Q1 2024 Black Stone Minerals LP Earnings Call
Operator: Please stand by; we're about to begin. Good day and welcome to the Black Stone Minerals First Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, there will be a question and answer session. You may queue for a question at any time by pressing the star key followed by the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require operator assistance, you can press star zero. I'd now like to turn the call over to Mark Meaux, Director of Finance. Please go ahead. Thank you.
Please standby we're about to begin.
Mark Meaux: Good day and welcome to the Blackstone minerals first quarter earnings call. At this time all participants are in a listen only mode. Later, there will be a question and answer session.
Mark Meaux: Thank you for a question that any time I personally Miss Starkey, followed by the number one on your telephone keypad.
Operator: Please be advised that today's conference is being recorded if you require operator assistance you can press star zero.
Operator: I'd now like to turn the call over to Mark Muth Director of Finance. Please go ahead.
Mark Meaux: Thank you. Good morning to everyone.
Mark Meaux: Thank you good morning to everyone and thank you for joining us either by phone or online for Black Stone Minerals' first quarter 2024 earnings conference call.
Mark Meaux: Thank you for joining us either by phone or online for Black Stone Minerals' first quarter 2024 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 actual results to differ materially from those estimates.
Mark Meaux: This 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 actual results.
Mark Meaux: Express or implied in our forward-looking statement. For 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 of our 2023 10-10. We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. 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.
Mark Meaux: To differ materially from the results.
Mark Meaux: Breasts 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 of our 2023 10-K, we may refer to certain non-GAAP financial measures that we believe are useful.
Mark Meaux: In evaluating our performance 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 Dot Blackstone minerals Dot com.
Mark Meaux: Joining me on the call from the company are Tom Carter, Chairman, CEO, and President; Evan Kiefer, Senior Vice President, Chief Financial Officer and Treasurer; Carrie Clark, Senior Vice President, Chief Commercial Officer; and Steve Putman, Senior Vice President and General Counsel. I'll now turn the call over to Tom.
Mark Meaux: Joining me on the call from the company are Tom Carter, Chairman, CEO, and President Evan cheaper Senior Vice President Chief Financial Officer, and Treasurer, Gary Clark Senior Vice President Chief Commercial Officer, and Steve Putman, Senior Vice President and General Counsel I will now call I'll now turn the call over to Tom.
Mark Meaux: Yeah.
Tom: Thank you Mark.
Thomas L. Carter: Good morning, everyone, and thank you for joining us this morning to discuss the quarter. We posted a good first quarter with net income of $63.9 million and adjusted EBITDA of $104.1 million. We generated total production volumes for the first quarter of 40.3 DOE per day, a decrease of 2% from our fourth quarter. Quality volumes for the quarter were 38.9 thousand BOD per day.
Tom: Good morning, everyone and for joining us this morning to discuss the quarter.
Thomas L. Carter: We posted a good first quarter with net income of 63.9 million and adjusted EBITDA of $104 1 million.
Thomas L. Carter: We generated total production volumes for the first quarter of 43 P. L E.
Thomas L. Carter: A decrease of 2% from our fourth quarter 'twenty three bonds.
Thomas L. Carter: If your volumes for the quarter were 38 9000.
Thomas L. Carter: He per day oil.
Thomas L. Carter: Oil volumes trended down in the Midland and Delaware Basins but were partially offset by an increase in the resilient Bakken area. And despite the ongoing natural gas challenges, natural gas volumes increased from the fourth quarter in the Fayetteville, Gulf Coast, Lance, Mesa, Verity, and other trenches. Factors like these continue to illustrate the benefit of a diversified portfolio where we continue to see additions and non-core plays that contribute to new production year-over-year.
Thomas L. Carter: Oil volumes trended down in the Midland and Delaware basins.
Thomas L. Carter: We're particularly partially offset by an increase in the resilient Bakken area.
Thomas L. Carter: Despite ongoing natural gas challenges natural gas volumes increased from the fourth quarter in the Fayetteville Gulf Coast Lance may severity and other choice.
Thomas L. Carter: Factors like these continue to illustrate the benefit of a diversified.
