Battalion Oil Q3 loss to common holders widens to $41.1M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Battalion Oil Corporation (BATL) reported third-quarter 2026 operating revenue of $45.644 million, versus $43.482 million a year earlier, while average daily production was 11,359 Boe/d versus 12,293 Boe/d. Net loss available to common stockholders was $41.108 million; the $44.831 million loss on derivative contracts included $38.378 million of non-cash unrealized mark-to-market losses. Adjusted diluted net loss available to common stockholders was $2.418 million, compared with $15.734 million, and adjusted EBITDA was $10.105 million versus $18.882 million.
Operating cash flow was $1.641 million, compared with $27.973 million. At September 30, 2026, cash and cash equivalents were $92.091 million and term loan indebtedness outstanding was $162.5 million. Battalion returned to active drilling; it reported oil production of 4,915 net barrels per day against a 4,835 target and contracted the rig for four additional wells. After quarter-end, it ceased nearly all trading under its ATM program. Management also described a transition from trucking to pipeline transportation for oil.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointAdjusted diluted net loss narrowed to $2.418 million from $15.734 million.
Negative
- Major pointNet loss available to common stockholders was $41.108 million, versus $15.014 million.
- Moderate pointAdjusted EBITDA declined to $10.105 million from $18.882 million.
- Moderate pointOperating cash flow fell to $1.641 million from $27.973 million.
Filing Explained
At
8-K Event Classification
Key Figures
Key Terms
non-GAAP financial measures financial
mark-to-market financial
Adjusted EBITDA financial
Boe/d technical
JEDA technical
ATM program financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What drove BATL's Q3 2026 revenue change?
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AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction |
| (Commission File Number) |
| (IRS Employer |
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(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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| Name of each exchange on which registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On November 12, 2026, Battalion Oil Corporation (the “Company”) issued a press release with respect to the Company’s second quarter 2026 financial results. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The press release contains certain measures discussed below that may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In each case, the most directly comparable GAAP financial measure and information reconciling the GAAP and non-GAAP measures is also included in the press release.
Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
From time to time management discloses net income (loss) and earnings per share excluding selected items as well as EBITDA, LTM EBITDA, cash flow from operations, general and administrative expenses adjusted for selected items. These measures are presented based on management’s belief that these non-GAAP measures enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods. These measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flow from operations, as defined by GAAP. These measures may not be comparable to similarly named non-GAAP measures that other companies may use and may not be useful in comparing the performance of those companies to our performance.
Item 8.01 | Other Events. |
The press release furnished as Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits. The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
| Description |
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99.1 |
| Press release issued by Battalion Oil Corporation dated November 12, 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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November 12, 2026 | By: | /s/ Matthew B. Steele |
| Name: | Matthew B. Steele |
| Title: | Chief Executive Officer |
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Exhibit 99.1
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Battalion Oil Corporation Announces
Third Quarter 2026 Financial and Operating Results
Houston, Texas, November 12, 2026 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the third quarter of 2026.
Key Q3 2026 Highlights
| ● | Generated third quarter 2026 sales volumes of 11,359 barrels of oil equivalent per day (“Boe/d”) (~43% oil, 69% liquids) |
| ● | Ended the quarter with $92.1 million of cash and cash equivalents and net debt (term loan indebtedness less cash and cash equivalents) of $70.4 million, down from $74.2 million at June 30, 2026 and $163.3 million at September 30, 2025. |
| ● | Placed 17.1 million shares of common stock under its at-the-market (“ATM”) program for net proceeds of $28.4 million. Subsequent to September 30, 2026, the Company placed 25,000 additional shares. |
| ● | Commenced drilling operations under the previously announced joint exploration and development agreement (“JEDA”). Subsequent to quarter end, have reached total depth on the four-well pad ahead of plan by over 25 days and under budget by more than $1.5 million gross cost. Completions will commence in late fourth quarter 2026 or early first quarter 2027. |
| ● | Appointed John “Brad” Juneau to the board of directors effective September 30, 2026. |
| ● | Executed a transformative midstream transaction on November 11, 2026 to transport the Company’s crude via pipeline rather than trucking. This transaction will significantly lower gathering costs as well as mitigate environment, health and safety risks. |
Management Comments
During the third quarter of 2026, the Company returned to active drilling operations. The drilling performance on the first four wells of the JEDA has exceeded expectations by significant margins. The Company has contracted the rig for an additional four wells, and the rig is currently mobilizing to the next drilling location. Our partner in the JEDA has indicated their desire to participate in the next 4 wells. The Company also exceeded internal oil production targets for the third quarter of 2026, producing an average 4,915 net barrels oil per day versus a target of 4,835 net barrels oil per day.
