Battalion Oil (NYSE: BATL) cuts loan margin, extends debt to 2029
Rhea-AI Filing Summary
Battalion Oil Corporation refinanced its senior secured credit facility through a Third Amended and Restated Senior Secured Credit Agreement. The new structure maintains $162.5 million of term loans, adds up to $175.0 million of discretionary delayed draw capacity, and extends debt maturity to December 31, 2029.
Borrowings now accrue interest at SOFR plus a fixed 6.50% margin (or ABR plus 5.50%) with a 0.15% credit spread adjustment, replacing a higher leverage-based grid. The company highlights reduced borrowing costs, deferred principal amortization beginning in the quarter ending June 30, 2027, and enhanced liquidity to support its Monument Draw development program and broader strategic objectives.
Positive
- Lower borrowing costs and extended maturity: The new credit agreement replaces a 7.75%–8.50% SOFR margin grid with a fixed 6.50% margin and extends debt maturity to December 31, 2029, which can ease interest expense and near-term refinancing pressure.
- Stronger liquidity and capital flexibility: The structure maintains $162.5 million of term loans, reflects prior debt reduction from about $208.1 million to $162.5 million, and adds up to $175.0 million of discretionary delayed draw capacity to fund operations and development if conditions and lender decisions allow.
Negative
- None.
Insights
Refinancing lowers borrowing cost, pushes out maturities, and adds discretionary debt capacity.
Battalion Oil replaced its Existing Credit Agreement with a Third Amended and Restated Senior Secured Credit Agreement. The facility keeps $162.5 million of term loans outstanding and introduces up to $175.0 million of uncommitted delayed draw capacity, extending maturity to December 31, 2029.
Pricing shifts to SOFR plus a fixed 6.50% margin (or ABR plus 5.50%) with a 0.15% credit spread adjustment, versus the prior leverage-based margin range of 7.75%–8.50%. Management also notes earlier 2026 balance sheet actions that reduced debt from approximately $208.1 million to $162.5 million.
The agreement adds maintenance covenants on Total Net Leverage Ratio, Current Ratio, Asset Coverage Ratio and minimum Liquidity, measured from quarters starting September 30, 2026. Overall, this appears to improve cost of capital and term out debt, though actual impact will depend on future leverage, covenant compliance and any use of the discretionary delayed draw capacity.
8-K Event Classification
Key Figures
Key Terms
Third Amended and Restated Senior Secured Credit Agreement financial
delayed draw term loan facility financial
Total Net Leverage Ratio financial
Current Ratio financial
Asset Coverage Ratio financial
Liquidity financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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CURRENT REPORT
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Item 1.01 | Entry Into Material Definitive Agreement. |
On June 30, 2026 (the “Closing Date”), Halcón Holdings, LLC (the “Borrower”), a wholly owned subsidiary of Battalion Oil Corporation (the “Company”), entered into a Third Amended and Restated Senior Secured Credit Agreement (the “Third Amended and Restated Credit Agreement”), by and among the Company, the Borrower, the subsidiary guarantors party thereto, Fortress Credit Corp. (“Fortress”), as administrative agent, and certain other financial institutions party thereto, as lenders. The Third Amended and Restated Credit Agreement amends and restates in its entirety the Second Amended and Restated Senior Secured Credit Agreement dated as of December 26, 2024 (as amended prior to the Closing Date, the “Existing Credit Agreement”), by and among the Company, the Borrower, the subsidiary guarantors party thereto, Fortress, as administrative agent, and the lenders party thereto. All secured obligations under the Existing Credit Agreement were deemed continued and re-evidenced under the Third Amended and Restated Credit Agreement.
Pursuant to the Third Amended and Restated Credit Agreement, the lenders party thereto have agreed to provide the Borrower with (i) a term loan facility in the aggregate principal amount of $162.5 million, deemed funded on the Closing Date and (ii) on an uncommitted and absolutely discretionary basis, a delayed draw term loan facility in a maximum aggregate amount of up to $175.0 million, to be made available during the period: from and including the Closing Date through and including the earliest to occur of (a) the date on which the delayed draw term loans have been fully drawn or (b) the date on which the discretionary delayed draw term loan commitments are terminated, subject to the satisfaction of certain conditions, each delayed draw term lender’s agreement, in its sole and absolute discretion, to provide a discretionary delayed draw term loan commitment thereunder, and Required Lenders (as defined in the Third Amended and Restated Credit Agreement) consent to such providing a discretionary delayed draw term loan commitment.
