Q1 2025 Kimbell Royalty Partners LP Earnings Call

And answer session will follow the formal presentation.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

And as a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce to you Rick Black with Investor Relations. Thank you Rick you may begin.

Speaker Change: Thank you operator, and good morning, everyone welcome to the Kimball royalty Partners Conference call to review financial and operational results for the first quarter of 2025, which ended on March 31, 2025. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the IR section.

Speaker Change: Kimball RP Dot Com information recorded on this call speaks only as of today, which is may eight 2025. So please be advised that any time sensitive information may no longer be accurate at the date of any replay listening or transcript reading.

Greetings and welcome to the Kimball royalty partners first quarter earnings Conference call.

Speaker Change: I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future future events or future financial performance. Those are considered forward looking statements made pursuant to the safe Harbor provisions.

At this time all participants are in a listen only mode.

And answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

And as a reminder, this conference is being recorded.

Speaker Change: The private Securities Litigation Reform Act of 1995.

Speaker Change: It is now my pleasure to introduce to you Rick Black with Investor Relations. Thank you Rick you may begin.

Speaker Change: We will be making forward looking statements as part of today's call, which by their nature are in <unk>.

Speaker Change: Certainly outside of the company's control actual results may differ materially. Please refer to today's earnings release for our disclosures on forward looking statements. These factors as well as other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

Speaker Change: Thank you operator, and good morning, everyone welcome to the Kimball royalty Partners Conference call to review financial and operational results for the first quarter of 2025, which ended on March 31, 2025. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the IR section.

Speaker Change: Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution Rex.

Speaker Change: Kimball RP Dot Com information recorded on this call speaks only as of today, which is may eight 2025. So please be advised that any time sensitive information may no longer be accurate at the date of any replay listening or transcript reading.

Speaker Change: Reconciliations to the nearest GAAP measures can be found at the end of today's earnings release Kimball assumes no obligation to publicly update or revise any of these forward looking statements.

Bob: And with that I will now turn the call over to Bob revenues, Kimball royalty partners, Chairman and Chief Executive Officer Bob.

Speaker Change: I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future future events or future financial performance. Those are considered forward looking statements made pursuant to the safe Harbor provisions.

Bob Kimball: Thank you Rick and good morning, everyone. We appreciate you joining us on the call. This morning with me today are several members of our senior management team, including David <unk>, Our President and Chief Financial Officer, Matt Daley, Our Chief operating officer, and Blaine Rheinberger our controller.

In today's discussion that are not historical facts, including statements of expectations or future future events or future financial performance. Those are considered forward looking statements made pursuant to the safe Harbor provisions.

Speaker Change: The private Securities Litigation Reform Act of 1995.

Speaker Change: We will be making forward looking statements as part of today's call, which by their nature are uncertain and outside of the company's control actual results may differ materially. Please refer to today's earnings release for our disclosures on forward looking statements. These factors as well as other risks and uncertainties are described in detail in the company's filings with the securities and exchange.

Bob Kimball: We're pleased to start the year by reporting a record first quarter, which achieved several milestones across key metrics, including record oil natural gas and NGL revenues record consolidated adjusted EBITDA and record cash available for distribution and other 2025 milestones so far off.

The private Securities Litigation Reform Act of 1995.

We will be making forward looking statements as part of today's call, which by their nature are uncertain and outside of the company's control actual results may differ materially. Please refer to today's earnings release for our disclosures on forward looking statements. These factors as well as other risks and uncertainties are described in detail in the company's filings with the securities and exchange.

Speaker Change: Commission managed.

Bob Kimball: So include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17th 2025, increasing the company's borrowing base and elected commitments on our credit facility from $550 million to $625 million on may 1st two.

Speaker Change: Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution reckon.

Speaker Change: Reconciliations to the nearest GAAP measures can be found at the end of today's earnings release Kimball assumes no obligation to publicly update or revise any of these forward looking statements.

Commission.

Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution.

Speaker Change: I will now turn the call over to Bob Ravenous, Kimball royalty partners, Chairman and Chief Executive Officer Bob.

Bob Kimball: 25.

Filiation. Some nearest GAAP measures can be found at the end of today's earnings release Kimball assumes no obligation to publicly update or revise any of these forward looking statements.

Bob Kimball: And redeeming, 50% of the series a cumulative.

Bob Ravenous: Thank you Rick and good morning, everyone. We appreciate you joining us on the call. This morning with me today are several members of our senior management team, including David <unk>, Our President and Chief Financial Officer, Matt Daley, Our Chief operating officer, and Blaine Rheinberger, Our controller, we're pleased to start the year by reporting a record first quarter.

Bob Kimball: Convertible preferred units on May 7th 2025, further simplifying our capital structure and reducing our cost of capital.

And with that I will now turn the call over to Bob Ravenous, Kimball royalty partners, Chairman and Chief Executive Officer Bob.

Bob Kimball: Even with the uncertainty occurring across the broader geopolitical landscape activity on our acreage remains robust with 90 rigs actively drilling on our acreage at quarter end, representing 16% market share of all rigs drilling in the lower 48, which is unchanged from Q4 2024.

Thank you Rick and good morning, everyone. We appreciate you joining us on the call. This morning with me today are several members of our senior management team, including David <unk>, Our President and Chief Financial Officer, Matt Daley, Our Chief operating officer, and Blaine Rheinberger, Our controller, we're pleased to start the year reporting a record first quarter.

Bob Ravenous: Would you achieved several milestones across key metrics, including record oil natural gas and NGL revenues.

Bob Ravenous: Record consolidated adjusted EBITDA and record cash available for distribution and other 2025 milestones. So far also include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17th 2025, increasing the companies.

Bob Kimball: Permitting also remained strong in fact, one. Notable example, this quarter was from one of our oldest properties that we acquired in 2006 from an East Coast College Endowment this royalty asset, which we have owned for nearly 20 years and has generated profits that are multiple times its original investment.

Which achieved several milestones across key metrics, including record oil natural gas and NGL revenues record consolidated adjusted EBITDA and record cash available for distribution.

2025 milestone. So far also include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17th 2025, increasing the company's borrowing base and elected commitments on our credit facility from $550 million.

Bob Ravenous: Borrowing base and elected commitments on our credit facility from $550 million to $625 million on May 1st 2025, and redeeming 50% of the series a cumulative.

Bob Kimball: Recently permitted 17 additional wells in Martin County, Texas with NRI above 2%. This shows not only the strength of our diversified portfolio of assets, but also the benefit of the perpetual nature of minerals that can often provide surprisingly upside decades beyond the.

Bob Ravenous: Convertible preferred units on May seven 2025, further simplifying our capital structure and reducing our cost of capital.

Two $625 million on May one 2025, and redeeming 50% of the series a cumulative.

Bob Kimball: Original investment at no cost to us.

Bob Ravenous: Even with the uncertainty occurring across the broader geopolitical landscape activity on our acreage remains robust with 90 rigs actively drilling on our acreage at quarter end, representing 16% market share of all rigs drilling in the lower 48, which is unchanged from Q4 2024.

Bob Kimball: Line of sight wells continue to be above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production for 2025 are superior five year annual average PDP decline rate of 14%, including the inquired production requires only an estimated $6.

Convertible preferred units on May seven 2025, further simplifying our capital structure and reducing our cost of capital.

Even with the uncertainty occurring across the broader geopolitical landscape activity on our acreage remains robust with 90 rigs actively drilling on our acreage at quarter end, representing 16% market share of all rigs drilling in the lower 48, which is unchanged from Q4 2024.

Bob Ravenous: Permitting also remained strong in fact, one. Notable example, this quarter was from one of our oldest properties that we acquired in 2006 from an East Coast College Endowment this royalty asset, which we have owned for nearly 20 years and has generated profits that are multiple times its original investment.

Bob Kimball: Five net wells annually to maintain flat production.

Bob Kimball: Today, we are pleased to declare our first quarter distribution of <unk> 47 per common unit, an increase of 17, 5% from the fourth quarter of 2024, and reflecting an approximate 16% annualized tax advantage yield we estimate that approximately 70%.

Permitting also remained strong in fact, one. Notable example, this quarter was from one of our oldest properties that we acquired in 2006 from an East Coast College Endowment this royalty asset, which we have owned for nearly 20 years and has generated profits that are multiple times its original investment.

Bob Ravenous: Recently permitted 17 additional wells in Martin County, Texas with NRI is above 2%. This shows not only the strength of our diversified portfolio of assets, but also the benefit of the perpetual nature of minerals that can often provides surprisingly upside decades beyond the <unk>.

Bob Kimball: Some of this distribution is expected to be considered return of capital and not subject to dividend taxes further enhancing the after tax return to our common unitholders.

Recently permitted 17 additional wells in Martin County, Texas with NRI above 2%. This shows not only the strength of our diversified portfolio of assets, but also the benefit of the perpetual nature of minerals that can often provides surprisingly upside decades beyond the <unk>.

Bob Kimball: Turning to the remainder of the year, despite the current volatility and uncertainty in the broader economy and its impact on commodity prices, we remain confident in achieving our goals for 2025 as a pure play mineral company with ownership of a diversified portfolio of high margin shallow decline assets with zero capital requirement.

Bob Ravenous: Original investment at no cost to us.

