Q3 2025 Kimbell Royalty Partners LP Earnings Call

Operator: Greetings. Welcome to the Kimbell Royalty Partners Q3 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Black with Investor Relations. Thank you, Rick. You may begin.

Greetings and welcome to the Kindle royalty partners third quarter earnings Conference call. At this time, all participants are in a listen only mode.

A question 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.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Rick Black with Investor Relations.

You may begin.

Rick Black: Thank you, operator, and good morning, everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for Q3, which ended 30 September 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. Information recorded on this call speaks only as of today, 6 November 2025. Please be advised that any time-sensitive information may no longer be accurate as of 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, are considered forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Thank you operator, and good morning, everyone welcome to the Kimball royalty Partners Conference call to review financial and operational results for the third quarter, which ended September 32025.

Call is also being webcast and can be accessed through the audio link on the events and presentations page of the IR section of Kimball Art P Dot com.

Information recorded on this call speaks only as of today November six 2025. So please be advised that any time sensitive information.

No longer be accurate as of 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 are considered forward looking statements made pursuant to the safe Harbor provisions is it private Securities Litigation Reform Act of $19 95.

Rick Black: We will be making forward-looking statements as part of today's call, which by their nature are uncertain and outside the company's control. Actual results may differ materially. Please refer to today's earnings press release for our disclosure 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 nearest GAAP 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. I would now like to 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 this morning.

We will be making forward looking statements as part of today's call, which by their nature are uncertain and outside the company's control actual results may differ materially.

Please refer to today's earnings press release for a disclosure 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 refer to non-GAAP measures, including adjusted EBITDA cash available for distribution.

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 I would now like to turn the call over to Bob Rabbinate, Kimball royalty partners, Chairman and Chief Executive Officer Bob.

Thank you Rick and good morning, everyone. We appreciate you joining us. This morning with me today are several members of our senior management team, including Davis Ravenous, our President and Chief Financial Officer, Matt Daley, Our Chief operating officer, and Blaine Ryan's Berger our controller.

Robert Ravnaas: 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 Blayne Rhynsburger, our Controller. To start off, we are pleased to report solid Q3 results, with production increasing organically by approximately 1% over Q2 and exceeding the midpoint of our 2025 guidance. This performance once again demonstrates the resilience of our high quality, diversified, and low decline production base. Despite the current general slowdown among US oil and natural gas operators for the first 9 months of 2025, our production averaged 25,574 BOE per day, which included a full Q1 of production from the Boren acquisition, also exceeding the midpoint of guidance.

Start off we are pleased to report solid third quarter results with production, increasing organically by approximately 1% over Q2 and exceeding the midpoint of our 2025 guidance.

This performance once again demonstrates the resilience of our high quality diversified and low decline production base. Despite the current general slowdown among U S oil and natural gas operators for the first nine months of 2025, our production averaged 25574 Boe per day.

Which included a full first quarter of production from the born acquisition also exceeding the midpoint of guidance. This operational success against the backdrop of headwinds within the broader energy sector is the result of the seeds that we planted over the last several years with our targeted M&A strategy.

Rick Black: This operational success against the backdrop of headwinds within the broader energy sector is the result of the seeds that we planted over the last several years with our targeted M&A strategy across the leading basins in the US. Our active rig count remains strong, with 86 rigs drilling across our acreage, representing a market share of US land rigs at 16%. Our line of sight wells continue to be above the number of wells needed to maintain flat production, giving us confidence in our production as we wrap up 2025.

Across our leading basins in the U S. Our active rig count remains strong with 86 rigs drilling across our acreage representing a market share of U S land rigs at 16%.

In addition, our line of sight wells continue to be above the number of wells needed to maintain flat production, giving us confidence in our production as we wrap up 2025, finally cash G&A per BOE was below the midpoint of guidance, reflecting operational discipline.