Thomas L. Carter: Folio, where we continue to see additions in noncore plays it contribute to move production year over year.
Thomas L. Carter: Our unique asset mix is a strategic advantage that continues to consistently add long-term value to Blackstone and its unit hold. With that, let me just turn to focus on the Haynesville Bosier, which is a significant, as everyone knows, a significant long-term growth engine for Black Stone.
Thomas L. Carter: Our unique asset mix as a strategic advantage that continues to consistently add long term by Blackstone and its unit holders.
Thomas L. Carter: With that let me turn to our focus on the Haynesville Bossier, which is a significant player as everyone knows a significant long term growth engine for Blackstone.
Thomas L. Carter: In the Shelby Trough, we announced in December that one of our operators invoked a, quote unquote, timeout under the provision of our joint exploration agreement, which would allow them to see activity for a period of time. We have a good group of operators in the Shelby Trough, including XTO, ATHON, Pine Wave, Milestone, XCO, and others. And in addition, in Louisiana, we have Chesapeake, Southwestern, Comstock, and others.
Thomas L. Carter: In the Shelby trough, we announced in December that one of our operators are invoked a quote unquote time out under the provision.
Thomas L. Carter: Our provision of our joint exploration agreement, which would allow them to six.
Thomas L. Carter: Activity for a period of time.
Thomas L. Carter: We have a good group of operators in the Shelby trough being X T O Athos pine way milestone.
Thomas L. Carter: Co and others and in addition in Louisiana, we have Chesapeake southwestern.
Thomas L. Carter: Comstock and others. So we've got a great portfolio of operators.
Thomas L. Carter: So we've got a great portfolio of operators. The operator that declared a timeout, however, is currently drilling three wells and is expected to continue levels of activity there. This suggests that either the operator is no longer in timeout and back on the clock under our joint exploration agreement, or alternatively, that these operations will not qualify for contractual minimums under our contract. This just underscores the strength of the structure of our joint exploration agreements with respect to activity in various different environments and price environments on our properties. One second here; I'm just scrolling up.
Thomas L. Carter:
Thomas L. Carter: The.
Thomas L. Carter: Operator that declared a time out however is currently drilling three wells and it's expected to continue levels of activity there.
Thomas L. Carter: Suggest that either the operator is no longer in time out and back on the clock under our joint exploration agreement or Alternatively that these operations will not qualify for contractual minimums under our contract.
Thomas L. Carter: This is just underscores the strength of the structure of our joint exploration of green much with respect to activity.
Thomas L. Carter: And various different environments.
Thomas L. Carter: This environment on our properties.
Thomas L. Carter:
Thomas L. Carter: So one second here I'm just growing up.
Thomas L. Carter: We continue to work closely with our operators in all of these areas, and we do not anticipate a material impact on our volumes in Hainesville through 24, 25, even though a lot of the operators are slowing down in response to the low price environment. We believe that there are positive results continually being added to the basin, and we're very encouraged by performance on new wells in the area, ranging anywhere from 25 to 30 million cubic feet a day and pressures in excess of 10,000 pounds.
Thomas L. Carter:
Thomas L. Carter: We continue to work.
Thomas L. Carter: Work closely with our operators and all of these areas.
Thomas L. Carter:
Thomas L. Carter: And we do not anticipate.
Thomas L. Carter: A material impact.
Thomas L. Carter: Volumes in the Haynesville are through 'twenty, four 'twenty five even though a lot of the operators are slowing down.
Thomas L. Carter: In response to the low price environment.
Thomas L. Carter: We believe that there are positive results continually being added.
Thomas L. Carter: In the basin and we're very encouraged by performance on new wells.
Thomas L. Carter: In the area ranging anywhere from 25 to 30 million cubic feet, a day and pressures.
Thomas L. Carter: And it and access.
Thomas L. Carter: 10000 pounds.
Thomas L. Carter: In addition to our interest with existing operators, Blackstone has an additional 170,000 plus net acres of undeveloped inventory in the Shelby Trough with an estimated 15 TCF of resource in the ground. We look forward to that.
Thomas L. Carter: In addition to our interests with existing operators Blackstone has an additional existing 170000, plus net acres of undeveloped inventory in the Shelby trough with an estimated 15 T C L.
