Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the
“Company”) today announced financial and operating results for the
fourth quarter of 2023.
Key Highlights
- Approximately 41,000 net acres, 91%
HBP in three contiguous blocks across Ward, Winkler and Pecos
Counties with substantial remaining location inventory
- Brought previously announced AGI
project online in Q1 2024 treating over 20 MMcf/d
- Recommenced drilling operations in
Monument Draw in Q4 2023 to execute a six well program
- Completed two wells in Q4 2023,
brought online in Q1 2024 under budget with strong initial
results
- Drilled two additional wells in Q1
2024, currently completing
- Commenced drilling operations on
two additional wells in Q1 2024, currently drilling ahead
- Generated full year sales volumes
of 13,784 barrels of oil equivalent per day (“Boe/d”) (48%
oil)
- Year-end 2023 reserves of
approximately 68.1 million barrels of oil equivalent (“MMBoe”) with
a standardized measure of discounted future net cash flows of
approximately $598.5 million.
- Executed a $35.0 million preferred
equity raise in December 2023 and an additional $20.0 million
preferred equity raise in March 2024 to support drilling
program
- Continuing strategic alternatives
initiative and are working toward closing our previously announced
merger agreement with Fury Resources
Management CommentsDuring Q4 2023, following
the preferred equity raise, the Company re-commenced its drilling
operations in Monument Draw after operating a three-well pad on
non-operated acreage adjacent to the asset. The company also
prepared additional locations across all three asset areas to
support additional activity in Ward, Winkler, and Pecos Counties.
Since the quarter close, the two well Glacier pad drilled in Q4
2023 has been completed and is on production. These wells came
online below budget, above projected type curve, with substantial
pressure support and 30-day IP’s over 1,950 Boe/d and 1,750 Boe/d,
respectively. Two additional wells (Rio Bravo pad) have been
drilled to total depth and are currently being completed. The
drilling rig has moved onto an additional two-well pad (Vermejo
pad) in Monument Draw. All operations have been favorable to plan
from both a capital and timing perspective.
During the fourth quarter, workover operations
for the acid gas injection (“AGI”) project were substantially
completed. Since that time, the facility has restarted operations
and began taking acid gas from the Company with approximately 200
MMcf being recently treated at AGI and approximately 175 MMcf of
sweet gas being returned to the Company for sales to our midstream
partner. As the facility continues to come online, the Company will
benefit from the return to production of currently curtailed
volumes of up to 750Bbl/d. Additionally, when the AGI is operating
at full capacity, we expect to save up to $2.0 million per month in
gas treating costs.
Matt Steele, Chief Executive Officer, commented
“The operations team has performed exceptionally well on our
Monument Draw drilling campaign. The most recent Glacier pad wells
represent some of the best the Company has ever drilled from both a
cost and performance basis. Bringing the AGI back online to treat
our gas represents a new era at Battalion. The difficult steps we
took last year to right size the Company and focus on operational
excellence are beginning to pay dividends.”
Results of OperationsAverage daily net
production and total operating revenue during the fourth quarter of
2023 were 12,022 Boe/d (46% oil) and $47.2 million, respectively,
as compared to production and revenue of 15,696 Boe/d (51% oil) and
$76.8 million, respectively, during the fourth quarter of 2022. The
decrease in revenues in the fourth quarter of 2023 as compared to
the fourth quarter of 2022 is attributable to an approximate 3,674
Boe/d decrease in average daily production and a $10.21 decrease in
average realized prices (excluding the impact of hedges). Excluding
the impact of hedges, Battalion realized 99.7% of the average NYMEX
oil price during the fourth quarter of 2023. Realized hedge losses
totaled approximately $3.0 million during the fourth quarter
2023.
Lease operating and workover expense was $11.87
per Boe in the fourth quarter of 2023 versus $9.89 per Boe in the
fourth quarter of 2022. The increase in lease operating and
workover expense per Boe year-over-year is primarily attributable
to a decrease in average daily production as a large portion of our
lease operating expenses are fixed costs. Gathering and other
expense was $13.31 per Boe in the fourth quarter of 2023 versus
$11.31 per Boe in the fourth quarter of 2022. The increase was
primarily related to midstream disruptions and plant curtailments
and an increased percentage of total production requiring H2S
treatment, as well as inflationary impacts on costs associated with
our own hydrogen sulfide treating plant. General and administrative
expense was $4.93 per Boe in the fourth quarter of 2023 compared to
$2.46 per Boe in the fourth quarter of 2022. The increase is
primarily due to audit, legal and transaction costs associated with
the potential merger with Fury Resources. These costs will be
substantially reduced in future quarters.
