BKV

MKT CAP $2.4BP/E 7.8DIV YIELD —FCF YIELD -0.74%REV TTM $1.4B +8.6%NET INCOME $273.1MNET DEBT $1.1B52W 20.28 – 32.16SEC XBRL · TTM TO Invalid Date

How BKV rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

42%

of sentences unchanged

Added

929

new sentences

Dropped

188

sentences removed

Length

+26,795

words, now 64,221

New in FY2025

Risk Factors ” in this Annual Report on Form 10-K, as well as the following factors, among others: statements about the anticipated benefits, opportunities and results with respect to the BKV-BPP Power Joint Venture Transaction and the Bedrock Acquisition, including any expected value creation from the BKV-BPP Power Joint Venture 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 BKV-BPP Power Joint Venture and the BKV-BPP Power Joint Venture 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.
These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.
Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about: • our business strategy; • our reserves; • our financial strategy, liquidity, and capital required for our development programs; • our relationship with our sponsor, Banpu and its affiliates, including future agreements with Banpu; • actual and potential conflicts of interest relating to Banpu, its affiliates, and other entities in which members of our officers and directors are or may become involved; • volatility in natural gas, NGL, and oil prices; • our dividend policy; • our drilling plans and the timing and amount of future production of natural gas, NGL, and oil; • our hedging strategy and results; • competition and government regulation; • changes in trade regulation, including tariffs and other market factors; • legal, regulatory, or environmental matters; • marketing of natural gas, NGL, and oil; • business or leasehold acquisitions and integration of acquired businesses, including the Bedrock Acquisition, with our business; • our ability to develop existing prospects; • costs of developing our properties and of conducting our operations; • our plans to establish midstream contracts that allow us to supply our own natural gas directly to the Temple Plants; • our plan to continue to build out our power generation business and to expand into retail power; • our ability to develop, produce, and sell Carbon Sequestered Gas; • our ability to effectively operate and grow our CCUS business; • our ability to forecast annual CO 2 sequestration rates for our CCUS projects; • our ability to reach final investment decision and execute and complete any of our pipeline of identified CCUS projects; • our ability to identify and complete additional CCUS projects as we expand our upstream operations; • our ability to effectively operate and grow our retail power business; • our anticipated Scope 1, 2, and 3 emissions from our owned and operated upstream and natural gas midstream businesses and our sustainability plans and goals, including our plans to offset our Scope 1, 2, and 3 emissions from our owned and operated upstream and natural gas midstream businesses; • our ESG strategy and initiatives, including those relating to the generation and marketing of environmental attributes or new products seeking to benefit from ESG-related activities, and the continuation of government tax incentives applicable thereto; • general economic conditions; • cost inflation; • credit markets; • our ability to service our indebtedness; • our ability to expand our business, including through the recruitment and retention of skilled personnel; • our future operating results; • the remediation of our material weakness; • the Bedrock Acquisition and the anticipated benefits thereof; • BKV-BPP Power Joint Venture Transaction and the anticipated benefits thereof; • the impact of the One Big Beautiful Bill Act of 2025 (the “OBBBA”); and • our plans, objectives, expectations, and intentions.
Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control.
In addition, management’s assumptions about future events may prove to be inaccurate.
Management cautions all readers that the forward-looking statements contained in this Annual Report on Form 10-K are not guarantees of future performance, and we cannot assure any reader that those statements will be realized or the forward-looking events and circumstances will occur.
Undue reliance should not be placed on any forward-looking statement, which are based on predictions of future results, which may not occur as anticipated.
Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, as well as others not now anticipated.
The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors.
The foregoing statements are not exclusive and further information concerning us, including factors that potentially could materially affect our financial results, may emerge from time to time.
We undertake no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements, except as required by law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (the “SEC”).
BUSINESS Overview BKV Corporation (“BKV,” the “Company,” “our,” “we,” and “us”) is a forward-thinking, growth-driven energy company focused on creating long-term risk-adjusted stockholder value through the development of natural gas producing assets, the ownership and operation of natural gas-fired power generation assets, and selective accretive acquisitions.
