What changed in this filing

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Item 1. Financial Statements

2021-11-02 compared with 2021-08-03 · 103 added, 80 removed, 495 unchanged (27% of the section changed)

4 unchanged sentences

(In thousands)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

CURRENT ASSETS

5 unchanged sentences

PROPERTY AND EQUIPMENT

Oil and natural gas properties, at cost, using the successful efforts method of accounting, includes unproved properties of $ 947,509 and $ 937,464 at June 30, 2021 and December 31, 2020, respectively

Oil and natural gas properties, at cost, using the successful efforts method of accounting, includes unproved properties of $ 947,538 and $ 937,464 at September 30, 2021 and December 31, 2020, respectively

3,000,406 3,157,818

1 unchanged sentence

Oil and natural gas properties, net 1,145,188 1,170,486

Other property and equipment, net of accumulated depreciation of $ 12,613 and $ 12,292 at June 30, 2021 and December 31, 2020, respectively

Other property and equipment, net of accumulated depreciation of $ 12,778 and $ 12,292 at September 30, 2021 and December 31, 2020, respectively

NET PROPERTY AND EQUIPMENT 1,146,426 1,172,136

17 unchanged sentences

MEZZANINE EQUITY

Partners' equity – Series B cumulative convertible preferred units, 14,711 units outstanding at June 30, 2021 and December 31, 2020

Partners' equity – Series B cumulative convertible preferred units, 14,711 units outstanding at September 30, 2021 and December 31, 2020

298,361 298,361

Partners' equity – general partner interest — —

Partners' equity – common units, 208,637 and 206,749 units outstanding at June 30, 2021 and December 31, 2020, respectively

Partners' equity – common units, 208,660 and 206,749 units outstanding at September 30, 2021 and December 31, 2020, respectively

687,084 760,606

6 unchanged sentences

(In thousands, except per unit amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

13 unchanged sentences

Accretion of asset retirement obligations 273 286 863 836

(Gain) loss on sale of assets, net ( 2,850 ) ( 24,045 ) ( 2,850 ) ( 24,045 )

TOTAL OPERATING EXPENSE 42,307 18,514 128,078 164,902

41 unchanged sentences

BALANCE AT JUNE 30, 2021 208,637 $ 725,693 $ 725,693

Restricted units granted, net of forfeitures 23 — —

Equity–based compensation — 2,903 2,903

Distributions — ( 52,165 ) ( 52,165 )

Charges to partners' equity for accrued distribution equivalent rights — ( 275 ) ( 275 )

Distributions on Series B cumulative convertible preferred units — ( 5,250 ) ( 5,250 )

Net income (loss) — 16,178 16,178

BALANCE AT SEPTEMBER 30, 2021 208,660 $ 687,084 $ 687,084

The accompanying notes are an integral part of these unaudited consolidated financial statements.

21 unchanged sentences

BALANCE AT JUNE 30, 2020 206,709 $ 775,681 $ 775,681

Restricted units granted, net of forfeitures 29 — —

Equity–based compensation — 1,613 1,613

Distributions — ( 31,011 ) ( 31,011 )

Charges to partners' equity for accrued distribution equivalent rights — ( 133 ) ( 133 )

Distributions on Series B cumulative convertible preferred units — ( 5,250 ) ( 5,250 )

Net income (loss) — 23,733 23,733

BALANCE AT SEPTEMBER 30, 2020 206,738 $ 764,633 $ 764,633

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

9 unchanged sentences

Exploratory dry hole expense 1,049 —

(Gain) loss on sale of assets, net ( 2,850 ) ( 24,045 )

Changes in operating assets and liabilities:

43 unchanged sentences

The unaudited interim consolidated financial statements include the consolidated results of the Partnership.

The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year.

In the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for the fair presentation of the financial results for all periods presented have been reflected.

15 unchanged sentences

Significant accounting policies are disclosed in the Partnership’s 2020 Annual Report on Form 10-K.

There have been no changes in such policies or the application of such policies during the six months ended June 30, 2021.

There have been no changes in such policies or the application of such policies during the nine months ended September 30, 2021.

