Core Viewpoint - Kimbell Royalty (KRP) is experiencing significant selling pressure, with a 14.3% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by analyst consensus for better-than-expected earnings [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2] - KRP's current RSI reading is 24.39, suggesting that the heavy selling pressure may be exhausting itself and a trend reversal could be imminent [5] Group 2: Fundamental Analysis - Analysts have raised earnings estimates for KRP, with the consensus EPS estimate increasing by 42.1% over the last 30 days, indicating a potential for price appreciation [7] - KRP holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the likelihood of a near-term turnaround [8]

Core Viewpoint - Kimbell Royalty Partners has successfully completed a redetermination and amendment of its secured revolving credit facility, enhancing its capital structure and financial flexibility while lowering borrowing costs [1][2]. Group 1: Financial Details - The maximum facility size has been increased from $750 million to $1.5 billion [1][5]. - The borrowing base and total commitments have been reaffirmed at $625 million, with the maturity date extended to December 16, 2030 [2][5]. - The pricing grid has been reduced by 25 basis points, and a 10 basis point Credit Spread Adjustment has been removed, improving interest rate spreads by a total of 35 basis points [5]. Group 2: Company Overview - Kimbell Royalty Partners is a leading oil and gas mineral and royalty company based in Fort Worth, Texas, owning interests in approximately 17 million gross acres across 28 states [3]. - The company has mineral and royalty interests in over 131,000 gross wells, covering every major onshore basin in the continental United States [3]. Group 3: Management Commentary - The President and CFO of Kimbell emphasized that the refinancing strengthens the capital structure by providing lower borrowing costs and enhanced financial flexibility, reflecting the confidence of their 16 existing bank partners [2].

Core Insights - The energy sector has several oversold stocks that present potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Venture Global Inc (NYSE:VG) has an RSI of 28.5, with a stock price decline of approximately 27% over the past month, closing at $5.93 [7] - PBF Energy Inc (NYSE:PBF) has an RSI of 29.4, with a stock price decline of around 21% over the past month, closing at $29.93 [7] - Kimbell Royalty Partners LP (NYSE:KRP) has an RSI of 23.7, with a stock price decline of about 8% over the past five days, closing at $11.79 [7]

Core Insights - The energy sector has several oversold stocks that present potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - Venture Global Inc (NYSE:VG) has an RSI of 28.5, with a stock price decline of approximately 27% over the past month, closing at $5.93 [7] - PBF Energy Inc (NYSE:PBF) has an RSI of 29.4, with a stock price drop of around 21% in the last month, closing at $29.93 [7] - Kimbell Royalty Partners LP (NYSE:KRP) has an RSI of 23.7, with an 8% decrease in stock price over the past five days, closing at $11.79 [7]

Core Viewpoint - Kimbell Royalty Partners, LP (NYSE:KRP) has experienced a significant decline in share price due to a downgrade by KeyBanc, reflecting concerns over the oil price environment and competition from larger entities in the mineral rights sector [3][4]. Company Summary - Kimbell Royalty Partners, LP engages in owning and acquiring mineral and royalty interests in oil and natural gas properties [2]. - The company's share price fell by 7.94% between November 19 and November 26, 2025, and has decreased by almost 26% since the beginning of 2025 [1][4]. Industry Context - The downgrade from 'Overweight' to 'Sector Weight' by KeyBanc was influenced by a 'choppy' oil price environment and minimal growth expectations for Permian oil in the upcoming year [3]. - Smaller mineral entities, like Kimbell, face challenges competing against larger players with a strong appetite for mergers and acquisitions [3].

Core Insights - Kimbell Royalty Partners (KRP) offers an attractive dividend, appealing to investors due to the nature of royalty companies receiving payments "off the top" without typical upstream risks [1] Company Overview - KRP operates in the oil and gas sector, which is characterized as a boom-bust, cyclical industry, requiring patience and experience for successful investment [1] - The company does not control the pace of development, which is a common trait among royalty companies [1] Investment Strategy - The investing group Oil & Gas Value Research, led by a retired CPA with an MBA and MA, focuses on under-followed oil companies and out-of-favor midstream companies that present compelling investment opportunities [1] - The group facilitates discussions among oil and gas investors through an active chat room, allowing for the exchange of recent information and ideas [1]

