Q4 2025 Black Stone Minerals LP Earnings Call

February 24, 2026

Operator: Thank you for standing by, welcome to the Black Stone Minerals Q4 and Full Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press Star followed by 1 on your telephone keypad. If you would like to withdraw your question, again, press Star 1. Thank you. I'd now like to turn the call over to Natalie Liddell, Vice President, Corporate Planning. You may begin.

Speaker #2: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.

Speaker #2: If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Natalie Liddell, Vice President, Corporate Planning.

Speaker #2: You may begin. Thank you. Good morning, everyone. Thank you for joining us. For the Black Stone Minerals fourth quarter and full year 2025 earnings conference call.

Natalie Gentry Liddell: 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 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: 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 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.

Speaker #2: 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.

Speaker #2: These statements involve risks that may cause our actual results to differ materially from the results expressed or implied in our forward-looking statements.

Speaker #2: 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.

Speaker #2: 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.

Natalie Gentry Liddell: 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 the call over to Fowler.

Natalie Liddell: 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 the call over to Fowler.

Speaker #2: Join 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.

Speaker #2: I'll now turn the call over to Fowler.

Speaker #3: Thank you, Natalie. Good morning, everyone, and thank you for joining us on our fourth quarter 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.

David Brown: Thank you, Natalie. Good morning, everyone, and 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 Caturus Energy. These deals place approximately 100,000 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 25 to 30 MMcf a day, with another five wells expected to come online in Q1.

Fowler Carter: Thank you, Natalie. Good morning, everyone, and 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 Caturus Energy. These deals place approximately 100,000 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 25 to 30 MMcf a day, with another five wells expected to come online in Q1.

Speaker #3: During the year, we achieved significant commercial milestones that will benefit our future production for years to come. We successfully signed development agreements with Reven Energy and Catters Energy.

Speaker #3: 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.

Speaker #3: And including

Speaker #1: Including a total of 50 gross wells over the same period, Ethan also recently brought several new wells online in the Shelby Trough at about 25 to 30 MCF a day, with another five wells expected to come online in the first quarter.

Speaker #1: An additional 18 wells are expected to be drilled throughout 2026 . Also in 2026 , we expect that Revenant will spud more than its minimum .

David Brown: An additional 18 wells are expected to be drilled throughout 2026. In 2026, we expect that Revenant will spud more than its minimum 6-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: An additional 18 wells are expected to be drilled throughout 2026. In 2026, we expect that Revenant will spud more than its minimum 6-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.

Speaker #1: Six well commitment and 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.

Speaker #1: 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 .

Speaker #1: We believe we can continue to expand the Shelby Trough in Haynesville Basin towards the western Haynesville with our continued focus of increasing production from existing assets and driving long term value for our unitholders .

David Brown: With our continued focus of increasing production from existing assets and driving long-term value for our unit holders, 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 unit holders. With that, I will hand the call over to Taylor.

Fowler Carter: With our continued focus of increasing production from existing assets and driving long-term value for our unit holders, 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 unit holders. With that, I will hand the call over to Taylor.

Speaker #1: 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 .

Speaker #1: Since launching the program in '23, we've invested about $240 million to add accretive mineral and royalty acreage across the Shelby Trough and Haynesville expansion area.

Speaker #1: We remain confident that the combination of these commercial initiatives will lead to significant growth and value for our unit holders With that , I will hand the call over to Taylor .

Speaker #2: 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.

Taylor DeWalch: 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, but we see that materially growing throughout 2026. While production guidance is roughly flat year-over-year, we see solid growth from Q4 2025 to 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 unit holders over the coming years.

Speaker #2: We ended 2025 and begin 2026 at about 32,000 boe per day . But we see that materially growing throughout 2026 . So while production guidance is roughly flat year over year , we see solid growth from fourth quarter 2025 to fourth quarter 2026 .

Speaker #2: Our fall investment 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 because we have won substantial, industry-leading inventory on our acreage in the Shelby Trough and Haynesville expansion, in two advantageous proximity to the Gulf Coast and key demand centers.

Taylor DeWalch: Because 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 unit holders. 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 unit holders.

Speaker #2: 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.

Speaker #2: 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 Blackstone's unitholders With that , I'll handle the call over to Chris to walk through the financial details for the quarter and full year .

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

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

Speaker #3: Thanks , Taylor , and good morning , everyone . In the fourth quarter , Midland Royalty production was 30.9 thousand boe per day , a decrease of 11% from the prior quarter .

Chris Bonner: Thanks, Taylor. Good morning, everyone. In Q4, mineral and royalty production was 30.9 thousand BOE per day, a decrease of 11% from the prior quarter. Total production for the quarter was 32.1 thousand 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.

Speaker #3: Total production for the quarter was 32.1 thousand per day , and 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 drilling activity and volume levels in the Shelby trough .

