Black Stone Minerals, L.P. Announces Fourth Quarter and Full Year 2015 Results And Provides Guidance for 2016; Authorizes $50 Million Common Unit Repurchase Program
Highlights
- Fourth quarter of 2015 average production of 27.1 MBoe/d.
-
Revenues of
$100.0 million for the quarter, including an unrealized derivative gain of$16.1 million . -
Net loss of
$49.7 million ; Adjusted EBITDA (as defined below) of$54.0 million . - Estimated year-end 2015 proved reserves of 49.8 MMBoe.
- Production for 2016 expected to average 28.5 – 29.5 MBoe/d, a 1% increase over 2015 average daily volumes at the mid-point of guidance.
-
Board of Directors has approved a
$50 million common unit repurchase program.
Management Commentary
Quarterly Financial and Operating Results
Production
Realized Prices, Revenues, and Net Loss
The Partnership’s average realized price per Boe, excluding the effect
of derivative settlements, was
Lease bonus and other income was
The Partnership reported a net loss of
Proved Reserves
An independent petroleum engineering firm prepared an estimate of Black
Stone Minerals’ proved reserves and value of proved reserves discounted
at 10% (“PV-10”) using reference prices of
Estimated proved oil and natural gas reserves at year-end 2015 were 49.8
MMBoe, a decrease of 3% from 51.1 MMBoe at year-end 2014, and were
approximately 32% oil and 88% proved developed producing. The
standardized measure of discounted cash flows (“SMOG”) and PV-10 was
A rollforward of proved reserves is presented in the following table:
Crude Oil |
Natural Gas |
Total |
||||||||||
Net proved reserves at December 31, 2014 | 17,067 | 204,256 | 51,109 | |||||||||
Revisions of previous estimates | (197 | ) | (17,043 | ) | (3,037 | ) | ||||||
Purchases of minerals in place | 8 | 367 | 69 | |||||||||
Extensions, discoveries, and other additions | 2,529 | 57,484 | 12,110 | |||||||||
Production | (3,565 | ) | (41,389 | ) | (10,463 | ) | ||||||
Net proved reserves at December 31, 2015 | 15,842 | 203,675 | 49,788 | |||||||||
Net Proved Developed Reserves | ||||||||||||
December 31, 2014 | 16,700 | 202,888 | 50,514 | |||||||||
December 31, 2015 | 15,497 | 174,555 | 44,590 | |||||||||
Net Proved Undeveloped Reserves | ||||||||||||
December 31, 2014 | 367 | 1,368 | 595 | |||||||||
December 31, 2015 | 345 | 29,120 | 5,198 | |||||||||
Financial Position
As of
Distributions
As previously announced, the Board of Directors of the general partner
approved a cash distribution of
Summary 2016 Guidance
Key assumptions in Black Stone Minerals’ 2016 program are as follows:
FY2016 |
||
Average daily production (MBoe/d) | 28.5 – 29.5 | |
Percentage oil | ~30% | |
Percentage royalty interest | ~63% | |
Lease bonus and other income ($MM) | $30 | |
Lease operating expense ($/Boe) | $2.00 – $2.25 | |
Lease operating expense ($/working interest Boe) | $5.45 – $6.10 | |
Production costs and ad valorem taxes (as % of total pre-derivative O&G revenue) | 14% – 16% | |
Exploration expense ($MM) | $0 – $1 | |
G&A – cash ($MM) | $36.5 – $37.5 | |
G&A – non-cash ($MM) | $29.0 – $30.0 | |
G&A – TOTAL ($MM) | $65.5 – $67.5 | |
DD&A ($/Boe) | $8.00 – $8.50 | |
Working Interest Participation
The Partnership’s working interest production is anticipated to average approximately 37% of total production in 2016.
Hedge Position
The Partnership has commodity derivative contracts in place covering a
substantial part of 2016’s anticipated production. Based on the guided
volumes above, approximately 63% of expected oil volumes are hedged at
prices averaging
Distributions
The minimum quarterly distribution will increase to
- the full minimum quarterly distribution will be paid on the common units;
-
a distribution of
$0.18375 per quarter will be paid on the subordinated units; and - subordinated distributions will be adjusted to maintain total distribution coverage in excess of 1.0x.