Accounts Receivable

The following table presents information about the Partnership's accounts receivable:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(in thousands)

3 unchanged sentences

Total accounts receivable $ 88,301 $ 61,908

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - OIL AND NATURAL GAS PROPERTIES

6 unchanged sentences

The assets acquired consisted of $ 4.9 million of proved oil and natural gas properties, $ 15.6 million of unproved oil and natural gas properties, and $ 0.3 million of net working capital.

Acquisition related costs of $ 0.3 million were expensed and included in the General and administrative line of the consolidated statement of operations for the three and six months ended June 30, 2021.

Acquisition related costs of $ 0.3 million were expensed and included in the General and administrative line of the consolidated statement of operations for the nine months ended September 30, 2021.

In the third quarter of 2021, the Partnership closed on the divestiture of its wholly owned subsidiary, TLW Investments, L.L.C.

("TLW"), effective September 1, 2021 for total proceeds of $ 0.2 million.

TLW holds non-operating working interests and overriding royalty interests primarily located in Oklahoma and Texas.

TLW's assets and liabilities consisted of oil and natural gas properties with a net book value of $ 3.0 million and asset retirement obligations with a book value of $ 5.7 million at the time of sale.

The Partnership recognized a $ 2.9 million gain associated with the divestiture included in the (Gain) loss on sale of assets, net line item of the consolidated statement of operations for the three and nine months ended September 30, 2021.

In the third quarter of 2020, the Partnership closed two separate divestitures of certain mineral and royalty properties in the Permian Basin for total proceeds, after closing adjustments, of $ 150.6 million.

2 unchanged sentences

The total book value of the assets divested through these transactions was $ 126.6 million at the time of sale.

The Partnership recognized a $ 24.0 million gain associated with the divestitures in the third quarter of 2020.

The Partnership recognized a $ 24.0 million gain associated with the divestitures included in the (Gain) loss on sale of assets, net line item of the consolidated statement of operations for the three and nine months ended September 30, 2020.

Farmout Agreements

1 unchanged sentence

Under these agreements, the Partnership conveyed its rights to participate in certain non-operated working interest opportunities to external capital providers while retaining value from these interests in the form of additional royalty income or retained economic interests.

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Canaan Farmout

6 unchanged sentences

Canaan participated in a total of 37 wells under the First Canaan Farmout.

In 2019, XTO Energy Inc.

suspended its development activities in the area due to low natural gas prices.

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In 2019, XTO suspended its development activities in the area due to low natural gas prices.

In March 2021, BSM and XTO reached an agreement to partition the jointly owned working interests in the San Augustine County development area.

2 unchanged sentences

The agreement provides for minimum well commitments by Aethon in exchange for reduced royalty rates and exclusive access to BSM's mineral and leasehold acreage in the contract area.

The agreement calls for a minimum of five wells to be drilled in the initial program year, which begins in the third quarter of 2021, increasing to a minimum of 12 wells per year beginning with the fourth program year.

The agreement calls for a minimum of five wells to be drilled in the initial program year, which began in the third quarter of 2021, increasing to a minimum of 12 wells per year beginning with the fourth program year.

The Partnership's development agreement with Aethon and related drilling commitments covering its San Augustine County acreage is independent of the development agreement and associated commitments covering Angelina County discussed below.

4 unchanged sentences

Canaan is obligated to fund the development of all wells drilled by Aethon in the initial program year and thereafter, Canaan has certain rights and options to continue funding the Partnership's working interest for the duration of the Second Canaan Farmout.

As of June 30, 2021, no wells had been drilled under the Second Canaan Farmout.

As of September 30, 2021, no wells have been spud in the contract area subject to the Second Canaan Farmout.

The Partnership will receive an ORRI before payout and an increased ORRI after payout on all wells drilled under the Second Canaan Farmout.

1 unchanged sentence

In November 2017, the Partnership entered into a farmout agreement (the "First Pivotal Farmout") with Pivotal Petroleum Partners (“Pivotal”), a portfolio company of Tailwater Capital, LLC.

The farmout agreement covers substantially all of the Partnership's remaining working interests in wells operated by XTO Energy and BPX Energy in the Shelby Trough area of East Texas targeting the Haynesville and Bossier shale acreage (after giving effect to the Canaan Farmout), until November 2025.

