Battalion Oil Corporation Announces Third Quarter 2023 Financial and Operating Results
November 15 2023 - 4:30PM
Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the
“Company”) today announced financial and operating results for the
third quarter of 2023.
Key Highlights
- Generated third quarter 2023 sales
volumes of 12,717 barrels of oil equivalent per day (“Boe/d”)
- Continued robust production results
from our most recent completed wells
- Recommenced drilling operations in
Monument Draw
- Executed a $38.0 million preferred
equity raise in September 2023 and obtained commitments for an
additional $55.0 million preferred equity in November 2023 to
support incremental activity plans
- Continued to explore strategic
alternatives
Management Comments
The Company has commenced drilling operations on
a two-well pad in Monument Draw while preparing additional
locations across all three asset areas. Drilling is ahead of plan
from both a capital and time perspective and the wells should now
be online in early 2024. The previously announced acid gas
injection (“AGI”) project is still undergoing workover operations.
All workover operations and improvements are expected to be
completed and the facility fully online in the first quarter of
2024. With this expected timing, the facility should be operational
contemporaneously with placing the two-well pad on production.
The latest Monument Draw well continues to
outperform offset wells and has produced over 266,000 Boe in its
first 225 days on production while flowing naturally without
artificial lift. Monument Draw production showcased a lower
forecast decline in the quarter, however downstream shut-ins
curtailed production by over 2,500 Boe/d which the Company expects
to have back online before the end of the first quarter of 2024,
post third-party improvements to infrastructure.
Matt Steele, Chief Executive Officer, commented,
“Drilling activity in Monument Draw is underway and ahead of plan
on all metrics after the team stood up a new rig and new crews. We
look forward to entering 2024 in position to benefit from producing
our existing and new wells into the enhanced cost structure
associated with AGI coming online.”
Results of Operations
Average daily net production and total operating
revenue during the third quarter of 2023 were 12,717 Boe/d (46%
oil) and $54.1 million, respectively, as compared to production and
revenue of 16,228 Boe/d (50% oil) and $99.1 million, respectively,
during the third quarter of 2022. The decrease in revenues in the
third quarter of 2023 as compared to the third quarter of 2022 is
primarily attributable to an approximate $20.44 decrease in average
realized prices (excluding the impact of hedges). Excluding the
impact of hedges, Battalion realized 100.3% of the average NYMEX
oil price during the third quarter of 2023. Realized hedge losses
totaled approximately $6.9 million during the third quarter
2023.
Lease operating and workover expense was $10.13
per Boe in the third quarter of 2023 versus $9.93 per Boe in the
third 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 $13.26 per Boe in the third quarter of 2023 versus
$11.16 per Boe in the third 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 $2.72 per Boe in the third quarter of 2023 compared to
$3.02 per Boe in the third quarter of 2022. The decrease is
primarily due to a benefit recognized related to stock-based
compensation forfeitures from the departure of certain executives
and employees. After adjusting for selected items, Adjusted G&A
was $2.64 per Boe in the third quarter of 2023 compared to $2.11
per Boe in the third quarter of 2022.
For the third quarter of 2023, the Company
reported a net loss available to common stockholders of $57.7
million and a net loss of $3.50 per share available to common
stockholders. After adjusting for selected items, the Company
reported an adjusted net loss available to common stockholders for
the third quarter of 2023 of $12.0 million, or an adjusted net loss
of $0.72 per common share (see Reconciliation for additional
information). Adjusted EBITDA during the quarter ended September
30, 2023 was $13.6 million as compared to $24.3 million during the
quarter ended September 30, 2022 (see Adjusted EBITDA
Reconciliation table for additional information).
Liquidity and Balance Sheet
As of September 30, 2023, the Company had $210.2
million of indebtedness outstanding and no letters of credit
outstanding. Subsequent to September 30, 2023, letters of credit
outstanding totaled $0.3 million. Total liquidity on September 30,
2023, made up of cash and cash equivalents, was $42.6 million.
