Black Stone Minerals, L.P. (NYSE:BSM) Q2 2023 Earnings Conference Call August 1, 2023 10:00 AM ET Company Participants Mark Meaux – Director-Finance Tom Carter – Chairman and Chief Executive Officer Evan Kiefer – Interim Chief Financial Officer and Treasurer Carrie Clark – Senior Vice President-Land and Commercial Conference Call Participants Tim Rezvan – KeyBanc Capital Markets Derrick Whitfield – Stifel Trafford Lamar – Raymond James Operator Good day, everyone, and welcome to today's Black Stone Minerals ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |----------------------------------------------------------------------------|--------------------------|------------------------------------------| | | | | | For the transition period _______________ to _______________ | | | | Commission File Number: 001-37362 | | | | Black Stone | Minerals, | L.P. | | (Exact name of registrant as specified | in its charter) | | | Delaware | | 47-184669 ...

Financial Data and Key Metrics Changes - The company reported total production volumes of 39.3 MBoe/d for the first quarter, an 8% decrease from the fourth quarter [16] - Adjusted EBITDA was $109 million and distributable cash flow was $104 million, both up 11% to 12% from the first quarter of 2022 [19] - Realized prices per Boe for the first quarter were approximately $33 per barrel, a decrease of 35% from $51 per barrel in the fourth quarter [10] - The borrowing base for the revolving credit facility was reaffirmed at $550 million, with $375 million in commitments [11] Business Line Data and Key Metrics Changes - Royalty volumes for the first quarter were 36.8 MBoe/d, which is 24% above the first quarter of 2022 [17] - The company turned to sales 20 wells in the Shelby Trough under development agreements, with six new wells since the beginning of the year [6] - The company has 21 new generation multistage completion wells turned to sales in the East Texas Austin Chalk, with potential for an additional 14 wells this year [6][21] Market Data and Key Metrics Changes - The company experienced a decrease in rig activity on its acreage, down from 108 rigs at the end of the previous year to 78 rigs as of March 31 [18][35] - Permitted activity in the first quarter remained consistent with the fourth quarter, with over 400 horizontal permits added on the company's acreage [7] Company Strategy and Development Direction - The company aims to continue developing through commodity cycles, expecting to add long-term value to its unit holders [19] - The company is focused on organic initiatives and long-term development deals to accelerate production with minimal capital requirements [32] Management's Comments on Operating Environment and Future Outlook - Management noted challenges with natural gas prices but expressed confidence in maintaining the highest distribution level as a public company at $0.475 per unit [19] - The company expects to see growing volumes from Aethon and the Austin Chalk, which may mitigate risks from other areas [28] Other Important Information - The company’s hedging strategy brought in over $13 million for the quarter, with hedge natural gas prices over $5 per MMBtu [33][36] - The total debt balance was $0 at the end of the quarter, with $66 million in cash on the balance sheet [22] Q&A Session All Questions and Answers Question: Update on 2023 guidance - Management indicated that they typically update guidance mid-year and are currently assessing the gas price environment and rig counts before making any updates [23] Question: Payout ratio and distribution policy - Management stated they are comfortable maintaining a lower coverage in the near term and aim for a stable to slightly growing distribution [27] Question: Oil cuts and production impact from the Austin Chalk - Management expects to see significant volume ramp-up in Q3 and Q4 from the Austin Chalk area [29] Question: Buybacks and capital structure - Management is considering buybacks but does not have aggressive plans currently, focusing on maintaining a clean balance sheet [46][50]

Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"), we have evaluated, under the supervision and with the participation of management of our general partner, including our general partner's principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end ...

Black Stone Minerals, L.P. (NYSE:BSM) Q4 2022 Earnings Conference Call February 22, 2023 10:00 AM ET Company Participants Steve Putman - Senior Vice President and General Counsel Tom Carter - Chairman and Chief Executive Officer Evan Kiefer - Vice President, Finance, and Investor Relations Conference Call Participants Derrick Whitfield - Stifel Tim Rezvan - KeyBanc Monroe Helm - Clemensen Capital Operator Good day, everyone, and welcome to today's Black Stone Minerals Fourth Quarter and Earnings Release Con ...

Development well. A well drilled within the proved area of an oil and natural gas reservoir to the depth of a stratigraphic horizon known to be productive. Exploitation. A drilling or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects. Extension well. A well drilled to extend the limits of a known reservoir. Gross acres or gross wells. The total acres or wells, as the case may ...

