Kimbell Royalty Partners, LP 8-K, filed Jul 24, 2020
Kimbell Royalty Partners, LP (KRP)
About this 8-K
Kimbell Royalty Partners, LP filed this 8-K on July 24, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 24, 2020
Kimbell Royalty Partners, LP
(Exact name of registrant as specified in its charter)
| Delaware | 1-38005 | 47-5505475 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
777 Taylor Street, Suite 810 Fort Worth, Texas |
76102 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (817) 945-9700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to 12(b) of the Act:
| Title of each class: | Trading symbol(s): | Name of each exchange on which registered: |
| Common Units Representing Limited Partnership Interests | KRP | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
| Item 8.01. | Other Events. |
On July 24, 2020, Kimbell Royalty Partners, LP announced that the board of directors of Kimbell Royalty GP, LLC, its general partner, declared a quarterly cash distribution of $0.13 per common unit for the quarter ended June 30, 2020. The distribution will be paid on August 10, 2020 to common unitholders of record at the close of business on August 3, 2020.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
|
Number |
Description |
| 99.1 | News release issued by Kimbell Royalty Partners, LP dated July 24, 2020 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KIMBELL ROYALTY PARTNERS, LP | ||
| By: | Kimbell Royalty GP, LLC, | |
| its general partner | ||
| By: | /s/ Matthew S. Daly | |
| Matthew S. Daly | ||
| Chief Operating Officer | ||
Date: July 24, 2020
Exhibit 99.1
 |
NEWS RELEASE |
Kimbell Royalty Partners Declares Second Quarter 2020 Distribution
Increases Payout Ratio to 75% of Projected Second Quarter 2020 Cash Available for Distribution
FORT WORTH, Texas, July 24, 2020 – Kimbell Royalty Partners, LP (NYSE: KRP) (“Kimbell”), a leading owner of oil and natural gas mineral and royalty interests in more than 96,000 gross wells across 28 states, today announced that the Board of Directors of Kimbell Royalty GP, LLC, Kimbell’s general partner (the “Board of Directors”) approved a cash distribution payment of 75% of projected cash available for distribution for the second quarter of 2020, or $0.13 per common unit. The distribution will be payable on August 10, 2020 to common unitholders of record at the close of business on August 3, 2020.
“Since our last quarterly distribution declaration in April 2020, we are encouraged by the gradual recovery in both commodity prices and the U.S. economy, including gasoline demand, retail sales and new home starts. We are also hopeful that the worst is behind us with regard to production curtailments, which appear to have peaked in May and early June 2020. However, many risks remain in the economy, including, but not limited to, significant recent increases in COVID-19 cases across the country, additional potential shut-downs related to COVID-19 and the related effects on U.S. employment. In addition, significant uncertainties remain in the U.S. energy sector, primarily related to the pace of new drilling and completions for the remainder of 2020. However, we believe the Kimbell business model is highly differentiated from most companies in the U.S. energy sector given our pure royalty model, diverse asset base, mix of commodities, substantial hedges and low PDP decline rate, which is among the best in the industry. As a result, management recommended and the Board of Directors approved an increase in the payout ratio of projected cash available for distribution from 50% in Q1 2020 to 75% in Q2 2020. We intend to utilize the remaining 25% of Q2 2020 projected cash available for distribution to pay down a portion of the outstanding borrowings under Kimbell’s credit facility. We look forward to reporting operational and financial results and providing additional commentary on the U.S. minerals sector when we release earnings, which we expect to do on August 6, 2020,” commented Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell’s general partner.
Kimbell Royalty Partners, LP – News Release
Page 2
Kimbell - Supplemental Distribution Data
| Percent | ||||||||||||
| Q1 2020 | Q2 2020 | Change | ||||||||||
| WTI Average Crude Oil Price (1) | $ | 45.76 | $ | 27.81 | (39.2 | )% | ||||||
| Henry Hub Average Natural Gas Price (1) | $ | 1.91 | $ | 1.71 | (10.5 | )% | ||||||
| Common Unit Distribution Declared | $ | 0.17 | $ | 0.13 | (23.5 | )% | ||||||
| Pay-Out Ratio (2) | 50 | % | 75 | % | 50.0 | % | ||||||
| Annualized Cash Yield (3) | 5.9 | % | ||||||||||
| Cash Received from Lease Bonuses and Other Income | $ | 229,319 | $ | 68,609 | ||||||||
SUBSTANTIALLY ALL OF THE DISTRIBUTION TO COMMON UNITHOLDERS FOR THE SECOND QUARTER OF 2020
EXPECTED TO BE FREE OF DIVIDEND INCOME TAXES AND INSTEAD CONSIDERED A RETURN OF CAPITAL(4)
(1) Average monthly commodity prices are from the Energy Information Administration. Crude oil prices are in dollars per barrel and natural gas prices are in dollars per million Btu.
(2) Represents percentage of projected cash available for distribution to be paid in quarterly distribution declared.
(3) Based on the closing price of Kimbell common units on July 24, 2020.
(4) This estimate is based upon assumptions Kimbell has made regarding, among other things, Kimbell Royalty Operating, LLC's income and depletion expenses and production from the mineral and royalty interests Kimbell acquired in the acquisition of Springbok Energy Partners, LLC and Springbok Energy Partners II, LLC (the "Springbok acquisition"), which closed on April 17, 2020, and ignores the effect of any possible acquisitions of additional assets (other than the Springbok acquisition). This estimate is based on current tax law and tax reporting positions that Kimbell has adopted and with which the Internal Revenue Service could disagree. This estimate is not a fact, and no assurances can be made regarding this estimate.
About Kimbell Royalty Partners
Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty company based in Fort Worth, Texas. Kimbell owns mineral and royalty interests in over 13 million gross acres in 28 states and in every major onshore basin in the continental United States, including ownership in more than 96,000 gross wells with over 40,000 wells in the Permian Basin. To learn more, visit kimbellrp.com.
Kimbell Royalty Partners, LP – News Release
Page 3
Forward-Looking Statements
This news release includes forward-looking statements, in particular statements relating to Kimbell’s financial, operating and production results and prospects for growth, the tax treatment of Kimbell's distributions and the recent COVID-19 outbreak and its impacts on Kimbell and on the oil and gas industry. These and other forward-looking statements involve risks and uncertainties, including risks that the anticipated benefits of the acquisition of the Springbok assets are not realized, risks relating to Kimbell’s integration of the Springbok assets, risks relating to the COVID-19 outbreak, and uncertainties relating to Kimbell’s business, prospects for growth and acquisitions and the securities markets generally and other risks described in Kimbell's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (the “SEC”), available at the SEC's website at www.sec.gov. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Kimbell's filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as required by law, Kimbell undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this news release.
Contact:
Rick Black
Dennard Lascar Investor Relations
krp@dennardlascar.com
(713) 529-6600