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]

Exhibit 99.1 BKV Corporation Reports Second Quarter 2025 Financial and Operational Results, Updated 2025 Guidance, Strategic Barnett Shale Acquisition, and Carbon Sequestered Gas Deal DENVER, Colorado – August 12, 2025 – BKV Corporation ("BKV" or the "Company") (NYSE: BKV), today reported financial and operational results for the second quarter of 2025 and updated guidance for the third quarter and full year of 2025. In addition, we are announcing a pending strategic transaction in the Barnett Shale with Be ...

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting that price movements should be supported by strong fundamentals and positive earnings estimates [1][2]. Group 1: Stock Performance - BKV has shown a solid price increase of 43.3% over the past 12 weeks, indicating strong investor interest and potential upside [4]. - The stock has also increased by 14% in the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, BKV is trading at 80.7% of its 52-week high-low range, indicating it may be on the verge of a breakout [5]. Group 2: Fundamental Strength - BKV holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like BKV that are on an uptrend supported by strong fundamentals [3]. - The article suggests that investors should consider other stocks that meet similar criteria for potential investment opportunities [8].

Group 1: Energy Sector Overview - Energy stocks, represented by the Energy Select Sector SPDR Fund (XLE), faced a challenging first half of 2025, with a decline of over 5% year-to-date as of late May due to tariff uncertainties and geopolitical factors [1] - Despite the overall downturn, demand for oil and gas products continues to rise, although prices have fallen since the start of the year due to increased production [2] Group 2: Sable Offshore - Sable Offshore Corp. (SOC) has seen a significant rally, with shares up about 42% in the last month and more than 19% year-to-date, following a sell-off in April [3][5] - The company is restarting oil production at its Santa Ynez Unit at a rate of approximately 6,000 barrels per day, with plans to fill its capacity of 540,000 barrels by June and relaunch oil sales by July [4] - Despite a quarterly net loss of over $109 million and outstanding debt of nearly $855 million, investor optimism remains strong, with a consensus price target suggesting about 10% upside potential [5] Group 3: California Resources Corp. - California Resources Corp. (CRC) has a 12-month stock price forecast of $61.27, indicating a potential upside of 38.63% [6] - The company has benefited from its merger with Aera Energy, expected to yield $185 million in collaborative gains through the last three quarters of 2025 [8] - CRC generated $131 million in free cash flow in the first quarter while funding $223 million in share and debt repurchases and $35 million in dividends [9] Group 4: BKV Corp. - BKV Corp. has a 12-month stock price forecast of $28.13, suggesting a 30.94% upside [10] - The company has secured $500 million in funding for its carbon sequestration projects, which is expected to accelerate growth in this area [11] - BKV shares have declined year-to-date by 7% but have rallied nearly 21% in the last month, with unanimous Buy ratings from eight analysts [12]

