Kimbell Royalty Partners, LP (KRP) Q1 2019 Earnings Call Transcript
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Kimbell Royalty Partners, LP (NYSE: KRP)
Q1 2019 Earnings Call
May. 9, 2019, 11:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greeting and welcome to the Kimbell Royalty Partners' First Quarter Earnings Conference Call. At this time all participants are only listen-only mode. A brief question-and-answer session will follow the presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now a pleasure to introduce your host, Rick Black, Investor Relations. Thank you. Please go ahead.
Rick Black -- Investor Relations
Thank you operator, and good morning everyone. Welcome to the Kimbell Royalty Partners conference call to review financial and operational results for the first quarter of 2019. 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, May 9. So please be advised that any time sensitive information may no longer be accurate as of the date of any replay. 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 provision of the Private Securities Litigation Reform Act of 1995.
We will be making forward-looking statements as part of today's call that, by their nature, are uncertain and outside of the Company's control. Actual results may differ materially. Please refer to today's press release for our disclosure on forward-looking statements. These factors as well as other risk factors 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 press 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.
Robert Ravnaas -- Chairman and Chief Executive Officer
Thank you Rick and good morning everyone. I'm here with several other members of our senior management team including, Davis Ravnaas, our President and Chief Financial Officer, Matt Daly, our Chief Operating Officer, Blayne Rhynsburger, our Controller.
I would like to begin by providing an overview of our performance for the first quarter followed by our expectations going forward. Then I'll ask Davis to cover our financial performance in more detail. After that we'll take your questions.
We had an excellent first quarter exceeding our expectations. Most notably, we had record high average daily production of 11,958 Boe per day, an increase of 19% from Q4 2018 and up 228% from Q1 2018. This reflects average daily production during the period from March 25th through March 31st, after giving effect to the Phillips acquisition.
Organic production growth between Q4 '18 and Q1 '19 accounting for a full quarter of the Phillips acquisition was 2.4%, which implies an approximate 10% annual organic growth rate. Total production was 902,877 Boe. The Phillips assets are performing very well, above our expectations and we expect many years of additional development across this newly acquired mineral position.
As of the end of the quarter, we now have royalty interest in over 92,000 wells with 89 rigs drilling on our acreage. We don't see any slowdown in drilling activity across our properties, which isn't surprising since 50% of our 89 rigs are currently drilling in the Permian and Mid-Con which have among the lowest break even cost across the United States. In addition, we have some of the strongest and most efficient operators drilling on our acreage at no cost to us including ExxonMobil, Occidental Petroleum, Pioneer, Concho, Parsley, EOG, and many others.
Oil, natural gas and NGL revenues in the first quarter were $22.8 million, up 111% from Q1 last year which generated consolidated adjusted EBITDA of $16.1 million up 111% compared to Q1 2018, including a full quarter of the Phillips acquisition, which would have resulted in consolidated adjusted EBITDA of $20.6 million.
Our first quarter distribution of $0.37 per common unit, which will be paid on May 13, 2019 implies an approximate 9% yield. This brings our total distributions paid since our IPO just two years ago to $3.27 per common unit, which is 18% of our IPO price. And since our conversion to the C-Corp in September 2018, we expect substantially all of the Q4 2018 and Q1 2019 distributions to common unit holders will not be taxable dividend income and instead should generally constitute non-taxable reductions to the tax basis.
As a reminder to anyone who might be new to our Company, we are a variable distribution partnership, that is we distribute 100% of available cash each quarter. We have no operating cost or capital expenditures. So the key influences on our distribution come from production volume, the fluctuation in commodity prices, and the pace of acquisitions.
To that end, we continue to experience the best of both worlds from our broad, stable and diverse portfolio of assets across all of the major basins in the lower 48, featuring organic growth from our recently acquired assets, coupled with the stability of the industry's lowest PDP decline rate of 12% from Kimbell's broad and diverse mineral portfolio. We are strategically adding production through acquisitions, while also growing PDP reserves organically year-over-year.
We are very pleased with our first quarter results and we have reaffirmed our guidance for 2019. We have a proven strategic model that continues to fuel growth. In a little over two years since our IPO, we have nearly quadrupled our production and we remain very bullish about our asset class within the upstream sector and Kimbell's strategic growth model moving forward.
Now I'll turn you over to Davis.