In November 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. 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.
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. SteeleChief Executive Officer & Principal
Financial Officer832-541-8334
|
BATTALION OIL CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
43,689 |
|
|
$ |
70,406 |
|
|
$ |
144,072 |
|
|
$ |
206,874 |
|
Natural gas |
|
|
3,668 |
|
|
|
15,656 |
|
|
|
8,628 |
|
|
|
39,296 |
|
Natural gas liquids |
|
|
6,078 |
|
|
|
12,644 |
|
|
|
18,893 |
|
|
|
35,234 |
|
Total oil, natural gas and natural gas liquids sales |
|
|
53,435 |
|
|
|
98,706 |
|
|
|
171,593 |
|
|
|
281,404 |
|
Other |
|
|
671 |
|
|
|
443 |
|
|
|
1,927 |
|
|
|
858 |
|
Total operating revenues |
|
|
54,106 |
|
|
|
99,149 |
|
|
|
173,520 |
|
|
|
282,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
11,152 |
|
|
|
12,265 |
|
|
|
34,208 |
|
|
|
35,698 |
|
Workover and other |
|
|
700 |
|
|
|
2,559 |
|
|
|
4,669 |
|
|
|
4,807 |
|
Taxes other than income |
|
|
3,307 |
|
|
|
5,613 |
|
|
|
9,677 |
|
|
|
15,936 |
|
Gathering and other |
|
|
15,512 |
|
|
|
16,663 |
|
|
|
48,857 |
|
|
|
47,787 |
|
General and administrative |
|
|
3,192 |
|
|
|
4,498 |
|
|
|
13,572 |
|
|
|
14,071 |
|
Depletion, depreciation and accretion |
|
|
13,426 |
|
|
|
13,615 |
|
|
|
44,287 |
|
|
|
36,436 |
|
Total operating expenses |
|
|
47,289 |
|
|
|
55,213 |
|
|
|
155,270 |
|
|
|
154,735 |
|
Income from
operations |
|
|
6,817 |
|
|
|
43,936 |
|
|
|
18,250 |
|
|
|
127,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) gain on derivative contracts |
|
|
(53,687 |
) |
|
|
67,634 |
|
|
|
(29,741 |
) |
|
|
(88,134 |
) |
Interest expense and other |
|
|
(6,929 |
) |
|
|
(5,682 |
) |
|
|
(24,245 |
) |
|
|
(13,202 |
) |
Total other (expenses) income |
|
|
(60,616 |
) |
|
|
61,952 |
|
|
|
(53,986 |
) |
|
|
(101,336 |
) |
(Loss) income before income taxes |
|
|
(53,799 |
) |
|
|
105,888 |
|
|
|
(35,736 |
) |
|
|
26,191 |
|
Income tax benefit (provision) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net (loss)
income |
|
$ |
(53,799 |
) |
|
$ |
105,888 |
|
|
$ |
(35,736 |
) |
|
$ |
26,191 |
|
Series A preferred dividends |
|
|
(3,863 |
) |
|
|
— |
|
|
|
(6,352 |
) |
|
|
— |
|
Net (loss) income
available to common stockholders |
|
$ |
(57,662 |
) |
|
$ |
105,888 |
|
|
$ |
(42,088 |
) |
|
$ |
26,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share of common stock available to common
stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(3.50 |
) |
|
$ |
6.48 |
|
|
$ |
(2.56 |
) |
|
$ |
1.60 |
|
Diluted |
|
$ |
(3.50 |
) |
|
$ |
6.42 |
|
|
$ |
(2.56 |
) |
|
$ |
1.59 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,457 |
|
|
|
16,340 |
|
|
|
16,436 |
|
|
|
16,327 |
|
Diluted |
|
|
16,457 |
|
|
|
16,483 |
|
|
|
16,436 |
|
|
|
16,496 |
|
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)(In
thousands, except share and per share amounts) |
|
|
|
September 30, 2023 |
|
December 31, 2022 |
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
42,590 |
|
|
$ |
32,726 |
|