Robert Ravnaas: Finally, cash G&A per BOE was below the midpoint of guidance, reflecting operational discipline and positive operating leverage. Today, we are also pleased to declare the Q3 2025 distribution of $0.35 per common unit as we continue to focus on returning value to unit holders. As we approach the end of 2025, we are very grateful to our employees, board of directors, and advisors for helping us achieve another successful year at Kimbell. We remain excited about our role as a leading consolidator in the oil and natural gas royalty sector and the prospects for Kimbell to generate long-term unit holder value for years to come. Now I'll turn the call over to Davis.

Positive operating leverage today. We are also pleased to declare the Q3 2025 distribution at <unk> 35 per common unit as we continue to focus on returning value to unit holders.

As we approach the end of 2025, we are very grateful to our employees board of directors and advisers for helping us achieve another successful year at Kimball.

We remain excited about our role as a leading consolidator in the oil and natural gas royalty sector and the prospects for Kimball to generate long term unitholder value for years to come and now I will turn the call over to Davis.

R. Davis Ravnaas: Thanks, Bob. Good morning, everyone. I'll now start by reviewing our financial results for Q3. Oil, natural gas, and NGL revenues totaled $76.8 million during Q3, and run rate production was 25,530 BOE per day. On the expense side, Q3 general and administrative expenses were $10.1 million, $5.9 million of which was cash G&A expense or $2.51 per BOE. Total Q3 consolidated adjusted EBITDA was $62.3 million. You will find a reconciliation of both consolidated adjusted EBITDA and cash available for distribution at the end of our news release. This morning, we announced a cash distribution of $0.35 per common unit for Q3.

Thanks, Bob and good morning, everyone I'll now start by reviewing our financial results from the third quarter.

Oil natural gas and NGL revenues totaled $76 $8 million during the third quarter and run rate production was 25530 Boe per day.

On the expense side.

Third quarter General and administrative expenses were $10 1 million.

$5 9 million of which was cash G&A expense or $2.51 for BLA.

Total third quarter consolidated adjusted EBITDA was $62 3 million.

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

This morning, we announced a cash distribution of <unk> 35 per common unit for the third quarter.

R. Davis Ravnaas: We estimate that approximately 100% 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 unit holders. 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. Moving now to our balance sheet and liquidity. At 30 September 2025, we had approximately $448 and a half million dollars in debt outstanding under our secured revolving credit facility, which represented a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.6x.

We estimate that approximately 100% of this distribution.

<unk> to be considered a return of capital.

Subject to dividend taxes.

Further enhancing the after tax return to our common unit holders.

This represents a cash distribution payment to <unk>.

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 Kimball secured revolving credit facility.

Moving now to our balance sheet and liquidity.

September 32025, we had approximately $448 $5 million in debt outstanding under our secured revolving credit facility.

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

R. Davis Ravnaas: We also had approximately $176.5 million in undrawn capacity under the secured revolving credit facility as of 30 September 2025. 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. Today, we are also reaffirming our financial and operational guidance ranges for 2025. As a reminder, our full 2025 guidance outlook was included in the Q4 2024 earnings release. Even in the face of a general slowdown among US oil and natural gas operators, we remain confident about the prospects for continued development as we wrap up 2025, given the number of rigs actively drilling on our acreage, especially in the Permian, as well as our line-of-sight wells exceeding our maintenance well count.

We also had approximately $176 5 million and undrawn capacity under the secured revolving credit facility as of September 32025.

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.

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

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

Even in the face of a general slowdown among U S oil and natural gas operators, we remain confident about the prospects for continued development as we wrap up 2025.

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

R. Davis Ravnaas: We continue to believe that the overall demand for US energy will continue to grow over the long term, and we are very well positioned to benefit from this trend for years to come, given our diversified portfolio of high-quality royalty assets across the leading US basins. With that, operator, we are now ready for questions.

We continue to believe that the overall demand for U S energy will continue to grow over the long term.

And we are very well positioned to benefit from this trend for years to come given our diversified portfolio of high quality royalty assets across the leading U S basins.

With that operator, we are now ready for questions.

Operator: Thank you. 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 your line is in the question queue. You may press star two if you would like to remove your question from the queue. 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 questions. Our first question comes from the line of Timothy Rezvan with KeyBanc Capital Markets. Please proceed with your question.

