Black Stone Minerals, L.P. Reports Second Quarter Results
Financial and Operational Highlights
-
Mineral and royalty production for the second quarter of 2025 equaled 33.2 MBoe/d, a decrease of
3% from the prior quarter; total production, including working-interest volumes, was 34.6 MBoe/d for the quarter. -
Net income for the second quarter was
$120.0 million $84.2 million -
Distributable cash flow was
$74.8 million -
Black Stone announced a distribution of
$0.30 20% from the prior quarter. Distribution coverage for all units was 1.18x. -
Total debt at the end of the second quarter was
$99.0 million $71.0 million $7.9 million
Management Commentary
Thomas L. Carter, Jr., Black Stone’s Chairman, Chief Executive Officer and President, commented, “Over the last two years, the BSM team undertook an in-depth subsurface evaluation of the expanding Shelby Trough area to delineate significant new areas of prospectivity, along with continuing to push the play westward towards the Western Haynesville. As previously announced and founded on this technical evaluation, we are excited to partner with the Revenant Energy team in a substantial new development in the Shelby Trough covering approximately 270,000 gross acres. Additionally, the ongoing technical delineation led to another 180,000 gross acre opportunity that is currently being marketed. Through these new areas and the existing Shelby Trough agreements, we see contractual development obligations more than doubling over the next five years. The proximity of these assets to the Gulf Coast market and projected long-term natural gas pricing provide confidence in significant long-term growth.
Thus far in 2025, we have seen lower production and anticipate subdued production growth in the near term, driven by delayed increases in natural gas weighted activity. These factors contribute to the decrease in the second quarter 2025 distribution. However, based on our continued focus on medium and long-term growth opportunities founded on new development agreements, we expect to see production growing in 2026 and distributions surpassing the previous high-water mark over the next six years.
We remain focused on disciplined capital management and continuing to pursue grass-roots mineral acquisitions that are accretive to our mineral positions and enhance our existing development agreements. With the combination of our continued financial discipline and comprehensive commercial strategy including existing asset management and new development agreements, we are confident in the growth outlook for the Partnership’s unitholders."
Quarterly Financial and Operating Results
Production
Black Stone reported mineral and royalty volumes of 33.2 MBoe/d (
Working-interest production was 1.4 MBoe/d for the second quarter of 2025, 1.3 MBoe/d in the first quarter of 2025, and 2.2 MBoe/d for the second quarter of 2024. The continued decline year over year in working-interest volumes is consistent with the Partnership’s decision to farm out its working-interest participation to third-party capital providers.
Total reported production averaged 34.6 MBoe/d (
Realized Prices, Revenues, and Net Income
The Partnership’s average realized price per Boe, excluding the effect of derivative settlements, was
Black Stone reported oil and gas revenue of
The Partnership reported a gain on commodity derivative instruments of
Lease bonus and other income was
The Partnership reported net income of
Adjusted EBITDA and Distributable Cash Flow
Adjusted EBITDA for the second quarter of 2025 was
Financial Position and Activities
As of June 30, 2025, Black Stone Minerals had
On April 30, 2025, Black Stone's borrowing base under the credit facility was reaffirmed at
Second Quarter 2025 Distributions
As previously announced, the Board approved a cash distribution of
Activity Update
Development Activity
At the end of the second quarter, Aethon Energy ("Aethon") was operating two rigs on our
As previously announced, the Partnership recently signed a new development agreement with Revenant Energy. This agreement covers approximately 270,000 gross acres across
Black Stone is also in the process of marketing an additional development opportunity covering approximately 180,000 gross acres, which includes the previously announced released acreage from Aethon. This development covers acreage in
In the Louisiana Haynesville, development continued under our Accelerated Drilling Agreements (“ADAs”). These agreements incentivize operators to accelerate development in our high-interest areas in exchange for a modest reduction in royalty burden, allowing us to capture near-term revenue and reduce uncertainty about where the locations sit in the operator's development plan. During the second quarter, 3 gross (0.09 net) wells in De Soto and Sabine Parishes were turned to sales under our ADAs. This brings the total well count under the ADA program to seven. We expect another 2 gross (0.13 net) wells to be turned to sales during the third quarter of 2025.
