BATL Battalion Oil Corporation

Exhibit 99.(b)(i)

 

Execution Version

 

Fortress Credit Corp.

 

CONFIDENTIAL

 

October 27, 2023

 

Ruckus Energy Holdings, LLC
17503 La Cantera Parkway, Suite 104-603
San Antonio, Texas 78257
Attn: Avi Mirman

 

Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Exclusivity and Expense Reimbursement Letter, dated September 22, 2023 (a copy of which is attached hereto as Exhibit B, the “Exclusivity and Reimbursement Letter”), to Ruckus Energy Holdings, LLC, a Delaware limited liability company (“Ruckus” or “you”), from the Investors (as defined therein).

 

You have advised Fortress Credit Corp. (“Fortress” and together with its affiliates, managed funds and accounts, collectively, the “Commitment Parties”, “we” or “us”) that Ruckus, which directly or indirectly controls San Jacinto Acquisition Corp., a Delaware corporation (“Merger Sub”), intends to acquire by merger Battalion Oil Corporation, a Delaware corporation (the “Company”), and its subsidiaries, including, without limitation, Halcón Holdings, LLC, a Delaware limited liability company (the “Borrower”). You have further advised us that, in connection with the foregoing, you intend to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description or the Exclusivity and Reimbursement Letter or the Summary of Indicative Terms attached as Annex A to the Exclusivity and Reimbursement Letter (as amended hereinbelow, the “Term Sheet”; this commitment letter, the Transaction Description, the Term Sheet and the Conditions Precedent to Initial Borrowing attached hereto as Exhibit C, collectively, the “Commitment Letter”), as applicable. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this letter agreement shall be determined by reference to the context in which it is used.

 

 

1.              Commitment.

 

In connection with the Transactions, Fortress is pleased to advise you of its commitment to provide fifty percent (50%) (i.e., $100 million) of a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”), upon the terms and conditions set forth in this Commitment Letter (including, without limitation, the last sentence of this paragraph) and subject only to the satisfaction (or written waiver by the Commitment Parties) of the conditions set forth or referenced in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit C hereto. The commitment of the Commitment Parties are several and not joint with any other Investor or any other Lender (as defined in the Term Sheet). You agree that no advisors, co-advisors, other agents, co-agents, arrangers, co-arrangers, bookrunners, co-bookrunners, managers or co-managers will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter) will be paid in connection with the Credit Facility unless you and we shall so agree. Notwithstanding the foregoing, in the event the current 5-year simple average of the NYMEX WTI strip is less than $51.62/bbl as of the date that is 20 days prior to the scheduled Closing Date (the “WTI Strip Determination Date”), which scheduled Closing Date shall be set by written notice by Ruckus to Fortress on such WTI Strip Determination Date, then Fortress shall have the right (but not the obligation) to within five (5) days after the WTI Strip Determination Date, reduce the sizing of the Credit Facility under this Commitment Letter by delivering written notice to you of such reduction, (a) if the current 5-year simple average of the NYMEX WTI strip on the WTI Strip Determination Date is less than $51.62/bbl but greater than or equal to $45.00/bbl, to a Credit Facility amount no less than $185 million, (b) if the current 5-year simple average of the NYMEX WTI strip on the WTI Strip Determination Date is less than $45.00/bbl but greater than or equal to $40.00/bbl, to a Credit Facility amount no less than $180 million, (c)  if the current 5-year simple average of the NYMEX WTI strip on the WTI Strip Determination Date is less than $40.00/bbl but greater than or equal to $35.00/bbl, to a Credit Facility amount no less than $175 million, or (d) if the current 5-year simple average of the NYMEX WTI strip on the WTI Strip Determination Date is less than $35.00/bbl to a Credit Facility amount determined by Fortress in its sole and absolute discretion; provided, that, for the avoidance of doubt, any right of Fortress to reduce its commitment pursuant hereto shall expire 5 days after the WTI Strip Determination Date.

 

2.              Term Sheet Amendments.

 

The parties hereby acknowledge and agree that the Term Sheet is hereby amended as follows:

 

(a)

Clause (iv) of the “Financial Covenants” section is hereby deleted in its entirety and replaced with the following new Clause (iv):

 

“(iv) Minimum Liquidity shall be in an amount equal to the greater of: (a) $10 million and (b) an amount equal to three (3) months of (i) scheduled amortization under the “Minimum Mandatory Amortization” section plus (ii) accrued interest as specified under the “Interest Rate” section.”

 

(b)

The last sentence in Clause (vi) of the “Financial Covenants” section is hereby deleted in its entirety and replaced with the following new sentence:

 

“Borrower shall not approve any future drilling wells that have a planned IRR below 30% (such calculation subject to Administrative Agent’s and the Lenders’ review and approval) based on the current strip at the time of approving the project.”

 

All references to the “Term Sheet” in this Commitment Letter shall be deemed to refer to the Term Sheet as amended by this Section 2 for all purposes.

 

 

3.              Information.

 

You hereby represent and warrant (prior to the date of the consummation of the Acquisition and the funding of the initial borrowing under the Credit Facility (the date of such borrowing, the “Closing Date”), to your knowledge with respect to the Company and its subsidiaries, including the Borrower) that (a) all written information and written data (other than (i) financial estimates, forecasts, projections and other forward-looking information (the “Projections”) and (ii) information of a general economic or industry specific nature) (the “Information”), that has been or will be made available to any Commitment Party, directly or indirectly, by you, the Company, the Borrower, or by any of your or its respective representatives on your behalf in connection with the transactions contemplated hereby, when taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections that have been, or will be, made available to any Commitment Party, directly or indirectly, by you, the Company, the Borrower, or by any of your or its respective representatives on your behalf in connection with the transactions contemplated hereby have been, or will be, prepared in good faith based upon assumptions that are believed by you to be reasonable at the time such Projections are so furnished to the Commitment Parties; it being understood that the Projections are as to future events and are not to be viewed as facts, that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and that no assurance can be given that any particular Projections will be realized and that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incomplete or incorrect in any material respect if the Information and the Projections were being furnished, or such representations were being made, at such time, then you will promptly inform us thereof and will (or, with respect to the Information and Projections relating to the Company and its subsidiaries, including the Borrower, prior to the Closing Date, will use commercially reasonable efforts to) promptly supplement the Information and such Projections such that such representations and warranties are so complete and correct in all material respects. In arranging the Credit Facility, each of the Commitment Parties (x) will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof and (y) assume no responsibility for the accuracy or completeness of the Information or the Projections.

 

4.              Fees.

 

As consideration for the commitments of the Commitment Parties hereunder and for the agreement of Fortress to act in the capacity as administrative agent and collateral agent (Fortress in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”) for the Credit Facility and to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Term Sheet and any of the Facility Documentation (as defined below), if and to the extent payable in accordance with the terms thereof. Once paid, such fees shall not be refundable except as otherwise agreed in writing.

 

5.              Conditions.

 

The commitment of the Commitment Parties hereunder to fund the Credit Facility on the Closing Date are subject solely to the conditions set forth herein and in Exhibit C hereto, and upon satisfaction (or written waiver by the Commitment Parties) of such conditions, the initial funding of the Credit Facility on the Closing Date shall occur.

 

Notwithstanding anything to the contrary in this Commitment Letter (including each of the exhibits attached hereto), the Facility Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, the terms of the Facility Documentation shall be in a form such that they do not impair the availability of the Credit Facility on the Closing Date if the conditions set forth in Exhibit C hereto are satisfied (or are waived by the Commitment Parties). For the avoidance of doubt, in no event shall the Company or any of its subsidiaries be required to execute any Facility Documentation, or any other document or instruments (other than customary authorization letters), prior to, or that become effective prior to the consummation of the Acquisition and the funding of the Credit Facility and it being understood that, to the extent any collateral is not provided on the Closing Date (as defined in the Acquisition Agreement) after your use of commercially reasonable efforts to do so (other than (x) the filing of Uniform Commercial Code financing statements, and (y) the filing of intellectual property security agreements for intellectual property that is registered as of the Closing Date, the providing of such collateral shall not constitute a condition precedent to the availability of the Credit Facility on the Closing Date but shall be required to be provided after the Closing Date pursuant to arrangements to be mutually agreed upon. This paragraph, and the provisions herein, shall be referred to as the “Certain Funds Provisions”.

 

 

6.              Exclusivity, Expense Reimbursement and Indemnity.

 

To induce the Commitment Parties to enter into this Commitment Letter and to proceed with the documentation of the Credit Facility, you agree that Section 2 (Exclusivity), Section 3 (Expense Reimbursement) and Section 5 (Indemnification) of the Exclusivity and Reimbursement Letter are incorporated herein mutatis mutandis.

 

7.              Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.

 

You acknowledge that the Commitment Parties and their respective affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, the Company, and your and their respective affiliates, may have conflicting interests regarding the transactions described herein and otherwise. None of the Commitment Parties or their respective affiliates will use confidential information obtained from you, the Company, or your or their respective affiliates by virtue of the transactions contemplated by this Commitment Letter or their other relationships with you, the Company, or your or their respective affiliates in connection with the performance by them of services for other persons, and none of the Commitment Parties nor their respective affiliates will furnish any such information to other persons, except to the extent permitted below. You also acknowledge that none of the Commitment Parties or their respective affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.

 

As you know, certain of the Commitment Parties may be full service securities firms engaged, either directly or through their affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, such Commitment Parties and certain of their respective affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of you, the Company and other companies which may be the subject of the arrangements contemplated by this Commitment Letter for their own account or for the accounts of their customers and may at any time hold long and short positions in such securities. Certain of the Commitment Parties or their respective affiliates may also co-invest with, make direct investments in, and invest or co-invest monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, the Company or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof. With respect to any securities and/or financial instruments so held by the Commitment Parties, their respective affiliates or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights in its sole discretion.

 

 

The Commitment Parties and their respective affiliates may have economic interests that conflict with those of you and may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and the Commitment Parties have no obligation to disclose any of such interests to you or your affiliates. You agree that the Commitment Parties will act under this Commitment Letter as independent contractors, and that nothing in this Commitment Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you, the Company, or your respective equity holders or affiliates. You acknowledge and agree that (i) the transactions contemplated by this Commitment Letter are arm’s-length commercial transactions between the Commitment Parties and, if applicable, their affiliates, on the one hand, and you, on the other, (ii) in connection therewith and with the process leading to such transaction each Commitment Party and its applicable affiliates (as the case may be) is acting solely as a principal and has not been, is not and will not be acting as an advisor, agent or fiduciary of you, the Company, or your or their management, equity holders, creditors, affiliates, or any other person, (iii) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Commitment Parties or any of their respective affiliates have advised or are currently advising you on other matters) except the obligations expressly set forth in this Commitment Letter and (iv) you have consulted your own legal and financial advisors to the extent you deemed appropriate. You further acknowledge and agree that (a) you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto, (b) you are capable of evaluating and understand and accept the terms, risks and conditions of the transactions contemplated hereby, and (c) we have provided no legal, accounting, regulatory or tax advice, and you contacted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate. You agree that you will not claim that the Commitment Parties or their applicable affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with such transaction or the process leading thereto and no Commitment Party, nor any of their respective affiliates, shall have any responsibility or liability to you with respect thereto. You hereby waive any claims that you or any of your affiliates may have against each of the Commitment Parties and their respective affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the Transactions and agree that no Commitment Party, nor any of their respective affiliates, shall have any liability (whether direct or indirect) to you in respect of such a fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or in right of you, including your equity holders, employees or creditors, in connection with the Transactions.

 

Without limiting the generality of this section, you hereby acknowledge that the Indemnified Persons may be engaged in such roles and that such roles may involve interests that differ from your interests and those of the Company and you, and you hereby waive any claims that you or your affiliates may have against the Commitment Parties’ Indemnified Persons (as defined in the Exclusivity and Reimbursement Letter) relating to this Commitment Letter or the Transaction as a result of any such conflict of interest and agree that such Indemnified Persons shall not have any liability (whether direct or indirect) to your or your affiliates in respect of any such claim or to any person asserting any such claim on behalf of you or your affiliates, including your equity owners.

 

 

8.              Confidentiality.

 

You agree that you will not disclose, directly or indirectly, this Commitment Letter, including the Term Sheet and the other exhibits and attachments hereto or the contents of any of the foregoing, or the activities of any Commitment Party pursuant hereto or thereto, to any person or entity without prior written approval of Fortress, except (a) to the Equity Investors and your and their respective officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders, in each case, who are informed of the confidential nature thereof, on a confidential and need-to-know basis, (b) if the Commitment Parties consent in writing to such proposed disclosure (such consent not to be unreasonably withheld, delayed or conditioned), (c) pursuant to the order of any court or administrative agency in any pending legal, judicial, regulatory, or administrative proceeding, or otherwise as required by applicable law, rule or regulation or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities, in each case based on the reasonable advice of your legal counsel (and in each such case you agree (i) to the extent practicable and not prohibited by applicable law, rule or regulation to inform us promptly thereof and, to the extent practicable, prior to such disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (d) to the extent reasonably necessary or advisable in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter, (e) to the Company, the subsidiaries of the Company, including the Borrower, and the respective officers, directors, employees, agents, attorneys, accountants, advisors, controlling persons and equity holders of each of the foregoing, on a confidential and need-to-know basis (provided that, until after the Closing Date any disclosure of the Term Sheet or its contents to the Company, the subsidiaries of the Company, including the Borrower, or their respective officers, directors, employees, agents, attorneys, accountants, advisors, controlling persons and equity holders shall be redacted in a customary manner (as reasonably agreed by the Commitment Parties), including in respect of the amounts, percentages and basis points of compensation set forth therein, unless the Commitment Parties otherwise consent); provided that (i) you may disclose the Commitment Letter and its contents (but not the Term Sheet or the contents thereof (other than its existence)) in connection with any public or regulatory filing relating to the Transactions and (ii) you may disclose the aggregate fee amount contained in the Term Sheet (but not the Term Sheet) as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts related to the Transactions to the extent required in any regulatory filing relating to the Transactions. You agree to inform all such persons who receive information concerning this Commitment Letter that such information is confidential on the terms set forth herein. The restrictions on disclosure set forth in this paragraph (other than with respect to the Term Sheet and the contents thereof) shall expire and shall be of no further effect after the first anniversary of the date hereof.

 

The Commitment Parties reserve the right to review and approve, in advance, all materials, press releases, advertisements and disclosures by the Borrower or its affiliates that contain the name of the Commitment Parties or any of their affiliates or describe the Commitment Parties’ financing commitment, role or activities with respect to the Credit Facility.

 

 

The Commitment Parties and their affiliates will use all information provided to them or such affiliates by or on behalf of you hereunder or in connection with the Credit Facility and the related Transactions solely for the purpose of providing the services which are the subject of this Commitment Letter and negotiating, evaluating and consummating the transactions contemplated hereby and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge, such information; provided that nothing herein shall prevent any Commitment Party and their affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial, regulatory or administrative proceeding, or otherwise as required by applicable law, rule or regulation or compulsory legal process (in which case the Commitment Parties agree (except with respect to any routine audit or examination conducted by auditing accountants or any regulatory authority exercising examination or regulatory authority), (i) to the extent practicable and not prohibited by applicable law, rule or regulation, to inform you promptly thereof prior to disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (b) upon the request or demand of any regulatory authority having or asserting jurisdiction over the Commitment Parties or any of their respective affiliates (in which case the Commitment Parties agree (except with respect to any routine audit or examination conducted by auditing accountants or any regulatory authority exercising examination or regulatory authority), (i) to the extent practicable and not prohibited by applicable law, rule or regulation, to inform you promptly thereof prior to disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by such Commitment Party or any of its affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, the Equity Investors, the Company or any of your or their respective subsidiaries or affiliates or related parties (including those set forth in this paragraph), as determined by a court of competent jurisdiction in a final and non-appealable decision, (d) to the extent that such information is received by such Commitment Party or any of its affiliates from a third party that is not, to such Commitment Party’s knowledge, subject to any contractual or fiduciary confidentiality obligations owing to you, the Equity Investors, the Company or any of your or their respective subsidiaries or affiliates or related parties, (e) to the extent that such information is independently developed by the Commitment Parties or any of their affiliates, (f) to such Commitment Party’s affiliates and to its and their respective directors, officers, employees, legal counsel, independent auditors, rating agencies, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential, (g) to its and its affiliates potential or prospective partners and lenders, other Investors, Lenders, participants or assignees and to any direct or indirect contractual counterparty to any loan, swap or derivative transaction relating to you or any of your subsidiaries, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph); provided that the disclosure of any such information to any partners, lender, Investors, Lenders or prospective Lenders or participants or prospective participants referred to above shall be made subject to the acknowledgment and acceptance by such person that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and each Commitment Party, including, without limitation, as agreed in any information materials or other marketing materials) in accordance with the standard processes of such Commitment Party or customary market standards for dissemination of such type of information, (h) to the extent you shall have consented to such disclosure in writing (such consent not to be unreasonably withheld, conditioned or delayed) or (i) for purposes of enforcing its rights hereunder in any legal proceedings and for purposes of establishing a defense in any legal proceedings. The Commitment Parties’ and their affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the Facility Documentation upon the initial funding thereunder. Otherwise, the confidentiality provisions set forth in this paragraph shall survive the termination of this Commitment Letter and expire and shall be of no further effect after the first anniversary of the date hereof.

 

 

9.              Miscellaneous.

 

This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto without the prior written consent of each other party hereto (and any attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended to be solely for the benefit of the parties hereto (and Commitment Parties’ Indemnified Persons) and are not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and such Indemnified Persons to the extent expressly set forth herein). The Commitment Parties reserve the right to employ the services of their affiliates or branches in providing services contemplated hereby, and to allocate, in whole or in part, to their affiliates or branches certain fees payable to the Commitment Parties in such manner as the Commitment Parties and their affiliates or branches may agree in their sole discretion and, to the extent so employed, such affiliates and branches shall be entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of, the Commitment Parties hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (including a “pdf” or “tif”) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. This Commitment Letter (including the exhibits hereto), (i) are the only agreements that have been entered into among the parties hereto with respect to the Credit Facility and (ii) supersede all prior and/or contemporaneous understandings, whether written or oral, among us with respect to the Credit Facility and sets forth the entire understanding of the parties hereto with respect thereto, including any prior commitment letter(s) with respect to the Credit Facility by, between or among the parties hereto. THIS COMMITMENT LETTER, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER, OR RELATED TO, THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK; provided, that, the interpretation of the definition of  Company Material Adverse Effect and Parent Material Adverse Effect (as such terms are defined in Exhibit C hereto) and whether or not a Company Material Adverse Effect or a Parent Material Adverse Effect has occurred), shall, in each case, be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.

 

Any Commitment Party or any of their respective affiliates, may, in consultation with you, place customary advertisements, or provide customary notifications, in financial and other newspapers and periodicals (including league tables) or on a home page or similar place for dissemination of customary information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, in each case, after the Closing Date, in the form of “tombstone” or otherwise describing the name of the Borrower, the Company or other obligor under the Credit Facility, and the amount, type and closing date of the Transactions, all at the expense of the applicable Commitment Party.

 

Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors' rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein (it being acknowledged and agreed that the commitments provided hereunder (and which are to be available and/or funded on the Closing Date) are subject to the satisfaction (or written waiver by the Commitment Parties) of the conditions set forth or referenced in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit C hereto). Promptly following the execution of this Commitment Letter, the parties hereto shall proceed with the negotiation in good faith of the Facility Documentation for purposes of executing and delivering the Facility Documentation substantially simultaneously with the consummation of the transactions described in the Transaction Description.

 

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THE ACQUISITION, THE TRANSACTIONS, THIS COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

 

 

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America, in each case, sitting in New York County in the State of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall only be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court; provided that suit for the recognition or enforcement of any judgment obtained in any such New York State or federal court may be brought in any other court of competent jurisdiction, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter or the transactions contemplated hereby or thereby in any such New York State court or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action or proceeding brought in any such court.

 

We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”) and 31 C.F.R. § 1010.230 (as amended, the “Beneficial Ownership Regulation”), each of us and each of the Lenders (as defined in the Term Sheet) may be required to obtain, verify and record information that identifies the Borrower, the Company and their respective subsidiaries, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower, the Company and their respective subsidiaries in accordance with the PATRIOT Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the PATRIOT Act and the Beneficial Ownership Regulation and is effective for each of us and the Lenders. You hereby agree that the Commitment Parties shall be permitted to share any and all such information with the Lenders.

 

The indemnification, compensation (if applicable), reimbursement (if applicable), jurisdiction, information, governing law, sharing of information, absence of fiduciary relationships, affiliate activities, service of process, venue, waiver of jury trial and confidentiality provisions contained herein shall remain in full force and effect regardless of whether the Facility Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Commitment Parties’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) compensation (if applicable) and (b) confidentiality of the Term Sheet and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facility Documentation upon the initial funding thereunder, and you shall automatically be released from obligations in connection therewith at such time (provided that nothing in this sentence shall operate to release you from liabilities in connection with a breach of the terms of the Commitment Letter or the Exclusivity and Reimbursement Letter prior to the Closing Date). You may terminate this Commitment Letter at any time subject to the provisions of the preceding sentence.

 

Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.

 

 

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter by returning to us, executed counterparts hereof not later than 11:59 p.m., New York City time, on October 31, 2023. The Commitment Parties’ commitments and the obligations of Fortress in its capacity as an Administrative Agent hereunder will expire automatically and without further action or notice and without further obligation to you at such time in the event that the Commitment Parties have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter, we agree, subject to the terms of the Exclusivity and Reimbursement Letter, to hold our commitment available for you until the earliest of (i) after execution of this Commitment Letter and prior to the consummation of the Transactions, the date on which an irrevocable written notice from you to the Commitment Parties is received by the Commitment Parties notifying the Commitment Parties that you desire to terminate the commitments hereunder, (ii) after execution of the Acquisition Agreement and prior to the consummation of the Transactions, the termination of the Acquisition Agreement in accordance with its terms, (iii) the consummation of the Transactions described in the Transaction Description without the funding of the Credit Facility and (iv) the first business day following the Termination Date (as defined in the Acquisition Agreement on the date hereof), upon which time this Commitment Letter and the commitments of the Commitment Parties hereunder and the agreement of the Commitment Parties to provide the services described herein to provide the services described herein shall terminate automatically and without further action or notice and without further obligation to you unless the Commitment Parties shall, in their sole discretion, agree to an extension in writing.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

 

	Very truly yours,
	FORTRESS CREDIT CORP.,
	for itself and/or as Administrative Agent on behalf of one or more of its affiliates or assignees
	By:
	Name:
	Title:

 

Signature Page to Commitment Letter

 

AGREED AND ACCEPTED
AS OF THE DATE FIRST WRITTEN ABOVE
RUCKUS ENERGY HOLDINGS, LLC
By
	Name:	Ariella Fuchs
	Title:	President and GC

 

Signature Page to Commitment Letter

 

EXHIBIT A

 

Transaction Description

 

Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit A is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the context in which it is used.

 

Fury Resources, Inc. (“Parent”), directly controlled by Ruckus, intends to acquire the Company, all as set forth in the Acquisition Agreement (as defined below). In connection therewith:

 

(a)              Parent, San Jacinto Merger Sub, Inc. (“Merger Sub”) and the Company will enter into that certain Agreement and Plan of Merger, dated as of the date hereof (together with the exhibits, annexes and disclosure schedules thereto, the “Acquisition Agreement”), by and among, inter alios, Parent, Merger Sub and the Company, pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company as the surviving entity (the “Acquisition”);

 

(b)              following the date hereof and on or prior to the Closing Date, the investors, which may include members of management of Ruckus, the Company and certain other direct or indirect existing equity holders of the Company (collectively, the “Equity Investors”) will make or shall have made cash or rollover equity contributions (collectively, the “Equity Contribution”), directly or indirectly, to Parent, in the form of common equity, qualified preferred equity or other equity (such preferred and other equity, to be on terms reasonably satisfactory to the Commitment Parties) (collectively, the “Permitted Equity”);

 

(c)              the Borrower will obtain a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”);

 

(d)              all existing third party debt for borrowed money of the Borrower under that certain Amended and Restated Credit Agreement, dated as of November 24, 2021 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time), by and among the Borrower, as borrower, the Company, the lenders party thereto from time to time (the “Existing Lenders”) and Macquarie Bank Limited, as administrative agent for the Existing Lenders, will be repaid, redeemed, defeased, discharged, refinanced, replaced or terminated and all commitments to extend credit thereunder shall have been terminated, and all guarantees and security interests (if any), in each case, in respect thereof terminated and discharged substantially concurrently with the initial funding of the Credit Facility (or other arrangements for such termination and release reasonably satisfactory to Fortress shall have been made) (the “Refinancing”);

 

(e)              the fees, premiums, expenses and other transaction costs incurred in connection with the Transactions, including to fund any original issue discount and/or upfront fees (the “Transaction Costs”), will be paid; and

 

(f)               the proceeds of the Equity Contribution and the loans under the Credit Facility funded on the Closing Date will be used to pay the consideration for, and other amounts owing in connection with, the Acquisition under the Acquisition Agreement, to effect the Refinancing and to pay all or a portion of the Transaction Costs.

 

The transactions described above are collectively referred to herein as the “Transactions”.

 

 

EXHIBIT B

 

(See attached Exclusivity and Reimbursement Letter)

 

 

EXHIBIT C

 

Conditions Precedent to Initial Borrowing

 

Capitalized terms used but not defined in this Exhibit C shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit C is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used. The initial borrowing under the Credit Facility shall be subject only to the satisfaction (or waiver by the Commitment Parties in writing) of the following conditions in the reasonable discretion of the Commitment Parties:

 

1.

Since the date of the Acquisition Agreement, no Company Material Adverse Effect nor Parent Material Adverse Effect (as such terms are defined in the Acquisition Agreement) shall have occurred and be continuing.

 

2.

The Acquisition shall have been consummated, or substantially simultaneously with the initial borrowing under the Credit Facility, shall be consummated, in accordance with the terms of the Acquisition Agreement, after giving effect to any modifications, amendments, consents or waivers thereto, other than those modifications, amendments, consents or waivers that are materially adverse to the interests of the Commitment Parties (in their capacities as such), unless consented to in advance in writing by the Commitment Parties (such consent not to be unreasonably withheld, delayed or conditioned) provided that the Commitment Parties shall be deemed to have consented to such modifications, amendments, consents or waivers unless it has objected thereto within four (4) business days after written notice to and receipt by the Commitment Parties of such modifications, amendments, consents or waivers).

 

3.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Preferred Stock Transactions shall have been consummated on the terms set forth in the Purchase Agreement and the Contribution Agreement.

 

4.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Refinancing shall have been consummated.

 

5.

Fortress shall have received evidence satisfactory to it, in its reasonable discretion, that (a) the other participating Lenders (which, for the avoidance of doubt, may include any other Investor party to the Exclusivity and Reimbursement Letter) and/or (b) such other alternative financing sources identified by Ruckus and reasonably acceptable to Fortress and pursuant to documentation reasonably acceptable to Fortress, shall collectively be obligated to fund on the Closing Date an amount not less than the portion of the Credit Facility amount (after giving effect to any reductions contemplated by the Commitment Letter) that Fortress has not committed (or otherwise agreed in writing) to fund.

 

6.

Fortress shall have received (a) the reviewed balance sheet of the Company as of December 31, 2022, and the related reviewed statement of income and retained earnings and statement of cash flow for the fiscal years then ended, together with the notes thereto and (b) the internally prepared balance sheet, of the Company as of the most recent reported month before close.

 

7.

Fortress shall have received a pro forma consolidated balance sheet of the Company and the Borrower as of the twelve-month period ending on the last day of the most recently completed four fiscal quarter period for which financial statements are available pursuant to paragraph 5 above, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

 

 

EXHIBIT C

 

8.

Subject in all respects to the Certain Funds Provisions, all documents and instruments (including schedules to security documentation) required to create and perfect the Administrative Agent’s security interests in the collateral described in the Term Sheet (with the requisite priority) shall have been executed and delivered by the Borrower and the Guarantors (or, where applicable, the Borrower and the Guarantors shall have authorized the filing of financing statements under the Uniform Commercial Code) and, if applicable, be in proper form for filing.

 

9.

The Administrative Agent and the Lenders (as defined in the Term Sheet) shall have received at least three (3) business days prior to the Closing Date (a) all documentation and other information about the Loan Parties (as defined in the Term Sheet) and the principals thereof as has been reasonably requested in writing at least ten (10) days prior to the Closing Date by the Administrative Agent or any Lender that they reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and (b) if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification (as defined below) in relation to the Borrower. “Beneficial Ownership Certification” means a certificate regarding beneficial ownership required by the Beneficial Ownership Regulation.

 

10.

(a) The execution and delivery of the Facility Documentation by the Loan Parties (including guarantees by the applicable Guarantors) which shall, in each case, be in accordance with the terms of the Commitment Letter and the Term Sheet and subject to the Certain Funds Provisions and (b) the delivery to the Administrative Agent of borrowing notices and/or issuance notices, as applicable, customary legal opinions, customary incumbency certificates and closing certificates, organizational documents, customary evidence of authorization and, as applicable, good standing certificates in jurisdictions of formation/organization, in each case with respect to the Borrower and the Guarantors and a solvency certificate of the Borrower, as of the Closing Date after and giving effect to the Transactions. The term “Facility Documentation” shall mean the documentation for the Credit Facility containing the terms and conditions in this Exhibit C and in the Term Sheet and, to the extent any terms are not so set forth, shall otherwise by usual and customary for transactions of this kind and shall contain such modifications as the Borrower, the Administrative Agent and the Lenders shall mutually agree, in each case, subject to the Certain Funds Provisions.

 

11.

The Administrative Agent and each Lender shall have received evidence in form and substance satisfactory to them that all fees required to be paid on the Closing Date pursuant to the Term Sheet and the Facility Documentation, and reasonable out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter and the Facility Documentation, to the extent invoiced at least two (2) business days prior to the Closing Date (except for fees pursuant to the Term Sheet and as otherwise reasonably agreed by the Borrower), shall, upon the initial borrowing under the Credit Facility, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Credit Facility).

 

12.

The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it that (a) the commodity hedging transactions set forth on Schedule 1 attached hereto (collectively, the “Existing Hedges” and each, individually, an “Existing Hedge”) are in full force and effect on the Closing Date after giving effect to the closing of the Transactions on the Closing Date; provided, that (i) any novation of any Existing Hedge or replacement of an Existing Hedge, in each case with written notice to Administrative Agent, with a new hedge on substantially the same or better terms (e.g., price, tenor, type, volumes) than the Existing Hedge being novated or otherwise replaced, in each case shall not be treated as a termination of such Existing Hedge and such Existing Hedge shall be deemed to continue to be in full force and effect after giving effect to such novation or replacement, (ii) any modification of an Existing Hedge, with not less than three (3) Business Days’ prior written notice to, and the prior written consent of, Administrative Agent, shall be permitted and such modified hedge shall continue to be deemed to be the applicable Existing Hedge, and (iii) any Existing Hedge having an “End Date” listed on Schedule 1 that occurs on or prior to the Closing Date shall not be required to be in full force and effect on the Closing Date.

 

 

EXHIBIT C

 

13.

Avi Mirman shall (a) have contributed up to $10 million of the $200 million of common equity and (b) hold (or have the right to appoint) no more than one (1) board seat on the board of directors (the “Board”) for the Company (which Board shall be composed of not less than five (5) seats), while Rich Little will lead management for the Holdings and the Borrower. For the avoidance of doubt, the Board shall contain not less than two (2) board seats appointed by independent investors in the Company.

 

14.

On the Closing Date, the Administrative Agent shall have received evidence in form and substance satisfactory to it that the Borrower has, in an aggregate amount greater than or equal to $95 million, consisting of (a) funded capital expenditures to drill and complete two (2) oil and/or gas wells located in the Monument Draw area of the Delaware Basin and spudded during the period time beginning on the date of the Commitment Letter and ending on the Closing Date and (b) not less than $70 million of unrestricted cash is on its balance sheet.

 

15.

The Closing Date shall not occur prior to the Closing Date (as defined in the Acquisition Agreement).

 

 

EXHIBIT C

 

Schedule 1 to Exhibit C

 

Existing Hedges

 

 

 

EXHIBIT C

 

 

 

Exhibit 99.(b)(ii)

 

Execution Version

 

CONFIDENTIAL

 

October 30, 2023

 

Ruckus Energy Holdings, LLC 

17503 La Cantera Parkway, Suite 104-603 

San Antonio, Texas 78257 

Attn: Avi Mirman

 

Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Exclusivity and Expense Reimbursement Letter, dated September 22, 2023 (a copy of which is attached hereto as Exhibit B, the “Exclusivity and Reimbursement Letter”), to Ruckus Energy Holdings, LLC, a Delaware limited liability company (“Ruckus” or “you”), from the Investors (as defined therein).

 

You have advised AI Partners Asset Management Co., Ltd (“AI Partners” and together with its affiliates, managed funds and accounts, collectively, the “Commitment Parties”, “we” or “us”) that Ruckus, which directly or indirectly controls San Jacinto Acquisition Corp., a Delaware corporation (“Merger Sub”), intends to acquire by merger Battalion Oil Corporation, a Delaware corporation (the “Company”), and its subsidiaries, including, without limitation, Halcón Holdings, LLC, a Delaware limited liability company (the “Borrower”). You have further advised us that, in connection with the foregoing, you intend to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description or the Exclusivity and Reimbursement Letter or the Summary of Indicative Terms attached as Annex A to the Exclusivity and Reimbursement Letter (as amended pursuant to the Fortress Commitment Letter (as defined below), the “Term Sheet”; this commitment letter, the Transaction Description, the Term Sheet, the Conditions Precedent to Initial Borrowing attached hereto as Exhibit C, and the Meritz Commitment Letter (as defined below) attached hereto as Exhibit D, collectively, the “Commitment Letter”), as applicable. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this letter agreement shall be determined by reference to the context in which it is used.

 

1.            Commitment.

 

In connection with the Transactions, AI Partners is pleased to advise you of its commitment to provide fifty percent (50%) (i.e., $100 million) of a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”), upon the terms and conditions set forth in this Commitment Letter (including, without limitation, the last sentence of this paragraph) and subject only to (a) the satisfaction (or written waiver by the Commitment Parties) of the conditions set forth or referenced in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit C hereto and (b) adjustment of the Credit Facility size as set forth in that certain Commitment Letter, dated as of the date hereof, between Fortress Credit Corp. (“Fortress”) and Ruckus (the “Fortress Commitment Letter”). The commitment of the Commitment Parties are several and not joint with any other Investor or any other Lender (as defined in the Term Sheet). You agree that no advisors, co-advisors, other agents, co-agents, arrangers, co-arrangers, bookrunners, co-bookrunners, managers or co-managers will be appointed, no other titles will be awarded and no compensation (other than compensation expressly contemplated by this Commitment Letter) will be paid in connection with the Credit Facility unless you and we shall so agree.

 

 

2.            Acknowledgement of Term Sheet Amendments. The parties hereby acknowledge and ratify the amendments to the Term Sheet set forth in the Fortress Commitment Letter.

 

3.            Information.

 

You hereby represent and warrant (prior to the date of the consummation of the Acquisition and the funding of the initial borrowing under the Credit Facility (the date of such borrowing, the “Closing Date”), to your knowledge with respect to the Company and its subsidiaries, including the Borrower) that (a) all written information and written data (other than (i) financial estimates, forecasts, projections and other forward-looking information (the “Projections”) and (ii) information of a general economic or industry specific nature) (the “Information”), that has been or will be made available to any Commitment Party, directly or indirectly, by you, the Company, the Borrower, or by any of your or its respective representatives on your behalf in connection with the transactions contemplated hereby, when taken as a whole, is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto from time to time) and (b) the Projections that have been, or will be, made available to any Commitment Party, directly or indirectly, by you, the Company, the Borrower, or by any of your or its respective representatives on your behalf in connection with the transactions contemplated hereby have been, or will be, prepared in good faith based upon assumptions that are believed by you to be reasonable at the time such Projections are so furnished to the Commitment Parties; it being understood that the Projections are as to future events and are not to be viewed as facts, that the Projections are subject to significant uncertainties and contingencies, many of which are beyond your control, and that no assurance can be given that any particular Projections will be realized and that actual results during the period or periods covered by any such Projections may differ significantly from the projected results and such differences may be material. You agree that, if at any time prior to the Closing Date, you become aware that any of the representations and warranties in the preceding sentence would be incomplete or incorrect in any material respect if the Information and the Projections were being furnished, or such representations were being made, at such time, then you will promptly inform us thereof and will (or, with respect to the Information and Projections relating to the Company and its subsidiaries, including the Borrower, prior to the Closing Date, will use commercially reasonable efforts to) promptly supplement the Information and such Projections such that such representations and warranties are so complete and correct in all material respects. In arranging the Credit Facility, each of the Commitment Parties (x) will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof and (y) assume no responsibility for the accuracy or completeness of the Information or the Projections.

 

4.            Conditions.

 

The commitment of the Commitment Parties hereunder to fund the Credit Facility on the Closing Date are subject solely to the conditions set forth herein and in Exhibit C hereto, and upon satisfaction (or written waiver by the Commitment Parties) of such conditions, the initial funding of the Credit Facility on the Closing Date shall occur.

 

 

Notwithstanding anything to the contrary in this Commitment Letter (including each of the exhibits attached hereto), the Facility Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, the terms of the Facility Documentation shall be in a form such that they do not impair the availability of the Credit Facility on the Closing Date if the conditions set forth in Exhibit C hereto are satisfied (or are waived by the Commitment Parties). For the avoidance of doubt, in no event shall the Company or any of its subsidiaries be required to execute any Facility Documentation, or any other document or instruments (other than customary authorization letters), prior to, or that become effective prior to the consummation of the Acquisition and the funding of the Credit Facility and it being understood that, to the extent any collateral is not provided on the Closing Date (as defined in the Acquisition Agreement) after your use of commercially reasonable efforts to do so (other than (x) the filing of Uniform Commercial Code financing statements, and (y) the filing of intellectual property security agreements for intellectual property that is registered as of the Closing Date, the providing of such collateral shall not constitute a condition precedent to the availability of the Credit Facility on the Closing Date but shall be required to be provided after the Closing Date pursuant to arrangements to be mutually agreed upon. This paragraph, and the provisions herein, shall be referred to as the “Certain Funds Provisions”.

 

5.            Exclusivity, Expense Reimbursement and Indemnity.

 

To induce the Commitment Parties to enter into this Commitment Letter and to proceed with the documentation of the Credit Facility, you agree that Section 2 (Exclusivity), Section 3 (Expense Reimbursement) and Section 5 (Indemnification) of the Exclusivity and Reimbursement Letter are incorporated herein mutatis mutandis.

 

6.            Sharing of Information, Absence of Fiduciary Relationships, Affiliate Activities.

 

You acknowledge that the Commitment Parties and their respective affiliates may be providing debt financing, equity capital or other services (including, without limitation, financial advisory services) to other persons in respect of which you, the Company, and your and their respective affiliates, may have conflicting interests regarding the transactions described herein and otherwise. None of the Commitment Parties or their respective affiliates will use confidential information obtained from you, the Company, or your or their respective affiliates by virtue of the transactions contemplated by this Commitment Letter or their other relationships with you, the Company, or your or their respective affiliates in connection with the performance by them of services for other persons, and none of the Commitment Parties nor their respective affiliates will furnish any such information to other persons, except to the extent permitted below. You also acknowledge that none of the Commitment Parties or their respective affiliates has any obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by them from other persons.

 

As you know, certain of the Commitment Parties may be full service securities firms engaged, either directly or through their affiliates, in various activities, including securities trading, commodities trading, investment management, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of these activities, such Commitment Parties and certain of their respective affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of you, the Company and other companies which may be the subject of the arrangements contemplated by this Commitment Letter for their own account or for the accounts of their customers and may at any time hold long and short positions in such securities. Certain of the Commitment Parties or their respective affiliates may also co-invest with, make direct investments in, and invest or co-invest monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of you, the Company or other companies which may be the subject of the arrangements contemplated by this Commitment Letter or engage in commodities trading with any thereof. With respect to any securities and/or financial instruments so held by the Commitment Parties, their respective affiliates or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights in its sole discretion.

 

 

The Commitment Parties and their respective affiliates may have economic interests that conflict with those of you and may be engaged in a broad range of transactions that involve interests that differ from yours and those of your affiliates, and the Commitment Parties have no obligation to disclose any of such interests to you or your affiliates. You agree that the Commitment Parties will act under this Commitment Letter as independent contractors, and that nothing in this Commitment Letter will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Commitment Parties and you, the Company, or your respective equity holders or affiliates. You acknowledge and agree that (i) the transactions contemplated by this Commitment Letter are arm’s-length commercial transactions between the Commitment Parties and, if applicable, their affiliates, on the one hand, and you, on the other, (ii) in connection therewith and with the process leading to such transaction each Commitment Party and its applicable affiliates (as the case may be) is acting solely as a principal and has not been, is not and will not be acting as an advisor, agent or fiduciary of you, the Company, or your or their management, equity holders, creditors, affiliates, or any other person, (iii) the Commitment Parties and their applicable affiliates (as the case may be) have not assumed an advisory or fiduciary responsibility or any other obligation in favor of you or your affiliates with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Commitment Parties or any of their respective affiliates have advised or are currently advising you on other matters) except the obligations expressly set forth in this Commitment Letter and (iv) you have consulted your own legal and financial advisors to the extent you deemed appropriate. You further acknowledge and agree that (a) you are responsible for making your own independent judgment with respect to such transactions and the process leading thereto, (b) you are capable of evaluating and understand and accept the terms, risks and conditions of the transactions contemplated hereby, and (c) we have provided no legal, accounting, regulatory or tax advice, and you contacted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate. You agree that you will not claim that the Commitment Parties or their applicable affiliates, as the case may be, have rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you or your affiliates, in connection with such transaction or the process leading thereto and no Commitment Party, nor any of their respective affiliates, shall have any responsibility or liability to you with respect thereto. You hereby waive any claims that you or any of your affiliates may have against each of the Commitment Parties and their respective affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the Transactions and agree that no Commitment Party, nor any of their respective affiliates, shall have any liability (whether direct or indirect) to you in respect of such a fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or in right of you, including your equity holders, employees or creditors, in connection with the Transactions.

