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BS

Black Stone Minerals, L.P. (BSM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered mixed results: oil & gas revenue rose 6% sequentially to $108.3M, but net income fell to $15.9M amid a $56.0M derivative loss; Adjusted EBITDA was $82.2M and DCF was $73.7M, while total production averaged 35.5 MBoe/d and realized prices improved to $33.94/Boe .
  • The partnership maintained the $0.375 distribution; coverage dipped to 0.93x largely due to a one-time seismic license purchase to advance Shelby Trough subsurface evaluation and acquisitions .
  • Versus Wall Street consensus (S&P Global), Q1 2025 was a miss: Primary EPS 0.29 vs 0.33*, oil & gas revenue $108.3M vs $115.8M*, and EBITDA $26.6M vs $85.3M*; sample sizes were thin (# of estimates: 2 for EPS/revenue) [GetEstimates*].
  • Activity remains a near-term catalyst: Aethon turned 11 gross wells to sales YTD and expects 17 more in 2025; Permian projects have 24 of 35+ wells spud with first sales expected in Q4 2025; borrowing base was reaffirmed with $375M commitments, and debt stood at $63M as of quarter-end .

What Went Well and What Went Wrong

What Went Well

  • Realized pricing improved: average realized price per Boe increased ~10% QoQ to $33.94/Boe; oil & gas revenue rose to $108.3M (+6% QoQ) .
  • Development execution: 11 gross (0.7 net) Aethon-operated wells turned to sales in Q1, with 17 additional gross wells expected during 2025; Haynesville ADAs turned 2 gross (0.2 net) wells; Permian large-scale program advancing with 24 wells spud .
  • Management tone on distribution and strategy: “Despite recent market volatility, our financial position and asset outlook remain strong, and we are maintaining our quarterly distribution of $0.375 per unit… [coverage] was partially driven by an expenditure related to a seismic license that further bolsters our subsurface evaluation and potential mineral acquisitions…” — Thomas L. Carter, Jr. .

What Went Wrong

  • Distribution coverage tightened to 0.93x, reflecting the seismic license outlay; while strategic, it reduced near-term coverage .
  • Net income dropped sharply QoQ ($15.9M vs $46.3M) primarily due to a larger derivative loss ($56.0M in Q1 vs $20.6M in Q4) despite stronger realized prices .
  • Production declined YoY: total volumes averaged 35.5 MBoe/d (vs 40.3 MBoe/d in Q1 2024); working-interest volumes continued to trend lower following farmouts .

Financial Results

Key financials vs prior periods

MetricQ3 2024Q4 2024Q1 2025
Oil & Gas Revenue ($USD Millions)$101.0 $102.3 $108.3
Revenue from Contracts with Customers ($USD Millions)$103.2 $104.3 $115.3
Total Revenue incl. Derivatives ($USD Millions)$134.9 $83.7 $59.3
Net Income ($USD Millions)$92.7 $46.3 $15.9
Adjusted EBITDA ($USD Millions)$86.4 $90.1 $82.2
Distributable Cash Flow ($USD Millions)$78.6 $81.9 $73.7
Diluted EPS per Common Unit ($USD)$0.41 $0.18 $0.04

Production and pricing KPIs

KPIQ3 2024Q4 2024Q1 2025
Mineral & Royalty Production (MBoe/d)35.3 34.8 34.2
Total Production (MBoe/d)37.4 36.1 35.5
Working-Interest Production (MBoe/d)2.1 1.3 1.3
% Natural Gas75% 74% 78%
Oil Volumes (MBbls)875 855 716
Natural Gas Volumes (MMcf)15,369 14,794 14,853
Realized Price ($/Boe)$29.40 $30.81 $33.94
Lease Bonus & Other Income ($USD Millions)$2.1 $2.0 $6.9
Distribution Coverage (x)~1.00x 1.03x 0.93x
Total Debt ($USD Millions)$0 $25.0 (Dec 31) $63.0 (Mar 31/May 2)

Revenue composition

MetricQ3 2024Q4 2024Q1 2025
Oil & Condensate Sales ($USD Millions)$64.0 $59.9 $50.1
Natural Gas & NGL Sales ($USD Millions)$37.0 $42.4 $58.2
Lease Bonus & Other ($USD Millions)$2.1 $2.0 $6.9

Actual vs Wall Street consensus (S&P Global) for Q1 2025

MetricConsensusActual
Primary EPS (USD)0.33*0.2902*
Revenue ($USD Millions)115.754*108.328*
EBITDA ($USD Millions)85.3295*26.623*

