Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Black Stone Minerals LP (BSM, Financial) reported solid results with total production in line with the first quarter at 40,400 BOE per day.
- The company generated $68 million of net income and over $100 million of adjusted EBITDA in the second quarter.
- BSM maintained its distribution at $37.5 per unit, utilizing excess coverage for growth opportunities.
- The company added $26.5 million in minerals and royalty acquisitions during the quarter, enhancing its asset position.
- BSM has a strong balance sheet with no outstanding borrowings on its $375 million credit facility and over $61 million in cash.
Negative Points
- The natural gas market continues to experience a downturn, impacting overall revenue.
- There was a delay in initial production from some wells, affecting expected output timelines.
- The company is unable to provide definitive information on Aethon's operational status, leading to uncertainty.
- BSM is not disclosing detailed information about its Gulf Coast acquisition program, which may concern investors seeking transparency.
- The company is facing challenges in fully realizing production potential due to market dynamics and operational delays.
Q & A Highlights
Q: Can you clarify the delayed initial production from some wells in the second quarter? Are they deferred, or is production being choked back?
A: Taylor Dewalch, Senior Vice President, Chief Financial Officer, explained that the delay was specific to previously announced wells. Eight of the ten wells have come online, and the remaining two are expected in the second half of the year.
Q: Has Aethon officially come out of the "timeout" they entered in December?
A: Carrie Clark, Senior Vice President & Chief Commercial Officer, stated that they are still in discussions with Aethon regarding a formal declaration of coming out of timeout. Three new wells started in February, but initial production rates are not yet available.
Q: Why is there limited disclosure about the emerging Gulf Coast area mineral acquisitions?
A: Carrie Clark mentioned that they are not publicly discussing the acquisition program in detail to maintain strategic advantage. They are working to assimilate a position that aligns with their scientific and technical evaluations.
Q: What is the status of the mineral and royalty acquisitions?
A: Thomas Carter, Chairman and CEO, noted that they added $26.5 million in acquisitions during the quarter, totaling about $65 million since September 2023. They continue to see opportunities to enhance their asset position.
Q: How is Black Stone Minerals positioned financially for the remainder of the year?
A: Taylor Dewalch highlighted that the company has a strong balance sheet with no outstanding borrowings on their $375 million credit facility and over $61 million in cash. They are well-hedged for 2024, with 60% of expected volumes hedged to mitigate price volatility.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