Financial Data and Key Metrics Changes - Total production volumes for Q3 2022 were 40,000 Boe per day, a 19% increase from Q2 2022, driven entirely by a 23% increase in royalty volumes to 37,300 Boe per day [7][16] - Adjusted EBITDA for Q3 was $123 million, up 9% from Q2, while distributable cash flow was $116 million, an 8% increase from the previous quarter [11][16] - Oil and gas revenues reached $218 million, a 6% increase from the last quarter [16] Business Line Data and Key Metrics Changes - Royalty production increased by 23% to 37,300 Boe per day, primarily due to higher gas volumes from producers in Louisiana Haynesville [16] - The company reported a record distribution of $0.45 per unit for Q3, marking a new high watermark [11] Market Data and Key Metrics Changes - Realized prices for oil were over $95 per barrel and for natural gas over $8 per MCF, despite a decrease from Q2 [16] - The rig count on the company's acreage increased by 14% from 81 to 92 rigs, significantly higher than the 59 rigs at the same time last year [10] Company Strategy and Development Direction - The company is focused on organic growth projects in the Shelby Trough and Austin Chalk, with ongoing development activity and increasing production volumes [11][12] - The strategy emphasizes long-term development and maximizing the value of existing acres without additional equity investments or debt [14] - The company aims to attract development dollars to enhance production growth and has successfully brought in new operators to increase activity [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued revenue impacts from higher production levels and favorable commodity prices, expecting total production for the year to meet or exceed original guidance [9][21] - The company anticipates a strong cash flow in 2023 due to increased hedge prices, with natural gas swap strike prices rising over 60% and oil hedge prices increasing over 20% [19][21] Other Important Information - The company reduced its debt from $60 million to $19 million, enhancing financial flexibility, and extended the maturity date of its credit facility to October 2027 [20][21] - The borrowing base of the credit facility was increased from $400 million to $550 million, although total commitments were limited to $375 million [21] Q&A Session Summary Question: Production strength commentary for Q3 - Management confirmed that the production strength was indeed driven by high-rate new wells in Louisiana Haynesville, with ongoing positive activity in the Shelby Trough expected to benefit Q4 volumes [23][24] Question: Activity expectations for Austin Chalk - Management anticipates activity levels in the Austin Chalk to be in the high-20s to low-30s over the next 12 months, with a focus on the core of the play where results have been favorable [26]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | |----------------------------------------------------------------------------|-------------------------------------------------------------|--------------|-- ...

