Good morning, everyone, and thank you for joining BKV Corporation’s First Quarter 2025 Earnings Conference Call. With me today are Chris Kalnin, Chief Executive Officer; and Eric Jacobsen, President of Upstream. 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. Additionally, 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 as well as the reconciliations of any non-GAAP financial measures, please see the company’s public filings, including the Form 8-K 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 Kalnin.

Thank you, David, and thank you to everyone for joining us to discuss our first quarter results. BKV’s business model is poised to grow rapidly in multiple economic scenarios. BKV sits at the confluence of some of the biggest megatrends in energy. As one of the largest natural gas producers in Texas, we expect natural gas demand to continue to grow robustly, both domestically and globally. Further, efforts to decarbonize the 1 global economy continue to show demand for low-carbon gas. This trend has helped to accelerate growth in our carbon capture business and the demand for our carbon offsets that are produced by this business. Further, we remain confident in the robustness of the 45Q tax credit as this part of the tax code has strong bipartisan backing and the current administration has vocalized its support of the carbon capture business. Finally, the U.S. power boom driven by cloud compute and generative AI is real and happening and continues to drive strong projected growth in the power industry, with Texas expected to see some of the strongest demand growth across the country. Our power joint venture’s modern combined cycle gas-fired power plants located in Temple, Texas are ideally situated to serve this insatiable power demand growth. BKV’s 4 business lines of upstream, midstream, carbon capture and power generation each stand-alone make money, but in combination, create premium margins and differentiated products like carbon sequestered gas, or CSG, a completely decarbonized natural gas product that is scalable, affordable, fully certified and commands a premium to regular natural gas. The current macroeconomic landscape has headwinds, including persistent inflation, the potential impact of tariffs and scenarios of slowing economic growth. However, despite these challenges, BKV is a new kind of energy company that is vertically integrating into the value chain and differentiating how energy gets developed and sold. Our proactive management of our supply chain puts us in a position where we project minimal supply chain disruptions and expect limited cost impacts to our businesses, reinforcing our ability to deliver value in any environment. The first quarter exemplifies BKV’s continued delivery on our promises, showcasing our company’s said and did cul2 ture, where we say what we are going to do and then do it. Let’s start with our upstream and midstream businesses. Once again, we delivered on the high end of expectations. Our upstream and midstream businesses are operating at full throttle, delivering strong financial and operational results. Our assets in the Barnett and Northeast Marcellus continue to show room for optimization as we drive down development cost per lateral foot while delivering at or above our sanctioned type curves. Further, BKV continues to defy gravity with our low base production decline rates. We are driving cost efficiencies across our asset base and enhancing our operations with strategic initiatives that include the use of data and analytics. This quarter’s results reflect out- standing operational execution, disciplined financial management and our team’s ability to deliver consistently. These outcomes reaffirm the strength of our ability to execute and our confidence in the Barnett Shale as a play with significant continued running room, where we have over 15 years of inventory and ability to serve long-term natural gas demand. The Barnett is geographically advantaged with direct access to unconstrained