06-05-2025
Black Stone Minerals LP (BSM) Q1 2025 Earnings Call Highlights: Strategic Acquisitions and ...
Release Date: May 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Black Stone Minerals LP (NYSE:BSM) maintained its quarterly distribution of $0.37 per unit despite recent volatility in commodity prices.
The company reported a net income of $15.9 million for the first quarter, with adjusted EBITDA of $82.2 million.
BSM continues to benefit from near-term development activity and production on high-interest acreage in both oil and gas regions.
The company is encouraged by the strength in natural gas prices, which is expected to drive additional near-term gas-weighted activity.
BSM has been active in acquisitions, acquiring over $160 million in minerals since September 2023, which supports long-term growth and aligns with their natural gas strategy.
Negative Points
The distributable cash flow for the quarter was $73.7 million, representing a coverage ratio of 0.93 times, which is slightly lower than desired.
The lower coverage ratio was largely driven by a seismic license purchase, indicating potential financial strain from strategic investments.
BSM is closely monitoring the commodity environment and activity trends, suggesting uncertainty in market conditions.
The company faces risks associated with forward-looking statements, which may cause actual results to differ materially from expectations.
There is a reliance on accelerated drilling agreements in the Louisiana Hainesville, which involve a slightly reduced royalty burden, potentially impacting revenue.
Q & A Highlights
Q: Can you share what you are seeing in terms of activity in the Hainesville given the re-rate in natural gas prices, and any visibility into Aon's completion of the remaining 17 gross wells in 2025? A: Taylor DeWalsh, CFO, responded that they are encouraged by the continued strength in natural gas prices and expect increased activity levels in the Hainesville. They are on schedule with Aon's completion of the 17 wells for the year and anticipate ongoing development from Aon and other operators.
Q: How do you view the current acquisition opportunity set, and does the decrease in oil prices make acquisitions in oilier basins an attractive countercyclical opportunity? A: Taylor DeWalsh, CFO, stated that they see long-term growth opportunities tied to their natural gas strategy, particularly with acquisitions near the Gulf Coast. While they continue to evaluate market opportunities, their focus remains on strategic acquisitions that align with their portfolio.
