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Battalion Oil Corporation Announces Second Quarter 2025 Financial and Operating Results

1. Battalion's Q2 2025 production up to 12,989 Boe/d from 12,857 Boe/d. 2. Reported a net loss of $3.5 million; adjusted loss of $10.6 million. 3. Initial production from new wells exceeds legacy wells, indicating strong output. 4. AGI facility ceased operations; plans to redirect gas production initiated. 5. Capex per well lowered, outperforming budget estimates by ~$1 million.

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Why Neutral?

Despite modest production increases, net losses and facility shutdowns could limit price upside. Historical correlations show that operational challenges tie to reduced share price movements.

How important is it?

The article highlights crucial operational details and financial health, which could engage investors' concerns.

Why Short Term?

Immediate operational issues, particularly with the AGI facility, may impact short-term profitability and stock price stability.

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CLROXYPDCENOG
HOUSTON, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter of 2025. Key Highlights Generated second quarter 2025 sales volumes of 12,989 barrels of oil equivalent per day (“Boe/d”) (49% oil)Continued to lower capex per well, outperforming AFE estimatesCompleted drilling operations on final two wells of 2025 six-well plan – wells online July 5, 2025AGI facility ceased operations effective August 11, 2025 Management Comments The Company completed drilling operations of its previously announced 2025 six-well activity plan, completing the remaining two wells in the West Quito area. Both wells were drilled ahead of schedule and under AFE budget estimates by approximately $1.0 million per well. Initial production rates from these are outperforming legacy offset wells. Additionally, offset wells have observed positive frac interference, increasing their daily oil production. This performance further confirms the excellent drilling location inventory in the West Quito area. During the second quarter 2025, the acid gas injection (“AGI”) facility treated approximately 2.2 Bcf or 24 MMcf/d average and returned approximately 18 MMcf/d of sweet gas to the Company for sales to its midstream partner. On August 11, 2025, the AGI facility notified us of immediate cessation of operations, citing that “continued operation of the System is neither economically viable nor prudent.” In response, we are temporarily shutting in a portion of our Monument Draw field and are working to redirect our gas production to alternative gas processing options readily available in the immediate vicinity of our operations. Results of Operations Average daily net production and total operating revenue during the second quarter of 2025 were 12,989 Boe/d (49% oil) and $42.8 million, respectively, as compared to production and revenue of 12,857 Boe/d (49% oil) and $49.1 million, respectively, during the second quarter of 2024. The decrease in revenues in the second quarter of 2025 as compared to the second quarter of 2024 is primarily attributable to a $5.93 decrease per Boe in average realized prices (excluding the impact of hedges) partially offset by an approximate 132 Boe/d increase in average daily production. Excluding the impact of hedges, Battalion realized 98.0% of the average NYMEX oil price during the second quarter of 2025. Realized hedge gains totaled approximately $4.3 million during the second quarter of 2025. Lease operating and workover expense was $10.98 per Boe in the second quarter of 2025 versus $10.22 per Boe in the second quarter of 2024. The increase in lease operating and workover expense per Boe year-over-year is primarily a result of increased workover activity. Gathering and other expenses were $9.27 per Boe in the second quarter of 2025 versus $10.36 per Boe in the second quarter of 2024. The decrease in gathering and other expenses per Boe is primarily related to progress made at the central production facilities yielding lower labor and repair costs as well as increased throughput and overall production volumes being treated by the AGI facility during 2025. General and administrative expenses were $2.17 per Boe in the second quarter of 2025 compared to $2.85 per Boe in the second quarter of 2024. The decrease in general and administrative expenses for the second quarter of 2025 is primarily due to lower merger costs. Excluding non-recurring charges, general and administrative expenses would have been $2.11 per Boe in the second quarter of 2025 compared to $2.49 per Boe in the second