Kimbell Royalty Partners, LP (NYSE:KRP) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 11:00 am ET


Kimbell Royalty Partners, LP (NYSE:KRP) Q3 2018 Earnings Conference Call Transcript


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Greetings, and welcome to the Kimbell Royalty Partners' Third Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Rick Black. Thank you, Mr. Black. You may begin.

Rick Black

Thank you, operator, and good morning, everyone. Thanks for joining the Kimbell Royalty Partners conference call to review financial and operational results for the third quarter 2018. This call is also being webcast and can be accessed through the audio link on the Events and Presentation page of the IR section of

(Forward-Looking Cautionary Statements)

Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution. Reconciliations to the nearest GAAP measures can be found at the end of today's earnings press release. Kimbell assumes no obligation to publicly update or revise any forward-looking statements.

I would now like to turn the call over to Bob Ravnaas, Kimbell Royalty Partners' Chairman and CEO. Bob?

Robert Ravnaas

Thank you, Rick, and good morning, everyone. Thanks for joining us. I'm here with several other members of our senior management team, including Davis Ravnaas, our President and CFO; Matt Daly, our COO; Jeff McInnis, our CAO; and Blayne Rhynsburger, our Controller. I would like to begin by giving an overview of our operational performance for the third quarter and our increased distribution. Then I will provide a quick recap of our tax status conversion and our oversubscribed and successful offering on a 3.45 million common units. I'll finish with comments about our strategy and expectations going forward. Then I'll ask Davis to cover our financial performance in more detail. After that, we'll take your questions.

The Haymaker acquisition is proving to be the transformational acquisition that we had envisioned. The full integration will be completed this year ahead of schedule, and the asset performance and quality is excellent. In the third quarter, a record-setting results included contribution from Haymaker and with Haymaker now included, we have significant scale to continue to grow our distributable cash flow and EBITDA. In addition, our cash in G&A costs per Boe are substantially reduced, which represents tremendous operating leverage for the company moving forward.

Now let's look at the performance of our assets in the third quarter. For the quarter, our results were outstanding across the board with impressive growth of revenues, adjusted EBITDA, and cash distribution. From our assets, average daily production was 8,546 Boe per day, up 135% from Q2 and up 159% from Q3 last year with total Q3 production of 731,253 Boe. Please note, as we mentioned in our press release, third quarter results include the contribution from Haymaker for all but a 11 days of the quarter due to the timing of the close. Davis will discuss more in his section.

On a revenue basis, in Q3, 65% of our production was from liquids, 53% oil, and 12% NGLs.