Kimbell Royalty Partners LP (KRP) 2023 Q3 法說會逐字稿

Greetings, and welcome to the Kimbell Royalty Partners Third Quarter 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Kimbell Royal Partners 2023 年第三季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It's now my pleasure to introduce your host, Rick Black, Investor Relations for Kimbell Royalty Partners. Thank you. You may begin.

現在我很高興向您介紹主持人，Rick Black，金貝爾皇室合夥人投資者關係部門的負責人。謝謝。你可以開始了。

Thank you, operator, and good morning, everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for the third quarter of 2023, which ended on September 30, 2023. This call is also being webcast and can be accessed through the audio link on the Events and Presentations page of the IR section of kimbellrp.com. Information recorded on this call speaks only as of today, November 2, 2023. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay listening or transcript reading.

謝謝接線員，大家早安。歡迎參加金貝爾版稅合作夥伴電話會議，審查2023 年第三季的財務和營運業績，該電話會議於 2023 年9 月30 日結束。該電話會議也正在進行網路直播，可以透過以下活動和演示頁面上的音訊連結進行訪問： kimbellrp.com 的 IR 部分。本次電話會議記錄的資訊僅截至今天（2023 年 11 月 2 日）。因此請注意，自任何重播收聽或文字記錄閱讀之日起，任何時間敏感資訊可能不再準確。

I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance are considered forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call, which, by their nature, are uncertain and outside of the company's control. Actual results may differ materially. Please refer to today's earnings press release for our disclosure on forward-looking statements.

我還想提醒您，今天的討論中所做的非歷史事實的陳述，包括預期或未來事件或未來財務業績的陳述，均被視為根據私人證券訴訟改革的安全港條款做出的前瞻性陳述1995 年法案。作為今天電話會議的一部分，我們將做出前瞻性聲明，這些聲明本質上是不確定的，並且不在公司的控制範圍內。實際結果可能存在重大差異。請參閱今天的收益新聞稿，以了解我們對前瞻性聲明的揭露。

These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution. Reconciliations to the nearest GAAP measures can be found at the end of today's press release. Kimbell assumes no obligation to publicly update or revise any forward-looking statements.

這些因素以及其他風險和不確定性在該公司向美國證券交易委員會提交的文件中進行了詳細描述。管理階層也將參考非公認會計原則衡量標準，包括調整後的 EBITDA 和可用於分配的現金。您可以在今天新聞稿的末尾找到與最接近的公認會計原則（GAAP）衡量標準的調節表。金貝爾不承擔公開更新或修改任何前瞻性陳述的義務。

I would now like to turn the call over to Bob Ravnaas, Kimbell Royalty Partners' Chairman and Chief Executive Officer. Bob?

我現在想將電話轉給金貝爾皇室合夥人公司董事長兼執行長 Bob Ravnaas。鮑伯？

Thank you, Rick, and good morning, everyone. We appreciate you joining us on the call this morning. With me today are several members of our senior management team, including Davis Ravnaas, our President and Chief Financial Officer; Matt Daly, our Chief Operating Officer; and Blayne Rhynsburger, our Controller.

謝謝你，瑞克，大家早安。我們感謝您今天早上加入我們的電話會議。今天與我在一起的有我們高階管理團隊的幾位成員，包括我們的總裁兼財務長 Davis Ravnaas；馬特·達利，我們的營運長；還有我們的財務總監 Blayne Rhynsburger。

We are very pleased to announce another record quarter that included substantial growth in all key operating metrics. Our total production, including a full quarter from our recent $455 million acquisition from a private seller exceeded 23,000 BOE per day for the first time in our history. We are excited to have achieved this significant milestone as we continue to execute our strategic business model aimed at not only consolidating the U.S. oil and natural gas royalty sector, but also, and more importantly, generating long-term value for our unitholders. The third quarter marked new all-time highs set in production, rig count, DUCs and permits.

我們非常高興地宣布又一個創紀錄的季度，所有關鍵營運指標均大幅成長。我們的總產量（包括最近以 4.55 億美元從私人賣家手中收購的產品）的整個季度產量在我們歷史上首次超過每天 23,000 桶油當量。我們很高興能夠實現這一重要里程碑，因為我們將繼續執行我們的戰略業務模式，不僅旨在鞏固美國石油和天然氣特許權使用費行業，更重要的是，為我們的單位持有人創造長期價值。第三季產量、鑽孔機數量、DUC 和許可證均創下歷史新高。

During the quarter, our production mix continued to materially shift towards liquids with oil and NGLs now representing 49% of our production compared to 46% last quarter. Activity in our acreage remains strong, and we now have a 17% market share of the overall U.S. land rig count, the highest in our history. Even after giving effect to our most recent $455 million acquisition, we still have the best-in-class PDP decline rate of only 14%.

