BKV Corporation Reports First Quarter 2025 Financial and Operational Results
First Quarter and Subsequent Highlights
- Announced a joint venture agreement with Copenhagen Infrastructure Partners (“CIP”) to partner on the development of carbon capture, utilization, and sequestration (“CCUS”) projects
-
Net loss of
$78.7 million $(0.93) -
Adjusted Net Income of
$35.0 million $0.41 -
Adjusted EBITDAX of
$90.9 million -
Combined Adjusted EBITDAX of
$100.7 million $9.8 million -
Net cash provided by operating activities of
$22.6 million -
Adjusted Free Cash Flow of
$6.1 million - Barnett Zero quarterly sequestration of 38,787 metric tons of CO2 equivalent; Barnett Zero life-to-date sequestration through March 31, 2025 of 212,112 metric tons of CO2 equivalent
-
Total generation of 1,588 GWh from the Power JV’s Temple Plants; combined capacity factor of
50.0% -
Net debt of
$184.7 million - Total net production of 761.1 MMcfe/d
“Once again BKV has demonstrated our ability to deliver strong results across our core business lines while making significant strides in advancing our closed loop strategy,” said Chris Kalnin, Chief Executive Officer of BKV. “Our performance across key first quarter guidance metrics was positive, with Power JV Adjusted EBITDA well above the high end of our quarterly projected range. In addition, we are excited to announce our strategic partnership with Copenhagen Infrastructure Partners —a key milestone in scaling our CCUS business. This partnership will allow us to accelerate our existing pipeline of CCUS projects as well as to help us meet increasing demand for low-carbon energy solutions with new partners and in new geographies. This momentum, paired with our operational and financial execution across the business, drives our continued growth and long-term value creation for our shareholders.”
Financial Results
First Quarter and Year-to-Date 2025
For the three months ended March 31, 2025, total revenues and other operating income for BKV was
Average realized natural gas price for the first quarter of 2025 was
|
Three Months Ended March 31, |
||||||
($ Millions, except EPS and Adjusted Free Cash Flow Margin)(1) |
|
2025 |
|
|
|
2024 |
|
Net loss |
$ |
(78.7 |
) |
|
$ |
(38.6 |
) |
Adjusted Net Income (Loss), non-GAAP |
$ |
35.0 |
|
|
$ |
(10.6 |
) |
Adjusted EBITDAX, non-GAAP |
$ |
90.9 |
|
|
$ |
47.1 |
|
Combined Adjusted EBITDAX, non-GAAP |
$ |
100.7 |
|
|
$ |
57.4 |
|
Net loss per common share, diluted |
$ |
(0.93 |
) |
|
$ |
(0.58 |
) |
Adjusted EPS, non-GAAP |
$ |
0.41 |
|
|
$ |
(0.16 |
) |
Net cash provided by operating activities |
$ |
22.6 |
|
|
$ |
19.3 |
|
Adjusted Free Cash Flow, non-GAAP |
$ |
6.1 |
|
|
$ |
47.3 |
|
Adjusted Free Cash Flow Margin, non-GAAP |
|
2.6 |
% |
|
|
30.4 |
% |
Losses from equity affiliate |
$ |
(9.6 |
) |
|
$ |
(7.7 |
) |
Capital expenditures (accrued) |
|
|
|
||||
Development (2) |
$ |
47.9 |
|
|
$ |
13.1 |
|
CCUS |
$ |
3.7 |
|
|
$ |
4.5 |
|
Other |
$ |
6.4 |
|
|
$ |
0.4 |
|
Total capital expenditures (accrued) |
$ |
58.0 |
|
|
$ |
18.0 |
|
____________________________________________________ |
|
(1) |
Adjusted Net Income (Loss), Adjusted EBITDAX, Combined Adjusted EBITDAX, Adjusted EPS, Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin are each non-GAAP financial measures. For a definition of each of these non-GAAP financial measures and reconciliations of such non-GAAP financial measures to their comparable GAAP metrics, please see “Supplemental Non-GAAP Financial Measures” below. |
(2) |
Excludes asset retirement obligation expenditures of |
BKV-BPP Power’s Income Statement (1) |
Three Months Ended March 31, |
||||||
($ Millions) |
|
2025 |
|
|
|
2024 |
|
Total revenues, net |
$ |
97.6 |
|
|
$ |
85.0 |
|
Depreciation and amortization |
|
9.6 |
|
|
|
9.9 |
|
Operating expenses |
|
94.1 |
|
|
|
73.3 |
|
Income (loss) from operations |
|
(6.1 |
) |
|
|
1.8 |
|
Interest expense |
|
(16.1 |
) |
|
|
(18.2 |
) |
Other income |
|
3.0 |
|
|
|
1.0 |
|
Net loss |
$ |
(19.2 |
) |
|
$ |
(15.4 |
) |
Power JV Adjusted EBITDA |
$ |
19.6 |
|
|
$ |
20.5 |
|
_____________________________________________________ |
|
(1) |
This table reflects the financial information of BKV-BPP Power LLC (the “Power JV”). Amounts are obtained from its unaudited financial statements for the three months ended March 31, 2025 and 2024, as applicable. BKV owns a |
“Our first quarter results highlight our ability to execute with consistency, to do what we said we would do, and drive results,” said David Tameron, BKV’s Chief Financial Officer. “In response to favorable commodity pricing early in the year, BKV has maintained a steady development program, all while generating positive Adjusted Free Cash Flow and sustaining low net leverage. The combination of our disciplined hedging strategy, low-decline asset base, top-tier operational execution, and conservative financial approach, positions us well to navigate evolving commodity cycles and macroeconomic environments, capitalizing on positive macro trends where possible. As we move through the rest of 2025, we will remain focused on delivering solid performance in our upstream business, advancing our differentiated CCUS platform, and capitalizing on the asymmetric upside of our power assets—all of which offer a compelling value proposition to our investors.”
