Earnings call transcript Q1 2023

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Operator

Good day, everyone, and welcome to today's Black Stone Minerals First Quarter 2023 Earnings Release. At this time, all participants are in a listen-only mode. [Operator Instructions]. Please note, on this call, I will be reporting and I will be standing by if you should need any assistance.

It is now my pleasure to turn the conference over to Mr. President Counsel. Vice Senior Putman, and General Steve Please go ahead.

Steve Putman

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

plans, will expectations, I'd like assumptions call to be we making start, that this forward-looking we future Before about our you our and regarding performance. during statements advise

These results statements our the or our involve risks that in may results to cause actual forward-looking implied from differ statements. materially expressed

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

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

President and Vice Land. CEO; Gremillion, the Joining Carter, Carrie and company Financial of of from Engineering Evan President Vice President, Thad Senior Treasurer, Officer, Vice Kiefer, and are call Chairman, Clark' Montgomery, Land, and Chief Garrett Tom the me on Commercial; Geology; and

I'll Tom. the turn now call to over

Tom Carter

continue joining operators in Chalk, thank the with 'XX for in quarter various others. And in Thanks, environment, despite results. strong all. success a our Aethon us to among pricing Steve. posted and discuss current see programs Good to morning the first and we We you today development our quarter you to headwinds

period. from quarter primary due Permian. were months of volumes production spanned that decrease payments total the XX.X several and oil first multiple from The boost that our Fourth We collected volumes A to the volumes that unusually quarter fourth that driver hard oil, major generated reduced volumes. operators were quarter was MBoe/d. for time of in X% of 'XX

XX.X first Royalty XX% XXXX. in the and volumes at above came of MBoe/d quarter

to production We in Louisiana had location rigs production Shelby up in the continues ramp in the Bowsher, both continue of quarter Haynesville and East meet the the pace see is Augustine on the expected Texas. of Shelby to five Trough, and per strong Aethon and the at XX end trough in and county. year year Angelina the the wells and to end minimum of by San

have to with and stages Shelby are in the wells XX development beginning since date turned agreements of wells Aethon, six sales the new completion. drilling been and/or in the To under year, of various our Trough XX another

for new have concentrated gen our completions additional potential this been Texas acreage -- year. to Austin sales an East Chalk addition, multistage In with position wells turned XX in completion the in 'XX wells

exciting momentum place on is further last the and on organic requirements. positive years in long-term focused to to putting It minimal we our over the from capital accelerate couple with to see work, the continue deals acreage we production initiatives development that new of

continue value had to on running of in operating in currently from largely XX cycles expect acreage add XXst. and and fourth first number to it Permian, average the rigs the to higher our driven developing incentives has This on as the quarter in was rigs decrease The rigs a long-term holders. March was quarter. running the we decrease acreage of through than our unit created where strategy a saw its commodity We Blackstone we

our acreage. activity horizontal the lower the line first quarter, with quarter with on rig XX% XXX count first to U.S. XX% in rigs Despite permitted approximately in and acreage our drilling averages continue of going forward. over the on expect quarter to fourth in the Blackstone's that remains permits added the

quarter Realized barrel $XXX approximately MMBtu. for per per the prices were first and $XX

While portfolio benefit $XX hedge per of in the quarter, in million MMBtu. our over were saw the both over gas down crude with bringing hedge we natural $X natural for prices and gas the quarter

has We distributable are XX% $XXX with of and driving first cash great unit distribution $X.XXX quarter. for EBITDA activity flow the new Despite quarter, public both Blackstone some maintain of as from our the at our a the for first XX% per of to $XXX guidance Overall, in and work acreage. our it on we year to adjusted We're on prices. and the reported XXXX. operators quarter to continue and start a million up gas natural highest the continue challenges first million we company to confident had able to was existing

walk turn quarter. I'll Evan to the that details through it over of to the With

Evan Kiefer

Tom, everyone. setting Thank morning first records oil gas quarter's for volume to and in you, After good came quarter. and several the lower

We total MBoe/d. as production the was Our multiple several XX.X quarter fourth the for and from Permian benefit of mentioned the in relative span quarter was the royalty volumes quarter XX.X X% coming Tom totaled first for the to in the received of periods new Haynesville MBoe/d, payments down that and XXXX. in quarter, volumes which fourth

payments the quarter oil was collected volumes period. just from that multiple first part are we Whereas result, down that were mentioned the there Permian. a over operators several primarily As in first-time that

time, it that benefit position this is this temporary time occur of is nature, forward. it large going is to a from the difficult diversified although While mineral does in predicting

off in driven decrease acreage was was rigs number in which activity move that significant And Permian our in speaking activity we of rigs in first the quarter. of a primarily where Permian, on we rig decrease saw on in saw at quarter, added the acreage the first rig of by end December, from a XXX The our down of the the year.

