Company: BSM
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001628280-25-007730
Chunk: 138

Company: Black Stone Minerals, L.P.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 138
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 for overseeing the preparation of our reserve estimates for 2023 and 2022. Mr. Gremillion is a petroleum engineer and had approximately 14 years of reservoir-engineering experience as of December 31, 2023.

Our historical proved reserve estimates were prepared in accordance with our internal control procedures. Throughout the year, our technical team met with NSAI to review properties and discuss evaluation methods and assumptions used in the proved reserves estimates, in accordance with our prescribed internal control procedures. Our internal controls over the reserves estimation process include verification of input data used in the reserves evaluation software as well as reviews by our internal engineering staff and management, which include the following:

•Comparison of historical operating expenses from the lease operating statements to the operating costs input in the reserves database;

•Review of working interests, net revenue interests, and royalty interests in the reserves database against our well ownership system;

•Review of historical realized commodity prices and differentials from index prices compared to the differentials used in the reserves database;

•Evaluation of capital cost assumptions derived from Authority for Expenditure estimates received;

•Review of actual historical production volumes compared to projections in the reserve report;

•Discussion of material reserve variances among our internal reservoir engineers; and

•Review of preliminary reserve estimates by our senior management with our internal technical staff.

Estimation of Proved Reserves

In accordance with rules and regulations of the SEC applicable to companies involved in oil and natural gas producing activities, proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. The term “reasonable certainty” means deterministically, the quantities of oil and/or natural gas are much more likely to be achieved than not, and probabilistically, there should be at least a 90% probability of recovering volumes equal to or exceeding the estimate. All our estimated proved reserves as of December 31, 2024, 2023, and 2022 are based on deterministic methods. Reasonable certainty can be established using techniques that have been proved effective by actual production from projects in the same reservoir or an analogous reservoir or by using reliable technology. Reliable technology is a grouping of one or more technologies (including computational methods) that have been field tested and have been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.