Operational Results
First Quarter 2025
Power JV
For the first quarter 2025, the Temple I and II power plants (the “Temple Plants”) reported a capacity factor of
In the first quarter of 2025, spark spreads improved compared to the fourth quarter of 2024, driven in part by winter weather, including widespread freezing temperatures across
BKV’s implied proportionate share of Power JV net loss for the three months ended March 31, 2025 was
BKV’s implied proportionate share of Power JV Adjusted EBITDA was
Despite recent macroeconomic headwinds, BKV continues to see significant growth potential in its Power JV. The company remains optimistic about long-term demand trends in the ERCOT market, supported by the accelerating adoption of AI technologies and the ongoing expansion of the data center sector.
Carbon Capture Utilization and Sequestration (“CCUS”)
As previously disclosed, BKV announced the formation of a strategic joint venture (the “CCUS JV”) between the Company's wholly-owned subsidiary, BKV dCarbon Ventures and the CI Energy Transition Fund (“CIP Energy Transition Fund”) managed by CIP, to develop and expand BKV’s portfolio of CCUS projects. CIP Energy Transition Fund has committed an initial
The CCUS JV will leverage BKV’s standing as an early leader and first mover in developing CCUS projects while benefiting from CIP’s significant expertise in developing low-carbon infrastructure projects. BKV and CIP expect to identify investment-ready projects for development by the CCUS JV. BKV will be responsible for day-to-day management and construction oversight of the CCUS JV. For additional information, please see our Current Report on Form 8-K filed on May 8, 2025.
During the first quarter, BKV submitted a permit application for five Class VI injection wells to the Louisiana Department of Energy and Natural Resources for our High West Project. As previously disclosed, the
Additionally, on May 1, 2025, BKV announced an exclusive, non-binding agreement with Comstock Resources, Inc. (NYSE: CRK) (“Comstock”), under which BKV and Comstock will explore opportunities to develop CCUS projects at two of Comstock’s natural gas processing facilities in its
The Company’s Barnett Zero Project sequestered 38,787 metric tons of CO2 equivalent during the three months ended March 31, 2025. The Barnett Zero Project has sequestered approximately 212,112 metric tons of CO2 equivalent since project start up in November 2023 through March 31, 2025. BKV’s Cotton Cove project remains on track for first injection in the first half of 2026, subject to the receipt of all required permits.
BKV’s CCUS project to sequester CO2 waste from a natural gas processing project in the Eagle Ford Shale (
Upstream & Midstream
Total hydrocarbon production for the three months ended March 31, 2025 was 761.1 MMcfe/d, which consisted of
The decrease in production volumes for the first quarter compared to the same period in 2024 is due to base production decline as a result of lower capital investment in 2023 and 2024. The decrease is also due to the sale of the Company’s non-operated upstream assets in the Marcellus Shale in the Appalachian Basin of
|
Three Months Ended March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Production |
|
|
|
||||
Net production per day (MMcfe/d) |
|
761.1 |
|
|
|
821.1 |
|
Natural gas (MMcf) |
|
54,121 |
|
|
|
59,644 |
|
NGL (MBbls) |
|
2,344 |
|
|
|
2,485 |
|
Oil (MBbls) |
|
53 |
|
|
|
28 |
|
Total (MMcfe) |
|
68,503 |
|
|
|
74,722 |
|
Natural Gas Pricing ($/Mcf) |
|
|
|
||||
Average NYMEX Henry Hub price |
$ |
3.65 |
|
|
$ |
2.24 |
|
Differential |
$ |
(0.55 |
) |
|
$ |
(0.62 |
) |
Average realized prices, excluding derivatives |
$ |
3.10 |
|
|
$ |
1.62 |
|
Average realized prices, including derivatives (1) |
$ |
2.86 |
|
|
$ |
2.00 |
|
NGLs ($/Bbl) |
|
|
|
||||
Average realized prices, excluding derivatives |
$ |
19.06 |
|
|
$ |
17.47 |
|
Average realized prices, including derivatives (1) |
$ |
16.89 |
|
|
$ |
17.53 |
|
Oil ($/Bbl) |
|
|
|
||||
Average realized prices |
$ |
65.28 |
|
|
$ |
69.07 |
|
Average Operating Cash Costs per Mcfe |
|
|
|
||||
Lease operating and workover |
$ |