Accounts receivable, net |
|
|
27,177 |
|
|
|
37,974 |
|
Assets from derivative contracts |
|
|
4,649 |
|
|
|
16,244 |
|
Restricted cash |
|
|
90 |
|
|
|
90 |
|
Prepaids and other |
|
|
786 |
|
|
|
1,131 |
|
Total current assets |
|
|
75,292 |
|
|
|
88,165 |
|
Oil and natural gas
properties (full cost method): |
|
|
|
|
|
|
Evaluated |
|
|
736,205 |
|
|
|
713,585 |
|
Unevaluated |
|
|
62,649 |
|
|
|
62,621 |
|
Gross oil and natural gas properties |
|
|
798,854 |
|
|
|
776,206 |
|
Less: accumulated depletion |
|
|
(434,034 |
) |
|
|
(390,796 |
) |
Net oil and natural gas properties |
|
|
364,820 |
|
|
|
385,410 |
|
Other operating
property and equipment: |
|
|
|
|
|
|
Other operating property and equipment |
|
|
4,623 |
|
|
|
4,434 |
|
Less: accumulated depreciation |
|
|
(1,653 |
) |
|
|
(1,209 |
) |
Net other operating property and equipment |
|
|
2,970 |
|
|
|
3,225 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Assets from derivative contracts |
|
|
2,022 |
|
|
|
5,379 |
|
Operating lease right of use assets |
|
|
889 |
|
|
|
352 |
|
Other assets |
|
|
10,768 |
|
|
|
2,827 |
|
Total
assets |
|
$ |
456,761 |
|
|
$ |
485,358 |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
59,417 |
|
|
$ |
100,095 |
|
Liabilities from derivative contracts |
|
|
36,363 |
|
|
|
29,286 |
|
Current portion of long-term debt |
|
|
45,106 |
|
|
|
35,067 |
|
Operating lease liabilities |
|
|
513 |
|
|
|
352 |
|
Asset retirement obligations |
|
|
— |
|
|
|
225 |
|
Total current liabilities |
|
|
141,399 |
|
|
|
165,025 |
|
Long-term debt,
net |
|
|
153,476 |
|
|
|
182,676 |
|
Other noncurrent
liabilities: |
|
|
|
|
|
|
Liabilities from derivative contracts |
|
|
35,089 |
|
|
|
33,649 |
|
Asset retirement obligations |
|
|
17,202 |
|
|
|
15,244 |
|
Operating lease liabilities |
|
|
375 |
|
|
|
— |
|
Deferred income taxes |
|
|
— |
|
|
|
— |
|
Other |
|
|
1,554 |
|
|
|
4,136 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Temporary
equity: |
|
|
|
|
|
|
Series A redeemable
convertible preferred stock: 63,000 shares of $0.0001 |
|
|
66,834 |
|
|
|
— |
|
par value authorized, issued and outstanding as of September 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 |
|
|
|
|
|
|
September 30, 2023 and December 31, 2022, respectively |
|
|
2 |
|
|
|
2 |
|
Additional paid-in
capital |
|
|
326,511 |
|
|
|
334,571 |
|
Retained earnings (accumulated
deficit) |
|
|
(285,681 |
) |
|
|
(249,945 |
) |
Total stockholders'
equity |
|
|
40,832 |
|
|
|
84,628 |
|
Total liabilities,
temporary equity and stockholders' equity |
|
$ |
456,761 |
|
|
$ |
485,358 |
|
|
BATTALION OIL CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(53,799 |
) |
|
$ |
105,888 |
|
|
$ |
(35,736 |
) |
|
$ |
26,191 |
|
Adjustments to reconcile net
(loss) income to net cash |
|
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and
accretion |
|
|
13,426 |
|
|
|
13,615 |
|
|
|
44,287 |
|
|
|
36,436 |
|
Stock-based compensation,
net |
|
|
(686 |
) |
|
|
683 |
|
|
|
(1,231 |
) |
|
|
1,540 |
|
Unrealized loss (gain) on