Bob Ravenous: On a site wells continue to be above the number of wells needed to maintain flat production gangbang us confidence in the resilience of our production for 2025 are superior five year annual average PDP decline rate of 14%, including the inquired production requires only an estimated $6 five.

Original investment at no cost to us.

Line of sight wells continue to be above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production for 2025 are superior five year annual average PDP decline rate of 14%, including the inquired production requires only an estimated $6.

Bob Kimball: It's needed to support resilient free cash flow, we remain bullish about the U S oil and natural gas royalty and history and our role as a leading consolidator in the sector.

Bob Ravenous: <unk> net wells annually to maintain flat production.

Bob Ravenous: We were pleased to declare our first quarter distribution of 47 cents per common unit, an increase of 17, 5% from the fourth quarter of 2024, and reflecting an approximate 16% annualized tax advantaged yield.

Bob Kimball: We are encouraged by the opportunities we see in 2025 and beyond to continue to grow and expand our industry leading portfolio of assets to generate long term unitholder value.

Five net wells annually to maintain flat production.

Today, we are pleased to declare our first quarter distribution of 47 per common unit, an increase of 17, 5% from the fourth quarter of 2024, and reflecting an approximate 16% annualized tax advantaged yield we estimate that approximately 70%.

Davis: Now I'll turn the call over to Davis.

Speaker Change: Thanks, Bob and good morning, everyone as Bob mentioned this was another strong quarter for Kimball.

Bob Ravenous: We estimate that approximately 70% of this distribution is expected to be considered return of capital and not subject to dividend taxes further enhancing the after tax return to our common unitholders.

Davis: <unk> several new quarterly records for oil natural gas and NGL revenues.

Davis: Consolidated adjusted EBITDA and cash available for distribution.

Bob Ravenous: Turning to the remainder of the year, despite the current volatility and uncertainty in the broader economy and its impact on commodity prices, we remain confident in achieving our goals for 2025 as a pure play mineral company with ownership of a diversified portfolio of high margin shallow decline assets with zero capital requirement.

This distribution is expected to be considered return of capital and not subject to dividend taxes further enhancing the after tax return to our common unitholders.

Davis: We also increased our borrowing base and elected commitment.

Davis: And redeemed 50% of the series a convertible preferred units, which I will discuss in more detail in a moment.

Turning to the remainder of the year, despite the current volatility and uncertainty in the broader economy and its impact on commodity prices, we remain confident in achieving our goals for 2025 as a pure play mineral company with ownership of a diversified portfolio of high margin shallow decline assets with zero capital requirement.

Davis: I'll now start by reviewing our financial results for the first quarter oil.

Bob Ravenous: Needed to support resilient free cash flow, we remain bullish about the U S oil and natural gas royalty and history and our role as a leading consolidator in the sector.

Davis: Oil natural gas and NGL revenues totaled $90 million during the quarter.

Davis: Which includes 74 days of contribution from the acquired production and is a new record for Kimball.

Bob Ravenous: We are encouraged by the opportunities we see in 2025 and beyond to continue to grow and expand our industry leading portfolio of assets to generate long term unit holder value I'll now turn the call over to Davis.

It's needed to support resilient free cash flow, we remain bullish about the U S oil and natural gas royalty and history and our role as a leading consolidator in the sector.

Davis: Including a full Q1 2025 impact of the acquired production further.

Davis: First quarter run rate production was 25841 Boe per day.

We are encouraged by the opportunities we see in 2025 and beyond to continue to grow and expand our industry leading portfolio of assets to generate long term unit holder value.

Davis: In addition, we exited the quarter with 90 rigs actively drilling on our acreage, which represents approximately 16% market share of all land rigs drilling in the continental United States and is flat from Q4 2024.

Thanks, Bob and good morning, everyone as Bob mentioned this was another strong quarter for Kimball.

Davis: We generated several new quarterly records for oil natural gas and NGL revenues consolidated adjusted EBITDA and.

I will turn the call over to Davis.

Thanks, Bob and good morning, everyone as Bob.

Davis: On the expense side first quarter general and administrative expenses were $9 6 million $5 8 million of which was cash G&A expense or $2 52 per Boe.

Operator: A question and answer session will follow the formal presentation.

Cash available for distribution.

Davis: Total first quarter consolidated adjusted EBITDA was $75 5 million, which includes 74 days of contribution from the acquired production and is also a new record for Campbell.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone.

We also increased our borrowing base and elected commitment and.

And redeemed 50% of the series a convertible preferred units, which I'll discuss in more detail in a moment.

Rick Black: And as a reminder, this conference is being It is now my pleasure to introduce to you Rick Black with Investor Relations.

I'll now start by reviewing our financial results for the first quarter.

Davis: You will find a reconciliation of those consolidated adjusted EBITDA and cash available for distribution at the end of our news release.

Bob Ravnaas: Thank you Rick, you may be dismissed.

Oil natural gas and NGL revenues totaled $90 million during the quarter.

Rick Black: Thank you, operator, and good morning, everyone.

Rick Black: Welcome to the Kimbell Royalty Partners Conference Call to review financial and operational results for the first quarter of 2025, which ended on March 31, 2025. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the IR section of kimbellrp.com.

Which includes 74 days of contribution from the acquired production and is a new record for Kimball.

Speaker Change: As Bob mentioned today, we announced a cash distribution of <unk> 47 per common unit for the first quarter.

Including a full Q1 2025 impact of the acquired production further.

Speaker Change: We estimate that approximately 70% of this distribution is expected to be considered a return of capital and not subject to dividend taxes further enhancing the after tax return to our common unitholders.

First quarter run rate production was 25841 Boe per day.

Rick Black: Information recorded on this call speaks only as of today, which is May 8, 2025, so please be advised that any time-sensitive information may no longer be accurate at the date of any replay listening or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, those are considered forward-looking statements made pursuant to the safe harbors provisions of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call, which by their nature are uncertain and outside of the company's control.

In addition, we exited the quarter with 90 rigs actively drilling on our acreage, which represents approximately 16% market share of all land rigs drilling in the continental United States and is flat from Q4 2024.

Speaker Change: This represents a cash distribution payment to common unit holders that equates to 75% of cash available for distribution.

Speaker Change: And the remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimball secured revolving credit facility.

On the expense side first quarter general and administrative expenses were $9 6 million $5 8 million of which was cash G&A expense or $2 52 per Boe.

Speaker Change: Moving now to our balance sheet and liquidity at.

Speaker Change: At March 31, 2025, we had approximately $299 million of debt outstanding under our secured revolving credit facility.

Total first quarter consolidated adjusted EBITDA was $75 5 million, which includes 74 days of contribution from the acquired production and it's also a new record for Campbell.

Speaker Change: Which represented a net debt to trailing 12 month consolidated adjusted EBITDA of approximately <unk> nine times.

Rick Black: Actual results may differ materially. Please refer to today's earnings release for our disclosures on forward-looking statements. These factors, as well as other risks and uncertainties, are described in detail in the company's filings with the Securities and Exchange Commission. Management will also refer to non-GAAP measures, including adjusted EBITDA and cash available for distribution. Reconciliations to the nearest gap measures can be found at the end of today's earnings release. Kimbell assumes no obligation to publicly update or revise any of these forward-looking statements.

Speaker Change: We also had approximately 251 million undrawn capacity under the secured revolving credit facility as of March 31 2025.

You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution at the end of our news release.

Speaker Change: Subsequent to quarter end on May one 2025, the borrowing base in aggregate commitments on our secured revolving credit facility or increase from $550 million to $625 million in connection with our spring Redetermination.

As Bob mentioned today, we announced a cash distribution of 47 per common unit for the first quarter.

We estimate that approximately 70% of this distribution is expected to be considered a return of capital and not subject to dividend taxes further enhancing the after tax return to our common unitholders.

Bob Ravnaas: And with that, I will now turn the call over to Bob Ravnaas, Kimbell Royalty Partners Chairman and Chief Executive Officer. Bob? Thank you, Rick, and good morning, everyone. We appreciate you joining us on the call this morning. With me today are several members of our senior management team, including Davis Ravnaas, our President and Chief Financial Officer, Matt Daly, our Chief Operating Officer, and Blaine Reinsberger, our Controller.

Speaker Change: In addition on May seven 2025, we redeemed 50% of the series a cumulative convertible preferred units outstanding.

This represents a cash distribution payment to common unit holders that equates to 75% of cash available for distribution.

Speaker Change: This further simplifies our capital structure and reduces our cost of capital.

And the remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimball secured revolving credit facility.

Speaker Change: After giving effect to this redemption, along with the expected pay down from the remaining 25% of Q1 2025 projected cash available for distribution Kimball.

Bob Ravnaas: We are pleased to start the year by reporting a record first quarter, which achieved several milestones across key metrics, including record oil, natural gas, and NGL revenues, record consolidated adjusted EBITDA, and record cash available for distribution.

Moving now to our balance sheet and liquidity at.

Speaker Change: Kimball expects to have approximately $462 1 million in debt outstanding under our secured credit facility and have net debt to first quarter 2025, trailing 12 month consolidated adjusted EBITDA of approximately one five times.

At March 31, 2025, we had approximately $299 million of debt outstanding under our secured revolving credit facility.

