Company: BSM
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001628280-25-022559
Chunk: 103

Company: Black Stone Minerals, L.P.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 2
Chunk 103
---
 taxes are jurisdictional taxes levied on the value of oil and natural gas minerals and reserves. Rates, methods of calculating property values, and timing of payments vary between taxing authorities. For the quarter ended March 31, 2025, production costs and ad valorem taxes decreased as compared to the quarter ended March 31, 2024, primarily due to lower production taxes stemming from lower oil and condensate commodity prices and decreased production volumes.

Exploration expense. Exploration expense typically consists of dry-hole expenses, payments for delay rentals where the Partnership is the lessee, and geological and geophysical costs, including seismic costs, and is expensed as incurred under the successful efforts method of accounting. For the quarter ended March 31, 2025, exploration expenses increased compared to the same period in 2024, primarily due to a one-time $4.0 million purchase of seismic data and additional costs related to seismic data acquisition projects. These seismic initiatives aim to further bolster our subsurface evaluation of the expanded Shelby Trough area. Exploration expenses were minimal in the first quarter of 2024.

25

Depreciation, depletion, and amortization. Depletion is the amount of cost basis of oil and natural gas properties attributable to the volume of hydrocarbons extracted during a period, calculated on a units-of-production basis. Estimates of proved developed producing reserves are a major component of the calculation of depletion. We adjust our depletion rates semi-annually based upon mid-year and year-end reserve reports, except when circumstances indicate that there has been a significant change in reserves or costs. Depreciation, depletion, and amortization decreased for the quarter ended March 31, 2025 as compared to the same period in 2024 due to lower production volumes.

General and administrative. General and administrative expenses are costs not directly associated with the production of oil and natural gas and include expenses such as the cost of employee salaries and related benefits, office expenses, and fees for professional services. For the quarter ended March 31, 2025, general and administrative expenses increased as compared to the same period in 2024, primarily due to increased cash and equity-based compensation. The increase in equity-based compensation was due to higher costs recognized for performance-based incentive awards resulting from upward movements in our common unit price during the quarter ended March 31, 2025 compared to minimal price changes in the corresponding period in 2024.

Interest expense. Interest expense in the first quarter of 2025 increased as compared to the corresponding period in