Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the
“Company”) today announced results of operations for the fourth
quarter and full year 2020.
Highlights
- Battalion is well positioned to deliver single digit production
growth while generating significant free cash flow in FY2021
- Completed the sale of ~3,700 net acres in the Northern West
Quito development area for $26.3 million in cash subject to
customary post-closing adjustments. These assets accounted for less
than 5% of the Company's average daily net oil production during
the quarter ended September 30, 2020.
- Improved 2020 adjusted operating unit costs by 12% from 2019 to
2020 (see Selected Operating data table for additional
information)
- Improved average well costs from $1,350/lin ft in 2019 down to
$850/lin ft in 2020
- Reduced Adjusted G&A unit cost by 49% from 2019 to 2020
(see Selected Operating data table for additional information)
- Disciplined hedge strategy provides cash flow assurance on 90%
of expected 2021 oil production
- Strong balance sheet with attractively priced RBL provides
ample liquidity to execute 2021 plan with a reinvestment rate of
70% - 80% of the estimated 2021 EBITDA
2021 Guidance
Battalion remains focused on execution and capital discipline as
it drives toward growth and positive free cash flow. The Company
developed its 2021 plan based on being free cash flow positive at
$45 NYMEX WTI. Total capital expenditures are expected to range
between $40 - $50 million, with 90% of its capital directed to
drilling and completion activities on its Monument Draw assets.
This plan will allow Battalion to modestly increase oil production
while remaining free cash flow positive.
|
|
|
|
|
|
|
|
|
FY 2021 Guidance |
|
|
Low |
|
High |
Oil Production, MBopd |
|
|
8.8 |
– |
|
9.8 |
Total Production, MBoepd |
|
|
16.0 |
– |
|
17.0 |
Wells POL |
|
|
6 |
– |
|
6 |
Total Capex, $MM |
|
$ |
40 |
– |
$ |
50 |
D&C Cost per Well,
$/ft |
|
$ |
800 |
– |
$ |
900 |
G&A, $MM |
|
$ |
15 |
– |
$ |
20 |
Management Comments
Richard Little, the Company’s CEO, commented, “2020 proved
itself to be one of the most challenging years in the history of
our industry, and I am tremendously proud of what our team
accomplished in the midst of that. COVID-19 and the unprecedented
collapse in commodity prices may have permanently altered the
outlook for oil and gas, but I believe our ability to remain nimble
and our commitment to excellence and execution sets Battalion up
well to succeed regardless of what that future holds.
Our plan for 2021 is simple: exercise capital discipline and
continue to optimize our operations with an eye towards keeping
production flat and improving our cash margins. Given how our team
executed despite the various challenges in 2020, we feel optimistic
that we can do just that while remaining cash flow positive. While
we execute on that plan, we will continue to pursue strategic,
deleveraging M&A transactions.”
Results of Operations
Battalion ended 2020 with 113 gross (107.3 net)
horizontal wells producing in the Delaware Basin. Annual net
production in 2020 was 16,858 barrels of oil equivalent per day
(“Boepd”) (56% oil) as compared to 17,986 Boepd (58% oil) in 2019.
Our total operating revenues for the year ended December 31, 2020
were approximately $148.3 million compared to total operating
revenues for the period of October 2, 2019 through December 31,
2019 (Successor) and the period of January 1, 2019 through October
1, 2019 (Predecessor) of approximately $65.6 million and $159.1
million, respectively, or $224.7 million combined. The decrease in
total operating revenues and average daily production year over
year was driven by our temporary shut-in of a portion of producing
wells across all our operating areas in May and June 2020 as a
consequence of low oil prices as well as average realized prices
that were lower by approximately $10.25 per Boe. Additionally, in
December 2020, the Company divested properties that produced 600
Boepd during the nine months ended September 30, 2020.
Average daily net production and total operating
revenue during the fourth quarter 2020 was 17,293 Boepd (54% oil)
and $42.6 million, respectively, as compared to production and
revenue of 20,293 Boepd (57% oil) and $65.6 million, respectively,
during the fourth quarter 2019. Excluding the impact of hedges,
Battalion realized 95% of the average NYMEX oil price during the
fourth quarter of 2020. Realized hedge gains totaled approximately
$1.2 million during the fourth quarter 2020.
Adjusted G&A was $3.24 per Boe in the fourth
quarter of 2020 compared to $3.22 per Boe in the fourth quarter of
2019 (see Selected Operating Data table for additional
information). Lease operating and workover expense was $6.39 per
Boe in the fourth quarter of 2020 and $7.75 per Boe in the fourth
quarter of 2019.
The Company reported a net loss to common
stockholders for the fourth quarter of $63.8 million, including a
non-cash full cost ceiling test impairment charge of $26.7 million,
and a net loss per basic and diluted share of $3.93. Adjusted LTM
EBITDA as of December 31, 2020 was $70.1 million, compared to $89.7
million as of December 31, 2019 (see Adjusted EBITDA Reconciliation
table for additional information).
Liquidity and Balance Sheet
As of December 31, 2020, Battalion has cash and
cash equivalents of $4.3 million and a borrowing base of $190
million under its Senior Revolving Credit Facility. In addition,
Battalion had $158.0 million of borrowings and $4.7 million of
outstanding letters of credit issued under the Senior Revolving
Credit Facility resulting in unused borrowing capacity of $27.3
million at year-end 2020.
