Q4 2025 BKV Corp Earnings Call

February 25, 2026

Speaker #2: BKV's fourth quarter and full year 2025 earnings conference call. As a reminder, today's call is being recorded, and at this time, all participants are in a listen-only mode.

Speaker #2: A brief question-and-answer session will follow the formal presentation. I would now like to turn the call over to Mr. Michael Hall, Vice President of Investor Relations.

Speaker #2: Please go ahead. Thank you, Operator, and good morning, everyone. Thank you for joining BKV Corporation's fourth quarter and full year 2025 earnings conference call.

Michael Hall: Thank you, operator, and good morning, everyone. Thank you for joining BKV Corporation's Q4 and Full Year 2025 Earnings Conference Call. With me today are Chris Kalnin, Chief Executive Officer, Eric Jacobsen, President of Upstream, and David Tameron, Chief Financial Officer. Before we provide our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements, which are subject to certain risks, uncertainties, and assumptions. Actual results could differ materially from those in any forward-looking statements. In addition, we may refer to non-GAAP measures.

Speaker #2: With me today are Chris Cowman, Chief Executive Officer; Eric Jacobsen, President of Upstream; and David Tameron, Chief Financial Officer. Before we provide a prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements which are subject to certain risks, uncertainties, and assumptions.

Speaker #2: Actual results could differ materially from those in any forward-looking statements. In addition, we may refer to non-GAAP measures. For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, including those associated with the recently completed Power JV transaction or the integration of recently acquired upstream assets, as well as the reconciliations of non-GAAP financial measures, please see the company's public filings, included in the Form 8K filed today.

Michael Hall: For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, including those associated with the recently completed Power JV transaction or the integration of recently acquired upstream assets, as well as the reconciliations of non-GAAP financial measures, please see the company's public filings included in the Form 8-K filed today. I would also point listeners to the updated investor presentation posted this morning on our investor relations website. We encourage everyone listening to review those slides and our forthcoming annual report to be filed with the SEC for further information on our business, operations, results from the quarter and full year, and details on our 2026 guidance. I'd now like to turn the call over to our CEO, Chris Kalnin.

Speaker #2: I would also point listeners to the updated Investor Presentation posted this morning on our Investor Relations website. We encourage everyone listening to review those slides and our forthcoming annual report to be filed with the SEC for further information on our business, operations, results from the quarter and full year, and details on our 2026 guidance.

Speaker #2: I'd now like to turn the call over to our CEO, Chris Cowman. Thank you, Michael. And thank you, everyone, for joining us to discuss our fourth quarter and full year 2025 results.

Chris Kalnin: Thank you, Michael, thank you everyone for joining us to discuss our Q4 and full year 2025 results. As we close out 2025, I'm proud to report that BKV delivered a transformational year that exemplifies our said, did culture and positions the company for sustained long-term, profitable growth. We generated strong earnings, maintained a fortress balance sheet, and delivered strong growth. 2025 marked our first full year as a public company, we executed across each pillar of our closed-loop strategy. Our business lines of upstream natural gas, natural gas midstream, carbon capture, and power deliver premium low-carbon energy solutions that are increasingly sought after in today's energy markets.

Speaker #2: As we close out 2025, I'm proud to report that BKV delivered a transformational year that exemplifies our said-did culture and positions the company for sustained, long-term, profitable growth.

Speaker #2: We generated strong earnings, maintained a fortress balance sheet, and delivered strong growth. 2025 marked our first full year as a public company, and we executed across each pillar of our closed-loop strategy.

Speaker #2: Our business lines of upstream natural gas, natural gas midstream, carbon capture, and power deliver premium low-carbon energy solutions that are increasingly sought after in today's energy markets.

Speaker #2: In our upstream business, we exceeded expectations throughout the year. And our performance across the Barnett and Northeast Pennsylvania showcased the depth, durability, and competitiveness of our upstream assets, with approximately 8% exit-to-exit organic production growth on upstream development capital well within cash flow and with top-tier F&D costs.

Chris Kalnin: In our upstream business, we exceeded expectations throughout the year, and our performance across the Barnett and Northeast Pennsylvania showcased the depth, durability, and competitiveness of our upstream assets with approximately 8% exit-to-exit organic production growth on upstream development capital, well within cash flow and with top-tier F&D costs. The successful close of the Bedrock acquisition in Q3 was executed in line with our plans. The transaction materially expanded our footprint in the Fort Worth Basin and added high-quality assets. We added more than 100 MCFE per day of production and nearly 1 TCFE of proved reserves to our leading position in the basin. Our upstream business remains foundational to our growth strategy. We believe we have built a scalable, repeatable, and disciplined operating model for extracting value from mid-tenured shale basins.

Speaker #2: The successful close of the Bedrock acquisition in the third quarter was executed in line with our plans. The transaction materially expanded our footprint in the Fort Worth Basin and added high-quality assets.

Speaker #2: We added more than 100 million cubic feet equivalent per day of production and nearly one TCFE of proof reserves through our leading position in the basin.

Speaker #2: Our upstream business remains foundational to our growth strategy. We believe we have built a scalable, repeatable, and disciplined operating model for extracting value from mid-tenured shale basins.

Speaker #2: Our team is at the forefront of driving efficiency, by leveraging technology, data, and AI to optimize development and performance across our portfolio. This is a model that we believe wins in mid-tenured gas basins over the long term.

Chris Kalnin: Our team is at the forefront of driving efficiency by leveraging technology, data, and AI to optimize development and performance across our portfolio. This is a model that we believe wins in mid-tenured gas basins over the long term. In our carbon capture business, we had meaningful progress in 2025. Earlier in the year, we secured a transformative partnership with Copenhagen Infrastructure Partners, or CIP, who committed up to $500 million for joint investment in carbon capture opportunities. We are working hand-in-hand with their team to scale this business profitably. Our flagship Barnett Zero facility continues to operate efficiently and has achieved cumulative injection of over 311,000 metric tons since first injection in November 2023. Further, we have announced multiple new projects during the year, including projects in Texas with a large midstream operator and Comstock Resources.

Speaker #2: In our carbon capture business, we had meaningful progress in 2025. Earlier in the year, we secured a transformative partnership with Copenhagen Infrastructure Partners, or CIP, who committed up to $500 million for joint investment in carbon capture opportunities.

Speaker #2: We are working hand in hand with their team to scale this business profitably. Our flagship Barnett Zero facility continues to operate efficiently, and has achieved cumulative injection of over 311,000 metric tons since first injection in November 2023.

Speaker #2: Further, we have announced multiple new projects during the year, including projects in Texas, with a large midstream operator, and Comstock Resources. We recently signed definitive agreements with Comstock Resources to sequester CO2 from their Bethel and Marquet facilities in the western Hainesville Play.

Chris Kalnin: We recently signed definitive agreements with Comstock Resources to sequester CO2 from their Bethel and Marquez facilities in the Western Haynesville Play. We expect to commence commercial operations in 2028. I would like to thank Jay and his team for their continued strong partnership in these projects. BKV has taken a clear leadership position in carbon capture and materially advanced the projects in our pipeline towards commerciality. On the back of that momentum, we are refreshing our near-term CCUS injection target to 1.5 million tons per annum within 2028. Carbon capture remains a key growth driver in 2026 and beyond.

Speaker #2: We expect to commence commercial operations in 2028. I would like to thank Jay and his team for their continued strong partnership in these projects.

Speaker #2: BKV has taken a clear leadership position in carbon capture, and materially advanced the projects in our pipeline towards commerciality. On the back of that momentum, we are refreshing our near-term CCUS injection target to 1.5 million tons per annum within 2028.

Speaker #2: We believe this volume run rate will enable the business to contribute materially to our financials. Carbon capture remains a key growth driver in 2026 and beyond.

Speaker #2: We remain on track for the startup of our Cotton Cove and Eagle Ford facilities in the first half of 2026, and are excited about the future opportunities in this business.

Chris Kalnin: We remain on track for the startup of our Cotton Cove and Eagle Ford facilities in the first half of 2026 and are excited about the future opportunities in this business. Our power business is a core growth engine within our closed-loop strategy. On the back of our recent power JV transaction, which closed on 30 January, we now hold a 75% majority ownership in the 1.5 GW of low heat rate generation capacity at the Temple plants, which are located at the center of ERCOT's accelerating AI and data center boom. BKV's power assets performed well during Winter Storm Fern. Within ERCOT, natural gas supplied nearly 60% of power generation through periods of peak load. This represents nearly 4 times the next closest source and reinforces the central role of natural gas in ensuring grid reliability.

Speaker #2: Our power business is a core growth engine within our closed-loop strategy. On the back of our recent Power JV transaction, which closed on January 30th, we now hold a 75% majority ownership in the 1.5 gigawatts of low-heat-rate generation capacity at the Temple plants, which are located at the center of ERCOT's accelerating AI and data center boom.

Speaker #2: BKV's power assets performed well during winter storm Fern. Within ERCOT, natural gas supplied nearly 60% of power generation through periods of peak load. This represents nearly four times the next closest source and reinforces the central role of natural gas in ensuring grid reliability.

Speaker #2: We are well positioned to deliver capital-efficient growth from these assets, as we seek to secure long-term fixed off-take agreements in the form of power purchase agreements or PPAs.

Chris Kalnin: We are well positioned to deliver capital-efficient growth from these assets as we seek to secure long-term fixed offtake agreements in the form of power purchase agreements or PPAs. In the second half of 2025, we continued to advance our structured and competitive process to secure a long-term offtaker for our Temple Energy Complex. We are currently evaluating proposals from multiple counterparties, which have shown strong interest in our offering. The broad participation in this process has reinforced our conviction that our Temple Energy Complex is uniquely positioned to provide near-term power solutions to some of the largest technology companies and infrastructure developers in the country. We remain confident in the timelines we previously outlined and continue to target a potential PPA in 2026 to early 2027.

Speaker #2: In the second half of 2025, we continue to advance our structured and competitive process to secure a long-term off-taker for our Temple energy complex.

