Kimbell Royalty Partners(KRP) - 2025 Q1 - Quarterly Results

Q1 2025 Performance Overview 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 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][6][8] - The borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from $550 million to $625 million[2][6][8] - 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][6] Management Commentary 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] - 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] - 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] Financial Performance 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 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 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] - 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] - 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] - 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] Operating Expenses 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 | $1.68 | Operational Performance Kimbell's Q1 2025 operational performance featured strong run-rate daily production and significant drilling activity across its acreage Production Q1 2025 run-rate average daily production was 25,501 Boe/d, with pro-forma production at 25,841 Boe/d, maintaining a balanced liquids and natural gas mix Production Metrics | Production Metric | Value | | :--- | :--- | | Q1 2025 Run-Rate Production | 25,501 Boe/d | | Pro-Forma Run-Rate Production | 25,841 Boe/d | | Liquids Mix | 52% (33% Oil, 19% NGLs) | | Natural Gas Mix | 48% | Drilling and Development Activity As of March 31, 2025, Kimbell's acreage had 90 active drilling rigs, representing a 15.7% U.S. land rig market share, with substantial DUC and permitted locations - As of March 31, 2025, there were 90 active rigs on Kimbell's acreage, representing a 15.7% market share of all U.S. land rigs[18] Net DUCs and Permits by Basin | Basin | Net DUCs | Net Permits | Total Net Locations | | :--- | :--- | :--- | :--- | | Permian | 2.64 | 2.55 | 5.19 | | Mid-Continent | 0.91 | 0.41 | 1.32 | | Haynesville | 0.37 | 0.16 | 0.53 | | Bakken | 0.31 | 0.22 | 0.53 | | Eagle Ford | 0.32 | 0.08 | 0.40 | | Other | 0.12 | 0.01 | 0.13 | | Total | 4.67 | 3.43 | 8.10 | Outlook and Hedging Kimbell maintains a strategic hedging position to mitigate commodity price risk and has reaffirmed its full-year 2025 guidance Hedging Position Kimbell employs a fixed-price swap strategy to manage commodity price risk, with hedges for oil and natural gas extending through Q1 2027 Hedging Summary | Period | Oil Volume (BBL) | Avg Oil Price ($/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 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] Financial Statements 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 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 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 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]