Kimbell Royalty Partners Reports Record Performance in Q4 and Full Year 2024
Kimbell Royalty Partners Reports Record Performance in Q4 and Full Year 2024
Kimbell Royalty Partners, LP, a distinguished player in the oil and natural gas sector, recently unveiled remarkable results for the fourth quarter and the entire year of 2024. The company recorded impressive gains in both production and revenues, underscoring its robust growth strategy and successful acquisitions.
Fourth Quarter Highlights
For the fourth quarter of 2024, Kimbell's average daily production reached 24,082 barrels of oil equivalent (Boe) per day. This figure includes an impactful addition of 1,864 Boe due to a significant acquisition finalized in January 2025. The total production, including this acquisition, surpassed 25,000 Boe per day, marking a milestone in Kimbell's history.
Revenue Generation
In terms of financial performance, Kimbell reported revenues of $69.1 million from oil, natural gas, and natural gas liquids (NGLs). However, the quarter also saw a net loss attributable to common units estimated at $37.8 million, primarily influenced by a substantial non-cash ceiling test impairment expense of $56.2 million.
Despite the loss, Kimbell's consolidated Adjusted EBITDA stood at $59.8 million, reflecting sound operational efficiency.
Operational Efficiency
The company maintained a conservative approach to its operations, with a net debt to trailing twelve months consolidated Adjusted EBITDA of only 0.8x. As of December 31, 2024, Kimbell operated 87 active drilling rigs, which represented 15% of the total U.S. land rig market share. Following the acquisition, this number increased to 91 rigs, boosting the market share to 16%.
Future Growth Guidance
Looking ahead, Kimbell initiated its operational guidance for 2025, projecting daily production figures to stabilize at around 25,500 Boe per day, with an anticipated range of 24,000 to 27,000 Boe. This optimistic outlook reflects the company’s strategy to capitalize on its extensive acreage and the robust performance of its acquired assets.
Strategic Acquisition and Market Position
One of the standout moves for Kimbell in 2024 was the successful acquisition of mineral and royalty interests under the historic Mabee Ranch located in the Midland Basin. This strategic acquisition further cements Kimbell's standing as a formidable player in the Permian Basin, which has proven lucrative in terms of production and exploration activities.
Kimbell's Chairman and CEO, Robert Ravnaas, expressed confidence in the company's trajectory, citing a staggering growth of 733% in production since the company's IPO. He emphasized the continuous consolidation efforts in the U.S. oil and gas royalty sector, which is projected to exceed $700 billion in size.
Distribution Plans
The fourth quarter cash distribution was set at $0.40 per common unit, with a payout ratio representing 75% of the cash available for distribution. This distribution demonstrates Kimbell's commitment to return value to its unitholders while responsibly managing its capital expenditures. The remaining 25% of cash available will be allocated towards debt repayment, further strengthening the company’s fiscal position.
Conclusion
Kimbell Royalty Partners stands at a pivotal point in its growth journey, showcasing a solid recovery and impressive operational metrics in the fourth quarter of 2024 and throughout the year. The combination of strategic acquisitions and a focus on optimizing existing operations positions Kimbell for continued success in the competitive oil and gas landscape. Investors can expect a potent blend of growth and stability as the company navigates the challenges and opportunities in the oil sector.
Topics Financial Services & Investing）
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