Q2 2026 Black Stone Minerals LP Earnings Call

August 4, 2026

Operator 3: Hello, everyone. Thank you for joining us, and welcome to the Black Stone Minerals Q2 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Natalie Liddell, Vice President, Corporate Planning. Natalie, please go ahead.

Operator: Hello, everyone. Thank you for joining us, and welcome to the Black Stone Minerals Q2 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Natalie Liddell, Vice President, Corporate Planning. Natalie, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Natalie Liddell, Vice President Corporate Planning.

Speaker #1: Natalie, please go ahead.

Natalie Liddell: Good morning. Thank you for joining us either by phone or online for Black Stone Minerals Q2 2026 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'll 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 of our 2025 10-K. We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance.

Speaker #2: Good morning. Thank you for joining us, either by phone or online, for Blackstone Minerals' second quarter 2026 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.

Speaker #2: 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. 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 2025 10-K.

Speaker #2: You may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of these 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 Liddell: Reconciliation of these 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 Taylor DeWalch, Co-CEO and President, Fowler Carter, Co-CEO and President

Speaker #2: Joining me on the call from the company are Taylor DeWalch, co-CEO and President; Fowler Carter, co-CEO and President; Steve Putman, Senior Vice President and General Counsel; and Chris Bonner, Senior Vice President, Chief Financial Officer and Treasurer.

Natalie Liddell: Steve Putman, Senior Vice President and General Counsel, and Chris Bonner, Senior Vice President, Chief Financial Officer, and Treasurer. I'll now turn the call over to Taylor.

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

Taylor DeWalch: Thanks, Kylie. Good morning, and thank you for joining us. We made meaningful progress during Q2 as we continue to execute our differentiated strategy. We advanced development activity across our Shelby Trough and Haynesville expansion position, remained active with mineral acquisitions, and continued creating value across our broader portfolio through leasing, marketing, and asset management efforts. We also announced a 7% increase in our quarterly distribution, reflecting the strength of our business and our commitment to delivering sustainable returns to unitholders. More broadly, activity across our core areas is moving in the right direction. Adamas continues to execute on its development program. Revenant progressed activity during the quarter, and Caturus has now begun operations on acreage covered by its agreement. We also see increasing operator activity throughout the Haynesville.

Speaker #3: Thanks, Natalie. Good morning, and thank you for joining us. We made meaningful progress during the second quarter as we continue to execute our differentiated strategy.

Speaker #3: We advanced development activity across our Shelby Trough and Haynesville expansion position, remained active with mineral acquisition, and continued creating value across our broader portfolio through leasing, marketing, and asset management efforts.

Speaker #3: We also announced a 7% increase in our quarterly distribution, reflecting the strength of our business and our commitment to delivering sustainable returns to unit holders.

Speaker #3: More broadly, activity across our core areas is moving in the right direction. Adamus continues to execute on its development program. Revenant progressed activity during the quarter.

Speaker #3: And Catteris has now begun operations on acreage covered by its agreement. We also see increasing operator activity throughout the Haynesville. At the same time, strong oil production from the Permian Bracken, coupled with higher oil pricing, contributed meaningfully to our results during the quarter and further highlights the benefit of Blackstone's diversified portfolio.

Taylor DeWalch: At the same time, strong oil production from the Permian Bakken, coupled with higher oil pricing, contributed meaningfully to our results during the quarter and further highlights the benefit of Black Stone's diversified portfolio. As we've stated previously, we believe 2026 represents an important inflection point for the partnership. While production dipped from Q1, we are encouraged by the activity underway across our acreage and remain focused on converting that activity into sustainable production, cash flow, and long-term value creation for our unitholders. With that, I'll turn it over to Fowler to discuss our commercial and operational activity.

Speaker #3: As we've stated previously, we believe 2026 represents an important inflection point for the partnership. While production dipped from the first quarter, we are encouraged by the activity underway across our acreage and remain focused on converting that activity into sustainable production cash flow and long-term value creation for our unit holders.

Speaker #3: With that, I'll turn it over to Fowler to discuss our commercial and operational activity.

