Black Stone Minerals (BSM) 5 Nov 24 2024 Q3 Earnings call transcript

Black Stone Minerals Inc. recently held its Q3 2024 Earnings Conference Call, where executives discussed the company's performance and future prospects. Despite facing commodity price volatility, Black Stone Minerals reported a successful quarter, maintaining its distribution and achieving consistent growth through strategic acquisitions and partnerships.

Strategic Focus and Achievements

Chairman, CEO, and President Tom Carter highlighted the company's consistent distribution, despite a decrease in production due to natural gas market volatility. Black Stone Minerals has been actively expanding its asset footprint, acquiring approximately $80 million in minerals and royalty interests since the end of 2023. These strategic acquisitions are part of the company's targeted acquisition strategy to enhance its long-term development opportunities.

Carter expressed confidence in the outlook across the company's acreage position, with a focus on working with operators for long-term development. The company's strategic objectives include full development of all assets and accretive production growth through active asset management and targeted acquisitions.

Financial Performance and Outlook

Senior Vice President, Chief Financial Officer, and Treasurer Taylor DeWalch provided a detailed financial overview, highlighting a successful quarter with net income of $92.7 million and adjusted EBITDA of $86.4 million. The company maintained its distribution at $0.375 per unit for the quarter, with a solid balance sheet and ample liquidity that provides flexibility during market cycles.

DeWalch also emphasized the importance of hedging strategies, with over 60% of expected gas and oil volumes hedged for the remainder of 2024. This hedging strategy will help insulate cash flows from near-term price volatility and secure future revenues.

Future Outlook and Investor Questions

During the Q&A session, analysts questioned the company's outlook for natural gas activity and the impact of recent acquisitions. Taylor DeWalch provided assurance that the company is actively working with operators across Louisiana and East Texas to promote development and monitor the commodity environment.

Regarding the company's acquisition strategy, DeWalch emphasized a measured approach, focusing on assessing opportunities on an individual basis. The company's ability to acquire minerals in the Gulf Coast region reflects its strategic focus on expanding its asset footprint and enhancing development opportunities.

Conclusion

Black Stone Minerals' Q3 2024 Earnings Conference Call provided valuable insights into the company's strategic focus, financial performance, and future prospects. With a confident outlook on its acreage position and targeted acquisition strategy, Black Stone Minerals is well-positioned for long-term growth and value creation for its shareholders.