Hi everyone, welcome. Good afternoon, this is BKV's session. This is Jenny Kim, I'm with CAC Specialty. We are an employee-owned insurance brokerage firm specializing in industries such as oil and gas. It is my pleasure to introduce BKV. BKV Corporation is one of the largest natural gas producers in the U.S., with core operations across the Barnett Shale in North Texas and the Marcellus Shale in Pennsylvania. Headquartered in Denver, BKV's largest shareholder, Banpu, a global energy company, is focused on safe, responsible, and efficient development of natural gas resources. In addition to upstream operations, BKV is investing in gas, power, midstream, and carbon capture initiatives, positioning itself as a leader in reliable low-carbon energy solutions. Leading the effort is Chris Kalnin, CEO of BKV, so please put your hands together for a warm welcome to our presenter today. Thank you. Great, thank you for that. I appreciate the intro. I always love getting the afternoon crowd because you guys are the hardcore ones who've caffeinated up, and hopefully I can keep that energy level up. I'm told I have a hard 25 minutes, so I'm going to make it my KPI to get through this presentation in 25 minutes, and then we have a Q&A following afterwards. First of all, welcome and thank you for your interest in BKV Corporation. I'm Chris Kalnin. I founded the company here in Denver just over 10 years ago, and a lot of people ask me, why did you base the company, why did you headquarter it out of Denver? I said, you know, my wife and I lived here. Sometimes you just make decisions because it's the right, easy decision. I want to talk a little bit about our strategy. We have something called a closed loop, net- zero strategy, and this is a unique way that we approach the world of energy. When we founded the company, I had this vision of building a company that took the best of what the energy industry does and pushing that forward in terms of how we think and where we see the industry going. Hopefully you'll see elements of that as I talk through. Some of the highlights of our strategy. First is that we believe natural gas is a critical fuel of the future. I'm going on record several times and saying I never want to use the words bridging fuel. I don't believe that. I think natural gas is a critical fuel that is part of the all-of-the-above energy strategy for the world. If you look at where the U.S. is going from an export perspective, natural gas will and is one of the biggest exports by dollars. At some point, some people forecast even surpassing oil potentially. In the future, you have to do some rough math and see what LNG prices look like and how much we actually export. That's how big and how important natural gas is from a global perspective. BKV believes in natural gas. We think it is a critical fuel, and you'll see why as I talk through the different parts of our business model. The second thing is that we believe in decarbonizing that natural gas. The most practical and scientific and economic and proven way to do that is carbon capture. What you see in BKV is this idea that we can take a natural gas portfolio and we believe by the early 2030s, completely decarbonize it with sequestration of CO2. There's a profitable path to do that. That would leave us as one of the first companies of our size to have a completely, you know, when you combust the value of our upstream molecules in terms of annual production, a completely decarbonized portfolio. That's incredible. We think that can be done profitably. Our power and our midstream business is all about distributing our energy to end customers. We believe that combination of being able to decarbonize the portfolio, being long in gas, having access to core markets, and then being able to decarbonize it and charge a premium for that is incredibly powerful. I've always said this, you know, when you look at other commodity industries, whether it's coffee or textiles, or just think about even seats on an airplane, every industry is figuring out a way of how to charge people more and create a differentiated product. That's essentially what we're doing here at BKV. We believe that when you can decarbonize a molecule of natural gas, there is a subset that will pay more, and I'll talk about that. That's the critical aspect of our strategy. For every unit of energy we sell, whether it's an electron or it's a methane molecule, we expect, and we are showing, and I'll show you proof points, that we're actually able to get more dollars for that. That's the incredible aspect of our strategy. By the way, we've got this upstream business that declines at a corporate rate of 10.8%. That means if we spent $0 on upstream CapEx in a given year, as stamped by Ryder Scott, the entire portfolio production would only decline by 10.8%. We've been outperforming that. That allows us this incredible flexibility to pivot our CapEx program in line with the commodity curve. We had this slide when I was on the roadshow before we took the company public last year that showed essentially eight quarters of production. I better check my time here. I'm only on slide one. I think there's like 35 slides here, so this could be a long day. We showed quarter after quarter, 9x curve, what it did in that quarter, our CapEx, and what our production did. What you see is this incredible picture of a company that systematically deploys capital where the strip's high, above $3 going to $4, we're growing production. When it comes off below $3, we're gently blowing