Company Overview - Kimbell Royalty Partners LP (KRP) is an oil and gas mineral and royalty company with assets across the US, possessing over 14 years of drilling inventory remaining [1] Analyst Background - The analyst has over 10 years of experience researching companies, estimating to have researched well over 1000 companies across various sectors including commodities like oil, natural gas, gold, and copper, as well as technology and emerging market stocks [1] Investment Focus - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, where they have researched hundreds of different companies, with a particular interest in metals and mining stocks, while also being comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Company Overview - Kimbell Royalty Partners LP (KRP) is an oil and gas mineral and royalty company with assets across the US, possessing over 14 years of drilling inventory remaining [1] Analyst Background - The analyst has over 10 years of experience researching companies, estimating that they have conducted in-depth research on over 1000 companies across various sectors including commodities like oil, natural gas, gold, and copper, as well as technology and emerging market stocks [1] Investment Focus - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, where they have researched hundreds of different companies, with a particular interest in metals and mining stocks, while also being comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Company Operations and Production - As of September 30, 2025, the company owned mineral and royalty interests in approximately 12.3 million gross acres, with 55% located in the Permian Basin and Mid-Continent[101] - Average daily production across all basins as of September 30, 2025, was 158,350 Boe/d, with the Permian Basin contributing 27,799 Boe/d[102] - The company has 806 drilled but uncompleted wells (DUCs) and 651 permitted locations as of September 30, 2025[103] - The company has interests in over 131,000 gross wells, including over 52,000 wells in the Permian Basin[101] - The total number of active rigs operating on the company's acreage decreased from 90 in September 2024 to 86 in September 2025, with notable changes in the Permian Basin increasing from 47 to 51 rigs[115] Financial Performance - The company declared a quarterly cash distribution of $0.35 per common unit for the quarter ended September 30, 2025, to be paid on November 24, 2025[104] - Oil revenue constituted 64% of total revenue for the three months ended September 30, 2025, down from 73% in the same period of 2024, while natural gas revenue increased from 15% to 23%[116] - Adjusted EBITDA for the three months ended September 30, 2025, was $62.27 million, compared to $63.12 million for the same period in 2024[123] - Cash available for distribution on common units was $43.47 million for the three months ended September 30, 2025, slightly down from $44.23 million in 2024[125] - The net income for the three months ended September 30, 2025, was $22.32 million, compared to $25.81 million in the same period of 2024[123] - Total revenues for the nine months ended September 30, 2025 were $251.4 million, an increase of $8.8 million from $242.6 million for the same period in 2024[134] Commodity Prices and Market Conditions - Oil prices ranged from a high of $80.73 to a low of $58.50 per barrel for the nine months ended September 30, 2025, while natural gas prices ranged from $9.86 to $2.65 per MMBtu[111] - The average daily price for oil in Q3 2025 was $65.78 per barrel, compared to $76.43 in Q3 2024[112] - The geopolitical conflicts, including the ongoing situation in Ukraine and the Middle East, have led to increased volatility in commodity prices, although the company has not yet experienced a material impact on operations[107] - The average price received for oil decreased by 17.5% to $64.42 per Bbl, while the average price for natural gas increased by 66.9% to $2.67 per Mcf for the three months ended September 30, 2025 compared to the same period in 2024[139] Acquisitions and Growth Strategy - The company is actively pursuing acquisitions of mineral and royalty interests, which are a key part of its growth strategy[127] - The Boren Acquisition in January 2025 is a material acquisition that may impact the comparability of results for the three and nine months ended September 30, 2025, and 2024[129] Expenses and Financial Management - General and administrative expenses for the three months ended September 30, 2025 were $10.1 million, an increase of $0.6 million compared to $9.5 million for the same period in 2024[147] - Interest expense for the three months ended September 30, 2025 was $9.8 million, an increase from $6.5 million for the same period in 2024, primarily due to an increase in the overall debt balance[148] - Interest expense increased to $25.4 million for the nine months ended September 30, 2025, up from $20.7 million in 2024, due to a higher overall debt balance[163] - The Board of Directors approved the allocation of 25% of available cash for distribution on common units for the repayment of $12.6 million in outstanding borrowings under the secured revolving credit facility[167] Cash Flows and Financial Position - Cash flows provided by operating activities were $189.2 million for the nine months ended September 30, 2025, a decrease of $5.1 million compared to $194.3 million in 2024[172] - Cash flows used in investing activities increased significantly to $223.4 million for the nine months ended September 30, 2025, primarily due to the Boren Acquisition[173] - Cash flows provided by financing activities were $40.0 million for the nine months ended September 30, 2025, compared to cash used of $190.5 million in 2024, driven by proceeds from the 2025 Equity Offering[174] Risk Management and Derivative Contracts - The company has entered into commodity derivative agreements extending through September 2027 to stabilize prices for a portion of its oil and natural gas production[116] - The company has entered into commodity derivative contracts to mitigate exposure to price volatility in oil and natural gas[187] - Changes in fair values of derivative contracts will be recognized as gains and losses in current period earnings, potentially affecting earnings significantly[190] Tax and Regulatory Environment - The company recognized a reduction in current income tax expense due to the enactment of the One Big Beautiful Bill Act, which included a permanent reduction of the corporate tax rate[109] Other Considerations - Inflation has not materially impacted operations from January 1, 2024, to September 30, 2025, but could affect costs and financial position in the future[194] - As of September 30, 2025, there were no off-balance sheet arrangements reported[184] - The company does not control the volumes or methods of sale for oil, natural gas, and NGLs produced from underlying properties[192]

