Barnett and Marcellus shale E&P BKV Corp. on Nov. 18 filed paperwork to conduct an initial public offering following more than $2 billion in acquisitions in the past two years.

BKV, based in Denver, initially started with its core in the Marcellus before taking a step out into the Barnett about two years ago and has since become the shale’s largest producer. The company averages daily production of 864 MMcfe/d, consisting of approximately 79% natural gas and approximately 21% NGL, according to a filing with the Securities and Exchange Commission (SEC).

In a July interview, BKV CEO Chris Kalnin said the company planned to continue consolidating in the Barnett, where the company has built on a strategy of a “closed-loop” approach to net-zero emissions with business lines devoted to natural gas production, midstream, power generation and carbon capture, utilization and sequestration.

BKV closed look approach
(Source: SEC filings)

Kalnin said the company’s thesis is based on providing climate friendly energy to consumers by owning and operating upstream and midstream assets, power plants as an integrated power company.

“That’s really where consumers are at: ‘I don’t want any responsibility of having to solve all that too, by the way, you go solve that problem for me,’” he told Hart Energy.

BKV assets
(Source: BKV)

BKV has engaged in number of large transactions, including the July purchase of upstream and midstream infrastructure from subsidiaries of Exxon Mobil Corp. for $750 million. The acquisition of Exxon Mobil subsidiary XTO Energy Inc.’s assets included upstream leasehold in Tarrant, Johnson and Parker counties in Texas, as well as Barnett Gathering LLC’s 750 miles of gathering pipelines, compression and midstream processing.

BKV entered in the Barnett in 2020 following the purchase of assets from Devon Energy for up to $830 million, including contingency fees.

The company reported that, as of Sept. 30, it held 505,000 net acres, 99% held by production.

Last year, BKV, in partnership with Banpu Power U.S. Corp., purchased a natural gas-fueled power plant in Temple, Texas, for $430 million. And in June, the company reached a final investment decision to begin a CCS project with EnLink Midstream LLC.

The company’s SEC filing reported EBITDAX of $332.5 million for the first nine months of 2022 and $142.9 million in adjusted free cash flow. The company’s net leverage ratio is 1.3x, according to the filing.

The company is backed by Banpu Pcl.

Credit Suisse​, Bank of America Securities​, Barclays, Citigroup​, Evercore ISI​ and Jefferies are underwriting the offering. BKV is represented by law firms Baker Botts L.L.P. and Latham & Watkins LLP, according to the filing.

Comments