Bob Ravnaas: Other 2025 milestones so far also include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17, 2025, increasing the company's borrowing base and elected commitments on our credit facility from 550 million to 625 million on May 1, 2025, and redeeming 50% of the Series A cumulative convertible preferred units on May 7, 2025, further simplifying our capital structure and reducing our cost of capital. Even with the uncertainty occurring across the broader geopolitical landscape, activity on our acreage remains robust, with 90 rigs actively drilling on our acreage at quarter end, representing 16 percent market share of all rigs drilling in the lower 48, which is unchanged from Q4 2024.

Which represented a net debt to trailing 12 month consolidated adjusted EBITDA of approximately 0.9 times.

Speaker Change: We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position.

We also had approximately 251 million and undrawn capacity under the secured revolving credit facility as of March 31 2025.

Speaker Change: Part of our expanding bank syndicate, and our financial flexibility.

Subsequent to quarter end on May 1st 2025, the borrowing base in aggregate commitments on our secured revolving credit facility or increase from $550 million to $625 million in connection with our spring Redetermination.

Speaker Change: Today, we are also affirming our financial and operational guidance ranges for 2025.

Speaker Change: As a reminder, our full 2025 guidance outlook was included in the Q4 2024 earnings release.

Speaker Change: We remain confident about the prospects for continued robust development as we progress through 2025.

In addition on May seven 2025, we redeemed 50% of the series a cumulative convertible preferred units outstanding.

Speaker Change: Given the number of rigs actively drilling on our acreage, especially in the Permian as well a line of sight wells materially exceeding our maintenance well count.

This further simplifies our capital structure and reduces our cost of capital.

After giving effect to this redemption, along with the expected pay down from the remaining 25% of Q1 2025 projected cash available for distribution.

Speaker Change: Lastly, as evidenced by our track record of ongoing acquisition activity, we expect to continue our role as a major consolidator in the highly fragmented U S oil and natural gas royalty sector.

Bob Ravnaas: Permitting also remains strong.

Bob Ravnaas: In fact, one notable example this quarter was from one of our oldest properties that we acquired in 2006 from an East Coast college endowment. This royalty asset, which we have owned for nearly 20 years and has generated profits that are multiple times its original investment. recently permitted 17 additional wells in Martin County, Texas, with NRIs above 2%. This shows not only the strength of our diversified portfolio of assets, but also the benefit of the perpetual nature of minerals that can often provide surprisingly upside decades beyond the original investment at no cost to us. Line-of-sight wells continue to be above the number of wells needed to maintain flat production, giving us confidence in the resilience of our production for 2025.

Kimball expects to have approximately $462 1 million in debt outstanding under our secured credit facility and have net debt to first quarter 2025, trailing 12 month consolidated adjusted EBITDA of approximately one five times.

Speaker Change: Which we estimate to be over $700 billion in size.

Speaker Change: And as we have stated in the past there are only a handful of public entities in the United States and Canada that have the financial resources infrastructure network and technical expertise to complete large scale multi basin acquisitions.

We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position the support of our expanding bank syndicate at our financial flexibility.

Speaker Change: We continue to believe that the overall demand for energy are well established and diversified asset portfolio and the attractive opportunities to further expand and add scale within our basins. We will continue to enhance value for our unit holders in the years to come with that operator, we are now ready for questions.

Today, we are also affirming our financial and operational guidance ranges for 2025.

As a reminder, our full 2025 guidance outlook was included in the Q4 2024 earnings release.

Speaker Change: Thank you, Sir we will now be conducting a question and answer session.

We remain confident about the prospects for continued robust development as we progress through 2025.

Bob Ravnaas: Our superior five-year annual average PDP decline rate of 14 percent, including the inquired production, requires only an estimated 6.5 net wells annually to maintain flat production.

Speaker Change: I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two to remove yourself from the queue.

Given the number of rigs actively drilling on our acreage, especially in the Permian as.

Your line of sight wells materially exceeding our maintenance well count.

Speaker Change: For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.

Bob Ravnaas: Today we are pleased to declare our first quarter distribution of 47 cents per common unit, an increase of 17.5% from the fourth quarter of 2024 and reflecting an approximate 16% annualized tax advantage yield. We estimate that approximately 70% of this distribution is expected to be considered return of capital and not subject to dividend taxes, further enhancing the after-tax return to a common unit.

Lastly, as evidenced by our track record of ongoing acquisition activity, we expect to continue our role as a major consolidator in the highly fragmented U S oil and natural gas royalty sector, which.

Speaker Change: One moment, please while we poll for any questions.

Speaker Change: And the first question comes from the line of Tim <unk> with Keybanc capital markets. Please proceed with your question.

Which we estimate made to be over 700 billion in size.

Speaker Change: Good morning folks thank you for taking our questions.

And as we have stated in the past there are only a handful of public entities in the United States and Canada that have the financial resources infrastructure network and technical expertise to complete large scale multi basin acquisitions.

Speaker Change: Good morning, Tim.

Speaker Change: I want to start.

Speaker Change: Your last comments about continuing as a major consolidator.

Bob Ravnaas: Turning to the remainder of the year, despite the current volatility and uncertainty in the broader economy and its impact on commodity prices, we remain confident in achieving our goals for 2025. As a pure-play mineral company with ownership of a diversified portfolio of high-margin, shallow-decline assets with zero capital requirements needed to support resilient, free cash flow, we remain bullish about the U.S. oil and natural gas rolling industry and our role as a leading consolidator in the sector.

Speaker Change: No surprise, there, but I was wondering if you could kind of talk about your interest in M&A today everything we are hearing on the oil side is that things are kind of on a pause right now.

We continue to believe that the overall demand for energy are well established and diversified asset portfolio and the attractive opportunities to further expand and add scale within our basins will continue to enhance value for our unit holders in the years to come with that operator, we are now ready for questions.

Speaker Change: The mineral space, there's been a lot of new capital being deployed especially on the gas side.

Speaker Change: If we can talk about kind of your your interest today and maybe how your equity currency is not really what it was a few months ago.

Speaker Change: Sure.

Speaker Change: Across the industry, so kind of your interest in how maybe where your shares are trading today with factor into that.

Thank you Sir we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two to remove yourself from the queue.

Bob Ravnaas: We are encouraged by the opportunities we see in 2025 and beyond to continue to grow and expand our industry-leading portfolio of assets to generate long-term unit over value.

Speaker Change: Yes, great Great question Tim.

Speaker Change: Looking at M&A opportunities as to say right out of the gate.

Speaker Change: Your comments, notwithstanding which I totally agree with we've had a hard time transacting on natural gas deals over the last couple of years, just seems like we've gotten blown out of the water I don't know if people are are baking in a higher price stacks in the future strip or what exactly is happening there, but that's been challenging on the natural gas side I'd say.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment. Please while we poll for any questions.

David Ravnaas: I'll now turn the call over to David. Thanks, Bob. And good morning, everyone. As Bob mentioned, this is another strong quarter for He generated several new quarterly records for oil, natural gas, and NGL revenues. consolidated adjusted EBITDA, and cash available for distribution. We also increased our borrowing base and elected commitment and redeemed 50% of the Series A convertible preferred units, which I'll discuss in more detail in a minute.

And the first question comes from the line of Tim restaurant with Keybanc capital markets. Please proceed with your question.

Speaker Change: M&A activity for us, it's a high bar to state the obvious we would we would be interested in doing deals where and we have a long history of doing that where we could use our equity.

Good morning folks thank you for taking our questions.

Good morning, Tim.

I want to start.

Your last comments about our continuing as a major consolidator.

Speaker Change: Accretively to buy assets that would delever the business and just accelerate not only the scale of the company, but also the deleveraging process. So if you look back historically, we've done that quite well I've been fortunate to have a lot of success in doing that.

No no no surprise, there, but I was wondering if you could kind of talk about your interest in M&A today everything we're hearing on the oil side is that things are kind of on a pause right now.

David Ravnaas: I'll now start by reviewing our financial results for the first quarter. Oil, natural gas, and NGO revenues totaled $90 million during the quarter. which includes 74 days of contribution from the acquired production and is a new record for Kimbell. including a full Q1 2025 impact of the acquired production. First quarter run rate production was 25,841 BOE per day. In addition, we exited the quarter with 90 rigs actively drilling on our acreage, which represents approximately 16 percent market share of all land rigs drilling in the continental United States and is flat from Q4 2024.

The mineral space has been a lot of new capital being deployed especially on the gas side.

Speaker Change: In the past and I would expect us to I'd be surprised if we weren't able to execute on some sort of M&A on that front, let's call. It over the next six to 18 months, which I think would be to everybody's benefit.

We can talk about kind of your your your interest today and maybe how your equity currency is not really what it was a few months ago.

Sure.

Across the industry, so kind of your interest in and maybe where your shares are trading today with factor into that.

Speaker Change: Okay. Okay. So I guess, we'll stay tuned on that front.

Yeah, Great Great question Ted.

Speaker Change: And then I appreciate the comments on leverage it seems pretty clear the residual free cash flow.

He is looking at M&A opportunities is to is to say right out of the gate.

Your comments, notwithstanding which I totally agree with we've had a hard time transacting on natural gas deals over the last couple of years, just seems like we've gotten blown out of the water I don't know if people are are baking in a higher price stacks in the future strip or what exactly is happening there, but that's that's been challenging on the natural gas side I'd say.

Speaker Change: Worked at that balance down.

Speaker Change: Do you have a target number you are looking to or is the plan just steady state pay that down to give you more dry powder for the next deal how are you thinking.