Financing activities under the ATM program during the third quarter of 2026 have completed the transformation of our balance sheet. Following the close of the third quarter, the Company ceased nearly all trading under the ATM and maintains its commitment of judicious use of the facility going forward. Transition from trucking to transportation of oil via pipeline is a gamechanger for the Company and represents the culmination of years of multi-party negotiations.
“Our commitment to operational excellence has shown in our third quarter results. I’m proud of the team and look forward to continued execution,” said Daniel Rohling, COO of Battalion.
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Results of Operations
Average daily net production and total operating revenue during the third quarter of 2026 were 11,359 Boe/d (43% oil) and $45.6 million, respectively, as compared to production and revenue of 12,293 Boe/d (53% oil) and $43.5 million, respectively, during the third quarter of 2025. The increase in revenues in the third quarter of 2026 as compared to the third quarter of 2025 is primarily attributable to a $5.13 increase per Boe in average realized prices (excluding the impact of hedges) partially offset by lower production primarily resulting from the disposition of volumes associated with the West Quito sale. Excluding the impact of hedges, Battalion realized approximately 98% of the average NYMEX oil price during the third quarter of 2026. Realized hedge losses totaled approximately $6.5 million during the third quarter of 2026.
Lease operating and workover expense was $10.40 per Boe in the third quarter of 2026 versus $11.69 per Boe in the third quarter of 2025. The decrease in lease operating and workover expense per Boe year-over-year is primarily the result of lower maintenance, power, and chemical costs. Gathering and other expenses were $12.57 per Boe in the third quarter of 2026 versus $9.02 per Boe in the third quarter of 2025. The increase in gathering and other expenses per Boe is primarily related to greater throughput volumes resulting from entry into a long-term processing agreement with a publicly traded large-cap midstream provider in January 2026. General and administrative expenses were $3.71 per Boe in the third quarter of 2026 compared to $2.73 per Boe in the third quarter of 2025. The increase in general and administrative expenses for the third quarter of 2026 is primarily due to higher professional fees including legal costs. Excluding non-recurring charges, general and administrative expenses would have been $3.29 per Boe in the third quarter of 2026.
For the third quarter of 2026, the Company reported a net loss available to common stockholders of $41.1 million and a net loss of $0.75 per share available to common stockholders, primarily reflecting a $44.8 million net loss on derivative contracts, of which $38.4 million was a non-cash unrealized mark-to-market loss. After adjusting for selected items, the Company reported an adjusted diluted net loss available to common stockholders for the third quarter of 2026 of $2.4 million or an adjusted diluted net loss of $0.04 per common share compared to an adjusted diluted net loss available to common stockholders for the third quarter of 2025 of $15.7 million or an adjusted diluted net loss of $0.96 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended September 30, 2026 was $10.1 million as compared to $18.9 million during the quarter ended September 30, 2025 (see Adjusted EBITDA Reconciliation table for additional information). The Company generated net cash flows from operating activities of $1.6 million for the quarter ended September 30, 2026 compared to $28.0 million for the quarter ended September 30, 2025.
Liquidity and Balance Sheet
As of September 30, 2026, the Company had $162.5 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents of $92.1 million.