Our core businesses are the production of natural gas and the generation of natural gas-fired power from our owned and operated assets, supported by a closed-loop strategy enabled by our upstream, midstream, power, and CCUS businesses.
Our operations are supported by four business lines: natural gas production, natural gas midstream, power generation, and CCUS.
Our operating approach is designed around a closed-loop model that aligns these business lines to support cost efficiency, commercial optimization, and operational reliability across the value chain.
Through this approach, we retain operational control over the production, transportation, and processing of natural gas and provide multiple platforms for disciplined capital deployment, while meeting growing demand for low carbon natural gas and power.
For example, in the Barnett Shale, natural gas produced from our upstream assets is gathered and transported in part through our midstream systems.
In November 2023, we commenced sequestration operations at our first CCUS project, and we currently expect our second and third CCUS projects to commence sequestration activities during the first and second quarter of 2026 with additional CCUS growth opportunities beyond 2026.
Further, we are pursuing a power growth strategy that aligns with both our natural gas and CCUS businesses.
As part of our ongoing operations, we expect our owned and operated upstream and natural gas midstream businesses to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions during the early 2030s and net-zero Scope 1, Scope 2, and Scope 3 emissions by the late 2030s.
We believe our business model, experienced management team, and disciplined technology-enabled operations support our ability to create long-term, risk-adjusted stockholder value.
Initial Public Offering On September 27, 2024, we completed our initial public offering (“IPO”) of 15,000,000 shares of our common stock at a price to the public of $18.00 per share.
We also granted the underwriters of our IPO a 30-day option to purchase up to 2,250,000 additional shares of common stock on the same terms.
The underwriters partially exercised the option and, on October 28, 2024, purchased 701,003 additional shares of common stock.
These sales of our common stock resulted in net proceeds of $265.7 million after deducting underwriter fees and offering expenses of $17.0 million.
All shares sold were registered pursuant to a registration statement on Form S-1 (File No. 333-268469), as amended, which was declared effective by the SEC on September 25, 2024.
We used $200.0 million to pay down a portion of our outstanding borrowings, including interest, under our RBL Credit Agreement, and $50.0 million to repay the outstanding balance, including interest, under our related party loan with BNAC, our majority stockholder.
The remaining amounts were used for growth capital expenditures and other general corporate purposes.
Strategy O ur strategy is to create value for our stockholders by managing and growing our integrated asset base and focusing on our net zero objectives.
We believe the following strategic priorities will help drive value creation and long-term success.
Optimize the value of our core businesses.
We utilize technology and data analysis to enhance our assets and operations, which we believe improves operational efficiencies, reduces our emissions, and helps us realize our operational and financial goals as we continue to scale our business.
Our Pad of the Future program, which includes conversion of natural gas-powered instrument pneumatics to compressed air or electric power instruments on existing pads, combined with emission and leak surveys, is expected to significantly reduce our annual GHG emissions and improve pad efficiencies and operating revenue.
We have also improved pad efficiencies and reduced lease operating costs through improvements including leveraging of data analytics to coordinate the workforce, prioritize high-value activity, and assess individual well profitability; automating critical plunger set points; in-sourcing key services such as slick-line, value re-builds, compression overhaul, and location repair and maintenance; and entering water share arrangements to reduce disposal and trucking cost.
By combining our reserves into a growing asset base with vertically integrated components, we believe we can enhance margins and create a “closed-loop” emissions reduction strategy that reduces Scope 1 and 2 emissions from our owned and operated upstream and natural gas midstream businesses and captures margin across the value chain.
Grow through opportunistic, synergistic acquisitions.
A significant element of our business strategy is gaining scale through accretive acquisitions.
We believe our business model, management team experience, and application of technology enable us to quickly and efficiently integrate additional upstream, midstream, power, and CCUS assets into our business.
Maintain a disciplined financial strategy.
We believe we can execute on our business plan and grow our business while continuing to generate substantial Adjusted Free Cash Flow.