本季度，我們的生產結構持續大幅轉向液體產品，其中石油和液化天然氣目前占我們產量的 49%，而上季為 46%。我們的土地活動依然強勁，目前我們在美國陸地鑽機總數中佔據 17% 的市場份額，這是我們歷史上最高的。即使在我們最近 4.55 億美元的收購生效之後，我們仍然擁有同類最佳的 PDP 下降率，僅為 14%。

At the end of the quarter, we had 9.3 net DUCs and permits reflecting the widest spread we've ever had of line-of-sight wells relative to the number of wells needed to maintain flat production of only 5.8 net wells per year. This gives us confidence in the resilience in our production as we wrap up 2023 and look at 2024. In short, we are extremely pleased with this quarter as well as our third quarter distribution of $0.51 that we declared today, an increase of 31% from last quarter.

截至本季末，我們擁有 9.3 個淨 DUC 和許可證，這反映了我們有史以來擁有的視距井的最大分佈範圍，而維持穩定產量所需的井數量僅為每年 5.8 個淨井。這讓我們在結束 2023 年並展望 2024 年時對我們的生產彈性充滿信心。簡而言之，我們對本季度以及我們今天宣布的第三季度分配 0.51 美元感到非常滿意，比去年增加了 31%上個季度。

In September, we closed our largest acquisition in the company's history. As we stated then and still believe today, this acquisition is expected to significantly enhance Kimbell's positions in the best-performing, highest growth oil and gas basins in the Lower 48. The targeted portfolio of mineral and royalty interest complements our disciplined approach to M&A, combining excellent reservoir quality, near-term cash flow and long-term drilling upside.

九月，我們完成了公司史上最大的收購案。正如我們當時所說且至今仍相信，此次收購預計將顯著增強Kimbell 在48 個州內表現最佳、增長最快的石油和天然氣盆地中的地位。礦產和特許權使用費權益的目標投資組合補充了我們嚴格的併購方法，結合了優異的儲層品質、近期現金流和長期鑽探優勢。

While this acquisition was immediately accretive to distributable cash flow per unit, we believe it will generate accelerated accretion in the future years. We look forward to continuing our role as a major consolidator in the oil and natural gas royalty sector.

雖然此次收購立即增加了單位可分配現金流，但我們相信它將在未來幾年加速增加。我們期待繼續發揮石油和天然氣特許權使用費領域主要整合者的作用。

I'll now turn the call over to Davis to review our financials in more detail before we open the call to questions.

現在，我將把電話轉給戴維斯，以便在我們開始提問之前更詳細地審查我們的財務狀況。

Thanks, Bob, and good morning, everyone. Kimbell performed extremely well in the third quarter and generated record daily production that marked a significant new milestone for Kimbell. Including a full quarter of the acquired production that Bob just discussed, the revenues of which will be received by Kimbell for the full quarter, run rate production was 23,531 BOE per day on a 6:1 basis. As a result of the significant incremental production and our expectations for the fourth quarter, today, we are boosting our production guidance range for Q4. In addition, we expect record low cash G&A per BOE at Q4, reflecting the positive operating leverage our business model generates.

謝謝鮑勃，大家早安。 Kimbell 在第三季表現非常出色，日產量創歷史新高，這標誌著 Kimbell 的一個重要的新里程碑。包括鮑勃剛才討論的整個季度的收購產量（金貝爾將在整個季度獲得收入），以 6:1 計算，運行產量為每天 23,531 桶油當量。由於產量大幅增加以及我們對第四季度的預期，今天我們提高了第四季度的生產指導範圍。此外，我們預計第四季度每個京東方的現金管理費用將創歷史新低，這反映出我們的業務模式產生的積極營運槓桿。

I'll start by reviewing our financial results from the third quarter, beginning with oil, natural gas and NGL revenues of $69.2 million, an increase of 21.5% compared to the second quarter. Third quarter 2023 run rate average daily production was 19,777 BOE per day, including 18 days of production from our recent acquisition. This represents a 13% increase compared to the second quarter run rate average daily production of 17,573 BOE per day. Our third quarter production mix was comprised of approximately 51% from natural gas and approximately 49% from liquids or 34% from oil and 15% from NGLs.

我首先回顧我們第三季的財務業績，首先是石油、天然氣和液化天然氣的收入為 6,920 萬美元，比第二季成長了 21.5%。 2023 年第三季的平均日產量為 19,777 桶油當量，其中包括我們最近收購的 18 天產量。與第二季平均日產量 17,573 桶油當量相比，這意味著增加了 13%。我們第三季的生產組合包括約 51% 來自天然氣，約 49% 來自液體，或 34% 來自石油，15% 來自液化天然氣。

As of September 30, 2023, Kimbell's major properties had 909 gross or 5.4 net DUCs and 805 gross or 3.94 net permitted locations on its acreage. This data does not include our minor properties, which we estimate can add an additional 20% to the DUC and permit inventory.

截至 2023 年 9 月 30 日，Kimbell 的主要房地產擁有 909 個總 DUC 或 5.4 個淨 DUC，以及 805 個總許可地點或 3.94 個淨許可地點。這些數據不包括我們的次要財產，我們估計這些財產可以為 DUC 和許可證庫存額外增加 20%。

In addition, we exited the quarter with 99 rigs actively drilling on our acreage, and our market share of all land rigs drilling in the continental United States represents approximately 17%, a new record.