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about anticipated production, liquidity, capital spending, drilling and completion plans, and forward guidance. Forward-looking statements may often, but not always, be identified by the use of such words such as "expects", "believes", "intends", "anticipates", "plans", "estimates", “projects,” "potential", "possible", or "probable" or statements that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various
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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
Matthew B. Steele
Chief Executive Officer & Principal Financial Officer
832-538-0300
3
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Operating revenues: | | | | | | | | | | | | |
Oil, natural gas and natural gas liquids sales: | | | | | | | | | | | | |
Oil | | $ | 37,987 | | $ | 38,325 | | $ | 123,421 | | $ | 114,316 |
Natural gas | | | 2,380 | | | 853 | | | (6,017) | | | 4,611 |
Natural gas liquids | | | 5,080 | | | 4,208 | | | 15,083 | | | 14,420 |
Total oil, natural gas and natural gas liquids sales | | | 45,447 | | | 43,386 | | | 132,487 | | | 133,347 |
Other | | | 197 | | | 96 | | | 460 | | | 422 |
Total operating revenues | | | 45,644 | | | 43,482 | | | 132,947 | | | 133,769 |
| | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | |
Production: | | | | | | | | | | | | |
Lease operating | | | 10,026 | | | 12,389 | | | 29,309 | | | 33,417 |
Workover and other | | | 849 | | | 839 | | | 2,489 | | | 4,581 |
Taxes other than income | | | 1,723 | | | 2,622 | | | 7,028 | | | 7,944 |
Gathering and other | | | 13,139 | | | 10,199 | | | 36,657 | | | 33,157 |
General and administrative | | | 3,879 | | | 3,085 | | | 12,205 | | | 10,065 |
Depletion, depreciation and accretion | | | 11,060 | | | 13,522 | | | 35,644 | | | 40,541 |
Total operating expenses | | | 40,676 | | | 42,656 | | | 123,332 | | | 129,705 |
Income from operations | | | 4,968 | | | 826 | | | 9,615 | | | 4,064 |
| | | | | | | | | | | | |
Other income (expenses): | | | | | | | | | | | | |
Net (loss) gain on derivative contracts | | | (44,831) | | | 5,180 | | | (79,744) | | | 26,030 |
Interest expense and other | | | (3,637) | | | (6,741) | | | (13,478) | | | (20,010) |
Loss on extinguishment of debt | | | — | | | — | | | (862) | | | — |
Total other (expenses) income | | | (48,468) | | | (1,561) | | | (94,084) | | | 6,020 |
(Loss) income before income taxes | | | (43,500) | | | (735) | | | (84,469) | | | 10,084 |
Income tax benefit (provision) | | | — | | | — | | | — | | | — |
Net (loss) income | | $ | (43,500) | | $ | (735) | | $ | (84,469) | | $ | 10,084 |
Preferred dividends | | | (201) | | | (14,279) | | | (8,532) | | | (34,369) |
Deemed contribution - preferred stock repurchase | | | 2,593 | | | — | | | 2,593 | | | — |
Net loss available to common stockholders | | $ | (41,108) | | $ | (15,014) | | $ | (90,408) | | $ | (24,285) |
| | | | | | | | | | | | |
Net loss per share of common stock available to common stockholders: | | | | | | | | | | | | |
Basic | | $ | (0.75) | | $ | (0.91) | | $ | (2.74) | | $ | (1.48) |
Diluted | | $ | (0.75) | | $ | (0.91) | | $ | (2.74) | | $ | (1.48) |
Weighted average common shares outstanding: | | | | | | | | | | | | |
Basic | | | 54,686 | | | 16,457 | | | 32,980 | | | 16,457 |
Diluted | | | 54,686 | | | 16,457 | | | 32,980 | | | 16,457 |
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BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)
| | September 30, 2026 | | December 31, 2025 | ||
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 92,091 | | $ | 27,965 |
Accounts receivable, net | | | 25,644 | | | 12,071 |
Assets from derivative contracts | | | 2,672 | | | 16,145 |
Restricted cash | | | 91 | | | 91 |
Prepaids and other | | | 589 | | | 892 |
Total current assets | | | 121,087 | | | 57,164 |
Oil and natural gas properties (full cost method): | | | | | | |
Evaluated | | | 840,724 | | | 890,050 |
Unevaluated | | | 54,334 | | | 48,025 |
Gross oil and natural gas properties | | | 895,058 | | | 938,075 |
