Kimbell Royalty Partners, LP (KRP): Business Model Canvas [11-2024 Updated]
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Kimbell Royalty Partners, LP (KRP) Bundle
In the dynamic world of energy investments, Kimbell Royalty Partners, LP (KRP) stands out with its unique business model that focuses on generating consistent cash flows from non-cost-bearing mineral and royalty interests. By leveraging strategic partnerships and a robust portfolio of assets across major U.S. basins, KRP offers investors a low-risk opportunity in the oil and gas sector. Discover how KRP's model not only ensures steady distributions to unitholders but also positions the company for sustained growth in an ever-evolving market.
Kimbell Royalty Partners, LP (KRP) - Business Model: Key Partnerships
Collaborations with oil and gas operators
Kimbell Royalty Partners collaborates with various oil and gas operators to optimize production from its mineral and royalty interests. For the nine months ended September 30, 2024, the average prices received by operators were:
| Commodity | Average Price (2024) | Average Price (2023) |
|---|---|---|
| Oil (Bbl) | $77.24 | $76.17 |
| Natural Gas (Mcf) | $1.89 | $2.66 |
| NGL (Bbl) | $23.68 | $23.67 |
This collaboration allows Kimbell to leverage the expertise of established operators while minimizing operational risks and costs associated with production.
Partnerships with third-party mineral and royalty owners
Kimbell actively partners with third-party mineral and royalty owners to expand its asset base and enhance revenue streams. As of September 30, 2024, Kimbell recorded lease bonus and other income amounting to:
| Period | Lease Bonus and Other Income |
|---|---|
| Q3 2024 | $3.2 million |
| Q3 2023 | $2.5 million |
This increase is attributed to strategic partnerships that facilitate the acquisition of additional mineral rights and royalties, thus enhancing Kimbell's portfolio.
Relationships with financial institutions for funding
Kimbell maintains robust relationships with financial institutions, which are crucial for funding acquisitions and managing liquidity. The partnership has a secured revolving credit facility, with aggregate commitments increased from $400 million to $550 million as of December 8, 2023. The interest expense for the nine months ended September 30, 2024 was:
| Period | Interest Expense |
|---|---|
| 2024 | $20.7 million |
| 2023 | $18.5 million |
This financial backing enables Kimbell to pursue growth strategies, such as acquisitions, while managing operational costs effectively.
Kimbell Royalty Partners, LP (KRP) - Business Model: Key Activities
Acquiring mineral and royalty interests
Kimbell Royalty Partners, LP (KRP) actively pursues acquisitions to expand its portfolio of mineral and royalty interests. In September 2023, KRP completed the acquisition of Cherry Creek Minerals LLC for approximately $455 million, funded through a secured revolving credit facility and proceeds from the Preferred Unit Transaction. Additionally, in May 2023, KRP acquired mineral and royalty assets from MB Minerals, L.P. for a total consideration of $48.8 million in cash and common units.
Managing and optimizing oil and gas production
KRP focuses on managing and optimizing oil and gas production across its acquired properties. For the three months ended September 30, 2024, KRP reported oil production of 660,789 barrels, natural gas production of 6,793,748 Mcf, and natural gas liquids production of 400,796 barrels. This resulted in total production volumes of 2,193,876 Boe, a significant increase from 1,819,457 Boe in the same period of 2023. The increase in production is attributed to the LongPoint Acquisition, enhancing KRP's overall operational efficiency.
| Production Type | Q3 2024 (Bbls/Mcf) | Q3 2023 (Bbls/Mcf) |
|---|---|---|
| Oil Production | 660,789 Bbls | 622,831 Bbls |
| Natural Gas Production | 6,793,748 Mcf | 5,589,952 Mcf |
| Natural Gas Liquids Production | 400,796 Bbls | 264,967 Bbls |
| Total Production (Boe) | 2,193,876 Boe | 1,819,457 Boe |
Distributing cash flows to unitholders
KRP is committed to distributing cash flows generated from its operations to unitholders. For the nine months ended September 30, 2024, KRP reported cash available for distribution on common units of $139,163,747, compared to $98,388,557 for the same period in 2023. The partnership declared distributions of $0.49 per common unit for Q1 2024, $0.42 for Q2 2024, and $0.41 for Q3 2024. This consistent distribution strategy underscores KRP's focus on providing value to its unitholders.
| Quarter | Distribution Amount per Unit | Declared Date | Payment Date |
|---|---|---|---|
| Q1 2024 | $0.49 | May 2, 2024 | May 20, 2024 |
| Q2 2024 | $0.42 | August 1, 2024 | August 19, 2024 |
| Q3 2024 | $0.41 | November 7, 2024 | November 25, 2024 |
Kimbell Royalty Partners, LP (KRP) - Business Model: Key Resources
Extensive landholdings across major U.S. basins
Kimbell Royalty Partners, LP (KRP) has a significant presence in various key U.S. basins, with approximately 2.0 million acres of mineral and royalty interests as of September 30, 2024. This strategic positioning allows KRP to capitalize on the production from prolific oil and natural gas regions including the Permian Basin and the Eagle Ford Shale.