Pivotal is obligated to fund the development of up to 80 wells, in designated well groups, across several development areas and then has options to continue funding the Partnership's working interest across those areas for the duration of the farmout agreement.

Once Pivotal achieves a specified payout for a designated well group, the Partnership will obtain a majority of the original working interest in such well group.

As of June 30, 2021, a total of 68 wells have been spud in the contract area subject to the First Pivotal Farmout.

The Partnership's development agreement with BPX Energy terminated in 2019 with respect to the majority of the Partnership's acreage covered by the agreement.

As such, Pivotal retains minimal rights or obligations related to the farmout for that area that remains subject to the First Pivotal Farmout.

The farmout agreement covered substantially all of the Partnership's remaining working interests in wells operated by XTO and BPX Energy in the Shelby Trough area of East Texas targeting the Haynesville and Bossier shale acreage (after giving effect to the Canaan Farmout), until November 2025.

Under the terms of the First Pivotal Farmout, Pivotal was obligated to fund the development of up to 80 wells, in designated well groups, across several development areas and then had options to continue funding the Partnership's working interest across those areas for the duration of the farmout agreement.

Once Pivotal achieved a specified payout for a designated well group, the Partnership would obtain a majority of the original working interest in such well group.

Pivotal’s rights and obligations to participate in future wells in the contract area were terminated in the fourth quarter of 2020 in conjunction with Pivotal and the Partnership entering into a new farmout agreement as discussed below.

Pivotal participated in a total of 68 wells under the First Pivotal Farmout.

In the second quarter of 2020, the Partnership entered into a development agreement with Aethon to develop certain portions of the area forfeited by BPX Energy in Angelina County, Texas.

The agreement provides for minimum well

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

commitments by Aethon in exchange for reduced royalty rates and exclusive access to our mineral and leasehold acreage in the contract area.

The agreement provides for minimum well commitments by Aethon in exchange for reduced royalty rates and exclusive access to our mineral and leasehold acreage in the contract area.

The agreement calls for a minimum of four wells to be drilled in the initial program year, which began in the third quarter of 2020, increasing to a minimum of 15 wells per year beginning with the third program year.

4 unchanged sentences

Pivotal is obligated to fund the development of all wells drilled by Aethon in the initial program year and thereafter, Pivotal has certain rights and options to continue funding the Partnership's working interests for the duration of the Second Pivotal Farmout.

Once Pivotal achieves a specified payout for a designated well group, the Partnership will obtain a majority of the original working interest in such well group.

As of June 30, 2021, a total of five wells have been spud in the contract area subject to the Second Pivotal Farmout.

From the inception of the farmout agreements through June 30, 2021, the Partnership has received $ 90.2 million and $ 119.2 million from Canaan and Pivotal, respectively, under the agreements.

Once Pivotal achieves a specified payout for

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

a designated well group, the Partnership will obtain a majority of the original working interest in such well group.

As of September 30, 2021, a total of six wells have been spud in the contract area subject to the Second Pivotal Farmout.

From the inception of the farmout agreements through September 30, 2021, the Partnership has received $ 90.2 million and $ 119.2 million from Canaan and Pivotal, respectively, under the agreements.

When such reimbursements are received prior to assigning the wells to Canaan and Pivotal, the Partnership records the amounts as increases to Oil and natural gas properties and Other long-term liabilities.

When working interests in farmout wells are assigned to Canaan and Pivotal, the Partnership's Oil and natural gas properties and Other long-term liabilities are reduced by the reimbursed capital costs.

As of June 30, 2021 and December 31, 2020, $ 0.1 million was included in the Other long-term liabilities line item of the consolidated balance sheets for reimbursements received associated with farmed-out working interests not yet assigned to Canaan and Pivotal.

As of September 30, 2021 and December 31, 2020, $ 0.1 million was included in the Other long-term liabilities line item of the consolidated balance sheets for reimbursements received associated with farmed-out working interests not yet assigned to Canaan and Pivotal.

Impairment of Oil and Natural Gas Properties

4 unchanged sentences

The Partnership determined these events and circumstances indicated a possible decline in the recoverability of the carrying value of certain proved properties and recoverability testing determined that certain depletable units consisting of mature oil producing properties were impaired.

