HOUSTON--(BUSINESS WIRE)--Feb. 25, 2019--
Black Stone Minerals, L.P. (NYSE: BSM) (“Black Stone Minerals,” “Black
Stone,” or “the Partnership”) today announces its financial and
operating results for the fourth quarter and full year of 2018 and
provides guidance for 2019.
Fourth Quarter 2018 Highlights
-
Set a new quarterly total reported production record in the fourth
quarter of 49.7 MBoe/d, representing a 3% increase from the third
quarter and a 30% increase from the fourth quarter of 2017.
-
Mineral and royalty production increased 9% from the third quarter of
2018, marking a new record of 35.8 MBoe/d.
-
Recognized net income and Adjusted EBITDA for the quarter of $164.1
million and $110.0 million, respectively.
-
Reported distributable cash flow of $96.7 million, resulting in
distribution coverage for all units of 1.3x based on the announced
cash distribution of $0.37 per unit; retained $20.8 million of
distributable cash in the fourth quarter.
Other Financial and Operational Highlights
-
Achieved full year 2018 production, net income, and Adjusted EBITDA of
46.3 MBoe/d, $295.6 million, and $419.4 million, respectively.
-
Mineral and royalty volumes in 2018 increased 45% over the prior year
to average 32.1 MBoe/d.
-
Closed on $149.9 million of acquisitions in 2018 focused on East Texas
Haynesville/Bossier and core Midland/Delaware plays.
-
Reported estimated proved reserves at year-end 2018 of 69.9 MMBoe (75%
natural gas and 86% proved developed producing), an increase of 3%
over year-end 2017.
-
Expect to maintain 2018's average daily production levels through
2019, with mineral and royalty production anticipated to grow by
approximately 12% year over year at mid-point of guidance.
Management Commentary
Thomas L. Carter, Jr., Black Stone Minerals’ Chief Executive Officer and
Chairman commented, “We capped off a terrific year with another strong
quarter. We posted new records for both mineral-and-royalty production
and total production in the fourth quarter and maintained our
distribution with solid coverage in a challenging commodity environment.
Our core mineral and royalty business performed extremely well, more
than offsetting our planned reduction in working interest volumes. We
acquired approximately $150 million worth of properties during the year,
and the Noble assets acquired at the end of 2017 continue to outperform
our original expectations. The Partnership grew distributions for both
common and subordinated unitholders throughout the year, while retaining
almost $100 million of our distributable cash flow that largely funded
our acquisition program for the year in a period where access to the
capital markets was challenged. Building on these accomplishments from
2018, we expect continued growth in our mineral and royalty business in
2019. We also expect to fully convert the subordinated units to common
units in May with the payment of the distribution attributable to the
first quarter of 2019, which will result in a simplified capital
structure. We are well positioned with a fantastic set of assets, strong
financial footing, and an experienced management team. In addition to
our organic growth driven by our strategic positions in the Permian and
Haynesville, we are excited about additional mineral consolidation
opportunities we see in the near term."
Quarterly Financial and Operating Results
Production
Black Stone Minerals reported average production of 49.7 MBoe/d (72%
mineral and royalty, 71% natural gas) for the fourth quarter of 2018,
representing a sequential increase of 3% and a year over year increase
of 30% from the corresponding period in 2017. Mineral and royalty
volumes grew by 9% from the levels reported in the third quarter of
2018, while working interest volumes decreased by 9% over the same
period. Year over year, mineral and royalty volumes grew 45% in 2018,
driven primarily by increases on existing acreage; excluding the Noble
acquisition completed in November 2017, base mineral and royalty
production grew 31% from 2017 to 2018. Working interest production
declined by 5% year over year as a result of the farmouts put in place
in 2017.
Realized Prices, Revenues, and Net Income
The Partnership’s average realized price per Boe, excluding the effect
of derivative settlements, was $33.97 for the quarter ended December 31,
2018. This is an increase of 4% from $32.81 per Boe from the third
quarter of 2018 and a 20% increase compared to $28.21 for the fourth
quarter of 2017.
