BKV Corporation Reports Third Quarter 2025 Financial and Operational Results

DENVER--(BUSINESS WIRE)-- BKV Corporation (“BKV” or the “Company”) (NYSE: BKV), today reported financial and operational results for the third quarter of 2025, including guidance for the fourth quarter of 2025.

Third Quarter 2025 Highlights

• Net income attributable to BKV of $76.9 million or $0.90 per diluted share
• Adjusted Net Income of $42.5 million or $0.50 per diluted share
• Combined Adjusted EBITDAX attributable to BKV of $91.8 million (includes implied proportionate share of Power JV Adjusted EBITDA of $20.4 million)
• Net cash provided by operating activities of $74.5 million
• Net cash provided by operating activities before working capital of $69.1 million
• Accrued capital expenditures of $79.6 million
• Adjusted Free Cash Flow attributable to BKV of $(10.6) million
• Average net production of 828.5 MMcfe/d
• Total generation from the Power JV’s Temple plants of 2,246 GWh
• Barnett Zero quarterly sequestration of approximately 43,900 metric tons of CO₂ equivalent
• Net leverage ratio of 1.32x
• Closed the previously announced acquisition of Bedrock Energy Partners’ Barnett Shale assets on September 29, 2025
• Executed a $500 million Senior Notes offering at 7.5% due in 2030

Strategic Power JV Acquisition Highlights

• On October 29, 2025, BKV agreed to acquire one-half of Banpu Power US Corporation’s (“BPPUS”) interest in BKV-BPP Power, LLC (“Power JV”), increasing BKV’s ownership to 75%. The transaction is expected to close in the first quarter of 2026.
• The acquisition strengthens BKV’s closed loop strategy and expands its control over a core growth platform.
• BKV sees strong opportunity in its power business, supported by ERCOT load growth, rising AI and data-center demand, and available capacity at the Temple I and II plants.
• Upon closing, BKV expects to consolidate Power JV results, improving transparency and highlighting cash flow contribution. Increased ownership and a simplified governance structure are expected to enhance control and support additional commercial growth.

Fourth Quarter 2025 Guidance Highlights

• Net production of 885-935 MMcfe/d, reflecting a ~10% increase from 3Q25 production at the mid-point
• Maintain FY25 Capex guidance of $290 - $350 million for Development, CCUS + other
• Power JV Adjusted EBITDA (100% share of Power JV) of $10 - $30 million

“We continue to make significant progress advancing our closed loop energy strategy,” said Chris Kalnin, Chief Executive Officer of BKV. “During the quarter, we strengthened our position as a differentiated, lower-carbon energy producer with two major milestones—entry into a purchase agreement to expand our ownership in the Power JV through the acquisition of an additional 25% interest from BPPUS and closing the acquisition of Bedrock Energy Partners’ assets in the Barnett. The Power JV transaction will allow BKV to consolidate the joint venture, increase our share of net power generation capacity of our modern combined-cycle gas turbines to over 1 GW, enhance our strategic flexibility, and accelerate the potential for growth in our power business. The IPP market is fundamental to our long-term strategy, and our vision is for a single, clean platform to operate, build, and acquire power assets, with BKV-BPP Power serving as a consolidated vehicle for these future developments.

“As we integrate the Bedrock assets, we are rapidly applying the BKV playbook to enhance efficiencies and drive results, while continuing to advance our power platform with discipline and focus. Our team remains committed to securing long-term PPAs and delivering sustainable value through operational excellence. BKV sits at the intersection of multiple energy megatrends, and we have the right assets, people, and strategy in place to capture the opportunities ahead and drive long-term value for our shareholders.”

Financial Results

Third Quarter 2025

For the three months ended September 30, 2025, total revenues and other operating income for BKV were $277.9 million (including realized hedging gains of $19.7 million) and earnings from the Power JV were $21.1 million. Net income attributable to BKV for the period was $76.9 million, or $0.90 per diluted share (including unrealized hedging gains of $55.2 million). For the three months ended September 30, 2025, Adjusted Net Income was $42.5 million, Adjusted EBITDAX was $72.4 million, Combined Adjusted EBITDAX attributable to BKV was $91.8 million, and Adjusted Free Cash Flow attributable to BKV was negative $10.6 million.

Average realized natural gas price for the third quarter of 2025 was $2.50/MMBtu, excluding the impact of derivatives. Including the impact of cash settled hedges, average realized natural gas price was $2.81/MMBtu. Average realized NGL price for the third quarter of 2025 was $15.17/Bbl, excluding the impact of derivatives. Including the impact of cash settled hedges, average realized NGL price was $15.64/Bbl. On a natural gas equivalent basis, average realized price in the third quarter of 2025 was $2.52/Mcfe, excluding the impact of derivatives. Including the impact of cash settled hedges, average natural gas equivalent realized price was $2.78/Mcfe.