For the fourth quarter of 2023, the Company
reported a net income available to common stockholders of $27.0
million and net income per diluted share available to common
shareholders of $1.63 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
fourth quarter of 2023 of $16.6 million, or an adjusted diluted net
loss of $1.01 per common share (see Reconciliation for additional
information). Adjusted EBITDA during the quarter ended December 31,
2023 was $10.0 million as compared to $22.7 million during the
quarter ended December 31, 2022 (see Adjusted EBITDA Reconciliation
table for additional information).
Liquidity and Balance SheetAs of December 31,
2023, the Company had $200.2 million of indebtedness outstanding
and approximately $0.3 million of letters of credit outstanding.
Total liquidity on December 31, 2023, made up of cash and cash
equivalents, was $57.5 million.
On November 8, 2023, the Company obtained a commitment letter
from its existing equity stockholders to purchase additional
preferred equity securities in an amount up to $55.0 million. An
aggregate of 35,000 shares of preferred stock were sold on December
15, 2023, under such support letter for proceeds of $34.1 million,
net of discount. On March 27, 2024, the remaining 20,000 shares
under such support letter were sold for proceeds of $19.5 million,
net of discount.
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-K.
Important Information for Investors and
StockholdersThis 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 SolicitationThe
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 StatementsThis 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 BattalionBattalion 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.
ContactMatthew 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 |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
39,562 |
|
|
$ |
60,816 |
|
|
$ |
183,634 |
|
|
$ |
267,690 |
|
Natural gas |
|
|
2,429 |
|
|
|
6,914 |
|
|
|
11,057 |
|
|
|
46,210 |
|
Natural gas liquids |
|
|
4,921 |
|
|
|
8,267 |
|
|
|
23,814 |
|
|
|
43,501 |
|
Total oil, natural gas and natural gas liquids sales |
|
|
46,912 |
|
|
|
75,997 |
|
|
|
218,505 |
|
|
|
357,401 |
|
Other |
|
|
330 |
|
|
|
805 |
|
|
|
2,257 |
|
|
|
1,663 |
|
Total operating revenues |
|
|
47,242 |
|
|
|
76,802 |
|
|
|
220,762 |
|
|
|
359,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
10,656 |
|
|
|
12,397 |
|
|
|
44,864 |
|
|
|
48,095 |
|
Workover and other |
|
|
2,480 |
|
|
|
1,876 |
|
|
|
7,149 |
|
|
|
6,683 |
|
Taxes other than income |
|
|
2,266 |
|
|
|
2,547 |
|
|
|
11,943 |
|
|
|
18,483 |
|
Gathering and other |
|
|
14,718 |
|
|
|
16,330 |
|
|
|
63,575 |
|
|
|
64,117 |
|
General and administrative |
|
|
5,453 |
|
|
|
3,564 |
|
|
|
19,025 |
|
|
|
17,635 |
|
Depletion, depreciation and accretion |
|
|
12,337 |
|
|
|
15,479 |
|
|
|
56,624 |
|
|
|
51,915 |
|
Total operating expenses |
|
|
47,910 |
|
|
|
52,193 |
|
|
|
203,180 |
|
|
|
206,928 |
|
(Loss) income from
operations |
|
|
(668 |
) |
|
|
24,609 |
|
|
|
17,582 |
|
|
|
152,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
|
42,430 |
|
|
|
(21,872 |
) |
|
|
12,689 |
|
|
|
(110,006 |
) |
Interest expense and other |
|
|
(9,074 |
) |
|
|
(10,389 |
) |
|
|
(33,319 |
) |
|
|
(23,591 |
) |
Total other income expenses |
|
|
33,356 |
|
|
|
