Financial Performance - Production revenues for Q3 2025 were $192.4 million, with midstream revenues of $2.6 million, totaling $608.3 million and $8.1 million for the nine months ended September 30, 2025 respectively [182]. - Net income attributable to BKV for the nine months ended September 30, 2025 was $102.8 million, with net cash provided by operating activities of $173.3 million [187]. - Total revenues and other operating income for the three months ended September 30, 2025, were $277.9 million, up from $173.1 million in the same period of 2024 [194]. - Total revenues and other operating income increased by $217.5 million, from $461.2 million in the nine months ended September 30, 2024, to $678.7 million in the same period of 2025 [220]. - Natural gas revenues increased by $207.4 million, or 78%, to $474.5 million for the nine months ended September 30, 2025, from $267.1 million in the same period of 2024 [221]. - NGL revenues increased by $4.0 million, or 3%, to $126.1 million for the nine months ended September 30, 2025, from $122.1 million in the same period of 2024 [222]. - Oil revenues increased by $2.4 million, or 45%, to $7.7 million for the nine months ended September 30, 2025, from $5.3 million in the same period of 2024 [223]. Production and Operations - Natural gas production for Q3 2025 was 60,325 MMcf, with total production volumes of 76,225 MMcfe, representing an increase from 70,162 MMcfe in Q3 2024 [189]. - Average realized natural gas price (excluding derivatives) for Q3 2025 was $2.50 per Mcf, compared to $1.58 per Mcf in Q3 2024 [193]. - The company completed the Bedrock Acquisition, acquiring approximately 99,000 net acres and 108 MMcfe/d of production, with nearly 1 Tcfe of 1P reserves [179]. Expenses and Costs - Lease operating expenses for Q3 2025 were $34.8 million, or $0.46 per Mcfe, consistent with the previous year [187]. - Operating expenses totaled $195.6 million for the three months ended September 30, 2025, compared to $194.1 million for the same period in 2024 [206]. - General and administrative expenses decreased by approximately $2.9 million, or 9%, to $30.7 million for the three months ended September 30, 2025, from $33.6 million in the same period of 2024 [212]. - Other operating expenses increased by approximately $12.4 million to $16.6 million for the three months ended September 30, 2025, compared to $4.1 million for the same period in 2024 [213]. - Total operating expenses increased by $2.0 million, from $559.7 million in the nine months ended September 30, 2024, to $561.7 million in the same period of 2025 [232]. Financing Activities - The company issued $500 million of 2030 Senior Notes, resulting in proceeds of $490 million after discounts, to fund part of the Bedrock Acquisition and repay borrowings [180]. - The company issued $500.0 million of 7.50% senior unsecured notes due October 15, 2030, resulting in proceeds of $490.0 million, which were used to repay a portion of the RBL Credit Agreement and fund the Bedrock Acquisition [257]. - Net cash provided by financing activities was $330.0 million for the nine months ended September 30, 2025, compared to net cash used in financing activities of $289.2 million for the same period in 2024 [254]. Emissions and Sustainability - BKV plans to achieve 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 [177]. Joint Ventures and Acquisitions - The BKV-BPP Power Joint Venture Transaction is expected to close in Q1 2026, with BKV acquiring 75% ownership for approximately $376 million [178]. - The company has made capital contributions to joint ventures, including $3.3 million to BKV-BPP Cotton Cove and additional contributions totaling $7.4 million in July 2025 [266]. Risk Management - The company is required to hedge not less than 50% of reasonably anticipated projected production from their proved developed producing reserves for the subsequent 24-month period [263]. - The company has entered into financial derivative instruments to mitigate the impact of commodity price volatility on cash flows [279]. - The company routinely monitors and manages exposure to counterparty risk related to derivative contracts by requiring specific minimum credit standards for all counterparties [288]. Market Conditions - The company has a primary market risk exposure related to the pricing of natural gas and NGL production, which is expected to remain volatile [278]. - The company's hedging activities do not provide complete protection against basis risk, which could result in economic losses [283].
Bkv Corporation(BKV) - 2025 Q3 - Quarterly Report