Black Stone Minerals, L.P. Q1 FY2026 earnings call

• Strong first quarter with higher production across the middle position, driven by increased natural gas activity in Louisiana Hainesville and Shelby Trough, and strong oil production in the Permian. - View 2026 as a year of production growth compared to 2025 with development across core areas ramping, maintaining production guidance outlined in February. - Multiple development agreements in Hainesville and Bossier expansion play progressing well, seeing continued delineation and increased activity across the broader Shelby Trough. - Commercial initiatives executed, including acquiring additional mineral and royalty acreage, operators under development agreements in Shelby Trough advancing programs, strong leasing activity in Permian, and marketing a project in Shelby Trough expansion area.

In the first quarter, mineral royalty production was 35.9 Bcf per day, up 16% from the prior quarter. Total production was 37 Bcf per day. 54% of the oil and gas revenue in the quarter came from natural gas and natural gas liquids.

• View 2026 as a year of production growth compared to 2025 as development across core areas continues to ramp, and maintain production guidance outlined in February. - Multiple development agreements in Hainesville and Bossier expansion play progressing well, positioned for meaningful production growth over time.

• Revenant spudded two wells during the quarter, and one of those wells experienced a loss of well control inset. There is an investigation ongoing to assess the potential impact on their first-year development program.

Q: For my first question, I was hoping you could provide maybe a little more context on what exactly the outcome is with the loss of well control incident from one of Revenant's wells. Does that well eventually get abandoned, or is there still a hope of salvaging it? you know, when you talked about assessing the potential impact, can you talk about what that means? Does that mean some sort of like deferral or delay?

A: Right now, it just happened. So the truth is we don't know. There is an investigation currently ongoing. Right now, I'd say there is potential for going back into that well, and there may be potential for not going back into that well. We just don't know yet. It is too early to tell.

Q: you had a very strong start to the year on the production front, and you laid out a, you know, pretty granular kind of cadence for, you know, your partnerships and their activity. So I know you're not a company that adjusts guidance on a quarterly basis, and you sort of reiterated it. But can you give us a little more color on maybe what the shape of 2026 production will look like?

A: I wouldn't say our enthusiasm is tempered in any way, shape, or form. But again, since this just happened, we are actively discussing these things and what that profile will look like this year. And as you said, Tim, we don't adjust guidance quarter to quarter, but... We will get back to you once we have something firmly in place and can understand the situation more clearly. Without putting anything of real substance out there, it might be a bit of a speed bump, but over, I'm going to say, a two-year period, you won't see any difference.

Q: With the change in ownership at Atheon and now Adamus Energy, could you speak to what changes, if any, you're seeing in behavior around desire to grow?

A: I think that given our contractual commitments there, we certainly have at least some expectations on their cadence of operations and excited about them continuing to move forward in developing the area. I think to be determined on excess growth beyond the commitments, that's a conversation we're having and we'll continue to kind of update as that becomes available. But overall excited about the transaction and the team and continuing to move forward with our contract.

Q: Back to the well control incident, and it feels like the market today is treating this as an issue that impacts a swath of your acreage. I understand this is more isolated in nature. Is that a fair characterization?

A: When you look at that area and where the well is, it's fully surrounded by development by the likes of Adamas, Exco, and historically others. So I think that the area is pretty well delineated from a subsurface standpoint. And we certainly look forward to kind of further development in that overall area.

Q: So as you guys think about the broader expansion from Shelby Trough to Western Hainesville, could you speak to midstream egress for this region and if it's adequate to meet the needs of where you think growth is headed?

A: There's certainly plenty of, there's quite a bit of infrastructure out there, but as you think about the area growing by potentially several more gross BCF a day over the coming years, there's a number of other midstream projects that I think are in the queue and probably more to come on exactly what those projects look like, but I'd say there's existing plus additional infrastructure kind of underway.