Business Context and Reporting Period
Company: Kimbell Royalty Partners, LP (KRP)
Filing Type: Form 8-K (Current Report)
Date of Report: December 16, 2025
Event: Entry into a Material Definitive Agreement (Second Amended and Restated Credit Agreement).
Key Financial Metrics and Debt Structure
This filing details the restructuring of the company's senior secured debt facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Facility Type: Senior secured reserve-based revolving credit facility.
- Maximum Principal Amount: Up to $1,500,000,000.
- Initial Borrowing Base: $625.0 million.
- Initial Aggregate Elected Commitments: Up to $625.0 million.
- Letters of Credit Sub-facility: Up to $10,000,000.
- Interest Rate: SOFR + 2.50% to 3.50% or Base Rate + 1.50% to 2.50% (based on utilization).
- Commitment Fee: 0.375% to 0.50% per annum on unused commitments.
- Collateral: Substantially all assets, including mortgages on at least 75% of the PV-9 of proved reserves.
Material Changes Versus Prior Period
The filing amends and restates the existing credit agreement dated June 13, 2023 (as previously amended). Key changes include:
- Maturity Extension: The maturity date is extended to December 16, 2030. This date may be shortened to May 3, 2030, if specific conditions regarding Permitted Preferred Units, Liquidity, Debt to EBITDAX Ratio, or Borrowing Base Deficiencies are met.
- Redetermination Schedule: The borrowing base will be redetermined semi-annually (May 1 and November 1), with the first scheduled redetermination occurring on or around May 1, 2026.
- Prepayment Requirements: Cash balances above $50.0 million and 10% of the Loan Limit must be applied weekly to prepay loans if not otherwise reduced.
Guidance, Covenants, and Risks
Financial Covenants: The Partnership must maintain the following as of the last day of each fiscal quarter:
- Debt to EBITDAX Ratio: Not more than 3.5 to 1.0.
- Current Ratio: Current assets to current liabilities of not less than 1.0 to 1.0.
Risks and Contingencies:
- Events of Default: Failure to comply with financial or other covenants may allow lenders to require immediate payment of all outstanding amounts and terminate unfunded commitments.
- Mandatory Prepayments: Required upon certain asset sales, equity sales, debt issuances, or swap terminations.
- Collateral Risk: The facility is secured by oil and natural gas properties; a decline in reserve values could impact the borrowing base.
Management Commentary: The filing text does not provide specific management commentary or forward-looking guidance beyond the terms of the credit agreement.
Investor Verification Checklist
- Verify the current outstanding balance under the facility against the $625.0 million initial borrowing base.
- Confirm the status of any "Permitted Preferred Units" outstanding as of December 16, 2025, to assess the risk of the maturity date shortening to May 3, 2030.
- Review the most recent reserve report to understand the PV-9 valuation underpinning the collateral.
- Monitor the upcoming borrowing base redetermination scheduled for May 1, 2026.
- Check the latest quarterly financial statements to ensure compliance with the 3.5x Debt to EBITDAX and 1.0x Current Ratio covenants.