Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the
“Company”) today announced financial and operating results for the
second quarter of 2024.
Key Highlights
- AGI facility online and treated
1.82 Bcf for the second quarter 2024 reducing operating expenses by
$4.26/Boe compared to the first quarter 2024
- On August 12, 2024, the AGI
facility processed 26.6 MMcf/d which allowed the Company to return
wells to production and realize approximately 7,500 Bbls of oil per
day (approximately 13,500 Boe/d) net production
- Drilled and brought two additional
wells on production in Monument Draw in the second quarter 2024
with the next two-well pad to be completed in late third quarter or
early fourth quarter 2024
- Generated second quarter 2024 sales
volumes of 12,857 Boe/d
- Executed a $20.0 million preferred
equity raise in May 2024 to support drilling program and debt
reduction
- Continuing strategic alternatives
initiative and reviewing a requested amendment to the previously
announced Merger Agreement with Fury that would reduce the purchase
price to $7.00 per share and require all of the existing preferred
equity holders to roll over 100% of their preferred equity
Management Comments
The Company concluded its current six-well
campaign ahead of planned timing and under budget on each well. The
Vermejo two-well pad in Monument Draw is currently a drilled but
uncompleted well and is currently scheduled to be fracked in the
third quarter of 2024. New pad locations and permits are being
prepared in all asset areas to support additional activity in Ward,
Winkler and Pecos Counties. Capital costs continue to trend lower
in the field with latest Monument Draw wells estimated below
$950/lateral foot for drilling, completion and wellsite facilities
while maintaining completions over 2,000 lbs/ft proppant. The
previously announced Glacier and Rio pads saw strong performance
with IP’s reaching over 2,000 Boe/d and sustained production above
the company’s type curve.
During the second quarter 2024, the acid gas
injection (“AGI”) facility treated approximately 20 MMcf/d average
and returned approximately 17 MMcf/d of sweet gas to the Company
for sales to its midstream partner. To date, the AGI facility has
processed more than 2.7 Bcf of sour gas and allowed the Company to
realize substantial savings compared to treating alternatives. The
Company and its JV partner continued to ramp toward full inlet
capacity, with expected savings up to $2.0 million per month in gas
treating costs.
Results of Operations
Average daily net production and total operating
revenue during the second quarter of 2024 were 12,857 Boe/d (49%
oil) and $49.1 million, respectively, as compared to production and
revenue of 14,253 Boe/d (49% oil) and $54.3 million, respectively,
during the second quarter of 2023. The decrease in revenues in the
second quarter of 2024 as compared to the second quarter of 2023 is
primarily attributable to an approximate 1,396 Boe/d decrease in
average daily production. Excluding the impact of hedges, Battalion
realized 98.4% of the average NYMEX oil price during the second
quarter of 2024. Realized hedge losses totaled approximately $3.2
million during the second quarter of 2024.
Lease operating and workover expense was $10.22
per Boe in the second quarter of 2024 versus $10.79 per Boe in the
second quarter of 2023. The decrease in lease operating and
workover expense per Boe year-over-year is primarily a result of
savings on chemicals and lower SWD costs. Gathering and other
expense was $10.36 per Boe in the second quarter of 2024 versus
$12.97 per Boe in the second quarter of 2023. The decrease in
gathering and other expenses per Boe is primarily related to the
start-up of the AGI facility and lower treating fees associated
versus the Valkyrie (liquid redox) plant. General and
administrative expenses were $2.85 per Boe in the second quarter of
2024 compared to $4.04 per Boe in the second quarter of 2023. The
decrease in general and administrative expense is primarily
attributable to a decrease in payroll and benefits compared with
the prior year period as a result of the headcount reduction in
2023 partially offset by an increase in audit, legal and
transaction costs associated with the potential merger with Fury
Resources.
For the second quarter of 2024, the Company
reported a net loss available to common stockholders of $8.7
million or a net loss of $0.53 per share available to common
stockholders. After adjusting for selected items, the Company
reported an adjusted diluted net loss available to common
stockholders for the second quarter of 2024 of $13.2 million or an
adjusted diluted net loss of $0.80 per common share (see
Reconciliation for additional information). Adjusted EBITDA during
the quarter ended June 30, 2024 was $15.6 million as compared to
$16.8 million during the quarter ended June 30, 2023 (see Adjusted
EBITDA Reconciliation table for additional information).
