Can you provide an update on potential new Haynesville agreements, beyond Adamas, Revenant, and Caturus?

The company is actively marketing additional acreage in the Shelby Trough and is close to formally signing and disclosing a new agreement with another Haynesville operator, building on past success. “we're getting close to being able to disclose more information as it relates to formally signing up another agreement with another Haynesville operator.”

How is the company thinking about its capital structure longer term, especially with leverage increasing and $300 million in preferred stock needing to be addressed in about a year?

The company maintains peer-leading leverage and is evaluating options for the preferred stock in the next open window. Current capital allocation prioritizes expanding the Shelby Trough through bolt-on acquisitions. “As we look out to the future, certainly taking into consideration the agreement that we have with Apollo right now on the preferred. But as we get into the next open window, we're certainly continuing to evaluate kind of uses of our capital and how the preferred fits into that.”

What drove stronger-than-expected oil volumes and the decline in Haynesville gas, and what's the H2 production outlook?

Oil volumes benefited from price-driven activity and DUCs being turned to sales. Gas volumes were lumpy due to high-interest positions and timing of wells. The company is confident in higher production from increased rig counts and advancing development programs in the medium to long term. “So looking at the oil production, we have seen some price-driven activity, particularly operators turning DUCs to sales. ... But with the recent increase in rig counts on us, we are confident that, that activity is going to turn into higher production.”

BSM

Black Stone Minerals (BSM) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Aug 4, 2026

Source: earnings call transcript

Executive summary

Black Stone Minerals Q2 FY26 — Distribution Increase Amidst Strategic Execution

Black Stone Minerals delivered a strong quarter, increasing its distribution by 7% and demonstrating confidence in its diversified portfolio and strategic execution. Despite a dip in natural gas production, the company is seeing encouraging activity across its core areas and is focused on converting this into sustainable production and long-term value. Management is actively pursuing new development agreements and managing its asset base to capitalize on future demand.

Highlights

Increased quarterly distribution by 7% to $0.32 per unit, supported by 1.18x coverage.
Completed $40 million in mineral and royalty acquisitions during the quarter.
Generated approximately $13 million in lease bonus and other income in the first half of the year.
Collected $6.5 million in refunds from deduct-free lease provision reviews.
Benefited from strong oil production and higher oil pricing from Permian and Bakken assets.

Concerns

Production dipped from the first quarter, primarily due to lower natural gas mineral and royalty volumes in the Haynesville.
Leverage increased from 0 in 2024 to "a little bit over half a turn" with $300 million of preferred stock on the balance sheet.

Guidance & targets

Category	Target	Timeline	Confidence
Adamas wells online	8 wells medium materiality	remainder of 2026 · FY26	High
Adamas wells to drill	17 wells medium materiality	new program year	High
Caturus development drilling	commence development drilling medium materiality	second half of 2026 · FY26	High
Blue Arrow wells online	22 wells medium materiality	second half of 2026 and into 2027 · FY26-FY27	High
Overall production and distributions	growing high materiality	long-term	High

Deals & partnerships

Multiple Mineral and royalty acquisitions $40 million

Deployed almost $300 million in acquisitions over nearly 3 years, primarily focused on acreage within or adjacent to core development areas.

Adamas Development program on Shelby Trough acreage ongoing

Adamas operated two rigs and turned four wells to sales in July; plans to drill 17 wells under the new program year.

Revenant Development program ongoing

Revenant continued its development program and spud two additional wells despite a reduction in its first year drilling commitment.

Caturus Development agreement ongoing

Caturus has a pilot well underway in Cherokee County and expects to commence development drilling during the second half of 2026.

Prospective operator New development agreement

Fruitful discussions ongoing regarding a new development agreement.

Risks & headwinds

Production variability and decline in natural gas volumes Q2 FY26

Production dipped from the first quarter, primarily due to lower natural gas mineral and royalty volumes in the Haynesville.

