Kimbell Royalty Partners (KRP) Q1 Results - May 9
Posted: Fri May 09, 2025 10:21 am
KRP is in our High Yield Income Portfolio. They raised their quarterly dividend to $0.47/share, which is annualized yield of 14.5% based on today's share price.
First Quarter 2025 Highlights
Q1 2025 run-rate daily production of 25,501 barrels of oil equivalent ("Boe") per day (6:1) < Beat my forecast of 24,750 Boepd.
Includes 74 days of production from the Company's $230 million acquisition from a private seller (the "Acquired Production"), which closed on January 17, 2025 with an effective date of October 1, 2024
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, run-rate production was 25,841 Boe per day (6:1)
Record Q1 2025 oil, natural gas and NGL revenues of $90.0 million
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, Q1 2025 oil, natural gas and NGL revenues were $91.6 million
Q1 2025 net income of approximately $25.9 million and net income attributable to common units of approximately $17.9 million < Beat my forecast of $13.0 million net income.
Record Q1 2025 consolidated Adjusted EBITDA of $75.5 million
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, consolidated Adjusted EBITDA was $77.1 million
On May 7, 2025, Kimbell redeemed 50% of its Series A Cumulative Convertible Preferred Units outstanding, further simplifying its capital structure and reducing its cost of capital
On May 1, 2025, the borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from $550 million to $625 million in connection with its spring redetermination
As of March 31, 2025, Kimbell's major properties had 8.10 net DUCs and net permitted locations on its acreage (4.67 net DUCs and 3.43 net permitted locations) compared to an estimated 6.5 net wells needed to maintain flat production
As of March 31, 2025, Kimbell had 90 rigs actively drilling on its acreage, representing approximately 16% market share of all land rigs drilling in the continental United States as of such time
Announced a Q1 2025 cash distribution of $0.47 per common unit, an increase of 17.5% from Q4 2024, reflecting a payout ratio of 75% of cash available for distribution; implies a 15.8% annualized yield based on the May 7, 2025 closing price of $11.88 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
Kimbell affirms its financial and operational guidance ranges for 2025 previously disclosed in its Q4 2024 earnings release
Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell Royalty GP, LLC, Kimbell's general partner (the "General Partner"), commented, "We are beginning 2025 with several new milestones for Kimbell, which include records for oil, natural gas and NGL revenues, consolidated adjusted EBITDA and cash available for distribution for Q1 2025. Other 2025 milestones so far include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17, 2025, increasing the Company's borrowing base and elected commitments on the credit facility from $550 million to $625 million on May 1, 2025 and redeeming 50% of the Series A Cumulative Convertible Preferred Units on May 7, 2025, further simplifying our capital structure and reducing our cost of capital. Even with the uncertainty occurring across the broader geopolitical landscape, activity on our acreage remains robust with 90 rigs actively drilling on our acreage as of March 31, 2025, representing 16% market share of all land rigs drilling in the lower 48.
"We are pleased to declare the Q1 2025 distribution of 47 cents per common unit, an increase of 17.5% from Q4 2024 and reflecting a 15.8% annualized tax advantaged yield based on Kimbell's closing price on May 7, 2025. We estimate that approximately 70% 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." < KRP offers investors the highest after-tax dividend yield of the 12 companies in our High Yield Income Portfolio.
"As we look forward in 2025 and beyond, we remain bullish about the U.S. oil and natural gas royalty industry, our role as a leading consolidator in the sector and the prospects for Kimbell to generate long-term unitholder value."
First Quarter 2025 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 first quarter of 2025, or $0.47 per common unit. The distribution will be payable on May 28, 2025 to common unitholders of record at the close of business on May 20, 2025.
First Quarter 2025 Highlights
Q1 2025 run-rate daily production of 25,501 barrels of oil equivalent ("Boe") per day (6:1) < Beat my forecast of 24,750 Boepd.
Includes 74 days of production from the Company's $230 million acquisition from a private seller (the "Acquired Production"), which closed on January 17, 2025 with an effective date of October 1, 2024
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, run-rate production was 25,841 Boe per day (6:1)
Record Q1 2025 oil, natural gas and NGL revenues of $90.0 million
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, Q1 2025 oil, natural gas and NGL revenues were $91.6 million
Q1 2025 net income of approximately $25.9 million and net income attributable to common units of approximately $17.9 million < Beat my forecast of $13.0 million net income.
Record Q1 2025 consolidated Adjusted EBITDA of $75.5 million
Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, consolidated Adjusted EBITDA was $77.1 million
On May 7, 2025, Kimbell redeemed 50% of its Series A Cumulative Convertible Preferred Units outstanding, further simplifying its capital structure and reducing its cost of capital
On May 1, 2025, the borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from $550 million to $625 million in connection with its spring redetermination
As of March 31, 2025, Kimbell's major properties had 8.10 net DUCs and net permitted locations on its acreage (4.67 net DUCs and 3.43 net permitted locations) compared to an estimated 6.5 net wells needed to maintain flat production
As of March 31, 2025, Kimbell had 90 rigs actively drilling on its acreage, representing approximately 16% market share of all land rigs drilling in the continental United States as of such time
Announced a Q1 2025 cash distribution of $0.47 per common unit, an increase of 17.5% from Q4 2024, reflecting a payout ratio of 75% of cash available for distribution; implies a 15.8% annualized yield based on the May 7, 2025 closing price of $11.88 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
Kimbell affirms its financial and operational guidance ranges for 2025 previously disclosed in its Q4 2024 earnings release
Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell Royalty GP, LLC, Kimbell's general partner (the "General Partner"), commented, "We are beginning 2025 with several new milestones for Kimbell, which include records for oil, natural gas and NGL revenues, consolidated adjusted EBITDA and cash available for distribution for Q1 2025. Other 2025 milestones so far include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17, 2025, increasing the Company's borrowing base and elected commitments on the credit facility from $550 million to $625 million on May 1, 2025 and redeeming 50% of the Series A Cumulative Convertible Preferred Units on May 7, 2025, further simplifying our capital structure and reducing our cost of capital. Even with the uncertainty occurring across the broader geopolitical landscape, activity on our acreage remains robust with 90 rigs actively drilling on our acreage as of March 31, 2025, representing 16% market share of all land rigs drilling in the lower 48.
"We are pleased to declare the Q1 2025 distribution of 47 cents per common unit, an increase of 17.5% from Q4 2024 and reflecting a 15.8% annualized tax advantaged yield based on Kimbell's closing price on May 7, 2025. We estimate that approximately 70% 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." < KRP offers investors the highest after-tax dividend yield of the 12 companies in our High Yield Income Portfolio.
"As we look forward in 2025 and beyond, we remain bullish about the U.S. oil and natural gas royalty industry, our role as a leading consolidator in the sector and the prospects for Kimbell to generate long-term unitholder value."
First Quarter 2025 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 first quarter of 2025, or $0.47 per common unit. The distribution will be payable on May 28, 2025 to common unitholders of record at the close of business on May 20, 2025.