midstream infrastructure, proximity to booming LNG export markets and a front row position to supply natural gas to the growing AI data center market. The Barnett is experiencing a true renaissance, and we believe it can compete with the best basins in the country when comparing the full cycle economics. In power, we outperformed our guidance in the first quarter, and that is the result of the combination of prudent financial planning and strong operational management that allows the Temple plants to maintain equivalent availability factors at approximately 90% for the plants, inclusive of downtime for maintenance while having significant capacity factor running room to capitalize on power demand growth and scarcity pricing in the ERCOT market. 3 As a result of the comprehensive maintenance programs conducted in the last 2 quarters, the Temple plants are well positioned to run at full capacity through the peak summer seasons in Texas. The demand growth in ERCOT is real, fueled by the expansion of data centers, population increases, economic development, industrial growth and the broader shift towards electrification. Our momentum in the discussions with hyperscalers and data center companies underscores the strength of our position in Texas as one of the go-to energy companies to serve the upcoming low demand. We are active in discussions with these potential customers and expect that agreements with these customers will be accretive to our power business. We believe our existing power assets, combined with the ability to serve decarbonized natural gas in the form of CSG ideally positions BKV in discussions with data center companies that need power, but also want to decarbonize this power and who are willing to pay a premium for this. Our CCUS business is consistently hitting milestones that we set out to achieve. Our team has been operating our flagship Barnett Zero facility safely and reliably for over a year, and both our Cotton Cove and South Texas carbon capture projects remain on track for initial injection of CO2 next year. Our recent announcement of our partnership with Comstock Resources helping them to decarbonize their midstream assets in the Haynesville underscores the momentum we have here. I want to take a moment to thank Jay Allison and his team for their belief in BKV, and I look forward to a strong partnership with Comstock in our carbon capture projects with them. In previous calls, I have referenced working towards a potential joint venture partnership 4 to help scale our CCUS business. I am pleased to emphasize that we have signed definitive agreements with Copenhagen Infrastructure Partners, or CIP, for their commitment to invest $500 million in our carbon capture business, with the ability to invest up to $1 billion upon mutual agreement. This creates an exciting new platform for us to accelerate the growth in the carbon capture business while accretively diversifying the source of capital for that growth. CIP brings deep expertise, proven execution capability and significant capital investment, all critical for the continued growth of our CCUS business. Their global track record in developing complex projects and commitment to decarbonization makes them an ideal partner for us as we work to accelerate our CCUS project pipeline and maximize the impact of our projects. We are incredibly excited about the prospect of serving more customers and growing our geographic footprint across the U.S. BKV has built a new kind of energy company that focuses on delivering energy solutions across our 4 business lines. We enjoy the best of both the traditional energy industry while accretively participating in the energy transition. BKV has the ability to offer decarbonized around-the-clock energy that is scalable, sustainable and profitable, and the momentum we have is showing results. With that, I’d like to turn the call over to Eric Jacobsen, our President of Upstream, to go through the details of our upstream, midstream and carbon capture businesses. Eric?