David Ravnaas: On the expense side, first quarter general and administrative expenses were $9.6 million. $5.8 million of which was cash G&A expense, or $2.52 per BOE. Total first quarter consolidated adjusted EBITDA was $75.5 million, which includes 74 days of contribution from the acquired production and is also a new record for Kimbell. You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution at the end of our news release.

Speaker Change: Target debt leverage yeah, absolutely. So one advantage of the <unk> that we have that that I think is lost on a lot of people is that for covenant purposes. It doesn't apply right. So the reason that we have the <unk>, which is more expensive than bank debt is because we've seen this we've seen this movie several times in the past the oil.

But if you know M&A activity for us, it's a high bar to state. The obvious we would we would be interested in doing deals where and we have a long history of doing this where we could use our equity accretively to buy asset they would delever the business and just accelerate not only the scale of the comp.

Speaker Change: Gas industry goes through cycles, we like to put it of Paramount importance the ability to protect common distributions.

Speaker Change: So we paid a dividend all the way through Covid, even when oil went negative we paid a dividend.

But also the deleveraging process.

If you look back historically, we've done that quite well I've been fortunate to have a lot of success in doing that in the past and I would expect us to I'd be surprised if we weren't able to execute on some sort of M&A on that front you know let's call. It over the next six to 18 months, which I think would be to everybody's benefit.

Speaker Change: So what we're doing is just carefully managing leverage so that we can stay at that one five times target for the foreseeable future and again, if we're able to execute like we have in the past on equity based M&A, we would expect to be able to accelerate that payment down so keeping leverage at one five times or less with gone <unk>.

David Ravnaas: As Bob mentioned, today we announced a cash distribution of 47 cents per common unit for the first quarter. We estimate that approximately 70% of this distribution is expected to be considered return of capital and not subject to dividend taxes, further enhancing the after-tax return to our common unit holder. This represents a cash distribution payment to common unit holders that equates to 75% of cash available for distribution. and the remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimbell's secured revolving credit facility.

Okay. Okay. So I guess, we'll stay tuned on that front.

Speaker Change: Generally lower than that in the past.

Speaker Change: And then and then reload the balance sheet for future M&A down the road, where we have to use cash consideration to find something thats, particularly attractive like one point or something else. So goal is absolutely to continue to delever. Our business is more than most purpose built for an environment like this we have by design.

And then I appreciate the comments on leverage it seems pretty clear the residual free cash flow will work.

Worked at that balance down.

Do you have a target number you are looking to or is the plan just steady state pay that down to give you more dry powder for the next deal how are you thinking about target leverage yeah.

Speaker Change: Balanced portfolio between oil and natural gas, it's funny I think a lot of people forgot that 50% of our production is in.

Absolutely. So one advantage of of the Prefs that we have that that I think is lost in a lot of people is that for covenant purposes. It doesn't apply right. So the reason that we have the <unk>, which is more expensive than bank debt is because we've seen this we've seen this movie several times in the past the oil and gas industry goes through cycles.

David Ravnaas: Moving now to our balance sheet and liquidity. At March 31st 2025, we had approximately $299 million in debt outstanding under our secured revolving credit which represented a net debt to trailing 12-month consolidated adjusted EBITDA of approximately 0.9 times. We also had approximately 251 million in undrawn capacity under the Secured Revolving Credit Facility as of March 31st, 2025. Subsequent to quarter end on May 1st, 2025, the borrowing base and aggregate commitments on our secured revolving credit facility were increased from $550 million to $625 million in connection with our spring redetermination. In addition, on May 7, 2025, we redeemed 50% of the Series A Cumulative Convertible Preferred Units Outstanding.

Speaker Change: As gasoline, which has obviously benefited quarter over quarter. We also have diversity across every basin in the United States and then last and certainly not least we have the lowest PDP decline rate of pretty much any company that I'm aware of so I think the combination of all of that of all of that plus 90 rigs still actively drilling on our acreage.

Speaker Change: We like to put it of Paramount importance the ability to protect the common distributions.

Speaker Change: But at least on a relative basis to outperform most most companies in the upstream space I'd also add just anecdotally just thought this was interesting.

Speaker Change: So we paid a dividend all the way through Covid, even when oil went negative we paid a dividend.

Speaker Change: So what we're doing is just carefully managing leverage so that we can stay at that one five times target for the foreseeable future and again, if we're able to execute like we have in the past on equity based M&A, we would expect to be able to accelerate that payment down so keeping leverage at one five times or less Wisconsin.

Speaker Change: We're in a unique position just given how diverse our exposure is to out throughout the United States. We have we have a.

Speaker Change: Acreage in pretty much every county, if not every county that produces hydrocarbons in the United States.

Speaker Change: And Theres been a lot of talk in the last couple of weeks about drilling activity slowing down in what's happening. What's interesting is we're looking looking forward to Q2 I don't want to get ahead too much but we might have the second highest lease bonus payments we've ever had in company history in Q2, and so I don't want to.

Speaker Change: Generally lower than that in the past.

Speaker Change: And then and then reload the balance sheet for future M&A down the road, where we have to use cash consideration to find something that's particularly attractive like one point or something else. So our goal is absolutely to continue to delever. Our business is more than most purpose built for an environment like this we have by design.

David Ravnaas: This further simplifies our capital structure and reduces our cost of capital. After giving us back to this redemption, along with the expected pay down from the remaining 25% of Q1 2025 projected cash available for distribution, Kimbell expects to have approximately $462.1 million in debt outstanding under a secured credit facility and have net debt to first quarter 2025 trailing 12-month consolidated adjusted EBITDA of approximately 1.5 times. We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position, the support of our expanding bank syndicate, and our financial flexibility.

Speaker Change: Read too much into that but we were a little bit surprised to see that lease bonus activity was picking up.

Speaker Change: <unk> at least quarter, one to quarter, two and most of that's been in the Permian Basin. So I just wanted a little bit counter to the narrative that things are slowing down and that isn't to say that things won't in the future, but from our perspective, not only are we not seeing a slowdown we've actually seen kind of a dramatic improvement in leasing activities, which which I think is.

Speaker Change: Balanced portfolio between oil and natural gas, it's funny I think a lot of people forgot that 50% of our production and.

Speaker Change: As gas weighted which is obviously benefited quarter over quarter. We also have diversity across every base in the United States and then last and certainly not least we have the lowest PDP decline rate of pretty much any company that I'm aware of so I think the combination of all of that with all of that plus 90, red still actively drilling on our acreage.

Speaker Change: Surprising and I hope you find interesting.

Speaker Change: Okay.

Speaker Change: I'd like to add to what David said this is Bob.

Speaker Change: But at least on a relative basis to outperform most most companies in the upstream states I'd also add just anecdotally because I thought this was interesting.

Speaker Change: Been doing this since 98 loved this business model obviously.

Speaker Change: And what with regard to organic growth.

David Ravnaas: Today, we are also affirming our financial and operational guidance ranges for 2025. As a reminder, our full 2025 Guidance Outlook was included in the Q4 2024 earnings release. We remain confident about the prospects for continued robust development as we progress through 2025. Given the number of rigs actively drilling on our acreage, especially in the Permian, as well as our line-of-sight wells materially exceeding our maintenance well Lastly, as evidenced by our track record of ongoing acquisition activity, we expect to continue our role as a major consolidator in the highly fragmented U.S. oil and natural gas royalty sector, which we estimate to be over $700 billion in size.

Speaker Change: We're in a unique position just given how diverse our exposure is three out throughout the United States. You know we have you have acreage in pretty much every county, if not every county that produces hydrocarbons in the United States.

Speaker Change: Production increases at our properties, we're very diversified.

Speaker Change: We've put together a portfolio with considerable thought through all the years to maintain a really low PDP decline rate.

Speaker Change: And Theres been a lot of talk in the last couple of weeks about drilling activity slowing down in what's happening. What's interesting is we're looking you know looking forward to Q2 I don't want to get ahead too much but we might have the second highest the lease bonus payments you've ever had in company history in Q2, and so you know I don't want to.

Speaker Change: And what we're doing is is.

Speaker Change: Really taking a bet.

Speaker Change: How smart the engineers and geologists and land men are and finance.

Speaker Change: That are employed by our operators.

Speaker Change: Their job depends on increasing production.

Speaker Change: And maintaining production.

Bob Ravenous: Read too much into that but we were a little bit surprised to see that lease bonus activity was picking up considerably at least quarter one to quarter two and most of that's been in the Permian Basin. So just wanted a little bit counter to the narrative that things are slowing down and that isn't to say that things won't in the future, but from our perspective, we would not.

Speaker Change: Their salaries dependent upon it and their bonuses depend upon it so so everyday those engineers geologists land men Midland to Houston, Dallas, Oklahoma City, Denver are trying to figure out there is some of the best and the brightest in the U S and theyre trying to figure out a way to maintain production because.

David Ravnaas: And as we have stated in the past, there are only a handful of public entities in the United States and Canada that have the financial resources, infrastructure, network, and technical expertise to complete large-scale, multi-basin acquisitions. We continue to believe that the overall demand for energy, our well established and diversified asset portfolio, and the attractive opportunities to further expand and add scale within our basins will continue to enhance value for our unit holders in the years to come.

Bob Ravenous: We've not seen a slowdown we've actually seen kind of a dramatic improvement in leasing activities, which are which I think is surprising and I hope you find interesting.