Black Stone reported oil and gas revenue of $155.4 million (50% oil and
condensate) for the fourth quarter of 2018, an increase of 7% from
$145.8 million in the third quarter of 2018. Oil and gas revenue in the
fourth quarter of 2017 was $98.9 million.
The Partnership reported a gain on commodity derivative instruments of
$83.0 million for the fourth quarter of 2018, composed of a $17.8
million loss from realized settlements and a non-cash $100.8 million
unrealized gain due to the change in value of Black Stone’s derivative
positions during the quarter. Black Stone reported losses on commodity
derivative instruments of $18.5 million and $8.5 million for the
quarters ended September 30, 2018 and December 31, 2017, respectively.
Lease bonus and other income was $7.6 million for the fourth quarter of
2018, compared to $12.4 million for the third quarter of 2018. For the
quarter ended December 31, 2017, Black Stone reported lease bonus and
other income of $5.0 million.
The Partnership reported net income of $164.1 million for the quarter
ended December 31, 2018, compared to net income of $60.8 million in the
preceding quarter. For the quarter ended December 31, 2017, net income
was $19.4 million.
Adjusted EBITDA and Distributable Cash Flow
Adjusted EBITDA for the fourth quarter of 2018 was $110.0 million, which
compares to $114.2 million in the third quarter of 2018 and $79.5
million in the fourth quarter of 2017. Distributable cash flow for the
quarter ended December 31, 2018 was $96.7 million. For the quarters
ended September 30, 2018 and December 31, 2017, distributable cash flow
was $100.8 million and $69.4 million, respectively.
Acquisitions
Black Stone acquired $17.8 million of properties during the fourth
quarter of 2018, substantially all of which were purchased using cash.
The vast majority of the quarter's activity related to the Partnership's
ongoing bolt-on acquisition program in the Shelby Trough area of East
Texas. For the full year, Black Stone Minerals completed $149.9 million
in acquisitions (85% of which were completed using cash) focused on East
Texas and the Permian Basin.
2018 Proved Reserves
Estimated proved oil and natural gas reserves at year-end 2018 were 69.9
MMBoe, an increase of 3% from 67.9 MMBoe at year-end 2017, and were
approximately 75% natural gas and 86% proved developed producing. The
standardized measure of discounted future net cash flows was $1,087.6
million at the end of 2018 as compared to $862.6 million at year-end
2017.
Netherland, Sewell and Associates, Inc., an independent petroleum
engineering firm, evaluated Black Stone Minerals’ estimate of its proved
reserves and PV-10 at December 31, 2018. These estimates were prepared
using reference prices of $65.56 per barrel of oil and $3.10 per MMBTU
of natural gas in accordance with the applicable rules of the Securities
and Exchange Commission. These prices were adjusted for quality and
market differentials, transportation fees, and in the case of natural
gas, the value of natural gas liquids. A reconciliation of proved
reserves is presented in the summary financial tables following this
press release.
FinancialPosition and Activities
As of December 31, 2018, Black Stone Minerals had $5.4 million in cash
and $410.0 million outstanding under its credit facility. The
Partnership’s borrowing base at December 31, 2018 was $675 million, and
the Partnership's next regularly scheduled borrowing base
redetermination is set for April 2019. Black Stone is in compliance with
all financial covenants associated with its credit facility.
As of February 22, 2019, $381.0 million was outstanding under the credit
facility and the Partnership had $12.1 million in cash.
The Partnership established an at-the-market (“ATM”) offering program in
2017. Early in the fourth quarter of 2018, Black Stone sold 122,132
common units under the ATM program at an average price of $18.36 per
unit. Through the ATM program, Black Stone can sell common units into
the open market from time to time. As of December 31, 2018, the
Partnership had approximately $27 million of remaining availability in
the ATM program.
During the fourth quarter of 2018, the Board of Directors authorized a
$75 million unit repurchase program. Late in the quarter, the
Partnership repurchased 128,627 common units at an average price of
$15.61 per unit.
