Greetings. Welcome to the Kimbell Royalty Partners second quarter 2026 earnings 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. I'd now like to turn the call over to your host, Zach Vaughan, with investor relations. Thank you. You may begin. Thank you, operator. Good morning, everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for the second quarter, which ended June 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, August 7th, 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 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 by 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 GAAP measures can be found at the end of today's earnings release. Kimbell assumes no obligation to publicly update or revise any 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, Zach. Good morning, everyone. 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 an outstanding quarter for Kimbell, which includes records for oil, natural gas, and NGL revenues, net income, consolidated adjusted EBITDA, lease bonuses, average daily production, and cash available for distribution. We also closed on our previously announced Mesa Royalties acquisition in June, which has begun to contribute nicely to our overall results. Last month, we announced the second drop-down acquisition since our IPO. Both of these transactions are expected to add meaningful production and drive cash flow growth for years to come. Production during the quarter grew both organically and through acquisitions, resulting in oil, natural gas, and NGL revenues exceeding $100 million for the first time, while cash G&A per BOE remained below the midpoint of guidance, generating positive operating leverage and distribution growth. Even with the uncertainty occurring across the broader geopolitical landscape in recent months, activity on our acreage remains robust, with 91 rigs actively drilling at quarter end, representing a market share of U.S. land rigs at 16%. This record second quarter performance allowed us to declare a Q2 2026 distribution of $0.47 per common unit, up 15% from Q1 2026 as we continue to focus on returning value to unit holders. This distribution reflects an annualized tax advantage yield of approximately 13% based on yesterday's closing price. Looking ahead, we are excited to layer in production from our drop-down acquisition, which is slated to close later this month, are confident in the potential of the combined company on a go-forward basis. We expect both transactions to expand our scale and enhance our cash flow generation for years to come. We also continue to expect higher oil prices to support a modest uptick in activity across our oil-weighted basins. While oil prices have been especially volatile in recent weeks due to the stops and starts of the Middle East conflict, they remain elevated relative to historical levels, we believe the current forward strip is conducive to incremental activity over time. We remain bullish about the U.S. oil and natural gas royalty industry and our role as a leading consolidator in the sector. As evidenced by our announcement of over $360 million in acquisitions over the last 90 days, we continue to believe that the transition from private to public ownership of U.S. oil and natural gas royalties remains in the beginning stages, we are encouraged by the opportunities in front of us. We intend to build on this recent activity 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 Kimbell forward and for their role in helping to generate long-term unit holder value. Now I'll turn the call over to Davis. Thanks, Bob, good morning, everyone. As Bob mentioned, this was another very strong quarter for Kimbell. We generated several new quarterly records for oil, natural gas, and NGL revenues, net income, consolidated adjusted EBITDA, lease bonuses, average daily production, and cash available for distribution. I'll now start by reviewing our financial results for the second quarter. Oil, natural gas, and NGL revenues totaled $103 million during the second quarter, which includes nine days of contribution from the acquired production and is a new record for Kimbell. Second quarter average daily production was 25,830 BOE per day. Following the closing of the Mesa Royalties acquisition, run rate production increased to 26,967 BOE per day. On the expense side, second quarter general and administrative expenses were $10.2 million, $5.9 million of which was cash G&A expense, or $2.50 per BOE, below the midpoint of our guidance range and a reflection of our continued operational discipline. Total second quarter consolidated adjusted EBITDA was a record $84.9 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 $0.47 per common unit for the second quarter, an increase of 15% from the prior quarter. We estimate that approximately 47% of this distribution is expected to be considered 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 and equates to 75% of cash available for distribution. The remaining 25% will be used to pay down a portion of the outstanding borrowings under Kimbell's secured revolving credit facility. I'd also like to point out that during the second quarter, we repurchased and canceled 500,000 units of the company's common stock for an aggregate purchase price of approximately $7.4 million at an average price of $14.70 per unit. This reflects our confidence in the underlying strength of the business and