Speaker #2: We are currently evaluating proposals from multiple counterparties, which have shown strong interest in our offering. The broad participation in this process has reinforced our conviction that our Temple energy complex is uniquely positioned to provide near-term power solutions to some of the largest technology companies and infrastructure developers in the country.

Speaker #2: We remain confident in the timelines we previously outlined and continue to target a potential PPA in 2026 to early 2027. BKV's position in the state of Texas is ideally situated to benefit from the mega-trends in energy.

Chris Kalnin: BKV's position in the state of Texas is ideally situated to benefit from the confluence of some of the biggest megatrends in energy. The Barnett Shale in the Fort Worth Basin sits underneath one of the fastest-growing markets for power and industrial growth in the country. We believe Texas is set to attract significant investment dollars in data center and other infrastructure over the coming years. BKV is working closely with state regulators, policymakers, and stakeholders to ensure investments in power and other forms of energy generate win-win outcomes for the state. Our strategy is backed by a systematic investment approach, which combines the winning formula of gas, power, and carbon capture to generate premium margins from our energy portfolio.

Speaker #2: The Barnett Shale in the Fort Worth Basin sits underneath one of the fastest-growing markets for power and industrial growth in the country. We believe Texas is set to attract significant investment dollars in data center and other infrastructure over the coming years.

Speaker #2: BKV is working closely with state regulators, policymakers, and stakeholders to ensure investments in power and other forms of energy generate win-win outcomes for the state.

Speaker #2: Our strategy is backed by a systematic investment approach, which combines the winning formula of gas, power, and carbon capture to generate premium margins from our energy portfolio.

Speaker #2: Our carbon sequestered gas product which we expect to hit the market this year is a prime example of the unique energy products that BKV's closed-loop strategy can bring to the market.

Chris Kalnin: Our Carbon Sequestered Gas product, which we expect to hit the market this year, is a prime example of the unique energy products that BKV's closed-loop strategy can bring to the market. BKV is excited about the future, as we believe our differentiated strategy will create leading risk-adjusted returns for our shareholders. With that, I'd like to hand the call over to BKV's President of Upstream, Eric Jacobsen, to discuss our upstream and CCUS operational performance for the quarter and full year.

Speaker #2: BKV is excited about the future as we believe our differentiated strategy will create leading risk-adjusted returns for our shareholders. With that, I'd like to hand the call over to BKV's President of Upstream, Eric Jacobsen, to discuss our Upstream and CCUS operational performance for the quarter and full year.

Speaker #2: Thanks, Chris. 2025 was an outstanding year for our operations, capped by a strong fourth quarter that highlighted the depth and quality of our asset base, the strength of our team, and the discipline deficient approach we apply across the business.

Eric Jacobsen: Thanks, Chris. 2025 was an outstanding year for our operations, capped by a strong Q4 that highlighted the depth and quality of our asset base, the strength of our team, and the disciplined, efficient approach we apply across the business. For the full year 2025, our upstream business delivered, in many cases, exceeded the targets we previously set, including the following highlights. We delivered robust and organic production growth of 8% exit to exit, while spending well within upstream cash flow and driving continued cost efficiencies. We beat and raised our full year legacy production guidance twice in the year, by 4% at midyear and then by another 1%, all within our initial development CapEx while maintaining LOE at the midpoint of guidance. We achieved a step change in completions efficiency, setting multiple internal records above 22 horsepower hours per day.

Speaker #2: For the full year 2025, our Upstream business delivered and in many cases exceeded the targets we previously set including the following highlights. We delivered robust and organic production growth of 8% exit to exit, while spending well within Upstream cash flow and driving continued cost efficiencies.

Speaker #2: We beat and raised our full-year legacy production guidance twice in the year, by 4% at mid-year and then by another 1%, all within our initial development capex and while maintaining LOE at the midpoint of guidance.

Speaker #2: We achieved a step change in completions efficiency, setting multiple internal records above 22 horsepower-hours per day. We drilled several company-record laterals, including the longest well in the history of the Barnett Shale.

Eric Jacobsen: We drilled several company record laterals, including the longest well in the history of the Barnett Shale. We delivered top-tier performing new Barnett wells, with three ranking among the highest in the entire history of the basin, based on first-month production. We lowered DNC cost per lateral foot to a gas peer-leading $545 per foot. We achieved consistent and sustained positive offset well, or POW, production, a unique advantage in the Barnett, which we discuss further in our investor presentation. We delivered lowest base decline amongst our peers, supported by our extensive data set and application of AI technology. We seamlessly integrated our recently acquired Bedrock assets, adding scale and inventory to our leading Barnett position. We ended the year with approximately 6 TCFE of 1P reserves, valued at NYMEX NPV 10 of $3.1 billion.

Speaker #2: We delivered top-tier performing new Barnett wells with three ranking among the highest in the entire history of the basin based on first month production.

Speaker #2: We lowered D&C cost per lateral foot to a gas peer leading $545 per foot. We achieved consistent and sustained positive offset well or PAL production a unique advantage in the Barnett which we discussed further in our investor presentation.

Speaker #2: We delivered lowest base decline amongst our peers supported by our extensive data set and application of AI technology. We seamlessly integrated our recently acquired Bedrock assets adding scale and inventory to our leading Barnett position.

Speaker #2: And we ended the year with approximately six trillion cubic feet equivalent of 1P reserves, valued at 9x NPV10 of $3.1 billion. The fourth quarter was a continuation of the results we had seen all year.

Eric Jacobsen: The Q4 was a continuation of the results we had seen all year. We again outperformed guidance across key metrics, punctuated by zero reportable safety incidents, production that outperformed the upper end of our guidance range at 940 million cubic feet equivalent per day. We delivered our first NEPA well to production for the year and drilled three additional wells, with completions expected in mid to late Q1 of 2026. We had over $6 million invested in rapidly progressing Bedrock development, landing full year 2025 development capital spend at $245 million. To note, we invested $319 million all in corporate CapEx, which was below the initial low end of full year guidance. We executed our first post-acquisition completions on the Bedrock assets, including two DUCs and two refracs, with strong results.

Speaker #2: We again outperformed guidance across key metrics, punctuated by zero reportable safety incidents. Production outperformed the upper end of our guidance range at 940 million cubic feet equivalent per day. We delivered our first NEPA well to production for the year and drilled three additional wells, with completions expected in mid to late Q1 of '26.

Speaker #2: And we had over 6 million dollars invested in rapidly progressing Bedrock development landing full year 2025 development capital spend at $245 million. To note, we invested $319 million all in corporate capex which was below the initial low end of full-year guidance.

Speaker #2: And we executed our first post-acquisition completions on the Bedrock assets including two ducks and two refracts with strong results. One more example of Barnett competitiveness and an important proof point in the continued optimization of the Barnett development is what we refer to as positive offset wells or PAL.

Eric Jacobsen: One more example of Barnett competitiveness and an important proof point in the continued optimization of the Barnett development, is what we refer to as positive offset wells or POW. In addition to new wells outperforming type curve expectations, we are consistently observing a material and sustained uplift in parent well performance across our DSUs following new completions. Based on early analysis across approximately 30 new wells and their offsets, we have seen an approximate 22% uplift above type curve on average through the first 150 days of production. Roughly half of this outperformance is due to POW. Whether POW, peer-leading DNC cost, structurally lowered operating costs, or applying big data and AI, these and more combine to validate our comprehensive operating approach of delivering durable value over the long term. There are more innings yet to go.

Speaker #2: In addition to new wells outperforming type curve expectations, we are consistently observing a material and sustained uplift in parent well performance across our DSUs following new completions.

Speaker #2: Based on early analysis across approximately 30 new wells and their offsets, we have seen an approximate 22% uplift above type curve on average through the first 150 days of production. Roughly half of this outperformance is due to PAL.

Speaker #2: Whether PAL, peer leading D&C cost, structurally lowered operating costs, or applying big data and AI, these and more combined to validate our comprehensive operating approach of delivering durable value over the long term.

Speaker #2: And there are more innings yet to go. It is a model that we believe wins in every mid-10-year gas basin. We are applying that model to our Bedrock acquisition, which has proven to be everything we anticipated and more, with integration progressing ahead of pace.

Eric Jacobsen: It is a model that we believe wins in every mid-tenured gas basin. We are applying that model to our Bedrock acquisition, which has proven to be everything we anticipated and more, with integration progressing ahead of pace. The assets fit seamlessly with our existing acreage position, creating further opportunities for lateral extensions, inventory additions, and multiple optimization levers. As an example of further accreting value, or what we call torque, we are actively evaluating over 60 equivalent 10,000 foot Tier One locations, compared to 50 underwritten, and over 100 refrac candidates, compared to 80 underwritten. Importantly, value creation from the acquisition is exceeding our underwriting assumptions in development counts, early time performance, day one LOE reductions, and other areas reflecting our ability to apply torque to the asset and unlock incremental synergies and value.

Speaker #2: The assets fit seamlessly with our existing acreage position creating further opportunities for lateral extensions inventory additions and multiple optimization levers. As an example of further accreting value or what we call torque, we are actively evaluating over 60 equivalent 10,000 foot tier one locations compared to 50 underwritten and over 100 refract candidates compared to 80 underwritten.

Speaker #2: Importantly, value creation from the acquisition is exceeding our underwriting assumptions in development counts, early time performance, day one LOE reductions, and other areas reflecting our ability to apply torque to the asset and unlock incremental synergies and value.

Speaker #2: These assets complement our low base decline attractive economics and highly competitive and accretive inventory opportunities which are all trademarks of our dominant Barnett position.

Eric Jacobsen: These assets complement our low base decline, attractive economics, and highly competitive and accretive inventory opportunities, which are all trademarks of our dominant Barnett position. Our performance throughout 2025 confirms that the Barnett is not only alive and well, but highly attractive and ideally positioned relative to other shale plays with advantaged access to the heart of the Gulf Coast gas market. Looking ahead to 2026, we expect continued strong performance from our upstream operations, enhanced by the full integration of our Bedrock assets. While the impacts of Winter Storm Fern resulted in significant and unanticipated downtime, we still expect strong production in the range of 900 to 930 million cubic feet equivalent per day during Q1. Development CapEx spend in the Q1, we anticipate to be in a range of $70 to 100 million.