Fowler Carter: Thanks, Taylor. We continued to make progress across our commercial initiatives during Q2, while further strengthening our position in the Shelby Trough and Haynesville expansion area. Our acquisition program remained active with about $40 million of mineral and royalty acquisitions completed during the quarter. Since launching our acquisition program nearly three years ago, we have deployed almost $300 million, primarily focused on acreage within or adjacent to our core development areas. We continue to see opportunities that complement our existing position and increase our exposure to future development activity. Beyond acquisitions, our leasing and asset management efforts generated meaningful value during H1. Strong leasing activity produced approximately $13 million of lease bonus and other income, significantly exceeding our expectations at the start of this year.

Speaker #4: Thanks, Taylor. We continued to make progress across our commercial initiatives during the second quarter while further strengthening our position in the Shelby Trough and Haynesville expansion area.

Speaker #4: Our acquisition program remained active, with about 40 million dollars of mineral and royalty acquisitions completed during the quarter. Since launching our acquisition program nearly three years ago, we have deployed almost 300 million dollars primarily focused on acreage within or adjacent to our core development areas.

Speaker #4: We continue to see opportunities that complement our existing position and increase our exposure to future development activity. Beyond acquisitions, our leasing and asset management efforts generated meaningful value during the first half of the year. Strong leasing activity produced approximately $13 million of lease bonus and other income, significantly exceeding our expectations at the start of this year.

Fowler Carter: We've also benefited from an initiative launched late last year to review deduct free lease provisions, resulting in approximately $6.5 million of refunds collected to date. These efforts highlight the value of actively managing our mineral and royalty portfolio. As Taylor mentioned earlier, development across our Shelby Trough and Haynesville expansion position continued to advance during the quarter. Adamas operated two rigs on our acreage at quarter end and turned four wells to sales in July. We expect another eight wells to come online during the remainder of 2026, and Adamas plans to drill 17 wells under the new program year that began in July. Revenant continued its development program during the quarter and spud two additional wells despite a reduction in its first-year drilling commitment following the previously disclosed well control incident.

Speaker #4: We also benefited from an initiative launched late last year to review deduct-free lease provisions, resulting in approximately 6.5 million dollars of refunds collected to date.

Speaker #4: These efforts highlight the value of actively managing our mineral and royalty portfolio. As Taylor mentioned earlier, development across our Shelby Trough and Haynesville expansion position continued to advance during the quarter.

Speaker #4: Adamus operated two rigs on our acreage at quarter end and turned four wells to sales in July. We expect another eight wells to come online during the remainder of 2026, and Adamus plans to drill 17 wells under the new program year that began in July.

Speaker #4: Revenant continued its development program during the quarter and spud two additional wells despite a reduction in its first-year drilling commitment following the previously disclosed well control incident.

Fowler Carter: Activity is also beginning to emerge under our agreement with Caturus, which currently has a pilot well underway in Cherokee County and expects to commence development drilling during H2 2026. In addition, we continue to have fruitful discussions with a prospective operator regarding a new development that could further expand our contracted development footprint across the Shelby Trough and Haynesville expansion area. On a broader basis, activity across the Haynesville increased during the quarter. We continue to see operators evaluating and pursuing opportunities throughout the play, and the number of active rigs on our Haynesville and Shelby Trough acreage increased significantly during the quarter. We remain encouraged by the level of industry interest across our acreage footprint and the opportunities we see to further expand development activity over time.

Speaker #4: Activity is also beginning to emerge under our agreement with Catteris, which currently has a pilot well underway in Cherokee County and expects to commence development drilling during the second half of 2026.

Speaker #4: In addition, we continue to have fruitful discussions with a prospective operator regarding a new development that could further expand our contracted development footprint across the Shelby Trough and Haynesville expansion area.

Speaker #4: On a broader basis, activity across the Haynesville increased during the quarter. We continue to see operators evaluating and pursuing opportunities throughout the play. And the number of active rigs on our Haynesville and Shelby Trough acreage increased significantly during the quarter.

Speaker #4: We remain encouraged by the level of industry interest across our acreage footprint and the opportunities we see to further expand development activity over time.

