Black Stone Minerals, L.P. Announces Second Quarter 2015 Results and Announces Cash Distribution
Key Second Quarter 2015 Highlights:
- Average production of 29.4 MBoe per day, representing growth from the first quarter of 2015 of 1% and year-over-year growth of 11%.
-
Revenues of
$64.8 million for the quarter, including unrealized derivative loss of$35.3 million . -
Net loss of
$122.8 million due to non-cash impairment and unrealized derivative loss; Adjusted EBITDA (as defined below) of$71.3 million . -
Quarterly distribution coverage ratio of 1.3 times with cash generated
from operations available for distribution of
$66.4 million . -
No net debt at the end of the quarter with nearly
$600 million of liquidity available through credit facility.
Management Commentary
Financial and Operating Results
Production
Realized Prices and Revenues
The partnership’s average realized price per Boe, excluding the effect
of derivative settlements, was
Net Income/Loss
Financial Position
As of
Acquisitions
Year to date,
Distributions
The Board of Directors of the general partner has approved a cash
distribution of
Conference Call
About
Forward-Looking Statements
This news release includes forward-looking statements. All statements,
other than statements of historical facts, included in this news release
that address activities, events or developments that the partnership
expects, believes or anticipates will or may occur in the future are
forward-looking statements. Terminology such as “will,” “may,” “should,”
“expect,” “anticipate,” “plan,” “project,” “intend,” “estimate,”
“believe,” “target,” “continue,” “potential,” the negative of such terms
or other comparable terminology often identify forward-looking
statements. Except as required by law,
- the partnership’s ability to execute its business strategies;
- the volatility of realized oil and natural gas prices;
- the level of production on the partnership’s properties;
- regional supply and demand factors, delays, or interruptions of production;
- the partnership’s ability to replace its oil and natural gas reserves; and
- the partnership’s ability to identify, complete, and integrate acquisitions.
Information for Non-U.S. Investors
This press release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Although a portion of Black Stone
Minerals’ income may not be effectively connected income and may be
subject to alternative withholding procedures, brokers and nominees
should treat 100% of Black Stone Minerals’ distributions to non-U.S.
investors as being attributable to income that is effectively connected
with a
BLACK STONE MINERALS, L.P. PREDECESSOR CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per unit amounts) |
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Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
REVENUE | ||||||||||||||||||
Oil and condensate sales | $ | 46,293 | $ | 64,934 | $ | 82,456 | $ | 124,576 | ||||||||||
Natural gas and natural gas liquids sales | 28,968 | 52,434 | 60,608 | 110,640 | ||||||||||||||
Gain (loss) on commodity derivative instruments | (18,627 | ) | (2,348 | ) | 1,020 | (8,343 | ) | |||||||||||
Lease bonus and other income | 8,169 | 3,917 | 11,780 | 19,476 | ||||||||||||||
TOTAL REVENUE | 64,803 | 118,937 | 155,864 | 246,349 | ||||||||||||||
OPERATING (INCOME) EXPENSE | ||||||||||||||||||
Lease operating expenses and other | 5,641 | 4,805 | 11,813 | 9,674 | ||||||||||||||
Production costs and ad valorem taxes | 9,819 | 10,822 | 18,075 | 21,408 | ||||||||||||||
Depreciation, depletion and amortization | 32,235 | 23,859 | 60,126 | 46,993 | ||||||||||||||
Impairment of oil and natural gas properties | 118,362 |
- |
131,829 |
- |
||||||||||||||
General and administrative | 19,718 | 14,512 | 34,536 | 29,963 | ||||||||||||||
Accretion of asset retirement obligations | 269 | 148 | 540 | 295 | ||||||||||||||
Gain on sale of assets | (17 | ) |
- |
(24 | ) |
- |
||||||||||||
TOTAL OPERATING EXPENSE | 186,027 | 54,146 | 256,895 | 108,333 | ||||||||||||||
INCOME (LOSS) FROM OPERATIONS | (121,224 | ) | 64,791 | (101,031 | ) | 138,016 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||
Interest and investment income | 27 | 2 | 28 | 24 | ||||||||||||||
Interest expense | (1,715 | ) | (3,419 | ) | (4,660 | ) | (6,852 | ) | ||||||||||
Other income | 146 | 737 | 196 | 807 | ||||||||||||||
TOTAL OTHER EXPENSE | (1,542 | ) | (2,680 | ) | (4,436 | ) | (6,021 | ) | ||||||||||