Thomas L. Carter: Uh huh.
Thomas L. Carter: Of <unk>.
Thomas L. Carter: Resource in the ground.
Thomas L. Carter: We look forward to that.
Thomas L. Carter: Acreage coming in juxtaposition to what we are a believer in and that is natural gas demand increases coming into 26 and beyond with the LNG export.
Thomas L. Carter: Acreage, coming in juxtaposition to what we are a believer in, and that is natural gas demand increases coming into 26 and beyond with the LNG export markets firming up and expanding. In response to lower natural gas prices, some of our operators have been involved in some curtailment, but we do not, as we said, we do not expect this to be meaningfully challenging to our bodies. As his challenging commodity price persists, we continue to focus on our long-term strategy while employing prudent balance sheet management. Our focus for several years has been centered around organic.
Thomas L. Carter: It's firming.
Thomas L. Carter: Permian up and expanding.
Thomas L. Carter: In response to lower natural gas prices some of our operators have.
Thomas L. Carter: Been involved in some curtailment, but we do not as we said we do not.
Thomas L. Carter: Expect this to be meaningfully challenging to our volume.
Thomas L. Carter: As these challenging commodity price.
Thomas L. Carter: Persist we continue to focus on our long term strategy, while employing prudent balance sheet management.
Thomas L. Carter: Our focus for several years, it's considered a rep and CIT has been centered around organic.
Thomas L. Carter: Initiatives to develop our existing asset base that has been a significant long-term adder to our production. Starting in the fourth quarter of 2023, we expanded those efforts, including targeted grassroot acquisition programs that are aimed to supplement our existing and expanding footprint in the Gulf Coast and Shelby Trough area. These efforts have allowed us to weather a lot of different cycles.
Thomas L. Carter: Initiatives to develop our existing asset base that has.
Thomas L. Carter: When a significant long term add her to our production.
Thomas L. Carter: Production starting in the fourth quarter of 'twenty, three we expanded those efforts, including targeted grassroot acquisitions program that are aimed to supplement.
Thomas L. Carter: Our existing and expanding footprint in the Gulf Coast and Shelby trough heritage.
Thomas L. Carter: These efforts have allowed us to weather a lot of different cycles.
Thomas L. Carter:
Thomas L. Carter: In 2022, we mentioned that we expected to grow production through 23 with a targeted exit rate close to 40,000 BOE per year, and we were able to execute on those expectations. Now in 24, we have set our plan to grow distribution back to the high water level mark by 2026 through production growth alongside liquefied natural gas demand that is expected to drive higher natural gas prices. We intend to capitalize on our existing portfolio and acquired acreage and add meaning to our development program in these Gulf Coast regions.
Thomas L. Carter: In 2022, we mentioned that we expected to grow production through 'twenty three with a targeted exit rate close to 40000 Boe per day and were able to execute on those ecstatic to expectations.
Thomas L. Carter: Now in 24, we have set our plan.
Thomas L. Carter: To grow the distribution.
Thomas L. Carter: Back to the high water level, Mark by 'twenty 'twenty six two projection growth alongside liquefied natural gas demand.
Thomas L. Carter: Expected to drive higher natural gas prices.
Thomas L. Carter: We intend to capitalize on our existing portfolio and acquired acreage and add meaningfully.
Thomas L. Carter: To our development program and these Gulf Coast regions, we've added over $50 million worth of non producing.
Thomas L. Carter: We've added over $50 million worth of non-produce assets since September 23, and this is just a fraction of what we intend to do going forward. Overall, it's a strong quarter, and despite a challenging commodity price environment, we're encouraged by the long-term natural gas outlook. We continue to make progress working with our key operators. Strategic Initiatives to grow and bring additional operators into our Shelby Trough area. With that, I'll ask Evan to take over.
Evan: Assets since September 23, and this is just a fraction of what we intend.
Evan: To do.
Evan: Going forward.
Evan: Overall, it's a strong quarter and despite a challenging commodity price environment.
Evan: We're encouraged by the long term natural gas outlook, we continue to make progress working to work with our key operators.