and plans of expect, to would as development as off year. and normal you As the on that ebbs expect our we of see activity acreage drilling later flows this part benefit operators their and move see these

been guidance. flows and mineral that in reduction the lower for focusing was in activity Haynesville in last we've a These saw our which and response on prices, owners. the It's gas also over of importance years. the ebbs to organic couple development just highlights We full-year initiatives contemplated

Aethon has recently new commitments online Chalk, headway well is mentioned, this for year. Austin we date, potential minimum wells year. XX to New to also and in six this their the have meet Tom multistage and wells where made turned sail We've to XX more expecting As are generation Generation expected

the years barrel, stability $XX portfolio of to which seen in downside momentum designed XX% Boe quarter first the provide of development our prices decrease of for flows $XX and highlights per These periods are program high provide see where future per from relative XX some to there. importance of our just and hedge barrel just years quarter. we're Realized activity XX protection fourth excited in to two the cash continued to to see operators we is the per a our were approximately areas volatility. that This was the of

in for hedges this Our challenge realized approximately is for in the brought provide and in will face. $XX.X hedges over we natural to barrel quarter our strike continue the $XX per the These or $X for first year, it's price cash pricing environment crude currently gas gains million average flow per support oil. hedge for MMBtu and

crude with hedge MMBtu average our at to strike per natural add at barrel. $X.XX for price an $XX.XX gas position, XXXX to continue and We per

our volumes position XXXX the the of to to continue targeting estimated the percent build XX approximately will throughout plus remainder We of year.

benefited quarter. million quarter, results first from and cash but as the for financial $XXX.X of from quarter quarter, lease our This cash bonus million well we is almost costs as distributable reduced compared approximately of to XX% fourth the $X $XXX.X EBITDA of $X operating solid million of reported For last the flow and adjusted million. quarter down a

was the end quarter, cash of have Our total the $XX and we of sheet on the currently today. debt million at balance balance $X

with base was revolving distribution this Prior month. that reaffirmed $XXX commitments borrowing April. our facility million The to the million at later in for payment $XXX credit

the quarter. revolver of X.XX distribution maintaining cash existing quarter, Given per the Directors Board unit, coverage in the $X.XXX for and translates generated which times of supported to undrawn the our

call for questions. ahead And with we'll open that, go and the

Operator

Instructions]. [Operator

Whitfield come question from Stifel. first will with Our Derrick

Derrick Whitfield

all. morning, Good

gas. For wanted would for the XXXX out be XXXX focus the process? The guy in oil implied to QX. you XXXX million million XX my and midpoint on in of wells accurate too on assuming XX just is the per to first an on that depiction balance on of your it up trajectory Is down the Or simply day projections update based question, your guidance? to barrels of I that guidance, laid early

Evan Kiefer

to in we're we the contracts gas really for the now the really of And thanks guidance. rig at I everything and Yeah. our Typically, on with looking price see before past, strong updated a is Evan, counts question. the update the place environment middle is start Trough. now, guidance Shelby existing Aethon we've This Haynesville right and out. in off gas that with think particularly Right just we settles in still And everything the always with where the the year. the Derrick. Louisiana and signed where got with thanks, Yeah, volumes,

waiting really update everyone. XQ revised put the so, we're And on just until out we'll guidance planning for whenever numbers

Derrick Whitfield

side. NRI as back to operating curtailment maybe your behaviors change you expecting flow development on follow-up the gas And regard relates Exxon, and/or activities? Aethon With a higher to are leaning my completion with and in and

Evan Kiefer

development don't you and Yeah, completion or pace Trough so we scheduled with really current Aethon focusing on see change as the any the Shelby even in [indiscernible] there. mentioned,

agreements the those With them that drill place, there criteria and to in wells. complete have we development are requires

we were sales. then probably to years several So, remember, as you years several that waited wells spotted, be have and actually turned to did ago,

knowledge limits the completion spot in Shelby time And Trough. overall into so, that amount current that from we've to of incorporated the agreement the

And operations timing expect changing delays do major or of due area. so, the to not completion, any in we

Operator

Our next Markets. Capital question KeyBanc Tim Rezvan with comes from

Tim Rezvan

Good you, questions. for Thank my morning, taking everybody.

distribution. think final the guess on about I first ask prepared to I comments Evan's

going the term or on to mean, how seem have How and distribution were How of the balance You have that near you the And distributable optimal. second cash sheet, price kind environment and flexibility balance near-term. ratio sort you challenged sheet should longer thinking $X.XXXX. draw had gas you payout? in keep XXX% you kind investors do that could payout think But, in doesn't flow about of but essentially I a that about maybe forward? that are is the level we're the think the of quarter. of