 

Without limiting the generality of this section, you hereby acknowledge that the Indemnified Persons may be engaged in such roles and that such roles may involve interests that differ from your interests and those of the Company and you, and you hereby waive any claims that you or your affiliates may have against the Commitment Parties’ Indemnified Persons (as defined in the Exclusivity and Reimbursement Letter) relating to this Commitment Letter or the Transaction as a result of any such conflict of interest and agree that such Indemnified Persons shall not have any liability (whether direct or indirect) to your or your affiliates in respect of any such claim or to any person asserting any such claim on behalf of you or your affiliates, including your equity owners.

 

 

7.            Confidentiality.

 

You agree that you will not disclose, directly or indirectly, this Commitment Letter, including the Term Sheet and the other exhibits and attachments hereto or the contents of any of the foregoing, or the activities of any Commitment Party pursuant hereto or thereto, to any person or entity without prior written approval of AI Partners, except (a) to the Equity Investors and your and their respective officers, directors, agents, employees, attorneys, accountants, advisors, controlling persons or equity holders, in each case, who are informed of the confidential nature thereof, on a confidential and need-to-know basis, (b) if the Commitment Parties consent in writing to such proposed disclosure (such consent not to be unreasonably withheld, delayed or conditioned), (c) pursuant to the order of any court or administrative agency in any pending legal, judicial, regulatory, or administrative proceeding, or otherwise as required by applicable law, rule or regulation or compulsory legal process or to the extent requested or required by governmental and/or regulatory authorities, in each case based on the reasonable advice of your legal counsel (and in each such case you agree (i) to the extent practicable and not prohibited by applicable law, rule or regulation to inform us promptly thereof and, to the extent practicable, prior to such disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (d) to the extent reasonably necessary or advisable in connection with the exercise of any remedy or enforcement of any right under this Commitment Letter, (e) to the Company, the subsidiaries of the Company, including the Borrower, and the respective officers, directors, employees, agents, attorneys, accountants, advisors, controlling persons and equity holders of each of the foregoing, on a confidential and need-to-know basis (provided that, until after the Closing Date any disclosure of the Term Sheet or its contents to the Company, the subsidiaries of the Company, including the Borrower, or their respective officers, directors, employees, agents, attorneys, accountants, advisors, controlling persons and equity holders shall be redacted in a customary manner (as reasonably agreed by the Commitment Parties), including in respect of the amounts, percentages and basis points of compensation set forth therein, unless the Commitment Parties otherwise consent); provided that (i) you may disclose the Commitment Letter and its contents (but not the Term Sheet or the contents thereof (other than its existence)) in connection with any public or regulatory filing relating to the Transactions and (ii) you may disclose the aggregate fee amount contained in the Term Sheet (but not the Term Sheet) as part of Projections, pro forma information or a generic disclosure of aggregate sources and uses related to fee amounts related to the Transactions to the extent required in any regulatory filing relating to the Transactions. You agree to inform all such persons who receive information concerning this Commitment Letter that such information is confidential on the terms set forth herein. The restrictions on disclosure set forth in this paragraph (other than with respect to the Term Sheet and the contents thereof) shall expire and shall be of no further effect after the first anniversary of the date hereof.

 

The Commitment Parties reserve the right to review and approve, in advance, all materials, press releases, advertisements and disclosures by the Borrower or its affiliates that contain the name of the Commitment Parties or any of their affiliates or describe the Commitment Parties’ financing commitment, role or activities with respect to the Credit Facility.

 

 

The Commitment Parties and their affiliates will use all information provided to them or such affiliates by or on behalf of you hereunder or in connection with the Credit Facility and the related Transactions solely for the purpose of providing the services which are the subject of this Commitment Letter and negotiating, evaluating and consummating the transactions contemplated hereby and shall treat confidentially all such information and shall not publish, disclose or otherwise divulge, such information; provided that nothing herein shall prevent any Commitment Party and their affiliates from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal, judicial, regulatory or administrative proceeding, or otherwise as required by applicable law, rule or regulation or compulsory legal process (in which case the Commitment Parties agree (except with respect to any routine audit or examination conducted by auditing accountants or any regulatory authority exercising examination or regulatory authority), (i) to the extent practicable and not prohibited by applicable law, rule or regulation, to inform you promptly thereof prior to disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (b) upon the request or demand of any regulatory authority having or asserting jurisdiction over the Commitment Parties or any of their respective affiliates (in which case the Commitment Parties agree (except with respect to any routine audit or examination conducted by auditing accountants or any regulatory authority exercising examination or regulatory authority), (i) to the extent practicable and not prohibited by applicable law, rule or regulation, to inform you promptly thereof prior to disclosure and (ii) to use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential treatment), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by such Commitment Party or any of its affiliates or any related parties thereto in violation of any confidentiality obligations owing to you, the Equity Investors, the Company or any of your or their respective subsidiaries or affiliates or related parties (including those set forth in this paragraph), as determined by a court of competent jurisdiction in a final and non-appealable decision, (d) to the extent that such information is received by such Commitment Party or any of its affiliates from a third party that is not, to such Commitment Party’s knowledge, subject to any contractual or fiduciary confidentiality obligations owing to you, the Equity Investors, the Company or any of your or their respective subsidiaries or affiliates or related parties, (e) to the extent that such information is independently developed by the Commitment Parties or any of their affiliates, (f) to such Commitment Party’s affiliates and to its and their respective directors, officers, employees, legal counsel, independent auditors, rating agencies, professionals and other experts or agents who need to know such information in connection with the Transactions and who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential, (g) to its and its affiliates potential or prospective partners and lenders, other Investors, Lenders, participants or assignees and to any direct or indirect contractual counterparty to any loan, swap or derivative transaction relating to you or any of your subsidiaries, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph); provided that the disclosure of any such information to any partners, lender, Investors, Lenders or prospective Lenders or participants or prospective participants referred to above shall be made subject to the acknowledgment and acceptance by such person that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and each Commitment Party, including, without limitation, as agreed in any information materials or other marketing materials) in accordance with the standard processes of such Commitment Party or customary market standards for dissemination of such type of information, (h) to the extent you shall have consented to such disclosure in writing (such consent not to be unreasonably withheld, conditioned or delayed) or (i) for purposes of enforcing its rights hereunder in any legal proceedings and for purposes of establishing a defense in any legal proceedings. The Commitment Parties’ and their affiliates’, if any, obligations under this paragraph shall terminate automatically and be superseded by the confidentiality provisions in the Facility Documentation upon the initial funding thereunder. Otherwise, the confidentiality provisions set forth in this paragraph shall survive the termination of this Commitment Letter and expire and shall be of no further effect after the first anniversary of the date hereof.

 

 

8.            Miscellaneous.

 

This Commitment Letter and the commitments hereunder shall not be assignable by any party hereto without the prior written consent of each other party hereto (and any attempted assignment without such consent shall be null and void). This Commitment Letter and the commitments hereunder are intended to be solely for the benefit of the parties hereto (and Commitment Parties’ Indemnified Persons) and are not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and such Indemnified Persons to the extent expressly set forth herein). The Commitment Parties reserve the right to employ the services of their affiliates or branches in providing services contemplated hereby, and to allocate, in whole or in part, to their affiliates or branches certain fees payable to the Commitment Parties in such manner as the Commitment Parties and their affiliates or branches may agree in their sole discretion and, to the extent so employed, such affiliates and branches shall be entitled to the benefits and protections afforded to, and subject to the provisions governing the conduct of, the Commitment Parties hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or other electronic transmission (including a “pdf” or “tif”) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. This Commitment Letter (including the exhibits hereto), (i) are the only agreements that have been entered into among the parties hereto with respect to the Credit Facility and (ii) supersede all prior and/or contemporaneous understandings, whether written or oral, among us with respect to the Credit Facility and sets forth the entire understanding of the parties hereto with respect thereto, including any prior commitment letter(s) with respect to the Credit Facility by, between or among the parties hereto. THIS COMMITMENT LETTER, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER, OR RELATED TO, THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK; provided, that, the interpretation of the definition of Company Material Adverse Effect and Parent Material Adverse Effect (as such terms are defined in Exhibit C hereto) and whether or not a Company Material Adverse Effect or a Parent Material Adverse Effect has occurred), shall, in each case, be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof.

 

Any Commitment Party or any of their respective affiliates, may, in consultation with you, place customary advertisements, or provide customary notifications, in financial and other newspapers and periodicals (including league tables) or on a home page or similar place for dissemination of customary information on the Internet or worldwide web as it may choose, and circulate similar promotional materials, in each case, after the Closing Date, in the form of “tombstone” or otherwise describing the name of the Borrower, the Company or other obligor under the Credit Facility, and the amount, type and closing date of the Transactions, all at the expense of the applicable Commitment Party.

 

Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity (whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein (it being acknowledged and agreed that the commitments provided hereunder (and which are to be available and/or funded on the Closing Date) are subject to the satisfaction (or written waiver by the Commitment Parties) of the conditions set forth or referenced in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit C hereto). Promptly following the execution of this Commitment Letter, the parties hereto shall proceed with the negotiation in good faith of the Facility Documentation for purposes of executing and delivering the Facility Documentation substantially simultaneously with the consummation of the transactions described in the Transaction Description.

 

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THE ACQUISITION, THE TRANSACTIONS, THIS COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

 

 

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America, in each case, sitting in New York County in the State of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Commitment Letter or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall only be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court; provided that suit for the recognition or enforcement of any judgment obtained in any such New York State or federal court may be brought in any other court of competent jurisdiction, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter or the transactions contemplated hereby or thereby in any such New York State court or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth above shall be effective service of process for any suit, action or proceeding brought in any such court.

 

We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”) and 31 C.F.R. § 1010.230 (as amended, the “Beneficial Ownership Regulation”), each of us and each of the Lenders (as defined in the Term Sheet) may be required to obtain, verify and record information that identifies the Borrower, the Company and their respective subsidiaries, which information may include their names, addresses, tax identification numbers and other information that will allow each of us and the Lenders to identify the Borrower, the Company and their respective subsidiaries in accordance with the PATRIOT Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the PATRIOT Act and the Beneficial Ownership Regulation and is effective for each of us and the Lenders. You hereby agree that the Commitment Parties shall be permitted to share any and all such information with the Lenders.

 

The indemnification, compensation (if applicable), reimbursement (if applicable), jurisdiction, information, governing law, sharing of information, absence of fiduciary relationships, affiliate activities, service of process, venue, waiver of jury trial and confidentiality provisions contained herein shall remain in full force and effect regardless of whether the Facility Documentation shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the Commitment Parties’ commitments hereunder; provided that your obligations under this Commitment Letter (other than your obligations with respect to (a) compensation (if applicable) and (b) confidentiality of the Term Sheet and the contents thereof) shall automatically terminate and be superseded by the provisions of the Facility Documentation upon the initial funding thereunder, and you shall automatically be released from obligations in connection therewith at such time (provided that nothing in this sentence shall operate to release you from liabilities in connection with a breach of the terms of the Commitment Letter or the Exclusivity and Reimbursement Letter prior to the Closing Date). You may terminate this Commitment Letter at any time subject to the provisions of the preceding sentence.

 

Section headings used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter.

 

 

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter by returning to us, executed counterparts hereof not later than 11:59 p.m., New York City time, on October 31, 2023. The Commitment Parties’ commitments hereunder will expire automatically and without further action or notice and without further obligation to you at such time in the event that the Commitment Parties have not received such executed counterparts in accordance with the immediately preceding sentence. If you do so execute and deliver to us this Commitment Letter, we agree, subject to the terms of the Exclusivity and Reimbursement Letter, to hold our commitment available for you until the earliest of (i) after execution of this Commitment Letter and prior to the consummation of the Transactions, the date on which an irrevocable written notice from you to the Commitment Parties is received by the Commitment Parties notifying the Commitment Parties that you desire to terminate the commitments hereunder, (ii) after execution of the Acquisition Agreement and prior to the consummation of the Transactions, the termination of the Acquisition Agreement in accordance with its terms, (iii) the consummation of the Transactions described in the Transaction Description without the funding of the Credit Facility, (iv) the first business day following the Termination Date (as defined in the Acquisition Agreement on the date hereof) and (v) the date falling six (6) months from the date of this Commitment Letter, upon which time this Commitment Letter and the commitments of the Commitment Parties hereunder and the agreement of the Commitment Parties to provide the services described herein to provide the services described herein shall terminate automatically and without further action or notice and without further obligation to you unless the Commitment Parties shall, in their sole discretion, agree to an extension in writing.

 

Ruckus acknowledges and agrees that (a) AI Partners is entering into this Commitment Letter in reliance on that certain commitment letter issued by Meritz Securities Co. Ltd (together with its affiliates, managed funds and accounts, collectively, “Meritz”) to AI Partners (as attached hereto as Exhibit D, the “Meritz Commitment Letter”), (b) AI Partners is entering into this Commitment Letter in its capacity as the asset manager of a trust fund to be established for Meritz benefit in respect of the Credit Facility (the “Trust Fund”) and (c) Ruckus may only have recourse to the trust assets of the Trust Fund and in no circumstances will the assets of any other trusts for which AI Partners manages as asset manager or AI Partners’ personal assets be available to Ruckus in respect of any claim that arises out of, or in connection with, this Commitment Letter.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

 

		Very truly yours,
		Al PARTNERS ASSET MANAGEMENT CO., LTD.,
		in its capacity as the asset manager of the Trust Fund
		By.	/s/ Andy S. Shin
		Name:	Andy S. Shin
		Title:	CEO

 

Signature Page to Commitment Letter

 

 

AGREED AND ACCEPTED
AS OF THE DATE FIRST WRITTEN ABOVE
RUCKUS ENERGY HOLDINGS, LLC
By	/s/ Ariella Fuchs
	Name: Ariella Fuchs
	Title: President and GC

 

Signature Page to Commitment Letter

 

 

EXHIBIT A

 

Transaction Description

 

Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit A is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the context in which it is used.

 

Fury Resources, Inc. (“Parent”), directly controlled by Ruckus, intends to acquire the Company, all as set forth in the Acquisition Agreement (as defined below). In connection therewith:

 

(a)            Parent, San Jacinto Acquisition Corp. (“Merger Sub”) and the Company will enter into that certain Agreement and Plan of Merger, dated as of the date hereof (together with the exhibits, annexes and disclosure schedules thereto, the “Acquisition Agreement”), by and among, inter alios, Parent, Merger Sub and the Company, pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company as the surviving entity (the “Acquisition”);

 

(b)            following the date hereof and on or prior to the Closing Date, the investors, which may include members of management of Ruckus, the Company and certain other direct or indirect existing equity holders of the Company (collectively, the “Equity Investors”) will make or shall have made cash or rollover equity contributions (collectively, the “Equity Contribution”), directly or indirectly, to Parent, in the form of common equity, qualified preferred equity or other equity (such preferred and other equity, to be on terms reasonably satisfactory to the Commitment Parties) (collectively, the “Permitted Equity”);

 

(c)            the Borrower will obtain a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”);

 

(d)            all existing third party debt for borrowed money of the Borrower under that certain Amended and Restated Credit Agreement, dated as of November 24, 2021 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time), by and among the Borrower, as borrower, the Company, the lenders party thereto from time to time (the “Existing Lenders”) and Macquarie Bank Limited, as administrative agent for the Existing Lenders, will be repaid, redeemed, defeased, discharged, refinanced, replaced or terminated and all commitments to extend credit thereunder shall have been terminated, and all guarantees and security interests (if any), in each case, in respect thereof terminated and discharged substantially concurrently with the initial funding of the Credit Facility (or other arrangements for such termination and release reasonably satisfactory to Fortress, as Administrative Agent for Fortress and the Commitment Parties (in such capacity, the “Administrative Agent”) shall have been made) (the “Refinancing”);

 

(e)            the fees, premiums, expenses and other transaction costs incurred in connection with the Transactions, including to fund any original issue discount and/or upfront fees (the “Transaction Costs”), will be paid; and

 

(f)            the proceeds of the Equity Contribution and the loans under the Credit Facility funded on the Closing Date will be used to pay the consideration for, and other amounts owing in connection with, the Acquisition under the Acquisition Agreement, to effect the Refinancing and to pay all or a portion of the Transaction Costs.

 

The transactions described above are collectively referred to herein as the “Transactions”.

 

 

EXHIBIT B

 

(See attached Exclusivity and Reimbursement Letter)

 

 

 

FORTRESS CREDIT CORP.

1345 Avenue of the Americas, 46th Floor
New York, NY 10105

 

CONFIDENTIAL

 

September 22, 2023

 

Ruckus Energy Holdings, LLC

17503 La Cantera Pkwy, Suite 104-603

San Antonio, Texas 78257

Attn.: Avi Mirman

Email: amirman@ruckusexp.com

 

Re:      Exclusivity and Expense Reimbursement Letter

 

1.            We refer to recent discussions between us relating to a potential debt acquisition financing transaction (the “Proposed Financing”) between one or more funds, investment vehicles and/or accounts managed or advised by Fortress Credit Corp. or one or more of its affiliates (collectively, “Fortress”), one or more funds, investment vehicles and/or accounts managed or advised by Meritz Securities Co., Ltd. or one or more of its affiliates (collectively, “Meritz”, together with Fortress “we” or the “Investors”), and Ruckus Energy Holdings, LLC and/or certain of its affiliates or subsidiaries (collectively, “Ruckus”) with respect to Ruckus’ intended acquisition of Battalion Oil Corporation by San Jacinto Acquisition Corp. (the “Borrower”). This letter agreement (this “Letter”) sets forth the arrangements relating to exclusivity and reimbursement in connection with the Proposed Financing. This Letter (including the Term Sheet referred to below), when countersigned by you, will confirm that you have engaged Investors on an exclusive basis in connection with the Proposed Financing on the terms set forth on the indicative summary of terms and conditions of which are set forth in Annex A hereto (the “Term Sheet”, the defined terms of which are used herein) subject to, among other things, the conditions set forth herein and therein.

 

2.            In consideration of the substantial amount of time, effort and expense that Investors will continue to expend with respect to the Proposed Financing, Ruckus agrees that until 11:59 PM, New York City time, on the earlier of (a) the 60th day following the date of this Letter if the SEC does not elect to review the transactions, (b) the 90th day following the date of this Letter if the SEC does elect to review the transactions, or (c) the date on which the Investors notify the Borrower in writing that they no longer intend to proceed with the Proposed Financing (the “Initial Exclusivity Period”), Ruckus shall not, and shall direct its officers, directors, senior management, agents, counsel, accountants, financial advisers, consultants and other representatives (“Representatives”) not to, directly or indirectly, initiate, assist, knowingly solicit, negotiate, knowingly encourage, accept or knowingly support (including by making available any nonpublic information to any actual or potential provider of an Alternative Financing (as defined below)) any inquiry, proposal or offer from any individual, corporation, partnership, limited liability company or other person, entity or group (other than Investors and any additional potential lenders in respect of the Proposed Financing identified by Investors in consultation with Ruckus or identified by Ruckus with the prior consent of Investors) to reach any agreement, arrangement or understanding (whether or not such agreement, arrangement or understanding is absolute, revocable, contingent or conditional) for, or otherwise attempt to consummate or discuss, any potential debt financing transaction for Borrower other than the Proposed Financing (any such potential financing transaction, an “Alternative Financing”). The Initial Exclusivity Period may be extended on or before the 30th day following the date of this Letter upon mutual agreement of Ruckus and Investors. Upon termination of this Letter by Ruckus without cause, Ruckus will provide reimbursement of all reasonable, documented and out-of-pocket expenses incurred by Investors through such date of termination per the terms below. Ruckus further agrees to, and shall direct its respective Representatives who are working on such other existing activities, discussions or negotiations to, promptly discontinue and terminate any existing activities, discussions or negotiations currently being conducted with respect to any Alternative Financing.

 

 

3.            In consideration of Investors’ agreement to conduct due diligence and negotiate the terms and conditions of the Proposed Financing, whether or not the Proposed Financing is consummated, Ruckus agrees to pay promptly on demand to Investors the reasonable and documented out-of-pocket costs and expenses incurred, in each case, prior to the conclusion of the Initial Exclusivity Period, by or on behalf of Investors in connection with the Proposed Financing. All payments in connection with Ruckus’s expense reimbursement obligations under this Letter shall be due promptly but no later than ten (10) business days following presentation to Ruckus of an invoice for the actual cost or expense incurred, together with reasonable supporting documentation. Investors will provide Ruckus with an accounting of estimated accrued but un-invoiced costs and expenses upon Ruckus’s written request therefor. Investors shall also notify Ruckus if and when expenses are expected to reach [*****]. Ruckus agrees that, once paid, any of the expenses that are reimbursable hereunder shall be not refundable under any circumstances, regardless of whether the Proposed Financing closes. In the event the Proposed Financing closes, any amount paid by Ruckus to Investors in connection with Ruckus’s expense reimbursement obligations hereunder will be credited against any expense reimbursement obligations of Ruckus under the definitive financing documentation. Further, to the extent the Proposed Financing does not close, Ruckus agrees that, once paid, none of the expenses reimbursable hereunder shall be creditable against any other amount due and payable by Ruckus or any other person to Investors in connection with the Proposed Financing or otherwise. All payments under this Letter shall be made by Ruckus to Investors in lawful money of the United States of America and in immediately available funds to the account designated by Investors without set-off, counterclaim, deduction or other defense. Upon the execution and delivery of definitive legal documentation regarding the Proposed Financing which otherwise addresses the payment of such costs and expenses and indemnification by all parties thereto, the expense reimbursement and indemnification obligations of Ruckus under this Letter shall terminate.

 

4.            It is understood and agreed that neither this Letter nor any continued negotiation with respect to the terms of, conduct of diligence with respect to, or commencement of documentation with respect to, the Proposed Financing shall constitute or give rise to any obligation on the part of Investors to provide or arrange the Proposed Financing; such obligation, if any, to be set forth solely in a definitive commitment letter mutually acceptable to, and executed and delivered by, Investors and Ruckus. Each party hereto agrees that notwithstanding the non-binding nature of the terms set forth in the Term Sheet, Sections 2, 3, 4, 5 and 6 shall be binding on the parties.

 

5.            Ruckus hereby agrees to indemnify and hold harmless (i) Investors and (ii) the respective officers, directors, employees, members, partners, agents, advisors and other representatives of each of the foregoing and their respective successors (each, an “Indemnified Person”), from and against any and all losses, penalties, claims, damages and liabilities of any kind or nature and reasonable and documented out-of-pocket fees and expenses, joint or several, to which any such Indemnified Person may become subject to the extent arising out of, resulting from or in connection with, the Proposed Financing or any related transaction contemplated hereby or thereby, or any claim, litigation, judgment, action, investigation, dispute or proceeding (including any inquiry or investigation) relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any such Indemnified Person is a party thereto, whether or not such Proceedings are brought by Ruckus, creditors or any other third person, and to reimburse each such Indemnified Person upon demand for any reasonable and documented out-of-pocket legal expenses of counsel for Investors) or other reasonable, documented and invoiced out-of-pocket fees and expenses incurred in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, penalties, claims, damages, liabilities or related expenses (x) to the extent that they have resulted from the bad faith, willful misconduct or gross negligence (in each case, as determined by a court of competent jurisdiction in a final and non-appealable decision) of such Indemnified Person or any of such Indemnified Person’s controlled affiliates or controlling persons or any of its or their respective officers, directors, employees, agents, advisors or other representatives, or (y) to the extent that they relate to any disputes solely between Indemnified Persons. In no event will the Indemnified Persons have any liability for any indirect, consequential, special, or punitive damages in connection with the Proposed Financing or any related transactions contemplated hereby or thereby, whether or not such damages are sought by Ruckus or its creditors or any other third person (provided, the foregoing shall not limit or affect Ruckus’s obligations to reimburse or indemnify Investors or the other Indemnified Persons in accordance with the terms of the indemnification provisions above).

 

 

6.            This Letter may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one document. Delivery of an original signature page via facsimile or other electronic transmission (e.g., “.pdf’ file) shall constitute delivery of an original signature page. This Letter, and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Letter, or the negotiation, execution or performance of this Letter (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Letter or as an inducement to enter into this Letter), shall be governed by, and enforced in accordance with, the internal laws of the State of New York, including its statutes of limitations, without regard to any borrowing statute that would result in the application of the statute of limitations of any other jurisdiction. Each of the parties hereto consents to the exclusive jurisdiction and venue of any state or federal court located within the county of New York, Borough of Manhattan, State of New York and irrevocably agrees that all actions or proceedings arising out of or relating to this Letter shall be litigated in such courts. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

[Signature Pages Follow]

 

 

Please indicate your agreement and acceptance to the foregoing by signing below and returning this Letter to us.

 

Sincerely,
FORTRESS CREDIT CORP.
By:	/s/ Brad Bailey
Name:	Brad Bailey
Title:	Authorized Signatory

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

MERITZ SECURITIES CO., LTD.
By:		[Seal]
Name:	Choi, Alexander Himoon
Title:	CEO

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

Agreed and Accepted:
Ruckus Energy Holdings, LLC
By:	/s/ Ariella Fuchs
Name:	Ariella Fuchs
Title:	President and GC

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

ANNEX A

 

SUMMARY OF INDICATIVE TERMS

 

Summary of Key Terms
Borrower:	Halcon Holding, LLC (collectively the “Borrower” or the “Company”)
Holdings:	Battalion Oil Corporation (“Holdings”)
Guarantors:	Each of Borrower’s other direct and indirect current and future subsidiaries, together with San Jacinto Acquisition Corp. and Holdings (each a “Guarantor” and collectively the “Guarantors;” and the Borrower and Guarantors, each sometimes individually a “Loan Party” and collectively the “Loan Parties”).
Facility:	First Lien Senior Secured Loan
Administrative Agent:	Fortress Credit Corp. (“Fortress”)
Administrative Agent Fee:	[*****]
Lender(s):	Fortress Credit Corp. (or an affiliate) (50% participation), and Meritz Securities Co., Ltd. (or an affiliate) (50% participation) (collectively, the “Lender”).
Security:	First priority perfected liens on and security interest in substantially all now owned and hereafter acquired tangible and intangible assets, including (i) at least 95% of the total PV-9 value of the oil and gas properties of the Loan Parties.
Facility Size:	$200 million Term Loan (the “Loan” or the “Facility”).
Use of Proceeds:	Proceeds of the initial $200 million funding to be used to cover transaction costs and fees and for the repayment of the existing Term Loan
Target Closing:	October 2023
Maturity Date:	Four years from Closing
Interest Rate:	[*****]
Loan Upfront Fee at Close:	[*****]
Default Interest:	Interest Rate + 2.00% per annum paid current
Optional Prepayment:	NC-18 months, 102 for months 19-30, par thereafter (other than pursuant to mandatory amortization of the term loan or excess cash flow sweep). Yield Maintenance Premium equal to undiscounted sum of remaining payments due on the Facility for the remainder of the make whole period plus applicable call protection.

 

 

Exit Fee:	A one-time fee paid on the earlier of (x) the repayment of the loan, or (y) the Maturity Date. Fee equal to 3.5% of the PV 10 of all incremental reserves converted to PDP over the course of the loan and net of any PDP PV 10 runoff using the end of year 2023 NSAI report as an initial starting point.   The Exit Fee shall be determined by the Admin Agent in good faith based on a Reserve Report reasonably acceptable to Lenders and approved by an Independent Engineer. Reserve Report to be based on the strip pricing at the time of calculation.
Hedging Requirements:	Minimum hedging of producing reserves at closing and over each rolling 48 month period thereafter, measured quarterly, at the following percentages of Proved Developed Producing (“PDP”) production volumes of oil and natural gas from the latest reserve report: (1) months 1-12, 80%; (2) months 13-24, 70%; (3) months 25-36, 60%; and (4) months 37-48, 50%. Such PDP production volumes to be measured as of each quarter end, with the Company having up to 45 days from the end of such quarter to implement such minimum hedging, provided that new well development volumes to be hedged at beginning of well completion to at least 50% of projected production volumes for first 24 months of production. Maximum hedging restrictions to allow reasonable hedging of other non-producing reserves under development (with reasonable limitations on unhedged DUC capex).
Permitted G&A:	Annual Net Cash G&A capped at the greater of (i) $15 million or (ii) 10% of the overall Planned Hedged EBITDA for that budgeted year.
Financial Covenants:	Beginning December 31, 2023 and thereafter:   (i) Asset Coverage defined as PDP PV 10 to Total Net Debt to be greater than 1.80x. PDP PV10 using forward strip commodity prices, adjusted for hedging, based on the latest third party engineering report rolled forward quarterly as needed.   (ii) Net Debt to LTM EBITDAX tested quarterly and not to exceed 2.50x   (iii) Current ratio to be tested [monthly] and to be greater than 1.0:1.0   (iv) Minimum Liquidity to begin at $10 million   (v) Maintenance of commodity Hedge Requirements   (vi) Maximum of one oil rig and associated frac crews maintained while Total Net Leverage (TNL) based on LTM EBITDAX is greater than 0.75x. Borrower is allowed to enter into a new contract for a second rig if the TNL is less than 0.75x, but is allowed to extend the existing contract with the second rig as long as the TNL is less than 0.85x. Borrower is not authorized to approve any future drilling wells that have a planned IRR below 30% based on the current strip at the time of approving the project.
Negative Covenants:	Usual and customary for financings of this type, including, without limitation, negative covenants (certain of which will be subject to materiality thresholds, baskets and customary exceptions and qualifications to be mutually agreed upon) regarding: indebtedness, liens,guarantees, negative pledges, restricted payments, subsidiary distributions, investments, fundamental changes, disposition of assets, acquisitions , disposal of subsidiary interests, sale-leasebacks, transactions with affiliates, conduct of business, changes to material contracts, fiscal year, accounting policies, and deposit accounts.
Affirmative Covenants:	Usual and customary for financings of this type, including, without limitation, affirmative covenants (certain of which will be subject to materiality thresholds, baskets and customary exceptions and qualifications to be mutually agreed upon) regarding: delivery of financial reporting, reports, certificates and annual budget, delivery of certain notices; maintenance of existence; licenses and permits; use of proceeds; payment of taxes and claims; maintenance of properties; maintenance of insurance; books and records; inspections; lender meetings; compliance with contractual obligations and laws; compliance with anti-terrorism laws, sanctions laws, anti-corruption laws and anti-money laundering laws; environmental matters; additional collateral and guarantors;disclosure updates; cash management; use of commercially reasonable efforts to deliver collateral access; regulatory matters; contractual compliance and further assurances.

 

 

Minimum Mandatory Amortization:	10.00% per annum paid quarterly, commencing on 3/31/2024
Excess Cash Sweep:	100% quarterly sweep of excess cash flow (“ECF”); provided, that the Borrower shall not be required to make ECF prepayments in an amount that would result in the Loan Parties holding cash and cash equivalents as of the end of such fiscal quarter of less than the greater of (i) $10 million and (ii) an amount equal to the next twelve month’s budgeted capex.   ECF sweep shall not be required in the case of the capital program for drilling placed on hold due to <30% IRR on planned well(s), provided that cash and cash equivalents do not exceed the greater of (a) $130.0 million, (b) the Board approved annual budget prior to the beginning of the current fiscal year, and (c) 10% above the actual cash balance at the time the decision was made to put the capital program on hold.   ECF shall be defined as: (a) gross revenue less (b) cash payments pursuant to commodities swap agreements and the cash components of OPEX, G&A, interest expense, taxes, and capex.   Cash on the balance sheet at closing will not be subject to ECF sweep until the first anniversary of closing.
Mandatory Prepayment:	Mandatory prepayments to include:   ·      Indebtedness not permitted by the Loan Documents ·      Proceeds from sale of assets ·      Insurance/condemnation proceeds and escrow/indemnity proceeds
Restricted Payments:	No allowance for restricted payments
Events of Default:	Usual and customary events of default, including among others, the following: failure to make payments under the Loan Documents when due; failure to apply operating cash flow or capital event proceeds in accordance with the distribution provisions set forth in the Loan Documents; representations or warranties incorrect when given; breach of covenants; ERISA matters; cross-payment default or cross-acceleration; voluntary or involuntary bankruptcy events with respect to the Borrower or Guarantors; monetary and non-monetary judgments; actual or asserted invalidity of Loan Documents; and impairment of security interests in the Security.
Reporting Requirements:	Customary reporting requirements for transactions of this type including quarterly reports and annual audited financial statements. Management will host quarterly earnings calls subject to the Lender’s discretion. Engineering reserve reports prepared by a third party firm to be provided two times per year for the first 2 years subsequent to closing, and one time per year thereafter; engineering reserve reports prepared internally to be provided for the quarters for which a third party report is not provided.

 

 

Permitted Indebtedness:	Letters of Credit capped at $5.0 million and pari passu with Facility.
Expenses; Expense Deposit:	Borrower understands that it will be necessary for the Lender to incur out-of-pocket costs and expenses in connection with the proposed Loan (including, without limitation, due diligence, legal and transportation fees and expenses) (collectively, “Lender Expenses”). Upon request of the Lender, Borrower shall promptly, but in any event within three business days after receipt of written request therefore, reimburse the Lender for all reasonable and documented Lender Expenses.
Confidentiality:	This term sheet is strictly confidential and its terms may not be shared with third-parties (other than advisors expressly engaged by Fortress or Borrower and as provided in the Mandate Letter.

 

 

EXHIBIT C

 

Conditions Precedent to Initial Borrowing

 

Capitalized terms used but not defined in this Exhibit C shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit C is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used. The initial borrowing under the Credit Facility shall be subject only to the satisfaction (or waiver by the Commitment Parties in writing) of the following conditions in the reasonable discretion of the Commitment Parties:

 

1.

Since the date of the Acquisition Agreement, no Company Material Adverse Effect nor Parent Material Adverse Effect (as such terms are defined in the Acquisition Agreement) shall have occurred and be continuing.

 

2.

The Acquisition shall have been consummated, or substantially simultaneously with the initial borrowing under the Credit Facility, shall be consummated, in accordance with the terms of the Acquisition Agreement, after giving effect to any modifications, amendments, consents or waivers thereto, other than those modifications, amendments, consents or waivers that are materially adverse to the interests of the Commitment Parties (in their capacities as such), unless consented to in advance in writing by the Commitment Parties (such consent not to be unreasonably withheld, delayed or conditioned) provided that the Commitment Parties shall be deemed to have consented to such modifications, amendments, consents or waivers unless it has objected thereto within four (4) business days after written notice to and receipt by the Commitment Parties of such modifications, amendments, consents or waivers).

 

3.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Preferred Stock Transactions shall have been consummated on the terms set forth in the Purchase Agreement and the Contribution Agreement.

 

4.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Refinancing shall have been consummated.

 

5.

AI Partners shall have received evidence satisfactory to it, in its reasonable discretion, that (a) the other participating Lenders (which, for the avoidance of doubt, may include any other Investor party to the Exclusivity and Reimbursement Letter) and/or (b) such other alternative financing sources identified by Ruckus and reasonably acceptable to AI Partners and pursuant to documentation reasonably acceptable to AI Partners, shall collectively be obligated to fund on the Closing Date an amount not less than the portion of the Credit Facility amount (after giving effect to any reductions contemplated by the Commitment Letter) that AI Partners has not committed (or otherwise agreed in writing) to fund.

 

6.

AI Partners shall have received (a) the reviewed balance sheet of the Company as of December 31, 2022, and the related reviewed statement of income and retained earnings and statement of cash flow for the fiscal years then ended, together with the notes thereto and (b) the internally prepared balance sheet, of the Company as of the most recent reported month before close.

 

7.

AI Partners shall have received a pro forma consolidated balance sheet of the Company and the Borrower as of the twelve-month period ending on the last day of the most recently completed four fiscal quarter period for which financial statements are available pursuant to paragraph 5 above, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

 

 

EXHIBIT C

  

8.

Subject in all respects to the Certain Funds Provisions, all documents and instruments (including schedules to security documentation) required to create and perfect the Administrative Agent’s security interests in the collateral described in the Term Sheet (with the requisite priority) shall have been executed and delivered by the Borrower and the Guarantors (or, where applicable, the Borrower and the Guarantors shall have authorized the filing of financing statements under the Uniform Commercial Code) and, if applicable, be in proper form for filing.

 

9.

The Administrative Agent and the Lenders (as defined in the Term Sheet) shall have received at least three (3) business days prior to the Closing Date (a) all documentation and other information about the Loan Parties (as defined in the Term Sheet) and the principals thereof as has been reasonably requested in writing at least ten (10) days prior to the Closing Date by the Administrative Agent or any Lender that they reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and (b) if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification (as defined below) in relation to the Borrower. “Beneficial Ownership Certification” means a certificate regarding beneficial ownership required by the Beneficial Ownership Regulation.

 

10.

(a) The execution and delivery of the Facility Documentation by the Loan Parties (including guarantees by the applicable Guarantors) which shall, in each case, be in accordance with the terms of the Commitment Letter and the Term Sheet and subject to the Certain Funds Provisions and (b) the delivery to the Administrative Agent of borrowing notices and/or issuance notices, as applicable, customary legal opinions, customary incumbency certificates and closing certificates, organizational documents, customary evidence of authorization and, as applicable, good standing certificates in jurisdictions of formation/organization, in each case with respect to the Borrower and the Guarantors and a solvency certificate of the Borrower, as of the Closing Date after and giving effect to the Transactions. The term “Facility Documentation” shall mean the documentation for the Credit Facility containing the terms and conditions in this Exhibit C and in the Term Sheet and, to the extent any terms are not so set forth, shall otherwise by usual and customary for transactions of this kind and shall contain such modifications as the Borrower, the Administrative Agent and the Lenders shall mutually agree, in each case, subject to the Certain Funds Provisions.

 

11.

The Administrative Agent and each Lender shall have received evidence in form and substance satisfactory to them that all fees required to be paid on the Closing Date pursuant to the Term Sheet and the Facility Documentation, and reasonable out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter and the Facility Documentation, to the extent invoiced at least two (2) business days prior to the Closing Date (except for fees pursuant to the Term Sheet and as otherwise reasonably agreed by the Borrower), shall, upon the initial borrowing under the Credit Facility, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Credit Facility).

 

12.

The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it that (a) the commodity hedging transactions set forth on Schedule 1 attached hereto (collectively, the “Existing Hedges” and each, individually, an “Existing Hedge”) are in full force and effect on the Closing Date after giving effect to the closing of the Transactions on the Closing Date; provided, that (i) any novation of any Existing Hedge or replacement of an Existing Hedge, in each case with written notice to Administrative Agent, with a new hedge on substantially the same or better terms (e.g., price, tenor, type, volumes) than the Existing Hedge being novated or otherwise replaced, in each case shall not be treated as a termination of such Existing Hedge and such Existing Hedge shall be deemed to continue to be in full force and effect after giving effect to such novation or replacement, (ii) any modification of an Existing Hedge, with not less than three (3) Business Days’ prior written notice to, and the prior written consent of, Administrative Agent, shall be permitted and such modified hedge shall continue to be deemed to be the applicable Existing Hedge, and (iii) any Existing Hedge having an “End Date” listed on Schedule 1 that occurs on or prior to the Closing Date shall not be required to be in full force and effect on the Closing Date.

 

 

EXHIBIT C

 

13.

Avi Mirman shall (a) have contributed up to $10 million of the $200 million of common equity and (b) hold (or have the right to appoint) no more than one (1) board seat on the board of directors (the “Board”) for the Company (which Board shall be composed of not less than five (5) seats), while Rich Little will lead management for the Holdings and the Borrower. For the avoidance of doubt, the Board shall contain not less than two (2) board seats appointed by independent investors in the Company.

 

14.

On the Closing Date, the Administrative Agent shall have received evidence in form and substance satisfactory to it that the Borrower has, in an aggregate amount greater than or equal to $95 million, consisting of (a) funded capital expenditures to drill and complete two (2) oil and/or gas wells located in the Monument Draw area of the Delaware Basin and spudded during the period time beginning on the date of the Commitment Letter and ending on the Closing Date and (b) not less than $70 million of unrestricted cash is on its balance sheet.

 

15.

The Closing Date shall not occur prior to the Closing Date (as defined in the Acquisition Agreement).