Proved Reserves Update
Battalion's estimated proved reserves as of
December 31, 2020 were approximately 63.4 MMBoe, comprised of 60%
oil, 19% NGL and 21% natural gas, with a standardized measure of
$209.4 million. Battalion's estimated proved reserves at December
31, 2020 were prepared by Netherland Sewell & Associates, Inc.
in accordance with Securities and Exchange Commission guidelines
using an average WTI price of $39.54 per barrel for oil and an
average Henry Hub spot price of $1.99 per MMBtu for natural
gas.
Operations Update
During the first quarter of 2021, the Company
plans to spud two new wells and expects to complete and bring on
production four drilled but uncompleted wells.
Hedging Activity
As of March 8, 2021, Battalion had approximately
8,430 barrels of oil per day (“Bopd”) of oil hedged for in 2021 at
a price of $44.98 per barrel. For 2022, the Company has
approximately 5,664 Bopd of oil hedged at an average price of
$47.73 per barrel.
Conference Call Information
Battalion Oil Corporation has scheduled a
conference call for Tuesday, March 9, 2021, at 11:00 a.m. EDT
(10:00 a.m. CDT). To participate in the conference call, dial +1
856-344-9291 or 800-496-3856 (toll free) a few minutes before the
call begins and reference Battalion Oil Corporation confirmation
code 3115525. The conference call recording will also be posted to
Battalion’s website: www.battalionoil.com.
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, 2020 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
Chris LangManager, Finance (832) 538-0551
BATTALION OIL
CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(In thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
October 1, 2019 |
|
|
Three Months Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
34,672 |
|
|
$ |
58,325 |
|
|
|
$ |
— |
|
Natural gas |
|
|
2,716 |
|
|
|
1,719 |
|
|
|
|
— |
|
Natural gas liquids |
|
|
4,886 |
|
|
|
5,071 |
|
|
|
|
— |
|
Total oil, natural gas and natural gas liquids sales |
|
|
42,274 |
|
|
|
65,115 |
|
|
|
|
— |
|
Other |
|
|
292 |
|
|
|
467 |
|
|
|
|
— |
|
Total operating revenues |
|
|
42,566 |
|
|
|
65,582 |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
9,226 |
|
|
|
12,804 |
|
|
|
|
— |
|
Workover and other |
|
|
942 |
|
|
|
1,655 |
|
|
|
|
— |
|
Taxes other than income |
|
|
2,926 |
|
|
|
3,730 |
|
|
|
|
— |
|
Gathering and other |
|
|
16,741 |
|
|
|
10,812 |
|
|
|
|
— |
|
Restructuring |
|
|
— |
|
|
|
1,175 |
|
|
|
|
— |
|
General and administrative |
|
|
5,219 |
|
|
|
5,111 |
|
|
|
|
— |
|
Depletion, depreciation and accretion |
|
|
13,886 |
|
|
|
19,996 |
|
|
|
|
— |
|
Full cost ceiling impairment |
|
|
26,702 |
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
— |
|
Total operating expenses |
|
|
75,642 |
|
|
|
54,777 |
|
|
|
|
— |
|
Income (loss) from
operations |
|
|
(33,076 |
) |
|
|
10,805 |
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
|
(28,936 |
) |
|
|
(16,692 |
) |
|
|
|
— |
|
Interest expense and other |
|
|
(1,745 |
) |
|
|
(1,275 |
) |
|
|
|
— |
|
Reorganization items, net |
|
|
— |
|
|
|
(3,298 |
) |
|
|
|
(115,366 |
) |
Total other income (expenses) |
|
|
(30,681 |
) |
|
|
(21,265 |
) |
|
|
|
(115,366 |
) |
Income (loss) before income
taxes |
|
|
(63,757 |
) |
|
|
(10,460 |
) |
|
|
|
(115,366 |
) |
Income tax benefit
(provision) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
Net income
(loss) |
|
$ |
(63,757 |
) |
|
|
(10,460 |
) |
|
|
|
(115,366 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(3.93 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(0.71 |
) |
Diluted |
|
$ |
(3.93 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(0.71 |
) |
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,204 |
|
|
|
16,204 |
|
|
|
|
161,502 |
|
Diluted |
|
|
16,204 |
|
|
|
16,204 |
|
|
|
|
161,502 |
|
BATTALION OIL
CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(In thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
January 1, 2019 |
|
|
Year Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
|
|
|
Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
|
|
|
|
Oil |
|
$ |
125,985 |
|
|
$ |
58,325 |
|
|
|
$ |
145,024 |
|
Natural gas |
|
|
5,818 |
|
|
|
1,719 |
|
|
|
|
107 |
|
Natural gas liquids |
|
|
14,972 |
|
|
|
5,071 |
|
|
|
|
13,229 |
|
Total oil, natural gas and natural gas liquids sales |
|
|
146,775 |
|
|
|
65,115 |
|
|
|
|
158,360 |
|
Other |
|
|
