Earnings Analysis November 5, 2026

Kimbell Royalty Partners LP ($KRP) Q3 2026 Earnings Analysis: Revenue and Profit Miss Estimates, Guidance Maintained

Earnings Report

Revenue: $86.3 million (up 7.1% YoY, vs. $103 million expected) ❌ Miss

EPS (Earnings Per Share): $0.12 (GAAP, diluted; vs. $0.26 adjusted expected) ❌ Miss

Guidance: Maintained · Reaffirmed the Q4 2026 financial and operational guidance range as presented on August 24 (specific figures not included in this announcement)

Stock Reaction: -0.65% in after-hours trading ($15.38, as of 21:13 KST on 11-05)

Highlights

Record Production: Set a quarterly record of 27,565 barrels per day (oil equivalent)

Improved Cash Generation: Adjusted EBITDA increased by 29.1% YoY to $80.4 million

Expanded Distribution Capacity: Declared a distribution of $0.45 per unit, representing an annualized yield of 10.7%

Quarterly production reached a record high as it included 41 days of production from the acreage acquired on August 21. The company decided to retain 25% of distribution resources for debt repayment, and net debt at the end of September remained at approximately 1.5x the trailing 12-month adjusted EBITDA. Drilling rigs totaled 93, accounting for 16% of U.S. land rigs, and proved reserves also reached an all-time high.

Lowlights

Decreased Net Income: Net income attributable to common stock was $12.38 million, falling short of $17.01 million in the same period last year

Revenue Miss: Total revenue of $86.3 million fell below the $103 million estimate

Weak Gas Prices: Realized gas price was only $2.21 per thousand cubic feet

Total revenue was weighed down by a $13.13 million loss on derivative valuation, despite a 26.1% increase in oil, gas, and NGL revenue. Furthermore, the August 21 acquisition contributed only 41 days to the results, creating a discrepancy with the $104.6 million revenue calculated from the effective date. Additionally, the decision to fund approximately $100.2 million for the 50% redemption of preferred stock through a revolving credit facility will increase interest expense burdens.

What the Company Said

CEO Robert Ravnaas stated that he expects cash flow to increase significantly in Q4 due to surging oil prices. As the company completed $367 million in acquisitions since June, the key for the next quarter will be whether the cash contribution from the integrated assets is reflected in the actual figures.

Market Reaction and Future Outlook

Total revenue fell short of expectations, and book income decreased due to a $13.13 million loss on derivative valuation, leading to weakness in after-hours trading. Production and cash flow maintained quarterly highs.

It is necessary to monitor how the net debt ratio and interest expenses move after the 50% redemption of preferred stock scheduled for November 16 is completed.

A key point of interest is how much revenue and cash flow will increase when the August acquisition of oil fields is reflected in the fourth-quarter results.

We must observe how much unhedged crude oil volume boosts cash flow if oil prices maintain their current levels.

Earnings Call Key Summary

Once the company script is released following the earnings call, the key takeaways from the call will be added here. We will select and summarize only the most important points, such as how management explained performance and outlook, and what analysts asked.