BKV Corporation Reports $142.9 Million Net Loss and Decrease in Revenues for 2024

BKV Corporation (BKV) reported a net loss of $142.9 million for the year ended December 31, 2024, compared to a net income of $116.9 million in 2023. Total revenues and other operating income decreased to $580.9 million in 2024 from $980.2 million in 2023. This decrease was primarily driven by lower natural gas, NGL, and oil prices, partially offset by gains on the sale of assets and a gain on the sale of the Chaffee business. Production volumes also decreased, with net daily production averaging 788.0 MMcfe/d in 2024, down from 859.7 MMcfe/d in 2023.

Significant changes compared to the previous year included a substantial decrease in derivative gains, with net losses of $34.2 million in 2024 compared to gains of $238.7 million in 2023. Lease operating expenses decreased by 9% to $137.0 million, while general and administrative expenses decreased by 9% to $104.5 million. However, other operating expenses increased by 54% to $19.4 million, primarily due to increased CCUS operating expenses and emissions monitoring costs. The company also completed its initial public offering (IPO) in September 2024, raising net proceeds of $265.7 million.

Strategic developments during the year included the sale of its wholly-owned subsidiary Chaffee for $106.7 million and certain non-operated assets in Chelsea for $25.0 million. The company also refinanced its debt, paying off outstanding balances under previous agreements and entering into a new reserve-based lending agreement with a $1.5 billion maximum credit commitment. BKV's CCUS business saw the commencement of commercial operations at the Barnett Zero Project in November 2023, achieving an annual sequestration rate of approximately 165,000 metric tons of CO2e. The company also reached internal final investment decisions (FIDs) for the Cotton Cove and Eagle Ford CCUS projects.

Key operational developments included the recertification of a portion of its production under the TrustWell environmental assessment program and the pursuit of additional CCUS projects with a projected total investment of $1.3 to $1.6 billion by the end of 2030. The company's retail power business, operated through a joint venture, grew its customer portfolio to over 55,000 customers. As of December 31, 2024, BKV had 366 employees and approximately 481,000 net acres under its control. Proved reserves decreased to 3,132 Bcfe as of December 31, 2024, primarily due to lower commodity pricing.

The company's outlook anticipates continued growth through opportunistic acquisitions and the development of its integrated asset base. BKV expects its owned and operated upstream and natural gas midstream businesses to achieve net-zero Scope 1 and 2 emissions by the early 2030s and net-zero Scope 1, 2, and 3 emissions by the late 2030s. However, the company acknowledges significant risks related to commodity price volatility, the success of its CCUS projects, and its ability to generate sufficient cash flow to meet its debt obligations. The company also notes a material weakness in its internal control over financial reporting related to income tax accounting.