Black Stone Minerals Q4 2025 Earnings Report

Black Stone Minerals EPS Results

• Actual EPS: $0.31
• Consensus EPS: $0.27
• Beat/Miss: Beat by +$0.04
• One Year Ago EPS: N/A

Black Stone Minerals Revenue Results

• Actual Revenue: $118.70 million
• Expected Revenue: $98.08 million
• Beat/Miss: Beat by +$20.62 million
• YoY Revenue Growth: N/A

Black Stone Minerals Announcement Details

• Quarter: Q4 2025
• Date: 2/23/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, February 24, 2026
• Conference Call Time: 10:00AM ET

Black Stone Minerals (NYSE:BSM) L.P. (NYSE: BSM) is a publicly traded limited partnership that acquires and manages oil and natural gas mineral interests and producing royalty interests across the United States. The company’s business model centers on holding fractional ownership in subsurface mineral estates, which allows it to earn royalty income from hydrocarbon production without taking on the capital expenditures or operating risks associated with exploration and development.

Founded in 1876 and headquartered in Houston, Texas, Black Stone Minerals has built a diversified portfolio spanning key U.S. onshore plays. Its acreage touches major basins such as the Permian, Eagle Ford, Bakken and Anadarko, and the partnership also maintains non-operated royalty positions in federal waters of the Gulf of Mexico. This geographic breadth provides exposure to a variety of commodity price environments and drilling technologies.

The partnership’s strategy involves leasing mineral interests to exploration and production companies in exchange for lease bonus payments and ongoing royalties based on production volumes and prices. By structuring agreements with established operators, Black Stone Minerals captures value from drilling activity and subsurface advancements while preserving capital and limiting operational responsibilities.

Led by President and Chief Executive Officer Bradley J. Pierce, Black Stone Minerals leverages a dedicated team of geoscientists, land professionals and financial specialists to evaluate new acquisitions and optimize existing assets. The partnership continues to pursue selective mineral interest purchases and organic leasing opportunities to enhance its acreage footprint and maintain a steady stream of royalty revenues.

Black Stone Minerals Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company signed multiple development agreements (Revenant, Caturus, Aethon) that place roughly 500,000 gross acres into development with minimum drilling commitments ramping to 37 gross wells per year by 2031 (50 gross wells including Aethon), giving long‑term visibility into activity.
• Positive Sentiment: Production ended 2025 at about 32,000 BOE per day and management expects production to be materially growing through 2026 with a quarter‑by‑quarter step‑up, even though full‑year guidance is roughly flat year‑over‑year.
• Neutral Sentiment: Q4 net income was $72.2 million with adjusted EBITDA of $76.7 million; the partnership declared a $0.30 per‑unit quarterly distribution (1.05x DCF coverage) and says it is confident, supported by hedges and contracted development, in funding distributions.
• Negative Sentiment: Black Stone is funding two proprietary 3D seismic surveys (~360,000 gross acres) with the majority of costs expected in 2026; the near‑term expense will be excluded from adjusted EBITDA per management but will pressure 2026 reported costs and cash outlays.

Presentation

[Operator]

Thank you. I'd now like to turn the call over to Natalie Liddell, Vice President, Corporate Planning. You may begin.

[Natalie Liddell, Vice President Corporate Planning at Black Stone Minerals]

Thank you. Good morning, everyone. Thank you for joining us for the Black Stone Minerals Q4 and full year 2025 earnings conference call. Today's call is being recorded and will be available on our website, along with the earnings release, which was issued last night. Before we start, I'd like to advise you that we will be making forward-looking statements during this call about our plans, expectations, and assumptions regarding our future performance. These statements involve risks that may cause our forward-looking or actual results to differ materially from the results expressed or implied in our forward-looking statements. For a discussion of these risks, you should refer to the cautionary information about forward-looking statements in our press release from yesterday and the Risk Factors section in our 2025 10-K. We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance.

[Natalie Liddell, Vice President Corporate Planning at Black Stone Minerals]

Reconciliation of those measures to the most directly comparable GAAP measure and other information about these non-GAAP metrics are described in our earnings press release from yesterday, which can be found on our website at www.blackstoneminerals.com. Joining me on the call from the company are Tom Carter, Executive Chairman, Taylor DeWalch, Co-CEO and President, Fowler Carter, Co-CEO and President, Steve Putman, Senior Vice President and General Counsel, Chris Bonner, Senior Vice President, Chief Financial Officer, and Treasurer. I'll now turn over the call over to Fowler.

