KRP

Business Context and Reporting Period

Company: Kimbell Royalty Partners, LP (KRP)
Filing Type: Form 8-K (Current Report)
Date of Report: July 16, 2026
Event: Entry into a Material Definitive Agreement (Purchase and Sale Agreement) for the acquisition of oil and gas assets and partnership interests, referred to as the "Dropdown."

Key Financial Metrics and Transaction Details

Transaction Consideration:

• Cash: Approximately $75 million.
• Equity: Issuance of 9,500,000 Opco Common Units and an equal number of Class B Units (exchangeable for Common Units).

Acquired Asset Profile (Estimates):

• Acres: Over 2,568 net royalty acres (20,547 NRA normalized to 1/8th).
• Production (Q3 2026 Estimate): 2,347 Boe/d (841 Bbl/d oil, 569 Bbl/d NGLs, 5,624 Mcf/d natural gas).
• Basins: Eagle Ford, Permian, Mid-Con, and Appalachian.
• Operational Status (as of March 31, 2026): 9 active rigs; 177 gross drilled but uncompleted wells/permits; over 29,000 gross producing wells in the Lower 48.
• Production Decline: Estimated shallow decline of 13%.

Liquidity and Debt: The filing text does not provide specific values for current debt levels, liquidity ratios, or cash flow metrics for the reporting period.

Material Changes and Transaction Structure

Counterparties: Rivercrest Capital Partners LP, Rivercrest Capital Partners II LP, and Cupola Royalty Direct, LLC (Sellers).
Related Party Status: Certain officers and managers of the Sellers serve as officers/directors of Kimbell's general partner. Sellers are direct or indirect beneficial owners of Kimbell.
Approval: Approved by the Board of Directors and the Conflicts and Compensation Committee (composed entirely of independent directors).
Lock-Up Period: Sellers agreed not to dispose of Opco Common Units or Class B Units for 90 days following closing.
Registration Rights: Kimbell agreed to file a shelf registration statement within 5 business days of closing and use reasonable best efforts to make it effective within 120 days.

Guidance, Outlook, Risks, and Contingencies

Closing Timeline: Expected to close on or about August 21, 2026, with an effective date of June 1, 2026.
Contingencies: Completion is subject to customary closing conditions. There is no assurance the transaction will close on the described terms or at all.
Risks and Uncertainties:

• Assessment of assets is limited; closing may not reveal all existing problems.
• Integration risks and failure to achieve expected benefits.
• Standard oil and gas risks: price volatility, production declines, capital availability, hedging activities, and operational hazards (e.g., blowouts, environmental issues).
• Forward-looking statements regarding production and benefits are subject to significant risks and uncertainties.

Investor Verification Checklist

• Transaction Finality: Verify if the Dropdown closes by the expected date (August 21, 2026) and if all conditions are satisfied.
• Asset Quality: Confirm actual production rates and decline curves post-closing against the estimated 2,347 Boe/d and 13% decline.
• Dilution Impact: Assess the impact of issuing 9,500,000 new units on existing unitholder equity.
• Related Party Conflicts: Review the specific terms of the Conflicts Committee's evaluation and the independent financial advisor's opinion.
• Capital Allocation: Monitor the use of the $75 million cash consideration and its effect on the company's liquidity and borrowing base.