(32,261 |
) |
|
|
(20,630 |
) |
|
|
(133,597 |
) |
Income (loss) before income
taxes |
|
|
32,688 |
|
|
|
(7,652 |
) |
|
|
(3,048 |
) |
|
|
18,539 |
|
Income tax benefit
(provision) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income
(loss) |
|
$ |
32,688 |
|
|
$ |
(7,652 |
) |
|
$ |
(3,048 |
) |
|
$ |
18,539 |
|
Series A preferred
dividends |
|
|
(5,695 |
) |
|
|
— |
|
|
|
(12,047 |
) |
|
|
— |
|
Net income (loss)
available to common stockholders |
|
$ |
26,993 |
|
|
$ |
(7,652 |
) |
|
$ |
(15,095 |
) |
|
$ |
18,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.64 |
|
|
$ |
(0.47 |
) |
|
$ |
(0.92 |
) |
|
$ |
1.14 |
|
Diluted |
|
$ |
1.63 |
|
|
$ |
(0.47 |
) |
|
$ |
(0.92 |
) |
|
$ |
1.12 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,457 |
|
|
|
16,345 |
|
|
|
16,441 |
|
|
|
16,331 |
|
Diluted |
|
|
16,517 |
|
|
|
16,345 |
|
|
|
16,441 |
|
|
|
16,510 |
|
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)(In
thousands, except share and per share amounts) |
|
|
|
December 31, 2023 |
|
December 31, 2022 |
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
57,529 |
|
|
$ |
32,726 |
|
Accounts receivable, net |
|
|
23,021 |
|
|
|
37,974 |
|
Assets from derivative contracts |
|
|
8,992 |
|
|
|
16,244 |
|
Restricted cash |
|
|
90 |
|
|
|
90 |
|
Prepaids and other |
|
|
907 |
|
|
|
1,131 |
|
Total current assets |
|
|
90,539 |
|
|
|
88,165 |
|
Oil and natural gas
properties (full cost method): |
|
|
|
|
|
|
Evaluated |
|
|
755,482 |
|
|
|
713,585 |
|
Unevaluated |
|
|
58,909 |
|
|
|
62,621 |
|
Gross oil and natural gas properties |
|
|
814,391 |
|
|
|
776,206 |
|
Less - accumulated depletion |
|
|
(445,975 |
) |
|
|
(390,796 |
) |
Net oil and natural gas properties |
|
|
368,416 |
|
|
|
385,410 |
|
Other operating
property and equipment: |
|
|
|
|
|
|
Other operating property and equipment |
|
|
4,640 |
|
|
|
4,434 |
|
Less - accumulated depreciation |
|
|
(1,817 |
) |
|
|
(1,209 |
) |
Net other operating property and equipment |
|
|
2,823 |
|
|
|
3,225 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Assets from derivative contracts |
|
|
4,877 |
|
|
|
5,379 |
|
Operating lease right of use assets |
|
|
1,027 |
|
|
|
352 |
|
Other assets |
|
|
17,656 |
|
|
|
2,827 |
|
Total
assets |
|
$ |
485,338 |
|
|
$ |
485,358 |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
66,525 |
|
|
$ |
100,095 |
|
Liabilities from derivative contracts |
|
|
17,191 |
|
|
|
29,286 |
|
Current portion of long-term debt |
|
|
50,106 |
|
|
|
35,067 |
|
Operating lease liabilities |
|
|
594 |
|
|
|
352 |
|
Asset retirement obligations |
|
|
— |
|
|
|
225 |
|
Total current liabilities |
|
|
134,416 |
|
|
|
165,025 |
|
Long-term debt,
net |
|
|
140,276 |
|
|
|
182,676 |
|
Other noncurrent
liabilities: |
|
|
|
|
|
|
Liabilities from derivative contracts |
|
|
16,058 |
|
|
|
33,649 |
|
Asset retirement obligations |
|
|
17,458 |
|
|
|
15,244 |
|
Operating lease liabilities |
|
|
490 |
|
|
|
— |
|
Other |
|
|
2,084 |
|
|
|
4,136 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Temporary
equity: |
|
|
|
|
|
|
Series A redeemable
convertible preferred stock: 98,000 shares of $0.0001 |
|
|
106,535 |
|
|
|
— |
|
par value authorized, issued and outstanding as of December 31,
2023 |
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
Common stock: 100,000,000 shares of $0.0001 par value
