Robert Deaton presented his in-depth investment thesis on Black Stone Minerals (BSM) at Wide-Moat Investing Summit 2015.

Black Stone Minerals has mineral and royalty interests on 17 million acres across 41 states. There are over 40,000 producing wells on their properties. The company actively leases minerals to third party operators, with approximately 18% of acreage is leased. Its strategy includes acquiring additional mineral and royalty interests in oil and natural gas properties. Black Stone also participates in low risk drilling opportunities in plays that generate attractive returns. The company maintains a conservative capital structure and manages the business for the long term. The share price implies a yield of ~6%. $1.35 per-share minimum quarterly distribution in 2019 produces a yield to cost of ~8%. The company has large optionality to: improvement in oil and gas prices; greater productivity from existing leased properties; additional leasing (realizing economics on some of the 83% of acreage not leased); and potentially accretive acquisitions.

About the instructor:

Robert Deaton has enjoyed a long and successful investment management career as a money manager and private investor. Currently, Robert is managing member of Fat Pitch Capital, an investment partnership. Robert was a founding member of Bennett Lawrence a NY-based investment fund, which had peak assets of over $2 billion. Robert was chief investment officer of Cambium Capital and member, and is past managing member of Deaton Partnership. Robert holds an AB from Davidson College, an MBA from Vanderbilt University and is a CFA charter holder. Robert is an active member of numerous community organizations. He is a board member of the Presbyterian Healthcare Foundation (executive committee), the Physicians Impact Fund and the Vanderbilt University Owen School of Management Alumni Board. He is a member of the Board of Trustees at The Fletcher School (executive committee, treasurer-elect). He is a past two-term member of both the Board of Visitors at Davidson College and the Board of the Davidson Athletic Foundation. Robert is married with two children.

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