BKV Corporation

Good morning, everyone, and welcome to PKV's second quarter 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. 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. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. Thank you for joining BKB Corporation's second quarter 2025 earnings conference call. With me today are Chris Kalman, Chief Executive Officer, Eric Jacobson, President of Upstream, and David Tamron, 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 for a more detailed discussion of the risks and uncertainties, including those associated with the closing of the bedrock acquisition, which remains subject to customary closing conditions, and integration of those assets into our existing portfolio, which could cause actual results to differ materially from any forward-looking statements. as well as the reconciliations of non-GAAP financial measures, please see the company's public filings, including the Form 8K filed today. We have also posted an updated investor presentation on our website. I'd now like to turn the call over to our CEO, Chris Callanan.

Thank you, Michael, and thank you, everyone, for joining us to discuss our second quarter results. I would like to start this call by taking a moment to reflect on the recent flooding in the Texas Hill Country. Our hearts are with everyone in Kerr County, across the whole country, and around the world who are feeling the devastating effects of the flooding. We are holding you all in our thoughts and prayers. We're proud to be part of the Texas community, and we're actively responding and doing our part as well. We have made a $50,000 contribution to the Kerr County Relief Fund. and are matching all donations made by BKB employees two to one for every dollar they give to agencies that are actively responding and assisting to those impacted by the floods. Turning to our results, the second quarter was marked by significant macro and regulatory events that have overall strengthened the business environment for BKB across our natural gas, carbon capture, and power businesses. In particular, the macro backdrop for natural gas remains bullish. While this summer has been marked by typical seasonality for natural gas, the expected ramp in Gulf Coast natural gas demand is well underway, with new LNG facilities coming online and ramping into the second half of 2025 and throughout the full year of 2026. The ERCOT power market has continued to show long-term strength as a recently released EIA study projects ERCOT to be the fastest growing electricity sales market in the U.S., with over 20% growth projected between 2024 and 2026. This load growth is being driven by residential, commercial, industrial, and importantly, AI and data center electricity demand. In the near term, We will be actively monitoring Texas power markets throughout the remainder of the summer and early fall, as these months are the most significant months for power demand. Our carbon capture business has benefited from one big beautiful bill act that solidifies the durability of the 45Q tax credit and demonstrates strong support for carbon capture. Further, We believe that progress in securing emitter volumes remains one of the key gating items in the carbon capture business. And BKV's strong progress in this regard underscores our leadership in this space. Overall, I'm excited to share with you another exceptional quarter that demonstrates our continued progress across all our business lines, highlighting our cultural value of delivering on promises. Our upstream business significantly exceeded our second quarter guidance from a production and capital efficiency perspective. Our production came in above the high end of our production range, while our operating teams were able to keep development and total company capital spending at the low end of our prior ranges. On the back of these results, we are increasing our 2025 production guidance midpoint to 800 million cubic feet equivalent per day, while reducing our overall corporate capital budget midpoint to $320 million. This was made possible in part by our proactive forward planning and domestic supply sourcing strategy, which has positioned our company robustly to help mitigate impacts of future anticipated tariffs. We are pleased to announce that we have signed definitive agreements to acquire Bedrock's Barnett Shale assets. This acquisition is a strong strategic fit as it extends our leadership position in the Barnett and improves our reserve life with low-decline PDP assets and meaningful well inventory. Subject to customary closing conditions, we anticipate that closing will occur in the third or early in the fourth quarter of 2025. Upon closing of the asset acquisition, BKV will add over 100 million cubic feet equivalent per day of production and nearly one TCFE of 1P reserves to our Barnett portfolio. In our power business, BKV is pleased to share that we have reserved manufacturing slots for natural gas turbines with a major power plant manufacturer. The optionality provided by these turbine slots enhances our ability to discuss additional power needs with large data center companies and hyperscalers. BKV remains in active discussions with these potential customers regarding long-term PPAs and is actively analyzing the market dynamics around PPA transactions to optimally position our temple power generation assets for maximum value. BKV's continued investment in carbon capture has solidified our leadership position in this industry and has allowed us to accelerate momentum in our CCUS business. Consistent with this, we recently announced yet another CCUS emitter agreement with our major midstream partner at another of their plants in Texas. We have seen continued momentum in our discussions with additional emitters, and our partnership with CIP continues to provide us with the opportunity to accelerate our CCUS project pipelines. We are also excited to announce that we have inked a seminal deal for the supply of carbon sequester gas, or CSG, to Gunvor, a global leading commodities trader. CSG enables the decarbonization of our energy and allows end users to utilize around the clock carbon neutral energy that commands a premium in the marketplace. Overall, BKV has demonstrated strong progress around our closed loop strategy, which combines the winning formula of gas, power, and carbon capture to create premium value in one of the fastest growing energy markets in the world, the state of Texas. We believe we are ideally positioned to benefit from megatrends that are driving the energy markets, and we are excited to continue to demonstrate as we progress our business strategy and execute on our said and did culture. Now, I'd like to hand the call over to BKV's President of Upstream, Eric Jacobson, to discuss operational specifics for the quarter.