0001282648false00012826482023-08-212023-08-21

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 21, 2023 

 

Battalion Oil Corporation

(Exact name of registrant as specified in its charter)

  

Delaware

 

001-35467

 

20-0700684

(State or other jurisdiction
of incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

 

3505 West Sam Houston Parkway North, Suite 300
Houston, Texas

 

77043

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (832) 538-0300

 

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock par value $0.0001

 

BATL

 

NYSE American

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

Item 2.02  Results of Operations and Financial Condition.

 

On August 21, 2023, Battalion Oil Corporation (the “Company”) issued a press release with respect to the Company’s second quarter 2023 financial results. The press release is furnished as Exhibit 99.1 to this Current Report. The press release contains certain measures discussed below that may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In each case, the most directly comparable GAAP financial measure and information reconciling the GAAP and non-GAAP measures is also included in the press release.

 

Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

 

From time to time management discloses net income (loss) and earnings per share excluding selected items as well as EBITDA, LTM EBITDA, cash flow from operations, general and administrative expenses adjusted for selected items. These measures are presented based on management’s belief that these non-GAAP measures enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. These 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 flow from operations, as defined by GAAP. These measures may not be comparable to similarly named non-GAAP measures that other companies may use and may not be useful in comparing the performance of those companies to our performance.

 

Item 9.01  Financial Statements and Exhibits.

 

(d)           Exhibits. The following exhibits are furnished as part of this Current Report on Form 8-K:

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press release issued by Battalion Oil Corporation dated August 21, 2023.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

2

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BATTALION OIL CORPORATION

 

 

 

 

 

August 21, 2023

By:

/s/ Matthew B. Steele

 

Name:

Matthew B. Steele

 

Title:

Chief Executive Officer

 

 

3

Exhibit 99.1

Graphic

Battalion Oil Corporation Announces Second Quarter 2023 Financial and Operating Results

HOUSTON, TEXAS – August 21, 2023 – Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter of 2023.

Key Highlights

Generated second quarter 2023 sales volumes of 14,253 barrels of oil equivalent per day (“Boe/d”)
Continued robust production results from our most recent wells
Generated net loss of $4.7 million and Adjusted EBITDA of $16.8 million in the second quarter of 2023

Management Comments

The Company has continued to work with its partner on the previously announced acid gas injection (“AGI”) project and now expects to have the facility online before year end. Additional compression and well work are underway to maximize the expense savings potential of the project once it is fully online. The latest Monument Draw well continues to outperform offset wells and has produced over 217,000 Boe in its first six months on production while flowing naturally without artificial lift.

Matt Steele, Chief Executive Officer, commented “In the second quarter, we prepared to recommence drilling activity in Monument Draw. We also worked diligently with our midstream partner to progress the AGI commissioning. We look forward to our drilling program and increasing EBITDA in the back half of the year.”

Results of Operations

Average daily net production and total operating revenue during the second quarter of 2023 were 14,253 Boe/d (49% oil) and $54.3 million, respectively, as compared to production and revenue of 15,044 Boe/d (49% oil) and $101.5 million, respectively, during the second quarter of 2022. The decrease in revenues in the second quarter of 2023 as compared to the second quarter of 2022 is primarily attributable to an approximate $32.44 decrease in average realized prices (excluding the impact of hedges). Excluding the impact of hedges, Battalion realized 98% of the average NYMEX oil price during the second quarter of 2023. Realized hedge gains totaled approximately $2.1 million during the second quarter 2023.

Lease operating and workover expense was $10.79 per Boe in the second quarter of 2023 versus $9.71 per Boe in the second 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 $12.97 per Boe in the second quarter of 2023 versus $11.59 per Boe in the second quarter of 2022. The increase was due primarily to cleanout projects on our Valkyrie facility that increased the throughput capacity. General and administrative expense was $4.04 per Boe in the second quarter of 2023 and $3.36 per Boe in the second quarter of 2022. The increase is primarily due to an increase in professional fees. After adjusting

1


for selected items, Adjusted G&A was $4.01 per Boe in the second quarter of 2023 compared to $2.90 per Boe in the second quarter of 2022.

