BKV Corporation Reports Fourth Quarter and Full Year 2024 Results
BKV reported its Q4 and full-year 2024 financial results. In Q4, the company achieved Adjusted Net Income of $0.8 million ($0.01 per share) and Adjusted EBITDAX of $71.9 million. Total net production reached 774.5 MMcfe/d, exceeding guidance.
For full-year 2024, BKV posted an Adjusted Net Loss of $39.5 million (-$0.55 per share) with Adjusted EBITDAX of $231.8 million. The company generated Adjusted Free Cash Flow of $91.6 million with a 14.9% margin. Notable operational achievements include total power generation of 7,360 GWh from Temple Plants and Barnett Zero's annual CO2 sequestration of 165,069 metric tons.
The company maintained strong financial health with net debt of $150.1 million and a net leverage ratio of 0.65x. Average realized natural gas price was $2.10/MMBtu in Q4 and $1.69/MMBtu for the full year, excluding hedges.
BKV ha riportato i risultati finanziari del quarto trimestre e dell'intero anno 2024. Nel quarto trimestre, l'azienda ha raggiunto un utile netto rettificato di 0,8 milioni di dollari (0,01 dollari per azione) e un EBITDAX rettificato di 71,9 milioni di dollari. La produzione netta totale ha raggiunto 774,5 MMcfe/giorno, superando le previsioni.
Per l'intero anno 2024, BKV ha registrato una perdita netta rettificata di 39,5 milioni di dollari (-0,55 dollari per azione) con un EBITDAX rettificato di 231,8 milioni di dollari. L'azienda ha generato un flusso di cassa libero rettificato di 91,6 milioni di dollari con un margine del 14,9%. Tra i risultati operativi notevoli ci sono la generazione totale di energia di 7.360 GWh dagli impianti di Temple e la cattura annuale di CO2 di Barnett Zero di 165.069 tonnellate metriche.
L'azienda ha mantenuto una solida salute finanziaria con un debito netto di 150,1 milioni di dollari e un rapporto di leva netta di 0,65x. Il prezzo medio realizzato del gas naturale è stato di 2,10 dollari/MMBtu nel quarto trimestre e di 1,69 dollari/MMBtu per l'intero anno, escludendo le coperture.
BKV informó sus resultados financieros del cuarto trimestre y del año completo 2024. En el cuarto trimestre, la compañía logró un ingreso neto ajustado de 0,8 millones de dólares (0,01 dólares por acción) y un EBITDAX ajustado de 71,9 millones de dólares. La producción neta total alcanzó 774,5 MMcfe/día, superando la guía.
Para el año completo 2024, BKV reportó una pérdida neta ajustada de 39,5 millones de dólares (-0,55 dólares por acción) con un EBITDAX ajustado de 231,8 millones de dólares. La compañía generó un flujo de caja libre ajustado de 91,6 millones de dólares con un margen del 14,9%. Logros operativos notables incluyen una generación total de energía de 7.360 GWh de las plantas de Temple y la captura anual de CO2 de Barnett Zero de 165.069 toneladas métricas.
La compañía mantuvo una sólida salud financiera con deuda neta de 150,1 millones de dólares y una relación de apalancamiento neto de 0,65x. El precio promedio realizado del gas natural fue de 2,10 dólares/MMBtu en el cuarto trimestre y de 1,69 dólares/MMBtu para el año completo, excluyendo coberturas.
BKV는 2024년 4분기 및 연간 재무 결과를 보고했습니다. 4분기 동안, 회사는 조정된 순이익 80만 달러 (주당 0.01달러)와 조정된 EBITDAX 7190만 달러를 달성했습니다. 총 순 생산량은 774.5 MMcfe/일로 가이던스를 초과했습니다.
2024년 전체 연도에 대해 BKV는 조정된 순손실 3950만 달러 (-주당 0.55달러)와 조정된 EBITDAX 2억3180만 달러를 기록했습니다. 회사는 조정된 자유 현금 흐름 9160만 달러를 생성했으며, 이는 14.9%의 마진을 기록했습니다. 주목할 만한 운영 성과로는 템플 발전소에서 7360 GWh의 총 전력 생성과 바넷 제로의 연간 CO2 격리량 165,069 미터 톤이 있습니다.
회사는 순 부채 1억5010만 달러와 0.65배의 순 레버리지 비율로 강력한 재무 건전성을 유지했습니다. 4분기 평균 실현 천연가스 가격은 2.10달러/MMBtu였으며, 전체 연도는 1.69달러/MMBtu로 헤지 제외 기준입니다.
BKV a publié ses résultats financiers du quatrième trimestre et de l'année complète 2024. Au quatrième trimestre, la société a atteint un revenu net ajusté de 0,8 million de dollars (0,01 dollar par action) et un EBITDAX ajusté de 71,9 millions de dollars. La production nette totale a atteint 774,5 MMcfe/jour, dépassant les prévisions.
Pour l'année complète 2024, BKV a enregistré une perte nette ajustée de 39,5 millions de dollars (-0,55 dollar par action) avec un EBITDAX ajusté de 231,8 millions de dollars. La société a généré un flux de trésorerie libre ajusté de 91,6 millions de dollars avec une marge de 14,9 %. Parmi les réalisations opérationnelles notables, on trouve une production totale d'énergie de 7 360 GWh provenant des centrales de Temple et une séquestration annuelle de CO2 de Barnett Zero de 165 069 tonnes métriques.
La société a maintenu une solide santé financière avec une dette nette de 150,1 millions de dollars et un ratio d'endettement net de 0,65x. Le prix moyen réalisé du gaz naturel était de 2,10 dollars/MMBtu au quatrième trimestre et de 1,69 dollars/MMBtu pour l'année complète, hors couvertures.
BKV hat seine finanziellen Ergebnisse für das vierte Quartal und das gesamte Jahr 2024 veröffentlicht. Im vierten Quartal erzielte das Unternehmen ein bereinigtes Nettoergebnis von 0,8 Millionen Dollar (0,01 Dollar pro Aktie) und ein bereinigtes EBITDAX von 71,9 Millionen Dollar. Die gesamte Nettoproduktion erreichte 774,5 MMcfe/Tag und übertraf die Prognose.
Für das gesamte Jahr 2024 meldete BKV einen bereinigten Nettoverlust von 39,5 Millionen Dollar (-0,55 Dollar pro Aktie) bei einem bereinigten EBITDAX von 231,8 Millionen Dollar. Das Unternehmen generierte einen bereinigten freien Cashflow von 91,6 Millionen Dollar mit einer Marge von 14,9%. Zu den bemerkenswerten betrieblichen Leistungen gehören eine Gesamterzeugung von 7.360 GWh aus den Temple-Anlagen und die jährliche CO2-Sequestrierung von Barnett Zero von 165.069 metrischen Tonnen.
Das Unternehmen wies eine starke finanzielle Gesundheit mit Nettoverbindlichkeiten von 150,1 Millionen Dollar und einem Netto-Leverage-Verhältnis von 0,65x auf. Der durchschnittlich realisierte Preis für Erdgas betrug im vierten Quartal 2,10 Dollar/MMBtu und für das gesamte Jahr 1,69 Dollar/MMBtu, ohne Absicherungen.
