Black Stone Minerals LP (BSM) Q1 Results - May 6

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BSM is one of four minerals in our High Yield Income Portfolio. It is a Master Limited Partnership that is heavily weighted to natural gas.

Financial and Operational Highlights

> Mineral and royalty production for the first quarter of 2025 was 34.2 MBoe/d; total production, including working-interest volumes, was 35.5 MBoe/d for the quarter. < Below my production forecast of 37,000 Boepd.
> Net income for the first quarter was $15.9 million, and Adjusted EBITDA for the quarter totaled $82.2 million.
> Distributable cash flow was $73.7 million for the first quarter.
> Black Stone announced a distribution of $0.375 per unit with respect to the first quarter of 2025. Distribution coverage for all units was approximately 0.93x.
> Total debt at the end of the first quarter was $63.0 million; as of May 2, 2025, total debt was also $63.0 million with approximately $4.3 million of cash on hand.

Management Commentary

Thomas L. Carter, Jr., Black Stone’s Chairman, Chief Executive Officer and President, commented, “Despite recent market volatility, our financial position and asset outlook remain strong, and we are maintaining our quarterly distribution of $0.375 per unit. Distribution coverage for the quarter was 0.93x; however, this lower level of coverage was partially driven by an expenditure related to a seismic license that further bolsters our subsurface evaluation and potential mineral acquisitions in the expanded Shelby Trough area. During the quarter, we continued to progress on our targeted mineral acquisitions and remain confident in the long-term growth opportunities that program provides for our unitholders. Finally, we are staying keenly aware of the current price environment and activity across all of our assets, and we expect to continue to benefit from near-term development activity and production on certain unique, high-interest acreage in both oil- and gas-focused regions.”

Quarterly Financial and Operating Results

Production

Black Stone reported mineral and royalty volumes of 34.2 MBoe/d (78% natural gas) for the first quarter of 2025, compared to 34.8 MBoe/d for the fourth quarter of 2024 and 38.1 MBoe/d for the first quarter of 2024.

Working-interest production was 1.3 MBoe/d in the first quarter of 2025, 1.3 MBoe/d in the fourth quarter of 2024, and 2.2 MBoe/d in the first quarter of 2024. The continued year-over-year decline in working-interest volumes is consistent with the Partnership’s decision to farm out its working-interest participation to third-party capital providers.

Total reported production averaged 35.5 MBoe/d (96% mineral and royalty, 78% natural gas) for the first quarter of 2025, compared to 36.1 MBoe/d and 40.3 MBoe/d for the fourth quarter of 2024 and the first quarter of 2024, respectively.

Realized Prices, Revenues, and Net Income

The Partnership’s average realized price per Boe, excluding the effect of derivative settlements, was $33.94 for the first quarter of 2025. This is an increase of 10% from $30.81 per Boe in the fourth quarter of 2024 and a 10% increase from $30.87 in the first quarter of 2024.

Black Stone reported oil and gas revenue of $108.3 million for the first quarter of 2025, an increase of 6% from $102.3 million in the fourth quarter of 2024. Oil and gas revenue in the first quarter of 2024 was $113.2 million. < My revenue forecast was $115.4 million.

The Partnership reported a loss on commodity derivative instruments of $56.0 million for the first quarter of 2025, composed of a $3.6 million loss from realized settlements and a non-cash $52.4 million unrealized loss due to the change in value of Black Stone’s derivative positions during the quarter. Black Stone reported losses of $20.6 million and $11.3 million on commodity derivative instruments for the fourth quarter of 2024 and the first quarter of 2024, respectively.

Lease bonus and other income was $6.9 million for the first quarter of 2025. Lease bonus and other income for the fourth quarter of 2024 and the first quarter of 2024 was $2.0 million and $3.5 million, respectively.

The Partnership reported net income of $15.9 million for the first quarter of 2025, compared to net income of $46.3 million in the preceding quarter. For the first quarter of 2024, the Company reported net income of $63.9 million.

Adjusted EBITDA and Distributable Cash Flow

Adjusted EBITDA for the first quarter of 2025 was $82.2 million, which compares to $90.1 million in the fourth quarter of 2024 and $104.1 million in the first quarter of 2024. Distributable cash flow for the first quarter of 2025 was $73.7 million. For the fourth quarter of 2024 and the first quarter of 2024, distributable cash flow was $81.9 million and $96.4 million, respectively.

Financial Position and Activities

As of March 31, 2025, Black Stone had $2.4 million in cash, with $63.0 million drawn under its credit facility. As of May 2, the Partnership had approximately $4.3 million in cash, and $63.0 million of debt was outstanding under the credit facility.

On April 30, 2025, Black Stone's borrowing base under the credit facility was reaffirmed, and total commitments under the credit facility were maintained at $375.0 million. Black Stone is in compliance with all financial covenants associated with its credit facility.

First Quarter 2025 Distributions

As previously announced, the Board approved a cash distribution of $0.375 for each common unit attributable to the first quarter of 2025. The quarterly distribution coverage ratio attributable to the first quarter of 2025 was approximately 0.93x. The distribution will be paid on May 15, 2025 to unitholders of record as of the close of business on May 8, 2025.