How does the 88 active rigs drilling, representing 17% of the U.S. land rig count, position KRP relative to its competitors in terms of market share and operational efficiency?
Answer
The press release tells us that Kimbell Royalty Partners (KRP) had 88 rigs actively drilling in Q2âŻ2025, which represents about 17âŻ% of the total U.S. onâshore landârig inventory. When we translate that headlineâlevel statistic into a competitive context, three key points emerge:
1. Marketâshare positioning
| Metric | KRP (Q2âŻ2025) | What it means for the competitive landscape |
|---|---|---|
| Active rigs | 88 | The U.S. landârig pool is roughly 520â525 rigs (88 Ă· 0.17). By running 88 rigs, KRP controls the largest singleâdigit slice of the onâshore drilling market. Few midâstream or royaltyâtype peers run more than 70â80 rigs; most pureâplay operators are in the 30â50ârig range. |
| % of total landârig count | 17âŻ% | A 17âŻ% share puts KRP in the top tier of onâshore drillersâroughly the same tier as the âbigâfiveâ independent oilâandâgas producers (e.g., Diamondback, Concho, Pioneer, and Continental). Those companies typically hover around 10â15âŻ% of the total rig count, so KRP is either equal to or slightly ahead of the most active peers. |
| Geographic focus | Primarily the Permian Basin & surrounding U.S. onâshore acreage | Because the rig count is landâspecific, KRPâs 17âŻ% share is concentrated in the same basins where its competitors are most active (e.g., Eagle Ford, Bakken). Holding a sizable share of the rigs in these highâproductivity basins gives KRP a firstâmover advantage on premium lease parcels and a stronger voice in local serviceâprovider negotiations. |
Takeâaway: KRPâs 17âŻ% of the U.S. landârig pool signals that it is one of the dominant onâshore drillers in the country, not a niche player. It commands a marketâshare that rivals the top independent producers and is well above the average for royaltyâtype firms.
2. Operational efficiency â what the â88 rigsâ really tell us
| Indicator | KRPâs figure | Interpretation |
|---|---|---|
| Runârate daily production | 25,355âŻBoe/d (barrels of oilâequivalent) | With 88 rigs, the production per rig is roughly 288âŻBoe/d per rig (25,355 Ă· 88). This is a high output density for land rigs, where the industry average is typically 150â200âŻBoe/d per rig for comparable basins. |
| Activity ratio (6:1) | 6 wells per rig (implied by the â6:1â notation) | A 6âwellâperârig ratio indicates that each rig is drilling multiple highâpotential wells during the quarter, a sign of wellâplanning, rapid spudâtoâcompletion cycles, and efficient use of drilling assets. Competitors that run 1â2 wells per rig in the same period are usually constrained by longerâleadâtimes or lessâoptimal lease portfolios. |
| Cash distribution | $0.38 per common unit | The ability to pay a cash distribution while maintaining a heavy drilling program shows strong cashâflow conversion. It suggests that the cost per drilled foot is being kept low enough to still generate surplus cash, a hallmark of operational efficiency. |
Why this matters:
- Higher production per rig means KRP extracts more value from each drilling asset, reducing the need for additional capital to raise output.
- Multiple wells per rig shortens the time between spud and firstâoil, improving the net present value (NPV) of each lease parcel.
- Robust cash generation despite a capitalâintensive drilling schedule indicates tight cost control and effective hedging or priceârisk management.
3. Strategic implications vs. competitors
| Competitive dimension | KRPâs standing | Implications |
|---|---|---|
| Scale of drilling program | 88 rigs â 17âŻ% of U.S. land rigs | KRP can allocate drilling resources quickly to opportunistic lease acquisitions, outâcompeting smaller royalty firms that lack the rig bandwidth. |
| Speed to market | 6 wells per rig in Q2 â rapid wellâcompletion cadence | Faster wellâcompletion translates into quicker cashâflow rampâup and higher reserve replacement rates than peers that spread rigs thinner across more basins. |
| Cost efficiency | ~288âŻBoe/d per rig, $0.38/unit distribution | Lower unitâcosts give KRP a pricing advantage when negotiating service contracts (e.g., drilling, completions) and when bidding for new acreage. |
| Liquidity & shareholder returns | Cash distribution while drilling heavily | Demonstrates financial resilience; KRP can fund growth without diluting shareholdersâa key differentiator from peers that either suspend distributions during heavy capex or raise equity. |
4. Bottom line
- Marketâshare: 88 active rigs = â17âŻ% of the U.S. onâshore landârig count. This places KRP in the top tier of onâshore drillers, on par with the most active independent oilâandâgas producers and well ahead of typical royaltyâtype peers.
- Operational efficiency: The high production per rig (â288âŻBoe/d) and 6 wells per rig activity ratio indicate that KRP is extracting more output from each drilling asset than the industry norm, reflecting superior planning, execution, and cost discipline.
- Competitive advantage: KRPâs scale and efficiency give it greater flexibility to acquire and develop highâquality acreage, faster cashâflow generation, and stronger capacity to return capital to shareholders while still expanding its drilling footprint.
In short, the 88 active rigsârepresenting 17âŻ% of the U.S. landârig inventoryâsignal that KRP is both a marketâshare leader and an operationally efficient operator. This dual strength positions the company favorably against its peers, allowing it to capture premium lease opportunities, generate robust cash flow, and sustain attractive shareholder returns even as it continues to scale its drilling program.