Speaker #3: 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 .

Speaker #3: We continue to monitor increasing activity levels in the Haynesville and commodity price dynamics as we look towards 2026 production and distributions . The partnership is also in the process of shooting two substantial 3D seismic surveys in the Shelby Trough in Haynesville expansion area , covering about 360,000 gross acres While initiating and funding these surveys is not typical for Blackstone .

Chris Bonner: 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, 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's 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.

Speaker #3: 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 .

Speaker #3: They are subject to partial reimbursement with reported costs reflecting Blackstone's 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 Together with these supplemental seismic purchases , these assets are expected to enhance subsurface valuation , further unlock the value of our mineral royalty acreage , and accelerate development of that acreage to better reflect how we view these investments .

Chris Bonner: Together with these supplemental seismic purchases, these assets are expected to enhance subsurface evaluation, further unlock the value of our mineral and 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 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, for $1.20 on an annualized basis.

Speaker #3: 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 fourth quarter, with adjusted EBITDA at $76.7 million.

Speaker #3: 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 .

Speaker #3: Distributable cash flow for the quarter was 66.8 million , which represents 1.5 times coverage for the period . As Fowler and Taylor mentioned earlier , the partnership's outlook remains strong , anchored by long term contracted development and our high interest Shelby Trough acreage , as well as our core legacy assets across the US .

Chris Bonner: Distributable cash flow for the quarter was $66.8 million, which represents 1.05x coverage for the period. 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 four legacy assets across the US. 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 Black Stone 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.

Speaker #3: With growing demand from LNG and electric power generation . The look for natural gas is increasingly constructive . Constructive over the next decade .

Speaker #3: Our significant assets near Gulf Coast LNG facilities positioned Black Stone to benefit from the substantial call on supply, which we expect to increase over the coming years.

Speaker #3: 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 patients , coupled with our commercial strategy and the Shelby trough , will provide a strong foundation to deliver sustainable , long term value for unitholders .

Chris Bonner: 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.

Speaker #3: With that , I'd like to open up the call for questions

Speaker #4: Thank you . We will now begin the question and answer session . If you'd like to ask a question , please press star one in your telephone keypad .

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.

Speaker #4: 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 .

Speaker #4: Your line is open

Speaker #5: Good morning , guys , and thanks for your time

Derrick Whitfield: Good morning, guys, and thanks for your time.

Taylor DeWalch: Good morning, Derek.

Speaker #6: Derrick .

Derrick Whitfield: 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?

Speaker #5: 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 ?

Speaker #5: Based on the known developments ?

Taylor DeWalch: Yeah, 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 gonna 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.

Speaker #2: Derrick , this is Taylor And I'll I'll start out with that . I mean , I think when we look back to 20 , 25 , kind of mid-year and then 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 .

Speaker #2: And the decreased activity there, and so 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.

Speaker #2: And in mentioned in our script this morning And then I think that where that puts us for the full year is reflected in the guidance .

Speaker #2: So again , we think we're going to be increasing materially throughout the course of 2026 . And most of that is attributable to kind of new development agreements as well as Permian production and those high interest developments out West .

Taylor DeWalch: 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.

Speaker #5: And Taylor , would you expect it to kind of stall out at the kind of Q1 Q2 , Q3 , Q4 level for Q1 and then kind of step up each quarter progressively ?

Derrick Whitfield: Taylor, would you expect it to kind of stall out at the kind of Q1, 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?

Speaker #5: Or would there be more lumpiness than what I just suggested

Speaker #2: No , I think that's right . You'll see it start to step up . We've as we've mentioned , we've got some wells coming on here in the beginning of the year specifically related to ASN .

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

Speaker #2: And then we see activity increasing throughout the year .

Speaker #5: Great . And 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 .

Derrick Whitfield: 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 to 18 months?

Speaker #5: 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 ?

Speaker #5: And how should we think about the cadence and acreage scope of incremental agreements over the next 12 to 18 months

Speaker #1: Derrick , I would tell you that we certainly don't discriminate against existing partners or newcomers . We we welcome all parties and while we enjoy the partnerships that are established , we are happy to continue to diversify our our new developments with with new partners or strengthen existing contracts with established partners

Chris Bonner: 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.

Fowler Carter: 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: Great. Thanks for your time, guys.

Speaker #5: Great . Thanks for your time , guys .

Derrick Whitfield: Great. Thanks for your time, guys.

Speaker #2: Thanks , Derrick .

Taylor DeWalch: Thanks, Derrick.

Speaker #4: As a reminder, it is a star question. Your next question comes from the line of Tim Risman from KeyBanc Capital Markets. Your line is open.

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

Speaker #7: 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 Kotara development area .

Tim Rezvan: 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 kind of how, you know, just kind of the scale and the priority of that, given everything that's going on in the Haynesville?