Speaker Change: Because they may be you want to buy a new effluent 50, they maybe you want to get a nice Christmas gift for their kids and wives it with.

Speaker Change: With a nice bonus and that's dependent upon them figuring out ways to maintain and increase production all debt on that all day long.

Bob Ravenous: Okay.

Bob Ravenous: I'd like to add to what David said this is Bob been doing this since 98 loved this business model obviously.

Speaker Change: Okay.

Bob Ravenous: And what what were with regard to organic growth in EM and production increases at our properties, we're very diversified.

Speaker Change: Excellent color I appreciate the context, if I could just sneak one last one in a related to that comment on natural gas I would've thought with that up and <unk>.

Bob Ravenous: We've put together a portfolio with considerable thought through all the years to maintain a really low PDP decline rate and what what we're doing is is.

Operator: With that, Operator, we are now ready for questions. Thank you, sir.

Speaker Change: Some significant contango in the gas strip, we might see you all take advantage of that I know you've layered in some 2027 hedges, but you seem about 20% hedge going forward just kind of curious on your thoughts on hedging with higher debt.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. The confirmation tone will indicate that your line is available.

Bob Ravenous: Really taking a bet.

Bob Ravenous: On how smart the engineers and geologists and land that are in and finance with that are employed by our operators.

Yes, that's a great question, we actually talked about that at the board level yesterday.

Operator: you may press star two to remove.

Bob Ravenous: Their job depends on increasing production.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing One moment, please, while we pull.

Speaker Change: We run stress tests internally on our on our production and we look for we stress the oil and gas down to very low levels and we look at our ability to protect that caught the ability to pay distributions to common unit holders.

Bob Ravenous: And maintaining production.

Bob Ravenous: Salaries depend upon it and their bonuses depend upon it. So so every day those engineers geologists landman Midland to Houston, Dallas, Oklahoma City, Denver are trying to figure out there theres some of the best and the brightest in the U S and they're trying to figure out a way to maintain production because.

Tim Rezvan: And the first question comes from the line of Tim Rezvan with KeyBank Capital Markets. Please proceed with your question. A lot of folks, thank you for taking our questions.

Speaker Change: And we feel with that 20% hedge level is a good place to be that is something that we actively think about though and your point is well taken with obviously the natural gas strip increasing.

Bob Ravnaas: Good morning, Sam. I want to start your last comments about continuing as a major consolidator, no surprise there. But I was wondering if you could kind of talk about your interest in M&A today. Everything we're hearing on the oil side is that things are kind of on a pause right now. You know, the mineral space has been a lot of new capital being deployed, especially on the gas side. Can you talk about kind of your interest today and maybe how your equity currency is not really what it was a few months ago as shares are pulled back across the industry?

Speaker Change: Because they may be you want to buy a new F 150. They may be you want to get a nice Christmas gift for their kids and wives it with a nice bonus and that's dependent upon them figuring out ways to maintain and increase production.

Speaker Change: You layer on more hedges, it's something we think about.

Speaker Change: On the other hand, we try to take judgment out of the equation. When we hedge we don't try to time oil and gas prices when we layer on hedging we have.

Speaker Change: A very.

Bob Ravenous: I'll bet on that all day long.

Speaker Change: Methodical formulaic approach to layering on hedges so.

Speaker Change: Okay. That's excellent color I appreciate that if I could just sneak one last one in a related to that that comment on natural gas I would have thought with with that up and.

Speaker Change: We do.

That thought is not lost on us, it's an intelligent guide but.

Speaker Change: But at this time, we still like that 20% hedging level, we think that it protects us even in.

Speaker Change: Some significant contango in the gastric we might see you all take advantage of that I know you've layered in some 2027 hedges, but you seem about 20% hedge going forward.

Speaker Change: In a very draconian pricing environment.

Bob Ravnaas: So kind of your interest and how maybe where your shares are trading today would factor into that. Thanks. Yeah, great, great question, Tim. Always looking at M&A opportunities just to stay right out of the gate. your comments notwithstanding, which I totally agree with. We've had a hard time transacting on natural gas deals over the last couple of years. It just seems like we've gotten blown out of the water. I don't know if people are baking in higher price stacks in the future strip or what exactly is happening there, but that's been challenging on the natural gas side.

Speaker Change: Okay I'll leave it there I appreciate all the answers.

Speaker Change: Yes, Thanks, Tim.

Speaker Change: Curious on your thoughts on hedging with higher debt. Thank you yeah.

Speaker Change: And the next question comes from the line of John <unk> with Texas Capital. Please proceed with your question.

Speaker Change: That's a great question, we actually talked about that at the board level yesterday, we we run stress test internally on our on our production and we look for when we stress the oil and gas down to very low levels and we look at our ability to protect that cotton you know the ability to pay distributions to common unit holders and we feel with that 20%.

John: Hey, good morning, guys and congrats on the strong quarter.

Speaker Change: Good morning, Joe.

Speaker Change: Good morning for my first one you mentioned the activity dashboard for both your line of site activity and your market share of active rigs is quite supportive of growth in 2025.

Bob Ravenous: Hedged level is a good place to be that is something that we actively think about though and you're your point is well taken with you know obviously the natural gas strip, increasing you know should you layer on more hedges, it's something we think about on the other hand, we try to take judgment out of the equation when we hedge.

Speaker Change: With the strong volumes in the first quarter, how do you see volumes trending throughout the year and is there anything that has left you a little more conservative.

Bob Ravnaas: I'd say that if, you know, M&A activity for us, it's a high bar to state the obvious. We would be interested in doing deals where, and we have a long history of doing this, where we could use our equity accretively to buy assets that would delever the business and just accelerate not only the scale of the company, but also the deleveraging process. So if you look back historically, we've done that quite well and have been fortunate to have a lot of success in doing that in the past. And I would expect us to, you know, I'd be surprised if we weren't able to execute on some sort of M&A on that front, you know, let's call it over the next 6 to 18 months, which I think would be to everybody's benefit.

Speaker Change: Just given the net well inventories are above maintenance levels.

Speaker Change: Great Great question and fair, we have a history of being conservative with our guidance, we're reaffirming our guidance.

Bob Ravenous: Don't try to time oil and gas prices will be a layer on hedging we have.

Bob Ravenous: A very methodical a formulaic approach to layering on hedges. So you know.

Speaker Change: And I don't think Theres anything at this time that we see that would cause us to alter our guidance one way or the other I think that in an environment like that.

Bob Ravenous: We do.

Speaker Change: Is that thought is not lost on us it's a it's an intelligent guide.

Speaker Change: Prudence is warranted with just unclear whats going to happen with drilling schedules and Capex again based on everything I said on the.

But at this time, we still like that 20% hedging level, we think that it protects us even in.

Speaker Change: And a very draconian pricing environment.

Speaker Change: Preceding 10 minutes, we're not seeing any evidence of a slowdown, which I think might be surprising to people.

Okay I'll leave it there I appreciate all the answers.

Tim Rezvan: Okay, okay.

Bob Ravnaas: So I guess we'll stay tuned on that front. And then I appreciate the comments on leverage. It seems pretty clear that the residual free cash flow will work that debt balance down. Do you have a target number you're looking to, or is the plan just steady state, pay that down to give you more dry powder for the next deal? How do you think about that, you know, target debt and leverage? Yeah, absolutely. So one advantage of the PREP that we have that I think is lost on a lot of people is that for covenant purposes, it doesn't apply, right?

Yeah. Thanks, Tim.

Speaker Change: Maybe it comes in the future, but just based on near term activity <unk> got from docs and permits the amount of rigs that are running at least not in us activity everything else. We feel very good about about hitting our guidance numbers this year and we'd like to just keep on the same so that's why we're reaffirming them.

Speaker Change: And the next question comes from the line of John Honest with Texas Capital. Please proceed with your question.

Speaker Change: Hey, good morning, guys and congrats on the strong quarter.

Davis: Morning, Joe.

Bob Ravenous: Good morning.

Speaker Change: My first one you mentioned the activity dashboard for both your line of site activity and your market share of active rigs is quite supportive of growth in 2025.

Speaker Change: That's terrific color.

Speaker Change: For my follow up just regarding your attractive tax structure, how much runway do you have where your distributions can be conveyed on a tax friendly basis.

Speaker Change: With the strong volumes in the first quarter, how do you see volumes trending throughout the year and is there anything that has left you a little more conservative.

Bob Ravnaas: So the reason that we have the PREP, which is more expensive than bank debt, is because we've seen this movie several times in the past. The oil and gas industry goes through cycles. We like to, and put it of paramount importance, the ability to protect common distributions. So we paid a dividend all the way through COVID. Even when oil went negative, we paid a dividend. So what we're doing is just carefully managing leverage so that we can stay at that 1.5 times target for the foreseeable future. And again, if we're able to execute like we have in the past on equity-based M&A, we would expect to be able to accelerate that payment down.

Speaker Change: That is a great question and it's a very complicated it's a.

Davis: Just given the net well inventories are above maintenance levels.

Speaker Change: A very complicated one obviously, we have a considerable tax shield and we do feel that as a very unique attribute to our business when oil and gas prices go up more of our dividend is subject to taxes when oil and gas prices go down less of it is and Thats why we have that that wonderful.

