Black Stone Minerals reports strong results for 2023, provides outlook for 2024

Black Stone Minerals, L.P. (NYSE: BSM), a leading owner of oil and natural gas mineral interests in the United States, announced its financial and operating results for the fourth quarter and full year of 2023 and provided guidance for 2024.

The Company reported net income of $147.6 million and Adjusted EBITDA of $125.5 million for the fourth quarter of 2023, compared to net income of $109.7 million and Adjusted EBITDA of $130.8 million for the third quarter of 2023.

Distributable cash flow was $119.1 million for the fourth quarter of 2023, resulting in a distribution coverage ratio of 1.19x for all units.

The Company declared a cash distribution of $0.475 per unit for the fourth quarter of 2023, representing a 9% increase from the full year 2022 distribution level.

For the full year of 2023, the Company reported net income of $422.5 million and Adjusted EBITDA of $474.7 million, compared to net income of $287.9 million and Adjusted EBITDA of $431.5 million for the full year of 2022. Distributable cash flow was $456.8 million for the full year of 2023, resulting in a distribution coverage ratio of 1.20x for all units.

Black Stone Minerals paid total cash distributions of $1.90 per unit for the full year of 2023, representing a 9% increase from the full year 2022 distribution level.

Black Stone Minerals achieved strong operational performance in 2023, with mineral and royalty production averaging 37.4 MBoe/d, a 9% increase from the prior year. Total production, including working interest volumes, averaged 39.8 MBoe/d for the full year of 2023. The Company also strengthened its balance sheet by eliminating its outstanding debt during 2023 and ending the year with zero debt and $102.9 million of cash as of February 16, 2024.

The Company also executed on its commercial strategy of attracting capital and securing drilling commitments on its existing mineral portfolio, as well as expanding its mineral portfolio through strategic acquisitions.

In 2023, Black Stone Minerals acquired additional, non-producing mineral and royalty interests totaling $14.6 million, primarily in the Gulf Coast region. The Company plans to continue pursuing meaningful, targeted mineral and royalty acquisitions to complement its existing positions in 2024.

The Company provided guidance for 2024, projecting royalty production to increase by approximately 4% relative to full year 2023 levels, driven by the expected on-line of 24 wells in the Shelby Trough and continued development in the Austin Chalk.

This is partially offset by an expected moderation of activity in Louisiana Haynesville due to lower commodity prices. Working interest production is expected to decline in 2024 as a result of the Company’s decision in 2017 to farm out participation in its working interest opportunities.

Black Stone Minerals expects general and administrative expenses to be slightly higher in 2024 as a result of inflationary costs and selective hires made to support the Company’s ability to evaluate, market and manage its undeveloped acreage positions to potential operators.

Thomas L. Carter, Jr., Black Stone Minerals’ Chairman, Chief Executive Officer, and President, commented, “We finished the year with a strong quarter. We were able to maintain our highest distribution without any outstanding debt despite a challenging natural gas market. We expect headwinds in 2024 as natural gas prices remain depressed, but we remain encouraged by the long-term prospects for liquefied natural gas export growth and an asset base with significant inventory life that will benefit unitholders through the next decade.”