Black Stone Minerals (BSM) Valuation After New Six-Year Caturus Drilling Deal in the Haynesville and Shelby Trough

Black Stone Minerals (BSM) just signed a multi year development agreement with Caturus Energy covering 220,000 gross acres in the Shelby Trough and Haynesville Expansion, effectively mapping out its next phase of gas driven growth.

See our latest analysis for Black Stone Minerals.

The latest Caturus deal lands as Black Stone Minerals’ share price sits at $14.03, with a solid 90 day share price return of 15.66 percent but a near flat 1 year total shareholder return. This suggests long term income holders are waiting to see whether this new gas growth phase can re energize momentum.

If this gas development story has you thinking more broadly about energy opportunities, it could be worth exploring aerospace and defense stocks as another area where long term demand and capital deployment trends really matter.

With the units trading slightly above analyst targets but at a sizable intrinsic discount, are investors overlooking the cash flow upside from this drilling ramp, or is Black Stone Minerals already valued for years of future gas growth?

Most Popular Narrative: 7.9% Overvalued

Compared with the last close at $14.03, the most widely followed narrative sees Black Stone Minerals trading above its implied fair value of $13.00, hinging heavily on a multi year drilling and production ramp.

The expansion of the Shelby Trough and new development agreements (notably with Revenant) are expected to more than double drilling obligations over the next five years, which should drive significant growth in natural gas volumes as global LNG demand rises, positively impacting future revenues and distributable cash flows.

Read the complete narrative.

Want to see how this drilling surge supposedly translates into future earnings power and a richer profit multiple than today, without leaning on tech style growth assumptions? Read on for the full blueprint behind that 6 point something revenue growth outlook, the margin reset it bakes in, and the exact earnings step up it needs to justify the target multiple.

Result: Fair Value of $13.00 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer 2025 production guidance and continued dependence on third party operators could easily derail that smooth, LNG-fueled growth trajectory.

Find out about the key risks to this Black Stone Minerals narrative.

Another Lens on Value

While the consensus narrative calls Black Stone Minerals about 7.9 percent overvalued at $13.00, its current price to earnings ratio of 12.2 times looks inexpensive relative to the US Oil and Gas average of 13.6 times, a 25.1 times peer average, and a 15.4 times fair ratio indicated by our models.

That gap hints at a market still pricing in execution and gas cycle risk more heavily than the multiples suggest, effectively baking in a margin of safety rather than excess, but it remains an open question whether this reflects healthy caution or a potential opportunity for patient income investors.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Black Stone Minerals Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.

A great starting point for your Black Stone Minerals research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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