DENVER--(BUSINESS WIRE)--BKV Corporation ("BKV†or the "Company†) (NYSE: BKV) and Banpu Power US Corporation ("BPPUS†) today announced that they have entered into a definitive purchase agreement (the "Purchase Agreement†) pursuant to which BKV will acquire from BPPUS one- half of BPPUS' interest in BKV-BPP Power, LLC ("BKV-BPP Power†or the "Power JV†) such that at the closing of the transaction, BKV would own 75% of the limited liability company interests in BKV- BPP Power. This transaction mark. ...

Core Insights - BKV Corporation's stock has increased by 19% over the past year, driven by strong business performance and a 23% rise in natural gas prices [1] Company Performance - The significant stock surge is attributed to the company's robust operational results [1] Market Context - The rally in natural gas prices, which increased by 23%, has positively impacted BKV Corporation's stock performance [1]

Core Viewpoint - BKV Corporation's share price experienced a significant decline of 14.95% from October 3 to October 10, 2025, amidst broader market downturns and rising trade tensions between the US and China [1][3]. Company Overview - BKV Corporation (NYSE:BKV) is engaged in the production and sale of natural gas, primarily operating in the Barnett Shale in Texas and the Marcellus Shale in Pennsylvania [2]. Recent Performance - The stock of BKV Corporation had previously surged over 14% due to a sharp increase in natural gas prices, but faced a heavy drop this week as part of a wider market decline [3]. - The recent downturn is attributed to profit-taking by investors amid concerns of an economic slowdown and a 6.5% drop in natural gas prices [4]. Financial Activities - BKV Corporation has filed a shelf registration prospectus to offer up to $1 billion in mixed securities and to register 63.88 million shares of common stock for sale by the selling stockholder [4].

Core Viewpoint - BKV is experiencing a bullish rebound, breaking past a new buy point as oil prices have rallied, indicating potential growth in the natural gas sector [1]. Company Overview - BKV is a Denver-based company focused on U.S. onshore natural gas exploration, development, and production [1]. - The company operates four business lines: natural gas production, natural gas gathering, processing, and transportation, and power generation [1]. Market Performance - BKV stock is featured on Investor's Business Daily's IPO Leaders screen, highlighting its strong market performance [1]. - The stock has received a technical rating upgrade, indicating rising relative price strength [4].

Core Viewpoint - BKV Corporation has announced the pricing of its private offering of $500 million in senior notes due 2030, indicating a strategic move to raise capital for future investments [1] Group 1: Offering Details - BKV Upstream Midstream, LLC, a wholly owned subsidiary of BKV, is the issuer of the $500 million aggregate principal of 7.500% senior notes [1] - The offering is expected to close on or about September 26, 2025, subject to customary closing conditions [1] Group 2: Use of Proceeds - The issuer intends to use the net proceeds from the offering for general corporate purposes [1]

Core Insights - BKV Corporation has released its 2024 Sustainability Report, marking its first sustainability disclosure since its IPO in September 2024 [1] - The report emphasizes the company's commitment to developing and scaling carbon reduction technologies and solutions within the global energy market [1] - BKV's progress aligns with its "Promise. Deliver. Repeat." philosophy, showcasing its ongoing efforts in sustainability [1]

Summary of BKV Corporation Conference Call Company Overview - **Company Name**: BKV Corporation - **Industry**: Natural Gas Production - **Headquarters**: Denver, Colorado - **Core Operations**: Barnett Shale (North Texas) and Marcellus Shale (Pennsylvania) - **Largest Shareholder**: BAMPU, a global energy company focused on natural gas resource development [2][5] Core Strategies and Business Model - **Closed Loop Net Zero Strategy**: A unique approach to energy that emphasizes the importance of natural gas as a critical fuel for the future, rejecting the notion of it being merely a bridging fuel [5][6] - **Decarbonization Focus**: Plans to completely decarbonize its natural gas portfolio by the early 2030s through carbon capture, positioning BKV as a leader in low carbon energy solutions [8][9] - **Profitability from Decarbonization**: The company aims to charge a premium for decarbonized natural gas, expecting to generate higher revenues per unit of energy sold [11] Production and Financial Performance - **Production Capacity**: Currently producing approximately 900 million cubic feet per day, with a target of reaching 1 billion cubic feet per day [15] - **EBITDA Performance**: Reported EBITDA of $88 million against a CapEx of $78.8 million, indicating strong cash flow management [33] - **Upstream Business Decline Rate**: The upstream business has a natural decline rate of 10.8%, but BKV has been outperforming this, allowing for flexible capital expenditure [12] Growth Initiatives - **Acquisitions**: Recent acquisition of Bedrock assets for $370 million, enhancing production capacity and inventory [29][31] - **Carbon Capture Growth**: On track to inject over 300,000 tons of CO2 per annum by next year, with a goal of reaching 1 million tons by 2027 [17][56] - **Power Business Expansion**: Operates two combined cycle power plants with a capacity to serve the growing electricity demand in Texas, particularly from data centers [51][54] Market Positioning and Future Outlook - **Natural Gas Export Potential**: BKV emphasizes the importance of natural gas exports, potentially surpassing oil exports in the future [7] - **Barnett Shale Renaissance**: The company is leveraging advanced drilling technologies to revitalize the Barnett Shale, which has significant untapped potential [32][43] - **Strategic Partnerships**: Collaboration with Gunvor to offer carbon sequestered gas, which meets stringent carbon intensity standards, enhancing market competitiveness [45][47] Key Metrics and Performance Indicators - **Production Efficiency**: Achieved a 17% improvement in type curves and reduced drilling costs to $5.60 per lateral foot [37][38] - **Market Demand**: Positioned to meet increasing LNG demand, with the Barnett Shale capable of supporting additional production [44] Conclusion - BKV Corporation is strategically positioned in the natural gas industry with a focus on decarbonization, innovative production techniques, and strong financial performance. The company is well-equipped to capitalize on future market trends and growth opportunities in the energy sector [58]

Preliminary Sections [Glossary of Commonly Used Terms](index=4&type=section&id=Glossary%20of%20Commonly%20Used%20Terms) This section defines technical and company-specific terms, including abbreviations for measurements, business entities, operational concepts, and financial agreements - Key defined terms relate to the company's natural gas operations, its carbon capture, utilization, and sequestration (CCUS) business, and its various joint ventures and credit facilities[11](index=11&type=chunk)[18](index=18&type=chunk)[30](index=30&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=8&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties, advising readers to consult the 2024 Annual Report on Form 10-K risk factors - Forward-looking statements cover business strategy, reserves, drilling plans, hedging, CCUS business growth, and anticipated benefits of the Bedrock acquisition[39](index=39&type=chunk)[40](index=40&type=chunk)[43](index=43&type=chunk) PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents BKV Corporation's unaudited condensed consolidated financial statements for Q2 and H1 2025, including balance sheets, operations, cash flows, equity, and accounting notes [Condensed Consolidated Financial Statements](index=11&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Unaudited financial statements show **total assets at $2.30 billion**, **net income of $25.9 million**, and **$98.8 million net cash from operations** for H1 2025 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,426 | $14,868 | | Total current assets | $98,436 | $94,610 | | Total natural gas properties, net | $1,938,337 | $1,888,281 | | **Total assets** | **$2,304,427** | **$2,231,088** | | Total current liabilities | $174,731 | $166,205 | | Long-term debt, net | $200,000 | $165,000 | | **Total liabilities** | **$716,369** | **$671,514** | | **Total stockholders' equity** | **$1,590,131** | **$1,559,574** | Condensed Consolidated Statement of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Natural gas, NGL, and oil sales | $199,729 | $125,854 | $415,855 | $267,541 | | Total revenues | $322,044 | $136,198 | $400,864 | $288,112 | | Income (loss) from operations | $128,398 | $(43,181) | $34,695 | $(77,544) | | **Net income (loss) attributable to BKV** | **$104,572** | **$(59,697)** | **$25,906** | **$(98,282)** | | **Diluted EPS** | **$1.23** | **$(0.90)** | **$0.30** | **$(1.48)** | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $98,783 | $9,782 | | Net cash provided by (used in) investing activities | $(129,654) | $101,633 | | Net cash