Less: accumulated depletion | | | (582,880) | | | (547,982) |
Net oil and natural gas properties | | | 312,178 | | | 390,093 |
Other operating property and equipment: | | | | | | |
Other operating property and equipment | | | 4,692 | | | 4,678 |
Less: accumulated depreciation | | | (2,856) | | | (2,807) |
Net other operating property and equipment | | | 1,836 | | | 1,871 |
Other noncurrent assets: | | | | | | |
Assets from derivative contracts | | | 3,822 | | | 7,350 |
Operating lease right of use assets | | | 7,152 | | | 840 |
Other assets | | | 3,867 | | | 3,360 |
Total assets | | $ | 449,942 | | $ | 460,678 |
| | | | | | |
Current liabilities: | | | | | | |
Accounts payable and accrued liabilities | | $ | 46,664 | | $ | 39,734 |
Liabilities from derivative contracts | | | 31,447 | | | 633 |
Current portion of long-term debt | | | 4,063 | | | 22,510 |
Operating lease liabilities | | | 1,398 | | | 764 |
Total current liabilities | | | 83,572 | | | 63,641 |
Long-term debt, net | | | 154,239 | | | 180,955 |
Other noncurrent liabilities: | | | | | | |
Liabilities from derivative contracts | | | 18,328 | | | 1,692 |
Asset retirement obligations | | | 18,832 | | | 20,837 |
Operating lease liabilities | | | 5,913 | | | 104 |
Commitments and contingencies | | | | | | |
Temporary equity: | | | | | | |
Redeemable convertible preferred stock: 138,000 shares | | | | | | |
of $0.0001 par value authorized, issued and outstanding, | | | | | | |
$193,757 aggregate liquidation preference at December 31, 2025 | | | — | | | 226,241 |
Stockholders' equity (deficit): | | | | | | |
Redeemable convertible preferred stock: 103,041 shares | | | | | | |
of $0.0001 par value authorized, issued and outstanding, | | | | | | |
$162,821 aggregate liquidation preference at September 30, 2026 | | | 175,083 | | | — |
Common stock: 100,000,000 shares of $0.0001 par value authorized; | | | | | | |
59,481,510 and 16,456,563 shares issued and outstanding at | | | | | | |
September 30, 2026 and December 31, 2025, respectively | | | 6 | | | 2 |
Additional paid-in capital | | | 351,434 | | | 240,202 |
Accumulated deficit | | | (357,465) | | | (272,996) |
Total stockholders' equity (deficit) | | | 169,058 | | | (32,792) |
Total liabilities, temporary equity and stockholders' equity | | $ | 449,942 | | $ | 460,678 |
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BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Cash flows from operating activities: | | | | | | | | | | | | |
Net (loss) income | | $ | (43,500) | | $ | (735) | | $ | (84,469) | | $ | 10,084 |
Adjustments to reconcile net (loss) income to net cash | | | | | | | | | | | | |
provided by operating activities: | | | | | | | | | | | | |
Depletion, depreciation and accretion | | | 11,060 | | | 13,522 | | | 35,644 | | | 40,541 |
Stock-based compensation, net | | | 115 | | | — | | | 536 | | | (109) |
Unrealized loss (gain) on derivative contracts | | | 38,378 | | | (1,044) | | | 64,450 | | | (20,120) |
Amortization of deferred financing costs | | | 320 | | | 388 | | | 932 | | | 1,180 |
Loss on extinguishment of debt | | | — | | | — | | | 862 | | | — |
Accrued settlements on derivative contracts | | | 2,906 | | | 613 | | | 5,301 | | | 76 |
Other | | | 126 | | | 84 | | | 133 | | | 193 |
Cash flows from operations before changes in working capital | | | 9,405 | | | 12,828 | | | 23,389 | | | 31,845 |
Changes in working capital | | | (7,764) | | | 15,145 | | | (10,865) | | | 19,064 |
Net cash provided by operating activities | | | 1,641 | | | 27,973 | | | 12,524 | | | 50,909 |
| | | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | | | |
Oil and natural gas capital expenditures | | | (5,276) | | | (16,483) | | | (13,094) | | | (69,573) |
Proceeds received from sale of oil and natural gas assets | | | (1,245) | | | — | | | 58,810 | | | — |
Other operating property and equipment capital expenditures | | | — | | | — | | | — | | | (14) |
Other | | | (315) | | | (5) | | | (329) | | | (375) |
Net cash (used in) provided by investing activities | | | (6,836) | | | (16,488) | | | 45,387 | | | (69,962) |
| | | | | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | | | | |
Proceeds from borrowings | | | — | | | — | | | — | | | 63,000 |
Repayments of borrowings | | | — | | | (5,651) | | | (45,635) | | | (11,329) |
Debt issuance costs | | | (258) | | | — | | | (1,322) | | | (1,875) |
Proceeds from issuance of common stock | | | 28,294 | | | — | | | 72,222 | | | — |
Preferred stock repurchase | | | (19,050) | | | — | | | (19,050) | | | — |
Net cash provided by (used in) financing activities | | | 8,986 | | | (5,651) | | | 6,215 | | | 49,796 |
| | | | | | | | | | | | |
Net increase in cash, cash equivalents and restricted cash | | | 3,791 | | | 5,834 | | | 64,126 | | | 30,743 |
| | | | | | | | | | | | |
Cash, cash equivalents and restricted cash at beginning of period | | | 88,391 | | | 44,712 | | | 28,056 | | | 19,803 |
Cash, cash equivalents and restricted cash at end of period | | $ | 92,182 | | $ | 50,546 | | $ | 92,182 | | $ | 50,546 |
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BATTALION OIL CORPORATION
SELECTED OPERATING DATA (Unaudited)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Production volumes: | | | | | | | | | | | | |
Crude oil (MBbls) | | | 452 | | | 599 | | | 1,490 | | | 1,752 |
Natural gas (MMcf) | | | 1,969 | | | 1,778 | | | 6,035 | | | 5,713 |
Natural gas liquids (MBbls) | | | 265 | | | 236 | | | 811 | | | 680 |
Total (MBoe) | | | 1,045 | | | 1,131 | | | 3,307 | | | 3,384 |
Average daily production (Boe/d) | | | 11,359 | | | 12,293 | | | 12,114 | | | 12,396 |
| | | | | | | | | | | | |
Average prices: | | | | | | | | | | | | |
Crude oil (per Bbl) | | $ | 84.04 | | $ | 63.98 | | $ | 82.83 | | $ | 65.25 |
Natural gas (per Mcf) | | | 1.21 | | | 0.48 | | | (1.00) | | | 0.81 |
Natural gas liquids (per Bbl) | | | 19.17 | | | 17.83 | | | 18.60 | | | 21.21 |
Total per Boe | | | 43.49 | | | 38.36 | | | 40.06 | | | 39.41 |
| | | | | | | | | | | | |
Cash effect of derivative contracts: | | | | | | | | | | | | |
Crude oil (per Bbl) | | $ | (17.29) | | $ | 1.48 | | $ | (16.19) | | $ | (1.42) |
Natural gas (per Mcf) | | | 0.73 | | | 1.83 | | | 1.48 | | | 1.47 |
Natural gas liquids (per Bbl) | | | (0.31) | | | — | | | (0.10) | | | — |
Total per Boe | | | (6.18) | | | 3.66 | | | (4.62) | | | 1.75 |
| | | | | | | | | | | | |
Average prices computed after cash effect of settlement of derivative contracts: | | | | | | | | | | | | |
Crude oil (per Bbl) | | $ | 66.75 | | $ | 65.46 | | $ | 66.64 | | $ | 63.83 |
Natural gas (per Mcf) | | | 1.94 | | | 2.31 | | | 0.48 | | | 2.28 |
Natural gas liquids (per Bbl) | | | 18.86 | | | 17.83 | | | 18.50 | | | 21.21 |
Total per Boe | | | 37.31 | | | 42.02 | | | 35.44 | | | 41.16 |
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Average cost per Boe: | | | | | | | | | | | | |
Production: | | | | | | | | | | | | |
Lease operating | | $ | 9.59 | | $ | 10.95 | | $ | 8.86 | | $ | 9.88 |
Workover and other | | | 0.81 | | | 0.74 | | | 0.75 | | | 1.35 |
Taxes other than income | | | 1.65 | | | 2.32 | | | 2.13 | | | 2.35 |
Gathering and other | | | 12.57 | | | 9.02 | | | 11.08 | | | 9.80 |
General and administrative, as adjusted (1) | | | 3.29 | | | 2.44 | | | 3.05 | | | 2.50 |
Depletion | | | 10.36 | | | 11.64 | | | 10.55 | | | 11.64 |
| | | | | | | | | | | | |
(1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below: | ||||||||||||
| | | | | | | | | | | | |
General and administrative: | | | | | | | | | | | | |
General and administrative, as reported | | $ | 3.71 | | $ | 2.73 | | $ | 3.70 | | $ | 2.97 |
Stock-based compensation: | | | | | | | | | | | | |
Non-cash | | | (0.12) | | | - | | | (0.17) | | | (0.01) |
Non-recurring charges and other: | | | | | | | | | | | | |
Cash | | | (0.30) | | | (0.29) | | | (0.48) | | | (0.46) |
General and administrative, as adjusted(2) | | $ | 3.29 | | $ | 2.44 | | $ | 3.05 | | $ | 2.50 |
| | | | | | | | | | | | |
Total operating costs, as reported | | $ | 28.33 | | $ | 25.76 | | $ | 26.52 | | $ | 26.35 |
Total adjusting items | | | (0.42) | | | (0.29) | | | (0.65) | | | (0.47) |
