Kimbell Royalty Partners LP (KRP) 2024 Q3 法說會逐字稿

Greetings, and welcome to Kimbell Royalty Partners third quarter earnings conference call.

您好，歡迎參加 Kimbell Royalty Partners 第三季財報電話會議。

(Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, Investor Relations. Thank you, Mr. Black, you may begin.

（操作員指示）提醒一下，本次會議正在錄音。現在我很高興介紹您的主持人，投資者關係部 Rick Black。謝謝您，布萊克先生，您可以開始了。

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 2024, which ended September 30, 2024. This call is also being webcast and can be accessed through the audio link on the Events & Presentations page of IR section of the kimbellrp.com.

謝謝接線員，大家早安。歡迎參加 Kimbell Royalty Partners 電話會議，回顧截至 2024 年 9 月 30 日的 2024 年第三季的財務和營運表現。此次通話也正在進行網路直播，您可以透過 kimbellrp.com 上 IR 部分的活動和演示頁面上的音訊連結存取。

Information recorded on this call speaks only as of today, which is November 07, 2024, 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.

本次通話中記錄的資訊僅截至今天，即 2024 年 11 月 7 日，因此請注意，任何時間敏感資訊在重播收聽或記錄閱讀之日起可能不再準確。

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's provision of the Private Securities Litigation Reform Act of 1995.

我還想提醒您，今天討論中做出的非歷史事實的陳述，包括預期或未來事件或未來財務表現的陳述，均被視為根據《1995 年私人證券訴訟改革法》安全港規定做出的前瞻性陳述。

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.

我們將在今天的電話會議中做出前瞻性陳述，這些陳述本質上是不確定的且不受公司控制。實際結果可能存在重大差異。

Please refer to today's earnings press release for our disclosure on forward-looking statements. 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.

請參閱今天的收益新聞稿，以了解我們對前瞻性陳述的揭露。這些因素和其他風險和不確定性在公司提交給美國證券交易委員會的文件中詳細描述。管理階層也將參考非公認會計準則指標，包括調整後的 EBITDA 和可供分配的現金。

Reconciliations to the nearest GAAP measures can be found at the end of today's earnings release. Kimbell assumes no obligation to publicly update or revise any of these forward-looking statements.

在今天的收益報告末尾可以找到與最近的 GAAP 指標的對帳表。Kimbell 不承擔公開更新或修改任何這些前瞻性聲明的義務。

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

現在，我想將電話轉給 Kimbell Royalty Partners 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; Matthew Daly, our Chief Operating Officer; and Blayne Rhynsburger, our Controller.

謝謝你，里克，大家早安。感謝您今天上午參加我們的電話會議。今天和我在一起的還有我們的幾位高階管理團隊成員，包括我們的總裁兼財務長 Davis Ravnaas；馬修戴利（Matthew Daly），我們的營運長；以及我們的控制員 Blayne Rhynsburger。

We are pleased to report solid results for the quarter, which include declaring a third quarter cash distribution of $0.41 per common unit. Returning value to unitholders is always our priority, and we are proud of the record we have established. Including the declared third quarter distribution, Kimbell has returned $11.45 per unit in total cash distributed to common unitholders since our IPO in 2017.

我們很高興地報告本季的穩健業績，其中包括宣布第三季每股普通股 0.41 美元的現金分配。為基金份額持有者帶來價值回報始終是我們的首要任務，我們為我們所創下的記錄感到自豪。包括宣布的第三季分配在內，自 2017 年首次公開募股以來，Kimbell 已向普通股持有人派發了每股 11.45 美元的現金。

During the third quarter, drilling activity remained strong with 90 rigs actively drilling on our acreage, which represents 16% market share of all land rigs drilling in the Lower 48. In addition, we had a record number of lease bonuses during the third quarter. This reflects increased operator interest in developing Kimbell's acreage.

第三季度，鑽井活動保持強勁，共有 90 個鑽機在我們的油田上活躍鑽井，占美國本土 48 個州所有陸地鑽機鑽井的 16% 市場份額。此外，我們在第三季度獲得了創紀錄的租賃獎金數量。這反映出營運商對開發 Kimbell 土地的興趣日益濃厚。

Line of sight wells continue to be well above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production as we wrap up 2024. More specifically, the number of net DUCs increased by 34% quarter-over-quarter to 5.1 net DUCs, the second highest level in Kimbell's history, led by the Permian Basin.

