[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Black Stone Minerals maintained its **$0.375 per unit** distribution with **0.93x coverage**, reporting **$15.9 million net income** and **$82.2 million Adjusted EBITDA** - The company maintained its quarterly distribution at **$0.375 per unit**, despite a distribution coverage of **0.93x** The lower coverage was partially attributed to an expenditure on a seismic license to support mineral acquisitions in the Shelby Trough area[4](index=4&type=chunk) Key Financial and Operational Metrics | Metric | Q1 2025 Value | | :--- | :--- | | **Total Production** | 35.5 MBoe/d | | **Net Income** | $15.9 million | | **Adjusted EBITDA** | $82.2 million | | **Distributable Cash Flow** | $73.7 million | | **Quarterly Distribution** | $0.375 per unit | | **Distribution Coverage** | 0.93x | | **Total Debt (end of Q1)** | $63.0 million | [Quarterly Financial and Operating Results](index=1&type=section&id=Quarterly%20Financial%20and%20Operating%20Results) Production declined year-over-year due to strategic farm-outs, with net income and cash flows impacted by derivative losses [Production](index=1&type=section&id=Production) Total production for Q1 2025 decreased to **35.5 MBoe/d**, primarily from reduced working-interest volumes, with mineral and royalty volumes at **96%** Production Volume Trends | Production Volume (MBoe/d) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Mineral and Royalty** | 34.2 | 34.8 | 38.1 | | **Working-Interest** | 1.3 | 1.3 | 2.2 | | **Total Production** | 35.5 | 36.1 | 40.3 | - The year-over-year decline in working-interest volumes is a result of the Partnership's strategic decision to farm out its working-interest participation to third-party capital providers[6](index=6&type=chunk) [Realized Prices, Revenues, and Net Income](index=1&type=section&id=Realized%20Prices%2C%20Revenues%2C%20and%20Net%20Income) Average realized price per Boe increased **10%** to **$33.94**, but net income fell to **$15.9 million** due to a **$56.0 million** derivative loss Realized Prices, Revenues, and Net Income Trends | Financial Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Average Realized Price ($/Boe)** | $33.94 | $30.81 | $30.87 | | **Oil and Gas Revenue** | $108.3 million | $102.3 million | $113.2 million | | **Net Income** | $15.9 million | $46.3 million | $63.9 million | - The Partnership reported a significant loss on commodity derivative instruments of **$56.0 million**, comprising a **$3.6 million** realized loss and a **$52.4 million** non-cash unrealized loss[11](index=11&type=chunk) [Adjusted EBITDA and Distributable Cash Flow](index=2&type=section&id=Adjusted%20EBITDA%20and%20Distributable%20Cash%20Flow) Adjusted EBITDA declined to **$82.2 million** and Distributable Cash Flow to **$73.7 million** compared to the prior year Adjusted EBITDA and Distributable Cash Flow Trends | Non-GAAP Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $82.2 million | $90.1 million | $104.1 million | | **Distributable Cash Flow** | $73.7 million | $81.9 million | $96.4 million | [Financial Position and Distributions](index=2&type=section&id=Financial%20Position%20and%20Distributions) Black Stone had **$63.0 million** drawn on its credit facility, a **$375.0 million** borrowing base, and approved a **$0.375 per unit** distribution with **0.93x** coverage - As of May 2, the Partnership had **$63.0 million** of debt outstanding and approximately **$4.3 million** in cash[14](index=14&type=chunk) - The Board approved a cash distribution of **$0.375 per common unit** for Q1 2025, with a distribution coverage ratio of **0.93x**[16](index=16&type=chunk) [Activity Update](index=2&type=section&id=Activity%20Update) Development and acquisition activities continued, with **11 new wells** in Shelby Trough and **$14.2 million** in mineral interests acquired [Development Activity](index=2&type=section&id=Development%20Activity) Development is active across key basins, with **11 gross wells** turned to sales in Shelby Trough and **24 wells spud** in the Permian Basin - In the Shelby Trough, Aethon turned **11 gross (0.7 net) wells** to sales and its development program remains on track with an estimated **17 gross (1.0 net)** additional wells expected to turn to sales during the remainder of 2025[17](index=17&type=chunk) - In the Permian Basin (Culberson County, Texas), a large operator has planned over **35 gross (1.25 