BKV Corporation Seeks U.S. IPO To Pay Down Debt (Pending:BKV)

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A Quick Take On BKV Corporation

BKV Corporation (BKV) has filed to boost $119 million in an IPO of its widespread stock, in response to an S-1 registration assertion.

The agency is an built-in producer of pure fuel and associated fuels within the Barnett and Marcellus Shale areas of the United States.

I’ll present an replace after we be taught extra about administration pricing and valuation assumptions for the IPO.

BKV Overview

Denver, Colorado-based BKV Corporation was based to amass, function, develop, transport and generate energy from pure fuel and pure fuel liquid gas sources.

Management is headed by founder and Chief Executive Officer Christopher P. Kalnin, who has been with the agency since 2015 and was beforehand a senior government at Level 3 Communications and a Strategy Advisor and Chief of Staff to the CEO at PTT Exploration.

Below is a map and desk of the agency’s drilling, midstream and energy era belongings.

Company Assets

Company Assets (SEC)

As of September 30, 2022, BKV has booked truthful market worth funding of $1.05 billion from traders, together with Banpu North America Corporation.

BKV’s Market & Competition

According to a market research report by the Dallas Federal Reserve, the Barnett shale is situated within the Fort Worth/Dallas area encompassing 25 counties.

The formation has produced over 13 trillion cubic toes of pure fuel for the reason that first nicely was drilled.

The Marcellus Shale is situated within the Appalachian area, from New York state by to Pennsylvania, Maryland, Ohio, Virginia and West Virginia.

Also, the formation has been the most important supply of pure fuel within the United States.

Major aggressive or different trade contributors embody:

  • TotalEnergies

  • Lime Rock Resources

  • Chesapeake Energy

  • Repsol USA

  • Coterra Energy

  • Southwestern Energy

  • Others

BKV Corporation Financial Performance

The firm’s latest monetary outcomes will be summarized as follows:

  • Growing topline income

  • Variable working revenue

  • High however uneven money stream from operations

Below are related monetary outcomes derived from the agency’s registration assertion:

Total Revenue

Period

Total Revenue

% Variance vs. Prior

Nine Mos. Ended September 30, 2022

$ 519,446,000

616.1%

2021

$ 505,682,000

252.9%

2020

$ 143,289,000

Operating Profit (Loss)

Period

Operating Profit (Loss)

Operating Margin

Nine Mos. Ended September 30, 2022

$ 8,120,000

1.6%

2021

$ 20,323,000

4.0%

2020

$ (9,907,000)

-6.9%

Net Income (Loss)

Period

Net Income (Loss)

Net Margin

Nine Mos. Ended September 30, 2022

$ 154,124,000

29.7%

2021

$ (170,714,000)

-32.9%

2020

$ (43,806,000)

-8.4%

Cash Flow From Operations

Period

Cash Flow From Operations

Nine Mos. Ended September 30, 2022

$ 231,076,000

2021

$ 358,133,000

2020

$ (7,405,000)

(Glossary Of Terms)

(Source – SEC)

As of September 30, 2022, BKV had $167.1 million in money and $1.8 billion in whole liabilities.

Free money stream throughout the twelve months ended September 30, 2022, was $146.2 million.

BKV Corporation IPO Details

BKV intends to boost $119 million in gross proceeds from an IPO of its widespread stock, though the ultimate determine could differ.

No current shareholders have indicated an curiosity in buying shares on the IPO worth.

Management says it’s going to use the online proceeds from the IPO as follows:

we intend to make use of [an as-yet undisclosed amount] to repay in full the mortgage underneath the $75 Million A&R Loan Agreement with BNAC, [an additional amount] to make extra contingent consideration funds payable in reference to the Devon Barnett Acquisition and the rest for different common company functions, together with to fund the enlargement of our CCUS enterprise.

(Source – SEC)

Management’s presentation of the corporate roadshow shouldn’t be out there.

Regarding excellent authorized proceedings, administration stated any authorized issues at present at difficulty wouldn’t have a fabric antagonistic impact on its monetary situation or operations.

The listed bookrunners of the IPO are Credit Suisse, BofA Securities, Barclays and different funding banks.

Commentary About BKV’s IPO

BKV is in search of U.S. public capital market funding to pay down debt for its company enlargement plans.

The firm’s financials have produced growing topline income, fluctuating working revenue and excessive however variable money stream from operations

Free money stream for the twelve months ended September 30, 2022, was $146.2 million.

The agency at present plans to pay dividends in response to a willpower by the Board of Directors and topic to its numerous credit score settlement necessities.

BKV’s trailing twelve-month CapEx Ratio was 1.87, which signifies it has spent considerably on capital expenditures as a proportion of its working money stream.

The market alternative for extracting pure fuel and NGL merchandise from the Barnett and Marcellus Shale areas is giant and anticipated to develop considerably attributable to growing demand for cleaner gas sources than current sources similar to coal.

Credit Suisse is the lead underwriter and there’s no efficiency knowledge on IPOs led by the agency over the past 12-month interval.

Risks to the corporate’s outlook as a public firm embody the risky worth of pure fuel costs on account of geopolitical forces.

I stay up for studying extra about administration’s distribution expectations and about its pricing and valuation assumptions.

Expected IPO Pricing Date: To be introduced.



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