Thank you 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 cough.

Confirmation tone will indicate your line is in the question queue you.

You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

One moment, please while the pool for questions.

Our first question.

Comes from the line of Tim regimen with Keybanc capital markets. Please proceed with your question.

Hey, good morning folks and thank you for taking my question.

Timothy Rezvan: Good morning, folks, thank you for taking my question. First wanted to ask, you know, a little bit on the macro, given your visibility across a number of basins. We did see the line of sight wells come down a bit. It looks like 7.07 is the lowest since the middle of 2023. Yet you've been able to hold production flat throughout the year. Can you talk about kind of what you're seeing across your footprint? There was a large Permian operator this morning talking about seeing a slowdown. You know, what gives you confidence that you can kind of stay flat or grow a little bit despite the line of sight reduction and what others are saying in the industry? Thank you.

First wanted to ask a little bit.

On the macro given your visibility across a number of basins. We did see that the line of sight wells it come down a bit it looks like 7.7 is the lowest since the middle of 2023.

Yes, <unk> been able to hold production flat throughout the year. So can you talk about kind of what youre seeing across your your foot.

There was a large Permian operator, this morning talking about seeing a slowdown.

What gives you confidence that you can kind of stay flat or grow a little bit.

<unk> a line of sight reduction and what others are saying in the industry. Thank you sure sure. Yes, Thanks, Tim well I think first what I'd say is we're very proud.

R. Davis Ravnaas: Sure. Sure. Thanks, Tim. Well, I think first what I'd say is we're very proud of this quarter. I think we delivered exactly what we've consistently told investors, which is to expect steady production from our portfolio. We'll see certain areas and certain basins that are up quarter over quarter, certain areas and basins that are down quarter over quarter. We're very encouraged by our rig activity. It's been relatively flat over the course of the year. Our market share is relatively flat over the course of the year of the entire US rig fleet. I would say that the DUC inventory goes up and down quarter over quarter. We had a nice draw down this quarter, we'll probably expect to see the benefits of those DUCs coming online next quarter.

This quarter I think we delivered exactly what we have consistently told investors wishes to expect steady production from our portfolio. So we will see certain areas in certain basins that are up quarter over quarter or certain areas in basins that are down quarter over quarter.

We're very encouraged by our rig activity, it's been relatively flat over the course of the year our market share is relatively flat over the course of the year of the entire U S rig fleet.

I would say that the DUC inventory, you guys up and down quarter over quarter, we had a nice drawdown this quarter and we'll probably expect to see the benefits of those duck does that is coming online next quarter. So I wouldn't draw any major.

R. Davis Ravnaas: Looking at the data, I wouldn't draw any major conclusions on a Permian slowdown. If anything, we're seeing most of our operators indicating that they wanna keep production relatively flat. I think that's encouraging. You know, we're paying a 10% dividend right now, waiting for oil and gas prices and the environment, the macro environment to ultimately improve. All of that is return of capital this quarter. We think we're delivering a, you know, very consistent, steady yield that has massive tax advantages. Again, we continue to see good reg-reg activity across the acreage. The DUC and permanent inventory should go up and down over time. I'm not seeing any major trends here that things are slowing down in a material way.

Looking at the data I wouldn't draw any major conclusions on a.

On our Permian slowdown if anything we're seeing most of our operators, indicating that they want to keep production relatively flat. So I think that's encouraging we're paying a 10% dividend right now waiting for oil and gas prices and the environment the macro environment to ultimately improve all of that is return of capital this quarter.

So we think we're delivering very consistent steady yield that as massive tax advantages and again, we continue to see good rig activity across the acreage and the DUC.

Permit inventory should go up and down over time, but not seeing any major trends here that.

The things are slowing down in a material way.

Timothy Rezvan: Okay. Okay, that's helpful. Then if I could dig in a little more, you know, people think of you know, you've expanded in the Permian quite a bit, but you have a lot of MidCon and Haynesville exposure. You've seen acceleration there. Can you talk in those areas, what you're seeing specifically?

