Kimbell Royalty Partners, LP, a U.S. owner of oil and natural gas mineral and royalty interests, reported record daily production of 27,565 barrels of oil equivalent per day (Boe/d) for the quarter ended September 30, 2026. The Fort Worth, Texas-based company also declared a cash distribution of $0.45 per common unit and raised the borrowing base on its credit facility.
Quarterly financial results#
For the third quarter of 2026, the partnership reported the following:
- Total revenues: $86.3 million
- Net income: approximately $17.3 million
- Net income attributable to common units: approximately $12.4 million, or $0.12 per common unit
- Consolidated Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): $80.4 million, a non-GAAP (generally accepted accounting principles) measure
Excluding the effect of certain prior period adjustments, average realized prices for the quarter were:
- Oil: $86.18 per barrel (Bbl)
- Natural gas: $2.21 per thousand cubic feet (Mcf)
- Natural gas liquids (NGLs): $25.23 per barrel
- Combined: $40.41 per Boe
Production, rigs and acreage#
Kimbell reported record daily production of 27,565 Boe/d and record line-of-sight wells. It had 93 rigs actively drilling across its acreage, an increase of two from the second quarter of 2026.
The rigs represented a 16% share of the U.S. land rig count of 586 reported by Baker Hughes as of October 2, 2026. The Permian Basin is Kimbell’s largest basin by revenue, production, rig count, drilled but uncompleted wells (DUCs) and permits.
Kimbell’s management estimates that its minor properties, which generally carry a net revenue interest of 0.1% or below, could add about 10% to its net inventory. These estimates do not include DUCs and permits from those minor properties.
Capital structure, acquisitions and credit facility#
- Preferred units: Kimbell gave notice to redeem 50% of its remaining Series A Cumulative Convertible Preferred Units. After the redemption closes later this month, the face value of the remaining preferred units will be less than 3% of Kimbell’s $2.8 billion enterprise value.
- Credit facility: the borrowing base and elected commitments on its secured revolving credit facility increased from $660 million to $750 million.
- Acquisitions: Kimbell has closed $367 million in acquisitions since June 2026.
Distribution and tax treatment#
The board of directors of the general partner, Kimbell Royalty GP, LLC, approved a cash distribution of $0.45 per common unit, equal to 75% of cash available for distribution for the third quarter. The distribution is payable November 23, 2026 to common unitholders of record at the close of business on November 16, 2026.
Kimbell plans to use the remaining 25% of cash available for distribution to repay approximately $18.8 million of outstanding borrowings under its secured revolving credit facility.
Based on the $16.88 closing price on October 30, 2026, the distribution represents a 10.7% annualized yield, which the company described as tax advantaged. Kimbell expects approximately 76% of the third quarter distribution not to be treated as dividends for U.S. federal income tax purposes. That portion is instead expected to be a non-taxable reduction to the basis of each recipient’s ownership interest.
The portion treated as dividends is expected to be qualified dividends, subject to holding period and other conditions. Those dividends would be taxed at 0%, 15% or 20%, depending on each unitholder’s income level and tax filing status for 2026. Kimbell says these estimates are reasonable based on currently available information but are subject to change. Form 8937, which contains additional information, is available in the Investor Relations section of the company’s website.
Outlook#
Robert Ravnaas, chairman and chief executive officer of the general partner, said Kimbell expects activity across the lower 48 states to remain strong as it completes 2026 and enters 2027, especially in the Permian Basin. Based on current-quarter oil prices, the company expects a material increase in cash flow in the fourth quarter of 2026, as approximately 84% of its estimated fourth quarter oil production is unhedged.
