Kimbell Royalty Units Up 55% In 2026
The war in Iran, broader tensions in the Middle East, and strong crude and gas prices has resulted in energy becoming the top performing sector in 2026 and over the last year. While there is urgency in Washington, D.C. to see an end to the prolonged war…that was supposed to be short lived, a cease fire is still on the horizon. As a result, energy stocks continue to be the most popular sector on Wall Street.
Unfortunately, volatility in the Middle East has created widespread optimism in the energy sector. This has helped many underperforming crude oil and stock trend higher. Eventually though, there will be peace in the Middle East, and those tailwinds will cool.
For energy bulls, you need to look for crude oil and gas plays that were doing well before the conflict. One great oil and gas company that has been doing well for years is Kimbell Royalty Partners LP (NYSE:KRP).
Kimbell Royalty Partners and its subsidiaries are engaged in acquiring and owning mineral and royalty interest in oil and natural gas properties in the U.S. (Source: “Fall 2026 Investor Presentation,” Kimbell Royalty Partners,” August 7, 2026.)
It has interests in over 135,000 gross wells across 17 million gross acres in the U.S, including the highest growth shale basins and stable conventional fields.
Roughly 98% of all onshore rigs in the Lower 48 are in counties where Kimbell holds mineral interest positions. It’s been experiencing solid growth too. Since its 2017 initial public offering, Kimbell has completed $2.2 billion in mergers and acquisitions, adding approximately 12.7 million gross acres, and grown its run-rate average daily production by over 8x.
This has allowed it to generate ongoing strong free cash flow, which, in turns has allowed it to return 79% of $18.00/unit IPO price through quarterly cash distributions.
KRP receives an upfront cash bonus payment and customarily, a 20-25% royalty on production revenues. In return, KRP delivers the right to explore and develop with the operator bearing 100% of costs for a specified lease term. KRP makes money, its customers do all the heavy lifting.
Kimbell has 91 active rigs (98% horizontal) drilling on its acreage at no cost to it; 64% of rigs are operated by public companies and 36% by private operators
Some of its top operators include Exxon Mobile Corp (NYSE:XOM), Occidental Petroleum Corp (NYSE:OXY), ConocoPhillips (NYSE:COP), and Devon Energy Corp (NYSE:DVN).
And, thanks to its high quality, diversified asset base, with current technology, the partnership has more than 11+ years of drilling inventory across its major properties.
Record Q2 Results
Kimbell continues to report strong financial results. After a record 2024 it reported an “outstanding” 2025. That momentum has carried into 2026, with strong first quarter and record second quarter results. (Source: “Kimbell Royalty Partners Announces Record Second Quarter 2026 Results,” Kimbell Royalty Partners, LP, August 7, 2026.)
In the second quarter it reported record daily production of 25,830 barrels of oil equivalent (Boe) per day. This helped its oil, natural gas and NGL revenues jump 38% to a record $103.0 million. Total revenue advanced 30% to $112.5million.
Second quarter net income grew 77% to a record $47.3 million. Net income attributable to common units jumped $38.4 million, or $0.40 per share, from$2.0 million, or $0.02 per share in the same prior year period.
It reported record second quarter consolidated adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $64.8 million.
Declares Q4 Dividend Of $0.47/Share
Kimbell’s quarterly payouts are variable, they fluctuate based on supply/demand and pricing, and earnings. That said, it has not missed a quarterly distribution since it went public in 2017. (Source: “Distribution History,” Kimbell Royalty Partners, LP., last accessed October 26, 2026.)
In the second quarter of 2026, it announced a cash distribution of $0.47 per share, or $1.60 per share on an annual basis, for a forward distribution yield of 9.43%. That also happens to be the trailing annual distribution yield.
KRP Stock Hits Record High
Kimbell’s 5-year average dividend yield is 10.74%. Keep in mind, share price and yield have an inverse relationship. That’s why its easy to find an ultra-high yield dividend yield tied to a stock that isn’t doing well.
This is not the case with Kimbell Royalty. It’s current ultra-high yield dividend yield of 9.43% is slightly lower than its average five year yield of 10.74%, because its doing so well.
On October 23, KRP units hit a record intra-day high of $17.00 per share and record close of $16.96. They continue to trade near that level at $16.79. This puts KRP units up:
- 15% over the last month
- 21% over the last six months
- 55% year to date
Wall Street expects KRP units to hit fresh highs over the coming quarters, with analyst’s providing a 12-month share price range of $19.20 to $23.00. This points to potential upside of approximately 14.3% to 37%.
Chart courtesy of StockCharts.com
The Lowdown on Kimbell Royalty Partners LP
Whether we’re facing geopolitical tensions or not, Kimbell Royalty Partners LP continues to be a great E&P company with a diversified, high margin, shallow decline portfolio of assets that require zero capital requirements.
In the second quarter, it reported records for oil, natural gas and NGL revenues, net income, consolidated adjusted EBITDA, lease bonuses, average daily production and cash available for distribution. It also cancelled 500,000 units under its unit repurchase program.
Thanks to ongoing acquisitions, the outlook for Kimbell remains robust, with management boosting its 2026 production guidance. This bodes well for both Kimbell’s unit and variable, ultra-high yield distribution.
For information and education only; not investment, tax or legal advice. Yields and prices are as of the publication date.
