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Greetings, and welcome to the Kimbell Royalty Partners Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black, with Investor Relations. Thank you, Rick. 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 third quarter, which ended September 30, 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 kimbellrp.com. Information recorded on this call speaks only as of today, November 6, 2025. So please be advised that any time-sensitive information may no longer be accurate as of 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 are considered forward-looking statements made pursuant to the safe harbor provisions for 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 the company's control. Actual results may differ materially. Please refer to today's earnings press release for our disclosure 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 nearest GAAP measures can be found at the end of today's earnings release. Kimbell assumes no obligation to publicly update or revise any of these forward-looking statements. I would now like to turn the call over to Bob Ravnaas, Kimbell Royalty Partners' Chairman and Chief Executive Officer. Bob?

Thank you, Rick, and good morning, everyone. We appreciate you joining us this morning. With me today are several members of our senior management team, including Davis Ravnaas, our President and Chief Financial Officer; Matt Daly, our Chief Operating Officer; and Blayne Rhynsburger, our Controller. To start off, we are pleased to report solid third quarter results with production increasing organically by approximately 1% over Q2 and exceeding the midpoint of our 2025 guidance. This performance once again demonstrates the resilience of our high-quality, diversified and low decline production base. Despite the current general slowdown among U.S. oil and natural gas operators, for the first 9 months of 2025, our production averaged 25,574 BOE per day, which included a full first quarter of production from the Boren acquisition also exceeding the midpoint of guidance. This operational success against the backdrop of headwinds within the broader energy sector is the result of the seeds that we planted over the last several years with our targeted M&A strategy across the leading basins in the U.S. Our active rig count remains strong with 86 rigs drilling across our acreage representing a market share of U.S. land rigs at 16%. In addition, our line-of-site wells continue to be above the number of wells needed to maintain flat production, giving us confidence in our production as we wrap up 2025. Finally, cash G&A per BOE was below the midpoint of guidance, reflecting operational discipline and positive operating leverage. Today, we are also pleased to declare the Q3 2025 distribution of $0.35 per common unit as we continue to focus on returning value to unitholders. As we approach the end of 2025, we are very grateful to our employees, Board of Directors and advisers for helping us achieve another successful year at Kimbell. We remain excited about our role as a leading consolidator in the oil and natural gas royalty sector and the prospects for Kimbell to generate long-term unitholder value for years to come. And now I'll turn the call over to Davis.

Thanks, Bob, and good morning, everyone. I'll now start by reviewing our financial results for the third quarter. Oil, natural gas and NGL revenues totaled $76.8 million during the third quarter, and run rate production was 25,530 BOE per day. On the expense side, third quarter general and administrative expenses were $10.1 million, $5.9 million of which was cash G&A expense or $2.51 per BOE. Total third quarter consolidated adjusted EBITDA was $62.3 million. You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution at the end of our news release. This morning, we announced a cash distribution of $0.35 per common unit for the third quarter. We estimate that approximately 100% of this distribution is expected to be considered a return of capital and not subject to dividend taxes, further enhancing the after-tax return to our common unitholders. This represents a cash distribution payment to common unitholders that equates to 75% of cash available for distribution, and the remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimbell's secured revolving credit facility. Moving now to our balance sheet and liquidity. At September 30, 2025, we had approximately $448.5 million and debt outstanding under our secured revolving credit facility, which represented a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.6x. We also had approximately $176.5 million in undrawn capacity under the secured revolving credit facility as of September 30, 2025. We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position, the support of our expanding bank syndicate and our financial flexibility. Today, we are also reaffirming our financial and operational guidance ranges for 2025. As a reminder, our full 2025 guidance outlook was included in the fourth quarter 2024 earnings release. Even in the face of a general slowdown among U.S. oil and natural gas operators, we remain confident about the prospects for continued development as we wrap up 2025, given the number of rigs actively drilling on our acreage, especially in the Permian as well as our line-of-site wells exceeding our maintenance well count. We continue to believe that the overall demand for U.S. energy will continue to grow over the long term, and we are very well positioned to benefit from this trend for years to come, given our diversified portfolio of high-quality royalty assets across the leading U.S. basins. With that, operator, we are now ready for questions.

[Operator Instructions] Our first question comes from the line of Tim Rezvan with KeyBanc Capital Markets.

First, I wanted to ask a little bit on the macro given your visibility across a number of basins. We did see the line-of-site wells come down a bit. It looks like 7.07 is the lowest since the middle of 2023, yet you've been able to hold production flat throughout the year. So can you talk about kind of what you're seeing across your footprint? There was a large Permian operator this morning talking about seeing a slowdown. What gives you confidence that you can kind of stay flat or grow a little bit despite the line-of-site reduction and what others are saying in the industry?