Values retrieved from S&P Global. Differences in metric definitions versus company-reported figures (e.g., GAAP vs Adjusted) may exist.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Production (MBoe/d)FY 202538–41 No update in Q1 press; reference prior Maintained
Mineral & Royalty (MBoe/d)FY 202536.5–38.5 No update in Q1 press Maintained
% Royalty InterestFY 202596% No update in Q1 press Maintained
% Natural GasFY 202577% No update in Q1 press Maintained
Lease Bonus & Other ($MM)FY 2025$9–11 No update in Q1 press Maintained
G&A – Cash ($MM)FY 2025$47–48 No update in Q1 press Maintained
DD&A ($/Boe)FY 2025$3.10–$3.30 No update in Q1 press Maintained
Common Distribution ($/unit)Q1 2025$0.375 (Q4 precedent) $0.375; payable May 15, record May 8 Maintained
Credit Facility Commitments ($MM)Current$375.0 (Dec 31, 2024) $375.0; reaffirmed Apr 30, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4)Current Period (Q1 2025)Trend
Shelby Trough development (Aethon/EXCO)Q3: JEAs amended; Aethon program timing adjusted . Q4: 11 gross wells TTS YTD; +17 gross expected in 2025 .11 gross (0.7 net) TTS in Q1; +17 gross expected remainder of 2025; Aethon 3 rigs, EXCO 1 rig .Accelerating
Louisiana Haynesville ADAsQ4: 2 gross TTS in 2024; +11 gross expected 2025 .Q1: 2 gross (0.2 net) wells TTS under ADAs .Executing
Permian large-scale development (Culberson)Q4: 37 gross (1.3 net) wells planned; 8 TTS in Q4 2025 .Q1: 35+ gross wells planned; 24 spud; 9 TTS expected Q4 2025; remainder H1 2026 .Progressing
Targeted mineral acquisitionsQ3: $14.7M added; cumulative $79.8M since Sep 2023 .Q4: $45.2M added; cumulative $130.5M .Q1: $14.2M added; cumulative $160.6M .
Distribution policy & coverageQ3: $0.375; ~1.00x coverage .Q4: $0.375; 1.03x coverage .Q1: $0.375; 0.93x coverage; seismic license impact .
Hedging (derivatives)Q3: +$31.7M gain .Q4: -$20.6M loss .Q1: -$56.0M loss (incl. -$52.4M unrealized) .

Management Commentary

  • “Despite recent market volatility, our financial position and asset outlook remain strong, and we are maintaining our quarterly distribution of $0.375 per unit… this lower level of coverage was partially driven by an expenditure related to a seismic license that further bolsters our subsurface evaluation and potential mineral acquisitions in the expanded Shelby Trough area.” — Thomas L. Carter, Jr., CEO .
  • “We will be maintaining our quarterly distribution of $0.375 per unit despite the recent volatility… Mineral and royalty production was 34.2 thousand BOE per day… Distributable cash flow for the quarter was $73.7 million, which represents 0.93x coverage… [seismic] complements our robust subsurface evaluation.” — Taylor DeWalch, CFO (prepared remarks) .
  • “Aethon… has already turned to sales 11 gross wells… with another 17 expected for the remainder of the year… In our Permian position… more than 35 gross wells… 24… spud to date; we anticipate nine gross wells to turn to sales in the fourth quarter of 2025.” — Taylor DeWalch, CFO .

Q&A Highlights

  • Haynesville activity and gas pricing: Management is “encouraged by the continued strength in natural gas prices” and expects increased basin activity; Aethon’s cadence remains “on schedule” for the remaining 17 gross wells in 2025 .
  • Acquisition focus: BSM continues to prioritize Shelby Trough/gulf-coast-proximate minerals aligned with long-term gas strategy, while remaining opportunistic on broader market opportunities; current focus remains concentrated .
  • Limited Q&A participation: One analyst line of questioning, focused on Haynesville cadence and acquisitions, consistent with lean coverage this quarter .

Estimates Context

  • Q1 2025 results compared to S&P Global consensus: Oil & gas revenue $108.3M vs $115.8M* (miss), Primary EPS 0.29 vs 0.33* (miss), EBITDA 26.6M vs 85.3M* (miss). Consensus count was limited (2 estimates for EPS and revenue) [GetEstimates*].
  • Note: Company-reported Adjusted EBITDA was $82.2M; S&P “EBITDA” may reflect a different (GAAP/unguided) definition, contributing to divergence. Anchor portfolio implications on definitions used and coverage depth .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Distribution maintained at $0.375 despite 0.93x coverage; the coverage dip was driven by a one-time seismic license purchase rather than recurring operations .
  • Stronger realized prices and higher gas revenue offset volume softness, but derivative losses (-$56.0M) drove lower net income; near-term earnings sensitivity to hedge mark-to-market remains high .
  • Near-term activity visibility is favorable: Aethon’s Shelby Trough cadence (11 TTS YTD, +17 expected) and Permian program (24 spud, first sales Q4 2025) support production trajectory into late-2025/2026 .
  • Balance sheet/liquidity: Credit facility commitments reaffirmed at $375M; debt increased to $63M by Q1-end, with cash ~$4.3M as of May 2, 2025—monitor leverage versus distribution sustainability in a volatile commodity/hedge backdrop .
  • Acquisitions continue to expand Shelby Trough footprint ($14.2M in Q1; $160.6M cumulative since Sep 2023), reinforcing long-term gas-weighted growth strategy .
  • Consensus coverage is thin (two estimates); EPS/revenue misses may prompt estimate recalibrations and increased focus on definition differences (Primary EPS vs GAAP per unit; EBITDA vs Adjusted) [GetEstimates*].
  • Trading lens: Narrative pivots on execution in Shelby Trough/Haynesville, hedge outcomes, and maintaining coverage; watch for additional development agreements and well-turn-to-sales cadence as catalysts into 2H25 .

Values retrieved from S&P Global.*