BSM - Earnings call 4 2023 | Black Stone Minerals, L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Black Stone Minerals Fourth Quarter and Year-end Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I'd now like to turn the call over to Mark Meaux, Director of Finance. Please go ahead.

Mark Meaux

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

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

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

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

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

Tom Carter

the the joining production to increase thank EBITDA XXXX. Mid/Del. and day, for the adjusted Eagle in posted total XX,XXX volumes and were by volumes Good million results Bakken our full We an of call, us results. $XXX.X We us to were $XXX.X quarter trend morning oil Ford, 'XX but ] end for down XX,XXX in strong discuss of guidance bringing range. BOE [ in of to on quarter Royalty where everyone for fourth fourth saw generated BOE, for X% year offset you today volumes million above our quarter we the quarter, per full year the with upper the and

We development acreage. with as agreements our gas sales provision in We wells time-out December to agreement obligated natural to natural in that in under threshold, full. a also we elect may in glass turned contractually have with the Today, primarily Trough specifies certain our development Aethon. Haynesville trends conforming Louisiana been our XX in the saw prices when Aethon that a in industry. temporarily see modest half the Yes, announced decrease gas that below suspend volumes, Shelby on our use a they drilling fall elected to

Aethon At may next fact, and this have XX-month actually time-out indicated several. we in Aethon-operated the to wells drilling that the the during completion operations time-out prior drill time-out. the begun not impact And do additional wells will and of for spud expect on cycle were they the time, has period

the for end had at of closely to count quarter, U.S. of Aethon compared the reduction time-out quarter. We running working the XX% of we determine of approximately a effects the in rigs focus the third are We the XXXX. our on rigs on expectations longer-term XX to with and XX production as representing acreage rig

oil for represents our unit quarter that quarter. to per in Midland our did the Delaware trends. $X.XXX reported X.XXx barrel increase drilling Haynesville the were Coast lower are prices see as previously Like We basis, response which, on last we maintaining the play most we or general in $X.XX for around Bakken per seeing business, an range, the yesterday, and in coverage announced Gulf annualized gas $XX as remaining natural slowdown small we a and a in With the prices.

throughout would reduced sheet been may and be we've XXXX, challenges we strong close we could we where let through the distribution stand highest likely balance target the Xx expected recoveries. exit hold with environment, grow expectations. at coverage, rates, level price natural we're since In pricing fall current we possible in a distribution those gas to prices, position to public. and implying and able until we to per BOE Despite suppressed 'XX going with below to Due a not the mentioned something XX,XXX to a production able rate that year execute day, a exceed its at maintain distribution

XXXX, As due adjusted in cycle on royalty but to balance to we we included that debt position. acreage acquisitions our minerals proactive we targeted $XX the and mineral complement no our of sheet, totaling commercial headwinds. efforts In down existing nonproducing -- there have to royalties acquired enter our be and and acreage and Due XXXX, quality are our million. a

includes of initiatives Our commercial to support long-term our and growth strategy acquisitions in that 'XX our unitholders. a continuation targeted accretive provide

commodity gas by challenging natural remain environment, long-term in strong progress encouraged as price make a to strategic it's we outlook Overall, and on we the And beyond. despite continue initiatives quarter. 'XX

to With Evan. it turn that, I'll over

Evan Kiefer

and good morning, Thank you, Tom, everyone.

we a reported BOE of production fourth day. pointed XX,XXX out, good daily Tom per very had average As we quarter where

range. the our For guidance full out the XXXX the And we as adjusted levels. million forecast we yesterday. earnings full up guidance we annual XX,XXX look we conjunction to slightly XXXX, year year, XXXX end BOE release, per year put to above which from of our high the be with full day, production generated is In forward from EBITDA $XXX.X just of

wells been on As future very the and volumes. production with we're the Tom them to Shelby provision, working to XXXX prior long-term impact have their Aethon time-out has the mentioned closely intentions in determine turn Trough, in spud to the in indicated line that

in with volumes the now partners as generation, in we are to we are that We currently Austin Texas the XX modest area operating wells working a increase where completion multistage expect Chalk East activity. our new in have accelerate producing

offset on XXXX continue as with as by that expected focus Bakken in to play continues an remain the line decline operators in is Our is levels to position to mature. Permian but discipline, broadly expected capital

gas heels response rig in to natural some the as expect as of lower on XXXX Louisiana evidenced cuts and well of in production of Haynesville XXXX, outside a X these slowdown our natural prices plays. announcement On by declines a as recent robust acreage we a

income other million was price by despite activity and $XX.X the these Wash Coast, fourth the primarily fourth bonus for remain Gulf quarter from in we in leasing and the full Lease encouraged The continued but plays environment. $X.X the Granite year. quarter for the lower Haynesville, and included million

