Black Stone Minerals LP

joining us either by phone or online for Blackstone Minerals' fourth quarter and full year 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 performance. These statements involve risks that may cause our actual results 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 2024 10-K. We 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. Joining me on the call from the company are Tom Carter, Chairman, CEO, and President, Taylor DeWalsh, Senior Vice President, Chief Financial Officer and Treasurer, Kerry Clark, Senior Vice President, Chief Commercial Officer, Steve Putman, Senior Vice President and General Counsel, and Fowler Carter, Senior Vice President, Corporate Development. I'll now turn the call over to Tom.

Good morning to everyone on the call and thank you for joining us today to discuss our fourth quarter and full year 24 results. Before getting into those details, I want to congratulate Fowler Carter on his recent promotion to SVP of Corporate Development, where he will continue to lead our acquisition program and work with all of the team on our ongoing long-term initiatives. 2024 can be described in two halves. We started the year with additive oil production and revenue from our strong oil assets, but weak natural gas pricing hindered production in the second half of the year. Despite the natural gas headwinds, our robust portfolio of both oil and gas assets enabled us to remain within our production guidance and hold our distributions at 37.5%. cents for the fourth quarter we're encouraged by the stronger natural gas pricing fundamentals which coupled with our attractive oil assets puts blackstone in a solid position for 2025. in addition we continue to focus on our targeted acquisition strategy which further builds on our long runway of high interest development opportunities on the acquisition front we added another $43 million in minerals and royalty acquisitions during the quarter, bringing our total acquisitions since September of 23 to around $130 million. In 2025, we're confident that we will continue to identify and execute on accretive opportunities, which enhance our existing asset position, increase development opportunities, and ultimately add long-term value to the shareholders. Overall, it was a solid quarter and a solid year despite a volatile pricing environment. We're pleased to hold our distribution flat during the year with excess coverage. Our clean balance sheet and ample liquidity position enable us to continue to execute on our commercial strategy, including targeted grassroots acquisitions and working with operators to achieve full field development across our assets. Constructive natural gas outlook buoyed by growth in LNG demand and robust oil production from multiple basins provides a solid outlook for 25 and long profitable runway for the company to ultimately drive strong long-term shareholder returns. With that, I'll turn it over to Taylor to walk through the financial details of the quarter.

Thank you, Tom, and good morning, everyone. As Tom pointed out, we had a solid quarter despite continued commodity price volatility. Mineral and royalty production was 34.8 thousand BLE per day in the fourth quarter, and total production volumes were 36.1 thousand BLE per day, both of which are down from last quarter. For 2024, mineral and royalty production was 36.6 thousand BLE per day, while total production volumes averaged 38.5 thousand BLE per day. Net income was $46.3 million for the fourth quarter, with adjusted EBITDA being $90.1 million. 59% of oil and gas revenue in the quarter came from oil and condensate production. For the full year 2024, net income was $271.3 million, with adjusted EBITDA totaling $380.9 million. We maintained our distribution at $0.375 per unit for the quarter, or $1.50 on an annualized basis. Distributable cash flow for the quarter was $81.9 million, which represents 1.03 times coverage for the quarter. In conjunction with the earnings release, we released our 2025 guidance yesterday. As we look forward to the full year 2025, we expect an increase in production from 2024 levels. In addition to activity across our broad acreage position, this production increase is driven by our unique high-interest development activity we highlighted in our press release last night. In East Texas, we continue to work with multiple operators to promote development on our Shelby Trough acreage. Currently, Exco is operating one rig and Athon is operating three rigs on the company's acreage. Athon has already turned to sales 11 gross wells in 2025, with another 17 expected for the remainder of the year. In addition, the accelerated development agreements in the Louisiana Hainesville are well underway. with first production on two high-interest wells during the fourth quarter of 2024, and another 11 gross wells expected to begin producing during 2025. Under these agreements, the operators will provide near-term certainty and accelerated development on BSM's high-interest areas in exchange for a slightly reduced royalty burden. In our Permian position, we are tracking activity across our acreage, including a large development in Culberson County. This development includes 37 gross wells on Blackstone's acreage. Currently, 13 wells have been slugged, and we expect eight of the 37 wells to first production in 2025. These developments across different basins represent unique high-interest assets within our portfolio and further demonstrate our strong, diverse asset base covering growth opportunities in both oil and gas plays. We expect lease bonus, operating expense, and production costs for 2025 to be in line with 2024. G&A is expected to increase slightly in 2025 as a result of hiring and promotions during the last year, as well as some additional hiring expected in 2025. Again, we had a solid quarter and year despite volatility in natural gas prices. With a strong start to 2025, we are confident in our long-term strategy and our ability to generate long-term value for our shareholders. With that, I'd like to open up the call for questions.