BKV Doubles Temple Modular Power Plan Under AI-Lab Deal

The Tip Desk · November 7, 2026 · 3 min read

The company booked $29.4 million of net income, or $0.27 a share, as it expanded Temple modular generation to 400 MW and issued $575.0 million of convertible notes.

BKV Corporation (BKV) reported net income attributable to the company of $29.4 million, or $0.27 a share, for the three months ended September 30, 2026, down from $75.8 million, or $0.67 a share, in the prior quarter.

Adjusted net income was $39.9 million, or $0.36 a share, and adjusted EBITDAX attributable to BKV was $132.7 million. The Denver-based energy company also completed a $575.0 million convertible senior notes offering at a 1.625% annual rate and expanded planned modular generation at the Temple Energy Complex to 400 MW from 200 MW under a cost reimbursement agreement with a leading frontier AI lab.

If mutually agreeable offtake arrangements are not agreed by November 18, 2026, the agreement covers up to approximately $179 million, with an intended extension to December 21, 2026. The intended offtaker may elect to take assignment of the equipment supply contract and reimburse eligible costs, subject to an aggregate cap of $374.1 million. BKV-BPP Power said the arrangement allows it to hold its development schedule while commercial discussions move toward a long-term purchase price agreement.

A separate equipment supply agreement for about 1.2 GW of combined-cycle gas turbine capacity in Texas is backed by a cost-reimbursement arrangement with an investment-grade hyperscaler that is also the intended offtaker. With the additional modular equipment, existing and planned power assets now represent about 3.3 GW of potential capacity.

Temple I and II generated 2,317 GWh in the quarter, with a combined capacity factor of 71.7% and an average equivalent availability factor of 96%. Temple I’s capacity factor was 75.9%, compared with 71.1% a year earlier; Temple II was 67.4%. Power total revenues, net, were $170.8 million, and income from operations was $38.5 million. Average power price including derivatives was $40.37 a megawatt-hour, and the average spark spread was $21.18 a megawatt-hour. The company said wholesale power prices and spark spreads were below expectations as increased renewable generation and battery storage moderated peak pricing despite record ERCOT demand.

Upstream/Midstream adjusted EBITDAX attributable to BKV was $122.1 million. Average net production was 981.2 MMcfe/d, above the high end of guidance excluding the Barnett acquisition completed September 15, 2026, which added about 65 MMcfe/d of production and about 0.35 Tcfe of proved developed producing reserves. Development capital expenditures were $51.5 million, below the low end of the guided range. Total accrued capital expenditures were $77.8 million. The company completed its first full quarter of internally marketing all natural gas production.

CCUS quarterly sequestration was approximately 55,200 metric tons of CO2 equivalent after the Barnett deal added an injection facility, taking the operating portfolio to four projects with an annual run rate of about 350,000 metric tons. BKV said it remains on track for a targeted annual injection run rate of 1.5 million metric tons in 2028. It also became the first company to receive Verra carbon credit certification for CO2 permanently sequestered through its CCUS operations, enabling delivery of carbon sequestered gas under arrangements with Kiewit and Gunvor.

Net cash provided by operating activities was $164.5 million. Adjusted free cash flow before power growth was $31.2 million. Cash and cash equivalents were $619.6 million at September 30, 2026, with total liquidity of $1.2 billion. Total principal debt was $2.0 billion and net debt $1.4 billion. The net leverage ratio was 2.41x.

For the fourth quarter of 2026, BKV guides total capital expenditures of $315 million to $385 million, including $240 million to $270 million for power strategic capital and investments plus maintenance, net production of 1,010 to 1,030 MMcfe/d, and power adjusted EBITDAX of $10 million to $30 million. It expects $80 million to $100 million in JV partner capital contributions for power and CCUS in the quarter.