Okay. Okay. That's helpful and then if I could dig in a little more.

People think of you you've expanded in the Permian quite a bit but you have a lot of mid con and Haynesville exposure you.

<unk> seen acceleration there can you talk in those areas.

What youre seeing specifically.

R. Davis Ravnaas: Yeah. Thanks for bringing that up. I think that really highlights the benefits of a diversified portfolio. Almost surprised, candidly, by how active the MidCon has been quarter-over-quarter. Obviously, benefit from, you know, a higher gas cut in those basins in this environment. In this macro environment, we've got oil prices relatively low and gas prices, you know, now above $4, which is great to see. We would probably expect a greater contribution to our production growth, you know, all things being the same from the MidCon, the Haynesville, and other areas across our portfolio. Really that's all by design. I mean, the idea is to have a balanced portfolio that allows us to deliver steady, consistent results despite whatever's happening on a relative basis between oil and gas prices.

Yeah. Thanks for thanks for bringing that up so I think that really highlights the benefits of a diversified portfolio.

Almost surprised candidly by how active the mid con has been quarter over quarter, obviously benefited from a higher gas cut in those basins in this environment. So in this in this sort of in this macro environment.

We've got oil prices relatively well and gas prices above $4, which is great to see we would probably expect a greater contribution to our production growth.

All things being the same from the mid con the haynesville, what other areas across our portfolio.

And really that's all by design I mean, the idea is to have a balanced portfolio that allows us to deliver steady and consistent results. Despite whatever is happening on a relative basis between oil and gas prices.

Timothy Rezvan: Okay. That's great context. If I could sneak one last one in, really more of a modeling question. The marketing and other deductions expense item, it was abnormally low last quarter. It seems to have was abnormally high this quarter. Can you talk about what's happened there? Is that just sort of a timing issue with something? Should we continue to expect that at that roughly $1.80 per BOE level going forward?

Okay. Okay, that's great great context, it if I can sneak one last one in really more of a modeling question.

The marketing and other deductions expense item.

Abnormally low last quarter seems to have was abnormally high this quarter can you talk about what's happening there is that just sort of a timing issue with something and we continue to expect that at that roughly $1 80 per Boe level going forward.

R. Davis Ravnaas: Yeah. Great, great question. Nothing gets past you, Tim. I love that. I would say for modeling purposes, somewhere in between those levels makes sense. We saw, you know, tremendous production growth in the MidCon, which has higher marketing costs. I think that kind of biased that line item a little bit higher this quarter. We would expect in a more normalized environment, something closer to our historical average, if that makes sense.

Yes, great. Great question nothing gets passed to you to have all of that I would say for modeling purposes somewhere in between those levels. It makes sense, we saw tremendous production growth in the mid con, which has higher marketing costs and so I think that kind of bias that that line item a little bit higher this quarter, we would expect in a more normal.

<unk> environment, something closer to our historical average if that makes sense.

Timothy Rezvan: Okay. Yeah, that does. All right. Appreciate the comments. Thanks.

Okay Alright.

Alright, I appreciate the comments thanks.

R. Davis Ravnaas: Of course.

Course.

Operator: Thank you. Our next question comes from the line of Paul Diamond with Citi. Please proceed with your question.

Thank you.

Our next question comes from the line of Paul Diamond with Citi. Please proceed with your question.

Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. Just, wanna touch quickly. You guys have that 6.5 net DUC and permits or net DUC and net permits kind of run rate to hold production steady. With efficiency you've seen across the space, part of the larger macro, is that being pressured down at all, or is it pretty stable at that 650?

Yes. Thank you good morning, all thanks for taking the call.

Just quickly you guys have that $6 five dunkin' permits.

And that permits kind of.

Run rate.

Dr. <unk> study.

You've seen across the space.

The larger macro pressure.

Pressure down at all or is it pretty stable.

