Core Insights - Black Stone Minerals (BSM) is expected to report quarterly earnings of $0.39 per share, reflecting a year-over-year decline of 40% [1] - Revenue is anticipated to be $115.46 million, down 39.5% from the same quarter last year [1] - The consensus EPS estimate has been revised upward by 1.9% in the past 30 days, indicating analysts' reassessment of their initial estimates [1][2] Revenue Estimates - Analysts project 'Revenue- Lease bonus and other income' to be $2.71 million, indicating a year-over-year decline of 29.1% [4] - 'Revenue- Oil and condensate sales' is expected to reach $62.56 million, down 21.9% from the previous year [4] - 'Revenue- Natural gas and natural gas liquids sales' is estimated at $48.16 million, reflecting an 8.2% decrease from the prior-year quarter [5] Production Estimates - The estimated 'Production - Equivalents/day' is 37.37 million barrels of oil equivalent per day, down from 41.1 million barrels of oil equivalent per day in the previous year [5] - 'Production - Natural gas' is forecasted to be 15,561.19 MMcf, compared to 16,546 MMcf a year ago [6] - 'Production - Oil and condensate' is expected to reach 844.63 MBBL, down from 1,026 MBBL in the prior year [6] Market Performance - Over the past month, shares of Black Stone Minerals have returned -3%, contrasting with the Zacks S&P 500 composite's +4.7% change [7] - BSM holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [7]

Group 1 - The current implied volatility for Black Stone Minerals indicates a potential trading opportunity, particularly with the Jan 17, 2025 $2.50 Call option showing some of the highest implied volatility among equity options [2][3] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate significant price changes, possibly due to an upcoming event [4] - Black Stone Minerals holds a Zacks Rank of 3 (Hold) within the Energy and Pipeline - Master Limited Partnerships industry, which is in the bottom 10% of the Zacks Industry Rank [5] Group 2 - Over the past 30 days, one analyst has raised earnings estimates for Black Stone Minerals for the current quarter, resulting in a consensus estimate increase from 37 cents to 38 cents per share [5]

Financial Performance - Total revenue for Q3 2024 was $134.856 million, an increase of 22.8% compared to $109.797 million in Q3 2023, primarily due to a gain on commodity derivative instruments[132]. - Adjusted EBITDA for Q3 2024 was $86.442 million, down from $130.015 million in Q3 2023, reflecting a decrease of 33.5%[129]. - Distributable cash flow for Q3 2024 was $78.622 million, compared to $124.405 million in Q3 2023, a decrease of 36.8%[129]. - Total revenue for the nine months ended September 30, 2024, decreased by 12.8% to $349,973,000 from $401,375,000 in the prior period, mainly due to reduced gains on commodity derivative instruments and lower natural gas and NGL sales[144]. - Oil and condensate sales slightly increased by 0.4% to $209,112,000 for the nine months ended September 30, 2024, driven by higher production volumes[147]. - Natural gas and NGL sales decreased by 21.9% to $115,543,000 for the nine months ended September 30, 2024, attributed to lower realized commodity prices[148]. - The company recognized $36.4 million of realized gains and $21.6 million of unrealized losses from commodity derivative instruments for the nine months ended September 30, 2024, compared to $65.7 million of realized gains and $29.0 million of unrealized losses in the same period in 2023[149]. - Cash flows provided by operating activities decreased by $89,048,000 to $298,087,000 for the nine months ended September 30, 2024, compared to $387,135,000 in the prior period[164]. Production and Sales - Oil and condensate production decreased by 19.9% to 875 MBbls in Q3 2024 from 1,092 MBbls in Q3 2023, while natural gas production decreased by 9.5% to 15,369 MMcf[131]. - The realized price for oil