Black Stone Minerals, L.P. (NYSE:BSM) Q2 2022 Earnings Conference Call August 2, 2022 10:00 AM ET Company Participants Evan Kiefer - Vice President, Finance & Investor Relations. Tom Carter - Chairman & Chief Executive Officer Jeff Wood - President & Chief Financial Officer Conference Call Participants Trafford Lamar - Raymond James Operator Good morning and welcome to the Black Stone Minerals Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. A ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Black Stone Minerals, L.P.'s unaudited consolidated financial statements as of June 30, 2022, reflecting significant revenue and net income growth driven by higher commodity prices and a slight increase in total assets to **$1.27 billion** [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (thousands of dollars) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $155,500 | $107,974 | | **Net Property and Equipment** | $1,109,878 | $1,133,336 | | **Total Assets** | **$1,272,693** | **$1,247,921** | | **Total Current Liabilities** | $124,817 | $77,140 | | **Total Liabilities** | $230,005 | $184,292 | | **Total Equity** | $744,327 | $765,268 | | **Total Liabilities, Mezzanine Equity, and Equity** | **$1,272,693** | **$1,247,921** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (thousands of dollars, except per unit) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $180,372 | $58,442 | $216,796 | $120,010 | | **Income from Operations** | $133,067 | $17,026 | $127,319 | $34,239 | | **Net Income** | $131,788 | $15,429 | $124,786 | $31,615 | | **Net Income Attributable to Common Units** | $126,538 | $10,179 | $114,286 | $21,115 | | **Net Income Per Common Unit (basic)** | $0.60 | $0.05 | $0.55 | $0.10 | | **Net Income Per Common Unit (diluted)** | $0.59 | $0.05 | $0.55 | $0.10 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Highlights (thousands of dollars) | Cash Flow Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $160,139 | $125,579 | | **Net Cash Used in Investing Activities** | ($145) | ($12,754) | | **Net Cash Used in Financing Activities** | ($156,712) | ($113,578) | | **Net Change in Cash and Cash Equivalents** | $3,282 | ($753) | | **Cash and Cash Equivalents - End of Period** | $12,158 | $1,043 | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) - The Partnership's primary business is owning and managing oil and natural gas mineral and royalty interests across **41 states** in the continental U.S.[25](index=25&type=chunk) - The Partnership entered into farmout agreements with Canaan, Azul, and JWM to fund development of its working interests in San Augustine County, Texas, retaining overriding royalty interests[46](index=46&type=chunk) - As of June 30, 2022, the Partnership held open fixed-price swap contracts for oil and natural gas, with a net fair value liability of **$107.2 million**, to mitigate commodity price risk[55](index=55&type=chunk)[56](index=56&type=chunk)[63](index=63&type=chunk) - The Partnership's credit facility has a borrowing base of **$400.0 million**, with **$86.0 million** outstanding as of June 30, 2022, maturing in November 2024[82](index=82&type=chunk)[86](index=86&type=chunk) - On July 25, 2022, the Board approved a distribution of **$0.42 per common unit** for the second quarter of 2022[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant increase in revenue and profitability for the second quarter and first half of 2022, driven by strong commodity prices, while highlighting development activities and strong liquidity with **$314.0 million** unused borrowing capacity [Overview and Recent Developments](index=21&type=section&id=Overview%20and%20Recent%20Developments) - The company's principal business is maximizing the value of its mineral and royalty assets through active management and acquisitions[119](index=119&type=chunk) - Development activity is progressing in the Shelby Trough, with Aethon turning eight wells to sales in Angelina County and commencing operations on six additional wells; Aethon is also actively drilling and completing wells in San Augustine County[122](index=122&type=chunk) - In the Austin Chalk play, seven operators are actively engaged in redevelopment, with four rigs running; twelve wells with modern completions are producing, and an additional six are being drilled or completed[123](index=123&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q2 2022 vs Q2 2021 Performance | Metric | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Production (MBoe/d)** | 33.5 | 38.2 | (12.3)% | | Natural Gas Production (MMcf) | 12,895 | 15,676 | (17.7)% | | **Realized Oil Price ($/Bbl)** | $104.89 | $62.72 | 67.2% | | **Realized Natural Gas Price ($/Mcf)** | $8.62 | $3.60 | 139.4% | | **Total Revenue ($ thousands)** | $180,372 | $58,442 | 208.6% | - The increase in Q2 2022 revenue was primarily due to significantly higher realized commodity prices for both oil and natural gas, which more than offset a **17.7% decrease** in natural gas production volumes[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) - For the six months ended June 30, 2022, total revenue increased **80.6%** to **$216.8 million** compared to the prior year, driven by higher commodity prices, partially offset by a **$60.0 million** increase in losses on commodity derivative instruments[175](index=175&type=chunk)[176](index=176&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary sources of liquidity are cash from operations and borrowings under the Credit Facility; as of June 30, 2022, the company had **$86.0 million** in borrowings outstanding[188](index=188&type=chunk) - Cash from operating activities increased to **$160.1 million** for the first six months of 2022, up from **$125.6 million** in the same period of 2021, mainly due to higher commodity prices[192](index=192&type=chunk)[196](index=196&type=chunk) - The 2022 capital expenditure budget for non-operated working interests is approximately **$4.5 million**, net of farmout reimbursements[195](index=195&type=chunk) - The Credit Facility has a borrowing base of **$400.0 million**, providing **$314.0 million** of unused borrowing capacity as of June 30, 2022[86](index=86&type=chunk)[199](index=199&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is commodity price volatility, mitigated by derivatives, alongside counterparty credit risk and interest rate risk on its **$86.0 million** variable-rate credit facility - The company's major market risk exposure is the pricing of oil, natural gas, and NGLs; it uses commodity derivative instruments to reduce exposure to price volatility[207](index=207&type=chunk) - As of June 30, 2022, the company had **seven derivative counterparties**, all rated **Baa1 or better by Moody's** and are lenders under the Credit Facility, mitigating counterparty risk[209](index=209&type=chunk) - The company is exposed to interest rate risk on its **$86.0 million** of outstanding borrowings under its Credit Facility; a **1% increase** in interest rates would have increased interest expense by **$0.4 million** for the first six months of 2022[211](index=211&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[213](index=213&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal controls[214](index=214&type=chunk) [PART II – OTHER INFORMATION](index=37&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, but management anticipates no material adverse effect on its financial condition or operations from these pending matters - The Partnership is involved in routine litigation from time to time, but management does not expect any pending claims to have a material adverse effect on its financial condition or operations[217](index=217&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section highlights a new risk factor concerning rising inflation, which could lead to higher interest rates and a recession, potentially impacting cash generation and distributions - A new risk factor has been identified related to rising inflation, which could lead to increased interest rates and a recession[219](index=219&type=chunk) - An economic slowdown or recession could result in decreased drilling activity by operators and reduced demand for oil and natural gas, which would adversely affect cash flow and distributions[222](index=222&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the reporting period, the company had no unregistered sales or repurchases of its equity securities - There were no unregistered sales of equity securities or repurchases of equity securities by the issuer during the period[223](index=223&type=chunk)[224](index=224&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - No information was reported under this item[225](index=225&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including required officer certifications - A list of exhibits filed with the report is provided, including officer certifications pursuant to the Sarbanes-Oxley Act of 2002[227](index=227&type=chunk)