Kimbell Royalty Partners(US:KRP)2024-11-07 18:21Financial Data and Key Metrics Changes - The company reported total revenues of $71.1 million for the third quarter, with a run rate production of 23,846 BOE per day [11] - Net income for the quarter was approximately $25.8 million, with net income attributable to common units at approximately $17.4 million or $0.22 per common unit [12] - Consolidated adjusted EBITDA for the third quarter was $63.1 million [13] - A cash distribution of $0.41 per common unit was declared for the third quarter, representing 75% of cash available for distribution [14] Business Line Data and Key Metrics Changes - The company maintained a strong market share with 90 rigs actively drilling on its acreage, representing approximately 16% of all land rigs in the continental U.S. [11][7] - The number of net DUCs increased by 34% quarter-over-quarter to 5.1 net DUCs, the second highest level in the company's history [8] Market Data and Key Metrics Changes - The company experienced a record number of lease bonuses during the third quarter, indicating increased operator interest in developing its acreage [7] - The drilling activity remained strong, particularly in the Permian Basin, which is a key area for the company [8] Company Strategy and Development Direction - The company aims to redeem at least half of the Apollo Preferred Stock in May 2025 to optimize cost savings while maintaining conservative leverage and liquidity [15] - The management expressed confidence in the prospects for continued robust development, particularly in the Permian Basin, and believes that its diversified portfolio of high-quality royalty assets will drive value for unitholders [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the increase in DUCs is encouraging, particularly in the Delaware Basin, and they expect to see positive results from these wells in the near term [21] - The company is optimistic about the future and its ability to drive unitholder value for years to come [8] Other Important Information - The company maintains a conservative balance sheet with a net debt to trailing 12-month consolidated adjusted EBITDA of approximately 0.8x [15] - Approximately $297.8 million in undrawn capacity under the secured revolving credit facility was reported as of September 30, 2024 [15] Q&A Session Summary Question: Clarification on the preferred stock redemption timing - Management indicated that redeeming the preferred stock in May 2025 is more cost-efficient than redeeming it now, saving the partnership a couple of million dollars [18] Question: Insights on net DUCs and permits - Management confirmed that the increase in net DUCs is encouraging, particularly in the Delaware Basin, and they expect to see production results from these wells soon [21] Question: Opportunities for M&A in various basins - Management stated that the Permian Basin remains attractive for M&A, but they are also seeing opportunities in the Appalachia basin due to increased infrastructure and LNG exports [25] Question: Impact of high NRI wells in Loving County - Management clarified that the high NRI wells are already producing, and they expect to start receiving production and cash flow in Q4 [28]