Production and Operations - As of March 31, 2022, the company owned mineral and royalty interests in approximately 11.4 million gross acres and overriding royalty interests in approximately 4.7 million gross acres, with over 99% of the acreage leased to working interest owners[125] - The company has a total average daily production of 149,589 Boe/d across various basins, with the Permian Basin contributing 23,560 Boe/d from 46,933 wells[126] - The company reported a total of 705 drilled but uncompleted wells (DUCs) and 683 permitted locations, indicating potential future production growth[127] - Approximately 62% of the company's mineral and royalty interests are located in the Permian Basin, Mid-Continent, and Bakken/Williston Basin, highlighting a strategic focus on key oil-producing regions[125] - The company operates in 28 states and has ownership in over 122,000 gross wells, demonstrating a broad operational footprint across the continental United States[125] Financial Performance - Net income for the three months ended March 31, 2022, was $8,407,244, compared to $537,194 for the same period in 2021, indicating a significant increase[154] - Adjusted EBITDA for the three months ended March 31, 2022, was $43,929,146, compared to $25,996,803 for the same period in 2021, reflecting a 69.0% increase[155] - Cash available for distribution on common units for the three months ended March 31, 2022, was $36,421,007, compared to $14,716,397 for the same period in 2021, showing a 147.5% increase[155] - For Q1 2022, the company reported net cash provided by operating activities of $36.0 million, an increase of 132% from $15.5 million in Q1 2021[188] - Cash flows used in investing activities for Q1 2022 were $237.3 million, significantly higher than $0.8 million in Q1 2021, primarily due to $236.9 million in investments held in marketable securities[189] - Cash flows provided by financing activities were $207.8 million in Q1 2022, compared to cash outflows of $16.3 million in Q1 2021, driven by $227.6 million from the initial public offering of TGR[190] Commodity Prices and Market Conditions - The average oil price for the three months ended March 31, 2022, was $95.18 per Bbl, compared to $58.09 per Bbl in the same period of 2021, representing a 63.8% increase[143] - The average natural gas price for the three months ended March 31, 2022, was $4.67 per MMBtu, compared to $3.50 per MMBtu in the same period of 2021, representing a 33.4% increase[143] - The ongoing impacts of COVID-19 and geopolitical conflicts, such as the Russia/Ukraine conflict, continue to create uncertainty in the oil and natural gas markets[139] - Commodity prices for oil, natural gas, and NGL production have been volatile, with expectations for continued volatility due to COVID-19 and supply-demand imbalances[214] Derivative Instruments and Risk Management - The company has entered into commodity derivative agreements extending through March 2024 to stabilize prices for a portion of its oil and natural gas production[148] - The company utilizes commodity derivative contracts to mitigate exposure to price volatility in oil and natural gas[214] - Changes in fair values of derivative contracts will significantly affect current period earnings, as they are recognized as gains and losses[217] - As of March 31, 2022, the company had four counterparties to its derivative contracts, which are also lenders under its secured revolving credit facility[220] Distributions and Shareholder Returns - The company paid a total quarterly distribution of $8,211 to Class B unitholders for the quarter ended March 31, 2022, reflecting a cash distribution of 2.0% per quarter on their respective Class B Contribution[135] - The quarterly cash distribution declared by the Board of Directors was $0.47 per common unit for the quarter ended March 31, 2022[136] - The company expects that substantially all of its Q1 2022 distribution will not constitute taxable dividend income, resulting in a non-taxable reduction to the tax basis of unitholders[199] Expenses and Liabilities - General and administrative expenses were $7.3 million, an increase of $0.5 million from $6.8 million in the prior year, influenced by expenses incurred by TGR[177] - Interest expense increased to $2.9 million for the three months ended March 31, 2022, compared to $2.1 million in the same period of 2021, primarily due to debt incurred for the redemption of Series A preferred units[178] - The company does not currently maintain a material reserve of cash for quarterly distribution stability or growth, nor does it intend to incur debt for distributions[182] - As of March 31, 2022, total borrowings under the secured revolving credit facility amounted to $226.5 million, with a potential annual interest expense increase of approximately $2.3 million for a 1% interest rate rise[222] Strategic Plans and Future Outlook - The company aims to provide increasing cash distributions to unitholders through acquisitions and organic growth from properties in which it holds interests[124] - The company expects to continue pursuing acquisitions of mineral and royalty interests, which may involve significant financial impacts on its operations[160] - The company plans to finance acquisitions of mineral and royalty interests largely through external sources, including borrowings and equity issuance[183] - The company entered into an interest rate swap with Citibank, fixing the interest rate on $150.0 million of the notional balance at approximately 3.9% until January 29, 2024, covering about 66% of the outstanding balance[223]

Table of Contents f WTI UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38005 Kimbell Royalty Partners, LP (Exact name of registrant as specified in its charter) Delaware (State or other jurisd ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38005 Kimbell Royalty Partners, LP (Exact name of registrant as specified in its charter) Delaware (State or other j ...

