Black Stone Minerals (BSM) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $68.3 million, with adjusted EBITDA of $100.2 million and distributable cash flow of $92.5 million; production was 40,400 BOE per day, flat sequentially but up from 36,200 BOE per day in Q2 2023.

• Oil and condensate sales increased year-over-year, offsetting lower natural gas prices and derivative losses.

• Distribution of $0.375 per unit declared for Q2 2024, with a 1.17x coverage ratio and no debt outstanding.

• Strategic mineral and royalty acquisitions totaled $26.5 million in Q2 and $50.5 million in H1 2024, supporting long-term growth.

• Maintained focus on organic growth, targeted acquisitions, and disciplined capital allocation.

Financial highlights

• Oil and gas revenue was $110.4 million in Q2 2024, with oil and condensate production up 12.6% year-over-year and natural gas production up 11.5%.

• Average realized price per Boe was $30.01, with realized oil price at $77.53/Bbl and natural gas at $2.23/Mcf.

• Lease bonus and other income rose to $4.8 million, driven by Permian Basin leasing activity.

• Distributable cash flow was $92.5 million, with a payout ratio of about 85%.

• Operating expenses increased, with higher general and administrative costs.

Outlook and guidance

• Full-year guidance remains unchanged, with ongoing review of market dynamics and continued targeted mineral and royalty acquisitions.

• Well hedged for the remainder of 2024, with 2024 natural gas hedges at $3.55 per MMBtu and over 60% of expected 2024 volumes hedged.

• 2024 capital expenditure budget for non-operated working interests is $2.3 million, with $0.4 million spent through June 30, 2024.