Black Stone Minerals, L.P. (NYSE: BSM) ("Black Stone Minerals,"
"Black Stone," or "the Company") today announces its financial and
operating results for the second quarter of 2024.
Financial and Operational Highlights
- Mineral and royalty production for the second quarter of 2024
equaled 38.2 MBoe/d; total production, including working-interest
volumes, was 40.4 MBoe/d for the quarter.
- Net income for the second quarter was $68.3 million, and
Adjusted EBITDA for the quarter totaled $100.2 million.
- Distributable cash flow was $92.5 million for the second
quarter.
- Black Stone announced a distribution of $0.375 per unit with
respect to the second quarter of 2024. Distribution coverage for
all units was 1.17x.
- No debt was outstanding at the end of the second quarter; as of
August 2, 2024, total debt remained at zero with approximately $61
million of cash on hand.
Management Commentary
Thomas L. Carter, Jr., Black Stone Minerals’ Chairman, Chief
Executive Officer and President, commented, “As previously
announced, the second quarter distribution is consistent with first
quarter's distribution, with the strong foundation of our
comprehensive commercial strategy and capital discipline ensuring
our ability to focus on long-term decision making. Throughout the
second quarter we continued to add strategic, targeted mineral and
royalty interest acquisitions that further enhance our existing
assets and provide a long runway for development in combination
with our organic growth strategy.”
Quarterly Financial and Operating Results
Production
Black Stone Minerals reported mineral and royalty volumes of
38.2 MBoe/d (74% natural gas) for the second quarter of 2024,
compared to 38.1 MBoe/d for the first quarter of 2024 and 33.6
MBoe/d for the second quarter of 2023.
Working-interest production for the second quarter of 2024 was
2.2 MBoe/d, representing the same volume generated in the first
quarter of 2024, and a decrease of 15% from the second quarter of
2023. The continued decline year over year in working-interest
volumes is consistent with the Company’s decision to farm out its
working-interest participation to third-party capital
providers.
Total reported production averaged 40.4 MBoe/d (94% mineral and
royalty, 74% natural gas) for the second quarter of 2024, compared
to 40.3 MBoe/d and 36.2 MBoe/d for the first quarter of 2024 and
the second quarter of 2023, respectively.
Realized Prices, Revenues, and Net Income
The Company’s average realized price per Boe, excluding the
effect of derivative settlements, was $30.01 for the second quarter
of 2024. This is a decrease of 3% from $30.87 per Boe in the first
quarter of 2024 and a 4% decrease from $31.35 in the second quarter
of 2023.
Black Stone reported oil and gas revenue of $110.4 million (67%
oil and condensate) for the second quarter of 2024, a decrease of
3% from $113.2 million in the first quarter of 2024. Oil and gas
revenue in the second quarter of 2023 was $103.2 million.
The Company reported a loss on commodity derivative instruments
of $5.5 million for the second quarter of 2024, composed of a $11.8
million gain from realized settlements and a non-cash $17.4 million
unrealized loss due to the change in value of Black Stone’s
derivative positions during the quarter. Black Stone reported a
loss of $11.3 million and a gain of $11.3 million on commodity
derivative instruments for the first quarter of 2024 and the second
quarter of 2023, respectively.
Lease bonus and other income was $4.8 million for the second
quarter of 2024. Lease bonus and other income for the first quarter
of 2024 and the second quarter of 2023 was $3.5 million and $2.5
million, respectively.
The Company reported net income of $68.3 million for the second
quarter of 2024, compared to net income of $63.9 million in the
preceding quarter. For the second quarter of 2023, the Company
reported net income of $78.4 million.
Adjusted EBITDA and Distributable Cash Flow
Adjusted EBITDA for the second quarter of 2024 was $100.2
million, which compares to $104.1 million in the first quarter of
2024 and $109.2 million in the second quarter of 2023.
Distributable cash flow for the second quarter of 2024 was $92.5
million. For the first quarter of 2024 and the second quarter of
2023, distributable cash flow was $96.4 million and $103.6 million,
respectively.
Financial Position and Activities
As of June 30, 2024, Black Stone Minerals had $26.7 million in
cash, with no amounts drawn under its credit facility. At the
beginning of August, the Company had approximately $61 million in
cash, and no debt was outstanding under the credit facility.
On April 25, 2024, Black Stone's borrowing base under the credit
facility was reaffirmed, and total commitments under the credit
facility were maintained at $375 million. Black Stone is in
compliance with all financial covenants associated with its credit
facility.
Second Quarter 2024 Distributions
As previously announced, the Board approved a cash distribution
of $0.375 for each common unit attributable to the second quarter
of 2024. The quarterly distribution coverage ratio attributable to
the second quarter of 2024 was approximately 1.17x. The
distribution will be paid on August 16, 2024 to unitholders of
record as of the close of business on August 9, 2024.