0.51 |
|
|
$ |
0.46 |
|
Taxes other than income |
$ |
0.15 |
|
|
$ |
0.15 |
|
Gathering and transportation costs |
$ |
0.81 |
|
|
$ |
0.79 |
|
Total |
$ |
1.47 |
|
|
$ |
1.40 |
|
(1) |
The impact of derivative prices excludes |
Capital Expenditures
Capital expenditures in the first quarter of 2025 were
Liquidity
As of March 31, 2025, BKV had cash and cash equivalents of
Total debt as of March 31, 2025 was
2025 Guidance
Accrued Capital Expenditures and Net Production ($ Millions) |
Q2 2025 |
|
FY 2025 |
Development |
|
|
|
CCUS and other |
|
|
|
Total capital expenditures |
|
|
|
|
|
|
|
Net production (MMcfe/d) |
775 - 805 |
|
755 - 790 |
|
|
|
|
Per Unit Operating Costs ($/Mcfe) |
|
|
|
Lease operating and workover |
|
|
|
Gathering and transportation |
|
|
|
General and administrative (excl. stock comp) |
|
|
|
General and administrative (stock comp) |
|
|
|
|
|
|
|
Natural Gas Price ($/Mcfe) |
|
|
|
Average differential |
|
|
|
|
|
|
|
Power ($ Millions) |
|
|
|
Power JV Adjusted EBITDA |
|
|
|
First Quarter 2025 Earnings Conference Call
The Company plans to host a conference call to discuss results today, May 9, 2025 at 10 AM EST. To access the conference call, participants may dial (877) 407-0779 (US) or (201) 389-0914 (international). Participants can also listen to a live webcast of the call by going to the Investors section on the BKV website at ir.bkv.com. A replay will be available shortly after the live conference call and can be accessed on the Company’s website or by dialing (844) 512-2921 (US) or (412) 317-6671 (international). The passcode for the replay is 13752676. The replay will be available for 60 days after the call.
About BKV Corporation
Headquartered in
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, which are not historical facts, include statements regarding BKV’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management, and often contain words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “seek,” “aspire,” “envision,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” “will,” and similar expressions. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. All forward-looking statements, expressed or implied, in this press release are based only on information currently available to BKV and speak only as of the date on which they are made. BKV undertakes no obligation to release publicly any update to any of these forward-looking statements except as required by federal securities laws. Forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to assumptions, risks and uncertainties regarding our ability to successfully fund, pursue and develop our CCUS business; expected increase in demand for power and our ability to serve that demand from our power business, our ability to develop, market and sell our carbon sequestered gas product; and management's outlook guidance or forecasts of future events, including projected capital expenditures, production volumes, operating costs, pricing differentials, and Power JV Adjusted EBITDA. For further discussions of risks and uncertainties applicable to forward-looking statements, you should refer to BKV’s filings with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of BKV’s Annual Report on Form 10-K dated March 31, 2025.
BKV Corporation Condensed Consolidated Balance Sheets ($ thousands, except per share amounts) (Unaudited) |
|||||||
|
March 31, 2025 |
|
December 31, 2024 |
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
15,299 |
|
|
$ |
14,868 |
|
Accounts receivable, net |
|
61,258 |
|
|
|
54,435 |
|
Accounts receivable, related parties |
|
11,725 |
|
|
|
11,414 |
|
Prepaid expenses |
|
5,027 |
|
|
|
7,638 |
|
Inventory |
|
6,079 |
|
|
|
6,255 |
|
Commodity derivative assets, current |
|
194 |
|
|
|
— |
|
Asset held for sale |
|
5,500 |
|
|
|
— |
|
Total current assets |
|
105,082 |
|
|
|
94,610 |
|
Natural gas properties and equipment |
|
|
|
||||
Developed properties |
|
2,364,068 |
|
|
|
2,315,167 |
|
Undeveloped properties |
|
10,863 |
|
|
|
10,757 |
|
Midstream assets |
|
276,742 |
|
|
|
276,644 |
|
Accumulated depreciation, depletion, and amortization |
|
(747,720 |
) |
|
|
