BKV Corp Q3 2026 net income falls to $29.4M
A cost-reimbursement deal supports planned Temple modular generation of 400 MW, while fourth-quarter production guidance is 1,010–1,030 MMcfe/d.
Sentiment and the balance of points
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Form Type
8-K
Rhea-AI Filing Summary
BKV Corporation reported Q3 2026 net income attributable to BKV of $29.4 million, versus $83.5 million a year earlier. Adjusted net income attributable to BKV was $39.9 million versus $23.1 million, and adjusted EBITDAX attributable to BKV was $132.7 million versus $101.3 million. Net cash provided by operating activities was $164.5 million, versus $109.1 million. Adjusted measures are non-GAAP.
The Power JV’s cost reimbursement agreement with a leading Frontier AI Lab supports raising planned Temple modular generation from 200 MW to 400 MW. If mutually agreeable offtake arrangements are not agreed to by November 18, 2026, it covers up to approximately $179 million; if the intended offtaker elects to take assignment of the equipment contract, it would reimburse eligible costs, subject to a $374.1 million aggregate cap. Verra certified carbon sequestered through BKV’s CCUS operations, and BKV can begin delivering Carbon Sequestered Gas under arrangements with Kiewit and Gunvor.
The September 15, 2026 Barnett acquisition added approximately 65 MMcfe/d and 0.35 Tcfe of proved developed producing reserves. September 30 liquidity was $1.2 billion. Q4 guidance calls for $315 million to $385 million of total capital expenditures and net production of 1,010 to 1,030 MMcfe/d.
4 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointAdjusted net income attributable to BKV rose to $39.9 million from $23.1 million.
- Moderate pointAdjusted EBITDAX attributable to BKV rose to $132.7 million from $101.3 million.
- Moderate pointOperating cash rose to $164.5 million from $109.1 million.
- Moderate pointBarnett acquisition added approximately 65 MMcfe/d of production.
Negative
- Moderate pointNet income attributable to BKV fell to $29.4 million from $83.5 million.
Filing Explained
At September 30, BKV reported 107,992 common shares outstanding versus 96,872 at December 31; unchanged holders’ ownership percentages fall absent offsetting changes.
The 8-K furnishes BKV’s third-quarter release, which reports completion of a
The balance sheet reports 107,992 common shares issued and outstanding at
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net income attributable to BKV: $29.4 million
Adjusted Net Income attributable to BKV: $39.9 million
Adjusted EBITDAX attributable to BKV: $132.7 million
+5 more
8 metrics
Net income attributable to BKV
$29.4 million
Q3 2026; $83.5 million in Q3 2025
Adjusted Net Income attributable to BKV
$39.9 million
Q3 2026; $23.1 million in Q3 2025
Adjusted EBITDAX attributable to BKV
$132.7 million
Q3 2026; $101.3 million in Q3 2025
Net cash provided by operating activities
$164.5 million
Q3 2026; $109.1 million in Q3 2025
Planned Temple modular generation
400 MW
The plan increased from 200 MW under the cost reimbursement agreement
Cost reimbursement agreement coverage
Up to approximately $179 million
Applies if mutually agreeable offtake arrangements are not agreed to by November 18, 2026
Production added by Barnett acquisition
Approximately 65 MMcfe/d
Acquisition completed September 15, 2026
Q4 2026 total capital expenditures guidance
$315 million to $385 million
Fourth-quarter 2026 guidance
Key Terms
Adjusted EBITDAX, Cost Reimbursement Agreement, Carbon Sequestered Gas, spark spread, +1 more
5 terms
Adjusted EBITDAX financial
"Adjusted EBITDAX attributable to BKV"
Adjusted EBITDAX is a measure of a company’s operating profit that adds back interest, taxes, depreciation, amortization and specific recurring costs (often exploration or similar project expenses), then removes one‑time or unusual items to show recurring cash profitability. Investors use it like a clean yardstick—ignoring financing choices, accounting rules and one‑off events—to compare core performance across periods or peers and assess a business’s ability to generate cash from operations.
Cost Reimbursement Agreement financial
"entered into a cost reimbursement agreement"
A cost reimbursement agreement is a contract where one party agrees to pay back another for actual costs incurred while carrying out a project, study, or service. It spells out which expenses are eligible, how they must be documented, and any limits or timing for repayment. For investors, these agreements matter because they shift which party bears project costs and cash-flow risk, affecting expected expenses, funding needs, and the timing of reported results.
Carbon Sequestered Gas technical
"through its Carbon Sequestered Gas"
spark spread technical
"Average spark spread ($/MWh)"
The spark spread is the gap between the price a power generator receives for selling electricity and the cost of the fuel used to produce that electricity, usually expressed per unit of energy (often per megawatt-hour). It tells investors how profitable it is to run a fuel-fired power plant at a given moment—think of it like the difference between what a bakery charges for a loaf and the cost of the flour and gas to bake it—so it helps value generation assets, guide trading and hedging decisions, and signal when plants will be turned on or off.
Net Leverage Ratio financial
"The Company defines Net Leverage Ratio"
The net leverage ratio measures how much debt a company has compared to its available assets or earnings, after accounting for its cash and liquid assets. It helps investors understand how heavily a company relies on borrowed money to finance its operations and growth. A higher ratio indicates greater financial risk, while a lower ratio suggests a more cautious approach to borrowing.
Earnings Snapshot
Net income attributable to BKV: $29.4 million · Guidance included
Third quarter 2026
Net income attributable to BKV
$29.4 million
versus $83.5 million in Q3 2025
Adjusted Net Income attributable to BKV
$39.9 million
versus $23.1 million in Q3 2025
Adjusted EBITDAX attributable to BKV
$132.7 million
versus $101.3 million in Q3 2025
Net cash provided by operating activities
$164.5 million
versus $109.1 million in Q3 2025
Guidance
Q4 2026 guidance includes total capital expenditures of $315 million to $385 million and net production of 1,010 to 1,030 MMcfe/d.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did BKV (BKV) perform in Q3 2026?
BKV reported $29.4 million of net income attributable to BKV for Q3 2026, compared with $83.5 million in Q3 2025. Adjusted net income attributable to BKV was $39.9 million, versus $23.1 million, and adjusted EBITDAX attributable to BKV was $132.7 million, versus $101.3 million. The adjusted measures are non-GAAP.
What is BKV's Q4 2026 production and capital spending guidance?
BKV's Q4 2026 guidance calls for net production of 1,010 to 1,030 MMcfe/d and total capital expenditures of $315 million to $385 million. The guidance also includes Power Adjusted EBITDAX of $10 million to $30 million.
What are the terms of BKV's Temple cost reimbursement agreement?
The Power JV agreement covers up to approximately $179 million if mutually agreeable offtake arrangements are not agreed to by November 18, 2026. It contemplates an extension to December 21, 2026, with further extensions by mutual agreement. If the intended offtaker elects to take assignment of the equipment supply contract, it would reimburse eligible costs subject to an aggregate cap of $374.1 million.
How much liquidity did BKV have at September 30, 2026?
BKV reported $1.2 billion in total liquidity as of September 30, 2026, consisting of $619.6 million in cash and cash equivalents and $544.5 million of available capacity under its RBL.
What did Verra certification allow BKV to do?
BKV can begin delivering Carbon Sequestered Gas under its previously announced arrangements with Kiewit and Gunvor, following Verra certification of carbon dioxide permanently sequestered through its CCUS operations.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 5, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (720) 375-9680
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 2.02. Results of Operations and Financial Condition.
Attached as Exhibit 99.1 is the registrant’s earnings release for the third quarter of 2026, issued November 5, 2026. This release is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as otherwise expressly stated in such filing.
Item 7.01. Regulation FD Disclosure.
On November 5, 2026, BKV posted an investor presentation on its website. The presentation may be found on BKV’s website at https://www.bkv.com by selecting “Investors,” “News & Events” and then “Presentations.”
The information in the investor presentation and consolidating statements are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise incorporated by reference into any filing pursuant to the Securities Act, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |||||||
99.1 | Press Release, dated November 5, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BKV Corporation | ||||||||
| November 5, 2026 | By: | /s/ David R. Tameron | ||||||
David R. Tameron | ||||||||
Chief Financial Officer | ||||||||
Exhibit 99.1
BKV Reports Q3 2026 Results, Cost Reimbursement Agreement with Leading Frontier AI Lab, and Verra Carbon Credit Certification
DENVER, Colorado – November 5, 2026 – BKV Corporation (“BKV” or the “Company”) (NYSE: BKV) today reported financial and operational results for the third quarter of 2026, along with guidance for the fourth quarter of 2026. In addition, the Company is announcing an expanded scope for its Phase 1 modular power development in Temple, TX, supported by a Cost Reimbursement Agreement with a Leading Frontier AI Lab, and Verra carbon credit certification.
