BSM — Black Stone Minerals, L.P.

Summary of Black Stone Minerals Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Production: Mineral and royalty production reached 35.9 MBoe per day, a 16% increase from the prior quarter. Total production was 37.0 MBoe per day.
• Net Income: Reported at $13.3 million.
• Adjusted EBITDA: $87 million.
• Revenue Composition: 54% of oil and gas revenue came from natural gas and natural gas liquids.
• Distribution: Declared a distribution of $0.30 per unit, annualized at $1.20.
• Distributable Cash Flow: $76.5 million, representing a coverage ratio of 1.2x.

2. Strategic Updates and Business Highlights:

• Increased production driven by heightened natural gas activity in the Louisiana Haynesville and Shelby Trough, alongside strong oil production in the Permian.
• Continued progress in development agreements in the Haynesville and Bossier expansion plays.
• Acquired an additional $12 million of mineral and royalty acreage, totaling over $250 million since the program's inception in 2023.
• Operators in the Shelby Trough are advancing multiple programs, with notable initial results from new wells.
• Strong leasing activity in the Permian and ongoing marketing of a new project in the Shelby Trough expansion area.

3. Forward Guidance and Outlook:

• The company maintains its production growth guidance for 2026, expecting continued development across core areas.
• Positive long-term outlook for natural gas demand driven by LNG exports, industrial activity, and power demand.
• Despite recent challenges, the company remains optimistic about production growth through 2026 and into 2027.

4. Bad News, Challenges, or Points of Concern:

• A well control incident involving Revenant's operations raised concerns about potential delays or impacts on development programs, though the extent is still being assessed.
• The company acknowledged significant commodity price volatility during the quarter, influenced by extreme weather and geopolitical developments.
• The potential impact of the well control incident is still uncertain, with management indicating it could be a temporary setback rather than a long-term issue.

5. Notable Q&A Insights:

• Management is currently investigating the well control incident and cannot provide definitive answers on its implications yet.
• Despite the incident, management expressed confidence in their production growth outlook, emphasizing that it might only represent a minor speed bump in the long-term trajectory.
• Discussions around changes in operator behavior following ownership changes at Aethon and Adamas Energy are ongoing, with expectations for continued development under existing contracts.
• Concerns about midstream infrastructure adequacy for future growth were addressed, with management indicating that existing and planned projects should meet anticipated demand increases.

Overall, Black Stone Minerals reported a strong start to 2026, with positive production metrics and strategic initiatives, although some operational challenges and market volatility were noted.