In This Article:
-
Revenue: $77 million from oil, natural gas, and NGL revenues.
-
Production: 24,110 BOE per day run rate production.
-
Net Income: Approximately $15.2 million; $8.4 million attributable to common units or $0.11 per common unit.
-
Adjusted EBITDA: $65.8 million for the second quarter.
-
Cash G&A Expense: $5.1 million or $2.34 per BOE, a record low.
-
Distribution: $0.42 per common unit, representing 75% of cash available for distribution.
-
Debt: $265.8 million outstanding under the secured revolving credit facility.
-
Net Debt to EBITDA Ratio: 0.9 times.
-
Undrawn Credit Capacity: $284.2 million as of June 30, 2024.
-
Rig Count: 91 rigs actively drilling, representing a 16% market share of all land rigs in the continental US.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Kimbell Royalty Partners LP (NYSE:KRP) reported strong cash flow and continued debt paydown for the second quarter of 2024.
-
The company maintained a robust rig count with 91 rigs actively drilling, representing a 16% market share of all land rigs in the continental United States.
-
KRP achieved a record low cash G&A expense per BOE, reflecting operational discipline and positive operating leverage.
-
The company announced a $0.42 distribution per common unit, focusing on returning value to unitholders.
-
KRP maintained a conservative balance sheet with a net debt to trailing 12-month consolidated adjusted EBITDA of 0.9 times, ensuring financial flexibility.
Negative Points
-
Despite strong production, KRP did not revise its guidance for 2024, which some analysts viewed as overly conservative.
-
The company faces challenges in acquiring gas assets, as there is limited availability in the market despite depressed gas prices.
-
KRP's M&A activity has been relatively quiet, with fewer transactions of interest from an asset quality standpoint.
-
The common units outstanding increased significantly, partly due to the conversion of private equity funds, which may dilute existing shareholders.
-
The weak gas environment presents challenges, although KRP's Haynesville production remained stable.
Q & A Highlights
Q: Why has Kimbell Royalty Partners not revisited its guidance given that production is outpacing expectations and cash G&A and DD&A are trending outside the range? A: R. Davis Ravnaas, President and CFO, acknowledged the point and mentioned that they might reconsider the guidance. He noted that while they don't control the drill bit, they aim to be conservative and ensure they deliver on their promises. Matt Daly, COO, added that they have significant wells coming online that could impact production positively.