Black Stone Minerals, L.P. Reports Second Quarter Results
Financial and Operational Highlights
-
Net income for the second quarter was
$106.4 million $91.3 million -
Distributable cash flow was
$80.4 million -
Mineral and royalty production for the second quarter of 2026 equaled 32.5 MBoe/d, a decrease of
9% from the prior quarter; total production, including working-interest volumes, was 33.5 MBoe/d for the quarter. -
Black Stone announced a distribution attributable to the second quarter of 2026 of
$0.32 $1.28 7% increase over the prior quarter. Distribution coverage for all units was 1.18x. -
Total debt at the end of the second quarter was
$196.0 million $168.0 million $1.9 million
Management Commentary
"The increase in our distribution reflects strong execution across the business and highlights the benefits of Black Stone's diversified mineral and royalty portfolio," said Taylor DeWalch, Co-CEO and President. "Through our focus on mineral acquisitions, development agreements, and active asset management, we continue to advance our differentiated organic growth strategy. We are pleased to increase the distribution while maintaining a prudent level of coverage and a conservative balance sheet as we continue to focus on accretive returns for our unitholders. Improved oil pricing and production contributed to our results during the quarter, and we remain highly encouraged by the long-term outlook for natural gas and increasing activity across our core development areas."
Fowler Carter, Co-CEO and President, added, "As we have previously discussed, we believe the Partnership is at an important inflection point for production and commercial activity. Development under our existing agreements continues to progress, and we have made significant progress toward an agreement covering a new development area, further expanding development opportunities across our Shelby Trough and Haynesville expansion acreage. Combined with continued leasing activity and our ongoing mineral acquisition program, we remain focused on enhancing our development position and supporting long-term production growth."
Quarterly Financial and Operating Results
Production
Black Stone reported mineral and royalty volumes of 32.5 MBoe/d (
Working-interest production was 1.0 MBoe/d for the second quarter of 2026, 1.1 MBoe/d in the first quarter of 2026, and 1.4 MBoe/d for the second quarter of 2025.
Total reported production averaged 33.5 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 2026 was
Financial Position and Activities
As of June 30, 2026, Black Stone had
On April 28, 2026, the borrowing base under the credit facility was reaffirmed at
Second Quarter 2026 Distributions
As previously announced, the Board approved a cash distribution of
Activity Update
Development Activity
At the end of the second quarter, Adamas Energy (formerly Aethon Energy, "Adamas") was operating two rigs on Black Stone's
The Partnership's agreement with Revenant Energy ("Revenant") covers 270,000 gross acres in which it currently controls approximately 122,000 undeveloped net acres. Under the original agreement, Revenant was obligated to drill a minimum of 6 wells in 2026, increasing annually to a minimum of 25 wells per year by 2030. The Partnership also secured a non-operated working interest partner for the development. In November 2025, the agreement was amended to maintain the original 6-well commitment for 2026 and convert future commitments to completed gross lateral-foot targets at one well per 7,000 lateral feet, allowing longer laterals while keeping overall development levels unchanged. In May 2026, the agreement was amended to reduce the Program Year 1 drilling commitment to 4 wells following the well control incident in April 2026 affecting one of the two wells spud in the first quarter of 2026. The amendment also revised the gross lateral-foot commitments applicable to subsequent program years and released approximately 40,000 gross acres from the development program. Development activity continued during the second quarter of 2026, with Revenant spudding two additional wells.
In November 2025, Black Stone entered into a 220,000 gross acre development agreement with Caturus Energy, LLC ("Caturus"), which aims to push the Shelby Trough westward towards the Western Haynesville. Activity will begin with approximately 2 gross (0.2 net) wells in the second half of 2026 and ramp to approximately 12 gross (0.8 net) wells annually by 2031, supported by minimum annual lateral-foot requirements, all net to Black Stone's interest. In addition to the 2 gross development wells in 2026, Caturus is currently drilling a pilot well in
In the Permian Basin, Blue Arrow Operating is in progress on a development of 25 gross (1.9 net) wells in the southern
Acquisition Activity
The Partnership continues to acquire bolt-on acreage in multiple contractual development programs with significant inventory at high net interests across
In the second quarter of 2026, Black Stone acquired
Hedge Position
Black Stone has commodity derivative contracts in place covering portions of its anticipated production for 2026, and 2027. The Partnership's hedge position as of July 31, 2026, is summarized in the following tables:
Oil Hedge Position |
|
|
|
Oil Swap |
Oil Swap Price |
|
MBbl |
$/Bbl |
3Q26 |
615 |
|
4Q26 |
615 |
|
1Q27 |
480 |
|
2Q27 |
480 |
|
3Q27 |
480 |
|
4Q27 |
480 |
|
Natural Gas Hedge Position |
||
|
Gas Swap |
Gas Swap Price |
|
BBtu |
$/MMbtu |
3Q26 |
12,880 |
|
4Q26 |
12,880 |
|
1Q27 |
7,200 |
|
2Q27 |
7,280 |
|
3Q27 |
7,360 |
|
4Q27 |
7,360 |
|
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 2026, which is expected to be filed on or around August 4, 2026.