- Q4 production exceeded guidance at 774.5 MMcfe/d
- Strong liquidity position of $435.8 million
- Low leverage ratio of 0.65x, below target range of 1.0x-1.5x
- Generated $91.6M in Adjusted Free Cash Flow for 2024
- Successful CO2 sequestration with 165,069 metric tons in 2024
- Full-year 2024 Adjusted Net Loss of $39.5 million
- Q4 net loss of $57.5 million
- Decreased production vs 2023 (788.0 MMcfe/d vs 859.7 MMcfe/d)
- Lower realized natural gas prices year-over-year
- Reduced Power JV EBITDA compared to 2023 ($33.9M vs $94.9M)
Insights
BKV 's Q4 and full-year 2024 results demonstrate resilience in a challenging natural gas price environment while positioning for anticipated market improvements in 2025. Despite realized natural gas prices averaging just
The company's financial position is exceptionally strong with net debt of only
Q4 production exceeded guidance at 774.5 MMcfe/d while capital expenditures came in below forecast at
BKV's multi-pronged strategy differentiates it from pure-play natural gas producers. The CCUS business continues scaling with 173,325 metric tons sequestered since inception and multiple projects advancing through regulatory processes. While the Power JV saw seasonal weakness in Q4 with a
The company's effective hedging strategy – which boosted realized gas prices by
BKV 's integrated energy platform is proving resilient amid volatile natural gas markets while strategically positioning for emerging opportunities in power generation and carbon management. The company's Q4 production outperformance (774.5 MMcfe/d vs. 720-750 MMcfe/d guidance) despite divesting Marcellus assets demonstrates superior operational execution and reservoir management capabilities. This production efficiency, combined with disciplined capital spending (
BKV's strategic differentiation lies in its closed-loop energy system spanning natural gas production, power generation, and carbon sequestration. This integrated approach provides natural hedges against commodity volatility while positioning for energy transition opportunities. The company's ultra-conservative balance sheet (0.65x leverage versus 1.0-1.5x target) provides exceptional flexibility to accelerate development across all business segments as market conditions improve.
The CCUS business continues gaining momentum with 173,325 metric tons sequestered to date. Each new project enhances BKV's competitive positioning in the carbon management space, with Section 45Q tax credits (
In power generation, while Q4 results reflected seasonal maintenance with a
Management's pivot toward "more robust development" signals confidence in improving natural gas fundamentals. With their disciplined hedging approach (which boosted 2024 realized prices by
Fourth Quarter 2024 Highlights
-
Adjusted Net Income of
$0.8 million $0.01 -
Adjusted EBITDAX of
$71.9 million -
Implied proportionate share of Power JV Adjusted EBITDA of
$0.5 million -
Net cash provided by operating activities of
$43.8 million -
Adjusted Free Cash Flow of
$5.4 million - Barnett Zero quarterly sequestration of 44,437 metric tons of CO2 equivalent
-
Total power generation of 1,228 GWh from the Power JV’s Temple Plants; capacity factor of
37.5% - Total net production of 774.5 MMcfe/d, well above guidance range of 720 - 750 MMcfe/d
-
Capital expenditures of
$60.3 million $65.0 million
Full Year 2024 Highlights
-
Adjusted Net Loss of
$39.5 million $(0.55) -
Adjusted EBITDAX of
$231.8 million -
Implied proportionate share of Power JV Adjusted EBITDA of
$33.9 million -
Net cash provided by operating activities of
$118.5 million -
Adjusted Free Cash Flow of
$91.6 million 14.9% -
De-levered balance sheet, achieving net debt of
$150.1 million - Barnett Zero annual sequestration of 165,069 metric tons of CO2 equivalent (and life-to-date sequestration of 173,325 metric tons of CO2 equivalent through December 31, 2024)
-
Total power generation of 7,360 GWh from the Power JV’s Temple Plants; capacity factor of
56.6% - Total net production of 788.0 MMcfe/d
“In the fourth quarter of 2024, BKV continued to demonstrate strong performance in each of our business lines,” said Chris Kalnin, Chief Executive Officer of BKV. “With the close of our first fiscal year as a public company we are looking forward to an exciting 2025. We continue to prioritize delivering on our current operations goals for each business line, executing on our ambitious growth strategies, and capitalizing on increased opportunities in the power and energy solutions arenas. Our integrated approach, combining natural gas upstream and midstream, power generation, and CCUS provides a winning formula to meet the expected surge in AI-driven demand. We remain dedicated to advancing our CCUS business, and the recent and projected strength in natural gas prices elevates the core of our business, our natural gas upstream operations. BKV’s financial strength, strong operational performance, and the favorable macroeconomic trends we see across each of our business lines position us for continued success in 2025.”
Financial Results
Fourth Quarter 2024
For the three months ended December 31, 2024, total revenues and other operating income for BKV was
Average realized natural gas price for the fourth quarter of 2024 was
Full Year 2024
For the year ended December 31, 2024, total revenues and other operating income for BKV was
Average realized natural gas price for the year ended December 31, 2024 was
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
($ Millions, except EPS) (1) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
(57.5 |
) |
|
$ |
37.5 |
|
|
$ |
(142.9 |
) |
|
$ |
116.9 |
|
Adjusted Net Income (Loss), non-GAAP |
$ |
0.8 |
|
|
$ |
(29.5 |
) |
|
$ |
(39.5 |
) |
|
$ |
(45.8 |
) |
Adjusted EBITDAX, non-GAAP |
$ |
71.9 |
|
|
$ |
67.4 |
|
|
$ |
231.8 |
|
|
$ |
251.2 |
|
Net income (loss) per common share, diluted |
$ |
(0.68 |
) |
|
$ |
0.53 |
|
|
$ |
(2.00 |
) |
|
$ |
1.82 |
|
Adjusted EPS, non-GAAP |
$ |
0.01 |
|
|
$ |
(0.45 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.75 |
) |
Net cash provided by operating activities |
$ |
43.8 |
|
|
$ |
7.9 |
|
|
$ |
118.5 |
|
|
$ |
123.3 |
|
Adjusted Free Cash Flow, non-GAAP |
$ |
5.4 |
|
|
$ |
41.7 |
|
|
$ |
91.6 |
|
|
$ |
19.0 |
|
Adjusted Free Cash Flow Margin, non-GAAP |
|
3.1 |
% |
|
|
22.0 |
% |
|
|
14.9 |
% |
|
|
2.6 |
% |
Earnings (losses) from equity affiliate |
$ |
(17.2 |
) |
|
$ |
(17.9 |
) |
|
$ |
10.4 |
|
|
$ |
16.9 |
|
Development capital expenditures (accrued) |
$ |
43.4 |
|
|
$ |
6.3 |
|
|
$ |
81.6 |
|
|
$ |
103.5 |
|
CCUS capital expenditures (accrued) |
$ |
3.1 |
|
|
$ |
8.2 |
|
|
$ |
10.7 |
|
|
$ |
52.7 |
|
Other capital expenditures (accrued) |
$ |
13.8 |
|
|
$ |
1.8 |
|
|
$ |
25.3 |
|
|
$ |
7.7 |
|
Total capital expenditures (accrued) |
$ |
60.3 |
|
|
$ |
16.3 |
|
|
$ |
117.6 |
|
|
$ |
163.9 |
|
____________________________________________________
(1) Adjusted Net Income (Loss), Adjusted EBITDAX, Adjusted EPS, Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin are each non-GAAP financial measures. For a definition of each of these non-GAAP financial measures and reconciliations of such non-GAAP financial measures to their comparable GAAP metrics, please see “Supplemental Non-GAAP Financial Measures” below.
