Thank you for joining us, and welcome to the Black Stone Minerals Fourth Quarter and Full Year 2025 Earnings Conference Call. I will now hand the call over to Natalie Liddell, Vice President of Corporate Planning. Please proceed.

Thank you. Good morning, everyone. Thank you for joining us for the Black Stone Minerals Fourth Quarter and Full Year 2025 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 Factors section in our 2025 10-K. We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of those measures to the most directly comparable GAAP measure and other information about these non-GAAP metrics are described in our earnings press release from yesterday, which can be found on our website. Joining me on the call from the company are Tom Carter, Executive Chairman; Taylor DeWalch, Co-CEO and President; Fowler Carter, Co-CEO and President; Steve Putman, Senior Vice President and General Counsel; Chris Bonner, Senior Vice President, Chief Financial Officer and Treasurer. I'll now turn the call over to Fowler.

Thank you, Natalie. Good morning, everyone, and thank you for joining us on our fourth quarter earnings call. If you look at our earnings release from last night, you'll see that we had a great 2025 despite headwinds from production and oil prices. During the year, we achieved significant commercial milestones that will benefit our future production for years to come. We successfully signed development agreements with Revenant Energy and Caturus Energy. These deals place approximately 500,000 gross acres into development with minimum drilling commitments ramping up to 37 gross wells per year by 2031 from those programs, and including Aethon, a total of 50 gross wells over the same period. Aethon also recently brought several new wells online in the Shelby Trough at about 25 to 30 MMcf a day with another 5 wells expected to come online in the first quarter. An additional 18 wells are expected to be drilled throughout 2026. Also in 2026, we expect that Revenant will spud more than its minimum 6-well commitment and Caturus plans to drill its initial wells, including a pilot well. We are also seeing increased activity from others in the Shelby Trough as the industry moves towards available inventory to meet the growing natural gas demand. In addition to these developments, we are building another new opportunity in our Haynesville expansion area that we believe will add significant inventory and scale to the current development. Based on existing subsurface analysis, we believe we can continue to expand the Shelby Trough and Haynesville Basin towards the Western Haynesville. With our continued focus on increasing production from existing assets and driving long-term value for our unitholders, we have also entered into an LOI with a reputable operator with experience in the Haynesville on a meaningful amount of acreage in the Gulf Coast region outside of our recent focus areas. Our acquisition program remains on track as well. Since launching the program in '23, we've invested about $240 million to add accretive mineral and royalty acreage across the Shelby Trough and Haynesville expansion area. We remain confident that the combination of these commercial initiatives will lead to significant growth and value for our unitholders.

Thanks, Fowler. Good morning, everyone. Adding on to Fowler's commentary, we're excited about the increased activity and the ramp in production that we expect throughout 2026. We ended 2025 and begin 2026 at about 32,000 BOE per day, but we see that materially growing throughout 2026. So while production guidance is roughly flat year-over-year, we see solid growth from fourth quarter 2025 to fourth quarter 2026. Our fall investor presentation showed that 2026 is anticipated to be just the beginning of new activity in the Shelby Trough. We expect significant increases in natural gas production and distributions for BSM unitholders over the coming years. Because we have one substantial industry-leading inventory on our acreage in the Shelby Trough and Haynesville expansion and two, advantageous proximity to the Gulf Coast and key demand centers, we are optimistic about the long-term growth for our unitholders. The team has done a phenomenal job the last several years delineating and marketing the Haynesville expansion area and securing the development agreements. We are now preparing to manage the growth in activity through these development agreements with our operating partners. As noted in our release last night, we are strategically increasing G&A in 2026 to support this increase in activity. We remain focused on disciplined capital management and our comprehensive commercial strategy, including grassroots acquisitions, high-interest development agreements, new development opportunities, and proactive asset management across all basins. Those efforts support our goal of delivering near-term and long-term value for Black Stone's unitholders.