and condensate decreased by 6.8% to $73.15 per Bbl in Q3 2024 from $78.50 per Bbl in Q3 2023[131]. - Natural gas prices at Henry Hub averaged $2.65 per MMBtu in the third quarter of 2024, compared to $2.42 in the second quarter[105]. - Net natural gas exports averaged 11.5 Bcf per day during the third quarter of 2024, a 3% decrease from the 2023 average[111]. Expenses and Costs - Lease operating expenses decreased by 7.4% to $2.422 million in Q3 2024 from $2.615 million in Q3 2023, primarily due to lower nonrecurring service-related expenses[138]. - Production costs and ad valorem taxes decreased by 24.8% to $12.369 million in Q3 2024 from $16.441 million in Q3 2023, driven by lower production taxes and decreased production volumes[139]. - General and administrative expenses increased by 3.4% to $40,286,000 for the nine months ended September 30, 2024, primarily due to higher professional costs and cash compensation[154]. Investments and Acquisitions - The company acquired mineral and royalty interests for a total of $65.2 million, funded by $64.2 million in cash and $1.0 million in equity[167]. - An asset exchange was completed in Q3 2024, involving approximately 8,000 net leasehold acres in East Texas in exchange for 51,000 undeveloped net mineral and royalty acres in Mississippi[169]. - The capital expenditure budget for 2024 associated with non-operated working interests is expected to be approximately $2.3 million, with $0.7 million already invested by September 30, 2024[166]. Debt and Financing - The company maintains a senior secured revolving credit facility with a maximum credit amount of $1.0 billion, reaffirmed at a borrowing base of $580.0 million as of October 2023[170]. - As of September 30, 2024, the company was in compliance with all debt covenants[171]. - The company had $1.8 million in weighted average outstanding borrowings under its credit facility, with an interest rate of 8.04%[178]. - The next semi-annual borrowing base redetermination is scheduled for April 2025[170]. Market Conditions and Strategies - The average WTI spot oil price for the third quarter of 2024 was $68.75 per barrel, a decrease from $82.83 in the second quarter[105]. - The company utilizes various derivative instruments to manage cash flow variability associated with oil and natural gas production[102]. - The company hedged 75% of its available oil and condensate hedge volumes for 2024 and 71% for 2025, and 77% and 79% of its natural gas hedge volumes for the same years, respectively[124]. - The company uses commodity derivative financial instruments to mitigate exposure to price volatility in oil and natural gas[174]. - All seven counterparties to the company's derivative contracts were rated Baa2 or better by Moody's as of September 30, 2024[176]. - The company believes the credit risk associated with its operators and customers is acceptable despite potential exposure from receivables[177]. Exploration and Future Plans - The company continues to explore opportunities in renewable energy and carbon sequestration as part of its strategy for energy transition[99]. - Exploration expenses for the nine months ended September 30, 2024, increased by 50.0% to $2,579,000 compared to $1,719,000 in the same period in 2023, primarily due to increased seismic purchases and delay rentals[144]. - The company plans to continuously monitor production and the commodity price environment to adjust hedging strategies accordingly[125]. Inventory and Reserves - Natural gas inventories at the end of October 2024 were estimated at 3.9 Tcf, which is 4% higher than the five-year average[109]. - The total U.S. rotary rig count was 587 at the end of the third quarter of 2024, showing a decrease from 621 in the first quarter[107]. - A 10% discount applied to SEC commodity pricing resulted in an approximate 2.5% reduction of proved reserve volumes as of September 30, 2024[175].

