Black Stone Minerals said it will cut its quarterly payouts to investors by almost 20 percent because of falling oil and gas prices.
In another sign of the weakening energy sector, the Houston oil and gas royalties firm will reduce its distributions to 30 cents per unit from 37 cents. This is the first time Black Stone has reduced its payout since going public in 2015.
Even during the lean years of the last oil bust in 2015 and 2016, Black Stone steadily hiked investor payments from an initial 16.2 cents per unit in 2015.
“We are taking a proactive approach to strengthen our balance sheet and enhance our financial flexibility with the expectation that 2020 may be a challenging year in terms of commodity prices and overall drilling activity,” said Black Stone CEO Thomas Carter Jr.
“Given the current environment, the board believes that reducing the distribution benefits unitholders by providing additional cash flow for, first, the repayment of debt, and for other such uses as unit repurchases and acquisitions.,” Carter added.
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