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 2026 on Tuesday, August 4, 2026 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 (833) 461-5787 for domestic participants and (585) 542-9983 for international participants. The conference ID for the call is 230 377 830. A recording of the conference call will be available on Black Stone's website.
About Black Stone Minerals, L.P.
Black Stone Minerals is one of the largest owners and managers of oil and natural gas mineral interests in the United States. The Partnership owns mineral interests and royalty interests in 41 states in the continental United States. Black Stone believes its large, diversified asset base and long-lived, non-cost-bearing mineral and royalty interests provide for stable production and reserves over time, allowing the majority of generated cash flow to be distributed to unitholders.
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. Investors 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, as wells as the Risk Factors section in the Partnership's most recent annual report on Form 10-K:
- 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, and regional supply and demand factors, delays, or interruptions of production;
- 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 Shelby Trough 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, |
||||||||||||
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||||||
|
|
|
|
|
|
|
|
||||||||
REVENUE |
|
|
|
|
|
|
|
||||||||
Oil and condensate sales |
$ |
75,151 |
|
|
$ |
55,807 |
|
|
$ |
129,265 |
|
|
$ |
105,900 |
|
Natural gas and natural gas liquids sales |
|
40,275 |
|
|
|
46,189 |
|
|
|
103,683 |
|
|
|
104,424 |
|
Lease bonus and other income |
|
6,696 |
|
|
|
4,714 |
|
|
|
13,083 |
|
|
|
11,639 |
|
Revenue from contracts with customers |
|
122,122 |
|
|
|
106,710 |
|
|
|
246,031 |
|
|
|
221,963 |
|
Gain (loss) on commodity derivative instruments, net |
|
26,850 |
|
|
|
52,784 |
|
|
|
(37,700 |
) |
|
|
(3,217 |
) |
TOTAL REVENUE |
|
148,972 |
|
|
|
159,494 |
|
|
|
208,331 |
|
|
|
218,746 |
|
OPERATING (INCOME) EXPENSE |
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
2,098 |
|
|
|
2,990 |
|
|
|
3,991 |
|
|
|
5,152 |
|
Production costs and ad valorem taxes |
|
6,108 |
|
|
|
9,026 |
|
|
|
15,308 |
|
|
|
19,211 |
|
Exploration expense |
|
4,825 |
|
|
|
1,749 |
|
|
|
9,450 |
|
|
|
6,859 |
|
Depreciation, depletion, and amortization |
|
9,402 |
|
|
|
9,187 |
|
|
|
19,187 |
|
|
|
18,317 |
|
General and administrative |
|
16,076 |
|
|
|
13,924 |
|
|
|
32,908 |
|
|
|
29,096 |
|
Accretion of asset retirement obligations |
|
393 |
|
|
|
337 |
|
|
|
782 |
|
|
|
669 |
|
TOTAL OPERATING EXPENSE |
|
38,902 |
|
|
|
37,213 |
|
|
|
81,626 |
|
|
|
79,304 |
|
INCOME FROM OPERATIONS |
|
110,070 |
|
|
|
122,281 |
|
|
|
126,705 |
|
|
|
139,442 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
||||||||
Interest and investment income |
|
57 |
|
|
|
56 |
|
|
|
89 |
|
|
|
120 |
|
Interest expense |
|
(3,816 |
) |
|
|
(2,270 |
) |
|
|
(7,177 |
) |
|
|
(3,667 |
) |
Other income (expense), net |
|
47 |
|
|
|
(39 |
) |
|
|
13 |
|
|
|
81 |
|
TOTAL OTHER EXPENSE |
|
(3,712 |
) |
|
|
(2,253 |
) |
|
|
(7,075 |
) |
|
|
(3,466 |
) |
NET INCOME |
|
106,358 |
|
|
|
120,028 |
|
|
|
119,630 |
|
|
|
135,976 |
|
Distributions on Series B cumulative convertible preferred units |
|
(7,366 |
) |
|
|
(7,367 |
) |
|
|
(14,732 |
) |
|
|
(14,733 |
) |
NET INCOME ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON UNITS |
$ |
98,992 |
|
|
$ |
112,661 |
|
|
$ |
104,898 |
|
|
$ |
121,243 |
|
ALLOCATION OF NET INCOME: |
|
|
|
|
|
|
|
||||||||
General partner interest |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common units |
