Kimbell Royalty Partners, LP (KRP): Marketing Mix Analysis [Dec-2025 Updated]

You're analyzing Kimbell Royalty Partners, LP (KRP) to see if their pure-play royalty structure still delivers in late 2025's energy market. Honestly, their asset-light model is working: they generated $62.3 million in Q3 Adjusted EBITDA while keeping leverage tight at 1.6x Net Debt to TTM EBITDA. We'll map out exactly how they promote this to income investors-focusing on that attractive, tax-advantaged yield-and how their Place strategy anchors them across 28 states, with significant acreage hosting 86 active rigs as of Q3. Dive in below for the precise breakdown of their Product, Place, Promotion, and Price strategy.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Product

The product Kimbell Royalty Partners, LP offers is direct, passive exposure to the production of oil and natural gas through the ownership of mineral and royalty interests. This structure defines the core value proposition, as it is fundamentally an asset-based financial instrument rather than an operating business.

The scale of this asset base is substantial, encompassing passive mineral and royalty interests across more than 17 million gross acres in the United States. This acreage is highly developed, with the portfolio including interests in over 131,000 gross wells as of late 2025. This extensive footprint across multiple basins provides diversification inherent to the product offering.

The defining feature of the Kimbell Royalty Partners, LP product is its asset-light model. This means the company collects royalty payments without incurring the high capital expenditures or operational risk associated with direct exploration and production. The business model relies on unaffiliated operators for all development and production activities, meaning Kimbell Royalty Partners, LP has zero capital expenditures or operational risk related to drilling and completion activities on its acreage. This structural difference is key to its financial profile.

The performance of this product is measured by the underlying commodity volumes and realized prices. For the third quarter of 2025, the run-rate production stood at 25,530 BOE per day. This production base is actively supported, with 86 rigs actively drilling on Kimbell Royalty Partners, LP acreage in Q3 2025, representing approximately 16% market share of all land rigs drilling in the continental United States at that time.

The composition of the revenue stream is dynamic, reflecting commodity market trends and the underlying geology of the acquired assets. The revenue mix has shown a notable shift toward natural gas; for the second quarter of 2025, the bulk of Kimbell Royalty Partners, LP revenue came from natural gas operators at about 67%, with the remaining 33% derived from oil production payments. By the third quarter of 2025, the production mix was approximately 48% from natural gas and 52% from liquids (with 32% oil and 20% NGLs).

Here are key statistical and financial metrics that define the product's performance as of Q3 2025:

The structure of the product also dictates the nature of its financial returns. The Q3 2025 cash distribution of $0.35 per common unit reflected a payout ratio of 75% of cash available for distribution, with the remaining 25% being used to repay borrowings under the secured revolving credit facility. Debt outstanding under that facility was $448.5 million as of September 30, 2025, with $176.5 million in undrawn capacity available.

The value proposition is further detailed by the realized prices for the third quarter of 2025:

• Oil realized price: $64.21 per Bbl
• Natural gas realized price: $2.47 per Mcf
• NGLs realized price: $21.74 per Bbl
• Combined realized price per Boe: $32.14

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Place

Place, or distribution strategy for Kimbell Royalty Partners, LP (KRP), centers on the geographic location and concentration of its mineral and royalty interests, which dictates where and how its revenue-generating assets are developed by third-party operators.

Kimbell Royalty Partners, LP (KRP) maintains a diversified footprint across the United States, holding mineral and royalty interests in over 17 million gross acres spread across 28 states. This acreage provides exposure to every major onshore basin in the continental United States. Key areas of interest include the Permian, Eagle Ford, Bakken, Appalachia, Mid-Continent, Haynesville, and Rockies plays.

The Permian Basin, specifically the Midland Basin, represents a high concentration and a critical driver for Kimbell Royalty Partners, LP (KRP). For instance, in Q1 2025, this basin alone contributed 52% of Kimbell's revenue.

The activity level on Kimbell Royalty Partners, LP (KRP)'s acreage reflects its prime location within active development areas. As of September 30, 2025, the acreage hosted 86 active rigs drilling operations. This level of activity translated to an approximate 16% U.S. land rig market share across Kimbell Royalty Partners, LP (KRP)'s properties at that time.

The company's inventory of potential future production provides a significant line-of-sight buffer against natural decline rates. As of the end of Q3 2025, Kimbell Royalty Partners, LP (KRP)'s major properties held 4.30 net DUCs (Drilled, Uncompleted Wells) and 2.77 net permitted locations. The combined figure for net DUCs and net permitted locations is 7.07 net wells. Management noted this inventory materially exceeded the estimated 6.5 net wells required to maintain flat production.

Kimbell Royalty Partners, LP (KRP) does not operate the wells; instead, it relies on third-party Exploration and Production (E&P) companies to conduct development. Kimbell Royalty Partners, LP (KRP) strategically holds interests where industry giants operate, ensuring development focus. These third-party E&P giants include companies like ExxonMobil, ConocoPhillips, and Diamondback Energy on Kimbell Royalty Partners, LP (KRP)'s acreage.

