#United States #Fort Worth #Kimbell Royalty #KRP

Kimbell Royalty Partners’ Recent Upsized Public Offering

Kimbell Royalty Partners, LP, trading on the New York Stock Exchange under the symbol KRP, has recently captured investor attention by announcing the pricing of its upsized public offering of common units. The company aims to raise approximately $149 million in gross proceeds by offering 10,000,000 common units at a price of $14.90 per unit.

Offering Details

This public offering, set to close on January 9, 2025, is part of Kimbell's strategic efforts to bolster its financial standing and operational capacity. Notably, the company has negotiated an option for underwriters to purchase an additional 1,500,000 common units, potentially increasing their capital intake.

Kimbell anticipates that the net proceeds from this offering will primarily serve to repay borrowings under its revolving credit facility. Furthermore, the funds will play a critical role in financing the cash component of their pending acquisition of mineral and royalty interests from Boren Minerals, a deal that underscores Kimbell's growth trajectory in the oil and gas sector.

Market Strategy and Future Aspirations

As a leading player in the oil and gas mineral rights sector, Kimbell holds varying interests across approximately 17 million gross acres within 28 states, making it a significant contributor to the U.S. energy landscape. The company boasts ownership in over 129,000 gross wells, with a dominant concentration in the Permian Basin, reflecting its strategic positioning in high-potential regions.

The leadership team at Kimbell has expressed optimism regarding the proposed acquisition, recognizing it as a pivotal moment for growth. However, the company has acknowledged potential risks tied to integration and the fulfillment of acquisition expectations amid fluctuating market conditions.

Financial Advisors and Regulatory Compliance

The public offering is under the guidance of prominent financial institutions including Citigroup, J.P. Morgan, RBC Capital Markets, BofA Securities, and Mizuho as joint-bookrunning managers. Meanwhile, entities like PNC Capital Markets LLC and KeyBanc Capital Markets have stepped in as co-managers. Interested investors can obtain the prospectus from multiple sources outlined in Kimbell's current report filed with the SEC.

The offering will comply with an effective shelf registration statement previously filed with the SEC, ensuring adherence to the regulatory stipulations necessary for such capital-raising activities.

Kimbell has underscored that this announcement is not a solicitation for the sale or purchase of its common units, emphasizing the necessity of compliance with regional securities regulations before any sales can occur.

Conclusion

With its upsized public offering, Kimbell Royalty Partners, LP demonstrates a keen understanding of market dynamics and financial strategy. Their clear focus on utilizing funds for debt repayment and acquisition reinforces their commitment to growth and positions them favorably within the competitive oil and gas sector. Investors and market analysts alike will be observing the outcomes of this strategic financial maneuver in the coming months, as Kimbell continues its trajectory to enhance its operational footprint in the energy market.