Black Stone Minerals, L.P. Q4 FY2024 earnings call

• Tom Carter congratulated Fowler Carter on his promotion to SVP of Corporate Development. 2024 had two halves: strong oil in the first half, weak natural gas in the second. Production remained within guidance, and distribution was held at $0.375. - There was $43 million in minerals and royalty acquisitions in the quarter, with total acquisitions since September 2023 around $130 million. Focus on targeted acquisitions for 2025. - Taylor DeWalch walked through financial details, noting Q4 production down from prior quarter, 59% oil revenue in Q4. 2025 expected production increase driven by activity in East Texas, Louisiana Haynesville, and Permian. Lease bonus, operating expense, and production costs expected to be in line with 2024, with G&A to increase slightly in 2025.

In the fourth quarter, mineral and royalty production was 34,800 BOE per day, with total production volumes at 36,100 BOE per day, both down from the previous quarter. For 2024, mineral and royalty production averaged 36,600 BOE per day, and total production volumes averaged 38,500 BOE per day. Net income for the fourth quarter was $46.3 million, with adjusted EBITDA at $90.1 million. 59% of oil and gas revenue in the quarter came from oil and condensate production. For the full year 2024, net income was $271.3 million and adjusted EBITDA totaled $380.9 million. The distribution was maintained at $0.375 per unit for the quarter, with distributable cash flow for the quarter being $81.9 million, representing 1.03 times coverage.

• Expect an increase in production from 2024 levels in 2025, driven by activity in East Texas, Louisiana Haynesville, and Permian. - Lease bonus, operating expense, and production costs for 2025 are expected to be in line with 2024. - G&A is expected to increase slightly in 2025 due to hiring and promotions, and additional hiring expected.

• Forward-looking statements involve risks that may cause actual results to differ from implied ones. Refer to the press release from yesterday and the Risk Factors section of the 2024 10-K for discussion of these risks.

Q: Could you help frame whether recent acquisitions continue to be focused on the Gulf Coast region and whether it's oil and gas? Also, characterize the current bid/ask spread for mineral opportunities for both oil and gas?

A: This is Tom. Our acquisition program is generally focused in the Gulf Coast region around expanding our Shelby Trough footprint. We're not actively looking at acquisitions in other basins at this time.

Q: How should we think about the duration of the accelerated drilling agreements entered into during 2024 in the Louisiana Haynesville? Are they multiyear type agreements? And how does the constructive natural gas outlook impact executing additional ADAs?

A: Hi, this is Carrie. On the ADA, they are not generally multiyear like joint exploration agreements. These are targeted opportunities. We are intentional in seeking out these accelerated opportunities to influence production predictability. Taylor added there are additional opportunities to continue this type of program into additional years.

Q: As we think about the increasing line of sight and activity in the Haynesville, do you think the activity like now as in first half of 2025 is reflecting this increase? Or do you think this will be more of a back half in 2026 impact? Also, context on the opportunity set for acquisitions and inclination to buy more with debt?

A: Tim, this is Tom. In our Haynesville area, especially in the Shelby Trough, we are hopeful for a very long cycle of growth. There's significant additional identified inventory available to be purchased. We are taking a conservative approach, watching the natural gas market as we consider further acquisitions.