In This Article:
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BKV Corp (NYSE:BKV) delivered solid business performance in 2024, driven by impressive results from upstream operations.
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The company made significant progress in its carbon capture, utilization, and storage (CCUS) initiatives, including securing a financial joint venture partner.
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BKV Corp (NYSE:BKV) maintained a strong balance sheet, providing flexibility to advance its business across various sectors.
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The company marked a major milestone by debuting on the New York Stock Exchange in September 2024.
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BKV Corp (NYSE:BKV) is actively exploring opportunities to build additional combined cycle units to address projected demand growth in the power sector.
Negative Points
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BKV Corp (NYSE:BKV) reported a net loss of $57 million in the fourth quarter of 2024, driven by net derivative losses.
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The company's power joint venture experienced a net loss of $17 million in Q4, including major maintenance expenses.
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BKV Corp (NYSE:BKV) faces short-term headwinds in the power market due to moderate power demand and additional renewable generation.
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Production taxes were lower than expected, attributed to timing impacts and delays in finalizing assessed values.
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The company's adjusted EBITDA guidance for the power joint venture in 2025 is lower than anticipated, reflecting lower forward pricing.
Q & A Highlights
Q: Chris, regarding the Texas power market, how much of your capacity would you be comfortable dedicating to a Power Purchase Agreement (PPA) given the growing demand from data centers? A: Chris Callan, CEO: We have two modern combined cycle power plants, each about 750 megawatts. For a PPA structure, we wouldn't want to exceed 750 megawatts to maintain redundancy, which is crucial for data center companies. So, 750 megawatts is the upper limit we'd consider for PPAs.
Q: Can you provide more details on your CCS capital spending guidance and whether it assumes a joint venture? A: Eric Jacobson, President of Upstream: Of the $130 million CCS and other category, about $90 million is expected for CCS. This guidance assumes 100% CapEx on CCS without a joint venture.
Q: Could you explain the lower-than-expected production taxes and whether this is a timing issue? A: John Jimenez, CFO: The variance was due to ad valorem taxes, which are real estate and personal property taxes. Some counties delayed finalizing assessed values, resulting in a $47 million true-up in Q4. Going forward, assume production taxes return to historical levels.