Evan: T J initiatives to grow and bringing additional operators into power.
Evan: Our Shelby trough area.
Evan: With that.
Evan: Uh huh.
Evan: I'll ask Gavin to take hold.
Evan M. Kiefer: Thank you, Tom, and good morning to everyone. As Tom pointed out, we had a positive first quarter. We generated 38.1 thousand BOE per day of mineral and royalty production for the first quarter, which was down two percent from the last quarter and 40.3 thousand BOE per day in total production volume. This resulted in a net income of $63.9 million and adjusted EBITDA for the first quarter of $104.1 million. We previously announced that we were reducing our distribution to 37.5 cents per unit, or $1.50 on an annualized basis. As reported yesterday, distributable cash flow for the quarter was $96.4 million, which represents 1.22 times coverage for the quarter.
Evan: Thank you, Tom and good morning to everyone.
Evan M. Kiefer: As Tom pointed out we had a positive first quarter, we generated $38 1000 Boe per day of mineral and royalty production for the first quarter, which was down 2% from last quarter and 43000 Boe per day and total production volumes.
Evan M. Kiefer: This resulted in a net income of $63 $9 million and adjusted EBITDA for the first quarter of $104 1 million.
Evan M. Kiefer: We previously announced that we were reducing our distribution to 37 five cents per unit or $1 50 on an annualized basis.
Evan M. Kiefer: As reported yesterday distributable cash flow for the quarter was $96 $4 million, which represents one point Q2 times coverage for the quarter.
Evan M. Kiefer: Due to the challenges with natural gas prices, production curtailments, and delays in turning wells on production, our board elected to reduce distributions and utilize the excess coverage in the first quarter towards growth opportunities. We continue to have a very strong balance sheet that gives us a lot of flexibility through these dynamic market cycles. As Tom mentioned, we have acquired approximately $50 million of non-producing mineral royalty interest. And, utilizing that excess cash from the first quarter to supplement these acquisitions, we continue to have no outstanding borrowings on our revolver.
Evan M. Kiefer: Due to the challenges with natural gas prices production curtailments and delays in turning wells on production our board elected to reduce the distribution and utilize the excess coverage in the first quarter towards growth opportunity.
Evan M. Kiefer: We continue to have a very strong balance sheet that gives us a lot of flexibility through these dynamic market cycle.
Evan M. Kiefer: Tom mentioned, we have acquired approximately $50 million of non producing mineral and royalty interests and utilizing that excess cash in the first quarter to supplement. These acquisitions. We continue to have no outstanding borrowings on our revolver as of last week, we had approximately $89 million of cash and that's prior to the payment of the distribution later this month.
Evan M. Kiefer: As of last week, we had approximately $89 million in cash, and that's prior to the payment of the distribution later this month. The borrowing base for our revolving credit facility was reaffirmed at $580 million, while we elected to hold commitments at $375 million. Yesterday, we also announced updated production guidance that reflects the challenges that we're seeing in the natural gas environment today. In response to production curtailments and a continued slowdown in bringing new production online, we're lowering our 2024 production guidance range for the full year by approximately 4% to between 38.5 thousand DOE per day and 40.5 thousand DOE per day.
Evan M. Kiefer: The borrowing base for our revolving credit facility was reaffirmed at $580 million, while we elected to hold commitments at $375 million.
Evan M. Kiefer: Yesterday, we also announced updated production guidance reflects the challenges that we're seeing in the natural gas price environment today.
Evan M. Kiefer: In response to production curtailments, and a continued slowdown in bringing new production online we're lowering our 2024 production guidance range for the full year by approximately 4%.
Evan M. Kiefer: Between 38, 5000 Boe per day, and 45000 Boe per day.
Evan M. Kiefer: As Tom mentioned, Athon has started curtailing a number of properties in the Shelby Trough and has indicated plans to delay the initial production on additional properties until later this year when prices are expected to improve. Now, off the heels of 2023, where we had natural gas hedges at over $5 per MMBTU, our 2024 natural gas hedge position is at approximately $3.55 per MMBTU. Comparing that to an average price at Henry Hub of $2.24 for MMVTU for the first quarter, we've benefited from a realized gain of approximately $14 million.