BKV-BPP Power’s Income
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
($ Millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Total revenues, net |
$ |
67.0 |
|
|
$ |
47.9 |
|
|
$ |
459.9 |
|
|
$ |
326.6 |
|
Depreciation and amortization |
|
9.5 |
|
|
|
10.8 |
|
|
|
38.0 |
|
|
|
31.8 |
|
Operating expenses |
|
74.8 |
|
|
|
52.4 |
|
|
|
331.4 |
|
|
|
211.3 |
|
Income (loss) from operations |
|
(17.4 |
) |
|
|
(15.3 |
) |
|
|
90.5 |
|
|
|
83.5 |
|
Interest expense |
|
(17.8 |
) |
|
|
(18.7 |
) |
|
|
(73.1 |
) |
|
|
(50.5 |
) |
Other income (loss) |
|
0.8 |
|
|
|
(1.8 |
) |
|
|
3.5 |
|
|
|
0.9 |
|
Net income (loss) |
$ |
(34.4 |
) |
|
$ |
(35.7 |
) |
|
$ |
20.8 |
|
|
$ |
33.9 |
|
______________________________________________________
(1) This table reflects the financial information of the BKV-BPP Power Joint Venture. Amounts are obtained from its unaudited financial statements for the three months ended December 31, 2023 or the three months or year ended December 31, 2024, or from its audited financial statements for the year ended December 31, 2023, as applicable. BKV owns a
John Jimenez, BKV’s Chief Financial Officer stated, “Our fourth quarter results underscore BKV’s ongoing operational excellence, highlighted by increased natural gas production volumes and efficient capital spending. The fourth quarter also marked our return to more robust development in anticipation of stronger overall pricing in 2025, a trend we’ve already seen in the early weeks of the year. During 2024, the Company generated positive Adjusted Free Cash Flow, driven by lower capital spend, disciplined execution, and a balanced hedging strategy. While maintaining strong performance in our core upstream business, management remains focused on positioning BKV for growth across all pillars of our energy solutions business, capitalizing on key macroeconomic tailwinds.”
Operational Results
Fourth Quarter and Year-to-Date 2024
Power JV
For the fourth quarter 2024 and the full year ended December 31, 2024, the Temple I and II power plants (the “Temple Plants”) reported a capacity factor of
The fourth quarter 2024 was characterized by moderate power demand and pricing, as expected during the shoulder season, as well as lower generation and capacity factor due to planned seasonal readiness and scheduled major maintenance on the Temple Plants.
BKV’s implied proportionate share of Power JV net loss for the three months ended December 31, 2024 was
BKV’s implied proportionate share of Power JV Adjusted EBITDA was
BKV sees substantial growth potential in its Power JV, fueled by macroeconomic trends such as rising power demand in ERCOT, the rapid expansion of the data center market, and the accelerated adoption of AI.
Carbon Capture Utilization and Sequestration (“CCUS”)
The Company’s Barnett Zero project has now been in operation for more than a year. The Barnett Zero project sequestered 44,437 metric tons of CO2 equivalent during the three months ended December 31, 2024. The Barnett Zero facility has sequestered approximately 173,325 metric tons of CO2 equivalent since project start up in November 2023 through December 31, 2024.
BKV’s Cotton Cove project remains on track for first injection in the first half of 2026, subject to the receipt of all required permits. During the fourth quarter of 2024, a Monitoring, Reporting, and Verification Plan (“MRV”) for the project was submitted to the EPA for approval and the Texas Railroad Commission approved the project’s injection permit for a Class II well with drilling expected to commence in the third quarter of 2025.
During the fourth quarter, BKV also reached final investment decision on a new CCUS project to be developed in partnership with a leading diversified midstream energy company that is currently operating a natural gas plant in south
BKV’s de-levered balance sheet and operating cash flow enable the Company to self-fund its near-term CCUS projects. The Company is in active negotiations with a large, global energy transition investor, to support BKV’s long-term vision for its CCUS business and the execution of its closed-loop strategy.
Upstream & Midstream
Total hydrocarbon production for the three months ended December 31, 2024 was 774.5 MMcfe/d, which consisted of
For the year ended December 31, 2024, total hydrocarbon production was 788.0 MMcfe/d, which consisted of
The decrease in production volumes for the fourth quarter compared to the same period in 2023 is primarily attributable to the sale of the Company’s non-operated upstream assets in the Marcellus Shale in the Appalachian Basin of
|
Three Months Ended
|
|
Year Ended December 31, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Production |
|
|
|
|
|
|
|
||||||||
Net production per day (MMcfe/d) |
|
774.5 |
|
|
|
838.4 |
|
|
|
788.0 |
|
|
|
859.7 |
|
Natural gas (MMcf) |
|
56,469 |
|
|
|
61,076 |
|
|
|
228,682 |
|
|
|
249,766 |
|
NGL (MBbls) |
|
2,443 |
|
|
|
2,649 |
|
|
|
9,858 |
|
|
|
10,554 |
|
Oil (MBbls) |
|
21 |
|
|
|
27 |
|
|
|
96 |
|
|
|
119 |
|
Total (MMcfe) |
|
71,253 |
|
|
|
77,132 |
|
|
|
288,406 |
|
|
|
313,804 |
|
Natural Gas Pricing ($/Mcf) |
|
|
|
|
|
|
|
||||||||
Average NYMEX Henry Hub price |
$ |
2.79 |
|
|
$ |
2.88 |
|
|
$ |
2.27 |
|
|
$ |
2.74 |
|
Differential |
$ |
(0.69 |
) |
|
$ |
(0.74 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.70 |
) |
Realized prices, excluding derivatives |
$ |
2.10 |
|
|
$ |
2.14 |
|
|
$ |
1.69 |
|
|
$ |
2.04 |
|
Realized prices, including derivatives |
$ |
2.23 |
|
|
$ |
2.33 |
|
|
$ |
2.10 |
|
|
$ |
2.23 |
|
NGLs ($/Bbl) |
|
|
|
|
|
|
|
||||||||
Realized prices, excluding derivatives |
$ |
17.76 |
|
|
$ |
17.42 |
|
|
$ |
16.79 |
|
|
$ |
17.80 |
|
Realized prices, including derivatives |
$ |
17.30 |
|
|
$ |
17.52 |
|
|
$ |
17.19 |
|
|
$ |
17.55 |
|
Oil ($/Bbl) |
|
|
|
|
|
|
|
||||||||
Realized prices |
$ |
61.33 |
|
|
$ |
69.81 |
|
|
$ |
68.81 |
|
|
$ |
70.97 |
|
Average Operating Cash Costs ($/Mcfe) |
|
|
|
|
|
|
|
||||||||
Lease operating and workover |
$ |
0.49 |
|
|
$ |
0.47 |
|
|
$ |
0.47 |
|
|
$ |
0.48 |
|
Taxes other than income |
$ |
0.04 |
|
|
$ |
0.17 |
|
|
$ |
0.12 |
|
|
$ |
0.23 |
|
Gathering and transportation costs |
$ |
0.80 |
|
|
$ |
0.85 |
|
|
$ |
0.77 |
|
|
$ |
0.79 |
|
Total |
$ |
1.33 |
|
|
$ |
1.49 |
|
|
$ |
1.36 |
|
|
$ |
1.50 |
|
Capital Expenditures
Capital expenditures in the fourth quarter of 2024 were
Liquidity
As of December 31, 2024, BKV had cash and cash equivalents of
Total debt as of December 31, 2024 was
2025 Guidance
Accrued Capital Expenditures and Net Production ($ Millions) |
Q1 2025 |
|
FY 2025 |
Development |
|
|
|
CCUS and other |
|
|
|
Total capital expenditures |
|
|
|
|
|
|
|
Net production (MMcfe/d) |
740 - 770 |
|
755 - 790 |
|
|
|
|
Per Unit Operating Costs ($/Mcfe) |
|
|
|
Lease operating and workover |
|
|
|
Gathering and transportation |
|
|
|
General and administrative (excl. stock comp) |
|
|
|
General and administrative (stock comp) |
|
|
|
|
|
|
|
Natural Gas Price ($/Mcfe) |
|
|
|
Average differential |
|
|
|
|
|
|
|
Power ($ Millions) |
|
|
|
Power JV Adjusted EBITDA |
|
|
|
Full Year and Fourth Quarter 2024 Earnings Conference Call
The Company plans to host a conference call to discuss results today, February 26, 2025 at 10 AM EST. To access the conference call, participants may dial (877) 407-0779 (US) or (201) 389-0914 (international). Participants can also listen to a live webcast of the call by going to the Investors section on the BKV website at ir.bkv.com. A replay will be available shortly after the live conference call and can be accessed on the Company’s website or by dialing (844) 512-2921 (US) or (412) 317-6671 (international). The passcode for the replay is 13751333. The replay will be available for 60 days after the call.