Fowler Carter: Strong results from Expand's Bobby Yancey well in Houston County and drilling activity in Anderson County further support our subsurface thesis of the connection between the Shelby Trough and Western Haynesville and reinforce the long-term development potential of our Haynesville expansion acreage. Outside of the Shelby Trough, Blue Arrow continues to advance development in the Southern Delaware Basin. Three wells were turned to sales during the quarter, with the remaining 22 wells in the program expected online during H2 2026 and into 2027. We also saw strong contributions from our Permian and Bakken acreage during the quarter, benefiting from solid production and higher oil prices. Overall, we are pleased with the progress across our commercial initiatives and believe the activity we are seeing today continues to support our longer-term production growth outlook. With that, I'll turn it over to Chris to cover the financial results.

Speaker #4: Strong results from expands Bobby Yancey Well in Houston County and drilling activity in Anderson County further support our subsurface thesis of the connection between the Shelby Trough and Western Haynesville, and reinforce the long-term development potential of our Haynesville expansion acreage.

Speaker #4: Outside of the Shelby Trough, Blue Arrow continues to advance development in the Southern Delaware Basin. Three wells were turned to sales during the quarter, with the remaining 22 wells in the program expected online during the second half of 2026 and into 2027.

Speaker #4: We also saw strong contributions from our Permian and Bracken acreage during the quarter benefiting from solid production and higher oil prices. Overall, we are pleased with the progress across our commercial initiatives and believe the activity we are seeing today continues to support our longer-term production growth outlook.

Speaker #4: With that, I'll turn it over to Chris to cover the financial results.

Chris Bonner: Thanks, Fowler, good morning. Mineral and royalty production during Q2 averaged 32.5 MBOE per day, while total production averaged 33.5 MBOE per day. Production declined from Q1, primarily due to lower natural gas mineral royalty volumes in the Haynesville. As Taylor mentioned, production trends do not always move in a straight line as development activity progresses. Wells come online at different points throughout the year. We remain confident in the overall trajectory of the business towards growing production and distributions. Commodity prices remained supported during Q2, particularly for oil. Our average realized price, excluding the impact of derivative settlements, increased 7% from last quarter to $37.82 per Boe. Higher oil pricing and production helped offset the impact of lower gas volumes. Contributed to strong cash flow generation during the period.

Speaker #5: Thanks, Fowler, and good morning. Mineral and royalty production during the quarter averaged 32.5 Mboe per day, while total production averaged 33.5 Mboe per day.

Speaker #5: Production declined from the first quarter primarily due to lower natural gas mineral and royalty volumes in the Haynesville. As Taylor mentioned, production trends do not always move in a straight line, as development activity progresses and wealth come online at different points throughout the year, and we remain confident in the overall trajectory of the business towards growing production and distributions.

Speaker #5: Commodity prices remained supportive during the quarter, particularly for oil. Our average realized price, excluding the impact of derivative settlements, increased 7% from last quarter to $37.82 per BOE.

Speaker #5: Higher oil pricing and production helped offset the impact of lower gas volumes and contributed to strong cash flow generation during the period. As a result, net income for the quarter was approximately $106 million, adjusted EBITDA totaled $91 million, and distributable cash flow was $80 million.

Chris Bonner: As a result, net income for Q2 was approximately $106 million. Adjusted EBITDA totaled $91 million. Distributable Cash Flow was $80 million. Oil and condensate accounted for 65% of our oil and gas revenues. As previously announced, we declared a distribution of $0.32 per unit for Q2, or $1.28 on an annualized basis. Strong production from our oil-weighted assets and improved commodity pricing supported our results, allowing us to increase the distribution while maintaining 1.18 times coverage for Q2. This balanced approach supports both continued investment in accretive growth opportunities and our goal of delivering sustainable distribution growth over time. As Taylor and Fowler discussed, we continue to see encouraging results across our core acreage, from development programs in the Shelby Trough and Haynesville expansion area, to opportunities across the broader portfolio.

Speaker #5: Oil and condensate accounted for 65% of our oil and gas revenues. As previously announced, we declared a distribution of $0.32 per unit for the quarter, or $1.28 on an annualized basis.

Speaker #5: Strong production from our oil-weighted assets and improved commodity pricing supported our results, allowing us to increase the distribution while maintaining 1.18 times coverage for the quarter.