Thank you, Chris. BKV’s upstream business in Northeast Pennsylvania and the Barnett continues to deliver outstanding results, fueled by strong production and top-tier operational efficiency. I want to take a moment to reiterate that we view our position in the Barnett Shale as an important strategic advantage for our upstream business. 5 The Barnett Shale is undergoing a true renaissance, and we’re leading the charge. The basin is now proving its resilience and value in a big way, and our reimagining of it is paying dividends. With more than 15 years of high-quality inventory, highly desired and sought-after low nitrogen content gas, limited to no takeaway capacity constraints and a peer-leading low base decline, the Barnett offers us significant running room, operational flexibility and resilient cash flow generation. It’s uniquely positioned at the intersection of 2 transformative forces, the LNG export boom and the explosive AI-driven growth of data centers literally at our feet. We’re unlocking value through disciplined capital efficiencies, continued optimization of CapEx ver- sus development and deep basin knowledge and expertise. The Barnett is not only back, it’s thriving. Our first quarter production was 761 million cubic feet equivalent per day, coming in above the midpoint of guidance. This was accomplished at meaningfully lower CapEx investment than forecast and yet at or even slightly ahead of planned activity levels. For the first quarter, the development CapEx spend was $48 million, 26% below the midpoint of our guided range for the quarter. This lower-than-forecast CapEx number was the result of development efficiencies carried forward from Q4 of 2024. We were able to further these efficiencies and maintain a strong safety record while drilling even more challenging wells in the first quarter. We recently drilled, for example, 2 horizontals with 110-degree bends mid-lateral with our One Rig Barnett program. We also achieved a BKV record of completing 14 Barnett new well frac stages in 24 hours this quarter. These efficiencies also enabled acceleration of turn-in lines, or TILs. I would like to note that we anticipate second and third quarter CapEx to be higher than 6 first quarters following the planned cadence of our upstream investment. Given our advanced purchase of long lead procurement items for 2025 CapEx to get ahead of potential tariff impact and our continued increase in efficiencies, we do not expect material capital inflation impacts in our 2025 program. In fact, our 2025 well costs are coming down considerably. For example, we are approaching a double-digit percentage cost reduction in cost per lateral foot for our new drills now when compared to a few quarters ago. In Q1, we put 6 new wells into production with the aggregate of the 6 wells producing at or above sanctioned type curves. This, along with accelerating these new well TILs and continuing our highly robust refrac program, helped us achieve overall production above the midpoint of the range for the quarter. We continue to expect a ramp in our production in the second half of 2025 as natural gas strip pricing remains elevated moving into 2026, and we forecast a Q4 2025 exit at production slightly above that of Q4 of 2024. We will deliver on all of this while maintaining our flexible yet disciplined capital investment framework. Across the Barnett and NEPA, our upstream business continues to be the backbone of our closed-loop operations model and the cash flow generated from this business line makes it exceptionally well suited to maintain strong performance now and well into the future. With low base decline, disciplined cost management, no midstream takeaway constraints and a high-quality long-duration inventory, our upstream assets are built for resilient performance and capital-efficient development. These combined advantages underpin our ability to deliver sustainable long-term value and consistently meet or beat performance targets. In addition to stellar performance in our upstream business, I am also excited to share highlights from our growing CCUS business. The announcement of our joint venture with 7 CIP is needle moving, and it not only derisks but accelerates our CCUS development efforts in 2026 and beyond. In the near term, we are hyper focused on optimizing our exist- ing Barnett Zero CCUS operation and moving forward our other FID and pre-FID projects. Here are several highlights of what we have accomplished in CCUS since our last call. In the first quarter, BKV submitted a Class VI permit application to the Louisiana Department of Energy and Natural Resources for 5 CO2 injection wells totaling 10 million tons per year of injection capacity as a part of our High West CCUS project. Additionally, we signed an exclusive LOI with Comstock Resources to develop CCUS projects at 2 of Comstock’s natural gas processing facilities in their Western Haynesville operating area in East Texas. As part of the agreement, the company’s plan to develop CCUS injection wells to permanently sequester CO2 waste produced at Comstock’s Bethel and Marquez natural gas processing and production facilities in Texas. Our Cotton Cove project, which previously reached FID, remains on track for first injection in the first half of 2026. And the CCUS project in South Texas with a leading midstream energy company that we announced in February is similarly on track to have initial injection of CO2 in the first quarter of 2026. Operations at our flagship CCUS project, Barnett Zero, continue to be highly reliable. Reliability for Barnett Zero in the first quarter was 100% with nearly 39,000 metric tons of CO2 injected. Once again, we are delivering on what we promised. Our CCUS strategy is being validated by our actions. We announced an exciting CCUS partnership with a global infrastructure leader in CIP. We are developing natural gas processing projects with multiple parties across multiple basins, including a major midstream company and a peer upstream company. We have submitted and received approval for 4 Class II injection wells in the state of Texas to date, along with submitting 3 Class VI permit applications across Texas and Louisiana, and we have a flagship operating CCUS facility in Barnett Zero that has delivered consistently and 8 safely since initial injection in late 2023. With all of these advancements in our CCUS business, we have clear line of sight to a 1 million ton per year injection run rate by the end of 2027. We are building a world-class CCUS portfolio, and we’re just getting started. With that, I will hand the call over to our CFO, David Tameron, to go over some details on our power business and BKV’s financial results.

