BATL Battalion Oil Corporation

On October 29, 2020, Battalion Oil Corporation, a Delaware corporation (the “Company”), and the subsidiary guarantors party thereto (collectively, the “Loan Parties”) entered into a Third Amendment to the Senior Secured Revolving Credit Agreement & Limited Waiver (the “Amendment”) with Bank of Montreal, as administrative agent (the “Administrative Agent”) and the lenders party thereto (the “Lenders”). The Amendment amends that certain Senior Secured Revolving Credit Agreement, dated as of October 8, 2019 (as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Loan Parties, the Administrative Agent, the Lenders, and certain other financial institutions party thereto from time to time. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Credit Agreement.

The Amendment, among other things, sets the borrowing base to $190 million as of November 1, 2020. The Amendment also suspends testing of the Current Ratio financial covenant until the fiscal quarter ending December 31, 2021 and amends certain other covenants including, but not limited to, covenants relating to increasing the minimum mortgaged total value of proved Borrowing Base Properties from 85% to 90%. Additionally, the Amendment provides for new covenants that, among other things, require the Company to enter into Required Swap Agreements representing not less than 65% of the Company’s reasonably anticipated projected production from the Proved Reserves classified as Developed Producing Reserves for a period from the Third Amendment Effective Date through at least December 31, 2022 and prohibit no more than $3 million of the Company’s uncontested accounts payable or accrued expenses, liabilities or other obligations from remaining outstanding for longer than 90 days.

Furthermore, pursuant to the Amendment, the Administrative Agent and the Lenders consented to a waiver of the Current Ratio covenant in Section 9.01(b) of the Credit Agreement for the fiscal quarter ended September 30, 2020.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amendment. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.