Black Stone Minerals, L.P. Reports First Quarter Results
Financial and Operational Highlights
- Mineral and royalty production for the first quarter of 2024 equaled 38.1 MBoe/d, a decrease of 2% from the prior quarter; total production, including working-interest volumes, was 40.3 MBoe/d for the quarter.
-
Net income for the first quarter was
$63.9 million , and Adjusted EBITDA for the quarter totaled$104.1 million . -
Distributable cash flow was
$96.4 million for the first quarter. -
Black Stone announced a distribution of
$0.375 per unit with respect to the first quarter of 2024, representing a decrease of 21% from the common distribution paid for the fourth quarter of 2023. Distribution coverage for all units was 1.22x. -
No outstanding debt at the end of the first quarter; as of
May 3, 2024 , total debt remained at zero with approximately$89 million of cash on hand.
Management Commentary
Thomas L. Carter, Jr., Black Stone Minerals’ Chairman, Chief Executive Officer and President, commented, "We previously announced the Company’s plan to decrease the first quarter 2024 distribution. We remain focused on disciplined capital management and staying the course of targeted, grass-roots mineral acquisitions that are accretive to our mineral positions in strategic basins. Because of decisions made by the Company in the past four years, we are well-positioned to stay focused on long-term decision-making, which we view as one of our most significant strategic advantages we have relative to our peers. With a comprehensive strategy focused on capital discipline, maintaining a strong balance sheet, thoughtful hedging and commercial strategy centered on organic growth, we are able to weather commodity price cycles for longer periods of time and stay focused on decisions that are best for the Company in the long term."
Quarterly Financial and Operating Results
Production
Working-interest production for the first quarter of 2024 was 2.2 MBoe/d, representing the same volume generated in the quarter ended
Total reported production averaged 40.3 MBoe/d (95% mineral and royalty, 75% natural gas) for the first quarter of 2024, compared to 41.1 MBoe/d and 39.3 MBoe/d for the quarters ended
Realized Prices, Revenues, and Net Income
The Company’s average realized price per Boe, excluding the effect of derivative settlements, was
Black Stone reported oil and gas revenue of
The Company reported a loss on commodity derivative instruments of
Lease bonus and other income was
The Company reported net income of
Adjusted EBITDA and Distributable Cash Flow
Adjusted EBITDA for the first quarter of 2024 was
Financial Position and Activities
As of
Subsequent to quarter-end, Black Stone's borrowing base under the credit facility was reaffirmed at
First Quarter 2024 Distributions
As previously announced, the Board approved a cash distribution of
Activity Update
Rig Activity
As of
Shelby Trough Development Update
A significant portion of Shelby Trough development in recent years has been performed by Aethon Energy (“Aethon”) under the two Joint Exploration Agreements (“JEAs”) between the Company and Aethon. The JEAs outline Aethon’s development obligations and other rights and obligations of each party related to the Company’s core mineral positions in
As announced on
In
Austin Chalk Update
Black Stone has entered into agreements with multiple operators to drill wells in the areas of the Austin Chalk in
Acquisition Activity
Black Stone’s commercial strategy since 2021 has been focused on attracting capital and securing drilling commitments on minerals already owned by the Company. Management made the decision to expand this growth strategy by adding to the Company’s mineral portfolio through strategic, targeted efforts primarily in the
Guidance Update
Because the Company expects continued pressure on natural gas prices will result in production curtailments and delays in drilling and completion of new wells, Black Stone's total production guidance is being lowered to a range of 38.5 MBoe/d to 40.5 MBoe/d, from the previously disclosed range of 40.0 MBoe/d to 42.0 MBoe/d.
Update to Hedge Position
Black Stone has commodity derivative contracts in place covering portions of its anticipated production for 2024 and 2025. The Company's hedge position as of
|
Oil Hedge Position |
|
|
|
|
|
Oil Swap |
Oil Swap Price |
|
|
|
MBbl |
$/Bbl |
|
|
2Q24 |
570 |
|
|
|
3Q24 |
570 |
|
|
|
4Q24 |
570 |
|
|
|
1Q25 |
555 |
|
|
|
2Q25 |
555 |
|
|
|
3Q25 |
555 |
|
|
|
4Q25 |
555 |
|
|
|
Natural Gas Hedge Position |
||
|
|
Gas Swap |
Gas Swap Price |
|
|
BBtu |
$/MMbtu |
|
2Q24 |
10,465 |
|
|
3Q24 |
10,580 |
|
|
4Q24 |
10,580 |
|
|
1Q25 |
7,200 |
|
|
2Q25 |
7,280 |
|
|
3Q25 |
11,040 |
|
|
4Q25 |
11,040 |
|
More detailed information about the Company's existing hedging program can be found in the Quarterly Report on Form 10-Q for the first quarter of 2024, which is expected to be filed on or around
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 Company 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 Company’s ability to execute its business strategies;
- the volatility of realized oil and natural gas prices;
- the level of production on the Company’s properties;
- overall supply and demand for oil and natural gas, as well as regional supply and demand factors, delays, or interruptions of production;
- conservation measures and general concern about the environmental impact of the production and use of fossil fuels;
- the Company’s ability to replace its oil and natural gas reserves;
- general economic, business, or industry conditions including slowdowns, domestically and internationally, and volatility in the securities, capital or credit markets;
- cybersecurity incidents, including data security breaches or computer viruses;
- competition in the oil and natural gas industry;
- the availability or cost of rigs, equipment, raw materials, supplies, oilfield services or personnel; and
- the level of drilling activity by the Company's operators, particularly in areas such as the Shelby Trough where the Company has concentrated acreage positions.