Evan M. Kiefer: As Tom mentioned Avon has started curtailing a number of properties in the Shelby trough and as indicated plans to delay the initial production on additional properties until later this year when prices are expected to improve.
Evan M. Kiefer: Now off the heels of 2023, where we had natural gas hedges at over $5 per M. N. B C. U R 2024, natural gas hedge position is at approximately $3 55 per M and Btu.
Evan M. Kiefer: Comparing that to an average price at Henry hub of $2.24 per <unk> for the first quarter, we benefited from a realized gain of approximately $14 million.
Evan M. Kiefer: We have over 60% of our expected volumes hedged for the remainder of 2024, and we have continued to add to that hedge position for 2025, both for crude and natural gas. This will continue throughout the remainder of the year. Overall, we had a positive quarter despite some headwinds created by the continued lower gas environment, but we remain focused on our commercial strategy of growing production and returning distribution to its previous high water mark.
Evan M. Kiefer: We have over 60% of our expected volumes hedged for the remainder of 2024 that will help insulate our cash flows from any continued near term pricing volatility.
Evan M. Kiefer: We have continued to add to that hedge position for 2025, both for crude and natural gas will continue throughout the remainder of the year.
Evan M. Kiefer: Overall, we had a positive quarter. Despite some headwinds created by the continued lower gas environment, but we remain focused on our commercial strategy of growing production and returning to distribution to its previous high watermark. This.
Evan M. Kiefer: This environment provides a very unique opportunity to be selectively acquisitive to the benefit of our unit holders in the next year and beyond as we continue to execute on those plans. And so with that, we'll open the call to questions.
Evan M. Kiefer: This environment provides a very unique opportunity to be selectively acquisitive as to the benefit of our unitholders in the next year and beyond as we continue to execute on this plan.
Speaker Change: And so with that we'll open the call up to questions.
Operator: Thank you. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If at any point you find your question has been answered, you may remove yourself by pressing star 2. Once again, that is star 1 to ask a question and star 2 to remove yourself. We'll go first to Derrick Whitfield by default.
Speaker Change: Thank you at this time, if you would like to ask a question. Please press star one on your telephone keypad.
Derrick Lee Whitfield: It's a data point you find your question has been answered you may remove yourself by pressing star to once again that is star one to ask a question and start to move yourself.
Operator: Well go first to Derrick Whitfield with Stifel.
Derrick Lee Whitfield: Good morning, all. Thanks for your time. Good morning, Derrick.
Derrick Lee Whitfield: Good morning, all and thanks for your time.
Derrick Lee Whitfield: Good morning Derik.
Derrick Lee Whitfield: For my first question, I wanted to focus on your 2024 guidance. With your lower guidance, could you help frame how you're thinking about the cadence of production throughout the year? And, while clearly price-dependent and not as material as some might think? What is your assumption about curtailment in your gut?
Derrick Lee Whitfield: Well My first question I wanted to focus on your 2024 guidance with your lowered guidance could you help frame, how you're thinking about the cadence of production throughout the year.
Derrick Lee Whitfield: And while clearly price dependent and not as material as some might think.
Derrick Lee Whitfield: What is your assumption on curtailments in your guidance.
Evan M. Kiefer: Yeah, Derrick, this is Evan. And I'll start with that. You know, one of the things we're looking at, not only just from public guidance, whether it's Chesapeake has come out and said that they intend on delaying wells through the next quarter, as well as what ATHON has indicated as well, what we're really looking at is, you know, average pricing in the third quarters, call it on average $2.50; the fourth quarter is closer to $3.
Derrick Lee Whitfield: Yeah, Derrick this is Evan and I'll start with that.
Evan M. Kiefer: One of the things we're looking at not only just from public guidance, whether it's you know.
Evan M. Kiefer: That's the peak has come out and said that they intend underlain wells for through the next quarter as well as what Avon hasn't indicated as well what we're really looking at is average pricing in the third quarter's call. It on average $2.50. The fourth quarter is closer to $3 and I think whenever you start to.