The maturity date of the Third Amended and Restated Credit Agreement is December 31, 2029. Until such maturity date, borrowings under the Third Amended and Restated Credit Agreement shall bear interest at a rate per annum equal to a forward-looking term rate based on SOFR for a tenor of three (3) months (with a credit spread adjustment of 0.15% per annum) (or another applicable reference rate, as determined pursuant to the terms of the Third Amended and Restated Credit Agreement) plus an applicable margin of 6.50% (or, for ABR Loans, a base rate plus an applicable margin of 5.50%). The applicable margin is fixed at 6.50% and replaces the leverage-based pricing grid contained in the Existing Credit Agreement, under which the applicable SOFR margin ranged from 7.75% to 8.50% depending on the Total Net Leverage Ratio
The Borrower may elect, at its option, to prepay any borrowing outstanding under the Third Amended and Restated Credit Agreement. Such voluntary prepayments, certain mandatory prepayments and change of control prepayments are subject to the following prepayment premium, as applicable:
Period | Premium | ||
Months 0-12 | Make-whole amount equal to 12 months of interest; provided that in the event of (a) a Change in Control Prepayment (as defined in the Third Amended and Restated Credit Agreement) or (b) the sale of all or substantially all of the loan parties’ assets, 2.00% | ||
Months 13-24 | 1.00% | ||
Thereafter | 0.00% |
The Borrower may be required to make mandatory prepayments of the loans under the Third Amended and Restated Credit Agreement in connection with the incurrence of non-permitted debt, certain asset sales, and with excess cash on hand in excess of certain maximum levels. The Borrower is required to make scheduled amortization payments (i) commencing with the fiscal quarter ending June 30, 2027 through and including the fiscal quarter ending March 31, 2029, in an aggregate principal amount equal to 1.25%, (ii) for the fiscal quarter ending June 30, 2029, an aggregate principal amount equal to 7.50%, and (iii) for the fiscal quarter ending September 30, 2029, an aggregate principal amount equal to 10.00%, in each case, of the loans outstanding on the Closing Date.
Amounts outstanding under the Third Amended and Restated Credit Agreement are guaranteed by certain of the Borrower’s direct and indirect subsidiaries and secured by a security interest in substantially all of the assets of
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the Borrower and such direct and indirect subsidiaries, and of the equity interests of the Borrower held by the Company.
The Third Amended and Restated Credit Agreement contains certain customary representations and warranties, including organization; powers; authority; enforceability; approvals; no conflicts; financial condition; no material adverse effect; litigation; environmental matters; compliance with laws and agreements; no defaults; Investment Company Act; taxes; ERISA; disclosure; no material misstatements; insurance; restrictions on liens; subsidiaries; location of business and offices; properties and titles; maintenance of properties; gas imbalances; prepayments; marketing of production; swap agreements; use of proceeds; solvency; money laundering; anti-corruption laws; sanctions; EEA financial institutions; senior debt status; suspense accounts; and midstream agreements.
The Third Amended and Restated Credit Agreement also contains certain affirmative and negative covenants, including delivery of financial statements; notice of material events; conduct of business; payment and performance of obligations; operation and maintenance of properties; insurance; books and records; compliance with laws; environmental matters; reserve reports; capital plan; title information; ERISA; account control agreements; lender meetings; marketing activities; keepwell; swap agreements; permitted joint ventures; separateness; indebtedness; liens; dividends and distributions; investments; amendments to organizational documents; sale or discount of receivables; mergers; sale of properties; unwind of swap agreements; transactions with affiliates; negative pledges; dividend restrictions; gas imbalances; take-or-pay or other prepayments; swap agreements; maximum G&A expenses; capital expenditures; minimum volume commitments; workover expenses; well services contracts; and a holding company status covenant in respect to the Company.
The Third Amended and Restated Credit Agreement also contains certain financial covenants, including the maintenance of (i) a Total Net Leverage Ratio (as defined in the Third Amended and Restated Credit Agreement) not to exceed 2.75x as of each fiscal quarter ending September 30, 2026 through and including December 31, 2026, and 2.50x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter, (ii) a Current Ratio (as defined in the Third Amended and Restated Credit Agreement) not to fall below 1.00x, determined as of the last day of any fiscal quarter commencing with the fiscal quarter ending September 30, 2026, (iii) an Asset Coverage Ratio (as defined in the Third Amended and Restated Credit Agreement) not to fall below 1.75x as of each fiscal quarter ending September 30, 2026 through and including December 31, 2026, 2.00x as of each fiscal quarter ending March 31, 2027 through and including December 31, 2027, and 2.50x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter, and (iv) Liquidity (as defined in the Third Amended and Restated Credit Agreement) not to fall below the greater of (x) $10,000,000 and (y) the amount equal to the scheduled principal and interest payments for the immediately succeeding three (3) month period, determined as of the last day of any fiscal quarter.
The Third Amended and Restated Credit Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy.
The foregoing description of the Third Amended and Restated Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Third Amended and Restated Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 7.01Regulation FD Disclosure.
On July 1, 2026, the Company issued a press release announcing the execution of the Third Amended and Restated Credit Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
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Item 9.01Financial Statements and Exhibits
(d)Exhibits.
