Black Stone Minerals LP Enters Strategic Farmout Agreement with Ellipsis U.S. Onshore Holdings

Black Stone Minerals LP (BSM) has entered a strategic farmout agreement with Ellipsis U.S. Onshore Holdings to develop its Haynesville acreage in East Texas. The deal covers 270,000 gross acres and requires Ellipsis to drill a minimum of six wells in 2026, increasing to 25 wells annually by year five. The partnership with Ellipsis aligns with BSM's growth objectives and could unlock significant value from its Haynesville assets. However, investors should monitor the execution of the drilling program and market conditions.

Black Stone Minerals LP (BSM) has entered into a strategic farmout agreement with Ellipsis U.S. Onshore Holdings to develop its Haynesville acreage in East Texas. The deal, announced on July 2, 2025, covers 270,000 gross acres and requires Ellipsis to drill a minimum of six wells in 2026, increasing to 25 wells annually by the fifth year [1].

The agreement allows Ellipsis to earn non-operated working interests while committing to a structured drilling program. This arrangement benefits BSM by providing a clear development pathway for its Haynesville assets without requiring BSM to deploy its own capital. The structured drilling program ensures systematic development of approximately 100,000 undeveloped net acres in BSM's Haynesville position [1].

This partnership aligns with BSM's growth objectives and could unlock significant value from its Haynesville assets. However, investors should monitor the execution of the drilling program and market conditions. The agreement's success will depend on Ellipsis' ability to meet its drilling commitments and the market's response to the increased production from the Haynesville region.

BSM's recent second-quarter results showed revenues of US$159.49 million and net income of US$120.03 million. However, the company lowered its full-year 2025 production guidance due to reduced output in oil, condensate, and natural gas. This update highlights the challenges in maintaining volume growth amid shifting operational and market conditions [2].

The farmout agreement with Ellipsis represents a significant asset optimization move for BSM. It allows BSM to monetize undeveloped acreage through creative deal structures, preserving long-term optionality while accelerating near-term development. This approach is particularly valuable in the Haynesville shale, which remains strategically important for U.S. natural gas supply despite recent price pressures [1].

Investors should closely watch the implementation of this agreement and its impact on BSM's financial performance and market position. The success of the drilling program and the resulting production increases will be crucial factors in determining the agreement's effectiveness.

References:
[1] https://www.stocktitan.net/news/BSM/ellipsis-u-s-onshore-holdings-announces-strategic-acquisitions-and-74yu7lmvduww.html
[2] https://simplywall.st/stocks/us/energy/nyse-bsm/black-stone-minerals/news/how-investors-may-respond-to-black-stone-minerals-bsm-loweri