Note 15 - Credit and Other Risk

Each of the derivative contracts entered into by the Company with counterparties is subject to the terms of an International Swap Dealers Association master agreement (“Master Agreement”).

The Company is not currently aware of any exceptional event, dispute, risks, or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position, or operations of the Company.

BKV-BPP Power relies on the Texas ERCOT system as the destination of produced energy in the State of Texas. If the Texas ERCOT system was not available to the Company, this would have a material adverse effect on the Company’s financial results.

The Company is subject to U.S. federal income tax as well as income in various state jurisdictions, and the Company’s operating cash flow is sensitive to the amount of income taxes the Company must pay. In the jurisdictions in which the Company operates or previously operated, income taxes are assessed on earnings after consideration of all allowable deductions and credits. Changes in the types of earnings that are subject to income tax, the types of costs that are considered allowable deductions (such as intangible drilling costs) and the timing of such deductions, or the rates assessed on the Company’s taxable earnings would all impact the Company’s income taxes and resulting operating cash flow. In addition, new taxes are, on occasion, proposed and if enacted, could adversely impact the Company’s financial condition and results of operations.

Substantially all of the Company’s accounts receivable, net result from the sale of natural gas, joint interest billings, and power sales. The Company sells the substantial majority of its natural gas, NGLs, and oil to fewer than five customers and bills working interest owners for costs related to development of the Company’s natural gas properties. As of December 31, 2025 and 2024, one purchaser accounted for 62% and 51%, respectively, of accounts receivable - contracts with customers. For the year ended December 31, 2025, two customers each accounted for approximately 59% and 13%, respectively, of the Company’s revenue from contracts with customers, totaling $675.9 million and $147.6 million, respectively. For the year ended December 31, 2024, three customers each accounted for approximately 47%, 18%, and 10%, respectively, of the Company’s revenue from contracts with customers, totaling $380.6 million, $146.0 million, and $82.6 million, respectively. For the year ended December 31, 2023, the same three customers each accounted for approximately 47%, 17%, and 10%, respectively, of the Company’s revenue from contracts with customers, totaling $476.5 million, $170.6 million, and $104.0 million, respectively. Additionally, for the year ended December 31, 2023, a fourth customer accounted for approximately 13% of the Company’s revenue from contracts with customers, totaling $129.8 million. The Company does not believe that the loss of these customers would have a material adverse effect on the consolidated financial statements because alternative customers are readily available.

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