bsm-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM						10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period _______________ to _______________

Commission File Number: 001-37362


Black Stone Minerals, L.P.
(Exact name of registrant as specified in its charter)


Delaware		47-1846692
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1001 Fannin Street, Suite 2020
Houston,	Texas	77002
(Address of principal executive offices)		(Zip code)


(713)			445-3200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units Representing Limited Partner Interests

BSM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 2, 2024, there were 210,689,203 common units and 14,711,219 Series B cumulative convertible preferred units of the registrant outstanding.

TABLE OF CONTENTS


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Equity	3
	Consolidated Statements of Cash Flows	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5.	Other Information	32
Item 6.	Exhibits	33

	Signatures	34

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BLACK STONE MINERALS, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)


	June 30, 2024		December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	26,669	$	70,282
Accounts receivable	73,825		82,253
Commodity derivative assets	10,967		38,273

Prepaid expenses and other current assets	3,057		2,319
TOTAL CURRENT ASSETS	114,518		193,127
PROPERTY AND EQUIPMENT
Oil and natural gas properties, at cost, using the successful efforts method of accounting, includes unproved properties of $929,291 and $890,338 at June 30, 2024 and December 31, 2023, respectively	3,078,212		3,026,394
Accumulated depreciation, depletion, amortization, and impairment	(1,983,801)		(1,961,899)
Oil and natural gas properties, net	1,094,411		1,064,495
Other property and equipment, net of accumulated depreciation of $14,349 and $14,163 at June 30, 2024 and December 31, 2023, respectively	876		1,007
NET PROPERTY AND EQUIPMENT	1,095,287		1,065,502
DEFERRED CHARGES AND OTHER LONG-TERM ASSETS	7,091		8,255
TOTAL ASSETS	$	1,216,896	$	1,266,884
LIABILITIES, MEZZANINE EQUITY, AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	5,632	$	6,270
Accrued liabilities	10,600		17,003
Commodity derivative liabilities	9,414		1,229
Other current liabilities	1,416		1,334
TOTAL CURRENT LIABILITIES	27,062		25,836
LONG–TERM LIABILITIES

Accrued incentive compensation	911		1,699
Commodity derivative liabilities	6,671		81
Asset retirement obligations	19,291		19,030
Other long-term liabilities	2,496		2,893
TOTAL LIABILITIES	56,431		49,539
COMMITMENTS AND CONTINGENCIES (Note 7)
MEZZANINE EQUITY
Partners' equity – Series B cumulative convertible preferred units, 14,711 units outstanding at June 30, 2024 and December 31, 2023	300,478		299,137
EQUITY
Partners' equity – general partner interest	—		—
Partners' equity – common units, 210,682 and 209,991 units outstanding at June 30, 2024 and December 31, 2023, respectively	859,987		918,208
TOTAL EQUITY	859,987		918,208
TOTAL LIABILITIES, MEZZANINE EQUITY, AND EQUITY	$	1,216,896	$	1,266,884

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BLACK STONE MINERALS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per unit amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REVENUE
Oil and condensate sales	$	73,889	$	61,551	$	145,113	$	122,460
Natural gas and natural gas liquids sales	36,493		41,619		78,504		99,042
Lease bonus and other income	4,789		2,527		8,337		6,502
Revenue from contracts with customers	115,171		105,697		231,954		228,004
Gain (loss) on commodity derivative instruments	(5,547)		11,303		(16,837)		63,574
TOTAL REVENUE	109,624		117,000		215,117		291,578
OPERATING (INCOME) EXPENSE
Lease operating expense	2,579		2,866		5,011		5,534
Production costs and ad valorem taxes	13,469		12,844		26,507		25,511
Exploration expense	14		4		17		8
Depreciation, depletion, and amortization	11,356		10,421		22,995		21,568

General and administrative	13,395		11,854		27,485		24,502
Accretion of asset retirement obligations	321		250		638		495

