 2024, primarily due to a **97.4% increase** in the average realized price of natural gas, which offset lower production volumes and a **9.6% decrease** in realized oil prices[146](index=146&type=chunk)[148](index=148&type=chunk) Production Data (Q1 2025 vs Q1 2024) | Product | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Oil (Bbls) | 749,744 | 804,589 | | Natural gas (Mcf) | 6,618,953 | 7,413,069 | | NGLs (Bbls) | 442,187 | 458,247 | | **Combined (Boe)** | **2,295,090** | **2,498,348** | - Depreciation and depletion expense decreased by **$7.1 million** to **$31.1 million** in Q1 2025, mainly due to a lower depletable base following impairments recorded in 2024[153](index=153&type=chunk) - No impairment was recorded in Q1 2025, in contrast to a **$6.0 million** impairment charge in Q1 2024, which was caused by a decline in the 12-month average commodity prices[155](index=155&type=chunk) Non-GAAP Financial Measures Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net income | $25,853,195 | $9,336,939 | | **Consolidated Adjusted EBITDA** | **$75,533,036** | **$74,113,012** | | Adjusted EBITDA attributable to Kimbell Royalty Partners, LP | $65,387,425 | $57,933,362 | | **Cash available for distribution on common units** | **$57,159,352** | **$48,877,514** | Liquidity and Capital Resources - Primary sources of liquidity are cash from operations and financing activities. The company's credit facility borrowing base was increased to **$550.0 million** in December 2023[160](index=160&type=chunk) - The Board of Directors allocated **25%** of cash available for distribution from Q1 2025 (**$16.9 million**) to repay outstanding borrowings under the secured revolving credit facility[162](index=162&type=chunk) - Cash from operations decreased to **$54.2 million** in Q1 2025 from **$69.0 million** in Q1 2024, impacted by changes in commodity prices and production volumes[167](index=167&type=chunk) - As of March 31, 2025, the outstanding balance on the secured revolving credit facility was **$299.0 million**[68](index=68&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is commodity price volatility for oil, natural gas, and NGLs, which it mitigates through the use of fixed-price swap derivative contracts. It also faces interest rate risk on its variable-rate debt, with a hypothetical 1% rate increase projected to raise annual interest expense by approximately $3.0 million. Counterparty credit risk is managed by evaluating the financial standing of its derivative counterparties, who are also lenders under its credit facility - The main market risk exposure is the pricing of oil, natural gas, and NGLs. The company uses commodity derivative contracts, specifically fixed-price swaps, to reduce price volatility[182](index=182&type=chunk)[183](index=183&type=chunk) - The company is exposed to interest rate risk on its **$299.0 million** of outstanding debt. A **1%** increase in interest rates would result in an approximate **$3.0 million** increase in annual interest expense[188](index=188&type=chunk)[189](index=189&type=chunk) - Counterparty risk on derivative contracts is present. As of March 31, 2025, the company had **seven counterparties**, all of whom are also lenders under its secured revolving credit facility[186](index=186&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025. No material changes to internal control over financial reporting occurred during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[191](index=191&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[192](index=192&type=chunk) Part II – Other Information [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any legal, environmental, or other commitments or contingencies that would materially affect its financial condition, results of operations, or liquidity as of March 31, 2025 - Management is not aware of any legal proceedings that would have a material effect on the Partnership's financial condition or operations[98](index=98&type=chunk)[194](index=194&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section supplements the risk factors from the 2024 Form 10-K, specifically highlighting the potential adverse effects of changes in U.S. trade policy and tariffs. Such changes could lead to market volatility, increased costs, and limited access to capital, which may materially impact the business and its results - The report supplements previous risk disclosures, emphasizing that changes in U.S. trade policy, including tariffs and trade restrictions, could have a material adverse effect on the business and results of operations[196](index=196&type=chunk)[197](index=197&type=chunk) - Potential impacts from trade policy changes include financial market volatility, declining consumer confidence, inflation, and increased volatility in commodity prices, which could increase costs of capital and limit access to financing[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities) In February 2025, the company issued a total of 32,580 common units in two separate transactions to existing OpCo unitholders in exchange for an equal number of OpCo common units and Class B units. These issuances were exempt from registration under Section 4(a)(2) of the Securities Act. Additionally, 315,276 common units were withheld to satisfy tax obligations related to vested restricted units - In February 2025, the Partnership issued a combined **32,580 common units** to OpCo unitholders in exchange for OpCo common units and Class B units, in transactions exempt from registration under Section 4(a)(2) of the Securities Act[200](index=200&type=chunk)[201](index=201&type=chunk) - During Q1 2025, **315,276 common units** were withheld to satisfy tax-withholding obligations related to the vesting of restricted units[202](index=202&type=chunk)