authorized; |
|
|
|
|
|
|
16,456,563 and 16,344,815 shares issued and outstanding as of |
|
|
|
|
|
|
December 31, 2023 and 2022, respectively |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
321,012 |
|
|
|
334,571 |
|
Accumulated deficit |
|
|
(252,993 |
) |
|
|
(249,945 |
) |
Total stockholders'
equity |
|
|
68,021 |
|
|
|
84,628 |
|
Total liabilities and
stockholders' equity |
|
$ |
485,338 |
|
|
$ |
485,358 |
|
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands) |
|
|
|
Three Months Ended |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
32,688 |
|
|
$ |
(7,652 |
) |
|
$ |
(3,048 |
) |
|
$ |
18,539 |
|
Adjustments to reconcile net
(loss) income to net cash provided by |
|
|
|
|
|
|
|
|
|
|
|
|
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and accretion |
|
|
12,337 |
|
|
|
15,479 |
|
|
|
56,624 |
|
|
|
51,915 |
|
Stock-based compensation, net |
|
|
161 |
|
|
|
670 |
|
|
|
(1,070 |
) |
|
|
2,210 |
|
Unrealized gain on derivative contracts |
|
|
(45,403 |
) |
|
|
3,655 |
|
|
|
(21,934 |
) |
|
|
(20,256 |
) |
Amortization/accretion of financing related costs |
|
|
1,826 |
|
|
|
2,722 |
|
|
|
7,615 |
|
|
|
5,448 |
|
Reorganization items, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(744 |
) |
Accrued settlements on derivative contracts |
|
|
(2,587 |
) |
|
|
(3,191 |
) |
|
|
259 |
|
|
|
4,302 |
|
Change in fair value of embedded derivative liability |
|
|
530 |
|
|
|
1,224 |
|
|
|
(2,052 |
) |
|
|
(1,819 |
) |
Other expense (income) |
|
|
214 |
|
|
|
51 |
|
|
|
358 |
|
|
|
(77 |
) |
Cash flow from operations
before changes in working capital |
|
|
(234 |
) |
|
|
12,958 |
|
|
|
36,752 |
|
|
|
59,518 |
|
Changes in working capital |
|
|
6,758 |
|
|
|
12,029 |
|
|
|
(19,163 |
) |
|
|
19,283 |
|
Net cash provided by operating
activities |
|
|
6,524 |
|
|
|
24,987 |
|
|
|
17,589 |
|
|
|
78,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital expenditures |
|
|
(16,196 |
) |
|
|
(38,467 |
) |
|
|
(46,288 |
) |
|
|
(125,465 |
) |
Proceeds received from sales of oil and natural gas assets |
|
|
3,740 |
|
|
|
331 |
|
|
|
4,929 |
|
|
|
332 |
|
Other operating property and equipment capital expenditures |
|
|
(17 |
) |
|
|
(211 |
) |
|
|
(153 |
) |
|
|
(1,160 |
) |
Contract asset |
|
|
(3,705 |
) |
|
|
— |
|
|
|
(10,308 |
) |
|
|
— |
|
Other |
|
|
1,439 |
|
|
|
(3 |
) |
|
|
(25 |
) |
|
|
163 |
|
Net cash used in investing
activities |
|
|
(14,739 |
) |
|
|
(38,350 |
) |
|
|
(51,845 |
) |
|
|
(126,130 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
— |
|
|
|
15,078 |
|
|
|
- |
|
|
|
35,200 |
|
Repayments of borrowings |
|
|
(10,027 |
) |
|
|
(10 |
) |
|
|
(35,093 |
) |
|
|
(95 |
) |
Payment of deferred financing costs |
|
|
— |
|
|
|
(2,508 |
) |
|
|
— |
|
|
|
(2,887 |
) |
Proceeds from issuance of preferred stock |
|
|
33,182 |
|
|
|
— |
|
|
|
94,607 |
|
|
|
- |
|
Other |
|
|
(1 |
) |
|
|
60 |
|
|
|
(455 |
) |
|
|
(432 |
) |
Net cash provided by financing
activities |
|
|
23,154 |
|
|
|
12,620 |
|
|
|
59,059 |
|
|
|
31,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
|
14,939 |
|
|
|
(743 |
) |
|
|
24,803 |
|
|
|
(15,543 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
42,680 |
|
|
|
33,559 |
|
|
|
32,816 |
|
|
|
48,359 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
57,619 |
|
|
$ |