and 889 more.

Gone since FY2024

RISK FACTORS The following risk factors should be considered in evaluating our business and future prospects, in addition to other information included in this Annual Report.
Energy Information Administration (the “EIA”), the historical high and low Henry Hub natural gas spot prices per MMBtu for the following periods were as follows: in 2022, high of $9.85 and low of $3.46; in 2023, high of $3.78 and low of $1.74; and in 2024, high of $13.20 and low of $1.21.
These factors include, but are not limited to: • worldwide and regional economic conditions impacting the global supply of, and demand for, natural gas and NGLs, including inflation; • the price, amount, timing and, quantity of foreign imports of natural gas and NGLs; • political conditions in or affecting other producing countries, including the armed conflicts between Russia and Ukraine and Israel and Hamas, and associated economic sanctions on Russia and conditions in China, the Middle East, Africa, and South America; • the level of global drilling, exploration, and production; • the level of global inventories; • prevailing market prices on local price indexes in the areas in which we operate and expectations about future commodity prices; • the impact on worldwide economic activity of an epidemic, outbreak, or other public health events, such as the COVID-19 pandemic or threat of such epidemic or outbreak, or any government response to such occurrence or threat; • increased associated natural gas and NGL production resulting from higher oil prices and the related increase in oil production; • the proximity of our natural gas and NGL production to, and capacity and cost of, natural gas and NGL pipelines and other transportation and storage facilities, and other factors that result in differentials to benchmark prices; • local and global supply and demand fundamentals and transportation availability; • United States storage levels of natural gas and NGLs; • weather conditions and other natural disasters; • domestic and foreign governmental regulations, including environmental initiatives and taxation; • overall domestic and global economic conditions; • the value of the dollar relative to the currencies of other countries; • stockholder activism or activities by non-governmental organizations to restrict the exploration, development, and production of natural gas, NGLs, and oil to minimize emissions of carbon dioxide, a GHG; • the actions of OPEC and other oil producing countries, including Russia; • speculative trading in natural gas and NGL derivative contracts; • technological advances affecting energy consumption and energy supply; • the price, availability, and acceptance of alternative energy sources; and • the impact of energy conservation efforts.
For example, during the period from January 1, 2022 through December 31, 2024, the Henry Hub natural gas spot price reached a high of $13.20 per MMBtu on January 13, 2024 and a low of $1.21 per MMBtu on November 11, 2024.
Henry Hub natural gas spot prices average in 2022 was $6.45 per MMBtu, which trended higher due to production freeze-offs and high net withdrawals of natural gas from storage.
In 2023 and 2024, natural gas spot prices averaged $2.57 per MMBtu and $2.21 per MMBtu, respectively, as a result of a warmer-than-normal winters, increased U.S. natural gas supply, and a combination of higher production and higher storage inventories given these mild winters.
Approximately 99% of our natural gas and NGL production for the assets we acquired in the Devon Barnett Acquisition, which comprised approximately 62%, 61%, and 69%, for the years ended December 31, 2024, 2023, and 2022, respectively, of our total natural gas and NGL production was gathered, processed, and transported by EnLink using its gas gathering systems, gas transportation system, and gas processing facilities.
Any termination or sustained disruption in the gathering, processing, and transportation of our natural gas and NGL production by EnLink on its systems and in its facilities would materially and adversely affect our financial condition and results of operations.
We rely on the credit worthiness of such third-party marketer, who collects directly from the purchasers and remits to us the total of all amounts collected on our behalf less their fee for making such sales.
The present value of future net revenues from our proved reserves is not the same as the current market value of our estimated natural gas, NGL, and oil reserves.
As of December 31, 2024, approximately 469.3 Bcfe, or 15.0%, of our total estimated proved reserves were undeveloped or behind pipe.
Our future natural gas and NGL production is, therefore, highly dependent on our level of success in finding or acquiring additional reserves as well as the pace of drilling and completion of new wells.
As of December 31, 2024, we carried unproved natural gas, NGL, and oil property costs of $10.8 million.
The availability of a ready market for our natural gas and NGL production depends on a number of factors, including the demand for and supply of natural gas and NGLs, the proximity of our natural gas and NGL production to and capacity of pipelines and storage facilities, gathering systems and other transportation, processing, fractionation, refining and export facilities, competition for such facilities, and the inability of such facilities to gather, transport, store, or process our natural gas and NGL production due to shutdowns or curtailments arising from mechanical, operational, or weather related matters, including hurricanes and other severe weather conditions, or pandemics such as the COVID-19 pandemic or regulatory action related thereto.
The cost of our drilling, completing, and well operations may increase and our results of operations and cash flows from such operations may be impacted, as a result of a variety of factors, including: • unexpected drilling conditions; • title problems; • pressure or irregularities in formations; • equipment failures or accidents; • adverse weather conditions, such as winter storms, flooding and hurricanes, and changes in weather patterns; • compliance with, or changes in, environmental laws and regulations relating to air emissions, hydraulic fracturing and disposal of produced water, drilling fluids and other wastes, laws and regulations imposing conditions and restrictions on drilling and completion operations, and other laws and regulations, such as tax laws and regulations; • the availability and timely issuance of required governmental permits and licenses; and • the availability of costs associated with, and terms of contractual arrangements for, properties, including mineral licenses and leases, pipelines, facilities, and equipment to gather, process, compress, store, transport, and market natural gas, NGLs, and related commodities.