視線井的數量繼續遠高於維持平穩產量所需的井數量，這使我們對 2024 年結束時生產的彈性充滿信心。更具體地說，淨 DUC 數量環比增長 34%，達到 5.1 個淨 DUC，這是 Kimbell 歷史上第二高的水平，其中 Permian Basin 最為突出。

Finally, we are very optimistic about the future for Kimbell and its ability to drive unitholder value for years to come.

最後，我們對金貝爾的未來以及其在未來幾年推動基金份額持有者價值的能力非常樂觀。

And now I'll turn the call over to Davis.

現在我將電話轉給戴維斯。

Thanks Bob and good morning, everyone in the third quarter, we once again generated strong results, maintained a substantial market share of the US rig count and achieved the lease bonuses during the quarter that were the highest in our history.

謝謝鮑勃，大家早上好，在第三季度，我們再次取得了強勁的業績，保持了美國鑽井平台數量的相當大的市場份額，並在本季度實現了我們歷史上最高的租賃獎金。

I'll start by reviewing our financial results from the quarter beginning with oil natural gas and NGO revenues which totaled 71.1 million.

我首先回顧本季的財務業績，石油天然氣和非政府組織的收入總計 7,110 萬美元。

We had run rate production of 23,846 BOE per day and we exited the quarter with 90 rigs actively drilling on our acreage which represents approximately 16% market share of all land rigs drilling in the continental United States on the expense side. Third quarter, general and administrative expenses were nine point 5,000,005 0.6 million of which was cash G and a expense or $2.57 per BOE.

我們的日產量為 23,846 桶油當量，本季末，我們的油田上有 90 個鑽機在積極鑽探，從費用方面來看，這約占美國大陸所有陸地鑽機鑽探市場份額的 16%。第三季度，一般及行政費用為九百五十萬零零五百六十萬美元，其中為現金 G 和費用或每桶油當量 2.57 美元。

This continues to demonstrate operational discipline and positive operating leverage net income in the third quarter was approximately 25.8 million and net income attributable to common units was approximately 17.4 million or 22¢ per common unit total. Third quarter, consolidated adjusted even was 63.1 million.

這繼續體現了營運紀律和積極的營運槓桿，第三季淨收入約為 2,580 萬美元，歸屬於普通股的淨收入約為 1,740 萬美元，即每普通股總計 22 美分。第三季度，合併調整後利潤為 6,310 萬。

You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution. At the end of our news release, as Bob mentioned today, we announced a cash distribution of 41¢ per common unit for the third quarter.

您將發現合併調整後 EBITDA 與可供分配現金的對帳表。正如鮑伯今天所提到的，在我們的新聞稿結束時，我們宣布第三季每股普通股的現金分配為 41 美分。

We estimate that approximately 100% of this distribution is expected to be considered return of capital and therefore not subject to dividend taxes. Further enhancing the after tax return to our common unit holders.

我們估計，預計該分配的約 100% 將被視為資本回報，因此無需繳納股息稅。進一步提高我們普通股持有人的稅後報酬。

This represents a cash distribution payment to common unit holders 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.

這代表向普通股持有人支付的現金分配金額相當於可供分配現金的 75%，剩餘的 25% 將用於償還 Kimbell 擔保循環信貸安排下的部分未償還借款。

Moving now to our balance sheet and liquidity at September 30th 2024 we had approximately 252.2 million in debt outstanding under our secured revolving credit facility.

現在轉到我們的資產負債表和流動性，截至 2024 年 9 月 30 日，我們在有擔保循環信貸安排下未償還的債務約為 2.522 億美元。

We continue to maintain a conservative balance sheet with net debt to trailing 12 month consolidated adjusted EBITDA of approximately 0.8 times.

我們繼續維持保守的資產負債表，淨債務與過去 12 個月合併調整後 EBITDA 比率約為 0.8 倍。

We had approximately 297.8 million in undrawn capacity under the secured revolving credit facility as of September 30th 2024 we remain very comfortable with our strong financial position, the support of our expanding bank syndicate and our financial flexibility.

截至 2024 年 9 月 30 日，我們在有擔保循環信貸安排下擁有約 2.978 億未提取額度，我們對我們的強勁財務狀況、不斷擴大的銀行財團的支持以及我們的財務靈活性仍然感到非常滿意。

With this substantial liquidity. We are planning to redeem at least half of the Apollo preferred stock in May 2025.

憑藉這種充足的流動性。我們計劃在 2025 年 5 月贖回至少一半的阿波羅優先股。

We believe this timing will optimize cost savings for the company as well as maintain conservative leverage and liquidity.