Total operating costs, as adjusted(3) | | $ | 27.91 | | $ | 25.47 | | $ | 25.87 | | $ | 25.88 |
| (2) | General and administrative, as adjusted, is a non-GAAP measure that excludes non-cash stock-based compensation charges relating to equity awards under our incentive stock plan, as well as other cash charges associated with non-recurring charges and other. The Company believes that it is useful to understand the effects that these charges have on general and administrative expenses and total operating costs and that exclusion of such charges is useful for comparison to prior periods. |
| (3) | Represents lease operating expense, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in the reconciliation above. |
7
BATTALION OIL CORPORATION
RECONCILIATION (Unaudited)
(In thousands, except per share amounts)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
As Reported: | | | | | | | | | | | | |
Net loss available to common stockholders - diluted (1) | | $ | (41,108) | | $ | (15,014) | | $ | (90,408) | | $ | (24,285) |
| | | | | | | | | | | | |
Impact of Selected Items: | | | | | | | | | | | | |
Unrealized loss (gain) on derivatives contracts: | | | | | | | | | | | | |
Crude oil | | $ | 34,794 | | $ | 841 | | $ | 61,789 | | $ | (21,485) |
Natural gas | | | 2,167 | | | (1,885) | | | 1,244 | | | 1,365 |
Natural gas liquids | | | 1,417 | | | — | | | 1,417 | | | — |
Total mark-to-market non-cash charge | | | 38,378 | | | (1,044) | | | 64,450 | | | (20,120) |
Loss on extinguishment of debt | | | — | | | — | | | 862 | | | — |
Non-recurring charges | | | 312 | | | 324 | | | 1,601 | | | 1,546 |
Selected items, before income taxes | | | 38,690 | | | (720) | | | 66,913 | | | (18,574) |
Income tax effect of selected items | | | — | | | — | | | — | | | — |
Selected items, net of tax | | | 38,690 | | | (720) | | | 66,913 | | | (18,574) |
| | | | | | | | | | | | |
Net loss available to common stockholders, as adjusted | | $ | (2,418) | | $ | (15,734) | | $ | (23,495) | | $ | (42,859) |
| | | | | | | | | | | | |
Diluted net loss per common share, as reported | | $ | (0.75) | | $ | (0.91) | | $ | (2.74) | | $ | (1.48) |
Impact of selected items (3) | | | 0.71 | | | (0.05) | | | 2.03 | | | (1.12) |
Diluted net loss per common share, excluding selected items (2) | | $ | (0.04) | | $ | (0.96) | | $ | (0.71) | | $ | (2.60) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Net cash provided by (used in) operating activities | | $ | 1,641 | | $ | 27,973 | | $ | 12,524 | | $ | 50,909 |
Changes in working capital | | | 7,764 | | | (15,145) | | | 10,865 | | | (19,064) |
Cash flows from operations before changes in working capital | | | 9,405 | | | 12,828 | | | 23,389 | | | 31,845 |
Cash components of selected items | | | (2,594) | | | (289) | | | (3,700) | | | 1,470 |
Income tax effect of selected items | | | — | | | — | | | — | | | — |
Cash flows from operations before changes in working capital, adjusted for selected items (2) | | $ | 6,811 | | $ | 12,539 | | $ | 19,689 | | $ | 33,315 |
| (1) | Amount reflects net loss available to common stockholders on a diluted basis for earnings per share purposes as calculated using the two-class method of computing earnings per share which is further described in Note 14, Earnings Per Share in our Form 10-K for the year ended December 31, 2025. |
| (2) | Diluted net loss per common share excluding selected items and cash flows from operations before changes in working capital adjusted for selected items are non-GAAP measures presented based on management's belief that they will enable a user of the financial information to understand the impact of these items on reported results. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flows from operations, as defined by GAAP. These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance. |
| (3) | The impact of selected items for the three and nine months ended September 30, 2026 were calculated based upon weighted average diluted shares of 54.7 and 33.0 million, respectively, due to the net loss available to common stockholders, excluding selected items. The impact of selected items for the three and nine months ended September 30, 2025 were calculated based upon weighted average diluted shares of 16.5 million due to the net loss available to common stockholders, excluding selected items |