Activity Update
Rig Activity
As of June 30, 2024, Black Stone had 62 rigs operating across
its acreage position, a decrease relative to the 78 rigs on the
Company's acreage as of March 31, 2024, and lower than the 73 rigs
operating on the Company's acreage as of June 30, 2023.
Shelby Trough Development Update
During the second quarter, Black Stone continued working with
Aethon to firm-up future development plans in light of Aethon’s
previously announced invocation of a “time-out” provision under the
two Joint Exploration Agreements covering portions of the Company’s
assets in San Augustine and Angelina counties in East Texas.
In April 2024, Aethon began curtailing production volumes on a
small number of producing wells. Production rates attributable to
those wells had been largely restored by the end of the second
quarter. In addition, Aethon has turned eight of 10 wells with
delayed initial production to sales and expects the remaining two
wells to be turned to sales in the second half of 2024. These
additions should continue to result in accretive development in the
area with supportive long-term natural gas pricing.
Austin Chalk Update
Black Stone remains focused on full field development, which
includes working with multiple operators on drilling and field
optimization opportunities in the Brookeland Field to enhance
production and increase reserves from the Austin Chalk
formation.
Acquisition Activity
Black Stone’s commercial strategy since 2021 has been focused on
attracting capital and securing drilling commitments on minerals
already owned by the Company. Management made the decision to
expand this growth strategy by adding to the Company’s mineral
portfolio through strategic, targeted efforts primarily in the Gulf
Coast region. In the second quarter of 2024 Black Stone acquired
additional, primarily non-producing mineral and royalty interests
totaling $26.5 million and since September 2023, the company has
acquired a total of $65.1 million in mineral and royalty interests.
Black Stone’s commercial strategy going forward includes the
continuation of meaningful, targeted mineral and royalty
acquisitions to complement the Company's existing positions.
Update to Hedge Position
Black Stone has commodity derivative contracts in place covering
portions of its anticipated production for 2024 and 2025. The
Company's hedge position as of August 2, 2024 is summarized in the
following tables:
Oil Hedge Position
Oil Swap
Oil Swap Price
MBbl
$/Bbl
3Q24
570
$71.45
4Q24
570
$71.45
1Q25
555
$71.22
2Q25
555
$71.22
3Q25
555
$71.22
4Q25
555
$71.22
Natural Gas Hedge Position
Gas Swap
Gas Swap Price
BBtu
$/MMbtu
3Q24
10,580
$3.55
4Q24
10,580
$3.55
1Q25
9,000
$3.42
2Q25
9,100
$3.42
3Q25
11,040
$3.45
4Q25
11,040
$3.45
More detailed information about the Company's existing hedging
program can be found in the Quarterly Report on Form 10-Q for the
second quarter of 2024, which is expected to be filed on or around
August 6, 2024.
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 2024 on Tuesday, August 6, 2024 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) 343-5419 for
domestic participants and (203) 518-9731 for international
participants, the conference ID for the call is BSMQ224. 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 of oil and
natural gas mineral interests in the United States. The Company
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 to growing 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 Company 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 Company’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 Company’s ability to execute its business strategies;
- the volatility of realized oil and natural gas prices;
- the level of production on the Company’s properties;
- overall supply and demand for oil and natural gas, as well as
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 Company’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 Company's operators,
particularly in areas such as the Shelby Trough where the Company
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,
2024
2023
2024
2023
REVENUE
Oil and condensate sales
$
73,889
$
61,551
$
145,113
$
122,460
Natural gas and natural gas liquids
sales
36,493
41,619
78,504
99,042
Lease bonus and other income
4,789
2,527
8,337
6,502
Revenue from contracts with customers
115,171
105,697
231,954
228,004
Gain (loss) on commodity derivative
instruments
(5,547
)
11,303
(16,837
)
63,574
TOTAL REVENUE
109,624
117,000
215,117
291,578
OPERATING (INCOME) EXPENSE
Lease operating expense
2,579
2,866
5,011
5,534
Production costs and ad valorem taxes
13,469
12,844
26,507
25,511
Exploration expense
14
4
17
8
Depreciation, depletion, and
amortization
11,356
10,421
22,995
21,568
General and administrative
13,395
11,854
27,485
24,502
Accretion of asset retirement
obligations
321
250
638
495
TOTAL OPERATING EXPENSE
41,134
38,239
82,653
77,618
INCOME (LOSS) FROM OPERATIONS
68,490
78,761
132,464
213,960
OTHER INCOME (EXPENSE)