我們相信，這一時機將優化公司的成本節約並保持保守的槓桿率和流動性。

Today, we are also affirming our 2024 guidance which includes daily production at its midpoint of 24,000 BOE per day.

今天，我們也確認了 2024 年的預期，其中包括日產量中間值為 24,000 桶油當量。

As a reminder, our full guidance outlook was provided in the Q4 2023 earnings press release.

提醒一下，我們在 2023 年第四季財報新聞稿中提供了完整的指導前景。

We remain confident about the prospects for continued robust development as we progress through 2024. Given the number of rigs, actively drilling on our acreage, especially in the permian.

我們對 2024 年持續保持強勁發展的前景充滿信心。考慮到鑽井平台的數量，我們正在積極地鑽探我們的土地，特別是在二疊紀地區。

We continue to believe that our diversified portfolio of high quality royalty assets across the leading us basins will continue to drive value for our unit holders for years to come with that operator. We are now ready for questions.

我們始終相信，我們遍布美國主要盆地的多元化高品質特許權使用費資產組合將在未來幾年繼續為我們的單位持有人創造價值。現在我們可以回答問題了。

(Operator Instructions)

（操作員指令）

Tim Rezvan with KeyBanc Capital Markets Inc

KeyBanc Capital Markets Inc 的 Tim Rezvan

Good morning, folks, and thank you for taking my question. I was expecting we hear comments on the preferred being partially redeemed this quarter. I believe you said May 2025, Davis. So I was curious if you could kind of walk through, what it seems to be a little bit of a change from what you commented on before, kind of what's driving that. Is that an interest rate, outlook or something else mechanical?

大家早安，謝謝你們回答我的問題。我預計我們會聽到有關本季部分贖回優先股的評論。我相信你說過是 2025 年 5 月，戴維斯。所以我很好奇，您是否可以詳細講解一下，這與您之前評論的相比有什麼變化，是什麼推動了這種變化。這是利率、前景還是其他機械的東西？

Yeah. Great question. As always, good job picking up on the detail. We ran the math with greater specificity following the last conference call and we realized that it's actually more cost efficient to redeem it in May than it is today. Just saves us a couple of million bucks when we kind of work through the mechanics of the math. So nothing's changed. The goal is still to take it out as soon as possible. We just realized that, waiting four or five months would actually save the, the partnership a little bit of money.

是的。好問題。一如既往，很好地把握了細節。我們在上次電話會議之後進行了更具體的計算，我們意識到五月贖回實際上比現在更具成本效益。當我們透過數學方法進行計算時，就為我們節省了幾百萬美元。所以什麼都沒有改變。目標仍然是盡快取出。我們剛剛意識到，等待四、五個月實際上可以為合作夥伴節省一點錢。

Okay. Okay. That that's fair. So from should we from a modeling perspective, is roughly half a good assumption to run with?

好的。好的。這很公平。那麼從建模的角度來看，大約一半是個好的假設嗎？

Yes. And what I would say, Tim, just to just to hedge that a little bit, obviously, if something crazy happens in oil and gas markets, we might want to readdress, taking it out at that time. But right now, barring some unforeseen events, that's absolutely the game plan we talked about on the board call yesterday.

是的。我想說的是，提姆，只是為了稍微規避一下這種情況，顯然，如果石油和天然氣市場出現一些瘋狂的事情，我們可能需要重新解決，並將其消除。但目前，除非發生一些不可預見的事件，否則這絕對是我們昨天在董事會會議上討論的比賽計劃。

Okay. That's good to know. Appreciate that. And then, as my follow-up, I noticed you did have the increase in net DUCs. It seemed to come at the expense of net permits, which went down about 1.4. So, but with that said, it's kind of been at that 8-ish level, the net DUCs and permits going forward.

好的。很高興知道這一點。非常感謝。然後，作為我的後續行動，我注意到你的淨 DUC 確實有所增加。這似乎是以犧牲淨許可證為代價的，淨許可證下降了約 1.4。所以，但話雖如此，未來的淨 DUC 和許可證一直處於 8 左右的水平。

So, you know, just trying to understand, is that the right way to kind of think about those two together going forward as a visibility on activity? We're just trying to trying to understand this increase a little better in the in the net DUCs.

所以，您知道，只是想了解，將這兩者結合起來作為活動的可見性是否是正確的思考方式？我們只是想更好地理解淨 DUC 的成長。

Yeah. I think that's a fair way to think about it. Obviously, a DUC is more valuable than a permit. It's always nice to see the conversion from permits to DUCs. Things go up and down. I will say that the increase in DUCs recently has been encouraging, particularly as it pertains to Delaware Basin activity. So the big driver of that DUC increase is in Loving County. Those well results just start to pay off in Q4, so we'll start to see the impact of those.

