Business Context and Reporting Period
This Form 8-K Current Report was filed by Kimbell Royalty Partners, LP on May 23, 2019. The filing discloses the entry into material definitive agreements regarding the company's revolving credit facility and the creation of direct financial obligations.
Key Financial Metrics and Debt
The filing focuses on liquidity and debt capacity adjustments rather than operational performance metrics like revenue or profit.
- Revolving Credit Facility Commitments: Increased from $200 million to $225 million.
- Borrowing Base: Increased from $200 million to $300 million.
- Maximum Potential Commitments: The Credit Agreement permits aggregate commitments to be increased up to $500 million subject to conditions.
- Availability: Defined as the lesser of aggregate maximum commitments or the borrowing base.
Material Changes Versus Prior Period
On May 23, 2019, the Partnership executed two primary agreements to expand its credit capacity:
- Total Commitment Increase Agreement: Frost Bank agreed to increase its existing commitments by $5 million.
- Additional Lender Agreement: Independent Bank joined as a new lender, providing $20 million in commitments.
- Borrowing Base Redetermination: Lenders completed the May 2019 review and agreed to raise the borrowing base by $100 million.
Guidance, Outlook, and Risks
The filing does not provide specific financial guidance, revenue outlook, or management commentary on future operational performance. The primary risk and contingency noted is that further increases to the credit facility up to $500 million are subject to the satisfaction of certain conditions and the procurement of additional commitments from new or existing lenders.
Important Facts for Investor Verification
- Verify the specific terms and covenants in the Total Commitment Increase Agreement (Exhibit 10.1) and Additional Lender Agreement (Exhibit 10.2).
- Confirm the current utilization rate of the Revolving Credit Facility against the new $300 million borrowing base.
- Monitor the conditions required to expand the facility further to the $500 million cap.
- Note that this filing does not contain updated revenue, profit, or cash flow data; refer to the most recent 10-Q or 10-K for operational metrics.