Kimbell Royalty Partners(US:KRP)2020-08-06 20:07Financial Performance - The Partnership reported a loss of approximately $4.0 million on commodity derivative instruments for the three months ended June 30, 2020[41]. - The company reported a net loss of $76,790,050 for the three months ended June 30, 2020, compared to a net loss of $25,710,850 for the same period in 2019[131]. - Adjusted EBITDA for the three months ended June 30, 2020, was $12,098,785, a decrease from $21,551,058 in the same period of 2019[131]. - Total revenues for Q2 2020 were $12.8 million, down from $31.9 million in Q2 2019, reflecting a significant decline in oil and gas prices[146]. - Oil, natural gas, and NGL revenues for Q2 2020 were $16.8 million, a decrease of $11.1 million (39.8%) from $27.9 million in Q2 2019[147]. - Cash available for distribution on common units was $5,930,243 for the three months ended June 30, 2020, compared to $9,055,722 for the same period in 2019[131]. Asset and Property Valuation - The Partnership's oil and natural gas properties as of June 30, 2020, totaled $658.4 million, a decrease from $704.4 million as of December 31, 2019[49]. - The Partnership's proved properties increased to $906.3 million as of June 30, 2020, compared to $758.3 million as of December 31, 2019[49]. - The Partnership recorded an impairment of $65.5 million and $136.5 million on its oil and natural gas properties for the three and six months ended June 30, 2020, respectively, due to a significant decline in oil and natural gas prices related to COVID-19 and OPEC production increases[52]. - The company expects to record an impairment to its oil and natural gas properties in Q3 2020 due to the full-cost ceiling limitation[114]. - The company experienced significant impairments of oil and natural gas properties, totaling $65,535,973 for the three months ended June 30, 2020[131]. Production and Revenue Sources - The company reported a total average daily production of 14,254 Boe/d (6:1) across all basins as of June 30, 2020, with the Permian Basin contributing 2,573 Boe/d[99]. - Production volumes increased to 1,260,619 Boe (14,254 Boe/d) in Q2 2020, up by 186,214 Boe (17.3%) from 1,074,405 Boe (11,807 Boe/d) in Q2 2019, primarily due to the Springbok Acquisition[148][149]. - Approximately 37% of the company's revenues and 58% of its production for Q2 2020 were derived from natural gas, providing some downside protection against low oil prices[113]. - Royalty income from oil sales increased to 55% of total revenue for the three months ended June 30, 2020, compared to 53% for the same period in 2019[125]. Debt and Financing - The Partnership's total commitments under the secured revolving credit facility are $225.0 million, with a borrowing base reaffirmed at $300.0 million[59]. - The Partnership borrowed an additional $85.5 million and $156.6 million under the secured revolving credit facility during the three and six months ended June 30, 2020, with an outstanding balance of $171.7 million as of June 30, 2020[61]. - The weighted average interest rate on the Partnership's outstanding borrowings was 3.69% for the six months ended June 30, 2020[62]. - A 1% increase in interest rates on the $171.7 million debt would result in an additional annual interest expense of approximately $1.7 million[203]. - The company currently does not have any interest rate hedges in place[203]. Acquisitions and Joint Ventures - The Partnership's acquisition of Springbok Energy Partners, LLC involved approximately $95.0 million in cash and the issuance of 2,224,358 common units[35]. - The Partnership's joint venture with Springbok SKR Capital Company, LLC and Rivercrest Capital Partners, LP holds a 49.3% ownership stake[36]. - The borrowing base under the secured revolving credit facility was reaffirmed at $300.0 million, supported by the assets acquired in the Springbok Acquisition[103]. - The company is actively pursuing acquisitions of mineral and royalty interests to support its growth strategy, including discussions with potential sellers[135][137]. Market Conditions and Price Volatility - Oil prices experienced significant volatility, with a low of $36.98 per barrel and a high of $63.27 per barrel for the six months ended June 30, 2020[117]. - Natural gas prices ranged from a low of $1.42 per MMBtu to a high of $4.25 per MMBtu during the same period[117]. - The ongoing COVID-19 pandemic has led to a significant reduction in global demand for oil and natural gas, impacting the company's operations and market outlook[108]. - The Baker Hughes United States Rotary Rig count decreased by 72.8% from 967 active rigs as of June 30, 2019, to 263 active rigs as of June 30, 2020[120]. Cash Distributions and Unit Information - The Partnership declared a quarterly cash distribution of $0.13 per common unit for Q2 2020, to be paid on August 10, 2020[90]. - The Partnership paid approximately $1.0 million in cash distributions on the Series A preferred units for Q2 2020[87]. - The balance of Class B units decreased from 25,557,606 at December 31, 2019, to 23,141,181 at June 30, 2020, after accounting for conversions and issuances[73]. - The total quarterly distribution to Class B unitholders for Q2 2020 was $23,141, representing 2.0% of their respective Class B Contributions[89]. - As of June 30, 2020, the Partnership had a total of 36,588,023 common units issued and outstanding[70].