Black Stone Minerals(BSM) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total production for Q2 2024 was 40,400 BOE per day, consistent with Q1 2024, generating $68 million in net income and over$100 million in adjusted EBITDA [5][9] - The distribution was maintained at $0.375 per unit, with excess coverage utilized for growth opportunities [5][10] - Distributable cash flow for the quarter was$92.5 million, representing a coverage ratio of 1.17x [9][10] Business Line Data and Key Metrics Changes - Mineral and royalty production was 38,200 BOE per day, flat compared to the previous quarter [9] - An increase in oil volumes helped offset the downturn in the gas market [9] Market Data and Key Metrics Changes - The company has hedged over 60% of expected volumes for the remainder of 2024, with natural gas hedges at approximately $3.55 per MMBtu compared to an average price of about$2 per MMBtu at Henry Hub for Q2 [10][11] Company Strategy and Development Direction - The company is focused on organic growth and targeted acquisitions to enhance its asset base and development opportunities [5][7] - A targeted grassroots acquisition program was initiated to enhance existing asset positions, with $26.5 million in minerals and royalty acquisitions added during the quarter [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term decision-making opportunities and a constructive outlook for natural gas [6] - The company is preparing for anticipated improvements in the natural gas market while maintaining a strong balance sheet [6][10] Other Important Information - The company has added 8 wells in the second quarter with initial production rates between 25 million to 30 million cubic feet per day [8] - The company continues to work with multiple operators to promote development on its acreage [7] Q&A Session Summary Question: Clarification on delayed initial production from Aethon wells - Management clarified that the delayed production refers to previously announced wells, with 8 of 10 expected to come online in the second half of the year [12] Question: Status of Aethon coming out of timeout - Management indicated ongoing discussions with Aethon regarding their status, with new wells having come online but no definitive updates available [13][14] Question: Details on undisclosed Gulf Coast mineral acquisitions - Management stated that they are not disclosing details publicly as they are still assimilating a position that is accretive to their existing assets [15]