[Fowler Carter, Co-CEO and President at Black Stone Minerals]

Thank you, Natalie. Good morning, everyone, thank you for joining us on our Q4 earnings call. If you look at our earnings release from last night, you'll see that we had a great 2025, despite headwinds from production and oil prices. During the year, we achieved significant commercial milestones that will benefit our future production for years to come. We successfully signed development agreements with Revenant Energy and Katouris Energy. These deals place approximately 500,000 gross acres into development, with minimum drilling commitments ramping up to 37 gross wells per year by 2031 from those programs, and including Aethon, a total of 50 gross wells over the same period. Aethon also recently brought several new wells online in the Shelby Trough at about 25MMcf-30 MMcf a day, with another five wells expected to come online in the Q1.

[Fowler Carter, Co-CEO and President at Black Stone Minerals]

An additional 18 wells are expected to be drilled throughout 2026. Also in 2026, we expect that Revenant will spud more than its minimum six-well commitment, and Caturus plans to drill its initial wells, including a pilot well. We are also seeing increased activity from others in the Shelby Trough as the industry moves towards available inventory to meet the growing natural gas demand. In addition to these developments, we are building another new opportunity in our Haynesville expansion area that we believe will add significant inventory and scale to the current developments. Based on existing subsurface analysis, we believe we can continue to expand the Shelby Trough and Haynesville Basin towards the Western Haynesville.

[Fowler Carter, Co-CEO and President at Black Stone Minerals]

With our continued focus of increasing production from existing assets and driving long-term value for our unitholders, we have also entered into a LOI with a reputable operator with experience in the Haynesville on a meaningful amount of acreage in the Gulf Coast region outside of our recent focus areas. Our acquisition program remains on track as well. Since launching the program in 2023, we've invested about $240 million to add accretive mineral and royalty acreage across the Shelby Trough and Haynesville expansion area. We remain confident that the combination of these commercial initiatives will lead to significant growth and value for our unitholders. With that, I will hand the call over to Taylor.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Thanks, Fowler. Good morning, everyone. Adding on to Fowler's commentary, we're excited about the increased activity and the ramp in production that we expect throughout 2026. We ended 2025 and began 2026 at about 32,000 BOE per day. We see that materially growing throughout 2026. While production guidance is roughly flat year-over-year, we see solid growth from Q4 2025-Q4 2026. Our fall investor presentation showed that 2026 is anticipated to be just the beginning of new activity in the Shelby Trough. We expect significant increases in natural gas production and distributions for BSM unitholders over the coming years.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

We have, one, substantial industry-leading inventory on our acreage in the Shelby Trough and Haynesville expansion, and two, advantageous proximity to the Gulf Coast and key demand centers, we are optimistic about the long-term growth for our unitholders. The team has done a phenomenal job the last several years delineating and marketing the Haynesville expansion area and securing the development agreements. We are now preparing to manage the growth and activity through these development agreements with our operating partners. As noted in our release last night, we are strategically increasing G&A in 2026 to support this increase in activity. We remain focused on disciplined capital management and our comprehensive commercial strategy, including grassroots acquisitions, high-interest development agreements, new development opportunities, and proactive asset management across all basins. Those efforts support our goal of delivering near-term and long-term value for Black Stone Minerals' unitholders.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

With that, I'll hand over the call over to Chris to walk through the financial details for the quarter and full year.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Thanks, Taylor. Good morning, everyone. In the Q4, mineral and royalty production was 30900 BOE per day, a decrease of 11% from the prior quarter. Total production for the quarter was 32100 BOE per day. We completed the year at the high end of the updated guidance. As discussed in the release last night, our updated guidance last year reflected lower natural gas-directed drilling activity and volume levels in the Shelby Trough over the last couple of years. We expect 2026 to be a turning point, with new and increased development in the Shelby Trough and Haynesville expansion areas, along with high-interest projects in the Permian Basin and ongoing development across our broader assets. We continue to monitor increasing activity levels in the Haynesville and commodity price dynamics as we look towards 2026 production and distribution.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

