Kimbell Royalty Partners, LP

What they do

Kimbell owns mineral and royalty interests in approximately 12.5 million gross acres and overriding royalty interests in approximately 4.8 million gross acres, with about 55% of aggregate acres in the Permian Basin and Mid-Continent. It receives a portion of revenues from oil, natural gas and associated NGL production net of post-production expenses and taxes, without funding drilling, completion, lease operating or plugging and abandonment costs. As of June 30, 2026, over 99% of acreage subject to its mineral and royalty interests was leased, and it holds interests in over 134,000 gross wells including over 54,000 in the Permian Basin.

Revenue drivers

• Oil, natural gas and NGL revenues — Royalty and mineral interests earn a share of production revenues across 28 states and every major onshore basin; Q2 2026 oil, natural gas and NGL revenues were a record $103.0 million.
• Permian Basin production — Largest producing region at 11,817 Boe/d (6:1) and 54,510 gross wells as of June 30, 2026, with 3,650,382 gross acres and 28,512 net acres.
• Mid-Continent production — Second-largest producing region at 4,892 Boe/d (6:1) and 21,181 gross wells, with the largest gross acreage position at 5,866,366 gross acres and 48,832 net acres.
• Lease bonus and other income — One-time lease bonus payments and other income set a record in Q2 2026 alongside record oil, natural gas and NGL revenues, net income, consolidated Adjusted EBITDA and cash available for distribution.

Recent performance

Q2 2026 revenue was $112.5 million, up from $65.5 million in Q1 2026, with record oil, natural gas and NGL revenues of $103.0 million, record net income of approximately $47.3 million and net income attributable to common units of approximately $38.4 million. Record Q2 2026 consolidated Adjusted EBITDA was $84.9 million and record daily production was 25,830 Boe/d (6:1), including 9 days of production from the $145.9 million Mesa Royalties acquisition that closed June 22, 2026 with an effective date of June 1, 2026. Following that closing, run-rate production was 26,967 Boe/d (6:1). Full-year 2025 revenue was $333.8 million with net income of $99.7 million and operating cash flow of $246.5 million, versus 2024 revenue of $309.3 million, net income of $11.1 million and operating cash flow of $250.9 million.

Strategy

The primary business objective is to provide increasing cash distributions to unitholders through acquisitions from third parties, Sponsors and Contributing Parties, and through organic growth from continued development by working interest owners. Kimbell closed the $145.9 million Mesa Royalties acquisition on June 22, 2026 with an effective date of June 1, 2026, and announced a Drop Down acquisition on July 17, 2026. On June 24, 2026, the borrowing base and aggregate commitments on its secured revolving credit facility were increased from $625 million to $660 million. During Q2 2026, Kimbell repurchased and cancelled 500,000 common units for approximately $7.4 million at an average price of $14.70 per unit. It intends to use the 25% of cash available for distribution not paid out to repay a portion of outstanding borrowings under the credit facility.

Risks

• Distribution coverage and priority — Series A preferred units (6.0% per annum plus accrued and unpaid distributions) and Class B units (2.0% per quarter on the Class B Contribution) receive quarterly cash distributions ahead of common units, and available cash may be insufficient to pay common unit distributions.
• Commodity price dependence — Substantially all cash available for distribution depends on oil, natural gas and NGL revenues, which depend on prices operators realize from production sales.
• Production concentration — As of June 30, 2026, approximately 55% of aggregate acres were in the Permian Basin and Mid-Continent, and Permian Basin production was 11,817 Boe/d of the 25,830 Boe/d total.
• No operational control — Kimbell does not fund or operate drilling and completion, and development depends on working interest owners' activity, as reflected by 91 active rigs on its acreage and 1,016 gross DUCs as of June 30, 2026.

Outlook

Management affirmed its 2026 financial and operational guidance ranges previously disclosed in its Q4 2025 earnings release and expects to update guidance upon the closing of the Drop Down acquisition announced on July 17, 2026. As of June 30, 2026, Kimbell's major properties had 7.39 net DUCs and net permitted locations versus an estimated 7.20 net wells needed to maintain flat production. Kimbell declared a Q2 2026 cash distribution of $0.47 per common unit, a 15% increase from Q1 2026, reflecting a 75% payout ratio and a 13.0% annualized yield based on the August 6, 2026 closing price of $14.51, payable August 24, 2026 to record holders as of August 17, 2026.