net) wells**, with **24 spud** to date, and **nine** are expected to turn to sales in Q4 2025[19](index=19&type=chunk) [Acquisition Activity](index=2&type=section&id=Acquisition%20Activity) Black Stone expanded its mineral portfolio, acquiring **$14.2 million** in Q1 2025, totaling **$160.6 million** since September 2023 - In Q1 2025, Black Stone acquired **$14.2 million** of additional mineral and royalty interests[20](index=20&type=chunk) - From September 2023 through May 2025, the Partnership has completed **$160.6 million** of mineral and royalty acquisitions[20](index=20&type=chunk) [Update to Hedge Position](index=3&type=section&id=Update%20to%20Hedge%20Position) Black Stone has commodity derivative contracts in place for 2025 and 2026, hedging oil at **$71.22/Bbl** and natural gas at **$3.36-$3.45/MMBtu** for 2025 Oil Swap Positions | Period | Oil Swap Volume (MBbl) | Oil Swap Price ($/Bbl) | | :--- | :--- | :--- | | **2Q25 - 4Q25** | 555 per quarter | $71.22 | | **1Q26 - 4Q26** | 390 per quarter | $64.89 | Gas Swap Positions | Period | Gas Swap Volume (BBtu) | Gas Swap Price ($/MMBtu) | | :--- | :--- | :--- | | **2Q25** | 10,920 | $3.36 | | **3Q25 - 4Q25** | 11,040 per quarter | $3.45 | | **1Q26 - 4Q26** | 11,700 - 11,960 per quarter | $3.67 | [Financial Statements and Non-GAAP Reconciliation](index=5&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliation) This section presents consolidated financial statements and non-GAAP reconciliations, detailing revenues, expenses, and key adjustments for Q1 2025 [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 consolidated statements show total revenues of **$59.3 million** and net income of **$15.9 million**, primarily due to a **$56.0 million** derivative loss Consolidated Statements of Operations (in thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenue** | $59,252 | $105,493 | | *Oil and gas sales* | *$108,328* | *$113,235* | | *Loss on derivatives* | *($56,001)* | *($11,290)* | | **Total Operating Expense** | $42,091 | $41,519 | | **Income from Operations** | $17,161 | $63,974 | | **Net Income** | $15,948 | $63,927 | | **Net Income per Common Unit (diluted)** | $0.04 | $0.27 | [Supplemental Operating and Financial Data](index=6&type=section&id=Supplemental%20Operating%20and%20Financial%20Data) Supplemental data for Q1 2025 shows total production of **3,192 MBoe**, with oil at **$69.96/Bbl** and natural gas at **$3.92/Mcf** Supplemental Operating and Financial Data | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Production (MBoe)** | 3,192 | 3,668 | | **Realized Oil Price ($/Bbl)** | $69.96 | $77.17 | | **Realized Nat Gas Price ($/Mcf)** | $3.92 | $2.55 | | **Avg. Realized Price ($/Boe)** | $33.94 | $30.87 | [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP Net Income to Adjusted EBITDA of **$82.2 million** and Distributable Cash Flow of **$73.7 million** for Q1 2025 Reconciliation of Non-GAAP Financial Measures (in thousands) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net income (loss)** | **$15,948** | **$63,927** | | Unrealized loss on derivatives | $52,390 | $25,087 | | Depreciation, depletion, and amortization | $9,130 | $11,639 | | Other adjustments | $4,699 | $3,464 | | **Adjusted EBITDA** | **$82,167** | **$104,117** | | Cash interest & preferred distributions | ($8,489) | ($7,728) | | **Distributable cash flow** | **$73,677** | **$96,388** | [Corporate Information and Disclosures](index=3&type=section&id=Corporate%20Information%20and%20Disclosures) This section provides details on the upcoming conference call and important forward-looking statements, highlighting inherent risks [Conference Call](index=3&type=section&id=Conference%20Call) Black Stone will host a conference call and webcast on May 6, 2025, at 9:00 a.m. Central Time, to discuss Q1 2025 results - A conference call to discuss Q1 2025 results is scheduled for May 6, 2025, at 9:00 a.m. Central Time[24](index=24&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements subject to risks and uncertainties, including oil and gas price volatility and production levels - The news release includes forward-looking statements that are subject to risks and uncertainties, including the volatility of oil and gas prices, production levels, and the level of drilling activity by operators[26](index=26&type=chunk)[27](index=27&type=chunk)