Financial Data and Key Metrics Changes - Net income for Q3 2024 was $92.7 million, with adjusted EBITDA at $86.4 million, reflecting a stable financial performance despite market volatility [15] - Mineral and royalty production was 35,300 BOE per day, while total production volumes were 37,400 BOE per day, both showing a slight decrease from the previous quarter [14] - Distributable cash flow for the quarter was $78.6 million, representing approximately 1x coverage for the quarter [15] - The company maintained its distribution at $0.375 per unit for the quarter, equating to an annualized distribution of $1.50 [15] Business Line Data and Key Metrics Changes - The company added approximately $15 million in minerals and royalty assets during the quarter, contributing to a total of about $80 million in acquisitions since Q4 2023 [9][10] - The focus remains on a targeted acquisition strategy to enhance existing development opportunities [8] Market Data and Key Metrics Changes - The company is actively monitoring the commodity environment, particularly in East Texas and Louisiana, where multiple operators are engaged in development [11] - Initial production rates from new wells in the Shelby Trough and Toledo Bend areas were reported at 20 to 25 million cubic feet per day [11][12] Company Strategy and Development Direction - The company is committed to maintaining a strategic objective of working with operators to achieve full development across all assets, aiming for accretive production growth [13] - The acquisition strategy is designed to drive long-term value for shareholders, with a focus on high-interest development opportunities [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook across their acreage position and the anticipated improvements in the natural gas market [8][11] - The company is well-hedged for the remainder of 2024, with natural gas hedges at approximately $3.55 per MMBtu, compared to an average price of $2.16 for Q3 [17] Other Important Information - The credit facility was reaffirmed at $580 million, with total commitments remaining at $375 million and no outstanding borrowings on the revolver [16] - The company had approximately $43 million in cash as of the end of the last week [17] Q&A Session Summary Question: Update on Aethon activity and future visibility - Management indicated ongoing collaboration with Aethon and a commitment to maintaining activity levels in the area, with a focus on the Shelby Trough [20][21] Question: Acquisition cadence and spending capacity - Management clarified that the current acquisition pace reflects a thoughtful approach to the market, with the potential to increase spending if attractive opportunities arise [22][23]

Production and Sales - Mineral and royalty production for Q3 2024 was 35.3 MBoe/d, a decrease from 38.2 MBoe/d in Q2 2024 and 40.3 MBoe/d in Q3 2023[4] - The company produced 875 MBbls of oil and condensate in Q3 2024, down from 1,092 MBbls in Q3 2023, a decrease of 19.9%[23] - Oil and condensate sales decreased to $63,999,000 in Q3 2024 from $85,724,000 in Q3 2023, representing a decline of 25.4%[23] - Natural gas and natural gas liquids sales also fell to $37,039,000 in Q3 2024 from $48,815,000 in Q3 2023, a decrease of 24.0%[21] Financial Performance - Net income for Q3 2024 was $92.7 million, up from $68.3 million in Q2 2024 and $62.1 million in Q3 2023[9] - Adjusted EBITDA for Q3 2024 totaled $86.4 million, down from $100.2 million in Q2 2024 and $130.0 million in Q3 2023[9] - Distributable cash flow for Q3 2024 was $78.6 million, compared to $92.5 million in Q2 2024 and $124.4 million in Q3 2023[9] - Total revenue for the three months ended September 30, 2024, was $134,856,000, an increase of 22.8% compared to $109,797,000 for the same period in 2023[21] - Net income for the three months ended September 30, 2024, was $92,731,000, up from $62,067,000 in the same period last year, reflecting a growth of 49.5%[21] - Total operating expenses decreased to $41,736,000 in Q3 2024 from $47,763,000 in Q3 2023, a reduction of 12.6%[21] Price Realization - The average realized price per Boe for Q3 2024 was $29.40, a 2% decrease from $30.01 in Q2 2024 and a 14% decrease from $34.30 in Q3 2023[6] - Realized prices for oil and condensate were $73.15 per Bbl in Q3 2024, compared to $78.50 per Bbl in Q3 2023, a decline of 9.0%[23] Distributions and Units - Black Stone announced a distribution of $0.375 per unit for Q3 2024, with a distribution coverage ratio of approximately 1.00x[2][11] - Distributable cash flow per unit decreased to $0.373 in Q3 2024 from $0.592 in Q3 2023[27] - Preferred unit distributions rose to $7.366 million in Q3 2024 