Battalion Oil Corporation Announces Termination of Merger Agreement with Fury Resources, Inc. and Provides Operations Update
Rhea-AI Summary
Battalion Oil (NYSE American: BATL) has terminated its merger agreement with Fury Resources, Inc. due to Fury's inability to meet obligations and close the transaction. Despite multiple amendments and support from preferred equity holders who agreed to contribute 100% of their preferred equity, Fury failed to provide evidence of additional equity financing. The scheduled special stockholders meeting for December 27, 2024, has been cancelled.
In operational updates, Battalion reports its latest drilling campaign is ahead of schedule and budget in Monument Draw. Two new Vermejo wells are performing above expectations, producing 1,211 barrels of oil equivalent per day (84% oil) with capital costs below $950/ft. The acid gas injection facility has processed over 5.1 billion cubic feet of sour gas, with daily volumes exceeding 30 million cubic feet per day.
Positive
- Two new Vermejo wells exceeding type curve expectations with 1,211 Boe/d production
- Capital costs remain below $950/ft for new wells
- AGI facility successfully processing over 5.1 bcf of sour gas
- Daily gas processing volumes exceeding 30 MMcf/d
- Current drilling campaign ahead of schedule and budget
Negative
- Termination of merger agreement with Fury Resources
- Failed acquisition due to Fury's inability to secure additional equity financing
News Market Reaction – BATL
On the day this news was published, BATL declined 42.92%, reflecting a significant negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Houston, Texas, Dec. 20, 2024 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL) (“Battalion” or the “Company”) announced today that it has terminated the previously disclosed Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Fury Resources, Inc. (“Buyer” or “Fury”).
As of this morning, Fury was not able meet the obligations and close the transaction contemplated by the Merger Agreement. Over the past year, in order to facilitate the transaction, the Company and Fury entered into numerous amendments to the terms of the Merger Agreement. In support of the transaction, the holders of all of the outstanding shares of the preferred equity of the Company, Luminus Management, LLC, Gen IV Investment Opportunities, LLC, and funds and accounts managed by Oaktree Capital Management, L.P., or their respective affiliates, had agreed to contribute to Buyer
In connection with the termination of the Merger Agreement, the Company has cancelled the special meeting of stockholders, scheduled for December 27, 2024.
Operations Update
The Company kicked off its latest drilling campaign in the fourth quarter and the first two-well pad in Monument Draw is currently ahead of plan from both cycle-time and budget perspectives. Also in the fourth quarter, the two previously announced Vermejo wells came online and are producing above the Company’s type curve expectations with initial 30-day production of 1,211 barrels of oil equivalent per day (Boe/d) (
To date, the acid gas injection (“AGI”) facility has treated over 5.1 billion cubic feet (bcf) of sour gas and daily volumes have exceeded 30 million cubic feet per day (MMcf/d). Battalion and its JV partner continue to ramp toward full inlet capacity in the current AGI facility and the Company is evaluating potential next steps for its second AGI well that is already permitted, drilled and completed in the target injection zone.
About Battalion
Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
FAQ
Why did Battalion Oil (BATL) terminate its merger agreement with Fury Resources?
What is the production rate of Battalion Oil's new Vermejo wells in December 2024?
How much gas has Battalion's AGI facility processed to date?
What are the capital costs per foot for Battalion Oil's new wells?