The partnership is also in the process of shooting two substantial 3D seismic surveys in the Shelby Trough and Haynesville expansion area, covering about 360,000 gross acres. While initiating and funding these surveys is not typical for Black Stone Minerals, we believe it allows us to control the timing, pace, and focus of the data, highlighting our minerals and supporting their development under our contracted agreements. Most of the remaining costs for these surveys are expected to be incurred in 2026, with completion targeted for early 2027. They are subject to partial reimbursement, with reported costs reflecting Black Stone Minerals' share, while the partnership retains full ownership of the data. Over time, the proprietary nature of these surveys may provide opportunities to license the data to industry, potentially generating additional revenue.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Together with these supplemental seismic purchases, these assets are expected to enhance subsurface evaluation, further unlock the value of our mineral royalty acreage, and accelerate development of that acreage. To better reflect how we view these investments, we've updated the presentation of adjusted EBITDA and distributable cash flow to exclude seismic acquisition costs. Turning to the quarter's financial results, net income was $72.2 million for the Q4, with adjusted EBITDA at $76.7 million. 51% of oil and gas revenue in the quarter came from oil and condensate production. As previously announced, we declared a distribution of $0.30 per unit for the quarter, or $1.20 on an annualized basis. Distributable cash flow for the quarter was $66.8 million, which represents 1.05x coverage for the period.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

As Fowler and Taylor mentioned earlier, the partnership's outlook remains strong, anchored by long-term contracted development in our high-interest Shelby Trough acreage, as well as our core legacy assets across the U.S. With growing demand from LNG and electric power generation, the outlook for natural gas is increasingly constructive over the next decade. Our significant assets near Gulf Coast LNG facilities position Blackstone to benefit from the substantial call on gas supply, which we expect to increase over the coming years. In conclusion, we had a successful 2025 on many fronts, setting the partnership up for a great 2026 and beyond. We remain confident that our existing acreage positions across numerous basins, coupled with our commercial strategy and the expanded Shelby Trough, will provide a strong foundation to deliver sustainable long-term value for unitholders. With that, I'd like to open up the call for questions.

[Operator]

Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, simply press star one again. Your first question today comes from the line of Derrick Whitfield from Texas Capital. Your line is open.

[Derrick Whitfield, Managing Director at Texas Capital]

Good morning, guys, and thanks for your time.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Morning, Derrick.

[Derrick Whitfield, Managing Director at Texas Capital]

Regarding guidance for the year, while I realize some of this is beyond your control, how should we think about the cadence of production from four key levels throughout 2026 based on the known developments?

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Derrick, this is Taylor, I'll start out with that. I mean, I think when we look back to 2025, kind of midyear along with kind of our investor presentation, we really pointed to where we thought production was headed, based on the last couple of years' kind of activity in the Shelby Trough and the decreased activity there. Where we end 2025 is where we think we're going to start 2026, which is what we've kind of alluded to in the release last night and mentioned in our script this morning. I think that where that puts us for the full year is reflected kinda in the guidance.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Again, we think, we're gonna be increasing materially throughout the course of 2026, and most of that is attributable to new development agreements, as well as Permian production and those high-interest developments out west.

[Derrick Whitfield, Managing Director at Texas Capital]

Taylor, would you expect it to kind of stall out at the kind of Q1 to maybe Q4 level for Q1, and then kind of step up each quarter progressively? Or would there be more lumpiness than what I just suggested?

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

No, I think that's right. You'll see it start to step up. As we've mentioned, we've got some wells coming on here in the beginning of the year, specifically related to Aethon. Then we see activity increasing throughout the year.

[Derrick Whitfield, Managing Director at Texas Capital]

Great, for my follow-up, in your commentary, you referenced efforts to build new opportunities to further expand your asset base and add new development agreements in both the Shelby Trough and Haynesville expansion area. I guess, looking ahead, how would you characterize the pipeline of potential new development agreements? Are these conversations primarily with new operators in the basin or extensions with existing operators? How should we think about the cadence and acreage scope of incremental agreements over the next 12 months-18 months?

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Derrick, I would tell you that we certainly don't discriminate against existing partners or newcomers. We welcome all parties, and while we enjoy the partnerships that are established, we are happy to continue to diversify our new developments with new partners or strengthen existing contracts with established partners.

[Derrick Whitfield, Managing Director at Texas Capital]

Great. Thanks for your time, guys.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Thanks, Derek.

[Operator]

As a reminder, it is star one to ask a question. Your next question comes from a line of Tim Rezvan from KeyBanc Capital Markets. Your line is open.

[Tim Rezvan, Managing Director at KeyBanc Capital Markets]

Hey, good morning, guys. Thank you for taking my questions. changing gears to the Permian, you know, we saw comments in the release about leasing outside of the Coterra development area. we also saw guidance for liquids, you know, down a bit in 2026 versus our expectations. Can you talk about kind of what you're pursuing in the Permian and kinda how, you know, just kind of the scale and the priority of that, given everything that's going on in the Haynesville?

