BSM - Earnings call 3 2023 | Black Stone Minerals, L.P.

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Operator

Good day, everyone, and welcome to the Black Stone Minerals 3Q Earnings Conference Call. [Operator Instructions] Please note, this call is being recorded. I will be standing by if you should need any assistance. At this time, it is my pleasure to turn the conference over to the Director of Finance, Mark Meaux. Please go ahead.

Mark Meaux

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

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

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

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

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

Joining Officer President me and Thad Chief Putman, and Vice the Steve Kiefer, company Counsel; President; General I'll Clark, Evan the over Chairman, Financial from Tom Commercial; Carter, Tom. Montgomery, call are Treasurer; Vice President, Vice to CEO Carrie Senior Senior Land turn call and President. now and and on today the

Tom Carter

over the sixth adjusted results. generated Stone for Thank is now Good million This a posted We where solid to consecutive $XXX XXXX an for EBITDA. us million of the quarter Black quarter XX% Quarter $XXX compared Mark. you, adjusted quarter. Third morning, and joining increase thanks the in has our second with EBITDA of for quarter,

of quarter BOE an to 'XX. per and be guidance the in the which to second production per of BOE production XX% Third [ XX,XXX second total and [ the now increase day XX,XXX BOE XX.XXX quarter royalty volumes volumes, XX.XXX the to per ] from X% Quarter end upper day. our expect volumes increased of driven quarter We from of our was of we for day, by ] the of XX% Much above range increase third generated

of wells online coming was Permian. oil driver Primary in volumes new the

had we lower XX% X quarter our the the lower to XTO. pricing, Two rig Despite continue of compared in [indiscernible] Trough. Shelby Haynesville online from come were resulting third wells in to those in we X year were quarter. Louisiana this the wells new volumes counts Additionally, to due new second and increasing see activity the Haynesville Louisiana the in

at wells Trough quarter. to are XX turned rigs in Angelina second San ramp XX Trough And Shelby drilling agreement held production to minimum exceeds and the rigs X Aethon. X XX in phase, Augustine wells with have our there we currently continues date, in which that To on development up the production to per increasing the of XXXX. Shelby benefit the sales year, third and expect the the Aethon in our counties of location completion pace under wells the quarter, from the been in end

operating Haynesville at ebbs rigs the Throughout September the position XX on in acreage diversified quarter. development we the driven the in has count August in approximately natural U.S. due Coast operators. contracted increase The highlights to as and ours. rig in rig quarter, and quarter, on from The of increase which X% our saw new flows the of XX. during by Permian rigs a drilling XX saw various We count such as running with X% peak acreage currently Gulf a third

a prices, as an public. since Despite we've challenges reported sheet unit the and natural basis maintain a per with through and quarter. at strong highest distribution we distribution the We annualized maintaining its previously or going announced to for X.XXx the level hold our balance on that represents gas are $X.XXX yesterday, coverage been year the of able $X.XX

into place unit the opportunistically It's that we're This to have million been by buy into and our we a positive ability flexibility Additionally, year. of year, program. own a allow repurchase the previous $XXX put and will program us momentum $XX replaces million the end units. the our great encouraged

him Yesterday, years Chief in position. interim over on Evan President and over that, of I'll turn With Kiefer, I as the Senior it and experience of With Evan? to Officer removing Evan the quarter. we announced with has title. details walk XX the Vice appointed been his Blackstone, Financial Treasurer, congratulate to through his

Evan Kiefer

you, thank Tom, everyone. Perfect morning and to good --

Trough average out, increase pointed day, an of as production. third a good XX.XXX XX% the quarter and [ of very second Tom daily we Permian in Shelby wells ] the well As from reported as was our which led Louisiana. over coming new production is reported Haynesville had production per quarter. the results online by We in This in BOE better-than-expected