|
98,992 |
|
|
|
112,661 |
|
|
|
104,898 |
|
|
|
121,243 |
|
|
$ |
98,992 |
|
|
$ |
112,661 |
|
|
$ |
104,898 |
|
|
$ |
121,243 |
|
NET INCOME ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON UNIT: |
|
|
|
|
|
|
|
||||||||
Per common unit (basic) |
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
0.49 |
|
|
$ |
0.57 |
|
Per common unit (diluted) |
$ |
0.47 |
|
|
$ |
0.53 |
|
|
$ |
0.49 |
|
|
$ |
0.57 |
|
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING: |
|
|
|
|
|
|
|
||||||||
Weighted average common units outstanding (basic) |
|
212,596 |
|
|
|
211,689 |
|
|
|
212,483 |
|
|
|
211,472 |
|
Weighted average common units outstanding (diluted) |
|
212,596 |
|
|
|
226,761 |
|
|
|
212,483 |
|
|
|
211,472 |
|
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, |
||||||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Unaudited) (Dollars in thousands, except for realized prices and per Boe data) |
||||||||||||||
Production: |
|
|
|
|
|
|
|
|
||||||||
Oil and condensate (MBbls) |
|
|
863 |
|
|
|
863 |
|
|
|
1,648 |
|
|
|
1,579 |
|
Natural gas (MMcf)1 |
|
|
13,133 |
|
|
|
13,710 |
|
|
|
28,399 |
|
|
|
28,563 |
|
Equivalents (MBoe) |
|
|
3,052 |
|
|
|
3,148 |
|
|
|
6,381 |
|
|
|
6,340 |
|
Equivalents/day (MBoe) |
|
|
33.5 |
|
|
|
34.6 |
|
|
|
35.3 |
|
|
|
35.0 |
|
Realized prices, without derivatives: |
|
|
|
|
|
|
|
|
||||||||
Oil and condensate ($/Bbl) |
|
$ |
87.08 |
|
|
$ |
64.67 |
|
|
$ |
78.44 |
|
|
$ |
67.07 |
|
Natural gas ($/Mcf)1 |
|
|
3.07 |
|
|
|
3.37 |
|
|
|
3.65 |
|
|
|
3.66 |
|
Equivalents ($/Boe) |
|
$ |
37.82 |
|
|
$ |
32.40 |
|
|
$ |
36.51 |
|
|
$ |
33.17 |
|
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Oil and condensate sales |
|
$ |
75,151 |
|
|
$ |
55,807 |
|
|
$ |
129,265 |
|
|
$ |
105,900 |
|
Natural gas and natural gas liquids sales1 |
|
|
40,275 |
|
|
|
46,189 |
|
|
|
103,683 |
|
|
|
104,424 |
|
Lease bonus and other income |
|
|
6,696 |
|
|
|
4,714 |
|
|
|
13,083 |
|
|
|
11,639 |
|
Revenue from contracts with customers |
|
|
122,122 |
|
|
|
106,710 |
|
|
|
246,031 |
|
|
|
221,963 |
|
Gain (loss) on commodity derivative instruments, net |
|
|
26,850 |
|
|
|
52,784 |
|
|
|
(37,700 |
) |
|
|
(3,217 |
) |
Total revenue |
|
$ |
148,972 |
|
|
$ |
159,494 |
|
|
$ |
208,331 |
|
|
$ |
218,746 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Lease operating expense |
|
$ |
2,098 |
|
|
$ |
2,990 |
|
|
$ |
3,991 |
|
|
$ |
5,152 |
|
Production costs and ad valorem taxes |
|
|
6,108 |
|
|
|
9,026 |
|
|
|
15,308 |
|
|
|
19,211 |
|
Exploration expense |
|
|
4,825 |
|
|
|
1,749 |
|
|
|
9,450 |
|
|
|
6,859 |
|
Depreciation, depletion, and amortization |
|
|
9,402 |
|
|
|
9,187 |
|
|
|
19,187 |
|
|
|
18,317 |
|
General and administrative |
|
|
16,076 |
|
|
|
13,924 |
|
|
|
32,908 |
|
|
|
29,096 |
|
Other expense: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
3,816 |
|
|
|
2,270 |
|
|
|
7,177 |
|
|
|
3,667 |
|
Per Boe: |
|
|
|
|
|
|
|
|
||||||||
Lease operating expense (per working-interest Boe) |
|
$ |
22.02 |
|
|
$ |
23.55 |
|
|
$ |
20.35 |
|
|
$ |
21.22 |
|
Production costs and ad valorem taxes |
|
|
2.00 |
|
|
|
2.87 |
|
|
|
2.40 |
|
|
|
3.03 |
|
Depreciation, depletion, and amortization |
|
|
3.08 |
|
|
|
2.92 |
|
|
|
3.01 |
|
|
|
2.89 |
|
General and administrative |
|
|
5.27 |
|
|
|
4.42 |
|
|
|
5.16 |
|
|
|
4.59 |
|
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 its 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, seismic data acquisition costs, non-cash equity-based compensation, unrealized gains and losses on commodity derivative instruments, 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.
