In 1998, the W.T. Carter properties, which had been held in the Carter family since the 1880s, were rolled up into Black Stone as owners sought diversification, professional management and future growth. These assets include approximately 200,000 fee mineral acres principally in East Texas. The acquisition of the former Kirby Lumber Company mineral estate from Santa Fe Energy in March 1992 was Black Stone’s first third-party acquisition and expanded its existing core area in East Texas. The Kirby acquisition contains over 400,000 additional gross mineral acres.

W.T. Carter / Kirby's success has been driven primarily by the discovery and development of five major producing fields. W.T. Carter & Bro., a predecessor entity of Black Stone, discovered the Double A Wells Field in 1984 and continued to develop the field until 1996, when it sold its working interest in the field to Comstock while retaining the mineral rights. Mariner discovered the Pine Island Bayou/Sandy Lake Field in 1994 in Jefferson County, Texas. Anadarko/UPR discovered Brookeland Field across Jasper, Newton, Polk and Tyler Counties, Texas. Two other major fields from the acquisitions are the Constitution and East Sour Lake Fields, both located in Hardin County, Texas.

In April 1999, Black Stone acquired the mineral assets of Southern Minerals Corporation. This transaction was comprised of approximately 520,000 acres in southern Mississippi, New Mexico and Texas. SMC represents diversified mineral interests whose success has not been driven by any single well or unit. The most active operators on SMC thus far have been BP, Sooner Petroleum, ConocoPhillips, Palmer Petroleum and Penn Virginia which operate in the Poplarville, Pistol Ridge and Baxterville Fields in Pearl River, Pistol Ridge and Marion Counties of Mississippi and the Hugoton Basin in the Texas Panhandle.

In January 1999, Black Stone purchased approximately 47,000 acres concentrated in the Rio Grande Valley of South Texas but also including acreage in 12 other states. The Four S properties represented family holdings and to accommodate the needs of the seller, a creative structure using partial cash and partial equity formed the basis for the transaction. Production has principally been generated from the Deep Frio formation in the Santa Ana/Marks Field in South Texas, including Hidalgo County.

In the late 1990s, Prize Energy Resources, L.P. sought to purchase a package of working interests and minerals from Pioneer Natural Resources. Through an ongoing relationship between the management teams of Black Stone and Prize and to assist Prize in making the Pioneer acquisition, Black Stone negotiated to purchase the minerals from Prize upon its closing with Pioneer. In September 1999, Black Stone acquired approximately 1.7 million gross mineral acres in 30 states in a tax-advantaged transaction with 66% of the purchase price paid in cash and the remainder in a like-kind exchange of properties. The Prize acquisition provided a significant addition to Black Stone’s mineral footprint and includes long-life producing royalty and working interests in over 2,000 wells as well as non-producing fee mineral acreage. Most production from Prize has come from properties in Kansas, Oklahoma and Texas. Drilling has been focused in the Hugoton Field, Stanton County, Kansas and the Hansford Field, Hansford and Ochiltree Counties, Texas.

In December 2000 Black Stone acquired 1.5 million gross mineral acres in an all cash transaction. The Prince properties include interests in over 6,700 wells and are characterized by long-life production stemming from a diverse set of properties in Michigan, New Mexico, North Dakota, Oklahoma, Texas, Wyoming and 23 other states. The package also included all fee mineral properties formerly held by the Wiser Oil Company.

In 2001, Kempner Minerals, L.P. contributed its mineral assets to Black Stone in exchange for partnership units. The Kempner fee mineral properties encompass approximately 70,000 gross acres throughout Texas and include interests in over 60 wells. The most prolific well drilled on Kempner is the Staley-Mangold Unit #2 oil well originally drilled by Stephens & Johnson in Archer County, Texas in 1937. This well along with other Kempner wells in Archer County continue to produce oil and account for a significant portion of the acquisition’s current value.

In September 2001, Black Stone acquired approximately 670,000 gross mineral acres from Cortez Oil and Gas in an all-cash transaction. This mineral package had previously been targeted for acquisition by Black Stone but Cortez Oil & Gas purchased the properties. Approximately one year later, Cortez sold the mineral interests, royalties and minor working interest properties to Black Stone. The Cortez acquisition holds interests in over 2,000 wells characterized mostly by mid- to-long-life production. The mineral acreage covers 17 states but is concentrated in Michigan, Oklahoma and Texas and in the Permian Basin, Mid-Continent and the Eastern United States.

In September 2002, Black Stone Natural Resources I (“Fund I”) acquired 670,000 gross mineral acres from Ocean Energy in an all-cash transaction. The package was comprised of a diverse spread of properties located in 22 states and including over 3,000 wells but concentrated in the Mid-Continent and Texas. The properties contain a strong current cash flow component in addition to significant upside potential through future drilling in prolific areas. Black Stone was able to complete the acquisition at a highly competitive price and the seller, who was in the process of being purchased by Devon Energy Corporation, was able to receive a higher price than the asset value assigned by Devon.