TOTAL OPERATING EXPENSE	41,134		38,239		82,653		77,618
INCOME (LOSS) FROM OPERATIONS	68,490		78,761		132,464		213,960
OTHER INCOME (EXPENSE)
Interest and investment income	462		373		1,132		530
Interest expense	(626)		(645)		(1,255)		(1,459)
Other income (expense)	(4)		(97)		(92)		(196)
TOTAL OTHER EXPENSE	(168)		(369)		(215)		(1,125)
NET INCOME (LOSS)	68,322		78,392		132,249		212,835

Distributions on Series B cumulative convertible preferred units	(7,366)		(5,250)		(14,733)		(10,500)
NET INCOME (LOSS) ATTRIBUTABLE TO THE GENERAL PARTNER AND COMMON UNITS	$	60,956	$	73,142	$	117,516	$	202,335
ALLOCATION OF NET INCOME (LOSS):
General partner interest	$	—	$	—	$	—	$	—
Common units	60,956		73,142		117,516		202,335
	$	60,956	$	73,142	$	117,516	$	202,335
NET INCOME (LOSS) ATTRIBUTABLE TO LIMITED PARTNERS PER COMMON UNIT:
Per common unit (basic)	$	0.29	$	0.35	$	0.56	$	0.96
Per common unit (diluted)	$	0.29	$	0.35	$	0.56	$	0.95
WEIGHTED AVERAGE COMMON UNITS OUTSTANDING:
Weighted average common units outstanding (basic)	210,703		209,967		210,679		209,954
Weighted average common units outstanding (diluted)	210,703		209,967		210,679		224,923

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BLACK STONE MINERALS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)


	Common units	Partners' equity
BALANCE AT DECEMBER 31, 2023	209,991	$	918,208
Repurchases of common units	(287)	(4,381)


Restricted units granted, net of forfeitures	952	—
Equity–based compensation	—	5,431
Distributions	—	(99,899)
Charges to partners' equity for accrued distribution equivalent rights	—	(595)
Distributions on Series B cumulative convertible preferred units	—	(7,367)
Net income (loss)	—	63,927
BALANCE AT MARCH 31, 2024	210,656	$	875,324
Repurchases of common units	(4)	(68)

Issuance of common units for property acquisitions	64	1,039
Restricted units granted, net of forfeitures	(34)	—
Equity–based compensation	—	1,935
Distributions	—	(79,014)
Charges to partners' equity for accrued distribution equivalent rights	—	(185)
Distributions on Series B cumulative convertible preferred units	—	(7,366)
Net income (loss)	—	68,322
BALANCE AT JUNE 30, 2024	210,682	$	859,987


	Common units	Partners' equity
BALANCE AT DECEMBER 31, 2022	209,407	$	911,451
Repurchases of common units	(358)	(5,496)


Restricted units granted, net of forfeitures	914	—
Equity–based compensation	—	5,052
Distributions	—	(99,600)
Charges to partners' equity for accrued distribution equivalent rights	—	(733)
Distributions on Series B cumulative convertible preferred units	—	(5,250)
Net income (loss)	—	134,443
BALANCE AT MARCH 31, 2023	209,963	$	939,867



Restricted units granted, net of forfeitures	5	—
Equity–based compensation	—	2,076
Distributions	—	(99,734)
Charges to partners' equity for accrued distribution equivalent rights	—	(471)
Distributions on Series B cumulative convertible preferred units	—	(5,250)
Net income (loss)	—	78,392
BALANCE AT JUNE 30, 2023	209,968	$	914,880

The accompanying notes are an integral part of these unaudited consolidated financial statements.

BLACK STONE MINERALS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	132,249	$	212,835
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion, and amortization	22,995		21,568

Accretion of asset retirement obligations	638		495
Amortization of deferred charges	536		513
(Gain) loss on commodity derivative instruments	16,837		(63,574)
Net cash (paid) received on settlement of commodity derivative instruments	25,616		41,469
Equity-based compensation	4,588		4,635


Changes in operating assets and liabilities:
Accounts receivable

SEC Form 10-Q filed by Black Stone Minerals L.P.