Thanks, Eric. First, I would like to say that I am honored to step into my new role as CFO, which I assumed from John Jimenez as of April 1. Over the past several years, I have taken on increasing responsibilities within BKV’s finance organization, and I’m excited to now lead these efforts as the company continues its era of rapid growth. Before we move into financials, I did want to provide an update on our power operations. BKV remains very bullish on power, and the fundamental supply and demand outlook in Texas underpins our enthusiasm. In its latest forecast, ERCOT revised its 2031 load forecast higher by 68 gigawatts. This is a 45% increase from 2024 projections with the uptick being primarily driven by data centers. Since its last forecast, ERCOT projection for data center load specifically is up by over 150%. These trends are strong and will continue to accelerate as more projects are added to the queue. As it relates to BKV capitalizing on these markets, one key advantage of our assets is that the Temple plants are fully operational and capable of serving the market immediately. This is unlike new projects that are still at least 3 to 4 years away from completion. Now on to our power results from the first quarter. The Temple power plants performed very well in the first quarter, significantly beating guidance. For the quarter, the Power 9 JV adjusted EBITDA was $20 million and BKV’s implied 50% share was $10 million. This outperformance was driven by a cold snap of weather in Texas earlier this year, which helped drive higher pricing. Looking at a few of the operational stats. Combined capacity factor during the first quarter was 50%. Total generation was nearly 1,600 gigawatt hours. Power prices averaged $54.52 per megawatt hour and average realized spark spread was $25.39 per megawatt hour. As a reminder, our power JV is nonconsolidated. As you likely saw in this morning’s release, we are now reporting combined adjusted EBITDAX, which we define as our adjusted EBITDAX plus 50% of power JV adjusted EBITDA. As we move into the summer season, we are well positioned to take advantage of what we believe will be a robust power market in ERCOT as drought conditions have intensified and projections for power pricing have increased. Based on our pricing outlook and current hedge position, we continue to target a 2025 gross power adjusted EBITDA range of $130 million to $170 million. Moving on from the operational update, I will now discuss BKV’s overall financial performance during the quarter. Financial results for the quarter were led by continued strong performance from our upstream operations and better-than-anticipated natural gas pricing. Our combined adjusted EBITDAX came in at just over $100 million, which included $90 million from upstream and the previously mentioned $10 million from power. For the first quarter, power JV adjusted EBITDA represented 10% of our combined adjusted EBITDAX. We expect the power JV’s impact to overall 2025 results to continue to increase and ultimately represent close to 15% to 20% of BKV’s full year combined adjusted EBITDAX. Overall, BKV had a net loss in the first quarter of $79 million or a loss of $0.93 per diluted 10 share. After removing unrealized derivative losses and other adjustments, we had an adjusted net income of $35 million or a positive $0.41 per diluted share. Accrued capital expenditures in the first quarter were $58 million, which included $48 million for upstream development and $10 million for CCUS and other. This was significantly below the low end of our first quarter guidance range of $75 million and reflected upstream items Eric previously discussed as well as lower-than-expected spending in our CCUS business. Looking ahead to the second quarter, we anticipate total CapEx will be between $75 million and $100 million with $70 million going to the upstream and $20 million going to- wards CCUS and other. Net production for the quarter is expected to fall between 775 million and 805 million cubic feet per day. At the midpoint, this is up 4% sequentially from first quarter 2025 levels. Moving to the balance sheet. At the end of 1Q, BKV had cash and cash equivalents of approximately $15 million. Our net leverage stood at less than 0.7x net debt to adjusted EBITDAX. Subsequent to the quarter end, we completed a successful RBL redetermination. Illustrating the strength of our business, we added an additional bank to our syndi- cate, increased our borrowing base to $850 million from $750 million and increased our elected commitment amount to $665 million from $600 million. The company generated positive adjusted free cash flow in the first quarter of $6 million, which included premiums paid to enable collars for fiscal years ’26 and 2027. Excluding the premiums paid, our adjusted free cash flow would have been $22 million and our overall adjusted free cash flow margin for the company would have been 10%. Regarding hedging, I’d like to reiterate that our philosophy is to hedge approximately 50% of production 24 months out. Based on our current position, for the balance of 2025, we have 58% of our natural gas hedged at an average price of $3.44 per MMBtu and 43% of our NGLs hedged at an average of $21.73 per weighted barrel. For 2026, we have 11 approximately half of our natural gas hedged at $3.45 per MMBtu and a little under 40% of our NGLs hedged at $22.01. I have covered a handful of our guidance ranges, and you can refer to our second quarter guidance, which is detailed in the earnings release from this morning. I would note we are not making any changes to our full year 2025 guidance targets, which we originally released in February. In summary, despite all the macro noise currently going on in the world, our business is performing above expectations and our financial position remains strong. We continue to deliver on promises, continue to meet and beat guidance and continue to achieve solid financial results. BKV offers a unique investment opportunity through our winning combination of a strong upstream position in the Barnett, a growing power business in the heart of ERCOT and a CCUS business with tremendous momentum. Our balance sheet is strong with net leverage ratio of less than 0.7x. And particularly with our CIP partnership announcement this morning, we have ample funding to deliver our growth targets in all aspects of our business. With that, I would like to turn it back over to Chris to wrap things up.