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

That's sure, Tim. This is Taylor, I'll start there. You know, I think we're excited to see activity in the Permian, kind of in two different folds, if you will. We've got high interest activity from Coterra, then we mentioned another large scale, kinda high interest development that's happening in the Southern Delaware. That's a bit more proactive asset management, if you will, along with quite a bit of leasing throughout 2025 that we think points to increased activity across 2026 and 2027. I think if you look at the timing of some of this and when we see those volumes coming on, certainly we'll see some of the Coterra wells continue to come on over the course of 2026.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Some of the other activity, I think really is probably later on in 2026 and more materially in 2027. I think you'll start to see those volumes a little bit later on. No, we're excited about what's going on. Certainly excited about some of the other folks in the industry and their excitement around the Barnett, which we've also seen leasing pick up. I think there's a lot to be excited about in the Permian right now.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Yeah. The only thing I'd add there is, so we know about these high interest developments that we can model. When we're looking at where pricing is right now in the Permian, we're being thoughtful on just the broader development there and not wanting to get ahead of ourselves when it comes to forecasting the broader Permian volumes.

[Tim Rezvan, Managing Director at KeyBanc Capital Markets]

Okay. Okay, I appreciate the context. My next question, if we look at the Henry Hub strip this year, it's below $3.50 for a lot of the year into kind of the winter. You've talked about sort of maybe a flattish start to the year growing. Do you feel comfortable you can fund your $0.30 distribution through distributable cash flow without sort of leaning on liquidity for the next... I mean, Q1 will be a big aberration, we know, with $5 Henry Hub. As we look to the summer, how confident are you that you can sort of fund that without leaning on liquidity?

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Yeah, good question, and maybe I'll start off and, Chris, you want to jump in. You know, I think it really just sort of following up on what Chris just said, we've taken a stance on being really thoughtful about where we see commodity prices and activity levels, and where we think that, we've got, you know, some pretty solid development, that's gonna happen, and we're confident in that development based on our agreements, and our minimum commitments there, along with the sort of ongoing activity and, wells coming online. I would say that, we're confident that we can continue to fund the distribution, and grow throughout the year based on those minimums.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

I would just concur with that assessment and then also note that we do have strong hedges in place for natural gas throughout the year.

[Tim Rezvan, Managing Director at KeyBanc Capital Markets]

Okay. Okay, just wanted to push on that. If I can sneak one more in, I appreciate the prepared comments on the seismic. We saw that adjustment with your adjusted EBITDA in the Q4. Should we assume that that $30 million of exploration expense is all seismic? Is there a cadence to that? Is that a one-time expense? Do you expect to continue to kind of adjust that out for adjusted EBITDA? Thanks.

[Chris Bonner, SVP and CFO at Black Stone Minerals]

Yes, I can answer that. It is expense throughout the year. We do expect more of it to hit when the shoot is actually taking place in the middle of the year. It is the majority of the seismic that we forecasted. It's about 90%+ of the total. We do expect the majority of the costs related to these two specific shoots to be completed in early 2027, but primarily expense in 2026. We don't anticipate additional significant seismic costs within this development area.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

I might just add on, too, and just take that question a little bit further. Tim, you know, the seismic shoot is certainly something I think pretty unique for a company like us to do. I think when you look back at the last couple of years, we have, you know, taken a stance of putting subsurface analysis and geology first, and we're pretty convicted in the rock in the Shelby Trough and the Haynesville expansion. I think these seismic shoots are just another data point for us to, you know, further that story and really build a foundation for our operators to come in and start to develop.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

I think as Chris also mentioned, in his prepared remarks, these are proprietary shoots, so we own them and look forward to, at some point, also potentially turning those licenses to industry and generating revenue off of them. A couple different ways we're thinking about the seismic, but excited to get those shot later this year, and just keep on developing the Shelby Trough and the Haynesville expansion.

[Tim Rezvan, Managing Director at KeyBanc Capital Markets]

Yeah, I think it makes a lot of sense, so I appreciate the insight on that. That's all I had. Thank you.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Thanks.

[Operator]

There being no further questions, I will now turn the call back over to Taylor DeWalch for some final closing comments.

[Taylor DeWalch, Co-CEO at Black Stone Minerals]

Thank you, and thank you all for joining us this morning, and look forward to speaking with you all again next quarter.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Chris Bonner, SVP and CFO
• Fowler Carter, Co-CEO and President
• Natalie Liddell, Vice President Corporate Planning
• Taylor DeWalch, Co-CEO

Analysts

• Derrick Whitfield, Managing Director at Texas Capital
• Tim Rezvan, Managing Director at KeyBanc Capital Markets