Greetings and welcome to the Kimbell 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. Please note this conference is being recorded. I will now turn the conference over to your host, Zach Vaughn. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for the third quarter ended September 30th, 2026. 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, November 5th, 2026. So 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 statements made in today's discussion that are not historical facts, including statements of expectations or future results 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. 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 disclosure on forward-looking statements. These factors and 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. Kimball assumes no obligation to publicly update or revise any forward-looking statements. I would now like to turn the call over to Bob Ravnaas, Kimball Royalty Partners Chairman and Chief Executive Officer. Bob?

Thank you, Zach, and good morning, everyone. We appreciate you joining us 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 Blayne Rhynsburger, our controller. To start off, we are pleased to report another outstanding quarter for Kimball, which included record daily production, an increase in our rig count by two rigs to 93 rigs, actively drilling across our acreage, and record line-of-sight wells. It has also been a busy year with M&A, and we have now closed 367 million in acquisitions since June, 2026. Each of these deals is expected to add meaningful production, be accretive to cash available for distribution per unit and drive cashflow growth for years to come. Production during the quarter grew by 7% quarter over quarter, resulting in oil, natural gas and NGL revenues of approximately 97 million. While cash GNA per BOE remained well within our third quarter guidance range, highlighting the operating leverage of our platform as we continue to grow. Activity on our acreage remains robust with our rig count representing approximately 16% of all U.S. land rigs at quarter end. In addition, our record number of line of site wells gives us confidence in the resilience of our production as we close out the year and enter 2027. This strong third quarter performance allowed us to declare a Q3 2026 distribution of 45 cents per common unit as we continue to focus on returning value to unit holders. This distribution reflects an annualized tax advantage yield of approximately 11%. Looking ahead, with these recently acquired assets now in our portfolio, we are excited about the earnings power of our extended asset base. With a recent surge in oil prices, not only for the rest of the year, but also for calendar year 2027, as reflected in the future curve, We expect activity across the lower 48 to remain strong. We expect to particularly see strong activity across our oil-weighted basins, such as the Permian, which is our largest basin by revenue, production, rig count, ducts, and permits. We also stand to significantly benefit from higher oil prices so far in the fourth quarter. And we expect a material increase in cash flow in the fourth quarter, given that approximately 84% of our estimated fourth quarter oil production is unhedged. We believe the current future curve and geopolitical landscape are conducive to incremental activity over time and we look forward to both the prospects ahead of us and the long-term growth potential of our portfolio. We are bullish about the U.S. oil and natural gas royalty industry and our role as a leading consolidator in the sector. We continue to believe that the transition from private to public ownership of U.S. oil and natural gas royalties is in the early stages and we are encouraged by the opportunities in front of us. We intend to continue pursuing accretive acquisitions as we strive to expand our industry-leading portfolio of assets. I'd like to thank all of our employees for their hard work and dedication in driving Kimball forward and for their role in helping to generate long-term unit holder value. And now I'll turn the call over to Davis.

Thanks, Bob, and good morning, everyone. As Bob mentioned, this is another strong quarter for Kimball. We set new records for daily production and line of sight wells, and activity on our acreage continued to grow. I'll start by reviewing our financial results for the quarter. Oil, natural gas, and NGO revenues totaled $96.9 million during the quarter, which included 41 days of contribution from the acquired production. Third quarter average daily production was 27,565 BOE per day, a new record for Kimball. On the expense side, third quarter general administrative expenses were 10.7 million, 6.3 million of which was cash G&A expense, or $2.48 per BOE, near the midpoint of our guidance range and a reflection of our continued operational discipline. Total third quarter consolidated adjusted EBITDA was 80.4 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 45 cents per common unit for the third quarter. 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 Kimball's secured revolving credit facility. We estimate that approximately 76% of this distribution will be considered return of capital and not subject to dividend taxes, further enhancing the after-tax return to our common unit holders. Moving now to our balance sheet and liquidity, at September 30th, 2026, We had approximately $535.8 million in debt outstanding under our secured revolving credit facility, which represented a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.5 times. We also had approximately $124.2 million in undrawn capacity under that facility at quarter end. Subsequent to quarter end, on October 15th, We increased the borrowing base and elected commitments on Kimball's secured revolving credit facility from $660 million to $750 million in connection with our fall redetermination. This increase reflects the growth of our asset base and provides additional financial flexibility and liquidity as we continue to pursue accretive acquisitions. In addition, on October 16th, Kimball gave notice to redeem 50% of the remaining Series A cumulative convertible preferred units. After closing, which is expected to occur on November 16th, the face value of the remaining outstanding preferred units will be less than 3% of Kimball's 2.8 billion enterprise value. This further simplifies our capital structure and lowers our cost of capital. We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position ample liquidity, and the ongoing support of our bank partners. Today, we are also reaffirming our financial and operational guidance ranges for the fourth quarter of 2026. As a reminder, our outlook for the fourth quarter was included in the guidance release that was issued on August 24th, 2026. We are confident about the prospects for continued development through year end and into 2027, Given the number of rigs actively drilling on our acreage, especially in the Permian, higher oil prices, and our record number of line-of-sight wells exceeding our maintenance well count. In closing, we believe Kimball is very well positioned for the long term. The U.S. oil and natural gas royalty sector is highly fragmented and estimated at over $850 billion in size. giving us a significant runway for continued consolidation. We believe that our capital light model and diversified portfolio across the leading U.S. basins allows us to generate durable cash flow and deliver attractive returns to unit holders for years to come. With that operator, we are now ready for questions.