$X.X income was for and and quarters $X.X quarter first for year. million quarter other bonus third the Lease the million for X the the of

remain lease this leasing emphasized to XXXX. compared we price bonus, programs year While development activity encouraged the in environment continued have lower the by we over Haynesville/Bossier despite

and approximately And per in second $X.XX per quarter, oil and X% represents speaking That to recovery gas an of pricing, prices in prices of we prices the a the barrel third with saw of Mcf. quarter $XX compared in respectively. realized X% oil increase and

comparison, XXXX, and $XX the per barrel price $X oil For Mcf. over per during average over of third quarter was of

our why and represents volumes. current prices in we and prices a this year near-term decrease from in decrease quarter The production to period last gas crude natural hedge XX% XX% continues highlight

have of over XXXX, quarter a approximately production the for the XX% approximately million hedged realized that with We with $XX remainder in of for book settlements hedged gas Mcf. of our $X brought at solid per cash natural a hedge little

with watermark adjusted have up our end add in set estimated we XX% quarter -- of the of is from This rivals to results by target quarter In production our which million, to up that our portfolio continued XX% $XXX approximately year. of XXXX, hedge our was second the a in fourth the of quarter of the for from EBITDA XXXX. high the and

that positive updated seeing. reflects strong the we trends guidance our we Yesterday, and quarter that are announced

Tom mentioned, that our in costs operating the to range XXXX, in production of with guidance expecting our the come expenses As for and line expect guidance lease remain we end upper while production expectations. at

Additionally, we end guidance be expect lower G&A, and noncash in to range. the cash of our

quarter X.XXx. the basis. this million, distribution previously annualized per coverage per announced results $XXX.X for $X.XX of third and in was unit for an a We of cash unit or $X.XXX Distributable the quarter flow distribution on the

$XXX quarter we week, next Effective $XX we $XXX ended of million. million distribution from of the yesterday, on cash commodity million have due prior month. our And to last in but $XXX increase an had as fourth elected have to to revolver. This consecutive the flat we of million no borrowing borrowings the over to prices, base is where hold we now quarter at our payment increased commitments with

mentioned, returning our Tom to As us while unit This cash our Board program, will approved our allows to million $XXX prioritize repurchase to investors. we continue units. common repurchase a opportunistically

unit reflects on we yield increase price and capacity not XXXX, exposure gas expected environment view. that to into low the XX.X% and the LNG fully long-term do valuation our gas current bullish think today are export approximately at With

at preferred $XX to repurchase repurchase flexibility program common or contractual first discount trades to XXX% the the unit. preferred gives for of unit redemption units of potentially our This window just opened us which units, a at price of redemption month. over the Additionally, par that end next per

rate convert reduce units potential into common of month. Repurchasing opportunity future the dilution goes should that the at allows us next those increased as effect to units interest common the any to as into well allows any us in end offset

rate basis rates. or XX.X% from to on current X% based Just XX-year as a plus reminder, that XXX approximately reset points the

Tom's echo with and for open is quarter it will comments as I'll comments. we that, the great call a

Operator

Markets. Instructions] with from We'll first Rezvan take Capital question Tim [Operator our KeyBanc

Timothy Rezvan

trying I of guess understand I'm kind start repurchases. with I'll just behind that. rationale the the to

a talked offsetting dilution. And also You about then about XXbX-X. you talked

So just Or that understand trying the -- is the put place? the this do behind of to may in in you be kind place? decision active XXbX-X quarter should you now? assume I'm Or repurchase you we is something rationale will

Evan Kiefer

This going to the flexibility Nothing is in just and right gives units opportunity place Yes. now. is repurchase forward. us the

looking One bit overall units the the at the $XX the of preferred. one-to-one the $XX.XX unit. XX.X% per that a really like since common were XX% and little little being convertible to things it, on gives relative to, in with call puts our at the of preferred par the over principal is and And value are going on discount yield which a at preferred we to us those and it the we XXX% units, common just units common on today

Timothy Rezvan

Okay.

do with preferred. if month guess I to what decide you're to another do Okay. have And going you the

you You if be some of Will of balance will the disclose or obviously redeem you them? marketplace in to building. cash bit that a have that do all little a decide something

