Black Stone Minerals(US:BSM)2025-11-04 16:00Financial Data and Key Metrics Changes - The company reported net income of $91.7 million for Q3 2025, with adjusted EBITDA at $86.3 million, representing a 5% increase in mineral and royalty production to 34,700 BOE per day compared to the prior quarter [12][13][14] - Distributable cash flow for the quarter was $76.8 million, which represents a coverage ratio of 1.21 times for the period [13] Business Line Data and Key Metrics Changes - Mineral and royalty production increased to 34,700 BOE per day, driven by strong volumes in the Permian Basin, while total production volumes reached 36,300 BOE per day [12][13] - The company expects to drill over 50 wells annually in the expanded Shelby Trough, contributing to significant gas growth [7][10] Market Data and Key Metrics Changes - The company noted that 57% of oil and gas revenue in the quarter came from oil and condensate production [13] - The outlook for natural gas is increasingly constructive due to rising demand from LNG and power sectors, positioning the company favorably for future supply calls [14] Company Strategy and Development Direction - The company is pursuing acquisitions in the Haynesville expansion and is optimistic about the development of Revenant starting in early 2026 [7][8] - A grassroots acquisition program added $20 million in mineral and royalty acquisitions during the quarter, totaling approximately $193 million since September 2023 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential anchored by development agreements in high-interest acreage and core legacy assets [14] - The company is focused on a multi-year forecast, emphasizing the importance of long-term strategies over short-term fluctuations [25] Other Important Information - The company is working on assembling additional development packages in the Shelby Trough and Western Haynesville, indicating a strong pipeline of opportunities [21][22] Q&A Session Summary Question: Update on KLX area discussions and interest in Western Haynesville - Management indicated progress in KLX area discussions, now at the half-yard line, with expectations to finalize soon. Interest in commitments following the entry into Western Haynesville remains robust [18][19] Question: Volume trends for Q4 and 2026 - Management did not update full-year guidance but expressed excitement about Aethon volumes coming online and ongoing developments in the Permian, suggesting a positive outlook for the upcoming months [23][24] Question: Natural gas differentials and hedging strategy - Management confirmed that their hedging strategy remains consistent, with a focus on maintaining good exposure to Henry Hub despite challenges at Waha [31][34]