Speaker #2: Our performance throughout 2025 confirms that the Barnett is not only alive and well but highly attractive and ideally positioned relative to other shale plays with advantaged access to the heart of the Gulf Coast gas market.

Speaker #2: Looking ahead to 2026, we expect continued strong performance from our upstream operations enhanced by the full integration of our Bedrock assets. While the impacts of winter storm Fern resulted in significant and unanticipated downtime, we still expect strong production in the range of 900 to 930 million cubic feet equivalent per day during Q1.

Speaker #2: Development capex spend in the first quarter we anticipate to be in a range of 70 to 100 million dollars. For the full year 2026, we are guiding to 935 million cubic feet equivalent per day of production on 240 million of development capital spend right in line with our 2025 development program.

Eric Jacobsen: For the full year 2026, we are guiding to 935 million cubic feet equivalent per day of production on $240 million of development capital spend, right in line with our 2025 development program. Our upstream business continues to serve as the backbone of our closed-loop operations model, generating the cash flow that enables growth across all our business lines while maintaining operational excellence and capital efficiency. Turning to carbon capture, 2025 was a year of strong and accelerating momentum for the business. Against a backdrop of growing market demand and supportive policy tailwinds, we advanced multiple projects across our portfolio, progressing them through critical stages of evaluation, development, and execution.

Speaker #2: Our upstream business continues to serve as the backbone of our closed-loop operations model, generating the cash flow that enables growth across all our business lines while maintaining operational excellence and capital efficiency.

Speaker #2: Turning to carbon capture, 2025 was a year of strong and accelerating momentum for the business. Against a backdrop of growing market demand, and supported policy tailwinds, we advanced multiple projects across our portfolio progressing them through critical stages of evaluation, development, and execution.

Speaker #2: Key highlights from the continued expansion and maturation of our development pipeline include our Eagleford and Cotton Cove projects continuing to progress as planned, with commencement of operations at both locations on track.

Eric Jacobsen: Key highlights from the continued expansion and maturation of our development pipeline include our Eagle Ford and Cotton Cove projects continue to progress as planned, with commencement of operations at both locations on track. At our East Texas project, where we are working with the same large midstream company as we are in the Eagle Ford, we have reached internal FID and are currently scheduled to begin drilling the injection well in the first half of this year. We also plan to drill our High West stratigraphic test well in the first half of the year. In addition, as Chris mentioned, we have recently executed definitive agreements with Comstock to add CCUS to their Bethel and Marquette facilities in the Western Haynesville Play in East Texas.

Speaker #2: At our East Texas project, where we are working with the same large midstream company as we are in the Eagle Ford, we have reached internal FID and are currently scheduled to begin drilling the injection well in the first half of this year.

Speaker #2: And we also plan to drill our high west stratigraphic test well in the first half of the year. In addition, as Chris mentioned, we have recently executed definitive agreements with Comstock to add CCUS to their Bethel and Marquet facilities in the western Haynesville play in East Texas.

Speaker #2: We continue to advance discussions on additional CCUS opportunities with new partners and emitters with a focus on larger projects that offer Several of these opportunities are referenced in our updated investor presentation and we look forward to providing updates as appropriate.

Eric Jacobsen: We continue to advance discussions on additional CCUS opportunities with new partners and emitters, with a focus on larger projects that offer greater economies of scale. Several of these opportunities are referenced in our updated investor presentation, and we look forward to providing updates as appropriate. Our flagship Barnett Zero facility continues to maintain exceptional reliability, providing the operating model that we will apply to our soon-to-be-commissioned projects. Given our continued execution and expanding project base, our path to achieving 1.5 million tons per year run rate CO2 injection during 2028 is well within reach. In addition to the projects currently underway, we have commissioned several studies to evaluate the feasibility and cost profile of deploying post-combustion carbon capture technologies.

Speaker #2: Our flagship Barnett Zero facility continues to maintain exceptional reliability providing the operating model that we will apply to our soon to be commissioned projects.

Speaker #2: Given our continued execution and expanding project base, our path to achieving 1.5 million tons per year run rate CO2 injection during 2028 is well within reach.

Speaker #2: In addition to the projects currently underway, we have commissioned several studies to evaluate the feasibility and cost profile of deploying post-combustion carbon capture technologies.

Speaker #2: Demand signals continue to strengthen across power and industrial markets as customers seek reliable low carbon energy solutions and we are positioning the business to remain a leader in this space.

Eric Jacobsen: Demand signals continue to strengthen across power and industrial markets as customers seek reliable, low-carbon energy solutions, and we are positioning the business to remain a leader in this space. I'll now turn the call over to our CFO, David Tameron, for a review of our power, business, and financial results.

Speaker #2: I'll now turn the call over to our CFO, David Tameron, for a review of our power business and financial results.

Speaker #1: Thank you, Eric. 2025 was a year of meaningful progress for BKV as we continue to execute and deliver on our promises. We had significant transactions in upstream power and CCUS.

David Tameron: Thank you, Eric. 2025 was a year of meaningful progress for BKV as we continue to execute and deliver on our promises. We had significant transactions in upstream, power, and CCUS. We strengthened our balance sheet and improved our capital structure, issuing our first-ever bond, while also increasing float and improving liquidity in our stock. We enter 2026 with significant momentum and are well-positioned to capitalize on our strategic initiative. In our power business, we deliver consistent performance throughout 2025, with the Temple Energy Complex maintaining high availability factors, minimal unplanned downtime, and strong operational execution. The Temple plants achieved a combined average capacity factor of 57% during the Q4 of 2025, and 59% for full year 2025, generating over 7,600 gigawatt hours.

Speaker #1: We strengthened our balance sheet and improved our capital structure. Issuing our first ever bond while also increasing float and improving liquidity in our stock.

Speaker #1: We entered 2026 with significant momentum and are well positioned to capitalize on our strategic initiative. In our power business, we deliver consistent performance throughout 2025 with the Temple Energy Complex maintaining high availability factors minimal unplanned downtime and strong operational execution.

Speaker #1: The Temple plants achieved a combined average capacity factor of 57% during the fourth quarter of 2025 and 59% for full year 2025 generating over 7,600 gigawatt hours.

Speaker #1: During the fourth quarter, power prices averaged $49.69 per megawatt hour, with natural gas costs averaging $3.55 per MMBtu. This resulted in an average quarterly spark spread of $24.54 per megawatt hour.

David Tameron: During Q4, power prices averaged $49.69 per MWh, with natural gas costs averaging $3.55 per MMBtu. This resulted in an average quarterly spark spread of $24.54 per MWh. For the full year, power prices averaged $48.86 per MWh, with natural gas costs averaging $3.31 per MMBtu. This resulted in an average full-year spark spread of $25.36. Underscoring the growing power demand in ERCOT, average spark spreads for the full year were up over 15% versus the prior year. Power JV adjusted EBITDA was $31 million for Q4 and $127 million for the full year, of which BKV had a 50% interest.

Speaker #1: For the full year, power prices averaged $48.86 per megawatt hour with natural gas costs averaging $3.31 per MMBTU. This resulted in an average full year spark spread of $25.36.

Speaker #1: Underscoring the growing power demand in ERCOT, average spark spreads for the full year were up over 15% versus the prior year. Power JV adjusted EBITDA was $31 million for the fourth quarter and $127 million for the full year of which BKV had a 50% interest.

Speaker #1: Reflecting our new controlling ownership stake, beginning with our first quarter 2026 results, we will consolidate the Power JV. For the first quarter, we expect gross Power JV EBITDA of $25 to $35 million, reflecting typical seasonal patterns, capture of storm-related power pricing, and strong operational performance thus far in the quarter.

David Tameron: Reflecting our new controlling ownership stake, beginning with our Q1 2026 results, we will consolidate the power JV. For the Q1, we expect gross power JV EBITDA of $25 to 35 million, reflecting typical seasonal patterns, capture of storm-related power pricing, and strong operational performance thus far in the quarter. Importantly, we weathered Winter Storm Fern without any related downtime. This is an important proof point for the reliability of our Temple assets as we engage in PPA off-taker discussions. For full year 2026, we are guiding to a power JV EBITDA range of $135 to 175 million. This outlook reflects the strength of the platform we've built, continued operational execution, and confidence in the earning power of our Temple assets. Turning to our 2025 corporate financial performance.

Speaker #1: Importantly, we weathered winter storm Fern without any related downtime. This is an important proof point for the reliability of our Temple assets as we engage in PPA off picker discussions.

Speaker #1: For full year 2026, we are guiding to a Power JV EBITDA range of $135 to $175 million. This outlook reflects the strength of the platform we've built continued operational execution and confidence in the earning power of our Temple assets.

Speaker #1: Turning to our 2025 corporate financial performance, these results clearly demonstrate our team's relentless focus on execution and ability to consistently deliver. Combined adjusted EBITDA attributable to BKV was $109 million in the fourth quarter and $390 million for the full year.

David Tameron: These results clearly demonstrate our team's relentless focus on execution and ability to consistently deliver. Combined adjusted EBITDA attributable to BKV was $109 million in Q4 and $390 million for the full year. This represented a 19% increase quarter-over-quarter and a 47% increase year-over-year. For Q4, adjusted net income was $27 million or $0.29 per diluted share. For full year 2025, adjusted net income totaled $122 million, or $1.40 per diluted share. Capital expenditures totaled $102 million for Q4 and $319 million for the full year. This full year result is below the low end of our original guidance, reflecting highly competitive capital efficiency and our ongoing attention to capital discipline and cost optimization.

Speaker #1: This represented a 19% increase quarter over quarter and a 47% increase year on year. For the fourth quarter, adjusted income was $27 million, or $0.29 per diluted share.

Speaker #1: For the full year 2025, adjusted income totaled $122 million, or $1.40 per diluted share. Capital expenditures totaled $102 million for the fourth quarter and $319 million for the full year.