About BKV Corporation
Headquartered in
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, which are not historical facts, include statements regarding BKV’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management, and often contain words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “budget,” “plan,” “seek,” “aspire,” “envision,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” “will,” and similar expressions. Actual results and future events could differ materially from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. All forward-looking statements, expressed or implied, in this press release are based only on information currently available to BKV and speak only as of the date on which they are made. BKV undertakes no obligation to release publicly any update to any of these forward-looking statements except as required by federal securities laws. Forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to assumptions, risks and uncertainties regarding our ability to successfully fund, pursue and develop our CCUS business; expected increase in demand for power and our ability to serve that demand from our power business, our ability to develop, market and sell our carbon sequestered gas product; and management's outlook guidance or forecasts of future events, including projected capital expenditures, production volumes, operating costs, pricing differentials, and Power JV Adjusted EBITDA. For further discussions of risks and uncertainties applicable to forward-looking statements, you should refer to BKV’s filings with the Securities and Exchange Commission (the “SEC”), including the “Risk Factors” section of the prospectus filed by BKV with the SEC pursuant to Rule 424(b) of the Securities Act on September 26, 2024.
BKV CORPORATION CONSOLIDATED BALANCE SHEETS ($ thousands, except per share amounts) (Unaudited)
|
|||||||
|
December 31, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
14,868 |
|
|
$ |
25,407 |
|
Restricted cash |
|
— |
|
|
|
139,662 |
|
Accounts receivable, net |
|
50,478 |
|
|
|
48,500 |
|
Accounts receivable, related parties |
|
15,371 |
|
|
|
559 |
|
Prepaid expenses |
|
7,638 |
|
|
|
3,837 |
|
Inventory |
|
6,255 |
|
|
|
9,935 |
|
Commodity derivative assets, current |
|
— |
|
|
|
84,039 |
|
Other current assets |
|
— |
|
|
|
218 |
|
Total current assets |
|
94,610 |
|
|
|
312,157 |
|
Natural gas properties and equipment |
|
|
|
||||
Developed properties |
|
2,315,167 |
|
|
|
2,370,156 |
|
Undeveloped properties |
|
10,757 |
|
|
|
15,846 |
|
Midstream assets |
|
276,644 |
|
|
|
318,855 |
|
Accumulated depreciation, depletion, and amortization |
|
(714,287 |
) |
|
|
(579,415 |
) |
Total natural gas properties, net |
|
1,888,281 |
|
|
|
2,125,442 |
|
Other property and equipment, net |
|
97,300 |
|
|
|
83,935 |
|
Goodwill |
|
18,417 |
|
|
|
18,417 |
|
Investment in joint venture |
|
115,173 |
|
|
|
104,750 |
|
Commodity derivative asset |
|
— |
|
|
|
18,508 |
|
Other noncurrent assets |
|
17,307 |
|
|
|
19,937 |
|
Total assets |
$ |
2,231,088 |
|
|
$ |
2,683,146 |
|
|
|
|
|
||||
Liabilities, mezzanine equity, and stockholders' equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
121,366 |
|
|
$ |
149,173 |
|
Contingent consideration payable |
|
20,000 |
|
|
|
20,000 |
|
Income taxes payable to related party |
|
1,438 |
|
|
|
864 |
|
Commodity derivative liabilities |
|
20,277 |
|
|
|
— |
|
Credit facilities |
|
— |
|
|
|
127,000 |
|
Current portion of long-term debt, net |
|
— |
|
|
|
112,373 |
|
Other current liabilities |
|
3,124 |
|
|
|
2,849 |
|
Total current liabilities |
|
166,205 |
|
|
|
412,259 |
|
Asset retirement obligations |
|
198,795 |
|
|
|
193,205 |
|
Contingent consideration |
|
— |
|
|
|
29,676 |
|
Commodity derivative liabilities |
|
47,357 |
|
|
|
— |
|
Note payable to related party |
|
— |
|
|
|
75,000 |
|
Deferred tax liability, net |
|
91,713 |
|
|
|
136,524 |
|
Long-term debt, net |
|
165,000 |
|
|
|
339,663 |
|
Other noncurrent liabilities |
|
5,469 |
|
|
|
11,652 |
|
Total liabilities |
|
674,539 |
|
|
|
1,197,979 |
|
Commitments and contingencies |
|
|
|
||||
Mezzanine equity |
|
|
|
||||
Common stock - minority ownership puttable shares; 0 and 2,403 authorized shares as of December 31, 2024 and 2023, respectively; and 0 and 2,403 shares issued and outstanding as of December 31, 2024 and 2023, respectively |
|
— |
|
|
|
59,988 |
|
Equity-based compensation |
|
— |
|
|
|
126,966 |
|
Total mezzanine equity |
|
— |
|
|
|
186,954 |
|
Stockholders' equity |
|
|
|
||||
Common stock, |
|
1,512 |
|
|
|
1,283 |
|
Treasury stock, shares at cost; 214 shares and 213 shares as of December 31, 2024 and 2023, respectively |
|
(6,663 |
) |
|
|
(4,582 |
) |
Additional paid-in capital |
|
1,437,202 |
|
|
|
1,034,144 |
|
Retained earnings |
|
124,498 |
|
|
|
267,368 |
|
Total stockholders' equity |
|
1,556,549 |
|
|
|
1,298,213 |
|
Total liabilities, mezzanine equity, and stockholders' equity |
$ |
2,231,088 |
|
|
$ |
2,683,146 |
|
BKV CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues and other operating income |
|
|
|
|
|
|
|
|
||||||||
Natural gas, NGL, and oil sales |
|
$ |
163,077 |
|
|
$ |
178,830 |
|
|
$ |
557,570 |
|
|
$ |
706,151 |
|
Midstream revenues |
|
|
2,392 |
|
|
|
3,941 |
|
|
|
12,560 |
|
|
|
16,168 |
|
Derivative gains (losses), net |
|
|
(58,295 |
) |
|
|
112,469 |
|
|
|
(34,152 |
) |
|
|
238,743 |
|
Marketing revenues |
|
|
1,963 |
|
|
|
2,042 |
|
|
|
10,668 |
|
|
|
8,710 |
|
Gain on sales of assets |
|
|
3,819 |
|
|
|
1,676 |
|
|
|
10,603 |
|
|
|
1,984 |
|
Related party and other |
|
|
6,826 |
|
|
|
3,015 |
|
|
|
23,732 |
|
|
|
8,251 |
|
Total revenues and other operating income |
|
|
119,782 |
|
|
|
301,973 |
|
|
|
580,981 |
|
|
|
980,007 |
|
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
Lease operating and workover |
|
|
34,763 |
|
|
|
36,454 |
|
|
|
136,991 |
|
|
|
150,647 |
|
Taxes other than income |