NET INCOME (LOSS) | (122,766 | ) | 62,111 | (105,467 | ) | 131,995 | ||||||||||||
NET (INCOME) LOSS ATTRIBUTABLE TO PREDECESSOR | 16,849 | (62,111 | ) | (450 | ) | (131,995 | ) | |||||||||||
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS SUBSEQUENT TO INITIAL PUBLIC OFFERING |
140 | - | 140 | - | ||||||||||||||
DIVIDENDS ON PREFERRED UNITS SUBSEQUENT TO INITIAL PUBLIC OFFERING |
(1,810 | ) | - | (1,810 | ) | - | ||||||||||||
NET LOSS ATTRIBUTABLE TO THE GENERAL PARTNER AND LIMITED PARTNERS SUBSEQUENT TO INITIAL PUBLIC OFFERING |
$ | (107,587 | ) | $ | - | $ | (107,587 | ) | $ | - | ||||||||
ALLOCATION OF NET LOSS SUBSEQUENT TO INITIAL PUBLIC OFFERING ATTRIBUTABLE TO: |
||||||||||||||||||
General partner interest | $ |
- |
$ |
- |
||||||||||||||
Common limited partner interests | (54,109 | ) | (54,109 | ) | ||||||||||||||
Subordinated limited partner interests | (53,478 | ) | (53,478 | ) | ||||||||||||||
$ | (107,587 | ) | $ | (107,587 | ) | |||||||||||||
NET LOSS ATTRIBUTABLE TO LIMITED PARTNERS PER UNIT: | ||||||||||||||||||
Per common limited partner unit (basic and diluted) | $ | (0.56 | ) | $ | (0.56 | ) | ||||||||||||
Weighted average common limited partner units outstanding | ||||||||||||||||||
(basic and diluted) | 96,178 | 96,178 | ||||||||||||||||
Per subordinated limited partner unit (basic and diluted) | $ | (0.56 | ) | $ | (0.56 | ) | ||||||||||||
Weighted average subordinated limited partner units outstanding | ||||||||||||||||||
(basic and diluted) | 95,057 | 95,057 | ||||||||||||||||
The following table shows the partnership’s production, realized prices, and revenues for the periods presented.
Three Months Ended
June 30, |
Six Months Ended
June 30, |
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2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(Dollars in thousands, except for realized prices) | |||||||||||||||||||||||||
Production: | |||||||||||||||||||||||||
Oil and condensate (MBbls)(1) | 905 | 661 | 1,732 | 1,323 | |||||||||||||||||||||
Natural gas (MMcf)(1) | 10,621 | 10,487 | 21,406 | 20,228 | |||||||||||||||||||||
Equivalents (MBoe)(2) | 2,675 | 2,409 | 5,300 | 4,694 | |||||||||||||||||||||
Realized prices: | |||||||||||||||||||||||||
Oil and condensate ($/Bbl) | $ | 51.15 | $ | 98.24 | $ | 47.61 | $ | 94.16 | |||||||||||||||||
Natural gas ($/Mcf)(1) | $ | 2.73 | $ | 5.00 | $ | 2.83 | $ | 5.47 | |||||||||||||||||
Equivalents ($/Boe)(2) | $ | 28.13 | $ | 48.72 | $ | 26.99 | $ | 50.11 | |||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Oil and condensate sales | $ | 46,293 | $ | 64,934 | $ | 82,456 | $ | 124,576 | |||||||||||||||||
Natural gas and natural gas liquids sales | 28,968 | 52,434 | 60,608 | 110,640 | |||||||||||||||||||||
Gain (loss) on commodity derivative instruments | (18,627 | ) | (2,348 | ) | 1,020 | (8,343 | ) | ||||||||||||||||||
Lease bonus and other income | 8,169 | 3,917 | 11,780 | 19,476 | |||||||||||||||||||||
Total revenue | $ | 64,803 | $ | 118,937 | $ | 155,864 | $ | 246,349 | |||||||||||||||||
1 |
As a mineral and royalty interest owner, Black Stone Minerals is often provided insufficient and inconsistent data on natural gas liquid (“NGL”) volumes by its operators. As a result, the partnership is unable to reliably determine the total volumes of NGLs associated with the production of natural gas on its acreage. Accordingly, no NGL volumes are included in reported production; however, revenue attributable to NGLs is included in natural gas revenue and the calculation of realized prices for natural gas. |
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2 |
“Btu-equivalent” production volumes are presented on an oil-equivalent basis using a conversion factor of six Mcf of natural gas per barrel of “oil equivalent,” which is based on approximate energy equivalency and does not reflect the price or value relationship between oil and natural gas. |
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Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, and cash available for distribution are non-GAAP supplemental financial measures used by Black Stone Minerals’ management and external users of the partnership’s financial statements such as investors, research analysts, and others, to assess the financial performance of its assets and its ability to sustain distributions over the long term without regard to financing methods, capital structure, or historical cost basis.