Speaker #1: This full year result is below the loan of our original guidance reflecting highly competitive capital efficiency and our ongoing attention to capital discipline and cost optimization.

Speaker #1: Importantly, after fully funding all capital investments across our business lines and excluding any cash contribution from a Power JV, we generated positive free cash flow for the entire year.

David Tameron: Importantly, after fully funding all capital investments across our business lines and excluding any cash contribution from our power JV, we generated positive free cash flow for the entire year. We did this while further strengthening our balance sheet and improving our liquidity. At year-end, total debt was $500 million, with the only debt outstanding reflecting our recently issued senior notes. Net leverage ratio was 0.9x. Cash and cash equivalents totaled $199 million, and total liquidity stood at $984 million, more than double the prior year. Looking ahead, our 2026 capital investment program is structured to lay the foundation for a multi-year phase of disciplined growth. There are three key components of this program.

Speaker #1: And we did this while further strengthening our balance sheet and improving our liquidity. At year-end, total debt was $500 million, with the only debt outstanding reflecting our recently issued senior notes.

Speaker #1: Net leverage ratio was 0.9 times. Cash and cash equivalents totaled $199 million, and total liquidity stood at $984 million — more than double the prior year.

Speaker #1: Looking ahead, our 2026 capital investment program is structured to lay the foundation for a multi-year phase of disciplined growth. There are three key components of this program.

Speaker #1: First, total gross capital expenditures of $410 to $560 million including an anticipated $135 million of gross strategic power capital. This power investment reflects the constructive conversations we are having with multiple potential PPA off takers.

David Tameron: First, total growth capital expenditures of $410 to 560 million, including an anticipated $135 million of gross strategic power capital. This power investment reflects the constructive conversations we are having with multiple potential PPA off-takers. Second, on a net basis and excluding our power growth capital, we are targeting a net capital investment midpoint of $324 million, effectively flat year-on-year. Third, importantly, based on current strip pricing, just as we did in 2025, we expect our total full year net capital expenditures to be fully funded within cash flow. This approach reinforces our commitment to disciplined capital allocation while positioning the company for sustainable long-term value creation. Regarding hedging, our program continues to provide downside protection while allowing participation in favorable market conditions.

Speaker #1: Second, on a net basis and excluding our power growth capital, we are targeting a net capital investment midpoint of $324 million, effectively flat year on year.

Speaker #1: Third, and importantly, based on current strip pricing and just as we did in 2025, we expect our total full year net capital expenditures to be fully funded within cash flow.

Speaker #1: This approach reinforces our commitment to disciplined capital allocation while positioning the company for sustainable long-term value creation. Regarding hedging, our program continues to provide downside protection while allowing participation in favorable market conditions.

Speaker #1: And our upstream business, our total 2026 hedge position protects just over 60% of forecasted production with gas hedged at $3.85 per MMBTU and NGOs hedged at $22 per barrel.

David Tameron: In our upstream business, our total 2026 hedge position protects just over 60% of forecasted production, with gas hedged at $3.85 per MMBtu and NGLs hedged at $22 per barrel. In our power business, for 2026, we have hedged 40% of our ERCOT generation capacity through heat rate call options or HRCOs. These HRCOs include substantial premium revenues that help mitigate annual earnings volatility. We've also locked in fixed spark spreads on roughly 100 megawatts, while retaining meaningful merchant exposure across the balance of the platform. For the remainder of our 2026 guidance, please refer to our complete schedule, which can be found both in the press release and our latest investor deck. With that, I'll turn the call back to Chris for his closing remarks.

Speaker #1: In our power business, for 2026, we have hedged 40% of our ERCOT generation capacity through heat rate call options or HERCOs. These HERCOs include substantial premium revenues that help mitigate annual earnings volatility.

Speaker #1: We've also locked in fixed spark spreads on roughly $100 megawatts while retaining meaningful merchant exposure across the balance of the platform. For the remainder of our 2026 guidance, please refer to our complete schedule which can be found both in the press release and our latest investor deck.

Speaker #1: With that, I'll turn the call back to Chris for his closing remarks.

Speaker #2: Thanks, David. As we conclude our discussion of 2025 and look ahead to 2026, I want to highlight what truly differentiates BKV. We have built a distinctive winning strategy connecting natural gas production power generation and carbon capture into a virtual closed loop platform uniquely positioned to serve the evolving needs of the energy market.

Chris Kalnin: Thanks, David. As we conclude our discussion of 2025 and look ahead to 2026, I want to highlight what truly differentiates BKV. We have built a distinctive winning strategy, connecting natural gas production, power generation, and carbon capture into a virtual closed-loop platform, uniquely positioned to serve the evolving needs of the energy market. This strategy is operating today, delivering results, positions us to shape solutions for the evolving needs of hyperscalers, data center developers, and industrial customers. Looking ahead to 2026, we see clear growth vectors. Increased control of our power JV is expected to enhance earnings and cash flow, while enabling tangible strides towards executing a PPA. Our CCUS business is accelerating momentum, with additional projects coming online soon with an increasingly high-graded portfolio of attractive projects in development.

Speaker #2: This strategy is operating today delivering results and positions us to shape solutions for the evolving needs of hyperscalers, data center developers, and industrial customers.

Speaker #2: Looking ahead, the 2026, we see clear growth vector. Increased control of our Power JV is expected to enhance earnings and cash flow while enabling tangible strides towards executing a PPA.

Speaker #2: Our CCUS business is accelerating momentum with additional projects coming online soon and with an increasingly high-graded portfolio of attractive projects in development. Our upstream business remains a reliable, repeatable cash engine with leading corporate decline rates and F&D metrics.

Chris Kalnin: Our upstream business remains a reliable, repeatable cash engine with leading corporate decline rates and F&D metrics. Finally, I want to thank our exceptional BKV team for their commitment to our values, our safety culture, and their focus on the execution of our strategy. We enter 2026 with strong momentum, clear line of sight to growth, and confidence in our ability to create long-term, risk-adjusted shareholder value. Operator, we are now ready to take questions.

Speaker #2: Finally, I want to thank our exceptional BKV team for their commitment to our values our safety culture and their focus on the execution of our strategy.

Speaker #2: We enter 2026 with strong momentum clear line of sight to growth and confidence in our ability to create long-term risk-adjusted shareholder value. Operator, we are now ready to take questions.

Speaker #3: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.... We ask that analysts limit themselves to one question and a follow-up so that others have the opportunity to do so as well. One moment please, while we poll for questions. Our first question comes from Betty Jiang with Barclays. Please proceed with your question.

Speaker #3: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #3: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that analysts limit themselves to one question and a follow-up so that others have the opportunity to do so as well.

Speaker #3: One moment, please, while we pull for questions. Our first question comes from Betty Jiang with Barclays. Please proceed with your question.

Speaker #4: Hi, good morning. Team, congrats on just strong execution across all segments in your first year. I want to start up with a question on the strategic power growth CapEx.

Betty Jiang: Hi, good morning, team. Congrats on just strong execution across all segments in your 1st year. I want to start up with a question on the strategic power growth CapEx. Chris, can you speak to what specifically is that spending on? Clearly, it's not maintenance, and it's aligned with the progress in the conversation that you are seeing. Can you just give us a bit more color on, is this spending ahead of contracts that you're expected to sign later this year or early next year? Thanks.

Speaker #4: Can you just Chris, can you speak to what specifically is that spending on clearly, it's not maintenance and it's aligned with the progress in the conversation that you are seeing.

Speaker #4: So, can you just give us a bit more color on—is it spending ahead of contracts that you're expecting to sign later this year or early next year?

Speaker #4: Thanks.

Speaker #5: Yeah. Hey, Betty. Thanks for the question. So you're correct. The power investments are strategic. As you can imagine right now, as you discuss long-term off-take agreements with potential customers, those designs are going to be in a private use network type setup.

Chris Kalnin: Yeah. Hey, Betty. Thanks for the question. You know, you're correct, the power investments are strategic. As you can imagine right now, you know, as you discuss long-term offtake agreements with potential customers, those designs are gonna be in a private use network type setup. That's the assumption here. As part of a private use network, you need to invest in transformers, switches, power lines, you know, generation equipment, earthworks, pipelines, water, and that infrastructure then gets recovered over the life of a contract, right? What we're guiding here is that we've got a, you know, line of sight to designs and/or investments that need to be made to enable this, and that's really where you see that capital.

Speaker #5: That's the assumption here. And so as part of a private use network, you need to invest in transformers, switches, power lines, generation equipment, earthworks.

Speaker #5: Pipelines, water. And that infrastructure then gets recovered over the life of a contract, right? And so what we're guiding here is that we've got line of sight to designs and/or investments that need to be made to enable this.

Speaker #5: And that’s really where you see that capital when you think about the existing Temple One, Temple Two CapEx. You could imagine historically that’s been in that sort of $5 million-ish per year level, and we expect that to continue.

Chris Kalnin: You think about the existing Temple I CapEx, you know, you could imagine historically, that's been in that sort of $5 million-ish per year level, and we expect that to continue. The vast majority of what we're guiding here to is really for establishment of a private use network type setup, and that's, again, we think, incredibly important to accreting value in a very capital efficient manner for BKV.

Speaker #5: So the vast majority of what we're guiding here to is really for establishment of a private-use network type setup. And that's, again, we think, incredibly important to accreting value in a very capital-efficient manner for BKV.

Speaker #5: Yeah, Betty, just if I could tack on one thing. Just keep in mind that all this is going to be funded within cash flow.

David Tameron: Yeah, Betty, and just if I could tack on one thing, just keep in mind that all this is gonna be funded within cash flow. Our entire 2026 program, including this power strategic power capital, is gonna be within cash flow for 2026.

Speaker #5: Our entire '26 program, including this strategic power capital, is going to be within cash flow for 2026.

Speaker #4: Got it. And I also sounds like you will recover this CapEx in that PPA contract down the line as well. So.

Betty Jiang: Got it. It also sounds like you will recover this CapEx in that PPA contract down the line as well.