provided by (used in) financing activities | $37,429 | $(267,287) | | **Net increase (decrease) in cash** | **$6,558** | **$(155,872)** | [Notes to the Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, debt structure, derivative instruments, the BKV-CIP Joint Venture consolidation, commitments, contingencies, and significant subsequent events like a new acquisition agreement - On May 8, 2025, the company formed the BKV-CIP Joint Venture with Copenhagen Infrastructure Partners (CIP) to develop CCUS projects, consolidating the JV as a Variable Interest Entity (VIE) due to BKV's controlling interest and asset contribution[136](index=136&type=chunk)[138](index=138&type=chunk) - The **final $20.0 million contingent consideration payment** related to the Devon Barnett Acquisition was made on January 8, 2025[93](index=93&type=chunk)[144](index=144&type=chunk) - Subsequent to quarter end, on August 7, 2025, the company agreed to acquire Barnett shale assets from Bedrock Production, LLC for approximately **$370.0 million**, comprising **$260.0 million in cash** and up to **$110.0 million in BKV common stock**[153](index=153&type=chunk) Derivative Positions as of June 30, 2025 (Natural Gas - NYMEX Henry Hub) | Year | Instrument | MMBtu | Weighted Avg Price/Ceiling (USD) | | :--- | :--- | :--- | :--- | | **2025** | Swap | 48,960,000 | $3.41 | | | Collars | 6,120,000 | $4.11 | | **2026** | Swap | 71,575,000 | $3.71 | | | Call options | 36,500,000 | $5.00 | | | Put options | 36,500,000 | $3.00 (Floor) | | **2027** | Swap | 36,500,000 | $3.96 | | | Call options | 36,500,000 | $5.00 | | | Put options | 36,500,000 | $3.00 (Floor) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and capital resources, focusing on commodity prices, production, and strategic initiatives including CCUS and the Bedrock acquisition [Overview and Recent Developments](index=36&type=section&id=Overview%20and%20Recent%20Developments) BKV is a growth-driven energy company focused on natural gas, midstream, power generation, and CCUS, aiming for net-zero emissions, with recent strategic moves including a CCUS joint venture, a new CCUS project, and the Bedrock acquisition - The company's core business is natural gas production, with a vertically integrated strategy targeting net-zero emissions for Scope 1 and 2 by the early 2030s and Scope 1, 2, and 3 by the late 2030s[156](index=156&type=chunk) - On August 7, 2025, BKV agreed to acquire Bedrock's Barnett assets for **$370.0 million**, adding approximately **108 MMcfe/d of production** and nearly **1 Tcfe of 1P reserves**[161](index=161&type=chunk) - A new CCUS project announced on July 21, 2025, is expected to capture and sequester approximately **70,000 metric tons of CO2 per year** starting in 2027[158](index=158&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Financial results significantly improved due to higher realized natural gas prices, with **Q2 2025 natural gas revenues up 88%** and **net income of $104.6 million**, while G&A expenses increased due to growth initiatives and DD&A decreased from a depletion rate adjustment Comparison of Operating Revenues (Three Months Ended June 30, in thousands) | Revenue Line | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Natural gas revenues | $155,562 | $82,840 | $72,722 | 88% | | NGL revenues | $41,630 | $41,216 | $414 | 1% | | Derivative gains (losses), net | $112,208 | $(7,486) | $119,694 | N/A | - The **$72.7 million (88%) increase** in Q2 2025 natural gas revenue was primarily driven by a **$71.0 million positive impact from higher commodity prices**, with a smaller **$1.7 million contribution from increased production volumes**[175](index=175&type=chunk) Comparison of Operating Expenses (Three Months Ended June 30, in thousands) | Expense Line | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Gathering and transportation | $63,026 | $53,714 | $9,312 | 17% | | DD&A, and accretion | $38,044 | $59,313 | $(21,269) | (36)% | | General and administrative | $30,516 | $19,296 | $11,220 | 58% | - General and administrative expenses increased by **$11.2 million (58%)** in Q2 2025 compared to Q2 2024, driven by costs related to company-wide growth initiatives, including higher labor, consulting, and severance costs[193](index=193&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on operating cash flow and its RBL Credit Agreement, with **$98.8 million in operating cash flow** for H1 2025, a **$76.3 million working capital deficit**, and **$200.0 million outstanding** on an **$850.0 million borrowing base** - Net cash provided by operating activities for the first six months of 2025 was **$98.8 million**, a