Kimbell Royalty Partners, LP Q3 FY2024 earnings call

• Declared a third quarter cash distribution of $0.41 per common unit. Total cash distributed to common unitholders since IPO in 2017 is $11.45 per unit.
• Drilling activity strong with 90 rigs actively drilling on acreage, 16% market share of Lower 48 land rigs. Record number of lease bonuses during the quarter. Net DUCs increased 34% QoQ to 5.1 net DUCs, second highest in history, led by Permian Basin.
• Third quarter general and administrative expenses $9.5 million, $5.6 million cash G&A, $2.57 per BOE. Balance sheet: net debt to trailing 12-month adjusted EBITDA 0.8x.
• Planning to redeem at least half of Apollo Preferred Stock in May 2025 to optimize cost savings and maintain leverage/liquidity. Affirmed 2024 guidance with daily production midpoint 24,000 BOE per day.

Oil, natural gas, and NGL revenues totaled $71.1 million. Run rate production was 23,846 BOE per day. Third quarter net income attributable to common units was approximately $17.4 million or $0.22 per common unit. Total consolidated adjusted EBITDA was $63.1 million. A third quarter cash distribution of $0.41 per common unit was declared. At September 30, 2024, debt outstanding under the secured revolving credit facility was approximately $252.2 million, with undrawn capacity of approximately $297.8 million.

• Affirmed 2024 guidance including daily production midpoint of 24,000 BOE per day.
• Planning to redeem at least half of Apollo Preferred Stock in May 2025, which is more cost efficient and aims to save the partnership money.

• Forward-looking statements are uncertain and actual results may differ materially. Risks and uncertainties described in SEC filings.

Q: Comment on preferred being partially redeemed in May 2025, driving factors A: More cost efficient to redeem in May, saves a couple million, goal to take it out as soon as possible Q: Increase in net DUCs, impact of net permits down A: DUCs more valuable than permits, increase in Loving County Delaware Basin, encouraging, permits may tick back up Q: Basins for M&A, blocky vs small interest A: Permian most attractive, also looking at Appalachia, reluctant to do small acquisitions on revolver, balance sheet and competitive dynamics Q: Lease bonus increase, operator interest, Tier two acreage A: Mid Continent leasing, Cherokee shale play, Tier two acreage more meaningful over time Q: High NRI wells in Loving County, timing of impact A: Wells already producing, expect production and cash flow in Q4, results encouraging