Kimbell Royalty Partners, LP (KRP): Marketing Mix Analysis [11-2024 Updated]

In the dynamic landscape of the energy sector, Kimbell Royalty Partners, LP (KRP) stands out with a strategic focus on mineral and royalty interests in oil and natural gas. With operations spanning 12.2 million gross acres across the U.S. and significant assets in the Permian Basin and Mid-Continent regions, KRP leverages its unique position to optimize revenue streams. Discover how KRP's marketing mix—encompassing product offerings, geographical presence, promotional strategies, and pricing mechanisms—shapes its success and attracts investors in 2024.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Product

Owns mineral and royalty interests in oil and natural gas properties.

Kimbell Royalty Partners, LP (KRP) owns a diverse portfolio of mineral and royalty interests across various oil and natural gas properties. The company focuses on acquiring and managing these interests, allowing it to benefit from the production of oil, natural gas, and natural gas liquids (NGLs) without bearing the operational costs associated with production.

Revenue generated from production of oil, natural gas, and NGLs.

In the nine months ended September 30, 2024, KRP generated total revenues of approximately $242.6 million, which reflects an increase from $194.9 million during the same period in 2023. The revenue is primarily derived from the sale of oil, natural gas, and NGLs, contributing significantly to the company’s financial performance.

Operates across 12.2 million gross acres in the U.S.

KRP operates over 12.2 million gross acres across multiple states in the United States, providing a substantial footprint in the oil and gas industry. This extensive landhold allows the company to capitalize on a wide range of production opportunities.

Major assets located in the Permian Basin and Mid-Continent regions.

Key assets of KRP are strategically located in high-value regions such as the Permian Basin and the Mid-Continent region. The Permian Basin is known for its prolific oil production, while the Mid-Continent region offers a mix of both oil and natural gas production opportunities.

Holds interests in over 129,000 gross wells, including over 50,000 in the Permian Basin.

KRP holds interests in over 129,000 gross wells, with more than 50,000 of these located in the Permian Basin alone. This extensive network of wells allows KRP to leverage its royalty interests effectively and capitalize on the production of hydrocarbons.

Focus on non-cost-bearing interests, avoiding operational expenses.

Kimbell Royalty Partners focuses on acquiring non-cost-bearing interests, which means it does not incur operational expenses related to drilling and production activities. This strategic focus allows KRP to maintain a strong balance sheet and generate revenue with lower risk compared to traditional oil and gas operators.

This comprehensive product offering positions Kimbell Royalty Partners favorably in the competitive landscape of the oil and natural gas industry, enabling it to effectively generate revenue while minimizing operational risks associated with production activities.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Place

Operations Across Major U.S. Onshore Basins

Kimbell Royalty Partners, LP operates in 28 states across major U.S. onshore basins, ensuring a broad geographic footprint that enhances its market presence and accessibility to various operators.

Significant Presence in Key Regions

The company has a significant presence in the Permian Basin and the Mid-Continent regions, which are critical areas for oil and natural gas production. The Permian Basin is known for its high yield, and in 2024, Kimbell reported production volumes of 660,789 barrels of oil and 6,793,748 Mcf of natural gas.

Leasing Structure

All mineral and royalty interests held by Kimbell are leased to working interest owners. This leasing model allows Kimbell to generate revenue without the direct costs associated with drilling and production, providing a consistent income stream based on production levels. As of September 30, 2024, the company reported total revenues of $83.8 million, driven largely by its leasing agreements.

Revenue Consistency Through Production

Kimbell ensures that its leases are primarily held by production, which is essential for maintaining revenue streams. For the three months ended September 30, 2024, the company reported oil, natural gas, and NGL revenues of $71.1 million, reflecting a strategic approach to maintaining production levels across its leased properties.

Engagement with Multiple Operators

To maximize the value derived from its acreage, Kimbell engages with multiple operators. This strategy not only diversifies its risk but also enhances its capability to optimize production and revenue from its mineral interests. The partnership structure allows for flexibility and adaptability in operations, crucial in the dynamic energy market.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Promotion

Focuses on building relationships with operators for better lease terms

Kimbell Royalty Partners, LP actively engages with operators to negotiate favorable lease terms. This relationship-building approach is vital in securing better financial arrangements, which ultimately enhances the profitability of their mineral and royalty interests.

Utilizes financial performance metrics to attract investors

Kimbell Royalty Partners leverages its financial performance metrics, including:

• Total revenues for the nine months ended September 30, 2024: $242,592,275 compared to $194,873,007 for the same period in 2023.
• Net income attributable to common units for the nine months ended September 30, 2024: $28,954,575 compared to $50,368,835 in 2023.
• Cash available for distribution on common units for the nine months ended September 30, 2024: $139,163,747 compared to $98,388,557 in 2023.

Promotes growth through strategic acquisitions of mineral and royalty interests

In 2023, Kimbell Royalty Partners completed significant acquisitions to enhance its portfolio:

• The LongPoint Acquisition in September 2023, valued at approximately $455 million.
• The MB Minerals Acquisition in May 2023, which also contributed to their growth strategy.

Communicates cash distribution capabilities to unitholders

Kimbell Royalty Partners consistently communicates its cash distribution capabilities, ensuring transparency with its unitholders:

• Distribution on Class B units for the nine months ended September 30, 2024: $56,218 compared to $67,939 in 2023.
• Distribution to unitholders for the nine months ended September 30, 2024: $41,560,510 compared to $36,932,514 in 2023.

Engages in investor presentations to showcase operational successes

Kimbell Royalty Partners engages in investor presentations that highlight operational successes, including:

• Adjusted EBITDA attributable to Kimbell Royalty Partners for the nine months ended September 30, 2024: $167,265,259 compared to $111,778,887 in 2023.
• Net cash provided by operating activities for the nine months ended September 30, 2024: $194,344,819 compared to $114,958,713 in 2023.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Price

Revenue dependent on commodity prices of oil, natural gas, and NGLs

Kimbell Royalty Partners, LP's revenue is significantly influenced by the prices of commodities such as oil, natural gas, and natural gas liquids (NGLs). For the nine months ended September 30, 2024, the average prices received were:

Uses market index pricing for sales contracts with operators

Kimbell utilizes market index pricing to establish sales contracts with operators, ensuring that the prices reflect current market conditions, which helps maintain competitive positioning in the market.

Experienced fluctuations in revenue tied to production volumes and market conditions

The company's revenue for the nine months ended September 30, 2024, was $242.6 million, an increase from $194.9 million in the same period for 2023, driven primarily by increased production volumes:

Cash available for distribution reflects operational efficiency and market pricing

As of September 30, 2024, the cash available for distribution on common units was $139.2 million, a significant increase from $98.4 million in the prior year:

Adjusted EBITDA used to evaluate profitability and distribution abilities

Kimbell’s Adjusted EBITDA for the nine months ended September 30, 2024, was $167.3 million, compared to $111.8 million for the same period in 2023, reflecting enhanced operational performance:

In summary, Kimbell Royalty Partners, LP (KRP) leverages a robust marketing mix that capitalizes on its unique product of mineral and royalty interests across vast U.S. territories, particularly in the lucrative Permian Basin. Its strategic place in 28 states ensures a diverse revenue stream, while effective promotion through relationship-building and investor engagement highlights its commitment to growth and operational success. Ultimately, KRP's pricing strategy, influenced by commodity market dynamics, underscores its potential for profitability and sustainable cash distributions, making it a compelling option for investors in the energy sector.

Updated on 16 Nov 2024

Resources:

1. 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.
2. 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.