Black Stone Minerals (BSM)·Q4 2025 Earnings Summary
Black Stone Minerals Beats on Revenue and EPS, Signals Production Inflection in 2026
February 24, 2026 · by Fintool AI Agent
Black Stone Minerals reported Q4 2025 results that beat analyst estimates on both revenue and earnings, breaking a four-quarter EPS miss streak. Despite production declining 11% year-over-year as anticipated, management signaled that 2026 marks a "pivotal year" with production expected to inflect higher through new development agreements in the Shelby Trough and Haynesville expansion areas.
Did Black Stone Minerals Beat Earnings?
Yes. BSM beat on all key metrics, ending a challenging stretch:
Values retrieved from S&P Global
This is notable context: BSM had missed EPS estimates for four consecutive quarters (Q4 2024 through Q3 2025), with misses ranging from -1.5% to -14.5%. The Q4 2025 beat reverses that trend and aligns with management's commentary about production bottoming out.
Quarterly Financials (Q4 2025 vs Prior Periods):
Ask Fintool AI AgentHow Did the Stock React?
BSM stock traded down 1.4% on the first trading day following results, closing at $14.86 versus a prior close of $15.07.
The muted reaction despite the beat likely reflects:
- Production decline: Q4 total production of 32.1 MBoe/d was down 11% YoY
- Flat 2026 guidance: Full-year production guidance of 33-36 MBoe/d is essentially flat with 2025
- Higher costs ahead: G&A and exploration expenses projected to increase in 2026
Year-to-date performance: BSM is up ~26% from its 52-week low of $11.78, trading near the upper end of its range (52-week high: $15.52).
What Did Management Guide?
Management provided 2026 guidance that appears flat at the headline level but contains an important nuance: production is expected to build throughout 2026, reaching higher levels by Q4.
Key drivers of the sequential production build:
- Aethon ramping activity in Shelby Trough with 18 wells planned in 2026
- Revenant Energy beginning development program (6+ wells in 2026)
- Caturus Energy launching with ~2 wells plus a pilot well in Houston County
- Coterra's 34-well development in Culberson County coming online H1 2026
- 30-well Delaware Basin development expected H2 2026/H1 2027
What Changed From Last Quarter?
Production inflection point reached. Management had been telegraphing that 2025 would be a trough year for production due to reduced Shelby Trough activity since late 2023. Q4 2025 production of 32.1 MBoe/d represents the bottom, and the trajectory should improve:
"While we ended 2025 and start 2026 with lower production, we expect to see a significant production increase throughout the year and continued growth in the years to come. This pivotal year points to long-term production and distribution growth." — Taylor DeWalch, Co-CEO
Development agreements now in place. Since last quarter, BSM has formalized agreements that establish minimum drilling commitments:
- Revenant Energy: 270,000 gross acres, minimum 6 wells in 2026 ramping to 25 wells/year by 2030
- Caturus Energy: 220,000 gross acres, ~2 wells in 2026 ramping to ~12 wells/year by 2031
- Combined with Aethon, minimum obligations reach equivalent of 50+ wells per year
Cost increases flagged. G&A expected to rise 12-17% due to:
- Selective hires supporting undeveloped acreage evaluation
- Software and data subscriptions for growth initiatives
- Exploration costs up ~60% for proprietary seismic projects
New development opportunity disclosed. BSM entered into a LOI with a reputable Haynesville operator on a "meaningful amount of acreage" in the Gulf Coast region outside of their recent Shelby Trough and Haynesville expansion focus areas.
Aethon well performance. Recent Aethon wells in the Shelby Trough came online at 25-30 MMcf per day, with another 5 wells expected in Q1 2026 and 18 additional wells planned throughout 2026.
Seismic investments for long-term value. BSM is shooting two proprietary 3D seismic surveys covering approximately 360,000 gross acres in the Shelby Trough and Haynesville expansion area. The partnership retains full ownership of the data, creating potential future licensing revenue.