Strong portfolio of mineral and royalty interests
The partnership's portfolio consists of interests in over 20,000 wells across numerous states, contributing to a diversified revenue stream. For the nine months ended September 30, 2024, KRP reported total revenues of $242.6 million, a substantial increase from $194.9 million in the same period of 2023. This revenue is largely derived from oil, natural gas, and natural gas liquids (NGL) sales, which amounted to approximately $235.5 million during the same period.
| Resource Type | Production Volume (Q3 2024) | Revenue Contribution (Q3 2024) |
|---|---|---|
| Oil (Bbls) | 660,789 | $51.6 million |
| Natural Gas (Mcf) | 6,793,748 | $10.9 million |
| NGL (Bbls) | 400,796 | $8.6 million |
Experienced management team with industry expertise
KRP is led by a seasoned management team with extensive experience in the oil and gas sector. The leadership brings over 100 years of combined experience in various roles including exploration, production, and financial management. This expertise is critical for navigating market fluctuations and optimizing asset performance.
As of September 30, 2024, KRP's net income attributable to common units stood at $17.4 million compared to $13.6 million in the same quarter of the previous year. The management's strategic focus on acquisitions and operational efficiency has positioned KRP for sustained growth.
Furthermore, KRP's financial health is underscored by its Adjusted EBITDA of $53.5 million for the third quarter of 2024, reflecting a robust operational performance driven by its resource portfolio and management effectiveness.
Kimbell Royalty Partners, LP (KRP) - Business Model: Value Propositions
Providing steady cash distributions to unitholders
Kimbell Royalty Partners, LP aims to deliver consistent cash distributions to its unitholders. For the third quarter of 2024, the partnership declared a cash distribution of $0.41 per common unit, following distributions of $0.49 and $0.42 in the first and second quarters, respectively. Over the nine months ended September 30, 2024, total cash distributions to common unit holders amounted to approximately $143.1 million.
Low-risk investment due to non-cost-bearing interests
Kimbell Royalty Partners operates with a structure that emphasizes low-risk investments. As of September 30, 2024, the total liabilities of KRP stood at $271.6 million, while total assets reached $1.2 billion, indicating a robust asset base relative to its liabilities. The partnership’s focus on non-cost-bearing interests allows it to generate revenue without incurring significant operational costs, thus enhancing profit margins. For the nine months ended September 30, 2024, KRP reported net income attributable to common units of $28.95 million.
Exposure to diverse oil and gas production areas
Kimbell Royalty Partners provides its investors with exposure to a variety of oil and gas production regions. This diversification is crucial for mitigating risks associated with price volatility in the energy sector. The partnership reported total revenues of $242.6 million for the nine months ended September 30, 2024, up from $194.9 million in the same period of 2023. The production volumes for the third quarter of 2024 included approximately 2,193,876 barrels of oil equivalent (Boe), reflecting an increase from prior periods.
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues | $83,785,439 | $67,204,273 | $242,592,275 | $194,873,007 |
| Net Income Attributable to Common Units | $17,375,301 | $13,580,211 | $28,954,575 | $50,368,835 |
| Cash Distributions to Common Unit Holders | $44,228,532 | $38,078,933 | $139,163,747 | $98,388,557 |
| Production Volumes (Boe) | 2,193,876 | 1,819,457 | 6,886,189 | 5,051,030 |
Kimbell Royalty Partners, LP (KRP) - Business Model: Customer Relationships
Engaging with unitholders through transparent communication
Kimbell Royalty Partners, LP (KRP) actively engages with its unitholders by prioritizing transparent communication. As of September 30, 2024, KRP reported a total of 74,646,476 common units outstanding, valued at approximately $526.8 million. The firm utilizes quarterly earnings calls and detailed financial reports to keep unitholders informed about operational performance and strategic initiatives.