quarter of 2024. For the second quarter of 2025, the Company reported a net loss available to common stockholders of $3.5 million and a net loss of $0.21 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 2025 of $10.6 million or an adjusted diluted net loss of $0.65 per common share (see Reconciliation for additional information). Adjusted EBITDA during the second quarter ended June 30, 2025 was $18.1 million as compared to $15.6 million during the quarter ended June 30, 2024 (see Adjusted EBITDA Reconciliation table for additional information). Liquidity and Balance Sheet As of June 30, 2025, the Company had $219.4 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents of $44.6 million. For additional details on liquidity, financial position, and recent developments, please refer to Management’s Discussion and Analysis and Risk Factors included in Battalion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 and its 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 Six Months Ended June 30, June 30, 2025 2024 2025 2024Operating revenues:           Oil, natural gas and natural gas liquids sales:           Oil$36,291  $45,699  $75,991  $88,128 Natural gas 935   (2,119)  3,758   (72)Natural gas liquids 5,350   5,503   10,212   10,559 Total oil, natural gas and natural gas liquids sales 42,576   49,083   89,961   98,615 Other 236   21   326   359 Total operating revenues 42,812   49,104   90,287   98,974             Operating expenses:           Production:           Lease operating 10,670   11,005   21,028   22,591 Workover and other 2,309   951   3,742   1,839 Taxes other than income 2,522   3,349   5,322   6,340 Gathering and other 10,958   12,126   22,958   29,412 General and administrative 2,567   3,340   6,980   7,411 Depletion, depreciation and accretion 13,939   13,213   27,019   26,238 Total operating expenses 42,965   43,984   87,049   93,831 (Loss) income from operations (153)  5,120   3,238   5,143             Other income (expenses):           Net gain (loss) on derivative contracts 11,548   1,223   20,850   (22,964)Interest expense and other (6,599)  (6,448)  (13,269)  (13,486)Total other income (expenses) 4,949   (5,225)  7,581   (36,450)Income (loss) income before income taxes 4,796   (105)  10,819   (31,307)Income tax benefit (provision) —   —   —   — Net income (loss)$4,796  $(105) $10,819  $(31,307)Preferred dividends (8,270)  (8,586)  (20,090)  (14,218)Net loss available to common stockholders$(3,474) $(8,691) $(9,271) $(45,525)            Net loss per share of common stock available to common stockholders:           Basic$(0.21) $(0.53) $(0.56) $(2.77)Diluted$(0.21) $(0.53) $(0.56) $(2.77)Weighted average common shares outstanding:           Basic 16,457   16,457   16,457   16,457 Diluted 16,457   16,457   16,457   16,457  BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(In thousands, except share and per share amounts)  June 30, 2025 December 31, 2024Current assets:     Cash and cash equivalents$44,621  $19,712 Accounts receivable, net 24,464   26,298 Assets from derivative contracts 13,717   6,969 Restricted cash 91   91 Prepaids and other 569   982 Total current assets 83,462   54,052 Oil and natural gas properties (full cost method):     Evaluated 876,736   816,186 Unevaluated 49,091   49,091 Gross oil and natural gas properties 925,827   865,277 Less: accumulated depletion (523,500)  (497,272)Net oil and natural gas properties 402,327   368,005 Other operating property and equipment:     Other operating property and equipment 4,677   4,663 Less: accumulated depreciation (2,696)  (2,455)Net other operating property and equipment 1,981   2,208 Other noncurrent assets:     Assets from derivative contracts 6,344   4,052 Operating lease right of use assets 1,000   453 Other assets 3,667   2,278 Total assets$498,781  $431,048       Current liabilities:     Accounts payable and accrued liabilities$62,286  $52,682 Liabilities from derivative contracts 4,483   12,330 Current portion of long-term debt 22,553   12,246 Operating lease liabilities 720   406 Total current liabilities 90,042   77,664 Long-term debt, net 191,467   145,535 Other noncurrent liabilities:     Liabilities from derivative contracts 4,764   6,954 Asset retirement obligations 19,812   19,156 Operating lease liabilities 307   84 Commitments and contingencies     Temporary equity:     Redeemable convertible preferred stock: 138,000 shares       of $0.0001 par value authorized, issued and outstanding     at June 30, 2025 and December 31, 2024 197,625   177,535 Stockholders' equity:     Common stock: 100,000,000 shares of $0.0001 par value authorized;     16,456,563 shares issued and outstanding