Speaker #5: Exactly. It works just like a lease, Betty, if you invest in landlord puts in infrastructure, then they recover it in the rent. It's the same concept, right?

Chris Kalnin: Exactly. It works just like a lease, Betty, if you invest and, you know, the landlord puts in infrastructure, then they recover it in the rent. It's the same concept, right? In a PPA, you basically amortize the cost of your capital over the life of a contract as part of the investments you make.

Speaker #5: In a PPA, you basically amortize the cost of your capital. Over the life of a contract as part of the investments you make.

Speaker #4: Got it. That makes sense. My follow-up is on the CCS business. It's really good to see that. Million ton per annum target getting raised to 1.5.

Betty Jiang: Got it. That makes sense. My follow-up is on the CCS business. It's really good to see that million ton per annum target getting raised to 1.5. Clearly momentum on that asset. Can you speak to the financial implication of that business going forward? Maybe help us with a maybe dollar per ton margin on that business, and what are you seeing in the market to drive that confidence to raise that long-term target?

Speaker #4: Clearly, momentum on that asset. Can you speak to the financial implication of that business going forward? Maybe help us with maybe dollar per ton margin on that business and what are you seeing in the market to drive that confidence to raise that long-term target?

Speaker #5: Hi, good morning, Betty. This is Eric. Yeah, thanks for the question on CCUS. It's a good one. And we've signaled before, on the back of the passage of the One Big Beautiful Bill Act, some expanded commercial interest—we continue to see that.

Chris Kalnin: Hi, good morning, Betty. This is Eric. Yeah, thanks for the question on CCUS. It's a good one, and we've signaled before on the back of the passage of the One Big Beautiful Bill Act, some expanded commercial interest. We continue to see that. That commercial interest and the subsequent projects like Comstock that we were excited to announce definitive agreements reached upon, in total, has given us the confidence to raise that target to 1.5 million tons run rate within 2028. We're stair stepping into that already this year, with two more projects coming on in the first half. We'll be drilling another injection well, a High West stratigraphic well and then advancing these commercial agreements like Comstock towards FID.

Eric Jacobsen: Hi, good morning, Betty. This is Eric. Yeah, thanks for the question on CCUS. It's a good one, and we've signaled before on the back of the passage of the One Big Beautiful Bill Act, some expanded commercial interest. We continue to see that. That commercial interest and the subsequent projects like Comstock that we were excited to announce definitive agreements reached upon, in total, has given us the confidence to raise that target to 1.5 million tons run rate within 2028. We're stair stepping into that already this year, with two more projects coming on in the first half. We'll be drilling another injection well, a High West stratigraphic well and then advancing these commercial agreements like Comstock towards FID.

Speaker #5: And that commercial interest, and the subsequent projects like Comstock that we were excited to announce definitive agreements reached upon, in total, has given us the confidence to raise that target to a 1.5 million tons run rate within 2028.

Speaker #5: So we're stair-stepping into that already this year with two more projects coming on in the first half. We'll be drilling another injection well, a high-west stratigraphic well, and then advancing these commercial agreements like Comstock towards economics of these projects and the kind of $48 per ton EBITDA range.

Chris Kalnin: You can think about the economics of these projects in the kind of $48 per ton EBITDA range, and those are the kind of solid economics we use as we march forward towards that 1.5 million tons.

Eric Jacobsen: You can think about the economics of these projects in the kind of $48 per ton EBITDA range, and those are the kind of solid economics we use as we march forward towards that 1.5 million tons.

Speaker #5: And those are the kind of solid economics we use as we march forward towards that 1.5 million tons.

Speaker #4: That's great. Thank you.

Betty Jiang: That's great. Thank you.

Speaker #5: You bet.

Chris Kalnin: You bet.

Speaker #4: Our next question comes from Scott Grubber with Citigroup. Please proceed with your question.

Operator: Our next question comes from Scott Gruber with Citigroup. Please proceed with your question.

Speaker #6: Yes, good morning. And I'll let go the congrats on the strong performance last year given multiple vectors of growth here. Chris, I wanted to come back to power.

Scott Gruber: Yes, good morning. I'll let go the congrats on a strong performance last year, given multiple vectors of growth here. Chris, I wanted to come back to power. You're investing in a private use network. Sounds like that's separate from the grid. So just wanted to confirm that. You know, there's discussions happening at ERCOT, you know, around alterations, you know, to their grid connect approval process. How is that impacting your discussions, you know, with potential customers, you know, for a longer-term PPA?

Speaker #6: Your investing in a private use network sounds like that's separate from a grid. So just wanted to confirm that. And then there's discussions happening at ERCOT around alterations to their grid connect approval process.

Speaker #6: How is that impacting your discussions with potential customers for a longer-term PPA?

Speaker #5: Yeah. Hey, Scott, thanks. Good questions. On the private use network, the setup would be ultimately to connect it back into the grid. So you can imagine it's a behind-the-meter setup.

Chris Kalnin: Yeah. Hey, Scott. Thanks. Good questions. On the private use network, the setup would be, ultimately to connect it back into the grid. You can imagine it's a behind the meter setup. You would, hypothetically connect into a data center directly from your generation assets, you would have a switching yard, that would feed a substation, which is grid connected. You know, think of it in, in simple terms, you know, the analogy would be sort of like a private use network that connects then into a broader grid. And, and those timelines may not match up one to one, that's the end goal.

Speaker #5: You would hypothetically connect into a data center directly from your generation assets. But then you would have a switching yard that would feed a substation, which is grid connected.

Speaker #5: And so think of it in simple terms. The analogy would be sort of like a private use network that connects then into a broader grid.

Speaker #5: And those timelines may not match up one-to-one. But that's the end goal. And so as we've mentioned, this is probably where you're going to see the market move with co-located power generation over the next few years.

Chris Kalnin: As we've mentioned, that this is probably where you're going to see the market move with co-located power generation over the next few years. The reason for that is manyfold, but a lot of it has to do with transmission congestion. One of the biggest constraints in the market, this will get to your second question, is the ability to kind of move electrons in sizable form in and out localized areas. Having co-located power in a private use network setup really does solve a lot of the issues associated with that. It optimizes the amount of CapEx that needs to be incorporated in the grid, and so that's really where we see the market going. In terms of the regulations specific for Texas and ERCOT, I think it's overall bullish.

Speaker #5: And the reason for that. As manyfold, but a lot of it has to do with transmission, congestion. One of the biggest constraints in the market, this will get to your second question, is the ability to kind of move electrons in sizable form in and out localized areas.

Speaker #5: And having co-located power in a private-use network setup really does solve a lot of the issues associated with that. It optimizes the amount of CapEx that needs to be incorporated into the grid.

Speaker #5: And so that's really where we see the market going. In terms of the regulations specific it's overall bullish. Look, Texas is going big on infrastructure, particularly data center infrastructure.

Chris Kalnin: Look, Texas is going big on infrastructure, particularly data center infrastructure. It's open for business. There's a very strong feeling here in the state to promote investments in the power grid. We think, you know, Texas is one of the states that's really going to figure this out quickly. BKV is taking a leadership position in power in Texas. With regards to the regulations themselves, the major concerns of the grid operators are: one, we want to ensure grid reliability. How are you considering that? Two, we want to make sure rates are fair and equitable to existing customers across the state. Three, we need to make sure that new investments built into the system are encouraged. The regulations are really orientating towards large load.

Speaker #5: It's open for business. There's a very strong feeling here in the state to promote investments in the power grid. And so we think Texas is one of the states that's really going to figure this out quickly.

Speaker #5: And BKV is taking a leadership position in power in Texas. With regards to the regulations themselves, the major concerns of the grid operators are, one, we want to ensure grid reliability.

Speaker #5: So how are you considering that? Two, we want to make sure rates are fair and equitable to existing customers across the state. And three, we need to make sure that new investments are built into the system or encouraged.

Speaker #5: And so the regulations are really oriented towards large load. That's the SB6 regulation that everyone's talking about here. And we think it's incredibly constructive because what they're doing is creating a framework to high-grade projects that address all those three things, right?

Chris Kalnin: That's the SB 6 regulation that everyone's talking about here. We think it's incredibly constructive because what they're doing is creating a framework to high grade projects that address all those three things, right? Grid reliability, ability to, you know, ensure equitable rates to existing customers in the state, and then adding grid generation assets. Our designs that we've been describing, including the CapEx I mentioned, address those three key points. We think this is going to high grade the projects that are real, that have real customers, that have real funding behind them, and weed out those projects which are speculative and sort of not as real.

Speaker #5: Grid reliability, ability to ensure equitable rates to existing customers in the state, and then adding grid generation assets. And our designs that we've been describing, including the CapEx I mentioned, address those three key points.

Speaker #5: So we think this is going to high-grade the projects that are real, that have real customers, that have real funding behind them, and weed out those projects which are speculative and sort of not as real.

Speaker #5: So overall, I think we're active with the regulators and the stakeholders here in the state. And we think that Texas figures this out very quickly.

Chris Kalnin: Overall, I think we're active with the regulators and the stakeholders here in the state, and we think that Texas figures this out very quickly, and I think a lot of customers have that same view.

Speaker #5: And I think a lot of customers have that same view.

Speaker #6: Yeah, I appreciate all the color. And I also want to turn to the Comstock deal. Good to see that across the finish line. Can you just walk through the injection ramp at those facilities as well as the timing of the associated CapEx?

Scott Gruber: I appreciate all the color. I also wanted to turn to the Comstock deal, good to see that cross the finish line. Can you just walk through the injection ramp at those facilities, as well as the timing of the associated CapEx? Is there CapEx associated with those projects in the second half of this year, for instance? Just some color there would be great.

Speaker #6: Is there CapEx associated with those projects in the second half of this year, for instance? Just some color there would be great.

Speaker #5: Yeah. So thanks, Scott. It's a good question. Just appreciate Jay and his team really working with us on this project. I think if you think about what we've guided to, we're expecting to be injecting in 2008.

