Kimbell Royalty Partners, LP (KRP) Reports Q3 Revenues Beat

Kimbell Royalty Partners, LP (NYSE: KRP) reported Q3 EPS of ($0.73), $0.75 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $32.98 million versus the consensus estimate of $27.7 million.

• Total third quarter 2019 revenues increased to $33.0 million compared to $18.4 million in the third quarter of 2018, primarily due to production and operating activities from the assets acquired in the Haymaker acquisition, dropdown and Phillips acquisition as well as organic growth.
• Third quarter 2019 net loss was $28.9 million and net loss attributable to common units was $16.3 million, or $0.73 per common unit, compared to net loss attributable to common units of $3.7 million in the third quarter of 2018.
  • The increase in net loss during the third quarter of 2019 was primarily due to a $34.9 million non-cash impairment expense recorded during the quarter related to a full-cost ceiling test.

Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell Royalty Partners\' general partner commented, "This was an excellent quarter generating record high revenue and production and further proving the strength of our business model and strategy. The sequential production growth in the third quarter of 8% was entirely organic, which is a testament to the high degree of activity on our acreage coupled with one of the industry's lowest PDP decline rates. We remain very pleased with the cash flow generation, production stability and growth potential across our asset base. In addition, revenue growth, particularly year-over-year, reflects strong performance from acquisitions made in the past twelve months, despite the decrease of realized commodity prices. In addition, in the third quarter we had receipts of nearly $1 million in lease bonuses. Finally, we had cash G&A per Boe of $3.30 in Q3 2019, which was below the low-end of our Q3 2019 guidance. Based on our strong third quarter results and expectations for the remainder of the year, we are raising our Q4 2019 production guidance.

"While current pressures persist for many exploration and production companies operating in the U.S., our broad-based, high-quality asset portfolio continues to outperform expectations. At the end of the third quarter, our rig count was 82, including four new rigs in the Permian, and our market share of the entire lower 48 U.S. drilling fleet increased to 9.8% from 9.5%.

"The acquisition market remains very active as we continue to evaluate opportunities across our many basins. We remain focused on assembling a high-quality, low-PDP decline and diversified royalty portfolio that generates substantial free cash flow and additional growth potential with no capital outlays. We are bullish on our business and the opportunities to further enhance growth in the future," concluded Robert Ravnaas.

For earnings history and earnings-related data on Kimbell Royalty Partners, LP (KRP) click here.

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