Mitigation:Increased rig counts and advancing development programs are expected to lead to higher production; diversified portfolio with strong oil assets helps offset gas volume impact.

Softer natural gas prices current

Implied headwind, but not quantified directly as an impact.

Mitigation:Industry pull towards the Shelby Trough due to dwindling legacy Haynesville inventory; strategic location near Gulf Coast demand centers and increasing power demand positions assets well for future gas demand.

Increased leverage and preferred stock obligations current, with preferreds due in a little over a year

Leverage inched up from 0 in 2024 to "a little bit over half a turn" with $300 million of preferred stock on the balance sheet.

Mitigation:Company maintains peer-leading leverage; evaluating options for the preferreds in the next open window; current capital allocation prioritizes accretive acquisitions.

What to watch in Q3 FY26

New Haynesville development agreement

Next quarter

Current Getting close to being able to disclose more information

Target Formal signing and disclosure of a new agreement

Why it matters

Expands contracted development footprint and supports long-term production growth in a key area.

That marketing has gone really well, and we're getting close to being able to disclose more information as it relates to formally signing up another agreement with another Haynesville operator.

Find out whether BSM delivers this. Inve re-checks your case every morning.

Q&A highlights

What drives confidence in maintaining the 7% distribution increase, given the company's tradition of fixed distributions?

The confidence stems from a combination of factors: the forecast for a coming ramp in production from development agreements, and strong results from oil assets. The company aims to increase distributions when confident in their sustainability.

“we do try to increase distributions when we have confidence that we're going to be able to maintain that distribution, and that's where we sit today.”

asked by Jonathan Mardini · answered by Taylor DeWalch

2 min read 6 chapters

Detailed narrative

Strategic Execution and Portfolio Diversification

Black Stone Minerals is actively executing a differentiated strategy, advancing development in the Shelby Trough and Haynesville expansion, pursuing mineral acquisitions, and managing its broader portfolio. The company's diversified oil and gas assets, including strong contributions from Permian and Bakken, provide resilience and benefit from higher oil prices, offsetting natural gas volume fluctuations.

Core Area Development Activity

Development activity is progressing across key areas. Adamas is operating two rigs and turned four wells to sales in July, with eight more expected online by year-end 2026 and 17 planned for the new program year. Revenant spud two additional wells, and Caturus has a pilot well underway, expecting to commence development drilling in the second half of 2026.

Blue Arrow also turned three wells to sales in the Southern Delaware Basin, with 22 more anticipated by early 2027.

Successful Acquisition and Asset Management Initiatives

The company's acquisition program deployed $40 million in mineral and royalty acquisitions during Q2, bringing the total to nearly $300 million over three years, primarily in core development areas. Leasing and asset management efforts generated $13 million in lease bonus and other income in H1 2026, and a review of deduct-free lease provisions resulted in $6.5 million in refunds collected to date.

Haynesville Expansion and Industry Interest

Activity in the Haynesville increased significantly, with rig counts rising on the company's acreage. Management is in discussions with a prospective operator for a new development agreement in the Shelby Trough and Haynesville expansion area. Strong results from Expand's Bobby Yancey well reinforce the subsurface thesis and long-term development potential, positioning the company well for future natural gas demand.

Distribution Increase and Financial Strength

Black Stone Minerals increased its quarterly distribution by 7% to $0.32 per unit, or $1.28 annualized, reflecting confidence in future performance. This increase was supported by strong cash flow generation, with net income of $106 million, adjusted EBITDA of $91 million, and distributable cash flow of $80 million, maintaining a healthy 1.18x distribution coverage.

Capital Structure and Leverage

The company's leverage has inched up to "a little bit over half a turn" from 0 in 2024, with $300 million in preferred stock on the balance sheet. Management views this as peer-leading and is evaluating options for the preferreds in the next open window, while continuing to prioritize accretive acquisitions in the Shelby Trough.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.