Black Stone Minerals Raises Unit Distribution for a Second Quarter

The Tip Desk · November 3, 2026 · 4 min read

The mineral-interest owner lifted the common-unit payout to $0.35, up 9% from the prior quarter, as distributable cash flow reached $93.0 million.

Black Stone Minerals, L.P. (BSM), a large owner of oil and natural gas mineral and royalty interests, raised its common-unit distribution for a second consecutive quarter to $0.35, a 9% increase from the prior quarter and 17% above the first-quarter payout of $0.30. Coverage was 1.25x. The payout is payable November 13, 2026, to unitholders of record on November 6.

The increase followed a 7% rise in the second-quarter distribution. Distributable cash flow was $93.0 million in the third quarter, compared with $80.4 million in the second quarter. Adjusted EBITDA was $104.1 million.

Mineral and royalty production averaged 34.5 MBoe/d, 73% natural gas, reversing a 9% sequential decline in the second quarter, when volumes were 32.5 MBoe/d. Total production including working interest was 35.6 MBoe/d. Co-CEO and President Taylor DeWalch said the quarter reflected increased development activity and higher oil production and revenue, with leasing and portfolio management supporting further development of oil acreage as natural gas programs continued to ramp.

Oil and gas revenue was $122.7 million, 63% oil and condensate, after a 2% sequential decline in the second quarter. The average realized price excluding derivatives was $37.44 a Boe. Lease bonus and other income was $7.2 million.

Net income was $52.4 million, down from $106.4 million in the second quarter, as a $30.2 million loss on commodity derivatives replaced a $26.8 million gain. The derivative loss included a $0.4 million realized-settlement loss and a $29.8 million non-cash unrealized loss. Net income attributable to common units was $0.21 a unit.

As of September 30, 2026, cash was $5.5 million and $195.0 million was drawn under the credit facility. As of October 30, cash was $5.4 million and debt was $197.0 million. The borrowing base was reaffirmed at $580.0 million on October 30, with total commitments held at $375.0 million. The next regularly scheduled redetermination is set for April 2027. The Partnership said it is in compliance with all financial covenants.

In October 2026, Black Stone entered an amended and restated development agreement with an affiliate of Caturus Energy that expanded the contract area by 730,000 gross acres to 950,000 gross acres and added two development areas primarily in Houston, Trinity, and Polk counties. Caturus had drilled a pilot well in Cherokee County in the third quarter and spud two development wells in October, expected to begin production in the first half of 2027. Co-CEO Fowler Carter said the two additional development areas and a long-term program expand the Caturus footprint in the Shelby Trough.

Adamas Energy was operating two rigs on Angelina and San Augustine acreage and turned 7 gross wells to sales in the quarter. Of 14 wells spud in the program year ended June 30, 2026, 9 gross had turned to sales as of September 30, with 4 gross expected to turn in the fourth quarter. Adamas had spud 6 of 17 wells expected in the program year ending June 30, 2027. Revenant Energy was operating one rig on 270,000 gross acres and had drilled 2 wells expected to turn to sales by year-end; it spud the remaining 2 wells in early October, with production expected in mid-2027. A September amendment increased the 2027 drilling commitment by 7,000 gross lateral feet.

In the Permian, Blue Arrow Operating is progressing a 25 gross well development in the southern Delaware Basin; 10 gross wells had turned to sales as of September 30, with the rest expected online in the fourth quarter of 2026 and the first half of 2027.

Black Stone acquired $14.6 million of additional primarily non-producing mineral and royalty interests in the third quarter. In October it bought additional mineral, royalty, and surface interests in the expanded Shelby Trough for $30.6 million in cash and $2.1 million in common units. From September 2023 through October 2026, it completed $335.5 million of acquisitions. Hedge contracts cover portions of anticipated production for 2026, 2027, and 2028.