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1. Company Snapshot

1.a. Company Description

Black Stone Minerals, L.P., together with its subsidiaries, owns and manages oil and natural gas mineral interests.It owns mineral interests in approximately 16.8 million gross acres, nonparticipating royalty interests in 1.8 million gross acres, and overriding royalty interests in 1.7 million gross acres located in 41 states in the United States.As of December 31, 2021, the company had a total estimated proved oil and natural gas reserves of 59,824 barrels of oil equivalent.


Black Stone Minerals, L.P. was founded in 1876 and is based in Houston, Texas.

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1.b. Last Insights on BSM

Black Stone Minerals' recent performance was driven by its strong Q4 2024 earnings, with a 2% production increase expected in 2025, primarily due to new wells and rising natural gas prices. The company maintained a distribution coverage greater than 1x distributable cash flow throughout 2024, and its renegotiated production agreement with Aethon is expected to boost earnings. Additionally, Black Stone Minerals' robust hedging program and improving natural gas prices have contributed to its positive outlook.

1.c. Company Highlights

2. Black Stone Minerals' Q3 2025 Earnings: A Strong Performance

Black Stone Minerals reported a robust third quarter with mineral and royalty production reaching 34,700 BOE per day, a 5% increase over the prior quarter. The company's net income was $91.7 million, and adjusted EBITDA was $86.3 million. Earnings per share (EPS) came in at $0.4, beating estimates of $0.28. Revenue growth is expected to continue, with analysts estimating an 8.6% increase in revenues for the next year.

Publication Date: Nov -15

📋 Highlights
  • Acquisition Growth:: Added $20 million in mineral/royalty acquisitions, totaling $193 million since September 2023.
  • Q3 Production & Earnings:: Mineral/royalty production rose to 34,700 BOE/day (+5% QoQ), with net income of $91.7 million and adjusted EBITDA of $86.3 million.
  • Haynesville Expansion:: Projected over 50 wells annually in the Shelby Trough, driving significant gas growth via 220,000 gross acre development.
  • Distribution & Guidance:: Declared $0.30/unit distribution; maintained 2025 production guidance at 33,000–35,000 BOE/day.

Operational Highlights

The company is making significant progress in its Haynesville expansion play, with the recent announcement of an expanded energy horizontal well and a successful pilot well. This has provided confidence in the play, and Black Stone Minerals expects to drive over 50 wells drilled in the expanded Shelby Trough per year, providing significant gas growth. The company is also working on several new projects in the Permian that are expected to add additional liquids volumes in the next 12 to 18 months.

Acquisition Strategy

Black Stone Minerals added $20 million in mineral and royalty acquisitions during the quarter, bringing their total acquisitions since September 2023 to roughly $193 million. The company is pursuing acquisitions through the Haynesville expansion around Shelby Trough and is working towards solidifying another development agreement covering 220,000 gross acres. As Tom Carter stated, the company is focused on the next 5 years, rather than the next 6 to 12 months, due to the massive reservoir and the time it takes to spool up and evaluate it.

Valuation and Growth Prospects

With a P/E Ratio of 10.61 and an EV/EBITDA of 9.04, the company's valuation appears reasonable. The dividend yield is 9.83%, indicating an attractive return for income investors. The company's return on equity (ROE) is 26.6%, and return on invested capital (ROIC) is 18.11%, demonstrating strong profitability. As the company continues to execute on its development plans and expand its presence in the Haynesville and Permian basins, investors can expect sustained growth and returns.

Challenges and Hedging Strategy

The company faced challenges related to natural gas differentials, which have weakened due to exposure to Waha. However, Taylor DeWalch stated that their hedging strategy remains consistent, and they are well-aligned with top operators in the Permian. Tom Carter mentioned that they have a robust hedge strategy in place to address the challenges at Waha, providing a level of protection against volatility in the energy market.

3. NewsRoom

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Black Stone Minerals and Caturus Energy Announce New Development Agreement in the Shelby Trough

Dec -03

Source: businesswire.com

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Black Stone Minerals, L.P. Common Units (BSM) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Black Stone Minerals, L.P. Reports Third Quarter Results

Nov -03

Source: businesswire.com

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Black Stone Minerals (BSM) to Release Quarterly Earnings on Monday

Nov -01

Source: defenseworld.net

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Profit From AI Without The Tech Bubble Risk With Black Stone Minerals

Oct -21

Source: seekingalpha.com

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Black Stone Minerals, L.P. Announces Distribution and Schedules Earnings Call to Discuss Third Quarter 2025 Results

Oct -15

Source: businesswire.com

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Black Stone Minerals: Expects Significant Natural Gas Production Growth

Oct -15

Source: seekingalpha.com

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New Strong Sell Stocks for October 6th

Oct -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (15.50%)

6. Segments

Oil & Gas - Exploration & Production

Expected Growth: 8.0%

The segment is expected to grow due to the company's ongoing drilling and completion efforts, which are expected to increase production volumes and drive revenue growth, despite potential volatility in commodity prices.

7. Detailed Products

Oil and Natural Gas Properties

Black Stone Minerals, L.P. owns and operates oil and natural gas properties across the United States, with a focus on the Permian, Bakken, and Eagle Ford shale plays.

Royalty and Mineral Interests

The company owns a significant portfolio of royalty and mineral interests in oil and natural gas properties, entitling it to a percentage of the revenue generated from the production of oil and natural gas on those properties.

Acquisitions and Divestitures

Black Stone Minerals, L.P. engages in the acquisition and divestiture of oil and natural gas properties, as well as royalty and mineral interests.

Exploration and Production (E&P) Services

Black Stone Minerals, L.P. provides E&P services, including drilling, completion, and production operations, to support the development of its oil and natural gas properties.

Midstream Services

The company provides midstream services, including gathering, processing, and transportation of oil and natural gas, to support the development and production of its properties.

8. Black Stone Minerals, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Black Stone Minerals, L.P. is medium as there are limited alternatives for the company's products and services.

Bargaining Power Of Customers

The bargaining power of customers for Black Stone Minerals, L.P. is low as the company operates in a niche market with limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Black Stone Minerals, L.P. is medium as the company relies on a few key suppliers for its operations.

Threat Of New Entrants

The threat of new entrants for Black Stone Minerals, L.P. is low as the company operates in a highly regulated industry with significant barriers to entry.

Intensity Of Rivalry

The intensity of rivalry for Black Stone Minerals, L.P. is high as the company operates in a highly competitive industry with several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.93%
Debt Cost 12.44%
Equity Weight 97.07%
Equity Cost 5.92%
WACC 6.11%
Leverage 3.02%

11. Quality Control: Black Stone Minerals, L.P. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Coterra Energy

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Value: 6.9

Growth: 4.4

Quality: 6.9

Yield: 9.0

Momentum: 4.5

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Black Stone Minerals

A-Score: 6.4/10

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Growth: 3.7

Quality: 9.0

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

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Quality: 6.2

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Value: 2.7

Growth: 3.7

Quality: 5.6

Yield: 10.0

Momentum: 2.0

Volatility: 8.7

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A-Score: 5.4/10

Value: 7.7

Growth: 4.6

Quality: 6.0

Yield: 7.0

Momentum: 3.0

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Ovintiv

A-Score: 5.1/10

Value: 7.4

Growth: 4.1

Quality: 5.2

Yield: 5.0

Momentum: 4.0

Volatility: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.48$

Current Price

14.48$

Potential

-0.00%

Expected Cash-Flows