R. Davis Ravnaas -- President and Chief Financial Officer
Thanks Bob and good morning everyone. Total first quarter 2019 revenues increased 65% from the first quarter of last year to $17.9 million. First quarter 2019 consolidated net loss, including non-controlling interest was $5.3 million in Q1 compared to a net loss of $52.8 million in Q1 2018. The consolidated net loss this quarter was primarily a result of a non-cash full-cost ceiling test impairment of $2.8 million. As a reminder, last year we had a full-cost ceiling test impairment of $54.8 million.
General and administrative expenses were $5.3 million in Q1, of which $3.6 million was cash G&A expense, which is approximately $3.95 per Boe, the low-end of our guidance range as we continue to capture efficiencies through the integration of our acquisitions into our existing portfolio of minerals.
Cash available for distribution attributable to the common units was $5.2 million. You will find a reconciliation of both adjusted EBITDA and cash available for distribution at the end of our news release.
As Bob mentioned, our first quarter cash distribution was $0.37 per common unit, a 7.5% reduction as compared to the fourth quarter of 2018, primarily due to a 9.4% reduction in realized prices between the quarters. Substantially all of this distribution will not be taxable dividend income and instead should generally constitute a non-taxable reduction to the tax basis.
The reduced tax basis will increase an investor's capital gain when the units are sold. To be clear, we expect this distribution to be 100% return of capital and free from dividend income taxes. Moreover, we expect to have minimal corporate taxes due to our significant tax shields for the foreseeable future.
These factors are something that we don't think the market appreciates. We are also working with our tax advisors and plan to put out a much more detailed forecast of our advantageous tax structure in the near term. We are nearly done with this analysis and intend to issue a detailed press release with our findings.
Average realized price per barrel for oil was $50.89. Natural gas per Mcf was $2.68 and natural gas liquids per barrel were $19.70, which all represented declines compared to Q4 2018. As of 03/31/2019, our hedges were approximately 20% of our daily oil and natural gas production for the next two years.
Looking now at the balance sheet. As of March 31st, we had cash on hand of $13.5 million and about $87 million outstanding on our $200 million revolving credit facility. As we've indicated before, our plan is to use the revolver to provide short term financing for acquisitions. Our balance sheet remains conservative at approximately 1.1 times debt to consolidated adjusted EBITDA, reflecting a full quarter of the Phillips assets.
Before turning the call over for questions, I'd like to again provide some perspective on the mineral space and what we believe are clear drivers that differentiate our Company and growth strategy. The market size for minerals is huge. It's over $500 billion in size. Some even believe it's over $800 billion. However, public companies still only represent about 2% of this market size, and additional consolidation is inevitable.
By our estimates, over $13 billion has been invested by private equity sponsors and institutional investors into the private mineral market over the last five years. These diverse mineral holdings will need an exit. This creates a tremendous opportunity for Kimbell and our public peers to make accretive acquisitions from the private markets. We believe we have a unique opportunity to continue to lead the way along with our peers and growing the public royalty sector. We believe that as our sector grows in size, it will inevitably attract more institutional capital and interest, which will lead to more liquidity and along with that will come increased attention from generalist investors.
Through our proven growth strategy with no operating or capital expenses, and with organic growth and accretive acquisitions and a variable distribution that pays out 100% of available cash each quarter, we have built a $1 billion business in just two years. Even with the recent stock market volatility, we are still one of the top performing mineral stocks year-to-date with a total return of over 20%.
We believe that we have earned the right to call ourselves a leader in the royalty sector, and have proven our ability to close complicated accretive acquisitions and to treat sellers fairly. We also provide an extremely advantageous and favorable tax structure for our investors. We will continue to be a leader in this space and execute our strategy to enhance value for our unitholders.
In addition, we are maintaining a very active schedule, attending conferences and meeting with investors to get our story heard and understood. Given our record setting operational performance and the fact that we are a diversified royalty Company, with the best-in-class PDP decline rate, we believe that we are the least risky asset class in the upstream oil and gas universe.
As we've mentioned before, where else can you find an approximate 9% tax-free yield and a Company with low-risk, stable assets and with a business model that has proven its ability to grow both organically and through acquisitions.
To conclude, while the oil and gas royalty business has been around for over 100 years, its place as an institutional asset class within the upstream sector is just getting started.
With that, operator, we are now ready for questions.
Questions and Answers:
Operator
Thank you. (Operator Instructions) Our first question comes from the line of John Freeman with Raymond James.
John Freeman -- Raymond James -- Analyst
Good morning guys.
Robert Ravnaas -- Chairman and Chief Executive Officer
Hey John.