Providing regular updates on financial performance
KRP consistently provides updates on its financial performance. For the three months ended September 30, 2024, KRP achieved total revenues of $83.8 million, representing an increase from $67.2 million in the same period of 2023. The net income attributable to common units for the same period was $17.4 million, compared to $13.6 million in the prior year. This growth in financial performance enhances the trust of unitholders and reinforces the company's commitment to delivering value.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $83,785,439 | $67,204,273 | $16,581,166 (24.7%) |
| Net Income Attributable to Common Units | $17,375,301 | $13,580,211 | $3,795,090 (27.9%) |
| Weighted Average Number of Common Units Outstanding | 116,414,205 | 94,969,077 | 21,445,128 (22.6%) |
Building trust through consistent distribution payments
KRP maintains a strong reputation for reliability by ensuring consistent distribution payments to its unitholders. For the nine months ended September 30, 2024, KRP allocated approximately $139.2 million in cash available for distribution on common units. The distribution policy is structured to return a significant portion of available cash to unitholders, which helps in fostering trust and long-term relationships.
In the third quarter of 2024, KRP's cash distribution on Series A preferred units was approximately $4.2 million. This consistent payment history not only enhances unitholder confidence but also positions KRP favorably in the market, as investors seek companies with reliable cash flow and distribution practices.
Kimbell Royalty Partners, LP (KRP) - Business Model: Channels
Publicly traded units on NYSE
Kimbell Royalty Partners, LP operates as a publicly traded partnership on the New York Stock Exchange under the ticker symbol KRP. As of September 30, 2024, there were approximately 80,969,651 common units outstanding. The market capitalization fluctuated around $532 million. The stock price has demonstrated volatility, reflecting broader market trends and commodity price fluctuations. Over the past year, KRP's stock price has ranged from a low of $12.85 to a high of $19.25.
Investor relations website for information access
Kimbell Royalty Partners maintains a comprehensive investor relations website that serves as a primary channel for disseminating information to its investors. This platform provides access to a range of resources, including:
- Quarterly and annual financial reports, including detailed earnings releases.
- Presentation materials from earnings calls and investor conferences.
- Current and historical unit price information and trading volume data.
- Press releases and updates regarding operational developments and strategic initiatives.
- Access to SEC filings, including Form 10-K and Form 10-Q reports.
This transparency aids investors in making informed decisions and fosters trust in the partnership's management.
Financial reports and earnings calls for updates
Kimbell Royalty Partners conducts quarterly earnings calls, providing stakeholders with updates on financial performance, operational highlights, and future guidance. For the three months ended September 30, 2024, KRP reported:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenues | $83,785,439 | $67,204,273 |
| Net Income | $25,805,447 | $18,481,038 |
| Cash Available for Distribution | $44,228,532 | $38,078,933 |
| Adjusted EBITDA | $63,122,605 | $55,773,677 |
These earnings calls are typically accompanied by detailed presentations that summarize the financial results and provide insights into operational strategies and market conditions. Analysts and investors can ask questions, allowing for a dynamic exchange of information.
Kimbell Royalty Partners, LP (KRP) - Business Model: Customer Segments
Institutional investors seeking income generation
Institutional investors represent a significant customer segment for Kimbell Royalty Partners, LP (KRP), primarily seeking stable income generation through dividends and distributions. As of September 30, 2024, KRP reported a net income attributable to common units of $17,375,301, translating to a diluted earnings per common unit of $0.22. The partnership's distribution policy mandates the distribution of all cash on hand at the end of each quarter, which aligns with the income generation needs of institutional investors.
| Metric | Value (Q3 2024) |
|---|---|
| Net Income Attributable to Common Units | $17,375,301 |
| Diluted Earnings per Common Unit | $0.22 |
| Cash Available for Distribution | $44,228,532 |
| Distributions Paid (Nine Months Ended September 30, 2024) | $143.1 million |
Retail investors looking for exposure to energy sector
Retail investors are another key segment for KRP, particularly those interested in gaining exposure to the energy sector without the complexities of direct investment in oil and gas exploration. The partnership's performance metrics, such as total revenues of $83,785,439 for Q3 2024, and a 4.0% increase in oil, natural gas, and NGL revenues to $71,069,593, indicate a robust performance that retail investors often seek.