Davis: Great Great question and fair, we have a history of being conservative with our guidance, we're reaffirming our guidance.

Davis: And I don't think there's anything at this time that we see that would cause us to alter our guidance one way or the other I think that in an environment like this.

Speaker Change: Preponderance of our of our dividend, which is return of capital as opposed to ordinary income or dividend taxation.

Davis: Prudence is warranted were just unclear whats going to happen with with drilling schedules and Capex again based on everything I said on the.

Speaker Change: The runway on that is hard to predict because it depends on so many different variables production oil and gas prices, which we can't predict but but it is considerable I'll put it that way and we.

Bob Ravnaas: So keeping leverage at one and a half times or less, we've gone considerably lower than that in the past. And then just reload the balance sheet for future M&A down the road, where we have to use cash consideration to find something that's particularly attractive like LongPoint or something else. So the goal is absolutely to continue to delever. Our business is, more than most, purpose-built for an environment like this. We have, by design, a very balanced portfolio between oil and natural gas. It's funny. I think a lot of people forgot that 50% of our production is gas-weighted, which has obviously benefited quarter over quarter.

Davis: Preceding 10 minutes.

Davis: We're not seeing any evidence of a slowdown, which I think might be surprising to people in it.

Davis: Maybe it comes in the future, but just based on near term activity. We've got from Dukson permits the amount of rigs that are running at least on this activity everything else. We feel very good about about hitting our guidance numbers. This year and I would like to just keep on the same so that's why we're reaffirming them.

Speaker Change: We see now we see no near term end to that runway so to speak.

Speaker Change: In the foreseeable future.

Speaker Change: Thanks, guys.

Speaker Change: Thank you.

Speaker Change: And the next question comes from the line of Paul Diamond with Citibank. Please proceed with your question.

Speaker Change: That's terrific color.

Speaker Change: My follow up just regarding your attractive tax structure, how much runway do you have where your distributions can be conveyed on a tax friendly basis.

Speaker Change: Alright, Thank you and good morning on thanks for taking the time.

Speaker Change: Good morning, Paul quick one.

Bob Ravnaas: We also have diversity across every base in the United States. And then last and certainly not least, we have the lowest PDP decline rate of pretty much any company that I'm aware of. So I think the combination of all of that plus 90 rigs still actively drilling on our acreage keys us up, at least on a relative basis, to outperform most companies in the upstream space. I'd also add just anecdotally, because I thought this was interesting, we're in a unique position just given how diverse our exposure is throughout the United States. We have acreage in pretty much every county, if not every county, that produces hydrocarbons in the United States.

Speaker Change: Just a quick one for you on the I know you are okay.

Speaker Change: Hey, down or redeemed, 50% of the converts just wanted to get an understanding of how you all think about whats left long term and how that fits into the cap structure over time.

Speaker Change: That is a great question and it's a very complicated, but it's a very complicated one obviously, our we have a considerable tax shield and we do feel that as a very unique attribute to our to our business.

Speaker Change: Yes.

Speaker Change: The game plan is to continue to pay down debt every quarter I think we paid down $70 million of debt. This quarter and then every two to three quarters, we will redeem out.

Speaker Change: When the oil and gas prices go up more of our dividend is subject to taxes when oil and gas prices go down less of it is and that's why we have that that wonderful.

Speaker Change: <unk>, 20% of the face value of that graph. That's the way that it's structured is that we can do it.

Speaker Change: The preponderance of our of our dividend, which is return of capital as opposed to ordinary income or dividend taxation.

Speaker Change: 20% increments, so youll see us continue to allocate 25% of cash flow available for distribution to debt Paydown and then we will periodically.

Speaker Change: The runway on that is hard to predict because it depends on so many different variables production oil and gas prices, which we can't predict.

Bob Ravnaas: And there's been a lot of talk in the last couple of weeks about drilling activity slowing down and what's happening. What's interesting is we're looking, you know, looking forward to Q2, and I don't want to get ahead too much, but we might have the second highest lease bonus payments we've ever had in company history in Q2. And so, you know, I don't want to read too much into that, but we were a little bit surprised to see that lease bonus activity was picking up considerably at least quarter one to quarter two. And most of that's been in the Permian Basin.

Speaker Change: Every couple of quarters or so chip away at that perhaps all the while maintaining that kind of ceiling of let's call it plus or minus depending on oil and gas prices plus or minus one five times EBITDA. So the goal is to just chip away at that over time, we did that the only other time, we've had a prep is back when we did that haymaker acquisition in 2008.

Speaker Change: But it is considerable I'll put it that way and that we.

Speaker Change: We see no.

Speaker Change: We see no near term end to that runway so to speak.

Speaker Change: In the foreseeable future.

Speaker Change: Thanks, guys.

Speaker Change: Thank you.

Speaker Change: <unk>, where we are.

Speaker Change: Bought into our what is what is the most important natural gas part of our company, which is in the in the eastern Haynesville in Louisiana, and we did that quite successfully that way and we just like the way that works. It gives us a lot of optionality to pay down pay down the debt prudently and to manage our debt levels.

Speaker Change: And the next question comes from the line of Paul Diamond with Citibank. Please proceed with your question.

Bob Ravnaas: So it just runs a little bit counter to the narrative that things are slowing down. And that isn't to say that things won't in the future, but from our perspective, not only have we not seen a slowdown, we've actually seen kind of a dramatic improvement in leasing activities, which I think is surprising, and I hope you find interesting.

Paul Diamond: Thank you good morning, thanks for taking the time.

Speaker Change: Just a quick one.

Speaker Change: Just a quick one for you on the I know you can or pay down or redeemed 50% of the converts I was wondering if the understanding of how you all think about whats left long term and how that fits into the cap structure over time.

Speaker Change: Our covenant levels.

Speaker Change: Understood makes perfect sense, and then just drilling down a bit more on something you had said prior where you got to get more out of the water.

Bob Ravnaas: I'd like to add to what David said, this is Bob, been doing this since 98, love this business model obviously, and what we're, with regard to organic growth and production increases on our properties, we're very diversified, we've put together a portfolio with considerable thought through all the years to maintain a really low PDP decline rate, and what we're doing is really taking a bet on how smart the engineers and geologists and land men are in finance that are employed by our operators. They, their job depends on increasing production. and maintaining production, their salaries depend upon it, and their bonuses depend upon it.

Speaker Change: Yeah. So the the the game plan is to continue to pay down debt every quarter I think we paid down $17 million of debt. This quarter and then every two to three quarters will redeem out at least 20% of the face value of that traffic. That's the way that it's structured if there'll be can thread.

Speaker Change: M&A side for Nat gas I guess could you is there any bifurcation in that narrative between haynesville or Appalachia, and the kind of shifted over time or is it all pretty much everyone's everyone's walking in a higher future growth.

Speaker Change: Good nuanced question I would say, it's been more competitive in the haynesville than it has been in Appalachia.

Speaker Change: And 20% increments, so you'll see us continue to allocate 25% of cash flow available for distribution to debt pay down and then we will periodically every every couple of quarters or so chip away at that press all the while maintaining that kind of ceiling of let's call it plus or minus.

Speaker Change: There's a lot of there's a lot of interest in the Haynesville. These days I mean look we.

Speaker Change: We like the Marcellus to everybody loves the Marcellus, but just the ability to ramp growth era, given infrastructure constraints is just obvious to everyone. So I would say if I had to handicap that I would say that we have been more in the money and Appalachia than we had been in the Haynesville recently.

Speaker Change: Depending on oil and gas prices plus or minus one five times EBITDA. So the goal is to just chip away at that over time, we did that the only other time, we've had a prep is back when we did that haymaker acquisition in 2018, where we bought into our what is what is the most important natural gas part of our company, which is in the.

Speaker Change: And.

Speaker Change: Look.

Speaker Change: Seen these waves before I mean, there was a long period of time, where we were just getting crushed in the Permian for example, and then and then as that place started to mature things became more accretive to us and we've been able to rattle off a series of acquisitions in the Permian and that wasn't because we were deliberately targeting the Permian. It's just because that's where we saw the opera.

Bob Ravnaas: So every day, those engineers, geologists, land men, Midland, Houston, Dallas, Oklahoma City, Denver, are trying to figure out, they're some of the best and the brightest in the U.S., and they're trying to figure out a way to maintain production because they maybe want to buy a new F-150, they maybe want to get a nice Christmas gift for their kids and wives with a nice bonus, and that's dependent upon them figuring out ways to maintain and increase production. I'll bet on that all day long.

Speaker Change: Eastern Haynesville in Louisiana and.

Speaker Change: We did that quite successfully that way and we just like the way that works. It gives us a lot of optionality to pay down pay down the debt prudently and to manage our debt levels.

Speaker Change: Our covenant levels.

Speaker Change: Understood makes perfect sense, and then just drilling down a bit more on something you had said prior where you got to get more out of the water.

Speaker Change: <unk> set up.

Speaker Change: I wouldn't be surprised to see for example, the western Haynesville East taxes. Those prices are really high right now and it's still a relatively undeveloped play theres still a lot of running room. There, it's more difficult for us to make things accretive on a cash flow basis, I think as that play gets delineated as we get a bit.

Speaker Change: The M&A side for Nat gas I guess could you is there any bifurcation in that narrative between haynesville or Appalachia.

Tim Rezvan: That's excellent, Carla. I appreciate the context.