XXXX to of inflationary our increase in XXXX to undeveloped We market to evaluate, continued expect lease support costs a for costs line our XXXX is and slightly levels. as production efforts operators. result and in acreage operating be potential bonus, G&A to with our positions expected expenses, ability manage to

XXXX, In natural which million provided our gains just our over hedge Hub per barrel. for realized oil MMBtu to hedges currently MMBtu see are $X.XX $XX had MMBtu averaged gas hedges strike a year. per per lower we $X while $X.XX In move Henry per of price levels XXXX, the above over while of those $XX

are year. for in volumes rest pullback provide cash recent of of to We to expected will XXXX hedging XX the flows That percent to XX-plus approximately our support normal continue pricing. of for to the range due in the our

cash quarter will million XXXX, Distributable increase which cash quarter X results announced full $XXX.X the over for a fourth of distributions the represents With pay coverage for in total balance distribution. debt we XXXX. out unit for XXXX at year. quarter of the a for currently advance to flow was in off the of X.XXx the us at distribution the the distribution, per and X.XXx X% paying allowed previously fourth and and year. have We fourth pay remain million $X.XX end of That of fully the $XXX debt quarter throughout

on common units preferred. from moving now the So the to

have at $XX.XX redeem outstanding we the prior XXXX we calls, per unit As XX, have February or option or on XXX% next through units of discussed preferred week. our to par

We have until $XX.XX and of redemption for redemption years closes, per will not not redeem XXX% units XXXX not unit. at do of reopen the X of price which November or expect par window before any to redeemed a

The in XXXX XX-year preferred X% the XXX or basis units from points November reset rate treasury plus X.X%. on the of to

October $XXX our in units, gives As at to buy common a place repurchase price. flexibility unit you This opportunistically recall, us discount a trade the we currently also redemption program put which million XXXX. of units to in preferred the

today gas gas low environment expected gas natural XXXX export the unit into on beyond, and liquefied capacity price. our to Given remain we and the exposure and natural increase going bullish long-term

turn call the will questions. for open that, so And with I

Operator

first go to with We'll Instructions] Tim KeyBanc. [Operator Rezvan

Timothy Rezvan

I the wanted on comments. start to

was And they're nonproducing, you -- from growth wondering, big relative made you public last strategy Coast, go? the relatively You you minerals this How strategy. of your buying expand you peers production the that sight talk on then could mentioned some could is $XX if expanding are bit into had line The years. to Gulf to million couple of I that Coast. Gulf growth mentioned in small area? that your you where on acquisitions your have the willing is a specifically and talk if in can

Tom Carter

Permian I don't I'll want maybe to our to is properties million -- continue can that running follows. reasons. to We too And for overpriced of are with will But profile. goals efforts do Black to buy type answer not have already much production to are, number acknowledge to as for those we acquisitions competitive in the Thanks well better upon the the do that substantially I'll here say say -- question, and is respect And our those and Stone. accretive suffice of are a our that $XX this not where capital that room Tim. because it expand be we Tom. mover needle and glad like expect to that so that be tenfold.

Timothy Rezvan

Okay.

to and Haynesville this So third as a to Chalk fair the think it's in addition leg the agreements? of growth maybe stool on the

Tom Carter

are Well, that typically in you tell areas would speaking, already we're where we expanding place. I

of things So it's already own that more new expansive plays. probably adding than we

Timothy Rezvan

Okay.

comments I Okay. that And thinking about It are I Evan's program. make redeeming preferred. repurchase sense are appreciate then about would not of today. prices How the those details. you appreciate where

maintaining per of it's the intentionally to indicate with difference to repurchasing you cash that versus don't to $X.XXX your that just seem you're want maybe XXX% You the I'm release. flow. in over in you -- that on shares between if And unit cash put maintain trying weakness understand hand

think given in and how Just XXXX. to cash, the between you're you about uses debt thinking have trying no repurchases distributions of