down. That allows us to have this concept of durable adjusted free cash flow and essentially gives us the ability to grow our business alongside our power generation and carbon capture and upstream with free cash flow. You get a growth company that has these emerging businesses that are at the confluence of the biggest trends in energy. This is what makes the company so exciting and why I get pumped. I'm so excited to be here. More proof in the pudding here. Let's go through some examples of what I'm talking about. First, what's our portfolio? We're headquartered in Denver. We don't actually have any assets in Colorado, ironically, but we're predominantly a Texas company. We've got most of our assets in Texas. Our position in the Northeast Marcellus was our original position. We're located right between Expand and Coterra in the Northeast Marcellus play there. We've got about 120 million cu ft, 130 million cu ft a day produced up there. The balance is produced in the Barnett Shale, where we are the largest incumbent producer. We moved about 800 million cu ft a day equivalent in the second quarter here and pro forma for the Bedrock acquisition, which I'll talk about, we're over 900 million cu ft a day and knocking on the door of a BCF a day as a company. Growing really rapidly. Remember, we're only 10 years old. We started the company June 2015. Ten years, this is the size. We move about 200 million cu ft a day through our midstream pipelines. Again, pro forma for the Bedrock acquisition, we'll have nearly almost 1,000 mi of gathering pipe here. Today we do just under 800 mi, and a lot of that is obviously our gas. What you see here is our gas moving through that system. We do move about 30 million cu ft a day of third-party gas as well that we charge for. We have a fully functioning midstream team that we brought over from the XTO/ExxonMobil acquisition. The last two parts of our business, the critical elements of what I just described earlier, are carbon capture. Our carbon capture business is one of the fastest growing in America. When we saw the question marks around what was going to happen under the Trump administration, we took the view that carbon capture is a bipartisan approach, a bipartisan agenda item, and we doubled down in carbon capture. You can see that we're on track to be injecting, not, you know, thinking about, but actually physically injecting over 300,000 tons per annum by next year. That's what we've already got in the works. We've already injected with our Barnett Zero 240,000 tons of CO2 in the ground. That's why Gunvor was so excited to partner with us. I'll talk more about that deal. Behind this, we've got a plan to get to 1 million tons of CO2 injection by 2027, injection rate. That's how quickly we're advancing the ball in carbon capture. We're doing it in a very simple fashion. This isn't, you know, as they say, rocket science. By the way, I don't know why rocket science is considered the bellwether. They should say this is not subsurface science. We don't need to give credit to rocket scientists or companies that launch stuff into space and blow it up. That's another day and another discussion. The last part of our business, of course, is the power business. We started building power investments before it was cool to be in power because we saw the criticality of electricity and electricity growth markets in its relationship to gas. We bought our first power plant in a 50-50 joint venture with Banpu Power in Q4 of 2021, and the second one in Q2 of 2023. We have today, under our joint venture, 1,500 MW sitting right in the middle of Texas with the ability to distribute power anywhere in the state, pretty much, and it's undedicated. You can imagine the positioning we have with hyperscalers as the AI boom is happening all over Texas, to be able to participate in around-the-clock energy that also can be decarbonized through this product called carbon sequestered gas. When you think about BKV, this is a company that, I hope you'll see after this presentation, envisions the way that energy can work in conjunction with carbon capture and power. I think this is where the world is going when it comes to a big part of the energy usage in the future. This just talks about our capital allocation strategy. Punchline here is our upstream business, our gas business is a cash engine. We generate cash to obviously reinvest, but above and beyond that, we have substantial cash to both grow our carbon capture business and our power business, which are both in joint ventures. We split the check with our partners where we are the controlling investors. You can see that this is a company that doesn't rely on a lot of capital raises to the external markets to grow the company, but actually has a plan built into the infrastructure of what we have in existing assets today to grow rapidly while having the option to continue to consolidate through M&A and/or do additional capital distributions to shareholders. This is the incredible aspect of it. It's because we've put together this really succinct strategy and we have these really high-quality assets that support that. I want to take a moment to talk about the Barnett. The Barnett was the first shale play of all, you know, Mitchell came in. We actually owned the original Mitchell well. You can come and we have pictures, you see the well that was first fracked. He obviously needed that well to supply gas to Chicago, and that set off this incredible revolution called the Shale Revolution that we've been