 

 

 

EXHIBIT C

 

Schedule 1 to Exhibit C
Existing Hedges

 

				Crude Oil Roll Swaps Swap					Crude Oil Basis Swaps Swap					Crude Oil Fixed Swaps Swap					Natural Gas Options Put						Natural Gas Options Call					Natural Gas Fixed Swaps Swap					Natural Gas Basis Swaps Swap
Start Date		End Date		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price			Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price
6/1/2023		6/30/2023		(187,470.0	)		0.7		(192,300.0	)		0.4		(187,470.0	)		70.9		-			-			-			-		(671,891.0	)		3.6		(671,891.0	)		(0.9	)
7/1/2023		7/31/2023		(200,167.0	)		0.5		(197,811.0	)		0.4		(200,167.0	)		67.7		-			-			-			-		(702,773.0	)		3.7		(702,773.0	)		(0.9	)
8/1/2023		8/31/2023		(208,688.0	)		0.5		(190,557.0	)		0.4		(193,688.0	)		67.6		-			-			-			-		(692,106.0	)		3.7		(692,106.0	)		(0.9	)
9/1/2023		9/30/2023		(173,250.0	)		0.5		(160,740.0	)		0.4		(158,250.0	)		67.9		-			-			-			-		(661,411.0	)		3,7		(661,411.0	)		(0.9	)
10/1/2023		10/31/2023		(159,712.0	)		0.5		(160,704.0	)		0.4		(159,712.0	)		68.1		-			-			-			-		(668,616.0	)		3.7		(668,616.0	)		(0.9	)
11/1/2023		11/30/2023		(150,720.0	)		0.5		(150,270.0	)		0.4		(150,720.0	)		67.9		537,300.0			3.8			(537,300.0	)		5.2		(95,917.0	)		3.6		(633,217.0	)		(0.8	)
12/1/2023		12/31/2023		(152,148.0	)		0.5		(150,629.0	)		0.4		(152,148.0	)		67.6		545,569.0			3.8			(545,569.0	)		5.2		(109,678.0	)		3.7		(655,247.0	)		(0.8	)
1/1/2024		1/31/2024		(170,074.0	)		0.3		(170,934.0	)		0.3		(171,554.0	)		64.3		601,090.0			3.8			(601,090.0	)		5.2		(35,027.0	)		3.7		(636,117.0	)		(0.9	)
2/1/2024		2/29/2024		(166,237.0	)		0.3		(166,237.0	)		0.3		(166,237.0	)		63.9		553,581.0			3.8			(553,581.0	)		5.2		(45,588.0	)		4.0		(599,778.0	)		(0.9	)
3/1/2024		3/31/2024		(173,933.0	)		0.3		(173,933.0	)		0.3		(173,933.0	)		63.7		580,568.0			3.8			(580,568.0	)		5.2		(52,044.0	)		4.1		(632,612.0	)		(0.9	)
4/1/2024		4/30/2024		(160,889.0	)		0.3		(160,889.0	)		0.3		(160,889.0	)		64.9		-			-			-			-		(591,361.0	)		3.6		(591,361.0	)		(0.9	)
5/1/2024		5/31/2024		(161,194.0	)		0.3		(161,194.0	)		0.3		(161,194.0	)		64.8		-			-			-			-		(604,736.0	)		3.6		(604,736.0	)		(0.9	)
6/1/2024		6/30/2024		(150,387.0	)		0.3		(151,950.0	)		0.3		(151,950.0	)		64.7		-			-			-			-		(575,934.0	)		3.6		(575,934.0	)		(0.9	)
7/1/2024		7/31/2024		(151,534.0	)		0.3		(151,534.0	)		0.3		(151,534.0	)		63.2		-			-			-			-		(588,992.0	)		3.6		(588,992.0	)		(0.9	)
8/1/2024		8/31/2024		(147,537.0	)		0.3		(147,537.0	)		0.3		(147,537.0	)		63.2		-			-			-			-		(582,563.0	)		3.6		(582,563.0	)		(0.9	)
9/1/2024		9/30/2024		(140,933.0	)		0.3		(140,933.0	)		0.3		(140,933.0	)		63.0		-			-			-			-		(557,280.0	)		3.6		(556,620.0	)		(0.9	)
10/1/2024		10/31/2024		(141,571.0	)		0.1		(141,571.0	)		0.2		(141,571.0	)		62.2		100,750.0			3.3			(100,750.0	)		4.5		(479,269.0	)		3.4		(580,019.0	)		(0.9	)
11/1/2024		11/30/2024		(135,863.0	)		0.1		(135,863.0	)		0.2		(135,863.0	)		62.1		382,500.0			3.5			(382,500.0	)		4.9		(162,672.0	)		3.2		(545,172.0	)		(0.7	)
12/1/2024		12/31/2024		(137,699.0	)		0.1		(137,699.0	)		0.2		(137,699.0	)		62.1		392,150.0			3.5			(392,150.0	)		4.9		(166,768.0	)		3.1		(558,918.0	)		(0.7	)
1/1/2025		1/31/2025		(135,313.0	)		0.2		(135,313.0	)		0.3		(135,313.0	)		61.6		424,700.0			3.7			(424,700.0	)		5.0		(126,604.0	)		3.1		(551,304.0	)		(0.7	)
2/1/2025		2/28/2025		(120,732.0	)		0.2		(120,732.0	)		0.2		(120,732.0	)		61.4		381,500.0			3.7			(381,500.0	)		5.0		(108,665.0	)		3.1		(490,165.0	)		(0.7	)
3/1/2025		3/31/2025		(130,105.0	)		0.2		(130,105.0	)		0.2		(130,105.0	)		61.3		418,500.0			3.7			(418,500.0	)		5.0		(120,299.0	)		3.1		(538,799.0	)		(0.7	)
4/1/2025		4/30/2025		(125,420.0	)		0.2		(125,420.0	)		0.2		(125,420.0	)		62.6		-			-			-			-		(518,430.0	)		3.4		(513,180.0	)		(0.7	)
5/1/2025		5/31/2025		(125,397.0	)		0.2		(125,397.0	)		0.2		(125,397.0	)		62.6		-			-			-			-		(529,976.0	)		3.4		(526,532.0	)		(0.7	)
6/1/2025		6/30/2025		(121,890.0	)		0.2		(121,890.0	)		0.2		(121,890.0	)		62.4		-			-			-			-		(507,690.0	)		3.4		(505,956.0	)		(0.7	)
7/1/2025		7/31/2025		(108,664.0	)		0.1		(108,664.0	)		0.2		(108,664.0	)		60.9		-			-			-			-		(427,025.0	)		3.4		(426,327.0	)		(0.7	)
8/1/2025		8/31/2025		(107,189.0	)		0.1		(107,189.0	)		0.2		(107,189.0	)		60.8		-			-			-			-		(429,412.0	)		3.4		(421,994.0	)		(0.7	)
9/1/2025		9/30/2025		(102,249.0	)		0.1		(102,249.0	)		0.2		(102,249.0	)		60.7		-			-			-			-		(405,876.0	)		3.4		(405,876.0	)		(0.7	)
10/1/2025		10/31/2025		(100,111.0	)		0.0		(100,111.0	)		0.1		(100,111.0	)		60.3		48,918.0			3.5			(48,918.0	)		5.1		(369,582.0	)		3.3		(418,488.0	)		(0.7	)
11/1/2025		11/30/2025		(95,607.0	)		0.0		(95,607.0	)		0.1		(95,607.0	)		60.2		186,960.0			3.8			(186,960.0	)		5.4		(209,586.0	)		3.2		(396,546.0	)		(0.6	)
12/1/2025		12/31/2025		(97,644.0	)		0.0		(97,644.0	)		0.1		(97,644.0	)		60.1		190,743.0			3.8			(190,743.0	)		5.4		(216,268.0	)		3.2		(407,011.0	)		(0.6	)
1/1/2026		1/31/2026		(93,856.0	)		0.2		(93,856.0	)		0.2		(93,856.0	)		61.0		411,401.0			4.0			(411,401.0	)		5.0		(8,413.0	)		4.9		(419,814.0	)		(0.9	)
2/1/2026		2/28/2026		(86,293.0	)		0.2		(86,293.0	)		0.2		(86,293.0	)		61.2		348,600.0			4.1			(348,600.0	)		5.0		(11,536.0	)		4.5		(360,136.0	)		(0.9	)
3/1/2026		3/31/2026		(91,720.0	)		0.3		(91,720.0	)		0.2		(91,720.0	)		60.9		383,811.0			4.1			(383,811.0	)		5.0		(7,713.0	)		4.9		(391,524.0	)		(0.9	)
4/1/2026		4/30/2026		(88,986.0	)		0.1		(88,986.0	)		0.1		(88,986.0	)		67.1		-			-			-			-		(380,766.0	)		3.9		(380,766.0	)		(0.8	)
5/1/2026		5/31/2026		(90,979.0	)		0.1		(90,979.0	)		0.1		(90,979.0	)		67.3		-			-			-			-		(391,245.0	)		3.9		(391,245.0	)		(0.8	)
6/1/2026		6/30/2026		(87,132.0	)		0.1		(87,132.0	)		0.1		(87,132.0	)		67.3		-			-			-			-		(376,680.0	)		3.9		(376,680.0	)		(0.8	)
7/1/2026		7/31/2026		(81,363.0	)		0.2		(81,363.0	)		0.0		(81,363.0	)		63.5		-			-			-			-		(324,297.0	)		4.0		(324,297.0	)		(0.6	)
8/1/2026		8/31/2026		(79,568.0	)		0.2		(79,568.0	)		0.0		(79,568.0	)		63.5		-			-			-			-		(327,137.0	)		4.0		(327,137.0	)		(0.6	)
9/1/2026		9/30/2026		(73,830.0	)		0.2		(73,830.0	)		0.0		(73,830.0	)		63.7		-			-			-			-		(312,000.0	)		4.0		(312,000.0	)		(0.6	)
10/1/2026		10/31/2026		(77,624.0	)		(0.7	)	(77,624.0	)		(0.3	)	(77,624.0	)		61.8		310,000.0			3.3			(310,000.0	)		5.6		(20,150.0	)		3.6		(330,150.0	)		(0.8	)
11/1/2026		11/30/2026		(75,480.0	)		(0.7	)	(75,480.0	)		(0.3	)	(75,480.0	)		61.8		300,000.0			3.3			(300,000.0	)		5.6		(10,236.0	)		4.0		(310,236.0	)		(0.8	)
12/1/2026		12/31/2026		(75,392.0	)		(0.7	)	(75,392.0	)		(0.3	)	(75,392.0	)		61.6		310,000.0			3.3			(310,000.0	)		5.6		(4,210.0	)		4.3		(314,210.0	)		(0.8	)
1/1/2027		1/31/2027		(71,610.0	)		0.0		(71,610.0	)		0.4		(71,610.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		(4,650.0	)		3.7		(314,650.0	)		(0.8	)
2/1/2027		2/28/2027		(64,820.0	)		0.0		(64,820.0	)		0.4		(64,820.0	)		59.6		280,000.0			4.3			(280,000.0	)		5.8		-			-		(280,000.0	)		(0.8	)
3/1/2027		3/31/2027		(71,858.0	)		0.0		(71,858.0	)		0.4		(71,858.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
4/1/2027		4/30/2027		(70,980.0	)		(0.0	)	(70,980.0	)		0.4		(70,980.0	)		63.6		150,000.0			2.5			(150,000.0	)		5.2		(150,000.0	)		3.5		(300,000.0	)		(0.8	)
5/1/2027		5/31/2027		(73,284.0	)		(0.0	)	(73,284.0	)		0.4		(73,284.0	)		63.6		155,000.0			2.5			(155,000.0	)		5.2		(155,000.0	)		3.5		(310,000.0	)		(0.8	)
6/1/2027		6/30/2027		(70,860.0	)		(0.0	)	(70,860.0	)		0.4		(70,860.0	)		63.6		150,000.0			2.5			(150,000.0	)		5.2		(150,000.0	)		3.5		(300,000.0	)		(0.8	)
7/1/2027		7/31/2027		(3,410.0	)		0.2		(3,410.0	)		0.3		(3,410.0	)		58.0		-			-			-			-		-			-		-			-
8/1/2027		8/31/2027		(3,348.0	)		0.2		(3,348.0	)		0.3		(3,348.0	)		58.0		-			-			-			-		-			-		-			-
9/1/2027		9/30/2027		(3,210.0	)		0.2		(3,210.0	)		0.3		(3,210.0	)		58.0		-			-			-			-		-			-		-			-
10/1/2027		10/31/2027		(3,255.0	)		0.2		(3,255.0	)		0.3		(3,255.0	)		58.0		-			-			-			-		-			-		-			-
11/1/2027		11/30/2027		(3,090.0	)		0.2		(3,090.0	)		0.3		(3,090.0	)		58.0		-			-			-			-		-			-		-			-
12/1/2027		12/31/2027		(3,162.0	)		0.2		(3,162.0	)		0.3		(3,162.0	)		58.0		-			-			-			-		-			-		-			-
1/1/2028		1/31/2028		-			-		-			-		-			-		-			-			-			-		-			-		-			-

 

 

EXHIBIT C

 

				Crude Oil Roll Swaps					Crude Oil Basis Swaps					Crude Oil Fixed Swaps					Natural Gas Options Put						Natural Gas Options Call					Natural Gas Fixed Swaps					Natural Gas Basis Swaps
Start Date		End Date		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price			Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price
6/1/2023		6/30/2023		(187,470.0	)		0.7		(192,300.0	)		0.4		(187,470.0	)		70.9		-			-			-			-		(671,891.0	)		3.6		(671,891.0	)		(0.9	)
7/1/2023		7/31/2023		(200,167.0	)		0.5		(197,811.0	)		0.4		(200,167.0	)		67.7		-			-			-			-		(702,773.0	)		3.7		(702,773.0	)		(0.9	)
8/1/2023		8/31/2023		(208,688.0	)		0.5		(190,557.0	)		0.4		(193,688.0	)		67.6		-			-			-			-		(692,106.0	)		3.7		(692,106.0	)		(0.9	)
9/1/2023		9/30/2023		(198,000.0	)		0.5		(177,990.0	)		0.4		(183,000.0	)		67.2		-			-			-			-		(661,411.0	)		3.7		(661,411.0	)		(0.9	)
10/1/2023		10/31/2023		(185,287.0	)		0.5		(178,529.0	)		0.4		(185,287.0	)		67.4		-			-			-			-		(663,966.0	)		3.7		(663,966.0	)		(0.9	)
11/1/2023		11/30/2023		(175,470.0	)		0.5		(167,520.0	)		0.4		(175,470.0	)		67.2		537,300.0			3.8			(537,300.0	)		5.2		(95,917.0	)		3.6		(633,217.0	)		(0.8	)
12/1/2023		12/31/2023		(177,723.0	)		0.5		(168,454.0	)		0.4		(177,723.0	)		66.9		545,569.0			3.8			(545,569.0	)		5.2		(109,678.0	)		3.7		(655,247.0	)		(0.8	)
1/1/2024		1/31/2024		(170,074.0	)		0.3		(170,934.0	)		0.3		(171,554.0	)		64.3		601,090.0			3.8			(601,090.0	)		5.2		(35,027.0	)		3.7		(636,117.0	)		(0.9	)
2/1/2024		2/29/2024		(155,956.0	)		0.3		(157,470.0	)		0.3		(157,470.0	)		64.2		553,581.0			3.8			(553,581.0	)		5.2		(45,588.0	)		4.0		(599,778.0	)		(0.9	)
3/1/2024		3/31/2024		(163,240.0	)		0.3		(165,323.0	)		0.3		(165,323.0	)		64.0		580,568.0			3.8			(580,568.0	)		5.2		(52,044.0	)		4.1		(632,612.0	)		(0.9	)
4/1/2024		4/30/2024		(154,554.0	)		0.3		(157,200.0	)		0.3		(157,200.0	)		65.1		-			-			-			-		(591,361.0	)		3.6		(591,361.0	)		(0.9	)
5/1/2024		5/31/2024		(156,259.0	)		0.3		(159,681.0	)		0.3		(159,681.0	)		64.9		-			-			-			-		(600,086.0	)		3.6		(600,086.0	)		(0.9	)
6/1/2024		6/30/2024		(148,314.0	)		0.3		(151,950.0	)		0.3		(151,950.0	)		64.7		-			-			-			-		(575,934.0	)		3.6		(575,934.0	)		(0.9	)
7/1/2024		7/31/2024		(149,198.0	)		0.3		(149,198.0	)		0.3		(150,283.0	)		63.3		-			-			-			-		(584,342.0	)		3.6		(584,342.0	)		(0.9	)
8/1/2024		8/31/2024		(147,537.0	)		0.3		(147,537.0	)		0.3		(147,537.0	)		63.2		-			-			-			-		(577,913.0	)		3.6		(577,913.0	)		(0.9	)
9/1/2024		9/30/2024		(140,196.0	)		0.3		(140,196.0	)		0.3		(140,196.0	)		63.0		-			-			-			-		(552,780.0	)		3.6		(552,120.0	)		(0.9	)
10/1/2024		10/31/2024		(137,173.0	)		0.1		(137,516.0	)		0.2		(137,516.0	)		62.3		100,750.0			3.3			(100,750.0	)		4.5		(479,269.0	)		3.4		(580,019.0	)		(0.9	)
11/1/2024		11/30/2024		(130,759.0	)		0.1		(131,460.0	)		0.2		(131,550.0	)		62.2		382,500.0			3.5			(382,500.0	)		4.9		(162,672.0	)		3.2		(545,172.0	)		(0.7	)
12/1/2024		12/31/2024		(131,654.0	)		0.1		(133,486.0	)		0.2		(135,625.0	)		62.2		392,150.0			3.5			(392,150.0	)		4.9		(166,768.0	)		3.1		(558,918.0	)		(0.7	)
1/1/2025		1/31/2025		(127,618.0	)		0.2		(127,618.0	)		0.3		(127,618.0	)		61.8		424,700.0			3.7			(424,700.0	)		5.0		(121,954.0	)		3.1		(546,654.0	)		(0.7	)
2/1/2025		2/28/2025		(112,291.0	)		0.2		(112,291.0	)		0.2		(112,291.0	)		61.6		381,500.0			3.7			(381,500.0	)		5.0		(108,665.0	)		3.1		(490,165.0	)		(0.7	)
3/1/2025		3/31/2025		(122,772.0	)		0.2		(122,772.0	)		0.2		(122,772.0	)		61.5		418,500.0			3.7			(418,500.0	)		5.0		(120,299.0	)		3.1		(538,799.0	)		(0.7	)
4/1/2025		4/30/2025		(102,297.0	)		0.2		(102,297.0	)		0.2		(102,297.0	)		61.7		-			-			-			-		(428,430.0	)		3.4		(423,180.0	)		(0.7	)
5/1/2025		5/31/2025		(104,256.0	)		0.2		(104,256.0	)		0.2		(104,256.0	)		61.5		-			-			-			-		(436,976.0	)		3.4		(433,532.0	)		(0.7	)
6/1/2025		6/30/2025		(99,507.0	)		0.2		(99,507.0	)		0.2		(99,507.0	)		61.4		-			-			-			-		(417,690.0	)		3.4		(415,956.0	)		(0.7	)
7/1/2025		7/31/2025		(101,410.0	)		0.1		(101,410.0	)		0.2		(101,410.0	)		61.1		-			-			-			-		(427,025.0	)		3.4		(426,327.0	)		(0.7	)
8/1/2025		8/31/2025		(100,136.0	)		0.1		(100,136.0	)		0.2		(100,136.0	)		61.0		-			-			-			-		(424,762.0	)		3.4		(417,344.0	)		(0.7	)
9/1/2025		9/30/2025		(95,658.0	)		0.1		(95,658.0	)		0.2		(95,658.0	)		60.9		-			-			-			-		(405,876.0	)		3.4		(405,876.0	)		(0.7	)
10/1/2025		10/31/2025		(93,502.0	)		0.0		(93,502.0	)		0.1		(93,502.0	)		60.4		48,918.0			3.5			(48,918.0	)		5.1		(369,582.0	)		3.3		(418,488.0	)		(0.7	)
11/1/2025		11/30/2025		(89,367.0	)		0.0		(89,367.0	)		0.1		(89,367.0	)		60.3		186,960.0			3.8			(186,960.0	)		5.4		(209,586.0	)		3.2		(396,546.0	)		(0.6	)
12/1/2025		12/31/2025		(91,357.0	)		0.0		(91,357.0	)		0.1		(91,357.0	)		60.2		190,743.0			3.8			(190,743.0	)		5.4		(216,268.0	)		3.2		(407,011.0	)		(0.6	)
1/1/2026		1/31/2026		(88,756.0	)		0.3		(88,756.0	)		0.2		(88,756.0	)		61.2		411,401.0			4.0			(411,401.0	)		5.0		(8,413.0	)		4.9		(419,814.0	)		(0.9	)
2/1/2026		2/28/2026		(79,349.0	)		0.3		(79,349.0	)		0.2		(79,349.0	)		61.1		348,600.0			4.1			(348,600.0	)		5.0		(7,336.0	)		4.9		(355,936.0	)		(0.9	)
3/1/2026		3/31/2026		(86,933.0	)		0.3		(86,933.0	)		0.2		(86,933.0	)		61.0		383,811.0			4.1			(383,811.0	)		5.0		(7,713.0	)		4.9		(391,524.0	)		(0.9	)
4/1/2026		4/30/2026		(77,256.0	)		0.1		(77,256.0	)		0.1		(77,256.0	)		67.6		-			-			-			-		(320,766.0	)		4.0		(320,766.0	)		(0.8	)
5/1/2026		5/31/2026		(78,951.0	)		0.1		(78,951.0	)		0.1		(78,951.0	)		67.8		-			-			-			-		(329,245.0	)		4.0		(329,245.0	)		(0.8	)
6/1/2026		6/30/2026		(75,582.0	)		0.1		(75,582.0	)		0.1		(75,582.0	)		67.8		-			-			-			-		(316,680.0	)		4.0		(316,680.0	)		(0.8	)
7/1/2026		7/31/2026		(77,271.0	)		0.2		(77,271.0	)		0.0		(77,271.0	)		63.8		-			-			-			-		(324,297.0	)		4.0		(324,297.0	)		(0.6	)
8/1/2026		8/31/2026		(76,468.0	)		0.2		(76,468.0	)		0.0		(76,468.0	)		63.8		-			-			-			-		(322,487.0	)		4.0		(322,487.0	)		(0.6	)
9/1/2026		9/30/2026		(73,230.0	)		0.2		(73,230.0	)		0.0		(73,230.0	)		63.7		-			-			-			-		(312,000.0	)		4.0		(312,000.0	)		(0.6	)
10/1/2026		10/31/2026		(76,260.0	)		(0.7	)	(76,260.0	)		(0.3	)	(76,260.0	)		61.9		310,000.0			3.3			(310,000.0	)		5.6		(20,150.0	)		3.6		(330,150.0	)		(0.8	)
11/1/2026		11/30/2026		(73,680.0	)		(0.7	)	(73,680.0	)		(0.3	)	(73,680.0	)		61.9		300,000.0			3.3			(300,000.0	)		5.6		(5,736.0	)		4.3		(305,736.0	)		(0.8	)
12/1/2026		12/31/2026		(73,005.0	)		(0.7	)	(73,005.0	)		(0.4	)	(73,005.0	)		61.7		310,000.0			3.3			(310,000.0	)		5.6		(4,210.0	)		4.3		(314,210.0	)		(0.8	)
1/1/2027		1/31/2027		(68,200.0	)		-		(68,200.0	)		0.4		(68,200.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
2/1/2027		2/28/2027		(61,600.0	)		-		(61,600.0	)		0.4		(61,600.0	)		59.6		280,000.0			4.3			(280,000.0	)		5.8		-			-		(280,000.0	)		(0.8	)
3/1/2027		3/31/2027		(68,200.0	)		-		(68,200.0	)		0.4		(68,200.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
4/1/2027		4/30/2027		-			-		-			-		-			-		150,000.0			2.5			(150,000.0	)		5.2		-			-		(150,000.0	)		(0.8	)
5/1/2027		5/31/2027		-			-		-			-		-			-		155,000.0			2.5			(155,000.0	)		5.2		-			-		(155,000.0	)		(0.8	)
6/1/2027		6/30/2027		-			-		-			-		-			-		150,000.0			2.5			(150,000.0	)		5.2		-			-		(150,000.0	)		(0.8	)

 

 

 

EXHIBIT D

 

(See attached Meritz Commitment Letter)

 

 

CONFIDENTIAL

 

October 30, 2023

 

AI PARTNERS ASSET MANAGEMENT CO., LTD.
702, Daeoh Bldg, 53-1 Yeouinaru-ro

Yeongdeungpo-gu, Seoul 07327, the Republic of Korea

 

Attn: The Directors

 

Commitment Letter

 

Ladies and Gentlemen:

 

Reference is made to that certain Exclusivity and Expense Reimbursement Letter, dated September 22, 2023 (a copy of which is attached hereto as Exhibit B, the “Exclusivity and Reimbursement Letter”), to Ruckus Energy Holdings, LLC, a Delaware limited liability company (“Ruckus”), from the Investors (as defined therein).

 

Ruckus has advised Meritz Securities Co., Ltd. (“Meritz” and together with its affiliates, managed funds and accounts, collectively, the “Commitment Parties”, “we” or “us”) and AI Partners Asset Management Co., Ltd. (together with its affiliates, managed funds and accounts, collectively, “AI Partners”) that Ruckus, which directly or indirectly controls San Jacinto Acquisition Corp., a Delaware corporation (“Merger Sub”), intends to acquire by merger Battalion Oil Corporation, a Delaware corporation (the “Company”), and its subsidiaries, including, without limitation, Halcón Holdings, LLC, a Delaware limited liability company (the “Borrower”). Ruckus has further advised us that, in connection with the foregoing, Ruckus intends to consummate the other Transactions described in the Transaction Description attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Transaction Description or the Exclusivity and Reimbursement Letter or the Summary of Indicative Terms attached as Annex A to the Exclusivity and Reimbursement Letter (as amended pursuant to the AI Partners Commitment Letter (as defined below), the “Term Sheet”; this commitment letter, the Transaction Description, the Term Sheet and the Conditions Precedent to Initial Borrowing attached hereto as Exhibit C, collectively, the “Commitment Letter”), as applicable. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this letter agreement shall be determined by reference to the context in which it is used.

 

1.            Commitment.

 

In connection with the Transactions, Meritz is pleased to advise you of its commitment to provide fifty percent (50%) (i.e., $100 million) of a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”), upon the terms and conditions set forth in this Commitment Letter (including, without limitation, the last sentence of this paragraph) and subject only to (a) the satisfaction (or written waiver by the Commitment Parties) of the conditions set forth or referenced in the section entitled “Conditions Precedent to Initial Borrowing” in Exhibit C hereto and (b) adjustment of the Credit Facility size as set forth in that certain commitment letter dated on or about the date hereof between Fortress Credit Corp. (“Fortress”) and Ruckus, so that you can use the proceeds of our funding under this Commitment Letter to perform your funding obligations under the commitment letter issued by you in favor of Ruckus Energy Holdings, LLC (the “AI Partners Commitment Letter”). The commitment of the Commitment Parties are several and not joint with any other Investor or any other Lender (as defined in the Term Sheet).

 

 

2.            Conditions.

 

The commitment of the Commitment Parties hereunder to fund the Credit Facility on the Closing Date are subject solely to the conditions set forth herein and in Exhibit C hereto, and upon satisfaction (or written waiver by the Commitment Parties) of such conditions, the initial funding of the Credit Facility on the Closing Date shall occur.

 

Notwithstanding anything to the contrary in this Commitment Letter (including each of the exhibits attached hereto), the Facility Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, the terms of the Facility Documentation shall be in a form such that they do not impair the availability of the Credit Facility on the Closing Date if the conditions set forth in Exhibit C hereto are satisfied (or are waived by the Commitment Parties). For the avoidance of doubt, in no event shall the Company or any of its subsidiaries be required to execute any Facility Documentation, or any other document or instruments (other than customary authorization letters), prior to, or that become effective prior to the consummation of the Acquisition and the funding of the Credit Facility and it being understood that, to the extent any collateral is not provided on the Closing Date (as defined in the Acquisition Agreement) after your use of commercially reasonable efforts to do so (other than (x) the filing of Uniform Commercial Code financing statements, and (y) the filing of intellectual property security agreements for intellectual property that is registered as of the Closing Date, the providing of such collateral shall not constitute a condition precedent to the availability of the Credit Facility on the Closing Date but shall be required to be provided after the Closing Date pursuant to arrangements to be mutually agreed upon. This paragraph, and the provisions herein, shall be referred to as the “Certain Funds Provisions”.

 

3.            Exclusivity, Expense Reimbursement and Indemnity.

 

Section 2 (Exclusivity), Section 3 (Expense Reimbursement) and Section 5 (Indemnification) of the Exclusivity and Reimbursement Letter are incorporated herein mutatis mutandis.

 

4.            General and Express Third Party Beneficiary.

 

Section 2 (Acknowledgement of Term Sheet Amendments), Section 3 (Information), Section 6 (Sharing of Information, Absence of Fiduciary Relationship, Affiliate Activities), Section 7 (Confidentiality) and Section 8 (Miscellaneous) of the AI Partners Commitment Letter are relied upon by us and/or incorporated herein mutatis mutandis. This Commitment Letter shall be governed by the laws of the Republic of Korea and the Seoul Central District Court shall have non-exclusive jurisdiction to settle any dispute under this Commitment Letter. Notwithstanding anything to the contrary contained herein, the parties hereby acknowledge and agree that Ruckus is an express third party beneficiary of this Commitment Letter and the rights, benefits and remedies conferred thereunder or by reason thereof.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

 

	Very truly yours,
	MERITZ SECURITIES CO., LTD.
	By:		[Seal]
	Name: Choi, Alexander Himoon
	Title: CEO

 

Signature Page to Commitment Letter

 

 

AGREED AND ACCEPTED
AS OF THE DATE FIRST WRITTEN ABOVE
AI PARTNERS ASSET MANAGEMENT CO., LTD. (in its capacity as asset manager of a trust fund to be established)
By	/s/ Andy S. Shin
	Name: Andy S. Shin
	Title: CEO

 

Signature Page to Commitment Letter

 

 

EXHIBIT A

 

Transaction Description

 

Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit A is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit A shall be determined by reference to the context in which it is used.

 

Fury Resources, Inc. (“Parent”), directly controlled by Ruckus, intends to acquire the Company, all as set forth in the Acquisition Agreement (as defined below). In connection therewith:

 

(a)            Parent, San Jacinto Acquisition Corp. (“Merger Sub”) and the Company will enter into that certain Agreement and Plan of Merger, dated as of the date hereof (together with the exhibits, annexes and disclosure schedules thereto, the “Acquisition Agreement”), by and among, inter alios, Parent, Merger Sub and the Company, pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company as the surviving entity (the “Acquisition”);

 

(b)            following the date hereof and on or prior to the Closing Date, the investors, which may include members of management of Ruckus, the Company and certain other direct or indirect existing equity holders of the Company (collectively, the “Equity Investors”) will make or shall have made cash or rollover equity contributions (collectively, the “Equity Contribution”), directly or indirectly, to Parent, in the form of common equity, qualified preferred equity or other equity (such preferred and other equity, to be on terms reasonably satisfactory to the Commitment Parties) (collectively, the “Permitted Equity”);

 

(c)            the Borrower will obtain a senior secured first lien term loan facility in the aggregate principal amount of $200 million (the “Credit Facility”);

 

(d)            all existing third party debt for borrowed money of the Borrower under that certain Amended and Restated Credit Agreement, dated as of November 24, 2021 (as amended, restated, amended and restated, supplemented and/or otherwise modified from time to time), by and among the Borrower, as borrower, the Company, the lenders party thereto from time to time (the “Existing Lenders”) and Macquarie Bank Limited, as administrative agent for the Existing Lenders, will be repaid, redeemed, defeased, discharged, refinanced, replaced or terminated and all commitments to extend credit thereunder shall have been terminated, and all guarantees and security interests (if any), in each case, in respect thereof terminated and discharged substantially concurrently with the initial funding of the Credit Facility (or other arrangements for such termination and release reasonably satisfactory to Fortress, as Administrative Agent for Fortress and AI Partners (in such capacity, the “Administrative Agent”) shall have been made) (the “Refinancing”);

 

(e)            the fees, premiums, expenses and other transaction costs incurred in connection with the Transactions, including to fund any original issue discount and/or upfront fees (the “Transaction Costs”), will be paid; and

 

(f)            the proceeds of the Equity Contribution and the loans under the Credit Facility funded on the Closing Date will be used to pay the consideration for, and other amounts owing in connection with, the Acquisition under the Acquisition Agreement, to effect the Refinancing and to pay all or a portion of the Transaction Costs.

 

The transactions described above are collectively referred to herein as the “Transactions”.

 

 

EXHIBIT B

 

(See attached Exclusivity and Reimbursement Letter)

 

 

 

FORTRESS CREDIT CORP.

1345 Avenue of the Americas, 46th Floor
New York, NY 10105

 

CONFIDENTIAL

 

September 22, 2023

 

Ruckus Energy Holdings, LLC

17503 La Cantera Pkwy, Suite 104-603

San Antonio, Texas 78257

Attn.: Avi Mirman

Email: amirman@ruckusexp.com

 

Re:

Exclusivity and Expense Reimbursement Letter

 

1.            We refer to recent discussions between us relating to a potential debt acquisition financing transaction (the “Proposed Financing”) between one or more funds, investment vehicles and/or accounts managed or advised by Fortress Credit Corp. or one or more of its affiliates (collectively, “Fortress”), one or more funds, investment vehicles and/or accounts managed or advised by Meritz Securities Co., Ltd. or one or more of its affiliates (collectively, “Meritz”, together with Fortress “we” or the “Investors”), and Ruckus Energy Holdings, LLC and/or certain of its affiliates or subsidiaries (collectively, “Ruckus”) with respect to Ruckus’ intended acquisition of Battalion Oil Corporation by San Jacinto Acquisition Corp. (the “Borrower”). This letter agreement (this “Letter”) sets forth the arrangements relating to exclusivity and reimbursement in connection with the Proposed Financing. This Letter (including the Term Sheet referred to below), when countersigned by you, will confirm that you have engaged Investors on an exclusive basis in connection with the Proposed Financing on the terms set forth on the indicative summary of terms and conditions of which are set forth in Annex A hereto (the “Term Sheet”, the defined terms of which are used herein) subject to, among other things, the conditions set forth herein and therein.

 

2.            In consideration of the substantial amount of time, effort and expense that Investors will continue to expend with respect to the Proposed Financing, Ruckus agrees that until 11:59 PM, New York City time, on the earlier of (a) the 60th day following the date of this Letter if the SEC does not elect to review the transactions, (b) the 90th day following the date of this Letter if the SEC does elect to review the transactions, or (c) the date on which the Investors notify the Borrower in writing that they no longer intend to proceed with the Proposed Financing (the “Initial Exclusivity Period”), Ruckus shall not, and shall direct its officers, directors, senior management, agents, counsel, accountants, financial advisers, consultants and other representatives (“Representatives”) not to, directly or indirectly, initiate, assist, knowingly solicit, negotiate, knowingly encourage, accept or knowingly support (including by making available any nonpublic information to any actual or potential provider of an Alternative Financing (as defined below)) any inquiry, proposal or offer from any individual, corporation, partnership, limited liability company or other person, entity or group (other than Investors and any additional potential lenders in respect of the Proposed Financing identified by Investors in consultation with Ruckus or identified by Ruckus with the prior consent of Investors) to reach any agreement, arrangement or understanding (whether or not such agreement, arrangement or understanding is absolute, revocable, contingent or conditional) for, or otherwise attempt to consummate or discuss, any potential debt financing transaction for Borrower other than the Proposed Financing (any such potential financing transaction, an “Alternative Financing”). The Initial Exclusivity Period may be extended on or before the 30th day following the date of this Letter upon mutual agreement of Ruckus and Investors. Upon termination of this Letter by Ruckus without cause, Ruckus will provide reimbursement of all reasonable, documented and out-of-pocket expenses incurred by Investors through such date of termination per the terms below. Ruckus further agrees to, and shall direct its respective Representatives who are working on such other existing activities, discussions or negotiations to, promptly discontinue and terminate any existing activities, discussions or negotiations currently being conducted with respect to any Alternative Financing.

 

 

3.            In consideration of Investors’ agreement to conduct due diligence and negotiate the terms and conditions of the Proposed Financing, whether or not the Proposed Financing is consummated, Ruckus agrees to pay promptly on demand to Investors the reasonable and documented out-of-pocket costs and expenses incurred, in each case, prior to the conclusion of the Initial Exclusivity Period, by or on behalf of Investors in connection with the Proposed Financing. All payments in connection with Ruckus’s expense reimbursement obligations under this Letter shall be due promptly but no later than ten (10) business days following presentation to Ruckus of an invoice for the actual cost or expense incurred, together with reasonable supporting documentation. Investors will provide Ruckus with an accounting of estimated accrued but un-invoiced costs and expenses upon Ruckus’s written request therefor. Investors shall also notify Ruckus if and when expenses are expected to reach [*****]. Ruckus agrees that, once paid, any of the expenses that are reimbursable hereunder shall be not refundable under any circumstances, regardless of whether the Proposed Financing closes. In the event the Proposed Financing closes, any amount paid by Ruckus to Investors in connection with Ruckus’s expense reimbursement obligations hereunder will be credited against any expense reimbursement obligations of Ruckus under the definitive financing documentation. Further, to the extent the Proposed Financing does not close, Ruckus agrees that, once paid, none of the expenses reimbursable hereunder shall be creditable against any other amount due and payable by Ruckus or any other person to Investors in connection with the Proposed Financing or otherwise. All payments under this Letter shall be made by Ruckus to Investors in lawful money of the United States of America and in immediately available funds to the account designated by Investors without set-off, counterclaim, deduction or other defense. Upon the execution and delivery of definitive legal documentation regarding the Proposed Financing which otherwise addresses the payment of such costs and expenses and indemnification by all parties thereto, the expense reimbursement and indemnification obligations of Ruckus under this Letter shall terminate.

 

4.            It is understood and agreed that neither this Letter nor any continued negotiation with respect to the terms of, conduct of diligence with respect to, or commencement of documentation with respect to, the Proposed Financing shall constitute or give rise to any obligation on the part of Investors to provide or arrange the Proposed Financing; such obligation, if any, to be set forth solely in a definitive commitment letter mutually acceptable to, and executed and delivered by, Investors and Ruckus. Each party hereto agrees that notwithstanding the non-binding nature of the terms set forth in the Term Sheet, Sections 2, 3, 4, 5 and 6 shall be binding on the parties.

 

5.            Ruckus hereby agrees to indemnify and hold harmless (i) Investors and (ii) the respective officers, directors, employees, members, partners, agents, advisors and other representatives of each of the foregoing and their respective successors (each, an “Indemnified Person”), from and against any and all losses, penalties, claims, damages and liabilities of any kind or nature and reasonable and documented out-of-pocket fees and expenses, joint or several, to which any such Indemnified Person may become subject to the extent arising out of, resulting from or in connection with, the Proposed Financing or any related transaction contemplated hereby or thereby, or any claim, litigation, judgment, action, investigation, dispute or proceeding (including any inquiry or investigation) relating to any of the foregoing (any of the foregoing, a “Proceeding”), regardless of whether any such Indemnified Person is a party thereto, whether or not such Proceedings are brought by Ruckus, creditors or any other third person, and to reimburse each such Indemnified Person upon demand for any reasonable and documented out-of-pocket legal expenses of counsel for Investors) or other reasonable, documented and invoiced out-of-pocket fees and expenses incurred in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to any of the foregoing; provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, penalties, claims, damages, liabilities or related expenses (x) to the extent that they have resulted from the bad faith, willful misconduct or gross negligence (in each case, as determined by a court of competent jurisdiction in a final and non-appealable decision) of such Indemnified Person or any of such Indemnified Person’s controlled affiliates or controlling persons or any of its or their respective officers, directors, employees, agents, advisors or other representatives, or (y) to the extent that they relate to any disputes solely between Indemnified Persons. In no event will the Indemnified Persons have any liability for any indirect, consequential, special, or punitive damages in connection with the Proposed Financing or any related transactions contemplated hereby or thereby, whether or not such damages are sought by Ruckus or its creditors or any other third person (provided, the foregoing shall not limit or affect Ruckus’s obligations to reimburse or indemnify Investors or the other Indemnified Persons in accordance with the terms of the indemnification provisions above).

 

 

6. This Letter may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one document. Delivery of an original signature page via facsimile or other electronic transmission (e.g., “.pdf’ file) shall constitute delivery of an original signature page. This Letter, and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Letter, or the negotiation, execution or performance of this Letter (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Letter or as an inducement to enter into this Letter), shall be governed by, and enforced in accordance with, the internal laws of the State of New York, including its statutes of limitations, without regard to any borrowing statute that would result in the application of the statute of limitations of any other jurisdiction. Each of the parties hereto consents to the exclusive jurisdiction and venue of any state or federal court located within the county of New York, Borough of Manhattan, State of New York and irrevocably agrees that all actions or proceedings arising out of or relating to this Letter shall be litigated in such courts. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

[Signature Pages Follow]

 

 

 

Please indicate your agreement and acceptance to the foregoing by signing below and returning this Letter to us.

 

Sincerely,

 

FORTRESS CREDIT CORP.

 

By:	/s/ Brad Bailey
Name:	Brad Bailey
Title:	Authorized Signatory

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

MERITZ SECURITIES CO., LTD.
By		[Seal]
Name:	Choi, Alexander Himoon
Title:	CEO

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

Agreed and Accepted:

 

Ruckus Energy Holdings, LLC
By:	/s/ Ariella Fuchs
Name:	Ariella Fuchs
Title:	President and GC

 

[Signature Page to Exclusivity and Expense Reimbursement Letter]

 

 

ANNEX A

 

SUMMARY OF INDICATIVE TERMS

 

Summary of Key Terms
Borrower:	Halcon Holding, LLC (collectively the “Borrower” or the “Company”)
Holdings:	Battalion Oil Corporation (“Holdings”)
Guarantors:	Each of Borrower’s other direct and indirect current and future subsidiaries, together with San Jacinto Acquisition Corp. and Holdings (each a “Guarantor” and collectively the “Guarantors;” and the Borrower and Guarantors, each sometimes individually a “Loan Party” and collectively the “Loan Parties”).
Facility:	First Lien Senior Secured Loan
Administrative Agent:	Fortress Credit Corp. (“Fortress”)
Administrative Agent Fee:	[*****]
Lender(s):	Fortress Credit Corp. (or an affiliate) (50% participation), and Meritz Securities Co., Ltd. (or an affiliate) (50% participation) (collectively, the “Lender”).
Security:	First priority perfected liens on and security interest in substantially all now owned and hereafter acquired tangible and intangible assets, including (i) at least 95% of the total PV-9 value of the oil and gas properties of the Loan Parties.
Facility Size:	$200 million Term Loan (the “Loan” or the “Facility”).
Use of Proceeds:	Proceeds of the initial $200 million funding to be used to cover transaction costs and fees and for the repayment of the existing Term Loan
Target Closing:	October 2023
Maturity Date:	Four years from Closing
Interest Rate:	[*****]
Loan Upfront Fee at Close:	[*****]
Default Interest:	Interest Rate + 2.00% per annum paid current
Optional Prepayment:	NC-18 months, 102 for months 19-30, par thereafter (other than pursuant to mandatory amortization of the term loan or excess cash flow sweep). Yield Maintenance Premium equal to undiscounted sum of remaining payments due on the Facility for the remainder of the make whole period plus applicable call protection.