Third Quarter 2026 Highlights
•Net income attributable to BKV of $29.4 million or $0.27 per diluted share
•Adjusted Net Income attributable to BKV of $39.9 million or $0.36 per diluted share
•Adjusted EBITDAX attributable to BKV of $132.7 million
•Net cash provided by operating activities of $164.5 million
•Net cash provided by operating activities before working capital of $112.7 million
•Accrued capital expenditures of $77.8 million
•Adjusted Free Cash Flow before Power Growth attributable to BKV of $31.2 million
•Average net production of 981.2 MMcfe/d
•Total generation from the Power JV’s Temple plants of 2,317 GWh
•CCUS quarterly sequestration of approximately 55,200 metric tons of CO2 equivalent
•Net Leverage Ratio of 2.41x
•Completed $575.0 million Convertible Senior Notes Offering at an annual rate of 1.625%
Cost Reimbursement Agreement with a Leading Frontier AI Lab for Modular Power Development
BKV-BPP Power (“Power JV”) entered into a cost reimbursement agreement (“CRA”) with a Leading Frontier AI Lab supporting an increase in planned modular power generation at the Temple Energy Complex to 400 MW from 200 MW. If mutually agreeable offtake arrangements are not agreed to by November 18, 2026, the CRA covers up to approximately $179 million. The agreement contemplates an extension to December 21, 2026, and the ability to extend further, each on mutual agreement. The intended offtaker may elect to take assignment of the equipment supply contract, if not retained by the Power JV, in which case it would reimburse Power JV for eligible costs, subject to an aggregate cap of $374.1 million. The CRA allows BKV to maintain its development schedule while advancing commercial discussions toward a long-term purchase price agreement (“PPA”).
Equipment Supply Agreement Backed by Agreement with a Leading Investment-Grade Hyperscaler
As previously announced in October, a wholly owned subsidiary of BKV entered into an equipment supply agreement with a Tier 1 supplier for the purchase of combined-cycle gas turbine (“CCGT”) power generation equipment for one of the Company’s prospective power generation projects in Texas representing approximately 1.2 GW. BKV also announced a backstop agreement with a leading investment-grade hyperscaler, under which the hyperscaler has agreed to reimburse a portion of BKV’s costs associated with the equipment and related project work. This investment-grade hyperscaler is also the intended offtaker for the prospective power generation project.
Verra Carbon Credit Certification Unlocks Carbon Sequestered Gas
BKV became the first company to receive carbon credit certification from Verra for CO₂ permanently sequestered through its CCUS operations. This milestone enables the Company to monetize carbon credits through its Carbon Sequestered Gas (“CSG”), a first-of-its-kind, third-party-verified carbon-neutral natural gas product. With verification complete, BKV can begin delivering CSG under its previously announced arrangements with Kiewit and Gunvor, while pursuing additional opportunities to market CSG to customers seeking reliable, lower-carbon energy solutions.
1
Strategic Barnett Shale Acquisition Highlights
As previously announced, on September 15, 2026, BKV completed the acquisition of upstream, midstream and carbon capture and sequestration (“CCS”) assets in the Barnett Shale, further strengthening its position as one of the basin’s leading operators. The acquisition added approximately 65 MMcfe/d of production (more than 50% liquids) and approximately 0.35 Tcfe of proved developed producing reserves. The acquired assets also include a cryogenic natural gas processing plant with 180 MMcf/d of capacity, approximately 340 miles of owned natural gas gathering infrastructure, 225 miles of owned water gathering infrastructure and two saltwater disposal wells. Additionally, the acquisition included an operating CCS facility that sequestered greater than 100,000 metric tons of CO₂ during the twelve months ended September 30, 2026.
“Our upstream business delivered another strong quarter, with continued operational outperformance providing a solid foundation as we advanced our strategic growth initiatives,” said Chris Kalnin, Chief Executive Officer of BKV. “We also made meaningful commercial progress in our power business, securing a cost reimbursement agreement for modular generation equipment and a previously announced backstop agreement with an investment-grade hyperscaler supporting our CCGT equipment commitments.”
“These milestones reflect our deliberate, disciplined approach to developing additional power generation capacity,” continued Kalnin. “We are encouraged by the progress of our commercial discussions and remain focused on securing long-term power purchase agreements that support our growth objectives. Combined with continued execution across our upstream and carbon capture businesses, we believe this progress positions BKV to advance its closed-loop strategy and create sustainable, long-term shareholder value.”
2
Financial Results
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ Millions, except EPS) (1) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income attributable to BKV | $ | 29.4 | $ | 83.5 | $ | 149.3 | $ | 109.3 | |||||||||||||||
| Adjusted Net Income attributable to BKV, non-GAAP | $ | 39.9 | $ | 23.1 | $ | 110.7 | $ | 84.7 | |||||||||||||||
Adjusted EPS attributable to BKV, non-GAAP (2) | $ | 0.36 | $ | 0.27 | $ | 1.03 | $ | 1.00 | |||||||||||||||
| Adjusted EBITDAX attributable to BKV, non-GAAP | $ | 132.7 | $ | 101.3 | $ | 381.3 | $ | 302.4 | |||||||||||||||
| Net cash provided by operating activities | $ | 164.5 | $ | 109.1 | $ | 346.2 | $ | 214.8 | |||||||||||||||
| Net cash provided by operating activities before working capital, non-GAAP | $ | 112.7 | $ | 94.0 | $ | 339.6 | $ | 228.5 | |||||||||||||||
| Adjusted Free Cash Flow before Power Growth attributable to BKV, non-GAAP | $ | 31.2 | $ | 15.0 | $ | 91.3 | $ | 43.5 | |||||||||||||||
| Capital expenditures (accrued) | |||||||||||||||||||||||
Development (3) | $ | 51.5 | $ | 55.7 | $ | 172.2 | $ | 166.2 | |||||||||||||||
Power (4) | $ | 6.8 | $ | 0.2 | $ | 30.3 | $ | 0.6 | |||||||||||||||
| CCUS and other | $ | 19.5 | $ | 24.0 | $ | 66.3 | $ | 50.2 | |||||||||||||||
| Total capital expenditures (accrued) | $ | 77.8 | $ | 79.9 | $ | 268.8 | $ | 217.0 | |||||||||||||||
Deposits on fixed asset purchases (5), (6) | $ | 109.7 | $ | 15.0 | $ | 268.2 | $ | 15.0 | |||||||||||||||
(1) Adjusted Net Income attributable to BKV, Adjusted EPS attributable to BKV, Adjusted EBITDAX attributable to BKV, Net cash provided by operating activities before working capital, and Adjusted Free Cash Flow before Power Growth attributable to BKV 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 most directly comparable GAAP metrics, please see “Supplemental Non-GAAP Financial Measures” below.
(2) Reflects Adjusted EPS attributable to BKV on a diluted basis.
(3) Excludes asset retirement obligation expenditures of $0.6 million and $0.5 million for the three months ended September 30, 2026 and 2025, respectively, and $1.5 million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively.
(4) Power maintenance was $0.6 million and $0.2 million for the three months ended September 30, 2026 and 2025, respectively, and $1.4 million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively.
(5) These deposits are comprised of payments for turbines, modular generation equipment, and other long lead time items in Power included within our Strategic Power Growth capital expenditures and investments guidance.
(6) Includes a $24.8 million deposit on property and equipment paid directly to the vendor by the lender of the Power Equipment Financing Facility.
“Our strong upstream cash flow, disciplined capital commitments and recent capital markets transactions have further strengthened our financial position and provided substantial liquidity to support our strategic growth initiatives,” said David Tameron, Chief Financial Officer of BKV. “As we advance our phased power development strategy, we remain focused on preserving financial flexibility and maintaining a strong balance sheet.”
“The announced cost reimbursement agreement for modular generation equipment and the previously disclosed hyperscaler backstop for combined-cycle equipment reflect our disciplined approach to structuring capital commitments,” continued Tameron. “These arrangements provide important financial protections and flexibility as we advance commercial discussions, positioning us to pursue significant growth opportunities while prudently managing capital exposure and development risk.”
