Company: BSM
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001628280-25-007730
Chunk: 215

Company: Black Stone Minerals, L.P.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 215
---
 events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This evaluation is performed on a depletable unit basis. We compare the undiscounted projected future cash flows expected in connection with a depletable unit to its unamortized carrying amount to determine recoverability. When the carrying amount of a depletable unit exceeds its estimated undiscounted future cash flows, the carrying amount is written down to its fair value, which is measured as the present value of the projected future cash flows of such properties. The factors used to determine fair value include estimates of proved reserves, future commodity prices, timing of future production, operating costs, future capital expenditures, and a risk-adjusted discount rate.

Unproved properties are also assessed for impairment periodically on a depletable unit basis when facts and circumstances indicate that the carrying value may not be recoverable, at which point an impairment loss is recognized to the extent the carrying value exceeds the estimated recoverable value. The carrying value of unproved properties, including unleased mineral rights, is determined based on management’s assessment of fair value using factors similar to those previously noted for proved properties, as well as geographic and geologic data.

Upon the sale of a complete depletable unit, the book value thereof, less proceeds or salvage value, is charged to income or loss. Upon the sale or retirement of an individual well, or an aggregation of interests which make up less than a complete depletable unit, the proceeds are credited to accumulated DD&A, unless doing so would significantly alter the DD&A rate of the depletable unit, in which case a gain or loss is recorded.

We are unable to predict future commodity prices with any greater precision than the futures market. To estimate the effect lower prices would have on our reserves, we applied a 10% discount to the commodity prices used in our December 31, 2024 reserve report. Applying this discount results in an approximate 1.5% reduction of estimated proved reserve volumes as compared to the undiscounted pricing scenario used in our December 31, 2024 reserve report prepared by NSAI.

Revenues from Contracts with Customers

Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers, requires us to identify the distinct promised goods and services within a contract which represent separate performance obligations and determine the transaction price to allocate to the performance obligations identified. 

Oil and natural gas sales

Sales of oil and natural gas are recognized at the point control of the product is