The Partnership recognized no impairment of oil and natural gas properties for the three and six months ended June 30, 2021 and the three months ended June 30, 2020.

The Partnership recognized $ 51.0 million of impairment of oil and natural gas properties for the six months ended June 30, 2020.

The Partnership recognized no impairment of oil and natural gas properties for the three and nine months ended September 30, 2021 and the three months ended September 30, 2020.

The Partnership recognized $ 51.0 million of impairment of oil and natural gas properties for the nine months ended September 30, 2020.

See Note 5 - Fair Value Measurements for further discussion.

5 unchanged sentences

The Partnership does not enter into derivative instruments for speculative purposes.

As of June 30, 2021, the Partnership’s open derivative contracts consisted of fixed-price swap contracts.

As of September 30, 2021, the Partnership’s open derivative contracts consisted of fixed-price swap contracts.

A fixed-price swap contract between the Partnership and the counterparty specifies a fixed commodity price and a future settlement date.

2 unchanged sentences

All derivative gains and losses from the Partnership’s derivative contracts have been recognized in revenue in the Partnership's accompanying consolidated statements of operations.

Derivative instruments that have not yet been settled in cash are reflected as either derivative assets or liabilities in the Partnership’s accompanying consolidated balance sheets as of June 30, 2021 and December 31, 2020.

See Note 5 - Fair Value Measurements for further discussion.

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Partnership's derivative contracts expose it to credit risk in the event of nonperformance by counterparties that may adversely impact the fair value of the Partnership's commodity derivative assets.

1 unchanged sentence

This evaluation includes reviewing a counterparty’s credit rating and latest financial information.

As of June 30, 2021, the Partnership had seven counterparties, all of which are rated Baa1 or better by Moody’s and six are lenders under the Credit Facility.

As of September 30, 2021, the Partnership had seven counterparties, all of which are rated Baa1 or better by Moody’s and six are lenders under the Credit Facility.

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The tables below summarize the fair values and classifications of the Partnership’s derivative instruments, as well as the gross recognized derivative assets, liabilities, and amounts offset in the consolidated balance sheets as of each date:

June 30, 2021

September 30, 2021

Classification Balance Sheet Location Gross

5 unchanged sentences

Deferred charges and other long-term assets — — —

$ 977 $ ( 977 ) $ —

Current liability

23 unchanged sentences

Changes in the fair values of the Partnership’s derivative instruments (both assets and liabilities) are presented on a net basis in the accompanying consolidated statements of operations and consolidated statements of cash flows and consist of the following for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Derivatives not designated as hedging instruments 2021 2020 2021 2020

7 unchanged sentences

Ending fair value of commodity derivative instruments $ ( 128,932 ) $ ( 1,822 ) $ ( 128,932 ) $ ( 1,822 )

The Partnership had the following open derivative contracts for oil as of June 30, 2021:

The Partnership had the following open derivative contracts for oil as of September 30, 2021:

Weighted Average Price (Per Bbl) Range (Per Bbl)

1 unchanged sentence

Oil Swap Contracts:

Second Quarter 220,000 $ 38.97 $ 32.64 $ 46.50

Third Quarter 220,000 $ 38.97 $ 32.64 $ 46.50

4 unchanged sentences

Fourth Quarter 480,000 60.14 55.29 65.50

The Partnership had the following open derivative contracts for natural gas as of June 30, 2021:

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Partnership had the following open derivative contracts for natural gas as of September 30, 2021:

Weighted Average Price (Per MMBtu) Range (Per MMBtu)

1 unchanged sentence

Natural Gas Swap Contracts:

Fourth Quarter 10,120,000 $ 2.69 $ 2.52 $ 3.08

First Quarter 7,920,000 $ 2.98 $ 2.80 $ 3.15

Second Quarter 8,000,000 2.99 2.80 3.15

Third Quarter 8,080,000 2.99 2.80 3.15

4 unchanged sentences

Fourth Quarter 1,840,000 3.28 3.28 3.29

BLACK STONE MINERALS, L.P.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - FAIR VALUE MEASUREMENTS

11 unchanged sentences

The carrying value of the Partnership's cash and cash equivalents, receivables, and payables approximate fair value due to the short-term nature of the instruments.

