BKV Corp (BKV)·Q1 2025 Earnings Summary

Executive Summary

• BKV delivered a mixed Q1: strong operations and Adjusted results, but a GAAP loss driven by large unrealized hedge losses. Adjusted EPS was $0.41 vs S&P consensus $0.22 (beat), and revenue was ~$227.7M vs $221.5M (beat), while GAAP EPS was $(0.93) on $152.2M unrealized/realized derivative losses . S&P Global estimates marked with * (values from S&P Global).
• Power JV outperformed guidance on a winter price spike (Temple plants ~50% capacity factor; $20M JV EBITDA, BKV 50% share ~$10M), and management reiterated full-year guidance; introduced Q2 guidance with a production uptick and higher CapEx cadence into 2H’25 .
• Strategic momentum in CCUS: definitive JV agreements with CIP for an initial $500M (up to $1B) to scale CCUS; Barnett Zero injected 38,787 tons in Q1; additional projects (Cotton Cove, South Texas) remain on track for 1H’26 starts .
• Stock catalysts: data-center PPAs and decarbonized gas/power commercialization, CCUS JV capital deployment milestones, and sustained Power JV outperformance amid tightening ERCOT supply/demand .

What Went Well and What Went Wrong

• What Went Well

  • Power JV beat: $20M JV EBITDA on cold-weather pricing; BKV’s implied 50% share ~$10M; capacity factor ~50% and ~1,600 GWh generated; spark spread $25.39/MWh .
  • CCUS scaling: signed definitive JV with CIP for $500M (up to $1B) to accelerate CCUS; “CIP brings deep expertise… critical for continued growth” (CEO) .
  • Operational execution: Q1 net production 761.1 MMcfe/d above midpoint; LOE $0.51/Mcfe; development CapEx below prior guidance; “our upstream and midstream businesses are operating at full throttle” (CEO) .

• What Went Wrong

  • GAAP loss: $(78.7)M and $(0.93) EPS driven by $(152.2)M derivative losses; Adjusted metrics were positive but mark-to-market swings pressured GAAP results .
  • Working capital and controls: working capital deficit widened to $(148.5)M; continuing material weakness in tax accounting controls (management remediation ongoing) .
  • YoY volume and midstream softness: lower production vs Q1’24 from prior asset sale; midstream revenues declined YoY; derivative losses and equity affiliate losses (Power JV GAAP) weighed on results .

Financial Results

Table 1: Q1 2025 results vs S&P Global consensus (EPS primary/adjusted basis; revenue per S&P “Revenue”)

Note: S&P values marked with * are from S&P Global; EBITDA here reflects S&P “EBITDA” metric (includes hedge MTM effects), whereas company-reported Adjusted EBITDAX was $90.9M .

Table 2: Quarterly trend (oldest → newest)

Table 3: Segment/KPI snapshot (Q1 2025)

Company-reported totals: Total revenues and other operating income $78.8M (includes $(152.2)M derivatives); GAAP net loss $(78.7)M; Adjusted Net Income $35.0M; Adjusted EBITDAX $90.9M; Combined Adjusted EBITDAX $100.7M (adds 50% Power JV) .

Guidance Changes

Management reiterated no changes to full-year 2025 targets; Q2 ranges reflect seasonal operations and cadence .

Earnings Call Themes & Trends

Management Commentary

• “Our upstream and midstream businesses are operating at full throttle… delivering strong financial and operational results.” – CEO, Chris Kalnin
• “The Temple power plants performed very well… Power JV adjusted EBITDA was $20 million and BKV’s implied 50% share was $10 million.” – CFO, David Tameron
• “We have clear line of sight to a 1 million ton per year injection run rate by the end of 2027.” – President, Upstream/CCUS, Eric Jacobsen
• On CIP JV: “This creates an exciting new platform… accelerate the growth in the carbon capture business while accretively diversifying the source of capital.” – CEO

Q&A Highlights

• 45Q resilience and CCUS momentum: Management emphasized bipartisan support and growing funnel, especially in gas processing projects; Comstock partnership adds to pipeline .
• CCUS JV mechanics and pace: Upfront capital undisclosed; ~$500M drawn over 12–24 months as projects are approved and deployed; accretive economics expected .
• Upstream growth stance: Will flex investment if strip remains $3.50–$4.00; targeting 2–3% growth (Q4’25 over Q4’24), with incremental 2H’25 spend driving 2026 volumes .
• Data-center decarbonization premium: Certain tech customers willing to pay for decarbonized power/gas; BKV can “menu” decarbonized and conventional offerings .
• Comstock projects cadence: Phased “train” approach aligned to Bethel/Marquez plant timelines; BKV to capture, inject, and monetize 45Q while paying a delivery fee .

Estimates Context

• Q1 2025: EPS (Primary/Adjusted) $0.41 vs $0.22 consensus (beat); Revenue ~$227.7M vs $221.5M (beat). EBITDA missed ($53.6M actual vs $81.3M est) due to hedge mark-to-market, while Adjusted EBITDAX was $90.9M (company metric) . S&P Global figures marked with * (values from S&P Global).
• Outlook: FY guidance maintained; Q2’25 production guided up 2–6% sequentially (775–805 MMcfe/d), with total Q2 CapEx $77–$103M supporting a stronger 2H cadence . Where models emphasize EBITDA, analysts may revisit treatment of derivatives vs Adjusted EBITDAX and incorporate Power JV contribution (Combined Adjusted EBITDAX adds 50% of JV EBITDA) .

Key Takeaways for Investors

• Adjusted earnings power intact despite GAAP volatility from hedge MTM; Q1 Adj EPS beat and Power JV outperformance reinforce execution in core businesses .
• FY 2025 guidance is unchanged; Q2 guide previews a production lift and rising spend trajectory into 2H’25, positioning for 2026 growth if the strip holds .
• CCUS is moving to scale: signed CIP JV ($500M initial) with optionality to $1B; multiple permits and LOIs in place support target of 1 Mtpa by 2027 .
• ERCOT exposure is a structural tailwind; Temple assets are levered to growing data center load and scarcity pricing, with decarbonized power/products as a differentiator .
• Hedge book provides visibility (’25 gas 58% at $3.44) while leaving upside; derivative accounting may continue to mask underlying adjusted performance in GAAP numbers .
• Balance sheet/liquidity improved via RBL upsizing; net leverage <0.7x maintains flexibility across upstream, power, and CCUS .
• Watch items: working capital deficit and remediation of material weakness in tax controls; trajectory of Power JV EBITDA within $130–$170M FY guide; execution milestones on CCUS JV deployment .

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Additional Detail and Source Data

Table: Company-reported Q1 2025 line items

Table: Power JV operating stats (Q1 2025)

Table: CCUS progress (Q1 2025)

Table: Guidance summary (Q2 and FY 2025)

Hedging snapshot (as of Q1 call): 2025 gas ~58% at $3.44/MMBtu; 2026 ~50% at $3.45; NGLs 2025 ~43% at $21.73/Bbl, 2026 ~<40% at $22.01 .

Balance sheet/liquidity: cash ~$15M; RBL borrowing base raised to $850M (elected commitments to $665M) post quarter; net leverage <0.7x .

Footnote on estimates: All items marked with * are values retrieved from S&P Global.