|
|
3,106 |
|
|
|
13,069 |
|
|
|
35,009 |
|
|
|
72,290 |
|
Gathering and transportation |
|
|
56,765 |
|
|
|
65,916 |
|
|
|
222,391 |
|
|
|
248,990 |
|
Depreciation, depletion, amortization, and accretion |
|
|
48,688 |
|
|
|
92,747 |
|
|
|
217,533 |
|
|
|
223,370 |
|
General and administrative |
|
|
30,930 |
|
|
|
33,723 |
|
|
|
104,473 |
|
|
|
114,688 |
|
Other |
|
|
1,799 |
|
|
|
1,909 |
|
|
|
19,385 |
|
|
|
12,625 |
|
Total operating expenses |
|
|
176,051 |
|
|
|
243,818 |
|
|
|
735,782 |
|
|
|
822,610 |
|
Income (loss) from operations |
|
|
(56,269 |
) |
|
|
58,155 |
|
|
|
(154,801 |
) |
|
|
157,397 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
||||||||
Gains (losses) on contingent consideration liabilities |
|
|
(297 |
) |
|
|
14,262 |
|
|
|
9,676 |
|
|
|
38,375 |
|
Earnings (losses) from equity affiliate |
|
|
(17,179 |
) |
|
|
(17,927 |
) |
|
|
10,423 |
|
|
|
16,865 |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(13,877 |
) |
|
|
— |
|
Interest expense |
|
|
(5,139 |
) |
|
|
(15,496 |
) |
|
|
(45,582 |
) |
|
|
(69,942 |
) |
Interest expense, related party |
|
|
— |
|
|
|
(1,995 |
) |
|
|
(5,181 |
) |
|
|
(7,078 |
) |
Interest income |
|
|
253 |
|
|
|
1,583 |
|
|
|
3,859 |
|
|
|
3,138 |
|
Other income |
|
|
7,639 |
|
|
|
4,142 |
|
|
|
9,008 |
|
|
|
6,388 |
|
Income (loss) before income taxes |
|
|
(70,992 |
) |
|
|
42,724 |
|
|
|
(186,475 |
) |
|
|
145,143 |
|
Income tax benefit (expense) |
|
|
13,535 |
|
|
|
(5,184 |
) |
|
|
43,605 |
|
|
|
(28,225 |
) |
Net income (loss) |
|
$ |
(57,457 |
) |
|
$ |
37,540 |
|
|
$ |
(142,870 |
) |
|
$ |
116,918 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.68 |
) |
|
$ |
0.57 |
|
|
$ |
(2.00 |
) |
|
$ |
1.93 |
|
Diluted |
|
$ |
(0.68 |
) |
|
$ |
0.53 |
|
|
$ |
(2.00 |
) |
|
$ |
1.82 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
84,387 |
|
|
|
66,276 |
|
|
|
71,288 |
|
|
|
60,730 |
|
Diluted |
|
|
84,387 |
|
|
|
70,340 |
|
|
|
71,288 |
|
|
|
64,380 |
|
BKV CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
||||||||
|
|
Year ended December 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(142,870 |
) |
|
$ |
116,918 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation, depletion, amortization, and accretion |
|
|
217,892 |
|
|
|
224,427 |
|
Equity-based compensation expense |
|
|
16,316 |
|
|
|
25,756 |
|
Deferred income tax (benefit) expense |
|
|
(44,811 |
) |
|
|
32,394 |
|
Unrealized (gains) losses on derivatives, net |
|
|
146,679 |
|
|
|
(148,564 |
) |
Gains on contingent consideration liabilities |
|
|
(9,676 |
) |
|
|
(38,375 |
) |
Settlement of contingent consideration |
|
|
(20,000 |
) |
|
|
(65,000 |
) |
Proceeds from the sale of call options |
|
|
23,502 |
|
|
|
— |
|
Gains on sales of assets |
|
|
(10,603 |
) |
|
|
(1,984 |
) |
Transaction costs from sales of assets |
|
|
(3,898 |
) |
|
|
— |
|
Earnings from equity affiliate |
|
|
(10,423 |
) |
|
|
(16,865 |
) |
Loss on early extinguishment of debt |
|
|
13,877 |
|
|
|
— |
|
Distribution from equity affiliate |
|
|
— |
|
|
|
10,000 |
|
Other, net |
|
|
(3,437 |
) |
|
|
3,029 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable, net |
|
|
(4,652 |
) |
|
|
86,477 |
|
Accounts receivable, related party |
|
|
(14,812 |
) |
|
|
(143 |
) |
Accounts payable and accrued liabilities |
|
|
(32,165 |
) |
|
|
(98,238 |
) |
Other changes in operating assets and liabilities |
|
|
(2,381 |
) |
|
|
(6,533 |
) |
Net cash provided by operating activities |
|
|
118,538 |
|
|
|
123,299 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Acquisition of natural gas properties |
|
|
— |
|
|
|
(4,889 |
) |
Capital expenditures |
|
|
(100,916 |
) |
|
|
(187,716 |
) |
Proceeds from sales of assets |
|
|
137,631 |
|
|
|
6,444 |
|
Loan advanced to equity affiliate |
|
|
— |
|
|
|
(8,000 |
) |
Loan repayment from equity affiliate |
|
|
— |
|
|
|
8,000 |
|
Other investing activities, net |
|
|
(649 |
) |
|
|
8,090 |
|
Net cash provided by (used in) investing activities |
|
|
36,066 |
|
|
|
(178,071 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions |
|
|
265,661 |
|
|
|
— |
|
Proceeds from the issuance of common stock |
|
|
— |
|
|
|
150,005 |
|
Proceeds from notes payable from related party |
|
|
— |
|
|
|
17,000 |
|
Payments on notes payable to related party |
|
|
(75,000 |
) |
|
|
(17,000 |
) |
Proceeds under RBL Credit Agreement |
|
|
580,000 |
|
|
|
— |
|
Payments on RBL Credit Agreement |
|
|
(415,000 |
) |
|
|
— |
|
Payment on term loan agreement |
|
|
(456,000 |
) |
|
|
(114,000 |
) |
Payment of debt issuance costs |
|
|
(8,054 |
) |
|
|
— |
|
Proceeds from draws on credit facilities |
|
|
44,000 |
|
|
|
375,500 |
|
Payments on credit facilities |
|
|
(171,000 |
) |
|
|
(338,500 |
) |
Payments of deferred offering costs |
|
|
(3,879 |
) |
|
|
(2,901 |
) |
Debt extinguishment costs |
|
|
(10,213 |
) |
|
|
— |
|
Net share settlements, equity-based compensation |
|
|
(53,239 |
) |
|
|
(2,961 |
) |
Other financing activities |
|
|
(2,081 |
) |
|
|
(430 |
) |
Net cash provided by (used in) financing activities |
|
|
(304,805 |
) |
|
|
66,713 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
(150,201 |
) |
|
|
11,941 |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
165,069 |
|
|
|
153,128 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
14,868 |
|
|
$ |
165,069 |
|
Proved Reserves
SEC Pricing
As of December 31, 2024, the Company reported total proved reserves of 3.1 Tcfe, a decrease of 961.9 Bcfe, or (23)%, compared to December 31, 2023 due to decreased commodity pricing and changes in our planned drilling activity, which resulted in downward revisions and also the disposition of the BKV Chaffee Corners, LLC and certain non-operated upstream assets held by BKV Chelsea, LLC. During the year ended December 31, 2024, proved undeveloped reserves was estimated at 262.6 Bcfe, a decrease of 443.8 Bcfe, or (63)% compared to December 31, 2023.