our view that the shares continue to trade below intrinsic value, making the repurchase an efficient use of capital while maintaining balance sheet discipline. Moving now to our balance sheet and liquidity. Prior to quarter end, on June 24th, 2026, we increased the borrowing base and aggregate commitments on Kimbell's secure revolving credit facility from $625 million to $660 million. This expansion both enhances our financial flexibility and supports our ongoing growth initiatives. At June 30th, 2026, we had approximately $478.7 million in debt outstanding under our secure revolving credit facility, which represented a net debt to trailing 12 months consolidated adjusted EBITDA of approximately 1.4 x. We also had approximately $181.3 million in undrawn capacity under the secure revolving credit facility at quarter end. We continue to maintain a conservative balance sheet and remain very comfortable with our strong financial position, financial flexibility, and the ongoing support of our bank partners. Today, we are also affirming our financial and operational guidance ranges for 2026. As a reminder, our full 2026 guidance outlook was included in the Q4 2025 earnings release. We can expect to update guidance upon the closing of the drop-down acquisition that was announced on July 17th, 2026. We remain confident about the prospects for continued development in 2026, given the number of rigs actively drilling on our acreage, especially in the Permian, higher commodity prices, as well as our line of sight wells exceeding our maintenance well counts. In closing, we are excited about our position as a leading consolidator in the highly fragmented U.S. oil and natural gas royalty sector, which we estimate at approximately $800 billion in size. Long-term demand for U.S. energy is expected to continue to grow. We are well positioned to benefit through our diversified portfolio of high-quality royalty assets across the leading U.S. basins. With that operator, we are now ready for questions. Thank you. If you'd 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'd 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 key. We ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Please proceed with your question. Hey, good morning, folks. Thanks for taking our questions. Morning, Tim. Yeah, good morning. I thought we might get a guidance update today. It sounds like we'll have to wait for the drop-down to close in a couple of weeks. As we look and see production about to hit 30,000 a day on equivalence? Can you talk about the acquisitions you're bringing in? Do they have similar production profiles to the legacy assets? Where I'm going, I know you won't give us a number, but should we sort of expect from this pro forma business, a steady growth CAGR like we've seen on the legacy assets? Yes. The short answer to that, Tim, is yes. We're always looking to add to our portfolio assets which we think are very complementary and in line with what we already own. We obviously want to add those in such a way that it's immediately accretive to our cash flow and accretive to DCF over time. Yeah, I would just assume that acquisitions that we make just continue to expand the size of the company with very similar growth and inventory characteristics. Okay. Thank you. As a follow-up, we did see the 5% increase in the credit facility. I assume that includes Mesa, which closed, but not the drop-down. I was wondering if you could just talk bigger picture about managing liquidity. You are over 70% drawn on today's facility. Maybe how, I know I ask this every quarter, but how you're thinking about the trade-offs of keeping the preferreds on the balance sheet. Thanks. Yeah, great question. Just to confirm, [Andrew], the latest borrowing base increased due to Mesa already. We have that incorporated in this number. Just so I'm clear. That's correct, Davis. Tim, we would expect another increase in the borrowing base, as a result of the drop down, so that'll add additional liquidity. Going forward, we want to be opportunistic on redeeming the preferred units. There's obviously a trade-off, like you mentioned, between keeping our leverage profile low for covenant purposes and redeeming the pref. I think you'll see us just continue to whittle down on the face value of that pref over time, while also maintaining conservative leverage. For a royalty company, we think one and a half times is low. We may opportunistically go up very slightly to redeem additional preferred units if we think that's in our best interest. Think about that all the time. On liquidity, great point. That's probably one of the things that we think about the most here. We want to always make sure that we have plenty of liquidity on the balance sheet, and you won't see us make acquisitions that will increase our leverage profile. If anything, we're de-levering by using less leverage, at least on an EBITDA basis going forward. I think that's a positive that would help our leverage profile and help us redeem those pref securities faster, if all that makes sense. Yeah, no, that's good context. If I could just sneak one last one in. Earlier this year, you were pretty candid about seeing an active A&D market, and obviously you've hit a couple bids here and brought in some additional royalty production. Can you just talk about, your peers have said the market's still hot. What are you seeing and how actively are