Speaker #5: This balanced approach supports both continued investment in accretive growth opportunities and our goal of delivering sustainable distribution growth over time. As Taylor and Fowler discussed, we continue to see encouraging results across our core acreage, from development programs in the Shelby Trough and Haynesville expansion area to opportunities across the broader portfolio.

Chris Bonner: We believe our diversified asset base, disciplined commercial strategy, growing development footprint, strategic position near Gulf Coast demand centers support our ability to deliver sustainable, long-term value for unitholders. With that, we will open it up for questions.

Speaker #5: We believe our diversified asset base, disciplined commercial strategy, growing development footprint, and strategic position near Gulf Coast demand centers support our ability to deliver sustainable, long-term value for unitholders.

Speaker #5: With that, we'll open it up for questions.

Operator 3: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tim Rezvan with KeyBanc. Tim, your line is open. Please go ahead.

Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tim Rezvan with KeyBanc. Tim, your line is open. Please go ahead.

Speaker #6: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #6: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #6: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Tim Rezvan with KeyBank.

Speaker #6: Tim, your line is open. Please go ahead.

John Annis: Good morning. This is John on for Tim. Thanks for taking our questions. We were surprised to see the distribution increase this quarter, but you showed you had a lot of coverage on that $0.32 distribution. Just given Black Stone's tradition of trying to maintain a fixed distribution, what's driving your confidence in being able to fund that bigger payout going forward? Is it visibility on stronger oil volumes that we saw? Is it your outlook on gas activity ramping, or is it something else?

[Analyst] (KeyBanc): Good morning. This is John on for Tim. Thanks for taking our questions. We were surprised to see the distribution increase this quarter, but you showed you had a lot of coverage on that $0.32 distribution. Just given Black Stone's tradition of trying to maintain a fixed distribution, what's driving your confidence in being able to fund that bigger payout going forward? Is it visibility on stronger oil volumes that we saw? Is it your outlook on gas activity ramping, or is it something else?

Speaker #4: Good morning. This is John Odd for Tim. Thanks for taking our questions. So we were surprised to see the distribution increase this quarter, but you showed you had a lot of coverage on that $0.32 distribution.

Speaker #4: Given Black Stone's tradition of trying to maintain a fixed distribution, what's driving your confidence in being able to fund that bigger payout going forward?

Speaker #4: Is it visibility on stronger oil volumes that we saw? Is it your outlook on gas activity ramping, or is it something else?

Taylor DeWalch: Good morning, John. This is Taylor. I think you hit the nail on the head. I think it's a little bit of all of the above. Certainly, I think that we do try to increase distributions when we have confidence that we're going to be able to maintain that distribution. That's where we sit today. When we look out to the forecast, we're certainly excited about the coming ramp in production that we've alluded to via our development agreements. As long as the strong results to date this year are from our oil assets. I'd say it's a little bit of both, and certainly have confidence in the 7% increase this quarter.

Speaker #3: Hey, good morning, John. This is Taylor. Yeah, I think you hit the nail on the head. I think it's a little bit of all of the above.

Speaker #3: Certainly, I think that we do try to increase distributions when we have confidence that we're going to be able to maintain that distribution. And that's where we sit today.

Speaker #3: When we look out to the forecast, we're certainly excited about the kind of coming ramp in production that we've alluded to via our development agreements, as long as the strong results to date this year from our oil assets.

Speaker #3: So I'd say it's a little bit of both, and certainly have confidence in the 7% increase this quarter.

John Annis: Okay. Just to tail off that, you discussed this a little in your prepared remarks. Could you just give an update on where you stand with any future Haynesville agreements? Or do you sound like you're looking to formally bring in any other operators as Adamas, Revenant, and Caturus are kind of in this steady state?

[Analyst] (KeyBanc): Okay. Just to tail off that, you discussed this a little in your prepared remarks. Could you just give an update on where you stand with any future Haynesville agreements? Or do you sound like you're looking to formally bring in any other operators as Adamas, Revenant, and Caturus are kind of in this steady state?

Speaker #4: Okay. Just to tail off that, and you discussed this a little in your prepared remarks, could you just give an update on where you stand with any future Haynesville agreements?