Thanks, David. BKV is leading the way as we continue to grow and reshape the energy industry. We are well positioned to leverage future growth opportunities. This quarter, we continue to add to our executive leadership team, creating a new Chief Commercial Officer role and welcoming Dilanka Seimon to the BKV team. Dilanka has broad, highly relevant experience identifying strategic and commercial opportunities. BKV delivered on promises this quarter. We delivered strong results on all our key metrics. We brought in a new CCUS JV partner in CIP and engaged with Comstock 12 to decarbonize their Haynesville assets. We maintained our disciplined balance sheet and increased liquidity while continuing to grow our businesses. We advanced our strategy across all our business lines. DKV’s platform produces an unmatched winning offering of decarbonized around-theclock energy that is scalable, sustainable and profitable. We believe our business model has multiple ways to win. With that, operator, we are ready to take any questions.

Operator, we are ready for questions. Operator, are you there? Give us a few minutes, everybody. We’re trying to connect with the operator.

Ladies and gentlemen, we are currently experiencing difficulties. Please standby. The event will resume momentarily. Again, we thank you for your patience. Please standby. We will resume momentarily.

— Operator Instructions — Our question is coming from Scott Gruber with Citigroup.

Congrats on the JV with CIP and the Comstock projects. I’m just curious, there’s obviously been the debate on the resiliency of the 45Q tax credit. But do you guys think the momentum here behind CCUS projects is picking up, especially the gas processing projects? Is that momentum part of the motivating factor to get this deal over the line? I’m just curious if line of sight on deploying a good portion of CIP’s cash really helped to spur 13 finalization of the agreement.

Yes, Scott, a good question. I’ll take the first part of that, and I’ll have Eric take the second half. In regards to 45Q, as I mentioned on the call, we believe it’s very robust. This is a bipartisan piece of legislation that’s in the tax code. Texas, Louisiana, North Dakota, Wyoming, all hugely supportive. The Trump administration has come out and said they support carbon capture. So we feel very good about the legislation being robust. And it ultimately helps energy competitiveness for the U.S., think about LNG, low carbon impact to Europe and you think about just the infrastructure and the jobs that you’re bringing to the U.S. So I think that’s incredibly powerful. At a high level, the momentum we’re seeing on the carbon capture side, particularly in natural gas processing, is incredibly strong. And as you rightly point out, I think this is a great moment in time where there may have been some footfalls on some of the other carbon capture projects, and I think BKV is just really blazing the trail with our ability to execute, deliver and drive growth on the carbon capture side, which, by the way, is critical when you think about data center and power because they want to decarbonize that around the clock, power. And that’s why we’re so excited about it. But Eric, maybe just a couple of words on how we think that funnel is looking.

Yes. Scott, on the – specifically on the momentum around natural gas processing plants, I think that does continue to be strong for us. We have the 2 FIDs announced with Cotton Cove and the South Texas midstream operator. We’re very excited to be working with a fantastic Comstock team on those 2 additional plants. 14 And then as we’ve shared in our slide pack, there are 12 million tons per year of CO2 from natural gas processing plants for which we’re going after in that specific niche. We have 4 Class II permits for natural gas processing plants approved in Texas. So that funnel remains strong. The economics for those projects remain robust. And I think we’re establishing ourselves as a key leader and a winner in the natural gas processing space.

And curious, why didn’t the Cotton Cove and Comstock projects get dropped into the JV? Was there something unique about those projects? Or was it just timing? Some color there would be great.

Yes, a good question, Scott. It’s really just around timing. There are certain kind of timing criteria involved in that deal. So we’ll continue to – we have the first 2 projects entered into the JV, and then there are many more to come in sort of the FID and pre-FID phases.

— Operator Instructions — The next question is coming from the line of Tim Rezvan with KeyBanc Capital Markets.

I want to start on the CapEx for CCUS. With this deal announced, you still have your kind of internal CapEx for CCUS and other unchanged at about $130 million. Can you walk me through – is that project that you’re waiting to drop into the JV? I thought we might see some sort of change with that. So I was wondering if you could give some context on that.

Yes, sure. You bet, Tim. Of course. And I’ll just start by reiterating our excitement around attracting an investor to the – of the reputation and scale of CIP. I think what this does 15 is it gives us an opportunity to optimize our capital spend in the CCUS space as well as accretively diversify our capital across the other business sectors we have. As part of that JV, we’re going to, I’d say, reevaluate the pace and scale of our CCUS capital. I think you’ll see in aggregate, that amount will remain very robust, but the near-term timing may shift around a bit. And as we refresh that and optimize it with our JV partner, CIP, more to come on it. What won’t change, Tim, in the near term is our continued commitment to deliver on our FID projects, Cotton Cove and South Texas, and continuing to work with the exceptional Comstock team on those projects. We’ll also continue to work a number of emitter agreements, which are kind of the critical path and backbone of the CCUS projects. We’ll continue to work those on a number of fronts that haven’t been announced yet. We’re already leveraging CIP and their reach to other emitters and other projects. And then lastly, we remain absolutely committed to our 1 million tons per year CO2 injection rate by the end of 2027. And as we show in our 10-K, with a number of other ethanol, NGP and industrial projects heading towards 30 million tons per year by the early 2030. So more to come. We’re going to refresh with our JV on that, Tim, but it’s exciting. The scope and scale of this business is put on – accentuated by the partnership with CIP, and more to come on a refresh there.

