Black Stone Minerals LP (BSM) will cut its quarterly distribution by another 73.3 percent to $0.08 per unit in the second quarter of 2020. Earlier this year the owner of oil and natural gas mineral interests in the United States had already cut its distribution by 18.9 percent.

The next distribution will be payable on May 21, 2020 to unitholders of record on May 14, 2020. A new annual distribution rate of 32 cents per unit yields 5.5% at a price of $5.79.

In its press release BSM statest that the reduction in distributions is a result of the Board’s decision to increase the amount of retained free cash flow for debt reduction and balance sheet protection during this period of unprecedented challenges for the industry and the country.

Thomas L. Carter, Jr., Black Stone Minerals’ Chairman and Chief Executive Officer, commented: "We have always been conservative in managing our balance sheet, which is reflected in our low leverage in comparison to industry norms, and that’s especially important today. We believe our large, diverse asset base, weighting towards natural gas for production and reserves, and robust hedge position for 2020 will generate stable cash flows during the year despite the current market disruptions. That will allow us to reduce more debt and further strengthen our balance sheet.

“It has been said ‘prepare for the worst and hope for the best,’” Mr. Carter added. “That is what we will do. The Board is very keen on returning to a more robust distribution, and when we have a clearer line of sight on the global recovery and all related matters, we intend to reward our unitholders.”

Black Stone Minerals, L.P. is an owner of oil and natural gas mineral interests in the United States. The Partnership owns mineral interests and royalty interests in 41 states and 64 onshore basins in the continental United States. The Partnership also owns and selectively participates as a nonoperating working interest partner in established development programs, primarily on its mineral and royalty holdings.