Black Stone Minerals (BSM) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $120 million, up 76% year-over-year, driven by gains on commodity derivatives and higher natural gas prices, despite lower oil production and prices.

• Adjusted EBITDA for Q2 2025 was $84.2 million, with distributable cash flow at $74.8 million and a distribution per unit of $0.30, down 20% from the prior quarter.

• Management expects subdued near-term production but anticipates growth in 2026 and distributions surpassing previous highs over the next six years, supported by new development agreements and acquisitions.

• Entered a joint exploration agreement with Revenant Energy covering 270,000 acres, with escalating well commitments through 2030, and ongoing marketing of 180,000 gross acres.

• Grassroots acquisition program added $31.2 million in mineral and royalty acquisitions in Q2 2025, totaling $172.3 million since September 2023.

Financial highlights

• Mineral royalty production averaged 33,200 BOE per day in Q2 2025; total production was 34,600 BOE per day, down 13–14% year-over-year.

• Oil and gas revenue for Q2 2025 was $102 million, with 55% from oil and condensate.

• Average realized price per Boe was $32.40, up 8% year-over-year.

• Gain on commodity derivatives was $52.8 million, including a $49.6 million unrealized gain.

• Net income for the first half of 2025 was $136 million, up 2.8% year-over-year.

Outlook and guidance

• 2025 production guidance lowered to 33,000–35,000 BOE per day due to delayed natural gas growth and operator transitions.

• Management expects production growth in 2026 and distributions to exceed previous highs over the next six years, driven by new development agreements and operator activity.

• Revenant Energy agreement obligates drilling of at least 6 wells in 2026, increasing to 25 wells per year over five years.

• 2025 capital expenditure budget for non-operated working interests is $2.3 million, with $0.3 million spent through June 30, 2025.

• The next semi-annual borrowing base redetermination is scheduled for October 2025, with the current borrowing base reaffirmed at $580 million.