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Black Stone Minerals(BSM) - 2024 Q3 - Earnings Call Transcript
BSMBlack Stone Minerals(BSM)2024-11-05 17:09
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Financial Data and Key Metrics Changes - Net income for Q3 2024 was 92.7million,withadjustedEBITDAat92.7 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 78.6million,representingapproximately1xcoverageforthequarter[15]−Thecompanymaintaineditsdistributionat78.6 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]BusinessLineDataandKeyMetricsChanges−Thecompanyaddedapproximately1.50 [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 80millioninacquisitionssinceQ42023[9][10]−Thefocusremainsonatargetedacquisitionstrategytoenhanceexistingdevelopmentopportunities[8]MarketDataandKeyMetricsChanges−Thecompanyisactivelymonitoringthecommodityenvironment,particularlyinEastTexasandLouisiana,wheremultipleoperatorsareengagedindevelopment[11]−InitialproductionratesfromnewwellsintheShelbyTroughandToledoBendareaswerereportedat20to25millioncubicfeetperday[11][12]CompanyStrategyandDevelopmentDirection−Thecompanyiscommittedtomaintainingastrategicobjectiveofworkingwithoperatorstoachievefulldevelopmentacrossallassets,aimingforaccretiveproductiongrowth[13]−Theacquisitionstrategyisdesignedtodrivelong−termvalueforshareholders,withafocusonhigh−interestdevelopmentopportunities[10]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheoutlookacrosstheiracreagepositionandtheanticipatedimprovementsinthenaturalgasmarket[8][11]−Thecompanyiswell−hedgedfortheremainderof2024,withnaturalgashedgesatapproximately80 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 2.16forQ3[17]OtherImportantInformation−Thecreditfacilitywasreaffirmedat2.16 for Q3 [17] Other Important Information - The credit facility was reaffirmed at 580 million, with total commitments remaining at 375millionandnooutstandingborrowingsontherevolver[16]−Thecompanyhadapproximately375 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]