Black Stone Minerals, L.P. Reports First Quarter 2016 Results and Announces Cash Distribution; Enters in Agreement to Acquire Mineral Interests in Colorado
Highlights
- First quarter of 2016 average production of 30.3 MBoe/d.
-
Revenues of
$64.4 million for the quarter. -
Net income of
$10.7 million ; Adjusted EBITDA (as defined below) of$55.7 million . -
Announces
$35 million acquisition of interests in approximately 4,800 gross mineral acres in the Wattenberg Field inWeld County, Colorado .
Management Commentary
Quarterly Financial and Operating Results
Production
Realized Prices, Revenues, and Net Income
The Partnership’s average realized price per Boe, excluding the effect
of derivative settlements, was
Gain on commodity price derivatives was
Lease bonus and other income was
The Partnership reported net income of
Financial Position
As of
Unit Repurchase Program
Through
Distributions
The Board of Directors of the general partner has approved a cash
distribution of
Common unit distributions are scheduled to increase by approximately 10%
to
Colorado Mineral Acquisition
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.
BLACK STONE MINERALS, L.P. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
(In thousands, except per unit amounts) | ||||||||
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
REVENUE | ||||||||
Oil and condensate sales | $ | 27,248 | $ | 36,163 | ||||
Natural gas and natural gas liquids sales |
25,112 | 31,640 | ||||||
Gain on commodity derivative instruments | 10,626 | 19,647 | ||||||
Lease bonus and other income | 1,395 | 3,611 | ||||||
TOTAL REVENUE | 64,381 | 91,061 | ||||||
OPERATING (INCOME) EXPENSE | ||||||||
Lease operating expense | 4,889 | 6,133 | ||||||
Production costs and ad valorem taxes | 7,062 | 8,256 | ||||||
Exploration expense | 8 | 39 | ||||||
Depreciation, depletion and amortization | 21,721 | 27,891 | ||||||
Impairment of oil and natural gas properties | 6,096 | 13,467 | ||||||
General and administrative | 17,401 | 14,818 | ||||||
Accretion of asset retirement obligations | 274 | 271 | ||||||
Gain on sale of assets, net | (4,680 | ) | (7 | ) | ||||
TOTAL OPERATING EXPENSE | 52,771 | 70,868 | ||||||
INCOME FROM OPERATIONS | 11,610 | 20,193 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest and investment income | 153 | 1 | ||||||
Interest expense | (1,048 | ) | (2,945 | ) | ||||
Other income | 34 | 50 | ||||||
TOTAL OTHER EXPENSE | (861 | ) | (2,894 | ) | ||||
NET INCOME | 10,749 | 17,299 | ||||||
NET INCOME ATTRIBUTABLE TO PREDECESSOR | — | (17,299 | ) | |||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS SUBSEQUENT TO INITIAL PUBLIC OFFERING | (2 | ) | — | |||||
DISTRIBUTIONS ON REDEEMABLE PREFERRED UNITS SUBSEQUENT TO INITIAL PUBLIC OFFERING | (1,804 | ) | — | |||||
NET INCOME ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON AND SUBORDINATED UNITS SUBSEQUENT TO INITIAL PUBLIC OFFERING | $ | 8,943 | $ | — | ||||
ALLOCATION OF NET INCOME SUBSEQUENT TO INITIAL PUBLIC OFFERING ATTRIBUTABLE TO: | ||||||||
General partner interest | $ | — | ||||||
Common units | 8,320 | |||||||
Subordinated units | 623 | |||||||
$ | 8,943 | |||||||
NET INCOME ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON AND SUBORDINATED UNIT: | ||||||||
Per common unit (basic) | $ | 0.09 | ||||||
Weighted average common units outstanding (basic) | 96,484 | |||||||
Per subordinated unit (basic) | $ | 0.01 | ||||||
Weighted average subordinated units outstanding (basic) | 94,995 | |||||||
Per common unit (diluted) | $ | 0.09 | ||||||
Weighted average common units outstanding (diluted) | 96,752 | |||||||
Per subordinated unit (diluted) | $ | 0.01 | ||||||
Weighted average subordinated units outstanding (diluted) | 94,995 | |||||||
DISTRIBUTIONS DECLARED AND PAID SUBSEQUENT TO INITIAL PUBLIC OFFERING: | ||||||||
Per common unit | $ | 0.2625 | ||||||
Per subordinated unit | $ | 0.18375 | ||||||
The following table shows the Partnership’s production, revenues, realized prices, and expenses for the periods presented.
