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Black Stone Minerals' (BSM) CEO Tom Carter on Q1 2022 Results - Earnings Call Transcript

May 03, 2022 4:03 PM ETBlack Stone Minerals, L.P. (BSM)4 Comments
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Black Stone Minerals, L.P. (NYSE:BSM) Q1 2022 Earnings Conference Call May 3, 2022 11:30 AM ET

Company Participants

Evan Kiefer – Vice President of Investor Relations

Tom Carter – Chairman and Chief Executive Officer

Jeff Wood – President and Chief Financial Officer

Garrett Gremillion – Vice President of Engineering and Geology

Thad Montgomery – Vice President of Land

Conference Call Participants

Leo Mariani – KeyBanc

Derrick Whitfield – Stifel

Ken Reese – Sagepoint

TJ Schultz – RBC Capital

Trafford Lamar – Raymond James


Ladies and gentlemen, thank you for standing by and welcome to the Black Stone Minerals First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Thank you.

I would now like to hand the conference over to your speaker today, Evan Kiefer, Vice President of Investor Relations. Please go ahead, sir.

Evan Kiefer

Thank you, Ren, and good morning to everyone. Thank you for joining us either by phone or online for the Black Stone Minerals first quarter 2022 earnings conference call. Today’s call is being recorded and will be available on our website along with the earnings release, which was issued last night.

Before we start, I’d like to advise you that we will be making forward-looking statements during this call about our plans, expectations and assumptions regarding our future performance. These statements involve risks that may cause our actual results to differ materially from the results expressed or implied in our forward-looking statements.

For a discussion of these risks, you should refer to the cautionary information about forward-looking statements in our press release from yesterday and the Risk Factor sections of our 2021 10-K. We may refer to certain non-GAAP financial measures that we believe are useful in

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Comments (4)

And that is the complete problem, they have left so much money on the table with the hedges. They will never be rewarded when energy prices eventually go down. The stock will fall, with investors anticipating the decline of the income as hedges roll off. It is a lose / lose strategy.
houtex profile picture
The stock will fall when commodity prices do. I don’t think anyone, including management, disagrees with that. You have 80%+ of the NPV exposure to the forward curve (or whatever — it’s a large number), so even though the 20% part is hedged, it won’t keep the units flat overall. It’s an open question whether or not the reduced volatility of cash flows reduces value through the cycle as lower vol means a lower discount rate. I *suspect* that it doesn’t create value because the current owners (unlike the pre-IPO owners) own the units for the commodity price exposure, but to prove that I’d have to somehow create a White Stone Minerals that has the same assets and liabilities but no hedges.
Go and do likewise profile picture
Jeff Wood:
"We’re about – we’re probably 65% to 70% hedged for 2022 and probably in the 10% to 20% hedged for 2023 as we stand here today."
Go and do likewise profile picture
Jeff Wood:
"Look, as anyone who’s followed this company for a long time knows, we have been consistent hedgers. And so for example, that benefited us greatly in 2021 and hampered result – I mean, sorry, in 2020 and hampered results in 2021, but what it’s done is just created some stability to our cash flow stream that it would otherwise be more volatile and what our Board has indicated and our Board is comprised almost entirely of large shareholders of Black Stone is that they appreciate that consistency as opposed to just saying, hey, we’re going to be a proxy for lower 48 production and fully swing with prices."

"So it’s just – it’s a corporate philosophy."
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