Executive Summary

Q2 2025 delivered strong operational and financial execution: net income of $104.6M and diluted EPS of $1.23, with Adjusted EPS of $0.39, alongside Combined Adjusted EBITDAX attributable to BKV of $88.2M .
Upstream outperformed plan with net production of 811 MMcfe/d (above 775–805 guidance) and LOE of $0.46/Mcfe, while development capex landed at the low end ($62.6M) .
Power JV materially outperformed, posting gross Adjusted EBITDA of $35.5M (BKV share $17.7M) and improved spark spreads; management raised FY production guidance and lowered FY capex midpoint, and maintained Power JV EBITDA outlook .
Strategic catalysts: definitive agreement to acquire Bedrock’s Barnett assets (~$370M) adding ~108 MMcfe/d and ~1 Tcfe 1P reserves, and a “Carbon Sequestered Gas” offtake with Gunvor up to 10,000 MMBtu/d .
Versus S&P Global consensus: BKV posted a significant EPS beat, a modest revenue miss, and a large EBITDA beat, driven by upstream production, lower LOE, and favorable power dynamics (values retrieved from S&P Global).

What Went Well and What Went Wrong

What Went Well
- Upstream exceeded production guidance at 811 MMcfe/d, with lower LOE ($0.46/Mcfe) and development spend ($62.6M) achieved through drilling efficiency and completions improvements .
- Power JV delivered gross Adjusted EBITDA of $35.5M (BKV share $17.7M), above the high end of quarterly guidance on advantaged weather and pricing; spark spread averaged $25.15/MWh .
- Strategic moves: Bedrock acquisition to extend Barnett leadership (longer laterals, low ~7% base declines, ~1 Tcfe 1P reserves), and CSG offtake with Gunvor to monetize decarbonized gas premiums .
- Management tone: “another exceptional quarter” and “continued progress across all business lines,” emphasizing “said and did culture” and premium positioning in Texas power and CCUS .
What Went Wrong
- Gathering & transportation costs per Mcfe rose YoY ($0.85 vs $0.74), pressuring total operating cash costs ($1.49 vs $1.36) despite LOE progress .
- Revenue excluding derivatives (~$209.8M) was below consensus, reflecting commodity mix and wider differentials, even as hedges improved realized prices .
- Capex increased materially YoY (Q2 accrued capex $78.8M vs $14.9M), reflecting ramped development and CCUS spend; Adjusted FCF attributable to BKV was modest at $2.1M .
- Analysts probed sustainability of cost-per-foot gains and power pricing seasonality/hard comps; management flagged near-term power market variability but reiterated bullish medium-term ERCOT outlook .

Financial Results

GAAP/standardized financials (S&P Global; values retrieved from S&P Global)

Metric	Q2 2024	Q1 2025	Q2 2025
Revenues ($USD Millions)	$131.28*	$225.38*	$203.84*
Net Income ($USD Millions)	$(59.70)	$(78.67)*	$104.57
Diluted EPS ($)	$(0.90)	$(0.93)*	$1.23
EBITDA ($USD Millions)	$16.21*	$(53.64)*	$166.54*
EBITDA Margin %	11.58%*	(23.56%)*	80.35%*
Net Income Margin %	(42.63%)*	(34.55%)*	50.45%*

Revenue composition (company-reported, excluding derivative gains/losses)

Metric	Q2 2024	Q2 2025
Total revenue excl. derivatives ($USD Millions)	$143.68	$209.84
Natural gas, NGL, and oil sales ($USD Millions)	$125.85	$199.73
Midstream revenues ($USD Millions)	$3.38	$2.74
Marketing revenues ($USD Millions)	$2.05	$1.37
Section 45Q tax credits ($USD Millions)	$3.64	$2.57
Related party revenues ($USD Millions)	$1.10	$0.43
Other ($USD Millions)	$1.69	$3.00

Upstream and pricing KPIs

Metric	Q2 2024	Q2 2025
Net production (MMcfe/d)	794.2	811.0
LOE ($/Mcfe)	$0.48	$0.46
G&T ($/Mcfe)	$0.74	$0.85
Avg realized gas price excl. derivatives ($/MMBtu)	$1.45	$2.67
Avg realized gas price incl. derivatives ($/MMBtu)	$1.98	$2.83