Speaker #7: We also saw guidance for for liquids down a bit . In 2026 versus our expectations . So can you talk about kind of what you're pursuing in the Permian and kind of how , you know , just kind of the scale and the priority of that , given everything that's going on in the Haynesville

Speaker #2: Sure . Tim , this is Taylor , and I'll start there . You know , I think we're excited to see activity in the Permian , kind of in two different fold , if you will .

Taylor DeWalch: Sure, Tim. This is Taylor, and 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, and then we mentioned another large scale, kind of, 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.

Speaker #2: We've got high interest activity from Kotara . And then we mentioned another large scale kind of high interest development that's happening in the southern Delaware .

Speaker #2: So 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 26 and 27 .

Speaker #2: I think if you look at the timing of some of this , and when we see those volumes coming on , we'll see some of the wells continue to come on over the course of 26 .

Speaker #2: Some of the other activity, I think, really is probably later on in '26 and more materially in 2027. So I think you'll start to see those volumes a little bit later on.

Taylor DeWalch: 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.

Speaker #2: But 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 .

Speaker #2: So I think there's a lot to be excited about in the Permian right now .

Speaker #3: And 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.

Chris Bonner: Yeah. The only thing I'd add there is, 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.

Speaker #3: And not wanting to get ahead of ourselves when it comes to forecasting the broader Permian volumes,

Speaker #7: Okay , okay . I appreciate the context . My next question , if we look at the Henry Hub strip this year , it's below 350 for a lot of the year into kind of the winter .

Tim Rezvan: 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 it 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? 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?

Speaker #7: And you've talked about sort of maybe a flattish start to the year growing . Do you feel comfortable you can fund your 30 cent distribution through distributable cash flow without sort of leaning on liquidity for the next ?

Speaker #7: I mean , one Q will be a big aberration . We know with $5 . Henry Hub . But as we look to the summer , how confident are you that you can sort of fund that without leaning on liquidity ?

Speaker #2: Yeah . Good question . And maybe I'll start off . And Chris , if you want to jump in , but 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 going to happen .

Taylor DeWalch: Yeah, good question. 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.

Speaker #2: And we're confident in that development based on our agreements and our minimum commitments there . So along with just sort of ongoing activity and wells coming online .

Speaker #2: So I would say that we're confident that we can continue to fund the distribution and grow throughout the year based on those minimums .

Speaker #3: Yeah , I would concur with that assessment . And then also note that we do have strong hedges in place for natural gas throughout the year

Chris Bonner: Yeah, 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.

Speaker #7: Okay , okay . I just wanted to push on that . And if I could sneak one more in , I appreciate the prepared comments on the the seismic .

Tim Rezvan: Okay. Okay, just wanted to push on that. If I could 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.

Speaker #7: We saw that adjustment with your adjusted EBITDA in the fourth quarter . Should we assume that that 30 million of exploration expense expense is all seismic ?

Speaker #7: Is there a cadence to that ? Is that a one time expense , and do you expect to continue to kind of adjust that out for adjusted EBITDA Thanks .

Speaker #3: Yes , I can answer that . So 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 .

Chris Bonner: 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 expensed in 2026. We don't anticipate additional significant seismic costs within this development area.

Speaker #3: And it is the majority of the seismic that we forecasted . It's about 90 plus percent of the total . And we do expect the majority of the costs related to these two specific shoots to be completed in in early 27 , but primarily expense in 26 .

Speaker #3: And we don't anticipate additional significant seismic costs within this development area .

Speaker #2: Yeah , I might just add on to 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 .

Taylor DeWalch: Yeah, 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. 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.

Speaker #2: But I think when you look back at the last couple of years , we have , you know , taken a stance of putting subsurface analysis in geology first , and we're pretty convicted in the rock in the Shelby Trough and Haynesville expansion .

Speaker #2: And I think the seismic shoots are just another data point for us to further that story and really build a foundation for our operators to come in and start to develop .

Taylor DeWalch: 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.

Speaker #2: And 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.

Speaker #2: Also potentially turning those licenses to industry and generating revenue off of them . So a couple of different ways we're thinking about the seismic , but excited to get those shot later this year .

Speaker #2: And just keep on developing the Shelby trough and the Haynesville expansion .

Tim Rezvan: You know, I think it makes a lot of sense. I appreciate the insight on that. That's all I had. Thank you.

Speaker #7: I think it makes a lot of sense, so I appreciate the insight on that. That's all I had. Thank you.

Speaker #2: Thanks

Taylor DeWalch: Thanks.

Speaker #4: And there being no further questions , I will now turn the call back over to Taylor DeWalch for some final closing comments .

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

Speaker #2: Thank you . Thank you all for joining us this morning and look forward to speaking with you all again next quarter .

Taylor DeWalch: Thank you. 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.

Q4 2025 Black Stone Minerals LP Earnings Call

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