Fourth Quarter 2018 Distributions
As previously announced, the Board of Directors of the general partner
approved a cash distribution of $0.37 for each common and subordinated
unit attributable to the fourth quarter of 2018. The quarterly
distribution coverage ratio attributable to the fourth quarter of 2018
was approximately 1.3x for all units. These distributions will be paid
on February 26, 2019 to unitholders of record as of the close of
business on February 19, 2019.
Summary 2019 Guidance
Following are the key assumptions in Black Stone Minerals’ 2019
guidance, as well as comparable results for 2018:
|
|
|
|
|
|
|
FY 2018
|
|
FY 2019 Est.
|
|
Mineral and royalty production (MBoe/d)
|
|
32.1
|
|
35 - 37
|
|
Working interest production (MBoe/d)
|
|
14.2
|
|
10 - 11
|
|
Total production (MBoe/d)
|
|
46.3
|
|
45 - 48
|
|
Percentage natural gas
|
|
71%
|
|
~71%
|
|
Percentage royalty interest
|
|
69%
|
|
~77%
|
|
|
|
|
|
|
Lease bonus and other income ($MM)
|
|
$36.2
|
|
$30 - $40
|
|
|
|
|
|
|
Lease operating expense ($MM)
|
|
$18.4
|
|
$17 - $19
|
|
Production costs and ad valorem taxes (as % of total pre-derivative
O&G revenue)
|
|
11.5%
|
|
11% - 13%
|
|
Exploration expense ($MM)
|
|
$7.9
|
|
$1.0 - $2.0
|
|
|
|
|
|
|
G&A - cash ($MM)
|
|
$46.6
|
|
$45 - $47
|
|
G&A - non-cash ($MM)
|
|
$30.1
|
|
$21 - $23
|
|
G&A - TOTAL ($MM)
|
|
$76.7
|
|
$66 - $70
|
|
|
|
|
|
|
DD&A ($/Boe)
|
|
$7.26
|
|
$7.00 - $8.00
|
|
|
|
|
|
No acquisitions are assumed in the guidance above; however, consistent
with its stated strategy, the Partnership expects to remain active in
the acquisition market in 2019 and beyond.
Production
Mineral and royalty production in 2019 is being driven principally by
anticipated development of the Haynesville/Bossier play in the Shelby
Trough of East Texas, and of the Midland and Delaware basins. At this
time, Black Stone does not anticipate investing its own capital in
working interest participation; accordingly working interest production
is expected to decline by approximately 25% as a result of Black Stone's
successful farmout of Shelby Trough Haynesville working interests.
Exploration Expense
Black Stone plans to purchase seismic data in the Shelby Trough in 2019
to help guide the Partnership's ongoing acquisition program in the area.
General & Administrative Expense
Non-cash general & administrative expense is expected to decline in 2019
as a result of the vesting and settlement of equity awards granted at
the time of our IPO. These awards vest over a four-year period and will
be settled in the first half of 2019.