Power JV performance

Metric	Q2 2024	Q2 2025
Total revenues, net ($USD Millions)	$86.8	$136.7
Net income (loss) ($USD Millions)	$(30.5)	$18.1
Power JV Adjusted EBITDA ($USD Millions)	$26.3	$35.5
50% share (BKV) ($USD Millions)	$13.1	$17.7
Temple I capacity factor (%)	67.8%	64.0%
Temple II capacity factor (%)	62.4%	54.8%
Spark spread ($/MWh)	$22.38	$25.15
Total generation (GWh)	2,107	1,913

Corporate liquidity and leverage

Metric	Dec 31, 2024	Jun 30, 2025
Cash & equivalents ($USD Millions)	$14.9	$21.4
Total debt ($USD Millions)	$165.0	$200.0
Net debt ($USD Millions)	—	$178.6
Net leverage (x)	—	0.63x
Total liquidity ($USD Millions)	$436.0	$472.3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net production (MMcfe/d)	FY 2025	755–790	790–810	Raised (midpoint +4%)
Total capital expenditures ($USD Millions)	FY 2025	$320–$380	$290–$350	Lowered (midpoint −9%)
Development capex ($USD Millions)	FY 2025	~$220	$205–$235	Maintained/Refined
CCUS & other capex ($USD Millions)	FY 2025	~$130	$85–$115	Lowered
Net production (MMcfe/d)	Q3 2025	—	805–835	New
Per-unit costs (LOE $/Mcfe)	FY 2025	—	$0.48–$0.52	New
Gathering & transportation ($/Mcfe)	FY 2025	—	$0.82–$0.86	New
G&A ex-stock comp ($/Mcfe)	FY 2025	—	$0.32–$0.35	New
Power JV Adjusted EBITDA ($USD Millions)	FY 2025	$130–$170	$130–$170	Maintained

Management clarified Q3/FY 2025 guidance excludes Bedrock; guidance will be updated post-close .

Earnings Call Themes & Trends

Topic	Q-2 (Q4 2024)	Q-1 (Q1 2025)	Current (Q2 2025)	Trend
AI/data center power demand	Highlighted ERCOT long-term demand; considering new combined cycle builds	Hyperscaler PPA discussions; assets ready for peak season	Reserved turbine slots; active PPA talks; capacity factor headroom	Intensifying engagement; optionality increasing
CCUS strategy & CIP JV	Announced pursuit of JV; FIDs (Eagle Ford) and Class II permits progressing	JV signed with CIP ($500M up to $1B); 1MM tpy by 2027 reiterated	JV contributions received; MRV approvals; new East Texas project; 7 Class VI apps	Acceleration, execution milestones
Carbon Sequestered Gas (CSG)	Concept positioned as decarbonized firming power	Customers willing to pay premium for decarbonized power	Signed offtake with Gunvor up to 10,000 MMBtu/d; premium product positioning	Commercialization underway
Upstream efficiency	Production above guide; lower development capex; type curve outperformance	Cost per foot trending lower; record completions; 761 MMcfe/d	811 MMcfe/d; $0.46 LOE; $560/ft cost; longest well; high pumping hours	Structural gains sustained
Supply chain/tariffs	Monitoring macro; inflation and power build costs	Proactive procurement to mitigate tariff impacts	Forward planning & domestic sourcing to mitigate anticipated tariffs	Mitigation progressing
Power market/hedging	Hedged ~700 MW; 2025 EBITDA $130–$170M	Outperformance; 2025 EBITDA maintained	3Q guide $55–$75M; FY maintained; seasonality acknowledged	Near-term variability, strong medium-term outlook
Regulatory/legal (45Q)	Bipartisan support emphasized	“Robust” 45Q; JV timeline and policy confidence	MRV approvals; Class VI pipeline advancing	Favorable regulatory progress