 

 

Exit Fee:	A one-time fee paid on the earlier of (x) the repayment of the loan, or (y) the Maturity Date. Fee equal to 3.5% of the PV 10 of all incremental reserves converted to PDP over the course of the loan and net of any PDP PV 10 runoff using the end of year 2023 NSAI report as an initial starting point.   The Exit Fee shall be determined by the Admin Agent in good faith based on a Reserve Report reasonably acceptable to Lenders and approved by an Independent Engineer. Reserve Report to be based on the strip pricing at the time of calculation.
Hedging Requirements:	Minimum hedging of producing reserves at closing and over each rolling 48 month period thereafter, measured quarterly, at the following percentages of Proved Developed Producing (“PDP”) production volumes of oil and natural gas from the latest reserve report: (1) months 1-12, 80%; (2) months 13-24, 70%; (3) months 25-36, 60%; and (4) months 37-48, 50%. Such PDP production volumes to be measured as of each quarter end, with the Company having up to 45 days from the end of such quarter to implement such minimum hedging, provided that new well development volumes to be hedged at beginning of well completion to at least 50% of projected production volumes for first 24 months of production. Maximum hedging restrictions to allow reasonable hedging of other non-producing reserves under development (with reasonable limitations on unhedged DUC capex).
Permitted G&A:	Annual Net Cash G&A capped at the greater of (i) $15 million or (ii) 10% of the overall Planned Hedged EBITDA for that budgeted year.
Financial Covenants:	Beginning December 31, 2023 and thereafter:   (i) Asset Coverage defined as PDP PV 10 to Total Net Debt to be greater than 1.80x. PDP PV10 using forward strip commodity prices, adjusted for hedging, based on the latest third party engineering report rolled forward quarterly as needed.   (ii) Net Debt to LTM EBITDAX tested quarterly and not to exceed 2.50x   (iii) Current ratio to be tested [monthly] and to be greater than 1.0:1.0   (iv) Minimum Liquidity to begin at $10 million   (v) Maintenance of commodity Hedge Requirements   (vi) Maximum of one oil rig and associated frac crews maintained while Total Net Leverage (TNL) based on LTM EBITDAX is greater than 0.75x. Borrower is allowed to enter into a new contract for a second rig if the TNL is less than 0.75x, but is allowed to extend the existing contract with the second rig as long as the TNL is less than 0.85x. Borrower is not authorized to approve any future drilling wells that have a planned IRR below 30% based on the current strip at the time of approving the project.
Negative Covenants:	Usual and customary for financings of this type, including, without limitation, negative covenants (certain of which will be subject to materiality thresholds, baskets and customary exceptions and qualifications to be mutually agreed upon) regarding: indebtedness, liens, guarantees, negative pledges, restricted payments, subsidiary distributions, investments, fundamental changes, disposition of assets, acquisitions , disposal of subsidiary interests, sale-leasebacks, transactions with affiliates, conduct of business, changes to material contracts, fiscal year, accounting policies, and deposit accounts.
Affirmative Covenants:	Usual and customary for financings of this type, including, without limitation, affirmative covenants (certain of which will be subject to materiality thresholds, baskets and customary exceptions and qualifications to be mutually agreed upon) regarding: delivery of financial reporting, reports, certificates and annual budget, delivery of certain notices; maintenance of existence; licenses and permits; use of proceeds; payment of taxes and claims; maintenance of properties; maintenance of insurance; books and records; inspections; lender meetings; compliance with contractual obligations and laws; compliance with anti-terrorism laws, sanctions laws, anti-corruption laws and anti-money laundering laws; environmental matters; additional collateral and guarantors; disclosure updates; cash management; use of commercially reasonable efforts to deliver collateral access; regulatory matters; contractual compliance and further assurances.

 

 

Minimum Mandatory Amortization:	10.00% per annum paid quarterly, commencing on 3/31/2024
Excess Cash Sweep:	100% quarterly sweep of excess cash flow (“ECF”); provided, that the Borrower shall not be required to make ECF prepayments in an amount that would result in the Loan Parties holding cash and cash equivalents as of the end of such fiscal quarter of less than the greater of (i) $10 million and (ii) an amount equal to the next twelve month’s budgeted capex.   ECF sweep shall not be required in the case of the capital program for drilling placed on hold due to <30% IRR on planned well(s), provided that cash and cash equivalents do not exceed the greater of (a) $130.0 million, (b) the Board approved annual budget prior to the beginning of the current fiscal year, and (c) 10% above the actual cash balance at the time the decision was made to put the capital program on hold.   ECF shall be defined as: (a) gross revenue less (b) cash payments pursuant to commodities swap agreements and the cash components of OPEX, G&A, interest expense, taxes, and capex.   Cash on the balance sheet at closing will not be subject to ECF sweep until the first anniversary of closing.
Mandatory Prepayment:	Mandatory prepayments to include:   ·     Indebtedness not permitted by the Loan Documents ·     Proceeds from sale of assets ·     Insurance/condemnation proceeds and escrow/indemnity proceeds
Restricted Payments:	No allowance for restricted payments
Events of Default:	Usual and customary events of default, including among others, the following: failure to make payments under the Loan Documents when due; failure to apply operating cash flow or capital event proceeds in accordance with the distribution provisions set forth in the Loan Documents; representations or warranties incorrect when given; breach of covenants; ERISA matters; cross-payment default or cross-acceleration; voluntary or involuntary bankruptcy events with respect to the Borrower or Guarantors; monetary and non-monetary judgments; actual or asserted invalidity of Loan Documents; and impairment of security interests in the Security.
Reporting Requirements:	Customary reporting requirements for transactions of this type including quarterly reports and annual audited financial statements. Management will host quarterly earnings calls subject to the Lender’s discretion. Engineering reserve reports prepared by a third party firm to be provided two times per year for the first 2 years subsequent to closing, and one time per year thereafter; engineering reserve reports prepared internally to be provided for the quarters for which a third party report is not provided.

 

  

Permitted Indebtedness:	Letters of Credit capped at $5.0 million and pari passu with Facility.
Expenses; Expense Deposit:	Borrower understands that it will be necessary for the Lender to incur out-of-pocket costs and expenses in connection with the proposed Loan (including, without limitation, due diligence, legal and transportation fees and expenses) (collectively, “Lender Expenses”). Upon request of the Lender, Borrower shall promptly, but in any event within three business days after receipt of written request therefore, reimburse the Lender for all reasonable and documented Lender Expenses.
Confidentiality:	This term sheet is strictly confidential and its terms may not be shared with third-parties (other than advisors expressly engaged by Fortress or Borrower and as provided in the Mandate Letter.

 

 

EXHIBIT C

 

Conditions Precedent to Initial Borrowing

 

Capitalized terms used but not defined in this Exhibit C shall have the meanings set forth in the other Exhibits to the Commitment Letter to which this Exhibit C is attached or in the Commitment Letter. In the case of any such capitalized term that is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit C shall be determined by reference to the context in which it is used. The initial borrowing under the Credit Facility shall be subject only to the satisfaction (or waiver by the Commitment Parties in writing) of the following conditions in the reasonable discretion of the Commitment Parties:

 

1.

Since the date of the Acquisition Agreement, no Company Material Adverse Effect nor Parent Material Adverse Effect (as such terms are defined in the Acquisition Agreement) shall have occurred and be continuing.

 

2.

The Acquisition shall have been consummated, or substantially simultaneously with the initial borrowing under the Credit Facility, shall be consummated, in accordance with the terms of the Acquisition Agreement, after giving effect to any modifications, amendments, consents or waivers thereto, other than those modifications, amendments, consents or waivers that are materially adverse to the interests of the Commitment Parties (in their capacities as such), unless consented to in advance in writing by the Commitment Parties (such consent not to be unreasonably withheld, delayed or conditioned) provided that the Commitment Parties shall be deemed to have consented to such modifications, amendments, consents or waivers unless it has objected thereto within four (4) business days after written notice to and receipt by the Commitment Parties of such modifications, amendments, consents or waivers).

 

3.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Preferred Stock Transactions shall have been consummated on the terms set forth in the Purchase Agreement and the Contribution Agreement.

 

4.

Substantially simultaneously with the initial borrowing under the Credit Facility, the Refinancing shall have been consummated.

 

5.

Meritz shall have received evidence satisfactory to it, in its reasonable discretion, that (a) the other participating Lenders (which, for the avoidance of doubt, may include any other Investor party to the Exclusivity and Reimbursement Letter) and/or (b) such other alternative financing sources identified by Ruckus and reasonably acceptable to Meritz and pursuant to documentation reasonably acceptable to Meritz, shall collectively be obligated to fund on the Closing Date an amount not less than the portion of the Credit Facility amount (after giving effect to any reductions contemplated by the Commitment Letter) that Meritz has not committed (or otherwise agreed in writing) to fund.

 

6.

Meritz shall have received (a) the reviewed balance sheet of the Company as of December 31, 2022, and the related reviewed statement of income and retained earnings and statement of cash flow for the fiscal years then ended, together with the notes thereto and (b) the internally prepared balance sheet, of the Company as of the most recent reported month before close.

 

7.

Meritz shall have received a pro forma consolidated balance sheet of the Company and the Borrower as of the twelve-month period ending on the last day of the most recently completed four fiscal quarter period for which financial statements are available pursuant to paragraph 5 above, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date which need not be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

 

 

EXHIBIT C

 

8.

Subject in all respects to the Certain Funds Provisions, all documents and instruments (including schedules to security documentation) required to create and perfect the Administrative Agent’s security interests in the collateral described in the Term Sheet (with the requisite priority) shall have been executed and delivered by the Borrower and the Guarantors (or, where applicable, the Borrower and the Guarantors shall have authorized the filing of financing statements under the Uniform Commercial Code) and, if applicable, be in proper form for filing.

 

9.

The Administrative Agent and the Lenders (as defined in the Term Sheet) shall have received at least three (3) business days prior to the Closing Date (a) all documentation and other information about the Loan Parties (as defined in the Term Sheet) and the principals thereof as has been reasonably requested in writing at least ten (10) days prior to the Closing Date by the Administrative Agent or any Lender that they reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and (b) if the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification (as defined below) in relation to the Borrower. “Beneficial Ownership Certification” means a certificate regarding beneficial ownership required by the Beneficial Ownership Regulation.

 

10.

(a) The execution and delivery of the Facility Documentation by the Loan Parties (including guarantees by the applicable Guarantors) which shall, in each case, be in accordance with the terms of the Commitment Letter and the Term Sheet and subject to the Certain Funds Provisions and (b) the delivery to the Administrative Agent of borrowing notices and/or issuance notices, as applicable, customary legal opinions, customary incumbency certificates and closing certificates, organizational documents, customary evidence of authorization and, as applicable, good standing certificates in jurisdictions of formation/organization, in each case with respect to the Borrower and the Guarantors and a solvency certificate of the Borrower, as of the Closing Date after and giving effect to the Transactions. The term “Facility Documentation” shall mean the documentation for the Credit Facility containing the terms and conditions in this Exhibit C and in the Term Sheet and, to the extent any terms are not so set forth, shall otherwise by usual and customary for transactions of this kind and shall contain such modifications as the Borrower, the Administrative Agent and the Lenders shall mutually agree, in each case, subject to the Certain Funds Provisions.

 

11.

The Administrative Agent and each Lender shall have received evidence in form and substance satisfactory to them that all fees required to be paid on the Closing Date pursuant to the Term Sheet and the Facility Documentation, and reasonable out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter and the Facility Documentation, to the extent invoiced at least two (2) business days prior to the Closing Date (except for fees pursuant to the Term Sheet and as otherwise reasonably agreed by the Borrower), shall, upon the initial borrowing under the Credit Facility, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Credit Facility).

 

12.

The Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it that (a) the commodity hedging transactions set forth on Schedule 1 attached hereto (collectively, the “Existing Hedges” and each, individually, an “Existing Hedge”) are in full force and effect on the Closing Date after giving effect to the closing of the Transactions on the Closing Date; provided, that (i) any novation of any Existing Hedge or replacement of an Existing Hedge, in each case with written notice to Administrative Agent, with a new hedge on substantially the same or better terms (e.g., price, tenor, type, volumes) than the Existing Hedge being novated or otherwise replaced, in each case shall not be treated as a termination of such Existing Hedge and such Existing Hedge shall be deemed to continue to be in full force and effect after giving effect to such novation or replacement, (ii) any modification of an Existing Hedge, with not less than three (3) Business Days’ prior written notice to, and the prior written consent of, Administrative Agent, shall be permitted and such modified hedge shall continue to be deemed to be the applicable Existing Hedge, and (iii) any Existing Hedge having an “End Date” listed on Schedule 1 that occurs on or prior to the Closing Date shall not be required to be in full force and effect on the Closing Date.

 

 

EXHIBIT C

 

13.

Avi Mirman shall (a) have contributed up to $10 million of the $200 million of common equity and (b) hold (or have the right to appoint) no more than one (1) board seat on the board of directors (the “Board”) for the Company (which Board shall be composed of not less than five (5) seats), while Rich Little will lead management for the Holdings and the Borrower. For the avoidance of doubt, the Board shall contain not less than two (2) board seats appointed by independent investors in the Company.

 

14.

On the Closing Date, the Administrative Agent shall have received evidence in form and substance satisfactory to it that the Borrower has, in an aggregate amount greater than or equal to $95 million, consisting of (a) funded capital expenditures to drill and complete two (2) oil and/or gas wells located in the Monument Draw area of the Delaware Basin and spudded during the period time beginning on the date of the Commitment Letter and ending on the Closing Date and (b) not less than $70 million of unrestricted cash is on its balance sheet.

 

15.

The Closing Date shall not occur prior to the Closing Date (as defined in the Acquisition Agreement).

 

 

 

EXHIBIT C

 

Schedule 1 to Exhibit C

 

Existing Hedges

 

				Crude Oil Roll Swaps Swap					Crude Oil Basis Swaps Swap					Crude Oil Fixed Swaps Swap					Natural Gas Options Put						Natural Gas Options Call					Natural Gas Fixed Swaps Swap					Natural Gas Basis Swaps Swap
Start Date		End Date		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price			Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price
6/1/2023		6/30/2023		(187,470.0	)		0.7		(192,300.0	)		0.4		(187,470.0	)		70.9		-			-			-			-		(671,891.0	)		3.6		(671,891.0	)		(0.9	)
7/1/2023		7/31/2023		(200,167.0	)		0.5		(197,811.0	)		0.4		(200,167.0	)		67.7		-			-			-			-		(702,773.0	)		3.7		(702,773.0	)		(0.9	)
8/1/2023		8/31/2023		(208,688.0	)		0.5		(190,557.0	)		0.4		(193,688.0	)		67.6		-			-			-			-		(692,106.0	)		3.7		(692,106.0	)		(0.9	)
9/1/2023		9/30/2023		(173,250.0	)		0.5		(160,740.0	)		0.4		(158,250.0	)		67.9		-			-			-			-		(661,411.0	)		3,7		(661,411.0	)		(0.9	)
10/1/2023		10/31/2023		(159,712.0	)		0.5		(160,704.0	)		0.4		(159,712.0	)		68.1		-			-			-			-		(668,616.0	)		3.7		(668,616.0	)		(0.9	)
11/1/2023		11/30/2023		(150,720.0	)		0.5		(150,270.0	)		0.4		(150,720.0	)		67.9		537,300.0			3.8			(537,300.0	)		5.2		(95,917.0	)		3.6		(633,217.0	)		(0.8	)
12/1/2023		12/31/2023		(152,148.0	)		0.5		(150,629.0	)		0.4		(152,148.0	)		67.6		545,569.0			3.8			(545,569.0	)		5.2		(109,678.0	)		3.7		(655,247.0	)		(0.8	)
1/1/2024		1/31/2024		(170,074.0	)		0.3		(170,934.0	)		0.3		(171,554.0	)		64.3		601,090.0			3.8			(601,090.0	)		5.2		(35,027.0	)		3.7		(636,117.0	)		(0.9	)
2/1/2024		2/29/2024		(166,237.0	)		0.3		(166,237.0	)		0.3		(166,237.0	)		63.9		553,581.0			3.8			(553,581.0	)		5.2		(45,588.0	)		4.0		(599,778.0	)		(0.9	)
3/1/2024		3/31/2024		(173,933.0	)		0.3		(173,933.0	)		0.3		(173,933.0	)		63.7		580,568.0			3.8			(580,568.0	)		5.2		(52,044.0	)		4.1		(632,612.0	)		(0.9	)
4/1/2024		4/30/2024		(160,889.0	)		0.3		(160,889.0	)		0.3		(160,889.0	)		64.9		-			-			-			-		(591,361.0	)		3.6		(591,361.0	)		(0.9	)
5/1/2024		5/31/2024		(161,194.0	)		0.3		(161,194.0	)		0.3		(161,194.0	)		64.8		-			-			-			-		(604,736.0	)		3.6		(604,736.0	)		(0.9	)
6/1/2024		6/30/2024		(150,387.0	)		0.3		(151,950.0	)		0.3		(151,950.0	)		64.7		-			-			-			-		(575,934.0	)		3.6		(575,934.0	)		(0.9	)
7/1/2024		7/31/2024		(151,534.0	)		0.3		(151,534.0	)		0.3		(151,534.0	)		63.2		-			-			-			-		(588,992.0	)		3.6		(588,992.0	)		(0.9	)
8/1/2024		8/31/2024		(147,537.0	)		0.3		(147,537.0	)		0.3		(147,537.0	)		63.2		-			-			-			-		(582,563.0	)		3.6		(582,563.0	)		(0.9	)
9/1/2024		9/30/2024		(140,933.0	)		0.3		(140,933.0	)		0.3		(140,933.0	)		63.0		-			-			-			-		(557,280.0	)		3.6		(556,620.0	)		(0.9	)
10/1/2024		10/31/2024		(141,571.0	)		0.1		(141,571.0	)		0.2		(141,571.0	)		62.2		100,750.0			3.3			(100,750.0	)		4.5		(479,269.0	)		3.4		(580,019.0	)		(0.9	)
11/1/2024		11/30/2024		(135,863.0	)		0.1		(135,863.0	)		0.2		(135,863.0	)		62.1		382,500.0			3.5			(382,500.0	)		4.9		(162,672.0	)		3.2		(545,172.0	)		(0.7	)
12/1/2024		12/31/2024		(137,699.0	)		0.1		(137,699.0	)		0.2		(137,699.0	)		62.1		392,150.0			3.5			(392,150.0	)		4.9		(166,768.0	)		3.1		(558,918.0	)		(0.7	)
1/1/2025		1/31/2025		(135,313.0	)		0.2		(135,313.0	)		0.3		(135,313.0	)		61.6		424,700.0			3.7			(424,700.0	)		5.0		(126,604.0	)		3.1		(551,304.0	)		(0.7	)
2/1/2025		2/28/2025		(120,732.0	)		0.2		(120,732.0	)		0.2		(120,732.0	)		61.4		381,500.0			3.7			(381,500.0	)		5.0		(108,665.0	)		3.1		(490,165.0	)		(0.7	)
3/1/2025		3/31/2025		(130,105.0	)		0.2		(130,105.0	)		0.2		(130,105.0	)		61.3		418,500.0			3.7			(418,500.0	)		5.0		(120,299.0	)		3.1		(538,799.0	)		(0.7	)
4/1/2025		4/30/2025		(125,420.0	)		0.2		(125,420.0	)		0.2		(125,420.0	)		62.6		-			-			-			-		(518,430.0	)		3.4		(513,180.0	)		(0.7	)
5/1/2025		5/31/2025		(125,397.0	)		0.2		(125,397.0	)		0.2		(125,397.0	)		62.6		-			-			-			-		(529,976.0	)		3.4		(526,532.0	)		(0.7	)
6/1/2025		6/30/2025		(121,890.0	)		0.2		(121,890.0	)		0.2		(121,890.0	)		62.4		-			-			-			-		(507,690.0	)		3.4		(505,956.0	)		(0.7	)
7/1/2025		7/31/2025		(108,664.0	)		0.1		(108,664.0	)		0.2		(108,664.0	)		60.9		-			-			-			-		(427,025.0	)		3.4		(426,327.0	)		(0.7	)
8/1/2025		8/31/2025		(107,189.0	)		0.1		(107,189.0	)		0.2		(107,189.0	)		60.8		-			-			-			-		(429,412.0	)		3.4		(421,994.0	)		(0.7	)
9/1/2025		9/30/2025		(102,249.0	)		0.1		(102,249.0	)		0.2		(102,249.0	)		60.7		-			-			-			-		(405,876.0	)		3.4		(405,876.0	)		(0.7	)
10/1/2025		10/31/2025		(100,111.0	)		0.0		(100,111.0	)		0.1		(100,111.0	)		60.3		48,918.0			3.5			(48,918.0	)		5.1		(369,582.0	)		3.3		(418,488.0	)		(0.7	)
11/1/2025		11/30/2025		(95,607.0	)		0.0		(95,607.0	)		0.1		(95,607.0	)		60.2		186,960.0			3.8			(186,960.0	)		5.4		(209,586.0	)		3.2		(396,546.0	)		(0.6	)
12/1/2025		12/31/2025		(97,644.0	)		0.0		(97,644.0	)		0.1		(97,644.0	)		60.1		190,743.0			3.8			(190,743.0	)		5.4		(216,268.0	)		3.2		(407,011.0	)		(0.6	)
1/1/2026		1/31/2026		(93,856.0	)		0.2		(93,856.0	)		0.2		(93,856.0	)		61.0		411,401.0			4.0			(411,401.0	)		5.0		(8,413.0	)		4.9		(419,814.0	)		(0.9	)
2/1/2026		2/28/2026		(86,293.0	)		0.2		(86,293.0	)		0.2		(86,293.0	)		61.2		348,600.0			4.1			(348,600.0	)		5.0		(11,536.0	)		4.5		(360,136.0	)		(0.9	)
3/1/2026		3/31/2026		(91,720.0	)		0.3		(91,720.0	)		0.2		(91,720.0	)		60.9		383,811.0			4.1			(383,811.0	)		5.0		(7,713.0	)		4.9		(391,524.0	)		(0.9	)
4/1/2026		4/30/2026		(88,986.0	)		0.1		(88,986.0	)		0.1		(88,986.0	)		67.1		-			-			-			-		(380,766.0	)		3.9		(380,766.0	)		(0.8	)
5/1/2026		5/31/2026		(90,979.0	)		0.1		(90,979.0	)		0.1		(90,979.0	)		67.3		-			-			-			-		(391,245.0	)		3.9		(391,245.0	)		(0.8	)
6/1/2026		6/30/2026		(87,132.0	)		0.1		(87,132.0	)		0.1		(87,132.0	)		67.3		-			-			-			-		(376,680.0	)		3.9		(376,680.0	)		(0.8	)
7/1/2026		7/31/2026		(81,363.0	)		0.2		(81,363.0	)		0.0		(81,363.0	)		63.5		-			-			-			-		(324,297.0	)		4.0		(324,297.0	)		(0.6	)
8/1/2026		8/31/2026		(79,568.0	)		0.2		(79,568.0	)		0.0		(79,568.0	)		63.5		-			-			-			-		(327,137.0	)		4.0		(327,137.0	)		(0.6	)
9/1/2026		9/30/2026		(73,830.0	)		0.2		(73,830.0	)		0.0		(73,830.0	)		63.7		-			-			-			-		(312,000.0	)		4.0		(312,000.0	)		(0.6	)
10/1/2026		10/31/2026		(77,624.0	)		(0.7	)	(77,624.0	)		(0.3	)	(77,624.0	)		61.8		310,000.0			3.3			(310,000.0	)		5.6		(20,150.0	)		3.6		(330,150.0	)		(0.8	)
11/1/2026		11/30/2026		(75,480.0	)		(0.7	)	(75,480.0	)		(0.3	)	(75,480.0	)		61.8		300,000.0			3.3			(300,000.0	)		5.6		(10,236.0	)		4.0		(310,236.0	)		(0.8	)
12/1/2026		12/31/2026		(75,392.0	)		(0.7	)	(75,392.0	)		(0.3	)	(75,392.0	)		61.6		310,000.0			3.3			(310,000.0	)		5.6		(4,210.0	)		4.3		(314,210.0	)		(0.8	)
1/1/2027		1/31/2027		(71,610.0	)		0.0		(71,610.0	)		0.4		(71,610.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		(4,650.0	)		3.7		(314,650.0	)		(0.8	)
2/1/2027		2/28/2027		(64,820.0	)		0.0		(64,820.0	)		0.4		(64,820.0	)		59.6		280,000.0			4.3			(280,000.0	)		5.8		-			-		(280,000.0	)		(0.8	)
3/1/2027		3/31/2027		(71,858.0	)		0.0		(71,858.0	)		0.4		(71,858.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
4/1/2027		4/30/2027		(70,980.0	)		(0.0	)	(70,980.0	)		0.4		(70,980.0	)		63.6		150,000.0			2.5			(150,000.0	)		5.2		(150,000.0	)		3.5		(300,000.0	)		(0.8	)
5/1/2027		5/31/2027		(73,284.0	)		(0.0	)	(73,284.0	)		0.4		(73,284.0	)		63.6		155,000.0			2.5			(155,000.0	)		5.2		(155,000.0	)		3.5		(310,000.0	)		(0.8	)
6/1/2027		6/30/2027		(70,860.0	)		(0.0	)	(70,860.0	)		0.4		(70,860.0	)		63.6		150,000.0			2.5			(150,000.0	)		5.2		(150,000.0	)		3.5		(300,000.0	)		(0.8	)
7/1/2027		7/31/2027		(3,410.0	)		0.2		(3,410.0	)		0.3		(3,410.0	)		58.0		-			-			-			-		-			-		-			-
8/1/2027		8/31/2027		(3,348.0	)		0.2		(3,348.0	)		0.3		(3,348.0	)		58.0		-			-			-			-		-			-		-			-
9/1/2027		9/30/2027		(3,210.0	)		0.2		(3,210.0	)		0.3		(3,210.0	)		58.0		-			-			-			-		-			-		-			-
10/1/2027		10/31/2027		(3,255.0	)		0.2		(3,255.0	)		0.3		(3,255.0	)		58.0		-			-			-			-		-			-		-			-
11/1/2027		11/30/2027		(3,090.0	)		0.2		(3,090.0	)		0.3		(3,090.0	)		58.0		-			-			-			-		-			-		-			-
12/1/2027		12/31/2027		(3,162.0	)		0.2		(3,162.0	)		0.3		(3,162.0	)		58.0		-			-			-			-		-			-		-			-
1/1/2028		1/31/2028		-			-		-			-		-			-		-			-			-			-		-			-		-			-

 

 

EXHIBIT C

 

				Crude Oil Roll Swaps					Crude Oil Basis Swaps					Crude Oil Fixed Swaps					Natural Gas Options Put						Natural Gas Options Call					Natural Gas Fixed Swaps					Natural Gas Basis Swaps
Start Date		End Date		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price			Volumes			WTG Avg price		Volumes			WTG Avg price		Volumes			WTG Avg price
6/1/2023		6/30/2023		(187,470.0	)		0.7		(192,300.0	)		0.4		(187,470.0	)		70.9		-			-			-			-		(671,891.0	)		3.6		(671,891.0	)		(0.9	)
7/1/2023		7/31/2023		(200,167.0	)		0.5		(197,811.0	)		0.4		(200,167.0	)		67.7		-			-			-			-		(702,773.0	)		3.7		(702,773.0	)		(0.9	)
8/1/2023		8/31/2023		(208,688.0	)		0.5		(190,557.0	)		0.4		(193,688.0	)		67.6		-			-			-			-		(692,106.0	)		3.7		(692,106.0	)		(0.9	)
9/1/2023		9/30/2023		(198,000.0	)		0.5		(177,990.0	)		0.4		(183,000.0	)		67.2		-			-			-			-		(661,411.0	)		3.7		(661,411.0	)		(0.9	)
10/1/2023		10/31/2023		(185,287.0	)		0.5		(178,529.0	)		0.4		(185,287.0	)		67.4		-			-			-			-		(663,966.0	)		3.7		(663,966.0	)		(0.9	)
11/1/2023		11/30/2023		(175,470.0	)		0.5		(167,520.0	)		0.4		(175,470.0	)		67.2		537,300.0			3.8			(537,300.0	)		5.2		(95,917.0	)		3.6		(633,217.0	)		(0.8	)
12/1/2023		12/31/2023		(177,723.0	)		0.5		(168,454.0	)		0.4		(177,723.0	)		66.9		545,569.0			3.8			(545,569.0	)		5.2		(109,678.0	)		3.7		(655,247.0	)		(0.8	)
1/1/2024		1/31/2024		(170,074.0	)		0.3		(170,934.0	)		0.3		(171,554.0	)		64.3		601,090.0			3.8			(601,090.0	)		5.2		(35,027.0	)		3.7		(636,117.0	)		(0.9	)
2/1/2024		2/29/2024		(155,956.0	)		0.3		(157,470.0	)		0.3		(157,470.0	)		64.2		553,581.0			3.8			(553,581.0	)		5.2		(45,588.0	)		4.0		(599,778.0	)		(0.9	)
3/1/2024		3/31/2024		(163,240.0	)		0.3		(165,323.0	)		0.3		(165,323.0	)		64.0		580,568.0			3.8			(580,568.0	)		5.2		(52,044.0	)		4.1		(632,612.0	)		(0.9	)
4/1/2024		4/30/2024		(154,554.0	)		0.3		(157,200.0	)		0.3		(157,200.0	)		65.1		-			-			-			-		(591,361.0	)		3.6		(591,361.0	)		(0.9	)
5/1/2024		5/31/2024		(156,259.0	)		0.3		(159,681.0	)		0.3		(159,681.0	)		64.9		-			-			-			-		(600,086.0	)		3.6		(600,086.0	)		(0.9	)
6/1/2024		6/30/2024		(148,314.0	)		0.3		(151,950.0	)		0.3		(151,950.0	)		64.7		-			-			-			-		(575,934.0	)		3.6		(575,934.0	)		(0.9	)
7/1/2024		7/31/2024		(149,198.0	)		0.3		(149,198.0	)		0.3		(150,283.0	)		63.3		-			-			-			-		(584,342.0	)		3.6		(584,342.0	)		(0.9	)
8/1/2024		8/31/2024		(147,537.0	)		0.3		(147,537.0	)		0.3		(147,537.0	)		63.2		-			-			-			-		(577,913.0	)		3.6		(577,913.0	)		(0.9	)
9/1/2024		9/30/2024		(140,196.0	)		0.3		(140,196.0	)		0.3		(140,196.0	)		63.0		-			-			-			-		(552,780.0	)		3.6		(552,120.0	)		(0.9	)
10/1/2024		10/31/2024		(137,173.0	)		0.1		(137,516.0	)		0.2		(137,516.0	)		62.3		100,750.0			3.3			(100,750.0	)		4.5		(479,269.0	)		3.4		(580,019.0	)		(0.9	)
11/1/2024		11/30/2024		(130,759.0	)		0.1		(131,460.0	)		0.2		(131,550.0	)		62.2		382,500.0			3.5			(382,500.0	)		4.9		(162,672.0	)		3.2		(545,172.0	)		(0.7	)
12/1/2024		12/31/2024		(131,654.0	)		0.1		(133,486.0	)		0.2		(135,625.0	)		62.2		392,150.0			3.5			(392,150.0	)		4.9		(166,768.0	)		3.1		(558,918.0	)		(0.7	)
1/1/2025		1/31/2025		(127,618.0	)		0.2		(127,618.0	)		0.3		(127,618.0	)		61.8		424,700.0			3.7			(424,700.0	)		5.0		(121,954.0	)		3.1		(546,654.0	)		(0.7	)
2/1/2025		2/28/2025		(112,291.0	)		0.2		(112,291.0	)		0.2		(112,291.0	)		61.6		381,500.0			3.7			(381,500.0	)		5.0		(108,665.0	)		3.1		(490,165.0	)		(0.7	)
3/1/2025		3/31/2025		(122,772.0	)		0.2		(122,772.0	)		0.2		(122,772.0	)		61.5		418,500.0			3.7			(418,500.0	)		5.0		(120,299.0	)		3.1		(538,799.0	)		(0.7	)
4/1/2025		4/30/2025		(102,297.0	)		0.2		(102,297.0	)		0.2		(102,297.0	)		61.7		-			-			-			-		(428,430.0	)		3.4		(423,180.0	)		(0.7	)
5/1/2025		5/31/2025		(104,256.0	)		0.2		(104,256.0	)		0.2		(104,256.0	)		61.5		-			-			-			-		(436,976.0	)		3.4		(433,532.0	)		(0.7	)
6/1/2025		6/30/2025		(99,507.0	)		0.2		(99,507.0	)		0.2		(99,507.0	)		61.4		-			-			-			-		(417,690.0	)		3.4		(415,956.0	)		(0.7	)
7/1/2025		7/31/2025		(101,410.0	)		0.1		(101,410.0	)		0.2		(101,410.0	)		61.1		-			-			-			-		(427,025.0	)		3.4		(426,327.0	)		(0.7	)
8/1/2025		8/31/2025		(100,136.0	)		0.1		(100,136.0	)		0.2		(100,136.0	)		61.0		-			-			-			-		(424,762.0	)		3.4		(417,344.0	)		(0.7	)
9/1/2025		9/30/2025		(95,658.0	)		0.1		(95,658.0	)		0.2		(95,658.0	)		60.9		-			-			-			-		(405,876.0	)		3.4		(405,876.0	)		(0.7	)
10/1/2025		10/31/2025		(93,502.0	)		0.0		(93,502.0	)		0.1		(93,502.0	)		60.4		48,918.0			3.5			(48,918.0	)		5.1		(369,582.0	)		3.3		(418,488.0	)		(0.7	)
11/1/2025		11/30/2025		(89,367.0	)		0.0		(89,367.0	)		0.1		(89,367.0	)		60.3		186,960.0			3.8			(186,960.0	)		5.4		(209,586.0	)		3.2		(396,546.0	)		(0.6	)
12/1/2025		12/31/2025		(91,357.0	)		0.0		(91,357.0	)		0.1		(91,357.0	)		60.2		190,743.0			3.8			(190,743.0	)		5.4		(216,268.0	)		3.2		(407,011.0	)		(0.6	)
1/1/2026		1/31/2026		(88,756.0	)		0.3		(88,756.0	)		0.2		(88,756.0	)		61.2		411,401.0			4.0			(411,401.0	)		5.0		(8,413.0	)		4.9		(419,814.0	)		(0.9	)
2/1/2026		2/28/2026		(79,349.0	)		0.3		(79,349.0	)		0.2		(79,349.0	)		61.1		348,600.0			4.1			(348,600.0	)		5.0		(7,336.0	)		4.9		(355,936.0	)		(0.9	)
3/1/2026		3/31/2026		(86,933.0	)		0.3		(86,933.0	)		0.2		(86,933.0	)		61.0		383,811.0			4.1			(383,811.0	)		5.0		(7,713.0	)		4.9		(391,524.0	)		(0.9	)
4/1/2026		4/30/2026		(77,256.0	)		0.1		(77,256.0	)		0.1		(77,256.0	)		67.6		-			-			-			-		(320,766.0	)		4.0		(320,766.0	)		(0.8	)
5/1/2026		5/31/2026		(78,951.0	)		0.1		(78,951.0	)		0.1		(78,951.0	)		67.8		-			-			-			-		(329,245.0	)		4.0		(329,245.0	)		(0.8	)
6/1/2026		6/30/2026		(75,582.0	)		0.1		(75,582.0	)		0.1		(75,582.0	)		67.8		-			-			-			-		(316,680.0	)		4.0		(316,680.0	)		(0.8	)
7/1/2026		7/31/2026		(77,271.0	)		0.2		(77,271.0	)		0.0		(77,271.0	)		63.8		-			-			-			-		(324,297.0	)		4.0		(324,297.0	)		(0.6	)
8/1/2026		8/31/2026		(76,468.0	)		0.2		(76,468.0	)		0.0		(76,468.0	)		63.8		-			-			-			-		(322,487.0	)		4.0		(322,487.0	)		(0.6	)
9/1/2026		9/30/2026		(73,230.0	)		0.2		(73,230.0	)		0.0		(73,230.0	)		63.7		-			-			-			-		(312,000.0	)		4.0		(312,000.0	)		(0.6	)
10/1/2026		10/31/2026		(76,260.0	)		(0.7	)	(76,260.0	)		(0.3	)	(76,260.0	)		61.9		310,000.0			3.3			(310,000.0	)		5.6		(20,150.0	)		3.6		(330,150.0	)		(0.8	)
11/1/2026		11/30/2026		(73,680.0	)		(0.7	)	(73,680.0	)		(0.3	)	(73,680.0	)		61.9		300,000.0			3.3			(300,000.0	)		5.6		(5,736.0	)		4.3		(305,736.0	)		(0.8	)
12/1/2026		12/31/2026		(73,005.0	)		(0.7	)	(73,005.0	)		(0.4	)	(73,005.0	)		61.7		310,000.0			3.3			(310,000.0	)		5.6		(4,210.0	)		4.3		(314,210.0	)		(0.8	)
1/1/2027		1/31/2027		(68,200.0	)		-		(68,200.0	)		0.4		(68,200.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
2/1/2027		2/28/2027		(61,600.0	)		-		(61,600.0	)		0.4		(61,600.0	)		59.6		280,000.0			4.3			(280,000.0	)		5.8		-			-		(280,000.0	)		(0.8	)
3/1/2027		3/31/2027		(68,200.0	)		-		(68,200.0	)		0.4		(68,200.0	)		59.6		310,000.0			4.3			(310,000.0	)		5.8		-			-		(310,000.0	)		(0.8	)
4/1/2027		4/30/2027		-			-		-			-		-			-		150,000.0			2.5			(150,000.0	)		5.2		-			-		(150,000.0	)		(0.8	)
5/1/2027		5/31/2027		-			-		-			-		-			-		155,000.0			2.5			(155,000.0	)		5.2		-			-		(155,000.0	)		(0.8	)
6/1/2027		6/30/2027		-			-		-			-		-			-		150,000.0			2.5			(150,000.0	)		5.2		-			-		(150,000.0	)		(0.8	)

 

 

Exhibit 99.(c)(ii)

 

Project San Jacinto DISCUSSION MATERIALS FOR THE BOARD OF DIRECTORS OF BATTALION OIL CORPORATION DECEMBER 14, 2023 | CONFIDENTIAL

CONFIDENTIAL Table of Contents 2 Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 5. Disclaimer 50

CONFIDENTIAL FINANCIAL INFORMATION □ The Company reported third quarter 2023 results on 11/15/23, and as such, the analysis now reflects financial information as of 9/30/23, compared to 8/31/23 previously » The Company’s net debt increased by $8.8 million since the previous materials MARKET PRICING UPDATE □ We have updated market pricing in the analysis to 12/13/23, compared to 11/1/23 in the previous materials » Selected Companies Observations and Analysis ▪ A number of selected companies reported third quarter results, which, in several cases, reflected updates for the pro forma i mpa ct of acquisitions ▪ Median EBITDA multiples decreased 0.6x and 0.4x for CY2023E and CY2024E, respectively ▪ No changes have been made to the selected multiple ranges in the selected companies analysis » Selected Transactions Observations and Analysis ▪ The analysis has been updated to include Occidental Petroleum’s acquisition of CrownRock announced on 12/11/23 ▪ No changes have been made to the selected multiple range in the selected transactions analysis COMMODITY PRICE CHANGES Changes Since Materials Dated 11/4/23 New Page 4 Date NYMEX Strip Case 11/1/23 Date NYMEX Strip Case 12/13/23 NYMEX Strip Case Natural Gas Crude Oil - WTI Natural Gas Crude Oil - WTI Natural Gas WTI 2023 $3.10 $84.54 2023 $2.76 $78.93 (11.0%) (6.6%) 2024 $3.57 $77.65 2024 $2.56 $70.25 (28.3%) (9.5%) 2025 $4.10 $73.19 2025 $3.41 $68.42 (16.9%) (6.5%) 2026 $4.12 $69.87 2026 $3.69 $66.03 (10.6%) (5.5%) 2027 $4.06 $67.31 2027 $3.72 $64.43 (8.3%) (4.3%) After $4.06 $67.31 After $3.72 $64.43 (8.3%) (4.3%)

CONFIDENTIAL NAV ANALYSIS □ The effective date of the reserves cash flows has been updated to 10/1/23, compared to 9/1/23, previously □ As a result of the revised effective date and commodity price update, changes to the implied net reserves values and implied com mon equity value reference ranges are noted below: » Strip Pricing - The implied midpoint of the net reserves value decreased $87.0 million and the resulting midpoint of the implied common equity value per share reference range decreased $2.06 » Strip +10% Pricing - The implied midpoint of the net reserves value decreased $96.2 million and the resulting midpoint of the im plied common equity value per share reference range decreased $2.42 » Strip - 10% Pricing - The implied midpoint of the net reserves value decreased $61.0 million and the resulting midpoint of the im plied common equity value per share reference range is unchanged DISCOUNTED CASH FLOW ANALYSIS □ No changes have been made to the Terminal Multiple selected range □ The selected WACC range has been revised to 13.00% - 15.00%, compared to 13.50% - 15.00% previously » The risk - free rate of return decreased to 4.36% from 5.13% in the previous materials » The selected unlevered beta decreased to 0.90 from 0.93 in the previous materials » The computed weighted average cost of capital decreased 1.0% and 0.5% for the industry capital structure and cost of debt and Co mpany capital structure and cost of debt approaches, respectively OTHER □ The date at which the Series A Convertible Preferred stock accrues PIK interest has been updated to 12/14/23, compared to 11/ 2/2 3 previously □ The conversion price of the Series A Convertible Preferred stock to be issued in December 2023 has been updated to reflect th e 2 0 - day VWAP as of 12/13/23, compared to 11/1/23 in the previous materials □ Per Company management, the Damages Claim range has increased to $6.0 million to $13.0 million, compared to $3.0 million to $ 7.0 million previously Changes Since Materials Dated 11/4/23 (cont.) New Page 5

CONFIDENTIAL Transaction Value Overview 1. Per the Agreement. 2. Per Company management. 3. Includes 16.3 million common shares outstanding, 109,373 RSUs that are vested, and 309,331 RSUs that vest on change of contro l. 4. Consists of term loan of $210 mm and other debt of $0.1 mm. 5. Includes restricted cash. 6. Reflects estimated liquidation preference as of 12/14/23. 7. Based on selected Delaware Basin transactions. Sources: Company management and public filings. (dollars in millions) Revised for pricing and metrics as of 12/13/23 and Company financial information as of 9/30/23 6 Selected Transaction Information Implied Transaction Multiples Merger Consideration [1] $9.80 Fully Diluted Shares [2] [3] 16.8 Total Cash Based Consideration $164.3 Implied Transaction Common Equity Value $164.3 Debt as of 9/30/23 [2] [4] 210.2 Cash as of 9/30/23 [2] [5] (42.7) Series A Convertible Preferred Stock [2] [6] 67.6 Implied Transaction Enterprise Value from Operations $399.5 Implied Transaction Multiples Selected Market Approach Information Corresponding Implied Selected Companies / Transactions [7] Summary Statistics Implied Transaction Multiples Base Amount Multiple Low High Median Mean Selected Companies Analysis Adjusted EBITDA FY 2023E $84.8 4.7x 3.0x 4.7x 3.1x 3.6x FY 2024E $98.3 4.1x 2.5x 3.7x 2.8x 3.0x Selected Transactions Analysis Adjusted EBITDA FY 2023E $84.8 4.7x 1.9x 4.6x 3.6x 3.4x Implied Premiums Corresponding Implied Implied Transaction Premia Base Amount Premium Per-Share Price as of 12/13/23 $4.67 109.9% 30-Day VWAP as of 12/13/23 $5.64 73.8% Per-Share Price as of 12/13/23 - Implied EV from Operations $313.5 27.4% 30-Day VWAP as of 12/13/23 - Implied EV from Operations $329.7 21.2% 4.7x 4.1x 0.0x 2.0x 4.0x 6.0x FY 2023E FY 2024E Adjusted EBITDA