The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
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10.1 |
| Third Amended and Restated Senior Secured Credit Agreement dated as of June 30, 2026, by and among Battalion Oil Corporation, as holdings, Halcón Holdings LLC, as borrower, the subsidiary guarantors party thereto, Fortress Credit Corp., as administrative agent, and the lenders party thereto. |
99.1 | Press Release issued on July 1, 2026. | |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BATTALION OIL CORPORATION | |
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July 1, 2026 | By: | /s/ Matthew B. Steele |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
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Exhibit 99.1
Battalion Oil Announces Refinancing and Execution of Third Amended and Restated Credit Agreement
Houston, Texas, July 1, 2026 (GLOBE NEWSWIRE) –
Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced the closing of a refinancing of its senior secured credit facility through the execution of a Third Amended and Restated Senior Secured Credit Agreement (the “New Credit Agreement”), which reduces borrowing costs, extends debt maturity through December 2029, defers principal amortization, and provides potential access to additional discretionary capital to support the Company's ongoing operations and strategic objectives.
Key Highlights
| ● | Achieved improved terms with no new cash borrowing and no novation, as existing lenders rolled the full $162.5 million of outstanding term loans into the New Credit Agreement, emphasizing continued lender confidence in Battalion’s credit. |
| ● | Net debt as of June 29, 2026 is ~$65.5 million; total gross term loan debt of $162.5 million less ~$96.99 million of cash and reinvestment proceeds. |
| ● | Reduced borrowing costs by a minimum of 125 basis points, replacing the Existing Credit Agreement's leverage-based pricing grid of 7.75% to 8.50% with a fixed applicable margin of 6.50% over SOFR. |
| ● | Extended debt maturity by a full year from December 26, 2028 to December 31, 2029. |
| ● | Deferred all principal amortization for a full year, with scheduled quarterly payments under the New Credit Agreement not commencing until the fiscal quarter ending June 30, 2027. |
| ● | Secured access to up to $175 million of additional discretionary delayed draw capacity to fund future growth, available on an uncommitted basis. |
Management Comments
The refinancing strengthens Battalion's capital structure by reducing borrowing costs, extending debt maturities, and enhancing liquidity flexibility for future development activities. These improvements build on the Company's balance sheet initiatives completed earlier in 2026, including the divestiture of the West Quito Assets and the associated debt reduction from approximately $208.1 million at year-end 2025 to approximately $162.5 million as of March 31, 2026, as previously reported, and further position Battalion to execute its Monument Draw development program and long-term strategic objectives. Given the significant cash on hand and reinvestment proceeds, the Company has ample liquidity to execute on its favorable Joint Development Agreement with enhanced economics as well as additional accretive operations or strategic alternatives.
“Closing this refinancing is a meaningful milestone for Battalion,” said Matt Steele, Chief Executive Officer of Battalion. “Locking in a fixed 6.50% margin over SOFR reduces our borrowing costs and eliminates the uncertainty associated with a leverage-based pricing grid. Combined with the deferral of principal amortization and extension of debt maturity through December 2029, this transaction significantly enhances our financial flexibility as we continue executing our Monument Draw development program.”
Transaction Description
The New Credit Agreement amends and restates in its entirety the Second Amended and Restated Senior Secured Credit Agreement dated December 26, 2024, as amended (the “Existing Credit Agreement”). The transaction amends and restates the Existing Credit Agreement and does not involve a novation. Outstanding term loans under the Existing Credit Agreement will continue under the New Credit Agreement as Closing Date Term Loans, against a maximum Closing Date Term Loan Commitment of $162.5 million and no new cash borrowing.
Key terms of the New Credit Agreement include:
Interest Rate: SOFR plus a fixed applicable margin of 6.50% per annum (or ABR plus 5.50%), along with a 0.15% credit spread adjustment. The fixed margin replaces the leverage-based pricing grid under the Existing Credit Agreement, under which the SOFR margin ranged from 7.75% to 8.50% depending on the Company's Total Net Leverage Ratio.
Maturity: December 31, 2029.
Delayed Draw Facility: Up to $175.0 million of discretionary delayed draw term loan capacity, available on an uncommitted basis and subject to each lender's sole discretion to provide commitments.
Amortization: Scheduled quarterly principal amortization commences with the fiscal quarter ending June 30, 2027.
Financial Covenants: Includes maintenance covenants relating to Total Net Leverage Ratio, Current Ratio, Asset Coverage Ratio and minimum Liquidity, each commencing with the fiscal quarter ending September 30, 2026.
A copy of the Third Amended and Restated Credit Agreement will be filed as an exhibit to a Current Report on Form 8-K with the Securities and Exchange Commission.
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about the expected benefits of the Third Amended and Restated Credit Agreement, anticipated improvements in the Company’s borrowing cost and financial ratios, future amortization obligations, covenant compliance expectations, the potential availability or use of the Discretionary Delayed Draw Term Loan facility, and the Company’s ability to execute its development program. Forward-looking statements can often, but not always, be identified by the use of such words as “expects”, “believes”, “intends”, “anticipates”, “plans”, “estimates”, “projects,” “potential”, “possible”, or “probable” or statements that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved. Forward-looking statements are based on current beliefs and
expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and other filings submitted by the Company to the SEC, copies of which may be obtained from the SEC’s website at www.sec.gov or through the Company’s website at www.battalionoil.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company’s expectations.
About Battalion
Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
Contact Data
Matthew B. Steele
Chief Executive Officer
832-538-0300