3
Business Segment Results
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||
| ($ Thousands) | Upstream/Midstream | Power | Corporate and Other | Total | |||||||||||||||||||
| Net income (loss) | $ | 25,736 | $ | 26,673 | $ | (14,023) | $ | 38,386 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 44,604 | 9,482 | 655 | 54,741 | |||||||||||||||||||
| Exploration and impairment expense | — | — | — | — | |||||||||||||||||||
| Unrealized (gains) losses on derivatives, net | 33,356 | (21,646) | — | 11,710 | |||||||||||||||||||
Forward month gas settlement (1) | (3,658) | — | — | (3,658) | |||||||||||||||||||
| Interest expense, net | 14,867 | 9,058 | (309) | 23,616 | |||||||||||||||||||
| Interest expense, related parties | — | 4,008 | — | 4,008 | |||||||||||||||||||
| Equity-based compensation expense | 2,662 | 967 | 1,189 | 4,818 | |||||||||||||||||||
| Income tax expense | — | — | 3,018 | 3,018 | |||||||||||||||||||
| Other nonrecurring transactions | 4,560 | 935 | — | 5,495 | |||||||||||||||||||
| Adjusted EBITDAX, non-GAAP | 122,127 | 29,477 | (9,470) | 142,134 | |||||||||||||||||||
(Deduct) add: Adjusted EBITDAX attributable to Noncontrolling Interests (2) | — | (8,504) | (962) | (9,466) | |||||||||||||||||||
Adjusted EBITDAX attributable to BKV, non-GAAP | $ | 122,127 | $ | 20,973 | $ | (10,432) | $ | 132,668 | |||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
| ($ Thousands) | Upstream/Midstream | Power | Corporate and Other | Total | |||||||||||||||||||
| Net income (loss) | $ | 91,756 | $ | 37,359 | $ | (34,224) | $ | 94,891 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 37,344 | 9,546 | 538 | 47,428 | |||||||||||||||||||
| Exploration and impairment expense | — | — | — | — | |||||||||||||||||||
| Unrealized (gains) losses on derivatives, net | (55,193) | (26,792) | — | (81,985) | |||||||||||||||||||
Forward month gas settlement (1) | (6,981) | — | — | (6,981) | |||||||||||||||||||
| Interest expense, net | 6,441 | 10,322 | (240) | 16,523 | |||||||||||||||||||
| Interest expense, related parties | — | 5,024 | — | 5,024 | |||||||||||||||||||
| Equity-based compensation expense | — | — | 2,944 | 2,944 | |||||||||||||||||||
| Income tax expense | — | — | 23,874 | 23,874 | |||||||||||||||||||
| Other nonrecurring transactions | — | 4,898 | 5,643 | 10,541 | |||||||||||||||||||
Adjusted EBITDAX, non-GAAP | 73,367 | 40,357 | (1,465) | 112,259 | |||||||||||||||||||
(Deduct) add: Adjusted EBITDAX attributable to Noncontrolling Interests (2) | — | (10,050) | (863) | (10,913) | |||||||||||||||||||
Adjusted EBITDAX attributable to BKV, non-GAAP | $ | 73,367 | $ | 30,307 | $ | (2,328) | $ | 101,346 | |||||||||||||||
4
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||
| ($ Thousands) | Upstream/Midstream | Power | Corporate and Other | Total | |||||||||||||||||||
| Net income (loss) | $ | 196,568 | $ | 39,368 | $ | (68,376) | $ | 167,560 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 128,116 | 30,838 | 1,605 | 160,559 | |||||||||||||||||||
| Exploration and impairment expense | — | — | — | — | |||||||||||||||||||
| Unrealized (gains) losses on derivatives, net | (6,532) | (41,101) | — | (47,633) | |||||||||||||||||||
Forward month gas settlement (1), (3) | (25,563) | — | — | (25,563) | |||||||||||||||||||
| Interest expense, net | 41,985 | 27,510 | (1,864) | 67,631 | |||||||||||||||||||
| Interest expense, related parties | — | 12,255 | — | 12,255 | |||||||||||||||||||
| Equity-based compensation expense | 8,077 | 3,019 | 4,028 | 15,124 | |||||||||||||||||||
| Impairment of asset held for sale | — | — | 3,516 | 3,516 | |||||||||||||||||||
| Income tax expense | — | — | 34,637 | 34,637 | |||||||||||||||||||
| Other nonrecurring transactions | 9,678 | 8,972 | 825 | 19,475 | |||||||||||||||||||
Adjusted EBITDAX, non-GAAP (3) | 352,329 | 80,861 | (25,629) | 407,561 | |||||||||||||||||||
(Deduct) add: Adjusted EBITDAX attributable to Noncontrolling Interests (2) | — | (23,465) | (2,751) | (26,216) | |||||||||||||||||||
Adjusted EBITDAX attributable to BKV, non-GAAP | $ | 352,329 | $ | 57,396 | $ | (28,380) | $ | 381,345 | |||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| ($ Thousands) | Upstream/Midstream | Power | Corporate and Other | Total | |||||||||||||||||||
| Net income (loss) | $ | 150,746 | $ | 30,381 | $ | (60,532) | $ | 120,595 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 114,479 | 28,709 | 1,417 | 144,605 | |||||||||||||||||||
| Exploration and impairment expense | — | — | — | — | |||||||||||||||||||
| Unrealized (gains) losses on derivatives, net | (24,142) | (21,925) | — | (46,067) | |||||||||||||||||||
Forward month gas settlement (1) | (10,200) | — | — | (10,200) | |||||||||||||||||||
| Interest expense, net | 16,909 | 31,070 | (509) | 47,470 | |||||||||||||||||||
| Interest expense, related parties | — | 15,123 | — | 15,123 | |||||||||||||||||||
| Equity-based compensation expense | 4,526 | 1,859 | 2,695 | 9,080 | |||||||||||||||||||
| Impairment of asset held for sale | 2,446 | — | — | 2,446 | |||||||||||||||||||
| Income tax expense | — | — | 22,449 | 22,449 | |||||||||||||||||||
| Other nonrecurring transactions | 4,165 | 4,898 | 12,763 | 21,826 | |||||||||||||||||||
Adjusted EBITDAX, non-GAAP | 258,929 | 90,115 | (21,717) | 327,327 | |||||||||||||||||||
(Deduct) add: Adjusted EBITDAX attributable to Noncontrolling Interests (2) | — | (23,521) | (1,373) | (24,894) | |||||||||||||||||||
Adjusted EBITDAX attributable to BKV, non-GAAP | $ | 258,929 | $ | 66,594 | $ | (23,090) | $ | 302,433 | |||||||||||||||
________________________________________________________
(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) Non-GAAP financial measure, see “Supplemental Non-GAAP Financial Measures” below for reconciliations to the most comparable financial measures in accordance with GAAP.
(3) The nine months ended September 30, 2026 reflects the correction of $3.0 million previously reflected in Forward month gas settlement and impacting Adjusted EBITDAX for the six months ended June 30, 2026. The correction did not affect the Company’s GAAP financial statements or previously reported GAAP results. As a result, Adjusted EBITDAX for the nine months ended September 30, 2026 may not equal the sum of previously reported six months ended June 30, 2026 and three months ended September 30, 2026.
5
Segment Operational Results - Third Quarter 2026
Power Segment
BKV has made tangible commercial progress toward securing long-term PPAs across its power development platform. The Company announced an equipment supply agreement for approximately 1.2 GW of CCGT capacity, supported by a backstop agreement with an investment-grade hyperscaler. The Power JV also entered into a cost reimbursement agreement with a leading Frontier AI Lab, supporting an increase in planned modular generation at the Temple Energy Complex to 400 MW from 200 MW. These agreements represent important commercial milestones as BKV advances discussions toward long-term PPAs. With the additional modular generation equipment, the Company's existing and planned power generation assets now represent approximately 3.3 GW of potential capacity.
The Temple I and II facilities continued to demonstrate strong operational reliability during the quarter, achieving a combined capacity factor of 71.7% and total generation of 2,317 GWh. Plant availability remained high with an average equivalent availability factor of 96% reflecting continued operational execution across both facilities.