In January, 2004, Fund I closed its second acquisition by acquiring over 2.8 million acres from Toreador Resources Corporation in an all-cash transaction. Toreador had used its royalty and fee mineral properties as a source of funding for its international operations before deciding to monetize these assets in a sale to Black Stone. The timely nature of this transaction for Toreador, which was in need of greater financial flexibility, allowed Black Stone to be opportunistic and pay an attractive price for these fee mineral properties. The assets, which include the Matador Ranches in West Texas, consisted of over 600 wells located in 16 states and concentrated in Alabama, Mississippi, Oklahoma and Texas.

In December 2004 Black Stone purchased the Pure Resources (“Pure”) mineral estate previously owned by International Paper. The assets cover an estimated 5.6 million gross acres in 10 states but are concentrated in the Gulf Coast region. The package included large, contiguous acreage blocks that had previously remained unleased and thus were highly attractive to Black Stone because of the potential to induce activity across the minerals. In order to provide the seller flexibility to attempt to create a 1031 tax-advantaged transaction, Black Stone delayed closing for nine months from the effective date. The acquisition was the third and final transaction for Fund I, which was fully deployed upon closing, and the first for Black Stone Natural Resources II (“Fund II”), Black Stone’s second institutionally-supported partnership. The balance of the purchase price was acquired by additional affiliated single-purpose investment vehicles.

In 2003, Black Stone solicited Kaiser Francis Oil Company (“KFOC”) to sell its mineral and royalty properties in the DJ Basin, which consists of seven pay zones, is long-lived and is the largest field in Colorado. In June 2004, KFOC held an auction for a select group of DJ Basin properties and allowed separate bids for the working interests and the overriding royalty interests (“ORRIs”). On October 1, 2004, Fund II acquired overriding royalty interests in approximately 120 producing wells and lands located in three counties.

In November 2004, Fund II closed on the acquisition of a package of mineral interests in four producing units, covering 2,560 acres in Vernon Field, Jackson Parish, Louisiana. Fund II bought 351 net acres carved out of the four units and royalties covering all of the units. At the time of the acquisition, 21 wells were known to be producing and another five wells commenced production soon after closing. Anadarko Petroleum Corporation, the original operator, sold its Vernon properties to EXCO Resources in early 2007.

In June 2005, Fund II and an affiliated single-purpose investment vehicle executed a term royalty agreement with Energy Corporation of America (“ECA”). The agreement provides for a 90 percent royalty interest in 312 long-life, producing gas wells located in the Appalachian Basin in Kentucky, Pennsylvania and West Virgina. Black Stone also acquired a 50 percent royalty interest in 181 development wells that were subsequently drilled by ECA in Kentucky and West Virginia. The term of the agreement is 20 years, after which the interests will revert back to ECA. In addition, ECA has drilled many of the development wells to a deeper formation called the Marcellus Shale.

In June 2005, Fund II closed the purchase of a package of ORRIs and minor non-operated working interests located in the Antrim Shale in Michigan from O’Neal Resources. The package consisted primarily of ORRIs in multiple units covering approximately 9,000 acres and producing from the Antrim Shale in northeast Michigan. At the time of the acquisition, the majority of production was from 60 gas wells within the two units of Churchill Point and Comstock Hills.

In June 2007, Dominion Exploration & Production, the largest operator of O’Neal wells, sold its interest to HighMount Exploration & Production, a subsidiary of Loews Corporation. In April 2010, Highmount E&P sold its interest in Antrim Shale assets to Linn Energy. Other operators in the Antrim Shale include Atlas Energy Resources, Whiting Petroleum, BreitBurn Energy Partners and Aurora Oil & Gas.

In January 2006, Fund II purchased 2,300 mineral acres over the Barnett Shale in Johnson County, Texas. Although all of the acreage was held by production, a large number of proved undeveloped locations remained as well as additional upside potential from infill drilling. The acquisition included 19 proved developed producing (“PDP’) wells, 5 wells drilling, 16 proved undeveloped (“PUD”) locations and 6 probable locations, almost all based on 1,000’ spacing. Chesapeake Energy, the sole operator on the properties, has drilled most of the acreage on 500’ spacing.

In October 2006, Fund II closed on the purchase of an undivided 75% interest in 640 acres in Tyler County, Texas. The acreage is located in the central western Texas portion of the Austin Chalk play and all 640 acres are leased to Anadarko from assignment from Plains Exploration & Production Company. The acquisition was strategic in that it was directly adjacent to existing assets and acreage.

In November 2006, Fund II purchased mineral interests in 26,000 non-producing gross acres in Amite, Adams, Franklin and Jefferson Counties, Mississippi. The majority of the acreage is located in the Tuscaloosa Marine Shale.