the beneficiaries of. I will always say we're standing on the shoulders of giants. BKV is not, we could have done this without the forerunners who have pioneered so much technology and so much innovation. We hope that on the shoulders of giants, we'll take this further. What have we done? We've consolidated the Barnett, and we're continuing to do that. We started with the acquisition of Devon 's Barnett assets, which we closed in Q4 of 2020 at the peak of when COVID was starting to happen. Then we bought ExxonMobil's assets, their Barnett position in the middle of 2022 when gas price was at a recent all-time high. You can take a look at those transaction metrics. This is a company that knows how to buy through very different cycles. It comes from this obsessive-compulsive nature we have around M&A. We love M&A. We look at M&A. We study deals. I can't get enough of looking at deals. If I could pick one thing to read, I'd be reeling the rags on what's going on in the marketplace. M&A is a critical part of our growth strategy, and we've done that. In the Barnett in particular, it's very important because of a number of reasons. Number one, as these basins mature, having scale matters. Think about you having a PDP base where your production is declining every year and your costs are relatively fixed. Your ability to scale and optimize your operations are critical to the ability to keep that reserve life long and be able to really optimize the cash flow. The second thing is the marketing power that you have. You know, as you also know, whoever controls the ability to distribute your gas has an impact on what kind of margins you get from that gas. The third thing is our ability to create economies of scale around just the fact that we can, you know, generate more cash to reinvest in the business, whether that's development, whether that's efficiencies with the way we manage water, sand, you know, just hauling sand anywhere in the basin, rig moves. We just have so many more advantages when we start to aggregate the basin. That is why the Bedrock deal made a ton of sense for us. You can see on the screen there, the dark blue is the Bedrock on the right, on your right, the green teal being our current position and how that is completely a synergistic transaction to us, really a natural fit. We are excited about the additional inventory that I'll talk through that we can bring online as well as the production that we'll have there. Let's take a moment to talk about the Bedrock acquisition. You know, Bedrock backed by Mountain Capital. We had talked with them off and on for a number of years, and it really made sense when we were a public company for us to really talk seriously about how we put these two efforts together. It's been a great relationship there. We agreed on a $370 million price that includes the midstream and about $27.5 million worth of hedges in the market as of the dates on the slide there. Net net, it works out to below $3,000 of flowing M. They get about 5.2 million of our shares, which, you know, they've got a lockup period and then obviously a commitment not to bring too much to the market. We'll work collaboratively with us on when that makes sense, obviously to bring float to there. We're also excited about the ability to really extend our inventory. I'm going to show you a slide later there. We rank order their inventory in our cost curve. It's the incredible detail that we go through when we evaluate these transactions. Suffice to say, another 50, 10,000 ft equivalent locations in the Barnett, and then another 20 on top of that in sort of tier two locations, as well as 80 reef frac candidates. We've got tremendous running room in terms of our existing acreage as well, being able to extend that, extend those laterals. What I'm going to talk about in the Barnett is that there's a renaissance happening in that basin, where a lot of the frac approaches and the drilling technology that was kind of developed in other plays over the last 10 years really wasn't applied in the Barnett. All we're really doing here is taking, you know, the Barnett was sort of gen 1 type frac and drilling approaches. We're taking gen 5, gen 6 approaches and reapplying them back to the Barnett and seeing tremendous efficiencies such that the wells in the Barnett compete with some of the best basins in America when it comes to shale plays and gas weighted plays in particular. Just some highlights on our quarter. Obviously, we came in at a corporate level at about $88 million of EBITDA. That's against a CapEx of $78.8 million, all within cash flow, right? This is growing a carbon capture business, delivering a power business, growing production in our upstream business, and staying within cash flow. When you talk about have your cake and eat it too, BKV is the poster child. I think we're really excited about being able to do that. We outperformed on production. It was no surprise to us. We've been saying, look, the Barnett has been a play that people have forgotten. As you bring these approaches to the Barnett, you are going to see efficiencies. Some of the capital efficiency curves that you saw in the Marcellus or in the Haynesville, you hadn't seen those in the Barnett yet. There wasn't a public company that was specifically visible to what you're doing in the Barnett, and we're now able to do that. When you look at some of our metrics around the power business, exceeded on that business as well. On the carbon capture side, we're excited to be, as I said, injecting CO2 