Chris Kalnin: Thanks, Scott. It's a good question. You know, just appreciate Jay and his team really working with us on this project. I think if you think about what we've guided to, you know, we're expecting to be injecting in 2028, that's when we're going to commercialize these projects. We didn't guide to a volume ramp. Obviously, that's something that we're working with Comstock, and we'll kind of figure out. I think you can think about the volume as multiples of our current injection amounts. It's a significant amount of injection volume. If you think about the spend curve, most of these projects follow a typical construction S curve. Within the last 12 months before injection, that's when you see a majority of the CapEx get spent.

Speaker #5: So that's when we're going to commercialize these projects. And we didn't guide to a volume ramp. Obviously, that's something that we're working with Comstock, and we'll kind of figure out.

Speaker #5: I think you can think about the volume as multiples of our current injection amounts. So it's a significant amount of injection volume. If you think about the spend curve, most of these projects follow a typical construction S curve.

Speaker #5: So within the last 12 months before injection, that's when you see a majority of the CapEx gets spent. We've kind of historically guided to sort of a couple hundred bucks a ton of capital that has to go into investment.

Chris Kalnin: You know, we've kind of historically guided, you know, to sort of, you know, $200 a ton of capital that has to go into investment. That's, you know, sorry, that's probably not a bad way to think about it. Yeah, I think, you know, you should expect that spend to be more sort of back-end loaded, and then the volumes themselves to be multiples of what we're currently injecting.

Speaker #5: And so that's probably not a good sorry, that's probably not a bad way to think about it. But yeah, I think you should expect that spend to be more sort of back-end loaded and then the volumes themselves to be multiples of what we're currently injecting.

Speaker #6: Great. Exciting. I appreciate the color. Thank you.

Scott Gruber: Great. Exciting. I appreciate the color. Thank you.

Speaker #5: Thank you.

Chris Kalnin: Thank you.

Speaker #6: Thanks, Scott.

John Mardini: Thanks, Scott.

Eric Jacobsen: Thanks, Scott.

Speaker #1: Our next question comes from Jonathan Mardini with KeyBanc Capital Markets. Please proceed with your question.

Operator: Our next question comes from John Mardini with KeyBanc Capital Markets. Please proceed with your question.

Speaker #7: Hi. Good morning. Thank you for taking our questions. On power, on slide 7, you reference a potential PPA execution on 4.5 terawatt-hours of unutilized capacity.

John Mardini: Hi, good morning. Thank you for taking our questions. On power, on slide 7, you reference a potential PPA execution on four and a half terawatt hours of unutilized capacity. Can you just clarify whether this implies that, you know, a PPA covering just a portion of the Temple plant's capacity, with the remainder being sold into merchant markets, or just how you're seeing the structure of a PPA shaping up based on your latest discussions?

Speaker #7: Can you just clarify whether this implies that a PPA is covering just a portion of the Temple plant's capacity, with the remainder being sold into merchant markets?

Speaker #7: Or just how you're seeing the structure of a PPA shaping up based on your latest discussions?

Speaker #5: Yeah. Jonathan, it's Chris here. It's a good question. So when you look at Temple today, we've got two identical power plants in Temple 1 and 2.

Chris Kalnin: Yeah, Jonathan, it's Chris here. It's a good question. When you look at Temple today, we've got two identical power plants in Temple one and two, each 750 MW. Today, we hedge roughly half of the complex, so one power plant equivalent worth of power. There's several reasons you do that, right? Oftentimes, you can sequence your maintenance to be down on one plant and be fulfilling your power obligations of the other. We see a PPA in a similar type structure. A PPA effectively is a long-term hedge on, you know, power prices.

Speaker #5: Each 750 megawatts. Today, we hedge roughly half of the complex. So one power plant equivalent worth of power. And there's several reasons you do that, right?

Speaker #5: Oftentimes, you can sequence your maintenance to be down on one plant and be fulfilling your power obligations with the other. And so, we see a PPA in a similar type structure.

Speaker #5: A PPA effectively is a long-term hedge on power prices. And so you could imagine that you're going to always be kind of looking at about half your capacity being kind of contracted and the other half being floated so that you can manage as I said around your maintenance schedules and just have resiliency as well.

Chris Kalnin: You could imagine that you're going to always be kind of looking at about half your capacity being kind of contracted and the other half being floated, so that you can manage, as I said, around your maintenance schedules and just have resiliency as well. The balance, when you have the balance of the volumes that are not contracted, you're absolutely right. You would, from a behind-the-meter setup, be actually able to feed that into the grid and sell that. You're able to load balance, right? If you've got, you know, additional power that the customer's not using, you would, again, theoretically sell that additional power into the grid as well.

Speaker #5: And so the balance when you have the balance of the volumes that are not contracted, you're absolutely right. You would, from a behind-the-meter setup, be actually able to feed that into the grid and sell that.

Speaker #5: And you're able to load balance, right? So if you've got additional power that the customer's not using, you would again theoretically sell that additional So when you think about these agreements, they're structured like long-term off-take agreements that you would see potentially even for an LNG contract.

Chris Kalnin: When you think about these agreements, you know, they're structured like long-term offtake agreements that you would see potentially even for an LNG contract. They're substantive. You can imagine something like 750 MW over 10 to 20 years, with a sort of a structured price, which is, you know, somewhat capacity payment blended with an energy payment, and, you know, at a price that's typically above strip, right? These are the structures that we see in the market today, and I think are good reference points, and you're starting to see the announcements on the gas side for these. Yeah, that's how you can envision something like this coming together.

Speaker #5: So they're substantive. You can imagine something like 750 megawatts over 10 to 20 years. With sort of a structured price, which is somewhat capacity payment blended with an energy payment.

Speaker #5: And at a price that's typically above strip, right? So these are the structures that we see in the market today. And I think are a good reference points.

Speaker #5: And you're seeing starting to see the announcements on the gas side for these. But yeah, that's how you can envision something like this coming together.

Speaker #7: Okay, that's great context. I appreciate that. Just moving on to CCUS—on the sequestration outlook for a 1.5 million ton annual run rate by 2028, it's an increase from the prior 1 million tons.

John Mardini: Okay. That's great context. I appreciate that. Just moving on to CCUS, on the sequestration outlook for a 1.5 million ton annual run rate by 2028, it's an increase from the prior 1 million tons you saw by 2027. Just on that gradual ramp, can you just help us understand how you see those volumes scaling throughout 2030?

Speaker #7: You saw by 2027. Just on that gradual ramp, can you just help us understand how you see those volumes scaling throughout 2030?

Speaker #5: Sure. Good morning, John. Eric here. So yeah, the ramp through 2030. So, I'll start with the ramp into 2028, the 1.5 million tons.

Chris Kalnin: Sure. Hey, good morning, John, Eric here. Yeah, the ramp through 2030. I'll start with the ramp into 2028, the 1.5 million tons. As you referenced, we've updated and upgraded that on the back of a lot of commercial interest, as I mentioned earlier, following the One Big Beautiful Bill. We've taken that commercial interest and translated it into projects like the Comstock project, like others in the making that we're progressing towards FID. As I mentioned, we have the 2 this year. We're drilling some more wells. We're really excited about this kind of steady cadence of CapEx to get us to that 1.5 million tons by 2028.

Speaker #5: As I mentioned, we have the two this year. We're drilling some more wells. We're really excited about this kind of steady cadence of CapEx to get us that 1.5 million tons by 2028.

Speaker #5: And then as we ramp from there into 2030, the volumes start to ramp significantly on the back of some of this commercial interest in bigger projects that we're navigating now on the back of the seven Class 6 permits that we filed, six of which are in Louisiana, all of which are progressing nicely.

Chris Kalnin: As we ramp from there into 2030, you know, the volumes start to ramp significantly on the back of some of this commercial interest in bigger projects that we're navigating now on the back of the 7 Class VI permits that we filed, 6 of which are in Louisiana, all of which are progressing nicely. You'll remember in Louisiana, our High West Project is surrounded by 30 million tons of CO2 emissions within a 30-mile radius.

Speaker #5: You'll remember in Louisiana, our high-west project is surrounded by 30 million tons of CO2 emissions within a 30-mile radius. So you can see the size and the magnitude of projects that help us start to scale this business dramatically past 2028.

Chris Kalnin: You can see the size and the magnitude of projects that help us start to scale this business dramatically, past 2028, on the back of these existing Class VI permits, roughly 50,000 acres we have under poor space lease, and a really nice platform to grow, post 2028, as we deliver on the million and a half tons run rate, within that year.

Speaker #5: On the back of these existing Class 6 permits, roughly 50,000 acres we have under pore space lease, and a really nice platform to grow post-2028 as we deliver on the million and a half tons run rate within that year.

Speaker #7: Understood. Appreciate the context. I'll leave it there.

John Mardini: Understood. Appreciate the context. I'll leave it there.

Speaker #1: Our next question comes from Michael Furrow with Pickering Energy Partners. Please proceed with your question.

Operator: Our next question comes from Michael Scialla with Pickering Energy Partners. Please proceed with your question.

Speaker #8: Hello. Good morning. Thanks for taking my questions. It seems like the company's willingness to develop a Temple 3 plant if it's under Penn by an off-take agreement is a positive indicator for your outlook on the PPA market as a whole.

Michael Scialla: Hello, and good morning. Thanks for taking my questions. It seems like the company's willingness to develop a Temple three plant, if it's underpinned by an offtake agreement, it's a positive indicator for your outlook on the PPA market as a whole. Would you say that your confidence level has improved in signing a quality PPA, and therefore, the potential for a Temple three plant has improved?

Michael Furrow: Hello, and good morning. Thanks for taking my questions. It seems like the company's willingness to develop a Temple three plant, if it's underpinned by an offtake agreement, it's a positive indicator for your outlook on the PPA market as a whole. Would you say that your confidence level has improved in signing a quality PPA, and therefore, the potential for a Temple three plant has improved?

Speaker #8: So would you say that your confidence level has improved in signing a quality PPA and therefore the potential for a Temple 3 plant has improved?