Financial Performance - Net income for the year ended December 31, 2024, was $271,326, a decrease of 35.8% compared to $422,549 in 2023[315]. - Total revenue for 2024 decreased by 26.8% to $433,699 from $592,216 in 2023, primarily due to lower oil and condensate sales and a loss on commodity derivative instruments[316][317]. - Adjusted EBITDA for 2024 was $380,946, down 19.7% from $474,710 in 2023[315]. - Distributable cash flow for 2024 was $349,446, a decrease of 22.6% compared to $451,210 in 2023[315]. - Cash flows provided by operating activities decreased by 25.4% to $389,043 in 2024 from $521,251 in 2023[332]. Production and Sales - Oil and condensate production decreased by 4.0% to 3,606 MBbls in 2024 from 3,757 MBbls in 2023[316]. - Natural gas production decreased by 2.6% to 62,984 MMcf in 2024 from 64,647 MMcf in 2023[316]. - The average net natural gas exports in 2024 were 12.0 Bcf per day, a 1% increase from 2023, with forecasts of 14.1 Bcf per day for early 2025, an 18% increase[299]. Commodity Prices and Market Conditions - The average WTI spot crude oil price in Q4 2024 was $72.44 per barrel, while the Henry Hub spot natural gas price was $3.40 per MMBtu[293]. - The company operates in a volatile commodity price environment, with oil prices rising early in 2024 but declining later due to market oversupply concerns[292]. - A 10% discount applied to commodity prices resulted in an approximate 1.5% reduction in estimated proved reserve volumes as of December 31, 2024[355]. Hedging and Risk Management - The company hedged 77% of its available oil and condensate hedge volumes and 82% of its available natural gas hedge volumes for 2025 as of December 31, 2024[309]. - The company utilizes various derivative instruments to manage cash flow variability, including fixed-price swap contracts and costless collar contracts[291]. - The company utilizes commodity derivative financial instruments to mitigate exposure to price volatility in oil and natural gas, with contracts settling monthly in cash[362]. - The company does not currently have any interest rate hedges in place[366]. - The company may consider using derivative instruments to hedge exposure to variable interest rates in the future[366]. Capital Expenditures and Investments - The 2025 capital expenditure budget for non-operated working interests is expected to be approximately $2.3 million, primarily for workovers and recompletions on existing wells[335]. - Expenditures for drilling, completion, and recompletion costs were $0.8 million in 2024 and $4.2 million in 2023, with lease acquisitions costing $3.4 million in 2024 and $0.6 million in 2023[336]. - In 2024, the company acquired mineral and royalty interests for an aggregate of $110.4 million, funded by $109.4 million in borrowings and $1.0 million through common units issuance[337]. Debt and Financing - The senior secured revolving credit facility has a maximum credit amount of $1.0 billion, with a borrowing base reaffirmed at $550.0 million in April 2023 and increased to $580.0 million in October 2023[340]. - The company had weighted average outstanding borrowings of $7.7 million under its Credit Facility[366]. - The weighted-average interest rate on the borrowings was 7.5%[366]. - A 1% increase in the interest rate would result in an increase in interest expense of less than $0.1 million for the year ended December 31, 2024[366]. - Interest expense increased by 12.9% to $3,109 in 2024 from $2,754 in 2023[327]. Future Outlook and Plans - In 2024, the company entered into Accelerated Drilling Agreements with large operators, resulting in 2 gross (0.4 net) wells turned-to-sales (TTS) and an expectation of 11 gross (0.6 net) additional wells TTS in 2025[286]. - The company expects Aethon to turn-to-sales 17 gross (1.1 net) additional wells during 2025, with initial rates between 20 – 30 MMcf/d[285]. - The company plans to continue targeted mineral and royalty acquisitions to complement existing positions[337]. - The next semi-annual borrowing base redetermination is scheduled for April 2025[340].

Black Stone Minerals, L.P. Common Units (NYSE:BSM) Q4 2024 Earnings Conference Call February 25, 2024 10:00 AM ET Company Participants Mark Meaux - Director, Finance Thomas Carter - Chairman, President and CEO Taylor DeWalch - SVP and CFO Carrie Clark - SVP and CCO Conference Call Participants John Annis - Texas Capital Tim Rezvan - KeyBanc Capital Markets Operator Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome every ...