(714,287 |
) |
Total natural gas properties, net |
|
1,903,953 |
|
|
|
1,888,281 |
|
Other property and equipment, net |
|
94,781 |
|
|
|
97,300 |
|
Goodwill |
|
18,417 |
|
|
|
18,417 |
|
Investment in joint venture |
|
105,588 |
|
|
|
115,173 |
|
Commodity derivative assets |
|
6,567 |
|
|
|
— |
|
Other noncurrent assets |
|
16,619 |
|
|
|
17,307 |
|
Total assets |
$ |
2,251,007 |
|
|
$ |
2,231,088 |
|
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
105,471 |
|
|
$ |
121,366 |
|
Contingent consideration payable |
|
— |
|
|
|
20,000 |
|
Income taxes payable to related party |
|
1,868 |
|
|
|
1,438 |
|
Commodity derivative liabilities, current |
|
141,934 |
|
|
|
20,277 |
|
Other current liabilities |
|
4,284 |
|
|
|
3,124 |
|
Total current liabilities |
|
253,557 |
|
|
|
166,205 |
|
Asset retirement obligations |
|
200,680 |
|
|
|
198,795 |
|
Commodity derivative liabilities |
|
50,240 |
|
|
|
47,357 |
|
Deferred tax liability, net |
|
59,069 |
|
|
|
88,688 |
|
Long-term debt, net |
|
200,000 |
|
|
|
165,000 |
|
Other noncurrent liabilities |
|
5,667 |
|
|
|
5,469 |
|
Total liabilities |
|
769,213 |
|
|
|
671,514 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' equity |
|
|
|
||||
Common stock, |
|
1,513 |
|
|
|
1,512 |
|
Treasury stock, shares at cost; 214 shares and 214 shares as of March 31, 2025 and December 31, 2024, respectively |
|
(6,663 |
) |
|
|
(6,663 |
) |
Additional paid-in capital |
|
1,448,556 |
|
|
|
1,447,671 |
|
Retained earnings |
|
38,388 |
|
|
|
117,054 |
|
Total stockholders' equity |
|
1,481,794 |
|
|
|
1,559,574 |
|
Total liabilities and stockholders' equity |
$ |
2,251,007 |
|
|
$ |
2,231,088 |
|
BKV Corporation Condensed Consolidated Statements of Operations ($ thousands, except per share amounts) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
|
2025 |
|
|
|
2024 |
|
Revenues and other operating income |
|
|
|
|
||||
Natural gas, NGL, and oil sales |
|
$ |
216,126 |
|
|
$ |
141,687 |
|
Midstream revenues |
|
|
2,771 |
|
|
|
4,128 |
|
Derivative losses, net |
|
|
(152,191 |
) |
|
|
(3,679 |
) |
Marketing revenues |
|
|
6,485 |
|
|
|
4,921 |
|
Section 45Q tax credits |
|
|
3,307 |
|
|
|
2,329 |
|
Related party revenues |
|
|
426 |
|
|
|
1,101 |
|
Other |
|
|
1,896 |
|
|
|
1,427 |
|
Total revenues and other operating income |
|
|
78,820 |
|
|
|
151,914 |
|
Operating expenses |
|
|
|
|
||||
Lease operating and workover |
|
|
35,055 |
|
|
|
34,468 |
|
Taxes other than income |
|
|
10,222 |
|
|
|
11,365 |
|
Gathering and transportation |
|
|
55,793 |
|
|
|
59,066 |
|
Depreciation, depletion, amortization, and accretion |
|
|
39,970 |
|
|
|
52,166 |
|
General and administrative |
|
|
25,257 |
|
|
|
20,645 |
|
Other |
|
|
6,226 |
|
|
|
8,567 |
|
Total operating expenses |
|
|
172,523 |
|
|
|
186,277 |
|
Loss from operations |
|
|
(93,703 |
) |
|
|
(34,363 |
) |
Other income (expense) |
|
|
|
|
||||
Gains on contingent consideration liabilities |
|
|
— |
|
|
|
6,594 |
|
Losses from equity affiliate |
|
|
(9,585 |
) |
|
|
(7,707 |
) |
Interest expense |
|
|
(5,052 |
) |
|
|
(16,083 |
) |
Interest expense, related party |
|
|
— |
|
|
|
(1,973 |
) |
Interest income |
|
|
149 |
|
|
|
1,633 |
|
Other income |
|
|
336 |
|
|
|
335 |
|
Loss before income taxes |
|
|
(107,855 |
) |
|
|
(51,564 |
) |
Income tax benefit |
|
|
29,189 |
|
|
|
12,979 |
|
Net loss |
|
$ |
(78,666 |
) |
|
$ |
(38,585 |
) |
|
|
|
|
|
||||
Net loss per common share: |
|
|
|
|
||||
Basic |
|
$ |
(0.93 |
) |
|
$ |
(0.58 |
) |
Diluted |
|
$ |
(0.93 |
) |
|
$ |
(0.58 |
) |
|
|
|
|
|
||||
Weighted average number of common shares outstanding: |
|
|
|
|
||||
Basic |
|
|
84,706 |
|
|
|
66,287 |
|
Diluted |
|
|
84,706 |
|
|
|
66,287 |
|
BKV Corporation Condensed Consolidated Statements of Cash Flows ($ thousands) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
|
2025 |
|
|
|
2024 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(78,666 |
) |
|
$ |
(38,585 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation, depletion, amortization, and accretion |
|
|
40,063 |
|
|
|
52,259 |
|
Equity-based compensation expense |
|
|
2,067 |
|
|
|
1,073 |
|
Deferred income tax benefit |
|