CONFIDENTIAL Parties to the Transaction: [COMPANY], a Delaware corporation (the “Company”) [PARENT], a Delaware corporation (“Parent”) [MERGER SUB], a Delaware corporation (“Merger Sub”) Form of Transaction: Reverse Triangular merger with the Company surviving as a wholly owned subsidiary of the Parent Form of Consideration: Cash Transaction Consideration: $9.80 per share in cash (the “Merger Consideration”) Termination Fee: Company Termination Fee: 2 $8 million Closing Failure Fee: 3 4 $10 million or $20 million Certain Closing Conditions: HSR Approval Company Stockholder Approval The Preferred Stock Transactions shall have been consummated Representations and Warranties: Parent has delivered to the Company true and complete copies of (a) executed commitment letter(s), from Fortress Credit Corp. and AI Partners Asset Management Co., Ltd. (the “Lenders”) (the “Debt Financing Commitments”) and (b) each of the executed Purchase Agreement and Contribution Agreement Related Agreements: Certain stockholders of the Company are entering into a voting agreement (the “Voting Agreement”) Holders of all of the issued and outstanding shares of the Company Series A Preferred Stock (the “Insider Stockholders”) and certain other persons (the “Purchasers”) are entering into a Purchase Agreement with Parent, pursuant to which the Purchasers will purchase from Parent shares of the Series A Preferred Stock of Parent (such shares, the “Parent Preferred Stock” and such transaction, the “Preferred Stock Financing”) The Insider Stockholders are entering into a Contribution, Rollover and Sale Agreement pursuant to which the Insider Stockholders will contribute and/or sell to Parent all of the issued and outstanding shares of Preferred Stock in exchange for shares of Parent Preferred Stock (such transaction, the “Preferred Stock Contribution” and, together with the Preferred Stock Financing, the “Preferred Stock Transactions”) Summary of Selected Transaction Terms 1 1. This summary is intended only as an overview of selected terms and is not intended to cover all terms or details of the Trans act ion. 2. Payable in the event ( i ) the Company terminates prior to obtaining the Company Stockholder Approval due to a Company Superior Proposal, (ii) Parent ter minates due to a Change of Recommendation or the Company breaching certain covenants, or (iii) the Company consummates a Company Superior Proposal within 1 year of terminatio n, (iv) closing has not occurred by the Termination Date, (v) Company Stockholder Approval has not been obtained, or (vi) a breach by Company causes conditions to closing to not be satisfied by the earlier o f t he Termination Date and 30 Business Days. 3. Payable in the event ( i ) the Company terminates due to a breach by Parent or Merger Sub causing conditions to closing to not be satisfied and such b rea ch is not curable (or has not been cured) by the earlier of the Termination Date and 30 Business Days or due to the Closing not having occurred prior to the Termination Date and not at the fau lt of the Company or (ii) either the Company or Parent terminate due to the Closing not having occurred prior to the Termination Date and not at the fault of the Company or (iii) Parent fails to deliver Qualif yin g Additional Financing Documents to the Company on or before the later of (a) 5:00 PM Central Time on [60 days post - signing] or (b) the date the Company causes the definitive Proxy Statement to be mailed to its sto ckholders or (iv) the Parent fails to deliver Evidence of Funding to the Company on or before the later of (A) 5:00 PM Central Time on [75 days post - signing] or (B) the date that the Company causes the definitive Pr oxy Statement to be mailed to the Company's stockholders or (v) Parent fails to consummate the Full Escrow Funding on or before 5:00 PM Central Time on [40 days post - signing]. 4. Initial Closing Failure Fee of $10 million shall increase to $20 million if termination occurs post 5:00 pm CT [40 days post - sig ning] unless terminated due to (iv) in footnote 3 above. Source: Draft Version of the Agreement and Plan of Merger dated as of [December 13, 2023] (the “Agreement”) and Company manag eme nt. Revised per latest draft of the Agreement Previously $16 million 7

CONFIDENTIAL Summary of Financial Analysis Methodologies Methodology Description Assumptions Discounted Cash Flow Analysis: NAV ▪ Based on the present value of the future pre - tax cash flows associated with the 1P reserves 1 expected to be generated from the Company’s assets to be developed on a stand - alone, status quo basis, adjusted for certain corporate items ▪ Considers three price decks: (i) strip pricing, (ii) strip pricing +10%, and (iii) strip pricing - 10% 2 ▪ 1P cash flows based on management projections discounted to present value utilizing risk - adjusted discount rates by reserve category ▪ Wells run out to end of economic life ▪ Utilizes estimates for P&A liabilities included in the ARIES database ▪ AGI joint venture interest is not separately added ▪ Damages claim related to delay in commencement of operations of AGI joint venture is separately added ▪ Net working capital deficit is separately deducted ▪ G&A / corporate overhead is separately deducted Selected Transactions Analysis ▪ Based on statistics of selected exploration & production precedent transactions in the Delaware Basin ▪ Selected metric: Adjusted EBITDA ▪ AGI joint venture interest is separately added ▪ Damages claim related to delay in commencement of operations of AGI joint venture is separately added ▪ Net working capital deficit is separately deducted Selected Companies Analysis ▪ Based on statistics of selected publicly traded exploration & production companies focused on or with significant exposure to the Delaware Basin ▪ Selected metric: Adjusted EBITDA ▪ AGI joint venture interest is separately added ▪ Damages claim related to delay in commencement of operations of AGI joint venture is separately added ▪ Net working capital deficit is not separately deducted Discounted Cash Flow Analysis: Corporate ▪ Based on the present value of the future unlevered post - tax cash flows associated with the Company on stand - alone, status quo basis ▪ Reflect corporate projections discounted at WACC ▪ Terminal period cash flows based on Adjusted EBITDA multiple ▪ AGI joint venture interest is separately added ▪ Damages claim related to delay in commencement of operations of AGI joint venture is separately added ▪ Net working capital deficit is not separately deducted Supplemental Analysis: Premiums Paid Analysis ▪ Based on observed premia in precedent corporate exploration & production transactions ▪ Selected premia calculated on the basis of 1 day, 15 day, and 30 day VWAP 1. 1P reserves consist of proved reserves. 2. Strip pricing from NYMEX. Premium and discount applied to strip pricing after 18 months for Strip +10% and Strip - 10% price deck s, respectively. 8

CONFIDENTIAL $3.32 $2.66 $1.71 $2.34 $0.00 $2.98 $0.00 $7.77 $6.30 $4.97 $5.60 $0.00 $7.15 $1.65 Merger Consideration [3]: $9.80 Current Share Price [4]: $4.67 30 - Day VWAP [4]: $5.64 $0.00 $3.00 $6.00 $9.00 $12.00 $15.00 Note: No weighting ascribed to any particular methodology. 1. NAV analysis effective date of 10/1/23. 2. Represents value - weighted RADRs for each analysis. 3. Per the Agreement. 4. As of 12/13/23. 5. At the midpoint. 6. Estimated based on ( i ) Company NOLs of ~$800 mm, (ii) bonus depreciation on capital expenditures of 80%, 60%, 40%, 20% and 0% in 2023, 2024, 2025, 20 26 and subsequent years and (iii) corporate tax rate of 21%. Source: Company management. Financial Analyses Summary Implied Per Share Value Reference Range Metric Used NAV Analysis [1] Reserves – RADR Approach Strip Pricing PV12 -- PV11 [2] Strip +10% Pricing PV13 -- PV12 [2] Strip - 10% Pricing PV12 -- PV10 [2] Selected Transactions Analysis Adjusted EBITDA FY 2023E 3.50x -- 4.00x Selected Companies Analysis Adjusted EBITDA FY 2023E 3.00x -- 3.50x FY 2024E 2.75x -- 3.25x Corporate DCF Analysis Terminal Multiple WACC: 15.00% Terminal Multiple: 2.75x -- WACC: 13.00% Terminal Multiple: 3.25x Implied Common Equity Value Per Share Reference Range $2.01 - $6.37 $0.00 - $0.89 $0.00 - $0.00 Implied range including the impact of corporate taxes [6] ($2.06) ($2.42) Unchanged ($0.29) ($0.32) ($0.33) $0.15 Revised pricing as of 12/13/23 and Implied Common Equity Per Share Reference Ranges Change since prior materials [5] 9

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 5. Disclaimer 50

CONFIDENTIAL Financial Analyses Summary Net Asset Value Analysis Please see the following page for footnotes. (dollars in millions, except as noted) 11 Reserves - RADR Approach Strip Pricing Strip +10% Pricing Strip -10% Pricing Net Reserves $285.2 -- $322.4 $366.8 -- $425.5 $238.5 -- $251.8 Implied Reserves Value Reference Range $285.2 -- $322.4 $366.8 -- $425.5 $238.5 -- $251.8 Note: Unrisked PV-10 Value $421.1 -- $421.1 $557.2 -- $557.2 $287.5 -- $287.5 Note: Implied Blended RAF [1] 67.7% -- 76.6% 65.8% -- 76.4% 83.0% -- 87.6% Market Value of Hedges ($20.2) -- ($20.2) ($27.5) -- ($27.5) ($12.8) -- ($12.8) Implied Hedge-Adjusted Reserves Value Reference Range $265.0 -- $302.2 $339.2 -- $398.0 $225.7 -- $239.0 Cash and Cash Equivalents as of 9/30/23 [2] [3] $42.7 -- $42.7 $42.7 -- $42.7 $42.7 -- $42.7 Cash Proceeds from December 2023 Series A Preferred Equity [4] $34.2 -- $34.2 $34.2 -- $34.2 $34.2 -- $34.2 Cash Proceeds from Potential Property Sales [5] $0.0 -- $3.8 $0.0 -- $3.8 $0.0 -- $3.8 AGI Joint Venture [6] $0.0 -- $0.0 $0.0 -- $0.0 $0.0 -- $0.0 Damages Claim [2] [7] $6.0 -- $13.0 $6.0 -- $13.0 $6.0 -- $13.0 Net Working Capital Deficit as of 9/30/23 [2] ($32.0) -- ($32.0) ($32.0) -- ($32.0) ($32.0) -- ($32.0) Corporate G&A [8] ($28.2) -- ($23.9) ($28.2) -- ($23.9) ($28.2) -- ($23.9) Implied Total Enterprise Value Reference Range $287.6 -- $340.0 $361.8 -- $435.7 $248.3 -- $276.8 Total Debt as of 9/30/23 [2] [9] ($210.2) -- ($210.2) ($210.2) -- ($210.2) ($210.2) -- ($210.2) Implied Total Equity Value Reference Range $77.3 -- $129.7 $151.6 -- $225.5 $38.1 -- $66.5 Series A Convertible Preferred Stock [2] [10] [11] [12] ($102.6) -- ($102.6) ($102.6) -- ($67.6) ($102.6) -- ($102.6) Implied Total Common Equity Value Reference Range $0.0 -- $27.1 $49.0 -- $157.9 $0.0 -- $0.0 Shares Outstanding as of 11/14/23 [2] [13] [14] 16.5 -- 16.5 16.5 -- 22.1 16.5 -- 16.5 Implied Common Equity Value Per Share Reference Range $0.00 -- $1.65 $2.98 -- $7.15 $0.00 -- $0.00 A B C

CONFIDENTIAL Financial Analyses Summary Net Asset Value Analysis (cont.) 1. Represents value - weighted RAFs for each analysis as applicable. 2. Per Company management. 3. Includes restricted cash. 4. Reflects cash proceeds from Incremental Series A convertible equity to be issued by the Company in December 2023, net of 2.4% OI D and other issuance expenses, per Company management. 5. Reflects cash proceeds from potential sale of certain mineral rights which may be effectuated in December 2023, estimated at $0. 0 and $3.8 mm on the low end and high end, respectively, per Company management. 6. Economic benefit of Company's 5% interest in AGI Joint Venture reflected in reserve cash flows as an offset to certain expens es. 7. Estimated damages claim due to delay in commencement of operations of the AGI Joint Venture, per Company management. 8. 2024E G&A capitalized at 3.25x at the low end and 2.75x at the high end. 9. Consists of term loan of $210.0 mm and other debt of $0.2 mm. 10. Series A convertible equity issued prior to 9/6/23 converts into ~3.1 mm shares based on a liquidation preference of $28.0 mm an d conversion price of $9.03 per share, as of 12/14/23. 11. Includes Incremental Series A convertible equity issued by the Company on 9/6/23, which converts into ~5.2 mm shares based on a liquidation preference of $39.7 mm and conversion price of $7.63 per share. 12. Includes Series A convertible equity to be issued by the Company in December 2023, which converts into ~5.6 mm shares based o n a liquidation preference of $35.0 mm and conversion price of $6.21 per share, based on an 18% premium to the 20 - day VWAP as of 12/13/23. 13. Includes 16.3 million common shares outstanding and 109,373 RSUs that are vested. Excludes performance shares that vest under ch ange of control. 14. The Company has 478,152 options outstanding (three equal tranches at exercise prices of $18.91, $28.23 and $37.83). Source: Company management. 12

CONFIDENTIAL Financial Analyses Summary (cont.) Selected Transactions Analysis (dollars in millions) Please see the following page for footnotes. 13 Selected Transactions Analysis FY 2023E Adjusted EBITDA Corresponding Base Amount $84.8 Selected Multiples Range 3.50x -- 4.00x Implied Enterprise Value Reference Range $296.9 -- $339.4 Cash and Cash Equivalents as of 9/30/23 [1] [2] $42.7 -- $42.7 Cash Proceeds from December 2023 Series A Preferred Equity [3] $34.2 -- $34.2 Cash Proceeds from Potential Property Sales [4] $0.0 -- $3.8 AGI Joint Venture [5] $3.6 -- $4.0 Damages Claim [1] [6] $6.0 -- $13.0 Net Working Capital Deficit as of 9/30/23 [1] ($32.0) -- ($32.0) Implied Total Enterprise Value Reference Range $351.4 -- $405.1 Total Debt as of 9/30/23 [1] [7] ($210.2) -- ($210.2) Implied Total Equity Value Reference Range $141.1 -- $194.8 Series A Convertible Preferred Stock [1] [8] [9] [10] ($102.6) -- ($102.6) Implied Total Common Equity Value Reference Range $38.5 -- $92.2 Shares Outstanding as of 11/14/23 [1] [11] [12] 16.5 -- 16.5 Implied Common Equity Value Per Share Reference Range $2.34 -- $5.60

CONFIDENTIAL Financial Analyses Summary (cont.) Selected Transactions Analysis (cont.) 1. Per Company management. 2. Includes restricted cash. 3. Reflects cash proceeds from Incremental Series A convertible equity to be issued by the Company in December 2023, net of 2.4% OI D and other issuance expenses, per Company management. 4. Reflects cash proceeds from potential sale of certain mineral rights which may be effectuated in December 2023, estimated at $0. 0 and $3.8 mm on the low end and high end, respectively, per Company management. 5. See page 31 for details. 6. Estimated damages claim due to delay in commencement of operations of the AGI Joint Venture, per Company management. 7. Consists of term loan of $210.0 mm and other debt of $0.2 mm. 8. Series A convertible equity issued prior to 9/6/23 converts into ~3.1 mm shares based on a liquidation preference of $28.0 mm an d conversion price of $9.03 per share, as of 12/14/23. 9. Includes Incremental Series A convertible equity issued by the Company on 9/6/23, which converts into ~5.2 mm shares based on a liquidation preference of $39.7 mm and conversion price of $7.63 per share. 10. Includes Series A convertible equity to be issued by the Company in December 2023, which converts into ~5.6 mm shares based o n a liquidation preference of $35.0 mm and conversion price of $6.21 per share, based on an 18% premium to the 20 - day VWAP as of 12/13/23. 11. Includes 16.3 million common shares outstanding and 109,373 RSUs that are vested. Excludes performance shares that vest under ch ange of control. 12. The Company has 478,152 options outstanding (three equal tranches at exercise prices of $18.91, $28.23 and $37.83). Source: Company management. 14

CONFIDENTIAL Financial Analyses Summary (cont.) Selected Companies Analysis (dollars in millions) Please see the following page for footnotes. 15 Selected Companies Analysis FY 2023E FY 2024E Adjusted EBITDA Adjusted EBITDA Corresponding Base Amount $84.8 $98.3 Selected Multiples Range 3.00x -- 3.50x 2.75x -- 3.25x Implied Enterprise Value Reference Range $254.5 -- $296.9 $270.2 -- $319.4 Cash and Cash Equivalents as of 9/30/23 [1] [2] $42.7 -- $42.7 $42.7 -- $42.7 Cash Proceeds from December 2023 Series A Preferred Equity [3] $34.2 -- $34.2 $34.2 -- $34.2 Cash Proceeds from Potential Property Sales [4] $0.0 -- $3.8 $0.0 -- $3.8 AGI Joint Venture [5] $3.6 -- $4.0 $3.6 -- $4.0 Damages Claim [1] [6] $6.0 -- $13.0 $6.0 -- $13.0 Net Working Capital Deficit as of 9/30/23 [7] $0.0 $0.0 $0.0 -- $0.0 Implied Total Enterprise Value Reference Range $340.9 -- $394.6 $356.7 -- $417.1 Total Debt as of 9/30/23 [1] [8] ($210.2) -- ($210.2) ($210.2) -- ($210.2) Implied Total Equity Value Reference Range $130.7 -- $184.4 $146.4 -- $206.8 Series A Convertible Preferred Stock [1] [9] [10] [11] ($102.6) -- ($102.6) ($102.6) -- ($67.6) Implied Total Common Equity Value Reference Range $28.1 -- $81.8 $43.8 -- $139.2 Shares Outstanding as of 11/14/23 [1] [12] [13] 16.5 -- 16.5 16.5 -- 22.1 Implied Common Equity Value Per Share Reference Range $1.71 -- $4.97 $2.66 -- $6.30

CONFIDENTIAL Financial Analyses Summary (cont.) Selected Companies Analysis (cont.) 1. Per Company management. 2. Includes restricted cash. 3. Reflects cash proceeds from Incremental Series A convertible equity to be issued by the Company in December 2023, net of 2.4% OI D and other issuance expenses, per Company management. 4. Reflects cash proceeds from potential sale of certain mineral rights which may be effectuated in December 2023, estimated at $0. 0 and $3.8 mm on the low end and high end, respectively, per Company management. 5. See page 31 for details. 6. Estimated damages claim due to delay in commencement of operations of the AGI Joint Venture, per Company management. 7. Company net working capital deficit is in - line with public peers. 8. Consists of term loan of $210.0 mm and other debt of $0.2 mm. 9. Series A convertible equity issued prior to 9/6/23 converts into ~3.1 mm shares based on a liquidation preference of $28.0 mm an d conversion price of $9.03 per share, as of 12/14/23. 10. Includes Incremental Series A convertible equity issued by the Company on 9/6/23, which converts into ~5.2 mm shares based on a liquidation preference of $39.7 mm and conversion price of $7.63 per share. 11. Includes Series A convertible equity to be issued by the Company in December 2023, which converts into ~5.6 mm shares based o n a liquidation preference of $35.0 mm and conversion price of $6.21 per share, based on an 18% premium to the 20 - day VWAP as of 12/13/23. 12. Includes 16.3 million common shares outstanding and 109,373 RSUs that are vested. Excludes performance shares that vest under ch ange of control. 13. The Company has 478,152 options outstanding (three equal tranches at exercise prices of $18.91, $28.23 and $37.83). Source: Company management 16

CONFIDENTIAL Financial Analyses Summary (cont.) Discounted Cash Flow Analysis (dollars in millions) Please see the following page for footnotes. 17 Discounted Cash Flow Analysis Terminal Multiple 2.75x -- 3.25x WACC 15.00% -- 13.00% Implied Enterprise Value Reference Range $313.1 -- $384.6 Cash and Cash Equivalents as of 9/30/23 [1] [2] $42.7 -- $42.7 Cash Proceeds from December 2023 Series A Preferred Equity [3] $34.2 -- $34.2 Cash Proceeds from Potential Property Sales [4] $0.0 -- $3.8 AGI Joint Venture [5] $3.6 -- $4.0 Damages Claim [1] [6] $6.0 -- $13.0 Net Working Capital Deficit as of 9/30/23 [1] ($32.0) ($32.0) Implied Total Enterprise Value Reference Range $367.5 -- $450.3 Total Debt as of 9/30/23 [1] [7] ($210.2) -- ($210.2) Implied Total Equity Value Reference Range $157.3 -- $240.0 Series A Convertible Preferred Stock [1] [8] [9] [10] ($102.6) -- ($28.0) Implied Total Common Equity Value Reference Range $54.7 -- $212.1 Shares Outstanding as of 11/14/23 [1] [11] [12] 16.5 -- 27.3 Implied Common Equity Value Per Share Reference Range $3.32 -- $7.77

CONFIDENTIAL Financial Analyses Summary (cont.) Discounted Cash Flow Analysis (cont.) 1. Per Company management. 2. Includes restricted cash. 3. Reflects cash proceeds from Incremental Series A convertible equity to be issued by the Company in December 2023, net of 2.4% OI D and other issuance expenses, per Company management. 4. Reflects cash proceeds from potential sale of certain mineral rights which may be effectuated in December 2023, estimated at $0. 0 and $3.8 mm on the low end and high end, respectively, per Company management. 5. See page 31 for details. 6. Estimated damages claim due to delay in commencement of operations of the AGI Joint Venture, per Company management. 7. Consists of term loan of $210.0 mm and other debt of $0.2 mm. 8. Series A convertible equity issued prior to 9/6/23 converts into ~3.1 mm shares based on a liquidation preference of $28.0 mm an d conversion price of $9.03 per share, as of 12/14/23. 9. Includes Incremental Series A convertible equity issued by the Company on 9/6/23, which converts into ~5.2 mm shares based on a liquidation preference of $39.7 mm and conversion price of $7.63 per share. 10. Includes Series A convertible equity to be issued by the Company in December 2023, which converts into ~5.6 mm shares based o n a liquidation preference of $35.0 mm and conversion price of $6.21 per share, based on an 18% premium to the 20 - day VWAP as of 12/13/23. 11. Includes 16.3 million common shares outstanding and 109,373 RSUs that are vested. Excludes performance shares that vest under ch ange of control. 12. The Company has 478,152 options outstanding (three equal tranches at exercise prices of $18.91, $28.23 and $37.83). Source: Company management. 18

CONFIDENTIAL Selected Historical and Projected Financial Information 1. Total Adjustments: 2. Consists of land and seismic related capital expenditures. 3. Refers to costs related to unwinding of hedges. 4. 2023 estimate assumes full year of AGI facility cost benefits. Adjustment not reflected in historical periods. Source: Company management. (dollars in millions) One-Time Costs Related to Sales Tax Audit $0.0 $0.0 $0.0 $0.0 $0.8 $0.2 $0.0 $0.0 $0.0 AGI Cost Benefit Add-back [4] $0.0 $0.0 $0.0 $0.0 $20.6 $0.0 $0.0 $0.0 $0.0 Total Adjustments $0.0 $0.0 $0.0 $0.0 $21.4 $0.2 $0.0 $0.0 $0.0 Fiscal Year Ended December 31, LTM Ended Fiscal Year Ended December 31, CAGR 2020A 2021A 2022A 9/30/2023 2023E 2024E 2025E 2026E 2027E 2022A to 2027E Net Oil Production (Mbbls) 3,436 3,196 2,837 2,645 2,411 2,508 2,612 3,303 3,672 Net Gas Production (MMcf) 8,745 9,447 9,337 8,931 8,598 9,230 9,215 10,532 11,292 Net NGL Production (Mbbls) 1,258 1,157 1,242 1,235 1,171 1,391 1,392 1,589 1,702 Total Net Production (Mboe) 6,152 5,927 5,635 5,369 5,015 5,438 5,539 6,646 7,256 Average Daily Net Production (Mboe/d) 16.9 16.2 15.4 14.7 13.7 14.9 15.2 18.2 19.9 5.2% Growth % NA -3.6% -4.9% -11.0% 8.1% 2.1% 20.0% 9.2% % Gas 23.7% 26.6% 27.6% 27.7% 28.6% 28.3% 27.7% 26.4% 25.9% % NGL 20.5% 19.5% 22.0% 23.0% 23.4% 25.6% 25.1% 23.9% 23.5% % Oil 55.9% 53.9% 50.3% 49.3% 48.1% 46.1% 47.1% 49.7% 50.6% % Liquids 76.3% 73.4% 72.4% 72.3% 71.4% 71.7% 72.3% 73.6% 74.1% Total Unhedged Revenue $146.8 $284.2 $357.4 $247.6 $224.0 $253.8 $250.3 $295.5 $312.0 -2.7% Realized Hedge Gain / (Loss) 44.9 (77.9) (130.3) (24.5) (14.8) (32.5) (22.4) (9.5) (3.9) Other Income 1.5 1.1 1.6 2.7 1.9 0.2 0.2 0.2 0.2 Total Hedged Revenue $193.2 $207.3 $228.7 $225.8 $211.1 $221.5 $228.0 $286.1 $308.2 6.1% Growth % NA 7.3% 10.3% -7.7% 4.9% 2.9% 25.5% 7.7% Lease operating expenses (42.1) (44.0) (48.1) (46.6) (46.0) (49.1) (49.8) (56.1) (61.2) Workover Expense (3.7) (3.2) (6.7) (6.5) (5.0) (3.6) (3.6) (3.6) (3.6) Production Taxes (10.1) (12.3) (18.5) (12.2) (13.6) (17.7) (16.4) (19.6) (20.8) Recurring Cash G&A (14.7) (14.7) (14.2) (13.7) (15.6) (8.7) (9.0) (9.3) (9.6) Gathering Transportation & Other (52.5) (60.4) (64.3) (64.7) (67.4) (44.3) (43.7) (46.3) (47.9) Adjustments [1] 0.0 0.0 0.0 0.0 21.4 0.2 0.0 0.0 0.0 Adjusted EBITDA $70.1 $72.7 $77.0 $82.0 $84.8 $98.3 $105.4 $151.2 $165.2 16.5% Margin % 36.3% 35.1% 33.7% 36.3% 40.2% 44.4% 46.2% 52.8% 53.6% Growth % NA 3.7% 5.9% 10.2% 15.8% 7.3% 43.4% 9.2% Additional Financial Information Drilling & Completions $54.8 $40.2 $125.8 NA $49.9 $25.5 $110.6 $106.8 $107.1 Midstream Capital Expenditures $31.8 $5.7 $11.1 NA $10.3 $4.9 $17.4 $17.4 $7.4 Other Capital Expenditures [2] $2.5 $2.7 $4.6 NA $1.9 $2.2 $2.2 $2.3 $2.4 Total Capital Expenditures $89.2 $48.7 $141.5 $89.6 $62.1 $32.6 $130.3 $126.5 $116.9 Divestitures $30.0 $0.0 $0.3 $1.5 $5.0 $0.0 $0.0 $0.0 $0.0 Other [3] $0.0 $0.0 $0.0 $1.1 $1.1 $0.0 $0.0 $0.0 $0.0 Depletion, Depreciation and Amortization NA NA $51.9 $59.9 $48.2 $48.9 $49.9 $59.8 $65.3 19

CONFIDENTIAL Reserves Summary (dollars in millions unless otherwise noted) Note: Pricing as of 12/13/23. Reserves as of 10/1/23. Source: Company management. Revised for pricing as of 12/13/23 and effective date as of 10/1/23 20 NYMEX Strip Pricing Net Reserves Implied Reserve Multiples Oil NGL Gas Total Reserve Category (MBBL) (MBBL) (MMCF) (MBoe) % Liquids PV-10 $mm PV-10$/Boe Proved Developed 15,827.7 8,716.1 70,556.8 36,303.3 67.6% 304.0 $8.37 Proved Undeveloped 24,060.4 8,120.0 57,743.1 41,804.3 77.0% 117.1 $2.80 Total Proved Reserves 39,888.2 16,836.1 128,299.8 78,107.6 72.6% $421.1 $5.39 % PUD 60.3% 48.2% 45.0% 53.5% 27.8% NYMEX Strip +10% Pricing Net Reserves Implied Reserve Multiples Oil NGL Gas Total Reserve Category (MBBL) (MBBL) (MMCF) (MBoe) % Liquids PV-10 $mm PV-10$/Boe Proved Developed 16,635.6 9,175.3 74,497.3 38,227.1 67.5% 358.1 $9.37 Proved Undeveloped 24,538.9 8,284.2 58,819.7 42,626.4 77.0% 199.1 $4.67 Total Proved Reserves 41,174.5 17,459.5 133,317.0 80,853.5 72.5% $557.2 $6.89 % PUD 59.6% 47.4% 44.1% 52.7% 35.7% NYMEX Strip -10% Pricing Net Reserves Implied Reserve Multiples Oil NGL Gas Total Reserve Category (MBBL) (MBBL) (MMCF) (MBoe) % Liquids PV-10 $mm PV-10$/Boe Proved Developed 14,813.7 8,119.6 65,591.0 33,865.1 67.7% 251.8 $7.44 Proved Undeveloped 23,448.2 7,909.0 56,353.5 40,749.5 77.0% 35.6 $0.87 Total Proved Reserves 38,262.0 16,028.6 121,944.5 74,614.6 72.8% $287.5 $3.85 % PUD 61.3% 49.3% 46.2% 54.6% 12.4%

CONFIDENTIAL NAV Analysis Summary (dollars in millions) Note: Strip pricing as of 12/13/23. Reserves as of 10/1/23. 1. UCF refers to Undiscounted Cash Flow. Source: Company management, Bloomberg. Revised for pricing as of 12/13/23 and effective date as of 10/1/23 21 NYMEX Strip Pricing Reserve Category UCF [1] Selected SPEE Based RADRs Implied PV Low High Low High PDP $456.7 PV12.0-- PV10.0 $285.2 -- $304.0 PUD $389.7 PV25.0-- PV20.0 $0.0 -- $18.4 Total $846.4 $285.2 -- $322.4 A NYMEX Strip +10% Pricing Reserve Category UCF [1] Selected SPEE Based RADRs Implied PV Low High Low High PDP $570.7 PV12.0-- PV10.0 $333.4 -- $358.1 PUD $563.2 PV25.0-- PV20.0 $33.4 -- $67.4 Total $1,133.9 $366.8 -- $425.5 B NYMEX Strip -10% Pricing Reserve Category UCF [1] Selected SPEE Based RADRs Implied PV Low High Low High PDP $350.8 PV12.0-- PV10.0 $238.5 -- $251.8 PUD $220.4 PV25.0-- PV20.0 $0.0 -- $0.0 Total $571.2 $238.5 -- $251.8 C

CONFIDENTIAL Reserves Risk Factors Source: SPEE. The table below illustrates SPEE Reserve Adjusted Discount Rates published by SPEE in June 2023 Operated Risk Adjusted Discount Rates (RADRs) Reserve Category P90 P50 Mean P10 PDP 8.0% 10.0% 10.0% 13.0% PDNP 12.0% 15.0% 15.0% 17.0% PUD 15.0% 20.0% 24.0% 30.0% PROB 20.0% 30.0% 30.0% 50.0% POSS 27.0% 38.0% 41.0% 65.0% Reserve Category Low High PDP PV12.0 -- PV10.0 PUD PV25.0 -- PV20.0 22

CONFIDENTIAL Selected Companies Analysis (dollars in millions) Note: No company used in this analysis for comparative purposes is identical to Company. 1. Based on closing prices as of 12/13/23. 2. Based on reported diluted shares. 3. Represents proved natural gas reserves as percentage of total proved natural gas and oil reserves. 4. Represents proved undeveloped reserves as percentage of total proved developed and undeveloped reserves. 5. Ratio of total proved reserves divided by annual production. 6. Reflects net value of estimated oil and gas cash flows in the future, discounted at 10% discount rate, as of 12/31/22. 7. Permian Resources is shown pro forma for their acquisition of Earthstone announced 8/21/23 (the “Permian Earthstone Acquisition”). 8. Based on Permian Resources Corporation's CY 2024E EBITDA estimate pro forma for their acquisition of Earthstone, per Capital IQ. 9. Metrics are shown pro forma for Vital’s acquisition of Henry Energy LP and Tall City Property Holdings, announced on 9/13/23 (the “Vital Acquisitions”). 10. Reflects Q4 - 23 pro forma production guidance and pro forma year end 2022 reserves, per public acquisition filings. 11. Implied Enterprise Value multiple shown based on Company estimates. *Excluded from low, high, median and mean data. Sources: Capital IQ, Company management, and public filings. Revised for pricing as of 12/13/23 23 Selected Reserve Statistics Enterprise Value to Share Equity Market Enterprise % % R/P FY 2023 FY 2024 Selected Company Price [1] Value [1] [2] Value [1] [2] Liquids [3] PUD [4] Ratio [5] PV-10 [6] Adj. EBITDA Adj. EBITDA Callon Petroleum Company $30.00 $2,037.8 $3,982.9 79.4% 38.9% 12.6 $9,004.1 3.0x 2.8x HighPeak Energy, Inc. 13.46 1,780.3 2,776.3 92.1% 50.2% 13.8 3,416.5 3.1x 2.5x Matador Resources Company 54.23 6,504.8 8,880.1 54.6% 37.6% 9.3 6,983.2 4.7x 3.6x Permian Resources Corporation [7] 13.04 10,631.4 14,237.7 68.2% 36.0% 14.5 17,780.2 NA 3.7x [8] Vital Energy, Inc. [9] 42.26 1,464.5 3,085.8 71.8% 46.6% 17.2[10] 10,404.5 NA 2.6x Low 54.6% 36.0% 9.3 $3,416.5 3.0x 2.5x High 92.1% 50.2% 17.2 17,780.2 4.7x 3.7x Median 71.8% 38.9% 13.8 9,004.1 3.1x 2.8x Mean 73.2% 41.9% 13.5 9,517.7 3.6x 3.0x Company [11] $4.67 $76.9 $312.0 74.0% 49.7% 16.3 $1,461.7 3.7x 3.2x

CONFIDENTIAL Selected Transactions Map Buyer: Continental Resources Seller: Pioneer Natural Resources $3.3 billion Nov 2021 55.0 Mboe / d $80.86 Spot WTI $35,925 / Mboe / d 3.6x / EBITDA 5 Buyer: Matador Resources Seller: Advance Energy Partners $1.6 billion Jan 2023 25.0 Mboe / d $79.78 Spot WTI $44,500 / Mboe / d 3.2x / EBITDA 3 Buyer: Vital Energy, Northern Oil & Gas Seller: Forge Energy II $540 million May 2023 13.6 Mboe / d $71.46 Spot WTI $36,700 / Mboe / d 1.9x / EBITDA 1 Buyer: Centennial Resource Development Seller: Colgate Operating $3.9 billion May 2022 70.0 Mboe / d $112.21 Spot WTI $42,600 / Mboe / d 4.6x / EBITDA 4 Company Acreage 3 5 6 Buyer: Callon Petroleum Seller: Percussion Petroleum II $475 million May 2023 14.1 Mboe / d $69.49 Spot WTI $33,688 / Mboe / d NA / EBITDA 2 Buyer: ConocoPhillips Seller: Shell $9.5 billion Sep 2021 175.0 Mboe / d $70.29 Spot WTI $29,100 / Mboe / d 3.7x / EBITDA 6 Buyer: Percussion Petroleum Operating Seller: Oasis Petroleum $375 million May 2021 7.2 Mboe / d $62.05 Spot WTI $28,068 / Mboe / d 3.6x / EBITDA 8 8 Buyer: Colgate Operating Seller: Occidental Petroleum $508 million June 2021 10.0 Mboe / d $70.29 Spot WTI $24,850 / Mboe / d NA / EBITDA 7 1 Source: Enverus . Note: Production multiples are shown on an adjusted basis. See the following page for further detail. 2 7 4 3 4 24

CONFIDENTIAL Selected Transactions Analysis Delaware Basin Note: No company used in this analysis is identical to the Company, and no transaction used in this analysis for comparative pur poses is identical to the Transaction. Includes operated transactions since Jan. 2021 with disclosed values equal to or greater than $50.0 million with significant exposure to the following Texas count ies , Winkler, Ward, Pecos, Reeves, and Loving. 1. Based on Enverus ' allocation of transaction value. 2. Shown on a 100% basis. 3. Represents total transaction value divided by production. 4. Based on estimated NFY EBITDA. 5. Based on the midpoint of NTM Adjusted EBITDA. 6. Based on annualized Adjusted EBITDA from the most recently completed quarter. Source: Enverus . (dollars in millions unless otherwise noted) Transaction Multiples Announced Date vs. Strip Total Transaction % of Value to Production Implied Total Implied $ / WTI WTI Date Buyer Seller Value ($mm) Acreage/Other [1] Net Acres [2] Counties % Oil (Mboe/d) $ / boe/d [1] $ / boe/d [3] EBITDA Spot 12M Strip 6/20/23 Civitas Resources Tap Rock Resources LLC $2,450 18.6% 30,000 Eddy, Lea, Loving, Winkler 50.7% 59.0 $33,816 $41,525 -- $71.68 $68.77 5/12/23 Vital Energy Inc, Northern Oil & Gas Inc Forge Energy II LLC $540 20.7% 34,285 Pecos, Reeves, Ward 66.0% 13.6 $36,700 $39,791 1.9x[4] $71.46 $67.23 5/3/23 Callon Petroleum Company Percussion Petroleum II LLC $475 -- 18,000 Loving, Ward, Winkler 70.0% 14.1 $33,688 $33,688 -- $69.49 $67.58 1/24/23 Matador Resources Advance Energy Partners LLC $1,600 30.5% 18,500 Eddy, Lea, Loving, Ward 72.0% 25.0 $44,500 $64,000 3.2x[5] $79.78 $79.51 6/30/22 APA Corp Titus Oil & Gas LLC $505 -- -- Loving, Reeves -- 13.0 $38,846 $38,846 -- $105.76 $94.52 5/19/22 Centennial Resource Development Colgate Operating LLC $3,942 24.4% 105,000 Eddy, Lea, Reeves, Ward, Winkler 54.0% 70.0 $42,600 $56,314 4.6x[6] $112.21 $98.59 1/31/22 Diamondback Energy Colgate Operating LLC $230 62.3% 6,200 Ward 56.5% 2.3 $37,717 $100,000 -- $88.15 $81.65 11/3/21 Continental Resources Pioneer Natural Resources $3,250 39.2% 92,000 Pecos, Reeves, Ward, Winkler 70.0% 55.0 $35,925 $59,091 3.6x[4] $80.86 $74.38 11/3/21 Henry Resources LLC, Pickering Energy Partners Centennial Resource Development $101 46.5% 6,200 Reeves 64.0% 1.6 $33,780 $63,125 -- $80.86 $74.38 9/20/21 ConocoPhillips Shell $9,500 46.4% 225,000 Culberson, Lea, Loving, Reeves, Ward, Winkler 60.0% 175.0 $29,100 $54,286 3.7x[4] $70.29 $68.07 6/10/21 Colgate Operating LLC Occidental Petroleum $508 51.1% 25,000 Reeves, Ward 68.0% 10.0 $24,850 $50,800 -- $70.29 $67.23 5/20/21 Percussion Petroleum Operating LLC Oasis Petroleum $375 46.2% 24,396 Loving, Ward, Winkler 81.3% 7.2 $28,068 $52,185 3.6x[6] $62.05 $60.22 Low 50.7% $24,850 $33,688 1.9x $62.05 $60.22 High 81.3% 44,500 100,000 4.6 112.21 98.59 Mean 64.8% 34,966 54,471 3.4 80.24 75.18 Median 66.0% 34,871 53,235 3.6 75.73 71.58 25