R. Davis Ravnaas: Great question. I'll ask my team this. I believe we update that once a year based on what we're seeing on our portfolio. Over time, with the maturing portfolio, to state the obvious, I know you know this, but just for the benefit of the wider audience, as higher decline wells come down in terms of production mix, so does their decline rate. The number of wells necessary to keep production should, all things being considered, continue to go down over time. We'll update that guidance at the appropriate time, probably with full year guidance for next year. Matthew S. Daly, I don't know if you wanna add anything in terms of how we've updated that historically, but very happy to see Go ahead. Go ahead, Robert Ravnaas.

Great question Greg.

Great question and I'll ask my team that I believe we update that once a year based on what we're seeing on our portfolio. So over time with the maturing portfolio just state the obvious I know you know this but just for the benefit of the wider audience.

As higher decline wells come on and come down in terms of production mix. So does their decline rate. So the number of wells necessary to keep production should all things being considered continue to go down over time.

We'll update that guidance at the appropriate time, probably with full year guidance for next year, Matt I don't know if you want to add anything in terms of how we've updated that historically.

Right.

Very happy to see it go ahead.

Matthew S. Daly: No, I agree with that. I mean, it modestly, you know, went up at the Boren acquisition from 5.8 wells to 6.5. Yeah, you're right, Davis, we do that once a year, and it'll likely slightly go down a little bit in terms of maintenance.

I agree with that I mean, it modestly went up at the board acquisition from $5 eight wells to $6 five, but yes, youre right. We do that once a year it'll likely slightly go down a little bit.

R. Davis Ravnaas: Yeah. I think Paul, I'm actually glad you brought that up because now we're dealing with a maintenance level of 6.5 that's now, you know, 9, 10 months overdue for updating, if that makes sense. It's a massive undertaking for us to do that exercise.

Yes.

So Paul I'm actually glad you brought that up because now we are dealing with that maintenance level of six 5% now.

910 months.

Overdue for updating if that makes sense, it's a massive undertaking for us to do that exercise. So one would expect for that maintenance level to go down which gives us increased confidence on the maintenance level of delta relative to the Dunkin' permit inventory that we have.

Paul Diamond: Sure.

R. Davis Ravnaas: One would expect for that maintenance level to go down, which gives us increased confidence on the maintenance level delta relative to the DUC and permit inventory that we have, you know, to maintain or grow production rates. Again, feel really good about how we're positioned with near-term catalysts for growth relative to maintenance production in this, particularly in this kind of environment.

To maintain or grow production rates. So again feel really good about our position with near term catalysts for growth relative to maintenance production in this particularly in this kind of environment. So.

Paul Diamond: Got it. Makes perfect sense. Just circling back on more of the wider M&A landscape. Has the removal of Sitio from that, from that landscape kinda shifted the opportunity set, or is it kinda too early to tell?

Got it makes perfect sense, and just circling back on more of a wider M&A landscape.

With you from that from that landscape kind of shifted the opportunity set or is it kind of too early to tell.

R. Davis Ravnaas: Yeah. I'd say that, you know, there's always been only a small number of publicly traded mineral companies. I'd say the larger competitive dynamic is between the privates, the privates overall. We selectively, you know, we'll look at, gosh, I think last year, you know, so far this year, we've looked at and placed bids on over 200 assets, and I think we've only gotten one that we're happy with, which was Boren, thank goodness, back in January, which has been an outstanding asset for us. The drop of one competitor in our landscape or two, I mean, it's obviously helpful on an apples-to-apples basis for us to have fewer competitors in the market.

Yeah, I'd say that.

There has always been to only a small number of publicly traded mineral companies I'd say that the larger competitive dynamic is between the privates.

Private silver all we selectively we will look at gosh I think last year. So far this year, we've looked at we've looked at in place today, it's over 200 assets and I think we've only gotten one that we're happy with which was boring. Thank goodness back in January which has been an outstanding asset for us.

The drop of one competitor landscape or two I mean, it's obviously helpful.

Apples to apples basis for us to answer your competitors in the market, but each of us kind of does a different thing than the public markets are slightly different strategy and so we actually rarely compete head to head with the public mineral companies. It's more of that there is an abundance of private guys out there that for one reason or another decided to get more aggressive.