此外，在本季度結束時，我們有 99 台鑽機在我們的區域積極鑽探，我們在美國大陸所有陸地鑽機鑽探的市場份額約為 17%，創下新紀錄。

On the expense side, general and administrative expenses for Kimbell were $10.4 million, $7 million of which was cash G&A expense. Excluding the impact of approximately $1.5 million in transaction-related expenses associated with the acquired production and including a full quarter impact of the acquired production, cash G&A per BOE was $2.55, a new record low for the company.

在費用方面，Kimbell 的一般和行政費用為 1,040 萬美元，其中 700 萬美元是現金一般管理費用。排除與所收購生產相關的約 150 萬美元交易相關費用的影響以及所收購生產的整個季度影響，每個 BOE 的現金管理費用為 2.55 美元，創下該公司的新低。

Third quarter net income was approximately $18.5 million and net income attributable to common units was approximately $13.6 million as compared to $17.8 million and $13.5 million, respectively, from last quarter.

第三季淨利約 1,850 萬美元，歸屬於普通單位的淨利潤約為 1,360 萬美元，而上季分別為 1,780 萬美元和 1,350 萬美元。

Total third quarter consolidated adjusted EBITDA was $55.8 million, up from $45 million last quarter, including the acquired production from the effective date of June 1, 2023, through September 30, 2023, Q3 2023 consolidated adjusted EBITDA was $71.6 million.

第三季綜合調整後EBITDA 總額為5,580 萬美元，高於上一季的4,500 萬美元，其中包括自2023 年6 月1 日生效之日起至2023 年9 月30 日期間獲得的生產，2023 年第三季綜合調整後EBITDA 為7,160 萬美元。

You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution at the end of our news release. Today, we announced a cash distribution of $0.51 per common unit for the third quarter. This represents a cash distribution payment to common unitholders that equates to 75% of cash available for distribution and the remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimbell's secured revolving credit facility.

在我們的新聞稿末尾，您會發現合併調整後的 EBITDA 和可供分配的現金的調整表。今天，我們宣布第三季每普通單位現金分配 0.51 美元。這代表向普通單位持有人支付的現金分配付款，相當於可分配現金的 75%，其餘 25% 將用於償還 Kimbell 擔保循環信貸安排下的部分未償還借款。

We expect that approximately 55% of our third quarter 2023 distribution should not constitute dividends for U.S. federal income tax purposes but instead are estimated to constitute nontaxable reductions to the basis of each distribution recipients ownership interest in Kimbell common units. Please refer to today's earnings release for additional commentary related to taxes.

我們預計，2023 年第三季分配的約 55% 不應構成用於美國聯邦所得稅目的的股息，而是估計構成每個分配接收者在 Kimbell 普通單位所有權權益基礎上的免稅減少。請參閱今天的收益報告，以了解與稅務相關的其他評論。

Moving now to our balance sheet and liquidity. As a reminder, on June 13, we amended our existing credit agreement to, among other things, increase the borrowing base and elected commitment amount from $350 million to $400 million on the secured revolver and extend the maturity to June 2027. As of September 30, 2023, we had approximately $310.4 million in debt outstanding under our secured revolving credit facility.

現在轉向我們的資產負債表和流動性。提醒一下，6 月13 日，我們修改了現有信貸協議，除其他外，將抵押循環貸款的借款基礎和選定承諾金額從3.5 億美元增加到4 億美元，並將期限延長至2027 年6月。截至9 月30 日至 2023 年，我們的擔保循環信貸安排下的未償債務約為 3.104 億美元。

We continue to maintain a conservative balance sheet with net debt to trailing 12-months consolidated adjusted EBITDA of 0.9x. Kimbell had approximately $89.6 million in undrawn capacity under its secured revolving credit facility as of September 30, 2023.

我們繼續維持保守的資產負債表，過去 12 個月的淨債務為 0.9 倍的綜合調整後 EBITDA。截至 2023 年 9 月 30 日，Kimbell 在其擔保循環信貸安排下擁有約 8,960 萬美元的未提取能力。

We are very comfortable with our strong financial position, the support of our expanding base syndicates and our financial flexibility. We remain very bullish about our industry and our company as we see a long horizon for continued growth and opportunities to enhance shareholder value.

我們對我們強大的財務狀況、不斷擴大的基礎集團的支持以及我們的財務靈活性感到非常滿意。我們仍然非常看好我們的行業和公司，因為我們看到持續成長的長遠前景和提高股東價值的機會。

With that, operator, we are now ready for questions.

接線員，現在我們準備好提問了。

(Operator Instructions) Our first question comes from the line of Derrick Whitfield with Stifel.

（操作員說明）我們的第一個問題來自 Derrick Whitfield 和 Stifel 的線路。

With my first question, I wanted to focus on your growth trajectory. Looking beyond Q4, with line of sight inventories far exceeding your maintenance requirement, it feels like there's quite a bit of upside to continue to forecast given that we're largely holding production flat in Q4. Is that a reasonable statement?