In the Permian Basin, the Partnership continues to monitor activity including a large-scale development expected to generate meaningful liquids volumes in 2025 and beyond. As previously disclosed, a large operator has planned more than 34 gross (1.20 net) wells in
Acquisition Activity
In the second quarter of 2025, Black Stone acquired
2025 Guidance Update
Due to the lower production through the first and second quarters of 2025 combined with expectations for delayed natural gas production growth through the end of the year, Black Stone's total production guidance for 2025 is being lowered to a range of 33 MBoe/d to 35 MBoe/d, from the previously disclosed range of 38 MBoe/d to 41 MBoe/d.
Update to Hedge Position
Black Stone has commodity derivative contracts in place covering portions of its anticipated production for 2025 and 2026. The Partnership's hedge position as of August 1, 2025, is summarized in the following tables:
Oil Hedge Position |
|
|
|
Oil Swap |
Oil Swap Price |
|
MBbl |
$/Bbl |
3Q25 |
555 |
|
4Q25 |
555 |
|
1Q26 |
480 |
|
2Q26 |
480 |
|
3Q26 |
480 |
|
4Q26 |
480 |
|
Natural Gas Hedge Position |
||
|
Gas Swap |
Gas Swap Price |
|
BBtu |
$/MMbtu |
3Q25 |
11,040 |
|
4Q25 |
11,040 |
|
1Q26 |
11,700 |
|
2Q26 |
11,830 |
|
3Q26 |
11,960 |
|
4Q26 |
11,960 |
|
More detailed information about the Partnership's existing hedging program can be found in the Quarterly Report on Form 10-Q for the second quarter of 2025, which is expected to be filed on or around August 5, 2025.
Conference Call
Black Stone Minerals will host a conference call and webcast for investors and analysts to discuss its results for the second quarter of 2025 and updated 2025 guidance on Tuesday, August 5, 2025 at 9:00 a.m. Central Time. Black Stone recommends participants who do not anticipate asking questions to listen to the call via the live broadcast available at http://investor.blackstoneminerals.com. Analysts and investors who wish to ask questions should dial (800) 715-9871 for domestic participants and (646) 307-1963 for international participants, the conference ID for the call is 8003975. Call participants are advised to call in 10 minutes in advance of the call start time. A replay of the conference call will be available approximately two hours after the call through a link on BSM’s investor relations website.
In addition to the regularly scheduled quarterly conference calls, Black Stone Minerals is planning to host an Investor Day in September. The Partnership will release further details related to the date and call-in information over the coming weeks and is looking forward to hosting all investors and participants. Updated presentation materials will be made available in the Investor Relations section of the Black Stone website prior to the event.
About Black Stone Minerals, L.P.
Black Stone Minerals is one of the largest owners of oil and natural gas mineral interests in
Forward-Looking Statements
This news release includes forward-looking statements. All statements, other than statements of historical facts, included in this news release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as “will,” “may,” “should,” “expect,” “anticipate,” “plan,” “project,” “intend,” “estimate,” “believe,” “target,” “continue,” “potential,” the negative of such terms, or other comparable terminology often identify forward-looking statements. Except as required by law, Black Stone Minerals undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this news release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. All forward-looking statements are qualified in their entirety by these cautionary statements. These forward-looking statements involve risks and uncertainties, many of which are beyond the control of Black Stone Minerals, which may cause the Partnership’s actual results to differ materially from those implied or expressed by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:
- the Partnership’s ability to execute its business strategies;
- the volatility of realized oil and natural gas prices;
- the level of production on the Partnership’s properties;
- overall supply and demand for oil and natural gas, as well as regional supply and demand factors, delays, or interruptions of production;
- domestic and foreign trade policies, including tariffs and other controls on imports or exports of goods, including energy products;
- conservation measures and general concern about the environmental impact of the production and use of fossil fuels;
- the Partnership’s ability to replace its oil and natural gas reserves;
- general economic, business, or industry conditions including slowdowns, domestically and internationally, and volatility in the securities, capital or credit markets;
- cybersecurity incidents, including data security breaches or computer viruses;
- competition in the oil and natural gas industry;
- the availability or cost of rigs, equipment, raw materials, supplies, oilfield services or personnel; and
- the level of drilling activity by the Partnership's operators, particularly in areas such as the Haynesville where the Partnership has concentrated acreage positions.
