On the desk today · Black Stone Minerals
They stopped cutting timber in 1968. They kept the mineral rights. The oil underneath has been paying ever since.
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The Lumber Company That
Kept the Dirt
In 1876, a man named W.T. Carter started a lumber company in East Texas. For nearly a century, the Carter family logged timber across hundreds of thousands of acres of pine forest. The wood built houses. The sawmills ran. The trucks rolled.
Then the timber thinned out. In 1968, the company left the lumber business entirely. But the Carter family did something that would turn out to be worth far more than any tree they ever cut. They kept the mineral rights.
Underneath that timberland — underneath the pine stumps and the red clay and the old logging roads — sat oil and natural gas. The Carters owned the rights to it. They didn't drill. They didn't operate. They just held the deed to what was below the surface and waited for someone else to come looking.
I was driving through East Texas last year — near the Shelby Trough, where the Haynesville Shale runs deep under the piney woods. I passed a drilling rig, then another, then a pipeline right-of-way being cleared through the trees. I asked a local who owned the mineral rights under all that acreage. He said a name I didn't recognize at the time: Black Stone.
Thomas L. Carter Jr. — W.T. Carter's great-grandson — took the family's 170,000 acres of retained mineral rights and began building something larger. In 1980, he founded Black Stone Energy Company. In 1998, he formed Black Stone Minerals as a partnership. And then he spent the next two decades buying mineral and royalty interests from other landowners, other timber companies, other families who had kept their dirt — assembling the largest pure-play mineral and royalty portfolio in the United States.
By 1992, Black Stone had acquired the mineral rights of the Kirby Lumber Company, founded by the legendary Texas lumber baron John Henry Kirby. Carter called the 2015 IPO — launched in the middle of an oil price collapse — "a Carter family renaissance festival."
As of December 31, 2025, Black Stone Minerals owned mineral and royalty interests across more than 20 million gross acres in 41 states. Approximately 71,000 wells produce on its acreage. Over 1,000 operators drill, complete, and run those wells. Black Stone pays nothing for the drilling. Nothing for the completion. Nothing for the operation. The interests are non-cost-bearing — the purest form of royalty in the energy business. Someone else spends the money. Black Stone collects a percentage of every barrel and every cubic foot that comes out of the ground.
In fiscal 2025, Black Stone reported approximately $470 million in revenue. Net income was $300 million. Adjusted EBITDA was $337 million. Distributable cash flow reached $300 million. Cash distributions for the year totaled $1.28 per common unit. And the company did all of this with 113 employees.
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That 113-employee figure is the number I keep coming back to. One hundred and thirteen people manage mineral and royalty interests across 20 million acres, 71,000 producing wells, and 41 states. That works out to roughly $4.2 million in revenue per employee — one of the highest ratios in the entire energy sector. The reason is the model itself. Black Stone doesn't operate wells. It doesn't hire roughnecks. It doesn't own drilling rigs. It owns paper — mineral deeds and royalty agreements that entitle it to a percentage of production from wells drilled on its acreage. The operators do the work. Black Stone collects the check.
The stickiness is geological. Mineral rights don't expire. They don't depreciate. They don't wear out. A mineral interest in the Permian Basin that was acquired 50 years ago still produces today — and will produce for decades more as new horizontal wells are drilled into deeper formations. When an operator like Aethon or Caturus drills a new well on Black Stone's acreage in the Shelby Trough, Black Stone's royalty interest kicks in automatically. No negotiation. No additional investment. The right was established when the Carter family kept the deed.
Thomas Carter said it plainly: "We had 170,000 acres from Carter mineral retention, and now we own interest in 17 million acres." The growth from 170,000 to over 20 million acres came through decades of acquisitions — buying mineral rights from timber companies, from families, from estates — at prices that reflected the value of the commodity at the time of purchase, not the value of the reserves underneath. In 2025, Black Stone acquired $114.5 million in new mineral and royalty interests, adding more acreage to a portfolio that has been compounding since 1876.
The flywheel runs on other people's capital. Every year, oil and gas companies invest billions of dollars drilling new wells across the United States. When those wells happen to sit on Black Stone's acreage — and with 20 million gross acres, many of them do — Black Stone collects a royalty on the production without spending a dollar on the drilling. The more the industry invests, the more wells get drilled, and the more royalty income flows to the mineral owner who never picked up a drill bit. Black Stone spends its capital on one thing: buying more mineral rights. The rights produce. The production pays distributions. The distributions attract capital. And the cycle continues.
WHY THIS WORKS
Non-cost-bearing means zero operating expense. Black Stone doesn't drill, complete, or operate wells. It owns the minerals. The operator bears all costs. Black Stone collects a royalty on every barrel produced — with no capital at risk.
Mineral rights don't expire. Unlike a lease that ends or a patent that expires, a mineral interest is perpetual. Acreage acquired in the 1800s still produces royalties today. The asset has infinite duration.
20 million acres across 41 states diversify the risk. No single basin, no single operator, no single well dominates. Over 1,000 operators drill on Black Stone's acreage. A dry hole in one state barely moves the portfolio.
113 employees generate $470 million in revenue. The operating structure is the leanest in the energy sector. There are no rigs to maintain, no crews to manage, no pipelines to build. The business is paperwork, acquisition, and collection.
W.T. Carter started a lumber company in East Texas in 1876. His great-grandson turned it into the largest pure-play mineral owner in the United States. The lumber is gone. The sawmills are gone. The pine forests have been replanted and cut and replanted again. But the mineral rights — the deeds that say whoever owns this paper collects a percentage of whatever comes out of the ground — are still there. One hundred and fifty years after a lumberman filed the first deed, 71,000 wells produce on acreage the Carter family never stopped owning. The timber was the product. The dirt was the fortune.