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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|
(Unaudited) |
|||||||
|
(In thousands, except per unit amounts) |
|||||||
|
|
Three Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
|
|
|
|
|
||||
|
REVENUE |
|
|
|
||||
|
Oil and condensate sales |
$ |
71,224 |
|
|
$ |
60,909 |
|
|
Natural gas and natural gas liquids sales |
|
42,011 |
|
|
|
57,423 |
|
|
Lease bonus and other income |
|
3,548 |
|
|
|
3,975 |
|
|
Revenue from contracts with customers |
|
116,783 |
|
|
|
122,307 |
|
|
Gain (loss) on commodity derivative instruments |
|
(11,290 |
) |
|
|
52,271 |
|
|
TOTAL REVENUE |
|
105,493 |
|
|
|
174,578 |
|
|
OPERATING (INCOME) EXPENSE |
|
|
|
||||
|
Lease operating expense |
|
2,432 |
|
|
|
2,668 |
|
|
Production costs and ad valorem taxes |
|
13,038 |
|
|
|
12,667 |
|
|
Exploration expense |
|
3 |
|
|
|
4 |
|
|
Depreciation, depletion, and amortization |
|
11,639 |
|
|
|
11,147 |
|
|
General and administrative |
|
14,090 |
|
|
|
12,648 |
|
|
Accretion of asset retirement obligations |
|
317 |
|
|
|
245 |
|
|
TOTAL OPERATING EXPENSE |
|
41,519 |
|
|
|
39,379 |
|
|
INCOME (LOSS) FROM OPERATIONS |
|
63,974 |
|
|
|
135,199 |
|
|
OTHER INCOME (EXPENSE) |
|
|
|
||||
|
Interest and investment income |
|
670 |
|
|
|
157 |
|
|
Interest expense |
|
(629 |
) |
|
|
(814 |
) |
|
Other income (expense) |
|
(88 |
) |
|
|
(99 |
) |
|
TOTAL OTHER EXPENSE |
|
(47 |
) |
|
|
(756 |
) |
|
NET INCOME (LOSS) |
|
63,927 |
|
|
|
134,443 |
|
|
Distributions on Series B cumulative convertible preferred units |
|
(7,367 |
) |
|
|
(5,250 |
) |
|
NET INCOME (LOSS) ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON UNITS |
$ |
56,560 |
|
|
$ |
129,193 |
|
|
ALLOCATION OF NET INCOME (LOSS): |
|
|
|
||||
|
General partner interest |
$ |
— |
|
|
$ |
— |
|
|
Common units |
|
56,560 |
|
|
|
129,193 |
|
|
|
$ |
56,560 |
|
|
$ |
129,193 |
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON UNIT: |
|
|
|
||||
|
Per common unit (basic) |
$ |
0.27 |
|
|
$ |
0.62 |
|
|
Per common unit (diluted) |
$ |
0.27 |
|
|
$ |
0.60 |
|
|
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING: |
|
|
|
||||
|
Weighted average common units outstanding (basic) |
|
210,654 |
|
|
|
209,941 |
|
|
Weighted average common units outstanding (diluted) |
|
210,654 |
|
|
|
224,910 |
|
The following table shows the Company’s production, revenues, pricing, and expenses for the periods presented:
|
|
|
Three Months Ended |
|||||
|
|
|
2024 |
|
2023 |
|||
|
|
|
|
|
|
|||
|
|
|
(Unaudited) (Dollars in thousands, except for realized prices and per Boe data) |
|||||
|
Production: |
|
|
|
|
|||
|
Oil and condensate (MBbls) |
|
|
923 |
|
|
|
793 |
|
Natural gas (MMcf)1 |
|
|
16,470 |
|
|
|
16,452 |
|
Equivalents (MBoe) |
|
|
3,668 |
|
|
|
3,535 |
|
Equivalents/day (MBoe) |
|
|
40.3 |
|
|
|
39.3 |
|
Realized prices, without derivatives: |
|
|
|
|
|||
|
Oil and condensate ($/Bbl) |
|
$ |
77.17 |
|
|
$ |
76.81 |
|
Natural gas ($/Mcf)1 |
|
|
2.55 |
|
|
|
3.49 |
|
Equivalents ($/Boe) |
|
$ |
30.87 |
|
|
$ |
33.47 |
|
Revenue: |
|
|
|
|
|||
|
Oil and condensate sales |
|
$ |
71,224 |
|
|
$ |
60,909 |
|
Natural gas and natural gas liquids sales1 |
|
|
42,011 |
|
|
|
57,423 |
|
Lease bonus and other income |
|
|
3,548 |
|
|
|
3,975 |
|
Revenue from contracts with customers |
|
|
116,783 |
|
|
|
122,307 |
|
Gain (loss) on commodity derivative instruments |
|
|
(11,290 |
) |
