Company: BSM
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001621434-25-000108
Chunk: 79

Company: Black Stone Minerals, L.P.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 79
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 in the first quarter of 2025, which drove higher heating demand and resulted in lower-than-average storage levels. Natural gas pricing was also supported by higher wholesale power pricing this summer compared to last summer. 

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 Prices1Second QuarterFirst QuarterSecond QuarterFirst QuarterWTI spot oil price ($/Bbl)$66.30 $71.87 $82.83 $83.96 Henry Hub spot natural gas ($/MMBtu)3.26 4.11 2.42 1.54 

1    Source:  EIA

19

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 Count1Second QuarterFirst QuarterSecond QuarterFirst QuarterOil432 484 479 506 Natural gas109 103 97 112 Other6 5 5 3 Total547 592 581 621 

1    Source:  Baker Hughes Incorporated

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 gas prices are significantly influenced by storage levels throughout the year. Accordingly, we monitor the natural gas storage reports regularly in the evaluation of our business and its outlook.

Historically, natural gas supply and demand fluctuates on a seasonal basis. From April to October, when the weather is warmer and natural gas demand is lower, natural gas storage levels generally increase. From November to March, storage levels typically decline as utility companies draw natural gas from storage to meet increased heating demand due to colder weather. In order to maintain sufficient storage levels for increased seasonal demand, a portion of natural gas production during the summer months must be used for storage injection