Kimbell Royalty Partners, LP Q3 FY2025 earnings call

• Production increased organically by ~1% over Q2 and exceeded 2025 guidance midpoint.
• First 9 months of 2025 average production was 25,574 BOE per day, including Boren acquisition's first quarter production which also exceeded guidance midpoint.
• Active rig count was 86, representing 16% of U.S. land rigs market share.
• Line-of-site wells were above the number needed to maintain flat production.
• Cash G&A per BOE was below guidance midpoint.
• Declared Q3 2025 distribution of $0.35 per common unit.
• Diversified portfolio provides steady results, with Mid-Con and Haynesville showing positive performance due to higher gas cut in current macro environment.

Oil, natural gas and NGL revenues totaled $76.8 million during the third quarter. Production increased organically by approximately 1% over Q2 and exceeded the midpoint of the 2025 guidance. For the first 9 months of 2025, production averaged 25,574 BOE per day, including a full first quarter of production from the Boren acquisition which also exceeded the midpoint of guidance. Active rig count was 86, representing a 16% market share of U.S. land rigs. Cash G&A per BOE was below the midpoint of guidance. Revenue contribution is from diversified segments including Mid-Con, Haynesville, etc., with Mid-Con and Haynesville showing acceleration due to higher gas cut in the current environment.

• Reaffirmed 2025 financial and operational guidance ranges.
• Believes 2026 production may be flat or increasing, with no indication of production on properties falling.
• M&A strategy is selective with a high bar, averaging 1-3 deals per year.

• Forward-looking statements are uncertain as actual results may differ materially from expectations.
• Risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

Q: First, I wanted to ask a little bit on the macro given your visibility across a number of basins...

A: Sure. Sure. Yes. Thanks, Tim. Well, I think first, what I'd say is we're very proud of this quarter...

Q: And then if I could dig in a little more. People think that you've expanded in the Permian quite a bit...

A: Yes. Thanks for bringing that up. So I think that really highlights the benefits of a diversified portfolio...

Q: Okay. Okay. That's great context. And if I could sneak one last one in, really more of a modeling question...

A: Yes, great question. Nothing gets past you, Tim. I love that. I would say for modeling purposes...

Q: Our first question comes from the line of Paul Diamond with Citi...

A: Great question, and I'll ask my team this. I believe we update that once a year based on what we're seeing in our portfolio...

Q: Our next question comes from the line of Noah Hungness with Bank of America...

A: Yes, I'd say flat to increasing. We see no indication of production on our properties falling...

Q: Our next question comes from the line of Derrick Whitfield with Texas Pacific Land Corporation...

A: Man, I love that you asked this question. So I love to see that analysis. We obviously saw that. A lot of respect for our peers at that business...

Q: Derrick Whitfield: Makes sense. I mean it would seem that it would be outsized relative to the U.S. increase in aggregate just because you're getting it from the key basins in which you would see the growth. Is that a fair characterization?

A: Absolutely. Absolutely. Yes. We fully support that. I totally agree with you...

Q: Derrick Whitfield: All right. Terrific. And then for my follow-up, I wanted to go a different direction on M&A...

A: Yes. We -- the bar is high for M&A. We have historically not pursued small ground game acquisitions. It's very labor intensive. It doesn't dramatically move the needle for us in terms of adding or contributing to the overall business' production base...