Some areas in which we have operations have experienced drought conditions that could result in restrictions on water availability or use.
As of December 31, 2024, we operated approximately 97% of our net (78% of our gross) acreage.
With respect to our natural gas midstream business, we do not operate the NEPA midstream entities, and in the Barnett, during the year ended December 31, 2024, approximately 75% of our gross operated production volumes were gathered and processed by a third party.
Risks Related to Our Power Generation Business We operate our power generation business through a joint venture which we do not control.
We and BPPUS each have a 50% interest in the BKV-BPP Power Joint Venture.
For the years ended December 31, 2024, 2023, and 2022, the portion of BKV's earnings in the BKV-BPP Power Joint Venture were $10.4 million, $16.9 million, and $8.5 million, respectively, and our interest in the earnings on the BKV-BPP Power Joint Venture represented approximately 1.8%, 1.7%, and 0.8% of our revenues, which includes derivative gains (losses), net, respectively.
In accordance with the terms of the Limited Liability Company Agreement of BKV-BPP Power (the “BKV-BPP Power LLC Agreement”), the BKV-BPP Power Joint Venture is managed by a board of managers (the “Power JV Board”) consisting of ten members, five of whom are appointed by us and five of whom are appointed by BPPUS.
Of the five members appointed by us, one is an employee of Banpu who also serves on our board of directors.
The BKV-BPP Power LLC Agreement delegates to a general manager appointed by the Power JV Board the authority to manage and administer the business affairs of BKV-BPP Power, subject to specified matters reserved for approval by the Power JV Board.
The appointment and removal of the general manager must be approved by both the Power JV Board and BPPUS.
Consequently, BKV-BPP Power may not take certain material actions without the consent of BPPUS.
The specified matters reserved for approval by at least a majority of the members of the Power JV Board include, among other things, (i) any merger, consolidation, amalgamation, conversion of BKV-BPP Power or any of its subsidiaries into another form or entity, or other business combination of any nature, (ii) the wind up, dissolution, liquidation, commencement, or any filing or petition for a voluntary bankruptcy, reorganization, debt arrangement involving BKV-BPP Power, (iii) any plan to or initial sale of BKV-BPP Power or other equity interests to the public, (iv) any amendments, restatements, or revocations of BKV-BPP Power’s organizational documents, (v) the execution, amendment, or termination of a material contract, and (vi) any amendment to or deviation from the dividend policy of the joint venture or any of its subsidiaries.
Additionally, under the terms of the BKV-BPP Power LLC Agreement: • we do not have the power to unilaterally cause BKV-BPP Power to make distributions; • we may be required to make additional capital contributions to fund items approved in the annual budget or other matters approved by the Power JV Board at the request of BPPUS, which would reduce the amount of cash otherwise available to us or require us to incur additional indebtedness; and • BKV-BPP Power may incur additional indebtedness in an amount greater than $1,500,000 if approved by the Power JV Board, which debt payments would reduce the amount of cash that might otherwise be available for distributions to us.
We may be required to make additional capital contributions to the BKV-BPP Power Joint Venture.
In addition, we may be required to make additional capital contributions to fund items approved in the annual budget or other matters approved by the Power JV Board.
We do not control the timing or the amount which we may be required to contribute.
If we fail to make additional capital contributions to BKV-BPP Power, as approved by the Power JV Board, such failure could be deemed an event of default under the BKV-BPP Power LLC Agreement.
If an event of default occurs, the non-defaulting party will be entitled to (i) sell the assets of the joint venture and dissolve the joint venture on reasonable terms deemed acceptable to the Power JV Board, (ii) obtain specific performance of the non-defaulting party’s obligations, and/or (iii) exercise any other right or remedy provided in law or in equity.
If we default on any obligation to make an additional capital contribution to BKV-BPP Power and any of these events were to occur, it could have a material adverse effect on the BKV-BPP Power Joint Venture and on our business, financial condition, results of operations, and cash flows.
For example, as of December 31, 2024, BKV-BPP Power had unrealized losses of $13.2 million on its derivative instruments as a result of increased power prices; of the $13.2 million, $5.5 million of these losses pertain to two open HRCOs.
Risks Related to Our Retail Power Business We operate our retail power business through a joint venture which we do not control.
Our retail energy business is operated through BKV-BPP Retail, a wholly-owned subsidiary of the BKV-BPP Power Joint Venture in which we and BPPUS each have a 50% interest.
For additional information, see “— Risks Related to Our Power Generation Business — We operate our power generation business through a joint venture which we do not control .” Our retail power business operates in a highly competitive environment, which may make it difficult to grow without reducing prices or incurring additional costs.
Any negative publicity regarding the retail industry in general could result in agencies or the state legislature to impose additional regulations on the retail business and increase our compliance obligations.
In particular, the Barnett Zero Project, the Cotton Cove Project, and the Eagle Ford Project face, and any of our potential future CCUS projects, including the pipeline of CCUS projects currently under evaluation, will face operational, technological, regulatory, and financial risks.

and 148 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch BKV. Know when insiders buy.

One email the day a filing lands. Free.