Company: BSM
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001621434-25-000108
Chunk: 47

Company: Black Stone Minerals, L.P.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 47
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 and 2024, respectively.

Gain (loss) on commodity derivative instruments. Cash settlements we receive represent realized gains, while cash settlements we pay represent realized losses related to our commodity derivative instruments. In addition to cash settlements, we also recognize fair value changes on our commodity derivative instruments in each reporting period. The changes in fair value result from new positions and settlements that may occur during each reporting period, as well as the relationships between contract prices and the associated forward curves. During the second quarter of 2025, we recognized a gain from our commodity derivative instruments compared to a loss in the same period in 2024. For the three months ended June 30, 2025, we recognized $3.2 million of realized gains and $49.6 million of unrealized gains from our oil and natural gas commodity contracts, compared to $11.8 million of realized gains and $17.4 million of unrealized losses in the same period in 2024. The unrealized gains on our commodity contracts during the second quarter of 2025 were primarily driven by changes in the forward commodity price curves for oil. The unrealized losses for the same period in 2024 were primarily driven by changes in the forward commodity price curves for natural gas. 

Lease bonus and 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 second quarter of 2025 was consistent with the same period in 2024. Leasing activity in the Permian Basin and Bakken/Three Forks plays made up the majority of lease bonus and other income for the second quarter of 2025, while the majority of the second quarter 2024 activity came from leasing activity in the Permian Basin. 

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 June 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