Hedge Position
Black Stone has commodity derivative contracts in place covering
portions of its anticipated production for 2019 and 2020. The
Partnership's current hedge position for 2019 and 2020, including hedges
put in place subsequent to December 31, 2018, is summarized in the
following tables:
|
Oil Hedge Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Avg
|
|
Oil Costless
|
|
Weighted Avg
|
|
Weighted Avg
|
|
|
Oil Swap
|
|
Oil Swap Price
|
|
Collars
|
|
Collar Floor
|
|
Collar Ceiling
|
|
|
MBbl
|
|
$/Bbl
|
|
MBbl
|
|
$/Bbl
|
|
$/Bbl
|
|
1Q19
|
|
685
|
|
$58.62
|
|
60
|
|
$65.00
|
|
$74.00
|
|
2Q19
|
|
765
|
|
$58.54
|
|
60
|
|
$65.00
|
|
$74.00
|
|
3Q19
|
|
765
|
|
$58.15
|
|
60
|
|
$65.00
|
|
$74.00
|
|
4Q19
|
|
765
|
|
$58.15
|
|
60
|
|
$65.00
|
|
$74.00
|
|
1Q20
|
|
180
|
|
$57.48
|
|
210
|
|
$56.43
|
|
$67.14
|
|
2Q20
|
|
180
|
|
$57.48
|
|
210
|
|
$56.43
|
|
$67.14
|
|
3Q20
|
|
180
|
|
$57.48
|
|
210
|
|
$56.43
|
|
$67.14
|
|
4Q20
|
|
180
|
|
$57.48
|
|
210
|
|
$56.43
|
|
$67.14
|
|
Gas Hedge Position
|
|
|
|
|
|
|
|
|
Weighted Avg
|
|
|
Gas Swap
|
|
Gas Swap Price
|
|
|
MMcf
|
|
$/Mcf
|
|
1Q19
|
|
14,400
|
|
$2.96
|
|
2Q19
|
|
14,520
|
|
$2.96
|
|
3Q19
|
|
14,640
|
|
$2.96
|
|
4Q19
|
|
14,640
|
|
$2.96
|
|
1Q20
|
|
6,370
|
|
$2.72
|
|
2Q20
|
|
6,370
|
|
$2.72
|
|
3Q20
|
|
6,440
|
|
$2.72
|
|
4Q20
|
|
6,440
|
|
$2.72
|
More detailed information about the Partnership's existing hedging
program can be found in the Annual Report on Form 10-K, which is
expected to be filed on February 26, 2019.
Conference Call
Black Stone Minerals will host a conference call and webcast for
investors and analysts to discuss its results for the fourth quarter and
full year of 2018 on Tuesday, February 26, 2019 at 9:00 a.m. Central
Time. To join the call, participants should dial (877) 447-4732 and use
conference code 2697118. A live broadcast of the call will also be
available at
http://investor.blackstoneminerals.com.
A recording of the conference call will be available at that site
through March 31, 2019.
Upcoming Investor Relations Events
Members of management from Black Stone Minerals will also be
participating in the following investor events:
-
Scotia Howard Weil 47th Annual Energy Conference - March 25
& 26, 2019 in New Orleans, Louisiana. Management will present on
Monday, March 25th and will also participate in one-on-one meetings.
-
IPAA OGIS - April 9, 2019 in New York City. Management will present
and participate in one-on-one meetings.
-
NYSE Investor Access Day - April 10, 2019 in New York City. Management
will conduct meetings with investors throughout the day.
-
World Oilman's Mineral & Royalty Conference - April 22 & 23, 2019 in
Houston, Texas. Management will participate on an industry panel.
Updated presentation materials and webcast information, if any, for the
aforementioned events will be made available on the Black Stone Minerals
website the day of the respective event.
About Black Stone Minerals, L.P.
Black Stone Minerals is one of the largest owners of oil and natural gas
mineral interests in the United States. The Partnership owns mineral
interests and royalty interests in 41 states and 64 onshore basins in
the continental United States. Black Stone expects that its large,
diversified asset base and long-lived, non-cost-bearing mineral and
royalty interests will result in production and reserve growth, as well
as increasing distributions to its unitholders, over time.