1,514 |
|
|
|
467 |
|
|
|
|
743 |
|
Total operating revenues |
|
|
148,289 |
|
|
|
65,582 |
|
|
|
|
159,103 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
42,106 |
|
|
|
12,804 |
|
|
|
|
39,617 |
|
Workover and other |
|
|
3,709 |
|
|
|
1,655 |
|
|
|
|
5,580 |
|
Taxes other than income |
|
|
10,056 |
|
|
|
3,730 |
|
|
|
|
9,213 |
|
Gathering and other |
|
|
56,016 |
|
|
|
10,812 |
|
|
|
|
36,057 |
|
Restructuring |
|
|
2,580 |
|
|
|
1,175 |
|
|
|
|
15,148 |
|
General and administrative |
|
|
18,456 |
|
|
|
5,111 |
|
|
|
|
36,550 |
|
Depletion, depreciation and accretion |
|
|
62,053 |
|
|
|
19,996 |
|
|
|
|
90,912 |
|
Full cost ceiling impairment |
|
|
215,145 |
|
|
|
— |
|
|
|
|
985,190 |
|
(Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
3,618 |
|
Total operating expenses |
|
|
410,121 |
|
|
|
54,777 |
|
|
|
|
1,221,885 |
|
Income (loss) from
operations |
|
|
(261,832 |
) |
|
|
10,805 |
|
|
|
|
(1,062,782 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses): |
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on derivative contracts |
|
|
38,759 |
|
|
|
(16,692 |
) |
|
|
|
(34,332 |
) |
Interest expense and other |
|
|
(6,634 |
) |
|
|
(1,275 |
) |
|
|
|
(37,606 |
) |
Reorganization items, net |
|
|
— |
|
|
|
(3,298 |
) |
|
|
|
(117,124 |
) |
Total other income (expenses) |
|
|
32,125 |
|
|
|
(21,265 |
) |
|
|
|
(189,062 |
) |
Income (loss) before income
taxes |
|
|
(229,707 |
) |
|
|
(10,460 |
) |
|
|
|
(1,251,844 |
) |
Income tax benefit
(provision) |
|
|
— |
|
|
|
— |
|
|
|
|
95,791 |
|
Net income
(loss) |
|
$ |
(229,707 |
) |
|
$ |
(10,460 |
) |
|
|
$ |
(1,156,053 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(14.18 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(7.27 |
) |
Diluted |
|
$ |
(14.18 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(7.27 |
) |
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,204 |
|
|
|
16,204 |
|
|
|
|
158,925 |
|
Diluted |
|
|
16,204 |
|
|
|
16,204 |
|
|
|
|
158,925 |
|
BATTALION OIL
CORPORATIONCONSOLIDATED BALANCE SHEETS
(Unaudited)(In thousands, except share and per
share amounts)
|
|
|
|
|
|
|
|
|
Successor |
|
|
December 31, 2020 |
|
December 31, 2019 |
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,295 |
|
|
$ |
5,701 |
|
Accounts receivable, net |
|
|
32,242 |
|
|
|
48,504 |
|
Assets from derivative contracts |
|
|
8,559 |
|
|
|
4,995 |
|
Restricted cash |
|
|
— |
|
|
|
4,574 |
|
Prepaids and other |
|
|
2,740 |
|
|
|
7,379 |
|
Total current assets |
|
|
47,836 |
|
|
|
71,153 |
|
Oil and natural gas
properties (full cost method): |
|
|
|
|
|
|
Evaluated |
|
|
509,274 |
|
|
|
420,609 |
|
Unevaluated |
|
|
75,494 |
|
|
|
105,009 |
|
Gross oil and natural gas properties |
|
|
584,768 |
|
|
|
525,618 |
|
Less - accumulated depletion |
|
|
(295,163 |
) |
|
|
(19,474 |
) |
Net oil and natural gas properties |
|
|
289,605 |
|
|
|
506,144 |
|
Other operating
property and equipment: |
|
|
|
|
|
|
Other operating property and equipment |
|
|
3,535 |
|
|
|
3,655 |
|
Less - accumulated depreciation |
|
|
(1,149 |
) |
|
|
(378 |
) |
Net other operating property and equipment |
|
|
2,386 |
|
|
|
3,277 |
|
Other noncurrent
assets: |
|
|
|
|
|
|
Assets from derivative contracts |
|
|
4,009 |
|
|
|
224 |
|
Operating lease right of use assets |
|
|
310 |
|
|
|
3,165 |
|
Funds in escrow and other |
|
|
2,351 |
|
|
|
703 |
|
Total
assets |
|
$ |
346,497 |
|
|
$ |
584,666 |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
58,928 |
|
|
$ |
97,333 |
|
Liabilities from derivative contracts |
|
|
22,125 |
|
|
|
8,069 |
|
Current portion of long-term debt |
|
|
1,720 |
|
|
|
— |
|
Operating lease liabilities |
|
|
403 |
|
|
|
923 |
|
Asset retirement obligations |
|
|
— |
|
|
|
109 |
|
Total current liabilities |
|
|
83,176 |
|
|
|
106,434 |
|
Long-term
debt |
|
|
158,489 |
|
|
|
144,000 |
|
Other noncurrent
liabilities: |
|
|
|
|
|
|
Liabilities from derivative contracts |
|
|
4,291 |
|
|
|
4,854 |
|
Asset retirement obligations |
|
|
10,583 |
|
|
|
10,481 |
|
Operating lease liabilities |
|
|
— |
|
|
|
2,247 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
Common stock: 100,000,000 shares of $0.0001 par value
authorized; 16,203,979 and 16,203,940 shares issued and
outstanding as of December 31, 2020 and 2019,
respectively |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
330,123 |
|
|
|
327,108 |
|
