Kimbell Royalty Partners, LP Announces $215.4 Million Drop Down Acquisition

Rhea-AI Summary

Kimbell Royalty Partners (NYSE: KRP) agreed to acquire certain oil and gas royalty interests from affiliated sellers for approximately $215.4 million in a drop down transaction expected to close on or around August 21, 2026, subject to customary conditions.

The consideration includes $74.9 million in cash (about 35%) and 9.5 million newly issued OpCo common units valued at $140.5 million, with standard closing and post-closing adjustments. The assets comprise about 2,568 Net Royalty Acres (20,547 NRA normalized to 1/8th) across the Eagle Ford, Permian, Mid-Con and Appalachia, with expected Q3 2026 average daily production of 2,347 boe/d. According to Kimbell, the multi-basin portfolio covers over 3 million gross acres, more than 29,000 gross producing wells, near-term growth backed by 9 active rigs and 177 DUCs and permits, and a shallow 13% production decline, and is expected to be immediately accretive to distributable cash flow per unit.

Positive

• $215.4 million drop down acquisition of royalty interests
• $74.9 million cash and 9.5 million OpCo units as consideration
• Adds approximately 2,568 Net Royalty Acres in key U.S. basins
• Expected Q3 2026 production of 2,347 boe/d from acquired assets
• Portfolio spans over 3 million gross acres and 29,000 producing wells
• Disclosed 13% shallow production decline profile on the assets

Negative

• Issuance of 9.5 million new OpCo units introduces equity dilution economics
• Transaction from affiliated sellers may raise related-party perception risk
• Closing remains subject to customary conditions; completion is not assured

News Market Reaction – KRP

+1.22%

+1.22% Session close to close

In the Jul 17 session, KRP gained 1.22%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

Set against an acquisition track record that has typically been followed by mild unit pressure and a...

Analysis

Set against an acquisition track record that has typically been followed by mild unit pressure and an active S-3 shelf registering 6,929,000 resale units with no proceeds to Kimbell, this Drop Down adds scale but also more equity overhang risk. With short interest described as low, future deal financing choices and any incremental resale activity remain key watchpoints.

Key Figures

Total purchase price: $215.4 million Cash consideration: $74.9 million OpCo units issued: 9.5 million units +5 more

8 metrics

Total purchase price $215.4 million Drop Down acquisition consideration

Cash consideration $74.9 million Approximately 35% of total purchase price

OpCo units issued 9.5 million units Newly issued OpCo common units valued at $140.5 million

Equity consideration value $140.5 million Value of newly issued OpCo common units

Net Royalty Acres 2,568 acres 20,547 NRA normalized to 1/8th in key basins

Q3 2026 production 2,347 Boe/d Expected average daily production from Drop Down assets

Active rigs 9 rigs Actively drilling on acreage as of March 31, 2026

Lockup period 90 days Sellers’ lockup after closing of the Drop Down

Previous Acquisition Reports

4 past events · Latest: Jun 22 (Positive)

Same Type Pattern 4 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 22	Permian acquisition close	Positive	+1.7%	Closed cash-and-unit Permian mineral and royalty acquisition from Mesa Royalties.
May 19	Permian acquisition deal	Positive	-1.4%	Agreed to $147 million Permian mineral and royalty acquisition funded mostly with units.
Jan 17	Midland Basin acquisition close	Positive	-0.1%	Closed $230 million Midland Basin mineral and royalty acquisition funded with equity and debt.
Jan 07	Midland Basin acquisition	Positive	-5.3%	Announced $231 million Midland Basin acquisition expected to boost production and cash flow.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Acquisition announcements for Kimbell have more often coincided with slight unit price weakness than strength, though there has been at least one recent positive reaction.

Key Terms

distributable cash flow per unit, net royalty acres, boe/d, lockup

4 terms

distributable cash flow per unit financial

"Expected to close on or around August 21, 2026 and be immediately accretive to distributable cash flow per unit"

Distributable cash flow per unit measures the amount of cash a company or fund expects to have available to pay distributions to each outstanding unit during a reporting period. It is calculated by taking the cash left after operating costs, maintenance capital spending, interest, taxes and other required items, then dividing that pool by the number of units—like slicing a pie to show how big each unit’s share of available cash would be.

net royalty acres financial

"Approximately 2,568 Net Royalty Acres (20,547 NRA normalized to 1/8th)"

