Kimbell Royalty Partners Files 8-K with Material Agreements

TL;DR

Kimbell Royalty Partners filed an 8-K on Jan 7, 2025, detailing material agreements and equity sales.

AI Summary

Kimbell Royalty Partners, LP announced on January 7, 2025, the entry into a material definitive agreement. The filing also disclosed unregistered sales of equity securities and provided Regulation FD disclosures. Additional details regarding other events and financial statements/exhibits were included.

Why It Matters

This 8-K filing indicates significant corporate actions and potential changes for Kimbell Royalty Partners, LP, requiring investor attention.

Risk Assessment

Risk Level: medium — Material definitive agreements and unregistered sales of equity securities can introduce significant financial and operational risks.

Key Players & Entities

• Kimbell Royalty Partners, LP (company) — Registrant
• January 7, 2025 (date) — Date of Report

FAQ

Key Financial Figures

• $231 m — a total purchase price of approximately $231 million, subject to customary adjustments
• $207 million — ely in cash or through a combination of $207 million in cash and the issuance of 1,433,915 c
• $30.9 million — GLs), which would generate an estimated $30.9 million of cash flow at strip pricing as of Jan

Filing Documents

• tm251962d3_8k.htm (8-K) — 49KB
• tm251962d3_ex10-1.htm (EX-10.1) — 546KB
• tm251962d3_ex99-1.htm (EX-99.1) — 39KB
• tm251962d3_ex99-2.htm (EX-99.2) — 142KB
• tm251962d3_ex99-1img001.jpg (GRAPHIC) — 15KB
• 0001104659-25-001678.txt ( ) — 1090KB
• krp-20250107.xsd (EX-101.SCH) — 3KB
• krp-20250107_lab.xml (EX-101.LAB) — 33KB
• krp-20250107_pre.xml (EX-101.PRE) — 22KB
• tm251962d3_8k_htm.xml (XML) — 4KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Acquisition of Mineral and Royalty Interests On January 7, 2025, Kimbell Royalty Partners, LP, a Delaware limited partnership ("Kimbell"), entered into a purchase and sale agreement (the "Purchase Agreement") with Boren Minerals, a Saskatchewan partnership ("Boren"), to acquire Boren's oil and natural gas mineral and royalty interests located in the Permian Basin (the "Acquired Assets"), for a total purchase price of approximately $231 million, to pay the consideration entirely in cash or through a combination of $207 million in cash and the issuance of 1,433,915 common units representing limited partnership interests in Kimbell ("Common Units") to Boren. Boren made certain representations, warranties and covenants in the Purchase Agreement, including to conduct its business in the ordinary course during the period between the execution of the Purchase Agreement and the closing, subject to certain exceptions. Kimbell made certain customary representations, warranties and covenants in the Purchase Agreement. Kimbell, on the one hand, and Boren, on the other hand, have agreed to indemnify each other, their affiliates and respective officers, directors, employees, consultants, advisors, representatives and agents against certain losses resulting from breaches of their respective representations, warranties and covenants, subject to certain negotiated limitations and survival periods set forth in the Purchase Agreement. The Purchase Agreement provides that, during the period from the date of the signing of the Purchase Agreement until the closing of the Acquisition or termination of the Purchase Agreement, Boren will be subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The private placement of the Common Units under the Purchase Agreement will be undertaken in reliance upon an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof.

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. On January 7, 2025, Kimbell issued a news release announcing that it had entered into the Purchase Agreement. A copy of the news release is attached hereto, furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 7.01. The information set forth in this Item 7.01 (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

01 Other Events

Item 8.01 Other Events. Additional Information about the Acquisition Kimbell estimates that, as of September 30, 2024, the Acquired Assets produced 1,842 Boe/d (1,125 Bbl/d of oil, 410 Bbl/d of NGLs, and 1,842 Mcf/d of natural gas) (on a 6:1 basis), which is expected to increase Kimbell's average daily net production as of September 30, 2024 by approximately 8% and further balance Kimbell's commodity mix. In addition, Kimbell estimates that the 2025 average production of the Acquired Assets will be approximately 1,842 Boe/d (60% oil, 17% natural gas, 23% NGLs), which would generate an estimated $30.9 million of cash flow at strip pricing as of January 3, 2025. Kimbell further estimates that, as of September 30, 2024, the Acquired Assets consisted of approximately 6,953 net royalty acres (normalized to 1/8th) and 875 gross producing wells in the Permian Basin. Kimbell estimates that the Acquired Assets will reduce Kimbell's general and administrative expense ("G&A"), net of non-cash unit-based compensation, by approximately 7% per Boe. As of September 30, 2024, there were 2 active rigs drilling on the Acquired Assets' acreage. Additionally, Kimbell estimates that, as of September 30, 2024, the Acquired Assets consisted of 1.22 net drilled but uncompleted wells and net permitted locations, which is expected to increase Kimbell's total net drilled but uncompleted wells and permitted location inventory by approximately 16% to a total of 9.06 net wells. The Acquired Assets consisted of 6.06 net (513 gross) upside locations, which is expected to increase Kimbell's major net drilling inventory by 19% in the Permian Basin. Kimbell estimates that, upon completion of the Acquisition, Kimbell will have approximately 158,350 net royalty acres, 130,238 gross wells and a total of 92 active rigs on Kimbell's properties, which represents approximately 16% of the total active land rigs drilling in the continental United States. Reserve engineering is a complex and subjective p

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. As previously reported, in September 2023 Kimbell completed the acquisition of Cherry Creek Minerals, LLC in a transaction described as the "LongPoint Acquisition." In addition, in September 2023, Kimbell timely filed on a Form 8-K the historical and pro forma financial statements required by Regulation S-X in connection with the LongPoint Acquisition. Kimbell is now filing additional unaudited pro forma financial statements described below pursuant to Article 11 of Regulation S-X. The pro forma financial statements described below do not include any information related to the Boren Acquisition described in Item 1.01 above. (b) Pro Forma Financial Information. Unaudited pro forma condensed statement of operations for the year ended December 31, 2023. ***

Forward-Looking Statements

Forward-Looking Statements Certain information contained in this Current Report on Form 8-K and in the exhibits hereto includes forward-looking statements. These forward-looking statements, which include Acquisition, the expected timing of the closing of the Acquisition, the financing of the Acquisition, involve risks and uncertainties, including risks that the anticipated benefits of the Acquisition are not realized; risks relating to Kimbell's integration of the Acquired Assets; risks relating to the possibility that the Acquisition does not close when expected or at all because any conditions to the closing are not satisfied on a timely basis or at all; and risks relating to Kimbell's business, prospects for growth and acquisitions and the securities markets generally. 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 Current Report on Form 8-K is filed. 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. These include risks inherent in oil and natural gas drilling and production activities, including risks with respect to low or declining prices for oil and natural gas that could result in downward revisions to the value of proved reserves or otherwise cause operators to delay or suspend planned drilling and completion operations or reduce production levels, which would adversely impact cash flow; risks relating to the impairment of oil and natural gas properties; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and natural gas prices; risks relating to Kimbell's ability to

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View this 8-K filing on SEC EDGAR