at June 30, 2025 and     December 31, 2024 2   2 Additional paid-in capital 268,818   288,993 Accumulated deficit (274,056)  (284,875)Total stockholders' (deficit) equity (5,236)  4,120 Total liabilities, temporary equity and stockholders' equity$498,781  $431,048  BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(In thousands)  Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024Cash flows from operating activities:           Net income (loss)$4,796  $(105) $10,819  $(31,307)Adjustments to reconcile net income (loss) to net cash           provided by operating activities:           Depletion, depreciation and accretion 13,939   13,213   27,019   26,238 Stock-based compensation, net —   36   (109)  135 Unrealized (gain) loss on derivative contracts (7,248)  (4,434)  (19,076)  15,327 Amortization/accretion of financing related costs 397   1,689   792   3,390 Accrued settlements on derivative contracts 23   (659)  (537)  774 Change in fair value of embedded derivative liability —   (437)  —   (1,365)Other 56   (91)  109   179 Cash flows from operations before changes in working capital 11,963   9,212   19,017   13,371 Changes in working capital (1,758)  20,612   3,919   20,370 Net cash provided by operating activities 10,205   29,824   22,936   33,741             Cash flows from investing activities:           Oil and natural gas capital expenditures (33,290)  (20,250)  (53,090)  (44,849)Proceeds received from sale of oil and natural gas assets —   7,015   —   7,015 Acquisition of oil and natural gas properties —   (47)  —   (47)Contract asset —   (560)  —   (7,795)Other operating property and equipment capital expenditures (8)  (9)  (14)  (17)Other (64)  (6)  (370)  (13)Net cash used in investing activities (33,362)  (13,857)  (53,474)  (45,706)            Cash flows from financing activities:           Proceeds from borrowings —   —   63,000   — Repayments of borrowings (5,652)  (29,827)  (5,678)  (39,853)Debt issuance costs (138)  —   (1,875)  — Payment of debt financing costs —   —   —   (129)Proceeds from issuance of preferred stock —   19,349   —   38,849 Merger deposit —   —   —   10,000 Net cash (used in) provided by financing activities (5,790)  (10,478)  55,447   8,867             Net (decrease) increase in cash, cash equivalents and restricted cash (28,947)  5,489   24,909   (3,098)            Cash, cash equivalents and restricted cash at beginning of period 73,659   49,032   19,803   57,619 Cash, cash equivalents and restricted cash at end of period$44,712  $54,521  $44,712  $54,521  BATTALION OIL CORPORATIONSELECTED OPERATING DATA (Unaudited)             Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024Production volumes:           Crude oil (MBbls) 584   577   1,153   1,143 Natural gas (MMcf) 2,136   1,929   3,935   4,109 Natural gas liquids (MBbls) 242   271   444   524 Total (MBoe) 1,182   1,170   2,253   2,352 Average daily production (Boe/d) 12,989   12,857   12,448   12,923             Average prices:           Crude oil (per Bbl)$62.14  $79.20  $65.91  $77.10 Natural gas (per Mcf) 0.44   (1.10)  0.96   (0.02)Natural gas liquids (per Bbl) 22.11   20.31   23.00   20.15 Total per Boe 36.02   41.95   39.93   41.93             Cash effect of derivative contracts:           Crude oil (per Bbl)$1.04  $(14.03) $(2.93) $(13.20)Natural gas (per Mcf) 1.73   2.53   1.31   1.81 Natural gas liquids (per Bbl) —   —   —   — Total per Boe 3.64   (2.74)  0.79   (3.25)            Average prices computed after cash effect of settlement of derivative contracts:           Crude oil (per Bbl)$63.18  $65.17  $62.98  $63.90 Natural gas (per Mcf) 2.17   1.43   2.27   1.79 Natural gas liquids (per Bbl) 22.11   20.31   23.00   20.15 Total per Boe 39.66   39.21   40.72   38.68             Average cost per Boe:           Production:           Lease operating$9.03  $9.41  $9.33  $9.61 Workover and other 1.95   0.81   1.66   0.78 Taxes other than income 2.13   2.86   2.36   2.70 Gathering and other 9.27   10.36   10.19   12.51 General and administrative, as adjusted (1) 2.11   2.49   2.54   2.53 Depletion 11.47      10.95   11.64   10.82             (1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below:            General and administrative:           General and administrative, as reported$2.17  $2.85  $3.10  $3.15 Stock-based compensation:           Non-cash —   (0.03)  (0.02)  (0.06)Non-recurring charges and other:           Cash (0.06)  (0.33)  (0.54)  (0.56)General and administrative, as adjusted(2)$2.11  $2.49  $2.54  $2.53             Total operating costs, as reported$24.55  $26.29  $26.64  $28.75 Total adjusting items (0.06)  (0.36)  (0.56)  (0.62)Total operating costs, as adjusted(3)$24.49  $25.93  $26.08  $28.13  ______________________(2)General and administrative, as adjusted, is a non-GAAP measure that excludes non-cash stock-based compensation charges relating to equity awards under our incentive stock plan, as well as other cash charges associated with non-recurring charges and other. The Company believes that it is useful to understand the effects that these charges have on general and administrative expenses and total operating costs and that exclusion of such charges is useful for comparison to prior periods.