Kimbell Royalty Partners, LP

Second-quarter oil, natural gas and NGL revenues were $103 million, a record for Kimbell, including 9 days of contribution from acquired production. Average daily production was 25,830 BOE per day, and run-rate production rose to 26,967 BOE per day after the Mesa Royalties closing. General and administrative expenses were $10.2 million, including $5.9 million of cash G&A, or $2.50 per BOE, below the midpoint of guidance. Consolidated adjusted EBITDA was a record $84.9 million. The company declared a $0.47 per common unit distribution for Q2, up 15% from Q1; management said about 47% is expected to be return on capital. At June 30, 2026, debt outstanding on the revolver was about $478.7 million, with about $181.3 million in undrawn capacity and net debt to trailing 12-month adjusted EBITDA of about 1.4x. Management affirmed 2026 financial and operational guidance, but said guidance will be updated after the announced drop-down acquisition closes later this month.

Bob Ravnaas called the quarter outstanding and emphasized records across revenue, net income, adjusted EBITDA, lease bonuses, production, and cash available for distribution. He highlighted Mesa Royalties and the recently announced drop-down as growth drivers that should add meaningful production and cash flow for years. His tone was confident and constructive, pointing to strong drilling activity on Kimbell acreage, elevated oil prices, and continued belief that U.S. royalty consolidation is still early in its cycle.

Davis Ravnaas focused on the financial execution: $103 million of oil, natural gas and NGL revenue, $84.9 million of adjusted EBITDA, and $10.2 million of G&A with cash G&A at $2.50 per BOE. He noted the Q2 distribution of $0.47 per unit, with roughly 75% of cash available for distribution paid out and the remaining 25% used to pay down revolver borrowings. He also cited the repurchase of 500,000 units for about $7.4 million at an average price of $14.70, the June 24 borrowing-base increase from $625 million to $660 million, and leverage of about 1.4x with $181.3 million of undrawn capacity.

Analysts pressed for a guidance update, but management said it would wait until the drop-down acquisition closes; Davis said future acquisitions should look similar to the legacy asset base and remain immediately accretive. Questions on liquidity and preferreds drew a response that Kimbell wants to keep plenty of liquidity, maintain conservative leverage, and opportunistically reduce preferred units over time. On A&D, management said the market is very competitive, especially for Permian-only packages where bids can be nearly 2x Kimbell’s level, while diversified multi-basin packages remain more attractive and more likely to clear. Management also said lease bonuses have risen with higher oil prices and deeper-zone interest, and that DUC/permit inventory should remain roughly stable relative to maintenance levels.