BKV Corporation — Q3 2026 Earnings Summary

Financial Performance:

• Net income attributable to BKV was $29.4 million ($0.27 per diluted share) for the three months ended September 30, 2026, compared to $83.5 million ($0.98 per diluted share) in the prior year period.
• Adjusted Net Income attributable to BKV was $39.9 million ($0.36 per diluted share) for the quarter, up from $23.1 million ($0.27 per diluted share) in Q3 2025.
• Adjusted EBITDAX attributable to BKV was $132.7 million for the quarter, an increase from $101.3 million in Q3 2025.
• Net cash provided by operating activities was $164.5 million for the quarter, compared to $109.1 million in Q3 2025.
• Net cash provided by operating activities before working capital was $112.7 million for the quarter, up from $94.0 million in Q3 2025.
• Adjusted Free Cash Flow before Power Growth attributable to BKV was $31.2 million for the quarter, compared to $15.0 million in Q3 2025.
• For the nine months ended September 30, 2026, net income attributable to BKV was $149.3 million, and Adjusted Net Income was $110.7 million.
• Accrued capital expenditures totaled $77.8 million for the quarter, down from $79.9 million in Q3 2025.
• Net Leverage Ratio was 2.41x as of September 30, 2026.
• Total principal debt was $2.0 billion, with net debt of $1.4 billion.
• Cash and cash equivalents were $619.6 million, with restricted cash of $16.3 million.
• Total liquidity was $1.2 billion, consisting of cash and $544.5 million available under the RBL.

Guidance and Future Outlook:

• Q4 2026 accrued capital expenditures guidance is $315 million to $385 million, broken down as $55-$75 million for Development, $240-$270 million for Power, and $20-$40 million for CCUS and other.
• Q4 2026 net production guidance is 1,010 to 1,030 MMcfe/d.
• Q4 2026 Power Adjusted EBITDAX guidance is $10 million to $30 million.
• Q4 2026 per unit operating costs guidance includes lease operating and workover of $0.52-$0.56/Mcfe, GCPT of $0.75-$0.79/Mcfe, and upstream G&A (excl. stock comp) of $0.20-$0.25/Mcfe.
• Q4 2026 other G&A costs guidance is $15-$19 million for Power, CCUS, and Other, and $4-$6 million for stock-based compensation.
• Q4 2026 commodity price assumptions include an average natural gas differential of $(0.70) to $(0.80)/Mcf and NGL % of WTI of approximately 31%.
• The Company expects JV partner capital contributions of $80 million to $100 million for Power and CCUS in Q4 2026.
• BKV targets an annual CO₂ injection run rate of 1.5 million metric tons by 2028.
• The Company remains focused on securing long-term power purchase agreements (PPAs) to support growth objectives.

Business Segments and Product Lines:

• Upstream/Midstream: Average net production was 981.2 MMcfe/d in Q3 2026, up from 828.5 MMcfe/d in Q3 2025. The segment completed the acquisition of Barnett Shale assets on September 15, 2026, adding approximately 65 MMcfe/d of production and 0.35 Tcfe of proved developed producing reserves. The segment began internally marketing all natural gas production for the first full quarter.
• Power: Total generation from the Power JV's Temple plants was 2,317 GWh in Q3 2026, with a combined capacity factor of 71.7%. The Power JV entered a cost reimbursement agreement with a Leading Frontier AI Lab to increase planned modular power generation at the Temple Energy Complex to 400 MW from 200 MW. An equipment supply agreement was secured for approximately 1.2 GW of CCGT capacity, backed by a backstop agreement with an investment-grade hyperscaler. Existing and planned assets represent approximately 3.3 GW of potential capacity.
• CCUS: Quarterly sequestration was approximately 55,200 metric tons of CO₂ equivalent. The operational portfolio expanded to four projects with an annual CO₂ sequestration run rate of approximately 350,000 metric tons. BKV became the first company to receive Verra carbon credit certification for permanently sequestered CO₂, enabling the monetization of Carbon Sequestered Gas (CSG) under arrangements with Kiewit and Gunvor.

Market and Competitive Landscape:

• Record power demand was observed across ERCOT during the quarter, though wholesale power prices and spark spreads were below expectations due to increased renewable generation and battery storage.
• The ERCOT market fundamentals remain supported by a substantial backlog of large-load interconnection requests and anticipated demand growth.
• BKV is one of the top 15 gas-weighted natural gas producers in the United States and the largest natural gas producer by gross operated volume in the Barnett Shale.

Risks and Challenges:

• Wholesale power prices and spark spreads may be moderated by increased renewable generation and battery storage.
• Forward-looking statements regarding future operations, financial position, and projected costs involve risks and uncertainties, including the ability to secure PPAs, operate and grow the CCUS business, and manage commodity price volatility.
• Actual results may differ materially from guidance and projections due to factors such as regulatory actions, project timing, and the success of strategic acquisitions.

Management Commentary and Tone:

• CEO Chris Kalnin stated the upstream business delivered another strong quarter with operational outperformance, while the power business made meaningful commercial progress with new agreements.
• Kalnin emphasized a deliberate, disciplined approach to developing power generation capacity and expressed confidence in securing long-term PPAs to support growth.
• CFO David Tameron noted that strong upstream cash flow, disciplined capital commitments, and recent capital markets transactions strengthened the financial position and provided liquidity for strategic growth.
• Management highlighted that cost reimbursement agreements and backstop agreements provide financial protections and flexibility while advancing commercial discussions.

Analyst Questions and Answers:

• No specific analyst questions and answers were included in the provided press release text.

Other Key Points:

• Completed a $575.0 million Convertible Senior Notes Offering at an annual rate of 1.625%.
• The Power JV entered into a cost reimbursement agreement with a Leading Frontier AI Lab covering up to approximately $179 million if offtake arrangements are not agreed to by November 18, 2026, with an aggregate cap of $374.1 million if the equipment supply contract is assigned.
• BKV acquired an additional 25% ownership interest in the Power JV, consolidating it as of January 30, 2026.
• JV partners contributed an aggregate $78.8 million during the nine months ended September 30, 2026.
• The Company reported a correction of $3.0 million previously reflected in Forward month gas settlement, impacting Adjusted EBITDAX and Adjusted Net Income for the six months ended June 30, 2026.
• The Company announced a backstop agreement with an investment-grade hyperscaler supporting equipment commitments for a prospective 1.2 GW power generation project in Texas.