R. Davis Ravnaas -- President and Chief Financial Officer
Hey John.
John Freeman -- Raymond James -- Analyst
Hi. In the last call you had mentioned looking to build possibly like a strategic relationship with kind of a micro accumulator of royalty assets, that was a pretty interesting idea there. Any updated thoughts on that concept?
R. Davis Ravnaas -- President and Chief Financial Officer
Yes. Thank you for asking about that. We're actually very close to signing some kind of partnership agreement, exactly in line with that with a group in Dallas, that we've known for a very long time, over a decade and has an incredible track record. So we're working on a framework, whereby we would invest with them under certain parameters that are obviously very creative and very attractive to us. That allows -- this partnership allows us to do that without having to hire 20 or 30 people to have a ground game here in-house, so it's, we believe very advantageous from a G&A perspective. We hope to announce something or nothing guaranteed, no definitive documentation has been signed, but we hope to have something to report next quarter in terms of entering into an agreement of that kind.
John Freeman -- Raymond James -- Analyst
That's great. And then my follow-up question. You only have one other peer with a dropdown potential component and I think that's still really underappreciated by the market, just because you're your sponsors and contributing parties are not public. And while I know you've done the one dropdown, I still don't think it's really well understood. I'm just, maybe you could just sort of remind everybody sort of how you view the dropdown potential?
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, absolutely thanks for asking that to John. We have several hundred million dollars of assets that are held by the private sponsors for our Company. It is our hope that those assets are dropped down over time. We have nothing imminent right now, but it is coming at some point in the future. And I think we're inundated right now with third-party M&A opportunities.
So the dropdown assets, I totally agree with you, it's a huge advantage we have that I don't think many people appreciate. The benefit we have though, is that third-party M&A activity has been so high, we've been focusing more of our time on that, because those opportunities obviously go away if we don't pay attention to them, whereas the dropdown inventory is more or less captive and staying put. And just kind of a general comment, I saw your quick note this morning John, I think you hit the nail on the head. I mean this was across the Board dramatic quarter for us, I mean we grew production volumes organically 2.5%. We had some outstanding performance on our Phillips assets. More specifically they're about 27% above on production volumes, what we underwrote at the time we did the acquisition. So it was a gangbusters quarter for us. It's frustrating to see the stock price down 4% after the best quarter we've ever announced, but we're going to continue to execute and continue to just kind of beat people over the head with our performance.
And I think also our entire peer group is undervalued in our opinion, but I believe we might be the only one of the publicly traded royalty companies that actually grew production this quarter. And several of our peers are expected to be higher growth entities than us and or at least so far outperforming. So I think in an environment like this, with this being really the first quarter where we've seen capital discipline on the part of the E&P companies in CapEx cuts, I think this is showing how on a relative basis, how resilient our strategy is through not only commodity price cycles but also through capital allocation cycles. So this is a huge quarter for us. I think it's proving that our assets are performing even above expectation and we really couldn't be happier with the performance of the business. It's very disappointing to see that the investor community doesn't seem to understand any of this.
John Freeman -- Raymond James -- Analyst
So I appreciate the comments. Keep up the great work.
Robert Ravnaas -- Chairman and Chief Executive Officer
Thanks, John.
R. Davis Ravnaas -- President and Chief Financial Officer
Thank you, John. Thank you.
Operator
Our next question is from the line of TJ Schultz with RBC.
TJ Schultz -- RBC Capital Markets -- Analyst
Hey guys, good morning.
R. Davis Ravnaas -- President and Chief Financial Officer
Good morning TJ.
Robert Ravnaas -- Chairman and Chief Executive Officer
Hey, TJ.
TJ Schultz -- RBC Capital Markets -- Analyst
So the partnership with the accumulator that you're considering, is that just in response to you getting bigger and your need to kind of evolve on and sourcing new mineral deals or is it more asset specific to what kind of they bring to the table relationships they have? Just trying to understand with more public mineral companies out there, how you're seeing the competitive dynamic change a little bit?
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, no great question. I think it's a number of factors. I think first of all the largest segment of the mineral market is the micro-cap market. So it's you know $500 billion in size. But the biggest portion of that is held by mineral owners that have assets that are several (ph) million dollars in size.