對於第一個問題，我想重點關注您的成長軌跡。展望第四季之後，視線庫存遠遠超過您的維護需求，鑑於我們在第四季度基本上保持產量持平，感覺繼續預測還有相當大的上行空間。這是一個合理的說法嗎？

It's a great question. It's a great point. As you know, it's always challenging to say the least to predict growth and production volumes as a royalty company, just given the fact that we don't have, obviously, control over DUC completion dates, permit conversions, et cetera. That being said, your point is well founded. So we now have more kind of line of sight wells relative to maintenance wells to keep production flat than I believe we've ever had in company history as a ratio. So that would suggest robust growth going forward or at least certainly more than we've had in the past on an organic basis.

這是一個很好的問題。這是一個很好的觀點。如您所知，至少可以說，作為一家特許權使用費公司，預測成長和產量總是具有挑戰性，因為我們顯然無法控制 DUC 完成日期、許可轉換等。話雖這麼說，你的觀點是有根據的。因此，我們現在擁有比維護井更多的視線井，以保持產量平穩，我相信我們在公司歷史上的比率是前所未有的。因此，這表明未來將出現強勁成長，或至少肯定比我們過去的有機成長要快。

What you'll probably see from us as we dig into the numbers and provide continued guidance for 2024, is a conservative view on production. That being said, your point is well stated and justified, and I don't disagree with the premise. Matt, anybody else want to jump in there on any thoughts?

當我們深入研究數據並為 2024 年提供持續指導時，您可能會從我們這裡看到的是對生產的保守看法。話雖這麼說，你的觀點陳述得很好並且有道理，我不同意這個前提。馬特，還有其他人想談談任何想法嗎？

Yes. Yes. I mean I would just say that looking at Q3, we had very good conversions to PDP in the Permian, Haynesville and Eagle Ford. Excluding the acquisition we made in Q3, our legacy production actually grew 2% quarter-over-quarter between Q2 and Q3. So that's 8% annualized growth organically for our legacy production. So that's a great growth quarter there. But looking forward, as Davis said, you're correct. I mean, we have a record number of line of sight wells right now, 9.34. We only need 5.8 net wells to stay flat. That's the highest spread in the company history. So we feel very good about not only the resilience of Q4 production, but also the potential for organic growth as we wrap up '23 and going to '24.

是的。是的。我的意思是，我只想說，從第三季來看，我們在二疊紀、海恩斯維爾和伊格爾福特對 PDP 的轉換非常好。不包括我們在第三季進行的收購，我們的傳統產量在第二季和第三季之間實際上比去年同期成長了 2%。因此，我們傳統生產的年化有機成長率為 8%。所以這是一個巨大的成長季度。但展望未來，正如戴維斯所說，你是對的。我的意思是，我們現在的視線井數量創歷史新高，達到 9.34 個。我們只需要 5.8 口淨井即可保持平穩。這是該公司史上最高的利差。因此，我們不僅對第四季度生產的彈性感到非常滿意，而且對 23 年結束並進入 24 年時的有機成長潛力感到非常滿意。

Derrick, it's a balance. We don't want to be unduly conservative, but we also don't want to be overly aggressive so we do our best when issuing guidance just given the obvious kind of lack of operational control. I hope that's fair in your view.

德里克，這是一個平衡。我們不想過於保守，但我們也不想過於激進，因此鑑於明顯缺乏營運控制，我們在發布指導時會盡力而為。我希望你認為這是公平的。

It is. And with my follow-up, clearly, understanding that the [interest driving] on the largest transaction you guys have done in the history of the company. I wanted to ask if you could characterize the competitive landscape for M&A at present and your interest in participating in it? And has the recent, I guess, surge or firming in commodity prices change the bid as dynamics out in the market?

這是。透過我的後續行動，我清楚地了解到你們在公司歷史上所做的最大一筆交易的[利益驅動]。我想問您能否描述一下目前併購的競爭格局以及您參與併購的興趣？我猜想，最近大宗商品價格的飆升或堅挺是否會隨著市場動態而改變出價？

Great question. So I would say just first and foremost, in my opinion, this was a historic year for M&A in the royalty sector, not just ourselves but also our peers. I think, have done a fabulous job of consolidating and getting private minerals into the public sector. So it's been a big year overall.

很好的問題。因此，我首先想說的是，在我看來，今年對於特許權使用費行業的併購來說是歷史性的一年，不僅是我們自己，也是我們的同行。我認為，在整合私人礦產並將其納入公共部門方面做得非常出色。所以整體來說這是重要的一年。

I think that the competitive dynamic for larger packages, like the ones that we would be targeting is probably the most favorable to buyers that I've seen in quite some time. I would actually argue in many ways and we see this that some of the smaller deals that come across our desk are priced competitively than larger deals.

我認為，較大包裝的競爭動態（例如我們的目標包裝）可能是我在相當長一段時間以來看到的對買家最有利的競爭動態。事實上，我會​​在很多方面爭論，我們看到，我們辦公桌上的一些較小的交易的定價比較大的交易更具競爭力。

And so I think that a lot of aggregators are going to have some difficulty putting together packages where they pay, let's call it, 10x cash flow and then try to sell to someone else like a meaningful multiple greater than that, like 12x. But in reality, the large M&A deals that you're seeing, whether it's from ourselves or our peers are in the 6 to 8x cash flow range.