Sure. Sure. Yes. Thanks, Tim. Well, I think first, what I'd say is we're very proud of this quarter. I think we delivered exactly what we've consistently told investors, which is to expect steady production from our portfolio. So we'll see certain areas in certain basins that are up quarter-over-quarter, certain areas in basins that are down quarter-over-quarter. We're very encouraged by our rig activity. It's been relatively flat over the course of the year. Our market share is relatively flat over the course of the year of the entire U.S. rig fleet. I would say that the DUC inventory goes up and down quarter-over-quarter. We had a nice drawdown this quarter, and we'll probably expect to see the benefits of those DUCs coming online next quarter. So I wouldn't draw any major -- looking at the data, I wouldn't draw any major conclusions on a Permian slowdown. If anything, we're seeing most of our operators indicating that they want to keep production relatively flat. So I think that's encouraging. We're paying a 10% dividend right now, waiting for oil and gas prices on the environment, the macro environment to ultimately improve. All of that is return of capital this quarter. So we think we're delivering a very consistent, steady yield that has massive tax advantages. And again, we continue to see good rig activity across the acreage and the DUC and permit inventory should go up and down over time. I'm not seeing any major trends here that things are slowing down in a material way.

Okay. Okay. That's helpful. And then if I could dig in a little more. People think that you've expanded in the Permian quite a bit, but you have a lot of Mid-Con and Haynesville exposure. You see an acceleration there. Can you talk in those areas, what you're seeing specifically?

Yes. Thanks for bringing that up. So I think that really highlights the benefits of a diversified portfolio. Almost surprised candidly by how active the Mid-Con has been quarter-over-quarter, obviously benefit from a higher gas cut in those basins in this environment. So in this sort of -- in this macro environment, we've got oil prices relatively low and gas prices now above $4, which is great to see. We would probably expect a greater contribution to our production growth, all things being the same from the Mid-Con, the Haynesville and other areas across our portfolio. And really, that's all by design. I mean the idea is to have a balanced portfolio that allows us to deliver steady, consistent results despite whatever is happening on a relative basis between oil and gas prices.

Okay. Okay. That's great context. And if I could sneak one last one in, really more of a modeling question. The marketing and other deductions expense item, it was abnormally low last quarter. It seems to have -- was abnormally high this quarter. Can you talk about what's happened there? Is that just sort of a timing issue with something? And should we continue to expect that at that roughly $1.80 per BOE level going forward?

Yes, great question. Nothing gets past you, Tim. I love that. I would say for modeling purposes, somewhere in between those levels make sense. We saw tremendous production growth in the Mid-Con, which has higher marketing costs. And so I think that kind of biased that line item a little bit higher this quarter. We would expect in a more normalized environment something closer to our historical average, if that makes sense.

Our next question comes from the line of Paul Diamond with Citi.

Just want to touch quickly, you guys have that 6.5 net DUC and permits or net DUC and net permits kind of run rate to hold production steady. And with the efficiency you've seen across the space as part of a larger macro, is that being pressured down at all? Or is it pretty stable at that 6.50?

Great question, and I'll ask my team this. I believe we update that once a year based on what we're seeing in our portfolio. So over time, with the maturing portfolio, just state the obvious, I know you know this, but just for the benefit of the wider audience. As higher decline wells come down in terms of production mix, so does their decline rate. So the number of wells necessary to keep production should, all things being considered, continue to go down over time. We'll update that guidance at the appropriate time, probably with full year guidance for next year. Matt, I don't know if you want to add anything in terms of how we've updated that historically. But very happy to see -- go ahead. Go ahead, Matt.

No, I agree with that. I mean it modestly went up with the Boren acquisition from 5.8 wells to 6.5. But yes, you're right, Davis. We do that once a year, and it will likely slightly go down a little bit.

Yes. So I think -- so Paul, I'm actually glad you brought that up because now we're dealing with a maintenance level of 6.5 that's now 9, 10 months overdue for updating, if that makes sense. It's a massive undertaking for us to do that exercise. So one would expect for that maintenance level to go down, which gives us increased confidence on the maintenance level delta relative to the DUC and permit inventory that we have to maintain or grow production rates. So again, feel really good about how we're positioned with near-term catalysts for growth relative to maintenance production in this, particularly in this kind of environment, so.

Got it. Makes perfect sense. And just circling back on more of a wider M&A landscape. Has the removal of Sitio from that landscape kind of shifted the opportunity set? Or is it kind of too early to tell?

Yes. I'd say that there's always been only a small number of publicly traded mineral companies. I'd say that the larger competitive dynamic is between the privates overall. We selectively -- we'll look at -- gosh, I think last year or so far this year, we've looked at and placed bids on over 200 assets. And I think we've only gotten one that we're happy with, which was Boren, thank goodness, back in January, which has been an outstanding asset for us. The drop of one competitor on our landscape or 2, I mean, it's obviously helpful on an apples-to-apples basis for us to have fewer competitors in the market. But each of us kind of does a different thing and the public market is a slightly different strategy. And so we actually rarely compete head-to-head with the public mineral companies. It's more that there's an abundance of private guys out there that, for one reason or another, decide to get more aggressive on price deck or development timing compared to us making acquisitions. We tend to be very careful and very selective, and the bar is extremely high for M&A. I think on average, we've done somewhere between 1 and 3 deals per year. So we try to stay very disciplined on that.

