Core Viewpoint - Kimbell Royalty reported strong fourth-quarter results, highlighting organic production growth, increased cash distributions, and a solid outlook for 2026, while maintaining a conservative balance sheet and exploring potential upside from the Barnett Woodford development across its Permian Basin acreage [3][4][17]. Financial Performance - Fourth-quarter general and administrative expenses totaled $10.4 million, with cash G&A at $2.63 per BOE, aligning with company guidance [1] - For the full year 2025, cash G&A was reported at $2.51 per BOE, below the midpoint of guidance due to operational discipline [1] - Kimbell's fourth-quarter revenues reached $76 million, with run-rate production at 25,627 BOE per day and Adjusted EBITDA of $64.8 million [2][6] - The company declared a quarterly cash distribution of $0.37 per unit, a 6% increase from the previous quarter, expected to be treated as a return of capital [6][7] Production and Reserves - Kimbell's production guidance for 2026 remains flat at a midpoint of 25,500 BOE per day, supported by an active rig count of 85 rigs, representing 16% of U.S. land rigs [4][10][11] - Proved developed reserves increased approximately 8% in 2025 to nearly 73 million BOE [5][9] Acquisitions and Capital Structure - In 2025, Kimbell completed a $230 million acquisition of mineral and royalty interests at Mabee Ranch, enhancing its position in the Permian Basin [5][8] - The company redeemed 50% of its Series A preferred units to simplify its capital structure and reduce costs [5][9] Market Conditions and Development Potential - Kimbell's management noted stable oil differentials and an increase in natural gas differentials from 18% to 24% quarter-over-quarter, attributed to seasonal factors [15] - The company is positioned to benefit from the Barnett Woodford development, with significant interest from major operators and potential for increased production without incurring drilling costs [17][18] Financial Flexibility and Debt Management - As of December 31, 2025, Kimbell had approximately $441.5 million in debt under its secured revolving credit facility, with a net debt to trailing twelve-month Adjusted EBITDA ratio of approximately 1.5x [13] - The company reaffirmed its borrowing base at $625 million and extended the maturity of its credit facility to December 16, 2030 [12][13]

Kimbell Royalty Partners Announces Filing of 2025 Annual Report on Form 10-K [Accessibility Statement] Skip NavigationFORT WORTH, Texas, Feb. 26, 2026 /PRNewswire/ -- Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell Royalty Partners" or "Kimbell"), a leading owner of oil and natural gas mineral and royalty interests in over 17 million gross acres in 28 states, today announced the filing of its Annual Report on Form 10-K ("Annual Report") for the fiscal year ended December 31, 2025 with the U.S. Securities ...

Core Insights - Kimbell Royalty Partners (KRP) offers an attractive dividend, appealing to investors due to the nature of royalty companies receiving payments "off the top" without typical upstream risks [1] Company Overview - KRP operates in the oil and gas sector, which is characterized as a boom-bust, cyclical industry, requiring patience and experience for successful investment [1] - The company does not control the pace of development, which is a common trait among royalty companies [1] Investment Strategy - The investing group Oil & Gas Value Research, led by a retired CPA with an MBA and MA, focuses on under-followed oil companies and out-of-favor midstream companies that present compelling investment opportunities [1] - The group facilitates discussions among oil and gas investors through an active chat room, allowing for the exchange of recent information and ideas [1]

Market Outlook - The job market in America is a key factor for stock performance, with expectations that stocks will continue to rise as long as it remains stable [1] Investment Strategy - The investment strategy includes a significant allocation to gold, cash, and high-growth stocks, indicating a diversified approach [2][6] - Gold is viewed as a long-term cyclical asset, with recent macroeconomic factors such as declining Fed rates and geopolitical issues contributing to its value [3][4] Asset Correlation - Bitcoin and cryptocurrencies are not seen as replacements for gold, as they have different market behaviors and correlations, particularly with tech stocks [5][6] Key Holdings - Palantir is highlighted as a major holding, with strong revenue and earnings growth, despite its high valuation [7] - Meta has experienced volatility but remains a long-term investment, with recent stock weakness viewed as an opportunity to buy more shares [8][11] - Texas Pacific Land (TPL) is noted as a smaller but significant holding, operating as a royalty and landowner company primarily benefiting from oil and gas production [12][14]

