Fort Worth – November 05, 2026 -- Kimbell Royalty Partners (NYSE: KRP) reported record third-quarter 2026 production of 27,565 barrels of oil equivalent per day (6:1), lifted its revolving credit facility to $750 million from $660 million, and moved to redeem half of its remaining preferred units for about $100.2 million.
Acquired assets lift output and revenue
The quarter includes 41 days of production from the $221.2 million Drop Down acquisition, which closed on August 21, 2026 with a June 1 effective date. Run-rate production after closing reached 28,910 Boe per day. Production was about 45% natural gas and 55% liquids, split between 34% oil and 21% natural gas liquids.
Oil, natural gas and NGL revenues were $96.9 million, or $104.6 million including the acquired production from its effective date. Total revenues were $86.3 million. Net income was about $17.3 million, of which about $12.4 million, or $0.12 per common unit, went to common unitholders.
Consolidated Adjusted EBITDA, a non-GAAP measure, was $80.4 million, or $87.5 million including the acquired production from the effective date. Realized prices, excluding certain prior-period adjustments, averaged $86.18 per barrel of oil, $2.21 per Mcf of gas and $25.23 per barrel of NGLs, or $40.41 per Boe combined.
Revolver grows 14% while preferred redemption adds borrowings
The borrowing base and elected commitments rose to $750 million on October 15 after the fall redetermination. Kimbell had $535.8 million drawn at September 30, leaving $124.2 million of undrawn capacity. Net debt stood at about 1.5x trailing twelve-month consolidated Adjusted EBITDA, and the partnership was in compliance with all covenants.
On October 16, Kimbell gave notice to redeem 50% of its remaining Series A cumulative convertible preferred units. The redemption is expected to close on November 16 at an aggregate price of about $100.2 million, funded with revolver borrowings. The remaining preferred units will then be less than 3% of Kimbell's $2.8 billion enterprise value.
Distribution of $0.45 per unit implies 10.7% yield
The board approved a distribution of $0.45 per common unit, a 75% payout of cash available for distribution. The distribution is payable on November 23 to unitholders of record on November 16. Based on the October 30 closing price of $16.88, the annualized yield is 10.7%.
Kimbell will use the remaining 25% of cash available for distribution to repay about $18.8 million of revolver borrowings. It estimates that about 76% of the distribution will be a non-taxable reduction to unitholders' basis rather than a dividend for U.S. federal income tax purposes. The portion treated as dividends is expected to be qualified, subject to holding-period and other conditions.
Common units outstanding totaled 105,451,405, alongside 18,752,185 Class B units, at both September 30 and November 5.
93 active rigs on acreage give 16% share of U.S. land count
Kimbell had 93 rigs drilling on its acreage at September 30, up two from the second quarter and about 16% of all land rigs in the continental United States. Its major properties held 1,005 gross (4.56 net) drilled-but-uncompleted wells (DUCs) and 705 gross (4.81 net) permitted locations. The combined 9.37 net DUCs and permitted locations is a record and compares with an estimated 8.20 net wells needed to hold production flat.
Unhedged oil exposure drives fourth-quarter cash flow outlook
Chairman and CEO Robert Ravnaas expects a material increase in fourth-quarter cash flow at current oil prices, since about 84% of estimated Q4 2026 oil production is unhedged. He expects strong activity across the Lower 48 into 2027, led by the Permian Basin, Kimbell's largest basin by revenue, production, rig count, DUCs and permits. Kimbell affirmed its Q4 2026 financial and operational guidance ranges, first disclosed on August 24.
Cash G&A was $6.3 million, or $2.48 per Boe, within total G&A of $10.7 million. Unit-based compensation added $4.4 million, or $1.73 per Boe. Ravnaas said Kimbell has "now closed $367 million in acquisitions since June 2026."