|
(29,619 |
) |
|
|
(13,122 |
) |
Unrealized losses on derivatives, net |
|
|
133,985 |
|
|
|
40,143 |
|
Gains on contingent consideration liabilities |
|
|
— |
|
|
|
(6,594 |
) |
Settlement of contingent consideration |
|
|
(20,000 |
) |
|
|
(20,000 |
) |
Proceeds from the sale of call options |
|
|
— |
|
|
|
23,502 |
|
Payments for the purchase of put options |
|
|
(16,206 |
) |
|
|
— |
|
Impairment of asset held for sale |
|
|
2,446 |
|
|
|
— |
|
Losses from equity affiliate |
|
|
9,585 |
|
|
|
7,707 |
|
Other, net |
|
|
(187 |
) |
|
|
743 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable, net |
|
|
(6,823 |
) |
|
|
(6,195 |
) |
Accounts receivable, related party |
|
|
(311 |
) |
|
|
(741 |
) |
Accounts payable and accrued liabilities |
|
|
(16,523 |
) |
|
|
(20,701 |
) |
Other changes in operating assets and liabilities |
|
|
2,809 |
|
|
|
(238 |
) |
Net cash provided by operating activities |
|
|
22,620 |
|
|
|
19,251 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(57,374 |
) |
|
|
(19,861 |
) |
Proceeds from sales of assets |
|
|
1,109 |
|
|
|
— |
|
Other investing activities, net |
|
|
257 |
|
|
|
(23 |
) |
Net cash used in investing activities |
|
|
(56,008 |
) |
|
|
(19,884 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds under RBL Credit Agreement |
|
|
170,000 |
|
|
|
— |
|
Payments on RBL Credit Agreement |
|
|
(135,000 |
) |
|
|
— |
|
Proceeds from draws on credit facilities |
|
|
— |
|
|
|
30,000 |
|
Payments on credit facilities |
|
|
— |
|
|
|
(31,000 |
) |
Payments of deferred offering costs |
|
|
— |
|
|
|
(590 |
) |
Net share settlements, equity-based compensation |
|
|
(1,181 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
33,819 |
|
|
|
(1,590 |
) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
431 |
|
|
|
(2,223 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
14,868 |
|
|
|
165,069 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
15,299 |
|
|
$ |
162,846 |
|
Volume of Derivative Activities
As of March 31, 2025, the Company’s derivative activities based on volume and contract prices, categorized by primary underlying risk and related commodity, by year, were as follows:
The following table represents natural gas commodity derivatives indexed to NYMEX Henry Hub pricing:
Instrument |
|
MMBtu |
|
Weighted Average Price (USD) |
|
Weighted Average Price Floor |
|
Weighted Average Price Ceiling |
|
Fair Value as of March 31, 2025 ($ thousands) |
|||||
2025 |
|
|
|
|
|
|
|
|
|
|
|||||
Swap |
|
78,400,000 |
|
$ |
3.41 |
|
|
|
|
|
$ |
(85,464 |
) |
||
Collars |
|
9,800,000 |
|
|
|
$ |
3.71 |
|
$ |
4.11 |
|
$ |
(5,555 |
) |
|
2026 |
|
|
|
|
|
|
|
|
|
|
|||||
Swap |
|
57,825,000 |
|
$ |
3.60 |
|
|
|
|
|
$ |
(48,283 |
) |
||
Collars |
|
25,550,000 |
|
|
|
$ |
3.67 |
|
$ |
4.19 |
|
$ |
(11,244 |
) |
|
Call options |
|
36,500,000 |
|
|
|
|
|
$ |
5.00 |
|
$ |
(19,784 |
) |
||
Put options |
|
36,500,000 |
|
|
|
|
|
$ |
3.00 |
|
$ |
5,273 |
|
||
2027 |
|
|
|
|
|
|
|
|
|
|
|||||
Collars |
|
29,200,000 |
|
|
|
$ |
3.53 |
|
$ |
3.93 |
|
$ |
(3,162 |
) |
|
Call options |
|
36,500,000 |
|
|
|
|
|
$ |
5.00 |
|
$ |
(13,729 |
) |
||
Put options |
|
36,500,000 |
|
|
|
|
|
$ |
3.00 |
|
$ |
10,268 |
|
||
The following table represents natural gas basis derivatives based on the applicable basis reference price listed below:
Instrument |
|
Basis Reference Price |
|
MMBtu |
|
Weighted Average Basis Differential |
|
Fair Value as of March 31, 2025 ($ thousands) |
|||
2025 |
|
|
|
|
|
|
|
|
|||
Swap |
|
Transco Leidy Basis |
|
9,625,000 |
|
$ |
(0.86 |
) |
|
$ |
1,502 |
Swap |
|
HSC Basis |
|
22,000,000 |
|
$ |
(0.45 |
) |
|
$ |
1,263 |
Swap |
|
Transco St 85 (Z4) Basis |
|
17,875,000 |
|
$ |
0.45 |
|
|
$ |
534 |
The following table represents natural gas liquids commodity derivatives for contracts, by contract type, expiring through December 31, 2026 based on the applicable index listed below:
Instrument |
|
Commodity Reference Price |
|
Gallons |
|
Weighted Average Price (USD) |
|
Fair Value as of March 31, 2025 ($ thousands) |
|||
2025 |
|
|
|
|
|
|
|
|
|||
Swap |
|
OPIS Purity Ethane Mont Belvieu |
|
80,850,000 |
|
$ |
0.25 |
|
$ |
(4,115 |
) |