from $5.250 million in Q3 2023[27] - The weighted average common units outstanding (basic) was 210,687 for Q3 2024, slightly up from 209,982 in Q3 2023[21] - Total units outstanding increased to 210,695 in Q3 2024 from 209,991 in Q3 2023[27] Debt and Cash Position - As of November 1, 2024, Black Stone had approximately $42.8 million in cash and no outstanding debt[10] - Interest expense increased to $724 thousand in Q3 2024 from $621 thousand in Q3 2023[27] Acquisitions and Agreements - The company acquired mineral, royalty, and leasehold interests totaling $14.7 million in Q3 2024, bringing total acquisitions since September 2023 to $79.8 million[14] - The company amended joint exploration agreements with Aethon, extending drill schedules and releasing 25,000 acres for other opportunities[13] Commodity Derivatives - Black Stone has commodity derivative contracts covering portions of its anticipated production for 2024, 2025, and 2026, with significant hedge positions in oil and natural gas[15][16] - Unrealized loss on commodity derivative instruments was $20.811 million in Q3 2024, compared to a gain of $51.111 million in Q3 2023[27] Other Financial Metrics - Adjusted EBITDA and Distributable cash flow are used to assess financial performance, with Adjusted EBITDA defined as net income before interest, taxes, and depreciation[26] - Equity-based compensation decreased to $2.177 million in Q3 2024 from $3.777 million in Q3 2023[27] - Net income attributable to common units was $85,365,000 for Q3 2024, compared to $56,817,000 in Q3 2023, an increase of 50.5%[21] - Net income for Q3 2024 was $92.731 million, a decrease from $274.902 million in Q3 2023[27] - Adjusted EBITDA for Q3 2024 was $86.442 million, down from $130.015 million in Q3 2023[27] - Distributable cash flow for Q3 2024 was $78.622 million, compared to $124.405 million in Q3 2023[27]

Financial Performance - For the three months ended June 30, 2024, net income was $68,322, a decrease of 12.7% compared to $78,392 for the same period in 2023[108]. - Adjusted EBITDA for the quarter was $100,247, down 8.9% from $109,245 in the prior year[108]. - Total revenue for the quarter decreased by 6.3% to $109,624 from $117,000 in the same quarter of 2023, primarily due to a loss on commodity derivative instruments[111]. - Total revenue for the six months ended June 30, 2024, decreased by 26.2% to $215,117,000 compared to $291,578,000 in the same period in 2023, primarily due to a loss on commodity derivative instruments and a decrease in natural gas and NGL sales[122][126]. - General and administrative expenses increased by 12.2% to $27,485,000 for the six months ended June 30, 2024, primarily due to higher professional costs and cash compensation[129]. - Cash flows provided by operating activities decreased by 24.3% to $204,845,000 for the six months ended June 30, 2024, compared to $270,425,000 in the same period in 2023[136]. Revenue Breakdown - Oil and condensate sales increased by 20.0% to $73,889, driven by higher production volumes and realized prices[110]. - Natural gas and NGL sales decreased by 12.3% to $36,493, attributed to lower realized commodity prices despite increased production volumes[113]. - Oil and condensate sales increased by 18.5% to $145,113,000 for the six months ended June 30, 2024, driven by higher production volumes and realized commodity prices[124]. - Natural gas and NGL sales decreased by 20.7% to $78,504,000 for the six months ended June 30, 2024, due to lower realized commodity prices despite higher production volumes[125]. Production and Operations - As of June 30, 2024, the company holds mineral and royalty interests in 41 states, including approximately 68,000 producing wells[84]. - Production volumes for oil and condensate increased by 14.5% to 1,876 MBbls, and natural gas production increased by 5.5% to 32,820 MMcf for the six months ended June 30, 2024[121]. - The company recognized a loss of $5,547 on commodity derivative instruments for the quarter, compared to a gain of $11,303 in the same period last year[110]. - The company recognized a loss of $16,837,000 on commodity derivative instruments for the six months ended June 30, 2024, compared to a gain of $63,574,000 in the same period in 2023[126]. - Exploration expenses remained minimal for the quarter, consistent with the prior period[118]. Market Conditions - The average WTI spot oil price for the second quarter of 2024 was $82.83 per barrel, compared to $70.66 per barrel in the second quarter of 2023, reflecting a significant increase[90]. - The average Henry Hub spot natural gas price for the second quarter of 2024 was $2.42 per MMBtu, up from $2.10 per MMBtu