Speaker #4: Are you you sound like you're looking to formally bring in any other operators? As Adam's revenue and Cataris, are kind of in the steady state?

Taylor DeWalch: I'll just touch on that real quickly. I mean, we've talked about in the past that we're marketing some additional acreage that we're excited about in the Shelby Trough, continuing to expand on the success we've had to date with operators. That marketing has gone really well, we're getting close to being able to disclose more information as it relates to formally signing up another agreement with another Haynesville operator.

Speaker #3: Yeah, I'll just touch on that real quickly. I mean, we've talked about it in the past, that we're marketing some additional acreage that we're excited about in the Shelby Trough continuing to expand on the success we've had to date with operators.

Speaker #3: That marketing has gone really well. And we're getting close to being able to disclose more information as it relates to formally signing up another agreement with another Haynesville operator.

John Annis: Okay. That's great. Sorry if I could just sneak one more in. Just on the leverage. It's inched up from zero in 2024 to a little bit over half a turn now with $300 million of preferred still on the balance sheet. Just looking at the next window to address the preferreds coming in a little over a year, how are you thinking about the capital structure longer term, just given the payments on those preferreds?

[Analyst] (KeyBanc): Okay. That's great. Sorry if I could just sneak one more in. Just on the leverage. It's inched up from zero in 2024 to a little bit over half a turn now with $300 million of preferred still on the balance sheet. Just looking at the next window to address the preferreds coming in a little over a year, how are you thinking about the capital structure longer term, just given the payments on those preferreds?

Speaker #4: Okay. That's great. And sorry, if I could just sneak one more in. Just on leverage, it's inched up from zero in 2024 to a little bit over half a turn now with $300 million of preferred still on the balance sheet.

Speaker #4: Just looking at the next window to address the preferreds coming in a little over a year, how are you thinking about the capital structure longer term, just given the pain that's on those preferreds?

Taylor DeWalch: Sure. Maybe more broadly, just thinking about how we allocate our capital. We've certainly been spending most of our time and resources thinking about the expanding Shelby Trough, and we're excited about our bolt-on acquisition program that we've been executing on for a while now. We still look at it as that we've got a peer-leading leverage. That's a place that we'd like to be. As we look out to the future, certainly taking into consideration the agreement that we have with Apollo right now on the preferred. As we get into the next open window, we'll certainly continue to evaluate uses of our capital and how the preferred fits into that.

Speaker #3: Sure. And maybe more broadly, just thinking about how we allocate our capital. We've certainly been spending most of our time and resources thinking about the expanding Shelby Trough, and we're excited about our bolt-on acquisition program that we've been executing on for a while now.

Speaker #3: So we still look at it as we've got a peer-leading leverage. That's a place that we'd like to be. As we look out to the future, certainly taking into consideration the agreement that we have with Apollo right now on the preferred, but as we get into the next open window, we're certainly continuing to evaluate kind of uses of our capital and how the preferred fits into that.

Chris Bonner: I would just add that we're continuing to advance our acquisition program in the Shelby Trough. That's where we've been using our debt recently. As that progresses, and we look into next year, we'll evaluate our options with the preferred and what makes the most sense.

Speaker #5: Yeah, I would just add that we're continuing to advance our acquisition program in the Shelby Trough. So that's where we've been using our debt recently.

Speaker #5: And as that progresses and we look into next year, we'll evaluate our options with the preferred and what makes the most sense.

John Annis: Great. That makes sense. Appreciate the time. I'll leave it there.

[Analyst] (KeyBanc): Great. That makes sense. Appreciate the time. I'll leave it there.

Speaker #4: Great, that makes sense. I appreciate the time. I'll leave it there.

Operator 3: Thanks. As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of John Annis with Texas Capital. John, your line is open. Please go ahead.

Operator: Thanks. As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of John Annis with Texas Capital. John, your line is open. Please go ahead.

Speaker #3: Thanks.

Speaker #6: As a reminder, if you would like to ask a question, please press star 1 to raise your hand. Your next question comes from the line of John Annie's with Texas Capital.

Speaker #6: John, your line is open. Please go ahead.