Thanks, Taylor, and good morning, everyone. In the fourth quarter, mineral and royalty production was 30,900 BOE per day, a decrease of 11% from the prior quarter. Total production for the quarter was 32,100 BOE per day, and we completed the year at the high end of the updated guidance. As discussed in the release last night, our updated guidance last year reflected lower natural gas-directed drilling activity and volume levels in the Shelby Trough over the last couple of years. We expect 2026 to be a turning point with new and increased development in the Shelby Trough and Haynesville expansion areas, along with high-interest projects in the Permian Basin and ongoing development across our broader assets. We continue to monitor increasing activity levels in the Haynesville and commodity price dynamics as we look towards 2026 production and distribution. The partnership is also in the process of shooting two substantial 3D seismic surveys in the Shelby Trough and Haynesville expansion area, covering about 360,000 gross acres. While initiating and funding these surveys is not typical for Black Stone, we believe it allows us to control the timing, pace, and focus of the data, highlighting our minerals and supporting their development under our contracted agreements. Most of the remaining costs for these surveys are expected to be incurred in 2026 with completion targeted for early 2027. They are subject to partial reimbursement with reported costs reflecting Black Stone's share while the partnership retains full ownership of the data. Over time, the proprietary nature of these surveys may provide opportunities to license the data to industry, potentially generating additional revenue. Together with these supplemental seismic purchases, these assets are expected to enhance subsurface evaluation, further unlock the value of our mineral and royalty acreage, and accelerate development of that acreage. To better reflect how we view these investments, we've updated the presentation of adjusted EBITDA and distributable cash flow to exclude seismic acquisition costs. Turning to the quarter's financial results. Net income was $72.2 million for the fourth quarter with adjusted EBITDA of $76.7 million. 51% of oil and gas revenue in the quarter came from oil and condensate production. As previously announced, we declared a distribution of $0.30 per unit for the quarter or $1.20 on an annualized basis. Distributable cash flow for the quarter was $66.8 million, which represents 1.05x coverage for the period. As Fowler and Taylor mentioned earlier, the partnership's outlook remains strong, anchored by long-term contracted development in our high-interest Shelby Trough acreage as well as our core legacy assets across the U.S. With growing demand from LNG and electric power generation, the outlook for natural gas is increasingly constructive over the next decade. Our significant assets near Gulf Coast LNG facilities position Black Stone to benefit from the substantial call on gas supply, which we expect to increase over the coming years. In conclusion, we had a successful 2025 on many fronts, setting the partnership up for a great 2026 and beyond. We remain confident that our existing acreage positions across numerous basins, coupled with our commercial strategy and the expanded Shelby Trough will provide a strong foundation to deliver sustainable long-term value for unitholders. With that, I'd like to open up the call for questions.

Your first question today comes from Derrick Whitfield from Texas Capital.

Regarding guidance for the year, while I realize some of this is beyond your control, how should we think about the cadence of production from 4Q levels throughout 2026 based on the known developments?

Yes, Derrick, this is Taylor, and I'll start out with that. I mean I think when we look back to 2025 kind of midyear and then along with kind of our investor presentation, we really pointed to where we thought production was headed based on the last couple of years of kind of activity in the Shelby Trough and the decreased activity there. And so where we end 2025 is where we think we're going to start 2026, which is what we've kind of alluded to in the release last night and mentioned in our script this morning. And then I think that where that puts us for the full year is reflected kind of in the guidance. So again, we think we're going to be increasing materially throughout the course of 2026. And most of that is attributable to kind of new development agreements as well as Permian production and those high-interest developments out West.

Taylor, do you think it will plateau at the Q4 level for the first quarter and then gradually increase each quarter? Or do you anticipate more fluctuations than what I've proposed?

No, I think that's correct. You'll notice it beginning to increase. As we've indicated, we have some wells coming online at the start of the year, particularly related to Aethon, and we anticipate that activity will rise throughout the year.

Great. And for my follow-up, in your commentary, you referenced efforts to build new opportunities to further expand your asset base and add new development agreements in both the Shelby Trough and Haynesville expansion area. I guess looking ahead, how would you characterize the pipeline of potential new development agreements? Are these conversations primarily with new operators in the basin or extensions with existing operators? And how should we think about the cadence and acreage scope of incremental agreements over the next 12 to 18 months?

Derrick, I would tell you that we certainly don't discriminate against existing partners or newcomers. We welcome all parties. And while we enjoy the partnerships that are established, we are happy to continue to diversify our new developments with new partners or strengthen existing contracts with established partners.