Despite record power demand across ERCOT during the quarter, wholesale power prices and spark spreads were below expectations, as increased renewable generation and battery storage moderated peak pricing. BKV remains confident in the long-term fundamentals of the ERCOT market, supported by a substantial backlog of large-load interconnection requests and anticipated demand growth.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Temple I capacity factor | 75.9 | % | 71.1 | % | 69.9 | % | 60.2 | % | |||||||||||||||
| Temple II capacity factor | 67.4 | % | 67.5 | % | 65.9 | % | 58.8 | % | |||||||||||||||
| Total power generation (GWh) | 2,317 | 2,246 | 6,520 | 5,746 | |||||||||||||||||||
| Average power price ($/MWh) (including derivatives) | $ | 40.37 | $ | 43.89 | $ | 44.03 | $ | 46.77 | |||||||||||||||
| Average natural gas cost ($/Mcf) | $ | 2.64 | $ | 2.88 | $ | 3.09 | $ | 3.24 | |||||||||||||||
| Average spark spread ($/MWh) | $ | 21.18 | $ | 23.32 | $ | 21.88 | $ | 23.73 | |||||||||||||||
| Summary of Power Operations | |||||||||||||||||||||||
| ($ Millions) | |||||||||||||||||||||||
| Total revenues, net | $ | 170.8 | $ | 178.8 | $ | 457.7 | $ | 413.3 | |||||||||||||||
| Depreciation and amortization | $ | 9.5 | $ | 9.5 | $ | 30.8 | $ | 28.7 | |||||||||||||||
| Operating expenses | $ | 122.8 | $ | 117.2 | $ | 350.4 | $ | 311.9 | |||||||||||||||
| Income from operations | $ | 38.5 | $ | 52.1 | $ | 76.5 | $ | 72.7 | |||||||||||||||
| Interest expense, net | $ | (13.1) | $ | (15.3) | $ | (39.8) | $ | (46.2) | |||||||||||||||
| Other income | $ | 1.3 | $ | 0.6 | $ | 2.7 | $ | 3.9 | |||||||||||||||
| Net income | $ | 26.7 | $ | 37.4 | $ | 39.4 | $ | 30.4 | |||||||||||||||
| Net income (loss) attributable to BKV | $ | 18.4 | $ | 26.8 | $ | 23.3 | $ | 20.1 | |||||||||||||||
Upstream-Midstream Segment
BKV’s Upstream-Midstream business had another strong quarter of operational performance. Production came in above the high end of the guidance range, excluding the contribution from the Barnett acquisition completed during the quarter, while development capital expenditures came in below the low end of the guided range. The production outperformance was primarily driven by continued new well development outperformance and peer-leading base decline management. Additionally, the Barnett
6
acquisition completed on September 15, 2026, provided an incremental production contribution during the quarter. The Upstream-Midstream business continues to outperform on multiple levels and generate strong cash flow, while continued improvements in capital efficiency support disciplined investment across the Company’s broader platform.
The Company completed its first full quarter of internally marketing all of its natural gas production. Bringing marketing in-house expands BKV’s closed-loop strategy and creates potential margin opportunities through retention of previously outsourced marketing economics, optimization of delivery points, transportation and basis, enhanced commercial execution and, over time, power-linked optimization and decarbonization monetization levers.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Production | |||||||||||||||||||||||
| Net production per day (MMcfe/d) | 981.2 | 828.5 | 961.7 | 800.4 | |||||||||||||||||||
| Natural gas (MMcf) | 72,839 | 60,325 | 213,703 | 172,776 | |||||||||||||||||||
| NGL (MBbls) | 2,861 | 2,621 | 8,001 | 7,498 | |||||||||||||||||||
| Oil (MBbls) | 44 | 29 | 139 | 126 | |||||||||||||||||||
| Total (MMcfe) | 90,269 | 76,225 | 262,543 | 218,520 | |||||||||||||||||||
Natural Gas ($/Mcf) | |||||||||||||||||||||||
| Average NYMEX Henry Hub price | $ | 2.95 | $ | 3.07 | $ | 3.63 | $ | 3.39 | |||||||||||||||
| Differential | $ | (0.64) | $ | (0.57) | $ | (0.99) | $ | (0.64) | |||||||||||||||
| Average realized prices, excluding derivatives | $ | 2.31 | $ | 2.50 | $ | 2.64 | $ | 2.75 | |||||||||||||||
| Average realized prices, including derivatives | $ | 2.90 | $ | 2.81 | $ | 2.94 | $ | 2.83 | |||||||||||||||
NGLs ($/Bbl) | |||||||||||||||||||||||
| Average realized prices, excluding derivatives | $ | 23.05 | $ | 15.17 | $ | 21.46 | $ | 16.82 | |||||||||||||||
| Average realized prices, including derivatives | $ | 20.13 | $ | 15.64 | $ | 19.36 | $ | 16.29 | |||||||||||||||
Oil ($/Bbl) | |||||||||||||||||||||||
| Average realized prices | $ | 84.95 | $ | 59.62 | $ | 81.79 | $ | 61.32 | |||||||||||||||
| Average Operating Cash Costs per Mcfe | |||||||||||||||||||||||
| Lease operating and workover | $ | 0.52 | $ | 0.49 | $ | 0.52 | $ | 0.49 | |||||||||||||||
| Taxes other than income | $ | 0.12 | $ | 0.15 | $ | 0.15 | $ | 0.16 | |||||||||||||||
| Gathering and transportation costs | $ | 0.78 | $ | 0.81 | $ | 0.79 | $ | 0.83 | |||||||||||||||
Total | $ | 1.42 | $ | 1.45 | $ | 1.46 | $ | 1.48 | |||||||||||||||
Carbon Capture Utilization and Sequestration (“CCUS”)
During the third quarter, BKV expanded its operational CCUS portfolio to four projects following the acquisition of an additional injection facility as part of its upstream Barnett acquisition. Together, these projects represent an annual CO₂ sequestration run rate of approximately 350,000 metric tons. Since commencing initial injection at Barnett Zero in November 2023, BKV has significantly expanded its operating footprint and sequestration capacity in less than three years.
Total injection volumes for the third quarter were 55,200 metric tons of CO₂, including 15 days of injection volumes of 5,400 metric tons from the acquired CCS injection well.
The Company remains focused on developing its broader CCUS pipeline in collaboration with its joint venture partner, CIP, and working closely with the State of Louisiana on its Class VI permit applications. The Company remains on track to achieve its targeted annual injection run rate of 1.5 million metric tons in 2028.
Liquidity and Debt
As of September 30, 2026, BKV had cash and cash equivalents of $619.6 million and restricted cash of $16.3 million related to the Power segment Temple Term Loan Facility. Total principal debt as of September 30, 2026 was $2.0 billion, with total net debt of $1.4 billion. Total principal debt was made up of the 2031 Convertible Senior Notes of $575.0 million, the 2030 Senior Notes of $500.0 million, an RBL balance of $240.0 million, the Promissory Note of $46.0 million, and Power segment debt of $676.7 million. Power segment debt included $162.0 million of borrowings under the Temple I Loan Agreements, $370.3 million of
7
borrowings under the Temple Term Loan Facility, Power Equipment Financing Facility of $84.4 million, and a Temple Revolving Facility balance of $60.0 million.
During the nine months ended September 30, 2026, BKV’s JV partners contributed an aggregate $78.8 million, comprised of $65.4 million from Banpu Power US Corporation (“BPPUS”) and $13.4 million from CIP. BKV expects continued contributions through year end.
As of September 30, 2026, total liquidity for BKV was $1.2 billion, which consisted of $619.6 million in cash and cash equivalents and $544.5 million available capacity under the Company’s RBL. RBL availability as of September 30, 2026, was based on the elected commitment amount of $800.0 million, less an outstanding balance of $240.0 million and $15.5 million of letters of credit.
Fourth Quarter 2026 Guidance
| Q4 2026 | |||||
| Accrued Capital Expenditures and Net Production ($ Millions) | |||||
Development (1) | $55 - $75 | ||||
Power - Strategic Capital & Investments + Maintenance (1), (2) | $240 - $270 | ||||
CCUS and other (2) | $20 - $40 | ||||
| Total capital expenditures | $315 - $385 | ||||
Net production (MMcfe/d) | 1,010 - 1,030 | ||||
| Per Unit Operating Costs ($/Mcfe) | |||||
| Lease operating and workover | $0.52 - $0.56 | ||||
| Gathering, compression, processing, and transport (GCPT) | $0.75 - $0.79 | ||||
| Upstream general and administrative (excl. stock comp) | $0.20 - $0.25 | ||||
| Other General and Administrative Costs ($ Millions) | |||||
| General and administrative (Power, CCUS, & Other) | $15 - $19 | ||||
| General and administrative (stock comp) | $4 - $6 | ||||
| Commodity Prices | |||||
Average natural gas differential (3), (4) | $(0.70) - $(0.80) | ||||
| NGL % of WTI | ~ 31% | ||||
| Power ($ Millions) | |||||
| Power Adjusted EBITDAX | $10 - $30 | ||||
____________________________________________
(1) 2026 maintenance capital: Upstream ~$200 million; Power ~$5 million. Before consideration of the Barnett acquisition completed on September 15, 2026.
(2) Expecting $80 million - $100 million in JV partner capital contributions for the fourth quarter of 2026 collectively for Power and CCUS.
(3) Differential includes $0.15/Mcfe - $0.20/Mcfe of gathering, compression, processing, and transport.
(4) Differential includes $0.15/Mcfe - $0.25/Mcfe of ethane rejection impacts.
8
Third Quarter 2026 Earnings Conference Call
The Company plans to host a conference call to discuss results today, November 5, 2026 at 10 AM ET. 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 www.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 13763134. The replay will be available for 30 days after the call.
