\nBlack Stone Minerals, L.P. (NYSE: BSM) (“Black Stone Minerals,” “Black Stone,” or “the Company”) today announces its financial and operating results for the second quarter of 2021.\n<\/p>\n
Financial and Operational Highlights<\/b><\/p>\n Management Commentary<\/b><\/p>\n \nThomas L. Carter, Jr., Black Stone Minerals\u2019 Chief Executive Officer and Chairman commented, \u201cWe posted robust operational and financial performance for the second quarter, with increases in production and realized prices. In addition to better fundamentals, our results for the quarter were bolstered by strong lease bonus payments and higher gas price realizations stemming from the February Texas storms. Most importantly, the positive results combined with our low debt levels allowed us to prioritize returning cash flow to our unitholders in the form of increased distributions. We look forward to building on this positive momentum into 2022.\u201d\n<\/p>\n Quarterly Financial and Operating Results<\/b><\/p>\n Production<\/i><\/p>\n \nBlack Stone Minerals reported mineral and royalty volume was 32.5 MBoe\/d (73% natural gas) for the second quarter of 2021, compared to 31.1 MBoe\/d for the first quarter of 2021. Mineral and royalty production for the second quarter of 2020 was 34.0 MBoe\/d.\n<\/p>\n \nWorking interest production for the second quarter of 2021 was 5.7 MBoe\/d, and represents a decrease of 1% from the levels generated in the quarter ended March 31, 2021 and a decrease of 34% from the quarter ended June 30, 2020. The continued decline in working interest volumes is consistent with the Company’s decision to farm out its working-interest participation to third-party capital providers.\n<\/p>\n \nTotal reported production averaged 38.2 MBoe\/d (85% mineral and royalty, 75% natural gas) for the second quarter of 2021. Total production was 36.8 MBoe\/d and 42.6 MBoe\/d for the quarters ended March 31, 2021 and June 30, 2020, respectively.\n<\/p>\n Realized Prices, Revenues, and Net Income<\/i><\/p>\n \nThe Company\u2019s average realized price per Boe, excluding the effect of derivative settlements, was $31.79 for the quarter ended June 30, 2021. This is an increase of 21% from $26.27 per Boe from the first quarter of 2021 and a 121% increase compared to $14.37 for the second quarter of 2020. Contributing to this increase was approximately $5.6 million in additional natural gas revenue recognized in the second quarter of 2021 due to realized price differentials during February of 2021 exceeding original Company projections.\n<\/p>\n \nBlack Stone reported oil and gas revenue of $110.4 million (49% oil and condensate) for the second quarter of 2021, an increase of 27% from $87.1 million in the first quarter of 2021. Oil and gas revenue in the second quarter of 2020 was $55.7 million.\n<\/p>\n \nThe Company reported a loss on commodity derivative instruments of $59.5 million for the second quarter of 2021, composed of a $17.4 million loss from realized settlements and a non-cash $42.1 million unrealized loss due to the change in value of Black Stone\u2019s derivative positions during the quarter. Black Stone reported losses of $27.9 million and $19.2 million on commodity derivative instruments for the quarters ended March 31, 2021 and June 30, 2020, respectively.\n<\/p>\n \nLease bonus and other income was $7.5 million for the second quarter of 2021, primarily related to leasing activity in the Austin Chalk and proceeds from surface use waivers on Black Stone\u2019s mineral acreage supporting solar development. Lease bonus and other income for the quarters ended March 31, 2021 and June 30, 2020 was $2.4 million and $2.0 million, respectively.\n<\/p>\n \nThere was no impairment for the quarters ended June 30, 2021, March 31, 2021, and June 30, 2020.\n<\/p>\n \nThe Company reported net income of $15.4 million for the quarter ended June 30, 2021, compared to net income of $16.2 million in the preceding quarter. For the quarter ended June 30, 2020, the Company reported a net loss of $8.4 million.\n<\/p>\n Adjusted EBITDA and Distributable Cash Flow<\/i><\/p>\n \nAdjusted EBITDA for the second quarter of 2021 was $78.4 million, which compares to $60.0 million in the first quarter of 2021 and $72.4 million in the second quarter of 2020. Distributable cash flow for the quarter ended June 30, 2021 was $72.1 million. For the quarters ended March 31, 2021 and June 30, 2020, distributable cash flow was $53.8 million and $64.4 million, respectively.\n<\/p>\n Financial<\/i>Position and Activities<\/i><\/p>\n \nAs of June 30, 2021, Black Stone Minerals had $1.0 million in cash and $96.0 million outstanding under its credit facility. The ratio of total debt at June 30, 2021 to trailing twelve-month Adjusted EBITDA was 0.4x. As of July 30, 2021, $81 million was outstanding under the credit facility and the Company had $6.6 million in cash.\n<\/p>\n \nDuring the second quarter, Black Stone’s borrowing base was reaffirmed at $400 million. As part of the redetermination process, the term of the credit facility was extended until November 1, 2024. Black Stone is in compliance with all financial covenants associated with its credit facility.\n<\/p>\n \nDuring the second quarter of 2021, the Company made no repurchases of units under the Board-approved $75 million unit repurchase program and issued no units under its at-the-market offering program.\n<\/p>\n Second Quarter 2021 Distributions<\/i><\/p>\n \nAs previously announced, the Board approved a cash distribution of $0.25 for each common unit attributable to the second quarter of 2021. The quarterly distribution coverage ratio attributable to the second quarter of 2021 was approximately 1.4x. The distribution is composed of a base distribution of $0.20 per unit and a special distribution of $0.05 per unit reflecting the benefit of certain one-time items including the $5.6 million in additional natural gas revenues discussed above and the $5.0 million of lease bonus in excess of the Company\u2019s original guidance of $2.5 million per quarter. Distributions will be payable on August 20, 2021 to unitholders of record as of the close of business on August 13, 2021.