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, Black Stone Minerals undertakes
no obligation and does not intend to update these forward-looking
statements to reflect events or circumstances occurring after this news
release. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this news
release. All forward-looking statements are qualified in their entirety
by these cautionary statements. These forward-looking statements involve
risks and uncertainties, many of which are beyond the control of Black
Stone Minerals, which may cause the Partnership’s actual results to
differ materially from those implied or expressed by the forward-looking
statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include, but are
not limited to, those summarized below:
-
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;
-
overall supply and demand for oil and natural gas, as well as 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, |
|
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
REVENUE
|
|
|
|
|
|
|
|
|
|
Oil and condensate sales
|
|
$
|
77,358
|
|
|
$
|
50,631
|
|
|
$
|
310,278
|
|
|
$
|
169,728
|
|
|
Natural gas and natural gas liquids sales
|
|
78,064
|
|
|
48,316
|
|
|
248,243
|
|
|
190,967
|
|
|
Lease bonus and other income
|
|
7,600
|
|
|
4,980
|
|
|
36,216
|
|
|
42,062
|
|
|
Revenue from contracts with customers
|
|
163,022
|
|
|
103,927
|
|
|
594,737
|
|
|
402,757
|
|
|
Gain (loss) on commodity derivative instruments
|
|
83,025
|
|
|
(8,485
|
)
|
|
14,831
|
|
|
26,902
|
|
|
TOTAL REVENUE
|
|
246,047
|
|
|
95,442
|
|
|
609,568
|
|
|
429,659
|
|
|
OPERATING (INCOME) EXPENSE
|
|
|
|
|
|
|
|
|
|
Lease operating expense
|
|
5,648
|
|
|
4,374
|
|
|
18,415
|
|
|
17,280
|
|
|
Production costs and ad valorem taxes
|
|
17,425
|
|
|
12,160
|
|
|
64,364
|
|
|
47,474
|
|
|
Exploration expense
|
|
1,161
|
|
|
2
|
|
|
7,943
|
|
|
618
|
|
|
Depreciation, depletion and amortization
|
|
34,518
|
|
|
30,051
|
|
|
122,653
|
|
|
114,534
|
|
|
General and administrative
|
|
16,296
|
|
|
25,576
|
|
|
76,712
|
|
|
77,574
|
|
|
Accretion of asset retirement obligations
|
|
283
|
|
|
266
|
|
|
1,103
|
|
|
1,026
|
|
|
(Gain) loss on sale of assets, net
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
(931
|
)
|
|
TOTAL OPERATING EXPENSE
|
|
75,330
|
|
|
72,429
|
|
|
291,187
|
|
|
257,575
|
|
|
INCOME (LOSS) FROM OPERATIONS
|
|
170,717
|
|
|
23,013
|
|
|
318,381
|
|
|
172,084
|
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
Interest and investment income
|
|
60
|
|
|
19
|
|
|
183
|
|
|
49
|
|
|
Interest expense
|
|
(5,437
|
)
|
|
(4,034
|
)
|
|
(20,756
|
)
|
|
(15,694
|
)
|
|
Other income (expense)
|
|
(1,202
|
)
|
|
362
|
|
|
(2,248
|
)
|
|
714
|
|
|
TOTAL OTHER EXPENSE
|
|
(6,579
|
)
|
|
(3,653
|
)
|
|
(22,821
|
)
|
|
(14,931
|
)
|
|
NET INCOME (LOSS)
|
|
164,138
|
|
|
19,360
|
|
|
295,560
|
|
|
157,153
|
|
|
Net (income) loss attributable to noncontrolling interests
|
|
(23
|
)
|
|
7
|
|
|
(24
|
)
|
|
34
|
|
|
Distributions on Series A redeemable preferred units
|
|
—
|
|
|
(665
|
)
|
|
(25
|
)
|
|
(3,117
|
)
|
|
Distributions on Series B cumulative convertible preferred units
|
|
(5,250
|
)
|
|
(1,925
|
)
|
|
(21,000
|
)
|
|
(1,925
|
)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON AND