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
(Unaudited) | ||||||
(Dollars in thousands, except for realized prices) | ||||||
Production: | ||||||
Oil and condensate (MBbls)1 | 886 | 827 | ||||
Natural gas (MMcf)1 | 11,250 | 10,785 | ||||
Equivalents (MBoe) | 2,761 | 2,625 | ||||
Revenue: | ||||||
Oil and condensate sales | $ | 27,248 | $ | 36,163 | ||
Natural gas and natural gas liquids sales | 25,112 | 31,640 | ||||
Gain on commodity derivative instruments | 10,626 | 19,647 | ||||
Lease bonus and other income | 1,395 | 3,611 | ||||
Total revenue | $ | 64,381 | $ | 91,061 | ||
Realized prices: | ||||||
Oil and condensate ($/Bbl) | $ | 30.75 | $ | 43.73 | ||
Natural gas ($/Mcf)1 | 2.23 | 2.93 | ||||
Equivalents ($/Boe) | $ | 18.96 | $ | 25.83 | ||
Operating expenses: | ||||||
Lease operating expense | $ | 4,889 | $ | 6,133 | ||
Production costs and ad valorem taxes | 7,062 | 8,256 | ||||
Exploration expense | 8 | 39 | ||||
Depreciation, depletion, and amortization | 21,721 | 27,891 | ||||
Impairment of oil and natural gas properties | 6,096 | 13,467 | ||||
General and administrative | 17,401 | 14,818 | ||||
Other expense: | ||||||
Interest expense | $ | 1,048 | $ | 2,945 | ||
Per Boe: | ||||||
Lease operating expense | $ | 1.77 | $ | 2.34 | ||
Lease operating expense (per working interest Boe) | 5.37 | 6.98 | ||||
Production costs and ad valorem taxes | 2.56 | 3.15 | ||||
Depreciation, depletion, and amortization | 7.87 | 10.63 | ||||
General and administrative | 6.30 | 5.64 | ||||
_____________ |
1As 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. |
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.
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Net income | $ | 10,749 | $ | 17,299 | ||||
Adjustments to reconcile to Adjusted EBITDA: | ||||||||
Add: | ||||||||
Depreciation, depletion and amortization | 21,721 | 27,891 | ||||||
Interest expense | 1,048 | 2,945 | ||||||
EBITDA | 33,518 | 48,135 | ||||||
Add: | ||||||||
Impairment of oil and natural gas properties | 6,096 | 13,467 | ||||||
Accretion of asset retirement obligations | 274 | 271 | ||||||
Equity-based compensation | 5,900 | 1,243 | ||||||
Unrealized loss on commodity derivative instruments | 9,955 | — | ||||||
Less: | ||||||||
Unrealized gain on commodity derivative instruments | — | (2,197 | ) | |||||
Adjusted EBITDA | 55,743 | 60,919 | ||||||
Adjustments to reconcile to cash generated from operations: | ||||||||
Add: | ||||||||
Borrowings/cash used to fund additions to and acquisitions of oil and natural gas properties | 35,110 | 13,612 | ||||||
Incremental general and administrative related to initial public offering | — | 227 | ||||||
Less: | ||||||||
Deferred revenue | (203 | ) | (104 | ) | ||||
Cash interest expense | (851 | ) | (2,704 | ) | ||||
Gain on sales of assets, net | (4,680 | ) | (7 | ) | ||||
Additions to oil and natural gas properties | (25,110 | ) | (13,612 | ) | ||||
Acquisitions of oil and natural gas properties | (10,000 | ) | — | |||||
Cash generated from operations | 50,009 | 58,331 | ||||||
Less: | ||||||||
Cash paid to noncontrolling interests | (33 | ) | (52 | ) | ||||
Redeemable preferred unit distributions | (1,804 | ) | (2,909 | ) | ||||
Cash generated from operations available for
distribution on common and subordinated units and reinvestment in our business |
$ | 48,172 | $ | 55,370 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006721/en/
Source:
Black Stone Minerals, L.P.
Brent Collins, 713-445-3200
Vice
President, Investor Relations
investorrelations@blackstoneminerals.com