significant increase from **$9.8 million** in the same period of 2024, primarily due to higher income from operations and lower interest payments[230](index=230&type=chunk) - Accrued capital expenditures for the six months ended June 30, 2025, were **$136.8 million**, a substantial increase from **$32.9 million** in the prior-year period[167](index=167&type=chunk)[234](index=234&type=chunk) RBL Credit Agreement Status (as of June 30, 2025) | Metric | Amount (in millions) | | :--- | :--- | | Borrowing Base | $850.0 | | Elected Commitment | $665.0 | | Outstanding Balance | $200.0 | | Letters of Credit | $14.1 | | Available Capacity (as of Aug 12, 2025) | $368.9 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity price volatility for natural gas and NGLs using derivative instruments, while also addressing counterparty credit risk and interest rate risk from its floating-rate RBL Credit Agreement - The company hedges a portion of its production to manage cash flow volatility, with the fair value of its commodity derivative instruments being a **net liability of $82.5 million** as of June 30, 2025[254](index=254&type=chunk)[261](index=261&type=chunk) - A hypothetical **$0.10 per Mcf change** in NYMEX natural gas prices would have resulted in a **$7.0 million change** in natural gas hedge revenues for the six months ended June 30, 2025[257](index=257&type=chunk) - The company is exposed to interest rate risk on its **$200.0 million of outstanding floating-rate debt** under the RBL Credit Agreement, where a **1.0% increase** in average interest rates would have increased interest expense by **$1.1 million** for the first half of 2025[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in internal control over financial reporting related to income tax accounting - A material weakness in internal control over financial reporting related to the accounting for income taxes continued to exist as of June 30, 2025[269](index=269&type=chunk) - The weakness stems from controls not being designed with sufficient precision to prepare and review the income tax provision, related balances, and disclosures, leading to past audit adjustments and financial statement revisions[270](index=270&type=chunk) - The company is actively working on remediating the material weakness by designing and implementing additional internal controls related to its income tax accounting processes[272](index=272&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11 of the financial statements for legal proceedings, stating that while subject to various claims, their ultimate liability is not expected to have a material adverse effect - Information on legal proceedings is incorporated by reference from Note 11 - Commitments and Contingencies in the financial statements[276](index=276&type=chunk)[142](index=142&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting new risks associated with the pending Bedrock acquisition, including potential failure to close and difficulties in integration and realizing anticipated benefits - A new material risk factor has been added concerning the pending Bedrock acquisition, which is expected to close in late Q3 or early Q4 2025[277](index=277&type=chunk)[278](index=278&type=chunk) - Risks include the potential failure to satisfy closing conditions, which are not entirely within the company's control, and the negative consequences of a failed transaction, such as incurred expenses and adverse market reactions[278](index=278&type=chunk) - Even if completed, the company faces integration risks, such as the inability to achieve anticipated synergies and cost savings, and potential unknown liabilities associated with the acquired assets[279](index=279&type=chunk)[281](index=281&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities[280](index=280&type=chunk) [Item 5. Other Information](index=57&type=section&id=Item%205.%20Other%20Information) The company disclosed that no director or executive officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading agreement during Q2 2025 - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the quarter[282](index=282&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments, the BKV dCarbon Project LLC agreement, CEO and CFO certifications, and XBRL data files - Key exhibits filed include the Limited Liability Company Agreement of BKV dCarbon Project, LLC, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act[283](index=283&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net income of $105 million or $1.23 per diluted share, with an adjusted basis of $0.39 per share [27] - Combined adjusted EBITDAX attributable to the company was $88 million, driven by strong production and lower than forecasted lease operating expenses [27] - Accrued capital expenditures in the second quarter were $79 million, which was 12% below the midpoint of guidance [27] Business Line Data and Key Metrics Changes - The upstream segment delivered net production of 811 million cubic feet equivalent per day, exceeding the high end of guidance [14] - The company increased its 2025 production guidance midpoint to 800 million cubic feet equivalent per day, a nearly 4% increase over the previous midpoint [17] - The power business achieved a combined average capacity factor of 59% with total generation exceeding 1,900 gigawatt hours [25] Market Data and Key Metrics Changes - The ERCOT power market is projected to grow over 20% between 2024 and 2026, driven by various sectors including AI and data centers [6] - The macro backdrop for natural gas remains bullish, with new LNG facilities coming online [5] - Power prices averaged $4,634 per megawatt hour, with an average natural gas cost of $2.98 per MMBtu, resulting in an average spark spread of $25.15 [26] Company Strategy and Development Direction - The company is focused on expanding its leadership position in the Barnett Shale through the acquisition of Bedrock's assets, which will enhance reserve life and production capacity [9] - Continued investment in carbon capture and utilization (CCUS) is a strategic priority, with multiple projects progressing towards final investment decisions [20] - The company aims to leverage its unique combination of gas, power, and carbon capture to create premium value in the Texas energy market [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term strength of the ERCOT power market and the expected ramp in Gulf Coast natural gas demand [6] - The passage of the One Big Beautiful Bill Act, which solidifies the 45Q tax credit, is seen as a significant win for the company and the industry [21] - The company is confident in achieving a million tons per year of CO2 injection run rate by 2027 [22] Other Important Information - The company has signed definitive agreements to acquire Bedrock's Barnett Shale assets for $370 million, expected to close in the third or early fourth quarter [18] - The acquisition is anticipated to add over 100 million cubic feet equivalent per day of production and nearly one trillion cubic feet of 1P reserves [19] - The company has reserved manufacturing slots for natural gas turbines, enhancing its ability to meet power needs for large data center companies [10] Q&A Session Summary Question: Can you provide insights on the benefits of purchasing adjacent acreage? - The acquisition allows for lengthening laterals and improving economics, with 50 Tier one and 20 Tier two lateral additions expected [41] Question: How do you see cost per foot evolving with longer laterals? - The company has reduced cost per foot by 11% and expects further improvements through enhanced completion designs and data analytics [44] Question: What are the initial focus areas of the CIP partnership? - The partnership focuses on advancing CCUS projects and leveraging relationships with emitters for project sourcing [58] Question: Can you elaborate on the carbon sequestered gas deal with Gunvor? - The initial volume is structured to establish a market, with potential for significant scaling in the future [66] Question: How do you see the power business performing for the remainder of the year? - The company remains confident in its guidance despite a slow start to the third quarter, with strong long-term demand dynamics expected [77]

Company Overview - BKV is the largest natural gas producer in the Barnett Shale, with a corporate 1-year decline rate of 10.8%[10] - BKV has 1,500 MW of low heat rate power assets in Texas[10] - BKV's 2Q25 production was above high end of guidance at 811 MMcfe/d[34] Bedrock Acquisition - BKV announced the Bedrock acquisition for $370 million, targeting close in 4Q25[22, 29] - The Bedrock acquisition includes ~97,000 net acres and 1,121 gross operated wells[29] - Bedrock's 2Q25 production is ~108 MMcfe/d (~63% natural gas) with a low PDP decline of ~7% YOY[29] - Bedrock has nearly 1 Tcfe of 1P reserves (>70% PDP reserves)[29] Capital Expenditure and Production - Forecasted 2025 capital expenditures are between $290 million and $350 million[17] - BKV is targeting projects to reach a 1 Mtpy CO2 sequestration rate by 2027[17] CCUS Business - BKV's Barnett Zero project has been injecting since November 2023, with forecasted annual sequestration of 183 ktpy[105, 106] - BKV has injected ~242,000 tons through 6/30/25 at Barnett Zero[106]