SUBORDINATED UNITS
|
|
$
|
158,865
|
|
|
$
|
16,777
|
|
|
$
|
274,511
|
|
|
$
|
152,145
|
|
|
ALLOCATION OF NET INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
General partner interest
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common units
|
|
83,625
|
|
|
14,400
|
|
|
154,662
|
|
|
98,389
|
|
|
Subordinated units
|
|
75,240
|
|
|
2,377
|
|
|
119,849
|
|
|
53,756
|
|
|
|
$
|
158,865
|
|
|
$
|
16,777
|
|
|
$
|
274,511
|
|
|
$
|
152,145
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON AND
SUBORDINATED UNIT:
|
|
|
|
|
|
|
|
|
|
Per common unit (basic)
|
|
$
|
0.78
|
|
|
$
|
0.15
|
|
|
$
|
1.46
|
|
|
$
|
1.01
|
|
|
Weighted average common units outstanding (basic)
|
|
108,465
|
|
|
103,415
|
|
|
106,064
|
|
|
97,400
|
|
|
Per subordinated unit (basic)
|
|
$
|
0.78
|
|
|
$
|
0.02
|
|
|
$
|
1.25
|
|
|
$
|
0.56
|
|
|
Weighted average subordinated units outstanding (basic)
|
|
96,329
|
|
|
95,388
|
|
|
96,099
|
|
|
95,149
|
|
|
Per common unit (diluted)
|
|
$
|
0.72
|
|
|
$
|
0.15
|
|
|
$
|
1.45
|
|
|
$
|
1.01
|
|
|
Weighted average common units outstanding (diluted)
|
|
124,354
|
|
|
103,415
|
|
|
121,264
|
|
|
97,400
|
|
|
Per subordinated unit (diluted)
|
|
$
|
0.78
|
|
|
$
|
0.02
|
|
|
$
|
1.25
|
|
|
$
|
0.56
|
|
|
Weighted average subordinated units outstanding (diluted)
|
|
96,329
|
|
|
95,388
|
|
|
96,346
|
|
|
95,149
|
|
The following table shows the Partnership’s production, revenues,
realized prices, and expenses for the periods presented.
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
|
(Dollars in thousands, except for realized prices) |
| Production: |
|
|
|
|
|
|
|
|
|
Oil and condensate (MBbls)
|
|
1,339
|
|
|
955
|
|
|
4,962
|
|
|
3,552
|
|
Natural gas (MMcf)1 |
|
19,417
|
|
|
15,320
|
|
|
71,622
|
|
|
59,779
|
|
Equivalents (MBoe)
|
|
4,575
|
|
|
3,508
|
|
|
16,899
|
|
|
13,515
|
|
Equivalents/day (MBoe)
|
|
49.7
|
|
|
38.1
|
|
|
46.3
|
|
|
37.0
|
| Revenue: |
|
|
|
|
|
|
|
|
|
Oil and condensate sales
|
|
$
|
77,358
|
|
|
$
|
50,631
|
|
|
$
|
310,278
|
|
|
$
|
169,728
|
|
Natural gas and natural gas liquids sales1 |
|
78,064
|
|
|
48,316
|
|
|
248,243
|
|
|
190,967
|
|
Lease bonus and other income
|
|
7,600
|
|
|
4,980
|
|
|
36,216
|
|
|
42,062
|
|
Revenue from contracts with customers
|
|
163,022
|
|
|
103,927
|
|
|
594,737
|
|
|
402,757
|
|
Gain (loss) on commodity derivative instruments
|
|
83,025
|
|
|
(8,485
|
)
|
|
14,831
|
|
|
26,902
|
|
Total revenue
|
|
$
|
246,047
|
|
|
$
|
95,442
|
|
|
$
|
609,568
|
|
|
$
|
429,659
|
| Realized prices, without derivatives: |
|
|
|
|
|
|
|
|
|
Oil and condensate ($/Bbl)
|
|
$
|
57.77
|
|
|
$
|
53.02
|
|
|
$
|
62.53
|
|
|
$
|
47.78
|
|
Natural gas ($/Mcf)1 |
|
$
|
4.02
|
|
|
$
|
3.15
|
|
|
$
|
3.47
|
|
|
$
|
3.19
|
|
Equivalents ($/Boe)
|
|
$
|
33.97
|
|
|
$
|
28.21
|
|
|
$
|
33.05
|
|
|
$
|
26.69
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
Lease operating expense
|
|
$
|
5,648
|
|
|
$
|
4,374
|
|
|
$
|
18,415
|
|
|
$
|
17,280
|
|
Production costs and ad valorem taxes
|
|
17,425
|
|
|
12,160
|
|
|
64,364
|
|
|
47,474
|
|
Exploration expense
|
|
1,161
|
|
|
2
|
|
|
7,943
|
|
|
618
|
|
Depreciation, depletion, and amortization
|
|
34,518
|
|
|
30,051
|