Production and Revenue - Natural gas production for Q1 2025 was 54,121 MMcf, down from 59,644 MMcf in Q1 2024, representing a decrease of approximately 4.2%[146] - Total production for Q1 2025 was 68.5 Bcfe, averaging 761.1 MMcfe/d, compared to 74.7 Bcfe and 821.1 MMcfe/d in Q1 2024, indicating a decline of about 8.5% in total volumes[139][146] - Natural gas revenues increased by 74% to $168.0 million in Q1 2025, up from $96.3 million in Q1 2024, primarily due to commodity price increases[150][151] - NGL revenues rose by 3% to $44.7 million in Q1 2025, compared to $43.4 million in Q1 2024, driven by higher commodity prices despite lower production volumes[150][152] - Oil revenues surged by 79% to $3.5 million in Q1 2025, up from $1.9 million in Q1 2024, mainly due to increased production volumes[150][153] - Marketing revenues rose by approximately $1.6 million, or 32%, to $6.5 million for the three months ended March 31, 2025, driven by a higher pricing environment[157] Financial Performance - The company reported a net loss of $(78.7) million for Q1 2025, compared to a net cash provided by operating activities of $22.6 million[144] - Net cash provided by operating activities increased to $22.6 million for the three months ended March 31, 2025, up from $19.3 million in the same period of 2024, driven by a $24.7 million increase in income from operations and a $20.4 million increase in working capital[178] - Net cash used in investing activities rose to $56.0 million for the three months ended March 31, 2025, compared to $19.9 million in 2024, primarily due to a $39.7 million increase in capital expenditures[180] - Net cash provided by financing activities was $33.8 million for the three months ended March 31, 2025, consisting of net borrowings on debt of $35.0 million, compared to a net cash outflow of $1.6 million in 2024[182] - As of March 31, 2025, the company had a net working capital deficit of $148.5 million, compared to a deficit of $71.6 million as of December 31, 2024[183] Expenses and Costs - Total operating expenses decreased to $172.5 million for the three months ended March 31, 2025, from $186.3 million in 2024, reflecting a reduction in various expense categories[162] - General and administrative expenses increased by approximately $4.6 million, or 22%, to $25.3 million for the three months ended March 31, 2025, due to growth initiatives[167] - Interest expense decreased to $5.1 million for the three months ended March 31, 2025, down from $16.1 million in 2024, primarily due to lower interest rates[171] - Income tax benefit increased to $29.2 million for the three months ended March 31, 2025, up from $13.0 million in 2024, driven by higher net losses and excess tax benefits[174] Capital Expenditures and Investments - Cash paid for capital expenditures was $57.4 million for the three months ended March 31, 2025, compared to $19.9 million in 2024, with an estimated budget for 2025 capital expenditures between $320 million and $380 million[176] - The company expects to fund up to 50% of its CCUS business from external sources, including joint ventures and federal grants, with the remainder from cash flows from operations[177] Debt and Credit Agreements - The company entered into a Second Amendment to the RBL Credit Agreement, increasing the borrowing base by $100 million and the elected commitment by $65 million on May 6, 2025[137] - The RBL Credit Agreement has a maximum credit commitment of $1.5 billion, with a borrowing base of $750.0 million and an elected commitment of $600.0 million as of March 31, 2025[185] - The company has outstanding borrowings of $200.0 million on its RBL Credit Agreement, which has a floating interest rate[213] Derivative Instruments and Risk Management - The company entered into financial derivative instruments to mitigate the impact of commodity price fluctuations, with contracts covering portions of projected positions through 2027[202] - The company mitigates price volatility through derivative contracts, which limit benefits from increases in commodity prices above fixed hedge prices[208] - The company actively monitors counterparty credit risk related to derivative contracts, requiring minimum credit standards for all counterparties[209] - Mark-to-market adjustments of derivative instruments cause earnings volatility but have no cash flow impact until contracts are settled[207] Environmental and Strategic Initiatives - A strategic CCUS joint venture was formed with C Squared Solutions, contributing to the development of CCUS projects, with BKV holding a 51% interest[138] - The company aims for net zero Scope 1 and Scope 2 emissions by the early 2030s and net zero Scope 1, 2, and 3 emissions by the late 2030s[136] - Section 45Q tax credits increased to $3.3 million for the three months ended March 31, 2025, up from $2.3 million in the same period in 2024, due to more CO2 waste sequestered[158] Market Conditions - The company has experienced volatility in natural gas and NGL prices, which are influenced by supply and demand dynamics, pipeline constraints, and seasonal factors[179] - A hypothetical increase of $0.10 per Mcf in NYMEX would have resulted in a $2.7 million decrease in natural gas hedge revenues for the three months ended March 31, 2025[204] - A 1.0% increase in average interest rates would have resulted in an increase of $0.5 million in interest expense for the three months ended March 31, 2025[213]

Financial Data and Key Metrics Changes - BKV reported a net loss of $79 million or a loss of $0.93 per diluted share for Q1 2025, while adjusted net income was $35 million or a positive $0.41 per diluted share [30] - Combined adjusted EBITDAX was just over $100 million, with $90 million from upstream operations and $10 million from the power segment [29] - Cash and cash equivalents at the end of Q1 were approximately $15 million, with net leverage standing at less than 0.7 times net debt to adjusted EBITDAX [32] Business Line Data and Key Metrics Changes - The upstream business produced 761 million cubic feet equivalent per day, exceeding guidance, with development CapEx at $48 million, 26% below the midpoint of guidance [15][16] - Power joint venture adjusted EBITDA was $20 million, with BKV's share at $10 million, driven by higher pricing due to cold weather [27] - The carbon capture business is on track with significant milestones, including a partnership with Comstock Resources and a $500 million investment commitment from Copenhagen Infrastructure Partners [11][12] Market Data and Key Metrics Changes - ERCOT revised its 2031 load forecast higher by 68 gigawatts, a 45% increase from 2024 projections, primarily driven by data centers [26] - The demand for low carbon gas is expected to grow, supported by decarbonization efforts and the increasing need for power driven by cloud computing and AI [4][5] Company Strategy and Development Direction - BKV is focused on vertical integration across its four business lines: upstream, midstream, carbon capture, and power generation, aiming to create premium margins and differentiated products [5] - The company is leveraging its position in the Barnett Shale, which has over 15 years of inventory and is strategically located near LNG export markets and data centers [8][15] - BKV aims to deliver decarbonized energy solutions and capitalize on the growing demand for carbon capture and storage [12][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the robustness of the 45Q tax credit and the bipartisan support for carbon capture initiatives [45] - Despite macroeconomic headwinds, BKV's proactive supply chain management is expected to minimize disruptions and cost impacts [5] - The company anticipates a ramp-up in production in the second half of 2025, with natural gas pricing remaining elevated [18] Other Important Information - BKV's CCUS strategy is validated by recent partnerships and project advancements, with a goal of achieving a 1 million ton per year CO2 injection rate by the end of 2027 [23][60] - The company has a disciplined capital investment framework, with expectations for total CapEx in Q2 2025 between $75 million and $100 million [31] Q&A Session Summary Question: Thoughts on the resiliency of the 45Q tax credit and momentum in CCUS projects - Management believes the 45Q tax credit is robust and enjoys bipartisan support, which is critical for energy competitiveness in the U.S. [45][46] - There is strong momentum in carbon capture, particularly in natural gas processing, with several projects in the pipeline [49] Question: Clarification on CapEx for CCUS and project timing - Management indicated that while the overall CapEx for CCUS remains robust, the timing may shift as they optimize capital spending with their JV partner [58][60] Question: Upstream production growth inclination - Management remains committed to disciplined capital investment, with a focus on commodity price ranges, and anticipates production growth in the latter half of 2025 [65][66] Question: Details on the Comstock partnership and project development - Management explained that the partnership with Comstock will follow a phased approach, capturing CO2 from their plants as production grows [73] Question: Macroeconomic conditions affecting the power segment - Management highlighted inflation in construction costs and bullish sentiment for data center investments as key factors influencing the power business [75][77] Question: Funding mechanisms for the new JV with CIP - Management confirmed that there is an upfront capital component to the JV, which will be drawn down as projects are deployed over the next 12 to 24 months [84]