you looking today? Are you ready and willing to transact again if the right deal presents itself? Yeah, no, look, great question, and I'm always happy that you ask that quarterly. We are always more competitive, usually, on assets that are diversified in nature. On the Permian-only deals, that's where we can see competition get out of control. We bid on a couple of large marketed packages recently in the Permian and got absolutely destroyed. I mean, bids that were nearly two times what we were paying, kind of head scratchers. They weren't huge deals, but multi-$100 million packages, not insignificant. We will do our best on those, understanding our cost of capital constraints. If someone else is going to pay 75% more of us for an asset, they can have it. That's what we're seeing on the bid front is the Permian continues to be very hot. I think what happened was, I'm sure you've heard this from other companies that you follow, when oil prices started going up this year, a lot of people went to market. We continue to see, almost on a weekly basis, a new acquisition opportunity for us. I'd say we've had a great year on A&D. Frankly, surpassing expectations this year in terms of what we've been able to achieve with our cost of capital. We are still in the market looking for acquisitions. We're only eight months into the year. There's going to be more to come, we're going to be very selective and obviously we're not going to overpay. Okay. Appreciate all the color. Thank you. Of course. Thank you. Our next question comes from the line of Nicholas Armato with Texas Capital. Please proceed with your question. Morning, all, and thanks for taking my questions. Morning. Good morning. For my first one, lease bonuses were particularly stronger in the quarter. Maybe just what drove the increase? Given the improved commodity backdrop, what are you seeing in terms of leasing interest and competition across your acreage? Are there any basins where activity is maybe picking up a little bit more meaningfully? Yeah, great question. Thank you for pointing that out. I think when we look at our portfolio, we like to say to people that we believe that everything is leased that we own, and that's obviously just not true because we have this recurring revenue stream which is meaningful every quarter in terms of royalty and lease bonus. What we have seen, as you rightly identified, with the increase in oil prices and renewed interest in deeper zones, I mean, there's a lot of talk about the Barnett these days. We have seen an uptick in lease bonus activity. I can say that we probably project that that will continue into subsequent quarters. Who knows how long that will last? Lease bonus activity has increased. We've noticed it. It's nice to see. I would just add that our Permian position, almost all of it, when we underwrote these assets, and we do this on every deal we look at, we look at existing zones and existing spacing. We give little, if any, credit to future zones that may be developed in the future. We have this incredible swath of acreage, in particular across the Permian, for which we feel like we really don't get enough credit for deeper zones that may be drilled in the future. Those two concepts, I think go hand in hand with the increased lease bonus and I think an increased realization that our assets, in nearly all cases, we own all zones, all depths. We believe that will be an additional windfall for us in the future, particularly if oil prices continue to improve and you start to see a continued drawdown on Tier 1 inventory. Great color. We appreciate it. Just for the follow-up, the DUC and permit backlog remains above the level needed to maintain that flat production profile. With the dropdown expected to close later this month, how do you expect the backlog to trend, and how should we think about the level of inventory needed to maintain flat production once at closing? I would expect it to be the same. I think you'll see probably the same relative difference between maintenance levels and actual levels. I think that'll continue to maintain the same as we make acquisitions into the future. I'd just add to that, because of the diversified nature of our footprint, and this is related to the lease bonus question you asked previously, that maintenance or that actual DUC and permit inventory is lower than what we actually own. We just have no way of quantifying that because we have millions of interests across the U.S., we're just constantly getting, which is a good problem to have, constantly getting new checks in the mail and new division orders that reflect interests in many cases, which are quite meaningful, and we didn't even know that we owned. There's a buffer there that we continue to see on an ongoing basis. Out of just the conservative nature of which we disclose numbers, we only identify things that are discrete, that we know about, that we can reflect in our materials to you. Perfect. I appreciate it. Great quarter, I'll turn it back to the operator. Thank you very much. Thank you. Our next question comes from the line of Paul Diamond with Citi. Please proceed with your question. Thank you. Good morning. Thanks for taking the call. Morning, Paul. Morning. The last several months, we've seen some activity modulation across different basins, particularly curtailments in the Permian, et cetera. It doesn't seem to have really hit you guys