|
|
122,653
|
|
|
114,534
|
|
General and administrative
|
|
16,296
|
|
|
25,576
|
|
|
76,712
|
|
|
77,574
|
| Per Boe: |
|
|
|
|
|
|
|
|
|
Lease operating expense (per working interest Boe)
|
|
4.41
|
|
|
3.53
|
|
|
3.55
|
|
|
3.17
|
|
Production costs and ad valorem taxes
|
|
3.81
|
|
|
3.47
|
|
|
3.81
|
|
|
3.51
|
|
Depreciation, depletion, and amortization
|
|
7.54
|
|
|
8.57
|
|
|
7.26
|
|
|
8.47
|
|
General and administrative
|
|
3.56
|
|
|
7.29
|
|
|
4.54
|
|
|
5.74
|
| 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 our 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
Adjusted EBITDA and distributable cash flow are supplemental non-GAAP
financial measures used by our management and external users of our
financial statements such as investors, research analysts, and others,
to assess the financial performance of our assets and our ability to
sustain distributions over the long term without regard to financing
methods, capital structure, or historical cost basis.
We define Adjusted EBITDA as net income (loss) before interest expense,
income taxes, and depreciation, depletion, and amortization adjusted for
impairment of oil and natural gas properties, accretion of asset
retirement obligations, unrealized gains and losses on commodity
derivative instruments, and non-cash equity-based compensation. We
define distributable cash flow as Adjusted EBITDA plus or minus amounts
for certain non-cash operating activities, estimated replacement capital
expenditures, cash interest expense, and distributions to noncontrolling
interests and preferred unitholders.
Adjusted EBITDA and distributable cash flow should not be considered an
alternative to, or more meaningful than, net income (loss), income
(loss) from operations, cash flows from operating activities, or any
other measure of financial performance presented in accordance with
generally accepted accounting principles in the United States ("U.S.
GAAP") as measures of our financial performance.
Adjusted EBITDA and distributable cash flow have important limitations
as analytical tools because they exclude some but not all items that
affect net income (loss), the most directly comparable U.S. GAAP
financial measure. Our computation of Adjusted EBITDA and distributable
cash flow may differ from computations of similarly titled measures of
other companies.
The following table presents a reconciliation of net income (loss), the
most directly comparable U.S. GAAP financial measure, to Adjusted EBITDA
and distributable cash flow for the periods indicated:
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
|
(In thousands, except per unit amounts) |
|
Net income (loss)
|
|
$
|
164,138
|
|
|
$
|
19,360
|
|
|
$
|
295,560
|
|
|
$
|
157,153
|
|
|
Adjustments to reconcile to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
34,518
|
|
|
30,051
|
|
|
122,653
|
|
|
114,534
|
|
|
Interest expense
|
|
5,437
|
|
|
4,034
|
|
|
20,756
|
|
|
15,694
|
|
|
Income tax expense
|
|
1,250
|
|
|
—
|
|
|
2,309
|
|
|
—
|
|
|
Accretion of asset retirement obligations
|
|
283
|
|
|
266
|
|
|
1,103
|
|
|
1,026
|
|
|
Equity-based compensation
|
|
5,187
|
|
|
14,431
|
|
|
30,134
|
|
|
33,045
|
|
|
Unrealized (gain) loss on commodity derivative instruments