Evan M. Kiefer: And I think whenever you start to move up those levels, they'll be a little bit more interested in turning that well, those wells online, and getting the production, as opposed to, you know, right now, we're closer to $2 in the second quarter. So, you know, our current guidance updates. It really contemplates curtailment through the second quarter and into the third and then, assuming at that level that they start to come back online, really kind of targeting that third quarter into the second half of the year.
Evan M. Kiefer: Move upstairs levels there'll be a little bit more interested in turning that while those wells online and getting the production as opposed to right now we're closer to $2 in the second quarter. So.
Evan M. Kiefer: Our current.
Evan M. Kiefer: Guidance update really contemplate curtailments through the second quarter ended the third and then.
Evan M. Kiefer: Assuming that that level today, they start to come back online really kind of targeting that third quarter into the second half of the year.
Thomas L. Carter: That makes sense. And then maybe we can shift over to acquisition activity. You've been active in acquiring over 50 million dollars in minerals since last September, as you guys have noted. While I know you guys would prefer not to disclose the location at this time, could you at least help frame the opportunity as to whether it's oil or gas, the kind of competitive environment that you're seeing, and the depth of the opportunity beyond what's been disclosed?
Speaker Change: That makes sense and then maybe shifting over to acquisition activity.
Thomas L. Carter: You've been active in acquiring over $50 million of minerals. Since last September you guys had noted.
Thomas L. Carter: Well I know you guys would prefer not to disclose the location at this time could you at least help frame the opportunity as to whether it's oil or gas kind of the competitive environment, you're seeing and the depth of the opportunity beyond what's been disclosed.
Thomas L. Carter: I'll answer that. Unlike a lot of people in the industry where mineral acquisitions are going on in the Permian, and the acquisition of a royalty acre in the Permian is extremely expensive. We are focusing our acquisitions on other areas that are not nearly as expensive but that are contiguous to and around significant positions that we already have in other areas. And while I'm not trying to say too much about where that is, it doesn't take a lot of imagination to figure out where that might be.
Speaker Change: I'll I'll answer that.
Thomas L. Carter: The.
Thomas L. Carter: And we think with what we see in the strip, in late 25 and beyond, that those acquisitions made today will have a significantly higher return on investment for Blackstone than trying to wade in where everybody else is. So I hope that answers your question.
Thomas L. Carter: Unlike a lot of people in the industry, where mineral acquisitions are going on in the Permian.
Thomas L. Carter: And the acquisition of a royalty acres in the Permian is extremely expensive.
Thomas L. Carter: We are focusing our acquisitions on other areas that are not nearly as expensive but that are.
Thomas L. Carter: Contiguous to and around significant positions that we already have in other areas and while I'm not trying to say too much about where that is it doesn't take a lot of.
Thomas L. Carter: Imagination to figure out where that might be and we think with.
Thomas L. Carter: What we see in the strip.
Thomas L. Carter: In late <unk>.
Thomas L. Carter: 25, and beyond that those acquisitions made today will have significantly higher return on investments for Blackstone then.
Thomas L. Carter: Trying to Wade in where everybody else here, so if I.
Thomas L. Carter: I hope that answers your question.
Derrick Lee Whitfield: It does, and then just in terms of the depth beyond what you guys have committed to today, and any color you could offer there.
Speaker Change: Yeah. It does and then just in terms of the depth beyond what you guys said committed to to date any color you could offer there.
Derrick Lee Whitfield: Depth, meaning how much do we expect to spend? and for how much more?
Speaker Change: Yep, meaning.
Speaker Change: How much do we expect to spend.
Derrick Lee Whitfield: Or how much more could you spend given the competitive landscape you see?
Derrick Lee Whitfield: Or how much more could you spend given the competitive landscape you see them.
Derrick Lee Whitfield:
Thomas L. Carter: I would answer that this way. I think we expect and have budgeted to spend a multiple of what we've spent so far, and that depends on price, but we've got a pretty robust program going on, and we're probably as active right now as we've been since 23.
Speaker Change: I would answer that this way I think we expect and have budgeted to spend.
Thomas L. Carter: Hey.
Thomas L. Carter: A multiple of what we've spent so far.
Thomas L. Carter: And that depends on.