Speaker Change: Shifted over time or is it all pretty much everyone's everyone's walking into higher future growth.

Tim Rezvan: If I could just sneak one last one in related to that comment on natural gas. I would have thought with debt up and some significant contango in the gas strip, we might see you all take advantage of that. I know you layered in some 2027 hedges, but you seem about 20% hedge going forward. I'm just kind of curious on your thoughts on hedging with higher debt. Thank you.

Speaker Change: Our understanding of how things are developed I would expect for that to become a more competitive place for us to allocate capital.

Speaker Change: Good nuanced question I would say, it's been more competitive in the haynesville than it has been in Appalachia.

Speaker Change: But good questions I think one other thing I'd add everybody everybody forgets about the mid con mid con is tremendous gas volumes without any of the infrastructure constraints. The long point acquisition that we did a few years ago really underscores almost the entire state of Oklahoma in terms of mineral ownership. So we've seen a lot of really.

Speaker Change: There's a lot of there's a lot of interest in the Haynesville. These days it would be I mean look we like the Marcellus to everybody loves the Marcellus, but just the ability to ramp growth. There given infrastructure constraints is just obvious to everyone. So I would say if I had to handicap that I'd say that we have been more in the money and Appalachia than we had been in there.

Bob Ravnaas: Yeah, that's a great question. We actually talked about that at the board level yesterday. We run stress tests internally on our production, and we stress oil and gas down to very low levels, and we look at our ability to protect the ability to pay distributions to common unit holders. That thought is not lost on us. It's an intelligent thought, but at this time, we still like that 20% hedging level. We think that it protects us even in a very draconian pricing environment.

Speaker Change: Really great natural gas revenue come in Ngls coming out of Oklahoma too so.

Speaker Change: Haynesville recently.

Speaker Change: And.

Speaker Change: Look the we've seen these waves before I mean, there was a long period of time, where we were just getting crushed in the Permian for example, and then and then how does that play started to mature things became more accretive to us and we've been able to rattle off a series of acquisitions in the Permian and that wasn't because we were deliberately targeting the Permian it's just.

Speaker Change: That's an area, where there's less competition.

Speaker Change: And frankly, just some really good repeatable well results. So I think thats one other plant kind of put on your radar of of interest.

Speaker Change: Of interest on the M&A front.

Speaker Change: Understood appreciate the clarity I'll leave it there.

Speaker Change: Of course, thank you.

Speaker Change: That's where we saw the opportunity said I wouldn't be surprised to see for example, the western Haynesville East, Texas. Those prices are really high right now and it's still a relatively undeveloped play theres still a lot of running room, there, it's more difficult for us to make things accretive on a cash flow basis I.

Speaker Change: And the next question comes from the line of Noah <unk> with Bank of America. Please proceed with your question.

Good morning, everyone.

Speaker Change: First question here.

Speaker Change: Good morning, I just wanted to ask.

Speaker Change: Good morning, Noah Good morning, good morning Noah.

Speaker Change: Hey, guys I just wanted to ask on the first question here I was just on NGL and natural gas realizations, you guys seem to come in a lot stronger and maybe what we were expecting and what we had seen.

Speaker Change: Think as that play gets delineated as we get a better understanding of how things are developed I would expect for that to become a more competitive place for us to allocate capital are but the good good questions. I think one other thing I'd add everybody everybody forgets about the mid con mid con is tremendous gas volumes without any of the infrastructure constraints.

Speaker Change: Similar times in.

Speaker Change: In prior years could you maybe talk about what drove that would be and then also kind of how to think about.

Tim Rezvan: Okay, I'll leave it there. I appreciate all the answers. Yeah, thanks.

Speaker Change: Where ngls as a percentage of <unk> and natural gas as a percent of Henry hub, what kind of trend through the balance of 'twenty five.

Speaker Change: The long point acquisition that we did a few years ago really underscores almost the entire state of Oklahoma and terminal mineral ownership. So we've seen a lot of really really great natural gas revenue come in Ngls coming out of Oklahoma too. So that's an area, where there's less competition and.

John Annis: And the next question comes from the line of John Annis with Texas Capitol. Please proceed with your question. Hey, good morning, guys, and congrats on the strong quarter. Good morning. For my first one, you mentioned the activity dashboard for both your line-of-sight activity and your market share of active rigs is quite supportive of growth in 2025. With the strong volumes in the first quarter, how do you see volumes trending throughout the year? And is there anything that has left you a little more conservative, just given the net well inventories are above maintenance levels?

Speaker Change: Yes, I would use I would use this quarter's numbers.

Speaker Change: Goalposts for the rest of the year fourth quarter differentials, there traditionally worse for royalty company for everybody, but for royalty companies in particular.

Speaker Change: I think <unk> number is going to be more representative going forward and I actually asked that same question Noah to our technical team about where are we seeing the biggest uplift uplift of differentials and it's really been across the board we've seen that.

Speaker Change: Frankly, just some really good repeatable well results. So I think that's one other point I'd kind of put on your radar of of interest of interest on the M&A front.

Speaker Change: Understood appreciate the clarity of it there.

Speaker Change: Pretty much in every basin across our portfolio and improvements.

Speaker Change: Of course, thank you.

Speaker Change: And the next question comes from the line of Noah Hung this with Bank of America. Please proceed with your question.

Speaker Change: In both NGL and natural gas differentials so.

Bob Ravnaas: A great, great question and fair. We have a history of being conservative with our guidance. We're reaffirming our guidance. I don't think there's anything at this time that we see that would cause us to alter guidance one way or the other. I think that in an environment like this, prudence is warranted, which is unclear what's going to happen with drilling schedules and CapEx. Again, based on everything I said on the preceding 10 minutes, we're not seeing any evidence of a slowdown, which I think might be surprising to people, and maybe it comes in the future.

Speaker Change: There really isn't one area that I can attribute that improvement to its really been across the entire portfolio.

Noah Hung: Good morning, everyone for my first question here.

Speaker Change: Good morning, I just wanted to ask.

Speaker Change: Great and then for my second question here, you guys gave us some great color on kind of where net ducts, where at the end of the quarter, but I'm sure. As you guys are well aware a lot has happened since March 31st So could you guys give us an update on where the net docs kind of stand today.

Noah Hung: Good morning, Noah Good morning, good morning Noah.

Speaker Change: Hey, guys I just wanted to ask on the first question here was just on NGL and natural gas realizations, you guys seem to come in a lot stronger and maybe what we were expecting and what we had seen a.

Noah Hung: Similar times.

Speaker Change: In prior years could you maybe talk about what drove that would be and then also kind of how to think about.

Speaker Change: Yes, I think thats in our materials, let me pull that up give me a second.

Speaker Change: Their ngls as a percent of W. T I at natural gas as a percent of Henry hub, what kind of trends through the balance of 'twenty five.

Speaker Change: Sure.

Bob Ravnaas: But just based on near-term activity we've got from ducts and permits, the amount of rigs that are running, lease bonus activity, everything else, we feel very good about hitting our guidance numbers this year and would like to just keep them the same. So that's why we're reaffirming them. That's a terrific color.

Speaker Change: Yes, I mean, we noticed Matt daily we disclosed we had $4 67, net ducks and $3 31, and that's the latest data we've disclosed publicly.

Speaker Change: Yeah, I would use I would use this quarter's number.

The goalposts for the rest of the year fourth quarter differentials, there traditionally worse for royalty copies for everybody, but for royalty companies in particular.

Speaker Change: Okay. Yeah I was just wondering if you had any color on maybe how that was trending.

Speaker Change: I think one two number is going to be more representative going forward and I actually asked that same question Noah to our technical team about.

Speaker Change: First.

Speaker Change: One month or two ended the quarter.

John Annis: For my follow-up, just regarding your attractive tax structure, how much runway do you have where your distributions can be conveyed on a tax-friendly basis? That is a great question, and it's a very complicated one. Obviously, we have a considerable tax shield, and we do feel that is a very unique attribute to our business. When oil and gas prices go up, more of our dividend is subject to taxes. When oil and gas prices go down, less of it is, and that's why we have that wonderful preponderance of our dividend, which is return of capital as opposed to ordinary income or dividend taxation.

Speaker Change: No I mean as you can imagine it's a incredibly time intensive endeavor to go through our tens of millions of acres and quantify those ducks and permits somebody do it once per quarter.

Speaker Change: Where are we seeing the biggest uplift uplift the differential and it's really been across the board. We've seen that are pretty much in every basin across our portfolio and improvement.

Activity remains very solid I, Wouldnt say theres, a trend one way or the other most of the docs are in the Permian, but we've got.

Speaker Change: And both NGL and natural gas differential so.

Speaker Change: There there really isn't one area that I can attribute that that improvement to its really been across the entire portfolio.

Speaker Change: A significant number of almost of the remaining half are spread throughout the other six major basins that we're in so good trends there havent again, just haven't seen any indication of a slowdown not to say that it isn't going to happen nationwide, but continue to feel very good about.

Speaker Change: Great and then for my second question here, you guys gave us some great color on kind of where net ducks were at the end of the quarter, but I'm sure. As you guys are well aware of what has happened.

Speaker Change: About our production profile.

Speaker Change: March 31st So could you guys give us an update on where the net docs kind of stand today.

Speaker Change: Yes, and I'll just add this.