32,816 |
|
|
$ |
57,619 |
|
|
$ |
32,816 |
|
|
BATTALION OIL CORPORATIONSELECTED
OPERATING DATA (Unaudited) |
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
|
510 |
|
|
|
740 |
|
|
|
2,415 |
|
|
|
2,837 |
|
Natural gas (MMcf) |
|
|
2,102 |
|
|
|
2,315 |
|
|
|
8,718 |
|
|
|
9,337 |
|
Natural gas liquids (MBbls) |
|
|
246 |
|
|
|
318 |
|
|
|
1,163 |
|
|
|
1,242 |
|
Total (MBoe) |
|
|
1,106 |
|
|
|
1,444 |
|
|
|
5,031 |
|
|
|
5,635 |
|
Average daily production (Boe/d) |
|
|
12,022 |
|
|
|
15,696 |
|
|
|
13,784 |
|
|
|
15,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
77.57 |
|
|
$ |
82.18 |
|
|
$ |
76.04 |
|
|
$ |
94.36 |
|
Natural gas (per Mcf) |
|
|
1.16 |
|
|
|
2.99 |
|
|
|
1.27 |
|
|
|
4.95 |
|
Natural gas liquids (per Bbl) |
|
|
20.00 |
|
|
|
26.00 |
|
|
|
20.48 |
|
|
|
35.02 |
|
Total per Boe |
|
|
42.42 |
|
|
|
52.63 |
|
|
|
43.43 |
|
|
|
63.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative
contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
(10.43 |
) |
|
$ |
(24.73 |
) |
|
$ |
(7.76 |
) |
|
$ |
(40.82 |
) |
Natural gas (per Mcf) |
|
|
1.12 |
|
|
|
0.04 |
|
|
|
1.09 |
|
|
|
(1.55 |
) |
Natural gas liquids (per Bbl) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total per Boe |
|
|
(2.69 |
) |
|
|
(12.62 |
) |
|
|
(1.84 |
) |
|
|
(23.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices computed after
cash effect of settlement of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
67.14 |
|
|
$ |
57.45 |
|
|
$ |
68.28 |
|
|
$ |
53.54 |
|
Natural gas (per Mcf) |
|
|
2.28 |
|
|
|
3.03 |
|
|
|
2.36 |
|
|
|
3.40 |
|
Natural gas liquids (per Bbl) |
|
|
20.00 |
|
|
|
26.00 |
|
|
|
20.48 |
|
|
|
35.02 |
|
Total per Boe |
|
|
39.73 |
|
|
|
40.01 |
|
|
|
41.59 |
|
|
|
40.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per Boe: |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
9.63 |
|
|
$ |
8.59 |
|
|
$ |
8.92 |
|
|
$ |
8.54 |
|
Workover and other |
|
|
2.24 |
|
|
|
1.30 |
|
|
|
1.42 |
|
|
|
1.19 |
|
Taxes other than income |
|
|
2.05 |
|
|
|
1.76 |
|
|
|
2.37 |
|
|
|
3.28 |
|
Gathering and other |
|
|
13.31 |
|
|
|
11.31 |
|
|
|
12.64 |
|
|
|
11.38 |
|
General and administrative, as adjusted (1) |
|
|
3.63 |
|
|
|
1.87 |
|
|
|
3.39 |
|
|
|
2.52 |
|
Depletion |
|
|
10.80 |
|
|
|
10.49 |
|
|
|
10.97 |
|
|
|
9.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
general and administrative costs per Boe, adjusted for items noted
in the reconciliation below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative, as reported |
|
$ |
4.93 |
|
|
$ |
2.46 |
|
|
$ |
3.78 |
|
|
$ |
3.13 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash |
|
|
(0.15 |
) |
|
|
(0.46 |
) |
|
|
0.21 |
|
|
|
(0.39 |
) |
Non-recurring (charges) credits and other: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
(1.15 |
) |
|
|
(0.13 |
) |
|
|
(0.60 |
) |
|
|
(0.22 |
) |
General and administrative, as adjusted(2) |
|
$ |
3.63 |
|
|
$ |
1.87 |
|
|
$ |
3.39 |
|
|
$ |
2.52 |
|
Total operating costs, as
reported |
|
$ |
32.16 |
|
|
$ |
25.42 |
|
|
$ |
29.13 |
|
|
$ |
27.52 |
|
Total adjusting items |
|
|
(1.30 |
) |
|
|
(0.59 |
) |
|
|
(0.39 |
) |
|
|
(0.61 |
) |
Total operating costs, as
adjusted(3) |
|
$ |
30.86 |
|
|
$ |
24.83 |
|
|
$ |
28.74 |
|
|
$ |
26.91 |
|
___________________ |
(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 |
|
Years Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
As
Reported: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders - diluted
(1) |
|
$ |
26,993 |
|
|
$ |
(7,652 |
) |
|
$ |
(15,095 |
) |
|
$ |
18,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected
Items: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (gain) loss on
derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
(38,604 |
) |
|
$ |
18,156 |
|
|
$ |
(22,601 |
) |
|
$ |
(10,730 |
) |
Natural gas |
|
|
(6,799 |
) |
|
|
(14,501 |
) |
|
|
667 |
|
|
|
(9,526 |
) |
Total mark-to-market non-cash
charge |
|
|
(45,403 |
) |
|
|
3,655 |
|
|
|
(21,934 |
) |
|
|
(20,256 |
) |
Change in fair value of
embedded derivative liability |
|
|
529 |
|
|
|
1,224 |
|
|
|
(2,053 |
) |
|
|
(1,819 |
) |
Non-recurring charges
(credits) |
|
|
1,268 |
|
|
|
194 |
|
|
|
3,042 |
|
|
|
1,230 |
|
Selected items, before income
taxes |
|
|
(43,606 |
) |
|
|
5,073 |
|
|
|
(20,945 |
) |
|
|
(20,845 |
) |
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Selected items, net of
tax |
|
$ |
(43,606 |
) |
|
$ |
5,073 |
|
|
$ |
(20,945 |
) |
|
$ |
(20,845 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) available to common
stockholders, as adjusted (2) |
|
$ |
(16,613 |
) |
|
$ |
(2,579 |
) |
|
$ |
(36,040 |
) |
|
$ |
(2,306 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per
common share, as reported |
|
$ |
1.63 |
|
|
$ |
(0.47 |
) |
|
$ |
(0.92 |
) |
|
$ |
1.12 |
|
Impact of selected items |
|
|
(2.64 |
) |
|
|
0.31 |
|
|
|
(1.27 |
) |
|
|
(1.26 |
) |
Diluted net (loss) per common
share, excluding selected items (2)(3) |
|
$ |
(1.01 |
) |
|
$ |
(0.16 |
) |
|
$ |
(2.19 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities |
|
$ |
6,524 |
|
|
$ |
24,987 |
|
|
$ |
17,589 |
|
|
$ |
78,801 |
|
Changes in working
capital |
|
|
(6,758 |
) |
|
|
(12,029 |
) |
|
|
19,163 |
|
|
|
(19,283 |
) |
Cash flow from operations
before changes in working capital |
|
|
(234 |
) |
|
|
12,958 |
|
|
|
36,752 |
|
|
|
59,518 |
|
Cash components of selected
items |
|
|
4,707 |
|
|
|
11,989 |
|
|
|
3,301 |
|
|
|
6,276 |
|
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash flows from operations
before changes in working capital, adjusted for selected items
(1) |
|
$ |
4,473 |
|
|
$ |
24,947 |
|
|
$ |
40,053 |
|
|
$ |
65,794 |
|
___________________ |
(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 14, Earnings Per Share in our Form 10-K
for the year ended December 31, 2023. |
(2) |
Net (loss) income earnings 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 and twelve months ended December 31, 2023 were
calculated based upon weighted average diluted shares of 16.5
million and 16.4 million shares, respectively, due to the net
(loss) income available to common stockholders, excluding selected
items. The impact of selected items for the three and twelve months
ended December 31, 2022 were calculated based upon weighted average
diluted shares of 16.3 million shares, respectively, due to the net
(loss) income available to common stockholders, excluding selected
items. |
|
|
BATTALION OIL CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
32,688 |
|
|
$ |
(7,652 |
) |
|
$ |
(3,048 |
) |
|
$ |
18,539 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
8,917 |
|
|
|
9,378 |
|
|
|
36,511 |
|
|
|
25,725 |