Year-to-Date 2025

For the nine months ended September 30, 2025, total revenues and other operating income for BKV were $678.7 million (including realized hedging gains of $10.8 million), and earnings from the Power JV were $20.6 million. Net income attributable to BKV for the period was $102.8 million, or $1.20 per diluted share (including unrealized hedging gains of $24.1 million). For the nine months ended September 30, 2025, Adjusted Net Income was $102.9 million, Adjusted EBITDAX was $234.1 million, Combined Adjusted EBITDAX attributable to BKV was $280.7 million, and Adjusted Free Cash Flow attributable to BKV was negative $2.4 million.

Average realized natural gas price for the nine months ended September 30, 2025, was $2.75/MMBtu, excluding the impact of derivatives. Including the impact of cash settled hedges, average realized natural gas price was $2.83/MMBtu. Average realized NGL price for the nine months ended September 30, 2025, was $16.82/Bbl, excluding the impact of derivatives. Including the impact of cash settled hedges, average realized NGL price was $16.29/Bbl. On a natural gas equivalent basis, average realized price for the nine months ended September 30, 2025, was $2.78/Mcfe, excluding the impact of derivatives. Including the impact of cash settled hedges, average natural gas equivalent realized price was $2.83/Mcfe.

“This was a pivotal quarter for BKV as we executed multiple strategic and financial milestones,” said David Tameron, Chief Financial Officer. “We successfully completed our inaugural bond offering with a $500 million note, which was met with strong investor demand and priced at a competitive rate — underscoring the debt market’s confidence in our strategy, disciplined execution, and differentiated business model. The proceeds were used to repay borrowings under our RBL, fund a portion of the purchase price for the Bedrock acquisition, which closed during the quarter, and to support the integration of the Bedrock assets.

“In addition, we announced the pending acquisition of additional interest in the Power JV, which is expected to further strengthen our alignment with key partners and advance our closed loop strategy. While leverage increased modestly following the closing of the Bedrock acquisition, we remain comfortably within our target range of 1.0x-1.5x and expect to deleverage through cash flow generation from our expanded, high-quality asset base. With a strong balance sheet, substantial liquidity, and a fully undrawn RBL at the close of the third quarter of 2025, BKV is well positioned to continue executing on its strategic growth objective and driving long-term shareholder value.”

Operational Results - Third Quarter 2025 and Year-to-Date 2025

Power JV

For the third quarter 2025, the Temple I and II power plants reported a capacity factor of 71.1% and 67.5%, respectively, with total power generation of 2,246 GWh. Average power pricing was $46.29/MWh and the average natural gas cost was $2.87/MMBtu, resulting in an average spark spread of $25.82/MWh.

In the third quarter of 2025, spark spreads improved only modestly compared to the second quarter of 2025, as ERCOT cooling degree days lagged the trailing 5 year average by roughly 15%. Despite this, the Temple plants operated at a higher capacity factor quarter-over-quarter, with limited unplanned downtime as they continued to serve strong regional load. Equivalent availability factor for Temple I and Temple II was 99.7% and 96.4%, respectively, for the third quarter, with Temple II experiencing only 3.5 days of unplanned downtime. Despite operational excellence, third quarter results were below guidance due to lower than anticipated spark spreads on cooler weather than forecast.

BKV’s implied proportionate share of Power JV net earnings for the three months ended September 30, 2025, was $21.1 million, compared to earnings of $50.6 million for the three months ended September 30, 2024, and $20.6 million for the nine months ended September 30, 2025, compared to earnings of $27.6 million for the nine months ended September 30, 2024.

BKV’s implied proportionate share of Power JV Adjusted EBITDA was $20.4 million for the three months ended September 30, 2025, compared to $10.1 million for the three months ended September 30, 2024, and $48.0 million for the nine months ended September 30, 2025, compared to $33.5 million for the nine months ended September 30, 2024.

BKV’s pending acquisition of an additional 25% interest in the Power JV, which is expected to close in the first quarter of 2026, subject to certain closing conditions, will take the Company’s interest in the JV to 75% and represents another step forward in executing BKV’s strategy to expand and integrate its power platform. BKV remains focused on securing a long-term PPA to enhance revenue visibility and optimize generation at its Temple plants. With power demand in the U.S. and ERCOT markets accelerating due to rapid data center growth and increasing electrification, BKV is well positioned to capitalize on these trends.

Carbon Capture Utilization and Sequestration (“CCUS”)

The Barnett Zero Project sequestered approximately 43,900 and 113,200 metric tons of CO₂ equivalent during the three and nine months ended September 30, 2025, respectively. Since start-up in November 2023, the project has sequestered approximately 286,500 metric tons of CO₂ equivalent through September 30, 2025.

