Executive Summary

Q4 2024 total production was 36.1 MBoe/d (74% gas), down sequentially from 37.4 MBoe/d and down year-over-year from 41.1 MBoe/d; net income was $46.3M and Adjusted EBITDA was $90.1M, with distributable cash flow (DCF) of $81.9M and coverage of 1.03x .
Oil and gas revenue rose 1% QoQ to $102.3M on higher realized prices per Boe ($30.81 vs $29.40), but total revenue fell QoQ to $83.7M due to a non-cash $29.3M unrealized hedge loss (Q3 had a $31.7M hedge gain) .
Management issued FY2025 guidance calling for total production of 38–41 MBoe/d (~2% royalty production growth), higher G&A, and robust activity across Shelby Trough, Louisiana Haynesville (ADAs), and the Permian; debt stood at $25.0M at year-end and $12.0M as of Feb 21, 2025 .
Key near-term catalysts: accelerated Haynesville drilling under ADAs, Aethon’s 28 Shelby Trough wells turned-to-sales in 2025, and an oil development in Culberson County (Permian); stronger gas fundamentals and hedges underpin confidence into 2025 .

What Went Well and What Went Wrong

What Went Well

Adjusted EBITDA improved sequentially to $90.1M from $86.4M on better realized prices, despite volume softness; DCF rose to $81.9M and the $0.375/unit distribution was maintained with 1.03x coverage .
High-interest activity set-up: Aethon turned 11 gross wells to sales in 2025 with strong initial rates (20–30 MMcf/d), and the Louisiana Haynesville ADAs add near-term certainty (11 gross wells expected in 2025) .
Management confidence: “We ended last year and started this year with stronger gas pricing and fundamentals… sets up for what we anticipate to be a positive 2025,” maintaining conservative leverage of ~0.07x and executing $110M of mineral acquisitions in 2024 .

What Went Wrong

Volumes declined: mineral and royalty production fell to 34.8 MBoe/d (Q3 35.3; Q4 2023 38.9), and working-interest volumes continued to trend down as farmouts progressed .
Hedge headwinds: total revenue dropped QoQ to $83.7M driven by a $20.6M loss on commodity derivatives (including a non-cash $29.3M unrealized loss), reversing the $31.7M derivative gain in Q3 .
YoY compression: realized prices per Boe fell 12% YoY ($30.81 vs $35.03), with oil and gas revenue down to $102.3M from $132.6M in Q4 2023, pressuring net income ($46.3M vs $147.6M YoY) .

Financial Results

Quarterly Comparison (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue from contracts with customers ($MM)	$115.171	$103.181	$104.294
Total revenue ($MM)	$109.624	$134.856	$83.726
Net income ($MM)	$68.322	$92.731	$46.346
Diluted EPS per common unit ($)	$0.29	$0.41	$0.18
Adjusted EBITDA ($MM)	$100.247	$86.442	$90.140
Distributable cash flow ($MM)	$92.522	$78.622	$81.914
Realized price ($/Boe)	$30.01	$29.40	$30.81
Mineral & royalty production (MBoe/d)	38.2	35.3	34.8
Total production (MBoe/d)	40.4	37.4	36.1
Oil & condensate share of O&G revenue (%)	67%	63%	59%
Net income margin (% of total revenue)	62.4% (68.322/109.624)	68.8% (92.731/134.856)	55.4% (46.346/83.726)
Adjusted EBITDA margin (% of customer revenue)	87.0% (100.247/115.171)	83.8% (86.442/103.181)	86.4% (90.140/104.294)

Q4 YoY Comparison

Metric	Q4 2023	Q4 2024
Revenue from contracts with customers ($MM)	$136.376	$104.294
Total revenue ($MM)	$190.841	$83.726
Net income ($MM)	$147.647	$46.346
Adjusted EBITDA ($MM)	$125.522	$90.140
Distributable cash flow ($MM)	$119.085	$81.914
Realized price ($/Boe)	$35.03	$30.81
Total production (MBoe/d)	41.1	36.1

Oil & Gas Revenue Breakdown

Metric	Q2 2024	Q3 2024	Q4 2024
Oil & condensate revenue ($MM)	$73.889	$63.999	$59.949
Natural gas & NGL revenue ($MM)	$36.493	$37.039	$42.364
Oil % of O&G revenue	67%	63%	59%

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Distribution per common unit ($)	$0.375	$0.375	$0.375
Distribution coverage (x)	1.17x	~1.00x	1.03x
Cash at quarter-end ($MM)	$26.7	$21.0	$2.5
Debt at quarter-end ($MM)	$0	$0	$25.0
Post-quarter cash/debt ($MM)	$61.0 cash (Aug 2)	$42.8 cash (Nov 1)	$6.9 cash / $12.0 debt (Feb 21, 2025)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Mineral & royalty production (MBoe/d)	FY2025	FY2024 actual: 36.6	36.5–38.5	Maintained (range around 2024)
Working-interest production (MBoe/d)	FY2025	FY2024 actual: 1.9	1.5–2.5	Maintained (range around 2024)
Total production (MBoe/d)	FY2025	FY2024 actual: 38.5	38–41	Raised (midpoint ↑)
% natural gas	FY2025	FY2024 actual: 74%	77%	Raised gas mix
% royalty interest	FY2025	FY2024 actual: 95%	96%	Raised
Lease bonus & other income ($MM)	FY2025	FY2024 actual: $12.5	$9–11	Lowered
Lease operating expense ($MM)	FY2025	FY2024 actual: $9.7	$8–10	Maintained
Production costs & ad valorem (% of pre-deriv. O&G revenue)	FY2025	FY2024 actual: 12%	10–12%	Lowered (midpoint)
G&A – cash ($MM)	FY2025	FY2024 actual: $43.5	$47–48	Raised
G&A – non-cash ($MM)	FY2025	FY2024 actual: $8.6	$10–12	Raised
G&A – total ($MM)	FY2025	FY2024 actual: $52.1	$57–60	Raised
DD&A ($/Boe)	FY2025	FY2024 actual: $3.20	$3.10–$3.30	Maintained

