BSM - Earnings call transcript Q3 2021 | Black Stone Minerals, L.P.

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Operator

Good morning, ladies and gentlemen, and welcome to the Black Stone Minerals Third Quarter Earnings Conference Call. [Operator Instructions] As a remainder this conference is being recorded. I would now like to turn the conference over to your host Evan Kiefer, Vice President, Finance and Investor Relations. Thank you. Please go ahead.

Evan Kiefer

morning good and you, to everyone. Thank for for the you conference joining quarter us online or call. phone by Black earnings either XXXX Thank Stone third Minerals website will is issued was available recorded call night. the and Today's on release, being last our along which with earnings be

results making plans, statements start, we actual expectations or the cause regarding performance. These be and risks from to during that this our that we advise forward-looking assumptions differ Before statements you call involve results may in like implied will statements. I'd materially forward-looking to about our future expressed our

For a in the our risks, in the should statements cautionary from release refer section yesterday and discussion to of these press Risk forward-looking XX-K. information XXXX about Factors you our

certain are metrics non-GAAP in we directly Reconciliation which on our to press our performance. website comparable that measures information be release useful found non-GAAP from are other those and evaluating blackstoneminerals.com. about refer metrics the believe of at financial these GAAP described will to most earnings can in We our yesterday, measure

Tom Joining are from over Vice Vice President Tom. Officer; and and General Putman, Vice call to the Chairman and President of call, Chief President the and Garrett Steve Senior Company Jeff President Financial now Clark, Engineering the Carrie turn - me Senior Counsel; and and I'll CEO; Land from Gremillion, Wood, Legal Carter, Geology.

Tom Carter

in other XXXX. X.X The we approximately quarter indirectly volumes Boe realized impact XX% per mainly the quarter increase day. we for financial of four in dramatically and their barrel, have third in was year. for XX,XXX a joining our thousand you solid per we down and To XXXX. combined and by to the on the even $XX more muted you, from the of resulted benefit volumes today everyone gas to driven put Midland We Haynesville decline quarter from have development last the up producer somewhat oil increased deals demand This of that our global acreage. of not rebound continued quarter, – in operating BOE. of Thank barrel around area hedged prices production Delaware the Thank trend very was and volumes we Natural at the had capital context, the rose In exceeded discuss big day royalty for that with benefit was risen third We producer XXXX. another of prices interest per gas Louisiana, $XX.XX X% and prices production cases production decline directly of quarter per un-hedged in us in our increase on discipline to period our properties. XXXX The highest seen last of Evan. levels our increased But XX,XXX had activity barrel Working equivalent, prices Good COVID since in expectations. have an by the double the CapEx extended cutbacks the we quarter was October results. last prices. in morning as in to results and Boe call. as in with for third our royalty XX% which total price and a on Permian prices financial of $XX.XX quarter than levels realized oil move oil many continued from and to Midland ways since above and since reported like XX% level, discussions third more on quarter

production XX% of royalty made for As volumes the up a our result, total quarter.

but quarter, slightly our rigs across from quarter. last of down has of overall trend the That's middle the We activity end third on an of acreage year. at XX operating the operator the since upward last have been end

the the to is $XX.X permits permits XX% We quarter line third quarter, per the increased above quarter's $X.XX approximately is our this flow of the the as coverage was rig EBITDA second X.XX below unit. adjusted year. quarter the quarter Last in and third the third distribution year. last cash we and third distribution prices X% the week, third maintained jumped XX we $X.XX and to paid financial above The our XXXX. quarter of XXX with payout, the $X.XX equates quarter end per $XX.X last another that strong of and per the to of levels had we number of We experienced distribution we production million, the than is third our which October. this we announced equal reported XXX start performance. with unit last quarter. Distributable than for the on approximately above paying last the quarter in expectations fact, on for were see which count higher quarter acreage the million, to of Higher for unit in original we that Even call. in which saw at quarter year what discussed higher of of roughly distribution quarter for earning the third times distribution In quarter year of in and from third for royalty second our contributed that of third we permitting. XX% same for We was XX% well quarter the XX% trend