derivative contracts |
|
|
46,805 |
|
|
|
(102,112 |
) |
|
|
23,469 |
|
|
|
(23,911 |
) |
Amortization/accretion of
financing related costs |
|
|
1,946 |
|
|
|
919 |
|
|
|
5,789 |
|
|
|
2,726 |
|
Reorganization items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(744 |
) |
Accrued settlements on
derivative contracts |
|
|
3,775 |
|
|
|
(7,159 |
) |
|
|
2,846 |
|
|
|
7,493 |
|
Change in fair value of
embedded derivative liability |
|
|
(1,878 |
) |
|
|
(448 |
) |
|
|
(2,582 |
) |
|
|
(3,043 |
) |
Other |
|
|
91 |
|
|
|
(32 |
) |
|
|
144 |
|
|
|
(128 |
) |
Cash flows from operations
before changes in working capital |
|
|
9,680 |
|
|
|
11,354 |
|
|
|
36,986 |
|
|
|
46,560 |
|
Changes in working
capital |
|
|
(7,264 |
) |
|
|
14,127 |
|
|
|
(25,921 |
) |
|
|
7,254 |
|
Net cash provided by operating
activities |
|
|
2,416 |
|
|
|
25,481 |
|
|
|
11,065 |
|
|
|
53,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital
expenditures |
|
|
(4,062 |
) |
|
|
(35,621 |
) |
|
|
(36,695 |
) |
|
|
(86,998 |
) |
Proceeds received from sale of
oil and natural gas assets |
|
|
— |
|
|
|
1 |
|
|
|
1,189 |
|
|
|
1 |
|
Other operating property and
equipment capital expenditures |
|
|
148 |
|
|
|
(244 |
) |
|
|
(136 |
) |
|
|
(949 |
) |
Other |
|
|
(1,453 |
) |
|
|
70 |
|
|
|
(1,464 |
) |
|
|
166 |
|
Net cash used in operating
activities |
|
|
(5,367 |
) |
|
|
(35,794 |
) |
|
|
(37,106 |
) |
|
|
(87,780 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
— |
|
|
|
122 |
|
|
|
— |
|
|
|
20,122 |
|
Repayments of borrowings |
|
|
(10,023 |
) |
|
|
— |
|
|
|
(25,066 |
) |
|
|
(85 |
) |
Payment of deferred debt
financing costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(379 |
) |
Proceeds from issuance of
preferred stock |
|
|
37,050 |
|
|
|
— |
|
|
|
61,425 |
|
|
|
— |
|
Other |
|
|
— |
|
|
|
(25 |
) |
|
|
(454 |
) |
|
|
(492 |
) |
Net cash provided by financing
activities |
|
|
27,027 |
|
|
|
97 |
|
|
|
35,905 |
|
|
|
19,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
|
24,076 |
|
|
|
(10,216 |
) |
|
|
9,864 |
|
|
|
(14,800 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
18,604 |
|
|
|
43,775 |
|
|
|
32,816 |
|
|
|
48,359 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
42,680 |
|
|
$ |
33,559 |
|
|
$ |
42,680 |
|
|
$ |
33,559 |
|
|
BATTALION OIL CORPORATION SELECTED
OPERATING DATA (Unaudited) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Production volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
|
539 |
|
|
|
753 |
|
|
|
1,905 |
|
|
|
2,097 |
|
Natural gas (MMcf) |
|
|
2,054 |
|
|
|
2,352 |
|
|
|
6,616 |
|
|
|
7,022 |
|
Natural gas liquids (MBbls) |
|
|
288 |
|
|
|
348 |
|
|
|
917 |
|
|
|
924 |
|
Total (MBoe) |
|
|
1,170 |
|
|
|
1,493 |
|
|
|
3,925 |
|
|
|
4,191 |
|
Average daily production (Boe/d) |
|
|
12,717 |
|
|
|
16,228 |
|
|
|
14,377 |
|
|
|
15,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
81.06 |
|
|
$ |
93.50 |
|
|
$ |
75.63 |
|
|
$ |
98.65 |
|
Natural gas (per Mcf) |
|
|
1.79 |
|
|
|
6.66 |
|
|
|
1.30 |
|
|
|
5.60 |
|
Natural gas liquids (per Bbl) |