Swap |
|
OPIS IsoButane Mont Belvieu Non-TET |
|
5,775,000 |
|
$ |
0.87 |
|
$ |
(770 |
) |
Swap |
|
OPIS Normal Butane Mont Belvieu Non-TET |
|
7,218,750 |
|
$ |
0.83 |
|
$ |
(913 |
) |
Swap |
|
OPIS Propane Mont Belvieu Non-TET |
|
31,762,500 |
|
$ |
0.73 |
|
$ |
(3,659 |
) |
Swap |
|
OPIS Natural Gasoline Mont Belvieu Non-TET |
|
11,550,000 |
|
$ |
1.41 |
|
$ |
(517 |
) |
2026 |
|
|
|
|
|
|
|
|
|||
Swap |
|
OPIS Purity Ethane Mont Belvieu |
|
94,762,500 |
|
$ |
0.25 |
|
$ |
(3,996 |
) |
Swap |
|
OPIS IsoButane Mont Belvieu Non-TET |
|
6,221,250 |
|
$ |
0.86 |
|
$ |
(412 |
) |
Swap |
|
OPIS Normal Butane Mont Belvieu Non-TET |
|
10,053,750 |
|
$ |
0.82 |
|
$ |
(581 |
) |
Swap |
|
OPIS Propane Mont Belvieu Non-TET |
|
37,327,500 |
|
$ |
0.70 |
|
$ |
(2,718 |
) |
Swap |
|
OPIS Natural Gasoline Mont Belvieu Non-TET |
|
16,275,000 |
|
$ |
1.40 |
|
$ |
649 |
|
Supplemental Non-GAAP Financial Measures
Adjusted Net Income (Loss) and Adjusted EPS
The Company defines Adjusted Net Income (Loss) as net income (loss) before (i) non-cash derivative gains (losses), (ii) earnings or losses from equity affiliate, (iii) gains (losses) on contingent consideration liabilities, (iv) certain equity-based compensation expense, (v) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods, (vi) other nonrecurring transactions, and (vii) the tax impact on these adjustments using a
We believe Adjusted Net Income (Loss) and Adjusted EPS are useful performance measures because they allow us to effectively evaluate our operating performance and results of operations from period to period and against our peers, without regard to our financing methods, corporate form, capital structure, or one-time events. We exclude the items listed above from net income (loss) in arriving at Adjusted Net Income (Loss) and Adjusted EPS because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Our presentation of Adjusted Net Income (Loss) and Adjusted EPS should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Other companies, including other companies in our industry, may not use Adjusted Net Income (Loss) and Adjusted EPS or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
The table below presents a reconciliation of Adjusted Net Income (Loss) to net income, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended March 31, |
||||||
($ Thousands, except EPS) |
|
2025 |
|
|
|
2024 |
|
Net loss |
$ |
(78,666 |
) |
|
$ |
(38,585 |
) |
Adjustment to net income: |
|
|
|
||||
Net unrealized derivative losses |
|
133,985 |
|
|
|
40,143 |
|
Losses from equity affiliate |
|
9,585 |
|
|
|
7,707 |
|
Gains on contingent consideration liabilities |
|
— |
|
|
|
(6,594 |
) |
Impairment of assets held for sale |
|
2,446 |
|
|
|
— |
|
Other nonrecurring transactions |
|
1,555 |
|
|
|
— |
|
Early settlement of derivative contracts (1) |
|
— |
|
|
|
(13,250 |
) |
Early settlements of derivative contracts related to the current period (2) |
|
— |
|
|
|
8,350 |
|
Total adjustments before taxes |
|
147,571 |
|
|
|
36,356 |
|
Tax effect of adjustments |
|
(33,941 |
) |
|
|
(8,362 |
) |
Total adjustments after taxes |
|
113,630 |
|
|
|
27,994 |
|
|
|
|
|
||||
Adjusted Net Income (Loss) |
$ |
34,964 |
|
|
$ |
(10,591 |
) |
|
|
|
|
||||
Adjusted Net Income (Loss) per basic share |
$ |
0.41 |
|
|
$ |
(0.16 |
) |
Adjusted Net Income (Loss) per diluted share |
$ |
0.41 |
|
|
$ |
(0.16 |
) |
|
|
|
|
||||
Basic weighted-average shares of common stock outstanding |
|
84,706 |
|
|
|
66,287 |
|
Add dilutive effects of TRSUs (3) |
|
22 |
|
|
|
— |
|
Add dilutive effects of PRSUs (3) |
|
— |
|
|
|
— |
|
Diluted weighted-average common shares outstanding |
|
84,728 |
|
|
|
66,287 |
|
_________________________________________________ |
|
(1) |
Reflects total cash settlements during the period upon termination of certain natural gas commodity derivative swap and collar contracts prior to their contractual settlement date. |
(2) |
When evaluating our operating performance and results of operations, early settlements of derivative contracts are “related to” the period that includes the underlying production month that was hedged. This adjustment removes the timing difference between the early termination date and the underlying production month that is hedged. |