Unit Repurchase Program
The Board of Directors has authorized the repurchase of up to
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 |
Year Ended December 31, |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUE | ||||||||||||||||
Oil and condensate sales | $ | 36,954 | $ | 61,725 | $ | 163,538 | $ | 257,390 | ||||||||
Natural gas and natural gas liquids sales | 23,219 | 50,902 | 116,018 | 207,456 | ||||||||||||
Gain on commodity derivative instruments | 32,838 | 36,997 | 90,288 | 37,336 | ||||||||||||
Lease bonus and other income | 7,029 | 19,553 | 23,080 | 46,139 | ||||||||||||
TOTAL REVENUE | 100,040 | 169,177 | 392,924 | 548,321 | ||||||||||||
OPERATING (INCOME) EXPENSE | ||||||||||||||||
Lease operating expense | 5,043 | 5,526 | 21,583 | 21,233 | ||||||||||||
Production costs and ad valorem taxes | 9,517 | 15,986 | 35,767 | 49,575 | ||||||||||||
Exploration expense | 578 | 187 | 2,592 | 631 | ||||||||||||
Depreciation, depletion and amortization | 20,884 | 27,904 | 104,298 | 111,962 | ||||||||||||
Impairment of oil and natural gas properties | 92,886 | 117,930 | 249,569 | 117,930 | ||||||||||||
General and administrative | 23,645 | 17,158 | 77,175 | 62,765 | ||||||||||||
Accretion of asset retirement obligations | 270 | 617 | 1,075 | 1,060 | ||||||||||||
(Gain) loss on sale of assets, net | (4,853 | ) | 32 | (4,873 | ) | 32 | ||||||||||
Other expense | 1,593 | 1,424 | 1,593 | 1,424 | ||||||||||||
TOTAL OPERATING EXPENSE | 149,563 | 186,764 | 488,779 | 366,612 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | (49,523 | ) | (17,587 | ) | (95,855 | ) | 181,709 | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest and investment income | 12 | 1 | 58 | 28 | ||||||||||||
Interest expense | (888 | ) | (3,217 | ) | (6,418 | ) | (13,509 | ) | ||||||||
Other income | 669 | 90 | 910 | 959 | ||||||||||||
TOTAL OTHER EXPENSE | (207 | ) | (3,126 | ) | (5,450 | ) | (12,522 | ) | ||||||||
NET INCOME (LOSS) | (49,730 | ) | (20,713 | ) | (101,305 | ) | 169,187 | |||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PREDECESSOR | — | 20,713 | (450 | ) | (169,187 | ) | ||||||||||
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS SUBSEQUENT TO INITIAL PUBLIC OFFERING | 1,123 | — | 1,260 | — | ||||||||||||
DISTRIBUTIONS ON REDEEMABLE PREFERRED UNITS SUBSEQUENT TO INITIAL PUBLIC OFFERING | (2,739 | ) | — | (7,522 | ) | — | ||||||||||
NET LOSS ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON AND SUBORDINATED UNITS SUBSEQUENT TO INITIAL PUBLIC OFFERING | $ | (51,346 | ) | $ | — | $ | (108,017 | ) |
$ |
— | ||||||
ALLOCATION OF LOSS SUBSEQUENT TO INITIAL PUBLIC OFFERING ATTRIBUTABLE TO: | ||||||||||||||||
General partner interest | $ | — | $ | — | ||||||||||||
Common units | (25,824 | ) | (54,326 | ) | ||||||||||||
Subordinated units | (25,522 | ) | (53,691 | ) | ||||||||||||
$ | (51,346 | ) | $ | (108,017 | ) | |||||||||||
NET LOSS ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON AND SUBORDINATED UNIT: | ||||||||||||||||
Per common unit (basic and diluted) | $ | (0.27 | ) | $ | (0.56 | ) | ||||||||||
Weighted average common units outstanding (basic and diluted) | 96,182 | 96,182 | ||||||||||||||
Per subordinated unit (basic and diluted) | $ | (0.27 | ) | $ | (0.56 | ) | ||||||||||
Weighted average subordinated units outstanding (basic and diluted) | 95,057 | 95,057 | ||||||||||||||
DISTRIBUTIONS DECLARED AND PAID SUBSEQUENT TO INITIAL PUBLIC OFFERING: | ||||||||||||||||
Per common unit | $ | 0.2625 | $ | 0.4240 | ||||||||||||
Per subordinated unit | $ | 0.2625 | $ | 0.4240 | ||||||||||||
The following table shows the Partnership’s production, revenues, realized prices, and operating expenses for the periods presented.