About BKV Corporation
Headquartered in Denver, Colorado, BKV Corporation is a forward-thinking, growth-driven energy company focused on creating value for its stockholders. BKV's core business is to produce natural gas from its owned and operated upstream assets. BKV’s overall business is organized into four business lines: natural gas production; natural gas gathering, processing and transportation; power generation; and carbon capture, utilization and sequestration. BKV (and its predecessor entity) was founded in 2015, and BKV and its employees are committed to building a different kind of energy company. BKV is one of the top 15 gas-weighted natural gas producers in the United States and the largest natural gas producer by gross operated volume in the Barnett Shale. BKV Corporation is the parent company for the BKV family of companies. For more information, visit the BKV website at www.bkv.com.
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, objectives of management and dividend policy, 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, including financial and operational performance, and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. Such forward-looking statements include, but are not limited to, statements about the amount and timing of capital expected to be contributed to our joint ventures by our joint venture partners; the anticipated benefits, opportunities and results with respect to the Barnett acquisition, the Power JV transaction and the Bedrock acquisition, including any expected value creation from these transactions, and any reserves additions, midstream opportunities and other anticipated impacts from these transactions, as well as other aspects of such transactions, and any anticipated efficiencies, power plant reliability and strategic growth and power purchase agreement opportunities relating to the Barnett acquisition, the BKV-BPP Power Joint Venture or the Power JV transaction, as well as guidance, projected or forecasted financial and operating results, future liquidity, leverage, results in certain basins, objectives, project timing, the anticipated benefits of reporting segment changes, expectations and intentions, regulatory and governmental actions and other statements that are not historical facts. 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. Forward-looking statements are not guarantees of future performance, and BKV cannot assure any reader that those statements will be realized or that the forward-looking events and circumstances will occur. Undue reliance should not be placed on any forward-looking statement, which is based on predictions of future results that may not occur as anticipated. 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 present expectations, including but not limited to assumptions, risks and uncertainties regarding the Barnett acquisition, the Power JV transaction and the Bedrock acquisition, as well as our ability to effectively operate and grow our CCUS business, expected increase in demand for power generation 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 Adjusted EBITDAX. 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 most recent Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, and any subsequent Quarterly Reports on Form 10-Q.
Investor Contacts:
Michael Hall
BKV Corporation
Vice President, Investor Relations
InvestorRelations@bkvcorp.com
Patrick Freeman
9
BKV Corporation
Senior Director, Investor Relations
InvestorRelations@bkvcorp.com
10
BKV Corporation
Condensed Consolidated Balance Sheets
($ thousands, except par value)
($ thousands, except par value)
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 619,558 | $ | 248,427 | |||||||
| Restricted cash | 16,254 | 15,846 | |||||||||
| Accounts receivable, net | 149,838 | 129,077 | |||||||||
| Accounts receivable, related parties | 10,354 | 11,196 | |||||||||
| Prepaid expenses | 8,410 | 14,720 | |||||||||
| Inventory | 19,084 | 20,039 | |||||||||
| Commodity derivative assets, current | 115,920 | 63,900 | |||||||||
| Other current assets | 11,428 | 8,150 | |||||||||
| Total current assets | 950,846 | 511,355 | |||||||||
| Natural gas properties, net | 2,647,462 | 2,407,330 | |||||||||
| Other property, plant, and equipment, net | 1,148,247 | 944,412 | |||||||||
| Deposits | 281,267 | 14,247 | |||||||||
| Goodwill | 18,417 | 18,417 | |||||||||
| Commodity derivative assets | 25,486 | 26,432 | |||||||||
| Other noncurrent assets | 14,235 | 17,064 | |||||||||
| Total assets | $ | 5,085,960 | $ | 3,939,257 | |||||||
| Liabilities, mezzanine equity, and equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | 260,945 | $ | 229,487 | |||||||
| Commodity derivative liabilities, current | 13,249 | 8,469 | |||||||||
| Income taxes payable to related party | — | 810 | |||||||||
| Payable to BPPUS for the BKV-BPP Power Joint Venture Transaction | — | 115,136 | |||||||||
| Current portion of Temple I Loan Agreements | — | 191,000 | |||||||||
| Current portion of long-term debt, net | 9,387 | 9,387 | |||||||||
| Other current liabilities | 9,304 | 10,302 | |||||||||
| Total current liabilities | 292,885 | 564,591 | |||||||||
| Asset retirement obligations | 213,355 | 230,372 | |||||||||
| Commodity derivative liabilities | 4,428 | 5,767 | |||||||||
| Temple I Loan Agreements | 162,000 | — | |||||||||
| Long-term debt, net | 1,835,067 | 937,724 | |||||||||
| Deferred tax liability, net | 149,482 | 128,839 | |||||||||
| Other noncurrent liabilities | 7,611 | 5,223 | |||||||||
| Total liabilities | 2,664,828 | 1,872,516 | |||||||||
| Commitments and contingencies | |||||||||||
| Mezzanine equity | |||||||||||
| Noncontrolling interest | 25,488 | 12,951 | |||||||||
| Stockholders' equity | |||||||||||
Common stock, $0.01 par value; 500,000 authorized shares; 107,992 and 96,872 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | 1,746 | 1,635 | |||||||||
Treasury stock, shares at cost; 214 shares as of September 30, 2026 and December 31, 2025 | (6,663) | (6,663) | |||||||||
| Additional paid-in capital | 1,795,053 | 1,681,785 | |||||||||
| Retained earnings | 455,738 | 309,051 | |||||||||
| Total stockholders' equity | 2,245,874 | 1,985,808 | |||||||||
| Noncontrolling interest | 149,770 | 67,982 | |||||||||
| Total equity | 2,395,644 | 2,053,790 | |||||||||
| Total liabilities, mezzanine equity, and equity | $ | 5,085,960 | $ | 3,939,257 | |||||||
11
BKV Corporation
Condensed Consolidated Statements of Income
($ thousands, except per share amounts)
($ thousands, except per share amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 (1) | 2026 | 2025 (1) | |||||||||||||||||||||||
| Revenues and other operating income | ||||||||||||||||||||||||||
| Natural gas, NGL, and oil sales | $ | 237,722 | $ | 192,435 | $ | 747,325 | $ | 608,290 | ||||||||||||||||||
| Power revenues | 87,445 | 85,018 | 230,797 | 190,806 | ||||||||||||||||||||||
| Derivative gains, net | 84,868 | 168,735 | 281,232 | 257,378 | ||||||||||||||||||||||
| Marketing revenues | 65,117 | 6,880 | 111,160 | 26,305 | ||||||||||||||||||||||
| Section 45Q tax credits | 3,277 | 3,740 | 9,385 | 9,621 | ||||||||||||||||||||||
| Other | (59) | (534) | (3,147) | (1,699) | ||||||||||||||||||||||
| Total revenues and other operating income | 478,370 | 456,274 | 1,376,752 | 1,090,701 | ||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Lease operating and workover | 46,568 | 36,920 | 136,125 | 106,151 | ||||||||||||||||||||||
| Fuel commodity costs | 44,459 | 46,173 | 144,412 | 132,388 | ||||||||||||||||||||||
| Purchased power | 44,659 | 41,427 | 101,516 | 89,588 | ||||||||||||||||||||||
| Marketing expense | 60,899 | 4,663 | 89,846 | 13,451 | ||||||||||||||||||||||
| Taxes other than income | 16,164 | 15,591 | 52,266 | 48,423 | ||||||||||||||||||||||
| Gathering and transportation | 70,501 | 61,822 | 206,398 | 180,641 | ||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 54,741 | 47,428 | 160,559 | 144,605 | ||||||||||||||||||||||
| Power operating and maintenance | 17,402 | 17,647 | 52,346 | 53,341 | ||||||||||||||||||||||
| General and administrative | 44,266 | 31,375 | 128,785 | 92,924 | ||||||||||||||||||||||
Other operating expenses | 11,474 | 14,084 | 29,580 | 28,794 | ||||||||||||||||||||||
| Total operating expenses | 411,133 | 317,130 | 1,101,833 | 890,306 | ||||||||||||||||||||||
| Income from operations | 67,237 | 139,144 | 274,919 | 200,395 | ||||||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||||
| Interest expense | (25,653) | (17,510) | (73,364) | (49,943) | ||||||||||||||||||||||
| Interest expense, related parties | (4,008) | (5,024) | (12,255) | (15,123) | ||||||||||||||||||||||
| Interest income | 2,037 | 987 | 5,733 | 2,473 | ||||||||||||||||||||||
| Other income | 1,791 | 1,168 | 7,164 | 5,242 | ||||||||||||||||||||||
| Income before income taxes | 41,404 | 118,765 | 202,197 | 143,044 | ||||||||||||||||||||||
| Income tax expense | (3,018) | (23,874) | (34,637) | (22,449) | ||||||||||||||||||||||
| Net income | 38,386 | 94,891 | 167,560 | 120,595 | ||||||||||||||||||||||
| Less: net income attributable to noncontrolling interest | 8,956 | 11,388 | 18,249 | 11,303 | ||||||||||||||||||||||
| Net income attributable to BKV | $ | 29,430 | $ | 83,503 | $ | 149,311 | $ | 109,292 | ||||||||||||||||||
| Net income per common share attributable to BKV: | ||||||||||||||||||||||||||
| Basic | $ | 0.27 | $ | 0.98 | $ | 1.37 | $ | 1.28 | ||||||||||||||||||
| Diluted | $ | 0.27 | $ | 0.98 | $ | 1.37 | $ | 1.28 | ||||||||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||||||||
| Basic | 109,108 | 84,776 | 106,866 | 84,731 | ||||||||||||||||||||||
| Diluted | 109,382 | 84,980 | 107,178 | 84,853 | ||||||||||||||||||||||
_________________________________________________
(1) The financial information presented in the condensed consolidated financial statements has been retrospectively adjusted for the Power JV Transaction, which was accounted for as a transaction between entities under common control, with prior periods recast as if the transaction had occurred at the beginning of the earliest period presented. For additional information, see Note 2 - Acquisitions to our condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended September 30, 2026.
