Kimbell Royalty Partners LP

Greetings, and welcome to the Kimball Royalty Partners first quarter earnings conference call. At this time, all participants are in a listen-only mode. A 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. And as a reminder, this conference is being recorded. It is now my pleasure to introduce to you Rick Black with Investor Relations. Thank you, Rick. You may begin.

Thank you, operator, and good morning, everyone. Welcome to the Kimball Royalty Partners conference call to review financial and operational results for the first quarter of 2025, which ended on March 31, 2025. 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 kimballrp.com. Information recorded on this call speaks only as of today, which is May 8, 2025, so please be advised that any time-sensitive information may no longer be accurate at the date of any replay listening or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, those are considered forward-looking statements made pursuant to the Safe Harbors 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. Actual results may differ materially. Please refer to today's earnings release for our disclosures on forward-looking statements. These factors, as well as 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 of these forward-looking statements. And with that, I will now 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 pleased to start the year by reporting a record first quarter, which achieved several milestones across key metrics, including record oil, natural gas, and NGL revenues, record consolidated adjusted EBITDA, and record cash available for distribution. Other 2025 milestones so far also include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17, 2025, increasing the company's borrowing base and elected commitments on our credit facility from $550 million to $625 million on May 1, 2025, and redeeming 50% of the Series A cumulative convertible preferred units on May 7, 2025, further simplifying our capital structure and reducing our cost of capital. Even with the uncertainty occurring across the broader geopolitical landscape, activity on our acreage remains robust, with 90 rigs actively drilling on our acreage at quarter end, representing 16 percent market share of all rigs drilling in the lower 48, which is unchanged from Q4 2024. Permitting also remains strong. In fact, one notable example this quarter was from one of our oldest properties that we acquired in 2006. from an East Coast college endowment. This royalty asset, which we have owned for nearly 20 years and has generated profits that are multiple times its original investment, recently permitted 17 additional wells in Martin County, Texas, with NRIs above 2 percent. This shows not only the strength of our diversified portfolio of assets, but also the benefit of the perpetual nature of minerals that can often provide surprisingly upside decades beyond the original investment at no cost to us. Line of site wells continue to be above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production for 2025. Our superior five-year annual average PDP decline rate of 14%, including the acquired production, requires only an estimated 6.5 net wells annually to maintain flat production. Today, we are pleased to declare our first quarter distribution of 47 cents per common unit, an increase of 17.5% from the fourth quarter of 2024 and reflecting an approximate 16% annualized tax advantage yield. We estimate that approximately 70 percent of this distribution is expected to be considered return of capital and not subject to dividend taxes, further enhancing the after-tax return to our common unit holders. Turning to the remainder of the year, despite the current volatility and uncertainty in the broader economy and its impact on commodity prices, we remain confident in achieving our goals for 2025. As a pure-play mineral company with ownership of a diversified portfolio of high margin, shallow decline assets with zero capital requirements needed to support resilient free cash flow, we remain bullish about the U.S. oil and natural gas rolling industry and our role as a leading consolidator in the sector. We are encouraged by the opportunities we see in 2025 and beyond to continue to grow and expand our industry leading portfolio of assets to generate long-term unit over value. I'll now turn the call over to Davis.