|
|
21.10 |
|
|
|
36.33 |
|
|
|
20.60 |
|
|
|
38.13 |
|
Total per Boe |
|
|
45.67 |
|
|
|
66.11 |
|
|
|
43.72 |
|
|
|
67.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
(14.96 |
) |
|
$ |
(36.07 |
) |
|
$ |
(7.04 |
) |
|
$ |
(46.50 |
) |
Natural gas (per Mcf) |
|
|
0.57 |
|
|
|
(3.11 |
) |
|
|
1.08 |
|
|
|
(2.07 |
) |
Natural gas liquids (per Bbl) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total per Boe |
|
|
(5.88 |
) |
|
|
(23.09 |
) |
|
|
(1.60 |
) |
|
|
(26.73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices computed after cash effect of settlement of
derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
66.10 |
|
|
$ |
57.43 |
|
|
$ |
68.59 |
|
|
$ |
52.15 |
|
Natural gas (per Mcf) |
|
|
2.36 |
|
|
|
3.55 |
|
|
|
2.38 |
|
|
|
3.53 |
|
Natural gas liquids (per Bbl) |
|
|
21.10 |
|
|
|
36.33 |
|
|
|
20.60 |
|
|
|
38.13 |
|
Total per Boe |
|
|
39.79 |
|
|
|
43.02 |
|
|
|
42.12 |
|
|
|
40.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per Boe: |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
9.53 |
|
|
$ |
8.22 |
|
|
$ |
8.72 |
|
|
$ |
8.52 |
|
Workover and other |
|
|
0.60 |
|
|
|
1.71 |
|
|
|
1.19 |
|
|
|
1.15 |
|
Taxes other than income |
|
|
2.83 |
|
|
|
3.76 |
|
|
|
2.47 |
|
|
|
3.80 |
|
Gathering and other |
|
|
13.26 |
|
|
|
11.16 |
|
|
|
12.45 |
|
|
|
11.40 |
|
General and administrative, as adjusted (1) |
|
|
2.64 |
|
|
|
2.11 |
|
|
|
3.32 |
|
|
|
2.74 |
|
Depletion |
|
|
11.17 |
|
|
|
8.97 |
|
|
|
11.02 |
|
|
|
8.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
general and administrative costs per Boe, adjusted for items noted
in the reconciliation below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative, as reported |
|
$ |
2.72 |
|
|
$ |
3.02 |
|
|
$ |
3.46 |
|
|
$ |
3.36 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash |
|
|
0.59 |
|
|
|
(0.46 |
) |
|
|
0.31 |
|
|
|
(0.37 |
) |
Non-recurring charges and other: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
(0.67 |
) |
|
|
(0.45 |
) |
|
|
(0.45 |
) |
|
|
(0.25 |
) |
General and administrative, as adjusted(2) |
|
$ |
2.64 |
|
|
$ |
2.11 |
|
|
$ |
3.32 |
|
|
$ |
2.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs, as
reported |
|
$ |
28.94 |
|
|
$ |
27.87 |
|
|
$ |
28.29 |
|
|
$ |
28.23 |
|
Total adjusting items |
|
|
(0.08 |
) |
|
|
(0.91 |
) |
|
|
(0.14 |
) |
|
|
(0.62 |
) |
Total operating costs, as
adjusted(3) |
|
$ |
28.86 |
|
|
$ |
26.96 |
|
|
$ |
28.15 |
|
|
$ |
27.61 |
|
___________________ |
(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 |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
As
Reported: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders - diluted
(1) |
|
$ |
(57,662 |
) |
|
$ |
105,888 |
|
|
$ |
(42,088 |
) |
|
$ |
26,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected
Items: |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on
derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
46,133 |
|
|
$ |
(99,848 |
) |
|
$ |
16,003 |
|
|
$ |
(28,886 |
) |
Natural gas |
|
|
672 |
|
|
|
(2,264 |
) |
|
|