|
|
(100,799
|
)
|
|
11,357
|
|
|
(53,066
|
)
|
|
(11,691
|
)
|
|
Adjusted EBITDA
|
|
110,014
|
|
|
79,499
|
|
|
419,449
|
|
|
309,761
|
|
|
Adjustments to distributable cash flow:
|
|
|
|
|
|
|
|
|
|
Change in deferred revenue
|
|
(40
|
)
|
|
(416
|
)
|
|
1,260
|
|
|
(2,086
|
)
|
|
Cash interest expense
|
|
(5,186
|
)
|
|
(3,818
|
)
|
|
(19,757
|
)
|
|
(14,817
|
)
|
|
(Gain) loss on sales of assets, net
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
(931
|
)
|
|
Estimated replacement capital expenditures1 |
|
(2,750
|
)
|
|
(3,250
|
)
|
|
(11,500
|
)
|
|
(13,500
|
)
|
|
Cash paid to noncontrolling interests
|
|
(50
|
)
|
|
(30
|
)
|
|
(211
|
)
|
|
(120
|
)
|
|
Preferred unit distributions
|
|
(5,250
|
)
|
|
(2,590
|
)
|
|
(21,025
|
)
|
|
(5,042
|
)
|
|
Distributable cash flow
|
|
96,737
|
|
|
69,395
|
|
|
368,213
|
|
|
273,265
|
|
|
|
|
Total units outstanding2 |
|
205,180
|
|
|
199,647
|
|
|
|
|
|
|
Distributable cash flow per unit
|
|
0.471
|
|
|
0.348
|
|
|
|
|
|
|
Common unit price as of February 22, 2019
|
|
$
|
18.15
|
|
|
|
|
|
|
|
|
Implied distributable cash flow yield
|
|
10.4
|
%
|
|
|
|
|
|
|
1 On August 3, 2016, the board of directors of our general
partner established a replacement capital expenditures estimate of $15.0
million for the period of April 1, 2016 to March 31, 2017. On June 8,
2017, the Board approved a replacement capital expenditure estimate of
$13.0 million for the period of April 1, 2017 to March 31, 2018. On
April 27, 2018, the Board approved a replacement capital expenditure
estimate of $11.0 million for the period of April 1, 2018 to March 31,
2019.
2 The distribution attributable to the quarter ended
December 31, 2018 is calculated using 108,851,353 common units and
96,328,836 subordinated units as of February 19, 2019. Distributions
attributable to the quarter ended December 31, 2017 were calculated
using 104,258,290 common units and 95,388,424 subordinated units as of
the record date of February 20, 2018.
Proved Oil & Gas Reserve Quantities
A reconciliation of proved reserves is presented in the following table:
|
|
|
|
Crude Oil |
|
Natural Gas |
|
Total |
|
|
(MBbl) |
|
(MMcf) |
|
(MBoe) |
|
Net proved reserves at December 31, 2017
|
|
17,899
|
|
|
300,274
|
|
|
67,945
|
|
|
Revisions of previous estimates
|
|
(35
|
)
|
|
(11,027
|
)
|
|
(1,873
|
)
|
|
Purchases of minerals in place
|
|
227
|
|
|
419
|
|
|
297
|
|
|
Extensions, discoveries, and other additions
|
|
4,438
|
|
|
95,976
|
|
|
20,434
|
|
|
Production
|
|
(4,962
|
)
|
|
(71,622
|
)
|
|
(16,899
|
)
|
|
Net proved reserves at December 31, 2018
|
|
17,567
|
|
|
314,020
|
|
|
69,904
|
|
|
Net Proved Developed Reserves
|
|
|
|
|
|
|
|
December 31, 2017
|
|
17,891
|
|
|
233,017
|
|
|
56,727
|
|
|
December 31, 2018
|
|
17,567
|
|
|
278,233
|
|
|
63,939
|
|
|
Net Proved Undeveloped Reserves
|
|
|
|
|
|
|
|
December 31, 2017
|
|
8
|
|
|
67,257
|
|
|
11,218
|
|
|
December 31, 2018
|
|
—
|
|
|
35,787
|
|
|
5,965
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190225006052/en/
Source: Black Stone Minerals, L.P.
Black Stone Minerals, L.P. Contact
Brent Collins
Vice
President, Investor Relations
Telephone: (713) 445-3200
investorrelations@blackstoneminerals.com