Big Sky Industrial Inc.

What they do

The company is developing the Big Sky Carbon Hub, a Montana project with a Phase 1 processing facility designed for roughly 8 MMcf/d of inlet capacity, targeting about 14 MMcf of high-purity helium and the capture and permanent sequestration or utilization of approximately 125,000 metric tons of CO2 per year at initial operations. On April 27, 2026 it signed a five-year helium sales agreement with an investment-grade global industrial gas counterparty, and it maintains a legacy exploration and production business that generated most of its reported revenue to date.

Revenue drivers

• Contracted helium sales — A five-year, 100% take-or-pay agreement at a fixed all-in price of $285 per Mcf realized at the plant gate, with CPI-linked escalation beginning March 1, 2028 and a year-three pricing redetermination; the counterparty bears all transportation, logistics and downstream delivery costs. No revenue has been recognized yet; management targets first revenue in Q1 2027.
• Carbon capture and sequestration — The Phase 1 plant is designed to capture and permanently sequester or utilize approximately 125,000 metric tons of CO2 per year at initial operations, tied to federal 45Q policy per management commentary. No contracted revenue is described in the excerpts.
• Legacy oil and gas production — The existing exploration and production business is the source of reported historical revenue, which has fallen from $44.6M in 2022 to $7.4M in 2025, and $2.1M in the quarter ended June 30, 2026. Management describes the company as transitioning away from this legacy E&P base.

Recent performance

Second quarter 2026 revenue was $2.1M, up from $1.6M in Q1 2026, $1.4M in Q4 2025 and $1.7M in Q3 2025. Full-year revenue declined from $6.7M in 2021 to $7.4M in 2025, while annual net losses narrowed from $32.4M in 2023 to $25.7M in 2024 and $14.4M in 2025. Operating cash flow was negative $7.1M in 2025, versus positive $4.6M in 2024 and $5.5M in 2023. At June 30, 2026 the company reported total assets of $55.9M, total liabilities of $18.9M, shareholder equity of $37.0M and cash and equivalents of $6.0M.

Strategy

Management is transitioning the company from a legacy E&P business to an integrated industrial gas, energy and carbon management company centered on the Big Sky Carbon Hub. Following the March 18, 2026 final investment decision and a fixed-scope EPC agreement with CANUSA EPC, construction of the Phase 1 processing facility is underway. Industrial gas capital expenditures totaled $9.6M in the first six months of 2026 versus $2.5M in the prior-year period. On April 20, 2026 the company amended its senior secured credit agreement to double the borrowing base to $20M, fix the interest margin at 200 basis points over the alternate base rate, and suspend quarterly financial covenant testing through the fiscal quarter ending March 31, 2027.

Risks

• Execution and first-revenue timing — Commercial operations and first revenue at the Big Sky Carbon Hub are targeted for Q1 2027, and the company had $6.0M of cash against $9.6M of industrial gas capital spending in the first half of 2026.
• Reduced tax and regulatory deductions — The 10-K states that legislative proposals to eliminate the immediate deduction for intangible drilling and development costs, eliminate the domestic production activities deduction, repeal the percentage depletion allowance, or extend the amortization period for geological and geophysical expenditures could adversely affect results.
• Water availability and disposal for hydraulic fracturing — The 10-K states that inability to secure sufficient water or to dispose of or recycle water used in operations, or new restrictions on hydraulic fracturing or waste disposal, could increase costs and cause delays or termination of operations.
• Commodity price volatility, inflation and supply chain — The 10-K cites volatility in industrial gas, oil and natural gas prices, which could require further ceiling test write-downs or impairments, and notes higher costs for steel, sand and fuel from supply chain disruption, tariffs, labor shortages and geopolitical instability.

Outlook

Management targets commercial operations and first revenue at the Big Sky Carbon Hub in the first quarter of 2027. Stated priorities for the balance of 2026 are completing gathering infrastructure, securing MRV approvals, and commissioning the plant while maintaining financial flexibility to deliver Phase 1 and advance planning for Phase 2. Management says the five-year, 100% take-or-pay helium offtake provides contracted initial revenue.