Speaker #5: Yeah. Hey, Michael. Good question. Absolutely right. If you look at what I've just described in terms of the way the regulators are thinking about the large load applications, and the overall SB 6 process, having additional generation assets co-located with additional data center infrastructure is, in our minds, very critical.

Chris Kalnin: Yeah. Hey, Michael, good question. Absolutely right. If you look at what I've just described in terms of the way the regulators are thinking about the large load applications and the overall SB 6 process, having additional generation assets co-located with additional data center infrastructure is, in our minds, very critical. You know, you need to be able to show that you're gonna not only kind of, you know, take power from the grid, but you're also gonna contribute power to the grid and add to grid resiliency. That enters the concept of Temple 3. You know, we believe that Temple 3 does contribute to that. It adds additional resiliency to the Temple Energy Complex. When you could imagine Temple I, 2, and originally, Temple was designed for 3 power plants.

Speaker #5: And so you need to be able to show that you're going to not only kind of take power from the grid, but you're also going to contribute power to the grid and add to grid resiliency.

Speaker #5: So that enters the concept of Temple 3. We believe that Temple 3 does contribute to that. It adds additional resiliency to the Temple energy complex when you've got you could imagine Temple 1, 2, and originally, Temple was designed for three power plants.

Speaker #5: There's a sufficient amount of space, water, gas infrastructure, etc. And so it makes a lot of sense that, as you start to design a private-use network, you would include the construction and development of additional generation assets in the form of a hypothetical Temple 3, right?

Chris Kalnin: There's a sufficient amount of space, water, gas, infrastructure, et cetera. It makes a lot of sense that as you start to design a private use network, you would include the construction and development of additional generation assets in the form of a, you know, hypothetically, Temple 3, right? We're excited about that. Again, it would be backed by commercial arrangements in the same vein of the capital we're spending on the power side. You're looking for a return on that capital as part of an agreement. We would not move forward without those agreements in place.

Speaker #5: So we're excited about that. Again, it would be backed by commercial arrangements. In the same vein of the capital, we're spending on the power side.

Speaker #5: You're looking for a return on that capital as part of an agreement. And so we would not move forward without those agreements in place.

Speaker #5: But as you've highlighted, the optimism around what's happening in Texas and the overall amount of data center infrastructure that we expect to be built is, I would say, really accelerating and BKV is at the forefront of that.

Chris Kalnin: As you've highlighted, the optimism around what's happening in Texas and the overall amount of data center infrastructure that we expect to be built is, I would say, really accelerating, and BKV is at the forefront of that.

Speaker #8: I appreciate that detail. As a follow-up, I'd like to hit on the Upper Barnett appraisal program that started this year. Now, the break-even costs appear higher than the core Lower Barnett position.

Michael Scialla: I appreciate that detail. As a follow-up, I'd like to hear on the Upper Barnett Appraisal program that started for this year. The break-even costs appear higher than the core lower Barnett position. What are the company's ultimate goals here with this program? Maybe you could provide us with maybe a well count that the company plans to test this year.

Michael Furrow: I appreciate that detail. As a follow-up, I'd like to hear on the Upper Barnett Appraisal program that started for this year. The break-even costs appear higher than the core lower Barnett position. What are the company's ultimate goals here with this program? Maybe you could provide us with maybe a well count that the company plans to test this year.

Speaker #8: So, what are the company's ultimate goals here with this program? And maybe you could provide us with, maybe, a well count that the company plans to test this year.

Speaker #5: Yeah. Sure. Hi, Michael. This is Eric. Thanks for the good question on the Upper Barnett. Yeah, we're excited about the future of the Upper Barnett as included in our inventory counts.

Chris Kalnin: Yeah, sure. Hi, Michael, this is Eric. Thanks for the good question on the Upper Barnett. Yeah, we're excited about the future of the Upper Barnett, as included in our inventory counts. We'll be testing one well, at least this year, possibly two. Yeah, at the moment, our breakevens are slightly higher than our average for the Lower Barnett, but on the back of the success we've had in Lower Barnett, dramatically lowering dollar per foot costs by 30% over the last 3 years, enhancing and advancing completions, negotiated gathering, compression, processing, transport for the Upper Barnett, and our ability to proven to execute, you know, in the high $0.40 per MCFE, F&D costs. We'll translate all those learnings in the Upper Barnett this year.

Speaker #5: We'll be testing one well at least this year, possibly two. Yeah, at the moment, our break-evens are slightly higher than our average for the Lower Barnett.

Speaker #5: But on the back of the success we've had in Lower Barnett, dramatically lowering dollar per foot costs by 30% over the last three years, enhancing and advancing completions, negotiated gathering compression processing, transport for the Upper Barnett, and our ability to proven to execute in the high $40 cents per MCFE F&D costs.

Speaker #5: We'll translate all those learnings in the Upper Barnett this year. We'll drill the one well. We'll evaluate it. We may drill a second by the end of the year, and then we'll have a steady dose of Upper Barnett wells as part of our program going forward.

Chris Kalnin: We'll drill the 1 well, we'll evaluate it. We may drill a second by the end of the year, then we'll have a steady dose of Upper Barnett wells, you know, as part of our program going forward. We absolutely expect to delineate and confirm those 100 wells this year. We're excited about those on the back of the, you know, the older, vertical wells, some refracs we've had in the area. We really think the Upper Barnett is prospective, and we'll look forward to sharing kind of some more results by midyear, second half of the year.

Speaker #5: But we absolutely expect to delineate and confirm those 100 wells this year. We're excited about those on the back of the older vertical wells, some refracts we've had in the area.

Speaker #5: So we really think the Upper Barnett is prospective and we'll look forward to sharing kind of some more results by mid-year, second half of the year.

Speaker #8: Thanks for your time.

Leo Mariani: Thanks for your time.

Michael Furrow: Thanks for your time.

Speaker #5: Thank you.

Speaker #1: Our next question comes from Jacob Roberts with TPH and Company. Please proceed with your question.

Chris Kalnin: Thank you.

Operator: Our next question comes from Jacob Roberts with TPH & Co. Please proceed with your question.

Speaker #9: Good morning.

Jacob Roberts: Good morning.

Speaker #5: Good morning, Jake.

David Tameron: Morning, Jake.

Jacob Roberts: I wanted to start circling back to the power capital. I guess my question is maybe in context of slide 25. When we think about that guidance, is that a function of the number of potential PPAs? Is it a function of the scale of the agreement or even maybe the geographical distance from Temple?

Speaker #9: I wanted to start circling back to the power capital and I guess my question is maybe in context of slide 25, when we think about that guidance, is that a function of the number of potential PPAs?

Speaker #9: Is it a function of the scale of the agreement or even maybe the geographical distance from Temple?

Speaker #5: Yeah. So thanks, Jake. Good question. I think the slide is meant to show the activity around Temple, right? If you think about where people are building massive amounts of data center infrastructure, they're looking for a few things.

Chris Kalnin: Yeah. Thanks, Jake. Good question. I think the slide is meant to show the activity around Temple, right? If you think about where people are building massive amounts of data center infrastructure, they're looking for a few things. One, is the ability to add generation assets and grid interconnect. That's critical. Number two, they're looking for proximity to existing fiber lines and/or data center clusters that are already in existence. Number three, they're looking for a buildable, friendly environment where, you know, just in terms of licensing, contracting, regulations, et cetera, are streamlined. Temple sits right between, you know, Dallas-Fort Worth area and the San Antonio-Austin cluster. This slide is meant to show the amount of activity in Temple.

Speaker #5: One is the ability to add generation assets and grid interconnect. That's critical. Number two, they're looking for proximity to existing fiber lines and/or data center clusters that are already in existence.

Speaker #5: And number three, they're looking for a buildable, friendly environment where, just in terms of licensing, contracting, regulations, etc., things are streamlined. Temple sits right between the Dallas-Fort Worth area and the San Antonio–Austin cluster.

Speaker #5: And this slide is meant to show the amount of activity in Temple, the city of Temple itself, has been astronomical in the last especially 24 months around that.

Chris Kalnin: The city of Temple itself has been astronomical in the last, you know, especially 24 months around that, and it's for the reasons that I just mentioned, right? It's proximity, it's flat land, it's buildable, it's Texas, it's grid connected. There's, you know, 30 to 45 kV lines. That's the intention. In terms of how you'd actually design, the closer to the generation assets, the better, right? As you build, you're going to see more and more of this co-located power design that I'm just describing here. That's critical because of what I mentioned around grid congestion. If you're pulling huge amounts of megawatts, the more localized you can match that, demand and supply, the less, taxing amount of, infrastructure you rely on the grid. That's where you're seeing...

Speaker #5: And it's for the reasons that I just mentioned, right? It's proximity, it's flat land, it's buildable, it's Texas. It's grid-connected. There's 30, 45 kV lines.

Speaker #5: So that's the intention in terms of how you would actually design. The closer to the generation assets, the better, right? As you build, you're going to see more and more of this co-located power design that I'm just describing here.

Speaker #5: That's critical because of what I mentioned around grid congestion. If you're pulling huge amounts of megawatts, the more localized you can match that demand and supply, the less taxing amount of infrastructure you rely on the grid.

Speaker #5: And so that's where you're seeing loads in the past were sort of in that 200, 300 megawatt kind of level for data centers. Now folks are talking about gigawatt plus.

Chris Kalnin: You know, loads in this, in the past, were sort of in that 200, 300 megawatt kind of level for data centers. Now, folks are talking about gigawatt plus. When you're talking about a gigawatt interconnection, you really do need localized generation support. You can imagine the closer you are to generation assets, you optimize your CapEx more, and you get better bang for buck in terms of just the overall design. That's kind of where this goes, and you're seeing that in this slide here on 25. Like I said, Temple is an incredibly active area for data center development, and we're excited to be at the heart of that with 1.5 gigawatts of generation capacity.

Speaker #5: And so when you're talking about a gigawatt interconnection, you really do need localized generation support. So you can imagine the closer you are to generation assets you optimize your CapEx more and you get better bang for buck in terms of just the overall design.

Speaker #5: So that's kind of where this goes. And you're seeing that in this slide here on 25. But like I said, Temple is an incredibly active area for data center development, and we're excited to be at the heart of that with 1.5 gigawatts of generation capacity.