7,466 |
|
|
|
4,975 |
|
Total mark-to-market non-cash
charge |
|
|
46,805 |
|
|
|
(102,112 |
) |
|
|
23,469 |
|
|
|
(23,911 |
) |
Change in fair value of
embedded derivative liability |
|
|
(1,878 |
) |
|
|
(449 |
) |
|
|
(2,582 |
) |
|
|
(3,043 |
) |
Non-recurring charges |
|
|
780 |
|
|
|
670 |
|
|
|
1,774 |
|
|
|
1,036 |
|
Selected items, before income
taxes |
|
|
45,707 |
|
|
|
(101,891 |
) |
|
|
22,661 |
|
|
|
(25,918 |
) |
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Selected items, net of
tax |
|
|
45,707 |
|
|
|
(101,891 |
) |
|
|
22,661 |
|
|
|
(25,918 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to
common stockholders, as adjusted (2) |
|
$ |
(11,955 |
) |
|
$ |
3,997 |
|
|
$ |
(19,427 |
) |
|
$ |
273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net (loss) income per
common share, as reported |
|
$ |
(3.50 |
) |
|
$ |
6.42 |
|
|
$ |
(2.56 |
) |
|
$ |
1.59 |
|
Impact of selected items |
|
|
2.77 |
|
|
|
(6.18 |
) |
|
|
1.38 |
|
|
|
(1.57 |
) |
Diluted net (loss) income per
common share, excluding selected items (2)(3) |
|
$ |
(0.73 |
) |
|
$ |
0.24 |
|
|
$ |
(1.18 |
) |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities |
|
$ |
2,416 |
|
|
$ |
25,481 |
|
|
$ |
11,065 |
|
|
$ |
53,814 |
|
Changes in working
capital |
|
|
7,264 |
|
|
|
(14,127 |
) |
|
|
25,921 |
|
|
|
(7,254 |
) |
Cash flows from operations
before changes in working capital |
|
|
9,680 |
|
|
|
11,354 |
|
|
|
36,986 |
|
|
|
46,560 |
|
Cash components of selected
items |
|
|
(2,995 |
) |
|
|
7,829 |
|
|
|
(1,406 |
) |
|
|
(5,713 |
) |
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Cash flows from operations
before changes in working capital, adjusted for selected items
(1) |
|
$ |
6,685 |
|
|
$ |
19,183 |
|
|
$ |
35,580 |
|
|
$ |
40,847 |
|
___________________ |
(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 12, Earnings Per Share in our Form 10-Q
for the quarter ended September 30, 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 nine months ended
September 30, 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 nine months ended September 30, 2022 were
calculated based upon weighted average diluted shares of 16.5
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 |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income, as reported |
|
$ |
(53,799 |
) |
|
$ |
105,888 |
|
|
$ |
(35,736 |
) |
|
$ |
26,191 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
9,219 |
|
|
|
6,232 |
|
|
|
27,594 |
|
|
|
16,347 |
|
Depletion, depreciation and accretion |
|
|
13,426 |
|
|
|
13,615 |
|
|
|
44,287 |
|
|
|
36,436 |
|
Stock-based compensation |
|
|
(686 |
) |
|
|
683 |
|
|
|
(1,231 |
) |
|
|
1,540 |
|
Interest income |
|
|
(293 |
) |
|
|
(141 |
) |
|
|
(718 |
) |
|
|
(142 |
) |
Unrealized loss (gain) on derivatives contracts |
|
|
46,805 |
|
|
|
(102,112 |
) |
|
|
23,469 |
|
|
|
(23,911 |
) |
Change in fair value of embedded derivative liability |
|
|
(1,878 |
) |
|
|
(449 |
) |
|
|
(2,582 |
) |
|
|
(3,043 |
) |
Non-recurring charges and other |
|
|
831 |
|
|
|
597 |