Beginning with the three months and year ended December 31, 2025, the Partnership revised its definition of Adjusted EBITDA to exclude seismic data acquisition costs, which are included in Exploration expense on the Partnership’s consolidated statements of operations. Comparative amounts for the three and six months ended June 30, 2025, for each of Adjusted EBITDA and Distributable Cash Flow have been recast to conform to the current period presentation. Management believes this revised definition enhances comparability between periods and reflects the Partnership’s view of seismic data acquisition costs as investments that support the long-term development and value of its mineral and royalty interests.
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, |
||||||||||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
||||||||
|
|
(Unaudited) (In thousands, except per unit amounts) |
||||||||||||||
Net income |
|
$ |
106,358 |
|
|
$ |
120,028 |
|
|
$ |
119,630 |
|
|
$ |
135,976 |
|
Adjustments to reconcile to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Depreciation, depletion, and amortization |
|
|
9,402 |
|
|
|
9,187 |
|
|
|
19,187 |
|
|
|
18,317 |
|
Interest expense |
|
|
3,816 |
|
|
|
2,270 |
|
|
|
7,177 |
|
|
|
3,667 |
|
Income tax expense (benefit) |
|
|
(2 |
) |
|
|
8 |
|
|
|
60 |
|
|
|
(77 |
) |
Accretion of asset retirement obligations |
|
|
393 |
|
|
|
337 |
|
|
|
782 |
|
|
|
669 |
|
Seismic data acquisition costs |
|
|
4,519 |
|
|
|
1,400 |
|
|
|
8,775 |
|
|
|
6,229 |
|
Equity–based compensation |
|
|
2,480 |
|
|
|
1,960 |
|
|
|
6,031 |
|
|
|
5,015 |
|
Unrealized (gain) loss on commodity derivative instruments |
|
|
(35,618 |
) |
|
|
(49,639 |
) |
|
|
16,688 |
|
|
|
2,751 |
|
Adjusted EBITDA |
|
|
91,348 |
|
|
|
85,551 |
|
|
|
178,330 |
|
|
|
172,547 |
|
Adjustments to reconcile to Distributable Cash Flow: |
|
|
|
|
|
|
|
|
||||||||
Change in deferred revenue |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
Cash interest expense |
|
|
(3,554 |
) |
|
|
(1,994 |
) |
|
|
(6,653 |
) |
|
|
(3,117 |
) |
Preferred unit distributions |
|
|
(7,366 |
) |
|
|
(7,367 |
) |
|
|
(14,732 |
) |
|
|
(14,733 |
) |
Distributable Cash Flow |
|
$ |
80,428 |
|
|
$ |
76,189 |
|
|
$ |
156,944 |
|
|
$ |
154,695 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total units outstanding1 |
|
|
212,711 |
|
|
|
211,853 |
|
|
|
|
|
||||
Distributable Cash Flow per unit |
|
$ |
0.378 |
|
|
$ |
0.360 |
|
|
|
|
|
||||
1 The distribution attributable to the three months ended June 30, 2026 is estimated using 212,710,571 common units as of July 31, 2026; the exact amount of the distribution attributable to the three months ended June 30, 2026 will be determined based on units outstanding as of the record date of August 6, 2026. Distributions attributable to the three months ended June 30, 2025 were calculated using 211,852,971 common units as of the record date of August 7, 2025. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260803413485/en/
Black Stone Minerals, L.P. Contact
Chris Bonner
Senior Vice President, Chief Financial Officer, and Treasurer
Telephone: (713) 445-3200
investorrelations@blackstoneminerals.com
Source: Black Stone Minerals, L.P.