Kimbell Royalty Partners to Buy $215.4 Million Drop Down Royalty Package
The related-party acquisition marks Kimbell's second drop down since its 2017 IPO and deepens its footprint across four basins including the Eagle Ford and Permian.
Kimbell Royalty Partners, LP (KRP) agreed to acquire certain oil and gas royalty interests from affiliated sellers in a mixed cash-and-unit transaction valued at approximately $215.4 million. The deal, known internally as the Drop Down, is expected to close on or around August 21, 2026.
Kimbell expects the Drop Down to drive significant production and distributable cash flow growth both in the near term and for years to come, strengthening the company's multi-basin mineral footprint across the Eagle Ford, Permian, Mid-Con and Appalachia.
"We are pleased to announce the second drop down acquisition since our IPO in February 2017, and we expect the transaction to drive significant production and distributable cash flow growth, both in the near term and for years to come," said Bob Ravnaas, Chairman and Chief Executive Officer of Kimbell's general partner.
The transaction extends a run of consolidation activity that has defined Kimbell's growth strategy over the past 18 months. In January 2025, Kimbell struck a $231 million cash-and-unit deal for mineral and royalty interests under the Mabee Ranch in the core of the Midland Basin, a transaction funded primarily with cash and structured to be immediately accretive to distributable cash flow per unit. More recently, in May 2026, Kimbell agreed to acquire Permian Basin mineral and royalty interests from Mesa Royalties for approximately $147.0 million, funded roughly 70% in newly issued OpCo units and 30% in cash, a deal it closed in June 2026 at a final value of $145.9 million. Those transactions establish a pattern of Kimbell using a blend of cash and equity to fund bolt-on and drop-down acquisitions while preserving balance sheet flexibility.
Kimbell has positioned itself as a leading consolidator in the U.S. oil and gas royalty sector, a role underscored by its Mesa Royalties acquisition, which would leave the company with over 17 million gross acres, more than 135,000 gross wells and roughly 18% of the total active land rigs drilling in the continental United States. The Drop Down builds on that scale by adding to Kimbell's positions across the Eagle Ford, Permian, Mid-Con and Appalachia basins, broadening the diversification that has underpinned the company's recent deal-making.
As with Kimbell's prior acquisitions, the structure pairs cash consideration with equity issuance, a mix the company has used to keep leverage in check while funding growth. The Mabee Ranch and Mesa Royalties deals were both immediately accretive to distributable cash flow per unit, and the company's messaging around the Drop Down points to a similar accretion thesis playing out over the near term and beyond.