Financial Data and Key Metrics Changes - Kimbell Royalty Partners reported record revenues for oil, natural gas, and NGL totaling $90 million for Q1 2025, marking a new record for the company [10] - Consolidated adjusted EBITDA reached $75.5 million, also a new record, reflecting strong operational performance [10] - The company declared a cash distribution of $0.47 per common unit, an increase of 17.5% from Q4 2024, with approximately 70% of this distribution expected to be considered a return of capital [7][11] Business Line Data and Key Metrics Changes - The company achieved a first quarter run rate production of 25,841 BOE per day, including contributions from acquired production [10] - General and administrative expenses for Q1 were $9.6 million, with cash G&A expenses at $2.52 per BOE [10] Market Data and Key Metrics Changes - Kimbell Royalty Partners maintained a market share of approximately 16% of all rigs drilling in the Lower 48 states, with 90 rigs actively drilling on its acreage [6][10] - The company noted strong permitting activity, including the permitting of 17 additional wells in Martin County, Texas, demonstrating the strength of its diversified asset portfolio [6] Company Strategy and Development Direction - The company aims to continue its role as a major consolidator in the U.S. oil and natural gas royalty sector, which is estimated to be over $700 billion in size [15] - Kimbell Royalty Partners plans to maintain a conservative balance sheet with a target net debt to EBITDA ratio of approximately 1.5 times, while continuing to pursue M&A opportunities [26][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving its goals for 2025 despite current economic volatility and uncertainty impacting commodity prices [7][14] - The company highlighted that its diversified portfolio and low PDP decline rate position it well to outperform many competitors in the upstream space [27] Other Important Information - The company increased its borrowing base and elected commitments on its credit facility from $550 million to $625 million as of May 1, 2025 [5][12] - Kimbell Royalty Partners redeemed 50% of its Series A cumulative convertible preferred units on May 7, 2025, simplifying its capital structure and reducing its cost of capital [5][13] Q&A Session Summary Question: Interest in M&A activity - Management acknowledged ongoing interest in M&A opportunities, particularly in the natural gas sector, despite challenges in transacting due to high valuations [20][22] Question: Target debt levels and leverage management - The company aims to maintain leverage at approximately 1.5 times EBITDA while continuing to pay down debt and redeem preferred units periodically [26][51] Question: Trends in production volumes - Management reaffirmed guidance for 2025, indicating no current evidence of a slowdown in drilling activity, with strong lease bonus payments expected [44][68] Question: Tax structure and distribution runway - The company has a considerable tax shield, allowing for a significant portion of distributions to be classified as return of capital, with no near-term end to this advantage anticipated [45][46] Question: NGL and natural gas realizations - Management noted stronger than expected realizations for NGL and natural gas, attributing improvements across the entire portfolio [62] Question: Update on net DUCs - The company reported 4.67 net DUCs at the end of Q1, with no significant trends indicating a slowdown in activity [65][67]

Financial Data and Key Metrics Changes - The company reported record revenues for oil, natural gas, and NGL totaling $90 million for Q1 2025, which includes contributions from acquired production [10] - Consolidated adjusted EBITDA reached a new record of $75.5 million for the quarter [10] - The cash distribution for Q1 2025 was declared at $0.47 per common unit, reflecting a 17.5% increase from Q4 2024 [7][11] Business Line Data and Key Metrics Changes - The company achieved a first quarter run rate production of 25,841 BOE per day, including contributions from acquired production [10] - General and administrative expenses for Q1 were reported at $9.6 million, with cash G&A expenses at $2.52 per BOE [10] Market Data and Key Metrics Changes - The company maintained a market share of approximately 16% of all rigs drilling in the Lower 48 states, with 90 rigs actively drilling on its acreage [5][10] - The company noted strong permitting activity, including the recent permitting of 17 additional wells in Martin County, Texas [5] Company Strategy and Development Direction - The company aims to continue its role as a major consolidator in the U.S. oil and natural gas royalty sector, which is estimated to be over $700 billion in size [14] - The company plans to maintain a conservative balance sheet and leverage ratio of approximately 1.5 times EBITDA while pursuing M&A opportunities [24][50] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals despite broader economic volatility and its impact on commodity prices [7][14] - The company highlighted a strong production profile and ongoing acquisition activity as key factors for future growth [14][29] Other Important Information - The company increased its borrowing base from $550 million to $625 million on May 1, 2025, and redeemed 50% of the Series A cumulative convertible preferred units on May 7, 2025 [4][12] Q&A Session Summary Question: Interest in M&A activity - Management acknowledged ongoing interest in M&A opportunities but noted challenges in transacting on natural gas deals due to competitive pricing [20][21] Question: Debt management and targets - The company aims to maintain a leverage ratio of approximately 1.5 times and plans to continue paying down debt while managing its capital structure [24][50] Question: Natural gas hedging strategy - Management stated that they are comfortable with a 20% hedging level, which they believe protects against price volatility while maintaining flexibility [34][36] Question: Production trends and guidance - Management reaffirmed guidance for 2025, indicating no current evidence of a slowdown in drilling activity [41][43] Question: Tax structure and distribution runway - The company has a considerable tax shield, allowing for a significant portion of distributions to be classified as return of capital, enhancing after-tax returns for unitholders [44][45] Question: Long-term capital structure and preferred units - Management plans to continue paying down debt and redeeming preferred units periodically while maintaining a conservative leverage ratio [50][52]

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]