Black Stone Minerals LP

Good day, everyone, and welcome to today's Blackstone Minerals 2Q earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your touchtone phone. You may withdraw yourself from the queue by pressing star 2. Please note this call may be recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mark Moe, Director of Finance. Please go ahead.

Thank you. Good morning to everyone. Thank you for joining us either by phone or online for Blackstone Minerals' second quarter 2023 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 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 2022 10-K. 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 gap measure and other information about these non-gap 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, Chairman and CEO, Evan Kiefer, Interim Chief Financial Officer, I'll now turn the call over to Tom. Thank you, Mark. Good morning to everyone on the call, and thank you for joining us today to discuss our second quarter of 23. We posted a solid quarter with adjusted EBITDA of $109 million for the second quarter.

in line with the first quarter results. This is the fifth consecutive quarter where Blackstone has generated over $100 million of adjusted EBITDA. Despite the pullback in natural gas prices and production, our hedge portfolio performed as it was intended to help insulate our cash flow from significant price movements. We generated total production volumes for the quarter of 36.2 thousand BOE per day, a decrease of 8% from the first quarter volumes. Royalty volumes decreased 9% from last quarter to 33.6 thousand VOE per day, but 11% above the second quarter of 22. Primary driver was reduced gas volumes in Louisiana, Hainesville, and we saw the natural decline as we saw the natural decline of several high interest, high initial production rate wells that came online in the second half of 22. Oil volumes moved up in the quarter as well due to new development activity in the pocket. Avon continues to ramp up production in the Shelby Trough and held the five rigs on location from the first quarter into the second quarter and is expected to meet the minimum pace of 27 wells per year by the end of the year in Angelina and San Agustin counties. To date, 22 wells have been turned to sales in the Shelby Trough under a development agreement that they thought at 27 are in various stages of drilling or completing that we expect to benefit our production in the second half of the year. In addition, 26 new generation multi-stage completion wells have been turned to sales in our concentrated acreage position in the East Texas Austin Chalk. We have reached an agreement with an existing operator in the field to drill 10 wells over the next two years And it's exciting to see continued momentum in the play, and we will keep working to put in place new long-term development deals to further accelerate production on our acreage. As the U.S. experienced an 11% decrease in rig activity in the second quarter, we only saw an 8% decrease in rigs operating on our acreage in that quarter, primarily in the Permian, with 73 rigs currently running as of June 30th. As of yesterday, the rig count was back to 83, an increase driven mainly from the Permian that offset the decreases seen in the second quarter. This highlights the normal ebb and flow of rig movement seen on our acreage and the importance of working with our operators like ATHON for long-term development agreements that will help to maintain consistent drilling activity on our high-interest acreage. Last week, we announced our distribution for the second quarter of 47.5 cents per unit, flat to our first quarter distribution. We have over 80 million cash prior to the payment of the distribution and a new high watermark for Blackstone since going public. We continue to prioritize returning that cash flow to our investors. With that, I'll turn it over to Evan.