EBITDA, Adjusted EBITDA, and cash available for distribution should not be considered an alternative to, or more meaningful than, net income, income from operations, cash flows from operating activities, or any other measure of financial performance presented in accordance with GAAP as measures of the partnership’s financial performance. EBITDA, Adjusted EBITDA, and cash available for distribution have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. The partnership’s computation of EBITDA, Adjusted EBITDA, and cash available for distribution may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of EBITDA, Adjusted EBITDA, and cash available for distribution to net income, the most directly comparable GAAP financial measure, for the periods indicated. |
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Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(Unaudited) | |||||||||||||||||
(In thousands) | |||||||||||||||||
Net income (loss) | $ | (122,766 | ) | $ | 62,111 | $ | (105,467 | ) | $ | 131,995 | |||||||
Adjustments to reconcile to Adjusted EBITDA: | |||||||||||||||||
Add: | |||||||||||||||||
Depreciation, depletion and amortization | 32,235 | 23,859 | 60,126 | 46,993 | |||||||||||||
Interest expense | 1,715 | 3,419 | 4,660 | 6,852 | |||||||||||||
EBITDA | (88,816 | ) | 89,389 | (40,681 | ) | 185,840 | |||||||||||
Add: | |||||||||||||||||
Impairment of oil and natural gas properties | 118,362 |
- |
131,829 |
- |
|||||||||||||
Accretion of asset retirement obligations | 269 | 148 | 540 | 295 | |||||||||||||
Unrealized loss on commodity derivative instruments | 35,332 | 1,489 | 33,135 | 5,400 | |||||||||||||
Equity-based compensation | 6,119 | 2,155 | 7,362 | 5,654 | |||||||||||||
Adjusted EBITDA | 71,266 | 93,181 | 132,185 | 197,189 | |||||||||||||
Adjustments to reconcile to cash generated from operations: | |||||||||||||||||
Add: | |||||||||||||||||
Borrowings/cash used to fund capital expenditures | 28,809 | 21,837 | 42,015 | 59,855 | |||||||||||||
Less: | |||||||||||||||||
Deferred revenue | (386 | ) |
- |
(490 | ) | (2,516 | ) | ||||||||||
Cash interest expense | (1,473 | ) | (3,177 | ) | (4,178 | ) | (6,369 | ) | |||||||||
Capital expenditures, net | (28,809 | ) | (21,837 | ) | (42,015 | ) | (59,855 | ) | |||||||||
Cash generated from operations | 69,407 | 90,004 | 127,517 | 188,304 | |||||||||||||
Less: | |||||||||||||||||
Cash paid to noncontrolling interests | (70 | ) | (95 | ) | (122 | ) | (168 | ) | |||||||||
Preferred unit distributions | (2,941 | ) | (3,919 | ) | (5,850 | ) | (7,801 | ) | |||||||||
Cash generated from operations available for distribution on common | |||||||||||||||||
and subordinated units and reinvestment in our business | $ | 66,396 | $ | 85,990 | $ | 121,545 | $ | 180,335 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20150812006308/en/
Source:
Black Stone Minerals, L.P.
Brent Collins, (713) 445-3200
Vice
President, Investor Relations
investorrelations@blackstoneminerals.com