#United States #Acquisition #Fort Worth #Oil and Gas #Kimbell Royalty

Kimbell Royalty Partners Completes $215.4 Million Drop Down Acquisition

Fort Worth, Texas-based Kimbell Royalty Partners, LP (NYSE: KRP), a prominent player in the oil and gas sector, has made waves in the market by announcing its latest acquisition. On July 17, 2026, the company revealed they are purchasing specific oil and gas royalty interests from affiliated sellers for approximately $215.4 million. This significant transaction marks Kimbell's second drop-down acquisition since their IPO in February 2017, expected to enhance their production capacity and boost distributable cash flow.

Key Transaction Details

The acquisition, referred to as the "Drop Down," has an expected closing date of around August 21, 2026, and is set to be accretive to the company's cash flow per unit from the moment it closes. The $215.4 million purchase price consists of about $74.9 million in cash, accounting for nearly 35% of the total, and includes the issuance of 9.5 million new common units from Kimbell Royalty Operating, LLC ("OpCo"), valued at $140.5 million.

In this deal, Kimbell is targeting approximately 2,568 net royalty acres, focusing on high-potential regions within the Eagle Ford, Permian, Mid-Continent, and Appalachian areas. With these interests, they anticipate an average daily production of 2,347 barrels of oil equivalent (boe/d) during the third quarter of 2026, which is broken down into 841 barrels per day of oil, 569 barrels per day of natural gas liquids (NGLs), and 5,624 thousand cubic feet per day of natural gas.

The company’s diverse portfolio now spans over three million gross acres and boasts access to more than 29,000 producing wells across high-growth areas in the Lower 48 states. This strategic acquisition adds significant value to Kimbell's operations, further solidifying its position in the competitive oil and gas market. The company forecasts robust production growth in the coming years due to a strong historical development cadence, with 9 active drilling rigs on their acreage as of the end of March 2026, alongside 177 drilled but uncompleted well locations and permits expected to come online soon.

Strategic Impact and Future Outlook

The ongoing demand for oil and gas remains steadfast in energy markets, accentuating Kimbell's proactive approach in enhancing its mineral and royalty holdings. Bob Ravnaas, the company's Chairman and CEO, expressed confidence in this acquisition, emphasizing that it bolsters their multi-basin mineral footprint while offering a favorable mix of current production and substantial future growth potential due to a longstanding inventory for further development.

The Conflicts and Compensation Committee of Kimbell’s Board of Directors approved the investment on July 16, 2026, paving the way for this milestone move. With Evercore acting as the financial advisor and Potter Anderson Corroon LLP providing legal counsel for the Conflicts Committee, the deal underscores the careful planning and strategic partnerships that Kimbell has fostered to secure its growth trajectory.

With this acquisition, Kimbell not only enhances its production portfolio but also positions itself for future acquisitions and growth in a fluctuating market. The confidence the management team has in the performance of Kimbell’s assets signals a promising outlook for investors and stakeholders alike, as the company continues to explore new opportunities in the ever-evolving landscape of the oil and gas industry.

As Kimbell Royalty Partners continues to expand its operational horizons, the market watches closely for how this acquisition will unfold and impact their overall performance moving forward. For further details on Kimbell and their growing portfolio, you can visit their official website at Kimbell Royalty Partners.