Black Stone Minerals LP saw mineral and royalty production decrease by roughly 8.6% quarter-over-quarter—a plunge in volumes the company blamed on muted activity in the Haynesville Shale.
The company reported mineral and royalty volumes of 33,600 boe/d (74% natural gas) for second-quarter 2023, compared to 36,800 boe/d in the first quarter. Volumes were still up compared to second-quarter 2022, when volumes were 30,300 boe/d.
“The decrease was primarily driven by lower volumes in the Louisiana Haynesville where rig count and activity have pulled back in response to lower natural gas prices,” the company said in a July 31 press release. “This was partially offset by increased oil volumes compared to the first quarter which was led by several high interest properties coming online in the Bakken.”
Despite the decrease in second-quarter production, Black Stone reported net income of $78.4 million.
Black Stone expects the increases in activity in the Shelby Trough and Austin Chalk to drive up full year production volumes, reaching the original guidance range of 37,000 boe/d to 39,000 boe/d.
“We continue to execute on our plans for the year and are starting to see increased volumes in the Shelby Trough as Aethon continues to ramp up production consistent with our development agreements,” Thomas L. Carter, Jr., Black Stones Minerals’ chairman and CEO, said in a press release.
Adjusted EBITDA for the quarter totaled $109.2 million, which compares to $109.9 million in the first-quarter 2023 and $112.8 million in second-quarter 2022. Distributable cash flow for the quarter ended June 30, 2023 was $103.6 million, making it the fifth consecutive quarter Black Stone has posted cash flow of more than $100 million.
Black Stone announced a distribution of $0.475 per unit for second-quarter 2023, representing an increase of 13% over the common distribution paid in second-quarter 2022. Distribution coverage for all units was 1.04x. These distributions will be paid on Aug. 18, 2023, to unitholders of record as of the close of business on Aug. 11, 2023.
Total outstanding debt at the end of the second quarter was zero; as of July 28, 2023, total debt remained at zero with $81.4 million of cash.
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