Okay. I guess 18 hours after the announcement, a little early for a change in guidance. So we’ll stay tuned. And then on the follow-up, Eric, on the upstream side, I’m trying to kind of understand the inclination to grow, if there is one. You beat expectations in the 16 first quarter. Again, you left the full year guidance out, and that seems like that may have been a corporate-wide decision to leave things unchanged after a quarter. But with the strip firming up and contango into the end of the year, can you kind of talk about your inclination to grow production maybe to or above 800 million a day?

Yes, sure. Great. Good follow-up. So I think I’d start by reiterating our systematic disciplined structural framework around capital investment, which largely hinges on price range – commodity price ranges. And we’ve shared before in the $3.50 to $4 price range. We’ll – that’s a kind of a growth mode to the tune of 2% or 3%. And with that on our production, we remain committed to that 2% – 2% to 3% growth 4Q ’25 over 4Q ’24. As you rightly said, the strip price has remained solidly in there. I think this morning, ’26 is $4.35 and ’27 is in the $4 range. So that certainly piques our attention and causes us to continue to look very closely at strip, which has remained resilient and solid. But I think what sort of drives us to continue to watch is the macroeconomic trade winds at the moment. So we’ll watch those trade wins, so to speak, closely as we make a decision about investing additional capital in the back half of the year. We certainly have the opportunity set and the inventory to do so that’s very, very attractive. And if you did see us invest in the back half of ’25 additionally, it would result in growth more in the 2026 region and beyond. So kind of watching the macroeconomic trade winds, opportunity set remains strong. Stay tuned in this space.

Our next question is coming from the line of Jacob Roberts with TPH.

I just wanted to touch on the recent announcement with Comstock and some of the com17 mentary there. Looking at the Western Haynesville, the Bethel and Marquez plant, I believe one is operational and one is under construction. So I was just wondering if you could speak to the differences of how those projects look in terms of jumping in halfway or 3/4 of the way, however far along it is, versus an already existing facility? And kind of subsequent to that, should we be thinking about you guys not starting on this project until that second plant is fully operational?

Jake, I’ll take that. Yes, I think – I’d start by saying that we’ll be releasing more details about kind of the pace and scale and timing of our projects with Comstock here in the coming quarters or so as we work with the exceptional Comstock team. We would expect to develop in sort of a phased approach or a trained approach. As they grow production, we would add trains. Bethel is in operation now, as you say, a likely starting point. I think just what we’ve released so far and what Jay Allison and his team spoke about are the principles of the deal, which are that BKV – that – excuse me, Comstock will concentrate the CO2 from their natural gas processing plants, both Bethel and Marquez, more and more as they grow for what you said over time. BKV will capture that concentrated stream, compress it, treat it, inject it and sequester it for all time. BKV will operate the CCUS projects. We will realize or receive the 45Q credits and pay Comstock a CO2 or a delivery fee. So that’s kind of the structure of the agreement. We’re very well prepared to kind of grow with Comstock with a trained approach as they grow their production.

Great. That’s very helpful. And then maybe for Chris. Chris, you touched on macroeconomic conditions in the prepared remarks, and you specifically referenced them relative 18 to the power segment in the slide deck. Can you comment relative to that power business, is that mostly domestic inflation? Or are there other broader considerations we need to be thinking about?

Yes, Jake, a good question. So I think when you think about the power business, there’s 2 kind of dimensions on the macro side. One is what does it mean for the cost inflation side of building new capacity, for example, a new steel – power plants or heavy steel, and turbines are coming from overseas largely. So you see there’s an inflation factor that we have to factor in, and that’s going to ultimately have a cost impact on the price of power, right, as the new marginal capacity coming into the market goes up, and cost, the overall power prices increase. So I think that’s one major dimension. And then I think the second dimension is what does it mean for data center and large load investments. And I would say on that front, it’s actually relatively bullish as well as you look at where folks are thinking about building additional data center capacity or even industrial capacity. I think there very much is a view that you’ve got to be in the U.S. if you want to kind of access the U.S. market. And I think that’s leading to, I would say, a decently more bullish sce- nario around some of the power gen, particularly in Texas and the ERCOT market. That’s why we referenced the recent kind of uptick in the amount of load that’s forecasted. We keep seeing these forecasts go up in Texas, in particular. And again, that’s a function of both the idea that the cost to build new capacity is going up and/or the fact that there is a strong incentive to start building more in the U.S. to access the U.S. market. And I think those things bode very well for our power business.