12
BKV Corporation
Condensed Consolidated Statements of Cash Flows
($ thousands)
($ thousands)
(Unaudited)
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 (1) | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | 167,560 | $ | 120,595 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation, depletion, amortization, and accretion | 160,559 | 144,605 | ||||||||||||
| Equity-based compensation expense | 15,124 | 9,080 | ||||||||||||
| Deferred income tax expense | 34,637 | 21,551 | ||||||||||||
| Unrealized gains on derivatives, net | (47,633) | (46,067) | ||||||||||||
| Settlement of contingent consideration | — | (20,000) | ||||||||||||
| Payments for the purchase of put options | — | (16,206) | ||||||||||||
| Other, net | 9,303 | 14,935 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Accounts receivable, net | (22,394) | (40,721) | ||||||||||||
| Accounts receivable, related parties | 141 | 3,874 | ||||||||||||
| Accounts payable and accrued liabilities | 27,502 | 17,572 | ||||||||||||
| Other changes in operating assets and liabilities | 1,412 | 5,585 | ||||||||||||
| Net cash provided by operating activities | 346,211 | 214,803 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Business combination | (200,430) | — | ||||||||||||
| Asset acquisition | (140,909) | (220,283) | ||||||||||||
| Deposits on fixed asset purchases | (243,345) | (15,000) | ||||||||||||
| Capital expenditures | (274,855) | (209,599) | ||||||||||||
| Proceeds from sales of assets | 529 | 6,875 | ||||||||||||
| Other investing activities, net | 264 | 2,334 | ||||||||||||
| Net cash used in investing activities | (858,746) | (435,673) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Net proceeds on long-term debt | 559,188 | 490,000 | ||||||||||||
| Payment for capped call transactions | (64,688) | — | ||||||||||||
| Repurchase of common stock | (35,000) | — | ||||||||||||
| Proceeds from issuance of common stock, net of underwriting discounts and commissions | 185,504 | — | ||||||||||||
| Acquisition of additional interest in BKV-BPP Power | (115,136) | — | ||||||||||||
| Proceeds under Power Equipment Financing Facility | 59,604 | — | ||||||||||||
Payments on Temple Term Loan Facility | (31,555) | (16,884) | ||||||||||||
| Proceeds from Promissory Note | 46,000 | — | ||||||||||||
| Payments on Temple I Loan Agreements | (29,000) | (14,000) | ||||||||||||
| Proceeds under RBL Credit Agreement | 907,000 | 577,000 | ||||||||||||
| Payments on RBL Credit Agreement | (667,000) | (742,000) | ||||||||||||
| Contributions from noncontrolling interest | 78,754 | 11,038 | ||||||||||||
| Distributions to noncontrolling interest | (5,352) | — | ||||||||||||
| Other financing activities | (4,245) | (6,066) | ||||||||||||
| Net cash provided by financing activities | 884,074 | 299,088 | ||||||||||||
| Net increase in cash, cash equivalents, and restricted cash | 371,539 | 78,218 | ||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 264,273 | 96,998 | ||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 635,812 | $ | 175,216 | ||||||||||
_________________________________________________
(1) The financial information presented in the condensed consolidated financial statements has been retrospectively adjusted for the Power JV Transaction, which was accounted for as a transaction between entities under common control, with prior periods recast as if the transaction had occurred at the beginning of the earliest period presented. For additional information, see Note 2 - Acquisitions to our condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended September 30, 2026.
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Derivative Contract Volumes and Fair Values
The following tables summarize the Company’s outstanding derivative positions as of September 30, 2026 by commodity and contract type, including volume, pricing indices, or reference points, and associated fair values.
The following table summarizes the Company's power derivatives:
| Instrument | Units | Quantity | Pricing Index | Fair Value as of September 30, 2026 ($ thousands) | ||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||
| Swap | MMBtu | 1,533,000 | HSC Gas Daily | $ | (1,497) | |||||||||||||||||||||
| Power forwards - sales | MWh | 219,000 | ERCOT North | $ | 4,098 | |||||||||||||||||||||
| Heat rate call option | MMBtu | 1,314,000 | Various | $ | 16,634 | |||||||||||||||||||||
| Power forwards - purchases | MWh | 178,847 | Various | $ | (3,318) | |||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||
| Swap | MMBtu | 41,602,400 | HSC Gas Daily | $ | (2,887) | |||||||||||||||||||||
| Power forwards - sales | MWh | 5,943,200 | ERCOT North | $ | 21,721 | |||||||||||||||||||||
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 September 30, 2026 ($ thousands) | |||||||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||||||||
| Swap | 30,177,255 | $ | 3.91 | $ | 21,247 | |||||||||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||||||||
| Swap | 98,958,854 | $ | 3.99 | $ | 73,630 | |||||||||||||||||||||||||||
| Collars | 37,662,319 | $ | 3.57 | $ | 4.00 | $ | 17,239 | |||||||||||||||||||||||||
| Call options | 36,500,000 | $ | 5.00 | $ | (3,659) | |||||||||||||||||||||||||||
| Put options | 36,500,000 | $ | 3.00 | $ | 11,934 | |||||||||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||||||||
| Swap | 104,095,323 | $ | 3.78 | $ | 7,311 | |||||||||||||||||||||||||||
| 2029 | ||||||||||||||||||||||||||||||||
| Swap | 35,587,500 | $ | 3.60 | $ | (2,557) | |||||||||||||||||||||||||||
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The following table represents natural gas basis derivatives by reference price listed below:
| Instrument | Basis Reference Price | MMBtu | Weighted Average Basis Differential | Fair Value as of September 30, 2026 ($ thousands) | ||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||
| Swap | Transco Leidy Basis | 13,321,817 | $ | (0.78) | $ | 1,294 | ||||||||||||||||||||
| Swap | HSC Basis | 13,800,000 | $ | (0.32) | $ | 2,255 | ||||||||||||||||||||
| Swap | Transco St 85 (Z4) Basis | 9,200,000 | $ | 0.62 | $ | (493) | ||||||||||||||||||||
| Swap | NGPL TXOK Basis | 11,972,217 | $ | (0.39) | $ | 792 | ||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||
| Swap | Transco Leidy Basis | 10,950,000 | $ | (0.76) | $ | (1,983) | ||||||||||||||||||||
| Swap | HSC Basis | 7,300,000 | $ | (0.25) | $ | 896 | ||||||||||||||||||||
| Swap | NGPL TXOK Basis | 38,865,270 | $ | (0.34) | $ | 446 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||
| Swap | Transco Leidy Basis | 7,320,000 | $ | (0.76) | $ | (927) | ||||||||||||||||||||
| Swap | HSC Basis | 10,980,000 | $ | (0.17) | $ | 1,360 | ||||||||||||||||||||
The following table summarizes the Company's natural gas liquids derivatives position by product and reference price:
| Instrument | Commodity Reference Price | Gallons | Weighted Average Price (USD) | Fair Value as of September 30, 2026 ($ thousands) | ||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||
| Swap | OPIS Purity Ethane Mont Belvieu | 34,017,747 | $ | 0.26 | $ | (210) | ||||||||||||||||||||
| Swap | OPIS IsoButane Mont Belvieu Non-TET | 3,557,011 | $ | 0.87 | $ | (1,773) | ||||||||||||||||||||
| Swap | OPIS Normal Butane Mont Belvieu Non-TET | 5,846,257 | $ | 0.83 | $ | (2,881) | ||||||||||||||||||||
| Swap | OPIS Propane Mont Belvieu Non-TET | 20,445,357 | $ | 0.70 | $ | (3,292) | ||||||||||||||||||||
| Swap | OPIS Natural Gasoline Mont Belvieu Non-TET | 9,115,823 | $ | 1.38 | $ | (5,345) | ||||||||||||||||||||
| 2027 | ||||||||||||||||||||||||||
| Swap | OPIS Purity Ethane Mont Belvieu | 79,965,970 | $ | 0.28 | $ | 2,607 | ||||||||||||||||||||
| Swap | OPIS IsoButane Mont Belvieu Non-TET | 13,846,327 | $ | 0.87 | $ | (3,123) | ||||||||||||||||||||
| Swap | OPIS Normal Butane Mont Belvieu Non-TET | 20,203,274 | $ | 0.83 | $ | (4,300) | ||||||||||||||||||||
| Swap | OPIS Propane Mont Belvieu Non-TET | 76,415,634 | $ | 0.70 | $ | (6,201) | ||||||||||||||||||||
| Swap | OPIS Natural Gasoline Mont Belvieu Non-TET | 34,754,781 | $ | 1.39 | $ | (10,196) | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||||||||
| Swap | OPIS Purity Ethane Mont Belvieu | 46,116,000 | $ | 0.23 | $ | (572) | ||||||||||||||||||||
| Swap | OPIS IsoButane Mont Belvieu Non-TET | 7,686,000 | $ | 0.78 | $ | (915) | ||||||||||||||||||||
| Swap | OPIS Normal Butane Mont Belvieu Non-TET | 7,686,000 | $ | 0.76 | $ | (746) | ||||||||||||||||||||
| Swap | OPIS Propane Mont Belvieu Non-TET | 38,430,000 | $ | 0.67 | $ | (745) | ||||||||||||||||||||
| Swap | OPIS Natural Gasoline Mont Belvieu Non-TET | 30,744,000 | $ | 1.41 | $ | (2,115) | ||||||||||||||||||||
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Supplemental Non-GAAP Financial Measures
This release includes the non-GAAP financial measures described below. These non-GAAP measures are intended to provide additional information only and should not be considered as alternatives to, or more meaningful than, net income (loss) attributable to BKV, basic and diluted EPS, net income (loss), net cash provided by operating activities, or any other measure calculated in accordance with GAAP.