8
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
| | | | | | | | | | | | |
Net (loss) income, as reported | | $ | (43,500) | | $ | (735) | | $ | (84,469) | | $ | 10,084 |
Impact of adjusting items: | | | | | | | | | | | | |
Interest expense | | | 4,632 | | | 7,318 | | | 15,597 | | | 21,848 |
Depletion, depreciation and accretion | | | 11,060 | | | 13,522 | | | 35,644 | | | 40,541 |
Stock-based compensation | | | 126 | | | — | | | 547 | | | 48 |
Interest income | | | (903) | | | (503) | | | (1,839) | | | (1,846) |
Loss on extinguishment of debt | | | — | | | — | | | 862 | | | — |
Unrealized loss (gain) on derivatives contracts | | | 38,378 | | | (1,044) | | | 64,450 | | | (20,120) |
Non-recurring charges and other | | | 312 | | | 324 | | | 1,601 | | | 1,546 |
Adjusted EBITDA(1) | | $ | 10,105 | | $ | 18,882 | | $ | 32,393 | | $ | 52,101 |
| (1) | Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net (loss) income. This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance. |
9
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)
| | Three Months | | Three Months | | Three Months | | Three Months | | ||||
| | Ended | | Ended | | Ended | | Ended | | ||||
| | September 30, 2026 | | June 30, 2026 | | March 31, 2026 | | December 31, 2025 | | ||||
| | | | | | | | | | | | | |
Net (loss) income, as reported | | $ | (43,500) | | $ | 15,508 | | $ | (56,477) | | $ | 1,795 | |
Impact of adjusting items: | | | | | | | | | | | | | |
Interest expense | | | 4,632 | | | 5,124 | | | 5,841 | | | 6,987 | |
Depletion, depreciation and accretion | | | 11,060 | | | 12,222 | | | 12,362 | | | 11,603 | |
Asset impairment | | | — | | | — | | | — | | | 1,072 | |
Stock-based compensation | | | 126 | | | 421 | | | — | | | — | |
Interest income | | | (903) | | | (612) | | | (324) | | | (414) | |
Loss on extinguishment of debt | | | — | | | — | | | 862 | | | — | |
Unrealized loss (gain) on derivatives contracts | | | 38,378 | | | (20,865) | | | 46,937 | | | (9,313) | |
Non-recurring charges and other | | | 312 | | | 454 | | | 835 | | | 1,631 | |
Adjusted EBITDA(1) | | $ | 10,105 | | $ | 12,252 | | $ | 10,036 | | $ | 13,361 | |
| | | | | | | | | | | | | |
Adjusted LTM EBITDA(1) | | $ | 45,754 | | | | | | | | | | |
| (1) | Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net (loss) income. This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance. |
10
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)
| | Three Months | | Three Months | | Three Months | | Three Months | | ||||
| | Ended | | Ended | | Ended | | Ended | | ||||
| | September 30, 2025 | | June 30, 2025 | | March 31, 2025 | | December 31, 2024 | | ||||
| | | | | | | | | | | | | |
Net (loss) income, as reported | | $ | (735) | | $ | 4,796 | | $ | 6,023 | | $ | (22,202) | |
Impact of adjusting items: | | | | | | | | | | | | | |
Interest expense | | | 7,318 | | | 7,341 | | | 7,189 | | | 6,135 | |
Depletion, depreciation and accretion | | | 13,522 | | | 13,939 | | | 13,080 | | | 14,155 | |
Asset impairment | | | — | | | — | | | — | | | 18,511 | |
Stock-based compensation | | | — | | | — | | | 48 | | | 12 | |
Interest income | | | (503) | | | (764) | | | (579) | | | (278) | |
Loss on extinguishment of debt | | | — | | | — | | | — | | | 7,489 | |
Unrealized (gain) loss on derivatives contracts | | | (1,044) | | | (7,248) | | | (11,828) | | | 1,648 | |
Change in fair value of embedded derivative liability | | | — | | | — | | | — | | | (761) | |
Merger Termination Payment | | | — | | | — | | | — | | | (10,000) | |
Non-recurring charges and other | | | 324 | | | 73 | | | 1,149 | | | 3,310 | |
Adjusted EBITDA(1) | | $ | 18,882 | | $ | 18,137 | | $ | 15,082 | | $ | 18,019 | |
| | | | | | | | | | | | | |
Adjusted LTM EBITDA(1) | | $ | 70,120 | | | | | | | | | | |
| (1) | Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance. |
11