Battalion Oil Corporation Announces Fourth Quarter 2023 Financial and Operating Results
- Expansion of acreage with 41,000 net acres across three counties
- Successful drilling operations with completion of wells under budget and strong initial results
- Raised $55.0 million through preferred equity to support drilling program
- Progress towards merger with Fury Resources Management
- Positive net income available to common stockholders of $27.0 million for Q4 2023
- Adjusted EBITDA of $10.0 million for Q4 2023
- Decrease in revenue and production compared to Q4 2022
- Realized hedge losses totaling approximately $3.0 million in Q4 2023
- Increase in lease operating and workover expenses per Boe year-over-year
- Increase in gathering and other expenses per Boe due to midstream disruptions and plant curtailments
- Increase in general and administrative expenses per Boe due to audit, legal, and transaction costs
Insights
The recent update from Battalion Oil Corporation indicates a strategic expansion in their operations, with an emphasis on cost efficiency and production enhancement. The company's execution of a six-well program and the successful completion of wells below budget with strong initial production rates are positive indicators for operational efficiency. The mention of year-end reserves of approximately 68.1 million barrels of oil equivalent and a standardized measure of discounted future net cash flows of approximately $598.5 million provides a solid foundation for the company's valuation and future revenue streams.
The acid gas injection (AGI) project coming online and its potential to save up to $2 million per month in gas treating costs is a significant development. This cost-saving measure, once fully operational, could materially improve Battalion's margins and profitability. The preferred equity raises totaling $55 million are also noteworthy as they demonstrate the company's ability to secure funding to support its drilling program and potentially reduce financial leverage.
However, the decrease in production and revenue compared to the previous year, alongside increased per Boe expenses, signals potential operational challenges. The rise in general and administrative expenses due to the pending merger with Fury Resources suggests a short-term increase in costs that investors should monitor closely. The impact of this merger on Battalion's financials and market position will be a focal point for stakeholders.
The proposed merger with Fury Resources Management is a pivotal event for Battalion Oil Corporation. Such transactions can lead to synergies that enhance operational capabilities and market reach, potentially leading to increased shareholder value. However, the costs associated with mergers, including audit and legal fees, can be substantial, as evidenced by the increase in general and administrative expenses per Boe. It is essential for investors to assess whether the long-term benefits of the merger justify these short-term costs.
Furthermore, the net income reported for the fourth quarter, alongside the adjusted diluted net loss after selected items, presents a mixed financial picture. These figures, in conjunction with the announced equity raises, suggest that the company is actively managing its capital structure in anticipation of the merger. The outcome of this transaction will likely have significant implications for the company's financial health and strategic direction.
Investors should also consider the implications of the proxy statement and other materials filed with the SEC. These documents will provide critical information about the merger's terms, the rationale behind it and how it aligns with Battalion's long-term strategy. The reaction of the stock market to these developments will be telling of the perceived value of the merger to Battalion's future.
Examining Battalion Oil Corporation's financial health, the reported net income of $27.0 million for Q4 2023 is a robust indicator, especially when juxtaposed with the adjusted diluted net loss of $16.6 million. This discrepancy suggests non-recurring expenses or adjustments that have impacted profitability, which stakeholders must dissect to understand the company's core earnings potential.
The liquidity position, with $57.5 million in cash and cash equivalents and the total indebtedness of $200.2 million, is a critical measure of Battalion's financial stability. The company's ability to raise preferred equity not only bolsters its liquidity but also reflects investor confidence in its strategy and management. However, the cost of capital associated with preferred equity is typically higher than debt, which could affect future earnings.
Investors should closely monitor the EBITDA decline from $22.7 million in Q4 2022 to $10.0 million in Q4 2023, as it reflects the company's operational performance and ability to generate cash flow from its core business activities. This decline, if indicative of a trend, could affect Battalion's ability to service its debt and fund future operations, thereby impacting its stock price.
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
- 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 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
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 (
Lease operating and workover expense was
For the fourth quarter of 2023, the Company reported a net income available to common stockholders of
Liquidity and Balance Sheet
As of December 31, 2023, the Company had
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
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 | 106,535 | — | ||||||
| par value authorized, issued and outstanding as of December 31, 2023 | ||||||||
| Stockholders' equity: | ||||||||
| Common stock: 100,000,000 shares of | ||||||||
| 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. |
FAQ
What were Battalion Oil 's (BATL) key highlights for Q4 2023?
How much did Battalion raise through preferred equity to support its drilling program?
What is Battalion's progress towards a merger with Fury Resources?
What was Battalion's net income available to common stockholders for Q4 2023?
What was Battalion's adjusted EBITDA for Q4 2023?