是的。我認為這是一種公平的思考方式。顯然，DUC 比許可證更有價值。看到從許可證到 DUC 的轉換總是令人高興的。事情有好有壞。我想說的是，最近 DUC 的成長令人鼓舞，特別是與特拉華盆地活動有關。因此，DUC 成長的主要動力是在洛文縣。這些良好的結果在第四季度才剛開始顯現，因此我們將開始看到其影響。

And good point of the permitting activity. Wouldn't be surprised to see that tick back up. It's just hard to predict. But, very happy. I mean, we're at a near record, if not record on the DUC activity. So continue to feel good about the production outlook over the near to medium term at this time. Okay. Thanks for the details.

許可活動的優點。看到這種回升並不會感到驚訝。這確實很難預測。但，很開心。我的意思是，即使沒有記錄 DUC 活動，我們也接近記錄了。因此，目前對近期至中期的生產前景持續保持樂觀。好的。謝謝你的詳細資料。

Okay, thanks for the.

好的，謝謝你。

Details. Absolutely, Tim.

細節。當然，提姆。

Bertrand Donnes with Truist Securities.

Truist Securities 的 Bertrand Donnes。

Hey, good morning. Thanks for taking my questions. What basins are you guys seeing the most opportunities for M&A? And are you still looking for maybe blocky acreage? Or is there may be more value in picking up small interest across your position and doing all the consolidating yourself? And then just part of that would be with the election behind us, does that maybe mark a pickup in M&A as some of the uncertainty has been removed?

嘿，早安。感謝您回答我的問題。你們認為哪些盆地最具併購機會？您還在尋找塊狀土地嗎？或者，在您的頭寸中拾取小額利息並親自進行所有合併是否更有價值？部分原因是隨著選舉的結束，一些不確定性已經消除，這是否標誌著併購活動的回升？

Yes, great question. I would say that, well, a lot of thoughts there. I'll try to keep it brief. Obviously, our sand box is the lower 48, so we're looking at every basin. We're always asking ourselves what's the most efficient way to deploy capital to maximize the risk adjusted return to our investors. So sometimes that's the Permian Basin, sometimes it's not.

是的，很好的問題。我想說的是，嗯，有很多想法。我會盡量簡短地說。顯然，我們的沙箱位於下部 48 個，因此我們正在觀察每個盆地。我們一直在問自己，什麼是最有效的資本配置方式，以最大化投資者的風險調整回報。所以有時那是二疊紀盆地，有時不是。

The Permian's wonderful. Everybody knows it's wonderful, so it can sometimes be too expensive. But I would continue to see just because of the pipeline of opportunities. I would say the Permian continues to be the most attractive, and we're just going to continue to make conservative bids. And as you know from following us for a while now, every once in a while, we win. Every once in a while, a competitor won't show up, or maybe they're full because they did a deal recently.

二疊紀很奇妙。每個人都知道它很棒，所以有時它會太貴。但我會繼續關注，因為還有很多機會。我想說二疊紀盆地仍然是最具吸引力的，我們將繼續提出保守的出價。正如您關注我們一段時間以來所知道的，我們偶爾會獲勝。有時，競爭對手不會出現，或者他們可能因為最近做了一筆交易而客滿。

I would say we started to see an uptick in, in a basin that we're not we're not particularly exposed to in a meaningful way, which is Appalachia.

我想說的是，我們開始看到一個上升趨勢，在一個我們還沒有特別深入的盆地裡，那就是阿巴拉契亞山脈。

And just on your point about the election, one thing we talked about yesterday was the view toward increased infrastructure and LNG exports becoming a more bullish story. Maybe that Appalachian story makes a little bit more sense for us now than it did historically. It's also a basin that's not traditionally played by a lot of our competitors.

關於您提到的選舉，我們昨天討論的一件事是，對增加基礎設施和液化天然氣出口的看法變得更加樂觀。或許，阿巴拉契亞的故事對我們現在來說比歷史上更有意義。這也是我們的許多競爭對手傳統上不參與的盆地。

So that could be a place where, you could see some activity from us going forward. That being said, continue to look at opportunities all across the board.

因此，從那裡你可以看到我們今後的一些活動。話雖如此，仍要繼續全面尋找機會。

On the smaller deals, we really want to use our balance sheet to make larger, more impactful acquisitions. We're reluctant to draw $10 million, $20 million, $30 million, $40 million, a quarter on smaller acquisitions on your revolver. It's just really easy to see leverage creep up and then you're not there with cash available to transact on bigger deals. And it takes us the same amount of time to analyze the larger transaction as it does a smaller one.

