Commercial agreements accelerate development — Black Stone signed deals with Revenant and Katouris that place about 500,000 gross acres into development and ramp minimum drilling to 37 gross wells/year by 2031 (50 gross wells including Aethon), with Aethon already bringing new Shelby Trough wells online at ~25–30 MMcf/d and more wells slated for 2026.
2026 marked as an inflection year — The partnership exited 2025 at roughly 32,000 BOE/day and expects production to “step up” materially through 2026 while reiterating the quarterly distribution of $0.30 per unit (DCF coverage 1.05x) and citing hedges and minimum drilling commitments as support for the payout.
Big seismic program and targeted acreage adds — Black Stone is funding two 3D seismic surveys covering about 360,000 gross acres (most costs in 2026, completion targeted early 2027) to guide development and potentially license data, and has invested roughly $240 million in accretive mineral and royalty acquisitions across the Shelby Trough and Haynesville expansion area.
Black Stone Minerals (NYSE:BSM) executives highlighted new development agreements, expanding drilling commitments in the Shelby Trough and Haynesville expansion area, and a planned step-up in production through 2026 during the partnership’s fourth-quarter and full-year 2025 earnings call.
Co-CEO and President Fowler Carter said the partnership had “a great 2025,” despite headwinds from production and oil prices, and emphasized commercial progress intended to support future volumes. The company signed development agreements with Revenant Energy and Katouris Energy, which management said place approximately 500,000 gross acres into development.
Under those agreements, minimum drilling commitments are expected to ramp to 37 gross wells per year by 2031, management said. Fowler Carter added that including Aethon, the programs total 50 gross wells over the same period.
Aethon recently brought several new wells online in the Shelby Trough at about 25 MMcf to 30 MMcf per day, according to management, with another five wells expected to come online in the first quarter. Management also said an additional 18 wells are expected to be drilled throughout 2026.
Co-CEO and President Taylor DeWalch said the partnership ended 2025 and began 2026 at about 32,000 BOE per day, and expects production to “materially” grow throughout 2026. While overall production guidance was described as roughly flat year-over-year, DeWalch said the company expects “solid growth from Q4 2025–Q4 2026.”
In response to an analyst question about cadence, DeWalch said he expects production to start at roughly the 2025 exit rate and “step up” as the year progresses, with some early contributions from Aethon-related wells and increasing activity later in the year.
Management also outlined expectations for operator activity in 2026. Fowler Carter said Revenant is expected to spud more than its minimum six-well commitment, while Katouris plans to drill its initial wells, including a pilot well.
Executives said the company is working to build additional opportunity in its Haynesville expansion area, with subsurface analysis supporting a potential expansion of the Shelby Trough and Haynesville Basin toward the Western Haynesville.
Fowler Carter also said Black Stone Minerals has entered into a letter of intent with “a reputable operator with experience in the Haynesville” involving a “meaningful amount of acreage” in the Gulf Coast region outside the company’s recent focus areas.
On acquisitions, Fowler Carter said the program launched in 2023 has invested about $240 million to add mineral and royalty acreage across the Shelby Trough and Haynesville expansion area, describing the purchases as accretive.
Chief Financial Officer Chris Bonner said fourth-quarter mineral and royalty production averaged 30,900 BOE per day, down 11% from the prior quarter, while total production averaged 32,100 BOE per day. He added that the partnership finished 2025 at the high end of its updated guidance, noting the prior update reflected lower natural gas-directed drilling activity and volume levels in the Shelby Trough over the last couple of years.
For the fourth quarter, Bonner reported:
Net income of $72.2 million
Adjusted EBITDA of $76.7 million
Oil and condensate accounted for 51% of oil and gas revenue
Distribution declared of $0.30 per unit for the quarter (or $1.20 annualized)
Distributable cash flow of $66.8 million, representing 1.05x coverage
During Q&A, management said it was confident it can continue to fund the $0.30 quarterly distribution based on minimum drilling commitments and ongoing activity, and Bonner added that the partnership has “strong hedges in place for natural gas throughout the year.”
Bonner said the partnership is in the process of shooting two “substantial” 3D seismic surveys in the Shelby Trough and Haynesville expansion area, covering about 360,000 gross acres. He acknowledged initiating and funding such surveys is not typical for Black Stone Minerals, but said management believes it will help control timing, pace, and focus of data to support development under contracted agreements.
Bonner said most of the remaining costs are expected to be incurred in 2026, with completion targeted for early 2027. He also said the surveys are subject to partial reimbursement, reported costs reflect Black Stone Minerals’ share, and the partnership retains full ownership of the data. Management said the proprietary data could potentially be licensed to industry over time, creating an opportunity for additional revenue.
In Q&A, the company said the exploration expense forecast is primarily seismic (about 90%+), with more expense expected when the shoot takes place mid-year, and it does not anticipate additional significant seismic costs within that development area beyond the two shoots.
Bonner also noted the company updated the presentation of adjusted EBITDA and distributable cash flow to exclude seismic acquisition costs, saying that approach better reflects how management views the investments.
Management closed the call by reiterating optimism for growing natural gas demand tied to LNG and electric power generation, and said the partnership’s proximity to Gulf Coast demand centers positions it to benefit as gas supply needs increase in the coming years.
Black Stone Minerals L.P. (NYSE: BSM) is a publicly traded limited partnership that acquires and manages oil and natural gas mineral interests and producing royalty interests across the United States. The company’s business model centers on holding fractional ownership in subsurface mineral estates, which allows it to earn royalty income from hydrocarbon production without taking on the capital expenditures or operating risks associated with exploration and development.
Founded in 1876 and headquartered in Houston, Texas, Black Stone Minerals has built a diversified portfolio spanning key U.S.