Our next question comes from the line of Noah Hungness with Bank of America.

Yes, for my first question here, I was just wondering -- so I wanted to go back to production and the production outlook. I know it's too early for 2026 full year guide or an outlook there. But maybe on our estimates, it takes 6 to 9 months for a reduction or addition in rig activity to affect the production stream, right? So really, I think that for us, that puts 2026 at risk. How do you think the first half of '26 production would kind of compare to your '25 guidance, if you can look out that far?

Yes, I'd say flat to increasing. We see no indication of production on our properties falling. We've actually gotten a lot of good indications recently on Q4 production so far. So that feels good. We'll see if that -- it's still early. We'll see if that plays out to fruition, but feel very good about activity on the acreage. And no, I think one thing that perhaps you're missing, we constantly are getting checks in the mail from things that we haven't even been able to quantify because we didn't even know that we own them. And we have interest in hundreds of thousands of acres with hundreds of thousands of wells, millions of acres with hundreds of thousands of wells. So we're constantly getting positive surprises from operators that are drilling different benches, expanding plays, doing different things, and all of that accrues to our benefit, and it's impossible for us to quantify. So all of our metrics that we have out there are, by definition, unduly conservative. So that's why -- I mean I think in this environment, the ability to grow production sequentially organically, we did no acquisitions, 1% quarter-over-quarter is quite extraordinary. And I think exactly what we want to deliver to our investors and our messaging, which is expect us to be the steady company that delivers a very solid tax advantage yield to you and despite what happens to oil and gas prices.

Yes. I appreciate that color. For my next question, you guys have continued to build cash on the balance sheet. And I guess I was just wondering, why you build the cash on the balance sheet versus just paying down the revolver?

Yes, pay down the revolver immediately after we pay out the distribution. It's just a timing thing.

Our next question comes from the line of Derrick Whitfield with Texas Pacific Land Corporation.

Yes. I didn't realize you were with Texas Pacific Land Corporation.

Did it come across as Texas Pacific? That should have been Texas Capital. That was a miss on the operator, I believe. One of your peers recently announced a multiyear outlook on growth. So while not holding you guys accountable to a number, could you speak to the underlying growth potential of your asset base out of the Haynesville and Mid-Con if we were to see this near 30 Bcf per day inflection of gas demand play out over the next 5 to 6 years?

Man, I love that you asked this question. So I love to see that analysis. We obviously saw that. A lot of respect for our peers at that business, great business they've got, proud of them. We're very conservative. We don't want to wind out multiyear projections on oil and gas production on our properties. At higher natural gas prices, $4, $5, what some of these people are expecting for natural gas growth is extraordinary and heroic. Obviously, if that materializes, you're going to see a huge increase in production on our asset base across all of the gas basins that we participate in. I think it's sometimes lost on folks that half of our production is natural gas. So we would expect tremendous growth in natural gas prices or natural gas production on our assets if this bullish case, given all the nice macro factors and tailwinds and electricity demand and natural gas' role in that materialize. I wouldn't want to put something out there for a 5-year outlook or beyond that suggest dramatic growth. But to state the obvious, if anybody looks at our position in the Haynesville, I think they'll be blown away by the number of counties that we have interest in and the amount of upside and inventory life that we have there. So we would expect tremendous growth in natural gas on our assets in an environment like that. I just think that we're very -- we do not control operations on our acreage. We obviously cannot control natural gas prices. So we like to put out guidance 1 year at a time, and we feel that, that is probably a conservative prudent path to take.

Makes sense. I mean it would seem that it would be outsized relative to the U.S. increase in aggregate just because you're getting it from the key basins in which you would see the growth. Is that a fair characterization?

Absolutely. Absolutely. Yes. We fully support that. I totally agree with you.

All right. Terrific. And then for my follow-up, I wanted to go a different direction on M&A. What are your general thoughts on pursuing organic mineral acquisition opportunities similar to the Western Haynesville and a lot of the derivative plays that are coming out of that?

Yes. We -- the bar is high for M&A. We have historically not pursued small ground game acquisitions. It's very labor intensive. It doesn't dramatically move the needle for us in terms of adding or contributing to the overall business' production base. We're more focused on cultivating relationships with folks that are putting together portfolios and finding the right time where they're willing to sell and we're willing and able to buy and linking those up in a material way that is material for our business. So we were obviously aware of and talk to teams all the time that are putting together production all across the Western Haynesville. We'll wait probably until some of those portfolios have matured to a place where they could be accretive on both DCF per share and also on NAV. So we'll wait until that nice nexus where the play has been developed to a point where we think it's derisked enough, and then I think you'll see us start to transact.

And this now concludes our question-and-answer session. I'd like to turn the floor back over to management for closing comments.