CONFIDENTIAL Selected Transactions Analysis Other Permian Note: No company used in this analysis is identical to the Company, and no transaction used in this analysis for comparative pur poses is identical to the Transaction. Includes operated Permian transactions since Jan. 2021 with disclosed values equal to or greater than $50.0 million. 1. Based on Enverus ' allocation of transaction value. 2. Shown on a 100% basis. 3. Represents total transaction value divided by production. 4. Based on NFY+1 EBITDA. 5. Based on NTM EBITDA. 6. Based on consensus NFY EBITDA as of the announcement date. 7. Multiple basis undisclosed. 8. Based on NFY+1 cash flow. Source: Enverus , Capital IQ. (dollars in millions unless otherwise noted) 26 Updated to include Occidental’s acquisition of CrownRock Transaction Multiples Announced Date vs. Strip Total Transaction % of Value to Production Implied Total Implied $ / WTI WTI Date Buyer Seller Value ($mm) Acreage/Other [1] Net Acres [2] Counties % Oil (Mboe/d) $ / boe/d [1] $ / boe/d [3] EBITDA Spot 12M Strip 12/11/23 Occidental Petroleum Corp CrownQuest Operating LLC; Lime Rock Partners $12,000 51.3% 94,000 Howard, Martin, Glasscock, Midland, Dawson, Upton, Sterling 80.0% 170.0 $41,046 $70,588 -- $70.65 $69.84 10/4/23 Civitas Resources Inc Vitol Inc $2,110 15.6% 44,000 Upton, Martin, Midland, Reagan, Glasscock 50.0% 62.5 $28,500 $33,760 2.8x[4] $86.55 $77.49 9/13/23 Vital Energy Inc Tall City Property Holdings III LLC; Henry Resources LLC; Maple Energy Holdings LLC $1,165 13.8% 52,850 Midland, Upton, Reeves 50.0% 35.0 $28,686 $33,286 2.9x[5] $89.47 $79.28 8/21/23 Permian Resources Corp Earthstone Energy Inc $4,500 24.5% 223,000 Eddy, Lea, Culberson, Midland, Upton, Reagan, Irion 41.0% 133.0 $25,530 $33,835 3.9x[6] $81.70 $75.73 6/20/23 Civitas Resources Inc Hibernia Energy III LLC $2,250 39.3% 38,000 Reagan, Upton 56.0% 41.0 $33,185 $54,878 -- $71.68 $68.77 4/3/23 Ovintiv Inc Black Swan Oil & Gas LLC, PetroLegacy Energy II LLC, Piedra Energy III LLC $4,275 36.4% 65,000 Andrews, Dawson, Gaines, Martin 80.0% 75.0 $36,215 $57,000 2.8x[5] $80.33 $71.12 2/14/23 Vital Energy Inc Driftwood Energy Operating LLC $216 9.9% 11,200 Reagan, Upton 63.0% 5.4 $35,988 $39,926 -- $79.06 $77.98 1/17/23 Permian Resources Corp Read & Stevens Inc $98 52.4% 4,413 Lea, Lea 73.0% 1.1 $42,375 $89,091 -- $80.18 $80.23 12/31/22 Undisclosed Buyer Permian Resources Corp $60 -- 3,500 Eddy, Reeves 44.0% 1.8 $33,333 $33,333 5.0x[7] $80.26 $79.34 11/16/22 Diamondback Energy Lario Oil & Gas Co $1,548 26.7% 15,000 Howard, Martin, Midland 72.0% 25.0 $45,360 $61,927 3.3x[8] $85.59 $81.54 10/11/22 Diamondback Energy Firebird Energy LLC $1,592 41.3% 68,000 Crane, Ector, Midland, Upton 77.0% 22.0 $42,509 $72,350 3.0x[4] $89.35 $81.85 6/28/22 Earthstone Energy Titus Oil & Gas $627 -- 7,900 Eddy, Lea 65.0% 20.5 $30,585 $30,585 1.9x[5] $111.76 $99.75 Low 41.0% 25,530 30,585 1.9 70.65 68.77 High 80.0% 45,360 89,091 5.0 111.76 99.75 Mean 62.6% 35,276 50,880 3.2 83.88 78.58 Median 64.0% 34,661 47,402 3.0 81.02 78.63

CONFIDENTIAL Selected Transactions Analysis Corporate Permian (dollars in millions unless otherwise noted) 27 See the following page for footnotes. Updated to include Occidental’s acquisition of CrownRock Consideration Breakout Transaction Multiples Announced Date vs. Strip Total Transaction % of Value to Production Implied Total Implied $ / WTI WTI Date Buyer Seller Value ($mm) Acreage/Other [1] % Cash % Equity Net Acres [2] Counties % Oil (Mboe/d) $ / boe/d [1] $ / boe/d [3] EBITDA Spot 12M Strip 12/11/23 Occidental Petroleum Corp CrownQuest Operating LLC; Lime Rock Partners $12,000 51.3% 84.3% 15.7% 94,000 Howard, Martin, Glasscock, Midland, Dawson, Upton, Sterling 80.0% 170.0 $41,046 $70,588 -- $70.65 $69.84 10/11/23 ExxonMobil Pioneer Natural Resources $64,500 50.5% -- 100.0% 856,000 Andrews, Crockett, Dawson, Ector, Gaines, Glasscock, Howard, Irion, Martin, Midland, Reagan, Tom Green, Upton 51.9% 710.0 $44,934 $90,845 6.3x[4] $85.15 $75.52 8/21/23 Permian Resources Corp Earthstone Energy Inc $4,500 24.5% -- 100.0% 223,000 Eddy, Lea, Culberson, Midland, Upton, Reagan, Irion 41.0% 133.0 $25,530 $33,835 3.9x[5] $81.70 $75.73 6/15/23 Earthstone Energy Inc; Northern Oil and Gas Inc Novo Oil & Gas Holdings LLC $1,500 21.1% 100.0% -- 16,900 Culberson, Eddy, Lea 37.0% 57.0 $20,759 $26,316 2.7x[6] $68.96 $65.91 5/3/23 Callon Petroleum Company Percussion Petroleum II LLC $475 -- 55.8% 44.2% 18,000 Loving, Ward, Winkler 70.0% 14.1 $33,688 $33,688 -- $69.49 $67.58 1/24/23 Matador Resources Advance Energy Partners LLC $1,600 30.5% 100.0% -- 18,500 Eddy, Lea, Loving, Ward 72.0% 25.0 $44,500 $64,000 3.2x[6] $79.78 $79.51 5/19/22 Centennial Resource Development Colgate Operating LLC $3,942 24.4% 20.7% 79.3% 105,000 Eddy, Lea, Reeves, Ward, Winkler 54.0% 70.0 $42,600 $56,314 4.6x[7] $112.21 $98.59 8/4/21 Callon Petroleum Primexx Energy Partners Ltd, BPP Acquisition LLC $788 33.0% 55.8% 44.2% 35,000 Reeves 61.0% 18.0 $29,350 $43,778 2.9x[4] $68.15 $65.52 4/1/21 Pioneer Natural Resources DoublePoint Energy LLC $6,375 63.9% 18.3% 81.7% 97,000 Andrews, Dawson, Glasscock, Howard, Martin, Midland, Reagan, Upton 60.0% 100.0 $23,000 $63,751 -- $61.45 $59.67 12/21/20 Diamondback Energy Guidon Energy Mgmt Services LLC $862 49.2% 43.5% 56.5% 32,500 Martin, Midland, Upton 64.8% 17.9 $24,442 $48,156 -- $47.74 $47.78 12/18/20 Earthstone Energy Independence Resources Mgmt LLC $188 -- 71.8% 28.2% 43,400 Ector, Glasscock, Irion, Midland, Reagan, Sterling, Tom Green 66.0% 8.8 $21,445 $21,445 2.3x[8] $49.10 $49.03 10/20/20 Pioneer Natural Resources Parsley Energy $7,621 43.1% -- 100.0% 248,011 Dawson, Ector, Glasscock, Howard, Martin, Midland, Pecos, Reagan, Reeves, Upton, Ward, Winkler 61.5% 183.2 $23,657 $41,609 5.4x[8] $41.46 $42.20 10/19/20 ConocoPhillips Concho Resources $13,337 43.2% -- 100.0% 550,000 Andrews, Chaves, Crane, Crockett, Culberson, Dawson, Ector, Eddy, Gaines, Glasscock, Lea, Loving, Martin, Midland, Pecos, Reagan, Reeves, Sterling, Upton, Ward, Winkler 62.5% 319.8 $23,698 $41,708 4.4x[8] $40.83 $41.95 5/4/20 Pure Acquisition Corp HighPeak Energy Holdings LLC $845 90.1% 88.9% 11.1% 51,000 Borden, Howard 90.0% 3.0 $27,900 $281,667 5.1x[6] $20.39 $28.22 12/16/19 WPX Energy Felix Energy Holdings II LLC $2,500 15.8% 36.0% 64.0% 58,500 Lea, Loving, Reeves, Ward, Winkler 70.0% 60.0 $35,100 $41,667 3.5x[4] $60.21 $58.23 10/14/19 Parsley Energy Jagged Peak Energy $2,270 37.2% -- 100.0% 78,000 Pecos, Reeves, Ward, Winkler 76.1% 38.3 $37,275 $59,332 5.4x[8] $54.70 $54.05 Low 37.0% 20,759 21,445 2.3 20.39 28.22 High 90.0% 44,934 281,667 6.3 112.21 98.59 Mean 62.5% 30,525 63,207 4.1 62.75 60.63 Median 62.5% 27,900 43,778 4.2 61.45 59.67

CONFIDENTIAL Selected Transactions Analysis Corporate Permian 28 Note: No company used in this analysis is identical to the Company, and no transaction used in this analysis for comparative pur poses is identical to the Transaction. Includes corporate Permian transactions since Oct. 2019 with disclosed values equal to or greater than $50.0 million. 1. Based on Enverus ' allocation of transaction value. 2. Shown on a 100% basis. 3. Represents total transaction value divided by production. 4. Based on NFY+1 EBITDA. 5. Based on consensus NFY EBITDA as of the announcement date. 6. Based on NTM EBITDA. 7. Based on last quarter annualized EBITDA. 8. Based on LTM EBITDA. Source: Enverus , Capital IQ.

CONFIDENTIAL Discounted Cash Flow Analysis Terminal Multiple (dollars in millions) Note: Present values as of 10/1/23; mid - year convention applied. Refer to WACC calculation for derivation of discount rate. 1. Based on projected financial metrics for 10/1/23 through 12/31/23, per Company management. 2. Per Company management. 3. Implied from corresponding discount rate and 2027E Adjusted EBITDA multiple. Source: Company management. Projected Fiscal Year Ending December 31, 2023E [1] 2024E 2025E 2026E 2027E Total Hedged Revenue $45.6 $221.5 $228.0 $286.1 $308.2 Growth % NA 4.9% 2.9% 25.5% 7.7% Lease operating expenses (11.6) (49.1) (49.8) (56.1) (61.2) Workover Expense (0.9) (3.6) (3.6) (3.6) (3.6) Production Taxes (3.8) (17.7) (16.4) (19.6) (20.8) Recurring Cash G&A (2.9) (8.7) (9.0) (9.3) (9.6) Gathering Transportation & Other (17.5) (44.3) (43.7) (46.3) (47.9) Adjustments 0.8 0.2 0.0 0.0 0.0 Adjusted EBITDA $9.6 $98.3 $105.4 $151.2 $165.2 Margin % 21.0% 44.4% 46.2% 52.8% 53.6% Implied Perpetual Depletion, Depreciation and Amortization (9.8) (48.9) (49.9) (59.8) (65.3) Discount Rate Growth Rate [3] Adjusted EBIT ($0.2) $49.3 $55.6 $91.4 $99.9 2.75x 3.00x 3.25x Taxes [2] 0.0 0.0 0.0 0.0 0.0 13.000% -4.6% -3.4% -2.3% Unlevered Earnings ($0.2) $49.3 $55.6 $91.4 $99.9 13.500% -4.2% -3.0% -1.9% Depletion, Depreciation and Amortization 9.8 48.9 49.9 59.8 65.3 14.000% -3.8% -2.6% -1.5% Capital Expenditures (32.8) (32.6) (130.3) (126.5) (116.9) 14.500% -3.4% -2.2% -1.1% Unlevered Free Cash Flows ($23.2) $65.7 ($24.8) $24.7 $48.3 15.000% -3.1% -1.8% -0.7% Present Value PV of Terminal Value of Cash Flows as a Multiple of Discount Rate (2023 - 2027) 2027 Adjusted EBITDA Discount Rate 2.75x 3.00x 3.25x 2.75x 3.00x 3.25x 2.75x 3.00x 3.25x 13.000% $65.2 $270.2 $294.8 $319.4 $335.4 $360.0 $384.6 13.000% 80.6% 81.9% 83.0% 13.500% $64.4 $265.2 $289.3 $313.4 $329.7 $353.8 $377.9 13.500% 80.5% 81.8% 82.9% 14.000% $63.7 + $260.3 $284.0 $307.6 = $324.0 $347.7 $371.3 14.000% 80.3% 81.7% 82.8% 14.500% $63.0 $255.5 $278.7 $302.0 $318.5 $341.7 $365.0 14.500% 80.2% 81.6% 82.7% 15.000% $62.3 $250.8 $273.6 $296.4 $313.1 $335.9 $358.7 15.000% 80.1% 81.5% 82.6% PV of Terminal Value as a % of Enterprise Value Implied Enterprise Value Revised to reflect present values as of 10/1/23, and WACC revised to 13.0% - 15.0% versus 13.5% - 15.0% in materials dated 11/4/23 29

CONFIDENTIAL 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 7.0x Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Selected Companies [2] Company Selected Companies Historical Trading Multiples Note: Multiples shown above are sourced from Capital IQ; as such, certain multiples may differ slightly from figures shown on ot her pages. Multiples less than 0.0x or greater than 30.0x deemed not meaningful. 1. Company emerged from bankruptcy on 10/18/19. 2. Includes Callon Petroleum Company, HighPeak Energy, Inc., Matador Resources Company, Permian Resources Corporation, and Vital Energy, Inc. Source: Capital IQ as of 12/13/23. Enterprise Value to NFY EBITDA (2022 – Current) 2/22 - 24/22: CPE, VTLE, and PR release FY21 earnings. NFY then refers to FY22E vs. FY21. Median multiple declined from 5.6x on 2/22/22 to 4.1x on 2/25/22. Wall Street estimates not available for periods prior to Q3 - 22 [1] 3/30/23: Company announced FY22 earnings. NFY then refers to FY23E ($138.5 mm EBITDA) vs. FY22 ($68.9 mm EBITDA). Company multiple declined from 4.1x to 2.2x. Roth MKM dropped coverage on October 2, 2023, resulting in no research coverage for the Company. 30 Revised for pricing and metrics as of 12/13/23 YTD Six Month One Year Total Average Average Average Average Selected Companies [2] 3.4x 3.5x 3.4x 3.5x Company 3.4x 3.3x 3.5x NA

CONFIDENTIAL Discounted Cash Flow Analysis AGI Contribution (dollars in millions) Note: Present values as of 10/1/23; mid - year convention applied. Refer to WACC calculation for derivation of discount rate. 1. Represents October through December projected cash flows. Source: Company management. Projected Fiscal Year Ending December 31, 2023E [1] 2024E 2025E 2026E 2027E AGI Joint Venture Cost Savings $0.0 $0.6 $0.6 $0.8 $0.9 Discount Period 0.12 0.75 1.75 2.75 3.75 Present Value of Net Debt-Free Cash Flows $0.0 $0.6 $0.5 $0.6 $0.6 DCF Assumptions Present Value PV of Terminal Value of Cash Flows as a Multiple of Discount Rate (2023 - 2027) 2027 Cost Savings 2.75x 3.00x 3.25x 2.75x 3.00x 3.25x 13.000% $2.2 $1.5 $1.7 $1.8 $3.8 $3.9 $4.0 13.500% $2.2 $1.5 $1.6 $1.8 $3.7 $3.9 $4.0 14.000% $2.2 + $1.5 $1.6 $1.7 = $3.7 $3.8 $3.9 14.500% $2.2 $1.4 $1.6 $1.7 $3.6 $3.7 $3.9 15.000% $2.2 $1.4 $1.5 $1.7 $3.6 $3.7 $3.8 Implied Present Value Revised to reflect present values as of 10/1/23, and WACC revised to 13.0% - 15.0% versus 13.5% - 15.0% in materials dated 11/4/23 31

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 5. Disclaimer 50

CONFIDENTIAL Trading Market Snapshot Public Market Trading Overview (shares outstanding and dollars in millions, except per share values and where otherwise noted) 1. As of 12/13/23. 2. Per Company's Form 10 - Q for the period ended 9/30/23. 3. Reflects dilutive impact of 0.142 vested restricted stock units, per Company’s Form 10 - Q for the period ended 3/31/23. 4. The Company has ( i ) 478,152 options outstanding with 3 equal tranches of 159,384 options at exercise prices of $18.91, $28.23, and $37.83 per s har e (ii) 889,394 unvested restricted stock units as of December 31, 2022. 5. Consists of term loan of $210 mm and other debt of $0.2 mm. 6. Includes restricted cash of $90,000. 7. Per Capital IQ. 8. Per Bloomberg. 9. Per public filings. 10. Represents common shares outstanding excluding those held by three largest shareholders and insiders. 11. VWAP based on cumulative trading activity over designated number of trading days (based on intraday trading). Sources: Bloomberg, Capital IQ and public filings. Historical VWAP [8] [11] (dollars per share) 1 - Day 5 - Day 10 - Day 20 - Day 30 - Day 3 - Month 6 - Month 9 - Month 12 - Month $4.68 $4.93 $4.94 $5.26 $5.64 $5.75 $6.29 $6.41 $6.87 33 Revised for pricing and metrics as of 12/13/23 Public Market Enterprise Value Derivation Selected Market Information as of December 13, 2023 Closing Stock Price [1] $4.67 1-Month Average [7] $5.33 Common Shares Outstanding [2] 16.5 3-Month Average [7] $5.75 Dilutive Shares [3] [4] 0.0 6-Month Average [7] $6.25 Fully Diluted Shares 16.5 52-Week High as of 1/24/2023 [7] $12.37 Market Value of Equity $76.9 52-Week Low as of 12/12/2023 [7] $4.51 Debt [2] [5] 210.2 Series A Convertible Preferred Stock [2] 67.6 90-Day Average Daily Trading Volume (in millions) [7] 0.0 Total Cash [6] (42.7) % of Total Shares Outstanding 0.1% Public Market Enterprise Value $312.0 90-Day Average Daily Trading Value (in millions) [7] $0.1 % of Market Value of Equity 0.1% Number of Analysts Covering the Company [8] 0 Implied Multiples LTM (9/30/23) [9] Total Public Float [9] [10] 3.6 Enterprise Value / Adjusted EBITDA 3.9x % of Total Shares Outstanding 21.8%

CONFIDENTIAL 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Daily Trading Volume Company Current Stock Price [1] Closing Stock Price ($) Daily Volume (millions) Timeline and Stock Trading History Trading History Since January 1, 2021 Selected Events Date Comment A 3/8/21 Q4 - 20 Earnings: Quarterly production and EBITDA of 17.3 Mboepd ( - 15% YoY) and $8.8 ( - 73% YoY). Annual production and EBITDA of 16.9 Mboepd ( - 6% YoY) and $70.1 ( - 22% YoY). 2021 production guidance of 8.8 to 9.8 Mboepd . B 5/17/21 Q1 - 21 Earnings: Quarterly production and EBITDA of 14.3 Mboepd ( - 24% YoY) and $15.3 ( - 35% YoY). C 6/25/21 Company dropped from Russell 3000E Value Index, Microcap Value Index, and Microcap Growth Index. D 8/9/21 Q2 - 21 Earnings: Quarterly production and EBITDA of 15.6 Mboepd (9% YoY) and $14.1 ( - 39% YoY). Initial borrowings of $200 mm repay revolving credit facility. $35 mm available for future development of Monument draw onset. E 11/8/21 Q3 - 21 Earnings: Quarterly production and EBITDA of 17.7 Mboepd (4% YoY) and $23.0 (57% YoY). F 11/29/21 Company completed a strategic refinancing on a new first lien delayed draw term loan facility for up to $235 mm bearing interest of LIBOR +7%. Initial borrowings of 200 million to repay revolving credit facility. $35 mm available for future development of Monument Draw onset. G 2/28/22 Company provided operational update and preliminary 2022 guidance. Based on recently executed financing, the Company launched a multi - year drilling program. Company plans to spud 12 wells in 2022 (1 rig) for total estimated capital expenditure of $130 - $150 mm. Total production 2022 guidance of 14 - 17 Mboepd (Oil 8 - 9.5 mboe /d). H 3/7/22 Q4 - 21 Earnings: Quarterly production and EBITDA of 17.3 Mboepd (0% YoY) and $20.4 (131% YoY). Annual production and EBITDA of 16.2 Mboepd ( - 4% YoY) and $72.7 (4% YoY). Proved reserves of 95.0 Mmboe (50% YoY). I 5/9/22 Q1 - 22 Earnings: Quarterly production and EBITDA of 14.8 Mboepd (3% YoY) and $11.8 ( - 23% YoY). Management noted goal of ramping up drilling activity to increase production and cash flow. J 5/16/22 Company announced agreement to develop acid gas injection (AGI) facility, expecting it to increase profitability and reduce overall gathering and other costs by 20 – 30% on an annual basis. The Company contributed a well bore with an approved permit for the injection of acid gas and surface land for the facility and road access rights for 5% interest in the JV. The JV partner will provide remining capital for the facility and associated infrastructure. Date Comment K 8/8/22 Q2 - 22 Earnings: Quarterly production and EBITDA of 15.0 Mboepd ( - 3% YoY) and $18.2 (29% YoY). L 11/14/22 Q3 - 22 Earnings: Quarterly production and EBITDA of 16.2 Mboepd ( - 8% YoY) and $24.3 (6% YoY). Company reiterated guidance on total production, total capital expenditures, and wells put online but lowered oil cut for the fiscal year 2022. Company management noted early results from test of the Third Bone Spring at Monument Draw were promising and in - line with Wolfcamp performance. M 1/20/23 Company announced appointment of Kristen McWatters as Chief Financial Officer. N 3/30/23 Q4 - 22 Earnings: Quarterly production and EBITDA of 15.7 Mboepd ( - 9% YoY) and $22.7 (12% YoY). Annual production and EBITDA of 15.4 Mboepd ( - 5% YoY) and $77.0 (6% YoY). Company issued redeemable convertible preferred stock to its existing three largest shareholders, receiving $24.4 mm in net proceeds to address liquidity needs. Company began testing procedures and initial processing at its AGI project. O 4/3/23 Company announced appointment of Matt Steele as Chief Executive. P 5/15/23 Q1 - 23 Earnings: Quarterly production and EBITDA of 16.2 Mboepd (9% YoY) and $26.1 (121% YoY). Company began testing procedures and initial processing at its AGI project. Q 8/4/23 Company announced Kristen McWatters resigned from her position as Executive Vice President, Chief Financial Officer and Treasurer. Matthew B. Steele, CEO, assumed the responsibilities of CFO. R 8/21/23 Q2 - 23 Earnings: Quarterly production and EBITDA of 14.3 Mboepd ( - 5% YoY) and $16.8 ( - 8% YoY). Company announces AGI facility expected to be fully online before year end. S 9/6/23 Company announced a private placement of 38,000 shares of Series A - 1 Redeemable Convertible Preferred Stock, par value $0.0001 per share. T 11/15/23 Q3 - 23 Earnings: Quarterly production and EBITDA of 12.7 Mboepd ( - 22% YoY) and $13.6 mm ( - 44% YoY). A F G E C H J L M N O B K P D I Current Stock Price = $4.67 1 S R Q Note: EBITDA figures noted refer to Adjusted EBITDA. 1. Represents closing stock price on 12/13/23. Sources: Capital IQ and public filings. 34 Revised for pricing as of 12/13/23 T

CONFIDENTIAL Selected Stock Trading Activity Last Twelve Months Last Nine Months Last Six Months Last Three Months 1. Based on VWAP over specified period (last twelve months, last nine months, last six months, or last three months). Reference to “Month” is based on Calendar months. VWAP in dollars. Source: Bloomberg as of 12/13/23 . Volume: 3.5 million VWAP 1 : $6.87 Volume: 3.0 million VWAP 1 : $6.41 Volume: 2.3 million VWAP 1 : $6.29 Volume: 1.0 million VWAP 1 : $5.75 35 Revised for pricing and metrics as of 12/13/23 10.9% 46.2% 13.7% 16.5% 3.1% 6.7% 1.6% 1.3% $4.50- $5.50 $5.50- $6.50 $6.50- $7.50 $7.50- $8.50 $8.50- $9.50 $9.50- $10.50 $10.50- $11.50 $11.50- $12.50 12.6% 53.3% 15.8% 16.2% 2.1% 0.0% 0.0% 0.0% $4.50- $5.50 $5.50- $6.50 $6.50- $7.50 $7.50- $8.50 $8.50- $9.50 $9.50- $10.50 $10.50- $11.50 $11.50- $12.50 16.8% 54.5% 9.3% 17.2% 2.2% 0.0% 0.0% 0.0% $4.50- $5.50 $5.50- $6.50 $6.50- $7.50 $7.50- $8.50 $8.50- $9.50 $9.50- $10.50 $10.50- $11.50 $11.50- $12.50 29.3% 64.2% 6.5% 0.0% 0.0% 0.0% 0.0% 0.0% $4.50- $5.50 $5.50- $6.50 $6.50- $7.50 $7.50- $8.50 $8.50- $9.50 $9.50- $10.50 $10.50- $11.50 $11.50- $12.50

CONFIDENTIAL Relative Total Shareholder Return Information Since January 1, 2023 1. Includes Callon Petroleum Company, HighPeak Energy, Inc., Matador Resources Company, Permian Resources Corporation, and Vital Energy, Inc. Source: Capital IQ as of 12/13/23. Since December 13, 2022 36 Revised for pricing as of 12/13/23 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Aug-23 Sep-23 Oct-23 Nov-23 Company Selected Companies Index [1] WTI Henry Hub Total Return Company -51.3% Selected Companies Index [1] -2.0% WTI -9.6% Henry Hub -39.5% -90% -70% -50% -30% -10% 10% 30% 50% Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Company Selected Companies Index [1] WTI Henry Hub Total Return Company -55.7% Selected Companies Index [1] -6.2% WTI -7.8% Henry Hub -63.7%

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

CONFIDENTIAL Weighted Average Cost of Capital Calculation Note: No company used in this calculation for comparative purposes is identical to the Company. 1. Total Cap refers to total capitalization, which equals Equity Market Value + Total Debt + Pfd. Stock. 2. Total Debt refers to total debt amount based on most recent public filings as of 12/13/23. 3. Dd refers to Implied Tax - Deductible Debt, which equals the lesser of (a) 30% of Adjusted Taxable Income/Cost of Debt, or (b) Tot al Debt. LTM Adjusted EBITDA, based on most recent public filings as of 12/13/23, is assumed to be a valid proxy for Adjusted Taxable Income for the selected companies. 4. Dnd refers to Implied Non - Tax - Deductible Debt, which equals Total Debt minus Dd. 5. Equity Market Value based on closing price on 12/13/23 and on diluted shares as of 12/13/23. 6. Pfd. Stock refers to preferred stock, which is the amount as stated in most recent public filings as of 12/13/23. 7. Permian Resources Corporation metrics shown pro forma for the Permian Earthstone Acquisition. 8. Vital Energy, Inc. metrics shown pro forma for the Vital Acquisitions. 9. Based on actual levered beta per Bloomberg 5 - year weekly as of 12/13/23. 10. Unlevered Beta = Levered Beta/(1 + ((1 – tax rate) * Dd to Equity Market Value) + ( Dnd to Equity Market Value) + (Pfd. Stock to Equity Market Value)). 11. Based on review of studies measuring the historical returns between stocks and bonds, theoretical models such as supply - side and demand - side models and other materials. 12. Duff & Phelps Cost of Capital Navigator ("Navigator"). 13. Cost of Equity = Risk - Free Rate of Return + (Levered Beta * Equity Risk Premium) + Size Premium. Risk - Free Rate of Return as of 12/13/23, based on 20 - year U.S. Treasury Bond Yield. 14. Based on selected company weighted average interest rate per most recent public filings as of 12/13/23. 15. Based on selected company weighted average preferred dividend per most recent public filings 12/13/23. 16. Company Preferred dividends paid at a fixed rate of either 14.5% per annum in cash or 16.0% per annum PIK on the Liquidation Pre ference; compounding and accruing quarterly in arrears. Currently, the Company’s Amended Term Loan Agreement prohibits the payment of cash dividends. *Excluded from low, high, median and mean data. Note: Prior to the announced acquisition, Earthstone had a Total Debt to Total Cap of 27.6%, levered beta of 1.44, unlevered beta of 1.10 and WACC of 11.8%. Sources: Bloomberg, Capital IQ. Revised for pricing as of 12/13/23 39 Total Debt to Dd to Dnd to Total Debt to Dd to Equity Dnd to Equity Pfd. Stock to Equity Market Pfd. Stock to Total Cap Total Cap Total Cap Equity Market Market Value Market Value Total Cap Value to Total Equity Market Selected Company [1][2] [1][3] [1][4] Value [2][5] [3][5] [4][5] [1][6] Cap [1][5] Value [5][6] Callon Petroleum Company 48.9% ### 48.9% ### 0.0% ### 95.6% ### 95.6% ### 0.0% ### 0.0% ### 51.1% ### 0.0%### HighPeak Energy, Inc. 39.2% ### 39.2% ### 0.0% ### 64.5% ### 64.5% ### 0.0% ### 0.0% ### 60.8% ### 0.0%### Matador Resources Company 25.2% ### 25.2% ### 0.0% ### 33.6% ### 33.6% ### 0.0% ### 0.0% ### 74.8% ### 0.0%### Permian Resources Corporation [7] 26.5% ### 26.5% ### 0.0% ### 36.1% ### 36.1% ### 0.0% ### 0.0% ### 73.5% ### 0.0%### Vital Energy, Inc. [8] 56.8% ### 56.8% ### 0.0% ### 131.6% ### 131.6% ### 0.0% ### 0.0% ### 43.2% ### 0.0%### Median 39.2% 39.2% 0.0% 64.5% 64.5% 0.0% 0.0% 60.8% 0.0% Mean 39.3% 39.3% 0.0% 72.3% 72.3% 0.0% 0.0% 60.7% 0.0% Company 59.3% ### 22.2% ### 37.0% ### 273.6% ### 102.6% ### 171.0% ### 19.1% ### 21.7% ### 88.0%### Debt Levered Unlevered Equity Risk Size Cost of Cost of Cost of Pfd. Selected Company Beta [5] Beta [9] Beta [10] Premium [11] Premium [12] Equity [13] Debt [14] Stock [15] WACC Callon Petroleum Company Input 1.76 ### 0.90 ### 5.75% 1.16% 15.6% ### 7.5% ### NANA 10.9%### HighPeak Energy, Inc. Input 0.19 * 0.13 * 5.75% 1.16% 6.6% ### NMF * NANA NMF * Matador Resources Company Input 1.91 ### 1.52 ### 5.75% 0.57% 15.9% ### 5.0% ### NANA 12.9%### Permian Resources Corporation [7] Input 1.16 ### 0.89 ### 5.75% 0.57% 11.6% ### 7.3% ### NANA 10.1%### Vital Energy, Inc. [8] Input 1.50 ### 0.73 ### 5.75% 1.16% 14.1% ### 9.5% ### NANA 10.4%### Median 1.63 0.90 14.1% 7.4% NA 10.6% Mean 1.58 1.01 12.8% 7.3% NA 11.1% Company Input 1.90 ### 0.43 ### 5.75% 4.83% 20.1% ### 12.9% ### 16.0%[16] 14.4%###

CONFIDENTIAL Weighted Average Cost of Capital Calculation (cont.) 1. Risk - Free Rate of Return as of 12/13/23, based on 20 - year U.S. Treasury Bond Yield. 2. Based on a review of studies measuring the historical returns between stocks and bonds, theoretical models such as supply sid e a nd demand side models and other materials. 3. Navigator. 4. Forward tax rate, per Company management. 5. Company LTM Adjusted EBIT is assumed to be a valid proxy for Company Adjusted Taxable Income. 6. Company Total Debt refers to total debt amount of Company as of 12/13/23. 7. Company Dd refers to Implied Tax - Deductible Debt of Company, which equals the lesser of (a) 30% of Company Adjusted Taxable Inco me/Cost of Debt, or (b) Company Total Debt. Based on Capital Structure Assumptions. 8. Company Dnd refers to Implied Non - Tax - Deductible Debt of Company, which equals Company Total Debt minus Company Dd. 9. Based on review of corresponding metrics of selected companies listed on previous page. 10. Based on Company's Dd and Dnd and the Capital Structure Assumptions regarding Total Debt to Total Capitalization and Equity Market Value to Total Capitaliz at ion. 11. Based on review of selected companies’ unlevered betas listed on Weighted Average Cost of Capital Calculation page. 12. Computed Levered Beta = Selected Unlevered Beta * (1 + ((1 – Tax Rate) * Dd to Equity Market Value) + ( Dnd to Equity Market Value) + (Preferred Stock to Equity Market Value)). Based on Market and Capital Structure Assumptions. 13. Cost of Equity = Risk - Free Rate of Return + (Computed Levered Beta * Equity Risk Premium) + Size Premium. Based on Market Assump tions. Sources: Bloomberg, Capital IQ. (dollars in millions) Selected WACC range revised to 13.0% - 15.0% versus 13.5% - 15.0% in materials dated 11/4/23 Revised for pricing as of 12/13/23 40 Market Capital Structure Cost of Equity for Assumptions Assumptions Computed WACC Risk-Free Rate of Return [1] 4.36% Company Adjusted Taxable Income [5] $22.2 Selected Unlevered Beta [11] 0.90 Equity Risk Premium [2] 5.75% Company Total Debt [6] $210.2 Computed Levered Beta [12] 1.42 Size Premium [3] 4.83% Company Dd [7] $90.1 Cost of Equity [13] 17.4% Tax Rate [4] 21.00% Company Dnd [8] $120.1 Debt Beta [15] Total Debt to Total Capitalization [9] 39.2% Dd to Total Capitalization [10] 16.8% Dnd to Total Capitalization [10] 22.4% Total Debt to Equity Market Value 64.5% Dd to Equity Market Value [10] 27.6% Dnd to Equity Market Value [10] 36.8% Preferred Stock to Total Capitalization [9] 0.0% Equity Market Value to Total Capitalization [9] 60.8% Preferred Stock to Equity Market Value 0.0% Cost of Debt [9] 7.4% Cost of Preferred Stock [9] NA Computed Weighted Average Cost of Capital | Industry Capital Structure and Cost of Debt 13.2% Computed Weighted Average Cost of Capital | Company Capital Structure and Cost of Debt 14.4% Selected Weighted Average Cost of Capital Range 13.00% -- 15.00%

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

CONFIDENTIAL Observed Premiums Paid Analysis 1. Based on press releases for each respective transaction. 2. Premiums based on unaffected share price date of October 5, 2023. Premiums based on date prior to announcement date are 6.7%, 10 .3%, and 9.8% for 1 Day, 15 Day VWAP, and 30 Day VWAP, respectively. 3. Reflects the subsequent offer announced on October 17, 2022. The initial offer to acquire the remaining outstanding shares of Co ntinental Resources was made on June 14, 2022. 4. Metrics based on unaffected share price as of 3 business days prior to announcement of the transaction. 5. Exchange ratio based on revised exchange offer announced on November 14, 2019. 6. Per the press release, the shareholders of Resolute Energy have the right to elect their preferred form of consideration betw een Cimarex shares, cash, or a mix of both. For purposes of our analysis, we are showing the implied premiums based on the cash consideration of $35.00 per common share. Sources: Capital IQ and press releases. Implied Per Share Consideration [1] Implied Premium % Announced Buyer Seller Consideration Type Implied Equity Consideration Per Share Implied Cash Consideration Per Share Implied Total Per Share Consideration 1 Day 15 Day VWAP 30 Day VWAP [A] [B] [C] = [A] + [B] 10/23/23 Chevron Hess Equity $171.00 $0.00 $171.00 4.9% 8.8% 10.5% 10/11/23 ExxonMobil Pioneer Natural Resources Equity $253.23 $0.00 $253.23 17.8% 12.3% 9.5%[2] 8/21/23 Permian Resources Earthstone Energy Equity $18.64 $0.00 $18.64 14.8% 15.6% 16.8% 7/13/23 ExxonMobil Denbury Equity $89.45 $0.00 $89.45 1.9% 3.8% 3.4% 5/22/23 Chevron PDC Energy Equity $72.00 $0.00 $72.00 10.6% 12.4% 12.9% 2/28/23 Baytex Energy Corp Ranger Oil Corp Cash / Equity $31.05 $13.31 $44.36 7.4% 7.9% 7.0% 9/6/22 Sitio Royalties Corp Brigham Minerals Inc Equity $28.57 $0.00 $28.57 -2.8% -3.7% -1.8% 6/14/22 Hamm Family Continental Resources Cash $0.00 $74.28 [3] $74.28 15.2% 5.8% 12.1% 3/7/22 Oasis Petroleum Whiting Petroleum Cash / Equity $83.43 $6.25 $89.68 7.5% 21.1% 24.6% 11/22/21 Paloma Partners VI LLC Goodrich Petroleum Cash $0.00 $23.00 $23.00 7.0% 6.6% 7.7% 8/11/21 Chesapeake Energy Vine Energy Inc Cash / Equity $13.80 $1.20 $15.00 0.8% 5.2% 5.2% 7/12/21 Penn Virginia Lonestar Resources US Inc. Equity $11.74 $0.00 $11.74 17.4% 12.5% 17.6% 5/24/21 Cabot Oil & Gas Cimarex Energy Equity $71.50 $0.00 $71.50 0.4% 1.0% 3.6% 5/10/21 Bonanza Creek Energy Extraction Oil & Gas Equity $43.85 $0.00 $43.85 0.9% 4.4% 7.7% 12/21/20 Diamondback Energy QEP Resources Equity $2.29 $0.00 $2.29 -0.8% -0.9% 11.2% 10/26/20 Contango Oil & Gas Mid-Con Energy Partners LP [4] Equity $2.42 $0.00 $2.42 13.9% 6.7% 1.3% 10/20/20 Pioneer Natural Resources Parsley Energy Equity $10.90 $0.00 $10.90 7.9% 7.9% 11.9% 10/19/20 ConocoPhillips Concho Resources Equity $49.30 $0.00 $49.30 1.4% 6.8% 9.0% 9/28/20 Devon Energy WPX Energy Equity $4.56 $0.00 $4.56 2.6% -0.6% -4.8% 8/12/20 Southwestern Energy Montage Resources Equity $5.67 $0.00 $5.67 -5.0% 14.1% 28.0% 7/20/20 Chevron Noble Energy Equity $10.38 $0.00 $10.38 7.6% 11.1% 11.1% 10/14/19 Parsley Energy Jagged Peak Energy Equity $7.59 $0.00 $7.59 11.2% 11.9% 4.1% 10/1/19 Citizen Energy Roan Resources Cash $0.00 $1.52 $1.52 23.6% 0.3% 6.2% 8/26/19 PDC Energy SRC Energy Inc Equity $3.99 $0.00 $3.99 -3.9% -9.3% -5.8% 7/15/19 Callon Petroleum Carrizo [5] Equity $11.20 $0.00 $11.20 6.7% 11.0% 12.9% 11/19/18 Cimarex Energy Resolute Energy Cash / Equity [6] $0.00 $35.00 $35.00 14.8% 14.3% 20.0% 11/1/18 EnCana Newfield Exploration Equity $27.36 $0.00 $27.36 35.4% 25.7% 12.2% 8/27/18 Eclipse Resources Blue Ridge Mountain Resources Inc Equity $7.44 $0.00 $7.44 35.3% 26.1% 27.2% 8/14/18 Diamondback Energy Energen Equity $84.95 $0.00 $84.95 19.0% 15.6% 15.1% 6/18/18 Cox Oil Energy XXI Gulf Coast Cash $0.00 $9.10 $9.10 21.5% 18.3% 19.2% 3/28/18 Concho Resources RSP Permian Inc Equity $50.24 $0.00 $50.24 29.1% 26.5% 26.6% Low -5.0% -9.3% -5.8% High 35.4% 26.5% 28.0% Median 7.6% 8.8% 11.1% Mean 10.5% 9.6% 11.0% 42

CONFIDENTIAL 10.5% 9.6% 11.0% 7.6% 8.8% 11.1% 35.4% 26.5% 28.0% 109.6% 93.4% 73.8% 1-Day VWAP 15-Day VWAP 30-Day VWAP Mean Median High Company [1] Observed Premiums Paid Analysis (cont.) Transaction Implied Premium Comparison 1. Implied based on respective VWAP metrics as of 12/13/23 per Bloomberg and the Merger Consideration. Sources: Bloomberg, Capital IQ, and press releases. Revised for pricing as of 12/13/23 62.0% Respective metric as of previous materials dated 11/4/23 64.8% 65.8% 43

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

CONFIDENTIAL Selected New Series A Preferred Stock Terms Source: San Jacinto Acquisition Corp Preliminary Term Sheet as of November 2023. Issuer ▪ Fury Resources, Inc. Closing Date / Redemption ▪ Immediately prior to, and as a condition to, the closing of the Transaction / Five - year anniversary of Transaction closing Aggregate Amount ▪ Up to $155 million (155,000 shares) Security ▪ Same as Existing Series A Preferred Stock Dividends ▪ Dividends at a fixed rate of either 11.0% per annum in cash or 14.0% per annum if accruing, at the option of the issuer Liquidation Preference ▪ Purchase price plus accrued but unpaid dividends Voting Rights ▪ Holders of preferred stock have no voting rights with respect to the shares of preferred stock Conversion ▪ Initially convertible into the Issuer’s common stock (“Common Stock”) at a price per share equal to 140% of the price per share at which the Issuer sells Common Stock to investors in connection with the Acquisition (the “Conversion Price”) as set forth below (the “Conversion Shares”) ▪ The Preferred Stock shall be convertible into the Conversion Shares at any time at the option of the holder of Preferred Stock ▪ Upon an initial public offering of the Issuer that yields net proceeds to the Issuer of at least $75,000,000 (“IPO”), the Preferred Stock plus all accrued dividends shall automatically convert into Conversion Shares at price that is the lesser of ( i ) the Conversion Price or (ii) a 20% discount to the price per share issued in the IPO Anti - Dilution Adjustments ▪ Customary anti - dilution adjustments in the Conversion Price will be made in the event of stock dividend, stock split, reclassification, reorganization, or consolidation Investor Rights ▪ Customary for transaction of this type including, but not limited to, registration rights, preemptive rights, tag along/co - sale rights and information rights Registration Rights ▪ Customary demand registration rights within a reasonable period of time after an IPO, as well as subsequent customary piggyback rights Governance ▪ The Preferred Stockholders shall have the right to appoint one (1) member to the Issuer’s board of directors, subject to a minimum number of shares of Preferred Stock remaining outstanding Previously up to $150 million (150,000 shares) Previously San Jacinto Acquisition Corp Revised 45 Previously either 9.0% per annum in cash or 12.0% per annum if accruing, at the option of the issuer

