Company: BSM
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001628280-25-022559
Chunk: 95

Company: Black Stone Minerals, L.P.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 2
Chunk 95
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 business environment as it affects us. 

Commodity Prices and Demand

Oil and natural gas prices have been historically volatile based upon the dynamics of supply and demand. To manage the variability in cash flows associated with the projected sale of our oil and natural gas production, we use various derivative instruments, which have recently consisted of fixed-price swap contracts.

Oil prices decreased during the first quarter of 2025 due to concerns arising from changes in trade policies, including the imposition of tariffs and other import/export restrictions, and their resulting consequences, which raised fears of a global economic slowdown and weakened expectations for oil demand growth. In April 2025, OPEC+ announced plans to accelerate production increases starting in May that were originally set for July, causing oil prices to continue to decrease. Natural gas prices rose in the first quarter of 2025 due to unusually cold weather in January and February, leading to higher consumption for heating and lower than expected storage levels. In addition, two new LNG export facilities began operations during the quarter, driving additional demand and higher prices. Given the dynamic nature of these events, including uncertainty regarding changes in trade policies and their resulting consequences, we cannot reasonably estimate how long these market conditions will persist. While we use derivative instruments to partially mitigate the impact of commodity price volatility, our revenues and operating results depend significantly upon the prevailing prices for oil and natural gas.

The following table reflects commodity prices at the end of each quarter presented:20252024Benchmark Prices1First QuarterFirst QuarterWTI spot oil price ($/Bbl)$71.87 $83.96 Henry Hub spot natural gas ($/MMBtu)4.11 1.54 

1    Source:  EIA

Rig Count

As we are not the operator of record on any producing properties, drilling on our acreage is dependent upon the exploration and production companies that lease our acreage. In addition to drilling plans that we seek from our operators, we also monitor rig counts in an effort to identify existing and future leasing and drilling activity on our acreage. 

The following table shows the rig count at the end of each quarter presented:20252024U.S. Rotary Rig Count1First QuarterFirst QuarterOil484 506 Natural gas103 112 Other5 3 Total592 621 

1    Source:  Baker Hughes Incorporated

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Natural Gas Storage

A substantial portion of our revenue is derived from sales of oil production attributable to our interests; however, the majority of our production is natural gas. Natural