Black Stone Minerals(US:BSM)2024-05-07 16:30Financial Data and Key Metrics Changes - The company reported a net income of $63.9 million and adjusted EBITDA of $104.1 million for Q1 2024 [10][22] - Total production volumes decreased by 2% from the previous quarter to 40.3 MBoe/d, with royalty volumes at 38.9 MBoe/d [10][22] - Distributable cash flow for the quarter was $96.4 million, representing a coverage ratio of 1.22x [24] Business Line Data and Key Metrics Changes - Oil volumes decreased in the Midland and Delaware Basins, but there was an increase in the Bakken area [10] - Natural gas volumes increased in several regions, including Fayetteville and Gulf Coast, despite ongoing challenges [11] Market Data and Key Metrics Changes - The company lowered its 2024 production guidance by approximately 4% to a range of 38,500 to 40,500 Boe per day due to production curtailments and delays [27] - The average price at Henry Hub for Q1 was $2.24 per MMbtu, while the company's 2024 natural gas hedge position is at approximately $3.55 per MMbtu [28] Company Strategy and Development Direction - The company aims to grow distributions back to previous high levels by 2026 through production growth and capitalizing on LNG demand [19] - A focus on organic initiatives and targeted grassroots acquisition programs has been emphasized to supplement existing assets [18] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the long-term natural gas outlook despite current commodity price challenges [20] - The company does not anticipate a material impact on volumes in Haynesville through 2024 and 2025, even with operators slowing down [15] Other Important Information - The company has acquired approximately $50 million of non-producing mineral and royalty interests since September 2023 [25] - The borrowing base for the revolving credit facility was reaffirmed at $580 million, with commitments held at $375 million [26] Q&A Session Summary Question: 2024 guidance and production cadence - Management indicated that production curtailments are expected through the second quarter, with a potential recovery in the third quarter as prices improve [33] Question: Acquisition activity and competitive environment - The company is focusing on less expensive mineral acquisitions in areas contiguous to existing positions, expecting higher returns compared to more competitive regions like the Permian [34][35] Question: Future distribution levels - Management expressed a desire to maintain the current distribution level of $0.375 per unit, but future coverage will depend on the continuation of low gas prices [39][40]