CONFIDENTIAL Existing Series A Convertible Preferred Stock Terms Source: Company public filings. 1. Refers to PDP PV - 20 based on a reserve report prepared by an independent reserve engineering firm at the end of a fiscal quar ter. Issuer ▪ Battalion Oil Corporation Issuance Date / Maturity Date ▪ Initial issuance on March 28, 2023; Incremental issuance on September 6, 2023; Incremental issuance in December 2023 / Matures November 24, 2025 Aggregate Amount ▪ $25 million (25,000 shares) initial issuance; $38 million (38,000 shares) incremental issuance; $35 million (35,000 shares) incremental issuance contemplated in December Liquidation Preference ▪ Purchase price plus accrued but unpaid dividends Voting Rights ▪ Holders of preferred stock have no voting rights with respect to the shares of preferred stock other than projection - based veto rights Dividends ▪ Dividends at a fixed rate of either 14.5% per annum in cash or 16.0% per annum PIK on the Liquidation Preference; compounding and accruing quarterly in arrears ▪ Currently, the Company’s Amended Term Loan Agreement prohibits the payment of cash dividends Conversion ▪ Holders of preferred stock may convert their shares into common stock at a conversion ratio (the “Conversion Ratio”) equal to the then applicable Liquidation Preference at the time of conversion divided by the then applicable conversion price ($9.03 per share for initial issuance; $7.63 per share for incremental issuance; incremental December issuance based on an 18.0% premium to the volume weighted average price of common stock for the 20 trading days immediately preceding the closing date) ▪ Company has the right to convert outstanding shares of preferred stock into common stock at the Conversion Ratio should the Company meet certain calculated valuation metrics (1) which when divided by the number of outstanding shares of common stock equals or exceeds 130% of the conversion price Redemption Features (Company) ▪ Company has the option to redeem the preferred stock in cash for an amount per share of preferred stock equal to (the “Redemption Price”): ▪ < 120 days following the closing date: 100% of the Liquidation Preference; ▪ On or after 120 days and < 180 days following the closing date: 102% of the Liquidation Preference; ▪ On or after 180 days and prior to the first anniversary of the closing date: 105% of the Liquidation Preference; ▪ After first anniversary and prior to the second anniversary of the closing date: 108% of the Liquidation Preference; ▪ After second anniversary of the closing date: 120% of the Liquidation Preference at such time Redemption Features (Change of Control) ▪ On or prior to 150 days following the issuance date, and at the election of the Company, a cash payment equal to the Liquidation Preference or equity consideration equal to the 107.5% of the Liquidation Preference, or ▪ > 150 days following the issuance date, the Company shall offer each Holder a cash payment equal to the Redemption Price. Holders may elect conversion into common stock at the Conversion Ratio 46

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 Weighted Average Cost of Capital Calculation 38 Observed Premiums Paid Analysis 41 Selected Series A Convertible Preferred Stock Terms 44 Glossary of Selected Terms 47 5. Disclaimer 50

CONFIDENTIAL 12M refers to Twelve Month 1P refers to proven reserves A refers to Actual Adj. refers to Adjusted Adjusted EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization, adjusted for certain non - recurring items AGI refers to Acid Gas Injection Avg refers to Average Bblpd refers to Barrels per Day Boe refers to Barrels of Oil Equivalent Boepd refers to Barrels of Oil Equivalent per Day CAGR refers to Compound Annual Growth Rate CAPEX refers to Capital Expenditures CY refers to Calendar Year DCF refers to Discounted Cash Flow Disc. refers to discount E refers to Estimated EBIT refers to Earnings Before Interest and Taxes EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization EPS refers to E arnings Per Share EV refers to Enterprise Value FV refers to Fair Value FY refers to Fiscal Year G&A refers to General and Administrative GTO refers to Gathering, Transportation and Other K refers to T housand L5M refers to most recently completed 5 - month period Lbs /ft refers to Pounds per Foot LOE refers to lease operating expenses LOS refers to lease operating schedule LQA refers to Last Quarter Annualized LTM refers to Most recently completed 12 - month period for which financial information has been made public or available, other than for the Company, in which case LTM refers to Latest 12 Months Mbbl refers to One Thousand Barrels Mboe refers to One Thousand Barrel of Oil Equivalent Mcf refers to Thousand Cubic Feet Mcfpd refers to Million Cubic Feet per day MM refers to Million Mmboe refers to One Million Barrels of Oil Equivalent MMcf refers to Million Cubic Feet Mo refers to Month NA refers to Not Applicable NAV refers to Net Asset Value NDA refers to Non - Disclosure Agreement NFY refers to Refers to the next fiscal year for which financial information has not been made public, other than for the Company, in which case NFY refers to Next Fiscal Year Glossary of Selected Terms 48

CONFIDENTIAL NFY+1 refers to Next Fiscal Year following NFY NGL refers to Natural Gas Liquid NMF refers to Not Meaningful Figure NTM refers to Next Twelve Months NYMEX refers to New York Mercantile Exchange P&A refers to Plugging and Abandonment PDNP refers to Proved Developed Non - Producing PDP refers to Proved Developed Producing Prem. refers to premium PROB refers to Probable POSS refers to Possible PUD refers to Proved Undeveloped PV refers to Present Value PV - 10 refers to present value discounted at ten percent Q refers to Quarter R/P refers to Reserves/Production RADR refers to Risk - Adjusted Discount Rates RAF refers to Reserve Adjustment Factors RSU refers to Restricted Stock Unit SPEE refers to Society of Petroleum Evaluation Engineers SWD refers to Saltwater Disposal UCF refers to Unlevered Cash Flow VWAP refers to Volume - Weighted Average Price WACC refers to Weighted Average Cost of Capital WTI refers to West Texas Intermediate YoY refers to Year - over - Year YTD refers to Year to Date Glossary of Selected Terms (cont.) 49

Page 1. Executive Summary 3 2. Financial Analyses 10 3. Selected Public Market Observations 32 4. Appendix 37 5. Disclaimer 50

CONFIDENTIAL This presentation, and any supplemental information (written or oral) or other documents provided in connection therewith (co lle ctively, the “materials”), are provided solely for the information of the Board of Directors (the “Board”) of Battalion Oil Corporation (the “Company”) by Houlihan Lokey in co nnection with the Board’s consideration of a potential transaction (the “Transaction”) involving the Company. This presentation is incomplete without reference to, and sh oul d be considered in conjunction with, any supplemental information provided by and discussions with Houlihan Lokey in connection therewith. Any defined terms used here in shall have the meanings set forth herein, even if such defined terms have been given different meanings elsewhere in the materials. The materials are for discussion purposes only. Houlihan Lokey expressly disclaims any and all liability, whether direct or i ndi rect, in contract or tort or otherwise, to any person in connection with the materials. The materials were prepared for specific persons familiar with the business and affa irs of the Company for use in a specific context and were not prepared with a view to public disclosure or to conform with any disclosure standards under any state, f ede ral or international securities laws or other laws, rules or regulations, and none of the Board, the Company or Houlihan Lokey takes any responsibility for the use of the mat erials by persons other than the Board. The materials are provided on a confidential basis solely for the information of the Board and may not be disclosed, summariz ed, reproduced, disseminated or quoted or otherwise referred to, in whole or in part, without Houlihan Lokey’s express prior written consent, except as expressly permi tte d by Houlihan Lokey’s engagement letter with the Company. Notwithstanding any other provision herein, the Company (and each employee, representative or other agent of the Company) may di sclose to any and all persons without limitation of any kind, the tax treatment and tax structure of any transaction and all materials of any kind (including opini ons or other tax analyses, if any) that are provided to the Company relating to such tax treatment and structure. However, any information relating to the tax treatment and tax s tru cture shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this pur pos e, the tax treatment of a transaction is the purported or claimed U.S. income or franchise tax treatment of the transaction and the tax structure of a transaction is any fac t that may be relevant to understanding the purported or claimed U.S. income or franchise tax treatment of the transaction. If the Company plans to disclose information pur suant to the first sentence of this paragraph, the Company shall inform those to whom it discloses any such information that they may not rely upon such informat ion for any purpose without Houlihan Lokey’s prior written consent. Houlihan Lokey is not an expert on, and nothing contained in the materials should be construed as advice with regard to, legal, accounting, regulatory, insurance, tax or other specialist matters. Houlihan Lokey’s role in reviewing any information was limited solely to performing such a review as it deemed necessary to support its own advice and analysis and was not on behalf of the Board. The materials necessarily are based on financial, economic, market and other conditions as in effect on, and the information ava ilable to Houlihan Lokey as of, the date of the materials. Although subsequent developments may affect the contents of the materials, Houlihan Lokey has not undertaken, and is under no obligation, to update, revise or reaffirm the materials. The materials are not intended to provide the sole basis for evaluation of the Transaction and do not purport to contain all information that may be required. The materials do not address the underlying business decision of the Company or any other party to proceed w ith or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available fo r the Company or any other party. The materials do not constitute any opinion, nor do the materials constitute a recommendation to the Board, the Company, any secu rit y holder of the Company or any other party as to how to vote or act with respect to any matter relating to the Transaction or otherwise or whether to buy or sell any assets or securities of any company. Houlihan Lokey’s only opinion is the opinion, if any, that is actually delivered to the Board. In preparing the materials Hou lih an Lokey has acted as an independent contractor and nothing in the materials is intended to create or shall be construed as creating a fiduciary or other relation shi p between Houlihan Lokey and any party. The materials may not reflect information known to other professionals in other business areas of Houlihan Lokey and its affiliat es. Disclaimer 51

CONFIDENTIAL The preparation of the materials was a complex process involving quantitative and qualitative judgments and determinations wi th respect to the financial, comparative and other analytic methods employed and the adaption and application of these methods to the unique facts and circumstances prese nte d and, therefore, is not readily susceptible to partial analysis or summary description. Furthermore, Houlihan Lokey did not attribute any particular weight t o a ny analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Each analytical technique ha s inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. Accordingly, the analyses cont ain ed in the materials must be considered as a whole. Selecting portions of the analyses, analytic methods and factors without considering all analyses and factors could cr eat e a misleading or incomplete view. The materials reflect judgments and assumptions with regard to industry performance, general business, economic, regulatory, mark et and financial conditions and other matters, many of which are beyond the control of the participants in the Transaction. Any estimates of value contained in the ma terials are not necessarily indicative of actual value or predictive of future results or values, which may be significantly more or less favorable. Any analyses relat ing to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which any assets, businesses or securities may actuall y b e sold. The materials do not constitute a credit rating. In preparing the materials, Houlihan Lokey has not conducted any physical inspection or independent appraisal or eval uat ion of any of the assets, properties or liabilities (contingent or otherwise) of the Company or any other party and has no obligation to evaluate the solvency of the Co mpany or any other party under any law. All budgets, projections, estimates, financial analyses, reports and other information with respect to operations reflected i n t he materials have been prepared by management of the relevant party or are derived from such budgets, projections, estimates, financial analyses, reports and ot her information or from other sources, which involve numerous and significant subjective determinations made by management of the relevant party and/or which such managem ent has reviewed and found reasonable. The budgets, projections and estimates contained in the materials may or may not be achieved and differences betw een projected results and those actually achieved may be material. Houlihan Lokey has relied upon representations made by management of the Company that such budgets, pr ojections and estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such manag eme nt (or, with respect to information obtained from public sources, represent reasonable estimates), and Houlihan Lokey expresses no opinion with respect to such b udg ets, projections or estimates or the assumptions on which they are based. The scope of the financial analysis contained herein is based on discussions with the Co mpa ny (including, without limitation, regarding the methodologies to be utilized), and Houlihan Lokey does not make any representation, express or implied, as to t he sufficiency or adequacy of such financial analysis or the scope thereof for any particular purpose. Houlihan Lokey has assumed and relied upon the accuracy and completeness of the financial and other information provided to, dis cussed with or reviewed by it without (and without assuming responsibility for) independent verification of such information, makes no representation or warranty ( exp ress or implied) in respect of the accuracy or completeness of such information and has further relied upon the assurances of the Company that it is not aware of any fac ts or circumstances that would make such information inaccurate or misleading. In addition, Houlihan Lokey has relied upon and assumed, without independent verificati on, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company or any othe r p articipant in the Transaction since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to, discusse d w ith or reviewed by Houlihan Lokey that would be material to its analyses, and that the final forms of any draft documents reviewed by Houlihan Lokey will not differ in any material respect from such draft documents. Disclaimer (cont.) 52

CONFIDENTIAL The materials are not an offer to sell or a solicitation of an indication of interest to purchase any security, option, commo dit y, future, loan or currency. The materials do not constitute a commitment by Houlihan Lokey or any of its affiliates to underwrite, subscribe for or place any securities, to e xte nd or arrange credit, or to provide any other services. In the ordinary course of business, certain of Houlihan Lokey’s affiliates and employees, as well as investment fun ds in which they may have financial interests or with which they may co - invest, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company, any Transaction counterparty, any oth er Transaction participant, any other financially interested party with respect to any transaction, other entities or parties that are mentioned in the materials, or any of the foregoing entities’ or parties’ respective affiliates, subsidiaries, investment funds, portfolio companies and representatives (collectively, the “Interested Parties”), or any currency or commodity that may be involved in the Transaction. Houlihan Lokey provides mergers and acquisitions, restructuring and other advisory and consultin g s ervices to clients, which may have in the past included, or may currently or in the future include, one or more Interested Parties, for which services Houlihan Lokey h as received, and may receive, compensation. Although Houlihan Lokey in the course of such activities and relationships or otherwise may have acquired, or may in the futu re acquire, information about one or more Interested Parties or the Transaction, or that otherwise may be of interest to the Board or the Company, Houlihan Lokey shall ha ve no obligation to, and may not be contractually permitted to, disclose such information, or the fact that Houlihan Lokey is in possession of such information, to the Board or the Company or to use such information on behalf of the Board or the Company. Houlihan Lokey’s personnel may make statements or provide advice that is c ont rary to information contained in the materials. Disclaimer (cont.) 53

CONFIDENTIAL 54 CORPORATE FINANCE FINANCIAL RESTRUCTURING FINANCIAL AND VALUATION ADVISORY HL .com

 

Exhibit 99.(c)(iii)

 

Project San Jacinto SUPPLEMENTAL SCHEDULES FOR THE BOARD OF DIRECTORS OF BATTALION OIL CORPORATION DECEMBER 14, 2023 | CONFIDENTIAL

CONFIDENTIAL Table of Contents 2 Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL Selected Float and Trading Data Average Daily Volume 1 / Shares Outstanding Average Daily Volume 1 / Public Float 1. Based on 90 - day average trading volume as of 12/13/23. CPE refers to Callon Petroleum Company, HPK refers to HighPeak Energy, Inc., MTDR refers to Matador Resources Company, PR refers to Permian Resources Corporation, and VTLE refers to Vital Energy, Inc. 2. Company float excludes shares held by Luminus Management, LLC., Brookfield Corporation, LSP Investment Advisors, LLC., and insiders. Source: Capital IQ as of 12/13/23. 4 Revised metrics as of 12/13/23 0.1% 2.6% 0.4% 1.1% 1.9% 3.4% Median: 1.9% Company CPE HPK MTDR PR VTLE 0.5% 3.3% 2.2% 1.2% 2.5% 5.3% Median: 2.5% Company [2] CPE HPK MTDR PR VTLE

CONFIDENTIAL Selected Float and Trading Data (cont.) Public Float / Shares Outstanding Average Daily Traded Value 2 (dollars in millions) 1. Company float excludes shares held by Luminus Management, LLC., Brookfield Corporation, LSP Investment Advisors, LLC., and insiders. 2. Based on 90 - day average trading volume as of 12/13/23. CPE refers to Callon Petroleum Company, HPK refers to HighPeak Energy, Inc., MTDR refers to Matador Resources Company, PR refers to Permian Resources Corporation, and VTLE refers to Vital Energy, Inc. Source: Capital IQ as of 12/13/23. 5 Revised metrics as of 12/13/23 $0.1 $61.0 $7.9 $80.9 $134.9 $40.3 Median: $61.0 Company CPE HPK MTDR PR VTLE 21.8% 77.6% 17.0% 92.6% 78.5% 63.7% Median: 77.6% Company [1] CPE HPK MTDR PR VTLE

CONFIDENTIAL If Preferred does not convert: If Preferred [1] converts: Common Stock Common Stock Holder Shares % Outstanding Shares % Outstanding Luminus Management, LLC 6.2 37.4% 10.5 42.6% Brookfield Corporation 4.0 24.2% 76.0% 6.1 24.8% 83.9% LSP Investment Advisors, LLC 2.4 14.4% 4.0 16.4% Goldman Sachs Group 0.6 3.8% 0.6 2.5% Lion Point Capital, LP 0.4 2.3% 0.4 1.6% Jefferies Financial Group Inc. 0.4 2.2% 0.4 1.5% The Vanguard Group, Inc. 0.3 1.7% 0.3 1.2% Loomis Sayles & Company, L.P. 0.3 1.7% 0.3 1.1% Current / Former Directors and Executive Officers 0.4 2.2% 0.4 1.5% Other 1.7 10.1% 1.7 6.7% Total 16.5 100.0% 24.5 100.0% Ownership Summary 16.5 million shares Note: Ownership represents data as of 12/13/23. 1. Conversion of Preferred would result in an implied 8.1 million shares on an as converted basis. Illustrative analysis assumes co nversion date of 12/14/23, PIK interest rate of 16.0%, and conversion price of $9.03 per share for Series A convertible equity issued prior to 9/6/23 and $7.63 for Incremental Seri es A convertible equity issued on 9/6/23. Sources: Capital IQ and public filings. (shares in millions) 24.5 million shares 6 Revised metrics as of 12/13/23 1) Luminus Management, LLC: 37.4% 2) Brookfield Corporation: 24.2% 3) LSP Investment Advisors, LLC: 14.4% 4) Goldman Sachs Group: 3.8% 5) Lion Point Capital, LP: 2.3% 6) Jefferies Financial Group Inc.: 2.2% 7) The Vanguard Group, Inc.: 1.7% 8) Loomis Sayles & Company, L.P.: 1.7% Current / Former Directors and Executive Officers: 2.2% Other: 10.1% 1) Luminus Management, LLC: 42.6% 2) Brookfield Corporation: 24.8% 3) LSP Investment Advisors, LLC: 16.4% 4) Goldman Sachs Group: 2.5% 5) Lion Point Capital, LP: 1.6% 6) Jefferies Financial Group Inc.: 1.5% 7) The Vanguard Group, Inc.: 1.2% 8) Loomis Sayles & Company, L.P.: 1.1% Current / Former Directors and Executive Officers: 1.5% Other: 6.7%

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL Selected Benchmarking Data Projected Growth (2023E - 2024E EBITDA) 1. Pro forma 2023 estimates for Permian Resources Corporation are unavailable. 2. Pro forma 2023 estimates for Vital Energy are unavailable. Sources: Company management, Capital IQ and public filings. Projected Growth (2023E - 2024E Production) 8 Revised for consensus estimates as of 12/13/23 29.0% 20.0% 15.8% 5.0% NA NA Median: 20.0% MTDR HPK Company CPE PR [1] VTLE [2] 19.1% 18.3% 8.1% 2.4% NA NA Median: 18.3% MTDR HPK Company CPE PR [1] VTLE [2]

CONFIDENTIAL Selected Benchmarking Data Projected Growth (2024E - 2025E EBITDA) 1. Shown pro forma for the Permian Earthstone Acquisition. 2. Shown pro forma for the Vital Acquisitions. Sources: Company management, Capital IQ and public filings. Projected Growth (2024E - 2025E Production) 9 Revised for consensus estimates as of 12/13/23 7.5% 7.3% 4.5% 4.3% 3.0% NA Median: 4.4% MTDR Company CPE VTLE [2] PR [1] HPK 7.4% 6.5% 4.2% 2.1% - 4.2% NA Median: 5.3% MTDR CPE PR [1] Company VTLE [2] HPK

CONFIDENTIAL 73.6% 66.5% 63.2% 58.3% 52.5% 33.2% Median: 63.2% HPK VTLE [3] CPE MTDR PR [4] Company Selected Benchmarking Data (cont.) 81.6% 46.4% 22.2% 7.4% - 0.3% - 6.7% Median: 22.2% HPK PR MTDR VTLE CPE Company Internal Investment (2023E Capital Expenditures / EBITDA) Internal Investment (2024E Capital Expenditures / EBITDA) 1. Pro forma 2023 estimates for Permian Resources Corporation are unavailable. 2. Pro forma 2023 estimates for Vital Energy are unavailable. 3. Shown pro forma for the Vital Acquisitions. 4. 2024E estimates are based on Wall Street consensus estimates which reflect the Permian Earthstone Acquisition. Sources: Company management, Capital IQ and public filings. 10 Revised for consensus estimates as of 12/13/23 115.5% 73.2% 71.6% 68.5% NA NA Median: 71.6% HPK Company CPE MTDR PR [1] VTLE [2]

CONFIDENTIAL Selected Benchmarking Data (cont.) 1. Shown pro forma for the Permian Earthstone Acquisition. 2. Shown pro forma for the Vital Acquisitions. Source: public filings for period ending 12/31/22. 114.9% 72.3% 72.0% 70.2% 65.6% NA Median: 72.1% HPK MTDR CPE VTLE Company PR 2022 Proved Reserves 2022 PV - 10 11 1,035 627 480 359 123 92 Median: 480 PR [1] VTLE [2] CPE MTDR HPK Company $17,780 $10,404 $9,004 $6,983 $3,417 $1,462 Median: $9,004 PR [1] VTLE [2] CPE MTDR HPK Company

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL 1 10 100 01/2015 01/2016 01/2017 01/2018 01/2019 01/2020 01/2021 01/2022 01/2023 01/2024 01/2025 01/2026 01/2027 01/2028 01/2029 01/2030 Daily Production Bblpd and Mcfpd Historical Oil Historical Gas PDP Production Forecast Review Houlihan Lokey compared gross historical production to gross forecasted production by basin, analyzing ( i ) production rate and (ii) decline rate: (i) Forecasted production rate is in line with recent output (ii) Forecasted decline rate ties to historical trends Well concentration is well diversified with 80% of PDP value coming from >30% of the Company’s wells Source: Company’s 3Q23 ARIES database Note: Gross production shown; Full historical production is current thru 10/2023; PV10 based on 12/13/23 strip pricing, effec tiv e 10/1/2023 Top 80% (39 wells) Bottom 20% (82 wells) 21% NTM Decline Key Points Gross PDP Production Profile PDP Well Concentration Top 80% of PDP value resides within 33% of wells 13 Revised for pricing as of 12/13/23

CONFIDENTIAL Monument Draw West Quito Draw Hackberry Draw Fixed LOE ($M / Well / Month) Variable LOE ( $ / Bw ) (2) $60.9 - $15.0 $30.0 $45.0 $60.0 YE-19 YE-20 YE-21 YE-22 1Q-23 Yr 1-7 $31.9 - $15.0 $30.0 $45.0 $60.0 YE-19 YE-20 YE-21 YE-22 1Q-23 Yr 1-7 $41.0 - $15.0 $30.0 $45.0 $60.0 YE-19 YE-20 YE-21 YE-22 1Q-23 Yr 1-4 $0.75 - $0.30 $0.60 $0.90 $1.20 $1.50 YE-19 YE-20 YE-21 YE-22 1Q-23 Proj. $0.75 - $0.30 $0.60 $0.90 $1.20 $1.50 YE-19 YE-20 YE-21 YE-22 1Q-23 Proj. $1.08 - $0.30 $0.60 $0.90 $1.20 $1.50 YE-19 YE-20 YE-21 YE-22 1Q-23 Proj. Projection Summaries | PDP LOS - Historical and Projected LOE Set forth below is a summary of the Company’s historical and projected fixed and variable LOE costs Assumes gas lift, which many wells are 2+ years without; switching to rod pump after 7 years production life (similar to legacy wells) Assumes jet pump; switching to rod pump after 4 years production life Assumes jet pump; switching to rod pump after 7 years production life. HBD's reversion date reflects larger volumes for longer SWD Forecast Fixed LOE Forecast Workover 6 Month Average 6Mo Avg. LOE = $27 6Mo Avg. LOE = $ 31 6Mo Avg. LOE = $41 6 Month Average 6Mo Avg. SWD = $0.87 6Mo Avg. SWD = $0.80 6Mo Avg. SWD = $0.72 Source: Company management. (1) Projections assume stepdowns of ~$29k/well/ mo in year 5 for MD; ~$15k in year 8 for WQ; ~$ 30 k in year 8 for HD; (2) Represents WaterBridge Contract. (1) (1) (1) 14

CONFIDENTIAL Total Company GTO ($ / Boe ) Total LOE + Workover Excluding GTO ($ / Boe ) $11.57 $11.26 $11.35 $13.23 $12.08 $7.78 $8.08 1H-22 2H-22 1Q-23 2Q-23 4Q-23 1Q-24 2Q-24 Asset Overview | PDP LOS – GTO & LOE Cost Breakdown Set forth below are the Company’s historical and projected Gathering, Transportation and Other cost and LOE costs per Boe Forecast GTO / Boe Source: Company management. LOE / Boe Forecast Workover / Boe Decrease primarily driven by AGI, providing low cost treating Q1 - 24 15 $8.68 $8.40 $8.02 $8.76 $0.83 $1.51 $0.92 $2.03 $10.44 $9.86 $10.42 1H-22 2H-22 1Q-23 2Q-23 4Q-23 1Q-24 2Q-24

CONFIDENTIAL GOR Historical vs. Projections Trend Monument Draw PDP (Historical vs Forecast Detail) | Mcf of Gas to Bbl of Oil Ratio Source: Company provided ARIES reserves database. Current database assumptions for go - forward GOR are in line with recent trends 3.5x 3.6x 3.7x 3.9x 3.9x 4.3x 4.7x 4.6x Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 4.8x 5.0x 5.1x 5.2x 5.2x YE-23 YE-24 YE-25 YE-26 YE-27 Historical Forecast 16

CONFIDENTIAL LOE Historical vs. Projections Trend Source: Company provided ARIES reserves database. 1. Excludes July 2023 2. Excludes prior period workover adjustment Current database assumptions for go - forward LOE + Workover Expenses (Excluding GTO) are in line with the last 5 months LOE (Historical vs Forecast Detail) | $ / boe Historical LOE Forecast Historical Workover L5M Average (1) $8.62 $8.24 $7.22 $8.19 $9.03 $9.12 $8.32 $10.25 $0.61 $0.55 $1.55 $2.66 $1.14 $2.24 $1.59 $9.23 $8.79 $8.77 $10.85 $10.17 $11.36 $8.32 $11.83 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 (2) 17 $10.44 $10.64 $9.49 $8.52 $8.40 YE-23 YE-24 YE-25 YE-26 YE-27

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Monument Draw | 3BS Type Well Selection Map Monument Draw type wells completed on or after 2015 with proppant loading greater than 1,500 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 1,230 / 1,792 Initial Decline (%): Oil / Gas 80% / 62% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 819 / 2,087 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,167 / 70% Type Curve BATL Type Wells Type Wells Avg Source: Company management. (1) EUR T : Technical EUR with 50 year cut off 18

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Monument Draw | WCA Type Well Selection Map Monument Draw type wells completed on or after 2015 with proppant loading greater than 1,500 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 956 / 1,374 Initial Decline (%): Oil / Gas 66% / 49% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 1,012 / 2,285 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,393 / 73% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 19

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Monument Draw | WCB Type Well Selection Map Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 885 / 1,264 Initial Decline (%): Oil / Gas 67% / 39% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 914 / 2,693 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,363 / 67% Monument Draw type wells completed on or after 2015 with proppant loading greater than 1,500 lbs /ft Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 20

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline West Quito Draw | 3BS Type Well Selection Map West Quito Draw type wells completed on or after 2015 with proppant loading greater than 1,700 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 682 / 5,135 Initial Decline (%): Oil / Gas 74% / 73% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 552 / 4,307 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,269 / 43% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 21

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline West Quito Draw | WCA Type Well Selection Map West Quito Draw type wells completed on or after 2015 with proppant loading greater than 1,700 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 563 / 4,634 Initial Decline (%): Oil / Gas 64% / 62% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 631 / 5,521 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,552 / 41% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 22

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline West Quito Draw | WCB Type Well Selection Map West Quito Draw type wells completed on or after 2015 with proppant loading greater than 1,700 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 494 / 5,636 Initial Decline (%): Oil / Gas 74% / 68% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 412 / 5,413 EUR T : (2 - Stream Mboe ) / % Oil (1) 1,315 / 31% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 23

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Hackberry Draw | 3BS Type Well Selection Map Hackberry Draw type wells completed on or after 2015 with proppant loading greater than 2,000 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 508 / 525 Initial Decline (%): Oil / Gas 62% / 34% b - factor: Oil / Gas 1.1 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 568 / 1,313 EUR T : (2 - Stream Mboe ) / % Oil (1) 787 / 72% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 24

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Hackberry Draw | WCA Type Well Selection Map Hackberry Draw type wells completed on or after 2015 with proppant loading greater than 2,000 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 561 / 820 Initial Decline (%): Oil / Gas 65% / 33% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 608 / 2,033 EUR T : (2 - Stream Mboe ) / % Oil (1) 947 / 64% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 25

CONFIDENTIAL - PRELIMINARY DRAFT - SUBJECT TO FURTHER REVIEW CONFIDENTIAL Type Curve Decline Hackberry Draw | WCB Type Well Selection Map Hackberry Draw type wells completed on or after 2015 with proppant loading greater than 2,000 lbs /ft Company Parameters Lateral Length 10,000’ Peak Rate: Oil ( Bblpd ) / Wet Gas (Mcfpd) 626 / 1,110 Initial Decline (%): Oil / Gas 74% / 34% b - factor: Oil / Gas 1.2 / 1.2 EUR T : Oil ( Mbbl ) / Wet Gas ( Mmcf ) (1) 525 / 2,694 EUR T : (2 - Stream Mboe ) / % Oil (1) 974 / 54% Type Curve BATL Type Wells Type Wells Avg Source: Company management (1) EUR T : Technical EUR with 50 year cut off 26

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL Commodity Pricing Summary (dollars in actuals) WTI Comparison Natural Gas Comparison Source: Capital IQ as of 12/13/23. 28 Revised for pricing as of 12/13/23 Date NYMEX Strip Case NYMEX Strip +10% Pricing NYMEX Strip -10% Pricing Natural Gas Crude Oil - WTI Natural Gas Crude Oil - WTI Natural Gas Crude Oil - WTI 2023 $2.76 $78.93 $2.76 $78.93 $2.76 $78.93 2024 $2.56 $70.25 $2.56 $70.25 $2.56 $70.25 2025 $3.41 $68.42 $3.59 $71.81 $3.23 $65.04 2026 $3.69 $66.03 $4.06 $72.63 $3.32 $59.43 2027 $3.72 $64.43 $4.09 $70.88 $3.35 $57.99 After $3.72 $64.43 $4.09 $70.88 $3.35 $57.99 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2023 2024 2025 2026 2027 After NYMEX Strip Case NYMEX Strip +10% Pricing NYMEX Strip -10% Pricing $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 2023 2024 2025 2026 2027 After NYMEX Strip Case NYMEX Strip +10% Pricing NYMEX Strip -10% Pricing

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL NAV Detail Strip Analysis (dollars in thousands) Note: Present values as of 10/1/2023. 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 30 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 PDP Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 1,144.9 $53,425.8 $3,323.2 $26,510.5 $0.0 $0.0 $0.0 $23,592.1 $23,318.2 2024E 3,978.1 $160,223.2 $9,972.1 $78,003.1 $0.0 $0.0 $0.0 $72,248.0 $67,540.0 2025E 3,331.6 $132,513.5 $8,298.0 $64,524.1 $0.0 $0.0 $0.0 $59,691.4 $50,616.2 2026E 2,912.9 $113,387.7 $7,210.5 $55,492.6 $0.0 $7,594.0 $494.2 $43,584.8 $33,527.7 2027E 2,585.4 $98,209.1 $6,274.2 $50,449.1 $0.0 $230.5 $15.0 $41,270.2 $28,918.1 2028E 2,339.1 $88,589.5 $5,706.2 $47,568.3 $0.0 $9.3 $0.6 $35,306.2 $22,489.8 2029E 2,136.9 $80,946.4 $5,410.0 $44,810.2 $0.0 $0.2 $0.0 $30,725.9 $17,791.6 2030E 1,955.7 $74,076.2 $4,997.5 $42,332.9 $0.0 $461.0 $30.0 $26,314.8 $13,847.5 2031E 1,809.4 $68,571.6 $4,626.0 $40,602.0 $0.0 $201.7 $13.1 $23,154.9 $11,083.1 2032E 1,667.1 $63,153.3 $4,260.8 $38,020.3 $0.0 $470.9 $30.6 $20,432.0 $8,892.4 2033E 1,531.1 $57,897.4 $3,907.4 $35,977.2 $0.0 $0.0 $0.0 $18,012.7 $7,123.3 2034E 1,387.1 $52,555.0 $3,544.3 $33,559.3 $0.0 $893.4 $58.1 $14,616.0 $5,257.2 2035E 1,280.7 $48,585.8 $3,275.4 $32,160.3 $0.0 $922.0 $60.0 $12,288.1 $4,024.8 2036E 1,129.1 $42,965.2 $2,893.3 $29,021.2 $0.0 $192.1 $12.5 $10,871.1 $3,232.8 2037E 998.7 $37,963.7 $2,556.6 $26,210.5 $0.0 $1,151.7 $74.9 $8,119.8 $2,189.7 2038E 895.0 $33,877.7 $2,283.6 $24,034.5 $0.0 $461.0 $30.0 $7,128.6 $1,755.9 2039E 805.4 $30,365.3 $2,048.9 $22,225.2 $0.0 $1,613.5 $105.0 $4,582.7 $1,021.8 2040E 684.3 $25,804.7 $1,740.7 $19,259.4 $0.0 $1,152.5 $75.0 $3,727.2 $757.1 2041E 590.8 $22,429.3 $1,509.8 $17,218.8 $0.0 $691.5 $45.0 $3,054.1 $564.3 2042E 526.6 $19,945.0 $1,342.9 $15,884.5 $0.0 $1,152.5 $75.0 $1,640.2 $279.1 2043E 441.5 $16,648.1 $1,121.6 $13,657.5 $0.0 $1,075.7 $70.0 $863.3 $132.7 2044E 350.4 $13,103.8 $884.3 $11,025.3 $0.0 $691.0 $45.0 $548.3 $75.8 2045E 297.3 $10,976.8 $742.9 $9,597.3 $0.0 $883.6 $57.5 ($189.5) ($22.6) 2046E 224.9 $8,139.7 $552.8 $7,389.4 $0.0 $1,517.7 $98.8 ($1,221.5) ($137.4) 2047E 181.3 $6,283.7 $431.0 $5,976.9 $0.0 $653.3 $42.5 ($735.0) ($76.0) 2048E 135.4 $4,315.2 $302.3 $4,368.5 $0.0 $1,093.7 $71.2 ($1,378.2) ($128.6) 2049E 125.7 $3,967.6 $278.6 $4,224.7 $0.0 $1,148.8 $74.8 ($1,609.8) ($137.6) 2050E 118.1 $3,729.5 $261.9 $4,001.8 $0.0 $821.2 $53.4 ($1,301.9) ($99.9) 2051E 101.0 $3,137.7 $221.1 $2,668.6 $0.0 $234.0 $15.2 $29.2 $0.5 2052E 87.9 $2,692.9 $190.4 $1,736.4 $0.0 $0.0 $0.0 $766.2 $49.5 2053E 79.4 $2,431.1 $171.9 $1,606.5 $0.0 $0.0 $0.0 $652.7 $38.4 2054E 73.1 $2,234.8 $158.1 $1,525.8 $0.0 $230.5 $15.0 $335.4 $17.9 2055E 68.7 $2,100.7 $148.6 $1,496.5 $0.0 $0.0 $0.0 $455.6 $22.1 2056E 64.6 $1,974.6 $139.7 $1,468.9 $0.0 $200.9 $13.1 $178.2 $7.8 2057E 60.2 $1,843.3 $130.4 $1,431.0 $0.0 $0.0 $0.0 $281.9 $11.3 2058E 51.8 $1,595.7 $112.7 $1,276.7 $0.0 $0.0 $0.0 $206.3 $7.5 2059E 47.7 $1,470.8 $103.8 $1,229.1 $0.0 $0.0 $0.0 $137.9 $4.6 2060E 37.2 $1,162.2 $81.7 $1,001.7 $0.0 $190.3 $12.4 ($99.1) ($2.8) 2061E 23.1 $738.1 $51.6 $649.8 $0.0 $0.0 $0.0 $36.7 $1.0 2062E 17.0 $556.6 $38.7 $510.7 $0.0 $221.9 $14.4 ($200.3) ($4.8) 2063E 13.6 $455.4 $31.5 $439.1 $0.0 $423.0 $27.5 ($410.6) ($9.1) 2064E 9.4 $277.4 $19.8 $290.0 $0.0 $212.1 $13.8 ($230.8) ($4.8) 2065E 4.2 $123.6 $8.8 $151.8 $0.0 $220.8 $14.4 ($243.4) ($4.6) 2066E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2067E 0.0 $0.0 $0.0 $0.0 $0.0 $413.0 $26.9 ($386.2) ($6.0) 2068E 0.0 $0.0 $0.0 $0.0 $0.0 $162.5 $10.6 ($152.0) ($2.1) 2069E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2070E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total 36,303.3 $1,395,444.8 $91,365.8 $821,587.9 $0.0 $27,591.8 $1,795.6 $456,694.8 $303,963.6

CONFIDENTIAL NAV Detail Strip Analysis (cont.) (dollars in thousands) Note: Present values as of 10/1/2023. 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 31 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 63.4 $4,061.0 $252.9 $702.8 $28,044.0 $0.0 $0.0 ($24,938.8) ($24,768.4) 2024E 751.1 $40,996.7 $2,566.0 $11,198.0 $35,718.4 $0.0 $0.0 ($8,485.8) ($8,066.4) 2025E 1,789.4 $94,693.7 $5,965.3 $21,410.0 $126,853.2 $0.0 $0.0 ($59,534.8) ($51,331.7) 2026E 3,027.4 $153,140.7 $9,704.7 $35,288.2 $130,956.3 $0.0 $0.0 ($22,808.5) ($18,303.7) 2027E 3,899.0 $178,113.6 $11,476.2 $47,152.7 $124,906.2 $0.0 $0.0 ($5,421.5) ($4,049.0) 2028E 5,057.4 $227,040.0 $14,679.0 $57,461.8 $139,194.5 $0.0 $0.0 $15,704.7 $9,841.0 2029E 4,255.5 $190,573.1 $12,334.1 $53,713.7 $4,740.5 $0.0 $0.0 $119,784.8 $69,607.1 2030E 2,940.7 $127,330.9 $8,304.0 $44,621.4 $0.0 $0.0 $0.0 $74,405.5 $39,233.4 2031E 2,305.0 $99,400.3 $6,488.3 $38,400.7 $0.0 $0.0 $0.0 $54,511.4 $26,108.4 2032E 1,919.3 $82,646.9 $5,396.3 $33,616.1 $0.0 $0.0 $0.0 $43,634.5 $18,992.3 2033E 1,655.9 $71,235.5 $4,652.2 $30,586.9 $0.0 $0.0 $0.0 $35,996.4 $14,235.8 2034E 1,462.5 $62,864.9 $4,106.2 $27,909.7 $0.0 $0.0 $0.0 $30,849.1 $11,091.4 2035E 1,313.3 $56,419.3 $3,685.7 $26,527.2 $0.0 $0.0 $0.0 $26,206.4 $8,566.3 2036E 1,194.4 $51,280.8 $3,350.4 $25,778.6 $0.0 $0.0 $0.0 $22,151.9 $6,582.3 2037E 1,096.9 $47,075.3 $3,075.9 $25,165.4 $0.0 $0.0 $0.0 $18,834.1 $5,087.5 2038E 1,015.4 $43,557.3 $2,846.3 $24,652.2 $0.0 $0.0 $0.0 $16,058.8 $3,943.5 2039E 945.6 $40,547.7 $2,649.9 $24,213.1 $0.0 $0.0 $0.0 $13,684.7 $3,055.0 2040E 884.3 $37,904.8 $2,477.3 $23,827.0 $0.0 $0.0 $0.0 $11,600.5 $2,354.5 2041E 829.0 $35,529.1 $2,322.1 $23,478.9 $0.0 $0.0 $0.0 $9,728.0 $1,795.1 2042E 778.4 $33,359.5 $2,180.4 $23,160.3 $0.0 $0.0 $0.0 $8,018.9 $1,345.4 2043E 731.6 $31,351.2 $2,049.1 $22,864.9 $0.0 $0.0 $0.0 $6,437.2 $982.1 2044E 669.9 $28,661.9 $1,874.0 $21,814.1 $0.0 $0.0 $0.0 $4,973.9 $690.1 2045E 624.8 $26,720.6 $1,747.2 $21,349.3 $0.0 $0.0 $0.0 $3,624.1 $457.4 2046E 555.0 $23,648.0 $1,547.5 $19,703.2 $0.0 $0.0 $0.0 $2,397.3 $275.3 2047E 470.0 $19,877.2 $1,302.7 $17,237.0 $0.0 $461.0 $30.0 $906.5 $93.3 2048E 378.9 $15,827.0 $1,040.0 $14,327.5 $0.0 $461.0 $30.0 $28.5 $4.6 2049E 211.7 $8,287.6 $552.2 $7,867.7 $0.0 $1,152.5 $75.0 ($1,209.8) ($102.3) 2050E 116.1 $3,988.7 $274.0 $4,110.9 $0.0 $1,140.5 $74.2 ($1,462.5) ($113.4) 2051E 88.1 $2,790.9 $195.7 $3,149.1 $0.0 $2,057.2 $133.9 ($2,477.2) ($174.5) 2052E 68.5 $1,972.2 $141.9 $2,481.3 $0.0 $4,149.0 $270.0 ($4,529.9) ($293.3) 2053E 64.3 $1,853.9 $133.3 $2,452.9 $0.0 $230.5 $15.0 ($947.8) ($55.4) 2054E 60.5 $1,742.6 $125.3 $2,426.1 $0.0 $691.5 $45.0 ($1,455.3) ($77.6) 2055E 56.9 $1,638.1 $117.8 $1,233.2 $0.0 $0.0 $0.0 $287.1 $13.3 2056E 53.4 $1,539.8 $110.8 $820.3 $0.0 $0.0 $0.0 $608.8 $26.9 2057E 50.2 $1,447.4 $104.1 $798.1 $0.0 $0.0 $0.0 $545.2 $21.9 2058E 47.2 $1,360.6 $97.9 $777.2 $0.0 $0.0 $0.0 $485.5 $17.7 2059E 44.4 $1,278.9 $92.0 $757.6 $0.0 $0.0 $0.0 $429.3 $14.2 2060E 41.7 $1,202.2 $86.5 $739.2 $0.0 $0.0 $0.0 $376.6 $11.4 2061E 39.2 $1,130.1 $81.3 $721.8 $0.0 $0.0 $0.0 $326.9 $9.0 2062E 36.9 $1,062.3 $76.4 $705.5 $0.0 $0.0 $0.0 $280.3 $7.0 2063E 34.7 $998.5 $71.8 $690.2 $0.0 $0.0 $0.0 $236.5 $5.4 2064E 32.6 $938.6 $67.5 $675.8 $0.0 $0.0 $0.0 $195.3 $4.0 2065E 30.6 $882.3 $63.5 $662.3 $0.0 $0.0 $0.0 $156.5 $2.9 2066E 28.8 $829.4 $59.7 $649.6 $0.0 $0.0 $0.0 $120.1 $2.0 2067E 27.1 $779.6 $56.1 $637.6 $0.0 $0.0 $0.0 $85.9 $1.3 2068E 25.4 $732.8 $52.7 $626.4 $0.0 $0.0 $0.0 $53.7 $0.8 2069E 23.9 $688.8 $49.5 $615.8 $0.0 $0.0 $0.0 $23.5 $0.3 2070E 8.0 $231.0 $16.6 $211.7 $0.0 $0.0 $0.0 $2.6 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $220.0 $14.3 ($205.7) ($1.9) 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $619.4 $40.3 ($579.1) ($5.1) Total 41,804.3 $1,861,233.3 $120,700.2 $749,971.0 $590,413.2 $11,182.6 $727.7 $389,694.1 $117,137.1 PUD

CONFIDENTIAL NAV Detail Strip +10% Analysis (dollars in thousands) Note: Present values as of 10/1/2023. 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 32 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 PDP Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 1,145.3 $53,429.6 $3,323.5 $26,516.0 $0.0 $0.0 $0.0 $23,590.0 $23,316.2 2024E 3,979.7 $160,235.8 $9,973.2 $78,024.9 $0.0 $0.0 $0.0 $72,237.6 $67,530.4 2025E 3,335.3 $139,653.9 $8,746.7 $64,667.0 $0.0 $0.0 $0.0 $66,240.2 $56,167.8 2026E 2,914.4 $125,384.7 $7,976.5 $55,520.4 $0.0 $7,544.9 $491.0 $54,833.9 $42,193.9 2027E 2,606.9 $109,704.9 $7,011.5 $51,410.3 $0.0 $0.0 $0.0 $51,283.0 $35,923.3 2028E 2,367.3 $99,486.4 $6,410.1 $48,923.5 $0.0 $230.5 $15.0 $43,937.3 $27,982.3 2029E 2,175.0 $91,286.2 $6,108.3 $46,423.9 $0.0 $0.0 $0.0 $38,754.1 $22,437.6 2030E 1,997.5 $83,520.5 $5,647.0 $43,754.7 $0.0 $58.7 $3.8 $34,064.0 $17,928.0 2031E 1,849.5 $77,103.1 $5,217.1 $41,716.3 $0.0 $0.0 $0.0 $30,169.6 $14,434.1 2032E 1,720.9 $71,737.5 $4,854.1 $39,689.3 $0.0 $0.0 $0.0 $27,194.1 $11,827.6 2033E 1,598.4 $66,595.2 $4,506.7 $38,235.6 $0.0 $461.0 $30.0 $23,421.9 $9,257.2 2034E 1,488.1 $61,911.8 $4,191.1 $36,893.7 $0.0 $240.4 $15.6 $20,602.3 $7,403.5 2035E 1,365.0 $56,909.6 $3,850.1 $34,997.5 $0.0 $230.5 $15.0 $17,846.5 $5,832.6 2036E 1,244.0 $51,867.6 $3,508.5 $32,827.3 $0.0 $691.7 $45.0 $14,885.2 $4,425.0 2037E 1,139.2 $47,609.2 $3,218.1 $31,164.1 $0.0 $691.5 $45.0 $12,580.6 $3,404.2 2038E 1,009.9 $42,282.0 $2,856.0 $28,313.9 $0.0 $624.3 $40.6 $10,528.5 $2,587.1 2039E 904.8 $37,778.2 $2,553.1 $25,975.2 $0.0 $1,151.7 $74.9 $8,173.1 $1,825.8 2040E 795.8 $33,158.9 $2,241.8 $23,318.3 $0.0 $230.5 $15.0 $7,383.3 $1,501.1 2041E 712.2 $29,633.9 $2,004.8 $21,500.6 $0.0 $1,613.5 $105.0 $4,620.0 $849.2 2042E 617.5 $25,588.4 $1,732.9 $19,021.3 $0.0 $1,383.0 $90.0 $3,541.1 $597.4 2043E 532.1 $22,166.7 $1,498.7 $16,951.9 $0.0 $893.2 $58.1 $2,881.1 $440.9 2044E 464.1 $19,448.8 $1,312.2 $15,400.8 $0.0 $922.0 $60.0 $1,873.8 $261.2 2045E 391.4 $16,308.9 $1,101.6 $13,319.0 $0.0 $1,075.7 $70.0 $882.6 $111.3 2046E 310.2 $12,830.0 $868.0 $10,753.8 $0.0 $921.5 $60.0 $346.7 $39.8 2047E 260.3 $10,556.0 $717.7 $9,182.8 $0.0 $883.6 $57.5 ($170.5) ($17.0) 2048E 194.7 $7,716.6 $526.9 $6,966.9 $0.0 $1,287.2 $83.8 ($980.6) ($91.8) 2049E 157.6 $6,018.4 $414.7 $5,696.2 $0.0 $883.8 $57.5 ($918.8) ($79.5) 2050E 118.2 $4,148.8 $292.3 $4,003.5 $0.0 $1,093.7 $71.2 ($1,169.5) ($90.9) 2051E 101.0 $3,491.2 $246.9 $2,668.6 $0.0 $1,148.8 $74.8 ($498.4) ($37.1) 2052E 88.0 $2,999.9 $212.9 $1,736.4 $0.0 $1,051.7 $68.4 $67.4 $6.2 2053E 82.7 $2,819.6 $200.1 $1,700.9 $0.0 $3.5 $0.2 $915.3 $53.8 2054E 77.7 $2,649.0 $188.0 $1,667.6 $0.0 $230.5 $15.0 $577.9 $30.8 2055E 71.2 $2,427.7 $172.3 $1,577.8 $0.0 $0.0 $0.0 $677.5 $32.9 2056E 64.6 $2,198.4 $156.1 $1,468.9 $0.0 $0.0 $0.0 $573.5 $25.3 2057E 60.7 $2,066.5 $146.7 $1,443.0 $0.0 $0.0 $0.0 $476.8 $19.2 2058E 57.0 $1,942.5 $137.9 $1,418.6 $0.0 $200.9 $13.1 $198.2 $7.3 2059E 53.6 $1,826.0 $129.6 $1,395.7 $0.0 $0.0 $0.0 $300.6 $10.0 2060E 47.4 $1,619.5 $114.9 $1,283.0 $0.0 $0.0 $0.0 $221.7 $6.7 2061E 43.1 $1,475.3 $104.6 $1,218.9 $0.0 $0.0 $0.0 $151.9 $4.2 2062E 36.1 $1,249.0 $88.3 $1,071.6 $0.0 $0.0 $0.0 $89.1 $2.2 2063E 22.0 $779.0 $54.7 $682.4 $0.0 $190.3 $12.4 ($136.0) ($3.1) 2064E 16.3 $588.3 $41.1 $537.0 $0.0 $0.0 $0.0 $10.2 $0.2 2065E 10.6 $387.3 $27.0 $371.8 $0.0 $423.6 $27.6 ($407.5) ($7.6) 2066E 0.0 $0.0 $0.0 $0.0 $0.0 $433.4 $28.2 ($405.2) ($7.0) 2067E 0.0 $0.0 $0.0 $0.0 $0.0 $220.8 $14.4 ($206.5) ($3.1) 2068E 0.0 $0.0 $0.0 $0.0 $0.0 $575.6 $37.5 ($538.1) ($7.3) 2069E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2070E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2073E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2073E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total 38,227.1 $1,592,590.9 $104,684.5 $891,410.7 $0.0 $27,591.8 $1,795.6 $570,699.4 $358,131.8

CONFIDENTIAL NAV Detail Strip +10% Analysis (cont.) (dollars in thousands) Note: Present values as of 10/1/2023. 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 33 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 63.4 $4,061.0 $252.9 $702.8 $28,044.0 $0.0 $0.0 ($24,938.8) ($24,768.4) 2024E 751.1 $40,996.7 $2,566.0 $11,198.0 $35,718.4 $0.0 $0.0 ($8,485.8) ($8,066.4) 2025E 1,789.4 $99,489.7 $6,270.1 $21,410.0 $126,853.2 $0.0 $0.0 ($55,043.6) ($47,560.3) 2026E 3,027.4 $168,761.1 $10,702.4 $35,288.2 $130,956.3 $0.0 $0.0 ($8,185.8) ($7,075.7) 2027E 3,899.0 $196,532.0 $12,678.1 $47,152.7 $124,906.2 $0.0 $0.0 $11,795.0 $7,994.2 2028E 5,057.4 $250,603.2 $16,224.0 $57,461.8 $139,194.5 $0.0 $0.0 $37,723.0 $23,824.0 2029E 4,255.5 $210,318.8 $13,628.9 $53,713.7 $4,740.5 $0.0 $0.0 $138,235.7 $80,324.4 2030E 2,940.7 $140,574.4 $9,180.0 $44,621.4 $0.0 $0.0 $0.0 $86,773.1 $45,750.3 2031E 2,305.0 $109,745.7 $7,173.3 $38,400.7 $0.0 $0.0 $0.0 $64,171.7 $30,733.0 2032E 1,919.3 $91,251.2 $5,966.3 $33,616.1 $0.0 $0.0 $0.0 $51,668.8 $22,487.6 2033E 1,655.9 $78,653.2 $5,143.7 $30,586.9 $0.0 $0.0 $0.0 $42,922.7 $16,974.4 2034E 1,462.5 $69,412.0 $4,540.1 $27,909.7 $0.0 $0.0 $0.0 $36,962.3 $13,288.6 2035E 1,313.3 $62,295.9 $4,075.2 $26,527.2 $0.0 $0.0 $0.0 $31,693.4 $10,358.9 2036E 1,194.4 $56,622.7 $3,704.5 $25,778.6 $0.0 $0.0 $0.0 $27,139.6 $8,063.6 2037E 1,096.9 $51,979.6 $3,401.1 $25,165.4 $0.0 $0.0 $0.0 $23,413.2 $6,323.7 2038E 1,015.4 $48,095.5 $3,147.2 $24,652.2 $0.0 $0.0 $0.0 $20,296.1 $4,983.3 2039E 945.6 $44,772.6 $2,930.0 $24,213.1 $0.0 $0.0 $0.0 $17,629.5 $3,935.1 2040E 884.3 $41,854.7 $2,739.3 $23,827.0 $0.0 $0.0 $0.0 $15,288.4 $3,102.4 2041E 829.0 $39,231.5 $2,567.7 $23,478.9 $0.0 $0.0 $0.0 $13,184.9 $2,432.4 2042E 778.4 $36,835.9 $2,410.9 $23,160.3 $0.0 $0.0 $0.0 $11,264.7 $1,889.4 2043E 731.6 $34,618.3 $2,265.8 $22,864.9 $0.0 $0.0 $0.0 $9,487.6 $1,446.9 2044E 687.7 $32,541.1 $2,129.9 $22,588.1 $0.0 $0.0 $0.0 $7,823.1 $1,084.8 2045E 644.9 $30,514.4 $1,997.3 $22,258.5 $0.0 $0.0 $0.0 $6,258.7 $789.2 2046E 590.5 $27,892.0 $1,826.3 $21,252.8 $0.0 $0.0 $0.0 $4,812.9 $551.9 2047E 549.1 $25,923.9 $1,697.6 $20,751.6 $0.0 $0.0 $0.0 $3,474.7 $362.5 2048E 483.0 $22,704.7 $1,488.2 $18,947.2 $0.0 $461.0 $30.0 $1,838.4 $176.3 2049E 408.0 $19,033.7 $1,249.6 $16,548.1 $0.0 $0.0 $0.0 $1,235.9 $106.9 2050E 318.7 $14,641.2 $964.5 $13,288.7 $0.0 $691.5 $45.0 ($258.4) ($18.4) 2051E 163.7 $6,921.6 $464.8 $6,600.3 $0.0 $1,152.5 $75.0 ($1,220.9) ($85.1) 2052E 101.1 $3,837.3 $264.7 $3,951.1 $0.0 $910.0 $59.2 ($1,229.3) ($79.1) 2053E 73.4 $2,520.5 $178.6 $2,871.0 $0.0 $3,670.7 $238.9 ($3,960.9) ($229.4) 2054E 60.5 $1,943.4 $140.3 $2,426.1 $0.0 $2,535.5 $165.0 ($2,993.6) ($159.5) 2055E 56.9 $1,826.8 $131.9 $1,233.2 $0.0 $230.5 $15.0 $246.2 $11.3 2056E 53.4 $1,717.2 $124.0 $820.3 $0.0 $691.5 $45.0 $126.4 $5.2 2057E 50.2 $1,614.1 $116.5 $798.1 $0.0 $0.0 $0.0 $699.5 $28.1 2058E 47.2 $1,517.3 $109.6 $777.2 $0.0 $0.0 $0.0 $630.5 $23.0 2059E 44.4 $1,426.3 $103.0 $757.6 $0.0 $0.0 $0.0 $565.7 $18.8 2060E 41.7 $1,340.7 $96.8 $739.2 $0.0 $0.0 $0.0 $504.7 $15.2 2061E 39.2 $1,260.2 $91.0 $721.8 $0.0 $0.0 $0.0 $447.4 $12.3 2062E 36.9 $1,184.6 $85.5 $705.5 $0.0 $0.0 $0.0 $393.6 $9.8 2063E 34.7 $1,113.6 $80.4 $690.2 $0.0 $0.0 $0.0 $342.9 $7.8 2064E 32.6 $1,046.7 $75.6 $675.8 $0.0 $0.0 $0.0 $295.3 $6.1 2065E 30.6 $983.9 $71.0 $662.3 $0.0 $0.0 $0.0 $250.6 $4.7 2066E 28.8 $924.9 $66.8 $649.6 $0.0 $0.0 $0.0 $208.5 $3.6 2067E 27.1 $869.4 $62.8 $637.6 $0.0 $0.0 $0.0 $169.0 $2.6 2068E 25.4 $817.2 $59.0 $626.4 $0.0 $0.0 $0.0 $131.8 $1.9 2069E 23.9 $768.2 $55.5 $615.8 $0.0 $0.0 $0.0 $96.9 $1.2 2070E 22.5 $722.1 $52.1 $605.9 $0.0 $0.0 $0.0 $64.1 $0.7 2071E 21.1 $678.8 $49.0 $596.6 $0.0 $0.0 $0.0 $33.2 $0.4 2072E 13.3 $426.1 $30.8 $388.2 $0.0 $0.0 $0.0 $7.1 $0.1 2072E 0.4 $13.9 $1.0 $12.9 $0.0 $0.0 $0.0 $0.0 $0.0 2072E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2073E 0.0 $0.0 $0.0 $0.0 $0.0 $617.7 $40.2 ($577.5) ($4.2) 2073E 0.0 $0.0 $0.0 $0.0 $0.0 $221.7 $14.4 ($207.3) ($1.4) Total 42,626.4 $2,085,431.7 $135,431.5 $785,927.1 $590,413.2 $11,182.6 $727.7 $563,205.1 $199,088.3 PUD

CONFIDENTIAL NAV Detail Strip - 10% Analysis (dollars in thousands) Note: Present values as of 10/1/2023. 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 34 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 PDP Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 1,139.7 $53,377.6 $3,318.9 $26,449.9 $0.0 $0.0 $0.0 $23,608.8 $23,334.7 2024E 3,957.8 $160,061.6 $9,957.8 $77,763.8 $0.0 $0.0 $0.0 $72,340.0 $67,625.8 2025E 3,311.9 $125,315.7 $7,840.3 $64,287.3 $0.0 $0.0 $0.0 $53,188.2 $45,103.3 2026E 2,861.3 $99,693.5 $6,331.7 $53,776.9 $0.0 $7,997.3 $520.4 $32,108.1 $24,692.1 2027E 2,548.9 $86,913.1 $5,543.8 $49,516.5 $0.0 $230.7 $15.0 $31,637.1 $22,171.6 2028E 2,289.7 $77,949.7 $5,009.6 $46,311.0 $0.0 $470.3 $30.6 $26,189.3 $16,698.6 2029E 2,086.4 $70,862.9 $4,723.6 $43,295.0 $0.0 $0.0 $0.0 $22,844.3 $13,230.3 2030E 1,886.7 $63,945.0 $4,303.3 $40,093.9 $0.0 $461.0 $30.0 $19,116.9 $10,070.6 2031E 1,727.8 $58,569.8 $3,940.9 $37,877.1 $0.0 $240.4 $15.6 $16,527.1 $7,914.4 2032E 1,554.6 $52,794.9 $3,550.0 $34,395.4 $0.0 $922.0 $60.0 $13,987.6 $6,097.7 2033E 1,419.7 $48,280.2 $3,244.9 $32,529.1 $0.0 $461.2 $30.0 $12,075.0 $4,779.7 2034E 1,242.1 $42,448.6 $2,848.5 $29,141.7 $0.0 $921.2 $59.9 $9,597.2 $3,457.8 2035E 1,109.6 $37,693.5 $2,532.4 $26,493.9 $0.0 $422.6 $27.5 $8,272.0 $2,701.1 2036E 994.7 $33,655.7 $2,263.2 $24,312.8 $0.0 $1,383.0 $90.0 $5,786.7 $1,726.4 2037E 860.6 $29,379.6 $1,970.4 $21,738.5 $0.0 $1,383.0 $90.0 $4,377.7 $1,187.5 2038E 736.6 $25,089.8 $1,683.2 $18,946.6 $0.0 $691.5 $45.0 $3,813.6 $939.5 2039E 665.0 $22,557.8 $1,514.7 $17,644.3 $0.0 $691.5 $45.0 $2,752.3 $614.7 2040E 581.6 $19,685.4 $1,321.9 $15,917.1 $0.0 $1,383.0 $90.0 $1,153.5 $235.3 2041E 469.8 $15,808.8 $1,062.3 $13,100.5 $0.0 $844.7 $55.0 $856.3 $156.4 2042E 388.4 $12,941.7 $871.2 $11,056.7 $0.0 $461.0 $30.0 $582.8 $98.1 2043E 319.3 $10,587.6 $713.0 $9,392.8 $0.0 $1,114.1 $72.5 ($559.8) ($85.2) 2044E 247.4 $7,977.0 $539.9 $7,367.2 $0.0 $1,517.7 $98.8 ($1,349.1) ($186.9) 2045E 196.0 $6,004.1 $411.0 $5,831.0 $0.0 $653.3 $42.5 ($848.7) ($105.4) 2046E 153.5 $4,344.1 $303.0 $4,496.2 $0.0 $1,093.7 $71.2 ($1,477.7) ($167.1) 2047E 142.4 $3,993.8 $279.3 $4,344.1 $0.0 $687.8 $44.8 ($1,272.6) ($132.6) 2048E 133.9 $3,753.5 $262.5 $4,283.7 $0.0 $1,051.7 $68.4 ($1,775.9) ($167.8) 2049E 125.8 $3,528.3 $246.7 $4,227.6 $0.0 $230.5 $15.0 ($1,161.5) ($100.2) 2050E 117.3 $3,288.3 $229.9 $3,979.5 $0.0 $3.5 $0.2 ($924.5) ($72.3) 2051E 95.4 $2,631.3 $184.6 $2,522.5 $0.0 $0.0 $0.0 ($75.8) ($6.7) 2052E 82.7 $2,242.8 $157.9 $1,590.1 $0.0 $0.0 $0.0 $494.8 $32.0 2053E 77.7 $2,108.2 $148.4 $1,557.0 $0.0 $201.1 $13.1 $214.9 $13.0 2054E 73.1 $1,981.7 $139.5 $1,525.8 $0.0 $234.0 $15.2 $97.6 $5.2 2055E 63.0 $1,717.6 $120.7 $1,359.0 $0.0 $0.0 $0.0 $237.8 $11.6 2056E 58.7 $1,601.8 $112.6 $1,321.7 $0.0 $0.0 $0.0 $167.4 $7.4 2057E 48.0 $1,326.2 $92.9 $1,128.5 $0.0 $0.0 $0.0 $104.7 $4.2 2058E 31.5 $890.6 $62.1 $773.1 $0.0 $190.3 $12.4 ($122.5) ($4.7) 2059E 22.2 $640.9 $44.4 $573.8 $0.0 $221.9 $14.4 ($184.8) ($5.8) 2060E 16.4 $487.6 $33.5 $455.8 $0.0 $201.4 $13.1 ($190.1) ($5.5) 2061E 15.4 $458.4 $31.5 $449.9 $0.0 $433.4 $28.2 ($428.3) ($11.8) 2062E 6.8 $192.1 $13.4 $216.9 $0.0 $221.1 $14.4 ($244.8) ($6.0) 2063E 5.1 $134.9 $9.6 $169.5 $0.0 $0.0 $0.0 ($44.2) ($1.0) 2064E 0.8 $21.7 $1.5 $68.0 $0.0 $0.0 $0.0 ($47.9) ($1.0) 2065E 0.0 $0.0 $0.0 $44.0 $0.0 $413.0 $26.9 ($430.2) ($8.3) 2066E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2067E 0.0 $0.0 $0.0 $0.0 $0.0 $162.5 $10.6 ($152.0) ($2.4) 2068E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2069E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2070E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total 33,865.1 $1,196,937.1 $77,970.3 $742,325.6 $0.0 $27,595.6 $1,795.8 $350,841.5 $251,838.4

CONFIDENTIAL NAV Detail Strip - 10% Analysis (cont.) (dollars in thousands) Note: Present values as of 10/1/2023 . 1. Taxes include Production and Ad Valorem taxes. Source: Company management and Capital IQ. 35 Revised for pricing as of 12/13/23 and effective date as of 10/1/23 Production (Net Mboe) Revenue Taxes [1] Operating Expenses Capital Expenditures Abandonment Expenses Salvage Gain Undiscounted Cash Flow Discounted Cash Flow (PV10) 2023E 63.4 $4,061.0 $252.9 $702.8 $28,044.0 $0.0 $0.0 ($24,938.8) ($24,768.4) 2024E 751.1 $40,996.7 $2,566.0 $11,198.0 $35,718.4 $0.0 $0.0 ($8,485.8) ($8,066.4) 2025E 1,789.4 $89,911.0 $5,661.4 $21,410.0 $126,853.2 $0.0 $0.0 ($64,013.5) ($55,092.7) 2026E 3,027.4 $137,520.3 $8,707.0 $35,288.2 $130,956.3 $0.0 $0.0 ($37,431.2) ($29,531.6) 2027E 3,899.0 $159,720.9 $10,275.9 $47,152.7 $124,906.2 $0.0 $0.0 ($22,614.0) ($16,075.4) 2028E 5,057.4 $203,509.3 $13,136.1 $57,461.8 $139,194.5 $0.0 $0.0 ($6,283.0) ($4,122.6) 2029E 4,255.5 $170,854.8 $11,041.1 $53,713.7 $4,740.5 $0.0 $0.0 $101,359.5 $58,904.6 2030E 2,940.7 $114,105.4 $7,429.2 $44,621.4 $0.0 $0.0 $0.0 $62,054.8 $32,725.4 2031E 2,305.0 $89,069.1 $5,804.2 $38,400.7 $0.0 $0.0 $0.0 $44,864.2 $21,490.1 2032E 1,919.3 $74,054.4 $4,827.1 $33,616.1 $0.0 $0.0 $0.0 $35,611.2 $15,501.8 2033E 1,655.9 $63,827.9 $4,161.4 $30,586.9 $0.0 $0.0 $0.0 $29,079.7 $11,500.8 2034E 1,462.5 $56,326.8 $3,672.9 $27,909.7 $0.0 $0.0 $0.0 $24,744.2 $8,897.3 2035E 1,313.3 $50,550.8 $3,296.7 $26,527.2 $0.0 $0.0 $0.0 $20,726.9 $6,776.2 2036E 1,194.4 $45,946.2 $2,996.7 $25,778.6 $0.0 $0.0 $0.0 $17,170.9 $5,103.1 2037E 1,096.9 $42,177.7 $2,751.2 $25,165.4 $0.0 $0.0 $0.0 $14,261.2 $3,853.0 2038E 1,015.4 $39,025.3 $2,545.8 $24,652.2 $0.0 $0.0 $0.0 $11,827.4 $2,905.1 2039E 945.6 $36,328.5 $2,370.0 $24,213.1 $0.0 $0.0 $0.0 $9,745.3 $2,176.2 2040E 884.3 $33,960.3 $2,215.7 $23,827.0 $0.0 $0.0 $0.0 $7,917.6 $1,607.6 2041E 829.0 $31,831.7 $2,076.9 $23,478.9 $0.0 $0.0 $0.0 $6,275.9 $1,158.7 2042E 756.4 $28,990.3 $1,892.2 $22,299.6 $0.0 $0.0 $0.0 $4,798.5 $805.7 2043E 705.3 $27,015.2 $1,763.4 $21,796.5 $0.0 $0.0 $0.0 $3,455.3 $527.7 2044E 623.4 $23,781.6 $1,553.6 $19,983.8 $0.0 $461.0 $30.0 $1,813.2 $255.1 2045E 527.2 $19,957.7 $1,305.7 $17,449.7 $0.0 $0.0 $0.0 $1,202.3 $152.3 2046E 420.4 $15,693.6 $1,029.5 $14,322.3 $0.0 $461.0 $30.0 ($89.2) ($8.3) 2047E 227.3 $7,882.7 $524.9 $7,579.3 $0.0 $1,152.5 $75.0 ($1,298.9) ($133.9) 2048E 130.5 $3,980.8 $272.6 $4,177.1 $0.0 $1,140.5 $74.2 ($1,535.3) ($144.9) 2049E 96.8 $2,689.3 $188.4 $3,119.9 $0.0 $2,979.2 $193.9 ($3,404.3) ($288.7) 2050E 77.5 $1,975.2 $141.4 $2,543.7 $0.0 $3,227.0 $210.0 ($3,726.9) ($290.7) 2051E 72.8 $1,856.6 $132.9 $2,511.5 $0.0 $230.5 $15.0 ($1,003.3) ($71.1) 2052E 68.5 $1,745.2 $124.9 $2,481.3 $0.0 $691.5 $45.0 ($1,507.5) ($97.6) 2053E 64.3 $1,640.5 $117.4 $2,452.9 $0.0 $0.0 $0.0 ($929.8) ($54.6) 2054E 60.5 $1,542.1 $110.4 $2,426.1 $0.0 $0.0 $0.0 ($994.4) ($53.1) 2055E 56.9 $1,449.6 $103.8 $1,233.2 $0.0 $0.0 $0.0 $112.7 $4.8 2056E 53.4 $1,362.6 $97.5 $820.3 $0.0 $0.0 $0.0 $444.8 $19.6 2057E 50.2 $1,280.8 $91.7 $798.1 $0.0 $0.0 $0.0 $391.1 $15.7 2058E 47.2 $1,204.0 $86.2 $777.2 $0.0 $0.0 $0.0 $340.6 $12.4 2059E 44.4 $1,131.8 $81.0 $757.6 $0.0 $0.0 $0.0 $293.1 $9.7 2060E 41.7 $1,063.8 $76.2 $739.2 $0.0 $0.0 $0.0 $248.5 $7.5 2061E 39.2 $1,000.0 $71.6 $721.8 $0.0 $0.0 $0.0 $206.6 $5.7 2062E 36.9 $940.0 $67.3 $705.5 $0.0 $0.0 $0.0 $167.2 $4.2 2063E 34.7 $883.6 $63.3 $690.2 $0.0 $0.0 $0.0 $130.1 $3.0 2064E 32.6 $830.6 $59.5 $675.8 $0.0 $0.0 $0.0 $95.3 $2.0 2065E 30.6 $780.8 $55.9 $662.3 $0.0 $0.0 $0.0 $62.6 $1.2 2066E 28.8 $733.9 $52.5 $649.6 $0.0 $0.0 $0.0 $31.8 $0.5 2067E 16.4 $418.8 $30.0 $382.5 $0.0 $0.0 $0.0 $6.3 $0.1 2068E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2069E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2070E 0.0 $0.0 $0.0 $0.0 $0.0 $839.5 $54.6 ($784.8) ($9.0) 2071E 0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Total 40,749.5 $1,635,609.3 $105,881.6 $708,461.4 $590,413.2 $11,182.6 $727.7 $220,398.2 $35,617.9 PUD

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL 12M refers to Twelve Month 1P refers to proven reserves A refers to Actual Adj. refers to Adjusted Adjusted EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization, adjusted for certain non - recurring items AGI refers to Acid Gas Injection Avg refers to Average Bblpd refers to Barrels per Day Boe refers to Barrels of Oil Equivalent Boepd refers to Barrels of Oil Equivalent per Day CAGR refers to Compound Annual Growth Rate CAPEX refers to Capital Expenditures CY refers to Calendar Year DCF refers to Discounted Cash Flow Disc. refers to discount E refers to Estimated EBIT refers to Earnings Before Interest and Taxes EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization EPS refers to E arnings Per Share EV refers to Enterprise Value FV refers to Fair Value FY refers to Fiscal Year G&A refers to General and Administrative GTO refers to Gathering, Transportation and Other K refers to T housand L5M refers to most recently completed 5 - month period Lbs /ft refers to Pounds per Foot LOE refers to lease operating expenses LOS refers to lease operating schedule LQA refers to Last Quarter Annualized LTM refers to Most recently completed 12 - month period for which financial information has been made public or available, other than for the Company, in which case LTM refers to Latest 12 Months Mbbl refers to One Thousand Barrels Mboe refers to One Thousand Barrel of Oil Equivalent Mcf refers to Thousand Cubic Feet Mcfpd refers to Million Cubic Feet per day MM refers to Million Mmboe refers to One Million Barrels of Oil Equivalent MMcf refers to Million Cubic Feet Mo refers to Month NA refers to Not Applicable NAV refers to Net Asset Value NDA refers to Non - Disclosure Agreement NFY refers to Refers to the next fiscal year for which financial information has not been made public, other than for the Company, in which case NFY refers to Next Fiscal Year Glossary of Selected Terms 37

CONFIDENTIAL NFY+1 refers to Next Fiscal Year following NFY NGL refers to Natural Gas Liquid NMF refers to Not Meaningful Figure NTM refers to Next Twelve Months NYMEX refers to New York Mercantile Exchange P&A refers to Plugging and Abandonment PDNP refers to Proved Developed Non - Producing PDP refers to Proved Developed Producing Prem. refers to premium PROB refers to Probable POSS refers to Possible PUD refers to Proved Undeveloped PV refers to Present Value PV - 10 refers to present value discounted at ten percent Q refers to Quarter R/P refers to Reserves/Production RADR refers to Risk - Adjusted Discount Rates RAF refers to Reserve Adjustment Factors RSU refers to Restricted Stock Unit SPEE refers to Society of Petroleum Evaluation Engineers SWD refers to Saltwater Disposal UCF refers to Unlevered Cash Flow VWAP refers to Volume - Weighted Average Price WACC refers to Weighted Average Cost of Capital WTI refers to West Texas Intermediate YoY refers to Year - over - Year YTD refers to Year to Date Glossary of Selected Terms (cont.) 38

Page 1. Selected Public Market Observations 3 2. Benchmarking Data 7 3. Selected Technical Observations 12 4. Pricing 27 5. NAV Analysis Detail 29 6. Glossary of Selected Terms 36 7. Disclaimer 39

CONFIDENTIAL This presentation, and any supplemental information (written or oral) or other documents provided in connection therewith (co lle ctively, the “materials”), are provided solely for the information of the Board of Directors (the “Board”) of Battalion Oil Corporation (the “Company”) by Houlihan Lokey in co nnection with the Board’s consideration of a potential transaction (the “Transaction”) involving the Company. This presentation is incomplete without reference to, and sh oul d be considered in conjunction with, any supplemental information provided by and discussions with Houlihan Lokey in connection therewith. Any defined terms used here in shall have the meanings set forth herein, even if such defined terms have been given different meanings elsewhere in the materials. The materials are for discussion purposes only. Houlihan Lokey expressly disclaims any and all liability, whether direct or i ndi rect, in contract or tort or otherwise, to any person in connection with the materials. The materials were prepared for specific persons familiar with the business and affa irs of the Company for use in a specific context and were not prepared with a view to public disclosure or to conform with any disclosure standards under any state, f ede ral or international securities laws or other laws, rules or regulations, and none of the Board, the Company or Houlihan Lokey takes any responsibility for the use of the mat erials by persons other than the Board. The materials are provided on a confidential basis solely for the information of the Board and may not be disclosed, summariz ed, reproduced, disseminated or quoted or otherwise referred to, in whole or in part, without Houlihan Lokey’s express prior written consent, except as expressly permi tte d by Houlihan Lokey’s engagement letter with the Company. Notwithstanding any other provision herein, the Company (and each employee, representative or other agent of the Company) may di sclose to any and all persons without limitation of any kind, the tax treatment and tax structure of any transaction and all materials of any kind (including opini ons or other tax analyses, if any) that are provided to the Company relating to such tax treatment and structure. However, any information relating to the tax treatment and tax s tru cture shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this pur pos e, the tax treatment of a transaction is the purported or claimed U.S. income or franchise tax treatment of the transaction and the tax structure of a transaction is any fac t that may be relevant to understanding the purported or claimed U.S. income or franchise tax treatment of the transaction. If the Company plans to disclose information pur suant to the first sentence of this paragraph, the Company shall inform those to whom it discloses any such information that they may not rely upon such informat ion for any purpose without Houlihan Lokey’s prior written consent. Houlihan Lokey is not an expert on, and nothing contained in the materials should be construed as advice with regard to, legal, accounting, regulatory, insurance, tax or other specialist matters. Houlihan Lokey’s role in reviewing any information was limited solely to performing such a review as it deemed necessary to support its own advice and analysis and was not on behalf of the Board. The materials necessarily are based on financial, economic, market and other conditions as in effect on, and the information ava ilable to Houlihan Lokey as of, the date of the materials. Although subsequent developments may affect the contents of the materials, Houlihan Lokey has not undertaken, and is under no obligation, to update, revise or reaffirm the materials. The materials are not intended to provide the sole basis for evaluation of the Transaction and do not purport to contain all information that may be required. The materials do not address the underlying business decision of the Company or any other party to proceed w ith or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available fo r the Company or any other party. The materials do not constitute any opinion, nor do the materials constitute a recommendation to the Board, the Company, any secu rit y holder of the Company or any other party as to how to vote or act with respect to any matter relating to the Transaction or otherwise or whether to buy or sell any assets or securities of any company. Houlihan Lokey’s only opinion is the opinion, if any, that is actually delivered to the Board. In preparing the materials Hou lih an Lokey has acted as an independent contractor and nothing in the materials is intended to create or shall be construed as creating a fiduciary or other relation shi p between Houlihan Lokey and any party. The materials may not reflect information known to other professionals in other business areas of Houlihan Lokey and its affiliat es. Disclaimer 40

CONFIDENTIAL The preparation of the materials was a complex process involving quantitative and qualitative judgments and determinations wi th respect to the financial, comparative and other analytic methods employed and the adaption and application of these methods to the unique facts and circumstances prese nte d and, therefore, is not readily susceptible to partial analysis or summary description. Furthermore, Houlihan Lokey did not attribute any particular weight t o a ny analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Each analytical technique ha s inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. Accordingly, the analyses cont ain ed in the materials must be considered as a whole. Selecting portions of the analyses, analytic methods and factors without considering all analyses and factors could c rea te a misleading or incomplete view. The materials reflect judgments and assumptions with regard to industry performance, general business, economic, regulatory, mark et and financial conditions and other matters, many of which are beyond the control of the participants in the Transaction. Any estimates of value contained in the ma terials are not necessarily indicative of actual value or predictive of future results or values, which may be significantly more or less favorable. Any analyses relat ing to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which any assets, businesses or securities may actuall y b e sold. The materials do not constitute a credit rating. In preparing the materials, Houlihan Lokey has not conducted any physical inspection or independent appraisal or eval uat ion of any of the assets, properties or liabilities (contingent or otherwise) of the Company or any other party and has no obligation to evaluate the solvency of the Co mpany or any other party under any law. All budgets, projections, estimates, financial analyses, reports and other information with respect to operations reflected i n t he materials have been prepared by management of the relevant party or are derived from such budgets, projections, estimates, financial analyses, reports and ot her information or from other sources, which involve numerous and significant subjective determinations made by management of the relevant party and/or which such managem ent has reviewed and found reasonable. The budgets, projections and estimates contained in the materials may or may not be achieved and differences bet wee n projected results and those actually achieved may be material. Houlihan Lokey has relied upon representations made by management of the Company that such budgets, pr ojections and estimates have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such manag eme nt (or, with respect to information obtained from public sources, represent reasonable estimates), and Houlihan Lokey expresses no opinion with respect to such b udg ets, projections or estimates or the assumptions on which they are based. The scope of the financial analysis contained herein is based on discussions with the C omp any (including, without limitation, regarding the methodologies to be utilized), and Houlihan Lokey does not make any representation, express or implied, as to t he sufficiency or adequacy of such financial analysis or the scope thereof for any particular purpose. Houlihan Lokey has assumed and relied upon the accuracy and completeness of the financial and other information provided to, dis cussed with or reviewed by it without (and without assuming responsibility for) independent verification of such information, makes no representation or warranty ( exp ress or implied) in respect of the accuracy or completeness of such information and has further relied upon the assurances of the Company that it is not aware of any fac ts or circumstances that would make such information inaccurate or misleading. In addition, Houlihan Lokey has relied upon and assumed, without independent verificat ion , that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company or any othe r p articipant in the Transaction since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to, discusse d w ith or reviewed by Houlihan Lokey that would be material to its analyses, and that the final forms of any draft documents reviewed by Houlihan Lokey will not differ in any material respect from such draft documents. Disclaimer (cont.) 41

CONFIDENTIAL The materials are not an offer to sell or a solicitation of an indication of interest to purchase any security, option, commo dit y, future, loan or currency. The materials do not constitute a commitment by Houlihan Lokey or any of its affiliates to underwrite, subscribe for or place any securities, to e xte nd or arrange credit, or to provide any other services. In the ordinary course of business, certain of Houlihan Lokey’s affiliates and employees, as well as investment fun ds in which they may have financial interests or with which they may co - invest, may acquire, hold or sell, long or short positions, or trade or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company, any Transaction counterparty, any oth er Transaction participant, any other financially interested party with respect to any transaction, other entities or parties that are mentioned in the materials, or any of the foregoing entities’ or parties’ respective affiliates, subsidiaries, investment funds, portfolio companies and representatives (collectively, the “Interested Parties”), or any currency or commodity that may be involved in the Transaction. Houlihan Lokey provides mergers and acquisitions, restructuring and other advisory and consultin g s ervices to clients, which may have in the past included, or may currently or in the future include, one or more Interested Parties, for which services Houlihan Lokey h as received, and may receive, compensation. Although Houlihan Lokey in the course of such activities and relationships or otherwise may have acquired, or may in the futu re acquire, information about one or more Interested Parties or the Transaction, or that otherwise may be of interest to the Board or the Company, Houlihan Lokey shall ha ve no obligation to, and may not be contractually permitted to, disclose such information, or the fact that Houlihan Lokey is in possession of such information, to the Board or the Company or to use such information on behalf of the Board or the Company. Houlihan Lokey’s personnel may make statements or provide advice that is c ont rary to information contained in the materials. Disclaimer (cont.) 42

CONFIDENTIAL 43 CORPORATE FINANCE FINANCIAL RESTRUCTURING FINANCIAL AND VALUATION ADVISORY HL .com

 

 

Exhibit 107

 

CALCULATION OF FILING FEE TABLES

 

Schedule 13E-3

(Form Type)

Battalion Oil Corporation
Luminus Management, LLC
Luminus Energy Partners Master Fund, Ltd.
Oaktree Capital Group, LLC
Oaktree Fund GP, LLC
OCM Holdings I, LLC
Oaktree Holdings, LLC
OCM HLCN Holdings, L.P.
Oaktree Fund GPI, L.P.
Oaktree Capital I, L.P.

 

(Exact Name of Registrant and Name of Person Filing Statement)

 

Table 1: Transaction Valuation

 

		Proposed Maximum Aggregate Value of Transaction				Fee  Rate				Amount of Filing Fee
Fees to be Paid		$	162,871,619.40	(1)			0.00014760			$	24,039.85	(2)
Fees Previously Paid		$	0							$	0
Total Transaction Valuation		$	162,871,619.40
Total Fees Due for Filing										$	24,039.85
Total Fees Previously Paid										$	0
Total Fee Offsets										$	24,039.85	(3)
Net Fee Due										$	0

 

(1)

The proposed maximum aggregate value of the transaction was determined based upon the sum of (A) (i) 16,456,563 shares of common stock, par value $0.0001, issued and outstanding and owned by persons other than the Company, Parent or Merger Sub, multiplied by (ii) the merger consideration of $9.80 per share; plus (B) no shares of common stock underlying options to purchase shares of common stock with exercise prices less than $9.80 per share; plus (C) (i) 162,990 shares of restricted stock units multiplied by (ii) the merger consideration of $9.80 per share. In accordance with Exchange Act Rule 0-11(c), the filing fee of $24,039.85 was determined by multiplying 0.0001476 by the proposed maximum aggregate value of the transaction..

 

(2)	. The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2023 by multiplying the transaction value by 0.00014760.

 

(3)	The Company previously paid $24,039.85 upon the filing of its Preliminary Proxy Statement on Schedule 14A on January 12, 2024 in connection with the transaction reported hereby.

 

Table 2: Fee Offset Claims and Sources

 

Registrant or Filer  Name

Form or Filing Type

File Number

Initial Filing Date

Filing Date

Fee Offset Claimed

Fee Paid with Fee Offset Source

Fee Offset Claims

Battalion Oil Corporation

Schedule 14A

001-35467

January 12, 2024

$

24,039.85

Fee Offset Sources

Battalion Oil Corporation

Schedule 14A

001-35467

January 12, 2024

$

24,039.85

 

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