and growing that business more. Very strong quarter. We look forward to future guidance, but suffice to say, as much as I like to talk grand strategy, there's a saying at BKV, it's like, you know, get shit done. There's very much a mantra that if we say we're going to do something, even if it sounds aspirational, there's a huge level of accountability to go follow through and get that stuff done. It matters a lot to being able to convince the market. A couple of proof points I'll show further on that. Coming back to the Barnett efficiency. What are we seeing to date, right? This is just as of like through the first half of this year, 17% improvement in our type curves over previous programs. Again, this is, you know, reflective of an average. You can imagine that this trend, if you're looking at the most recent wells, just continues. A drilling efficiency, again, DNC cost, we're dropping that dramatically. $560 per lateral ft. That's everything, all in. Soup and nuts. That's the whole kit and caboodle. How are we able to do that? When you're in the basin and you're able to manage your supplier base, when you are really the only, you know, operator that can provide, you know, access to regular work, you're able to negotiate contracts that are really favorable. We're also able to take equipment that requires less pressure. Our, you know, our pumping equipment has less wear and tear. You know, 5,000 PSI, 6,000 PSI type pumping equipment versus where you go to the Haynesville. We're using a really modern rig with our partners here at Unit Drilling. They're bringing some of the best and learning about AI. They showed me this great AR chart that we're there looking at real-time reading, you know, where the rig is and where the wells are and pulling that information. It's just being deployed in an incredible way with the results that you see here. A lot of it's just good old-fashioned cooperation, learnings, and blocking and tackling, as you guys all know. These are the things we're doing. We see lots more running room, of course, on the horizon with the play. We're excited about it, and we expect to be continuing that. I didn't mention earlier on the slide there that there's about a BCF left of smaller players in the Barnett. You can imagine who the natural owner of those assets are. We see that as a critical way for us to continue to grow inorganically while being very excited about our organic growth. In terms of our organic growth, you know, you look at this chart is our cost curve. Just kind of your, what I would say, economic price points with your Y-axis being your Henry Hub and then your X-axis being the stack rank order of the number of wells that we could drill to fulfill that. The dark blue is the, you know, the wells that you see in NEPA, and then the gray is the Bedrock deals. What you can see is there's a tremendous amount of inventory left in the Barnett. Why is this the case? Wasn't the Barnett spent? Isn't it a done basin? You can imagine when people originally developed it, it was 5,000 ft laterals, and they were just spraying the wells everywhere, right? There was no sort of rhyme or reason. Now that we know and we've mapped the reservoir, by the way, we see more of the Barnett than any company in the history of the Barnett. We have more well history on horizontal shale plays than any company in the history of shale plays by virtue of being in the Barnett because those are the oldest wells that we've seen. That combination of information with a very capable technical team that's looking at it allows us to really pinpoint exactly where we need to drill these wells. We're going through and retapping swaths of reservoir that were left behind because we're now able to do designer wells coming in behind them off the same pads, reusing the water and the midstream infrastructure. The Barnett was a 5 BCF a day play. Today it's 2 BCF. Imagine the headroom we have in our midstream infrastructure to just bring on new production without having to even miss a beat. This is the kind of inventory and running room. When people talk about how do we serve LNG, I think one of the biggest misses is that, and those of you who are running research on here, this is your cue to perk up and tell me, you know, but people don't realize the Barnett could be another 3 BCF a day play. There's another BCF I think that could come online from this play to serve the LNG, and it's going to have to. If you're watching the Hainsville and you're watching other plays, we don't have enough gas to serve what's happening in the LNG corridors. You're going to need plays like the Barnett. It's not going to serve all of it, but there's room to grow. It's low nitrogen gas, 0.8%. This is critical when you think about gas coming over from Midland to the Gulf Coast, and you've got to blend it because it's too expensive to extract that 3%- 5% nitrogen concentration. This is where the Barnett is ideally positioned to serve that Gulf Coast. Where are we in the Barnett? I'm going to skip ahead. There's a lot of slides in here. I'm not going to go through all of them. We won't get through this, but I'll go through. Our positioning in the Barnett allows us to get gas to some of the critical markets in the Gulf Coast. There on the slide, you see where we sell gas to today. I want to point out and take a moment here to talk about our Gunvor deal. Many of you know of Gunvor. They're a trader out of Switzerland, a global commodity firm. They were extremely excited to sign up with this new product