因此，我認為許多聚合商在組合支付（我們稱之為 10 倍現金流）的套餐時會遇到一些困難，然後嘗試以高於此的有意義的倍數（例如 12 倍）出售給其他人。但實際上，您看到的大型併購交易，無論是來自我們自己還是我們的同行，現金流量都在 6 到 8 倍範圍內。

So we think there is benefit right now to being a larger buyer of assets. We will always look at everything. I think what you'll see is that we'll continue to be very (inaudible) on the acquisitions that we make. We've had years where we've done no deals. We've had years where we've done one deal. This year, we did 3 meaningful ones, but frankly, they were all unexpected in nature. We didn't -- it's hard to predict the M&A wave and we just happen to be in a good place at the right time. And they are assets that we really like, and we're able to get them.

因此，我們認為現在成為更大的資產買家是有好處的。我們將永遠專注於一切。我想你會看到我們將繼續非常（聽不清楚）我們所做的收購。我們已經很多年沒有達成任何交易了。多年來我們都達成過一筆交易。今年我們做了三件有意義的事，但坦白說，都是出乎意料的。我們沒有——很難預測併購浪潮，而我們恰好在正確的時間處於正確的位置。它們是我們真正喜歡的資產，我們能夠得到它們。

So I'd say that we're going to participate. We'll be pursuing deals on a leverage-neutral basis. We don't anticipate levering up, obviously, any more than we already are and we like our chances.

所以我想說我們會參加。我們將在槓桿中性的基礎上尋求交易。顯然，我們預計不會比現在更提高槓桿率，而且我們希望抓住機會。

And I think that we've done very well historically in using our currency, either through primary offerings or direct issuances to sellers as a currency to acquire assets. I think we're differentiated in that regard. And so I think you'll continue to see us in the M&A landscape. So we're going to be very rifle shot in our approach. Bob or Matt, anything else you guys want to add?

我認為，歷史上我們在使用我們的貨幣方面做得非常好，無論是透過初級發行還是直接向賣家發行作為購買資產的貨幣。我認為我們在這方面是有區別的。因此，我認為您將繼續在併購領域看到我們。所以我們的方法將是非常步槍射擊。鮑伯或馬特，你們還有什麼要補充的嗎？

Yes. The only thing I'd like to add is we really love the last 3 acquisitions that we've done, and we're delighted to have been able to get them at accretive pricing. So starting with (inaudible) last year, MB and then this most recent largest third quarter acquisition, the quality of the production on all 3 are excellent and just a lot of drilling activity. So we're very excited about the way these 3 acquisitions are performing.

是的。我唯一想補充的是，我們真的很喜歡我們最近完成的 3 次收購，而且我們很高興能夠以增值定價獲得它們。因此，從去年（聽不清楚）MB 開始，然後是最近第三季最大的收購，所有 3 個項目的生產品質都非常出色，而且鑽探活動也很多。因此，我們對這三項收購的表現感到非常興奮。

Our next question comes from the line of John Abbott with Bank of America.

我們的下一個問題來自美國銀行的約翰·阿博特。

Yes. So both our questions are really on tax. So per your presentation, you've indicated that 55% of the distribution paid in November will be nontax from federal -- for federal purposes. I guess the real question is just how does that trajectory sort of look over a sort of a multiyear basis based off your forecast? What do you think about that?

是的。所以我們的兩個問題其實都是關於稅收的。因此，根據您的演示文稿，您已表示 11 月支付的分配的 55% 將不是聯邦稅——出於聯邦目的。我想真正的問題是，根據您的預測，這種軌跡在多年基礎上看起來如何？你對此有何看法？

In terms of future, how does that 55% number change going forward?

就未來而言，55% 的數字將如何變化？

Correct.

正確的。

Yes. Blayne, are you on the call right now? I might defer it to you to answer that question.

是的。布萊恩，你現在在打電話嗎？我可能會請你來回答這個問題。

Yes, I am. And we used to in previous year, provide guidance going out further than just the quarter. But then when commodity prices increased, we kind of made the change to do it quarter-by-quarter. So I would say really that number, that 55% number is really just going to ride with commodity prices. So if you see a run in oil and that's where the capital number is going to go down. But there's really no other factors other than that that's going to change that. So I would just -- the answer would be that it's going to change with commodity prices and move with that, so.

我是。去年我們常常提供比季度更進一步的指導。但當大宗商品價格上漲時，我們做出了改變，並按季度進行。所以我想說的是，55% 的數字確實會隨著大宗商品價格的上漲而改變。因此，如果你看到石油價格上漲，那麼資本數量就會下降。但除此之外確實沒有​​其他因素會改變這一點。所以我的答案是，它會隨著大宗商品價格的變化而變化，並隨之變化，所以。

I understand. I understand that you don't necessarily provide multiyear tax guidance anymore, and I understand the volatility of commodity prices. But you are taxed like a C corp. You've done your acquisitions, so that probably helps your taxes probably next year and maybe a little bit after that. But at what point, if just sort of assuming if you did not do another acquisition, would you guys think that you would be a full taxpayer? Are we looking 4 to 5 years out? How do you kind of -- if we just sort of look at the strip today.