Three Months Ended |
Year Ended |
|||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
(Unaudited) | ||||||||||||
(Dollars in thousands, except for realized prices) | ||||||||||||
Production: | ||||||||||||
Oil and condensate (MBbls)1 | 897 | 899 | 3,565 | 3,005 | ||||||||
Natural gas (MMcf)1 | 9,572 | 11,100 | 41,389 | 42,273 | ||||||||
Equivalents (MBoe) | 2,492 | 2,749 | 10,463 | 10,051 | ||||||||
Revenue: | ||||||||||||
Oil and condensate sales | $ | 36,954 | $ | 61,725 | $ | 163,538 | $ | 257,390 | ||||
Natural gas and natural gas liquids sales | 23,219 | 50,902 | 116,018 | 207,456 | ||||||||
Gain on commodity derivative instruments | 32,838 | 36,997 | 90,288 | 37,336 | ||||||||
Lease bonus and other income | 7,029 | 19,553 | 23,080 | 46,139 | ||||||||
Total revenue | $ | 100,040 | $ | 169,177 | $ | 392,924 | $ | 548,321 | ||||
Realized prices: | ||||||||||||
Oil and condensate ($/Bbl) | $ | 41.20 | $ | 68.66 | $ | 45.87 | $ | 85.65 | ||||
Natural gas ($/Mcf)1 | $ | 2.43 | $ | 4.59 | $ | 2.80 | $ | 4.91 | ||||
Equivalents ($/Boe) | $ | 24.15 | $ | 40.97 | $ | 26.72 | $ | 46.25 | ||||
Operating expenses: | ||||||||||||
Lease operating expense | $ | 5,043 | $ | 5,526 | $ | 21,583 | $ | 21,233 | ||||
Production costs and ad valorem taxes | 9,517 | 15,986 | 35,767 | 49,575 | ||||||||
Exploration expense | 578 | 187 | 2,592 | 631 | ||||||||
Depreciation, depletion, and amortization | 20,884 | 27,904 | 104,298 | 111,962 | ||||||||
Impairment of oil and natural gas properties | 92,886 | 117,930 | 249,569 | 117,930 | ||||||||
General and administrative | 23,645 | 17,158 | 77,175 | 62,765 | ||||||||
Per Boe: | ||||||||||||
Lease operating expense | $ | 2.02 | $ | 2.01 | $ | 2.06 | $ | 2.11 | ||||
Production costs and ad valorem taxes | 3.82 | 5.82 | 3.42 | 4.93 | ||||||||
Depreciation, depletion, and amortization | 8.38 | 10.15 | 9.97 | 11.14 | ||||||||
General and administrative | 9.49 | 6.24 | 7.38 | 6.24 |
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. |
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 |
Year Ended |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Net income (loss) | $ | (49,730 | ) | $ | (20,713 | ) | $ | (101,305 | ) | $ | 169,187 | |||||
Adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
Add: | ||||||||||||||||
Depreciation, depletion and amortization | 20,884 | 27,904 | 104,298 | 111,962 | ||||||||||||
Interest expense | 888 | 3,217 | 6,418 | 13,509 | ||||||||||||
EBITDA | (27,958 | ) | 10,408 | 9,411 | 294,658 | |||||||||||
Add: | ||||||||||||||||
Impairment of oil and natural gas properties | 92,886 | 117,930 | 249,569 | 117,930 | ||||||||||||
Accretion of asset retirement obligations | 270 | 617 | 1,075 | 1,060 | ||||||||||||
Equity-based compensation | 4,948 | 3,888 | 18,000 | 11,340 | ||||||||||||
Less: | ||||||||||||||||
Unrealized gain on commodity derivative instruments | (16,145 | ) | (35,575 | ) | (27,063 | ) | (39,283 | ) | ||||||||
Adjusted EBITDA | 54,001 | 97,268 | 250,992 | 385,705 | ||||||||||||
Adjustments to reconcile to cash generated from operations: | ||||||||||||||||
Add: | ||||||||||||||||
Borrowings/cash used to fund additions to and acquisitions of oil and natural gas properties | 11,964 | 16,895 | 116,522 | 119,753 | ||||||||||||
Restructuring charges | 4,208 | — | 4,208 | — | ||||||||||||
Incremental general and administrative related to initial public offering | 353 | — | 1,303 | — | ||||||||||||
Loss on sales of assets, net | — | 32 | — | 32 | ||||||||||||
Less: | ||||||||||||||||
Deferred revenue | (76 | ) | (73 | ) | (660 | ) | (2,589 | ) | ||||||||
Cash interest expense | (677 | ) | (2,978 | ) | (5,483 | ) | (12,544 | ) | ||||||||
Gain on sales of assets, net | (4,853 | ) | — | (4,873 | ) | — | ||||||||||
Additions to oil and natural gas properties | (11,843 | ) | (16,774 | ) | (54,244 | ) | (74,201 | ) | ||||||||
Acquisitions of oil and natural gas properties | (121 | ) | (121 | ) | (62,278 | ) | (45,552 | ) | ||||||||
Cash generated from operations | 52,956 | 94,249 | 245,487 | 370,604 | ||||||||||||
Less: | ||||||||||||||||
Cash paid to noncontrolling interests | (41 | ) | (55 | ) | (208 | ) | (307 | ) | ||||||||
Redeemable preferred unit distributions | (2,739 | ) | (3,957 | ) | (11,562 | ) | (15,720 | ) | ||||||||
Cash generated from operations available for
distribution on common and subordinated units and reinvestment in our business |
$ | 50,176 | $ | 90,237 | $ | 233,717 | $ | 354,577 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160307006615/en/
Source:
Black Stone Minerals, L.P.
Brent Collins, 713-445-3200
Vice
President, Investor Relations
investorrelations@blackstoneminerals.com