Black Stone Minerals, L.P.

Black Stone Minerals reported Q2 mineral royalty production of 32.5 MBoe/d and total production of 33.5 MBoe/d. Average realized price excluding derivative settlements increased 7% sequentially to $37.82 per Boe. Net income was approximately $106 million, adjusted EBITDA was $91 million, and distributable cash flow was $80 million. Oil and condensate represented 65% of oil and gas revenues. The quarterly distribution was declared at $0.32 per unit, or $1.28 annualized, with 1.18x coverage for the quarter. Looking ahead, management said Adamas expects another eight wells to come online during the remainder of 2026 and plans to drill 17 wells in the new program year; Caturus expects to start development drilling in the second half of 2026; and Blue Arrow has 22 remaining wells expected online during the second half of 2026 into 2027.

Taylor DeWalch framed the quarter as meaningful progress toward an inflection point in 2026, emphasizing the company’s differentiated strategy across a diversified portfolio. He highlighted stronger oil production in the Permian and Bakken, rising activity in the Haynesville, and advancing development agreements as reasons for optimism about converting activity into sustainable production and cash flow. His tone was confident but measured, stressing that the distribution increase was supported by visibility into future production and cash generation.

Chris Bonner said production was lower sequentially because of lower natural gas mineral and royalty volumes in the Haynesville, but offset by stronger oil pricing and production. He cited a 7% increase in average realized price to $37.82 per Boe, net income of approximately $106 million, adjusted EBITDA of $91 million, and distributable cash flow of $80 million. He also pointed to 1.18x distribution coverage and said the company is using debt primarily for acquisitions in the Shelby Trough while continuing to evaluate options for the preferred securities as the next window approaches.

Analysts pressed on why Black Stone felt comfortable raising the distribution, and management said it reflected a mix of stronger oil volumes, expected production ramp from development agreements, and confidence in maintaining the payout. On Haynesville growth, management said higher rig counts, operator incentives to delineate acreage, and dwindling legacy inventory are driving more activity in the Shelby Trough, with the company expecting that trend to continue into 2029 and 2030. They also said they are close to disclosing another formal Haynesville operator agreement. On capital structure, management said leverage remains peer-leading and that they will evaluate the preferred securities and broader capital allocation choices as the next open window approaches.