The estimated carrying value of all debt as of June 30, 2021 and December 31, 2020 approximated the fair value due to variable market rates of interest.

The estimated carrying value of all debt as of September 30, 2021 and December 31, 2020 approximated the fair value due to variable market rates of interest.

These debt fair values, which are Level 3 measurements, were estimated based on the Partnership’s incremental borrowing rates for similar types of borrowing arrangements, when quoted market prices were not available.

The estimated fair values of the Partnership’s financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Partnership estimated the fair value of commodity derivative financial instruments using the market approach via a model that uses inputs that are observable in the market or can be derived from, or corroborated by, observable data.

See Note 4 - Commodity Derivative Financial Instruments for further discussion.

BLACK STONE MINERALS, L.P.

1 unchanged sentence

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

See Note 4 - Commodity Derivative Financial Instruments for further discussion.

The following table presents information about the Partnership’s assets and liabilities measured at fair value on a recurring basis:

2 unchanged sentences

(in thousands)

As of June 30, 2021

As of September 30, 2021

Financial Assets

23 unchanged sentences

(in thousands)

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Impaired oil and natural gas properties $ — $ — $ — $ —

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Impaired oil and natural gas properties $ — $ — $ — $ —

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Impaired oil and natural gas properties $ — $ — $ — $ —

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Impaired oil and natural gas properties $ — $ — $ 2,044 $ 51,031

2 unchanged sentences

Changes to these estimates, particularly related to economic reserves, future commodity prices, and timing of future production could result in additional impairment charges in the future.

There were no significant changes in valuation techniques or related inputs as of June 30, 2021 or December 31, 2020.

There were no significant changes in valuation techniques or related inputs as of September 30, 2021 or December 31, 2020.

NOTE 6 - CREDIT FACILITY

5 unchanged sentences

The Partnership also has the right to request a redetermination following the acquisition of oil and natural gas properties in excess of 10 % of the value of the borrowing base immediately prior to such acquisition.

Effective November 3, 2020, the borrowing base redetermination reduced the borrowing base from $ 430.0 million to $ 400.0 million, and effective April 30, 2021, the borrowing base was reaffirmed at $ 400.0 million.

The next semi-annual redetermination is scheduled for October 2021.

Effective November 3, 2020, the borrowing base redetermination reduced the borrowing base from $ 430.0 million to $ 400.0 million.

The April and October 2021 borrowing base redeterminations reaffirmed the borrowing base at $ 400.0 million.

The next semi-annual redetermination is scheduled for April 2022.

Outstanding borrowings under the Credit Facility bear interest at a floating rate elected by the Partnership equal to an alternative base rate (which is equal to the greatest of the Prime Rate, the Federal Funds effective rate plus 0.50 %, or 1-month LIBOR plus 1.00 %) or LIBOR, in each case, plus the applicable margin.

As of December 31, 2020, the applicable margin for the alternative base rate ranged from 1.00 % to 2.00 % and the applicable margin for LIBOR ranged from 2.00 % to 3.00 %, depending on the borrowings outstanding in relation to the borrowing base.

As of June 30, 2021, the alternative base rate margin ranged from 1.50 % to 2.50 % and the LIBOR margin ranged from 2.50 % to 3.50 %.

The weighted-average interest rate of the Credit Facility was 2.60 % and 2.40 % as of June 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, the alternative base rate margin ranged from 1.50 % to 2.50 % and the LIBOR margin ranged from 2.50 % to 3.50 %.

The weighted-average interest rate of the Credit Facility was 2.59 % and 2.40 % as of September 30, 2021 and December 31, 2020, respectively.

Accrued interest is payable at the end of each calendar quarter or at the end of each interest period, unless the interest period is longer than 90 days, in which case interest is payable at the end of every 90-day period.

4 unchanged sentences

Distributions are not permitted if there is a default under the Credit Facility (including the failure to satisfy one of the financial covenants), if the availability under the Credit Facility is less than 10 % of the lenders' commitments, or if total debt to EBITDAX is greater than 3.0 .

As of June 30, 2021, the Partnership was in compliance with all financial covenants in the Credit Facility.

As of September 30, 2021, the Partnership was in compliance with all financial covenants in the Credit Facility.