R. Davis Ravnaas: Each of us kind of does a different thing in the public markets, a slightly different strategy. We actually rarely compete head-to-head with the public mineral companies. It's more that, you know, there's an abundance of private guys out there that for one reason or another decide to get more aggressive on price deck or development timing compared to us on making acquisitions. We tend to be, you know, very careful and very selective, and the bar is, you know, extremely high for M&A. I think, you know, on average, we've done somewhere between one and three deals per year. We try to stay very disciplined on that.

Price stack, our development timing compare to us about making acquisitions, we tend to be very careful and very selective and the bar is extreme.

Extremely high for M&A I think on average we've done somewhere between one and three deals per year. So we try to stay very disciplined on that.

Paul Diamond: Got it. Makes perfect sense. Appreciate the clarity on it there.

Got it makes perfect sense I appreciate the clarity there.

R. Davis Ravnaas: Thanks, Paul.

Thanks, Paul.

Operator: Thank you. Our next question comes from the line of Noah Hungness with Bank of America. Please proceed with your question.

Thank you.

Our next question comes from the line of Noah <unk> with Bank of America. Please proceed with your question.

Noah Hungness: Morning.

Good morning.

R. Davis Ravnaas: Morning, Noah.

Noah Hungness: for my first question here, I was just wondering, so I wanted to go back to production, and the production outlook. I know it's too early for 2026 full year guide or an outlook there, but maybe on our e-estimates, you know, it takes 6 to 9 months for a reduction or addition in rig activity to affect the production stream, right? Really, I think that for us, that puts 2026 at risk. How do you think the H1 of 2026 production would kinda compare to your 2025 guidance, if you can look out that far?

Hey, Good morning first question here.

For my first question here I was just wondering I wanted to go back to production.

And the production outlook I know, it's too early for 2026 full year guide or outlook, there, but maybe on our estimates you know it takes six to nine months for a reduction or addition in rig activity to affect the production stream right.

So it really I think that for us that puts 2026 at risk.

How do you think the first half.

26 production kind of compare to your 25 guidance. If you can look out that far.

R. Davis Ravnaas: Yeah. I'd say flat to increasing. You know, we see no indication of production on our properties falling. We've actually gotten a lot of good indications recently on Q4 production so far, so that feels good. It's still early. We'll see if that plays out to fruition. Feel very good about activity on the acreage. Noah, I think one thing that perhaps you're missing, we constantly are getting checks in the mail from things that we haven't even been able to quantify because we didn't even know that we own them.

Yeah, I would say flat to increasing we see no no indication of production on our properties falling we've actually gotten a lot of good indications recently on Q4 production. So far so that feels good we'll see if that it's still early we'll see if that plays out.

Fruition, but feel very good about activity on the acreage and no I think one thing that perhaps are missing when we constantly are getting checks in the mail from things that we haven't even been able to quantify because we didn't even know that we own them and we have interest in.

R. Davis Ravnaas: We have interests in, you know, hundreds of thousands of acres with hundreds of thousands of wells, millions of acres with hundreds of thousands of wells. We're constantly getting positive surprises from operators that are drilling different benches, expanding plays, doing different things, and all of that accrues to our benefit, and it's impossible for us to quantify. All of our metrics that we have out there are by definition unduly conservative. That's why, I mean, I think in this environment, the ability to grow production sequentially organically, we did no acquisitions, 1% quarter over quarter is, you know, quite extraordinary.

Hundreds of thousands of acres with hundreds of thousands of wells millions of acres with hundreds of thousands of wells that we're constantly getting positive surprises from operators that are drilling different benches, expanding play assuming different things and all of that accrues to our benefit and it's impossible for us to quantify so all of our metrics that we have out there.

By definition unduly conservative so that's why I mean, I think in this environment the ability to grow production sequentially organically, we did no acquisitions and 1% quarter over quarter is quite extraordinary and I think exactly what we wanted to deliver to our investors and our messaging which is expected.

R. Davis Ravnaas: I think exactly what we want to deliver to our investors and our messaging, which is expect us to be the steady company that delivers a very solid tax advantage yield to you despite what happens to oil and gas prices.

Just to be the steady company that delivers a very solid tax advantaged yield give it to you and despite what happens to oil and gas prices.

Okay, Yeah, I appreciate that color.

Noah Hungness: Yeah. I appreciate that color. For my next question, you guys have continued to build cash on the balance sheet, and I guess I was just wondering, why build the cash on the balance sheet versus just paying down the revolver?

My next question you guys have continued to build cash on the balance sheet and I guess I was just wondering why you build the cash on the balance sheet versus just paying down the revolver.

R. Davis Ravnaas: Yeah. Pay down the revolver immediately after we pay out the distribution. It's just a timing thing.

Yeah pay down the revolver immediately after we pay out the distributions just a timing thing.

Noah Hungness: Okay. Okay, that makes sense.

Okay, Okay that makes sense.

Operator: Thank you. Our next question comes from the line of Derrick Whitfield with Texas Pacific Land Corporation. Please proceed with your question.

Thank you.

Our next question comes from the line of Derrick Whitfield with Texas specific Land Corporation. Please proceed with your question.

Derrick Whitfield: Good morning, and thanks for your time.

Good morning, and thanks for your time.

R. Davis Ravnaas: Yeah, I didn't realize you were with Texas Pacific Land Corporation.

Yes, I didn't realize you were with Texas specific land Corporation.

[laughter] did it come across this Texas Pacific that should've been Texas capital Miss up on the operator I believe.

Derrick Whitfield: Did it come across as Texas Capital? That should have been Texas Capital. That was a mix-up on the operator, I believe.

Hi, everybody.

R. Davis Ravnaas: That's funny. Yeah.

Derrick Whitfield: One of your peers recently announced a multi-year outlook on growth.

One of your peers recently announced a multi year outlook on growth.

R. Davis Ravnaas: Yeah

Derrick Whitfield: not holding you guys accountable to that, to a number, could you speak to the underlying growth potential of your asset base out of the Haynesville and MidCon if we were to see this near 30 BCF per day inflection of gas demand play out over the next 5 to 6 years?

Yeah. It holding you guys accountable to the to a number could you speak to the underlying growth potential of your asset base out of the Haynesville and mid Con. If you were to see this near 30 Bcf per day inflection of gas demand play out over the next five to six years.

R. Davis Ravnaas: Oh, man, I love that you asked this question. Love to see that analysis. We obviously saw that. A lot of respect for our peers at that business. Great business they've got. Proud of them. We're very conservative. We don't wanna wide out, you know, multi-year projections on oil and gas production on our properties. At higher natural gas prices, $4, $5, what some of these people are expecting for natural gas growth is extraordinary and heroic. Obviously, if that materializes, you're gonna see a huge increase in production on our asset base across all of the gas basins that we participate in. I think it's sometimes lost on folks that half of our production is natural gas.

Oh Man I Love that you asked this question so.

Love to see that analysis, we obviously saw that a lot of respect for our peers at that business, great great business, they've got proud of them.

We're very conservative we don't want to wind out multiyear projections on oil and gas production on our properties at higher natural gas prices for a $5 with some of these people are expecting for natural gas growth is.

It is extraordinary and heroic obviously, if that materializes youre going to see a huge increase in production on our asset base across all of the gas basins that we participate in I think it is sometimes lost on folks that half of our production is natural gas. So we would expect tremendous growth.

R. Davis Ravnaas: We would expect tremendous growth in natural gas prices on our natural gas production on our assets if this bullish case, given all the nice macro factors and tailwinds and electricity demand and natural gas' role in that materialize. Wouldn't wanna put something out there for a 5-year outlook or beyond that suggests dramatic growth. To state the obvious, you know, if anybody looks at our position in the Haynesville, I think they'll be blown away by the number of counties that we have interest in and the amount of upside and inventory life that we have there. We would expect tremendous growth in natural gas on our assets. In an environment like that, I just think that we're very. You know, we do not control operations on our acreage.