Management Commentary

Strategic posture: “Overall, I’m excited to share… another exceptional quarter that demonstrates our continued progress across all our business lines… our closed loop strategy” .
Upstream execution: “Outperformed our sanction type curves… delivered net production of 811 MMcfe/d… at lower than expected capital investment” .
Power positioning: “Temple Complex… uniquely positions BKV to provide energy solutions for… data center operators” with spark spread of $25.15/MWh and capacity factor headroom .
CCUS leadership: “Signed… CCUS JV… initial contributions received… MRV approvals… seven Class VI applications… East Texas project ~70k tpy” .
CSG commercialization: “Seminal deal… with Gunvor… allows end users to utilize around-the-clock carbon neutral energy that commands a premium” .

Q&A Highlights

Bedrock acquisition synergy: Longer laterals and inventory accretion (~70 equivalent 10k-ft laterals, 80 refracs); liquids mix ~37% on Bedrock footprint .
Cost structure durability: 11% reduction in $/ft to ~$560; structural changes from subsurface placement, frac design, analytics; preference for long straight laterals .
Maintenance capex: With raised 800 MMcfe/d midpoint, maintenance capex ~$170–$180M; Bedrock adds ~$20–$25M due to low decline profile .
Power PPAs: Behind-the-meter and tolling structures under consideration; ~1,500 MW capacity with potential up to ~90% capacity factor; flexible contracting .
Guidance clarity: Bedrock excluded from current guidance; update after close .

Estimates Context

Consensus vs actual (Q2 2025; values retrieved from S&P Global)

Metric	Consensus	Actual	Surprise
Primary EPS Consensus Mean ($)	$0.148*	$0.39*	+163% (beat)*
Revenue Consensus Mean ($USD Millions)	$214.54*	$207.26*	−3.4% (miss)*
EBITDA Consensus Mean ($USD Millions)	$78.65*	$166.54*	+112% (beat)*
Target Price Consensus Mean ($)	$29.88*	$29.88*	—*
EPS # of Estimates	5*	—	—*
Revenue # of Estimates	3*	—	—*

Note: S&P Global normalizes EPS; company-reported diluted EPS was $1.23 while non-GAAP Adjusted EPS was $0.39 . The primary EPS actual above reflects S&P Global methodology.*

Where estimates may need to adjust:

Upstream productivity and lower LOE support upward revisions to EPS/EBITDA, while revenue mix/wider differentials suggest nuanced revenue revisions. Power JV outperformance should bolster consolidated EBITDA outlook despite seasonal variability .

Key Takeaways for Investors

BKV is executing across the portfolio: upstream beats on volume and cost, power delivers outsized EBITDA, and CCUS advances with JV capital and permitting momentum—supporting a constructive EPS/EBITDA revision trajectory .
The Bedrock acquisition is accretive strategically and financially (longer laterals, low base declines, inventory depth), with leverage expected at the low end of the 1.0–1.5x target post-close—an M&A flywheel in the Barnett favors BKV as the natural consolidator .
Power optionality is a differentiator: PPA discussions with hyperscalers, turbine slots reserved, and ability to offer decarbonized firm power via CSG should command premiums and improve capacity factors over time .
Near-term trading: Expect stock sensitivity to Bedrock close/timing, additional PPA/CSG announcements, and Q3 power performance; strong beats on EPS/EBITDA vs consensus are catalysts, tempered by revenue mix and cost line monitoring (G&T) (values retrieved from S&P Global).
Medium-term thesis: Closed-loop model (gas, power, CCUS) aligned with ERCOT demand growth and decarbonization trends; CCUS JV capital reduces funding risk and accelerates deployment, supporting 1MM tpy by 2027 .
Risk checks: Power seasonality, commodity price differentials, execution on Bedrock integration, and regulatory timelines for CCUS; hedging mitigates natural gas price volatility .
Guidance credibility: Raised FY production midpoint and lowered capex midpoint reinforce capital efficiency; explicit exclusion of Bedrock from guidance provides clarity on future upward adjustments post-close .

Disclosures: Values marked with an asterisk (*) are retrieved from S&P Global.

BKV Corp (BKV)·Q2 2025 Earnings Summary