John Annis: Hey, good morning, all. Thanks for taking my questions. For my first one-

Speaker #7: Hey, good morning to all, and thanks for taking my questions. For my first one, morning. Maybe starting with production, can you walk us through the drivers of the stronger-than-expected oil volumes and the decline in Haynesville gas volumes during the quarter and how you're thinking about the production trajectory carrying into the second half?

Taylor DeWalch: Morning.

John Annis: Morning. Maybe starting with production, can you walk us through the drivers of the stronger than expected oil volumes and the decline in Haynesville gas volumes during the quarter, and how you're thinking about the production trajectory, carrying into the H2?

Taylor DeWalch: Yeah, I can start with that. Looking at the oil production, we have seen some price-driven activity, particularly operators turning DUCs to sales. We certainly have benefited from that. On the gas side, We have some higher interest positions within the Shelby Trough. Depending on the timing of when some of those wells come on, it makes our production a bit lumpy. We've also just seen variability in activity. With the recent increase in rig counts on us, we are confident that activity is going to turn into higher production. As our development programs advance under our contracted agreements, we're also encouraged by our medium to long-term outlook on gas there. Yeah. Thanks, Chris.

Chris Bonner: Yeah, I can start with that. Looking at the oil production, we have seen some price-driven activity, particularly operators turning DUCs to sales. We certainly have benefited from that. On the gas side, We have some higher interest positions within the Shelby Trough. Depending on the timing of when some of those wells come on, it makes our production a bit lumpy. We've also just seen variability in activity. With the recent increase in rig counts on us, we are confident that activity is going to turn into higher production. As our development programs advance under our contracted agreements, we're also encouraged by our medium to long-term outlook on gas there.

Speaker #5: Yeah, I can start with that. So looking at the oil production, we have seen some price-driven activity, particularly operators turning ducks to sales. And so we certainly have benefited from that.

Speaker #5: On the gas side, our gas has we have some higher interest positions within the Shelby Trough. And so depending on the timing of when some of those wells come on, that makes our production a bit lumpy.

Speaker #5: We've also just seen variability in activity, but with the recent increase in recounts on us, we are confident that that activity is going to turn into higher production.

Speaker #5: And then as our development programs advance under our contracted, agreements, we're also encouraged by our medium-to-long-term outlook on gas there.

John Annis: Yeah. Thanks, Chris.

Speaker #3: Yeah, I might just add, thanks, Chris. I might just add in too, John, that when you look at our portfolio, it's great to be in a place where we've got the diversity of oil and gas assets.

Taylor DeWalch: I might just add in too, John, that when you look at our portfolio, it's great to be in a place where we've got the diversity of oil and gas assets. I think we've seen that play into the first part of this year and the strong results, also the significant leasing that's been going on across the Permian, the Bakken, and elsewhere. One place to really be thinking about it, is the Woodford Barnett, as that's getting more attention. We've certainly seen more leasing there on us. I think as we're really driving a lot of resource expansion in the Haynesville and certainly spending a lot of time focusing on development agreements there, it's worth noting that we're participating in resource expansion in some of the other plays. I think that's benefiting us, in leasing dollars today, but ultimately production and activity down the line.

Speaker #3: I mean, I think we've seen that play into the first part of this year and the strong results. And also the significant leasing that's been going on across the Permian and the Bocken and elsewhere.

Speaker #3: I mean, one place to really be thinking about it is the Woodford Barnett as that's getting more attention. We've certainly seen more leasing there on us.

Speaker #3: And I think as we're really driving a lot of resource expansion in the Haynesville, and certainly spending a lot of time focusing on development agreements there, it's worth noting that we're participating in resource expansion in some of the other plays.

Speaker #3: I think that's benefiting us in leasing dollars today, but ultimately it will impact production and activity down the line.

John Annis: I appreciate all that color. Maybe for my follow-up, we've seen a significant increase in activity across your three-county Shelby Trough area, which I think stands at roughly 19 rigs today. What do you think is driving that acceleration despite the softer gas type? How much of that activity reflects operators maybe delineating acreage today to support future development commitments?

[Analyst] (KeyBanc): I appreciate all that color. Maybe for my follow-up, we've seen a significant increase in activity across your three-county Shelby Trough area, which I think stands at roughly 19 rigs today. What do you think is driving that acceleration despite the softer gas type? How much of that activity reflects operators maybe delineating acreage today to support future development commitments?