Natural gas prices on our natural gas production on our assets. If this bullish case, given all the nice macro factors and tailwind.

And electricity demand and natural gas is rolling that materialize.

Want to put something out there for a five year outlook or or or beyond that that suggests dramatic growth, but to state the obvious.

If anybody looks at our.

<unk> position in the Haynesville.

There'll be blown away by the number of counties that we have interest in and the amount of upside and inventory life that we have there. So we would expect tremendous growth in natural gas on our assets.

In an environment like that I, just think that we're very we we do not control operations on our acreage. We obviously cannot control natural gas prices. So we like to put out guidance one year at a time and we feel that that said yes.

R. Davis Ravnaas: We obviously cannot control natural gas prices. We like to put out guidance 1 year at a time, and we feel that that's, you know, it's probably a conservative prudent path to take.

Probably a conservative prudent path to take.

Derrick Whitfield: Makes sense. I mean, it would seem that it would be outsized relative to the US increase in aggregate, just because you're getting it from the key basins in which you would see the growth. Is that a fair characterization?

Makes sense I mean, it would seem that it would be outsized relative to the U S increase in aggregate aggregate, just because youre getting it from the key basins in which you would see the growth is that a fair characterization.

R. Davis Ravnaas: Absolutely. Absolutely. Yep. We fully support that. Totally agree with you.

Absolutely absolutely, yes, we fully support that.

Totally agree with you.

Derrick Whitfield: All right. Terrific. Then for my follow-up, I wanted to go a different direction on M&A. What are your general thoughts on pursuing organic mineral acquisition opportunities similar to the Western Haynesville and a lot of the derivative plays that are coming out of that?

Alright terrific and then for my follow up I wanted to go a different direction on M&A. What are your general thoughts on pursuing organic mineral acquisition opportunities similar to the western Haynesville and a lot of the derivative plays that are coming out of that.

R. Davis Ravnaas: We, the bar is high for M&A. We have historically not pursued small ground game acquisitions. It's, it's very labor-intensive and doesn't dramatically move the needle for us in terms of, you know, adding or contributing to the overall business' production base. We're more focused on cultivating relationships with folks that are putting together portfolios and finding the right time where they're willing to sell and we're willing and able to buy, and linking those up in a material way that is, you know, that is material for our business. We're obviously aware of and talk to teams all the time that are putting together production all across the Western Haynesville.

Yeah, we the bar is high for M&A, we have historically not pursued small ground game acquisitions, it's very labor intensive it doesn't dramatically move the needle for us in terms of adding are contributing to the overall businesses production base.

We're more focused on that.

Cultivating relationships with folks that are putting together portfolios and finding the right time, where they are willing to sell and we are willing and able to buy and linking those up in a material way that that is.

It is material for our business. So we were obviously aware of and talk to teams. All the time that are putting together production all across the western Hain Western Haynesville, well wait probably until some of those portfolios mature to a place where they can be accretive on those.

R. Davis Ravnaas: We'll wait probably until some of those portfolios have matured to a place where they can be accretive on both, DCF per share and also on NAV. We'll wait until that nice nexus where the play has been developed to a point where we think it's de-risked enough, and then I think you'll see us start to transact.

DCF per share growth and also on AAV civil wait until that nice and access where the the play has been developed to a point, where we think it's derisked enough and then I think youll see us start to transact.

Derrick Whitfield: Terrific. great color, and I'll turn it back to the operator.

Perfect, Great color and I'll turn it back to the operator.

R. Davis Ravnaas: Thank you very much.

Thank you very much.

Operator: Thank you. This now concludes our question and answer session. I would like to turn the floor back over to management for closing comments.

Thank you.

And this now concludes our question and answer session I would like to turn the floor back over to management for closing comments.

Robert Ravnaas: We thank you all for joining us this morning and look forward to speaking with you again next quarter. This completes today's call.

We thank you all for joining us this morning, and look forward to speaking with you again next quarter. This completes today's call.