Financial Data and Key Metrics Changes - Second quarter total revenues were $25.7 million, with net income of approximately $3.7 million and net income attributable to common units of approximately $1.5 million, or $0.04 per common unit [15][20] - Consolidated adjusted EBITDA reached a new record of $28.1 million, an increase of 8% compared to the prior quarter [20] - Cash available for distribution resulted in a 15% increase in quarterly distribution to $0.31 per common unitholder, reflecting a 75% payout of cash available for distribution [6][20] Business Line Data and Key Metrics Changes - Average daily production for Q2 was 14,393 BOE per day, with a run rate production of 14,011 BOE per day, up 2% sequentially from Q1 [6][19] - The production composition was approximately 61% from natural gas and 39% from liquids, with 26% from oil and 13% from NGLs [19] - The company had 50 active rigs at the end of Q2, up from 49 in Q1, indicating increased operational activity [19] Market Data and Key Metrics Changes - Oil prices are well above pre-COVID levels, while natural gas prices are at multi-year highs, driven by increased power demand and surging LNG exports [8] - The U.S. land rig count is 39% below year-end 2019 levels, indicating a disciplined approach to drilling despite higher commodity prices [7][8] Company Strategy and Development Direction - The company aims to remain a major consolidator in the fragmented U.S. oil and gas royalty sector, focusing on assembling a high-quality, low PDP decline, and diversified royalty portfolio [12] - Kimbell plans to continue its long-term focus on sustainability and growth, with a strong track record of organic growth and strategic acquisitions [11][12] - The company is optimistic about the energy sector's recovery and the potential for industry consolidation, which could benefit Kimbell specifically [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, citing improved fundamentals across the U.S. energy sector and a favorable outlook for production due to high natural gas prices [23][34] - The company does not expect to pay a material amount of federal income taxes from 2021 to 2027, providing a competitive advantage in generating superior after-tax returns [9][10] - Management noted that the current market conditions have made it challenging to pursue large-scale mineral acquisitions, but they remain open to opportunities [27][28] Other Important Information - The company successfully redeemed 55% of the outstanding Series A cumulative convertible preferred units for $36.1 million, simplifying its capital structure [21] - Kimbell Tiger Acquisition Corporation, a newly formed SPAC sponsored by Kimbell, will search for a target in the energy and natural resources industry [13] Q&A Session Summary Question: Update on mineral acquisition front - Management noted that while they have historically been active in acquisitions, the current market has made it difficult to find significant opportunities due to undervaluation of public mineral companies [27][28] Question: Outlook for the first half of next year - Management expressed a positive outlook, particularly due to high natural gas prices, which are expected to drive increased activity [34] Question: Rig count market share trends - Management indicated that the slight dip in market share is likely temporary, with expectations of an increase in rig count based on recent trends [38][39] Question: Lease bonuses and new activity - Management highlighted increased lease bonuses in Q2, particularly in Martin County, Texas, indicating a positive sign for future activity [41]

K I M B E L L R O Y A L T Y P A R T N E R S Fall 2021 Investor Presentation Disclaimer This presentation includes forward-looking statements relating to the business, financial performance, results, plans, objectives and expectations of Kimbell Royalty Partners, LP ("KRP" or "Kimbell"). Statements that do not describe historical or current facts, including statements about beliefs and expectations and statements about the federal income tax treatment of future earnings and distributions, future production, ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION 777 Taylor Street, Suite 810 Fort Worth, Texas 76102 (817) 945-9700 Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38005 Kimbell Royalty Partners, LP (Exact name of reg ...