19 Our next question is coming from the line of Betty Jiang with Barclays.

Yes, also share the congrats on the JV announcement. It’s a big deal because it’s – they’re showing a vote of confidence in the pipeline of projects that you guys have put together. I want to better understand some of the funding mechanism of how that JV is going to evolve. Like what’s the value of the assets that’s being contributed into the JV? And how CIP will be contributing dollars into that JV over time? And sort of the pace of the drawdown of that $500 million commitment?

Yes, just to start before I answer those questions, I just want to reiterate what you said, and Eric had mentioned this as well. But if you think about the vote of confidence, right, we’ve now had it from a global infrastructure partner in CIP. We had it from the large midstream operator we’ve referenced, and then we’ve had it from Comstock, one of our peers. So to your point, we validated our pipeline, right, across the spectrum, across many different entities and a lot of eyes have looked at it. So thank you for pointing that out. Second question, we’re not disclosing the amount of upfront capital that’s associated with this transaction. That’s at the – I think CIP as well as ourselves are keeping some of those details confidential. But the important thing is for us, it does accrete our economics. If you think about kind of traditional drill cos or in the E&P world, some of those types – so just think about it, it accretes our value. It gives us obviously significant flexibility, provides a funding mechanism. So as far as that piece goes, there is an upfront piece of capital associated with it. And that capital will be drawn down over the next, call it, 12 to 24 months. As additional projects are deployed and additional spending as on those projects as well as additional 20 projects that are contributed, that will be drawn down. And as far as the project, there is – on the governance side, there is a Board that we’re represented on as well as CIP. We will bring projects to that Board. And there’s certain criteria. But once those projects are signed off, then it will be contributed into the JV at that point. Did I answer your question? Did I miss anything in there?

No, I got it. I know there’s disclosure limitations, but that color is helpful. For my follow-up, Chris, you mentioned in the prepared remarks about data center companies willing to pay a premium for decarbonized power and decarbonized gas. Just cu- rious how that conversation is going? And are you seeing the willingness to buy – still seeing the willingness to buy decarbonized power? Or is there also a willingness to pay a premium for the gas that’s going into the power plants that they’re currently using? Basically, I’m trying to understand the value of the environmental attributes and how that’s going to get monetized going forward.

Yes. Betty, a good question. With regards to the premium or the ability for us to sell decarbonized power, I think the momentum is very strong. And it depends on the customer. It’s not every customer that’s willing to pay that premium. But there are certain large technology companies that are utilizing these data centers that are extremely concerned about their ESG goals and their carbon footprint. And what BKV is able to uniquely offer them is an ability to grow their portfolio with gas as the firming power combined with other sources of power and decarbonize and hit their goals. And so for that, we are very active in the discussions around a premium. And I think what you’ll see – again, looking at the broader market and just kind of from 21 my perspective, what you’ll see is a menu where people can say, "All right, I want to buy X percent of decarbonized power, X percent of kind of regular" – what I call regular unleaded gas, and then some sort of renewable mix. And I don’t think it’s going to be one solution. But the great thing about BKV is we can offer customers that commercial flexibility in that menu. And for the decarbonized – middle of the night when I need to run my generative AI and cloud compute and I don’t have renewables out there, I can still decarbonize that power and not use my ESG offsets against that. So that is incredibly compelling. Again, not every customer is willing to pay for that or wanting to pay for that, but there is a segment in the market that we believe this product with the carbon capture absolutely addresses, and I would say the market is moving in this direction.

— Operator Instructions — It appears we have no additional questions at this time. So I’d like to pass the floor back over to management for any additional closing remarks.

Yes. Thank you, operator. Well, listen, everyone, we’re really, really pleased with the results in this quarter. I think you can expect BKV to meet and beat and deliver on results. That’s our philosophy. We’re excited about this winning formula that we’ve put together in our company. Stay tuned for more announcements, and thank you for your time.

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