called carbon sequestered gas, where we took the CO2 that we're injecting that's backed by blockchain and certified, staple it to our gas so that whoever combusts our gas has a net neutral footprint, either not adding a molecule of CO2 all into the atmosphere. Think about this when you apply it against marine fuel standards. If you're buying a ship that's consuming LNG and you have to move that ship to and from Europe, you're going to be held to a carbon intensity standard, which increases over time. If you can buy a gas product, i.e. an LNG product that is already decarbonized, your CI score goes to zero on what you combust from that. That's just one example of the market potential. The penalties increase over time. This is irrespective of what the U.S. does or what Europe does. This is a marine organization that represents standards that, you know, across the oceans, all the shipping companies have agreed to. You're going to be charged if you go in a port and your CI score is not meeting a certain criteria. That's why a company like Gunvor would jump on this idea of carbon sequestered gas. You can imagine it trades at a premium off of the cost to comply with those CI scores. That's not rocket science, as we say. It's common sense. We've figured out a way to bundle those two products together on top of the money we're getting on 45Q for carbon sequestering and on what we're getting for our gas. This is what I mean creating alpha. We're creating a new product, a new category. It's called in the grocery stores, you buy organic food and you pay twice as much for the same bloody bananas. This is what we're doing with gas. I mean, that's a terrible example, but it works. You all remember that one. You might not remember everything I say, but you'll remember that. The other thing I would say is we're sitting underneath Dallas Fort Worth, literally underneath Dallas Fort Worth, where some of the fastest growing data center markets are happening in the country. In fact, the fastest growing electricity market, sales in electricity in the next from 2024 to 2026, is Texas. We can actually just supply our gas direct to these data centers as well. This is the incredible thing of the Barnett, why we're so excited. Let's take a moment to talk about our power business. We have two modern combined cycle power plants. These are basically big steel boxes with jet engines that consume gas. I mean, that's what it is. That's what a power plant is that's a combined cycle. What you see on there is the Temple 1 and 2, 250-acre lot located in Temple. If you've never been to Temple, there's a good Mexican restaurant, a good barbecue place, and that's about it. Not much else. I don't recommend it for touristing, but certainly exciting from a power plant perspective because it's located an hour's drive from San Antonio and the Austin area. We serve our gas into the Dallas Fort Worth market, but you can also ship it off to Houston if you need to. You're sitting there and you've got an ideal asset that we bought at $600 a KW approximately, less than half of replacement costs. We have 2.8 BCF a day of storage with these power plants, and we can serve, as I said, most of the Texas market. Today, those plants are undedicated. What's exciting for me is that the ability for us to ramp into the electricity demand that we see on the horizon from the AI-driven data center boom is incredible. I got one minute. All right. Let's just take a look at that. What is that ability? Today, our capacity factor, which is the amount you utilize of the asset, is about 56%. We have another 34% running room if you run the facility up to 90%. That's at current strip. If you look at where the strip is going over time, you can see it's up and to the right. It doesn't take, you know, somebody who's got a PhD. to do the math here quickly to say you've got a lot of EBITDA upside potential just from your existing assets, let alone what you're going to do to grow and enhance those assets. Very excited as we look at the AI-driven data center boom in particular, as well as the industrial demand that's coming to Texas. Finally, on the carbon capture business, I mentioned that that's really exciting for us. We've been growing that actively. We're on track, ladies and gentlemen, to be delivering 1 million tons per annum run rate by 2027. This is the projects of emitters, third-party emitters and our own that have signed up. I always said the one thing to watch in a carbon capture deal is how much did it cost you and who have you signed up. Who are the emitters that you've signed up? That's the biggest gating item. It's not a sink. There are lots of sinks all over Texas. The question is who do you sign up for and at what price point? BKV is leading the way. It goes to this point that we're not afraid to double down when the market looks left. When everyone was kind of hemming and hawing carbon capture, we went big. When everyone was hemming and hawing on gas in Q4 2020 at the peak of COVID, we doubled down. When everyone was not looking at power and ERCOT, we bought the power plants. This is a company that knows how to look through cycles, see deep value, and make strategic bets around that to build this winning business model. I'll wrap up by saying there's a lot of slides here. You can read these at your leisure. I'm sure everyone wants to do that. We're cash generating. We're growth-driven. We've got margin enhancement potential, and there's multiple ways to win. You can have your cake and eat it too with BKV, thank you.