As a result of the Company’s acquisition of an additional 25% ownership interest in and consolidation of the Power JV as of January 30, 2026, the Company changed the presentation of its non-GAAP measures of Combined Adjusted EBITDAX, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Margin beginning in the first quarter of 2026. The Company now discloses Adjusted Net Income (Loss) attributable to BKV, Adjusted EPS attributable to BKV, Adjusted EBITDAX, Adjusted EBITDAX attributable to BKV, Adjusted EBITDAX attributable to Noncontrolling Interests, Adjusted Free Cash Flow before Power Growth, and Adjusted Free Cash Flow before Power Growth attributable to BKV. Such non-GAAP measures have been presented in this release for the comparative period and have been calculated based on the definitions below.
Net Leverage Ratio
The Company defines Net Leverage Ratio as total debt less cash and cash equivalents, and restricted cash, divided by Adjusted EBITDAX for the most recent quarter’s annualized Adjusted EBITDAX (the quarter’s Adjusted EBITDAX multiplied by four). The Company uses this metric to evaluate the total carrying value of debt relative to the Company’s ability to generate cash through Adjusted EBITDAX. This metric also provides management with a benchmark of debt levels while considering growth opportunities and the Company’s ability to manage periods of commodity price volatility.
The table below presents a calculation of the Company’s Net Leverage Ratio:
| ($ thousands, except Net Leverage Ratio) | As of September 30, 2026 | |||||||
| Total debt | $ | 2,006,454 | ||||||
| Less: Cash, cash equivalents, and restricted cash | $ | 635,812 | ||||||
| Net debt | $ | 1,370,642 | ||||||
Divided by annualized Adjusted EBITDAX (1) | $ | 568,536 | ||||||
| Net Leverage Ratio | 2.41x | |||||||
_______________________________
(1) Adjusted EBITDAX for the three months ended September 30, 2026 multiplied by four.
Adjusted Net Income (Loss) Attributable to BKV and Adjusted EPS Attributable to BKV
The Company defines Adjusted Net Income (Loss) attributable to BKV as net income (loss) attributable to BKV before (i) net unrealized derivative (gains) losses, (ii) forward month gas settlements, (iii) impairment of assets held for sale, (iv) other nonrecurring transactions, and (v) the tax impact of these adjustments calculated using a 23% statutory rate. The Company defines Adjusted EPS attributable to BKV as Adjusted Net Income (Loss) attributable to BKV divided by diluted weighted average common shares outstanding.
The Company believes Adjusted Net Income (Loss) attributable to BKV and Adjusted EPS attributable to BKV are useful performance measures because they allow the Company to effectively evaluate its operating performance and results of operations from period to period and against its peers, without regard to financing methods, corporate form, capital structure, or one-time events. The Company excludes the items listed above from net income (loss) attributable to BKV in arriving at Adjusted Net Income (Loss) attributable to BKV and Adjusted EPS attributable to BKV because these amounts can vary substantially from company to company within the industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. The Company's presentation of Adjusted Net Income (Loss) attributable to BKV and Adjusted EPS attributable to BKV should not be construed as an inference that its results will be unaffected by unusual or non-recurring items. Other companies, including other companies in the industry, may not use Adjusted Net Income (Loss) attributable to BKV and Adjusted EPS attributable to BKV or may calculate these measures differently than as presented in this release, limiting their usefulness as comparative measures.
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The table below presents a reconciliation of Adjusted Net Income (Loss) attributable to BKV to net income (loss) attributable to BKV, the Company's most directly comparable GAAP financial measure, for the periods indicated.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ Thousands, except EPS) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income attributable to BKV | $ | 29,430 | $ | 83,503 | $ | 149,311 | $ | 109,292 | |||||||||||||||
| Adjustment to net income attributable to BKV: | |||||||||||||||||||||||
| Net unrealized derivative (gains) losses | 11,710 | (81,985) | (47,633) | (46,067) | |||||||||||||||||||
Forward month gas settlement (1), (2) | (3,658) | (6,981) | (25,563) | (10,200) | |||||||||||||||||||
| Impairment of asset held for sale | — | — | 3,516 | 2,446 | |||||||||||||||||||
| Other nonrecurring transactions | 5,495 | 10,541 | 19,475 | 21,826 | |||||||||||||||||||
| Total adjustments before taxes | 13,547 | (78,425) | (50,205) | (31,995) | |||||||||||||||||||
| Tax effect of adjustments | (3,116) | 18,038 | 11,547 | 7,359 | |||||||||||||||||||
| Total adjustments after taxes | 10,431 | (60,387) | (38,658) | (24,636) | |||||||||||||||||||
Adjusted Net Income attributable to BKV (2) | $ | 39,861 | $ | 23,116 | $ | 110,653 | $ | 84,656 | |||||||||||||||
| Adjusted EPS attributable to BKV: | |||||||||||||||||||||||
| Basic | $ | 0.37 | $ | 0.27 | $ | 1.04 | $ | 1.00 | |||||||||||||||
| Diluted | $ | 0.36 | $ | 0.27 | $ | 1.03 | $ | 1.00 | |||||||||||||||
| Basic weighted-average shares of common stock outstanding | 109,108 | 84,776 | 106,866 | 84,731 | |||||||||||||||||||
| Add dilutive effects of TRSUs | 189 | 204 | 176 | 122 | |||||||||||||||||||
| Add dilutive effects of PRSUs | 85 | — | 136 | — | |||||||||||||||||||
| Diluted weighted-average shares of common stock outstanding | 109,382 | 84,980 | 107,178 | 84,853 | |||||||||||||||||||
_________________________________________________
(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) The nine months ended September 30, 2026 reflects the correction of $3.0 million previously reflected in Forward month gas settlement and impacting Adjusted Net Income attributable to BKV for the six months ended June 30, 2026. The correction did not affect the Company’s GAAP financial statements or previously reported GAAP results. As a result, Adjusted Net Income attributable to BKV for the nine months ended September 30, 2026 may not equal the sum of previously reported six months ended June 30, 2026 and three months ended September 30, 2026.