Thomas L. Carter: Price, but we've got.
Thomas L. Carter: We've got a.
Thomas L. Carter: Pretty robust program going on and where.
Thomas L. Carter: Probably as active right now as we've been shipped.
Thomas L. Carter: <unk> 23.
Derrick Lee Whitfield: That's a terrific color and I certainly look forward to updates from you guys in the future.
Speaker Change: That's terrific color and certainly look forward to updates from you guys in the future.
Thomas L. Carter: As soon as we get a little bit more, we'll say more about that.
Speaker Change: So as we get a little bit more will say more about it.
Speaker Change: Thank you.
Operator: As a reminder for our listening audience, that is Star 1, if you would like to enter the queue against Star 1. We'll go next to John Mardini with KeyBank Capital Markets.
Thomas L. Carter: As a reminder, for our listening audience. It is star one if you would like in order to kill again Star One well go next to John Guinee with Keybanc capital markets.
John Mardini: Hi, good morning. Good morning, John.
John Mardini: Hi, good morning.
John Mardini: Good morning, John.
John Mardini: Our first question is on distribution. You trimmed it in one quarter and had more than enough coverage to pay for it. Are you looking to maintain this $0.375 distribution going forward just given the current gas strip and hedges in place?
John Mardini: Yeah.
John Mardini: Our first question is on distribution you all be trimmed Q1and had more than enough coverage to pay for it.
John Mardini: Are you looking to maintain the 37 and a half cent distribution going forward just given the current gas strip hedges in place.
Evan M. Kiefer: Yeah, John, that's a great question. And, you know, with the higher coverage that we had in the first quarter, that was really chosen to help support some of the acquisition efforts. Now, you know, given the production delays and curtailments, we do expect that coverage could fall in the future. And, you know, a lot of this is really going to be dependent on how long the low gas environment continues. Do we see the strength kind of continuing in the second half of the year, as the script would indicate? And so, you know, we do like setting a distribution level that is achievable and expect to maintain it. But, as always, there's some openness as to where the strip in the current environment will persist.
John Mardini: Yes, John that's a great question and with the higher coverage than we had in the first quarter that was really elected to help support some of the acquisition efforts now.
Evan M. Kiefer: Given the production delays and curtailments, we do expect that coverage could fall in the future and you know a lot of this is really going to be dependent on how long the low gas environment continues do we see the strength kind of continue in the second half of the year as the strip would indicate and so we do like.
Evan M. Kiefer: Getting a distribution level that is achievable and expect to maintain it but as always there is.
Evan M. Kiefer: Some openness as to where the strip in the current environment persists.
John Mardini: Okay, that's helpful. That's actually all we had. We appreciate the color there.
Speaker Change: Okay. That's helpful.
Speaker Change: Actually all we had we appreciate your the.
Speaker Change: Color there.
Speaker Change: Great. Thank you John.
John Mardini: Okay.
Operator: And at this time, it appears we have no further questions. I'd like to turn the floor back over to Mr. Tom Carter for any additional or closing comments.
John Mardini: And at this time it appears we have no further questions I'd like to turn the floor back over to Mr. Tom Carter for any additional or closing comments.
Thomas L. Carter: All right, well, um... Thank you all for joining us today. I just want to summarize by saying we're in one of the many sort of bumpy roads that we run into in our industry, but we're pretty excited about the next four or five years and what we see coming down the road and are trying to position Black Stone to be in its best position to really perform during that time, and thank you very much for joining us today.
Thomas L. Carter: All right well.
Operator: Thank you. Once again, ladies and gentlemen, that will conclude today's call. Thank you for your participation. You may disconnect at this time.
Thomas L. Carter: Thank you all for joining us today.
Operator: I'll just summarize by saying we're in one of the many sort of bumpy roads that we run into in our industry, but we're pretty excited about the next four or five years, and what we see coming down the road and.
Speaker Change: Trying to position Blackstone to be in the best position to.
Operator: Really perform through there and thank you very much for joining us today.
Operator: Thank you once again, ladies and gentlemen that will conclude today's call. Thank you for your participation you may disconnect at this time.
Operator: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
Operator: Uh huh.
Operator: [music].