$XX returning million flow we investors. is our Going total; to to cash forward, given our currently debt prioritize which very will continue in low below balances

cash and repeatedly and unique to volumes we extent that from around and initiatives new core growth here exploiting in an that remain update that Trough the team acquisition acreage plays attract last generate position and from focused over new I'll To economic Haynesville Stone which development. capital. the we've are by heard new the us doing is have we entire the several on is the for acreage on had of that our the equate dollars to you've can available in Shelby to Bossier the a significant of new for Texas. highly production the our organic the Shelby quarters, acreage we Black As had where continuing Two land. positions these an areas of Trough, flow in existing streams zero play Southern Austin start extent in Chalk. East with success capital

Those area that operating and development by under has program some when nicely that is the are providing very performing well one of our experienced the two it envisioned producers involve County. in encouragement. Our in them development early could then Raton Raton; acreage wells in to was with sales Haynesville. in area. most operated The spacing turned tighter wells Angelina VP

to formally XTO in redeveloping are highly, attention, operated. The its Austin October, where seeing San the additional wells spud and Aethon using lot Aethon Energy, Chalk spud fields has garner completions. trend County. strong Augustine of our area three Magnolia a has EOG, high in others continues wells Aethon agreement Angelina covering Chalk SM progressing in well intensity Texas County As where is four of also results development first under by

Black wells been into drilled and We Texas interest well wells sales positions. under drilled large multiple in new first newer in turned has vintage acreage Stone well five to currently in these the have Hancock operators has Chalk drill agreements. entered and where One the to significant agreements being to addition additional with East Austin are

over development results We better area are and of visibility encouraged design initial by the online. have early we will test across months the these six the the the with as well come program; wells next

the around momentum positive of asset lot a base. have We

Some team during of driven by market here improved a and done work which is the price downturn. improved which much the commodity price commodity but by of hard by environment, of result is an

the with our entire Chalk, acreage focused and of In over will we Haynesville lands to I'll With to top the move the on be the the that, addition industry to working stacks. industry core Jeff. call position, attractive capital Austin turn our to

Jeff Wood

a morning, Tom, you, Thank clean quarter. everyone. and It was really Okay. good

questions. can on to pretty so So keep we I'm remarks going that move to my just your brief

our royalty and those common averaged performance. benchmark mentioned, quarter an quarter with third commodity consistent and stay WTI allowed again prices. to last EBITDA of increased distribution for over realized prices Henry at of That Gas are Both per our hedges for at driven had We Those was Hub the of of $XX million and before of Tom XXX% the from robust of price cash held and steady XX% Oil before a by averaged things quarter, quarter adjusted prices third million us $XX.X the results. for the much generated quarter quarter. environment. unit. flow to we NGL hedges our As $X level financial from distributable last improving led realized that over production another quarter of strong for strong with that barrel price $XX.X prices amount, prices. $X.XX of second MMBTU

You the one-time call number second performance was operations last time third more And impacted we That base our second special of discussion may third because into supported quarter that fully $X.XX the we end the level were results results better that the divided were remember a $X.XX. the quarter distribution distribution that that the than of a per as quarter at what distribution felt the the distinction from distribution and distribution unit, $X.XX we items. per base of Well, expected unit. by we of through and quarter's for positively of more $X.XX sustainable recurring year. dropped quarter the was reflective

at X.XX maintained Tom of even the distribution fact, times. very $X.XX we mentioned, as healthy In coverage distribution, a

strong. with ratio remains times. debt-to-EBITDA and total quarter total very ended sheet million balance debt X.X Our a of We the of $XX

As debt down Friday was to of $XX that million. balance last

positive costs at guidance continues end of per business Boe we last respectively. year to the end million guidance XX% XX,XXX announced the of to a the gas day $XX that as near direction, trend lease expect range revenues will production of a low of or we the at and now revised and operating ranges we be for and percentage the XXXX oil quarter. full XX,XXX million be to So production $XX just and of of the in to believe high revised to Further expenses XX%

to and expect revised original the open with last that's call relative quarter, to due be slightly questions. from And our financial that results targets. G&A guidance of to XXXX the now for above and said primarily ranges outperformance the we date will we Finally, cash non-cash operating to

Operator

question Instructions] Thank KeyBanc. is you, Decker from sir. Steve of [Operator Your first

open. is line Your

Steve Decker

was Hey we production old X% that noticed third sequentially guys in the your up quarter.