BLACK STONE MINERALS, L.P.

1 unchanged sentence

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The aggregate principal balance outstanding was $ 96.0 million and $ 121.0 million at June 30, 2021 and December 31, 2020, respectively.

The unused portion of the available borrowings under the Credit Facility were $ 304.0 million and $ 279.0 million at June 30, 2021 and December 31, 2020, respectively.

The aggregate principal balance outstanding was $ 99.0 million and $ 121.0 million at September 30, 2021 and December 31, 2020, respectively.

The unused portion of the available borrowings under the Credit Facility were $ 301.0 million and $ 279.0 million at September 30, 2021 and December 31, 2020, respectively.

On March 5, 2021, the U.K.

10 unchanged sentences

From time to time, the Partnership is involved in legal actions and claims arising in the ordinary course of business.

The Partnership believes existing claims as of June 30, 2021 will be resolved without material adverse effect on the Partnership’s financial condition or operations.

The Partnership believes existing claims as of September 30, 2021 will be resolved without material adverse effect on the Partnership’s financial condition or operations.

NOTE 8 - INCENTIVE COMPENSATION

The table below summarizes incentive compensation expense recorded in the General and administrative line item of the consolidated statements of operations for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

8 unchanged sentences

1 Compensation expense related to the restricted performance awards is determined using the measurement-date (i.e., the last day of each reporting period date) fair value of the Partnership's common units.

Downward cost revisions recognized in the six months ended June 30, 2020 are due to the decrease in the Partnership's common unit price period over period.

Downward cost revisions recognized in the nine months ended September 30, 2020 are due to the decrease in the Partnership's common unit price period over period.

NOTE 9 - PREFERRED UNITS

8 unchanged sentences

However, the Partnership shall not be obligated to honor any request for such conversion if such request does not involve an underlying value of common units of at least $ 10.0 million based on the closing trading price of common units on the trading day immediately preceding the conversion notice date, or such lesser amount to the extent such exercise covers all of a holder's Series B cumulative convertible preferred units.

The Series B cumulative convertible preferred units had a carrying value of $ 298.4 million, including accrued distributions of $ 5.3 million, as of June 30, 2021 and December 31, 2020.

The Series B cumulative convertible preferred units had a carrying value of $ 298.4 million, including accrued distributions of $ 5.3 million, as of September 30, 2021 and December 31, 2020.

The Series B cumulative convertible preferred units are classified as mezzanine equity on the consolidated balance sheets since certain provisions of redemption are outside the control of the Partnership.

9 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per common unit:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

18 unchanged sentences

The following units of potentially dilutive securities were excluded from the computation of diluted weighted average units outstanding because their inclusion would be anti-dilutive:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

12 unchanged sentences

The following table provides information about the Partnership's per unit distributions to common unitholders:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

3 unchanged sentences

The repurchase program authorizes the Partnership to make repurchases on a discretionary basis as determined by management, subject to market conditions, applicable legal requirements, available liquidity, and other appropriate factors.

The Partnership made no repurchases under this program for the six months ended June 30, 2021.

As of June 30, 2021, the Partnership has repurchased $ 4.2 million in common units under the repurchase program since inception.

The Partnership made no repurchases under this program for the nine months ended September 30, 2021.

As of September 30, 2021, the Partnership has repurchased $ 4.2 million in common units under the repurchase program since inception.

The repurchase program is funded from the Partnership's cash on hand or availability on the Credit Facility.

1 unchanged sentence

NOTE 12 - SUBSEQUENT EVENTS

On July 26, 2021, the Board approved a distribution for the three months ended June 30, 2021 of $ 0.25 per common unit.

In determining the distribution level with respect to the second quarter, the Board considered a base distribution of $ 0.20 per unit, which it expects will be sustainable through the end of 2021, plus a special distribution of $ 0.05 per unit which reflects certain positive, non-recurring items in the quarter.

Distributions will be payable on August 20, 2021 to unitholders of record at the close of business on August 13, 2021.

On October 27, 2021, the Board approved a distribution for the three months ended September 30, 2021 of $ 0.25 per common unit.

Distributions will be payable on November 19, 2021 to unitholders of record at the close of business on November 12, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements