BSM · Black Stone Minerals, L.P.

Black Stone Minerals delivered a mixed first quarter 2026, marked by strong operational execution but significant earnings pressure from commodity derivatives. Production growth was robust—mineral and royalty volumes rose 16% quarter-over-quarter to 35.9 MBoe/d, fueled by accelerated natural gas drilling in the Haynesville and Shelby Trough and sustained oil output in the Permian. However, net income collapsed to $13.3 million from $72.2 million in Q4 2025, almost entirely attributable to a $64.6 million loss on derivatives, comprising a $12.2 million realized loss and a $52.3 million unrealized loss tied to mark-to-market volatility—including dislocations from Winter Storm Fern and geopolitical uncertainty impacting March oil pricing. Despite this, core operating performance remained solid: Adjusted EBITDA grew 13% QoQ to $87.0 million, and distributable cash flow reached $76.5 million, comfortably covering the $0.30/unit distribution at 1.20x coverage. Management emphasized execution across multiple development agreements—Adamas advanced its Shelby Trough program with 4 wells spud and 7 turned to sales, Revenant began drilling under its amended 6-well 2026 commitment (though one well encountered a control incident), and Caturus Energy’s new 220,000-acre agreement launched with plans for pilot wells and ramp-up to 12 gross wells annually by 2031. Acquisition activity also continued, adding $11.5 million in Q1 and bringing the total since late 2023 to $251.0 million—reinforcing Black Stone’s strategy of consolidating high-net-interest positions in emerging resource trends. With debt reduced to $164.0 million as of May 1 and the borrowing base reaffirmed at $580.0 million, the Partnership maintains strong financial flexibility to fund ongoing development and acquisitions through 2026 and beyond.