Retained earnings (accumulated deficit) |
|
|
(240,167 |
) |
|
|
(10,460 |
) |
Total stockholders'
equity |
|
|
89,958 |
|
|
|
316,650 |
|
Total liabilities and
stockholders' equity |
|
$ |
346,497 |
|
|
$ |
584,666 |
|
BATTALION OIL
CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
October 1, 2019 |
|
|
Three Months Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(63,757 |
) |
|
$ |
(10,460 |
) |
|
|
$ |
(115,366 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and accretion |
|
|
13,886 |
|
|
|
19,996 |
|
|
|
|
— |
|
Full cost ceiling impairment |
|
|
26,702 |
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
— |
|
Stock-based compensation, net |
|
|
785 |
|
|
|
— |
|
|
|
|
— |
|
Unrealized loss (gain) on derivative contracts |
|
|
30,172 |
|
|
|
18,681 |
|
|
|
|
— |
|
Reorganization items, net |
|
|
(125 |
) |
|
|
(3,615 |
) |
|
|
|
109,170 |
|
Other expense (income) |
|
|
(442 |
) |
|
|
253 |
|
|
|
|
— |
|
Cash flow from operations
before changes in working capital |
|
|
7,221 |
|
|
|
24,349 |
|
|
|
|
(6,196 |
) |
Changes in working capital |
|
|
(4,902 |
) |
|
|
(10,695 |
) |
|
|
|
(302 |
) |
Net cash provided by (used in)
operating activities |
|
|
2,319 |
|
|
|
13,654 |
|
|
|
|
(6,498 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital expenditures |
|
|
(5,305 |
) |
|
|
(43,230 |
) |
|
|
|
— |
|
Proceeds received from sales of oil and natural gas assets |
|
|
25,529 |
|
|
|
— |
|
|
|
|
— |
|
Acquisition of oil and natural gas properties |
|
|
(23 |
) |
|
|
— |
|
|
|
|
— |
|
Other operating property and equipment capital expenditures |
|
|
(54 |
) |
|
|
— |
|
|
|
|
— |
|
Proceeds received from sale of other operating property and
equipment |
|
|
— |
|
|
|
6 |
|
|
|
|
— |
|
Funds held in escrow and other |
|
|
2 |
|
|
|
434 |
|
|
|
|
— |
|
Net cash provided by (used in)
investing activities |
|
|
20,149 |
|
|
|
(42,790 |
) |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
29,000 |
|
|
|
36,000 |
|
|
|
|
130,000 |
|
Repayments of borrowings |
|
|
(49,000 |
) |
|
|
(22,000 |
) |
|
|
|
(258,234 |
) |
Cash payments to Common Holders, Noteholders and Preferred
Holders |
|
|
— |
|
|
|
— |
|
|
|
|
(4 |
) |
Debt issuance costs |
|
|
— |
|
|
|
(1,471 |
) |
|
|
|
(8,764 |
) |
Common stock issued |
|
|
— |
|
|
|
— |
|
|
|
|
155,929 |
|
Equity issuance costs and other |
|
|
— |
|
|
|
(2,503 |
) |
|
|
|
(53 |
) |
Net cash provided by (used in)
financing activities |
|
|
(20,000 |
) |
|
|
10,026 |
|
|
|
|
18,874 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
|
2,468 |
|
|
|
(19,110 |
) |
|
|
|
12,376 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
1,827 |
|
|
|
29,385 |
|
|
|
|
17,009 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
4,295 |
|
|
$ |
10,275 |
|
|
|
$ |
29,385 |
|
BATTALION OIL
CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
January 1, 2019 |
|
|
Year Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(229,707 |
) |
|
$ |
(10,460 |
) |
|
|
$ |
(1,156,053 |
) |
Adjustments to reconcile net
income (loss) to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
Depletion, depreciation and accretion |
|
|
62,053 |
|
|
|
19,996 |
|
|
|
|
90,912 |
|
Full cost ceiling impairment |
|
|
215,145 |
|
|
|
— |
|
|
|
|
985,190 |
|
(Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
3,618 |
|
Deferred income tax provision (benefit) |
|
|
— |
|
|
|
— |
|
|
|
|
(95,791 |
) |
Stock-based compensation, net |
|
|
2,578 |
|
|
|
— |
|
|
|
|
(8,035 |
) |
Unrealized loss (gain) on derivative contracts |
|
|
6,143 |
|
|
|
18,681 |
|
|
|
|
45,834 |
|
Amortization and write-off of deferred loan costs |
|
|
— |
|
|
|
— |
|
|
|
|
1,859 |
|
Amortization of discount and premium |
|
|
— |
|
|
|
— |
|
|
|
|
134 |
|
Reorganization items, net |
|
|
(6,565 |
) |
|
|
(3,615 |
) |
|
|
|
108,887 |
|
Other expense (income) |
|
|
312 |
|
|
|
253 |
|
|
|
|
535 |
|
Cash flow from operations
before changes in working capital |
|
|
49,959 |
|
|
|
24,349 |
|
|
|
|
(22,910 |
) |
Changes in working capital |
|
|
238 |
|
|
|
(10,695 |
) |
|
|
|
(16,821 |
) |
Net cash provided by (used in)
operating activities |
|
|
50,197 |
|
|
|
13,654 |
|
|
|
|
(39,731 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
Oil and natural gas capital expenditures |
|
|
(101,788 |
) |
|
|
(43,230 |
) |
|
|
|
(167,235 |
) |
Proceeds received from sales of oil and natural gas assets |
|
|
29,029 |
|
|
|
— |
|
|
|
|
1,247 |
|
