Kimbell Royalty Partners (KRP) Update - Sept 13

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dan_s
Posts: 34962
Joined: Fri Apr 23, 2010 8:22 am

Kimbell Royalty Partners (KRP) Update - Sept 13

Post by dan_s »

This increases my valuation of KRP by $1.50 to $23.00/share.

Kimbell Royalty Partners Closes $455 Million Acquisition of Permian and Mid-Con Mineral and Royalty Interests in Cash Transaction

FORT WORTH, Texas, Sept. 13, 2023 /PRNewswire/ -- Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell" or the "Company"), a leading owner of oil and gas mineral and royalty interests in over 17 million gross acres in 28 states, today announced that it has closed the previously announced purchase of mineral and royalty interests (the "Acquired Assets") held by a private seller in a cash transaction valued at approximately $455 million (the "Acquisition"). The purchase price of the Acquisition was funded through a $325 million private placement of 6.00% Series A Cumulative Convertible Preferred Units ("Preferred Units") to funds managed by affiliates of Apollo (NYSE: APO) and borrowings under the Company's $400 million revolving credit facility. Kimbell is entitled to all cash flow from production attributable to the Acquired Assets since June 1, 2023. Revenues and certain other operating statistics under generally accepted accounting principles will be recorded for the Acquisition beginning on the closing date of September 13, 2023.

Kimbell estimates that, as of June 1, 2023, the Acquired Assets produced approximately 4,840 Boe/d (1,619 Bbl/d of oil, 1,227 Bbl/d of NGLs, and 11,964 Mcf/d of natural gas) (6:1)1. For the full year 2024, Kimbell estimates that the Acquired Assets will produce approximately 5,049 Boe/d (1,682 Bbl/d of oil, 1,312 Bbl/d of NGLs, and 12,327 Mcf/d of natural gas) (6:1). The Acquired Assets are concentrated in the Permian Basin (64% of reserve value) and Mid-Continent (36% of reserve value)2.

About Kimbell Royalty Partners

Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty company based in Fort Worth, Texas. Kimbell owns mineral and royalty interests in over 17 million gross acres in 28 states and in every major onshore basin in the continental United States, including ownership in more than 129,000 gross wells with over 50,000 wells in the Permian Basin. To learn more, visit http://www.kimbellrp.com.
Dan Steffens
Energy Prospectus Group
aja57
Posts: 421
Joined: Sun May 29, 2022 10:35 pm

Re: Kimbell Royalty Partners (KRP) Update - Sept 13

Post by aja57 »

It's interesting that Kimball got clobbered on August 3 when they announced their equity raise for this acquisition and now its back to its pre August 3 trading range. In hindsight, a real buying opportunity. Same for SBOW and VTLE.
dan_s
Posts: 34962
Joined: Fri Apr 23, 2010 8:22 am

Re: Kimbell Royalty Partners (KRP) Update - Sept 13

Post by dan_s »

90% of the time, when companies do an equity raise to make an accretive acquisition and the share price declines IT IS A BUYING OPPORTUNITY.

Just being able to do an equity raise IMO is a positive sign for a small-cap.

When a company raises equity to by an asset package with current income and lots of running room, why is that bad? If it raises per share results it is a VERY GOOD THING.
Dan Steffens
Energy Prospectus Group
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