Black Stone Minerals (BSM) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $15.9 million, down from $63.9 million in Q1 2024, primarily due to increased unrealized losses on commodity derivatives and lower oil sales, partially offset by higher natural gas sales and lease bonus income.

• Adjusted EBITDA was $82.2 million, with distributable cash flow at $73.7 million and a coverage ratio of 0.93x, impacted by a seismic license purchase.

• Mineral and royalty production averaged 34,200 BOE per day (78% natural gas), with total production at 35,500 BOE per day, both down year-over-year.

• Quarterly distribution of $0.375 per unit was maintained, with Series B preferred units receiving a 9.8% annualized rate.

• Management remains confident in long-term growth, citing ongoing mineral acquisitions and development activity in key regions.

Financial highlights

• Total revenue for Q1 2025 was $59.3 million, down 43.8% from Q1 2024, mainly due to a $56.0 million loss on commodity derivatives.

• Oil and condensate sales fell 29.7% to $50.1 million, while natural gas and NGL sales rose 38.6% to $58.2 million.

• Lease bonus and other income nearly doubled to $6.9 million, driven by Permian Basin leasing and solar development proceeds.

• Adjusted EBITDA margin was approximately 76%.

• Cash flow from operations was $64.8 million, a decrease from $104.5 million in the prior year period.

Outlook and guidance

• Management expects to benefit from near-term development activity and production on high-interest acreage in both oil and gas regions.

• Aethon Energy is expected to turn 17 additional gross wells to sales in the Shelby Trough during 2025.

• In the Permian Basin, nine gross wells are anticipated to turn to sales in Q4 2025, with more in early 2026.

• The 2025 capital expenditure budget for non-operated working interests is $2.3 million, with $0.1 million spent in Q1.

• The company continues to pursue targeted mineral and royalty acquisitions, funded by operating cash and credit facility borrowings.