Bay Street News

Battalion Oil Corporation Announces Fourth Quarter 2023 Financial and Operating Results

HOUSTON, March 29, 2024 (GLOBE NEWSWIRE) — Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the fourth quarter of 2023.

Key Highlights

Management Comments
During 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 Operations
Average 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 Sheet
As 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 Stockholders
This communication is being made in respect of the proposed transaction involving the Company and Fury Resources, Inc., a Delaware corporation. In connection with the proposed transaction, the Company intends to file, or has filed, the relevant materials with the U.S. Securities and Exchange Commission (“SEC”), including a proxy statement on Schedule 14A and a transaction statement on Schedule 13e-3 (the “Schedule 13e-3”). Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement, the Schedule 13e-3 or any other document that the Company has or may file with the SEC or send to its stockholders in connection with the proposed transaction. The relevant materials filed by the Company will be made available to the Company’s investors and stockholders at no expense to them and copies may be obtained free of charge on the Company’s website at www.battalionoil.com. In addition, all of those materials will be available at no charge on the SEC’s website at www.sec.gov. Investors and stockholders of the Company are urged to read the proxy statement, the Schedule 13e-3 and the other relevant materials as they become available before making any voting or investment decision with respect to the proposed transaction because they contain important information about the Company and the proposed transaction.

Participants in Solicitation
The Company and its directors, executive officers, other members of its management and employees may be deemed to be participants in the solicitation of proxies of the Company stockholders in connection with the proposed transaction under SEC rules. Investors and stockholders may obtain more detailed information regarding the names, affiliations and interests of the Company’s executive officers and directors in the solicitation by reading the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2023, and the proxy statement, the Schedule 13e-3 and other relevant materials that will be, or have been, filed with the SEC in connection with the proposed transaction as they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the proposed transaction and the Schedule 13e-3, as they become available.

Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about anticipated production, liquidity, capital spending, drilling and completion plans, and forward guidance. Forward-looking statements may often, but not always, be identified by the use of such words such as “expects”, “believes”, “intends”, “anticipates”, “plans”, “estimates”, “projects,” “potential”, “possible”, or “probable” or statements that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and other filings submitted by the Company to the SEC, copies of which may be obtained from the SEC’s website at www.sec.gov or through the Company’s website at www.battalionoil.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company’s expectations.

About Battalion
Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.

Contact
Matthew B. Steele
Chief Executive Officer & Principal Financial Officer
832-538-0300

BATTALION OIL CORPORATION
CONDENSED 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 CORPORATION
CONDENSED 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 CORPORATION
CONDENSED 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 CORPORATION
SELECTED 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 CORPORATION
RECONCILIATION (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 CORPORATION
ADJUSTED 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 CORPORATION
ADJUSTED 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 CORPORATION
ADJUSTED 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.
   


Bay Street News