Black Stone Minerals LP (BSM) Reports 20% Increase in Q3 Production and Zero Debt
Black Stone Minerals LP (NYSE:BSM) reported a 20% increase in mineral and royalty production for Q3 2023 compared to the previous quarter.
The company reported a net income of $62.1 million for the third quarter and a total outstanding debt of zero.
BSM announced a distribution of $0.475 per unit for Q3 2023, a 6% increase from the same period in 2022.
The company also approved a $150 million common unit repurchase program.
Black Stone Minerals LP (NYSE:BSM) released its financial and operating results for the third quarter of 2023 on October 31, 2023. The company reported a 20% increase in mineral and royalty production, reaching 40.3 MBoe/d. The total production, including working-interest volumes, was 42.6 MBoe/d for the quarter.
Financial Highlights
The company reported a net income of $62.1 million for the third quarter. The adjusted EBITDA for the quarter totaled $130.0 million. The distributable cash flow was $124.4 million for the third quarter, marking the sixth consecutive quarter above $100 million. As of the end of the third quarter, the total outstanding debt was zero, with $90.6 million of cash.
Black Stone announced a distribution of $0.475 per unit for the third quarter of 2023, representing a 6% increase over the common distribution paid for the third quarter of 2022. The distribution coverage for all units was 1.25x. The company also approved a $150 million common unit repurchase program.
Thomas L. Carter, Jr., Black Stone Minerals Chairman, Chief Executive Officer, and President, commented, We had a very strong third quarter driven by production exceeding our expectations and improving commodity prices. As a result, Black Stone was able to maintain its distribution at an annualized rate of $1.90 per unit with over 1.25x coverage for the quarter. With our existing development contracts and robust activity on our acreage, we now believe our production for the full year will come in at the upper end of our guidance range of 37 to 39 Mboe per day.
Operational Highlights
Black Stone Minerals reported mineral and royalty volume of 40.3 MBoe/d for the third quarter of 2023, compared to 33.6 MBoe/d for the second quarter of 2023 and 37.3 MBoe/d for the third quarter of 2022. The increase was primarily driven by new wells coming online in the Permian and the Shelby Trough.
The company's average realized price per Boe, excluding the effect of derivative settlements, was $34.30 for the quarter ended September 30, 2023. This is an increase of 9% from $31.35 per Boe in the second quarter of 2023 and a 42% decrease from $59.30 in the third quarter of 2022.
Black Stone reported oil and gas revenue of $134.5 million for the third quarter of 2023, an increase of 30% from $103.2 million in the second quarter of 2023. Oil and gas revenue in the third quarter of 2022 was $218.0 million.
Looking Forward
With the strong performance in Q3, Black Stone Minerals expects total production for 2023 to be at the upper end of the guidance range of 37 to 39 Mboe/d. The company also expects lease operating expenses to be in line with the revised guidance range of $11 to $12 million and production costs as a percentage of oil and gas revenues to be in line with the revised guidance range of 10% to 12%.
Explore the complete 8-K earnings release (here) from Black Stone Minerals LP for further details.
This article first appeared on GuruFocus.