Liquidity and Balance Sheet
As of June 30, 2024, the Company had $160.2
million of indebtedness outstanding and approximately $0.3 million
of letters of credit outstanding. Total liquidity on June 30, 2024,
made up of cash and cash equivalents, was $54.4 million.
On May 13, 2024, 20,000 shares of preferred
equity were sold for proceeds of $19.5 million, net of discount. On
May 14, 2024, the Company used $17.3 million of the proceeds from
the sale of the preferred equity to pay down debt.
For further discussion on our liquidity and
balance sheet, as well as recent developments, refer to
Management’s Discussion and Analysis and Risk Factors in the
Company’s Form 10-Q.
Merger Agreement with Fury
Resources
Fury Resources, Inc. (“Fury”) has requested a
further amendment of the previously disclosed Agreement and Plan of
Merger dated December 14, 2024, as amended (the “Merger
Agreement”), such that the amount of merger consideration payable
to the Company’s stockholders in connection with the transaction
contemplated by the Merger Agreement would be reduced from $9.80
per share to $7.00 per share. The modified offer is contingent on
the existing holders of the Company’s Series A through Series A-4
preferred equity rolling 100% of their preferred equity into new
preferred equity in the surviving company following the merger in
order to help support the transaction. The Company’s Special
Committee and its Board of Directors are reviewing Fury’s proposal.
The Company has been advised by the holders of the Company’s
preferred stock that they are also reviewing Fury’s proposal. The
Company does not intend to comment further on this matter until
such reviews are complete.
Important Information for Investors and
Stockholders
This communication is being made in respect of
the proposed transaction involving the Company and Fury Resources,
Inc., a Delaware corporation. In connection with the proposed
transaction, the Company intends to file, or has filed, the
relevant materials with the U.S. Securities and Exchange Commission
(“SEC”), including a proxy statement on Schedule
14A and a transaction statement on Schedule 13e-3
(the “Schedule 13e-3”). Promptly after filing
its definitive proxy statement with the SEC, the Company will mail
the definitive proxy statement and a proxy card to each stockholder
of the Company entitled to vote at the special meeting relating to
the proposed transaction. This communication is not a substitute
for the proxy statement, the Schedule 13e-3 or any other document
that the Company has or may file with the SEC or send to its
stockholders in connection with the proposed transaction. The
relevant materials filed by the Company will be made available to
the Company’s investors and stockholders at no expense to them and
copies may be obtained free of charge on the Company’s website at
www.battalionoil.com. In addition, all of those materials will be
available at no charge on the SEC’s website at www.sec.gov.
Investors and stockholders of the Company are urged to read the
proxy statement, the Schedule 13e-3 and the other relevant
materials as they become available before making any voting or
investment decision with respect to the proposed transaction
because they contain important information about the Company and
the proposed transaction.
Participants in
Solicitation
The Company and its directors, executive
officers, other members of its management and employees may be
deemed to be participants in the solicitation of proxies of the
Company stockholders in connection with the proposed transaction
under SEC rules. Investors and stockholders may obtain more
detailed information regarding the names, affiliations and
interests of the Company’s executive officers and directors in the
solicitation by reading the Company’s Annual Report on
Form 10-K, for the fiscal year ended December 31, 2023,
and the proxy statement, the Schedule 13e-3 and other relevant
materials that will be, or have been, filed with the SEC in
connection with the proposed transaction as they become available.
Information concerning the interests of the Company’s participants
in the solicitation, which may, in some cases, be different than
those of the Company’s stockholders generally, will be set forth in
the proxy statement relating to the proposed transaction and the
Schedule 13e-3, as they become available.
Forward Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements that are not strictly historical statements
constitute forward-looking statements. Forward-looking statements
include, among others, statements about anticipated production,
liquidity, capital spending, drilling and completion plans, and
forward guidance. Forward-looking statements may often, but not
always, be identified by the use of such words such as "expects",
"believes", "intends", "anticipates", "plans", "estimates",
“projects,” "potential", "possible", or "probable" or statements
that certain actions, events or results "may", "will", "should", or
"could" be taken, occur or be achieved. Forward-looking statements
are based on current beliefs and expectations and involve certain
assumptions or estimates that involve various risks and
uncertainties that could cause actual results to differ materially
from those reflected in the statements. These risks include, but
are not limited to, those set forth in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2023, and other
filings submitted by the Company to the SEC, copies of which may be
obtained from the SEC's website at www.sec.gov or through the
Company's website at www.battalionoil.com. Readers should not place
undue reliance on any such forward-looking statements, which are
made only as of the date hereof. The Company has no duty, and
assumes no obligation, to update forward-looking statements as a
result of new information, future events or changes in the
Company's expectations.
About Battalion
Battalion Oil Corporation is an independent energy company
engaged in the acquisition, production, exploration and development
of onshore oil and natural gas properties in the United States.
Contact
Matthew B. SteeleChief Executive Officer & Principal
Financial Officer832-538-0300
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
|
Oil |
$ |
45,699 |
|
|
$ |
46,168 |
|
|
$ |
88,128 |
|
|
$ |
100,383 |
|
Natural gas |
|
(2,119 |
) |
|
|
2,060 |
|
|
|
(72 |
) |
|
|
4,960 |
|
Natural gas liquids |
|
5,503 |
|
|
|
5,657 |
|
|
|
10,559 |
|
|
|
12,815 |
|
Total oil, natural gas and natural gas liquids sales |
|
49,083 |
|
|
|
53,885 |
|
|
|
98,615 |
|
|
|
118,158 |
|
Other |
|
21 |
|
|
|
387 |
|
|
|
359 |
|
|
|
1,256 |
|
Total operating revenues |
|
49,104 |
|
|
|
54,272 |
|
|
|
98,974 |
|
|
|
119,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
11,005 |
|
|
|
11,365 |
|
|
|
22,591 |
|
|
|
23,056 |
|
Workover and other |
|
951 |
|
|
|
2,634 |
|
|
|
1,839 |
|
|
|
3,969 |
|
Taxes other than income |
|
3,349 |
|
|
|
3,180 |
|
|
|
6,340 |
|
|
|
6,370 |
|
Gathering and other |
|
12,126 |
|
|
|
16,828 |
|
|
|
29,412 |
|
|
|
33,345 |
|
General and administrative |
|
3,340 |
|
|
|
5,243 |
|
|
|
7,411 |
|
|
|
10,380 |
|
Depletion, depreciation and accretion |
|
13,213 |
|
|
|
14,713 |
|
|
|
26,238 |
|
|
|
30,861 |
|
Total operating expenses |
|
43,984 |
|
|
|
53,963 |
|
|
|
93,831 |
|
|
|
107,981 |
|
Income from
operations |
|
5,120 |
|
|
|
309 |
|
|
|
5,143 |
|
|
|
11,433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
1,223 |
|
|
|
4,473 |
|
|
|
(22,964 |
) |
|
|
23,946 |
|
Interest expense and other |
|
(6,448 |
) |
|
|
(9,530 |
) |
|
|
(13,486 |
) |
|
|
(17,316 |
) |
Total other (expenses) income |
|
(5,225 |
) |
|
|
(5,057 |
) |
|
|
(36,450 |
) |
|
|
6,630 |
|
(Loss) income before income taxes |
|
(105 |
) |
|
|
(4,748 |
) |
|
|
(31,307 |
) |
|
|
18,063 |
|
Income tax benefit (provision) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net (loss)
income |
$ |
(105 |
) |
|
$ |
(4,748 |
) |
|
$ |
(31,307 |
) |
|
$ |
18,063 |
|
Preferred dividends |
|
(8,586 |
) |
|
|
(997 |
) |
|
|
(14,218 |
) |
|
|
(2,489 |
) |
Net (loss) income
available to common stockholders |
$ |
(8,691 |
) |
|
$ |
(5,745 |
) |
|
$ |
(45,525 |
) |
|
$ |
15,574 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share of common stock available to common
stockholders: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.53 |
) |
|
$ |
(0.35 |
) |
|
$ |
(2.77 |
) |
|
$ |
0.87 |
|
Diluted |
$ |
(0.53 |
) |
|
$ |
(0.35 |
) |
|
$ |
(2.77 |
) |
|
$ |
0.86 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
16,457 |
|
|
|
16,457 |
|
|
|
16,457 |
|
|
|
16,425 |
|
Diluted |
|
16,457 |
|
|
|
16,457 |
|
|
|
16,457 |
|
|
|
16,520 |
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)(In
thousands, except share and per share amounts) |
|
|
|
|
|
|
|
June 30, 2024 |
|
December 31, 2023 |
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
54,430 |
|
|
$ |
57,529 |
|
Accounts receivable, net |
|
24,894 |
|
|
|
23,021 |
|
Assets from derivative contracts |
|
5,869 |
|
|
|
8,992 |
|
Restricted cash |
|
91 |
|
|
|
90 |
|
Prepaids and other |
|
821 |
|
|
|
907 |
|
Total current assets |
|
86,105 |
|
|
|
90,539 |
|
Oil and natural gas
properties (full cost method): |
|
|
|
|
|
Evaluated |
|
791,908 |
|
|
|
755,482 |
|
Unevaluated |
|
51,896 |
|
|
|
58,909 |
|
Gross oil and natural gas properties |
|
843,804 |
|
|
|
814,391 |
|
Less: accumulated depletion |
|
(471,413 |
) |
|
|
(445,975 |
) |
Net oil and natural gas properties |
|
372,391 |
|
|
|
368,416 |
|
Other operating
property and equipment: |
|
|
|
|
|
Other operating property and equipment |
|
4,657 |
|
|
|
4,640 |
|
Less: accumulated depreciation |
|
(2,141 |
) |
|
|
(1,817 |
) |
Net other operating property and equipment |
|
2,516 |
|
|
|
2,823 |
|
Other noncurrent
assets: |
|
|
|
|
|
Assets from derivative contracts |
|
4,614 |
|
|
|
4,877 |
|
Operating lease right of use assets |
|
749 |
|
|
|
1,027 |
|
Other assets |
|
20,916 |
|
|
|
17,656 |
|
Total
assets |
$ |
487,291 |
|
|
$ |
485,338 |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
76,456 |
|
|
$ |
66,525 |
|
Liabilities from derivative contracts |
|
25,554 |
|
|
|
17,191 |
|
Current portion of long-term debt |
|
52,606 |
|
|
|
50,106 |
|
Operating lease liabilities |
|
634 |
|
|
|
594 |
|
Total current liabilities |
|
155,250 |
|
|
|
134,416 |
|
Long-term debt,
net |
|
101,185 |
|
|
|
140,276 |
|
Other noncurrent
liabilities: |
|
|
|
|
|
Liabilities from derivative contracts |
|
19,635 |
|
|
|
16,058 |
|
Asset retirement obligations |
|
18,135 |
|
|
|
17,458 |
|
Operating lease liabilities |
|
162 |
|
|
|
490 |
|
Other |
|
10,719 |
|
|
|
2,084 |
|
Commitments and
contingencies |
|
|
|
|
|
Temporary
equity: |
|
|
|
|
|
Redeemable convertible
preferred stock: 138,000 shares and 98,000 shares |
|
159,535 |
|
|
|
106,535 |
|
of $0.0001 par value authorized, issued and outstanding as of |
|
|
|
|
|
June 30, 2024 and December 31, 2023, respectively |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
Common stock: 100,000,000
shares of $0.0001 par value authorized; |
|
|
|
|
|
16,456,563 shares issued and outstanding as of June 30, 2024
and |
|
|
|
|
|
December 31, 2023 |
|
2 |
|
|
|
2 |
|
Additional paid-in
capital |
|
306,969 |
|
|
|
321,012 |
|
Accumulated deficit |
|
(284,301 |
) |
|
|
(252,993 |
) |
Total stockholders'
equity |
|
22,670 |
|
|
|
68,021 |
|
Total liabilities,
temporary equity and stockholders' equity |
$ |
487,291 |
|
|
$ |
485,338 |
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(105 |
) |
|
$ |
(4,748 |
) |
|
$ |
(31,307 |
) |
|
$ |
18,063 |
|
Adjustments to reconcile net
(loss) income to net cash |
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and
accretion |
|
13,213 |
|
|
|
14,713 |
|
|
|
26,238 |
|
|
|
30,861 |
|
Stock-based compensation,
net |
|
36 |
|
|
|
(772 |
) |
|
|
135 |
|
|
|
(545 |
) |
Unrealized loss (gain) on
derivative contracts |
|
(4,434 |
) |
|
|
(2,332 |
) |
|
|
15,327 |
|
|
|
(23,336 |
) |
Amortization/accretion of
financing related costs |
|
1,689 |
|
|
|
2,045 |
|
|
|
3,390 |
|
|
|
3,843 |
|
Accrued settlements on
derivative contracts |
|
(659 |
) |
|
|
(374 |
) |
|
|
774 |
|
|
|
(929 |
) |
Change in fair value of
embedded derivative liability |
|
(437 |
) |
|
|
358 |
|
|
|
(1,365 |
) |
|
|
(704 |
) |
Other |
|
(91 |
) |
|
|
42 |
|
|
|
179 |
|
|
|
53 |
|
Cash flows from operations
before changes in working capital |
|
9,212 |
|
|
|
8,932 |
|
|
|
13,371 |
|
|
|
27,306 |
|
Changes in working
capital |
|
20,612 |
|
|
|
406 |
|
|
|
20,370 |
|
|
|
(18,657 |
) |
Net cash provided by operating
activities |
|
29,824 |
|
|
|
9,338 |
|
|
|
33,741 |
|
|
|
8,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital
expenditures |
|
(20,250 |
) |
|
|
(4,022 |
) |
|
|
(44,849 |
) |
|
|
(32,633 |
) |
Proceeds received from sale of
oil and natural gas assets |
|
7,015 |
|
|
|
— |
|
|
|
7,015 |
|
|
|
1,189 |
|
Acquisition of oil and natural
gas properties |
|
(47 |
) |
|
|
— |
|
|
|
(47 |
) |
|
|
— |
|
Contract asset |
|
(560 |
) |
|
|
— |
|
|
|
(7,795 |
) |
|
|
— |
|
Other operating property and
equipment capital expenditures |
|
(9 |
) |
|
|
(15 |
) |
|
|
(17 |
) |
|
|
(284 |
) |
Other |
|
(6 |
) |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
(11 |
) |
Net cash used in investing
activities |
|
(13,857 |
) |
|
|
(4,043 |
) |
|
|
(45,706 |
) |
|
|
(31,739 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Repayments of borrowings |
|
(29,827 |
) |
|
|
(10,026 |
) |
|
|
(39,853 |
) |
|
|
(15,043 |
) |
Payment of debt financing
costs |
|
— |
|
|
|
— |
|
|
|
(129 |
) |
|
|
— |
|
Proceeds from issuance of
preferred stock |
|
19,349 |
|
|
|
— |
|
|
|
38,849 |
|
|
|
24,375 |
|
Merger deposit |
|
— |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(454 |
) |
Net cash (used in) provided by
financing activities |
|
(10,478 |
) |
|
|
(10,026 |
) |
|
|
8,867 |
|
|
|
8,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash |
|
5,489 |
|
|
|
(4,731 |
) |
|
|
(3,098 |
) |
|
|
(14,212 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
49,032 |
|
|
|
23,335 |
|
|
|
57,619 |
|
|
|
32,816 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
54,521 |
|
|
$ |
18,604 |
|
|
$ |
54,521 |
|
|
$ |
18,604 |
|
BATTALION OIL CORPORATIONSELECTED
OPERATING DATA (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Production volumes: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
577 |
|
|
|
636 |
|
|
|
1,143 |
|
|
|
1,366 |
|
Natural gas (MMcf) |
|
1,929 |
|
|
|
2,155 |
|
|
|
4,109 |
|
|
|
4,562 |
|
Natural gas liquids (MBbls) |
|
271 |
|
|
|
302 |
|
|
|
524 |
|
|
|
629 |
|
Total (MBoe) |
|
1,170 |
|
|
|
1,297 |
|
|
|
2,352 |
|
|
|
2,755 |
|
Average daily production (Boe/d) |
|
12,857 |
|
|
|
14,253 |
|
|
|
12,923 |
|
|
|
15,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
$ |
79.20 |
|
|
$ |
72.59 |
|
|
$ |
77.10 |
|
|
$ |
73.49 |
|
Natural gas (per Mcf) |
|
(1.10 |
) |
|
|
0.96 |
|
|
|
(0.02 |
) |
|
|
1.09 |
|
Natural gas liquids (per Bbl) |
|
20.31 |
|
|
|
18.73 |
|
|
|
20.15 |
|
|
|
20.37 |
|
Total per Boe |
|
41.95 |
|
|
|
41.55 |
|
|
|
41.93 |
|
|
|
42.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
$ |
(14.03 |
) |
|
$ |
(2.68 |
) |
|
$ |
(13.20 |
) |
|
$ |
(3.92 |
) |
Natural gas (per Mcf) |
|
2.53 |
|
|
|
1.78 |
|
|
|
1.81 |
|
|
|
1.31 |
|
Natural gas liquids (per Bbl) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total per Boe |
|
(2.74 |
) |
|
|
1.65 |
|
|
|
(3.25 |
) |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices computed after cash effect of settlement of
derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
$ |
65.17 |
|
|
$ |
69.91 |
|
|
$ |
63.90 |
|
|
$ |
69.57 |
|
Natural gas (per Mcf) |
|
1.43 |
|
|
|
2.74 |
|
|
|
1.79 |
|
|
|
2.40 |
|
Natural gas liquids (per Bbl) |
|
20.31 |
|
|
|
18.73 |
|
|
|
20.15 |
|
|
|
20.37 |
|
Total per Boe |
|
39.21 |
|
|
|
43.20 |
|
|
|
38.68 |
|
|
|
43.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per Boe: |
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
$ |
9.41 |
|
|
$ |
8.76 |
|
|
$ |
9.61 |
|
|
$ |
8.37 |
|
Workover and other |
|
0.81 |
|
|
|
2.03 |
|
|
|
0.78 |
|
|
|
1.44 |
|
Taxes other than income |
|
2.86 |
|
|
|
2.45 |
|
|
|
2.70 |
|
|
|
2.31 |
|
Gathering and other |
|
10.36 |
|
|
|
12.97 |
|
|
|
12.51 |
|
|
|
12.10 |
|
General and administrative, as adjusted (1) |
|
2.49 |
|
|
|
4.01 |
|
|
|
2.53 |
|
|
|
3.61 |
|
Depletion |
|
10.95 |
|
|
|
11.07 |
|
|
|
10.82 |
|
|
|
10.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
general and administrative costs per Boe, adjusted for items noted
in the reconciliation below: |
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative: |
|
|
|
|
|
|
|
|
|
|
|
General and administrative, as reported |
$ |
2.85 |
|
|
$ |
4.04 |
|
|
$ |
3.15 |
|
|
$ |
3.77 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
Non-cash |
|
(0.03 |
) |
|
|
0.60 |
|
|
|
(0.06 |
) |
|
|
0.20 |
|
Non-recurring charges and other: |
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
(0.33 |
) |
|
|
(0.63 |
) |
|
|
(0.56 |
) |
|
|
(0.36 |
) |
General and administrative, as adjusted(2) |
$ |
2.49 |
|
|
$ |
4.01 |
|
|
$ |
2.53 |
|
|
$ |
3.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering and other, as
reported |
$ |
10.36 |
|
|
$ |
12.97 |
|
|
$ |
12.51 |
|
|
$ |
12.10 |
|
Rig termination and stacking charges and other |
|
— |
|
|
|
0.26 |
|
|
|
— |
|
|
|
0.12 |
|
Gathering and other, as
adjusted(3) |
$ |
10.36 |
|
|
$ |
13.23 |
|
|
$ |
12.51 |
|
|
$ |
12.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs, as
reported |
$ |
26.29 |
|
|
$ |
30.25 |
|
|
$ |
28.75 |
|
|
$ |
27.99 |
|
Total adjusting items |
|
(0.36 |
) |
|
|
0.23 |
|
|
|
(0.62 |
) |
|
|
(0.04 |
) |
Total operating costs, as
adjusted(3) |
$ |
25.93 |
|
|
$ |
30.48 |
|
|
$ |
28.13 |
|
|
$ |
27.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) General
and administrative, as adjusted, is a non-GAAP measure that
excludes non-cash stock-based compensation charges relating to
equity awards under our incentive stock plan, as well as other cash
charges associated with non-recurring charges and other. The
Company believes that it is useful to understand the effects that
these charges have on general and administrative expenses and total
operating costs and that exclusion of such charges is useful for
comparison to prior periods.(3) Represents lease operating
expense, workover and other expense, taxes other than income,
gathering and other expense and general and administrative costs
per Boe, adjusted for items noted in the reconciliation above. |
BATTALION OIL CORPORATIONRECONCILIATION
(Unaudited)(In thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
As
Reported: |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to
common stockholders - diluted(1) |
$ |
(8,691 |
) |
|
$ |
(5,745 |
) |
|
$ |
(45,525 |
) |
|
$ |
14,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected
Items: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on
derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
|
Crude oil |
$ |
(4,847 |
) |
|
$ |
(10,440 |
) |
|
$ |
16,570 |
|
|
$ |
(30,130 |
) |
Natural gas |
|
413 |
|
|
|
8,108 |
|
|
|
(1,243 |
) |
|
|
6,794 |
|
Total mark-to-market non-cash
charge |
|
(4,434 |
) |
|
|
(2,332 |
) |
|
|
15,327 |
|
|
|
(23,336 |
) |
Change in fair value of
embedded derivative liability |
|
(436 |
) |
|
|
358 |
|
|
|
(1,364 |
) |
|
|
(704 |
) |
Non-recurring charges |
|
384 |
|
|
|
811 |
|
|
|
1,321 |
|
|
|
994 |
|
Selected items, before income
taxes |
|
(4,486 |
) |
|
|
(1,163 |
) |
|
|
15,284 |
|
|
|
(23,046 |
) |
Income tax effect of selected
items |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Selected items, net of
tax |
|
(4,486 |
) |
|
|
(1,163 |
) |
|
|
15,284 |
|
|
|
(23,046 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common
stockholders, as adjusted(2) |
$ |
(13,177 |
) |
|
$ |
(6,908 |
) |
|
$ |
(30,241 |
) |
|
$ |
(8,766 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net (loss) income per
common share, as reported |
$ |
(0.53 |
) |
|
$ |
(0.35 |
) |
|
$ |
(2.77 |
) |
|
$ |
0.86 |
|
Impact of selected items |
|
(0.27 |
) |
|
|
(0.07 |
) |
|
|
0.93 |
|
|
|
(1.39 |
) |
Diluted net loss per common
share, excluding selected items(2)(3) |
$ |
(0.80 |
) |
|
$ |
(0.42 |
) |
|
$ |
(1.84 |
) |
|
$ |
(0.53 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities |
$ |
29,824 |
|
|
$ |
9,338 |
|
|
$ |
33,741 |
|
|
$ |
8,649 |
|
Changes in working
capital |
|
(20,612 |
) |
|
|
(406 |
) |
|
|
(20,370 |
) |
|
|
18,657 |
|
Cash flows from operations
before changes in working capital |
|
9,212 |
|
|
|
8,932 |
|
|
|
13,371 |
|
|
|
27,306 |
|
Cash components of selected
items |
|
1,043 |
|
|
|
851 |
|
|
|
547 |
|
|
|
1,589 |
|
Income tax effect of selected
items |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash flows from operations
before changes in working capital, adjusted for selected
items(1) |
$ |
10,255 |
|
|
$ |
9,783 |
|
|
$ |
13,918 |
|
|
$ |
28,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amount
reflects net (loss) income available to common stockholders on a
diluted basis for earnings per share purposes as calculated using
the two-class method of computing earnings per share which is
further described in Note 10, Earnings Per Share in our Form 10-Q
for the quarter ended June 30, 2024. (2) Net (loss) income per
share excluding selected items and cash flows from operations
before changes in working capital adjusted for selected items are
non-GAAP measures presented based on management's belief that they
will enable a user of the financial information to understand the
impact of these items on reported results. These financial measures
are not measures of financial performance under GAAP and should not
be considered as an alternative to net income, earnings per share
and cash flows from operations, as defined by GAAP. These financial
measures may not be comparable to similarly named non-GAAP
financial measures that other companies may use and may not be
useful in comparing the performance of those companies to
Battalion's performance.(3) The impact of selected items for
the six months ended June 30, 2024 and 2023 were calculated based
upon weighted average diluted shares of 16.5 million, due to the
net (loss) income available to common stockholders, excluding
selected items. |
BATTALION OIL CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income, as reported |
$ |
(105 |
) |
|
$ |
(4,748 |
) |
|
$ |
(31,307 |
) |
|
$ |
18,063 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
7,610 |
|
|
|
9,366 |
|
|
|
16,001 |
|
|
|
18,375 |
|
Depletion, depreciation and accretion |
|
13,213 |
|
|
|
14,713 |
|
|
|
26,238 |
|
|
|
30,861 |
|
Stock-based compensation |
|
36 |
|
|
|
(772 |
) |
|
|
135 |
|
|
|
(545 |
) |
Interest income |
|
(634 |
) |
|
|
(234 |
) |
|
|
(1,335 |
) |
|
|
(425 |
) |
Unrealized loss (gain) on derivatives contracts |
|
(4,434 |
) |
|
|
(2,332 |
) |
|
|
15,327 |
|
|
|
(23,336 |
) |
Change in fair value of embedded derivative liability |
|
(436 |
) |
|
|
358 |
|
|
|
(1,364 |
) |
|
|
(704 |
) |
Non-recurring charges and other |
|
384 |
|
|
|
477 |
|
|
|
1,321 |
|
|
|
629 |
|
Adjusted EBITDA(1) |
$ |
15,634 |
|
|
$ |
16,828 |
|
|
$ |
25,016 |
|
|
$ |
42,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted
EBITDA is a non-GAAP measure, which is presented based on
management's belief that it will enable a user of the financial
information to understand the impact of these items on reported
results. This financial measure is not a measure of financial
performance under GAAP and should not be considered as an
alternative to GAAP measures, including net (loss) income. This
financial measure may not be comparable to similarly named non-GAAP
financial measures that other companies may use and may not be
useful in comparing the performance of those companies to
Battalion's performance. |
BATTALION OIL CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Three Months |
|
Three Months |
|
Three Months |
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income, as reported |
$ |
(105 |
) |
|
$ |
(31,203 |
) |
|
$ |
32,688 |
|
|
$ |
(53,799 |
) |
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
7,610 |
|
|
|
8,391 |
|
|
|
8,917 |
|
|
|
9,219 |
|
Depletion, depreciation and accretion |
|
13,213 |
|
|
|
13,025 |
|
|
|
12,337 |
|
|
|
13,426 |
|
Stock-based compensation |
|
36 |
|
|
|
99 |
|
|
|
161 |
|
|
|
(686 |
) |
Interest income |
|
(634 |
) |
|
|
(701 |
) |
|
|
(525 |
) |
|
|
(293 |
) |
Unrealized loss (gain) on derivatives contracts |
|
(4,434 |
) |
|
|
19,761 |
|
|
|
(45,403 |
) |
|
|
46,805 |
|
Change in fair value of embedded derivative liability |
|
(436 |
) |
|
|
(928 |
) |
|
|
529 |
|
|
|
(1,878 |
) |
Non-recurring charges (credits) and other |
|
384 |
|
|
|
937 |
|
|
|
1,268 |
|
|
|
831 |
|
Adjusted EBITDA(1) |
$ |
15,634 |
|
|
$ |
9,381 |
|
|
$ |
9,972 |
|
|
$ |
13,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
$ |
48,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted
EBITDA is a non-GAAP measure, which is presented based on
management's belief that it will enable a user of the financial
information to understand the impact of these items on reported
results. This financial measure is not a measure of financial
performance under GAAP and should not be considered as an
alternative to GAAP measures, including net (loss) income. This
financial measure may not be comparable to similarly named non-GAAP
financial measures that other companies may use and may not be
useful in comparing the performance of those companies to
Battalion's performance. |
BATTALION OIL CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Three Months |
|
Three Months |
|
Three Months |
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
$ |
(4,748 |
) |
|
$ |
22,811 |
|
|
$ |
(7,652 |
) |
|
$ |
105,888 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
9,366 |
|
|
|
9,009 |
|
|
|
9,378 |
|
|
|
6,232 |
|
Depletion, depreciation and accretion |
|
14,713 |
|
|
|
16,148 |
|
|
|
15,479 |
|
|
|
13,615 |
|
Stock-based compensation |
|
(772 |
) |
|
|
227 |
|
|
|
670 |
|
|
|
683 |
|
Interest income |
|
(234 |
) |
|
|
(191 |
) |
|
|
(227 |
) |
|
|
(141 |
) |
Unrealized loss (gain) on derivatives contracts |
|
(2,332 |
) |
|
|
(21,004 |
) |
|
|
3,655 |
|
|
|
(102,112 |
) |
Change in fair value of embedded derivative liability |
|
358 |
|
|
|
(1,062 |
) |
|
|
1,224 |
|
|
|
(449 |
) |
Non-recurring charges (credits) and other |
|
477 |
|
|
|
152 |
|
|
|
194 |
|
|
|
597 |
|
Adjusted EBITDA(1) |
$ |
16,828 |
|
|
$ |
26,090 |
|
|
$ |
22,721 |
|
|
$ |
24,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
$ |
89,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted
EBITDA is a non-GAAP measure, which is presented based on
management's belief that it will enable a user of the financial
information to understand the impact of these items on reported
results. This financial measure is not a measure of financial
performance under GAAP and should not be considered as an
alternative to GAAP measures, including net income (loss). This
financial measure may not be comparable to similarly named non-GAAP
financial measures that other companies may use and may not be
useful in comparing the performance of those companies to
Battalion's performance. |
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