Just want guys you what to? are attributing to that see

Tom Carter

Yes.

that. as let others the Permian, in chime and in little just as think is I uptake I primarily, outperformance Basin. production to that due Midland our in. But the primarily think it expectation Honestly, was oil a simple I the in to I'll think relative Delaware

Steve Decker

it. Got

Okay. want just And any the guys the improved you give on talked can detail if there's results to you on Chalk, then well the see in more Austin release?

Tom Carter

kind there's wells. utilized to have only only Chalk Well, wells I that that that I'd wells both mean the intensity X higher producing And completion to and times two same of round in core just less the area Hooper clear, horizontals of technology and performance area. of we those numbers, have vintage very say our very, of be the Austin is – Hancock the the strong. look stimulated in X

should got this in we another around by coming that three mean the technology wells on year, another the five just to of over that February end March. will next note completion note, we We've be that's in what very got similar release the that we've that. that and sales using will right several another and So turn months. I in

encouraging. come, overall of that to that, going tests results have a we're very early are but So number additional

Steve Decker

great. Thanks. Okay,

Operator

Whitfield is Stifel. Derrick question from next Your from

Your is line open.

Derrick Whitfield

Good all on congrats and update. your quarter morning, and

Tom Carter

good Hey, morning.

Derrick Whitfield

As the QX about a we end previous marks? production netted your should through the old the oil in oil given follow strength general, Austin developments the year up trajectory Chalk question in production, based QX on of how on you've on and Permian prepared think your

Jeff Wood

can you that revised you, approach in Jeff. with and QX like. a others from I'll mean, guidance, they'd numbers. this as is Derrick, can cautious Well can start fairly – you chime tell I then taking our we're still to if as as

mid-dow, So an there, we'll don't that and amount I that the turns that around continues. in wasn't out activity I again, affected the see improved I thinking ultimately would back think so think, how unusual of hope that quarter period oil. between performance

that fourth Chug surprises So sort us a going us. of continues around that a way for a more may quarter. orientation and say our the well, Bakken positive again, to little Permian along in I'd gives it was above I'd to say frankly where that's And the go expectations just depend

– So continues, continues from Hopefully on I outlook think a, way. trend that it we're to a going to we continue but to Permian hope relatively that a perspective Bakken. that take cautious the run the that

Derrick Whitfield

get the Austin to Terrific. that's When the total And two Wells probably of wells? my area I'm and five I'll that been the about what as understand because the turned that by to activity covered for that follow-up How help large is to back that date. again, Chalk us been that's aerial extent of the trying you could sales update just guys? to provided that you have an spud, have wells been think sense you that

Tom Carter

a the XX gas, wells offsets XX,XXX month two both a B are produced of XXX,XXX XH have the that Hooper partial tenths X.X that far XH It's Hancock produce. on It in Bcf far barrels is So two the what County. and of over thus and Tyler barrels. The above produced months. produced

So good field stage older the offsets. have it relative did to any very the Again, not looks frac's.

Polk we're testing over recently our to And certainly the that come operator. north. bench we're and – operators mainly, to operator public this would So I who's County's trying Tyler into field. well Newton main it's what have but another a a the look an the we're seeing the in seeing forward County, large can hoping where is say too very very comment field there. in is alike over in do play activity positive We stretch to within on getting's look results and Spud in seeing

older within the the activity spread field field itself, and out to counties, we're all five those is over areas. seeing four So

Jeff Wood

us. well of blocks following massive add and those, total XXX,XXX a to aerial And got acreage I'll just Jeff. are and about, position Derrick, over additional from extent that this extent, mean, I is it's to that. large for we're so acres we've an perspective, on talking

Derrick Whitfield

guys. Thanks. Very helpful

Operator

Instructions] [Operator

Tom Carter

Black Okay. to questions aren't thank and much. you Stone, there look Thank Well, quarter. more in if we any you forward for with you we next your interest talking

Operator

Ladies Thank and gentlemen, conference conference call. today's participating. this for you

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Black Stone Minerals (BSM) 2 Nov 212021 Q3 Earnings call transcript