The following table presents the Company’s reserves at SEC pricing, standardized measure of discounted future net cash flow (the “Standardized Measure”), and PV-10:
|
|
December 31, 2024 |
||||||
SEC pricing (1) |
|
Proved Developed |
|
Proved Undeveloped |
|
Total |
||
|
|
|
|
|
|
|
||
Reserves (Bcfe) |
|
2,869 |
|
263 |
|
|
3,132 |
|
PV-10 (millions) (2) |
|
|
|
|
|
$ |
672 |
|
Present value of future income taxes discounted at |
|
|
|
|
|
$ |
(39 |
) |
Standardized Measure (millions) |
|
|
|
|
|
$ |
633 |
|
______________________________________________________
(1) Prices for natural gas, oil, and NGLs used in preparing our estimated proved reserves and the associated PV-10 Value based on SEC Pricing at December 31, 2024 were
(2) PV-10 is a non-GAAP financial measure. Please see “Supplemental Non-GAAP Financial Measures” below.
NYMEX Pricing
As of December 31, 2024, the Company reported total proved reserves of 4.9 Tcfe, a decrease of 32.9 Bcfe or less than (1)% compared to December 31, 2023. Reserves using NYMEX pricing were consistent between periods due to comparable forward prices.
The following table presents the Company’s reserves at NYMEX pricing:
|
|
December 31, 2024 |
||||||
NYMEX pricing (1) |
|
Proved Developed |
|
Proved Undeveloped |
|
Total |
||
|
|
|
|
|
|
|
||
Reserves (Bcfe) |
|
3,693 |
|
1,224 |
|
|
4,917 |
|
PV-10 (millions) (2) |
|
|
|
|
|
$ |
2,446 |
|
Present value of future income taxes discounted at |
|
|
|
|
|
$ |
(456 |
) |
Standardized Measure (millions) |
|
|
|
|
|
$ |
1,990 |
|
______________________________________________________
(1) NYMEX strip pricing is as of market close on December 31, 2024.
(2) PV-10 is a non-GAAP financial measure. Please see “Supplemental Non-GAAP Financial Measures” below.
Volume of Derivative Activities
As of December 31, 2024, the Company’s derivative activities based on volume and contract prices, categorized by primary underlying risk and related commodity, by year, were as follows:
The following table represents natural gas commodity derivatives indexed to NYMEX Henry Hub pricing:
Instrument |
|
MMBtu |
|
Weighted
|
|
Weighted
|
|
Weighted
|
|
Fair Value as of
|
|||||
2025 |
|
|
|
|
|
|
|
|
|
|
|||||
Swap |
|
104,225,000 |
|
$ |
3.40 |
|
|
|
|
|
$ |
(12,460 |
) |
||
Collars |
|
13,360,000 |
|
|
|
$ |
3.71 |
|
$ |
4.11 |
|
$ |
4,017 |
|
|
2026 |
|
|
|
|
|
|
|
|
|
|
|||||
Swap |
|
57,825,000 |
|
$ |
3.60 |
|
|
|
|
|
$ |
(18,419 |
) |
||
Collars |
|
25,550,000 |
|
|
|
$ |
3.67 |
|
$ |
4.19 |
|
$ |
(78 |
) |
|
Call options |
|
36,500,000 |
|
|
|
|
|
$ |
5.00 |
|
$ |
(11,640 |
) |
||
2027 |
|
|
|
|
|
|
|
|
|
|
|||||
Collars |
|
29,200,000 |
|
|
|
$ |
3.53 |
|
$ |
3.93 |
|
$ |
(2,337 |
) |
|
Call options |
|
36,500,000 |
|
|
|
|
|
$ |
5.00 |
|
$ |
(12,365 |
) |
||
The following table represents natural gas basis derivatives based on the applicable basis reference price listed below:
Instrument |
|
Basis Reference Price |
|
MMBtu |
|
Weighted
|
|
Fair Value as of
|
||||
2025 |
|
|
|
|
|
|
|
|
||||
Swap |
|
Transco Leidy Basis |
|
12,775,000 |
|
$ |
(0.86 |
) |
|
$ |
(1,750 |
) |
Swap |
|
HSC Basis |
|
29,200,000 |
|
$ |
(0.45 |
) |
|
$ |
(3,630 |
) |
The following table represents natural gas liquids commodity derivatives for contracts, by contract type, expiring through December 31, 2026 based on the applicable index listed below:
Instrument |
|
Commodity Reference Price |
|
Gallons |
|
Weighted
|
|
Fair Value as of
|
|||
2025 |
|
|
|
|
|
|
|
|
|||
Swap |
|
OPIS Purity Ethane Mont Belvieu |
|
119,595,000 |
|
$ |
0.24 |
|
$ |
(1,374 |
) |
Swap |
|
OPIS IsoButane Mont Belvieu Non-TET |
|
8,515,500 |
|
$ |
0.89 |
|
$ |
(1,307 |
) |
Swap |
|
OPIS Normal Butane Mont Belvieu Non-TET |
|
10,998,750 |
|
$ |
0.85 |
|
$ |
(1,623 |
) |
Swap |
|
OPIS Propane Mont Belvieu Non-TET |
|
46,882,500 |
|
$ |
0.75 |
|
$ |
(1,409 |
) |
Swap |
|
OPIS Natural Gasoline Mont Belvieu Non-TET |
|
17,220,000 |
|
$ |
1.42 |
|
$ |
(741 |
) |
2026 |
|
|
|
|
|
|
|
|
|||
Swap |
|
OPIS Purity Ethane Mont Belvieu |
|
94,762,500 |
|
$ |
0.25 |
|
$ |
(2,028 |
) |
Swap |
|
OPIS IsoButane Mont Belvieu Non-TET |
|
2,388,750 |
|
$ |
0.84 |
|
$ |
(120 |
) |
Swap |
|
OPIS Normal Butane Mont Belvieu Non-TET |
|
10,053,750 |
|
$ |
0.82 |
|
$ |
(208 |
) |
Swap |
|
OPIS Propane Mont Belvieu Non-TET |
|
37,327,500 |
|
$ |
0.70 |
|
$ |
(581 |
) |
Swap |
|
OPIS Natural Gasoline Mont Belvieu Non-TET |
|
16,275,000 |
|
$ |
1.40 |
|
$ |
419 |
|
Supplemental Non-GAAP Financial Measures
Adjusted Net Income (Loss) and Adjusted EPS
The Company defines Adjusted Net Income (Loss) as net income (loss) before (i) non-cash derivative gains (losses), (ii) earnings or losses from equity affiliate, (iii) gains (losses) on contingent consideration liabilities, (iv) certain equity-based compensation expense, (v) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods, (vi) other nonrecurring transactions, and (vii) the tax impact on these adjustments using a
We believe Adjusted Net Income (Loss) and Adjusted EPS are useful performance measures because they allow us to effectively evaluate our operating performance and results of operations from period to period and against our peers, without regard to our financing methods, corporate form, capital structure, or one-time events. We exclude the items listed above from net income (loss) in arriving at Adjusted Net Income (Loss) and Adjusted EPS because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Our presentation of Adjusted Net Income (Loss) and Adjusted EPS should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Other companies, including other companies in our industry, may not use Adjusted Net Income (Loss) and Adjusted EPS or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