Net royalty acres measure the effective land area where an investor holds a royalty right to receive a portion of production revenue from oil, gas or mineral extraction, after accounting for the size of the ownership share. Think of it like owning a percentage of rent from specific apartments without managing the building — it shows the scale of potential passive income and helps investors compare revenue exposure and risk without bearing operating costs.

boe/d technical

"Expected Q3 2026 average daily production of 2,347 boe/d"

A measure of energy production that converts oil and gas output into a single daily figure — barrels of oil equivalent per day — so different fuels can be compared on the same scale. Think of it like converting miles and kilometers into one unit before comparing distances: investors use boe/d to judge how much total hydrocarbon output a company generates, estimate revenue potential, and compare production efficiency across firms or projects.

lockup regulatory

"The sellers in the Drop Down will be subject to a 90-day lockup after closing"

A lockup is a contractual restriction that prevents company insiders, early investors, and employees from selling their shares for a fixed period after a public offering or other share issuance. It matters to investors because when that period ends, a sudden increase in available shares can push the stock price down or change trading liquidity; think of it like many homeowners being allowed to list their homes for sale all at once after a temporary sales ban is lifted.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FORT WORTH, Texas, July 17, 2026 /PRNewswire/ -- Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell" or the "Company"), a leading owner of oil and gas mineral and royalty interests in over 17 million gross acres in 28 states, today announced the purchase of certain oil and gas royalty interests from certain affiliated sellers for approximately $215.4 million (the "Drop Down"). 

HIGHLIGHTS

• Expected to close on or around August 21, 2026 and be immediately accretive to distributable cash flow per unit¹
• Total purchase price consideration is comprised of $74.9 million in cash (approximately 35%) and 9.5 million newly issued common units of Kimbell Royalty Operating, LLC ("OpCo") valued at $140.5 million, subject to customary closing and post-closing adjustments
• Approximately 2,568 Net Royalty Acres (20,547 NRA normalized to 1/8^th), strategically focused in premier areas of the Eagle Ford, Permian, Mid-Con and Appalachia
• Expected Q3 2026 average daily production of 2,347 boe/d (841 Bbl/d of oil, 569 Bbl/d of NGLs, and 5,624 Mcf/d of natural gas) (6:1)
• Targeted multi-basin portfolio spans over 3 million gross acres with over 29,000 gross producing wells in high-growth areas across the Lower 48, further expanding Kimbell's scaled and diversified mineral and royalty position
• Expected near-term production growth supported by strong historical development cadence, 9 rigs actively drilling on acreage as of March 31, 2026, and 177 DUCs and permits
• Shallow production decline of 13% enhances Kimbell's best-in-class five-year PDP decline rate

"We are pleased to announce the second drop down acquisition since our IPO in February 2017, and we expect the transaction to drive significant production and distributable cash flow growth, both in the near term and for years to come," said Bob Ravnaas, Chairman and Chief Executive Officer of Kimbell's general partner.

"Located in the premier oil and gas resource plays in the Eagle Ford, Permian, Mid-Con and Appalachia, the Drop Down strengthens our existing multi-basin mineral footprint and provides an attractive blend of current production, expected baseline growth from near-term activity and more than a decade of future development inventory.  I want to thank our team and our advisors for their diligent work as we continue to scale our proven business model."

The Drop Down was approved by the Conflicts and Compensation Committee of the Board of Directors of Kimbell Royalty Partners' general partner (the "Conflicts Committee") and the Board of Directors of Kimbell Royalty Partners' general partner on July 16, 2026.  Evercore acted as financial advisor and Potter Anderson & Corroon LLP acted as legal advisor to the Conflicts Committee in connection with the Drop Down. White & Case LLP and Kelly Hart & Hallman LLP acted as legal advisor to Kimbell in connection with the Drop Down. TenOaks Energy Partners, LLC and Stephens Inc. acted as financial advisors and Mayer Brown LLP acted as legal advisor to the sellers in the Drop Down. The sellers in the Drop Down will be subject to a 90-day lockup after closing, which is expected to occur on or around August 21, 2026.  The closing of the Drop Down remains subject to the satisfaction of customary closing conditions, and there can be no assurance that it will be completed as planned or at all. 

About Kimbell Royalty Partners

Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty company based in Fort Worth, Texas.  Kimbell owns mineral and royalty interests in over 17 million gross acres in 28 states and in every major onshore basin in the continental United States, including ownership in more than 135,000 gross wells.  To learn more, visit http://www.kimbellrp.com.