我明白。我了解你們不一定再提供多年期稅務指導，而且我了解商品價格的波動性。但你要像 C 型企業一樣納稅。你已經完成了收購，所以這可能會對你明年的稅收有所幫助，也許在那之後會有所幫助。但是，如果只是假設如果您不進行另一次收購，那麼您會在什麼時候認為自己會成為完整的納稅人？我們是否期待 4 到 5 年後？如果我們看看今天的連環畫，你覺得怎麼樣？

Yes, John, it's a fair question. Given the dramatic growth we've had this year, candidly, that analysis that you're asking for, it's challenging. We have to work with accounting firms and it takes time to come up with that. In fact, I think we're one of the only firms that's ever provided multiyear tax guidance, at least in our sector, let us reflect on that.

是的，約翰，這是一個公平的問題。坦白說，考慮到我們今年的急劇增長，您所要求的分析是具有挑戰性的。我們必須與會計師事務所合作，這需要時間來解決。事實上，我認為我們是唯一提供多年稅務指導的公司之一，至少在我們的行業，讓我們反思一下這一點。

Given the M&A growth that we've had this year, obviously, the dynamics of the company have changed pretty meaningfully. But that might be something that's worth our time to revisit and point taken that additional disclosure is always great. So that's on us, let us circle up internally and figure out next steps on providing additional guidance, if that's fair.

考慮到今年我們的併購成長，顯然，公司的動態發生了相當有意義的變化。但這可能值得我們花時間重新審視，並指出額外的披露總是好的。因此，這就是我們的責任，讓我們在內部進行討論，找出提供額外指導的後續步驟（如果公平的話）。

Our next question comes from the line of Trafford Lamar with Raymond James.

我們的下一個問題來自特拉福德·拉馬爾和雷蒙德·詹姆斯的對話。

I guess the first one I have is leverage is now below 1x and continues to move directionally lower. Should we anticipate a 75% payout ratio moving higher over time? Or how should we think about that? How are you guys thinking of that?

我想我擁有的第一個槓桿現在低於 1 倍，並且繼續定向走低。我們是否應該預期 75% 的支付率會隨著時間的推移而上升？或者說我們該如何思考這個問題？你們覺得怎麼樣？

Yes. Excellent question. Always the best question for us is how do you manage the cash flows and how do we think about rewarding shareholders in the most efficient way. I would say that at the Board level, we want to keep the ratio -- the payout ratio consistent at 75%. We like paying down debt, particularly when we're paying 8% interest on it with 25% of our cash flow. So I think you'll see us continue to do that for quite some time. There will be a point at which we want to start to redeem the profit that we have. So bringing up additional capacity on the revolver, just gives us more flexibility to do that.

是的。很好的問題。對我們來說，最好的問題始終是如何管理現金流以及我們如何考慮以最有效的方式回報股東。我想說，在董事會層面，我們希望將派息率維持在 75%。我們喜歡償還債務，特別是當我們用 25% 的現金流支付 8% 的利息時。所以我想你會看到我們在相當長的時間內繼續這樣做。到了某個時間點，我們就會開始贖回我們所擁有的利潤。因此，增加左輪手槍的容量，只會讓我們更靈活地做到這一點。

So I think that's where we are at this point, but it's something that we constantly evaluate. And your point is very well taken, which is that the balance sheet is in great shape. There may be a point in the future where we decide to increase that payout ratio because it's just unduly conservative. We just don't feel -- at least at this point, that we're at that point yet. Matt or Bob, anything you guys want to add?

所以我認為這就是我們目前所處的情況，但我們會不斷評估這一點。你的觀點很好，那就是資產負債表狀況良好。未來某個時候，我們可能會決定提高股息率，因為它過於保守。我們只是不覺得──至少在這一點上，我們還沒有到那個地步。馬特或鮑勃，你們還有什麼要補充的嗎？

No, I'd say that our borrowing base continues to increase. We're going to have a (inaudible) determination meeting later this month, and we -- right now, we're at $400 million on our credit facility. We expect that to go up in Q4, which is adding additional liquidity. But as Davis says, right now, the plan is to, over the next quarters to continue to pay down the credit facility to be in a good position, call it, this time next year to redeem a big chunk of that Apollo preferred. So...

不，我想說的是我們的借貸基礎繼續增加。我們將在本月稍後召開一次（聽不清楚）決策會議，目前我們的信貸額度為 4 億美元。我們預計第四季度這一數字將會上升，從而增加額外的流動性。但正如戴維斯所說，目前的計劃是，在接下來的幾個季度中繼續償還信貸安排，以便處於有利地位，稱之為，明年這個時候，贖回阿波羅優先的一大部分。所以...