The Company reported net loss for the second quarter of 2023 of $4.7 million, or $0.35 per share available to common stockholders. After adjusting for selected items, the Company reported an adjusted net loss available to common stockholders for the second quarter of 2023 of $6.9 million, or $0.42 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended June 30, 2023 was $16.8 million as compared to $18.2 million during the quarter ended June 30, 2022 (see Adjusted EBITDA Reconciliation table for additional information).

Liquidity and Balance Sheet

As of June 30, 2023, the Company had $220.3 million of indebtedness outstanding and approximately $1.4 million of letters of credit outstanding. Subsequent to June 30, 2023, the letters of credit were cancelled. Total liquidity on June 30, 2023, made up of cash and cash equivalents, was $18.5 million.

In August 2023, the Company obtained a commitment letter from its existing equity shareholders to purchase additional preferred equity securities in an amount up to $38 million and provided notice to the investors of its intent to draw the full $38 million with an expected close the third quarter of 2023. 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.

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, 2022, and other filings submitted by the Company to the U.S. Securities and Exchange Commission (“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.

2


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. Steele

Chief Executive Officer & Principal Financial Officer

832-541-8334

3


BATTALION OIL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

    

2023

2022

2023

2022

Operating revenues:

Oil, natural gas and natural gas liquids sales:

Oil

$

46,168

$

73,944

$

100,383

$

136,468

Natural gas

2,060

14,759

4,960

23,640

Natural gas liquids

5,657

12,587

12,815

22,590

Total oil, natural gas and natural gas liquids sales

53,885

101,290

118,158

182,698

Other

387

221

1,256

415

Total operating revenues

54,272

101,511

119,414

183,113

Operating expenses:

Production:

Lease operating

11,365

11,909

23,056

23,433

Workover and other

2,634

1,383

3,969

2,248

Taxes other than income

3,180

5,372

6,370

10,323

Gathering and other

16,828

15,869

33,345

31,124

General and administrative

5,243

4,588

10,380

9,573

Depletion, depreciation and accretion

14,713

12,601

30,861

22,821

Total operating expenses

53,963

51,722

107,981

99,522

Income (loss) from operations

309

49,789

11,433

83,591

Other income (expenses):

Net gain (loss) on derivative contracts

4,473

(31,910)

23,946

(155,768)

Interest expense and other

(9,530)

(4,832)

(17,316)

(7,520)

Total other income (expenses)

(5,057)

(36,742)

6,630

(163,288)

Income (loss) before income taxes

(4,748)

13,047

18,063

(79,697)

Income tax benefit (provision)

Net income (loss)

$

(4,748)

$

13,047

$

18,063

$

(79,697)

Net income (loss) per share of common stock:

Basic

$

(0.35)

$

0.80

$

0.87

$

(4.88)

Diluted

$

(0.35)

$

0.79

$

0.86

$

(4.88)

Weighted average common shares outstanding:

Basic

16,457

16,338

16,425

16,320

Diluted

16,457

16,510

16,520

16,320

4


BATTALION OIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share amounts)

    

June 30, 2023

    

December 31, 2022

Current assets:

Cash and cash equivalents

$

18,514

$

32,726

Accounts receivable, net

23,518

37,974

Assets from derivative contracts

9,611

16,244

Restricted cash

90

90

Prepaids and other

1,049

1,131

Total current assets

52,782

88,165

Oil and natural gas properties (full cost method):

Evaluated

727,347

713,585

Unevaluated

62,649

62,621

Gross oil and natural gas properties

789,996

776,206

Less - accumulated depletion

(420,964)

(390,796)

Net oil and natural gas properties

369,032

385,410

Other operating property and equipment:

Other operating property and equipment

4,674

4,434

Less - accumulated depreciation

(1,486)

(1,209)

Net other operating property and equipment

3,188

3,225

Other noncurrent assets:

Assets from derivative contracts

5,299

5,379

Operating lease right of use assets

162

352

Other assets

2,778

2,827

Total assets

$

433,241

$

485,358

Current liabilities:

Accounts payable and accrued liabilities

$

48,897

$

100,095

Liabilities from derivative contracts

15,480

29,286

Current portion of long-term debt

42,606

35,067

Operating lease liabilities

162

352

Asset retirement obligations

111

225

Total current liabilities

107,256

165,025

Long-term debt, net

164,055

182,676

Other noncurrent liabilities:

Liabilities from derivative contracts

17,406

33,649

Asset retirement obligations

15,741

15,244

Operating lease liabilities

Deferred income taxes

Other

3,432

4,136

Commitments and contingencies

Temporary equity:

Series A redeemable convertible preferred stock: 25,000 shares of $.0001

26,030

par value authorized, issued and outstanding as of June 30, 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

June 30, 2023 and December 31, 2022, respectively

2

2

Additional paid-in capital

331,201

334,571

Retained earnings (accumulated deficit)

(231,882)

(249,945)

Total stockholders' equity

99,321

84,628

Total liabilities, temporary equity and stockholders' equity

$

433,241

$

485,358

5


BATTALION OIL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

    

2023

2022

2023

2022

Cash flows from operating activities:

Net income (loss)

$

(4,748)

$

13,047

$

18,063

$

(79,697)

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Depletion, depreciation and accretion

14,713

12,601

30,861

22,821

Stock-based compensation, net

(772)

473

(545)

857

Unrealized loss (gain) on derivative contracts

(2,332)

(12,837)

(23,336)

78,201

Amortization/accretion of financing related costs

2,045

908

3,843

1,807

Reorganization items

(744)

Accrued settlements on derivative contracts

(374)

1,843

(929)

14,652

Change in fair value of embedded derivative liability

358

(563)

(704)

(2,595)

Other income (expense)

42

(96)

53

(96)

Cash flows from operations before changes in working capital

8,932

15,376

27,306

35,206

Changes in working capital

406

910

(18,657)

(6,873)

Net cash provided by (used in) operating activities

9,338

16,286

8,649

28,333

Cash flows from investing activities:

Oil and natural gas capital expenditures

(4,022)

(35,693)

(32,633)

(51,377)

Proceeds received from sale of oil and natural gas assets

1,189

Other operating property and equipment capital expenditures

(15)

(545)

(284)

(705)

Proceeds received from sale of other operating property and equipment

96

96

Other

(6)

(11)

Net cash provided by (used in) investing activities

(4,043)

(36,142)

(31,739)

(51,986)

Cash flows from financing activities:

Proceeds from borrowings

20,000

20,000

Repayments of borrowings

(10,026)

(15,043)

(85)

Payment of deferred debt financing costs

(379)

Proceeds from issuance of preferred stock

24,375

Other

(6)

(454)

(467)

Net cash provided by (used in) financing activities

(10,026)

19,994

8,878

19,069

Net increase (decrease) in cash, cash equivalents and restricted cash

(4,731)

138

(14,212)

(4,584)

Cash, cash equivalents and restricted cash at beginning of period

23,335

43,637

32,816

48,359

Cash, cash equivalents and restricted cash at end of period

$

18,604

$

43,775

$

18,604

$

43,775

6


BATTALION OIL CORPORATION

SELECTED OPERATING DATA (Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2023

2022

2023

2022

Production volumes:

Crude oil (MBbls)

636

674

1,366

1,344

Natural gas (MMcf)

2,155

2,355

4,562

4,670

Natural gas liquids (MBbls)

302

303

629

576

Total (MBoe)

1,297

1,369

2,755

2,698

Average daily production (Boe/d)

14,253

15,044

15,221

14,906

Average prices:

Crude oil (per Bbl)

$

72.59

$

109.71

$

73.49

$

101.54

Natural gas (per Mcf)

0.96

6.27

1.09

5.06

Natural gas liquids (per Bbl)

18.73

41.54

20.37

39.22

Total per Boe

41.55

73.99

42.89

67.72

Cash effect of derivative contracts:

Crude oil (per Bbl)

$

(2.68)

$

(58.03)

$

(3.92)

$

(52.35)

Natural gas (per Mcf)

1.78

(2.39)

1.31

(1.54)

Natural gas liquids (per Bbl)

Total per Boe

1.65

(32.69)

0.22

(28.75)

Average prices computed after cash effect of settlement of derivative contracts:

Crude oil (per Bbl)

$

69.91

$

51.68

$

69.57

$

49.19

Natural gas (per Mcf)

2.74

3.88

2.40

3.52

Natural gas liquids (per Bbl)

18.73

41.54

20.37

39.22

Total per Boe

43.20

41.30

43.11

38.97

Average cost per Boe:

Production:

Lease operating

$

8.76

$

8.70

$

8.37

$

8.69

Workover and other

2.03

1.01

1.44

0.83

Taxes other than income

2.45

3.92

2.31

3.83

Gathering and other

12.97

11.59

12.10

11.54

General and administrative, as adjusted (1)

4.01

2.90

3.61

3.09

Depletion

11.07

    

9.07

10.95

8.33

(1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below:

General and administrative:

General and administrative, as reported

$

4.04

$

3.36

$

3.77

$

3.55

Stock-based compensation:

Non-cash

0.60

(0.35)

0.20

(0.32)

Non-recurring charges and other:

Cash

(0.63)

(0.11)

(0.36)

(0.14)

General and administrative, as adjusted(2)

$

4.01

$

2.90

$

3.61

$

3.09

Gathering and other, as reported

$

12.97

$

11.59

$

12.10

$

11.54

Rig termination and stacking charges and other

0.26

0.07

0.12

0.04

Gathering and other, as adjusted(3)

$

13.23

$

11.66

$

12.22

$

11.58

Total operating costs, as reported

$

30.25

$

28.58

$

27.99

$

28.44

Total adjusting items

0.23

(0.39)

(0.04)

(0.42)

Total operating costs, as adjusted(3)

$

30.48

$

28.19

$

27.95

$

28.02


(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.

7


BATTALION OIL CORPORATION

RECONCILIATION (Unaudited)

(In thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30,

June 30,

2023

2022

2023

2022

As Reported:

Net income (loss) available to common stockholders - diluted (1)

$

(5,745)

$

13,047

$

14,280

$

(79,697)

Impact of Selected Items:

Unrealized loss (gain) on derivatives contracts:

Crude oil

$

(10,440)

$

(11,939)

$

(30,130)

$

70,962

Natural gas

8,108

(898)

6,794

7,239

Total mark-to-market non-cash charge

(2,332)

(12,837)

(23,336)

78,201

Change in fair value of embedded derivative liability

358

(562)

(704)

(2,594)

Non-recurring charges

811

149

994

366

Selected items, before income taxes

(1,163)

(13,250)

(23,046)

75,973

Income tax effect of selected items

Selected items, net of tax

(1,163)

(13,250)

(23,046)

75,973

Net income (loss) available to common stockholders, as adjusted (2)

$

(6,908)

$

(203)

$

(8,766)

$

(3,724)

Diluted net income (loss) per common share, as reported

$

(0.35)

$

0.79

$

0.86

$

(4.88)

Impact of selected items

(0.07)

(0.80)

(1.39)

4.65

Diluted net income (loss) per common share, excluding selected items (2)(3)

$

(0.42)

$

(0.01)

$

(0.53)

$

(0.23)

Net cash provided by (used in) operating activities

$

9,338

$

16,286

$

8,649

$

28,333

Changes in working capital

(406)

