Kimbell Royalty Partners (KRP) Q2 2024 earnings summary

Executive summary

• Q2 2024 oil, natural gas, and NGL revenues reached $77.1 million, with net income of $15.2 million and consolidated Adjusted EBITDA of $65.8 million.

• Run-rate average daily production was 24,110 Boe/d, exceeding guidance midpoint, with 91 active rigs representing 16% U.S. land rig market share.

• Declared a $0.42 per common unit distribution, with a 75% payout ratio and annualized yield of 10.1%.

• Diversified, high-margin asset base with interests in over 129,000 gross wells across 17 million gross acres.

• Since IPO, $1.8 billion invested in M&A, growing run-rate average daily production by ~8x and returning 61% of IPO price via distributions.

Financial highlights

• Total Q2 2024 revenues were $77.1 million; net income attributable to common units was $8.4 million ($0.11 per unit).

• Adjusted EBITDA reached $65.8 million; cash available for distribution on common units was $46.1 million.

• Record low cash G&A expense per Boe at $2.34, below guidance.

• Net debt as of June 30, 2024, was $240.8 million; net leverage ratio was 0.9x.

• Market capitalization was $1.59 billion; enterprise value was $2.16 billion.

Outlook and guidance

• Affirmed 2024 guidance with daily production midpoint at 24,000 Boe/d and full-year guidance of 22.5–25.5 Mboe/d.

• Management confident in production resilience due to strong rig activity and well inventory.

• Oil production expected at 32–36% of net production; natural gas at 48–52%; NGL at 14–18%.

• 2024E annualized distribution yield sensitivity ranges from 7.7% to 13.9% depending on commodity prices.

• Board intends to continue allocating a portion of cash available for distribution to debt repayment.