Kimbell Royalty Partners, LP (NYSE: KRP)

Kimbell Royalty Partners, LP (KRP) operates in the oil and natural gas industry, specifically as an owner and acquirer of mineral and royalty interests in the United States. The company, formed in 2015, has chosen to be taxed as a corporation for federal income tax purposes. KRP's primary business objective is to provide increasing cash distributions to unitholders through acquisitions from third parties, its Sponsors, and the Contributing Parties, as well as from organic growth through the continued development by working interest owners of the properties in which it owns an interest.

KRP's operations span across the United States, with mineral and royalty interests located in 28 states and every major onshore basin, including the Permian Basin, Mid-Continent, Terryville/Cotton Valley/Haynesville, Appalachian Basin, Eagle Ford, and Bakken/Williston Basin. These locations provide a competitive advantage for the company, with exposure to mature producing basins and undeveloped opportunities.

The company's revenues are generated from royalty payments received from the operators of its properties, based on the sale of oil and natural gas production, as well as the sale of NGLs extracted from natural gas during processing. The top ten operators accounted for approximately 38% of its revenues in 2023, with EP Energy E&P Company, L.P., SWN Production Company LLC, XTO Energy, Inc., Chesapeake Operating, Inc., EOG Resources, Inc., Vital Energy, Mewbourne Oil Company, Pioneer Natural Resources Company, Chevron USA, Inc., and Diamondback E&P, LLC being the largest.

KRP's competitive strengths lie in its significant diversified portfolio of mineral and royalty interests in mature producing basins and exposure to undeveloped opportunities, its exposure to many of the leading resource plays in the United States, its financial flexibility to fund expansion, and its experienced and proven management team with a track record of making acquisitions.

KRP's mineral interests are real property interests that grant ownership to all the oil and natural gas lying below the surface of the property, as well as the right to explore, drill, and produce oil and natural gas on that property or to lease such rights to a third party. Overriding royalty interests, on the other hand, are royalty interests that burden the working interests of a lease and represent the right to receive a fixed, cost-free percentage of production or revenue from production from a lease.

In terms of regulation, KRP's oil and natural gas operations are subject to various types of legislation, regulation, and other legal requirements enacted by governmental authorities. The company is subject to environmental laws and regulations, including the Resource Conservation and Recovery Act, the Clean Water Act, and the Comprehensive Environmental Response, Compensation, and Liability Act, which impose requirements regarding the generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes. Additionally, KRP is subject to air emissions regulations, including the Clean Air Act, and climate change regulations, such as the Paris Agreement. The company is also subject to regulation by state authorities, including the Texas Railroad Commission.