Kimbell Royalty Partners (KRP) Q2 Results - Aug 4

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Second Quarter 2024 Highlights

Q2 2024 run-rate daily production of 24,110 barrels of oil equivalent ("Boe") per day (6:1) < Beat my Q2 forecast of 24,000 Boepd.

Q2 2024 oil, natural gas and NGL revenues of $77.0 million

Q2 2024 net income of approximately $15.2 million and net income attributable to common units of approximately $8.4 million

Q2 2024 consolidated Adjusted EBITDA of $65.8 million

Record low cash G&A per BOE of $2.34 in Q2 2024, below low-end of guidance reflecting operational discipline and positive operating leverage

As of June 30, 2024, Kimbell's major properties had 7.96 net drilled but uncompleted wells ("DUCs") and net permitted locations on its acreage (3.82 net DUCs and 4.14 net permitted locations) compared to an estimated 5.8 net wells needed to maintain flat production

As of June 30, 2024, Kimbell had 91 rigs actively drilling on its acreage, representing 16.3% market share of all land rigs drilling in the continental United States as of such time

Announced a Q2 2024 cash distribution of $0.42 per common unit, reflecting a payout ratio of 75% of cash available for distribution; implies a 10.2% annualized yield based on the July 31, 2024 closing price of $16.48 per common unit; Kimbell intends to utilize the remaining 25% of its cash available for distribution to repay a portion of the outstanding borrowings under Kimbell's revolving credit facility

Conservative Balance Sheet with Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA of 0.9x

Kimbell affirms its financial and operational guidance ranges for 2024 previously disclosed in its Q4 2023 earnings release

Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell Royalty GP, LLC, Kimbell's general partner (the "General Partner"), commented, "Kimbell's active rig count remains strong with our market share of U.S. land rigs actively drilling remaining at 16%, which includes 91 rigs led by the Permian Basin with 47 rigs drilling at the end of Q2 2024. Furthermore, our line-of-site wells continue to be well above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production as we progress through 2024. Finally, cash G&A per BOE was at a record low during the quarter, well below the low-end of guidance reflecting operational discipline and positive operating leverage.

"We are pleased to declare the Q2 2024 distribution of 42 cents per common unit. We estimate that approximately 100% percent of this distribution is expected to be considered return of capital and not subject to dividend taxes, further enhancing the after-tax return to our common unitholders."

Second Quarter 2024 Distribution and Debt Repayment

Today, the Board of Directors of the General Partner (the "Board of Directors") approved a cash distribution payment to common unitholders of 75% of cash available for distribution for the second quarter of 2024, or $0.42 per common unit. The distribution will be payable on August 19, 2024 to common unitholders of record at the close of business on August 12, 2024. Kimbell plans to utilize the remaining 25% of cash available for distribution for the second quarter of 2024 to pay down a portion of the outstanding borrowings under its secured revolving credit facility. Since May 2020 (excluding the expected upcoming pay-down from the remaining 25% of Q2 2024 projected cash available for distribution), Kimbell has paid down approximately $165.4 million of outstanding borrowings under its secured revolving credit facility by allocating a portion of its cash available for distribution for debt pay-down.

Kimbell expects that approximately 100% of its second quarter 2024 distribution should not constitute dividends for U.S. federal income tax purposes, but instead are estimated to constitute non-taxable reductions to the basis of each distribution recipient's ownership interest in Kimbell common units. The reduced tax basis will increase unitholders' capital gain (or decrease unitholders' capital loss) when unitholders sell their common units. The Form 8937 containing additional information may be found at www.kimbellrp.com under "Investor Relations" section of the site. Kimbell currently believes that the portion that constitute dividends for U.S. federal income tax purposes will be considered qualified dividends, subject to holding period and certain other conditions, which are subject to a tax rate of 0%, 15% or 20% depending on the income level and tax filing status of a unitholder for 2024. Kimbell believes these estimates are reasonable based on currently available information, but they are subject to change.