BKV to Acquire Bedrock’s Barnett Shale Assets for $370MM

BKV Corporation is acquiring Bedrock Energy Partners’ Barnett Shale assets in north Texas in a transaction valued at approximately $370 million.

BKV and its subsidiary BKV Upstream Midstream LLC entered into a definitive purchase agreement to acquire all of the issued and outstanding equity interests of Bedrock Production LLC, according to a news release.

The Bedrock acquisition is estimated to include approximately 97,000 net acres directly offsetting BKV’s existing acreage, midstream assets, and around 108 million cubic feet equivalent per day of production, consisting of approximately 63 percent natural gas, BKV said.

The purchase price, to be funded upon closing, consists of a combination of cash and shares of BKV common stock valued at up to $110.0 million, or approximately 5.2 million shares. The cash will be funded from a combination of cash on hand and borrowings under existing reserve-based lending capacity, the company said.

BKV said the acquisition is expected to add 1,121 producing locations with low 1- and 5-year base decline rates of approximately 7 percent and nearly 1 trillion cubic feet equivalent of 1P reserves, using NYMEX strip pricing.

The acquisition also covers about 50 new drill locations with an equivalent 10,000 foot lateral length at accretive natural gas price break-evens compared to BKV’s existing inventory, the company said.

Further, BKV said it entered an agreement with commodities trader Gunvor to supply carbon sequestered gas (CSG).

Under the agreement, Gunvor will purchase, market, and sell CSG, subject to certain conditions. The agreement covers up to 10,000 million British thermal units per day, BKV said.

New CCS Project in East Texas

Last month BKV said it signed an agreement to develop a new carbon capture and sequestration (CCS) project with an undisclosed “leading diversified midstream energy company” at a natural gas processing plant in East Texas.

The agreement expands on a previously announced agreement between the companies to develop a separate CCS project at a location in South Texas, BKV said in an earlier statement.

The new CCS project will be constructed on the same site as an existing East Texas natural gas processing plant and is expected to be operational in early 2027, according to the statement.

Under the terms of the agreement, BKV said it forecasts approximately 70,000 metric tons per year of carbon dioxide (CO2) waste stream could be captured at the plant, which would then be delivered to BKV to be compressed, transported and permanently sequestered via BKV’s co-located class II injection well. The co-located class II injection well eliminates the need to invest in a high-pressure pipeline, the company stated.

The East Texas CCS project will be owned by BKV, but may be transferred to its recently announced CCS joint venture with Copenhagen Infrastructure Partners, the company said.

“Deepening our relationships with key partners demonstrates their confidence in our technical and operating expertise in developing and scaling carbon capture, utilization and sequestration projects,” BKV CEO Chris Kalnin said. “As demand for low-carbon energy solutions continues to grow, we are pleased to expand our existing business relationship with one of the largest midstream providers in the United States”.

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