Key Highlights

  • Kimbell reported record second-quarter 2026 production of 25,830 Boe per day and GAAP net income of about $47.3 million.
  • Kimbell closed its $221.2 million Drop Down acquisition, paying $74.9 million in cash and 9.5 million OpCo units.
  • Kimbell raised third- and fourth-quarter production guidance on August 24, with midpoints 10% and 15% above prior 2026 midpoints.
  • Kimbell will redeem half its Series A preferred units on November 16 for about $100.2 million, funded by revolver borrowings.

Kimbell Royalty Partners (NYSE:KRP) shares were trading near their 52-week high at USD 16.38 on October 19, 2026, up 0.58%. The owner of oil and gas mineral and royalty interests has been busy since June: it closed two acquisitions, lifted its production outlook and, on October 16, announced a partial redemption of its preferred units. RBC Capital Markets has updated its target since the August results, and third-quarter numbers are due on November 5.

One large brokerage has updated its view

RBC Capital Markets acted on August 20, within two weeks of the results. The firm kept its Outperform rating and lowered its price target to $19 from $20. The price of USD 16.38 sits below that target. This is the firm's own view, not a forecast by this article.

A record quarter, and a comparison worth reading closely

Second-quarter 2026 production averaged a record 25,830 Boe per day, including nine days from the Mesa Royalties acquisition. Oil, natural gas and NGL revenues reached a record $103.0 million, up from $74.7 million a year earlier. Total revenues, including derivative gains, were $112.5 million versus $86.5 million.

GAAP net income was about $47.3 million, up from $26.7 million. Net income attributable to common units was $38.4 million, or $0.40 per basic and diluted unit, against $0.02 a year earlier, when Series A preferred distribution and accretion totaled $24.3 million rather than this quarter's $2.6 million. Consolidated Adjusted EBITDA, a non-GAAP measure, was a record $84.9 million.

Kimbell declared a distribution of $0.47 per common unit, equal to 75% of cash available for distribution and 15% above the first-quarter payout. Kimbell plans to use the remaining 25%, about $17.9 million, to pay down borrowings. It also repurchased and cancelled 500,000 units for about $7.4 million during the quarter.

Two acquisitions and a resale registration

Kimbell closed the $145.9 million Mesa Royalties Permian purchase on June 22, paying $44.0 million in cash and about 6.9 million OpCo units. The Drop Down, announced July 17 at about $215.4 million, closed August 21 at roughly $221.2 million, reflecting the $15.40 unit price that day. Consideration was $74.9 million in cash plus 9.5 million OpCo units valued at about $146.3 million. The assets span the Eagle Ford, Permian, Mid-Con and Appalachia, with over 29,000 gross producing wells that Kimbell estimates produced about 2,347 Boe per day as of June 1, the effective date.

The Drop Down sellers were affiliated parties, and the company's conflicts committee and the general partner's board approved the deal on July 16. On August 28, Kimbell filed a registration statement covering the resale of up to 9.5 million common units by those sellers. Kimbell receives no proceeds from any sales.

Guidance, leverage and the November calendar

On August 24, Kimbell issued updated guidance for the third and fourth quarters. It expects net production of 26.5 to 29.5 MBoe per day in the third quarter and 27.7 to 30.7 MBoe per day in the fourth, with midpoints about 10% and 15% above those of prior 2026 guidance. These are management estimates, and the third-quarter range includes a full quarter of Mesa and 41 days of the Drop Down.

At June 30, revolver borrowings were $478.7 million, with $181.3 million undrawn after the borrowing base and commitments rose to $660 million from $625 million. Net debt was $433.8 million, about 1.4 times trailing twelve-month consolidated Adjusted EBITDA (non-GAAP, pro forma for the June acquisition), and Kimbell reported covenant compliance. On October 16, Kimbell gave notice that it will redeem 81,250 Series A Cumulative Convertible Preferred Units, half those outstanding, on November 16 at $1,233.37895 per unit, with revolver borrowings covering the cost. Results remain exposed to commodity prices, with swaps covering part of volumes.

Third-quarter results are scheduled for November 5 before the market opens, and Kimbell will declare its third-quarter distribution with the release.