CONFIDENTIAL | NOT FOR DISTRIBUTION KIM B E L L R O Y A L T Y P A R T N E R S SUMMER 2021 INVESTOR PRESENTATION Disclaimer This presentation includes forward-looking statements relating to the business, financial performance, results, plans, objectives and expectations of Kimbell Royalty Partners, LP ("KRP" or "Kimbell"). Statements that do not describe historical or current facts, including statements about beliefs and expectations and statements about the federal income tax treatment of future earnings an ...

Financial Data and Key Metrics Changes - The company reported a cash distribution of $0.27, which is an increase of 42% compared to the fourth quarter of 2020 [6][22] - Realized oil prices increased by 37%, natural gas prices by 62%, and NGL prices by 63% [7][22] - First quarter consolidated adjusted EBITDA was $26 million, reflecting a 46% increase compared to the prior quarter [28] - Net income for the first quarter was approximately $537,000, with a net loss attributable to common units of approximately $704,000 or $0.02 per common unit [29] Business Line Data and Key Metrics Changes - The first quarter average daily production was 13,721 BOE per day, with approximately 61% from natural gas and 39% from liquids [25] - The company had 761 gross and 2.2 net drilled but uncompleted wells, as well as 669 gross or 2.54 net permits on its acreage [27] Market Data and Key Metrics Changes - The rig count increased by 26% compared to the end of the fourth quarter of 2020, with 49 active rigs at the end of Q1 2021 [26] - The company held approximately 12% market share of all rigs drilling in the lower 48 states at that time [27] Company Strategy and Development Direction - The company aims to be a major consolidator in the fragmented U.S. oil and gas royalty sector, focusing on assembling a high-quality, low PDP decline, and diversified royalty portfolio [18] - The company has identified 10,160 gross and 68.1 net undrilled upside locations, representing an estimated 15 years of future drilling inventory [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of the industry due to rapidly improving fundamentals across the U.S. energy sector [19] - The company remains focused on sustainability and growth, with a vision to deliver compelling value to unitholders for years to come [18][19] Other Important Information - The company has paid down approximately $25 million in debt since May 2020 by allocating a portion of its cash flow to debt repayment [22] - The company’s liquidity position was strong, with $96.5 million of undrawn capacity under its secured credit facility as of the end of the first quarter [31] Q&A Session Summary Question: Comments on hedging strategy and exposure to commodity prices - Management explained that the decrease in hedges is due to an increase in enterprise value, allowing for more exposure to commodity prices [38][39] Question: Discussion on inventory analysis and upside potential - Management confirmed that the inventory analysis was conservative and highlighted additional upside potential in various formations [41][42] Question: Insights on asset base and third-party assessment - Management indicated that the third-party assessment generally aligned with their views, with minor adjustments made based on feedback [52][54] Question: Consideration of share buybacks or divestitures - Management stated that they prefer to focus on consolidating assets rather than divesting, and emphasized the importance of paying down debt over buying back stock [62][65] Question: Timeline for achieving leverage targets - Management mentioned plans to pay down preferred shares next quarter and continue reducing debt to achieve a leverage target below 2x [71][73]

PART I [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Kimbell Royalty Partners' unaudited Q1 2021 financial statements reflect a net income of $0.54 million, a significant improvement from a $59.78 million net loss in Q1 2020 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets were $564.0 million, with liabilities increasing to $195.7 million and equity decreasing to $325.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $8,124 | $9,805 | | Total current assets | $34,450 | $28,332 | | Total oil and natural gas properties, net | $513,802 | $520,993 | | **Total assets** | **$563,980** | **$564,634** | | **Liabilities & Equity** | | | | Total current liabilities | $15,827 | $8,767 | | Long-term debt | $168,534 | $171,550 | | **Total liabilities** | **$195,699** | **$186,333** | | **Total equity** | **$324,999** | **$335,635** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2021, the Partnership reported net income of $0.54 million, a significant improvement from a $59.78 million net loss in Q1 2020, primarily due to the absence of a $70.9 million impairment charge Statement of Operations Highlights (in thousands) | Account | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Oil, natural gas and NGL revenues | $36,369 | $25,585 | | (Loss) gain on commodity derivative instruments, net | $(14,136) | $10,133 | | **Total revenues** | **$22,419** | **$35,947** | | Impairment of oil and natural gas properties | $0 | $70,926 | | **Total costs and expenses** | **$20,435** | **$94,474** | | **Operating income (loss)** | **$1,984** | **$(58,527)** | | **Net income (loss)** | **$537** | **$(59,784)** | | Net loss attributable to common units | $(704) | $(39,301) | | **Net loss per common unit (Basic & Diluted)** | **$(0.02)** | **$(1.29)** | [Condensed Consolidated Statements of Changes in Unitholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Unitholders%27%20Equity) Total unitholders' equity decreased to $325.0 million by March 31, 2021, primarily due to $11.3 million in distributions to unitholders and preferred units - Total equity decreased by **$10.6 million** during Q1 2021, primarily due to distributions to unitholders and preferred unitholders[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $15.5 million for Q1 2021, decreasing from $20.8 million in Q1 2020, leading to a $1.7 million overall decrease in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $15,481 | $20,788 | | Net cash used in investing activities | $(812) | $(11,177) | | Net cash used in financing activities | $(16,350) | $(9,334) | | **Net (decrease) increase in cash** | **$(1,681)** | **$277** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the Partnership's business, accounting policies, derivative activities, and debt structure, highlighting no impairment in Q1 2021 and a new interest rate swap - The Partnership's business is owning and acquiring **mineral and royalty interests**, entitling it to revenue from oil and gas production without funding drilling or operating costs[19](index=19&type=chunk) - In January 2021, the Partnership entered into an **interest rate swap**, fixing the interest rate at approximately **3.9%** on **$150.0 million** of its secured revolving credit facility until January 2024[33](index=33&type=chunk) - **No impairment** was recorded on oil and natural gas properties for the three months ended March 31, 2021, in contrast to a **$70.9 million impairment** for the same period in 2020[44](index=44&type=chunk) - Subsequent to the quarter end, the Partnership drew down **$4.0 million** on its credit facility and declared a Q1 2021 cash distribution of **$0.27 per common unit**[81](index=81&type=chunk)[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial results, highlighting a 42% increase in oil, gas, and NGL revenues due to higher commodity prices, offset by derivative losses, and the absence of a prior-year impairment charge [Overview and Business Environment](index=27&type=section&id=Overview%20and%20Business%20Environment) Kimbell owns mineral and royalty interests in over 97,000 wells, with Q1 2021 showing improved commodity prices and a rebound in rig count despite a year-over-year decrease - As of March 31, 2021, Kimbell owned interests in approximately **13.6 million gross acres** and over **97,000 gross wells**, with the **Permian Basin** being a key area[91](index=91&type=chunk)[94](index=94&type=chunk) Average Commodity Prices (EIA) | Commodity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Oil ($/Bbl) | $58.09 | $45.54 | | Natural gas ($/MMBtu) | $3.50 | $1.90 | - The Baker Hughes active land rig count was **416** at March 31, 2021, a **41.4% decrease** from 710 rigs at March 31, 2020, but a **25.3% increase** from 332 rigs at December 31, 2020[116](index=116&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Q1 2021 results show a **42% increase** in oil, natural gas, and NGL revenues due to higher commodity prices, leading to operating income compared to a prior-year loss burdened by a **$70.9 million impairment** - Oil, natural gas, and NGL revenues increased to **$36.4 million** in Q1 2021 from **$25.6 million** in Q1 2020, driven by a **20.5% increase** in average oil prices and a **71.5% increase** in average natural gas prices received[140](index=140&type=chunk)[142](index=142&type=chunk) - A **net loss on commodity derivatives of $14.1 million** was recorded in Q1 2021, compared to a **$10.1 million gain** in Q1 2020, due to rising strip prices[138](index=138&type=chunk)[144](index=144&type=chunk) - **No impairment expense** was recorded in Q1 2021, compared to a **$70.9 million impairment** in Q1 2020, which was caused by a significant decline in commodity prices and drilling uncertainty at that time[149](index=149&type=chunk) - Depreciation and depletion expense decreased to **$7.9 million** in Q1 2021 from **$13.3 million** in Q1 2020, as the depletion rate per barrel fell from **$10.86 to $6.22** due to significant impairments recorded in 2020[146](index=146&type=chunk)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on cash from operations and its credit facility, with $5.6 million allocated to debt repayment in Q1 2021, leaving $96.5 million in available capacity - The Board of Directors