Evan Kiefer

is That to about Yes. middle the forward, correct. balance next today as But that's $XX the paid And we potential redemption as we will through million going on distribution coverage be on cash today. credit likely out redeeming in $XXX we have Really, as commitments currently just the -- common go far of cash sheet. the of Yes. out the of month. that's build units, used the million that be or unused have common of any most preferred with any the or that line we of thinking

Timothy Rezvan

take why think XX,XXX just production one the that could about saying year. for in first one kind will I decline strong quarter if very some talk Can at The the be sort And end of you're that. in. above shouldn't and it production. you'll last revision number. we you what a of appreciate day I a be seeing modest in to fourth that guidance Okay. Obviously, upper

the about the think to near-term trying of of Just production. kind cadence

Evan Kiefer

model thanks Yes, and we typically we what Yes, Tim, sight and model we very when visibility for line of look have course, just and forecast our question. into. the forward, of clean

permits of based be drilling on and from our we from that to going that's see any received we activity operators acreage. feedback off So

for at look we all And new wells year. the from into the of drill beginning that that results whenever we so the quarter, was third our saw

challenges rig we as it into Haynesville, that there's production, flat have count up remain we see was quarter some lower still on such clean visibility to fairly into. expect always that diversified But year. that going going ours there forward large next the necessarily for don't occur although overall things a in With and position the the

with is we volumes beyond. from can see that optimistic and that into But conservatism into current with going now the go what encouraged and that so see visibility model the into, we year to the pace program see as decrease we fourth and still built everything, volumes Right what where views. quarter. and drill have we we're inherent there's because next and our And there into where

Operator

with Whitfield Derrick to [Operator Instructions] next We'll Stifel. go

Derrick Whitfield

on up question. Following Tim's

oil how Given the help much your that could activity versus increase of growth? was frame you the strength quarter of quarter, production underlying prior in for

Evan Kiefer

Yes.

quarter third we between what So in based the in that from XXXX. majority that of versus the periods to a current or the breakdown -- of of The in vast the drilled from really saw this off really was all majority quarter, smaller a be like were in was of or actual that all at of piece production going that the prior in least wells received XXXX. increase we was the volumes in that said, that. portion oil But quarter production was drilled smaller I

Derrick Whitfield

they frame regard the are in in be of expectations and stages Angelina your in on the that wells turned split with lie will XX to when help wells line. where could County development, the various on Asian you And development

Evan Kiefer

Yes.

months So drill drilling currently we complete to That's Whenever are on wells. being at to be certain and wells what look the wells agreement, pad. the same that criteria initial phase, going it, line requires average, call to forward. in XX drill them we that that turn through going include may those have, on in that the are from

in so we most And coming the expect of wells those would middle year. see online, to likely next

Tom Carter

of of at And to them wells it in and all a there Aethon metrics there contract more to see doing Shelby and positive, have to just get are wells a X a built expand. see in of And program because around great ready or set more doing so job morphing is that as really to look and sales with a become out on our the is we work lumpiness something more that. Trough. bit takes ago into add to may little But we closely they're on. statement. and really longer the and common, Aethon program to some growing I'd we the likely timing X as multi-pad turning we turn that years once, some that out -- they up full development

Derrick Whitfield

know last on And your could. perhaps said would market state in that, Having the of follow-up, desire for your to I conversion characterize if with how that. staying been focus current I in the opportunities. M&A recent you has organic years one you and participate

Tom Carter

that to way. answer where overall said I market be would more we or The pretty but frothy year I'll this than a to there continue think people in terms say. aren't have we would trying look we valuations, of Well, in is we are M&A But looking. X ago, saw other places maybe opportunities

Operator

I At to over the closing turn time, will any or our back this additional for comments conference presenters

Evan Kiefer

to grow to and forward platform, joining levels quarter. for We're to that all activity and next again we're we you thank Well, and today. ability the with look talking optimistic continue pace seeing our you us our to pretty

Operator

Thank today's gentlemen, and conclude that Ladies you. does program.

time. disconnect You this may at

Black Stone Minerals (BSM) 31 Oct 232023 Q3 Earnings call transcript