Interest and investment income
462
373
1,132
530
Interest expense
(626
)
(645
)
(1,255
)
(1,459
)
Other income (expense)
(4
)
(97
)
(92
)
(196
)
TOTAL OTHER EXPENSE
(168
)
(369
)
(215
)
(1,125
)
NET INCOME (LOSS)
68,322
78,392
132,249
212,835
Distributions on Series B cumulative
convertible preferred units
(7,366
)
(5,250
)
(14,733
)
(10,500
)
NET INCOME (LOSS) ATTRIBUTABLE TO THE
GENERAL PARTNER AND COMMON UNITS
$
60,956
$
73,142
$
117,516
$
202,335
ALLOCATION OF NET INCOME (LOSS):
General partner interest
$
—
$
—
$
—
$
—
Common units
60,956
73,142
117,516
202,335
$
60,956
$
73,142
$
117,516
$
202,335
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED
PARTNERS PER COMMON UNIT:
Per common unit (basic)
$
0.29
$
0.35
$
0.56
$
0.96
Per common unit (diluted)
$
0.29
$
0.35
$
0.56
$
0.95
WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING:
Weighted average common units outstanding
(basic)
210,703
209,967
210,679
209,954
Weighted average common units outstanding
(diluted)
210,703
209,967
210,679
224,923
The following table shows the Company’s production, revenues,
pricing, and expenses for the periods presented:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(Unaudited)
(Dollars in thousands, except
for realized prices and per Boe data)
Production:
Oil and condensate (MBbls)
953
846
1,876
1,639
Natural gas (MMcf)1
16,350
14,670
32,820
31,121
Equivalents (MBoe)
3,678
3,291
7,346
6,826
Equivalents/day (MBoe)
40.4
36.2
40.4
37.7
Realized prices, without derivatives:
Oil and condensate ($/Bbl)
$
77.53
$
72.76
$
77.35
$
74.72
Natural gas ($/Mcf)1
2.23
2.84
2.39
3.18
Equivalents ($/Boe)
$
30.01
$
31.35
$
30.44
$
32.45
Revenue:
Oil and condensate sales
$
73,889
$
61,551
$
145,113
$
122,460
Natural gas and natural gas liquids
sales1
36,493
41,619
78,504
99,042
Lease bonus and other income
4,789
2,527
8,337
6,502
Revenue from contracts with customers
115,171
105,697
231,954
228,004
Gain (loss) on commodity derivative
instruments
(5,547
)
11,303
(16,837
)
63,574
Total revenue
$
109,624
$
117,000
$
215,117
$
291,578
Operating expenses:
Lease operating expense
$
2,579
$
2,866
$
5,011
$
5,534
Production costs and ad valorem taxes
13,469
12,844
26,507
25,511
Exploration expense
14
4
17
8
Depreciation, depletion, and
amortization
11,356
10,421
22,995
21,568
General and administrative
13,395
11,854
27,485
24,502
Other expense:
Interest expense
626
645
1,255
1,459
Per Boe:
Lease operating expense (per
working-interest Boe)
$
12.55
$
12.46
$
12.39
$
12.30
Production costs and ad valorem taxes
3.66
3.90
3.61
3.74
Depreciation, depletion, and
amortization
3.09
3.17
3.13
3.16
General and administrative
3.64
3.60
3.74
3.59
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 Company 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 Company'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 Company 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 the United States as measures of the Company's
financial performance.
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 U.S. GAAP financial measure. The Company's computation
of Adjusted EBITDA and Distributable cash flow may differ from
computations of similarly titled measures of other companies.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(Unaudited)
(In thousands, except per unit
amounts)
Net income (loss)
$
68,322
$
78,392
$
132,249
$
212,835
Adjustments to reconcile to Adjusted
EBITDA:
Depreciation, depletion, and
amortization
11,356
10,421
22,995
21,568
Interest expense
626
645
1,255
1,459
Income tax expense (benefit)
51
139
186
286
Accretion of asset retirement
obligations
321
250
638
495
Equity–based compensation
2,205
2,517
4,588
4,635
Unrealized (gain) loss on commodity
derivative instruments
17,366
16,881
42,453
(22,105
)
Adjusted EBITDA
100,247
109,245
204,364
219,173
Adjustments to reconcile to Distributable
cash flow:
Change in deferred revenue
(1
)
(2
)
(2
)
(7
)
Cash interest expense
(358
)
(387
)
(719
)
(946
)
Preferred unit distributions
(7,366
)
(5,250
)
(14,733
)
(10,500
)
Distributable cash flow
$
92,522
$
103,606
$
188,910
$
207,720
Total units outstanding1
210,689
209,986
Distributable cash flow per unit
$
0.439
$
0.493
1
The distribution attributable to the three
months ended June 30, 2024 is estimated using 210,689,203 common
units as of August 2, 2024; the exact amount of the distribution
attributable to the three months ended June 30, 2024 will be
determined based on units outstanding as of the record date of
August 9, 2024. Distributions attributable to the three months
ended June 30, 2023 were calculated using 209,986,210 common units
as of the record date of August 11, 2023.
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version on businesswire.com: https://www.businesswire.com/news/home/20240805735232/en/
Black Stone Minerals, L.P. Contact Taylor DeWalch Senior
Vice President, Chief Financial Officer, and Treasurer Telephone:
(713) 445-3200 investorrelations@blackstoneminerals.com
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