approved allocating **25%** of cash available for distribution for Q1 2021 to repay **$5.6 million** in outstanding borrowings under the secured revolving credit facility[157](index=157&type=chunk) Credit Facility Status (as of March 31, 2021) | Item | Amount (in millions) | | :--- | :--- | | Borrowing Base | $265.0 | | Outstanding Borrowings | $168.5 | | Available Capacity | $96.5 | - Net cash provided by operating activities **decreased by $5.3 million to $15.5 million** in Q1 2021 compared to Q1 2020[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity price volatility with fixed-price swap derivatives and mitigates interest rate risk on its variable-rate debt by fixing **$150.0 million** at **3.9%** through an interest rate swap - The company uses **commodity derivative contracts (fixed price swaps)** to reduce exposure to oil and natural gas price volatility[174](index=174&type=chunk)[175](index=175&type=chunk) - As of March 31, 2021, the company had **two counterparties** for its derivative contracts, both of which are also lenders under its credit facility[180](index=180&type=chunk) - To manage interest rate risk, the company entered an **interest rate swap** fixing the rate on **$150.0 million** of its debt at **~3.9%** until January 2024, covering approximately **89%** of its outstanding balance at the time[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2021, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[184](index=184&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the quarter ended March 31, 2021[185](index=185&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2021, the company is not aware of any legal, environmental, or other commitments that would materially affect its financial condition or operations - As of March 31, 2021, management is **not aware of any legal proceedings** that would materially affect the Partnership[79](index=79&type=chunk)[188](index=188&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - There have been **no material changes** to the risk factors disclosed in the 2020 Form 10-K[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company did not have a common unit repurchase program, but 85,360 common units were withheld to satisfy tax obligations from restricted unit vesting - In March 2021, **85,360 common units** were withheld to satisfy tax-withholding obligations from the vesting of restricted units[191](index=191&type=chunk) - The company **did not have a common unit repurchase program** in place during the quarter[191](index=191&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and CEO/CFO certifications [Signatures](index=57&type=section&id=Signatures) The report is signed on May 6, 2021, by Robert D. Ravnaas, CEO, and R. Davis Ravnaas, President and CFO, for Kimbell Royalty Partners, LP

PART I [Item 1. Business](index=16&type=section&id=Item%201.%20Business) Kimbell Royalty Partners, LP owns and acquires mineral and royalty interests in oil and natural gas properties across the United States, generating revenue without bearing operational costs - The company's primary business involves owning mineral and royalty interests, entitling it to revenue from oil and gas production without funding operational costs like drilling, completion, or abandonment[64](index=64&type=chunk) Asset and Reserve Overview (as of Dec 31, 2020) | Metric | Value | | :--- | :--- | | Gross Mineral Interest Acres | ~9.1 million | | Gross Overriding Royalty Acres | ~4.6 million | | Gross Wells | >97,000 | | Proved Reserves (PDP) | 42,418 MBoe | | Liquids Percentage of Reserves | 43.3% | | Average 5-Year PDP Decline Rate | 12.5% | Revenue Breakdown by Commodity (FY 2020) | Commodity | Percentage of Revenue | | :--- | :--- | | Oil Sales | 56% | | Natural Gas Sales | 34% | | NGL Sales | 9% | | Other Sales | 1% | - The company's business strategy focuses on acquiring additional mineral and royalty interests, benefiting from organic development by operators, and maintaining a conservative capital structure[83](index=83&type=chunk)[84](index=84&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risks to its business, with the most significant being the volatility of oil and gas prices, dependence on unaffiliated operators, and structural partnership limitations - The COVID-19 pandemic and its impact on oil and gas prices are cited as a primary risk, having already led to a significant impairment charge of **$251.6 million in 2020** and potentially affecting operator activity, borrowing base, and future distributions[210](index=210&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - A core operational risk is the complete dependence on unaffiliated operators for all exploration, development, and production activities, as their decisions directly affect the company's revenue streams[317](index=317&type=chunk)[318](index=318&type=chunk) - Structural risks include potential conflicts of interest with the General Partner and its affiliates, who may favor their own interests, and