(3) |
Net losses are prohibited from including potential common shares in the computation of diluted per share amounts. Therefore, we have utilized the basic shares outstanding to calculate both basic and diluted Adjusted Net Loss per common share. |
Adjusted EBITDAX
The Company defines Adjusted EBITDAX as net income (loss) attributable to BKV before (i) non-cash derivative gains (losses), (ii) depreciation, depletion, amortization, and accretion, (iii) exploration and impairment expense, (iv) gains (losses) on contingent consideration liabilities, (v) interest expense, (vi) interest expense, related party, (vii) income tax benefit (expense), (viii) equity-based compensation expense, (ix) bargain purchase gains, (x) earnings (losses) from equity affiliate, (xi) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods and (xii) other nonrecurring transactions.
The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax burden, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Other companies, including other companies in our industry, may not use Adjusted EBITDAX or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by our management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, rating agencies and others to more effectively evaluate our operating performance and results of operations from period to period and against our peers. We believe Adjusted EBITDAX is a useful performance measure because it allows us to effectively evaluate our operating performance and results of operations from period to period and against our peers, without regard to our financing methods, corporate form or capital structure.
The table below presents a reconciliation of Adjusted EBITDAX to net loss, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended March 31, |
||||||
($ Thousands) |
|
2025 |
|
|
|
2024 |
|
Net loss |
$ |
(78,666 |
) |
|
$ |
(38,585 |
) |
Add back (subtract): |
|
|
|
||||
Net unrealized derivative losses |
|
133,985 |
|
|
|
40,143 |
|
Forward month gas settlement (1) |
|
3,997 |
|
|
|
(9,048 |
) |
Depreciation, depletion, amortization, and accretion |
|
40,063 |
|
|
|
52,259 |
|
Exploration and impairment expense |
|
— |
|
|
|
— |
|
Gains on contingent consideration liabilities |
|
— |
|
|
|
(6,594 |
) |
Interest expense |
|
5,052 |
|
|
|
16,083 |
|
Interest expense, related party |
|
— |
|
|
|
1,973 |
|
Income tax benefit |
|
(29,189 |
) |
|
|
(12,979 |
) |
Equity-based compensation expense |
|
2,067 |
|
|
|
1,073 |
|
Impairment of asset held for sale |
|
2,446 |
|
|
|
— |
|
Losses from equity affiliate |
|
9,585 |
|
|
|
7,707 |
|
Other nonrecurring transactions |
|
1,555 |
|
|
|
— |
|
Early settlement of derivative contracts (2) |
|
— |
|
|
|
(13,250 |
) |
Early settlements of derivative contracts related to the current period (3) |
|
— |
|
|
|
8,350 |
|
Adjusted EBITDAX |
$ |
90,895 |
|
|
$ |
47,132 |
|
________________________________________________ |
|
(1) |
Natural gas derivative contracts settle and are realized in the month prior to the production covered by the contract. This adjustment removes the timing difference between the settlement date and the underlying production month that is hedged. |
(2) |
Reflects total cash settlements during the period upon termination of certain natural gas commodity derivative swap and collar contracts prior to their contractual settlement date. |
(3) |
When evaluating our operating performance and results of operations, early settlements of derivative contracts are “related to” the period that includes the underlying production month that was hedged. This adjustment removes the timing difference between the early termination date and the underlying production month that is hedged. |
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin
We define Adjusted Free Cash Flow as net cash provided by (used in) operating activities, excluding cash paid for contingent consideration and changes in operating assets and liabilities, less total cash paid for capital expenditures (excluding leasehold costs and acquisitions).
