Kimbell Royalty Partners LP

Greetings, and welcome to the Kimball Royalty Partners Second 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, Investor Relations. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for the second quarter 2023, ended June 30th, 2023. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the IR section of KimbellRP.com. Information recorded on this call speaks only as of today, August 2nd, 2023. So please be advised that any time sensitive information can no longer be accurate as of the date of any replay listening or transcript reading. I would also like to remind you that statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are considered forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call, which by their nature, are uncertain and outside of the company's control. The actual results may differ materially. Please refer to today's earnings press release for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. 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 release. Kimball assumes no obligation to publicly update or revise any forward-looking statements. I would now like to turn the call over to Bob Ravenous, Kimball Realty Partners Chairman and Chief Executive Officer. Bob?

Thank you, Rick, and good morning, everyone. We appreciate you joining us on the call this morning. With me today are several members of our senior management team, including Davis Ravenous, our President and Chief Financial Officer, Matt Daly, our Chief Operating Officer, and Blaine Reinsberger, our controller. We are very pleased with another record quarter and continue to build on momentum from Q1 and the recently closed MB Minerals royalty acquisition. Notably, our Q2 production mix materially shifted towards oil, which represented 33% on a 6-to-1 basis, up from 29% in the first quarter. Activity in our acreage remains resilient, despite a lower overall U.S. land rate count. In fact, we now have the highest market share ever of the overall U.S. land rig count at 13.8%. After giving effect to our two most recent acquisitions, the Permian Basin leads all categories in terms of production, inventory, rig count, and line-of-sight wells. Production in the Permian grew by 48%, quarter over quarter, reflecting a full quarter of the MB Minerals acquisition, with the Permian rig count increasing by 11% during the same period. we're very pleased to report that we maintain a superior five-year annual PDP decline rate of 13% that only requires an estimated 4.9 net wells annually to maintain flat production. Overall, we had a great quarter and are right on track to meet our targets for the year. Our Q2 2023 distribution of 39 cents represents an increase of 11% from Q1 and demonstrates our ongoing focus and commitment to enhancing unit holder value. As we head into the second half of the years, as well as looking out toward 2024, we will continue to execute on our strategy to drive growth both through organic development and our discipline acquisition strategy that is both a consistent and proven method at Kimball. We also expect to continue benefiting from our diverse portfolio with low PDP decline rates coupled with upside drilling locations. As a major consolidator in the highly fragmented U.S. oil and natural gas royalty sector, we remain bullish about the long-term prospects in this space and our role in it. We believe the future opportunities for Kimball are very bright and will extend for many years to come. I'll now turn the call over to Davis to review our financials in more detail before we open the call to questions.