Black Stone Minerals raises distribution as realized prices climb
The mineral rights owner reported distributable cash flow of $80.4 million for the second quarter.
Black Stone Minerals (BSM) increased its quarterly distribution following a rise in realized commodity prices that offset a decline in production volumes. The mineral rights owner raised its distribution to $0.32 per unit, a 7% increase over the $0.30 per unit paid in the first quarter.
The company reported a trajectory of improving margins despite fluctuating output. Average realized price per Boe, excluding derivatives, rose to $37.82 in the second quarter, up 7% from $35.30 in the first quarter and 17% higher than the $32.40 recorded in the second quarter of the previous year.
Net income for the second quarter was $106.4 million, an increase from $13.3 million in the first quarter, though down from $120.0 million in the second quarter of 2024. Oil and gas revenue fell 2% sequentially to $115.4 million from $117.5 million, but rose from $102.0 million in the same period last year.
Production volumes trended lower during the period. Mineral and royalty production averaged 32.5 MBoe/d, a 9% decrease from 35.9 MBoe/d in the first quarter and a slight decline from 33.2 MBoe/d in the second quarter of 2024. Total reported production, which includes working-interest, averaged 33.5 MBoe/d, down from 37.0 MBoe/d in the prior quarter.
Financial performance remained steady on an adjusted basis. Adjusted EBITDA rose to $91.3 million, up from $87.0 million in the first quarter and $85.6 million in the second quarter of 2024. Distributable cash flow followed a similar path, increasing to $80.4 million from $76.5 million in the first quarter.
Operational adjustments occurred in May 2024 when the company amended its development agreement with Revenant Energy. The amendment reduced the Program Year 1 drilling commitment from six wells to four following a well control incident in April.
Black Stone Minerals continued its acquisition strategy, spending $37.2 million on additional mineral and royalty interests during the quarter. This brought total acquisitions since September 2023 to $299.7 million. Total debt increased to $196.0 million by the end of the second quarter from $187.0 million at the end of the first quarter.