Black Stone Minerals Reports Mixed Q3 Results Amid Fluctuating Commodity Prices and Strategic Developments

Black Stone Minerals, L.P. (BSM) reported its financial results for the third quarter and the nine months ended September 30, 2024, reflecting a mixed performance amid fluctuating commodity prices and strategic developments. For the three months ended September 30, 2024, total revenue increased to $134.9 million, a 22.8% rise from $109.8 million in the same period of 2023. However, for the nine months, total revenue decreased to $350.0 million, down 12.8% from $401.4 million in the prior year.

Oil and condensate sales for the third quarter were $64.0 million, a decline of 25.3% from $85.7 million in 2023, while natural gas and natural gas liquids sales fell to $37.0 million, down 24.1% from $48.8 million. The decrease in sales was attributed to lower production volumes and realized commodity prices, particularly in the Permian Basin. Notably, the company recognized a significant gain on commodity derivative instruments of $31.7 million in Q3 2024, contrasting with a loss of $26.9 million in Q3 2023, resulting in a substantial variance of $58.6 million.

Net income for the third quarter of 2024 was $92.7 million, compared to $62.1 million in the same quarter of 2023. Net income attributable to common unitholders was $85.4 million, up from $56.8 million in the prior year, leading to an increase in earnings per common unit (basic) to $0.41 from $0.27. For the nine-month period, net income totaled $225.0 million, down from $274.9 million in 2023.

The company’s cash and cash equivalents decreased significantly to $21.0 million as of September 30, 2024, from $70.3 million at the end of 2023. Total current assets also fell to $109.3 million from $193.1 million. The partnership's total assets decreased to $1.2 billion from $1.3 billion, while partners' equity declined to $867.8 million from $918.2 million.

Strategically, BSM acquired mineral and royalty interests for $65.2 million during the nine months, primarily in the Gulf Coast region, funded by cash from operating activities and equity issuance. The partnership also engaged in an asset exchange, trading undeveloped mineral acres in Mississippi for leasehold acres in East Texas. Additionally, BSM amended Joint Exploration Agreements with Aethon Energy, extending program years and allowing for the release of rights under certain acreage.

The company maintained compliance with its credit facility, which has a maximum credit amount of $1.0 billion, and reported no outstanding principal balance as of September 30, 2024. The weighted-average interest rate for the credit facility was 8.04% for the nine months ended September 30, 2024.