Hedge program for 2025–2026 includes oil swaps at ~$71.22/bbl (2025) and ~$66.29/bbl (2026), and gas swaps at $3.36–$3.45/MMBtu (2025) and $3.64/MMBtu (2026) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Natural gas pricing & LNG demand	Curtailments restored; supportive long-term gas pricing noted	Distribution maintained amid volatile commodity environment	“Stronger gas pricing and fundamentals” underpin positive 2025 outlook	Improving
Shelby Trough development	Aethon time-out addressed; delayed wells turned-to-sales	JEAs amended; program years extended; area-of-mutual-interest rights released	3 rigs (Aethon), 1 rig (EXCO); 28 wells TTS in 2025 expected	Accelerating
Louisiana Haynesville ADAs	Not highlighted	ADAs introduced for accelerated development (hedged royalty)	2 gross wells TTS in Q4; 11 gross expected in 2025 under ADAs	Building
Permian (Culberson)	Broader rig count decline	Notable activity tracked	37 gross wells planned; 8 to TTS in Q4 2025	Multi-year growth
Working-interest strategy	Farmouts reduce WI volumes	Continued decline in WI volumes	Farmout terminations; no intention to step into WI; operator to absorb non-consents	De-risking WI exposure
Capital allocation & M&A	$26.5M acquisitions; strategy expanded	$14.7M acquisitions; total $79.8M since Sep 2023	$45.2M Q4 acquisitions; $130.5M since Sep 2023; continued targeted buys	Active

Management Commentary

Tom Carter: “We ended last year and started this year with stronger gas pricing and fundamentals, which when coupled with our solid oil assets, sets up for what we anticipate to be a positive 2025… we were able to maintain our quarterly distribution of $0.375 per unit… and a conservative leverage position of 0.07x” .
Taylor DeWalch: “Mineral and royalty production was 34,800 BOEs per day… Net income was $46.3 million… Adjusted EBITDA being $90.1 million… Aethon has already turned-to-sales 11 gross wells in 2025 with another 17 expected for the remainder of the year” .
Carrie Clark on ADAs: “These accelerated agreements add up quite a bit but they are typically much more limited than… multiyear joint exploration agreement… we are intentional in seeking out those opportunities… to try to maintain some more predictability on the production side” .
Tom Carter (Q&A acquisitions): Focus remains on the Gulf Coast/Shelby Trough footprint, expanding minerals aligned with LNG growth opportunities; not actively pursuing other basins .

Q&A Highlights

Acquisition focus and pacing: Company is conservatively expanding Gulf Coast/Shelby Trough minerals, with meaningful identified inventory remaining; cautious on leverage and pacing given gas market volatility .
Louisiana Haynesville ADAs: Targeted, limited-area agreements to accelerate development with slightly reduced royalty burden; management sees additional opportunities to continue the program into future years .
Multi-year runway in Shelby Trough: BSM aims to expand operator set and mineral footprint across ~450,000+ acres in East Texas, with natural gas price sensitivity acknowledged but outlook relatively predictable .

Estimates Context

Wall Street consensus (S&P Global Capital IQ) estimates for Q4 2024 EPS and revenue were unavailable at the time of this analysis due to S&P Global request limits; as a result, we cannot quantify beats/misses vs consensus for Q4 2024. Values retrieved from S&P Global were not available for inclusion at this time.

Where adjustments may be needed: given the non-cash hedge loss in Q4 (vs Q3 gain), analysts could revise near-term net income expectations while maintaining EBITDA/DCF assumptions given robust operational activity and 2025 hedges .

Key Takeaways for Investors

Sequential resilience: Despite lower volumes, improved realized prices supported sequential Adjusted EBITDA growth to $90.1M and DCF to $81.9M; distribution held at $0.375 with 1.03x coverage .
Hedge and gas tailwinds: 2025 gas swaps ($3.36–$3.45/MMBtu) and stronger gas fundamentals position BSM well against commodity volatility, supporting guidance for 38–41 MBoe/d .
High-interest development: Concrete line-of-sight to Aethon’s Shelby Trough program (28 wells TTS in 2025), Louisiana Haynesville ADAs (11 wells in 2025), and Permian Culberson development (37 gross wells), driving medium-term production growth .
Capital discipline: Targeted acquisitions ($45.2M in Q4; $130.5M since Sep 2023) coupled with modest leverage ($12M debt as of Feb 21) offer optionality without stressing the balance sheet .
Cost outlook: 2025 guidance implies slightly higher G&A ($57–60M total) and stable DD&A ($3.10–$3.30/Boe), while production taxes trend to 10–12% of pre-derivative O&G revenue—supportive for DCF stability .
Trading implications (short term): Stock narrative likely driven by Haynesville/Permian activity updates, hedging disclosures, and gas price momentum; watch for pace of TTS wells, realized prices, and hedge settlements in Q1/Q2 prints .
Thesis considerations (medium term): Multi-basin, royalty-heavy exposure with accelerating gas-weighted development and disciplined acquisitions supports durable DCF and distribution stability through commodity cycles .

Black Stone Minerals, L.P. (BSM)·Q4 2024 Earnings Summary