Speaker #7: I appreciate all that color. Maybe for my follow-up, we've seen a significant increase in activity across your three counties, Shelby Trough area, which I think stands at roughly 19 rigs today.

Speaker #7: What do you think is driving that acceleration despite the softer gas type? And how much of that activity reflects operators maybe delineating acreage today to support future development commitments?

Taylor DeWalch: Yeah. John, good question. I think it's a little bit of both. I think there are some operators that are certainly seeing some nice returns in the current environment, as well as the incentives to delineate, and certainly stick to their commitments under our development agreements. We've seen the same. I think there's clearly an industry pull towards the Shelby Trough as inventory is dwindling in the legacy Haynesville, I think that's a dynamic we're going to continue to see. Certainly, we're excited about the trajectory of the activity and where that puts us as we go over the next couple of years, but really into 2029 and 2030 as the industry is looking for natural gas inventory to supply the coming wave of demand. We think we're really well-positioned for that, where our assets sit in proximity to the Gulf Coast.

Speaker #3: Yeah, John, good question. I mean, I think it's a little bit of both. I think there are some operators that are certainly seeing some nice returns in the current environment, as well as the incentives to delineate and certainly stick to their commitments under our development agreements.

Speaker #3: So we've seen the same. I think there's clearly a industry pull towards the Shelby Trough as inventory is dwindling and the legacy Haynesville. And I think that's a dynamic we're going to continue to see certainly.

Speaker #3: We're excited about the trajectory of the activity and where that puts us kind of as we go over the next couple of years, but really into '29 and '30 as the industry is looking for natural gas inventory to supply the coming wave of demand and we think we're really well positioned for that where our assets sit in proximity to the Gulf Coast.

Taylor DeWalch: Of course, as well as increasing power demand. I do think there's just a continued increase of activity towards the Shelby Trough and the expanding Haynesville, our anchorage is really well-positioned to grab that market share and take advantage of it.

Speaker #3: Of course, as well as increasing power demand. So I do think there's just a continued increase of activity towards the Shelby Trough and the expanding Haynesville.

Speaker #3: And our acreage is really well-positioned to grab that market share and take advantage of it.

John Annis: Thanks, guys. I'll leave it there.

[Analyst] (KeyBanc): Thanks, guys. I'll leave it there.

Speaker #7: Thanks, Chris. I'll leave it there.

Operator 3: Thanks, John. We have reached the end of our question and answer session. I will now turn the call back to Taylor for closing remarks. Thanks, everybody, for joining us this morning. As we've talked about, we're really excited to continue our solid execution of our differentiated strategy across our diverse portfolio. We continue to really stay confident in our trajectory and trying to return as much value to our unitholders as we can. We look forward to speaking with all of you again next quarter. Thanks. This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Black Stone Minerals Q2 2026 earnings conference call. The line will disconnect automatically.

Taylor DeWalch: Thanks, John.

Speaker #3: Thanks, John.

Operator: We have reached the end of our question and answer session. I will now turn the call back to Taylor for closing remarks.

Speaker #6: We have reached the end of our question-and-answer session. I will now turn the call back to Taylor for closing remarks.

Taylor DeWalch: Thanks, everybody, for joining us this morning. As we've talked about, we're really excited to continue our solid execution of our differentiated strategy across our diverse portfolio. We continue to really stay confident in our trajectory and trying to return as much value to our unitholders as we can. We look forward to speaking with all of you again next quarter. Thanks.

Speaker #1: Thanks, everybody, for joining us this morning. As we've talked about, we're really excited to continue our solid execution of our differentiated strategy across our diverse portfolio.

Speaker #1: We continue to really stay confident in our trajectory and trying to return as much value to our unit holders as we can. So we look forward to speaking with all of you again next quarter.

Speaker #1: Thanks.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Black Stone Minerals Q2 2026 earnings conference call. The line will disconnect automatically.

Speaker #6: This concludes today's call. Thank you for attending. You may now disconnect.

Q2 2026 Black Stone Minerals LP Earnings Call

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