Bob Ravnaas: The runway on that is hard to predict because it depends on so many different variables, production, oil and gas prices, which we can't predict, but it is considerable. I'll put it that way, and we see no near-term end to that runway, so to speak. and the foreseeable future.

Speaker Change: Madigan the Conoco commentary. This morning indicated that production is going to remain flat.

Yeah, I think that's in our materials, we let me pull that up give me a second.

Speaker Change: In the Permian assets and overall and then the diamondback down 1% or we're not looking at this sort of a dramatic drop off here in terms of Permian production and again half of our production is natural gas. So in some ways. We're a lot more insulated from what could be happening in the Permian in terms of a slight slowdown.

Speaker Change: Yes, I mean, we noticed my daily we disclosed we had a $4 six seven net ducks and 331 and that's the latest data we've disclosed publicly.

Speaker Change: No that makes a ton of sense I appreciate the color. Thank you.

John Annis: Thanks, guys. Thank you.

Noah: Thank you know Noah Noah Thank you for your time.

Speaker Change: Oh, Okay. Yeah I was just wondering if you had any color on maybe how that was trending.

Paul Diamond: And the next question comes from the line of Paul Diamond with Citibank. Please proceed with your question. Thank you. Good morning, all, and thanks for taking the time. Just a quick one for you on, I know you can pay down or redeem 50% of the converts.

Speaker Change: In the first.

Speaker Change: One month or two ended the quarter.

Speaker Change: This now concludes our question and answer session and I would like to turn the floor back over to management for any closing comments.

Speaker Change: No I mean, it's it's as you can imagine, let's say incredibly time intensive endeavor to go through our tens of millions of acres.

Speaker Change: And quantify those ducks and permits somebody do it once per quarter.

Bob Ravnaas: I want to get an understanding of how you all think about, you know, what's left long-term and how that fits into the cap structure over time. Yeah, so the game plan is to continue to pay down debt every quarter. I think we paid down $17 million of debt this quarter. And then every two to three quarters, we'll redeem out at least 20% of the face value of that prep. That's the way that it's structured, is that we can do it. 20% increments. So you'll see us continue to allocate 25% of cash flow available just per distribution to debt pay down.

Speaker Change: Again activity remains very solid I wouldn't say, there's a trend one way or the other most of the doctor in the Permian, but we've got you know.

Speaker Change: Thank you for your time, everybody and have a great day.

Speaker Change: Ladies and gentlemen that does conclude today's conference call. Thank you for your participation.

Speaker Change: Significant number almost of the remaining half are spread throughout the other six major basins that we're in so good trends. There haven't had again just haven't seen any indication of a slowdown not to say that it isn't going to happen nationwide, but continue to feel very good about.

Speaker Change: About our production profile.

Speaker Change: Yeah, and I'll just add this.

Speaker Change: Madigan the Conoco commentary this morning indicated that production here I mean class.

Bob Ravnaas: And then we will periodically, every couple quarters or so, chip away at that PREF, all the while maintaining that kind of ceiling of, you know, it's called plus or minus, depending on oil and gas prices, but plus or minus 1.5 times EBITDA. So the goal is to just chip away at that over time.

Speaker Change: In the Permian assets and overall and then the Diamondback and are down 1% or we're not looking at this sort of a dramatic drop off here in terms of Permian production and again half of our production is natural gas. So in some ways. We're a lot more insulated from what could be happening in the Permian in terms of a slight slowdown.

Bob Ravnaas: The only other time we've had a PREF is back when we did that haymaker acquisition in 2018, where we bought into what is the most important natural gas part of our company, which is in the Eastern Haynesville in Louisiana. And we did that quite successfully that way. And we just like the way that works. It gives us a lot of optionality to pay down the debt prudently and to manage our debt level. are coming along. Understood. Makes perfect sense.

Speaker Change: No that makes a ton of sense I appreciate the color. Thank you.

Speaker Change: Thank you know Noah Noah Thank you for your time.

Speaker Change: This now concludes our question and answer session and I would like to turn the floor back over to management for any closing comments.

Speaker Change: Thank you for your time, everybody and have a great day.

Bob Ravnaas: And then just drilling down a bit more on something you had said prior where you got to get blown out of the water on the M&A side for NatGas. I guess, can you, is there any bifurcation in that narrative between Hainesville or Appalachia? And has it kind of shifted over time or is it all pretty much like everyone's, everyone's walking in a higher future price? Good nuanced question. I would say it's been more competitive in the Haynesville than it has been in Appalachia. There's a lot of interest in the Haynesville these days. I mean, look, we like the Marcellus too.

Speaker Change: Ladies and gentlemen that does conclude today's conference call. Thank you for your participation.

Speaker Change: [music].

Bob Ravnaas: Everybody loves the Marcellus. But just the ability to ramp growth there given infrastructure constraints is just obvious to everyone. So I would say if I had to handicap that, I'd say that we have been more in the money in Appalachia than we have been in the Haynesville recently. and look, we've seen these waves before, I mean there was a long period of time where we were just getting crushed in the Permian, for example, and then as that place started to mature, things became more accretive to us and we've been able to rattle off a series of acquisitions in the Permian and that wasn't because we were deliberately targeting the Permian, it's just because that's where we saw the opportunity set.

Speaker Change: Right.

Speaker Change: [noise] [music].

Bob Ravnaas: I wouldn't be surprised to see, for example, the western Haynesville, East Texas, those prices are really high right now and it's still a relatively undeveloped play, there's still a lot of running room there. It's more difficult for us to make things accretive on a cash flow basis.

Bob Ravnaas: I think as that play gets delineated, as we get a better understanding of how things are developed, I would expect for that to become a more competitive place for us to allocate capital, but good question.

Speaker Change: Okay.

Speaker Change: [music].

Bob Ravnaas: I think one other thing I'd add, everybody forgets about the MidCon, MidCon has tremendous gas volumes without any of the infrastructure constraints. The Long Point acquisition that we did a few years ago really underscores almost the entire state of Oklahoma in terms of mineral ownership, so we've seen a lot of really great natural gas revenue coming in NGLs coming out of Oklahoma too, so that's an area where there's less competition and frankly just some really good repeatable well results, so I think that's one other play I'd put on your radar of interest on the M&A front.

Paul Diamond: Understood. Appreciate the clarity. I'll leave it there. Of course. Thank you.

Noah Hungness: And the next question comes from the line of Noah Hungness with Bank of America. Please proceed with your question. Morning, everyone. For my first question here. Good morning, I just wanted to ask on how- Hey, good morning, Noah. Good morning. Good morning, Noah. Hey, guys.

Noah Hungness: I just wanted to ask on the first question here was just on NGL and natural gas realizations. You guys seem to come in a lot stronger than maybe what we were expecting and what we had seen, you know, at similar times in prior years. Could you maybe talk about what drove that beat? And then also kind of how to think about where NGLs as a percent of WTI, natural gas as a percent of Henry Hub would kind of trend through the balance of 25.

Bob Ravnaas: Yeah, I would use this quarter's numbers as a goalpost for the rest of the year. Fourth quarter differentials, they're traditionally worse for royalty companies, for everybody, but for royalty companies in particular, I think 1Q number is going to be more representative going forward. And I actually asked that same question, Noah, to our technical team about, you know, where are we seeing the biggest uplift in differentials? And it's really been across the board. We've seen that pretty much in every basin across our portfolio and improvements. and both NGL and natural gas differentials. So there really isn't one area that I could attribute that improvement to.

Bob Ravnaas: It's really been across the entire portfolio.

Matthew Daly: Great, and then for my second question here, you guys gave us some great color on kind of where net ducks were at the end of the quarter, but I'm sure as you guys are well aware, a lot has happened since March 31st. So could you guys give us an update on where the net ducks kind of stand today? Uh, yeah, I think that's in our materials. Wait, wait, pull that up. Give me a sec. Yeah, I mean, we know this Matt Daly, we disclosed we had 4.67 net ducks at 331. And that's the latest data we've disclosed publicly.

Matthew Daly: Oh, okay. Yeah, I was just wondering if you had any color on maybe how that was trending, you know, in the first month, month or two into the quarter. No, I mean, it's, as you can imagine, it's an incredibly time-intensive endeavor to go through our tens of millions of acres and quantify those ducks and permits. So we do it once per quarter. Again, activity remains very solid. I wouldn't say there's a trend one way or the other. Most of the ducks are in the Permian, but we've got, you know, a significant number, almost the remaining half are spread throughout the other six major basins that we're in.

Matthew Daly: So good trends there. Again, just haven't seen any indication of a slowdown, not to say that it isn't going to happen nationwide, but, you know, continue to feel very good about our production profile. Yeah, and I would add to that again, I mean, the Conoco, you know, commentary this morning indicated that production is going to remain flat, you know, in their Permian assets and overall and then the Diamondback, you know, down 1%. So we're not looking at this sort of a dramatic drop off here in terms of Permian production. And again, half our production is natural gas.

Bob Ravnaas: So in some ways, we're a lot more insulated from what could be happening in the Permian in terms of a slight slowdown.

Noah Hungness: No, that makes a ton of sense. I appreciate the call. Thank you. Thank you Noah. Noah, thank you for your time.

Operator: This now concludes our question and answer session, and I would like to turn the floor back over to management for any closing comments. Thank you for your time, everybody, and have a great day.

Operator: Ladies and gentlemen, that does conclude today's conference call. Thank you for your participation.