Kimbell Royalty Partners, LP (NYSE: KRP)

Kimbell Royalty Partners, LP is a Delaware limited partnership formed in 2015 to own and acquire mineral and royalty interests in oil and natural gas properties throughout the United States. The company has elected to be taxed as a corporation for United States federal income tax purposes. As an owner of mineral and royalty interests, it receives a portion of revenues from the production of oil, natural gas, and associated NGLs from the acreage underlying its interests, net of post‑production expenses and taxes. It is not obligated to fund drilling and completion costs, lease operating expenses, or plugging and abandonment costs. Its primary business objective is to provide increasing cash distributions to unitholders resulting from acquisitions from third parties, its sponsors and contributing parties, and from organic growth through continued development by working interest owners of the properties in which it holds an interest.

The company generates revenue primarily from royalty payments it receives from operators of its properties based on the sale of oil, natural gas, and NGLs extracted from natural gas during processing. As of December 31, 2025, approximately 1,300 operators were actively producing on its acreage, with its top ten operators—Conoco Phillips, Vital Energy, EOG Resources, Inc., Occidental Petroleum, Diamondback E&P LLC, CPX Energy Operating LLC, Pioneer Natural Resources Company, Devon Energy Production Company, Ovintiv Exploration Inc., and Verdun Oil Company—together accounting for about 47.1% of its revenues. For the year ended December 31, 2025, oil sales contributed 62% of total revenue, natural gas sales contributed 25%, and NGL sales contributed 13%. The company does not believe the loss of any individual purchaser would have a material adverse effect due to the broad base of active producers.

The company operates through the following segments:

• Mineral interests: This segment includes mineral and nonparticipating royalty interests that grant ownership of oil and natural gas below the surface, the right to explore, drill, and produce, or to lease such rights to third parties. As of December 31, 2025, the company owned mineral and royalty interests in approximately 12.3 million gross acres, with over 99% of that acreage leased to working interest owners. The segment also includes ownership in over 133,000 gross wells, of which more than 53,000 are located in the Permian Basin.

• Overriding royalty interests: This segment consists of overriding royalty interests that burden the working interests of a lease and provide a fixed, cost‑free percentage of production or revenue from the lease. As of December 31, 2025, the company held overriding royalty interests in approximately 4.7 million gross acres, with virtually all of that acreage producing and leased to working interest owners. The segment contributes to the company’s royalty income in a manner similar to its mineral interests.

Kimbell Royalty Partners, LP holds a diversified position in the oil and natural gas industry, with a low‑decline asset base spread across multiple resource plays. The company competes with other entities for the acquisition of mineral and royalty interests, many of which have greater financial and operational resources. Its competitive advantages include a broad geographic footprint covering 28 states and every major onshore basin, exposure to leading plays such as the Permian Basin, Mid‑Continent, and others, and a conservative capital structure that provides financial flexibility for strategic acquisitions. The management team and board of directors possess extensive oil and gas experience, with a track record of executing over 160 acquisitions, which enhances its ability to source, evaluate, and manage high‑quality mineral and royalty assets.

The company’s customer base consists primarily of oil and natural gas operators that pay royalties for production from its leased acreage. As of December 31, 2025, there were approximately 1,300 active operators, with the top ten being Conoco Phillips, Vital Energy, EOG Resources, Inc., Occidental Petroleum, Diamondback E&P LLC, CPX Energy Operating LLC, Pioneer Natural Resources Company, Devon Energy Production Company, Ovintiv Exploration Inc., and Verdun Oil Company. These operators represent a significant portion of its revenue, but the large number of producers reduces reliance on any single customer.