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1. Company Snapshot

1.a. Company Description

Kimbell Royalty Partners, LP, together with its subsidiaries, acquires and owns mineral and royalty interests in oil and natural gas properties in the United States.As of December 31, 2021, it owned mineral and royalty interests in approximately 11.4 million gross acres and overriding royalty interests in approximately 4.7 million gross acres.The company's mineral and royalty interests are located in 28 states and include ownership in approximately 122,000 gross wells, including approximately 46,000 wells in the Permian Basin.


It serves as the general partner of the company.The company was founded in 2013 and is based in Fort Worth, Texas.

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1.b. Last Insights on KRP

Kimbell Royalty Partners' recent performance was negatively impacted by concerns over declining EPS, price volatility, and solvency issues. Despite a strong Q3 earnings beat, with $0.19 per share beating the Zacks Consensus Estimate, the company's royalty model lacks control over development pace. The Dallas Federal Reserve's survey signals upstream industry contraction and lower spending plans, raising concerns. Additionally, KRP's high leverage and negative levered FCF margin have sparked worries about long-term stability, prompting a "Hold" rating from some analysts.

1.c. Company Highlights

2. Strong Q3 Earnings Reflect Operational Discipline

The company's Q3 earnings report was solid, with production increasing organically by 1% over Q2, and exceeding the midpoint of 2025 guidance. The company's adjusted EBITDA was $62.3 million, and EPS came in at $0.19, beating analyst estimates of $0.13. The distribution of $0.35 per common unit was declared, representing a 75% payout ratio, with the remaining 25% used to pay down debt. Cash G&A per BOE was below the midpoint of guidance, reflecting operational discipline.

Publication Date: Nov -12

📋 Highlights
  • Production Growth:: 1% organic Q2-Q3 2025 production increase, exceeding 2025 guidance midpoints with 25,574 BOE/day for first 9 months.
  • Q3 Distribution:: $0.35 per common unit declared, with 75% of cash available for distribution allocated to unitholders and 25% used for debt reduction.
  • EBITDA Performance:: Q3 consolidated adjusted EBITDA of $62.3 million, fully classified as return of capital for tax benefits.
  • Liquidity & Debt:: Net debt-to-EBITDA ratio of 1.6x with $176.5 million undrawn capacity under secured revolving credit facility.

Operational Highlights

The company's production averaged 25,574 BOE per day for the first 9 months of 2025, driven by a strong active rig count of 86 rigs across its acreage, representing a 16% market share of U.S. land rigs. The company's diversified portfolio of high-quality royalty assets across leading U.S. basins positions it well for long-term growth. As the company noted, "We're constantly getting positive surprises from operators that are drilling different benches, expanding plays, doing different things, and all of that accrues to our benefit."

Financial Position

The company's balance sheet and liquidity are strong, with approximately $448.5 million in debt outstanding under its secured revolving credit facility, representing a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.6x. The company had approximately $176.5 million in undrawn capacity under the secured revolving credit facility as of September 30, 2025, providing flexibility for future growth.

Valuation and Growth Prospects

With a P/E Ratio of 36.71 and an EV/EBITDA of 12.16, the company's valuation appears to reflect a moderate growth outlook. Analysts estimate revenue growth of 1.5% next year. The company's diversified portfolio and strong operational performance position it well for long-term growth, particularly in the Haynesville and Mid-Con, where higher natural gas prices could drive significant upside. The Dividend Yield of 12.15% is also attractive, with approximately 100% of the distribution expected to be considered a return of capital.

Outlook

The company remains confident about its prospects for continued development, driven by its diversified portfolio and strong operational performance. With a strong balance sheet and liquidity position, the company is well-positioned to benefit from long-term growth trends in U.S. energy demand. As the company noted, "We feel very good about our position and our prospects for continued growth and development."

