Battalion Oil Corporation (NYSE American: BATL, “Battalion” or
the “Company”) today announced certain financial and operating
updates.
Key Highlights
- Acid gas injection (“AGI”) well is
projected to be injecting by end of the first quarter
2024
- Recent two well pad was drilled and
completed under budget and the wells have IP’d above type curve at
1,964 BOEPD and 1,711 BOEPD respectively (71% oil) with
production still inclining
- Approximately $61MM cash on hand to
fund operations
- Additional equity commitment of
$20MM uncalled at current time
- Recently announced merger with Fury
anticipated to close as outlined in the Merger Agreement
Operations Update
The Company continues its drilling and
completions operations in Monument Draw while preparing additional
locations in Ward, Winkler, Reeves and Pecos counties. Recent
drilling and completions on the Company’s two well “Glacier” pad
finished ahead of plan from both a capital and time perspective.
The Glacier pad wells averaged $11.5 million for 10,000’ laterals
and are currently producing above type curve with high pressure
supporting sustained increasing rates. The Company is currently
drilling an additional two well pad in Monument Draw and expects
production from those wells to be online before the end of Q2.
The previously announced workover operation on
the Company’s AGI is substantially complete. The Company is
currently waiting for delivery of a specialty packer to finalize
the installation and return the well to injection. It is expected
to be online in the first quarter as previously discussed by
management.
Matt Steele, Chief Executive Officer, commented
“We continue to see great results from our drilling and completions
operations and have once again shown well performance in Monument
Draw stacks up against some of the best in the Delaware Basin.”
Liquidity and Balance Sheet
Currently, the Company has $200.2 million of
indebtedness outstanding and $0.3 million of letters of credit
outstanding. In November 2023, the Company obtained a commitment
letter from its existing equity shareholders to purchase additional
preferred equity securities in an amount up to $55 million and
still has over $20 million undrawn under this commitment.
Additionally, the Company has cash on hand of approximately $61
million providing ample liquidity based on the Company’s current
operating budget.
Fury Resources Inc. Merger
Transaction
The Company has filed a preliminary proxy
statement and Schedule 13e-3 with the Securities and Exchange
Commission (“SEC”) for the proposed merger and is awaiting
comments. The Company continues to work with Fury to close the
transaction in the first quarter of 2024.
Important Information for Investors and
Stockholders
This communication is being made in connection
with the proposed transaction involving the Company and Fury
Resources, Inc., a Delaware corporation (“Fury”). In connection
with the proposed transaction, the Company intends to file the
relevant materials with the 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 may file with the SEC or send to its stockholders in
connection with the proposed transaction. The materials to be 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
http://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 when 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.
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,
as amended on Form 10-K/A, for the fiscal year ended December 31,
2022, and the proxy statement, the Schedule 13e-3 and other
relevant materials that will be filed with the SEC in connection
with the proposed transaction when 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 when 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, forward
guidance and the ability of the parties to complete the proposed
transaction and the expected timing of completion of the proposed
transaction; as well as any assumptions underlying any of the
foregoing. 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, including (i) the risk that the
proposed transaction may not be completed in a timely manner or at
all; (ii) the failure to receive, on a timely basis or otherwise,
the required approvals of the proposed transaction by the Company’s
stockholders; (iii) the possibility that any or all of the various
conditions to the consummation of the proposed transaction may not
be satisfied or waived, including the failure to receive any
required regulatory approvals from any applicable governmental
entities (or any conditions, limitations or restrictions placed on
such approvals); (iv) the possibility that competing offers or
acquisition proposals for the Company will be made; (v) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the definitive transaction
agreement relating to the proposed transaction, including in
circumstances, which would require the Company to pay a termination
fee; (vi) the effect of the announcement or pendency of the
proposed transaction on the Company’s ability to attract, motivate
or retain key executives and employees, its ability to maintain
relationships with its customers, suppliers and other business
counterparties, or its operating results and business generally;
(vii) risks related to the proposed transaction diverting
management’s attention from the Company’s ongoing business
operations; (viii) the amount of costs, fees and expenses related
to the proposed transaction; (ix) the risk that the Company’s stock
price may decline significantly if the Merger is not consummated;
(x) the risk of shareholder litigation in connection with the
proposed transaction, including resulting expense or delay; and
(xi) other factors as set forth from time to time in the Company’s
filings with the SEC, including its Annual Report on Form 10-K for
the fiscal year ended December 31, 2022, 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.
BATTALION OIL CORPORATION
Matthew B. Steele
Chief Executive Officer
832-538-0300 | www.battalionoil.com
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