對於較小的交易，我們確實希望利用我們的資產負債表進行更大、更有影響力的收購。我們不願意從你的循環信貸中提取 1000 萬美元、2000 萬美元、3000 萬美元、4000 萬美元等季度小額收購款。很容易看到槓桿率逐漸上升，而你卻沒有足夠的現金來進行更大的交易。我們分析較大交易和較小交易所花的時間是相同的。

And I would also add to that, I think the competition for some of the smaller acquisitions, let's call it less than $5 million is significantly greater than acquisitions over $50 million. So at this time, we don't really see the benefit of increased consolidation efforts on the micro level, both from a balance sheet perspective, but also from competitive dynamics.

我還要補充一點，我認為一些較小的收購（比如說 500 萬美元以下的收購）的競爭要比 5000 萬美元以上的收購激烈得多。因此目前，我們實際上並沒有看到在微觀層面上加強整合力度帶來的好處，無論是從資產負債表的角度還是從競爭動態的角度來看。

That's really great detail. And then just the follow-up is your quarterly lease bonus is obviously impressive, but you guys noted in there that maybe there's increased operator interest. Is that what you're attributing to? Is it maybe those operators have run through some of their Tier one acreage already? And should we go back down to normalized levels? Or is this maybe a trend that goes forward?

這真是很棒的細節。然後接下來的問題是，您的季度租賃獎金顯然令人印象深刻，但你們在其中指出，也許營運商的興趣有所增加。這就是你所認為的嗎？是不是那些業者已經利用了他們的部分一級土地了？我們應該回到正常水平嗎？或者這可能是未來的趨勢？

The big driver of this quarter's leasing activity was in the Mid Continent. Part of that, the new Cherokee shale play, which we hope is successful because we have such a robust footprint up there. So hopefully that continues to pay off. A good thought on the Tier two acreage. Yes, I think that will continue to be more meaningful if I had to give you an answer over time. I think that you'll start to see folks expanding their exploratory efforts beyond what has already lineated and known. So I think that's a good thought. It will be interesting to see if that continues to pick up in subsequent quarters. We'll obviously keep you guys posted.

本季租賃活動的最大推動力來自中部地區。其中一部分是新的切諾基頁岩氣田，我們希望它能成功，因為我們在那裡擁有如此強大的影響力。所以希望這能夠繼續帶來回報。關於二級土地面積的一個好點子。是的，我認為如果我必須隨著時間的推移給你一個答案，這將會變得更有意義。我認為你將開始看到人們將探索範圍擴大到已知的範圍之外。所以我認為這是個好想法。看看這一趨勢在接下來的幾季是否會繼續回升將會很有趣。我們當然會及時向大家通報最新情況。

That makes sense. Thanks.

這很有道理。謝謝。

Noah Hungness with Bank of America.

美國銀行的 Noah Hungness。

Morning, guys. Just one question for me. I wanted to ask just a clarification question on the high NRI wells in Loving County. So should we expect that to come online in 4Q and then really start to see the impact at the start of 2025?

早安，大家。我只想問一個問題。我只是想問一個關於洛文縣高 NRI 水井的澄清問題。那麼，我們是否應該預期它將在第四季度上線，然後在 2025 年初真正開始看到影響？

Sure. Matt, correct me if I'm wrong here. Those wells are actually already producing. We just expect to start receiving production and cash flow in Q4. And I'll just add that so far the results are very encouraging. Unsurprisingly, it's one of, if not the best, most productive counties in the United States, very encouraging initial results from that, and we're very happy to see the production.

當然。馬特，如果我錯了，請糾正我。這些油井實際上已開始生產。我們預計在第四季度開始獲得生產和現金流。我還要補充一點，迄今為止的結果非常令人鼓舞。毫不奇怪，它是美國生產力最高的縣之一，甚至可以說是最好，初步成果非常令人鼓舞，我們很高興看到這樣的產量。

Awesome, thanks.

太棒了，謝謝。

Thank you. Thank you. Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to the management for closing comments.

謝謝。謝謝。女士們、先生們，我們的問答環節已經結束。現在，我想將發言權交給管理階層，請他們發表最後評論。

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

我們感謝大家今天上午的參與，我們期待下個季度再次與你們交談。今天的通話到此結束。

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。現在您可以斷開您的線路。感謝您的參與。