BLACK STONE MINERALS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per unit amounts) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
|
|
|
|
|
|
|
|
||||||||
REVENUE |
|
|
|
|
|
|
|
||||||||
Oil and condensate sales |
$ |
55,807 |
|
|
$ |
73,889 |
|
|
$ |
105,900 |
|
|
$ |
145,113 |
|
Natural gas and natural gas liquids sales |
|
46,189 |
|
|
|
36,493 |
|
|
|
104,424 |
|
|
|
78,504 |
|
Lease bonus and other income |
|
4,714 |
|
|
|
4,789 |
|
|
|
11,639 |
|
|
|
8,337 |
|
Revenue from contracts with customers |
|
106,710 |
|
|
|
115,171 |
|
|
|
221,963 |
|
|
|
231,954 |
|
Gain (loss) on commodity derivative instruments |
|
52,784 |
|
|
|
(5,547 |
) |
|
|
(3,217 |
) |
|
|
(16,837 |
) |
TOTAL REVENUE |
|
159,494 |
|
|
|
109,624 |
|
|
|
218,746 |
|
|
|
215,117 |
|
OPERATING (INCOME) EXPENSE |
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
2,990 |
|
|
|
2,579 |
|
|
|
5,152 |
|
|
|
5,011 |
|
Production costs and ad valorem taxes |
|
9,026 |
|
|
|
13,469 |
|
|
|
19,211 |
|
|
|
26,507 |
|
Exploration expense |
|
1,749 |
|
|
|
14 |
|
|
|
6,859 |
|
|
|
17 |
|
Depreciation, depletion, and amortization |
|
9,187 |
|
|
|
11,356 |
|
|
|
18,317 |
|
|
|
22,995 |
|
General and administrative |
|
13,924 |
|
|
|
13,395 |
|
|
|
29,096 |
|
|
|
27,485 |
|
Accretion of asset retirement obligations |
|
337 |
|
|
|
321 |
|
|
|
669 |
|
|
|
638 |
|
TOTAL OPERATING EXPENSE |
|
37,213 |
|
|
|
41,134 |
|
|
|
79,304 |
|
|
|
82,653 |
|
INCOME (LOSS) FROM OPERATIONS |
|
122,281 |
|
|
|
68,490 |
|
|
|
139,442 |
|
|
|
132,464 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
||||||||
Interest and investment income |
|
56 |
|
|
|
462 |
|
|
|
120 |
|
|
|
1,132 |
|
Interest expense |
|
(2,270 |
) |
|
|
(626 |
) |
|
|
(3,667 |
) |
|
|
(1,255 |
) |
Other income (expense) |
|
(39 |
) |
|
|
(4 |
) |
|
|
81 |
|
|
|
(92 |
) |
TOTAL OTHER EXPENSE |
|
(2,253 |
) |
|
|
(168 |
) |
|
|
(3,466 |
) |
|
|
(215 |
) |
NET INCOME (LOSS) |
|
120,028 |
|
|
|
68,322 |
|
|
|
135,976 |
|
|
|
132,249 |
|
Distributions on Series B cumulative convertible preferred units |
|
(7,367 |
) |
|
|
(7,366 |
) |
|
|
(14,733 |
) |
|
|
(14,733 |
) |
NET INCOME (LOSS) ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON UNITS |
$ |
112,661 |
|
|
$ |
60,956 |
|
|
$ |
121,243 |
|
|
$ |
117,516 |
|
ALLOCATION OF NET INCOME (LOSS): |
|
|
|
|
|
|
|
||||||||
General partner interest |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common units |
|
112,661 |
|
|
|
60,956 |
|
|
|
121,243 |
|
|
|
117,516 |
|
|
$ |
112,661 |
|
|
$ |
60,956 |
|
|
$ |
121,243 |
|
|
$ |
117,516 |
|
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON UNIT: |
|
|
|
|
|
|
|
||||||||
Per common unit (basic) |
$ |
0.53 |
|
|
$ |
0.29 |
|
|
$ |
0.57 |
|
|
$ |
0.56 |
|
Per common unit (diluted) |
$ |
0.53 |
|
|
$ |
0.29 |
|
|
$ |
0.57 |
|
|
$ |
0.56 |
|
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING: |
|
|
|
|
|
|
|
||||||||
Weighted average common units outstanding (basic) |
|
211,689 |
|
|
|
210,703 |
|
|
|
211,472 |
|
|
|
210,679 |
|
Weighted average common units outstanding (diluted) |
|
226,761 |
|
|
|
210,703 |
|
|
|
211,472 |
|
|
|
210,679 |
|
The following table shows the Partnership’s production, revenues, pricing, and expenses for the periods presented:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|||||||
|
|