| Metric | Value (Q3 2024) |
|---|---|
| Total Revenues | $83,785,439 |
| Oil, Natural Gas, and NGL Revenues | $71,069,593 |
| Production Volumes (Boe) | 2,193,876 |
| Average Price of Oil (12-month average) | $77.48 per Bbl |
Financial analysts monitoring oil and gas investments
Financial analysts represent a critical segment for KRP, as they continuously monitor the company's financial health and performance metrics to provide insights to their clients. KRP's Adjusted EBITDA for the nine months ended September 30, 2024, was $203,056,573, reflecting a strong operational performance. Analysts pay close attention to key indicators such as production costs, revenue growth, and cash flow generation, all of which KRP maintains transparency on through regular financial reporting.
| Metric | Value (Nine Months Ended September 30, 2024) |
|---|---|
| Adjusted EBITDA | $203,056,573 |
| Net Cash Provided by Operating Activities | $194,344,819 |
| Interest Expense | $20,740,037 |
| Production and Ad Valorem Taxes | $16,455,621 |
Kimbell Royalty Partners, LP (KRP) - Business Model: Cost Structure
Operational costs related to asset management
Operational costs for Kimbell Royalty Partners, LP (KRP) include various expenses incurred in managing their mineral and royalty assets. For the nine months ended September 30, 2024, the depreciation and depletion expense was reported at $103.3 million, which reflects an increase of $43.0 million from the previous year. This increase was primarily due to acquisitions, specifically the MB Minerals Acquisition and the LongPoint Acquisition.
General and administrative expenses
For the three months ended September 30, 2024, KRP reported general and administrative expenses of $9.5 million, a decrease from $10.4 million in the same period of 2023. For the nine months ended September 30, 2024, these expenses totaled $29.2 million, compared to $26.6 million in the same period of 2023.
Production and ad valorem taxes
Production and ad valorem taxes for KRP amounted to $16.5 million for the nine months ended September 30, 2024, which reflects an increase of $1.8 million from $14.7 million in the same period of 2023. The increase was attributed to production associated with the recent acquisitions.
| Cost Category | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Depreciation and Depletion Expense | 32.2 | 23.1 | 103.3 | 60.3 |
| General and Administrative Expenses | 9.5 | 10.4 | 29.2 | 26.6 |
| Production and Ad Valorem Taxes | 4.3 | 5.0 | 16.5 | 14.7 |
Kimbell Royalty Partners, LP (KRP) - Business Model: Revenue Streams
Royalties from Oil and Gas Production
The primary revenue stream for Kimbell Royalty Partners, LP (KRP) is derived from royalties on oil and gas production. For the three months ended September 30, 2024, KRP reported oil, natural gas, and NGL revenues amounting to $71.1 million, an increase from $69.2 million during the same period in 2023. This revenue is influenced by production volumes and average prices received for these commodities.
Production volumes for the three months ended September 30, 2024, were 2,193,876 Boe (23,846 Boe/d), reflecting an increase of 374,419 Boe from 1,819,457 Boe (19,777 Boe/d) in the previous year. The average prices received during the same period were $78.09 per Bbl for oil, $1.60 per Mcf for natural gas, and $21.49 per Bbl for NGL .
| Commodity | Revenue (3 months ended September 30, 2024) | Revenue (3 months ended September 30, 2023) |
|---|---|---|
| Oil Revenue | $51,599,632 | $50,777,614 |
| Natural Gas Revenue | $10,857,225 | $12,339,244 |
| NGL Revenue | $8,612,736 | $6,120,745 |
| Total Revenue | $71,069,593 | $69,237,603 |
Cash Distributions from Mineral Interests
KRP also generates revenue through cash distributions from its mineral interests. For the three months ended September 30, 2024, lease bonus and other income totaled $3.2 million, which is an increase from $2.5 million in the same period of 2023. This increase is primarily attributed to a significant lease bonus received during this period .
Income from Leasing Agreements
In addition to royalties and cash distributions, KRP earns income from leasing agreements. The company has various long-term operating leases, with fixed payment terms, which are expected to terminate in June 2029. The weighted average remaining lease term as of September 30, 2024, is 4.65 years. The total operating lease expense recorded for the three months ended September 30, 2024, was $0.2 million .
The following table summarizes future minimum lease commitments as of September 30, 2024:
| Year | Minimum Lease Commitment |
|---|---|
| 2024 | $0.5 million |
| 2025 | $0.5 million |
| 2026 | $0.5 million |
| 2027 | $0.5 million |
| 2028 | $0.5 million |
| Thereafter | $1.5 million |
Updated on 16 Nov 2024
Resources:
- Kimbell Royalty Partners, LP (KRP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kimbell Royalty Partners, LP (KRP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kimbell Royalty Partners, LP (KRP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.