Your next question comes from the line of Tim Rezvan from KeyBanc Capital Markets.

Switching to the Permian, we noticed comments in the release about leasing outside of the Coterra development area. We also observed that the guidance for liquids is slightly lower in 2026 compared to our expectations. Can you discuss what you're aiming to achieve in the Permian and how this fits into the overall priority given the current situation in the Haynesville?

Sure, Tim. This is Taylor, and I'll start there. I think we're excited to see activity in the Permian kind of in two different folds, if you will. We've got high-interest activity from Coterra, and then we mentioned another large-scale kind of high-interest development that's happening in the Southern Delaware. So that's a bit more proactive asset management, if you will, along with quite a bit of leasing throughout 2025 that we think points to increased activity across '26 and '27. I think if you look at the timing of some of this and when we see those volumes coming on, certainly, we'll see some of the Coterra wells continue to come on over the course of '26. Some of the other activity, I think, really is probably later on in '26 and more materially in 2027. So I think you'll start to see those volumes a little bit later on. But no, we're excited about what's going on. Certainly excited about some of the other folks in the industry and their excitement around the Barnett, which we've also seen leasing pick up. So I think there's a lot to be excited about in the Permian right now.

Yes. I would like to mention that we are aware of the high interest developments we can analyze. As we consider current pricing in the Permian, we are being cautious about the overall development and are careful not to overestimate the broader Permian volumes.

I appreciate the context. My next question is about the Henry Hub strip this year, which is below $3.50 for much of the year going into winter. You've mentioned a potentially flat start to the year with growth. Are you confident that you can fund your $0.30 distribution through distributable cash flow without relying on liquidity? We know that the first quarter will be unusual with a $5 Henry Hub, but as we approach summer, how certain are you that you can support that without depending on liquidity?

Yes. Good question. And maybe I'll start off and Chris, if you want to jump in. But I think it really just sort of following up on what Chris just said, we've taken a stance on being really thoughtful about where we see commodity prices and activity levels and where we think that we've got some pretty solid development that's going to happen, and we're confident in that development based on our agreements and our minimum commitments there. So along with the sort of ongoing activity and wells coming online. So I would say that we're confident that we can continue to fund the distribution and grow throughout the year based on those minimums.

Yes. I would just concur with that assessment and then also note that we do have strong hedges in place for natural gas throughout the year.

Okay. Okay. I just wanted to push on that. And if I could sneak one more in. I appreciate the prepared comments on the seismic, we saw that adjustment with your adjusted EBITDA in the fourth quarter. Should we assume that, that $30 million of exploration expense is all seismic? Is there a cadence to that? Is that a one-time expense? And do you expect to continue to kind of adjust that out for adjusted EBITDA?

Yes, I can answer that. So it is expense throughout the year. We do expect more of it to hit when the shoot is actually taking place in the middle of the year. And it is the majority of the seismic that we forecasted. It's about 90-plus percent of the total. And we do expect the majority of the costs related to these two specific shoots to be completed in early '27, but primarily expensed in '26. And we don't anticipate additional significant seismic costs within this development area.

Yes. I might just add on too and just take that question a little bit further, Tim. The seismic shoot is certainly something, I think, pretty unique for a company like us to do. But I think when you look back at the last couple of years, we have taken a stance of putting subsurface analysis and geology first, and we're pretty convicted in the Rock in the Shelby Trough and the Haynesville expansion. And I think these seismic shoots are just another data point for us to further that story and really build the foundation for our operators to come in and start to develop. And I think as Chris also mentioned in his prepared remarks, these are proprietary shoots. So we own them and look forward to, at some point, also potentially turning those licenses to industry and generating revenue off of them. So a couple of different ways we're thinking about the seismic. But excited to get those shot later this year and just keep on developing the Shelby Trough and the Haynesville expansion.

And there being no further questions, I will now turn the call back over to Taylor DeWalch for some final closing comments.

Thank you all for joining us this morning and look forward to speaking with you all again next quarter.

This concludes today's conference call. Thank you for your participation. You may now disconnect.