BKV continues to advance its seven Class VI well permit applications (six in Louisiana, one in Texas), where all applications under review have been deemed administratively complete and are progressing through the review process. The Company believes its proposed High West project aligns with Louisiana’s carbon management goals and would deliver meaningful economic and environmental benefits. Regarding recent developments in Louisiana, the governor signed a temporary moratorium on the consideration of new CCUS project permits. BKV views this action as a constructive step toward improving clarity and focus in the permitting process. Importantly, the state has prioritized review of existing applications, which benefits credible developers like BKV that have already submitted technically robust and administratively complete permit applications, and BKV remains confident in the ultimate approval of its permit applications.

The development of the East Texas project, as announced last quarter, remains on track with a target FID date in 1H26. BKV forecasts approximately 70,000 metric tons per year of CO₂ equivalent could be captured from the project. If approved at FID, and assuming the Company is able to execute definitive agreements on the terms and timeline it believes are obtainable, BKV expects this project, which is the second project it is developing with a leading diversified midstream company, to be the fourth of its current modular line of identified potential natural gas processing projects, following the previously announced natural gas processing project in the Eagle Ford.

Development of the Eagle Ford and Cotton Cove projects also remains on schedule, with first injection targeted for 1Q26 and 1H26 respectively, subject to receipt of all required permits. These projects are expected to achieve a sequestration rate of approximately 90,000 and 32,000 metric tons per year of CO₂ equivalent, respectively. The Cotton Cove injection well was successfully drilled in September 2025, and both projects have received EPA approval of their monitoring, reporting, and verification (MRV) plans.

BKV is also in the process of commencing Front-End Loading (FEL-2) studies for post-combustion carbon capture on large existing and new power plants. Following completion of these studies, which is targeted for 1Q26, BKV will evaluate how these initiatives may advance the Company’s broader strategy to supply low-carbon energy across the portfolio.

BKV believes that the Barnett Zero Project, together with the Cotton Cove Project and South Texas Project that the Company has identified, have a combined annual forecasted sequestration volume of approximately 375,000 metric tons of CO₂ equivalent by the end of 2026. This total excludes proposed projects with Comstock Resources, for which forecasted volumes have yet to be announced. BKV remains on track to reach an annual injection rate of 1 million metric tons of CO₂ equivalent by the end of 2027, reinforcing its position as a leading independent operator in the CCUS sector.

Upstream & Midstream

Total hydrocarbon production for the three months ended September 30, 2025 was 828.5 MMcfe/d, which consisted of 79% natural gas and 21% NGLs. This compares to total production for the three months ended September 30, 2024 of 762.6 MMcfe/d, which consisted of 79% natural gas and 21% NGLs. Total hydrocarbon production for the nine months ended September 30, 2025 was 800.4 MMcfe/d, which consisted of 79% natural gas and 21% NGLs. This compares to total production for the nine months ended September 30, 2024, of 792.5 MMcfe/d, which consisted of 80% natural gas and 20% NGLs. Third quarter production exceeded the mid-point of the previously guided range of 805-835 MMcfe/d due to several factors, including better than forecasted well performance on new development, effective base decline management, and accelerated pace of new development.

The increase in production volumes for the third quarter 2025 compared to the same period in 2024 is due to increased development pace and scale on a year-on-year basis.

On September 29, 2025, BKV closed the previously announced acquisition of Bedrock Energy Partners’ Barnett Shale assets. BKV acquired approximately 99,000 net acres, ~108 MMcfe/d of production as of second quarter 2025 (approximately 63% natural gas), 1,121 producing locations, approximately 800 Bcfe of 1P reserves (>70% PDP) using NYMEX strip pricing, and ~50 new drill locations at an equivalent 10,000 foot lateral length with accretive natural gas price break-evens compared to the Company’s existing inventory, in addition to ~80 refrac locations.

Capital Expenditures

Accrued capital expenditures in the third quarter of 2025 were $79.6 million, which included $55.7 million for development capital and $23.9 million for CCUS and other expenditures. Accrued capital expenditures for the same period in 2024 were $24.4 million, which included $13.8 million for development capital and $10.6 million for CCUS and other expenditures.

Year-to-date accrued capital expenditures for 2025 were $216.4 million, which included $166.2 million for development capital and $50.2 million for CCUS and other expenditures. Accrued capital expenditures for the same period in 2024 were $57.3 million, which included $38.6 million for development capital and $18.7 million for CCUS and other expenditures.

Liquidity

As of September 30, 2025, BKV had cash and cash equivalents of $83.1 million.

Total debt as of September 30, 2025 was $500 million, which was made up of the 2030 Senior Notes. Net debt as of September 30, 2025 was $416.8 million, and net leverage ratio was 1.32x. BKV’s long-term net leverage target is to manage between 1.0x to 1.5x.