the partnership agreement replacing standard fiduciary duties with contractual ones, limiting remedies for unitholders[234](index=234&type=chunk)[249](index=249&type=chunk) - The company's ability to grow and pay distributions is limited by its policy of distributing all available cash, which necessitates reliance on external financing for acquisitions, and failure to make accretive acquisitions would limit growth and could lead to reduced distributions over time as reserves deplete[229](index=229&type=chunk)[333](index=333&type=chunk)[341](index=341&type=chunk) [Item 1B. Unresolved Staff Comments](index=133&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[408](index=408&type=chunk) [Item 2. Properties](index=133&type=section&id=Item%202.%20Properties) Information regarding the company's properties is incorporated by reference from "Item 1. Business" of this report - The information required for this item is contained in "Item 1. Business"[409](index=409&type=chunk) [Item 3. Legal Proceedings](index=133&type=section&id=Item%203.%20Legal%20Proceedings) The company states that while it may be involved in various legal claims in the normal course of business, it does not believe the resolution of these matters will have a material adverse impact on its financial condition or results of operations - The company is not involved in any legal proceedings that are expected to have a material adverse impact[410](index=410&type=chunk) [Item 4. Mine Safety Disclosures](index=133&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[411](index=411&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities](index=134&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Unitholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common units trade on the NYSE under the symbol "KRP", with a cash distribution policy recently adjusted to repay debt, and details on unregistered equity issuances - The company's common units are listed on the NYSE under the symbol **"KRP"** As of February 19, 2021, there were **38,918,689 common units** and **20,779,781 Class B units** outstanding[414](index=414&type=chunk) - The cash distribution policy requires distributing all available cash each quarter, but due to the economic impact of COVID-19, the Board allocated **25% of cash available for distribution for Q4 2020 ($3.9 million)** to repay outstanding debt and intends to continue this practice in future quarters[415](index=415&type=chunk)[416](index=416&type=chunk) - In connection with the Springbok Acquisition on April 17, 2020, the company issued **2,224,358 common units** and **2,497,134 Class B units** in an unregistered sale[432](index=432&type=chunk) [Item 6. Selected Financial Data](index=140&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data for the past five years highlights a net loss of $256.1 million in 2020 due to a significant impairment charge and lower revenues Selected Statement of Operations Data (in millions) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Total Revenues | $90.5 | $108.2 | $70.3 | | Impairment of oil and natural gas properties | $251.6 | $169.2 | $67.3 | | Operating (Loss) Income | ($250.7) | ($151.6) | ($48.2) | | Net (Loss) Income | ($256.1) | ($158.2) | ($52.3) | | Adjusted EBITDA (Non-GAAP) | $65.9 | $80.7 | $44.2 | Selected Balance Sheet Data (in millions, as of year-end) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | $564.6 | $748.6 | | Long-term Debt | $171.6 | $100.1 | | Total Equity | $335.6 | $565.0 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=146&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant negative impact of the COVID-19 pandemic and commodity price volatility on 2020 results, leading to a major impairment charge and decreased operating cash flow - The business environment in 2020 was dominated by the COVID-19 pandemic and OPEC actions, causing a significant reduction in global oil demand and price volatility, which led to a **57% decrease in active land rigs** in the U.S. and a **52% decrease on the company's acreage** from year-end 2019 to 2020[463](index=463&type=chunk)[477](index=477&type=chunk)[480](index=480&type=chunk) Year-over-Year Results of Operations Comparison (2020 vs. 2019) | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Oil, Gas & NGL Revenues | $92.6M | $107.5M | ($14.9M) | | Production Volumes (Boe) | 5,072,635 | 4,515,867 | +556,768 | | Impairment Expense | $251.6M | $169.2M | +$82.4M | | Net Loss | ($256.1M) | ($158.2M) | ($97.9M) | | Operating Cash Flow | $62.2M | $80.7M | ($18.5M) | - The company recorded a **$251.6 million impairment** in 2020 due to the decline in the 12-month average SEC prices for oil (down **28.9%**) and natural gas (down **22.9%**), as well as a determination that its Proved Undeveloped (PUD) reserves no longer had reasonable certainty of development[491](index=491&type=chunk)[525](index=525&type=chunk)[873](index=873&type=chunk) - As of December 31, 2020, the company had **$171.6 million** in