"After natural gas producer BKV expanded into the power business, the company went on its IPO roadshow two years ago and was met with suspicion and ridicule about its then-unusual business model. It's rare-and uncomfortable for shareholders-for oil and gas producers to take over power plants that require very different skillsets. They're both hydrocarbon industries, but drilling and extracting from the earth and producing electricity require completely different business models and technologies."
""I went to a very large institutional investor and explained our gas-to-power strategy in our business, and I got berated for like 30 minutes about how it was such a foolish thing for me to go into power," BKV founder and CEO Chris Kalnin told Fortune."
"Fast forward to today, and BKV's stock has spiked 50% since going public in September 2024-rising from a small cap to a mid-market cap value of $2.5 billion. BKV is on the brink of making a deal with a hyperscaler to provide immediate gas-fired power to an AI data center campus and continue, according to analysts, before buying and building more power plants. "It was a pretty controversial decision for us to buy power. It's been, honestly, one of our best investments ever," Kalnin said. "Hyperscalers need more generation. They used to talk about hundreds of megawatts. Now the conversations start with gigawatts. Can you give me gigawatts?" "We're going to have to build power plants. If they want gigawatt power, we're going to have to add more power," he said."
BKV expanded from natural gas production into power generation and acquired two Texas power plants four years ago, creating 1.5 gigawatts of generation capacity. The move initially drew investor skepticism because oil-and-gas operations and power plant operations require different skillsets and business models. CEO Chris Kalnin recounted being berated by an institutional investor for pursuing a gas-to-power strategy. Since the September 2024 IPO, BKV's stock rose 50% to a $2.5 billion market value. The company is nearing a deal to supply immediate gas-fired power to an AI data center campus and plans further plant purchases and construction to meet gigawatt-scale demand.
Read at Fortune
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