As of September 30, 2025, total liquidity for BKV was $868.1 million, which consists of $83.1 million in cash and cash equivalents and $785.0 million available under the Company’s RBL. RBL availability as of September 30, 2025, is based on the elected commitment amount of $800.0 million, less $15.0 million of letters of credit. On September 22, 2025, BKV Upstream Midstream amended the RBL to increase the borrowing base by $150.0 million and the elected commitment amount by $135.0 million. As of November 10, 2025, BKV had a zero balance on its revolving borrowings and $15.0 million of letters of credit were outstanding under the RBL, leaving $785.0 million of available capacity thereunder for future borrowings and letters of credit.

2025 Guidance

Third Quarter 2025 Earnings Conference Call

The Company plans to host a conference call to discuss results today, November 10, 2025 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 13756033. The replay will be available for 60 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 20 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 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. Such forward-looking statements include, but are not limited to, statements about the consummation and timing of the Power JV transaction, the anticipated benefits, opportunities and results with respect to the Power JV transaction and the Bedrock acquisition, including any expected value creation from the Power JV transaction or the Bedrock acquisition, and any reserves additions, midstream opportunities and other anticipated impacts from the Bedrock acquisition, anticipated efficiencies, power plant reliability and strategic growth and power purchase agreement opportunities relating to the Power JV and 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, 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. 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 present expectations, including but not limited to assumptions, risks and uncertainties regarding the ability of the parties to consummate the Power JV transaction in the anticipated timeframe or at all; risks related to the satisfaction or waiver of the conditions to closing the Power JV transaction in the anticipated timeframe or at all; disruption from the Company’s acquisitions, including the Bedrock acquisition, making it more difficult to maintain business and operational relationships; significant transaction costs associated with the Company’s acquisitions, including the Power JV transaction and the Bedrock acquisition; the risk of litigation and/or regulatory actions related to the Company’s acquisitions, including the Power JV transaction and the Bedrock acquisition, as well as our ability to successfully fund, pursue and develop our CCUS business; fluctuation in spark spreads, 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 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 most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.

Volume of Derivative Activities

As of September 30, 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:

The following table represents natural gas basis derivatives based on the applicable basis reference price listed below:

The following table represents natural gas liquids commodity derivatives for contracts, by contract type, expiring through December 31, 2027, based on the applicable index listed below:

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 attributable to BKV, diluted EPS, net income (loss), net cash provided by operating activities, or any other measure calculated in accordance with GAAP.

As a result of C Squared Solutions, Inc.’s noncontrolling equity interest in the CCUS JV that commenced on May 8, 2025, the Company has adjusted its non-GAAP measures of Combined Adjusted EBITDAX, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Margin. Beginning in the second quarter of 2025, such non-GAAP measures will be adjusted to exclude the proportionate share of Adjusted EBITDAX and Adjusted Free Cash Flow attributable to the noncontrolling interested held by C Squared Solutions, Inc., and will be referred to as Combined Adjusted EBITDAX attributable to BKV, Adjusted Free Cash Flow attributable to BKV, and Adjusted Free Cash Flow Margin attributable to BKV. Such non-GAAP measures have been presented in this release for the comparative period have been calculated based on the updated definitions.

Adjusted Net Income (Loss) and Adjusted EPS

The Company defines Adjusted Net Income (Loss) as net income (loss) attributable to BKV before (i) non-cash derivative gains (losses), (ii) gains (losses) on contingent consideration liabilities, (iii) certain equity-based compensation expense, (iv) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods, (v) other nonrecurring transactions, and (vi) the tax impact on these adjustments using a 23% statutory rate. The Company defines Adjusted EPS as Adjusted Net Income (Loss) divided by diluted weighted average common shares outstanding.

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.

Adjusted EBITDAX and Combined Adjusted EBITDAX attributable to BKV

The Company defines Adjusted EBITDAX as net income (loss) 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) earnings (losses) from the Power JV, (x) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods and (xi) other nonrecurring transactions. Combined Adjusted EBITDAX attributable to BKV is defined as Adjusted EBITDAX less Adjusted EBITDAX attributable to noncontrolling interest plus BKV’s 50% proportionate share of Power JV Adjusted EBITDA. Adjusted EBITDAX attributable to noncontrolling interest is defined as C Squared Solutions, Inc.’s 45% proportionate share of Adjusted EBITDAX attributable to the CCUS JV for the applicable period.

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 and Combined Adjusted EBITDAX attributable to BKV are supplemental non-GAAP financial measures that are 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, and Combined Adjusted EBITDAX attributable to BKV 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 or capital structure.

The table below presents a reconciliation of Adjusted EBITDAX and Combined Adjusted EBITDAX attributable to BKV to net income (loss), our most directly comparable GAAP financial measure for the periods indicated.