in the second quarter of 2023[90]. - The total U.S. rotary rig count decreased to 581 in the second quarter of 2024 from 674 in the second quarter of 2023, indicating a decline in drilling activity[92]. - Natural gas storage levels are projected to rise to 4.0 Tcf by the end of October 2024, which is 6% higher than the five-year average[95]. - Net natural gas exports averaged 11.9 Bcf per day in the first half of 2024, consistent with the average for the full year of 2023[97]. Strategic Initiatives - The company continues to explore opportunities in renewable energy and carbon sequestration as part of its strategy for energy transition[83]. - Aethon Energy has invoked a time-out provision under Joint Exploration Agreements, potentially delaying drilling obligations until September 2024[86]. - The company utilizes various derivative instruments to manage cash flow variability associated with oil and natural gas production[88]. - The company uses commodity derivative financial instruments to mitigate exposure to price volatility in oil and natural gas[143]. - All counterparties to derivative contracts were rated Baa2 or better by Moody's as of June 30, 2024[145]. Financial Position and Capital Expenditures - The company’s capital expenditure budget for 2024 is expected to be approximately $2.3 million, with $0.4 million already invested in the first half of the year[138]. - Cash flows used in investing activities increased significantly to $(51,681,000) for the six months ended June 30, 2024, compared to $(2,633,000) in the same period in 2023, primarily due to acquisitions of oil and natural gas properties[134]. - The company acquired mineral and royalty interests for a total of $50.5 million, funded by $49.5 million in cash and $1.0 million in equity[139]. - The senior secured revolving credit facility has a maximum credit amount of $1.0 billion, with a reaffirmed borrowing base of $580.0 million as of October 2023[140]. - The company maintained cash commitments at $375.0 million after each borrowing base redetermination[140]. - As of June 30, 2024, the company was in compliance with all debt covenants[141]. - The company had $0.2 million in weighted average outstanding borrowings under the credit facility, with a weighted average interest rate of 7.96%[146]. - The next semi-annual borrowing base redetermination is scheduled for October 2024[140]. Asset Valuation - A 10% discount applied to SEC commodity pricing resulted in an approximate 2.5% reduction of proved reserve volumes[144]. - The company has not designated any of its contracts as fair value or cash flow hedges, impacting net income in the period of change[144].

Financial Data and Key Metrics Changes - Total production for Q2 2024 was 40,400 BOE per day, consistent with Q1 2024, generating $68 million in net income and over $100 million in adjusted EBITDA [5][9] - The distribution was maintained at $0.375 per unit, with excess coverage utilized for growth opportunities [5][10] - Distributable cash flow for the quarter was $92.5 million, representing a coverage ratio of 1.17x [9][10] Business Line Data and Key Metrics Changes - Mineral and royalty production was 38,200 BOE per day, flat compared to the previous quarter [9] - An increase in oil volumes helped offset the downturn in the gas market [9] Market Data and Key Metrics Changes - The company has hedged over 60% of expected volumes for the remainder of 2024, with natural gas hedges at approximately $3.55 per MMBtu compared to an average price of about $2 per MMBtu at Henry Hub for Q2 [10][11] Company Strategy and Development Direction - The company is focused on organic growth and targeted acquisitions to enhance its asset base and development opportunities [5][7] - A targeted grassroots acquisition program was initiated to enhance existing asset positions, with $26.5 million in minerals and royalty acquisitions added during the quarter [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term decision-making opportunities and a constructive outlook for natural gas [6] - The company is preparing for anticipated improvements in the natural gas market while maintaining a strong balance sheet [6][10] Other Important Information - The company has added 8 wells in the second quarter with initial production rates between 25 million to 30 million cubic feet per day [8] - The company continues to work with multiple operators to promote development on its acreage [7] Q&A Session Summary Question: Clarification on delayed initial production from Aethon wells - Management clarified that the delayed production refers to previously announced wells, with 8 of 10 expected to come online in the second half of the year [12] Question: Status of Aethon coming out of timeout - Management indicated ongoing discussions with Aethon regarding their status, with new wells having come online but no definitive updates available [13][14] Question: Details on undisclosed Gulf Coast mineral acquisitions - Management stated that they are not disclosing details publicly as they are still assimilating a position that is accretive to their existing assets [15]