The table below presents a reconciliation of Adjusted Net Income (Loss) to net income, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended December 31, |
|
Year ended December 31, |
||||||||||||
($ Thousands, except EPS) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
(57,457 |
) |
|
$ |
37,540 |
|
|
$ |
(142,870 |
) |
|
$ |
116,918 |
|
Adjustment to net income (loss): |
|
|
|
|
|
|
|
||||||||
Unrealized (gain) loss on derivatives |
|
64,537 |
|
|
|
(93,284 |
) |
|
|
146,679 |
|
|
|
(148,564 |
) |
(Earnings) losses from equity affiliate |
|
17,179 |
|
|
|
17,927 |
|
|
|
(10,423 |
) |
|
|
(16,865 |
) |
Change in contingent consideration liabilities |
|
297 |
|
|
|
(14,262 |
) |
|
|
(9,676 |
) |
|
|
(38,375 |
) |
Release of legal claims |
|
(5,269 |
) |
|
|
— |
|
|
|
(5,269 |
) |
|
|
— |
|
Acceleration of equity-based compensation due to IPO |
|
— |
|
|
|
— |
|
|
|
10,508 |
|
|
|
— |
|
Gain on sales of non-operated interest in proved reserves |
|
(1,112 |
) |
|
|
— |
|
|
|
(6,563 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
13,877 |
|
|
|
— |
|
Early settlement of derivative contracts (1) |
|
— |
|
|
|
(7,577 |
) |
|
|
(13,250 |
) |
|
|
(46,701 |
) |
Early settlements of derivative contracts related to the current period (2) |
|
— |
|
|
|
10,082 |
|
|
|
8,350 |
|
|
|
39,124 |
|
Total adjustments before taxes |
|
75,632 |
|
|
|
(87,114 |
) |
|
|
134,233 |
|
|
|
(211,381 |
) |
Tax effect of adjustments |
|
(17,395 |
) |
|
|
20,036 |
|
|
|
(30,874 |
) |
|
|
48,618 |
|
Total adjustments after taxes |
|
58,237 |
|
|
|
(67,078 |
) |
|
|
103,359 |
|
|
|
(162,763 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income (Loss) |
$ |
780 |
|
|
$ |
(29,538 |
) |
|
$ |
(39,511 |
) |
|
$ |
(45,845 |
) |
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income (Loss) per basic share |
$ |
0.01 |
|
|
$ |
(0.45 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.75 |
) |
Adjusted Net Income (Loss) per diluted share |
$ |
0.01 |
|
|
$ |
(0.45 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.75 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares of common stock outstanding |
|
84,387 |
|
|
|
66,276 |
|
|
|
71,288 |
|
|
|
60,730 |
|
Add dilutive effects of TRSUs (3) |
|
123 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Add dilutive effects of PRSUs (3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted-average common shares outstanding |
|
84,510 |
|
|
|
66,276 |
|
|
|
71,288 |
|
|
|
60,730 |
|
______________________________________________________
(1) Reflects total cash settlements during the period upon termination of certain natural gas commodity derivative swap and collar contracts prior to their contractual settlement date.
(2) When evaluating our operating performance and results of operations, early settlements of derivative contracts are “related to” the period that includes the underlying production month that was hedged. This adjustment removes the timing difference between the early termination date and the underlying production month that is hedged.
(3) Net losses are prohibited from including potential common shares in the computation of diluted per share amounts. Therefore, we have utilized the basic shares outstanding to calculate both basic and diluted Adjusted Net Loss per common share.
Adjusted EBITDAX
The Company defines Adjusted EBITDAX as net income (loss) attributable to BKV before (i) non-cash derivative gains (losses), (ii) depreciation, depletion, amortization and accretion, (iii) exploration and impairment expense, (iv) gains (losses) on contingent consideration liabilities, (v) interest expense, (vi) interest expense, related party, (vii) income tax benefit (expense), (viii) equity-based compensation expense, (ix) bargain purchase gains, (x) earnings or losses from equity affiliate, (xi) the portion of settlements paid (received) for early-terminated derivative contracts that relate to future periods and (xii) other nonrecurring transactions.
The Company excludes the items listed above from net income (loss) in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax burden, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDAX. Our presentation of Adjusted EBITDAX should not be construed as an inference that our results will be unaffected by unusual or non-recurring items. Other companies, including other companies in our industry, may not use Adjusted EBITDAX or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by our management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, rating agencies and others to more effectively evaluate our operating performance and results of operations from period to period and against our peers. We believe Adjusted EBITDAX is a useful performance measure because it allows us to effectively evaluate our operating performance and results of operations from period to period and against our peers, without regard to our financing methods, corporate form or capital structure.
