Company: BSM
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001621434-25-000133
Chunk: 90

Company: Black Stone Minerals, L.P.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 8
Chunk 90
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 other income. When we lease our mineral interests, we generally receive an upfront cash payment, or a lease bonus. Lease bonus revenue can vary substantively between periods because it is derived from individual transactions with operators, some of which may be significant. Lease bonus and other income for the third quarter of 2025 was higher than the same period in 2024. Leasing activity in the Permian Basin and Haynesville/Bossier plays made up the majority of lease bonus and other income for the third quarter of 2025, while the majority of the third quarter 2024 activity came from leasing activity in the Bakken/Three Forks. 

Operating Expenses

Lease operating expense. Lease operating expense includes recurring expenses associated with our non-operated working interests necessary to produce hydrocarbons from our oil and natural gas wells, as well as certain nonrecurring expenses, such as well repairs. Lease operating expense increased for the quarter ended September 30, 2025 as compared to the same period in 2024, primarily due to increased nonrecurring service-related expenses, including workovers.

Production costs and ad valorem taxes. Production taxes include statutory amounts deducted from our production revenues by various state taxing entities. Depending on the regulations of the states where the production originates, these taxes may be based on a percentage of the realized value or a fixed amount per production unit. This category also includes the costs to process and transport our production to applicable sales points. Ad valorem taxes are jurisdictional taxes levied on the value of oil and natural gas minerals and reserves. Rates, methods of calculating property values, and timing of payments vary between taxing authorities. For the quarter ended September 30, 2025, production costs and ad valorem taxes decreased as compared to the quarter ended September 30, 2024, primarily due to lower production taxes from decreased oil commodity prices and reduced natural gas production, as well as lower ad valorem tax estimates.

Exploration expense. Exploration expense typically consists of dry-hole expenses, payments for delay rentals where the Partnership is the lessee, and geological and geophysical costs, including seismic costs, and is expensed as incurred under the successful efforts method of accounting. For the quarter ended September 30, 2025, exploration expenses decreased compared to the same period in 2024, primarily due to a decrease in seismic costs.

Depreciation, depletion, and amortization. Depletion is the amount of cost basis of oil and natural gas properties attributable to the volume of hydrocarbons