Forward-Looking Statements

This news release includes forward-looking statements. These forward-looking statements, which include statements regarding the anticipated benefits of the Drop Down, the expected timing of the closing of the Drop Down, operational data with respect to the Drop Down, involve risks and uncertainties, including risks that the anticipated benefits of the Drop Down are not realized; risks relating to Kimbell's integration of the Drop Down assets; risks relating to the possibility that the Drop Down does not close when expected or at all because any conditions to the closing are not satisfied on a timely basis or at all; and risks relating to Kimbell's business and prospects for growth and acquisitions. Except as required by law, Kimbell undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this news release. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Kimbell's filings with the Securities and Exchange Commission ("SEC").  These include risks inherent in oil and natural gas drilling and production activities, including risks with respect to low or declining prices for oil and natural gas that could result in downward revisions to the value of proved reserves or otherwise cause operators to delay or suspend planned drilling and completion operations or reduce production levels, which would adversely impact cash flow; risks relating to the impairment of oil and natural gas properties; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and natural gas prices; risks relating to Kimbell's ability to meet financial covenants under its credit agreement or its ability to obtain amendments or waivers to effect such compliance; risks relating to Kimbell's hedging activities; risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks relating to delays in receipt of drilling permits; risks relating to unexpected adverse developments in the status of properties; risks relating to borrowing base redeterminations by Kimbell's lenders, risks relating to the absence or delay in receipt of government approvals or third-party consents; risks relating to acquisitions, dispositions and drop downs of assets; risks relating to Kimbell's ability to realize the anticipated benefits from and to integrate acquired assets, including the assets acquired in the Drop Down; and other risks described in Kimbell's Annual Report on Form 10-K and other filings with the SEC, available at the SEC's website at www.sec.gov.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release.

Contact:

Rick Black
Dennard Lascar Investor Relations
krp@dennardlascar.com 
(713) 529-6600 

¹ With an effective date of June 1, 2026, the cash flows from the Drop Down and related accretion will be recognized fully in Q3 2026.

View original content:https://www.prnewswire.com/news-releases/kimbell-royalty-partners-lp-announces-215-4-million-drop-down-acquisition-302828245.html

SOURCE Kimbell Royalty Partners, LP

FAQ

What is included in Kimbell Royalty Partners' $215.4 million drop down acquisition announced July 17, 2026 (KRP)?

The drop down includes oil and gas royalty interests valued at $215.4 million. According to Kimbell, the package comprises about 2,568 Net Royalty Acres across Eagle Ford, Permian, Mid-Con and Appalachia, with a multi-basin footprint over 3 million gross acres and 29,000 producing wells.

How is the $215.4 million KRP drop down acquisition being financed by Kimbell Royalty Partners?

Kimbell is funding the deal with $74.9 million in cash and 9.5 million newly issued OpCo common units valued at $140.5 million. According to Kimbell, this mix represents roughly 35% cash and 65% equity, subject to customary closing and post-closing adjustments.

When is Kimbell Royalty Partners' (KRP) drop down acquisition expected to close and what conditions apply?

The drop down is expected to close on or around August 21, 2026. According to Kimbell, closing is subject to satisfaction of customary conditions, and there is no assurance the transaction will be completed as planned or at all.

What production levels does Kimbell Royalty Partners expect from the acquired assets in Q3 2026 (KRP)?

Kimbell expects Q3 2026 average daily production of 2,347 boe/d from the acquired assets. According to Kimbell, this includes 841 Bbl/d of oil, 569 Bbl/d of NGLs and 5,624 Mcf/d of natural gas, based on a 6:1 ratio.

How might the drop down acquisition affect Kimbell Royalty Partners' distributable cash flow per unit (KRP)?

Kimbell expects the transaction to be immediately accretive to distributable cash flow per unit. According to Kimbell, the shallow 13% production decline and multi-basin development activity support near-term production growth and long-lived cash flow from the acquired royalty interests.

Are there any lockup restrictions for the sellers in Kimbell Royalty Partners' 2026 drop down (KRP)?

Yes. The affiliated sellers will be subject to a 90-day lockup after closing. According to Kimbell, this lockup applies to the consideration units received in the drop down and follows approval by the Conflicts and Compensation Committee and the general partner's board.