outstanding borrowings under its secured revolving credit facility, with **$93.4 million** of available capacity, and the borrowing base was **$265.0 million**[558](index=558&type=chunk) - Subsequent to year-end, on January 27, 2021, the company entered into an interest rate swap, fixing the interest rate on **$150.0 million** of notional debt at approximately **3.9%** for three years[460](index=460&type=chunk)[586](index=586&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=177&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are commodity price volatility and interest rate risk, partially mitigated by derivative contracts and an interest rate swap - The main market risk is commodity price volatility, which the company mitigates using derivative contracts (fixed price swaps), though these are not designated as accounting hedges, meaning fair value changes impact current earnings[578](index=578&type=chunk)[581](index=581&type=chunk) - The company has interest rate risk on its **$171.6 million** of debt, where a **1% increase in rates** would increase annual interest expense by approximately **$1.7 million**, a risk partially addressed post-year-end with an interest rate swap fixing the rate on **$150 million** of the debt[585](index=585&type=chunk)[586](index=586&type=chunk) - The company has customer concentration risk, with its top purchaser accounting for **7.1%** of oil, natural gas, and NGL revenues in 2020[583](index=583&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=179&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section indicates that the company's consolidated financial statements are included in the report, beginning on page F-1 - The Partnership's consolidated financial statements are included in the Annual Report beginning on page F-1[588](index=588&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=179&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[589](index=589&type=chunk) [Item 9A. Controls and Procedures](index=179&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective as of December 31, 2020 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[590](index=590&type=chunk) - Based on the COSO framework, management concluded that internal controls over financial reporting were effective as of December 31, 2020[596](index=596&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2020 that materially affected, or are reasonably likely to materially affect, internal controls[598](index=598&type=chunk) [Item 9B. Other Information](index=181&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[599](index=599&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=181&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the General Partner's directors and executive officers, including committee structures and corporate governance exemptions - The executive officers are Robert D. Ravnaas (CEO), R. Davis Ravnaas (President & CFO), and Matthew S. Daly (COO)[602](index=602&type=chunk) - The Board of Directors has an Audit Committee and a Conflicts and Compensation Committee, both composed of three independent directors: William H. Adams III, Craig Stone, and Erik B. Daugbjerg[619](index=619&type=chunk)[622](index=622&type=chunk) - The company has adopted a Code of Business Conduct and Ethics, which is available on its website[626](index=626&type=chunk) [Item 11. Executive Compensation](index=189&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation, determined by the Conflicts and Compensation Committee, includes base salary, long-term incentive restricted units, and short-term cash bonuses - The company does not directly employ its executive officers; they are compensated by Kimbell Operating under a management services agreement, with costs indirectly paid by the Partnership[629](index=629&type=chunk)[631](index=631&type=chunk) 2020 Named Executive Officer Compensation Summary | Name | Position | Salary | Long-Term Incentive | Non-Equity Incentive | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Robert D. Ravnaas | CEO | $575,000 | $2,186,663 | $790,625 | $3,798,178 | | R. Davis Ravnaas | President & CFO | $550,000 | $1,692,900 | $756,250 | $3,184,031 | | Matthew S. Daly | COO | $450,000 | $1,199,138 | $618,750 | $2,392,967 | - The Long-Term Incentive Plan (LTIP) authorizes up to **4,541,600 common units** for awards like restricted units, which generally vest in one-third installments over three years[656](index=656&type=chunk)[662](index=662&type=chunk)[648](index=648&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters](index=204&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Unitholder%20Matters) This section details the beneficial ownership of the company's units, including significant holders and the collective ownership of directors and executive officers - As of February 19, 2021, all directors and executive officers as a group beneficially owned approximately **8.4 million common units** (assuming full exchange of Class B units), representing **14.1%** of the total[687](index=687&type=chunk) - Major beneficial owners (over **5%**) include Kimbell Art Foundation (**8.6%**), PEP III Holdings, LLC (**9.0%**), PEP II Holdings, LLC (**5.6%**), and EIGF Aggregator III LLC (**6.5%**), assuming full conversion of Class B units[687](index=687&type=chunk) - The General Partner is wholly owned by Kimbell GP Holdings, LLC, which is controlled by affiliates of founders Robert D. Ravnaas, Brett G. Taylor, Mitch S. Wynne, and Ben J. Fortson[697](index=697&type=chunk)[698](index=698&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=211&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) The company has numerous relationships and transactions with its General Partner, Sponsors, and their affiliates, including participation rights and management service agreements - The company has a right to participate in up to **50%** of certain acquisitions for which founders Messrs. R. Ravnaas, Taylor, and Wynne provide diligence or other business services[726](index=726&type=chunk) - The company has a management services agreement with Kimbell Operating, which in turn has agreements with entities controlled by Sponsors (Messrs. Fortson and Wynne) to provide management, administrative, and acquisition services[734](index=734&type=chunk)[735](index=735&type=chunk) - Registration rights have been granted to sellers from the Haymaker, Dropdown, Phillips, and Springbok acquisitions, allowing them to sell their common units in the public market[707](index=707&type=chunk)[710](index=710&type=chunk)[714](index=714&type=chunk)[717](index=717&type=chunk) [Item 14. Principal Accounting Fees and Services](index=227&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The company engaged Grant Thornton LLP as its independent registered public accounting firm, with all services pre-approved by the Audit Committee Fees Paid to Grant Thornton LLP (in thousands) | Fee Type | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Audit Fees | $691.6 | $543.4 | $514.2 | | Audit-Related Fees | $0.0 | $0.0 | $69.8 | | Tax Fees | $0.0 | $0.0 | $0.0 | | All Other Fees | $0.0 | $0.0 | $0.0 | | **Total** | **$691.6** | **$543.4** | **$583.9** | PART IV [Item 15. Exhibits, Financial Statement Schedules](index=229&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report, including key corporate documents and required certifications - This item lists all financial statements and exhibits filed with the report, including consents from auditors Grant Thornton LLP and reserve engineers Ryder Scott Company, L.P[766](index=766&type=chunk)[775](index=775&type=chunk) [Item 16. Form 10-K Summary](index=236&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to include a summary for this item - The Partnership has elected not to include summary information[777](index=777&type=chunk) Financial Statements and Supplementary Data [Consolidated Financial Statements](index=239&type=section&id=Consolidated%20Financial%20Statements) The audited consolidated financial statements for the years ended December 31, 2020, 2019, and 2018 are presented, showing a net loss of $256.1 million for 2020 Consolidated Balance Sheet Highlights (as of Dec 31, 2020) | Account | Value (in millions) | | :--- | :--- | | Total Current Assets | $28.3 | | Total Oil and Natural Gas Properties, net | $521.0 | | **Total Assets** | **$564.6** | | Total Current Liabilities | $8.8 | | Long-term Debt | $171.6 | | **Total Liabilities** | **$186.3** | | **Total Equity** | **$335.6** | Consolidated Statement of Operations Highlights (Year ended Dec 31, 2020) | Account | Value (in millions) | | :--- | :--- | | Total Revenues | $90.5 | | Impairment of oil and natural gas properties | $251.6 | | Operating Loss | ($250.7) | | **Net Loss** | **($256.1)** | | Net Loss attributable to common units | ($167.4) | [Notes to Consolidated Financial Statements](index=247&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial results, including the 2020 impairment charge, derivative instruments, debt, equity, and related-party transactions - The company follows the full-cost method of accounting for its oil and gas properties, capitalizing all acquisition, exploration, and development costs[826](index=826&type=chunk) - The 2020 impairment of **$251.6 million** was driven by a decline in the 12-month average commodity prices and the reclassification of all PUD reserves due to drilling uncertainty[873](index=873&type=chunk)[874](index=874&type=chunk) Change in Proved Reserves (MBOE) | Period | Beginning Balance | Revisions | Purchases | Production | Ending Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | **2020** | 43,563 | (359) | 4,286 | (5,072) | **42,418** | | **2019** | 37,651 | 5,766 | 4,661 | (4,515) | **43,563** | - The standardized measure of discounted future net cash flows from proved reserves decreased from **$400.0 million** at year-end 2019 to **$285.0 million** at year-end 2020, primarily due to lower commodity prices[944](index=944&type=chunk)