Awesome. And kind of on a similar note, regarding hedges, that's where you've all kind of proportionally added oil and gas hedges in '24 and '25 and got some higher swap price in the second half of '24. Similarly with leverage kind of below the 1x number, kind of how do you all think about hedging moving forward?

驚人的。類似地，關於對沖，你在 24 年和 25 年按比例增加了石油和天然氣對沖，並在 24 年下半年獲得了更高的掉期價格。類似地，槓桿率低於 1 倍，你們對未來的避險有何看法？

We systematically do it. We -- it's always a question of how do you think about hedging as a royalty company. For us, we look at -- we don't have to protect the CapEx budget like a driller does, obviously. But for us, we do have the built-in financial leverage vis-a-vis debt. And so what we do is we take our debt, we divide it by enterprise value, and we hedge that ratio on a rolling 2-year forward basis. So if I'm not mistaken, I believe that's at 17% right now, Matt, I think, for the next 2 years on average.

我們有系統地這樣做。我們—作為一家特許權使用費公司，您如何看待對沖始終是一個問題。對我們來說，我們顯然不必像鑽井公司那樣保護資本支出預算。但對我們來說，我們確實擁有針對債務的內在財務槓桿。因此，我們所做的就是將債務除以企業價值，然後在滾動的兩年遠期基礎上對沖該比率。所以，如果我沒記錯的話，我認為，馬特，我認為未來 2 年的平均成長率為 17%。

That's correct, yes.

這是正確的，是的。

Yes. So I think we'll just continue to do that, just keep a consistent strategy. We're not trying to predict movements in oil and gas prices, people historically get a lot of trouble doing that. So...

是的。所以我認為我們會繼續這樣做，保持一致的策略。我們並不是試圖預測石油和天然氣價格的變動，歷史上人們在這方面遇到了許多麻煩。所以...

(Operator Instructions) Our next question comes from the line of Tim Rezvan with KeyBanc Capital Markets.

（操作員說明）我們的下一個問題來自 KeyBanc Capital Markets 的 Tim Rezvan。

Congratulations on the Texas Rangers last night.

昨晚恭喜德州遊騎兵隊。

Yes, thanks.

對了謝謝。

That was a great game.

那是一場很棒的比賽。

Good series. Derrick actually took both my questions, so I was hoping to push a little more because I think they're important topics. On the M&A market, you've seen some pretty attractive debt financing set up by peers of yours. And I'd imagine that sellers noticed that as well. So we saw -- it looks like a logjam broke on M&A this year and now that there's more financing available maybe than people thought in the year -- at the start of the year. I'm just trying to understand sort of what's the latest kind of -- how do you think about kind of the near-term outlook overall for the sector?

好系列。德里克實際上回答了我的兩個問題，所以我希望能多討論一點，因為我認為它們是重要的主題。在併購市場上，您已經看到了一些同業設立的相當吸引人的債務融資。我想賣家也注意到了這一點。所以我們在年初看到，今年併購的僵局似乎已經打破，現在可用的融資可能比人們想像的要多。我只是想了解一下最新的情況——您如何看待該行業的整體近期前景？

Man, it's a really great question. That's one of the most fun things about our business is looking at the M&A environment, and it's been really fun to watch and evolve since we started doing this well, 25 years ago, but in the public context and gearing up for public the last 10 years, we continue to be surprised by just the sheer volume of private sellers that are out there. There are groups out there that have $100 million packages that we just get introduced to on a weekly, if not monthly basis, they didn't know previously. I mean there's just an incredible consolidation effort going out there -- going on out there, and it's really just a reflection of just how big the industry is. We're going to see that over $0.5 trillion in size, and it's just massively fragmented.

夥計，這真是一個很好的問題。我們業務中最有趣的事情之一就是審視併購環境，自從 25 年前我們開始做得很好以來，觀察和發展真的很有趣，但在過去 10 年是在公共背景下為公眾做好準備多年來，我們仍然對私人賣家的龐大數量感到驚訝。有些團體擁有價值 1 億美元的套餐，我們每週（如果不是每月）都會向我們介紹這些套餐，他們以前並不知道。我的意思是，那裡正在進行令人難以置信的整合工作，這實際上反映了該行業的規模有多大。我們將看到其規模超過 5 兆美元，而且非常分散。

So we expect that trend. If you look historically, and if we had like a bar chart of it, it just continues to always go up. And frankly, it always surprises us. We always end up being a little bit conservative on how much M&A volume there is out there.

所以我們預計這種趨勢。如果你回顧歷史，如果我們有一個長條圖，你會發現它一直在上漲。坦白說，它總是讓我們感到驚訝。我們對於併購數量總是有點保守。

Our view, so I would say that we continue to expect robust M&A activity. Our view is always to be just highly selective in what we buy. We try to sit around and look at the landscape and say, what's the best possible asset out there that we can get at a price that maximizes returns to our shareholders. And we try to focus in on those opportunities, and there's not a lot of them every year, if you run up the Rangers, we're just waiting for the right pitch and we want to swing at the right opportunity.