Evan Kiefer

Yes, is this Tim, Evan.

debt especially overall having kind think we balances cash idea of period time Xx going to prices, see As see our where $XX effectively for and gas distribution. said, really long to of we're as there borrow in preferred. coverage could compared units we today on the about of don't those term that be to we to at support also value the the over well, accretion and at That the below our at like a units and repurchasing lower

as And some so using level be of be more our Xx. repurchase overall, as less opposed coverage feel to revolver we distribution to to require able a than it exists common supporting would the to units that comfortable

Timothy Rezvan

Okay.

see with stay start just we'll guess that I tuned So repurchases. and if program you

Evan Kiefer

It's utilize year kind of the where sense environment, that's with on come. something Yes, it more the something current we throughout think the makes expect and to correct. have and that that to we opportunity

Operator

Stifel. go to with Whitfield next We'll Derrick

Derrick Whitfield

Congrats on your guidance. the wanted first focus my question, strong on to year-end. I And XXXX

you at gas are the expecting DUCs Aethon the about conversion quarters we're to cadence observing more half-weighted present, production across With of you the second the prices how uniform in guidance, activity? your are thinking meaning or lower

Evan Kiefer

great Derrick, question. Yes,

the the year same year, likely us. then on see do to So and bit Aethon you and lumpy as and a -- current quarter expectations online that's would provided expect towards multiple earlier the to and becomes their to off come expect as it to that existing is the they it, DUCs, second with to little in first wells going conversations going those have we a are come based the time. off our multi-pad do of provided little end they you'll bit some with as What at overall, call the more based online the expected completions,

Derrick Whitfield

a characterization? So year. lumpy across but Is relatively fair that uniform the

Evan Kiefer

Yes.

Derrick Whitfield

amounts over shifting then in And consolidation business, limited competitive only considerable seen Chesapeake, activity expecting landscape, last said, on see that to impact have And your subsector. the of years upstream sector minerals Okay. over you're mineral Southwestern. E&P M&A With to the within the we've the the across X sector? the consolidation thoughts are greater your what namely if on could that

Evan Kiefer

Yes.

And be is on beneficial. consolidation I'll on of hit think kind within I side could So this the consolidation the the first. operator Evan. operator And industry overall,

the that can as or that on [indiscernible] trickle deal, persist. down comps development there's the owner could about costs gained side through thinking benefits additional everything think be efficiencies, benefit thinking specifically and think Southwestern I mineral about I will operator

other little possibly I I Now and to and seeing of on Diamondback-Endeavor cuts bit discipline, capital side indicated rig flatter more what a that, to be the know has there's was production. maybe a

see piece. probably So overall story, I reasonable kind growth in the world that side, neutral of on on waiting think on I how be gained and think overall, we're everything looks. Permian how ultimately gas to level, efficiencies it's still kind particularly But at and of particularly transact the Haynesville moderate-to-low the kind the to of post-transaction

Derrick Whitfield

more consolidation of on that? side what the on the are minerals just your And of equation, thoughts

Carrie Clark

question. Clark. for Thanks Carrie is the This

consolidation some basis, years, off course, the on they're a from think smaller a head, the of last Sitio-Brigham I significant of of couple on been just but -- year. the in transaction relative much last top just pool, my mineral has over there space,

a that us, as as always don't nothing And what and back impact deals around, operator to on And there transaction. But don't on the point projects a we're expect as is far they consolidation that monitoring and us and we're -- company about, impact the material capital shift that the come that trying bit we're those consolidations that's understand see to what that company these impact out as course, could outlook a we on there's the based we as Chesapeake are and looking always about the different to quantify that its shift I priority and again, touch to for from consolidation, this -- and us of that think from -- I said, consolidation I mineral form anticipating. for on operator at can at monitoring front. SWN we to as one that. specific

market. we're is the I be in have just that seeing we to that that's think of kind really all thing So the share might seeing same on all you

Operator

turn this or Tom At to time, like comments closing Carter over I to call remarks. back for any the would additional

Tom Carter

for all days the and you joining again forward today, speaking thank or to XX you Well, so. call we with in look

Operator

and today's ladies for your gentlemen, Thank participation. that again, you call. Once conclude does

this time. at disconnect may You

Black Stone Minerals (BSM) 20 Feb 242023 Q4 Earnings call transcript