And so I think and what we've seen, is that often in that market you can get very, very, very attractive deals. We have never played in that market. In the micro-cap market, we've always been interested and moving into it, and we've been trying to find a partner over the last really two years to three years, that has an incredible track record and experience in that field and relationships on the ground that we could benefit from. And so I think it's we want to continue to execute not only on these huge M&A opportunities, which are driving significant growth and appreciation and production per unit and DCF, but we also want to be able to address kind of a smaller market by drawing a modest amount on our revolver every quarter to finance assets, and some of these deals are $20,000, $30,000, $40,000 in size, but you roll-up enough of them and they can be very meaningful. And so we think this is a new avenue for growth for our Company that we didn't previously have.
Some of our competitors already do this. Every quarter they very successfully, Viper has got an excellent ground game for example, buying assets in West Texas and there's so many of those deals that there isn't any one group that's getting all of them. The competitive pricing could be quite attractive. So it's something that we think is very interesting. We think we've found the right group to back and we hope that we can form a formal partnership going forward.
TJ Schultz -- RBC Capital Markets -- Analyst
Okay, got it. And then you mentioned in that kind of $500 billion in mineral market size, we've kind of seen that out there for a while, or you're saying maybe $800 billion. So I'm not exactly sure what the differences in the calculations. But just trying to break that down a little bit, when you think about the public mineral companies, do you kind of think of a subset of that mineral market size that's a realistic sandbox or opportunity set for you all to go acquire minerals? And then second to that, I know private equity is kind of invested, but do you have a ballpark for what maybe the mineral market size held by public E&Ps that may want to monetize those -- some of those minerals?
Robert Ravnaas -- Chairman and Chief Executive Officer
Yes, we're in discussions with various E&P companies, about doing potential deals where they carve out their minerals or even an override and monetize to us. I think of that overall market size, our estimate is $500 billion. We've seen other people as high as $800 billion, but we're just relying on our own math and our own estimates at the $500 billion levels, that's why we mentioned that.
I think that for us frankly the Permian is what 30% now of US oil production. So we're still active in the Permian, but we're really one of the only groups that is very happy and has been very successful investing not only in the Permian but also outside of the Permian. So I'd say, now let's call out the 70%, that's non-Permian of the market, perfect candidates for us, less competitive, allows us to deploy capital and generate better returns. But we're still going to participate in the Permian market, it's just more competitive and more of our peers are very active there.
So to answer your question. I'd say that half of the Permian opportunity is probably going to be taken by folks that are Permian specialists and I'd say -- as I said, the other half is open game for anybody including us. And then the other 70% is obviously right in our wheelhouse. So I think 85% of that market, I'm just talking out loud here and I'm looking at my team and they're nodding, it's probably our sandbox.
R. Davis Ravnaas -- President and Chief Financial Officer
And other thing TJ is that the the overriding royalty interest market right now, we've got a flurry of inbound calls from E&Ps that are looking for ways to alternative financing techniques rather than using their credit facility or bonds. So that's probably another $100 billion to $200 billion of market size I would think.
Robert Ravnaas -- Chairman and Chief Executive Officer
Yes, exactly. Look I mean and you know this TJ because you've been following us since we went public. I think one of the reasons we're doing so well in this environment is that obviously when you have a 12% PDP decline rate, it really doesn't take a whole lot of activity on your acreage to generate positive production growth. And that's exactly what we're seeing. We had some big wells come on with EOG and Gonzales County. We had some wells come on Dewey, some big ones in Glasscock. So kind of just across the board activity, that's really driving meaningful production growth for the Company. We really -- to reiterate what I just said, we could not be more happy with this quarter. I mean it was just an outstanding quarter for us, not only on an absolute basis but also on a relative basis.
TJ Schultz -- RBC Capital Markets -- Analyst
Great. I appreciate all the color. Thanks guys.
Robert Ravnaas -- Chairman and Chief Executive Officer
Thank you, TJ.
Operator
Our next question comes from the line of Tim Howard with Stifel.
Tim Howard -- Stifel -- Analyst
Hi, thanks for taking my question.
Robert Ravnaas -- Chairman and Chief Executive Officer
Hey Tim.
Tim Howard -- Stifel -- Analyst
Hi. Just on the tax analysis, maybe if you could provide some more details on timing, what's all going to be included and potentially a preliminary conclusion if that's available or?