The table below presents a reconciliation of Adjusted EBITDAX to net income, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
($ Thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) |
$ |
(57,457 |
) |
|
$ |
37,540 |
|
|
$ |
(142,870 |
) |
|
$ |
116,918 |
|
Add back (subtract): |
|
|
|
|
|
|
|
||||||||
Unrealized derivative (gains) losses |
|
64,537 |
|
|
|
(93,284 |
) |
|
|
146,679 |
|
|
|
(148,564 |
) |
Forward month gas settlement (1) |
|
9,858 |
|
|
|
(7,094 |
) |
|
|
9,543 |
|
|
|
(9,807 |
) |
Depreciation, depletion, amortization, and accretion |
|
48,781 |
|
|
|
93,038 |
|
|
|
217,892 |
|
|
|
224,427 |
|
Exploration and impairment expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Change in contingent consideration liabilities (earnout adjustment) |
|
297 |
|
|
|
(14,262 |
) |
|
|
(9,676 |
) |
|
|
(38,375 |
) |
Release of legal claims |
|
(5,269 |
) |
|
|
— |
|
|
|
(5,269 |
) |
|
|
— |
|
Interest expense |
|
5,139 |
|
|
|
15,496 |
|
|
|
45,582 |
|
|
|
69,942 |
|
Interest expense, related party |
|
— |
|
|
|
1,995 |
|
|
|
5,181 |
|
|
|
7,078 |
|
Loss on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
13,877 |
|
|
|
— |
|
Income tax (benefit) expense |
|
(13,535 |
) |
|
|
5,184 |
|
|
|
(43,605 |
) |
|
|
28,225 |
|
Equity-based compensation expense |
|
3,497 |
|
|
|
8,364 |
|
|
|
16,316 |
|
|
|
25,756 |
|
Gain on sales of non-operated interest in proved reserves |
|
(1,112 |
) |
|
|
— |
|
|
|
(6,563 |
) |
|
|
— |
|
(Earnings) losses from equity affiliate |
|
17,179 |
|
|
|
17,927 |
|
|
|
(10,423 |
) |
|
|
(16,865 |
) |
Early settlement of derivative contracts (2) |
|
— |
|
|
|
(7,577 |
) |
|
|
(13,250 |
) |
|
|
(46,701 |
) |
Early settlements of derivative contracts related to the current period (3) |
|
— |
|
|
|
10,082 |
|
|
|
8,350 |
|
|
|
39,124 |
|
Adjusted EBITDAX |
$ |
71,915 |
|
|
$ |
67,409 |
|
|
$ |
231,764 |
|
|
$ |
251,158 |
|
________________________________________________
(1) Natural gas derivative contracts settle and are realized in the month prior to the production covered by the contract. This adjustment removes the timing difference between the settlement date and the underlying production month that is hedged.
(2) Reflects total cash settlements during the period upon termination of certain natural gas commodity derivative swap and collar contracts prior to their contractual settlement date.
(3) When evaluating our operating performance and results of operations, early settlements of derivative contracts are “related to” the period that includes the underlying production month that was hedged. This adjustment removes the timing difference between the early termination date and the underlying production month that is hedged.
Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin
We define Adjusted Free Cash Flow as net cash provided by (used in) operating activities, excluding cash paid for contingent consideration and changes in operating assets and liabilities, less total cash paid for capital expenditures (excluding leasehold costs and acquisitions).
Adjusted Free Cash Flow is not a measure of net cash flow provided by or used in operating activities as determined by GAAP. Adjusted Free Cash Flow is a supplemental non-GAAP financial measure that is used by our management and other external users of our financial statements, such as industry analysts, investors, lenders, rating agencies and others to assess our ability to internally fund our capital program, service or incur additional debt and to pay dividends. We believe Adjusted Free Cash Flow is a useful liquidity measure because it allows us and others to compare cash flow provided by operating activities across periods and to assess our ability to internally fund our capital program (including acquisitions), to reduce leverage, fund acquisitions and pay dividends to our stockholders. We define Adjusted Free Cash Flow Margin as the ratio of Adjusted Free Cash Flow for any period to total revenues, excluding derivative gains and losses, for such period. We use this metric to assess our liquidity relative to our revenues. Adjusted Free Cash Flow Margin illustrates the efficiency with which the Company generates Adjusted Free Cash Flow. Adjusted Free Cash Flow should not be considered as an alternative to, or more meaningful than, net income (loss) or net cash provided by (used in) operating activities determined in accordance with GAAP. Other companies, including other companies in our industry, may not use Adjusted Free Cash Flow or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
The table below presents our reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, our most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
($ Thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
43,762 |
|
|
$ |
7,868 |
|
|
$ |
118,538 |
|
|
$ |
123,299 |
|
Cash paid for contingent consideration (1) |
|
— |
|
|
|
— |
|
|
|
20,000 |
|
|
|
65,000 |
|
Change in operating assets and liabilities |
|
9,824 |
|
|
|
60,465 |
|
|
|
54,010 |
|
|
|
18,437 |
|
Cash paid for capital expenditures (excl. leasehold costs, acquisitions) |
|
(48,142 |
) |
|
|
(26,648 |
) |
|
|
(100,916 |
) |
|
|
(187,716 |
) |
Adjusted Free Cash Flow (2) |
$ |
5,444 |
|
|
$ |
41,685 |
|
|
$ |
91,632 |
|
|
$ |
19,020 |
|
__________________________________________
(1) Cash paid for contingent consideration is included as a deduction to arrive at net cash provided by (used in) operating activities and therefore, is added back for the purpose of computing Adjusted Free Cash Flow.
(2) The early termination of derivative contracts increased Adjusted Free Cash Flow by
Power JV Adjusted EBITDA
We define Power JV Adjusted EBITDA as net income (loss) of BKV-BPP Power LLC (the “Power JV”) before (i) unrealized derivative gains/losses, (ii) depreciation and amortization, and (iii) interest expense.
The items listed above are excluded from the Power JV’s net income (loss) in arriving at Power JV Adjusted EBITDA because these amounts can vary substantially from company to company within the power industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Power JV Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Other companies, including other companies in the power industry, may not use Adjusted EBITDA or may calculate this measure differently than as presented in this release, limiting its usefulness as a comparative measure.
Power JV Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by our management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, rating agencies and others to more effectively evaluate our and the Power JV’s operating performance and results of operations from period to period and against our peers. We believe our investment in the Power JV is a strategic differentiator for BKV’s integrated energy solutions model. Investors in BKV may be interested in the results of the Power JV and the respective impact to BKV’s financial results. We believe Power JV Adjusted EBITDA is a useful performance measure because it allows us to effectively evaluate the Power JV’s operating performance and results of operations from period to period and against peers, without regard to financing methods, corporate form or capital structure.
The table below presents our reconciliation of Power JV Adjusted EBITDA to its net income (loss), the most directly comparable GAAP financial measure for the periods indicated.
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
($ Thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 (1) |
|
Net income (loss) |
$ |
(34,358 |
) |
|
$ |
(35,716 |
) |
|
$ |
20,846 |
|
|
$ |
33,868 |
|
Add back: |
|
|
|
|
|
|
|
||||||||
Unrealized derivative (gains) losses |
|
7,992 |
|
|
|
6,625 |
|
|
|
(64,061 |
) |
|
|
73,617 |
|
Depreciation and amortization |
|
9,528 |
|
|
|
10,772 |
|
|
|
37,967 |
|
|
|
31,752 |
|
Interest expense |
|
17,761 |
|
|
|
18,683 |
|
|
|
73,147 |
|
|
|
50,524 |
|
Power JV Adjusted EBITDA |
$ |
923 |
|
|
$ |
364 |
|
|
$ |
67,899 |
|
|
$ |
189,761 |
|
____________________________________________
(1) Includes six months of operations from Temple II following its acquisition by BKV-BPP Power in July 2023.
PV-10
PV-10 refers to the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using prices and costs in effect at the determination date, without giving effect to non-property related expenses such as general and administrative expenses, debt service and future income tax expense or to depreciation, depletion and amortization, discounted using an annual discount rate of
View source version on businesswire.com: https://www.businesswire.com/news/home/20250225206593/en/
Investor Contacts:
David Tameron
BKV Corporation
Vice President, Strategic Finance and Investor Relations
InvestorRelations@bkvcorp.com
Caldwell Bailey
ICR, Inc.
BKVIR@icrinc.com
Source: BKV Corporation
FAQ
What were BKV's Q4 2024 production levels and how did they compare to guidance?
How much CO2 did BKV's Barnett Zero project sequester in 2024?
What was BKV's free cash flow and margin for full-year 2024?
What was BKV's debt position at the end of 2024?
