Kimbell Royalty Partners(KRP) - 2024 Q2 - Quarterly Results

Kimbell Royalty Partners Announces Second Quarter 2024 Results Second Quarter 2024 Highlights Kimbell Royalty Partners reported strong Q2 2024 results, exceeding production guidance and achieving record low cash G&A per BOE Q2 2024 Key Financial and Operational Metrics | Metric | Value | | :--- | :--- | | Run-Rate Daily Production (Boe/d) | 24,110 (6:1) | | Oil, Natural Gas & NGL Revenues ($) | $77.0 million | | Net Income ($) | $15.2 million | | Consolidated Adjusted EBITDA ($) | $65.8 million | | Cash G&A per BOE ($/Boe) | $2.34 (Record Low) | | Q2 2024 Cash Distribution ($/unit) | $0.42 | | Net Debt to TTM EBITDA (x) | 0.9 | - As of June 30, 2024, Kimbell had 91 active rigs on its acreage, representing a 16.3% market share of all U.S. land rigs[2] - The company announced a Q2 2024 cash distribution of $0.42 per common unit, reflecting a 75% payout ratio[2] - The remaining 25% of cash available for distribution will be used to repay outstanding borrowings under its revolving credit facility[2] - The inventory of drilled but uncompleted wells (DUCs) and permits on major properties totaled 7.96 net wells, exceeding the estimated 5.8 net wells required to maintain flat production[2] Management Commentary Management highlighted strong operational performance, including a 16% market share of U.S. land rigs and record low cash G&A per BOE - The active rig count remains strong at 91 rigs, led by 47 rigs in the Permian Basin, maintaining a 16% market share of U.S. land rigs[3] - The company's line-of-sight wells are well above the number needed to maintain flat production, providing confidence in production resilience for the remainder of 2024[3] - Cash G&A per BOE reached a record low in Q2, which management attributes to operational discipline and positive operating leverage[3] - The Q2 2024 distribution of $0.42 per common unit is estimated to be approximately 100% return of capital, making it not subject to dividend taxes[4] Shareholder Returns and Capital Strategy Kimbell declared a $0.42 per unit cash distribution with a 75% payout, allocating the remainder to debt reduction Q2 2024 Distribution Details | Metric | Value | | :--- | :--- | | Distribution per Common Unit ($/unit) | $0.42 | | Payout Ratio (%) | 75% of cash available for distribution | | Record Date | August 12, 2024 | | Payment Date | August 19, 2024 | - The company plans to use the remaining 25% of cash available for distribution to pay down outstanding borrowings on its secured revolving credit facility[4] - The Q2 distribution is expected to be approximately 100% non-taxable return of capital for U.S. federal income tax purposes, which reduces the unitholder's cost basis[5] Debt and Liquidity as of June 30, 2024 | Metric | Value | | :--- | :--- | | Debt Outstanding ($) | ~$265.8 million | | Undrawn Credit Facility Capacity ($) | ~$284.2 million | | Net Debt to TTM EBITDA (x) | ~0.9 | Financial and Operational Performance Kimbell reported $76.6 million revenues and $15.2 million net income in Q2 2024, with strong production and DUC inventory Q2 2024 Average Realized Prices | Commodity | Price per Unit | | :--- | :--- | | Oil ($/Bbl) | $79.99 | | Natural Gas ($/Mcf) | $1.81 | | NGLs ($/Bbl) | $25.05 | | Combined ($/Boe) | $35.14 | Q2 2024 Production Breakdown | Commodity | Percentage of Production | | :--- | :--- | | Natural Gas (6:1) (%) | ~51% | | Liquids (%) | ~49% | | - Oil (%) | (32%) | | - NGLs (%) | (17%) | Net DUCs and Permits by Basin (as of June 30, 2024) | Basin | Net DUCs | Net Permits | | :--- | :--- | :--- | | Permian | 1.93 | 2.44 | | Eagle Ford | 0.50 | 0.34 | | Haynesville | 0.33 | 0.38 | | Mid-Continent | 0.89 | 0.70 | | Bakken | 0.10 | 0.23 | | Total | 3.82 | 4.14 | Hedging Update Kimbell implemented fixed-price swaps for oil and natural gas, extending hedges through Q2 2026 to manage price risk Hedge Book Summary as of June 30, 2024 | Period | Oil Weighted Avg. Price ($/Bbl) | Nat Gas Weighted Avg. Price ($/MMBTU) | | :--- | :--- | :--- | | 3Q 2024 | $76.88 | $3.96 | | 4Q 2024 | $74.60 | $4.19 | | 1Q 2025 | $71.55 | $4.32 | | 2Q 2025 | $67.64 | $3.52 | | 3Q 2025 | $74.20 | $3.74 | | 4Q 2025 | $68.26 | $3.68 | | 1Q 2026 | $70.38 | $4.07 | | 2Q 2026 | $70.78 | $3.33 | Financial Statements and Non-GAAP Reconciliations Q2 2024 unaudited financials report $1.24 billion assets, $77.0 million revenues, and $65.8 million Adjusted EBITDA Condensed Consolidated Balance Sheet Highlights (June 30, 2024) | Account | Value ($ thousands) | | :--- | :--- | | Total current assets | $88,931 | | Total oil and natural gas properties, net | $1,144,716 | | Total assets | $1,242,801 | | Long-term debt | $265,760 | | Total liabilities | $284,353 | | Total unitholders' equity | $643,235 | Condensed Consolidated Statement of Operations (Three Months Ended June 30) | Account | 2024 ($ thousands) | 2023 ($ thousands) | | :--- | :--- | :--- | | Total revenues | $76,573 | $60,752 | | Total costs and expenses | $52,681 | $36,114 | | Operating income | $23,892 | $24,638 | | Net income | $15,187 | $17,797 | | Net income attributable to common units | $8,410 | $13,468 | | Diluted EPS ($/share) | $0.11 | $0.23 | Q2 2024 Reconciliation to Cash Available for Distribution (in thousands) | Item | Value ($ thousands) | | :--- | :--- | | Net income | $15,187 | | Consolidated Adjusted EBITDA | $65,821 | | Adjusted EBITDA attributable to Kimbell Royalty Partners, LP | $55,810 | | Less: Cash interest expense & distributions | ($9,752) | | Cash available for distribution on common units | $46,058 | | Cash available for distribution per common unit ($/unit) | $0.57 | - The company's Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA was calculated to be 0.9x as of June 30, 2024[25]