Production and Revenue - Mineral and royalty production for Q2 2024 was 38.2 MBoe/d, with total production at 40.4 MBoe/d[2] - Oil and gas revenue for Q2 2024 was $110.4 million, down 3% from Q1 2024[5] - Total revenue for Q2 2024 was $109,624, a decrease of 6.4% from $117,000 in Q2 2023[20] - Oil and condensate sales increased to $73,889 in Q2 2024 from $61,551 in Q2 2023, representing a growth of 20.5%[20] - Natural gas and natural gas liquids sales decreased to $36,493 in Q2 2024 from $41,619 in Q2 2023, a decline of 12.8%[20] - Production of oil and condensate increased to 953 MBbls in Q2 2024 from 846 MBbls in Q2 2023, a rise of 12.7%[22] Financial Performance - Net income for Q2 2024 was $68.3 million, and Adjusted EBITDA totaled $100.2 million[2][6] - Distributable cash flow for Q2 2024 was $92.5 million, with a distribution of $0.375 per unit and coverage of 1.17x[2][8] - Net income for Q2 2024 was $68,322, down 13.7% from $78,392 in Q2 2023[20] - Adjusted EBITDA and Distributable cash flow are used to assess financial performance, but specific figures for these measures were not provided in the documents[25] - Net income for 2024 is $68,322,000, a decrease of 12.6% from $78,392,000 in 2023[26] - Adjusted EBITDA for 2024 is $100,247,000, down 8.9% from $109,245,000 in 2023[26] - Distributable cash flow for 2024 is $92,522,000, a decline of 10.7% compared to $103,606,000 in 2023[26] - Distributable cash flow per unit for 2024 is $0.439, down 10.9% from $0.493 in 2023[26] Expenses and Losses - The company reported a loss on commodity derivative instruments of $5.5 million for Q2 2024[6] - Total operating expenses for Q2 2024 were $41,134, an increase of 7.4% from $38,239 in Q2 2023[20] - The company reported a loss on commodity derivative instruments of $5,547 in Q2 2024, compared to a gain of $11,303 in Q2 2023[20] - Depreciation, depletion, and amortization increased to $11,356,000 in 2024 from $10,421,000 in 2023[26] - Interest expense decreased slightly to $626,000 in 2024 from $645,000 in 2023[26] - Preferred unit distributions increased to $7,366,000 in 2024 from $5,250,000 in 2023[26] - Unrealized loss on commodity derivative instruments for 2024 is $17,366,000, compared to a gain of $16,881,000 in 2023[26] Strategic Acquisitions and Operations - Black Stone acquired $26.5 million in mineral and royalty interests in Q2 2024, totaling $65.1 million since September 2023[12] - The company continues to focus on strategic mineral and royalty interest acquisitions to enhance its asset base[3][12] - As of June 30, 2024, Black Stone had 62 rigs operating, down from 78 in Q1 2024[9] Pricing and Market Trends - Average realized price per Boe was $30.01, a decrease of 3% from Q1 2024 and 4% from Q2 2023[4] - Realized prices for oil and condensate were $77.53 per Bbl in Q2 2024, compared to $72.76 per Bbl in Q2 2023, an increase of 10.5%[22] - The weighted average common units outstanding (basic) was 210,703 in Q2 2024, slightly up from 209,967 in Q2 2023[20] - Total units outstanding increased to 210,689 in 2024 from 209,986 in 2023[26] - The estimated distribution for the three months ended June 30, 2024, is based on 210,689,203 common units[26]

mysticenergy For the March quarter, Black Stone Minerals beat estimates nicely, with EBITDA of $104 million (vs $93 million Street estimates). The company earned Distributable Cash Flow (DCF) of $0.46 per share. That was down from $0.59 in the fourth quarter of 2023. The company cut the distribution by 22%, but we generally knew that between 1) lower natural gas prices and 2) some expiring gas hedges, that earnings and the distribution would fall. With coverage now at 1.22x and a 9% yield, we continue to li ...

In December 2023, we received notice that Aethon was exercising the "time-out" provisions under these JEAs. When natural gas prices fall below specified thresholds, Aethon may elect to temporarily suspend its drilling obligations for up to nine consecutive months and a maximum of 18 total months in any 48-month period. Aethon has not previously invoked the time-out provisions under the JEAs. We continue working closely with Aethon to finalize development plans going forward and assess the effect of the temp ...