Financial Data and Key Metrics Changes - BKV reported a net loss of $79 million or a loss of $0.93 per diluted share for Q1 2025, while adjusted net income was $35 million or a positive $0.41 per diluted share [30] - Combined adjusted EBITDAX was just over $100 million, with $90 million from upstream operations and $10 million from the power segment [29] - Accrued capital expenditures for the quarter were $58 million, significantly below the low end of the guidance range of $75 million [30] Business Line Data and Key Metrics Changes - The upstream business produced 761 million cubic feet equivalent per day, exceeding the midpoint of guidance [15] - Development capital expenditures for upstream were $48 million, 26% below the midpoint of the guided range [16] - Power joint venture adjusted EBITDA was $20 million, with BKV's share being $10 million, driven by higher pricing due to cold weather [27] Market Data and Key Metrics Changes - ERCOT revised its 2031 load forecast higher by 68 gigawatts, a 45% increase from 2024 projections, primarily driven by data centers [26] - Power prices averaged $54.52 per megawatt hour, with an average realized spark spread of $25.39 per megawatt hour [28] Company Strategy and Development Direction - BKV is focused on vertical integration across its four business lines: upstream, midstream, carbon capture, and power generation, aiming to create premium margins [5] - The company is leveraging its position in the Barnett Shale, which has over 15 years of inventory and is geographically advantaged for natural gas supply [8] - BKV is actively pursuing partnerships to enhance its carbon capture business, including a significant investment from Copenhagen Infrastructure Partners [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the robustness of the 45Q tax credit and the ongoing demand for low carbon gas amid global decarbonization efforts [4] - The company anticipates continued strong demand growth in the power sector, particularly in Texas, driven by data centers and industrial growth [9] - Despite macroeconomic headwinds, BKV's proactive supply chain management is expected to minimize disruptions and cost impacts [5] Other Important Information - BKV's CCUS strategy is gaining momentum, with multiple projects on track for CO2 injection in the coming years [20][21] - The company has a strong balance sheet with net leverage of less than 0.7 times net debt to adjusted EBITDAX [32] Q&A Session Summary Question: Thoughts on the resiliency of the 45Q tax credit and momentum behind CCUS projects - Management believes the 45Q tax credit is robust and enjoys bipartisan support, which is critical for energy competitiveness in the U.S. [45] - There is strong momentum in carbon capture, particularly for natural gas processing projects, with BKV positioned as a leader in this space [47] Question: Clarification on CapEx for CCUS and project timing - Management indicated that while the overall CapEx for CCUS remains robust, the timing may shift as they optimize capital spending with their JV partner [58] Question: Upstream production growth inclination - Management reiterated a disciplined approach to capital investment, with a commitment to 2% to 3% growth in production by Q4 2025 compared to Q4 2024 [66] Question: Details on the Comstock partnership and project development - Management explained that the partnership with Comstock will follow a phased approach, allowing BKV to grow with Comstock's production [75] Question: Insights on the power business and macroeconomic conditions - Management highlighted that inflation in construction costs could impact power prices, but there is a bullish outlook for data center investments in the U.S. [78]