Acquisition of oil and natural gas properties |
|
|
(23 |
) |
|
|
— |
|
|
|
|
(2,809 |
) |
Other operating property and equipment capital expenditures |
|
|
(82 |
) |
|
|
— |
|
|
|
|
(85,613 |
) |
Proceeds received from sale of other operating property and
equipment |
|
|
— |
|
|
|
6 |
|
|
|
|
— |
|
Funds held in escrow and other |
|
|
510 |
|
|
|
434 |
|
|
|
|
(7 |
) |
Net cash provided by (used in)
investing activities |
|
|
(72,354 |
) |
|
|
(42,790 |
) |
|
|
|
(254,417 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
148,209 |
|
|
|
36,000 |
|
|
|
|
445,234 |
|
Repayments of borrowings |
|
|
(132,000 |
) |
|
|
(22,000 |
) |
|
|
|
(315,234 |
) |
Cash payments to Common Holders, Noteholders and Preferred
Holders |
|
|
— |
|
|
|
— |
|
|
|
|
(4 |
) |
Debt issuance costs |
|
|
— |
|
|
|
(1,471 |
) |
|
|
|
(8,764 |
) |
Common stock issued |
|
|
— |
|
|
|
— |
|
|
|
|
155,929 |
|
Equity issuance costs and other |
|
|
(32 |
) |
|
|
(2,503 |
) |
|
|
|
(494 |
) |
Net cash provided by (used in)
financing activities |
|
|
16,177 |
|
|
|
10,026 |
|
|
|
|
276,667 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
|
(5,980 |
) |
|
|
(19,110 |
) |
|
|
|
(17,481 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
10,275 |
|
|
|
29,385 |
|
|
|
|
46,866 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
4,295 |
|
|
$ |
10,275 |
|
|
|
$ |
29,385 |
|
BATTALION OIL
CORPORATIONSELECTED OPERATING DATA
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
2020 |
|
2019 (5) |
|
2020 |
|
2019 (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
|
857 |
|
|
|
1,057 |
|
|
|
3,446 |
|
|
|
3,780 |
|
Natural gas (MMcf) |
|
|
2,332 |
|
|
|
2,755 |
|
|
|
8,769 |
|
|
|
9,136 |
|
Natural gas liquids (MBbls) |
|
|
345 |
|
|
|
351 |
|
|
|
1,262 |
|
|
|
1,262 |
|
Total (MBoe) |
|
|
1,591 |
|
|
|
1,867 |
|
|
|
6,170 |
|
|
|
6,565 |
|
Average daily production (Boe/d) |
|
|
17,293 |
|
|
|
20,293 |
|
|
|
16,858 |
|
|
|
17,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
40.46 |
|
|
$ |
55.18 |
|
|
$ |
36.56 |
|
|
$ |
53.80 |
|
Natural gas (per Mcf) |
|
|
1.16 |
|
|
|
0.62 |
|
|
|
0.66 |
|
|
|
0.20 |
|
Natural gas liquids (per Bbl) |
|
|
14.16 |
|
|
|
14.45 |
|
|
|
11.86 |
|
|
|
14.50 |
|
Total per Boe |
|
|
26.57 |
|
|
|
34.88 |
|
|
|
23.79 |
|
|
|
34.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative
contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
1.28 |
|
|
$ |
(1.03 |
) |
|
$ |
12.31 |
|
|
$ |
(0.96 |
) |
Natural gas (per Mcf) |
|
|
0.06 |
|
|
|
0.19 |
|
|
|
0.28 |
|
|
|
0.71 |
|
Natural gas liquids (per Bbl) |
|
|
— |
|
|
|
7.31 |
|
|
|
— |
|
|
|
8.80 |
|
Total per Boe |
|
|
0.78 |
|
|
|
1.06 |
|
|
|
7.28 |
|
|
|
2.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices computed after
cash effect of settlement of derivative contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil (per Bbl) |
|
$ |
41.74 |
|
|
$ |
54.15 |
|
|
$ |
48.87 |
|
|
$ |
52.84 |
|
Natural gas (per Mcf) |
|
|
1.22 |
|
|
|
0.81 |
|
|
|
0.94 |
|
|
|
0.91 |
|
Natural gas liquids (per Bbl) |
|
|
14.16 |
|
|
|
21.76 |
|
|
|
11.86 |
|
|
|
23.30 |
|
Total per Boe |
|
|
27.35 |
|
|
|
35.94 |
|
|
|
31.07 |
|
|
|
36.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per Boe: |
|
|
|
|
|
|
|
|
|
|
|
|
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
5.80 |
|
|
$ |
6.86 |
|
|
$ |
6.82 |
|
|
$ |
7.98 |
|
Workover and other |
|
|
0.59 |
|
|
|
0.89 |
|
|
|
0.60 |
|
|
|
1.10 |
|
Taxes other than income |
|
|
1.84 |
|
|
|
2.00 |
|
|
|
1.63 |
|
|
|
1.97 |
|
Gathering and other, as adjusted (1) |
|
|
10.52 |
|
|
|
5.80 |
|
|
|
8.53 |
|
|
|
6.88 |
|
Restructuring |
|
|
— |
|
|
|
0.63 |
|
|
|
0.42 |
|
|
|
2.49 |
|
General and administrative, as adjusted (1) |
|
|
3.24 |
|
|
|
3.22 |
|
|
|
2.38 |
|
|
|
4.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents
gathering and other and general and administrative costs per Boe,
adjusted for items noted in the reconciliation below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative, as reported |
|
$ |
3.28 |
|
|
$ |
2.74 |
|
|
$ |
2.99 |
|
|
$ |
6.35 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash |
|
|
(0.49 |
) |
|
|
— |
|
|
|
(0.42 |
) |
|
|
1.22 |
|
Transaction costs and other: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
|
0.45 |
|
|
|
0.48 |
|
|
|
(0.19 |
) |
|
|
(2.87 |
) |
General and administrative, as adjusted(2) |
|
$ |
3.24 |
|
|
$ |
3.22 |
|
|
$ |