(Unaudited) (Dollars in thousands, except for realized prices and per Boe data) |
|||||||||||||
Production: |
|
|
|
|
|
|
|
|
|||||||
Oil and condensate (MBbls) |
|
|
863 |
|
|
953 |
|
|
|
1,579 |
|
|
|
1,876 |
|
Natural gas (MMcf)1 |
|
|
13,710 |
|
|
16,350 |
|
|
|
28,563 |
|
|
|
32,820 |
|
Equivalents (MBoe) |
|
|
3,148 |
|
|
3,678 |
|
|
|
6,340 |
|
|
|
7,346 |
|
Equivalents/day (MBoe) |
|
|
34.6 |
|
|
40.4 |
|
|
|
35.0 |
|
|
|
40.4 |
|
Realized prices, without derivatives: |
|
|
|
|
|
|
|
|
|||||||
Oil and condensate ($/Bbl) |
|
$ |
64.67 |
|
$ |
77.53 |
|
|
$ |
67.07 |
|
|
$ |
77.35 |
|
Natural gas ($/Mcf)1 |
|
|
3.37 |
|
|
2.23 |
|
|
|
3.66 |
|
|
|
2.39 |
|
Equivalents ($/Boe) |
|
$ |
32.40 |
|
$ |
30.01 |
|
|
$ |
33.17 |
|
|
$ |
30.44 |
|
Revenue: |
|
|
|
|
|
|
|
|
|||||||
Oil and condensate sales |
|
$ |
55,807 |
|
$ |
73,889 |
|
|
$ |
105,900 |
|
|
$ |
145,113 |
|
Natural gas and natural gas liquids sales1 |
|
|
46,189 |
|
|
36,493 |
|
|
|
104,424 |
|
|
|
78,504 |
|
Lease bonus and other income |
|
|
4,714 |
|
|
4,789 |
|
|
|
11,639 |
|
|
|
8,337 |
|
Revenue from contracts with customers |
|
|
106,710 |
|
|
115,171 |
|
|
|
221,963 |
|
|
|
231,954 |
|
Gain (loss) on commodity derivative instruments |
|
|
52,784 |
|
|
(5,547 |
) |
|
|
(3,217 |
) |
|
|
(16,837 |
) |
Total revenue |
|
$ |
159,494 |
|
$ |
109,624 |
|
|
$ |
218,746 |
|
|
$ |
215,117 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|||||||
Lease operating expense |
|
$ |
2,990 |
|
$ |
2,579 |
|
|
$ |
5,152 |
|
|
$ |
5,011 |
|
Production costs and ad valorem taxes |
|
|
9,026 |
|
|
13,469 |
|
|
|
19,211 |
|
|
|
26,507 |
|
Exploration expense |
|
|
1,749 |
|
|
14 |
|
|
|
6,859 |
|
|
|
17 |
|
Depreciation, depletion, and amortization |
|
|
9,187 |
|
|
11,356 |
|
|
|
18,317 |
|
|
|
22,995 |
|
General and administrative |
|
|
13,924 |
|
|
13,395 |
|
|
|
29,096 |
|
|
|
27,485 |
|
Other expense: |
|
|
|
|
|
|
|
|
|||||||
Interest expense |
|
|
2,270 |
|
|
626 |
|
|
|
3,667 |
|
|
|
1,255 |
|
Per Boe: |
|
|
|
|
|
|
|
|
|||||||
Lease operating expense (per working-interest Boe) |
|
$ |
23.55 |
|
$ |
12.55 |
|
|
$ |
21.22 |
|
|
$ |
12.39 |
|
Production costs and ad valorem taxes |
|
|
2.87 |
|
|
3.66 |
|
|
|
3.03 |
|
|
|
3.61 |
|
Depreciation, depletion, and amortization |
|
|
2.92 |
|
|
3.09 |
|
|
|
2.89 |
|
|
|
3.13 |
|
General and administrative |
|
|
4.42 |
|
|
3.64 |
|
|
|
4.59 |
|
|
|
3.74 |
|
| 1 | As a mineral-and-royalty-interest owner, Black Stone Minerals is often provided insufficient and inconsistent data on natural gas liquid ("NGL") volumes by its operators. As a result, the Partnership is unable to reliably determine the total volumes of NGLs associated with the production of natural gas on its acreage. Accordingly, no NGL volumes are included in reported production; however, revenue attributable to NGLs is included in natural gas revenue and the calculation of realized prices for natural gas. |
Non-GAAP Financial Measures
Adjusted EBITDA and Distributable cash flow are supplemental non-GAAP financial measures used by Black Stone's management and external users of the Partnership's financial statements such as investors, research analysts, and others, to assess the financial performance of its assets and ability to sustain distributions over the long term without regard to financing methods, capital structure, or historical cost basis.
