Black Stone Minerals LP

Good day and welcome to the Blackstone Minerals first quarter earnings call. At this time, all participants are in a listen-only mode. Later, there will be a question and answer session. You may queue for a question at any time by pressing the star key followed by the number one on your telephone keypad. Please be advised that today's conference is being recorded. If you require operator assistance, you can press star zero. I'd now like to turn the call 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' first quarter 2024 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 performances. 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 2023 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, CEO, and President, Evan Keeper, Senior Vice President, Chief Financial Officer and Treasurer, Carrie Clark, Senior Vice President, Chief Commercial Officer, and Steve Putnam, Senior Vice President and General Counsel. I'll now turn the call over to Tom.

Thank you, Mark. Good morning, everyone, and thank you for joining us this morning to discuss the quarter. We posted a good first quarter with net income of $63.9 million and adjusted EBITDA of $104.1 million. We generated total production volumes for the first quarter of 40.3 VOE per day, a decrease of 2% from our fourth quarter 23 volumes. Growth volumes for the quarter were 38.9 thousand VOE per day. Oil volumes trended down in the Midland and Delaware basins, but were partially offset by an increase in the resilient Bakken area And despite the ongoing natural gas challenges, natural gas volumes increased from the fourth quarter in the Fayetteville, Gulf Coast, Lance, Mesa Verde, and other trends. Factors like these continue to illustrate the benefit of a diversified portfolio where we continue to see additions and non-core plays that contribute to new production year over year. Our unique asset mix is a strategic advantage that continues to consistently add long-term value. the blackstone and its unit holders with that let me just turn to uh focus on the haynesville bozer which is a significant as everyone knows a significant long-term growth engine for blackstone in the shelby trough we announced in december that one of our operators uh invoked a quote-unquote timeout under the provision provision of our joint exploration agreement, which would allow them to cease activity for a period of time. We have a good group of operators in the Shelby Trough, being XTO, Athon, Pine Wave, Milestone, Exco, and others. And in addition, in Louisiana, we have Chesapeake, Southwestern, Comstock and others. So we've got a great portfolio of operators. The operator that declared a timeout, however, is currently drilling three wells and is expected to continue levels of activity there. This suggests that either the operator is no longer in timeout and back on the clock under our joint exploration agreement, or alternatively that these operations will not qualify for contractual minimums under our contract. This just underscores the strength of the structure of our joint exploration agreements with respect to activity in various different environments, price environments on our properties. One second here. I'm just scrolling up. We continue to work closely with our operators in all of these areas. And we do not anticipate a material impact in our volumes in Hainesville through 24 and 25, even though a lot of the operators are slowing down in response to the low price environment. We believe that there are positive results continually being added in the basin and we're very encouraged by performance on new wells in the area ranging anywhere from 25 to 30 million cubic feet a day and pressures in excess of In addition to our interest with existing operators, Blackstone has an additional existing 170,000 plus net acres of undeveloped inventory in the Shelby Trough with an estimated 15 TCF of resource in the ground. We look forward to that acreage coming in juxtaposition to what we are a believer in, and that is natural gas demand increases coming into 26 and beyond, with the LNG export markets firming up and expanding. In response to lower natural gas prices, some of our operators have been involved in some curtailment, but we do not, as we said, we do not expect this to be meaningfully challenging to our volumes. As these challenging commodity prices persist, we continue to focus on our long-term strategy while employing prudent balance sheet management. Our focus for several years has been centered around organic initiatives to develop our existing asset base that has been a Starting in the fourth quarter of 23, we expanded those efforts, including targeted grassroot acquisitions programs that are aimed to supplement our existing and expanding footprint in the Gulf Coast and Shelby Trough areas. These efforts have allowed us to weather a lot of different cycles. In 2022, we mentioned that we expected to grow production through 23 with a targeted exit rate close of 40,000 VOE per year, and we're able to execute on those expectations. Now in 24, we have set our plan to grow the distribution back to the high water level mark by 2026 through projection growth alongside liquefied natural gas demand that is expected to drive higher natural gas prices. We intend to capitalize on our existing portfolio and acquired acreage and add meaningfully to our development program in these Gulf Coast regions. We've added over $50 million worth of nonproducing assets since September of 23, and this is just a fraction of what we intend to do going forward overall it's a strong quarter and despite a challenging commodity price environment we're encouraged by the long-term natural gas outlook we continue to make progress working towards with our key operators and strategic initiatives to grow and bringing additional operators into our shelby trough area with that I'll ask Edmund to take over.