2.38 |
|
|
$ |
4.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gathering and other, as
reported |
|
$ |
10.52 |
|
|
$ |
5.79 |
|
|
$ |
9.08 |
|
|
$ |
7.14 |
|
Rig termination and stacking charges and other |
|
|
— |
|
|
|
0.01 |
|
|
|
(0.55 |
) |
|
|
(0.26 |
) |
Gathering and other, as
adjusted(3) |
|
$ |
10.52 |
|
|
$ |
5.80 |
|
|
$ |
8.53 |
|
|
$ |
6.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs, as
reported |
|
$ |
22.03 |
|
|
$ |
18.28 |
|
|
$ |
21.12 |
|
|
$ |
24.54 |
|
Total adjusting items |
|
|
(0.04 |
) |
|
|
0.49 |
|
|
|
(1.16 |
) |
|
|
(1.91 |
) |
Total operating costs, as
adjusted(4) |
|
$ |
21.99 |
|
|
$ |
18.77 |
|
|
$ |
19.96 |
|
|
$ |
22.63 |
|
(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 plans, as well
as other cash charges associated with transaction and other costs.
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) Gathering and other, as
adjusted, is a non-GAAP measure that excludes rig termination and
stacking charges and other costs. The Company believes that it is
useful to understand the effects that these charges have on
gathering and other expense and total operating costs and that
exclusion of such charges is useful for comparative
purposes.(4) 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.(5) For illustrative
purposes, the Company has combined the Successor and Predecessor
results to derive combined results for the three months and the
year ended December 31, 2019. The combination was generated by
addition of comparable financial statement line items. However,
because of various adjustments to the consolidated financial
statements in connection with the application of fresh-start
reporting, including asset valuation adjustments and liability
adjustments, the results of operations for the Successor are not
comparable to those of the Predecessor. The financial information
preceding the table above provides the Successor and the
Predecessor GAAP results for the applicable periods. The
Company believes that subject to consideration of the impact of
fresh-start reporting, combining the results of the Predecessor and
Successor provide meaningful information about, for instance,
production, revenues and costs, that assist a reader in
understanding the Company’s financial results for the applicable
periods.
BATTALION OIL
CORPORATIONSELECTED ITEM REVIEW AND RECONCILIATION
(Unaudited)(In thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
October 1, 2019 |
|
|
Three Months Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
As
Reported: |
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders, as
reported |
|
$ |
(63,757 |
) |
|
$ |
(10,460 |
) |
|
|
$ |
(115,366 |
) |
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected
Items: |
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on
derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
31,978 |
|
|
$ |
16,751 |
|
|
|
$ |
— |
|
Natural gas |
|
|
(1,806 |
) |
|
|
(1,332 |
) |
|
|
|
— |
|
Natural gas liquids |
|
|
— |
|
|
|
3,262 |
|
|
|
|
— |
|
Total mark-to-market non-cash
charge |
|
|
30,172 |
|
|
|
18,681 |
|
|
|
|
— |
|
Full cost ceiling
impairment |
|
|
26,702 |
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of Water
Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
— |
|
Reorganization items, net |
|
|
— |
|
|
|
3,298 |
|
|
|
|
115,366 |
|
Restructuring |
|
|
— |
|
|
|
1,175 |
|
|
|
|
— |
|
Other |
|
|
(658 |
) |
|
|
(901 |
) |
|
|
|
— |
|
Selected items, before income
taxes |
|
|
56,216 |
|
|
|
21,747 |
|
|
|
|
115,366 |
|
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
Selected items, net of
tax |
|
$ |
56,216 |
|
|
$ |
21,747 |
|
|
|
$ |
115,366 |
|
|
|
|
|
|
|
|
|
|
|
|
As
Adjusted: |
|
|
|
|
|
|
|
|
|
|
Net income (loss), excluding
selected items (1)(2) |
|
$ |
(7,541 |
) |
|
$ |
11,287 |
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
common share, as reported |
|
$ |
(3.93 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(0.71 |
) |
Impact of selected items |
|
|
3.46 |
|
|
|
1.35 |
|
|
|
|
0.71 |
|
Basic net income (loss) per
common share, excluding selected items (1)(2) |
|
$ |
(0.47 |
) |
|
$ |
0.70 |
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per
common share, as reported |
|
$ |
(3.93 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(0.71 |
) |
Impact of selected items |
|
|
3.46 |
|
|
|
1.35 |
|
|
|
|
0.71 |
|
