Company: BSM
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001621434-25-000133
Chunk: 121

Company: Black Stone Minerals, L.P.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 121
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 and Other Expenses

Lease operating expense. Lease operating expense increased for the nine months 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. For the nine months ended September 30, 2025, production costs and ad valorem taxes decreased as compared to the nine months ended September 30, 2024, primarily due to lower production taxes from decreased oil commodity prices and reduced oil and natural gas production volumes, as well as lower ad valorem tax estimates.

Exploration expense. For the nine months ended September 30, 2025, exploration expense increased as compared to the nine months ended September 30, 2024. The increase was primarily driven by purchases of seismic data and costs from proprietary seismic projects associated with existing and future development programs in the expanded Shelby Trough area.

Depreciation, depletion, and amortization. Depreciation, depletion, and amortization decreased for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to decreased production volumes.

General and administrative. For the nine months ended September 30, 2025, general and administrative expenses slightly increased as compared to the same period in 2024, primarily due to increased salaries, equity-based compensation, and certain one-time personnel-related costs. This increase was partially offset by lower costs recognized under our short-term cash incentive plan and lower professional fees related to consulting costs for internal projects.

Interest expense. Interest expense increased for the nine months ended September 30, 2025 as compared to the corresponding period in 2024. The increase was due to higher average outstanding borrowings under our Credit Facility. 

29

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash generated from operations and borrowings under our Credit Facility. Our primary uses of cash are for distributions to our unitholders, reducing outstanding borrowings under our Credit Facility, and for investing in our business. On November 28, 2023 the distribution rate for the Series B cumulative convertible preferred units was adjusted to 9.8% and will be readjusted every two years thereafter (each, a "Readjustment Date"). The rate set on each Readjustment Date is equal to the greater of (i) the distribution rate in effect immediately prior to the relevant Readjustment Date and (ii) the 10-year