Kimbell Royalty Partners (KRP) Valuation Update - May 12

[dan_s]

I have updated my forecast model for KRP for their solid Q1 2025 results and increasing production that should be close to the high end of their 2025 production guidance range of 24,000 to 27,000 Boepd. Like all of our minerals companies, KRP generates a lot of free cash flow from operations.

My current valuation increases from $19.50 to $21.00 per unit. < KRP is a partnership that has elected to be taxed as a C-Corp.

TipRanks: "In the last 3 months, 7 ranked analysts set 12-month price targets for KRP. The average price target among the analysts is $17.17." < None of the 7 analysts have updated their price targets since KRP reported solid Q1 results and increased their quarterly cash distribution from $0.40 to $0.47.

In addition to strong annual production growth of 34.6% year-over-year in 2023 and another 23.8% YOY in 2024, I like KRP's production mix of 48% natural gas, 19% NGLs and 33% crude oil. KRP's hedging program also reduces commodity price risk. In 2024, KRP was paid $10,867,000 for cash settlement on their hedges.

My updated forecast/valuation model for KRP has been posted to the EPG website.