Here are the key operational statistics for the Place strategy as of Q3 2025:

The geographic distribution of Kimbell Royalty Partners, LP (KRP)'s asset base can be summarized by its exposure to premier plays:

• Nearly 96% of production comes from the seven premier U.S. onshore resource plays.
• Significant exposure to the Permian Basin, including the Midland Basin and Delaware Basin.
• Meaningful exposure to gas-centric plays like the Haynesville and Mid-Continent regions.
• Active rig count in Q3 2025 was 86, down from 88 in Q2 2025.
• The company's royalty interests are positioned under operators like ConocoPhillips and ExxonMobil.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Promotion

You're looking at how Kimbell Royalty Partners, LP (KRP) communicates its value proposition to the investment community, which is heavily skewed toward income-focused capital. The promotion strategy centers on delivering a high, stable yield backed by operational performance and a favorable tax structure.

Focus on Income-Investors Seeking a Compelling Double-Digit Yield

The primary message to income investors is the high cash return. Kimbell Royalty Partners, LP actively markets its distribution as a compelling double-digit yield. For instance, the Q3 2025 cash distribution of \$0.35 per common unit implied an annualized yield of 10.7% based on the November 5, 2025, closing price of \$13.12 per common unit. Honestly, the forward yield as of December 3, 2025, was reported even higher at 11.19%. This focus is key, especially since management has been clear about prioritizing distributions while deleveraging.

Marketing the Tax-Advantaged Nature of Distributions

A significant differentiator Kimbell Royalty Partners, LP promotes is its tax structure. Unlike traditional MLPs that issue a Schedule K-1, Kimbell Royalty Partners, LP elected to be taxed as a corporation, meaning investors receive a Form 1099-DIV. This simplifies tax filing for many investors, avoiding the complexities of K-1s and potential state tax filings. For the first quarter of 2025, management estimated that approximately 70% of the distribution would constitute non-taxable reductions to the basis of the ownership interest, which is a powerful incentive for taxable accounts.

Investor Relations Emphasizes Operational Resilience and Organic Growth

Investor relations materials, particularly following the Q3 2025 results, hammer home the operational stability of the underlying asset base. Management proudly reported that production increased organically by approximately 1% between Q2 and Q3 2025, which they view as the ultimate proof the royalty model is working. This sequential growth was achieved despite a general slowdown in the broader U.S. oil and natural gas sector. The company's active rig count remained robust, with 86 rigs drilling across their acreage as of September 30, 2025, representing a substantial 16% market share of all U.S. land rigs at that time. Here's the quick math on their operational scale:

Management Stresses Highly Selective, Accretive M&A

When discussing growth drivers beyond organic development, management is careful to frame their Mergers and Acquisitions (M&A) strategy as highly disciplined. They explicitly state they are not interested in small ground game deals that could increase leverage unnecessarily. The focus is on large, equity-accretive transactions. A concrete example of this strategy in action was the closing of a \$230 million acquisition of Midland Basin mineral and royalty interests in January 2025. This selective approach is promoted as a way to simplify the balance sheet and acquire high-quality assets, rather than just chasing volume.

Uses the Asset-Light Royalty Toll Booth Model as a Core Value Proposition

The fundamental promotion point is the asset-light nature of the business, often termed the royalty toll booth model. Kimbell Royalty Partners, LP owns mineral and royalty interests across over 17 million gross acres with more than 131,000 wells. The core message is that they receive all the revenue upside when operators drill and develop these assets, but they bear zero associated operating costs or capital expenditures. This structure is promoted as inherently low-decline and capital-efficient. The promotional narrative highlights what this means for unitholders:

• Direct mineral ownership in leading U.S. basins.
• No associated operating costs or capital expenditures.
• Receives revenue upside from operator drilling activity.
• Distribution payout framework: 75% to unitholders, 25% to debt paydown.

Finance: draft 13-week cash view by Friday.

Kimbell Royalty Partners, LP (KRP) - Marketing Mix: Price

You're looking at how Kimbell Royalty Partners, LP structures the price it delivers back to you, the unitholder, which is directly tied to the cash flow generated from its royalty assets. Effective pricing here isn't about setting a sticker price, but about the policy governing the distribution of realized value, which must align with market conditions and your expectations for a return.

Here's the quick math on the key financial metrics that underpin that distribution policy as of the third quarter of 2025:

The distribution policy itself is the core of the 'price' Kimbell sets for its equity ownership. It's a fixed framework designed for predictability, balancing direct return with balance sheet strength. This policy is defintely a key component for you to watch as an income-focused investor.

• Distribution policy is a fixed 75% payout of cash available for distribution (CAFD).
• The Q3 2025 cash distribution declared was $0.35 per common unit.
• This distribution implies an annualized yield of approximately 10.7% based on the November 5, 2025 closing price of $13.12 per common unit.
• The remaining 25% of CAFD is retained for debt paydown, which was approximately $12.6 million in Q3 based on the stated figures.

This capital allocation strategy shows Kimbell Royalty Partners, LP prioritizing a high, fixed payout while using the retained cash flow to actively manage leverage. Keeping the Net debt to TTM Adjusted EBITDA at approximately 1.6x provides a conservative cushion, reflecting a commitment to financial flexibility, which is crucial when commodity prices fluctuate.