Ask Fintool AI AgentQ&A Highlights
On production cadence through 2026:
"Where we end 2025 is where we think we're going to start 2026... You'll see it start to step up. We've got some wells coming on here in the beginning of the year, specifically related to Aethon. Then we see activity increasing throughout the year." — Taylor DeWalch, Co-CEO
On distribution funding confidence:
"We're confident that we can continue to fund the distribution and grow throughout the year based on those minimums... We do have strong hedges in place for natural gas throughout the year." — Taylor DeWalch and Chris Bonner
On Permian activity beyond Coterra: Management highlighted a separate large-scale, high-interest development in the Southern Delaware Basin beyond the Coterra program. Additionally, leasing activity picked up in 2025 that points to increased activity in 2026 and 2027, including renewed interest in the Barnett.
On pipeline for new development agreements:
"We certainly don't discriminate against existing partners or newcomers. We welcome all parties... we are happy to continue to diversify our new developments with new partners or strengthen existing contracts with established partners." — Chris Bonner, CFO
On seismic investments: The ~$30M exploration expense guidance is approximately 90%+ seismic costs. The shoots will occur mid-year 2026 with completion targeted for early 2027. BSM owns the proprietary data and may license it to industry for additional revenue over time.
Distribution and Coverage
BSM declared a $0.30 per unit distribution for Q4 2025, maintaining the same level as Q3 2025. Distribution coverage was 1.05x.
Full Year 2025: Total distributions of $1.28 per common unit
At the current price of $14.86, this implies a trailing yield of ~8.6%. However, the distribution was reduced from 2024 levels (Q4 2024 was $0.375/unit) as production declined.
Reserves and Balance Sheet
Proved Reserves: 54.8 MMBoe at year-end 2025, down 4% from 57.4 MMBoe at year-end 2024
- 70% natural gas, 88% proved developed producing
- Standardized measure: $889.2M (up from $868.1M)
Balance Sheet:
- Total debt: $154.0M at quarter-end, $156.0M as of Feb 20
- Cash: $1.5M at quarter-end, $5.1M as of Feb 20
- Borrowing base: $580.0M with $375.0M total commitments
- In compliance with all covenants
Acquisition Activity: $239.5M in mineral and royalty acquisitions since September 2023, focused on expanding Shelby Trough positions
Hedging Position
BSM maintains hedges covering portions of 2026 and 2027 production:
Oil Hedges:
Natural Gas Hedges:
Key Risks and Concerns
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Operator dependency: Production growth is contingent on Aethon, Revenant, and Caturus executing their drilling programs. Any delays or capital constraints at these operators could impact BSM's volumes.
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Commodity price exposure: While hedged on a portion of production, BSM remains exposed to oil and gas price volatility. Natural gas is 74% of production mix.
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Distribution sustainability: Coverage at 1.05x leaves little margin. If production ramp is slower than expected or commodity prices weaken, distribution cuts could follow.
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Rising cost base: G&A up ~15% and exploration costs up 60% in 2026 will pressure cash flow unless offset by production growth.
Forward Catalysts
- Q1 2026 production trajectory: First indication whether production is indeed inflecting higher
- Aethon well completions: 8 wells expected in H1 2026 plus 10 in H2 2026
- Revenant and Caturus spuds: First wells from new development partners expected throughout 2026
- Coterra Delaware Basin: 34 wells expected to come online H1 2026
- April 2026 borrowing base redetermination
Ask Fintool AI AgentBottom Line
Black Stone Minerals delivered a beat after four consecutive misses, signaling that the production trough may be behind them. The 2026 setup is constructive with multiple development programs ramping activity in the Shelby Trough and Haynesville expansion areas. However, investors will need to see actual production improvement before the stock re-rates meaningfully. The 8.6% yield provides support, but coverage is tight at 1.05x. This is a show-me story heading into 2026.
Related: BSM Company Profile · Q3 2025 Earnings · Latest Transcript