Black Stone Q3: Net Income $52.4M, Distribution Up 9%, Caturus Acreage Expanded to 950,000
BSM is trading near its 52-week low of $12.93 (14% above the low) on elevated volume (1.9× avg).
Summary
Black Stone reported Q3 net income of $52.4M and distributable cash flow of $93.0M, covering a $0.35 distribution 1.25x, while expanding its Caturus development agreement by 730,000 gross acres and buying $32.7M of Shelby Trough minerals in October.
Key Events · Earnings and Guidance · BSM
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Q3 Results and Distribution
Net income of $52.4 million on total revenue of $99.7 million; distributable cash flow of $93.0 million covered the $0.35 per unit distribution 1.25x. The payout is up 9% from the prior quarter and 17% from Q1's $0.30.
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Caturus Acreage Expanded to 950,000
The amended and restated Caturus agreement adds 730,000 gross acres across two new development areas, with minimum annual drilling commitments rising from 8,000 to 33,600 net lateral feet by 2034. First pilot well in the initial new area is targeted by Q1 2028.
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October Acquisition of $32.7M
Black Stone bought additional Shelby Trough mineral and royalty interests and surface rights for $30.6 million cash plus $2.1 million in common units, securing 3 additional drilling locations. Total acquisitions since September 2023 reach $335.5 million.
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Derivative Loss Hits Reported Income
A $30.2 million loss on commodity derivatives — $29.8 million of it unrealized and non-cash — pulled net income down from $106.4 million in Q2. Adjusted EBITDA still rose to $104.1 million from $91.3 million.
Analysis · BSM · Energy & Transportation
The quarter itself was solid but not a surprise — the $0.35 distribution and $52.4M net income were already public. What is new is the scale of the Shelby Trough build-out: the Caturus agreement now covers 950,000 gross acres (up 730,000), with minimum drilling commitments ramping from 8,000 to 33,600 net lateral feet by 2034, plus $32.7M of October acquisitions ($30.6M cash, $2.1M units). That locks in a multi-year drilling inventory behind a mineral owner that collects royalties without bearing drilling cost. The offset is a $30.2M derivative loss ($29.8M unrealized, non-cash) that cut net income to $52.4M from $106.4M last quarter, and debt that ticked up to $197.0M. Distribution coverage of 1.25x and a reaffirmed $580M borrowing base keep the payout comfortable for now.
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At the time of this filing, BSM was trading at $14.80 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $3.1B. The 52-week trading range was $12.93 to $15.49. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.