In December 2006, Fund II purchased interests in approximately 48,000 gross mineral acres in Denton, Tarrant, Johnson, Hood, Parker, Palo Pinto, Somerville, Bosque and Erath Counties, Texas, in Cimarron and Texas Counties, Oklahoma and in Conway County, Arkansas. At the time of purchase, approximately 53% of the acreage was leased to operators including Devon, Burlington, EOG and El Paso. In addition, there were approximately 320 PDP wells principally producing from the Barnett Shale with interests varying from 0.005% to 10.38%.

In December 2006, Fund II closed on the purchase of a package of non-operated working interests in Carthage Field, Panola County, Texas. The acquisition included interests in 176 PDP, 10 proved developed nonproducing (“PDNP’) and 20 PUD wells primarily operated by Chevron and BP.

In December 2006 Fund II closed on the purchase of overriding royalty interests covering 20,800 gross acres in Newark East Field, Johnson County, Texas. The acquisition included 147 PDP wells, 11 PDNP wells, and 183 PUD wells. Chesapeake Energy is the sole operator on the properties. The ORRIs in part cover acreage acquired in the Mize transaction in January 2006 thus increasing Fund II’s interest in those properties.

In August 2007, Fund II and an affiliated single-purpose vehicle purchased a large package of mineral interests, overriding royalty interests and non-operated working interests in the Rockies. The properties include approximately 150,000 acres of federal and private lands located in Wyoming and several other Western states. The assets’ value was comprised of 96% ORRIs and 4% working interests. The majority of the acquisition value is derived from the Pinedale Anticline Field located in Sublette County, Wyoming. In Pinedale, 75 PDP wells were producing at acquisition and significant drilling opportunities exist as the majority of the acreage has been drilled on 40 or 80 acre spacing. Shell, BP and Williams are the operators for the Pinedale properties. Additional assets include ORRIs in the Prairie Dog / Recluse Field, the Madden Deep Unit and Coal Gulch, all located in Wyoming.

In September 2007, Fund II purchased a package of non-operated working interests in Southeast Poteau Field in Le Flore County, Oklahoma. These coal-bed methane properties are situated under approximately 7,627 gross, 2,600 net contiguous acres and are focused on the Hartshorne. At acquisition, there were 14 vertical and 54 horizontal PDP wells and 33 PUDs. Vectra was the last acquisition for Fund II.

In December 2007, Black Stone purchased a diversified package of non-operated working interests in 15 states and primarily in the Rockies, Permian Basin, Mid-Continent, Eastern Texas and Northern Louisiana regions. Approximately 255 different companies operate the wells. The acquisition was the first for Black Stone Natural Resources III (“Fund III”), Black Stone’s third institutionally-supported fund.

Beginning in July 2008, Black Stone began acquiring, on behalf of Fund III, undivided mineral interests from various mineral owners in the northern portion of the Barnett Shale oil play in Montague County, Texas. Ultimately 10,677 gross acres (1,277 net) were purchased in the play. At the time of acquisition, the acreage was in an undeveloped area of the play but drilling was expanding in its direction.

In November 2008, Fund III closed the purchase of a 12.0% interest in 218,219 net mineral acres in the Appalachian basin. The seller was Pennsylvania Mineral Group, LLC. The diversified mineral position is located across approximately 40 counties primarily in Pennsylvania, West Virginia and Maryland. While current production is limited, approximately 85% of the acreage is currently leased to operators including Samson, Chief, Carrizo, Chesapeake, Range and Marathon.

In January 2009, Fund III and an affiliated single-purpose entity completed the acquisition of TLW Investments, LLC (“TLWI”), a diversified non-operated working interest portfolio. The properties include interests in approximately 6,000 wells and are located primarily in Oklahoma, Texas, New Mexico, Arkansas and Louisiana. TLWI was owned 100% by Thomas L. Ward, co-founder of Chesapeake Energy Company and now CEO of SandRidge Energy, Inc.

In November 2010, Black Stone closed on an acquisition of property interests from J.M. Huber Corporation. Huber includes approximately 29,000 net acres of fee minerals and overriding royalty interests in seven states. A majority of the cash flow is generated from oil producing properties in the Texas Panhandle.

In May 2010, Black Stone closed on an acquisition of mineral and other property interests from Eagle Rock Partners, L.P. The acquisition’s primary assets include a 13.2% interest in the Pure properties, non-participating royalty interests in the Brea Olinda Field in California, overriding royalty interests in the Northeast Blanco and 30-6 Units in the San Juan Basin and overriding royalty interests in the Washburn Field in south Texas, the Levelland Field in west Texas and the Savell Field in east Texas. Black Stone purchased 50.4% of the assets directly while a new co-investment vehicle, BSNR Raptor L.P. purchased the remaining 49.6%.

In June 2011, Black stone acquired an undivided 25% interest in 3,722 gross acres in the Eagle Ford Shale from a private seller through a limited auction process. The acquired acreage is located within the volatile oil window in DeWitt and Gonzales Counties, Texas. At the time of acquisition, eight units had been formed, seven wells were producing and one well was waiting on completion. With its purchase of Petrohawk, BHP Billiton is now the primary operator.