Battalion Oil Corporation (NYSE American: BATL) (“Battalion” or the
“Company”) announced today that it had entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Fury Resources,
Inc. (“Buyer” or “Parent”), pursuant to which Parent will acquire
all of the outstanding shares of Common Stock of the Company (the
“Common Stock”), for $9.80 per share in cash (the “Merger
Consideration”), which represents a total transaction value of
approximately $450 million. The Preferred Stock of the Company held
by Luminus Management LLC and funds and accounts managed by Oaktree
Capital Management, L.P., or their respective affiliates
(collectively, the “Rollover Stockholders”), will be contributed to
Buyer in exchange for new preferred shares of Buyer, or sold to
Buyer for cash, in each case at a valuation based on the conversion
or redemption value of such Preferred Stock.
The transaction is expected to close in the
first quarter of 2024, subject to various closing conditions. Such
conditions include customary closing conditions, such as the
approval of Battalion’s stockholders.
Parent has received debt commitments from
Fortress Credit Corp. and AI Partners Asset Management Co., Ltd to
finance a portion of the Merger Consideration under the Merger
Agreement.
In connection with the transaction, the Rollover
Stockholders, who collectively own 61.61% of the Common Stock of
the Company, entered into a Voting Agreement with Buyer pursuant to
which they have agreed, among other things, to vote 6,254,652 of
their shares of Common Stock, which in the aggregate represents 38%
of the total voting power of the shares of capital stock of the
Company, in favor of adopting the Merger Agreement.
For Battalion, Houlihan Lokey Capital, Inc.
acted as financial advisor and Mayer Brown LLP is acting as legal
counsel. Jefferies LLC acted as financial advisor and K&L Gates
LLP is acting as legal counsel to the Buyer.
Avi Mirman, Executive Chairman of the Board of
Parent commented, “We are excited to announce this transaction with
Battalion and believe we are well positioned to drive value growth
for our investors as we return the asset to active development. It
has been a pleasure working with the Battalion team on this
transaction, and we look forward to continuing that work as we move
toward a successful close.
The acquisition of Battalion represents a return
to the Delaware Basin for our team, which now includes Battalion’s
former CEO Richard Little. Our team has a strong understanding of
the subsurface as well as the capital constraints that have
previously hampered the Company’s ability to exploit this asset.
With the benefit of a newly revived balance sheet, we believe we
can leverage our deep knowledge of the basin and combined
operational excellence to fully unlock the asset’s potential.
Additionally, we are excited to explore the opportunities provided
to the Company through its joint venture with Caracara. By offering
the ability to drill locations with higher H2S volumes, this joint
venture will allow the company to exploit additional drilling and
acquisition opportunities which may not be available to others in
the region.
As part of this transaction, several of
Battalion’s major shareholders have agreed to reinvest proceeds
from this sale into the ongoing business. We view this as a vote of
confidence in our ability to develop this asset and drive
profitable growth. This acquisition represents a compelling value
proposition for our investors and we are eager to get to work.”
Matt Steele, Battalion CEO, commented, “It has
been a pleasure working with Avi Mirman and his team to get the
transaction to this point. Avi has a plan to become a premier
player in the Delaware Basin. With the additional investment
capital provided by the transaction, the company will finally be in
a position to fully develop the Battalion asset base and position
the company, its investors, and its employees for success.”
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.
About Fury
Fury Resources, Inc. (“Fury Resources”) is a
privately held exploration and production company focused on value
creation through the acquisition and exploitation of assets in the
Permian Basin. The team is comprised of core individuals who are
long-term oil and gas veterans, and have in the past successfully
grown Lilis Energy, Inc., a struggling $3MM market cap exploration
and production company, to well over $550MM, by the acquisition,
organic growth, and development of Permian Basin properties. With
expertise and talent in the team, Fury Resources is positioned and
capitalized to grow in the area organically and through future
acquisitions. To learn more, visit Fury Resource’s website at
www.furyresources.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release includes “forward-looking
statements”. All statements included in this press release other
than statements of historical fact, including, but not limited to,
forecasts or expectations regarding the transaction are
forward-looking statements. Forward-looking statements are based on
current expectations and assumptions about future events and
currently available information as to the outcome and timing of
future events. Such statements are inherently subject to numerous
business, economic, competitive, regulatory and other risks and
uncertainties, most of which are difficult to predict and many of
which are beyond Battalion’s control. No assurance can be given
that such expectations will be correct or achieved or that the
assumptions are accurate or that any transaction will ultimately be
consummated. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which such statement is made. Should one or more of the risks or
uncertainties described in this press release occur, or should
underlying assumptions prove incorrect, Battalion’s actual results
and plans could differ materially from those expressed in any
forward-looking statements. All forward-looking statements are
expressly qualified in their entirety by this cautionary statement.
Except as otherwise required by applicable law, Battalion
undertakes no obligation to publicly correct or update any
forward-looking statement whether as a result of new information,
future events or circumstances after the date of this report, or
otherwise.
Additional Information About the
Transaction
Battalion will furnish to the U.S. Securities
and Exchange Commission (the “SEC”) a current report on Form 8-K
regarding the transaction, which will include the Merger Agreement
as an exhibit thereto. All parties desiring details regarding the
Merger are urged to review these documents, which will be available
at the SEC’s website (http://www.sec.gov).
In connection with the transaction, Battalion
will prepare and mail to its stockholders a proxy statement that
will include a copy of the Merger Agreement. In addition, in
connection with the transaction, Battalion and certain other
participants in the transaction will prepare and disseminate to the
Battalion’s stockholders a Schedule 13E-3 Transaction Statement
that will include Battalion’s proxy statement (the “Schedule
13E-3”). The Schedule 13E-3 will be filed with the SEC. INVESTORS
AND STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY
THE SCHEDULE 13E-3 AND OTHER MATERIALS FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
BATTALION, THE TRANSACTION, AND RELATED MATTERS. Stockholders will
also be able to obtain these documents, as well as other filings
containing information about Battalion, the transaction and related
matters, without charge from the SEC’s website
(http://www.sec.gov).
Battalion and Fury Resources, their respective
directors and certain of their respective executive officers and
other employees may be deemed to be participants in the
solicitation of proxies from Battalion’s stockholders with respect
to the proposed transaction. Information regarding the persons who
may be considered “participants” in the solicitation of proxies
will be set forth in the Schedule 13E-3 and proxy statement when
filed with the SEC.
This announcement is neither a solicitation of
proxy, an offer to purchase nor a solicitation of an offer to sell
any securities, and it is not a substitute for any proxy statement
or other materials that may be filed with or furnished to the SEC
should the proposed merger proceed.
BATTALION OIL CORPORATION
Matthew B. Steele
Chief Executive Officer
832-538-0300
www.battalionoil.com
FURY RESOURCES, INC.
Avi Mirman
Executive Chairman of the Board
631-704-7744
info@furyresources.com
Battalion Oil (AMEX:BATL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Battalion Oil (AMEX:BATL)
Historical Stock Chart
From Jul 2023 to Jul 2024