Evan Kiefer

a a we at and great look question something internally. That's lot that

And sheet today. and where We little a so comfortable, X.XX now near-term. coverage, feel the in coverage lower times maintain really just bit do the with right with a is balance

slightly we Something our look a that establish stable as we have going always as we can at our distribution something we to that forecasts. what for forward distribution we policy and growing look for is look

prices. that lower right recognize GAAP I as forecast fourth look to at is and resulting level quarter-to-quarter. and have those is things where some necessary But flat forward, number, that our to on there the decent challenges adjust we future. latest we'll as volumes, this whenever And continue so, well we to revise now, at quarter, think national potential side, distribution. still what held for change forward. set continue expecting the at We going out going as and that in were And look And if as that's we'll in appropriate coverage that the potentially look we the

And year. we Chalk, may But and in areas see to with of potentially of and agreements, have volumes, those growing gives that that development guidance others. for the half Aethon risks still see the mitigate even current the production ramping second the the some where really, us up we confidence Austin outstanding. the from that expect the We

Tim Rezvan

For some dig provided. visibility the comments into second pretty constructive chocolate more, bit like on to question, my I'd a

this cuts really should seeing on? wells coming that of more you we, the variable how all? the the become think And in a it's does start big these can a across look event? wedge Do XQ total Should total I production. production kind chalk we you really oil could play. generalize So impact When we you of when know that's for talk quarter?

Garrett Gremillion

Garrett is, Gremilion. This Thanks, question. the Tim. for Hi,

QX. QX, certainly So

We ramping up start area. that heavily volumes more expect heavily, in to

as of number tend, the of some area. XX areas see economical vary their where the to be current the oil say to but time we concentrate across, across per we Operators at the existing wells that in year enough field XXX to very seen four-county development be starting to have in tested environment. Within good cuts play, plus over feature locations. a And same healthy seem you

Tim Rezvan

sort in of as what production Do you that have context any on you've a seen oil area? of percent

Tom Carter

million You to barrels they get from can the anywhere areas of XXX XXX drill. within per that some

Garrett Gremillion

Earth, Middle recent XH. Some the online, wells have come of XH the that and

day a barrels XH XH barrels about current XXX for a X.X day. day, of rates then at barrels day got You've the a a and for million X,XXX X.X million cubic the feet and

Operator

question Instructions] with Lamar comes Our next [Operator Raymond Trafford from James.

Trafford Lamar

about the going question. guys. and on million for on on ratio do of color buybacks kind $XX with that? have my payout authorized and to just Hi, think forward. the get potentially taking balance Thanks to that a lowered Expanding sheet, you in back debt Kind you of circling payout how from the guys all obviously given some no want lowering that ratio

Tom Carter

This have that is stab place that cleaned would balance in We that's at available looked is And will at, preferred I some a absolutely that have aggressive are focus that that that we any Buybacks you're could that Tom, do I'll we up something something it. that we're don't area. go we that. have just We plans question take at is to look and current continue answer security in our on. a and see as to a with, keeping sharp tremendously. the eye have scenario mentioning us sheet certainly year. And through we

Trafford Lamar

color then appreciate to one real on quick. that. one Perfect, quick And

had noticed and Wolfcamp And bonus, step a Bowsher. Hainesville mentioned, lease I the up y'all both good quarter-over-quarter. On you pretty

leaves the bonus. was That bones Bowsher. assuming Regarding third-party that correct? that what I'm Hainesville operator Is Atheon. wasn't to not related is that activity

Tom Carter

It's third-party. a That is correct.

Operator

[Operator Rezvan Tim Instructions] will KeyBanc Next come question Capital with Markets. from

Tim Rezvan

you kind me the years rate more follow-up environment preferred, of different about than whittle free do in. to structure I'm kind using believe up just want Thanks you possibly a we or of and color that that I a completely? on is that rate that? in will flow back steps floating with? capital that trying give guess them did couple for letting certainly much think think It's the kind I you quarter to How of were something of on in just a first XXXX interest rate just more deal I of to and retire Or cash ago. and down how

Tom Carter

again. is This Tom

going just to looking made balance We becomes very as a any we're what closely. the to have the not do but quarter, I in fourth around our up redeemable has moment we're sheet it significantly. at said, And firm decisions preferred it been as cleaned relative ago,

that some issue level. that. as the looking is and distribution we highest its year Our at we'll And be making are around closely very decisions at progresses

questions. think don't I there are any other

and joining thank just we on forward we with all So, us call catching look up today, you next to for the you quarter.

Operator

your does This you. Thank participation. conclude today's call. We appreciate

at may disconnect any You time.

Black Stone Minerals (BSM) 2 May 232023 Q1 Earnings call transcript