Core Insights - Black Stone Minerals (BSM) reported a significant decline in revenue and earnings per share (EPS) for the quarter ended December 2024, with revenue of $83.73 million, down 56.1% year-over-year, and EPS of $0.18 compared to $0.65 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $115.46 million by 27.48%, while the EPS also missed the consensus estimate of $0.39 by 53.85% [1] Financial Performance - The company’s production metrics showed a decrease in oil equivalent production to 36.1 million barrels per day, below the analyst estimate of 37.37 million barrels [4] - Natural gas production was reported at 14,794 MMcf, which was lower than the average estimate of 15,561.19 MMcf [4] - Oil and condensate production was slightly above the analyst estimate, reported at 855 MBBL compared to 844.63 MBBL [4] Revenue Breakdown - Revenue from lease bonuses and other income was $1.98 million, significantly lower than the estimated $2.71 million, marking a 48.2% decline year-over-year [4] - Oil and condensate sales generated $59.95 million, falling short of the $62.56 million estimate and representing a 25.2% decrease from the previous year [4] - Revenue from natural gas and natural gas liquids sales was reported at $42.36 million, below the estimated $48.16 million, reflecting a 19.2% year-over-year decline [4] Stock Performance - Over the past month, shares of Black Stone Minerals have returned -2%, compared to a -0.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Production and Reserves - Black Stone Minerals reported fourth quarter 2024 production of 36.1 MBoe/d, a decrease from 37.4 MBoe/d in the previous quarter and 41.1 MBoe/d in Q4 2023[6]. - Full year 2024 production averaged 38.5 MBoe/d, with mineral and royalty volumes decreasing by 2% year-over-year to 36.6 MBoe/d[7]. - Black Stone expects full year 2025 production guidance of 38 - 41 MBoe/d, representing approximately 2% growth over 2024[3]. - Estimated proved reserves at year-end 2024 were 57.4 MMBoe, an 11% decrease from 64.5 MMBoe at year-end 2023[12]. - Total proved reserves at December 31, 2024, decreased to 57,380 MBoe from 64,474 MBoe at the end of 2023, reflecting a reduction of 10.9%[45]. - Net proved developed reserves fell from 57,101 MBoe at December 31, 2023, to 54,283 MBoe at December 31, 2024, a decrease of 4.9%[45]. - The company experienced a production decline of 14,103 MBoe for the year ended December 31, 2024, compared to 14,103 MBoe in 2023[45]. - The company made extensions, discoveries, and other additions of 11,402 MBoe during the year ended December 31, 2024[45]. Financial Performance - Net income for Q4 2024 was $46.3 million, down from $92.7 million in Q3 2024 and $147.6 million in Q4 2023[11]. - Total revenue for Q4 2024 was $83.726 million, a decrease of 56% compared to $190.841 million in Q4 2023[34]. - Oil and condensate sales amounted to $59.949 million in Q4 2024, down from $80.112 million in Q4 2023, representing a 25% decline[34]. - Natural gas and natural gas liquids sales were $42.364 million in Q4 2024, a decrease of 19% from $52.440 million in Q4 2023[34]. - Net income for Q4 2024 was $46.346 million, compared to $147.647 million in Q4 2023, reflecting a 69% drop[34]. - Adjusted EBITDA for Q4 2024 totaled $90.1 million, compared to $86.4 million in Q3 2024 and $125.5 million in Q4 2023[11]. - Adjusted EBITDA for the year ended December 31, 2024, was $380,946,000, down 19.7% from $474,710,000 in 2023[43]. - Distributable cash flow for the three months ended December 31, 2024, was $81,914,000, a decline of 31.1% from $119,085,000 in the same quarter of 2023[43]. - Distributable cash flow per unit for the quarter ended December 31, 2024, was $0.388, down 31.5% from $0.566 in the same quarter of 2023[43]. - The company reported a total operating expense of $36.204 million in Q4 2024, down from $43.239 million in Q4 2023[34]. Distribution and Cash Flow - The company maintained a quarterly distribution of $0.375 per unit for Q4 2024, with a distribution coverage ratio of 1.03x[16]. - Adjusted EBITDA and Distributable cash flow are used to assess financial performance, but should not replace GAAP measures[39][41]. Acquisitions and Investments - The company acquired $45.2 million in mineral, royalty, and leasehold interests in Q4 2024, totaling $130.5 million since September 2023[22]. - Black Stone plans to continue its targeted mineral acquisition program, focusing on high-interest areas in the Gulf Coast region[22]. Market Conditions and Outlook - The company anticipates continued volatility in oil and natural gas prices, impacting future performance[32]. - The company has a hedge position for oil and natural gas covering portions of its anticipated production for 2025 and 2026[27][28]. Unit and Share Information - The weighted average common units outstanding (basic) was 210,694 in Q4 2024, slightly up from 209,991 in Q4 2023[34]. - The number of total units outstanding increased slightly from 210,313,000 in 2023 to 211,138,000 in 2024[43]. Unrealized Gains and Losses - The company reported a significant unrealized gain on commodity derivative instruments of $29,302,000 for the three months ended December 31, 2024, compared to an unrealized loss of $37,400,000 in the same period of 2023[43].

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]