Adjusted Free Cash Flow is not a measure of net cash flow provided by or used in operating activities as determined by GAAP. Adjusted Free Cash Flow is a supplemental non-GAAP financial measure that is used by our management and other external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others to assess our ability to internally fund our capital program, service or incur additional debt and to pay dividends. We believe Adjusted Free Cash Flow is a useful liquidity measure because it allows us and others to compare cash flow provided by operating activities across periods and to assess our ability to internally fund our capital program (including acquisitions), to reduce leverage, fund acquisitions and pay dividends to our stockholders. We define Adjusted Free Cash Flow Margin as the ratio of Adjusted Free Cash Flow for any period to total revenues, excluding derivative gains and losses, for such period. We use this metric to assess our liquidity relative to our revenues. Adjusted Free Cash Flow Margin illustrates the efficiency with which the Company generates Adjusted Free Cash Flow. Adjusted Free Cash Flow should not be considered as an alternative to, or more meaningful than, net income (loss) or net cash provided by (used in) operating activities determined in accordance with GAAP. Other companies, including other companies in our industry, may not use Adjusted Free Cash Flow or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
The table below presents our reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended March 31, |
||||||
($ Thousands) |
|
2025 |
|
|
|
2024 |
|
Net cash provided by operating activities |
$ |
22,620 |
|
|
$ |
19,251 |
|
Cash paid for contingent consideration (1) |
|
20,000 |
|
|
|
20,000 |
|
Change in operating assets and liabilities |
|
20,848 |
|
|
|
27,875 |
|
Cash paid for capital expenditures (excl. leasehold costs, acquisitions) |
|
(57,374 |
) |
|
|
(19,861 |
) |
Adjusted Free Cash Flow (2) |
$ |
6,094 |
|
|
$ |
47,265 |
|
Total revenue, excluding derivative gains and losses |
$ |
231,011 |
|
|
$ |
155,593 |
|
Adjusted Free Cash Flow Margin (2) |
|
2.6 |
% |
|
|
30.4 |
% |
__________________________________________ |
|
(1) |
Cash paid for contingent consideration is included as a deduction to arrive at net cash provided by (used in) operating activities and therefore, is added back for the purpose of computing Adjusted Free Cash Flow. |
(2) |
The early termination of derivative contracts increased Adjusted Free Cash Flow by |
Power JV Adjusted EBITDA
We define Power JV Adjusted EBITDA as net income (loss) of BKV-BPP Power LLC (the “ Power JV”) before (i) unrealized derivative gains/losses, (ii) depreciation and amortization, and (iii) interest expense.
The items listed above are excluded from the Power JV’s net income (loss) in arriving at Power JV Adjusted EBITDA because these amounts can vary substantially from company to company within the power industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Power JV Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Other companies, including other companies in the power industry, may not use Adjusted EBITDA or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
Power JV Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by our management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, rating agencies and others to more effectively evaluate our and the Power JV’s operating performance and results of operations from period to period and against our peers. We believe our investment in the Power JV is a strategic differentiator for BKV’s integrated energy solutions model. Investors in BKV may be interested in the results of the Power JV and the respective impact to BKV’s financial results. We believe Power JV Adjusted EBITDA is a useful performance measure because it allows us to effectively evaluate the Power JV’s operating performance and results of operations from period to period and against peers, without regard to financing methods, corporate form or capital structure.
The table below presents our reconciliation of Power JV Adjusted EBITDA to the Power JV’s net loss, the most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended March 31, |
||||||
($ Thousands) |
|
2025 |
|
|
|
2024 |
|
Net loss |
$ |
(19,170 |
) |
|
$ |
(15,414 |
) |
Add back: |
|
|
|
||||
Unrealized derivative losses |
|
13,049 |
|
|
|
7,852 |
|
Depreciation and amortization |
|
9,627 |
|
|
|
9,885 |
|
Interest expense |
|
16,073 |
|
|
|
18,182 |
|
Power JV Adjusted EBITDA |
$ |
19,579 |
|
|
$ |
20,505 |
|
Combined Adjusted EBITDAX
We define Combined Adjusted EBITDAX as our Adjusted EBITDAX plus
|
Three Months Ended March 31, |
||||
($ Thousands) |
|
2025 |
|
|
2024 |
Adjusted EBITDAX |
$ |
90,895 |
|
$ |
47,132 |
|
|
9,790 |
|
|
10,253 |
Combined Adjusted EBITDAX |
$ |
100,685 |
|
$ |
57,385 |
Please see the reconciliations above of Adjusted EBITDAX to our net loss, our most directly comparable GAAP financial measure for the periods indicated, and of Power JV Adjusted EBITDA to the Power JV’s net loss, the most directly comparable GAAP financial measure for the periods indicated.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250509647990/en/
Investor Contacts:
David Tameron
BKV Corporation
Chief Financial Officer
InvestorRelations@bkvcorp.com
Caldwell Bailey
ICR, Inc.
BKVIR@ircinc.com
Source: BKV Corporation