(910)

18,657

6,873

Cash flows from operations before changes in working capital

8,932

15,376

27,306

35,206

Cash components of selected items

851

(1,694)

1,589

(13,542)

Income tax effect of selected items

Cash flows from operations before changes in working capital, adjusted for selected items (1)

$

9,783

$

13,682

$

28,895

$

21,664


(1)Amount reflects net income (loss) 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 12, Earnings Per Share in our Form 10-Q for the quarter ended June 30, 2023.
(2)Net income (loss) 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 six months ended June 30, 2023 were calculated based upon weighted average diluted shares of 16.5 million and 16.4 million shares, respectively, due to the net income (loss) available to common stockholders, excluding selected items. The impact of selected items for the three and six months ended June 30, 2022 were calculated based upon weighted average diluted shares of 16.3 million shares, respectively, due to the net income (loss) available to common stockholders, excluding selected items.

8


BATTALION OIL CORPORATION

ADJUSTED EBITDA RECONCILIATION (Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2023

2022

2023

2022

Net income (loss), as reported

$

(4,748)

$

13,047

$

18,063

$

(79,697)

Impact of adjusting items:

Interest expense

9,366

5,394

18,375

10,115

Depletion, depreciation and accretion

14,713

12,601

30,861

22,821

Stock-based compensation

(772)

473

(545)

857

Interest income

(234)

(1)

(425)

(1)

Unrealized loss (gain) on derivatives contracts

(2,332)

(12,837)

(23,336)

78,201

Deferred financing costs expensed

-

-

-

Change in fair value of embedded derivative liability

358

(562)

(704)

(2,594)

Rig termination and stacking charges

Non-recurring charges and other

477

53

629

270

Adjusted EBITDA(1)

$

16,828

$

18,168

$

42,918

$

29,972


(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.

9


BATTALION OIL CORPORATION

ADJUSTED 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.

10


BATTALION OIL CORPORATION

ADJUSTED EBITDA RECONCILIATION (Unaudited)

(In thousands)

Three Months

Three Months

Three Months

Three Months

Ended

Ended

Ended

Ended

June 30, 2022

March 31, 2022

December 31, 2021

September 30, 2021

Net income (loss), as reported

$

13,047

(92,744)

25,935

13,052

Impact of adjusting items:

Interest expense

5,394

4,721

3,215

1,904

Depletion, depreciation and accretion

12,601

10,220

12,679

10,885

Stock-based compensation

473

384

450

481

Interest income

(1)

(1)

(3)

Loss (gain) on extinguishment of debt

122

(2,068)

Unrealized loss (gain) on derivatives contracts

(12,837)

91,038

(21,332)

(1,816)

Change in fair value of embedded derivative liability

(562)

(2,032)

Non-recurring charges (credits) and other

53

217

(718)

559

Adjusted EBITDA(1)

$

18,168

$

11,804

$

20,350

$

22,994

Adjusted LTM EBITDA(1)

$

73,316


(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.

11


v3.23.2
Document and Entity Information
Aug. 21, 2023
Cover [Abstract]  
Entity Registrant Name Battalion Oil Corp
Entity Address, Address Line One 3505 West Sam Houston Parkway North, Suite 300
Entity Central Index Key 0001282648
Document Type 8-K
Entity Address, City or Town Houston
Document Period End Date Aug. 21, 2023
Entity Incorporation, State or Country Code DE
Securities Act File Number 001-35467
Entity Address, State or Province TX
City Area Code 832
Entity Tax Identification Number 20-0700684
Entity Address, Postal Zip Code 77043
Local Phone Number 538-0300
Title of 12(b) Security Common Stock par value $0.0001
Amendment Flag false
Security Exchange Name NYSEAMER
Written Communications false
Trading Symbol BATL
Soliciting Material false
Pre-commencement Issuer Tender Offer false
Pre-commencement Tender Offer false
Entity Emerging Growth Company false

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