Story Stocks®
Updated: 30-Apr-15 09:29 ET
Black Stone Minerals (BSM) - Natural Gas Mineral Asset Owner Expected to IPO Tomorrow
Tomorrow, Black Stone Minerals (BSM), one of the largest owners of natural gas mineral assets in the United States, is expected to price its 22.5 million share IPO within the range of $19-21. If priced at the midpoint, this would raise $450 million in gross proceeds.
For some background, BSM's principal business is focused on maximizing the value of its portfolio of assets through the management and expansion of its asset base via acquisitions of additional mineral interests and royalty interests. Its primary objective is to grow its reserves, production, and cash generated from operations, while paying a growing quarterly distribution to its unit holders.
BSM currently owns mineral interests in approximately 14.5 million acres, with an average 48.1% ownership interest in that acreage. It also owns non-participating royalty interests in 1.2 million acres and over-riding interests in 1.4 million acres. Its mineral and royalty interests are located in 41 states and in 62 onshore basins in the continental United States. Many of these interests are in active resource plays, including the Bakken/Three Forks plays, Eagle Ford Shale, Wolfcamp play, Haynesville play, Granite Wash, and Fayetteville Shale.
Taking a look at the financials, for FY14, BSM's total revenue increased by 18% to $548.3 million. The increase was made up of $43.2 million from commodity derivative instruments, $23.8 million from higher production volumes, $14.3 million from higher lease bonus, and $3.4 million from higher realized commodity prices.
Not surprisingly, BSM is a strong cash flow generator, with cash flow from operations up 23% y/y to $396.1 million for FY14. For the four quarters ending March 31, 2016, BSM is forecasting minimum quarterly distributions of $0.2625/unit, or, $1.05 annually. At the mid-point of the $19-$21 expected price range, this would equate to an annualized yield of 5.25%.
For some background, BSM's principal business is focused on maximizing the value of its portfolio of assets through the management and expansion of its asset base via acquisitions of additional mineral interests and royalty interests. Its primary objective is to grow its reserves, production, and cash generated from operations, while paying a growing quarterly distribution to its unit holders.
BSM currently owns mineral interests in approximately 14.5 million acres, with an average 48.1% ownership interest in that acreage. It also owns non-participating royalty interests in 1.2 million acres and over-riding interests in 1.4 million acres. Its mineral and royalty interests are located in 41 states and in 62 onshore basins in the continental United States. Many of these interests are in active resource plays, including the Bakken/Three Forks plays, Eagle Ford Shale, Wolfcamp play, Haynesville play, Granite Wash, and Fayetteville Shale.
Taking a look at the financials, for FY14, BSM's total revenue increased by 18% to $548.3 million. The increase was made up of $43.2 million from commodity derivative instruments, $23.8 million from higher production volumes, $14.3 million from higher lease bonus, and $3.4 million from higher realized commodity prices.
Not surprisingly, BSM is a strong cash flow generator, with cash flow from operations up 23% y/y to $396.1 million for FY14. For the four quarters ending March 31, 2016, BSM is forecasting minimum quarterly distributions of $0.2625/unit, or, $1.05 annually. At the mid-point of the $19-$21 expected price range, this would equate to an annualized yield of 5.25%.