Financial Data and Key Metrics Changes - Kimbell Royalty Partners reported total revenues of $76.8 million for Q3 2025, with adjusted EBITDA of $62.3 million [8][9] - Production averaged 25,574 BOE per day, reflecting a 1% organic increase over Q2 2025 [4][5] - Cash G&A expenses were $5.9 million, equating to $2.51 per BOE, which was below the midpoint of guidance [8][9] Business Line Data and Key Metrics Changes - The company’s production base is diversified and low-decline, with a strong performance despite a general slowdown in the U.S. oil and natural gas sector [4][5] - The active rig count remains strong at 86 rigs, representing a 16% market share of U.S. land rigs [5] Market Data and Key Metrics Changes - The company noted a favorable environment for natural gas, with prices above $4, which is expected to contribute positively to production growth [16][42] - The Mid-Continent and Haynesville areas have shown acceleration in activity, benefiting from a higher gas cut [16][42] Company Strategy and Development Direction - Kimbell aims to be a leading consolidator in the oil and natural gas royalty sector, focusing on long-term unit holder value [6] - The company maintains a conservative balance sheet with a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.6 times [9] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining flat or slightly increasing production despite industry challenges, citing strong rig activity and a diversified portfolio [10][32] - The company is optimistic about the long-term demand for U.S. energy and its position to benefit from this trend [10] Other Important Information - A cash distribution of $0.35 per common unit was declared for Q3 2025, with approximately 100% expected to be a return of capital [8][9] - The company reaffirmed its financial and operational guidance ranges for 2025 [9] Q&A Session Summary Question: Insights on macro conditions and production stability - Management highlighted steady production from their portfolio and noted that rig activity has remained relatively flat, providing confidence in maintaining production levels [12][13] Question: Activity in Mid-Continent and Haynesville - Management reported strong activity in the Mid-Continent, benefiting from higher gas prices, and emphasized the importance of a diversified portfolio [16] Question: Marketing and other deductions expense fluctuations - Management indicated that the recent increase in marketing costs was due to production growth in the Mid-Continent and suggested a return to historical averages in a normalized environment [17] Question: Maintenance level for production stability - Management confirmed that the maintenance level of 6.5 wells is due for an update and is expected to decrease, enhancing confidence in production maintenance [21][24] Question: M&A landscape and opportunities - Management noted that the removal of competitors from the market could create opportunities, but emphasized a disciplined approach to M&A, focusing on larger, more impactful acquisitions [25][26] Question: Growth potential in gas demand - Management expressed caution about making multi-year projections but acknowledged the potential for significant growth in natural gas production if favorable market conditions materialize [41][42] Question: Organic mineral acquisition opportunities - Management stated that they prefer larger, more mature acquisitions rather than small ground game acquisitions, focusing on building relationships for future opportunities [46][47]