|
|
|
1,460 |
|
|
|
867 |
|
Adjusted EBITDA(1) |
|
$ |
13,625 |
|
|
$ |
24,313 |
|
|
$ |
56,543 |
|
|
$ |
54,285 |
|
___________________ |
(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 |
|
|
September 30, 2023 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income, as reported |
|
$ |
(53,799 |
) |
|
$ |
(4,748 |
) |
|
|
22,811 |
|
|
|
(7,652 |
) |
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
9,219 |
|
|
|
9,366 |
|
|
|
9,009 |
|
|
|
9,378 |
|
Depletion, depreciation and accretion |
|
|
13,426 |
|
|
|
14,713 |
|
|
|
16,148 |
|
|
|
15,479 |
|
Stock-based compensation |
|
|
(686 |
) |
|
|
(772 |
) |
|
|
227 |
|
|
|
670 |
|
Interest income |
|
|
(293 |
) |
|
|
(234 |
) |
|
|
(191 |
) |
|
|
(227 |
) |
Unrealized loss (gain) on derivatives contracts |
|
|
46,805 |
|
|
|
(2,332 |
) |
|
|
(21,004 |
) |
|
|
3,655 |
|
Change in fair value of embedded derivative liability |
|
|
(1,878 |
) |
|
|
358 |
|
|
|
(1,062 |
) |
|
|
1,224 |
|
Non-recurring charges (credits) and other |
|
|
831 |
|
|
|
477 |
|
|
|
152 |
|
|
|
194 |
|
Adjusted EBITDA(1) |
|
$ |
13,625 |
|
|
$ |
16,828 |
|
|
$ |
26,090 |
|
|
$ |
22,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
|
$ |
79,264 |
|
|
|
|
|
|
|
|
|
|
___________________ |
(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 |
|
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
105,888 |
|
|
|
13,047 |
|
|
|
(92,744 |
) |
|
|
25,935 |
|
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
6,232 |
|
|
|
5,394 |
|
|
|
4,721 |
|
|
|
3,215 |
|
Depletion, depreciation and accretion |
|
|
13,615 |
|
|
|
12,601 |
|
|
|
10,220 |
|
|
|
12,679 |
|
Stock-based compensation |
|
|
683 |
|
|
|
473 |
|
|
|
384 |
|
|
|
450 |
|
Interest income |
|
|
(141 |
) |
|
|
(1 |
) |
|
|
- |
|
|
|
(1 |
) |
Loss (gain) on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
122 |
|
Unrealized loss (gain) on derivatives contracts |
|
|
(102,112 |
) |
|
|
(12,837 |
) |
|
|
91,038 |
|
|
|
(21,332 |
) |
Change in fair value of embedded derivative liability |
|
|
(449 |
) |
|
|
(562 |
) |
|
|
(2,032 |
) |
|
|
— |
|
Non-recurring charges (credits) and other |
|
|
597 |
|
|
|
53 |
|
|
|
217 |
|
|
|
(718 |
) |
Adjusted EBITDA(1) |
|
$ |
24,313 |
|
|
$ |
18,168 |
|
|
$ |
11,804 |
|
|
$ |
20,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted LTM EBITDA(1) |
|
$ |
74,635 |
|
|
|
|
|
|
|
|
|
|
___________________ |
(1) |
Adjusted EBITDA is a non-GAAP measure, which is presented based on
management's belief that it will enable a user of the financial
information to understand the impact of these items on reported
results. This financial measure is not a measure of financial
performance under GAAP and should not be considered as an
alternative to GAAP measures, including net income (loss). This
financial measure may not be comparable to similarly named non-GAAP
financial measures that other companies may use and may not be
useful in comparing the performance of those companies to
Battalion's performance. |
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