The Partnership defines Adjusted EBITDA as net income (loss) before interest expense, income taxes, and depreciation, depletion, and amortization adjusted for impairment of oil and natural gas properties, if any, accretion of asset retirement obligations, unrealized gains and losses on commodity derivative instruments, non-cash equity-based compensation, and gains and losses on sales of assets, if any. Black Stone defines Distributable cash flow as Adjusted EBITDA plus or minus amounts for certain non-cash operating activities, cash interest expense, distributions to preferred unitholders, and restructuring charges, if any.
Adjusted EBITDA and Distributable cash flow should not be considered an alternative to, or more meaningful than, net income (loss), income (loss) from operations, cash flows from operating activities, or any other measure of financial performance presented in accordance with generally accepted accounting principles ("GAAP") in
Adjusted EBITDA and Distributable cash flow have important limitations as analytical tools because they exclude some but not all items that affect net income (loss), the most directly comparable
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||||
|
|
(Unaudited) (In thousands, except per unit amounts) |
||||||||||||||
Net income (loss) |
|
$ |
120,028 |
|
|
$ |
68,322 |
|
|
$ |
135,976 |
|
|
$ |
132,249 |
|
Adjustments to reconcile to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Depreciation, depletion, and amortization |
|
|
9,187 |
|
|
|
11,356 |
|
|
|
18,317 |
|
|
|
22,995 |
|
Interest expense |
|
|
2,270 |
|
|
|
626 |
|
|
|
3,667 |
|
|
|
1,255 |
|
Income tax expense (benefit) |
|
|
8 |
|
|
|
51 |
|
|
|
(77 |
) |
|
|
186 |
|
Accretion of asset retirement obligations |
|
|
337 |
|
|
|
321 |
|
|
|
669 |
|
|
|
638 |
|
Equity–based compensation |
|
|
1,960 |
|
|
|
2,205 |
|
|
|
5,015 |
|
|
|
4,588 |
|
Unrealized (gain) loss on commodity derivative instruments |
|
|
(49,639 |
) |
|
|
17,366 |
|
|
|
2,751 |
|
|
|
42,453 |
|
Adjusted EBITDA |
|
|
84,151 |
|
|
|
100,247 |
|
|
|
166,318 |
|
|
|
204,364 |
|
Adjustments to reconcile to Distributable cash flow: |
|
|
|
|
|
|
|
|
||||||||
Change in deferred revenue |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Cash interest expense |
|
|
(1,994 |
) |
|
|
(358 |
) |
|
|
(3,117 |
) |
|
|
(719 |
) |
Preferred unit distributions |
|
|
(7,367 |
) |
|
|
(7,366 |
) |
|
|
(14,733 |
) |
|
|
(14,733 |
) |
Distributable cash flow |
|
$ |
74,789 |
|
|
$ |
92,522 |
|
|
$ |
148,466 |
|
|
$ |
188,910 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total units outstanding1 |
|
|
211,853 |
|
|
|
210,687 |
|
|
|
|
|
||||
Distributable cash flow per unit |
|
$ |
0.353 |
|
|
$ |
0.439 |
|
|
|
|
|
||||
1 |
The distribution attributable to the three months ended June 30, 2025 is estimated using 211,852,971 common units as of August 1, 2025; the exact amount of the distribution attributable to the three months ended June 30, 2025 will be determined based on units outstanding as of the record date of August 7, 2025. Distributions attributable to the three months ended June 30, 2024 were calculated using 210,687,379 common units as of the record date of August 9, 2024. |
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Black Stone Minerals, L.P. Contact
Taylor DeWalch
Senior Vice President, Chief Financial Officer, and Treasurer
Telephone: (713) 445-3200
investorrelations@blackstoneminerals.com
Source: Black Stone Minerals, L.P.
