In This Article:
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Revenue: $71.1 million from oil, natural gas, and NGL revenues.
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Net Income: Approximately $25.8 million.
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Net Income Attributable to Common Units: Approximately $17.4 million or $0.22 per common unit.
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Adjusted EBITDA: $63.1 million.
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Cash Distribution: $0.41 per common unit, with approximately 100% expected to be considered return of capital.
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Production: Run rate production of 23,846 BOE per day.
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General and Administrative Expenses: $9.5 million, with cash G&A expense of $2.57 per BOE.
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Debt Outstanding: Approximately $252.2 million under the secured revolving credit facility.
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Net Debt to EBITDA Ratio: Approximately 0.8 times.
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Undrawn Credit Facility Capacity: Approximately $297.8 million.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Kimbell Royalty Partners LP (NYSE:KRP) declared a third quarter cash distribution of $0.41 per common unit, highlighting their commitment to returning value to unitholders.
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The company reported strong drilling activity with 90 rigs actively drilling on their acreage, representing a 16% market share of all land rigs in the Lower 48.
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KRP achieved a record number of lease bonuses during the third quarter, indicating increased operator interest in their acreage.
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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, driven by activity in the Permian Basin.
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KRP maintained a conservative balance sheet with a net debt to trailing 12-month consolidated adjusted EBITDA of approximately 0.8 times, ensuring financial flexibility.
Negative Points
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The decision to delay the partial redemption of Apollo preferred stock to May 2025, although cost-efficient, may raise concerns about the timing and financial strategy.
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Net permits decreased by about 1.4, which could indicate a potential slowdown in future drilling activity if not addressed.
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The company faces competition in smaller acquisitions, which could limit their ability to consolidate smaller interests efficiently.
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There is uncertainty regarding the continuation of increased lease bonuses, as it may depend on operators running through their Tier 1 acreage.
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KRP's exposure to the Appalachian Basin is limited, which could be a missed opportunity given the potential for increased infrastructure and LNG exports in the region.
Q & A Highlights
Q: Could you explain the decision to partially redeem the preferred stock in May 2025 instead of this quarter? A: R. Davis Ravnaas, President and CFO, explained that after recalculating, it was found to be more cost-efficient to redeem the preferred stock in May 2025, saving the partnership a couple of million dollars. The goal remains to redeem it as soon as possible, but waiting a few months is financially beneficial.