|
Depletion, depreciation and accretion |
|
|
12,337 |
|
|
|
15,479 |
|
|
|
56,624 |
|
|
|
51,915 |
|
Stock-based compensation |
|
|
161 |
|
|
|
670 |
|
|
|
(1,070 |
) |
|
|
2,210 |
|
Interest income |
|
|
(525 |
) |
|
|
(227 |
) |
|
|
(1,243 |
) |
|
|
(369 |
) |
Loss (gain) on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Unrealized loss (gain) on derivatives contracts |
|
|
(45,403 |
) |
|
|
3,655 |
|
|
|
(21,934 |
) |
|
|
(20,256 |
) |
Change in fair value of embedded derivative liability |
|
|
529 |
|
|
|
1,224 |
|
|
|
(2,053 |
) |
|
|
(1,819 |
) |
Non-recurring charges (credits) and other |
|
|
1,268 |
|
|
|
194 |
|
|
|
2,728 |
|
|
|
1,061 |
|
Adjusted EBITDA(1) |
|
$ |
9,972 |
|
|
$ |
22,721 |
|
|
$ |
66,515 |
|
|
$ |
77,006 |
|
___________________ |
(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 CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
Three Months |
|
Three Months |
|
Three Months |
|
Three Months |
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
December 31, 2023 |
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
32,688 |
|
|
$ |
(53,799 |
) |
|
$ |
(4,748 |
) |
|
$ |
22,811 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
8,917 |
|
|
|
9,219 |
|
|
|
9,366 |
|
|
|
9,009 |
|
Depletion, depreciation and accretion |
|
|
12,337 |
|
|
|
13,426 |
|
|
|
14,713 |
|
|
|
16,148 |
|
Stock-based compensation |
|
|
161 |
|
|
|
(686 |
) |
|
|
(772 |
) |
|
|
227 |
|
Interest income |
|
|
(525 |
) |
|
|
(293 |
) |
|
|
(234 |
) |
|
|
(191 |
) |
Unrealized loss (gain) on derivatives contracts |
|
|
(45,403 |
) |
|
|
46,805 |
|
|
|
(2,332 |
) |
|
|
(21,004 |
) |
Change in fair value of embedded derivative liability |
|
|
529 |
|
|
|
(1,878 |
) |
|
|
358 |
|
|
|
(1,062 |
) |
Non-recurring charges (credits) and other |
|
|
1,268 |
|
|
|
831 |
|
|
|
477 |
|
|
|
152 |
|
Adjusted EBITDA(1) |
|
$ |
9,972 |
|
|
$ |
13,625 |
|
|
$ |
16,828 |
|
|
$ |
26,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
|
$ |
66,515 |
|
|
|
|
|
|
|
|
|
|
___________________ |
(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 CORPORATIONADJUSTED EBITDA
RECONCILIATION (Unaudited)(In
thousands) |
|
|
|
Three Months |
|
Three Months |
|
Three Months |
|
Three Months |
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
(7,652 |
) |
|
$ |
105,888 |
|
|
$ |
13,047 |
|
|
$ |
(92,744 |
) |
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
9,378 |
|
|
|
6,232 |
|
|
|
5,394 |
|
|
|
4,721 |
|
Depletion, depreciation and accretion |
|
|
15,479 |
|
|
|
13,615 |
|
|
|
12,601 |
|
|
|
10,220 |
|
Stock-based compensation |
|
|
670 |
|
|
|
683 |
|
|
|
473 |
|
|
|
384 |
|
Interest income |
|
|
(227 |
) |
|
|
(141 |
) |
|
|
(1 |
) |
|
|
— |
|
Unrealized loss (gain) on derivatives contracts |
|
|
3,655 |
|
|
|
(102,112 |
) |
|
|
(12,837 |
) |
|
|
91,038 |
|
Change in fair value of embedded derivative liability |
|
|
1,224 |
|
|
|
(449 |
) |
|
|
(562 |
) |
|
|
(2,032 |
) |
Non-recurring charges (credits) and other |
|
|
194 |
|
|
|
597 |
|
|
|
53 |
|
|
|
217 |
|
Adjusted EBITDA(1) |
|
$ |
22,721 |
|
|
$ |
24,313 |
|
|
$ |
18,168 |
|
|
$ |
11,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
|
$ |
77,006 |
|
|
|
|
|
|
|
|
|
|
___________________ |
(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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