Kimbell Royalty Partners: Reviewing Its Outlook For 2023

Summary

  • Kimbell is projected to generate $1.68 per unit in distributable cash flow in 2023 at the current strip.
  • Around 58% of its production is natural gas and less than 20% of that is hedged, so it is affected by the weak near-term gas prices.
  • I still expect Kimbell to be able to deliver over $2 per unit in distributable cash flow per year in the longer term.
  • Estimated value has been trimmed to $18.50 per unit as 2023 production outlook was a bit lower than I expected.
  • Looking for more investing ideas like this one? Get them exclusively at Distressed Value Investing. Learn More »
Oil field site, in the evening, oil pumps are running, The oil pump and the beautiful sunset reflected in the water

zhengzaishuru

Kimbell Royalty Partners (NYSE:KRP) is now projected to generate approximately $1.68 per unit in distributable cash flow in 2023 at current strip, with 75% of that going towards distributions and 25% towards debt reduction. Kimbell's production is approximately 58% natural gas, so it has been affected

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This article was written by

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Aaron Chow, aka Elephant Analytics has 15+ years of analytical experience and is a top rated analyst on TipRanks. Aaron previously co-founded a mobile gaming company (Absolute Games) that was acquired by PENN Entertainment. He used his analytical and modeling skills to design the in-game economic models for two mobile apps with over 30 million in combined installs. He is the author of the investing group Distressed Value Investing, which focuses on both value opportunities and distressed plays, with a significant focus on the energy sector. Learn more>>

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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