Diluted net income (loss) per
common share, excluding selected items (1)(2)(3) |
|
$ |
(0.47 |
) |
|
$ |
0.70 |
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities |
|
$ |
2,319 |
|
|
$ |
13,654 |
|
|
|
$ |
(6,498 |
) |
Changes in working
capital |
|
|
4,902 |
|
|
|
10,695 |
|
|
|
|
302 |
|
Cash flow from operations
before changes in working capital |
|
|
7,221 |
|
|
|
24,349 |
|
|
|
|
(6,196 |
) |
Cash components of selected
items |
|
|
(229 |
) |
|
|
6,929 |
|
|
|
|
5,321 |
|
Income tax effect of selected
items |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
Cash flows from operations
before changes in working capital, adjusted for selected items
(1)(2) |
|
$ |
6,992 |
|
|
$ |
31,278 |
|
|
|
$ |
(875 |
) |
(1) Net income (loss) and 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. (2) For the period from
October 2, 2019 through December 31, 2019 (Successor), net income
(loss) and earnings per share excluding selected items and cash
flows from operations before changes in working capital include
approximately $0.9 million of proceeds from hedge monetizations
that occurred during the period.(3) The impact of selected
items for the three months ended December 31, 2020 (Successor),
October 2, 2019 through December 31, 2019 (Successor)
and October 1, 2019 through October 1, 2019 (Predecessor) were
calculated based upon weighted average diluted shares of 16.2
million, 16.2 million, and 161.5 million respectively, due to the
net income (loss) available to common stockholders, excluding
selected items.
BATTALION OIL
CORPORATIONSELECTED ITEM REVIEW AND RECONCILIATION
(Unaudited)(In thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
Predecessor |
|
|
|
|
|
Period from |
|
|
Period from |
|
|
|
|
October 2, 2019 |
|
|
January 1, 2019 |
|
|
Year Ended |
|
through |
|
|
through |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
|
October 1, 2019 |
As
Reported: |
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
(229,707 |
) |
|
$ |
(10,460 |
) |
|
|
$ |
(1,156,053 |
) |
|
|
|
|
|
|
|
|
|
|
|
Impact of Selected
Items: |
|
|
|
|
|
|
|
|
|
|
Unrealized loss (gain) on
derivatives contracts: |
|
|
|
|
|
|
|
|
|
|
Crude oil |
|
$ |
5,777 |
|
|
$ |
16,751 |
|
|
|
$ |
35,967 |
|
Natural gas |
|
|
366 |
|
|
|
(1,332 |
) |
|
|
|
3,753 |
|
Natural gas liquids |
|
|
— |
|
|
|
3,262 |
|
|
|
|
6,114 |
|
Total mark-to-market non-cash
charge |
|
|
6,143 |
|
|
|
18,681 |
|
|
|
|
45,834 |
|
Full cost ceiling
impairment |
|
|
215,145 |
|
|
|
— |
|
|
|
|
985,190 |
|
(Gain) loss on sale of Water
Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
|
3,618 |
|
Reorganization items, net |
|
|
— |
|
|
|
3,298 |
|
|
|
|
117,124 |
|
Restructuring |
|
|
2,580 |
|
|
|
1,175 |
|
|
|
|
15,148 |
|
Rig termination and stacking
charges and other |
|
|
4,669 |
|
|
|
(901 |
) |
|
|
|
22,601 |
|
Selected items, before income
taxes |
|
|
228,537 |
|
|
|
21,747 |
|
|
|
|
1,189,515 |
|
Income tax effect of selected
items(1) |
|
|
— |
|
|
|
— |
|
|
|
|
(53,660 |
) |
Selected items, net of
tax |
|
$ |
228,537 |
|
|
$ |
21,747 |
|
|
|
$ |
1,135,855 |
|
|
|
|
|
|
|
|
|
|
|
|
As
Adjusted: |
|
|
|
|
|
|
|
|
|
|
Net income (loss), excluding
selected items (2)(3) |
|
$ |
(1,170 |
) |
|
$ |
11,287 |
|
|
|
$ |
(20,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
common share, as reported |
|
$ |
(14.18 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(7.27 |
) |
Impact of selected items |
|
|
14.11 |
|
|
|
1.35 |
|
|
|
|
7.14 |
|
Basic net income (loss) per
common share, excluding selected items (2)(3) |
|
$ |
(0.07 |
) |
|
$ |
0.70 |
|
|
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per
common share, as reported |
|
$ |
(14.18 |
) |
|
$ |
(0.65 |
) |
|
|
$ |
(7.27 |
) |
Impact of selected items |
|
|
14.11 |
|
|
|
1.35 |
|
|
|
|
7.14 |
|
Diluted net income (loss) per
common share, excluding selected items (2)(3)(4) |
|
$ |
(0.07 |
) |
|
$ |
0.70 |
|
|
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities |
|
$ |
50,197 |
|
|
$ |
13,654 |
|
|
|
$ |
(39,731 |
) |
Changes in working
capital |
|
|
(238 |
) |
|
|
10,695 |
|
|
|
|
16,821 |
|
Cash flow from operations
before changes in working capital |
|
|
49,959 |
|
|
|
24,349 |
|
|
|
|
(22,910 |
) |
Cash components of selected
items |
|
|
13,194 |
|
|
|
6,929 |
|
|
|
|
44,851 |
|
Income tax effect of selected
items (1) |
|
|
— |
|
|
|
— |
|
|
|
|
(9,419 |
) |