Thank you. 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 keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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. And our first question will come from Tim Resvan with KeyBank Capital Markets.

Good morning, folks. Thank you for taking our questions.

Morning, Tim.

I want to start, you know, we noticed one of your large peers who operates in the Permian has been acquiring royalties with more of a longer-term focus as the deeper Permian zones, you know, sort of get delineated. Some of these transactions are really not accretive on day one, but have sort of longer-term value. Is that something that Kimball would sort of entertain as you think about M&A or are you going to stick with your kind of day one accretion blueprint?

I think we want to stick to our existing methodology. Obviously, the other benches that are being developed are not lost on us. We have significant exposure to Woodford, Barnett, all of those different zones across all of the acquisitions that we've made. At the time that we made those acquisitions, for the most part, we gave very little, if any, credit to those zones just because they hadn't been developed at the time. It's just part of our conservative underwriting process. We will, however, give credit to them in cases where we see that there is ongoing development or existing development of those benches. So I'd say that, you know, it's important to us that every time we make an acquisition that it's immediately accreted to cash flow, but we are going to give increasing value to benches that are being developed at this time. And I would add that that's been a huge boon to us as we look back at our acquisitions that we've made in the Permian. Again, we gave very little credit to those areas and we expect to get tremendous benefits from those as they are developed in the future. We do believe in them and we think it's a very viable play, so.

Okay, okay, I appreciate the context there. Following up, you know, you mentioned it in your prepared comments, you know, the line of site wells, you know, now trending well above your maintenance level. I know you're not going to give a 2027 guide out there, but is there a reason to think that you could have some kind of modest inflection from where you are today, given that that, you know, stronger visibility on production to come?

Yes. Yes. I mean, that was something that was very positive that we noticed across our asset base this quarter. We had We had 10 new permits come in in Loving County for wells that we did not give, that were not included in our underwriting, that were allocated to the long point acquisition we made years ago. And that kind of feeds in a little bit, Tim, to my previous comment, which is we're starting to see other benches, different spacing being applied to these areas. So we had 10 permits where we have almost a 20% NRI at each of those permits. We have those coming online in the fourth quarter of 2027. It might happen sooner, it might happen later. Our experience with permits is it's usually six to, let's call it six to 18 months, so midpoint 12 months. If you run the math on that, you can run your own math, but the cash flow associated with 10, 20% NRI wells is tremendous. And again, that's something that we didn't pay for at the time of underwriting. So a nice tailwind that we have on that front. and if we continue to see activity like that on the acreage that you were talking about in your first question, that would probably indicate some sort of more bullish guidance for 2027, 2028 going forward. It's been a really nice development to see.

All right, that's great. Thank you.

Thank you.

And again, if you'd like to ask a question, that is star one. and we will go next to Nick Armato with Texas Capital.

Good morning team and thanks for taking my questions. For my first one, lease bonuses were strong again this quarter. Can you help frame your outlook for them moving forward and discuss where you're currently seeing the most leasing activity across the portfolio? Are there any emerging areas where leasing activity suggests operator interest is increasing before it becomes visible on the drill bit?

Yeah, great question. You know, in these higher oil price environments, you tend to see greater lease bonuses. For modeling purposes, just to be conservative, I would take a trailing four-quarter average and apply that going forward. But with maybe a bias towards more activity, it comes in waves. Some quarters we have de minimis lease bonus, some quarters it exceeds their expectations dramatically. I would say that it's mostly focused on the Permian. We're seeing some increased lease bonus activity in other areas as well, but the Permian continues to be the main driver. And again, it's folks that are looking to different benches in the Permian that they now believe have greater value than perhaps they did in the past and therefore justify increased interest in leasing activity. So I think that When you're dealing with a portfolio of assets like ours that are so diverse in nature with such a broad growth footprint, I would expect that we would continue to see significant leasing activity across those areas.

Perfect. And then maybe just for my follow-up. You saw a meaningful sequential increase in the net back-end permit locations, which you've highlighted. Can you maybe just help characterize that increase and how much was attributed to some of the recent acquisitions versus an organic increase in activity across the legacy acreage?

It's a combination of both, obviously. I wouldn't have a split in front of me between the acquisition inventory that we've acquired versus organic. I would say the biggest driver of that are the 10 wells, the 10 permits that I mentioned just back on the last call. That was a meaningful boost, and that was on our legacy position, obviously, an acquisition that we made three or four years ago. So I would say it's evenly split between the two. If I had to handicap it, I'd say that most of that increase in inventory is probably attributable to, well, I'd say it's about 50-50 between acquisitions and legacy properties.

Perfect. I appreciate it. I'll turn it back to the operator. Thank you.

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.

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

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.