3. NewsRoom

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Kimbell Royalty (NYSE:KRP) Given Consensus Rating of “Reduce” by Analysts

Dec -06

Source: defenseworld.net

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Here are Monday's Top Wall Street Analyst's Research Calls: Baidu, Carvana, Exact Sciences, Ferrari, Marvell Technology, Meta Platforms and More

Nov -24

Source: 247wallst.com

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Kimbell Royalty Partners: A Sell Despite Its Tempting Yield

Nov -24

Source: seekingalpha.com

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Kimbell Royalty Partners: Compelling Double-Digit Yield For Tomorrow's Energy Landscape

Nov -21

Source: seekingalpha.com

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These Dividends Are Printing Cash - I'm Going All In

Nov -18

Source: seekingalpha.com

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Kimbell Royalty Partners, LP Common Units (KRP) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Kimbell Royalty (KRP) Beats Q3 Earnings and Revenue Estimates

Nov -06

Source: zacks.com

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Kimbell Royalty Partners Announces Third Quarter 2025 Results

Nov -06

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.84%)

6. Segments

Oil, Natural Gas and Natural Gas Liquids

Expected Growth: 5%

Kimbell Royalty Partners, LP's 5% growth in Oil, Natural Gas, and Natural Gas Liquids is driven by increasing demand, improved operational efficiencies, and strategic acquisitions. Additionally, favorable commodity prices, growing production volumes, and a strong hedging program contribute to the growth. Furthermore, the partnership's diversified asset base and low-cost structure enable it to capitalize on market opportunities and deliver sustainable growth.

Gains (Loss) on Commodity Derivative Instruments

Expected Growth: 3%

Kimbell Royalty Partners, LP's 3% growth in Gains (Loss) on Commodity Derivative Instruments is driven by increased hedging activities, favorable commodity price movements, and improved risk management strategies. Additionally, the company's diversified portfolio of oil and gas assets and strategic partnerships have contributed to the growth.

Lease Bonus and Other Income

Expected Growth: 4%

Kimbell Royalty Partners, LP's 4% growth in Lease Bonus and Other Income is driven by increasing oil and gas production, rising commodity prices, and strategic acquisitions of mineral and royalty interests. Additionally, the company's focus on cost optimization and efficient operations has contributed to the growth.

7. Detailed Products

Royalty Interests

Kimbell Royalty Partners, LP acquires and manages oil and natural gas royalty interests in the United States, providing a steady stream of revenue to investors.

Mineral Interests

The company acquires and manages mineral interests in oil and gas properties, providing a potential source of future revenue.

Working Interests

Kimbell Royalty Partners, LP participates in the drilling and production of oil and gas wells, providing a potential source of revenue through working interests.

Net Profits Interests

The company acquires and manages net profits interests in oil and gas properties, providing a share of the profits from production.

Overriding Royalty Interests

Kimbell Royalty Partners, LP acquires and manages overriding royalty interests in oil and gas properties, providing a percentage of the revenue from production.

8. Kimbell Royalty Partners, LP's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Kimbell Royalty Partners, LP because the company's oil and gas royalties are unique and difficult to replicate.

Bargaining Power Of Customers

The bargaining power of customers is medium for Kimbell Royalty Partners, LP because while the company has a diverse customer base, some customers may have significant bargaining power due to their size and volume of purchases.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Kimbell Royalty Partners, LP because the company is not heavily reliant on a single supplier and has multiple options for sourcing oil and gas royalties.

Threat Of New Entrants

The threat of new entrants is high for Kimbell Royalty Partners, LP because the oil and gas industry is highly competitive and new companies may enter the market, increasing competition for the company's royalties.

Intensity Of Rivalry

The intensity of rivalry is high for Kimbell Royalty Partners, LP because the oil and gas industry is highly competitive, and the company faces intense competition from other companies in the industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.04%
Debt Cost 9.16%
Equity Weight 99.96%
Equity Cost 9.36%
WACC 9.36%
Leverage 0.04%

11. Quality Control: Kimbell Royalty Partners, LP passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.83$

Current Price

12.83$

Potential

-0.00%

Expected Cash-Flows