Company Overview - PrairieSky has an enterprise value of $6.4 billion[4] - The company's balance sheet is strong with a Debt/EBITDA ratio of 0.6x[5] - PrairieSky offers a sustainable annual dividend of $1.04 per common share, paid quarterly[6] - Since its IPO, PrairieSky has returned $2.4 billion to shareholders[8] - The company holds 18.5 million acres of royalty lands[9] Production and Growth - Oil and liquids account for 94% of YTD 2025 royalty production revenue[6] - Royalty oil production has grown by 7% YTD in 2025[10] - Clearwater royalty oil production has averaged approximately 2,450 bbl/d YTD, a 27% increase over the same period in 2024[34] - Duvernay royalty volumes have averaged an estimated 1,070 BOE/d YTD, with 80% being oil and liquids, representing an 87% increase over the same period in 2024[46] Financial Performance - In 2024, funds from operations were $380.5 million, primarily used for dividends of $239.0 million and a net debt reduction of 39% to $134.9 million[51] - The royalty operating margin for the nine months ended September 30, 2025, was 99%[60]

Financial Data and Key Metrics Changes - The company reported a strong start to 2025, with revenues increasing to approximately $44 million, representing a 20% sequential increase and a 131% year-over-year growth [9] - Adjusted EBITDA for Q1 was $38.8 million, reflecting a sequential increase of 221% year-over-year, with an adjusted EBITDA margin of 88% [10] - Free cash flow was approximately $15.8 million, with a free cash flow margin of 36%, although there was a quarter-over-quarter compression due to higher accounts receivable [11] Business Line Data and Key Metrics Changes - Resource sales and royalties increased by 118%, driven by increased brackish water sales and royalty volumes from newly acquired acreage [9] - Surface use royalties and revenues increased by 3% sequentially, supported by a 72% sequential increase in surface use royalty volumes [10] - Oil and gas royalties declined by 24% sequentially due to a decrease in net royalty production, with volumes falling from 11.99 BOE per day in Q4 2024 to 9.23 BOE per day in Q1 2025 [10] Market Data and Key Metrics Changes - Non-oil and gas royalty revenue streams accounted for approximately 92% of overall revenue during Q1, up from approximately 88% in the previous quarter [5] - The company continues to see strong demand for water handling infrastructure in the Delaware Basin, which is a key driver of business through its affiliate company Waterbridge [6] Company Strategy and Development Direction - The company is focused on advancing its active land management strategy in 2025, with strong growth driven by the acquisition of the Wolfbone Ranch [7] - The Wolfbone Ranch contributed to a greater than 70% quarter-over-quarter increase in produced water royalty volumes, underpinned by a minimal annual revenue commitment of $25 million for each of the next five years [8] - The company aims to maintain a strong balance sheet and pursue value-enhancing land acquisitions as part of its capital allocation priorities for 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, emphasizing that the majority of revenue streams are insulated from oil and gas price volatility [4] - Despite macroeconomic volatility, management has not observed any changes in production expectations from major customers, indicating a stable demand for services [16] - The company anticipates continued growth in produced water handling, particularly in core areas where demand remains strong [22] Other Important Information - The Board declared a dividend of $0.10 per Class A share, payable on June 19 to shareholders of record as of June 5 [11] - The Speedway pipeline project is expected to provide significant cash flow once operational, with an anticipated capacity of up to 500,000 barrels a day [18] Q&A Session Summary Question: Impact of Permian activity levels on produced water handling growth - Management stated that the majority of the business is insulated from commodity price exposure, with 92% of revenue from non-mineral royalties, indicating a strong position despite potential production slowdowns [15] Question: Demand for the Speedway pipeline and its growth impact - Management indicated that the pipeline could generate approximately $30 million a year in cash flow once operational, with initial payments expected in the fourth quarter [18] Question: Update on data centers in West Texas - Management noted that traction remains strong, with ongoing discussions about power generation needs in West Texas, which could benefit the company [25][27] Question: Growth in produced water volumes across the basin - Management confirmed that water growth is expected to eclipse oil growth in core development areas due to deeper intervals and flatter PDP declines [32] Question: Desalination opportunities and Waterbridge's perspective - Management highlighted ongoing pilot projects with Five Point and the potential for desalination efforts to be economically beneficial, although feasibility at scale is still being evaluated [35][36]