Cash flows from operations
before changes in working capital, adjusted for selected items
(2)(3) |
|
$ |
63,153 |
|
|
$ |
31,278 |
|
|
|
$ |
12,522 |
|
(1) For the period from January 1, 2019 through October 1,
2019 (Predecessor), this represents the tax impact using an
estimated tax rate of 21.0% and includes a $196.1 million
adjustment for the net change in valuation allowance and deferred
tax asset. (2) Net income (loss) and 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) For the year ended December 31,
2020 (Successor), the period from October 2, 2019 through December
31, 2019 (Successor), and the period from January 1, 2019 through
October 1, 2019 (Predecessor), net income (loss) and earnings per
share excluding selected items and cash flows from operations
before changes in working capital include approximately $22.9
million, $0.9 million, and $7.8 million, respectively, of net
proceeds from hedge monetizations that occurred during the
periods.(4) The impact of selected items for the year ended
December 31, 2020 (Successor), the period October 2, 2019 through
December 31, 2019 (Successor) and January 1, 2019 through
October 1, 2019 (Predecessor) were calculated based upon weighted
average diluted shares of 16.2 million, 16.2 million, and 158.9
million respectively, due to the net income (loss) available to
common stockholders, excluding selected items.
BATTALION OIL
CORPORATIONADJUSTED EBITDA RECONCILIATION
(Unaudited)(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
2020 |
|
2019 (3) |
|
2020 |
|
2019 (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
(63,757 |
) |
|
$ |
(125,826 |
) |
|
$ |
(229,707 |
) |
|
$ |
(1,166,513 |
) |
Impact of adjusting
items: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
1,853 |
|
|
|
1,430 |
|
|
|
7,373 |
|
|
|
37,695 |
|
Depletion, depreciation and accretion |
|
|
13,886 |
|
|
|
19,996 |
|
|
|
62,053 |
|
|
|
110,908 |
|
Full cost ceiling impairment |
|
|
26,702 |
|
|
|
— |
|
|
|
215,145 |
|
|
|
985,190 |
|
Income tax provision (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(95,791 |
) |
Stock-based compensation |
|
|
785 |
|
|
|
— |
|
|
|
2,578 |
|
|
|
(8,035 |
) |
Interest income |
|
|
(171 |
) |
|
|
(128 |
) |
|
|
(773 |
) |
|
|
(219 |
) |
(Gain) loss on sale of other assets |
|
|
— |
|
|
|
(6 |
) |
|
|
52 |
|
|
|
412 |
|
Restructuring |
|
|
— |
|
|
|
1,175 |
|
|
|
2,580 |
|
|
|
16,323 |
|
Reorganization items, net |
|
|
— |
|
|
|
118,664 |
|
|
|
— |
|
|
|
120,422 |
|
(Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
— |
|
|
|
3,112 |
|
Unrealized loss (gain) on derivatives contracts |
|
|
30,172 |
|
|
|
18,681 |
|
|
|
6,143 |
|
|
|
64,515 |
|
Rig termination and stacking charges and other |
|
|
(658 |
) |
|
|
(901 |
) |
|
|
4,669 |
|
|
|
21,700 |
|
Adjusted EBITDA(1)(2) |
|
$ |
8,812 |
|
|
$ |
32,579 |
|
|
$ |
70,113 |
|
|
$ |
89,719 |
|
(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.(2) Adjusted EBITDA for the three
months ended December 31, 2019 includes approximately $0.9 million
of net proceeds from hedge monetizations that occurred during the
period. Adjusted EBITDA for the years ended December 31, 2020
and 2019 includes approximately $22.9 million and $8.7 million,
respectively, of net proceeds related to hedge monetizations that
occurred during the year.(3) For illustrative purposes, the
Company has combined the Successor and Predecessor results to
derive combined results for the three months and the year ended
December 31, 2019. The combination was generated by addition
of comparable financial statement line items. However, because of
various adjustments to the consolidated financial statements in
connection with the application of fresh-start reporting, including
asset valuation adjustments and liability adjustments, the results
of operations for the Successor are not be comparable to those of
the Predecessor. The financial information preceding the table
above provides the Successor and the Predecessor GAAP results for
the applicable periods. The Company believes that subject to
consideration of the impact of fresh-start reporting, combining the
results of the Predecessor and Successor provide meaningful
information about, for instance, production, revenues and costs,
that assist a reader in understanding the Company’s financial
results for the applicable periods.
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