Speaker #9: Thanks, Chris. That's helpful. And then maybe taking a longer-term view on the gas marketing side of things, could you remind us on how your Barnett takeaway contracts are currently structured?

Jacob Roberts: Thanks, Chris. That's helpful. Then maybe taking a longer term view, on the gas marketing side of things, could you remind us on how your Barnett takeaway contracts are currently structured, and maybe in terms of the ability to eventually shift more of those volumes toward what could become more valuable hubs, specifically Katy and Ship Channel?

Speaker #9: And maybe in terms of the ability to eventually shift more of those volumes toward what could become more valuable hubs specifically, Katie and ShipChannel?

Speaker #5: Yeah. Sure. Jake, this is Eric. Thanks for the question on the contractual nature of our marketing. As we show in our slide deck, right now, from the Barnett anyway, roughly 40% of our gas goes to NGPL Texco, 30% to Houston, Katy Ship, and 30% to Transco.

Chris Kalnin: Yeah, sure. Jake, this is Eric. Thanks for the question on the contractual nature of our marketing. You know, as we show in our slide deck, right now, from the Barnett anyway, roughly 40% of our gas goes to NGPL TexOk, you know, 30% to Houston, Katy Ship, and 30% to Transco. We receive a very nice uplift from the Transco station 85 on a typical run rate basis. I think over time, a lot of contracts, firm contracts, are expiring over the next two to three years, enabling us opportunities to sell the gas into multiple markets. This is exactly why we're so very excited to be positioned in the Gulf Coast. We can sell to our own power plants or other power plants. We can sell, you know, to locally to the DFW area.

Speaker #5: We receive a very nice uplift from the Transco Station 85 on a typical run-rate basis. I think over a lot of contracts, firm contracts are expiring over the next two to three years, enabling us opportunities to sell the gas into multiple markets.

Speaker #5: And this is exactly why we're so very excited to be positioned in the Gulf Coast. We can sell to our own power plants or other power plants.

Speaker #5: We can sell to locally to the DFW area. We can expand some of our contracts to these existing hubs, directly do industrials in the Gulf Coast corridor.

Chris Kalnin: We can expand some of our contracts to these existing hubs, directly to industrials in the Gulf Coast corridor. Then, of course, the big boom of all, the LNG expansion that's hitting to the tune of, you know, in our estimation, 17 BCF over the next four or five years. Being positioned in the Gulf Coast, having multiple access to multiple points and hubs, as well as infrastructure that was built to handle far more than the Barnett is producing today as a basin, and the contractual nature of our expiries that allow us the flexibility, we're very excited for margin enhancement, what we call alpha margin, as a result of our marketing coming out of the Barnett and really increasing, you know, the commercial generation of cash flow and margin from our company.

Speaker #5: And then, of course, the big boom of all, the LNG expansion that's going that's hitting to the tune of in our estimation, 17 BCF over the next four or five years.

Speaker #5: So being positioned in the Gulf Coast, having multiple access to multiple points and hubs, as well as infrastructure that was built to a handle far more than the Barnett is producing today as a basin, and the contractual nature of our expiries that allow us the flexibility, we're very excited for margin enhancement, what we call alpha margin, as a result of our marketing coming out of the Barnett.

Speaker #5: And really increasing the commercial generation of cash flow and margin from our company.

Speaker #10: Yeah, Jake. It's David. It's something we're actively managing. We spend a lot of time on that internally. And you've heard Chris talk about it, right?

David Tameron: Yeah, Jacob Roberts, it's David Tameron. It's something we're actively managing. We spend a lot of time on that internally. You've heard Chris Kalnin talk about, right? End of the day, we want to be the highest dollar per molecule provider out there. This is part of that. You'll see us over the next, you know, 6 to 9 months, we'll add some more color around our marketing efforts. I think we'll be well received by yourself in the street.

Speaker #10: End of the day, we want to be the highest dollar per molecule provider out there. And this is part of that. So you'll see us over the next six to nine months, we'll have some more color around our marketing efforts.

Speaker #10: And I think we'll be well received by yourself in the street.

Speaker #9: Thanks, Eric. Thanks, David.

Jacob Roberts: Thanks, Eric. Thanks, David. I appreciate the time.

Speaker #5: Thanks, Eric.

Speaker #9: I appreciate your time.

Speaker #5: Thanks, Jake.

David Tameron: Thanks, Jake.

Speaker #1: As a reminder, if you'd like to ask a question, star one on your telephone keypad. Our next question comes from Fusan with Roth Capital Partners.

Operator: As a reminder, if you'd like to ask a question, press star one on your telephone keypad. Our next question comes from Leo Mariani with Roth Capital Partners. Please proceed with your question.

Speaker #1: Please proceed with your question.

Speaker #11: Yeah, thanks for having me on. So I just have a question about the East Texas project. In the last quarter, you said that the target FID was going to be in the first half of '26, but this quarter, you said it's going to be an internal FID in December.

Leo Mariani: Yeah, thanks for having me on. I just have a question about the East Texas project. In the last quarter, you said that the target FID was going to be in first half 2026, but this quarter, you said it's going to be during the internal FID in December. Is that project still waiting for FID or is it ready? That's one question.

Speaker #11: So, is that project still waiting for FID, or is it ready? That's my question.

Speaker #5: Yeah. Thank you. This is Eric. Thank you for the question, Fu, about our East Texas project where we reached internal FID. Yeah, we're very excited about that.

Eric Jacobsen: Yeah, thank you. This is Eric Jacobsen. Thank you for the question, Leo Mariani, about our East Texas project, where we reached internal FID. We're very excited about that. That's kind of stage one in our trajectory towards our final investment decision, which we haven't put out a timeline on just yet. What I can say is, we're progressing that project with the same major midstream operator for which we're doing the Eagle Ford project about to start. All of the documents and agreements are in place. We'll be drilling the injection well this year with an anticipated startup, you know, sometime in 2027, is what we've signaled. You know, the FID is forthcoming on that. We'll be drilling the well.

Speaker #5: That's kind of stage one in our trajectory towards our final investment decision, which we haven't put out a timeline on just yet. But what I can say is we're progressing that project with the same major midstream operator for which we're doing the Eagle Ford project, about to start.

Speaker #5: All of the documents and agreements are in place. We'll be drilling the injection well this year, with an anticipated startup sometime in 2027, is what we've signaled.

Speaker #5: So, FID is forthcoming on that. We'll be drilling the well, and we're very excited for that here in the first half of the year. We look at that as a continuation of our kind of sweet spot so far in these class two natural gas processing projects.

Eric Jacobsen: We're very excited for that here in the first half of the year, and we look at that as a continuation of our, you know, kind of sweet spot so far in these Class II natural gas processing projects, generating that $48 per ton in EBITDA margin and stair-stepping into additional projects in our ramp to 1.5 million tons.

Speaker #5: Generating that $48 per ton in EBITDA margin, and stair-stepping into additional projects in our ramp to one and a half million tons.

Speaker #11: Thank you. And just my second question about the M&As. After the backlog acquisitions, what are the constraints on the M&A right now?

Leo Mariani: Thank you. Just my second question about the M&A, after Bedrock acquisitions. What are the concerns on the M&A right now?

Speaker #5: Yeah. So it's Chris here. I think we've shown this is a company that knows how to do M&A. The Bedrock acquisition is going incredibly well in terms of just being able to integrate those assets and really absorb them into the Barnett.

Chris Kalnin: Yeah, Leo Mariani, it's Chris Kalnin here. I think we've shown this is a company that knows how to do M&A. The Bedrock Energy Partners acquisition is going incredibly well in terms of just being able to integrate those assets and really absorb them into the Barnett. The Barnett remains our core M&A target. There's a natural roll-up on the upstream side. There are a number of players that we've shown in the past. There's over a BCF of M&A opportunities in the basin, and we'll continue to prioritize those. More broadly speaking, you know, we're always looking in the M&A markets, right? We think this business model for mid tenure gas basins is ideally positioned, and we really are mastering it.

Speaker #5: The Barnett remains our core M&A target. There's a natural roll-up on the upstream side. There are a number of players that we've shown in the past.

Speaker #5: There's over a BCF of M&A opportunities in the basin, and we'll continue to prioritize those. More broadly speaking, we're always looking in the M&A markets, right?

Speaker #5: We think this business model for mid-10-year gas basins is ideally positioned, and we really are mastering it. We manage some of the oldest shale wells in the entire country, and we understand how to manage them really, really well.

Chris Kalnin: you know, we manage some of the oldest shale wells, shale wells in the entire country, and we understand how to manage them really, really well, and we've demonstrated that. As we look in the Gulf Coast at basins and evaluate sort of the horizon, we'll be, you know, active, evaluating, and analyzing opportunities and looking for accretive, risk-adjusted transactions that BKV can continue to scale our business model in line with the winning formula of gas, power, and carbon capture.

Speaker #5: And we've demonstrated that. So as we look in the Gulf Coast at basins and evaluate sort of the horizon, we'll be active evaluating and analyzing opportunities and looking for creative risk-adjusted transactions that BKV can continue to scale our business model in line with the winning formula of gas power and carbon capture.

Speaker #11: Thank you.

Leo Mariani: Thank you.

Speaker #5: Great.

Chris Kalnin: Great.

Operator: We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Chris Kalnin for closing comments.

Speaker #1: We have reached the end of our question and answer session. I would now like to turn the floor back over to Chris Cownan for closing comments.

Speaker #5: Thank you. And thank you, everyone. I appreciate your time. BKV is positioned for growth the wrong all our three vectors. We're very excited about 2026, and we look forward to future announcements around that.

Chris Kalnin: Thank you, and thank you, everyone. I appreciate your time. You know, BKV is positioned for growth along all our three vectors. We're very excited about 2026, and we look forward to future announcements around that. Thank you, everyone.

Speaker #5: Thank you, everyone.

Eric Jacobsen: Thank you, Maria.

Q4 2025 BKV Corp Earnings Call

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