Production and Revenue - Natural gas production for Q1 2025 was 54,121 MMcf, down from 59,644 MMcf in Q1 2024, representing a decrease of approximately 4.2%[146] - Total production for Q1 2025 was 68.5 Bcfe, averaging 761.1 MMcfe/d, compared to 74.7 Bcfe and 821.1 MMcfe/d in Q1 2024, indicating a decline of about 8.5% in total volumes[139][146] - Natural gas revenues increased by 74% to $168.0 million in Q1 2025, up from $96.3 million in Q1 2024, primarily due to commodity price increases[150][151] - NGL revenues rose by 3% to $44.7 million in Q1 2025, compared to $43.4 million in Q1 2024, driven by higher commodity prices despite lower production volumes[150][152] - Oil revenues surged by 79% to $3.5 million in Q1 2025, up from $1.9 million in Q1 2024, mainly due to increased production volumes[150][153] - Marketing revenues rose by approximately $1.6 million, or 32%, to $6.5 million for the three months ended March 31, 2025, driven by a higher pricing environment[157] Financial Performance - The company reported a net loss of $(78.7) million for Q1 2025, compared to a net cash provided by operating activities of $22.6 million[144] - Net cash provided by operating activities increased to $22.6 million for the three months ended March 31, 2025, up from $19.3 million in the same period of 2024, driven by a $24.7 million increase in income from operations and a $20.4 million increase in working capital[178] - Net cash used in investing activities rose to $56.0 million for the three months ended March 31, 2025, compared to $19.9 million in 2024, primarily due to a $39.7 million increase in capital expenditures[180] - Net cash provided by financing activities was $33.8 million for the three months ended March 31, 2025, consisting of net borrowings on debt of $35.0 million, compared to a net cash outflow of $1.6 million in 2024[182] - As of March 31, 2025, the company had a net working capital deficit of $148.5 million, compared to a deficit of $71.6 million as of December 31, 2024[183] Expenses and Costs - Total operating expenses decreased to $172.5 million for the three months ended March 31, 2025, from $186.3 million in 2024, reflecting a reduction in various expense categories[162] - General and administrative expenses increased by approximately $4.6 million, or 22%, to $25.3 million for the three months ended March 31, 2025, due to growth initiatives[167] - Interest expense decreased to $5.1 million for the three months ended March 31, 2025, down from $16.1 million in 2024, primarily due to lower interest rates[171] - Income tax benefit increased to $29.2 million for the three months ended March 31, 2025, up from $13.0 million in 2024, driven by higher net losses and excess tax benefits[174] Capital Expenditures and Investments - Cash paid for capital expenditures was $57.4 million for the three months ended March 31, 2025, compared to $19.9 million in 2024, with an estimated budget for 2025 capital expenditures between $320 million and $380 million[176] - The company expects to fund up to 50% of its CCUS business from external sources, including joint ventures and federal grants, with the remainder from cash flows from operations[177] Debt and Credit Agreements - The company entered into a Second Amendment to the RBL Credit Agreement, increasing the borrowing base by $100 million and the elected commitment by $65 million on May 6, 2025[137] - The RBL Credit Agreement has a maximum credit commitment of $1.5 billion, with a borrowing base of $750.0 million and an elected commitment of $600.0 million as of March 31, 2025[185] - The company has outstanding borrowings of $200.0 million on its RBL Credit Agreement, which has a floating interest rate[213] Derivative Instruments and Risk Management - The company entered into financial derivative instruments to mitigate the impact of commodity price fluctuations, with contracts covering portions of projected positions through 2027[202] - The company mitigates price volatility through derivative contracts, which limit benefits from increases in commodity prices above fixed hedge prices[208] - The company actively monitors counterparty credit risk related to derivative contracts, requiring minimum credit standards for all counterparties[209] - Mark-to-market adjustments of derivative instruments cause earnings volatility but have no cash flow impact until contracts are settled[207] Environmental and Strategic Initiatives - A strategic CCUS joint venture was formed with C Squared Solutions, contributing to the development of CCUS projects, with BKV holding a 51% interest[138] - The company aims for net zero Scope 1 and Scope 2 emissions by the early 2030s and net zero Scope 1, 2, and 3 emissions by the late 2030s[136] - Section 45Q tax credits increased to $3.3 million for the three months ended March 31, 2025, up from $2.3 million in the same period in 2024, due to more CO2 waste sequestered[158] Market Conditions - The company has experienced volatility in natural gas and NGL prices, which are influenced by supply and demand dynamics, pipeline constraints, and seasonal factors[179] - A hypothetical increase of $0.10 per Mcf in NYMEX would have resulted in a $2.7 million decrease in natural gas hedge revenues for the three months ended March 31, 2025[204] - A 1.0% increase in average interest rates would have resulted in an increase of $0.5 million in interest expense for the three months ended March 31, 2025[213]
Bkv Corporation(BKV) - 2025 Q1 - Quarterly Report