|
|
52,271 |
|
Total revenue |
|
$ |
105,493 |
|
|
$ |
174,578 |
|
Operating expenses: |
|
|
|
|
|||
|
Lease operating expense |
|
$ |
2,432 |
|
|
$ |
2,668 |
|
Production costs and ad valorem taxes |
|
|
13,038 |
|
|
|
12,667 |
|
Exploration expense |
|
|
3 |
|
|
|
4 |
|
Depreciation, depletion, and amortization |
|
|
11,639 |
|
|
|
11,147 |
|
General and administrative |
|
|
14,090 |
|
|
|
12,648 |
|
Other expense: |
|
|
|
|
|||
|
Interest expense |
|
|
629 |
|
|
|
814 |
|
Per Boe: |
|
|
|
|
|||
|
Lease operating expense (per working-interest Boe) |
|
$ |
12.22 |
|
|
$ |
12.13 |
|
Production costs and ad valorem taxes |
|
|
3.55 |
|
|
|
3.58 |
|
Depreciation, depletion, and amortization |
|
|
3.17 |
|
|
|
3.15 |
|
General and administrative |
|
|
3.84 |
|
|
|
3.58 |
|
1 As a mineral-and-royalty-interest owner, |
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Non-GAAP Financial Measures
Adjusted EBITDA and Distributable cash flow are supplemental non-GAAP financial measures used by Black Stone's management and external users of the Company's financial statements such as investors, research analysts, and others, to assess the financial performance of its assets and ability to sustain distributions over the long term without regard to financing methods, capital structure, or historical cost basis.
The Company defines 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, if any, accretion of asset retirement obligations, unrealized gains and losses on commodity derivative instruments, non-cash equity-based compensation, and gains and losses on sales of assets, if any. Black Stone defines Distributable cash flow as Adjusted EBITDA plus or minus amounts for certain non-cash operating activities, cash interest expense, distributions to preferred unitholders, and restructuring charges, if any.
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 ("GAAP") in
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
|
|
|
|
Three Months Ended |
||||||
|
|
|
|
2024 |
|
2023 |
||||
|
|
|
|
|
|
|
||||
|
|
|
(Unaudited) (In thousands, except per unit amounts) |
|||||||
|
Net income (loss) |
|
|
$ |
63,927 |
|
|
$ |
134,443 |
|
|
Adjustments to reconcile to Adjusted EBITDA: |
|
|
|
|
|
||||
|
Depreciation, depletion, and amortization |
|
|
|
11,639 |
|
|
|
11,147 |
|
|
Interest expense |
|
|
|
629 |
|
|
|
814 |
|
|
Income tax expense (benefit) |
|
|
|
135 |
|
|
|
147 |
|
|
Accretion of asset retirement obligations |
|
|
|
317 |
|
|
|
245 |
|
|
Equity–based compensation |
|
|
|
2,383 |
|
|
|
2,118 |
|
|
Unrealized (gain) loss on commodity derivative instruments |
|
|
|
25,087 |
|
|
|
(38,986 |
) |
|
Adjusted EBITDA |
|
|
|
104,117 |
|
|
|
109,928 |
|
|
Adjustments to reconcile to Distributable cash flow: |
|
|
|
|
|
||||
|
Change in deferred revenue |
|
|
|
(1 |
) |
|
|
(5 |
) |
|
Cash interest expense |
|
|
|
(361 |
) |
|
|
(559 |
) |
|
Preferred unit distributions |
|
|
|
(7,367 |
) |
|
|
(5,250 |
) |
|
Distributable cash flow |
|
|
$ |
96,388 |
|
|
$ |
104,114 |
|
|
|
|
|
|
|
|
||||
|
Total units outstanding1 |
|
|
|
210,703 |
|
|
|
209,967 |
|
|
Distributable cash flow per unit |
|
|
|
0.457 |
|
|
|
0.496 |
|
|
1 The distribution attributable to the three months ended |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240506575153/en/
Senior Vice President, Chief Financial Officer, and Treasurer
Telephone: (713) 445-3200
investorrelations@blackstoneminerals.com
Source: