Battalion Oil Corporation Announces First Quarter 2025 Financial and Operating Results

HOUSTON, May 14, 2025 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the first quarter of 2025. Key Highlights Generated first quarter 2025 sales volumes of 11,900 barrels of oil equivalent per day (“Boe/d”) (53% oil)Continued to lower capex per well, outperforming AFE estimatesAGI facility online and treated 1.6 Bcf for the first quarter of 2025Commenced drilling operations on final two wells of 2025 six-well plan Management Comments The Company has continued drilling operations as part of its previously announced 2025 six-well activity plan, completing four Monument Draw wells and drilling ahead of schedule on the remaining two wells in the West Quito area. Capital on first well post-TD in West Quito is approximately $1.0 million under AFE and the 10,000 foot lateral well was drilled in record time for the area. The Company is currently in the final stages of drilling operations on the last well. Recently completed wells in the Monument Draw field continue to produce above type curve and are on track to deliver over 1,000,000 barrels of oil ultimate recovery each. Additional permits and drilling pads are being built in Hackberry Draw and the Company is currently planning additional permits and drilling pads in Monument Draw and West Quito. During the first quarter 2025, the acid gas injection (“AGI”) facility treated approximately 18 MMcf/d average and returned approximately 15 MMcf/d of sweet gas to the Company for sales to its midstream partner. Daily average volume was lower in the quarter due to facility-related downtime. Subsequent to quarter end, the midstream partner has added equipment and daily rates have reached over 30 MMcf/d. Results of Operations Average daily net production and total operating revenue during the first quarter of 2025 were 11,900 Boe/d (53% oil) and $47.5 million, respectively, as compared to production and revenue of 12,989 Boe/d (48% oil) and $49.9 million, respectively, during the first quarter of 2024. The decrease in revenues in the first quarter of 2025 as compared to the first quarter of 2024 is primarily attributable to an approximate 1,089 Boe/d decrease in average daily production partially offset by a $2.33 increase in average realized prices (excluding the impact of hedges). Excluding the impact of hedges, Battalion realized 97.7% of the average NYMEX oil price during the fourth quarter of 2024. Realized hedge losses totaled approximately $2.5 million during the first quarter of 2025. Lease operating and workover expense was $11.01 per Boe in the first quarter of 2025 versus $10.55 per Boe in the first quarter of 2024. The increase in lease operating and workover expense per Boe year-over-year is primarily a result of an inflationary market increase in maintenance, power and chemical costs combined with a decrease in average daily production. Gathering and other expenses were $11.20 per Boe in the first quarter of 2025 versus $14.62 per Boe in the first quarter of 2024. The decrease in gathering and other expenses per Boe is primarily related to a full quarter of volumes being treated by the AGI facility this quarter compared to the prior period as the plant did not come online until March 2024. General and administrative expenses were $4.12 per Boe in the first quarter of 2025 compared to $3.44 per Boe in the first quarter of 2024. The increase in general and administrative expense is primarily due to higher payroll and benefits costs this quarter. Excluding non-recurring charges, general and administrative expenses would have been $3.01 per Boe in the first quarter of 2025 compared to $2.57 per Boe in the first quarter of 2024. For the first quarter of 2025, the Company reported a net loss available to common stockholders of $5.8 million and a net loss of $0.35 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 first quarter of 2025 of $16.5 million or an adjusted diluted net loss of $1.00 per common share (see Reconciliation for additional information). Adjusted EBITDA during the first quarter ended March 31, 2025 was $15.1 million as compared to $9.4 million during the quarter ended March 31, 2024 (see Adjusted EBITDA Reconciliation table for additional information). Liquidity and Balance Sheet As of March 31, 2025, the Company had $225.0 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents of $73.6 million. 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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, 2024, 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 March 31, 2025 2024Operating revenues: Oil, natural gas and natural gas liquids sales: Oil $39,700 $42,429 Natural gas 2,823 2,047 Natural gas liquids 4,862 5,056 Total oil, natural gas and natural gas liquids sales 47,385 49,532 Other 90 338 Total operating revenues 47,475 49,870 Operating expenses: Production: Lease operating 10,358 11,586 Workover and other 1,433 888 Taxes other than income 2,800 2,991 Gathering and other 12,000 17,286 General and administrative 4,413 4,071 Depletion, depreciation and accretion 13,080 13,025 Total operating expenses 44,084 49,847 Income from operations 3,391 23 Other income (expenses): Net gain (loss) on derivative contracts 9,302 (24,187)Interest expense and other (6,670) (7,039)Total other income (expenses) 2,632 (31,226)Income (loss) income before income taxes 6,023 (31,203)Income tax benefit (provision) — — Net income (loss) $6,023 $(31,203)Preferred dividends (11,820) (5,632)Net income (loss) available to common stockholders $(5,797) $(36,835) Net income (loss) per share of common stock available to common stockholders: Basic $(0.35) $(2.24)Diluted $(0.35) $(2.24)Weighted average common shares outstanding: Basic 16,457 16,457 Diluted 16,457 16,457 BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(In thousands, except share and per share amounts) March 31, 2025 December 31, 2024Current assets: Cash and cash equivalents $73,568 $19,712 Accounts receivable, net 21,177 26,298 Assets from derivative contracts 15,706 6,969 Restricted cash 91 91 Prepaids and other 901 982 Total current assets 111,443 54,052 Oil and natural gas properties (full cost method): Evaluated 841,213 816,186 Unevaluated 49,091 49,091 Gross oil and natural gas properties 890,304 865,277 Less: accumulated depletion (509,945) (497,272)Net oil and natural gas properties 380,359 368,005 Other operating property and equipment: Other operating property and equipment 4,669 4,663 Less: accumulated depreciation (2,589) (2,455)Net other operating property and equipment 2,080 2,208 Other noncurrent assets: Assets from derivative contracts 8,846 4,052 Operating lease right of use assets 298 453 Other assets 3,222 2,278 Total assets $506,248 $431,048 Current liabilities: Accounts payable and accrued liabilities $58,499 $52,682 Liabilities from derivative contracts 14,716 12,330 Current portion of long-term debt 22,579 12,246 Operating lease liabilities 286 406 Total current liabilities 96,080 77,664 Long-term debt, net 196,833 145,535 Other noncurrent liabilities: Liabilities from derivative contracts 6,272 6,954 Asset retirement obligations 19,428 19,156 Operating lease liabilities 43 84 Commitments and contingencies Temporary equity: Redeemable convertible preferred stock: 138,000 shares 189,354 177,535 of $0.0001 par value authorized, issued and outstanding at March 31, 2025 and December 31, 2024 Stockholders' equity: Common stock: 100,000,000 shares of $0.0001 par value authorized; 16,456,563 shares issued and outstanding at March 31, 2025 and December 31, 2024 2 2 Additional paid-in capital 277,088 288,993 Accumulated deficit (278,852) (284,875)Total stockholders' (deficit) equity (1,762) 4,120 Total liabilities, temporary equity and stockholders' equity $506,248 $431,048 BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(In thousands) Three Months Ended March 31, 2025 2024Cash flows from operating activities: Net income (loss) $6,023 $(31,203)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depletion, depreciation and accretion 13,080 13,025 Stock-based compensation, net (109) 99 Unrealized (gain) loss on derivative contracts (11,828) 19,761 Amortization/accretion of financing related costs 395 1,701 Accrued settlements on derivative contracts (560) 1,433 Change in fair value of embedded derivative liability — (928)Other 53 270 Cash flows from operations before changes in working capital 7,054 4,158 Changes in working capital 5,677 (242)Net cash provided by operating activities 12,731 3,916 Cash flows from investing activities: Oil and natural gas capital expenditures (19,800) (24,599)Contract asset — (7,235)Other operating property and equipment capital expenditures (6) (8)Other (306) (6)Net cash used in investing activities (20,112) (31,848) Cash flows from financing activities: Proceeds from borrowings 63,000 — Repayments of borrowings (26) (10,026)Debt issuance costs (1,737) — Payment of debt financing costs — (129)Proceeds from issuance of preferred stock — 19,500 Merger deposit — 10,000 Net cash provided by financing activities 61,237 19,345 Net increase (decrease) in cash, cash equivalents and restricted cash 53,856 (8,587) Cash, cash equivalents and restricted cash at beginning of period 19,803 57,619 Cash, cash equivalents and restricted cash at end of period $73,659 $49,032 BATTALION OIL CORPORATIONSELECTED OPERATING DATA (Unaudited) Three Months Ended March 31, 2025 2024 Production volumes: Crude oil (MBbls) 569 566 Natural gas (MMcf) 1,799 2,180 Natural gas liquids (MBbls) 202 253 Total (MBoe) 1,071 1,182 Average daily production (Boe/d) 11,900 12,989 Average prices: Crude oil (per Bbl) $69.77 $74.96 Natural gas (per Mcf) 1.57 0.94 Natural gas liquids (per Bbl) 24.07 19.98 Total per Boe 44.24 41.91 Cash effect of derivative contracts: Crude oil (per Bbl) $(7.00) $(12.36)Natural gas (per Mcf) 0.81 1.18 Natural gas liquids (per Bbl) — — Total per Boe (2.36) (3.74) Average prices computed after cash effect of settlement of derivative contracts: Crude oil (per Bbl) $62.77 $62.60 Natural gas (per Mcf) 2.38 2.12 Natural gas liquids (per Bbl) 24.07 19.98 Total per Boe 41.88 38.17 Average cost per Boe: Production: Lease operating $9.67 $9.80 Workover and other 1.34 0.75 Taxes other than income 2.61 2.53 Gathering and other 11.20 14.62 General and administrative, as adjusted (1) 3.01 2.57 Depletion 11.83 10.68 (1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below: General and administrative: General and administrative, as reported $4.12 $3.44 Stock-based compensation: Non-cash (0.04) (0.08)Non-recurring charges and other: Cash (1.07) (0.79)General and administrative, as adjusted(2) $3.01 $2.57 Total operating costs, as reported $28.94 $31.14 Total adjusting items (1.11) (0.87)Total operating costs, as adjusted(3) $27.83 $30.27 ________________________(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 March 31, 2025 2024 As Reported: Net (loss) income available to common stockholders - diluted (1) $(5,797) $(36,835) Impact of Selected Items: Unrealized loss (gain) on derivatives contracts: Crude oil $(5,544) $21,417 Natural gas (6,284) (1,656)Total mark-to-market non-cash charge (11,828) 19,761 Change in fair value of embedded derivative liability — (928)Non-recurring charges 1,149 937 Selected items, before income taxes (10,679) 19,770 Income tax effect of selected items — — Selected items, net of tax (10,679) 19,770 Net loss available to common stockholders, as adjusted (2) $(16,476) $(17,065) Diluted net income (loss) per common share, as reported $(0.35) $(2.24)Impact of selected items (0.65) 1.20 Diluted net loss per common share, excluding selected items (2)(3) $(1.00) $(1.04) Net cash provided by (used in) operating activities $12,731 $3,916 Changes in working capital (5,677) 242 Cash flows from operations before changes in working capital 7,054 4,158 Cash components of selected items 1,709 (496)Income tax effect of selected items — — Cash flows from operations before changes in working capital, adjusted for selected items (1) $8,763 $3,662 ________________________(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 15, Earnings Per Share in our Form 10-K for the year ended December 31, 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 three months ended March 31, 2025 and 2024 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 March 31, 2025 2024 Net income (loss), as reported $6,023 $(31,203)Impact of adjusting items: Interest expense 7,189 8,391 Depletion, depreciation and accretion 13,080 13,025 Stock-based compensation 48 99 Interest income (579) (701)Unrealized loss (gain) on derivatives contracts (11,828) 19,761 Change in fair value of embedded derivative liability — (928)Non-recurring charges and other 1,149 937 Adjusted EBITDA(1) $15,082 $9,381 ________________________(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 March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 Net income (loss), as reported $6,023 $(22,202) $21,628 $(105)Impact of adjusting items: Interest expense 7,189 6,135 6,873 7,610 Depletion, depreciation and accretion 13,080 14,155 12,533 13,213 Impairment of contract asset — 18,511 — — Stock-based compensation 48 12 5 36 Interest income (579) (278) (509) (634)Loss (gain) on extinguishment of debt — 7,489 Unrealized loss (gain) on derivatives contracts (11,828) 1,648 (28,091) (4,434)Change in fair value of embedded derivative liability — (761) 41 (436)Merger Termination Payment — (10,000) — — Non-recurring charges (credits) and other 1,149 3,310 978 384 Adjusted EBITDA(1) $15,082 $18,019 $13,458 $15,634 Adjusted LTM EBITDA(1) $62,193 ________________________(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 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Net (loss) income, as reported $(31,203) $32,688 $(53,799) $(4,748)Impact of adjusting items: Interest expense 8,391 8,917 9,219 9,366 Depletion, depreciation and accretion 13,025 12,337 13,426 14,713 Stock-based compensation 99 161 (686) (772)Interest income (701) (525) (293) (234)Unrealized loss (gain) on derivatives contracts 19,761 (45,403) 46,805 (2,332)Change in fair value of embedded derivative liability (928) 529 (1,878) 358 Non-recurring charges (credits) and other 937 1,268 831 477 Adjusted EBITDA(1) $9,381 $9,972 $13,625 $16,828 Adjusted LTM EBITDA(1) $49,806 ________________________(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.

Battalion Oil Corporation Announces First Quarter 2025 Financial and Operating Results

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