UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):   August 12, 2015

 

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Black Stone Minerals, L.P.

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code: (713) 658-0647

 

Not Applicable

(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

 

 

 

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Item 2.02  Results of Operations and Financial Condition

 

On August 12, 2015, Black Stone Minerals, L.P. issued a press release that announced its second quarter financial results. A copy of the press release is furnished herewith as Exhibit 99.1.

 

The information in Item 2.02 of this Current Report, including the exhibit attached hereto as Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

 

 

Item 9.01  Financial Statements and Exhibits

 

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SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

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Exhibit Index

 

 

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Black Stone Minerals, L.P. Announces Second Quarter 2015 Results

And Announces Cash Distribution

 

HOUSTON, August 12, 2015 (BUSINESS WIRE) – Black Stone Minerals, L.P. (NYSE: BSM) (“Black Stone Minerals”) today announced its financial and operating results for the second quarter of 2015.  

 

Key Second Quarter 2015 Highlights:

 

 

Management Commentary

 

Thomas L. Carter, Jr., Black Stone Minerals’ President, Chief Executive Officer, and Chairman commented, “Black Stone Minerals grew production in the second quarter, which is a testament to the strength and quality of our diverse asset base given the recent commodity price environment. Even in these challenging times, we are seeing continued development of existing plays, leasing in emerging plays, and exploration tests in both core resource plays as well as conventional plays. There continues to be meaningful activity and exciting developments across our interests. We’ve also recently added interests in the Midland Basin and the Eagle Ford Shale, where we are confident we will continue to see development activity contribute to our production. We have a strong balance sheet and we are well positioned to continue to execute on our acquisition strategy.”

 

 

Financial and Operating Results

 

Production

 

Black Stone Minerals reported average production of 29.4 MBoe per day for the second quarter of 2015, an increase of 11% over average production of 26.5 MBoe per day for the corresponding period in 2014. The increase in production was primarily attributable to activity in the Bakken/Three Forks, Eagle Ford, Haynesville/Bossier, and Wilcox plays.

 

Realized Prices and Revenues

 

The partnership’s average realized price per Boe, excluding the effect of derivative settlements, was $28.13 for the quarter ended June 30, 2015, a decline of 42% from $48.72 per Boe for the quarter ended June 30, 2014.

 

Black Stone Minerals reported revenues of $64.8 million in the second quarter of 2015, a decline of 46% from $118.9 million in the second quarter of 2014. The decline reflects lower commodity prices compared to the corresponding period in 2014 as well as an unrealized loss of $35.3 million in the current quarter that reflects the change in value of unsettled derivative contracts during the quarter.

 

Net Income/Loss

 

Black Stone Minerals reported a net loss of $122.8 million for the quarter ended June 30, 2015 compared to net income of $62.1 million in the corresponding period in 2014. The decline was due to the lower revenues described above and non-cash impairment charges to the partnership’s oil and gas assets which resulted from significant declines in commodity prices.

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Financial Position

 

As of June 30, 2015, the partnership had $6.0 million outstanding under its credit facility. The borrowing base is currently $600 million. Black Stone Minerals is in compliance with all financial covenants associated with its credit facility.

 

 

Acquisitions

 

Year to date, Black Stone Minerals has closed or entered into agreements to purchase in excess of $65 million in mineral and royalty interests. The majority of these interests are in the Midland Basin and in the Eagle Ford Shale. Production associated with these interests is immaterial to the partnership’s current production.

 

 

Distributions

 

The Board of Directors of the general partner has approved a cash distribution of $0.2625 per unit attributable to the second quarter of 2015. The quarterly distribution coverage ratio was over 1.3 times the approved distribution attributable to the second quarter of 2015. Distributions will be payable on August 27, 2015 to unitholders of record at the close of business on August 20, 2015. As a result of Black Stone Minerals’ initial public offering in early May of this year, common and subordinated unitholders will receive a prorated distribution for the period May 6, 2015 through June 30, 2015 of $0.1615 per unit.

 

 

Conference Call

 

Black Stone Minerals will host a conference call and webcast for investors and analysts to discuss its results of operations for the second quarter of 2015 on Thursday, August 13, 2015 at 9:00 a.m. Central Time. To join the call, participants should dial (855) 546-9558 and use conference code 90055060. A live broadcast of the call will also be available on our website at http://investor.blackstoneminerals.com. A recording of the conference call will be available at that site through August 28, 2015.

 

 

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 over 40 states and 60 onshore basins in the continental United States.  The partnership also owns and selectively participates in non-operating working interests in established development programs, primarily on its mineral and royalty holdings.  The partnership 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 quarterly distributions to its unitholders.

 

 

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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:

 

 

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 United States trade or business.  Accordingly, Black Stone Minerals’ distributions to non-U.S. investors are subject to federal income tax withholding at the highest marginal rate, currently 39.6% for individuals.

 

 

Black Stone Minerals, L.P. Contact

 

Brent Collins

Vice President, Investor Relations

Telephone: (713) 445-3200

investorrelations@blackstoneminerals.com   

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BLACK STONE MINERALS, L.P. PREDECESSOR

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per unit amounts)

 

 

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The following table shows the partnership’s production, realized prices, and revenues for the periods presented.

 

 

 

 

 

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.

 

Black Stone Minerals defines EBITDA as net income (loss) before interest expense, income taxes and depreciation, depletion, and amortization. Black Stone Minerals defines Adjusted EBITDA as EBITDA adjusted for impairment of oil and natural gas properties, accretion of asset retirement obligations, unrealized gains/losses on derivative instruments, and non-cash equity-based compensation. Black Stone Minerals defines cash available for distribution as Adjusted EBITDA plus or minus amounts for certain non-cash operating activities, borrowings for capital expenditures, capital expenditures, cash interest expense, and distributions to noncontrolling interests and preferred unitholders.

 

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.

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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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