(3)Represents lease operating expense, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in the reconciliation above. BATTALION OIL CORPORATIONRECONCILIATION (Unaudited)(In thousands, except per share amounts)  Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024As Reported:           Net (loss) income available to common stockholders - diluted (1)$(3,474) $(8,691) $(9,271) $(45,525)            Impact of Selected Items:           Unrealized loss (gain) on derivatives contracts:           Crude oil$(16,782) $(4,847) $(22,326) $16,570 Natural gas 9,534   413   3,250   (1,243)Total mark-to-market non-cash charge (7,248)  (4,434)  (19,076)  15,327 Change in fair value of embedded derivative liability —   (436)  —   (1,364)Non-recurring charges 73   384   1,222   1,321 Selected items, before income taxes (7,175)  (4,486)  (17,854)  15,284 Income tax effect of selected items —   —   —   — Selected items, net of tax (7,175)  (4,486)  (17,854)  15,284             Net loss available to common stockholders, as adjusted (2)$(10,649) $(13,177) $(27,125) $(30,241)            Diluted net income (loss) per common share, as reported$(0.21) $(0.53) $(0.56) $(2.77)Impact of selected items (0.44)  (0.27)  (1.09)  0.93 Diluted net loss per common share, excluding selected items (2)(3)$(0.65) $(0.80) $(1.65) $(1.84)                        Net cash provided by (used in) operating activities$10,205  $29,824  $22,936  $33,741 Changes in working capital 1,758   (20,612)  (3,919)  (20,370)Cash flows from operations before changes in working capital 11,963   9,212   19,017   13,371 Cash components of selected items 50   1,043   1,759   547 Income tax effect of selected items —   —   —   — Cash flows from operations before changes in working capital, adjusted for selected items (1)$12,013  $10,255  $20,776  $13,918  ______________________(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 June 30, 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 Six Months Ended June 30, June 30, 2025 2024 2025 2024            Net income (loss), as reported$4,796  $(105) $10,819  $(31,307)Impact of adjusting items:           Interest expense 7,341   7,610   14,530   16,001 Depletion, depreciation and accretion 13,939   13,213   27,019   26,238 Stock-based compensation —   36   48   135 Interest income (764)  (634)  (1,343)  (1,335)Unrealized loss (gain) on derivatives contracts (7,248)  (4,434)  (19,076)  15,327 Change in fair value of embedded derivative liability —   (436)  —   (1,364)Non-recurring charges and other 73   384   1,222   1,321 Adjusted EBITDA(1)$18,137  $15,634  $33,219  $25,016  ______________________(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, 2025 March 31,2025 December 31, 2024 September 30, 2024            Net income (loss), as reported$4,796  $6,023  $(22,202) $21,628 Impact of adjusting items:           Interest expense 7,341   7,189   6,135   6,873 Depletion, depreciation and accretion 13,939   13,080   14,155   12,533 Impairment of contract asset —   —   18,511   — Stock-based compensation —   48   12   5 Interest income (764)  (579)  (278)  (509)Loss (gain) on extinguishment of debt —   —   7,489    Unrealized loss (gain) on derivatives contracts (7,248)  (11,828)  1,648   (28,091)Change in fair value of embedded derivative liability —   —   (761)  41 Merger Termination Payment —   —   (10,000)  — Non-recurring charges (credits) and other 73   1,149   3,310   978 Adjusted EBITDA(1)$18,137  $15,082  $18,019  $13,458             Adjusted LTM EBITDA(1)$64,696           ______________________(1)Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net (loss) income. This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance. BATTALION OIL CORPORATIONADJUSTED EBITDA RECONCILIATION (Unaudited)(In thousands)  Three Months Three Months Three Months Three Months Ended Ended Ended Ended June 30, 2024 March 31,2024 December 31, 2023 September 30, 2023            Net (loss) income, as reported$(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 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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