Robert Ravnaas -- Chairman and Chief Executive Officer
Yes, I think I can speak of some generalities, I'd rather because it's so complicated, I'd rather wait to give specifics and we're going have a very thoughtful press release that gives a lot of detail. We hope to actually to have something to announce today, but it's -- taxes are always very complicated and we had to involve a big accounting firm and then also our legal tax experts to weigh in on this. But the plan is to, one of the most opting -- one of the questions we receive most often is, the current tax shield is obviously basically a 100%, what's it going to be for the next several years? And so we've been building out a model to quantify that and so the hope would be, Tim, to -- our goal as as management is always to provide as much transparency as we possibly can to you and our investors.
And so what we want to do is, be able to release a multi-year outlook on what the tax shield is not only at the corporate level, but also in the percentage of the distributions that are our unitholders will receive, that will be treated as return of capital. And so we're going to be as specific as we can and as conservative as we can. So that we're putting out thoughtful conservative guidance that our investors can use when making decisions.
I mean it's obviously, it's a huge number. I mean, if you're someone who cares about taxes, and you're a investor in our Company, the 9% yield that you're getting on are our assets is, that's an after tax yield. So when you compare it to other opportunities that you can be investing in and other industries that generate yield, you should really be comparing it to like, take 9% and divide it by minus 1.37 (ph) which is the high -- the top tax rate, it's really like a 13% opportunity. And it's in a low risk asset class. So I think that, that's not being understood by people and it's really we keep getting asked questions about it and that's why we've done the work and hope to have something out I would probably in the next week or two. But, and then you asked about the general consensus, so I mean it's going to be a very high percentage of our distributions are gonna be tax free for a number of years. Yes.
Tim Howard -- Stifel -- Analyst
Got it. That's helpful and we're looking forward to it. And then just on on the guidance provided, maybe if you could speak to that at a high level. The 4Q, I am sorry, 2Q through 4Q, the range is pretty wide, it seems like the 1Q kind of, end of quarter run rate is well above that. So just, is there anything we should, any headwinds we should anticipate in the second half or is that just conservative guidance? Thanks.
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, great great question. We anticipated that one. Conservative guidance, this is the first year that we've provided guidance and so I think it's important that we establish credibility with the numbers that we put out there. So our plan Tim, as many other well-run companies do, as the year goes on, it might not be next quarter but possibly the quarter after it will probably narrow that range significantly. So they'd be as if by that point, most of the data's end for the year. So we would intend to narrow that range over time, to provide you guys with more specificity when looking at the Company and modeling.
Matthew Daly -- Chief Operating Officer of the General Partner
Hey, Tim this is Matt. The rig count as of 331 with 89 rigs, as of 51 (ph) it was 88 rigs, so basically flat as big movement of rigs to the Permian outside the Eagle Ford, but the overall rig count kind of stayed flat. So we don't see any slowdown whatsoever in terms of our production and everything looks really good so far for the rest of the year.
Robert Ravnaas -- Chairman and Chief Executive Officer
Yes, I mean Tim frankly just as Davis just kept talking here, we are surprised by how robust the activities are on our acreage. I mean it's been it's been pretty remarkable and we've been, I'm not just being a salesman here, I mean I think the numbers speak for themselves. I mean we've really -- 2.5% organic growth quarter-over-quarter, that would equate to 10% annualized growth if it keeps up. So it's been -- we've been very very pleased.
Tim Howard -- Stifel -- Analyst
Thank you
R. Davis Ravnaas -- President and Chief Financial Officer
Thank you
Operator
Our next question comes from line of Betty Jiang with Credit Suisse.
Betty Jiang -- Credit Suisse -- Analyst
Hi, good morning.
R. Davis Ravnaas -- President and Chief Financial Officer
Good morning, Betty. How are you?
Betty Jiang -- Credit Suisse -- Analyst
Good. I just wanted to follow up on your comment earlier just on the activity. Thank you for the additional details in the presentation, now you have 89 rigs running on the asset. How does it compare to your rig activity in 2018? And how should we be thinking about the interests of those assets compared to your average net royalty interest in the portfolio?
Robert Ravnaas -- Chairman and Chief Executive Officer
Good question. Matt, do you want to take that?
Matthew Daly -- Chief Operating Officer of the General Partner
I mean the activity, -- last year we didn't have fill-ups, we closed Haymaker in July. So it's sort of apples and oranges, we don't have the same -- but I would say it's relatively flat to up slightly in terms of the rig count. The interest level is going to be roughly 1% on average, that's sort of the average.
Robert Ravnaas -- Chairman and Chief Executive Officer
0.5% to 1% on horizontal wells, maybe slightly higher than 1% on some of the older mature stuff we have. Do you guys agree with that? Being directionally correct. So I think pretty -- Betty, I guess in the way I am answer your question, which is a good one, the interest we have and fill ups and Haymaker and others would be pretty much in line with with KRP legacy holdings. So kind of that 0.5% to 1.5% level on average. Some units, we have -- some big stuff we had this quarter was where we had really high net revenue interests and then we have other areas where we have very low net revenue interests, so it fluctuates. But pretty similar Betty, I wouldn't -- if you're getting at like should you start thinking about our exposure to these rigs being lower now on a net basis than before, I would say it's pretty similar.
Betty Jiang -- Credit Suisse -- Analyst
Great, now thanks for that. And then on one question on the acquisitions, as you're evaluating opportunities in the market, has your appetite evolved at all to have greater emphasis on unconventional assets perhaps, which is a bit more higher decline that what you historically pursued. And then which region do you see as the most attractive opportunities right now?
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, great question and -- to give you kind of a long answer, I'll try to keep it short. But, so the most of the private equity money that is invested in minerals is obviously unconventionally focused, right. And so that's been kind of the near-term M&A and A&D focus in the market has been, private equity groups that have done a good job, buying ahead of the drill dates and now these properties are producing cash flow and the shale basins and they're looking to monetize. So that that presents to us I think the more near-term opportunity set for making acquisitions. But we we are very cognizant of making a lot of those acquisitions changing the Company's strategy, right. We don't want to buy a lot of shale plays, shale assets that have 40% or 50% decline rates, because that's just not consistent with our business model. So what we would attempt to -- what we intend to do is balance acquisitions of that kind with acquisitions in more mature basins that have very shallow declines. And so again, it's just kind of the same strategy, you might see us announce a big acquisition that has a lot of unconventional exposure and then another one after that, that's a little bit more flat decline and stable to balance it out. So that would be how we would ideally look at the M&A opportunity set here. And then what was the second part of your question, Betty? I apologize.
Betty Jiang -- Credit Suisse -- Analyst
Oh, no just I guess in which regions do you see the most acquisition opportunity, because you mentioned earlier that Permian is getting a lot more competitive. So where would you go next?
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, I mean there's just a lot of groups that have a mandate from their sponsors that they can only buy in the Permian. And so they're being forced just to look at the Permian alone, in fact I'd say that's the majority of mineral buyers now. I think we've had the most success probably in places like the Eagle Ford, Appalachia, Haynesville and the Bakken, maybe in that order. Bob, would you, anything to add to that.
Robert Ravnaas -- Chairman and Chief Executive Officer
I agree. Always an advantage we have, are looking at assets that are multi-basin so it isn't the sale of just assets in one basin, but multi-basin, because we're familiar and comfortable buying in all the major basins.
R. Davis Ravnaas -- President and Chief Financial Officer
Yes, and I think -- again I think a benefit we have when buying assets is that most buyers don't want to have multiple basin exposure. They want to be specialists in a particular basin. And so if a package comes up that's 20% Permian, but 80% of the assets are in the Eagle Ford, the Haynesville, the Bakken, and the Marcellus. Most most buyers are either from their sponsor or from kind of just the strategic level, aren't interested in that, right. Because it's not in their wheelhouse, it's not their scope, they don't understand assets outside of one specific basin. And for us, that's perfect for us and I think that's what's allowed us to pick up assets at better valuations, which is like what you've seen recently in the acquisitions we've made. I mean just to reiterate, Phillips is performing 27% above the volumes that we underwrote when we did the acquisition. So it's been a home run for us so far.
Betty Jiang -- Credit Suisse -- Analyst
Great, thank you for that.
R. Davis Ravnaas -- President and Chief Financial Officer
Thank you Betty.
Operator
Thank you. This concludes our question-and-answer session. I'd like to turn the floor back to Bob Ravnaas for closing comments.
Robert Ravnaas -- Chairman and Chief Executive Officer
Thank you everyone and thank you all for joining us this morning. This completes today's call.
Operator
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.
Duration: 33 minutes
Call participants:
Rick Black -- Investor Relations
Robert Ravnaas -- Chairman and Chief Executive Officer
R. Davis Ravnaas -- President and Chief Financial Officer
Matthew Daly -- Chief Operating Officer of the General Partner
John Freeman -- Raymond James -- Analyst
TJ Schultz -- RBC Capital Markets -- Analyst
Tim Howard -- Stifel -- Analyst
Betty Jiang -- Credit Suisse -- Analyst
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