operationally. I guess, how do you see that progressing in, I guess, other basins and back to the Permian over coming quarters? Any bump in the Permian or potential curtailment elsewhere? How's your view on the macro allocations there? Yeah, great question. You broke up a little bit on it, but I think I heard you. I always love looking at that because one of the fun things sitting in my seat is looking at the different basins that we have exposure to and trends that we're seeing within each basin. In many cases, they surprise me on a quarterly basis. Even on a quarterly basis, and then over longer periods of time, it's even more interesting to see. Was pleasantly surprised by the uptick in activity in the Permian. We had very meaningful additions to our Permian rig count. Permian rig count quarter-over-quarter was up 23%, which frankly surprised me, if I'm looking at the right numbers here. Our MidCon number went down slightly. It went down by an almost equal amount. We went from 17 to 13 rigs, down about 24%. What that tells me, just speculatively, Paul, is that with natural gas prices disappointing this year, gas was down almost as much quarter-over-quarter as oil was up. I think that the MidCon, on a relative basis, probably was less competitive for CapEx dollars for operators. As I go down the list, Haynesville flat, Appalachia flat, Bakken flat, Eagle Ford flat. The rest of the basins appear to be kind of steady production and steady CapEx allocations. A couple of surprising, not necessarily surprising things, just on production levels, that was a rig count. On production levels, the Permian was obviously up meaningfully for us this quarter-over-quarter. MidCon down kind of mid-single digits. Haynesville was down about 11%, and I actually don't mind that. We're always hopeful that operators in the Haynesville will look at spot natural gas prices and even increasingly the curves and perhaps put rigs down or just allocate less capital and wait for better days before they develop our assets. Appalachia was up slightly, kind of surprisingly to me, our Bakken production was up kind of high single digits. Everybody kind of thinks about the Bakken being played out. I mean, it's still going. We keep getting activity and notices there that show that there's still life there. I hope that answers your question. No, it does. I appreciate the insight. Just a quick follow-up. You've talked a bit about it, I mean, I expected in other questions here, are there any particular kind of basins or scales jumping out at you, whether it's emerging plays like a Western Haynesville or more Utica or the larger package deals versus the smaller ground game? Just how you see the market unfolding in 2H given current conditions. Yeah. Great question. We're always basin and commodity agnostic. We feel like our job on behalf of our unitholders is to deploy capital and acquisitions where we can get the highest rate of return for the lowest risk, regardless of which basin or which commodity we're looking at. The Permian obviously has the most deal flow. It's also the most competitive. We've been able to transact in the Permian in the last few years, but I'd say if we put out 25 bids, we maybe get one. It's just that competitive and hard to get. We're more competitive on multi-basin portfolios. If there are groups out there with portfolios in multiple basins, a lot of our competition is precluded from participating in those processes because their mandate is to only play in the Permian. In those cases, we have a much higher success rate. It's still low, but it's much higher than it is on the Permian-specific deals. Sometimes our competition will try to buy just the Permian-only piece. Obviously, if you're the seller, you have to think about carving up your package into multiple packages with multiple buyers. You've got multiple diligence processes going on contemporaneously, which is a hassle. I would think that ideal asset for us would have a significant Permian component, but it doesn't even have to be the majority of it, spread out the basins that we continue to like longer term. We do believe in the bull thesis on natural gas, we like the MidCon. We like the Haynesville. We're a little bit, jury's still out on the Western Haynesville. I think we'd be unlikely to do a significant transaction there. If there's a core Haynesville position that has inventory, obviously we're very interested in that. We love Appalachia. Appalachia can have some title issues and sort of some considerations in the diligence process, which just adds some additional risk that we have to take into account. The Eagle Ford's great too, again, it's about finding an asset, kind of like the Haynesville, where there's existing production, where it's immediately accreted to us, but where it still has enough inventory remaining to where it's accreted to our long-term NAV. That's the way that we're thinking about the basins. Again, we're more successful on diversified packages versus just a pure play Permian deal. Got it. Makes perfect sense. Appreciate the time. I'll leave it there. Thank you. Thank you. This concludes our question and answer session. I'll turn the floor back to management for any final comments. Yeah. We thank you all for joining us this morning, and we look forward to speaking with you again next quarter. This completes today's call. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.