\n<\/p>\n Activity Update<\/b><\/p>\n Rig Activity<\/i><\/p>\n \nAs of June 30, 2021, Black Stone had 64 rigs operating across its acreage position, an increase relative to the 59 rigs on the Company’s acreage as of March 31, 2021 and the 29 rigs operating on the Company’s acreage as of June 30, 2020.\n<\/p>\n Shelby Trough Development Update<\/i><\/p>\n Angelina County San Augustine County \nIn May 2021, the Company entered into a new farmout agreement (the \u201cSecond Canaan Farmout\u201d) with Canaan Resource Partners (“Canaan”). The Second Canaan Farmout supersedes and replaces the original farmout agreement with Canaan with respect to the area in San Augustine County covered by the Aethon development agreement. The Second Canaan Farmout covers part of the Company\u2019s share of working interests under active development by Aethon in San Augustine County, Texas and continues until May 2031, unless earlier terminated in accordance to the terms of the agreement. Canaan will earn 80% of the Company\u2019s working interest in the partitioned acreage from XTO (up to a maximum of 40% on an 8\/8ths basis) and 50% of the Company\u2019s working interest in other areas (up to a maximum of 12.5% on an 8\/8ths basis) in wells drilled and operated by Aethon in accordance with the development agreement. Canaan is obligated to fund the development of all wells drilled by Aethon in the initial program year and thereafter, Canaan has certain rights and options to continue funding the Company\u2019s working interests for the duration of the Second Canaan Farmout. As of June 30, 2021, no wells had been drilled under the Second Canaan Farmout. The Company will receive an ORRI before payout and an increased ORRI after payout on all wells drilled under the Second Canaan Farmout.\n<\/p>\n Austin Chalk Update<\/i><\/p>\n \nIn April 2021, Black Stone entered into an agreement with several operators to test and develop areas of the Austin Chalk in East Texas where the Company has significant acreage positions. Recent drilling results have shown that advances in fracturing and other completion techniques can dramatically improve well performance in existing Austin Chalk fields. Under the terms of the agreement, the operators will participate in three multi-stage completion test wells targeting the Austin Chalk formation. Two of the wells under the test program are currently being drilled, and the third well has been permitted. In addition to the test program, Black Stone has entered into a development agreement with one of the operators and is negotiating separate agreements with each remaining operator to further develop the acreage.\n<\/p>\n \nIn April 2021, Black Stone also entered into an agreement with a large, private independent operator to drill and complete multiple Austin Chalk wells on Company acreage within East Texas. Black Stone expects the operator to spud two wells on the acreage in 2021. If the initial wells are successful, the operator has the option to expand the Austin Chalk development program on additional Black Stone acreage.\n<\/p>\n \nEarlier in the year, Black Stone entered into an agreement with a large, publicly traded independent operator by which the operator will undertake a program to drill, test, and complete wells in the Austin Chalk formation on certain of the Company\u2019s acreage in East Texas. The first well under this agreement is scheduled to be spud in the third or fourth quarter of 2021. If the initial wells are successful, the operator has the option to expand the Austin Chalk drilling program over a significant acreage position, the majority of which is owned and controlled by the Company.\n<\/p>\n Acquisition Update<\/i><\/p>\n \nIn May 2021, Black Stone closed on the acquisition of mineral and royalty acreage in the northern Midland Basin for total consideration of $20.8 million. The purchase price consisted of $10.0 million in cash and $10.8 million in Black Stone common units.\n<\/p>\n Update to 2021 Guidance<\/b><\/p>\n \nThe following table provides the assumptions for Black Stone\u2019s original and current 2021 guidance. Production through the first half of 2021 exceeded the Company\u2019s original guidance expectations. Production is anticipated to trend lower in the second half of 2021, driven in part by declines in mature plays such as the Bakken and Gulf Coast, and by lower natural gas volumes in the Shelby Trough as existing production declines in advance of the expected ramp-up in new drilling activity under the existing development deals.\n<\/p>\n\n
\n
<\/span>Aethon has successfully turned to sales the initial two program wells and has commenced operations on four additional wells under the development agreement covering Angelina County. Under the terms of that agreement, Aethon must drill a minimum of four wells on Black Stone acreage in the first program year ending in September 2021, escalating to a minimum of 15 wells per program year starting with the third program year.\n<\/p>\n
\n
<\/span>In May 2021, Black Stone and Aethon entered into an agreement to develop certain of the Company\u2019s undeveloped acreage in San Augustine County. The agreement provides for minimum well commitments by Aethon in exchange for reduced royalty rates and exclusive access to Black Stone\u2019s mineral and leasehold acreage in the contract area for the Haynesville and Bossier formations. The agreement calls for a minimum of five wells to be drilled in the initial program year, which begins in the third quarter of 2021, increasing to a minimum of 10 wells per year beginning with the second program year. The Company\u2019s development agreement with Aethon and related drilling commitments covering its San Augustine County acreage is independent of the development agreement and associated commitments covering Angelina County.\n<\/p>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20210802005585\/en\/464276\/3\/Black_Stone_Logo_by_BE_New_Config-Red.jpg\"){kind=logo}
<\/td>\n<\/tr>\n