我們的觀點是，我們繼續預期併購活動將強勁。我們的觀點始終是在購買時精挑細選。我們試著坐下來看看情況，然後說，我們能以最大化股東回報的價格獲得的最好的資產是什麼。我們試著專注於這些機會，而且每年的機會並不多，如果你在流浪者隊中表現出色，我們只是在等待合適的投球，我們希望抓住合適的機會。

So I agree with you on the debt financing angle. I don't think that -- you're looking at an environment where there's a very small number of public buyers and there are hundreds, if not thousands of private buyers. And so I think that sets up a very favorable dynamic for us as a buyer, as a public buyer. I think that in cases, the private folks have gotten a little bit disappointed by the ability to pay of the public. And I think you've kind of forgotten in some cases that the public valuations where we trade should trickle down to what the private valuations are.

所以我同意你關於債務融資的觀點。我不認為——你所看到的環境中，公共買家的數量非常少，而私人買家的數量則有數百甚至數千。因此，我認為這為我們作為買家、作為公共買家創造了非常有利的動力。我認為，在某些情況下，私人對公眾的支付能力感到有點失望。我認為在某些情況下你有點忘記了，我們交易的公共估值應該會逐漸下降到私人估值。

And so for us, I think -- and you've seen this consistently, there is a strange dynamic going on. We're seeing some private folks raise money and outbid public competitors, and that's just kind of the opposite of what you would expect.

所以對我們來說，我認為——你一直都看到這一點，正在發生一種奇怪的動態。我們看到一些私人籌集資金並出價高於公共競爭對手，這與您的預期相反。

So maybe at some point, that changes, but focusing on some of these larger packages where there is a limited exit opportunity seems to be working for ourselves and our peers, not just us, it seems to working for everybody. So I think we'll just continue to do more of the same in this environment. Bob or Matt, anything you guys want to add?

因此，也許在某個時候，這種情況會發生變化，但專注於退出機會有限的一些較大的一攬子計劃似乎對我們自己和我們的同行都有效，而不僅僅是我們，它似乎對每個人都有效。所以我認為我們將在這種環境下繼續做更多相同的事情。鮑伯或馬特，你們還有什麼要補充的嗎？

No, that's a great answer.

不，這是一個很好的答案。

Okay. That's great. I appreciate that context. And then back to the sort of the maintenance activity levels. I think 5.4 net DUCs, 3.9 net permitted locations. You have now a much bigger exposure to sort of the Mid-Con. I'm just curious kind of any insight on visibility on converting those permits to PDPs. And you mentioned strong execution in the third quarter. Just how that's been trending? And how you think about that now that you have a lot more exposure to the Mid-Con than you had earlier in the year?

好的。那太棒了。我很欣賞這種背景。然後回到維護活動層級的排序。我認為 5.4 個淨 DUC，3.9 個淨允許位置。您現在對某種中型設備的接觸程度要大得多。我只是好奇有關將這些許可證轉換為 PDP 的可見性的任何見解。您提到第三季的強勁執行力。趨勢如何？現在你對 Mid-Con 的接觸比今年早些時候多了很多，你對此有何看法？

Yes, that's a great question. I'm not sure we have enough data yet to really give you a full answer on the most recently acquired Mid-Con asset in terms of how those permits have converted to real development. I would say on average, permits convert across the portfolio, Bob, what would you say, 12 to 18 months?

是的，這是一個很好的問題。我不確定我們是否有足夠的數據來真正為您提供有關最近收購的 Mid-Con 資產的完整答案，即這些許可證如何轉化為真正的開發。我想說的是，平均而言，許可證可以在整個投資組合中轉換，鮑勃，你怎麼說，12 到 18 個月？

Yes, usually within that, but yes, yes.

是的，通常在這個範圍內，但是是的，是的。

Yes. And we love our Mid-Con position. In fact, we think that was one of the best buys we've ever made, frankly, in terms of bang for your buck and in terms of what we've been able to buy in terms of hydrocarbon in place relative to purchase price. A good question. Let us give you a more full answer over the next quarter or 2 in terms of how we're seeing activity there. But I think just a little bit too early to probably give you a read on what's going on there in terms of permit conversions. So...

是的。我們喜歡我們的中控位置。事實上，坦白說，就物有所值以及我們能夠購買的碳氫化合物相對於購買價格而言，我們認為這是我們做過的最好的購買之一。這是個好問題。讓我們在接下來的一兩個季度就我們如何看待那裡的活動向您提供更全面的答案。但我認為現在讓您了解許可證轉換方面的情況還為時過早。所以...

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to management for any final comments.

謝謝。女士們先生們，我們的問答環節到此結束。我將把最後的意見轉回給管理階層。

Yes. We thank you all for joining us this morning, and look forward to speaking with you again when we report fourth quarter results. This completes today's call.

是的。我們感謝大家今天早上加入我們，並期待在我們報告第四季度業績時再次與您交談。今天的通話到此結束。

Thank you. You may now disconnect your lines. Thank you for your participation and interest.

謝謝。現在您可以斷開線路。感謝您的參與和興趣。