Adjusted EBITDAX, Adjusted EBITDAX Attributable to BKV, and Adjusted EBITDAX Attributable to Noncontrolling Interests
The Company defines Adjusted EBITDAX as net income (loss) before (i) depreciation, depletion, amortization, and accretion, (ii) exploration and impairment expense, (iii) net unrealized gains (losses) on derivatives, (iv) net interest expense, (v) interest expense, related parties, (vi) equity-based compensation expense, (vii) income tax benefit (expense), and (viii) other nonrecurring transactions. Adjusted EBITDAX attributable to BKV is defined as Adjusted EBITDAX less Adjusted EBITDAX attributable to Noncontrolling Interests.
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 the industry depending upon accounting methods and
17
book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered 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. The Company’s presentation of Adjusted EBITDAX should not be construed as an inference that its results will be unaffected by unusual or non-recurring items. Other companies, including other companies in the 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 the Company’s management and external users of its consolidated financial statements, such as industry analysts, investors, lenders, rating agencies, and others to more effectively evaluate the Company’s operating performance and results of operations from period to period and against industry peers. The Company believes Adjusted EBITDAX is a useful performance measure because it allows the Company to effectively evaluate its operating performance and results of operations from period to period and against industry peers, without regard to its financing methods, corporate form, or capital structure.
The table below presents a reconciliation of Adjusted EBITDAX to net income, the Company’s most directly comparable GAAP financial measure, for the periods indicated.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ Thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | 38,386 | $ | 94,891 | $ | 167,560 | $ | 120,595 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Depreciation, depletion, amortization, and accretion | 54,741 | 47,428 | 160,559 | 144,605 | |||||||||||||||||||
| Exploration and impairment expense | — | — | — | — | |||||||||||||||||||
| Unrealized (gains) losses on derivatives, net | 11,710 | (81,985) | (47,633) | (46,067) | |||||||||||||||||||
Forward month gas settlement (1), (2) | (3,658) | (6,981) | (25,563) | (10,200) | |||||||||||||||||||
| Interest expense, net | 23,616 | 16,523 | 67,631 | 47,470 | |||||||||||||||||||
| Interest expense, related parties | 4,008 | 5,024 | 12,255 | 15,123 | |||||||||||||||||||
| Equity-based compensation expense | 4,818 | 2,944 | 15,124 | 9,080 | |||||||||||||||||||
| Impairment of asset held for sale | — | — | 3,516 | 2,446 | |||||||||||||||||||
| Income tax expense | 3,018 | 23,874 | 34,637 | 22,449 | |||||||||||||||||||
| Other nonrecurring transactions | 5,495 | 10,541 | 19,475 | 21,826 | |||||||||||||||||||
| Adjusted EBITDAX | 142,134 | 112,259 | 407,561 | 327,327 | |||||||||||||||||||
(Deduct) add: Adjusted EBITDAX attributable to Noncontrolling Interests (3) | (9,466) | (10,913) | (26,216) | (24,894) | |||||||||||||||||||
| Adjusted EBITDAX attributable to BKV | $ | 132,668 | $ | 101,346 | $ | 381,345 | $ | 302,433 | |||||||||||||||
_________________________________________
(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) The nine months ended September 30, 2026 reflects the correction of $3.0 million previously reflected in Forward month gas settlement and impacting Adjusted EBITDAX for the six months ended June 30, 2026. The correction did not affect the Company’s GAAP financial statements or previously reported GAAP results. As a result, Adjusted EBITDAX for the nine months ended September 30, 2026 may not equal the sum of previously reported six months ended June 30, 2026 and three months ended September 30, 2026.
(3) Non-GAAP financial measure, see below for a reconciliation of this non-GAAP financial measure to the most comparable financial measure in accordance with GAAP.
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The Company defines Adjusted EBITDAX attributable to Noncontrolling Interests as the proportionate share of Adjusted EBITDAX attributable to Noncontrolling Interests in the Power JV, BKV-CIP JV, and BKV-BPP Cotton Cove JV, our non-wholly owned consolidated subsidiaries. The table below reconciles Adjusted EBITDAX attributable to Noncontrolling Interests to net income (loss) attributable to noncontrolling interest, the most comparable financial measure in accordance with GAAP.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ Thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income attributable to noncontrolling interest | $ | 8,956 | $ | 11,388 | $ | 18,249 | $ | 11,303 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Interest expense, net | 3,266 | 3,837 | 9,941 | 11,548 | |||||||||||||||||||
| Depreciation and amortization | 2,656 | 2,386 | 8,301 | 7,524 | |||||||||||||||||||
| EBITDAX before adjustments | 14,878 | 17,611 | 36,491 | 30,375 | |||||||||||||||||||
| Net unrealized derivative (gains) losses | (5,412) | (6,698) | (10,275) | (5,481) | |||||||||||||||||||
Adjusted EBITDAX attributable to Noncontrolling Interests | $ | 9,466 | $ | 10,913 | $ | 26,216 | $ | 24,894 | |||||||||||||||
Adjusted Free Cash Flow before Power Growth and Adjusted Free Cash Flow before Power Growth Attributable to BKV
The Company defines Adjusted Free Cash Flow before Power Growth as net cash provided by 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), excluding strategic power growth capital expenditures. Adjusted Free Cash Flow before Power Growth attributable to BKV is defined as Adjusted Free Cash Flow before Power Growth, less Adjusted EBITDAX attributable to Noncontrolling Interests, with net interest expense attributable to noncontrolling interests added back, plus net contributions from CCUS noncontrolling interests.
Adjusted Free Cash Flow before Power Growth and Adjusted Free Cash Flow before Power Growth attributable to BKV are not measures of net cash provided by or used in operating activities as determined in accordance with GAAP. These measures are supplemental non-GAAP financial measures used by management and external users of the Company's financial statements, including industry analysts, investors, lenders and rating agencies, to assess the Company's ability to internally fund its capital program, service or incur additional debt and pay dividends. Adjusted Free Cash Flow before Power Growth reflects cash flow available to fund the Company's capital program, excluding strategic power growth capital expenditures, while Adjusted Free Cash Flow before Power Growth attributable to BKV further adjusts for noncontrolling interests to reflect amounts attributable to the Company's common shareholders. The Company believes these measures are useful indicators of liquidity because they facilitate period-over-period comparisons of cash flow provided by operating activities and the Company's ability to internally fund its capital program (including acquisitions), reduce leverage, fund acquisitions and return capital to shareholders. Adjusted Free Cash Flow before Power Growth and Adjusted Free Cash Flow before Power Growth attributable to BKV should not be considered alternatives 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 the industry, may define these measures differently, limiting their usefulness as comparative measures.
The table below presents a reconciliation of Adjusted Free Cash Flow before Power Growth and Adjusted Free Cash Flow before Power Growth attributable to BKV to net cash provided by operating activities, the Company's most directly comparable GAAP financial measure, for the periods indicated.
19
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ Thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net cash provided by operating activities | $ | 164,480 | $ | 109,055 | $ | 346,211 | $ | 214,803 | |||||||||||||||
| Change in operating assets and liabilities | (51,803) | (15,080) | (6,661) | 13,690 | |||||||||||||||||||
| Net cash provided by operating activities before change in working capital | 112,677 | 93,975 | 339,550 | 228,493 | |||||||||||||||||||
Cash paid for contingent consideration (1) | — | — | — | 20,000 | |||||||||||||||||||
| Cash paid for capital expenditures (excl. leasehold costs, acquisitions) | (81,490) | (85,497) | (274,855) | (209,599) | |||||||||||||||||||
| Strategic Power Growth capital expenditures | 6,184 | — | 29,463 | — | |||||||||||||||||||
| Adjusted Free Cash Flow before Power Growth | $ | 37,371 | $ | 8,478 | $ | 94,158 | $ | 38,894 | |||||||||||||||
| Add back (subtract): | |||||||||||||||||||||||
| Adjusted EBITDAX attributable to Noncontrolling Interests | (9,466) | (10,913) | (26,216) | (24,894) | |||||||||||||||||||
| Net interest expense attributable to noncontrolling interests | 3,266 | 3,837 | 9,941 | 11,548 | |||||||||||||||||||
Net contributions from CCUS noncontrolling interests (2) | — | 13,582 | 13,400 | 17,935 | |||||||||||||||||||
| Adjusted Free Cash Flow before Power Growth attributable to BKV | $ | 31,171 | $ | 14,984 | $ | 91,283 | $ | 43,483 | |||||||||||||||
(1) Cash paid for contingent consideration is included as a deduction to arrive at net cash provided by operating activities and therefore, is added back for the purpose of computing Adjusted Free Cash Flow before Power Growth.
(2) Excludes contributions from BPPUS to the Power JV for Strategic Power Growth expenditures of $65.4 million for the three and nine months ended September 30, 2026.
20