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Battalion Oil Corporation Announces Second Quarter 2022 Financial and Operating Results

·16-min read
Battalion Oil Corporation
Battalion Oil Corporation

HOUSTON, Aug. 08, 2022 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter 2022.

Key Highlights

  • First five wells of 2022 capital program put online during quarter and continued one-rig program with spudding of next three well pad

  • Disciplined capital program mitigating inflation and supply chain disruption

  • Outstanding performance in drilling and completion operations – fewer drilling days and higher pump efficiency than plan

  • Construction underway on recently announced strategic acid gas treating facility

  • Anticipate meaningful production and EBITDA growth in second half of 2022

Management Comments

Richard Little, the Company’s CEO, commented, “The second quarter was all about building momentum as we pivoted towards production and cash flow growth. The first five wells of our 2022 capital program were brought online this quarter and with that comes increased exposure to a strong commodity price environment. While we are yet to see a full quarter of production from these wells, we are encouraged by the early results and the potential they bring from a cash flow perspective.”

“We are also excited to have recently announced a landmark joint venture to develop a strategic acid gas treatment facility in Winkler County. This agreement is a critical piece of our story and is central to our strategy. Not only does it provide a comprehensive solution for our current and future gas processing needs, but it does so while significantly reducing our operating expenses, minimizing our capital exposure, and meaningfully reducing our environmental impact.”

Mr. Little continued, “With our development program still clipping along with record efficiency and our hedge book continuously improving as we aim to lock in returns, we expect to generate substantial EBITDA growth in the second half of the year as we exit 2022 having delivered meaningful growth in daily production.”

Results of Operations

Average daily net production and total operating revenue during the second quarter 2022 were 15,044 barrels of oil equivalent per day (“Boepd”) (49% oil) and $101.5 million, respectively, as compared to production and revenue of 15,571 Boepd (57% oil) and $64.4 million, respectively, during the second quarter 2021. The increase in revenues year-over-year is primarily attributable to an approximate $28.75 per Boe increase in average realized prices (excluding the impact of hedges).

Excluding the impact of hedges, Battalion realized 101% of the average NYMEX oil price during the second quarter of 2022. Realized hedge losses totaled approximately $44.7 million during the second quarter 2022.

Lease operating and workover expense was $9.71 per Boe in the second quarter of 2022 and $7.72 per Boe in the second quarter of 2021. Adjusted G&A was $2.90 per Boe in the second quarter of 2022 compared to $2.69 per Boe in the second quarter of 2021 (see Selected Operating Data table for additional information).

The Company reported net income to common stockholders for the second quarter of 2022 of $13.0 million and net income per diluted share of $0.79. After adjusting for selected items, the Company reported an adjusted net loss to common stockholders for the second quarter of 2022 of $0.2 million, or an adjusted net loss of $0.01 per diluted share (see Selected Item Review and Reconciliation for additional information). Adjusted EBITDA during the quarter ended June 30, 2022, was $18.2 million as compared to $14.1 million during the quarter ended June 30, 2021 (see Adjusted EBITDA Reconciliation table for additional information).

Liquidity and Balance Sheet

As of June 30, 2022, the Company had $220.0 million of indebtedness outstanding, approximately $1.3 million of letters of credit outstanding and up to $15.0 million in delayed draw term loans available to be drawn under our Term Loan Agreement. Total liquidity on June 30, 2022, inclusive of $43.6 million of cash and cash equivalents, was $58.6 million.

Conference Call Information

Battalion Oil Corporation has scheduled a conference call for Tuesday, August 9, 2022, at 10:00 a.m. Central Time. To access the live conference call, local participants may dial +1 646-828-8193. All other participants may dial (888) 220-8474 for toll free. The confirmation code for the live conference call is 1239325. The live conference call will also be available through the Company’s website at www.battalionoil.com on the Events and Presentations page under the Investors tab. The replay for the event will be available on the Company’s website at www.battalionoil.com on the Events and Presentations page under the Investors tab.

Forward Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about anticipated production, liquidity, capital spending, drilling and completion plans, and forward guidance. Forward-looking statements may often, but not always, be identified by the use of such words such as "expects", "believes", "intends", "anticipates", "plans", "estimates", “projects,” "potential", "possible", or "probable" or statements that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and other filings submitted by the Company to the U.S. Securities and Exchange Commission (“SEC”), copies of which may be obtained from the SEC's website at www.sec.gov or through the Company's website at www.battalionoil.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company's expectations.

About Battalion

Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.

Contact

Chris Lang
Director, Finance & Investor Relations
(832) 538-0551

BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

Oil, natural gas and natural gas liquids sales:

 

 

 

 

 

 

 

 

 

 

 

Oil

$

73,944

 

 

$

51,935

 

 

$

136,468

 

 

$

93,205

 

Natural gas

 

14,759

 

 

 

5,317

 

 

 

23,640

 

 

 

14,404

 

Natural gas liquids

 

12,587

 

 

 

6,851

 

 

 

22,590

 

 

 

11,760

 

Total oil, natural gas and natural gas liquids sales

 

101,290

 

 

 

64,103

 

 

 

182,698

 

 

 

119,369

 

Other

 

221

 

 

 

263

 

 

 

415

 

 

 

515

 

Total operating revenues

 

101,511

 

 

 

64,366

 

 

 

183,113

 

 

 

119,884

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

 

 

 

Lease operating

 

11,909

 

 

 

10,169

 

 

 

23,433

 

 

 

19,636

 

Workover and other

 

1,383

 

 

 

767

 

 

 

2,248

 

 

 

1,327

 

Taxes other than income

 

5,372

 

 

 

2,912

 

 

 

10,323

 

 

 

6,104

 

Gathering and other

 

15,869

 

 

 

14,331

 

 

 

31,124

 

 

 

27,502

 

General and administrative

 

4,588

 

 

 

4,031

 

 

 

9,573

 

 

 

8,858

 

Depletion, depreciation and accretion

 

12,601

 

 

 

11,249

 

 

 

22,821

 

 

 

21,844

 

Total operating expenses

 

51,722

 

 

 

43,459

 

 

 

99,522

 

 

 

85,271

 

Income (loss) from operations

 

49,789

 

 

 

20,907

 

 

 

83,591

 

 

 

34,613

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on derivative contracts

 

(31,910

)

 

 

(53,089

)

 

 

(155,768

)

 

 

(98,800

)

Interest expense and other

 

(4,832

)

 

 

(1,747

)

 

 

(7,520

)

 

 

(3,117

)

Total other income (expenses)

 

(36,742

)

 

 

(54,836

)

 

 

(163,288

)

 

 

(101,917

)

Income (loss) before income taxes

 

13,047

 

 

 

(33,929

)

 

 

(79,697

)

 

 

(67,304

)

Income tax benefit (provision)

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

13,047

 

 

$

(33,929

)

 

$

(79,697

)

 

$

(67,304

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.80

 

 

$

(2.09

)

 

$

(4.88

)

 

$

(4.14

)

Diluted

$

0.79

 

 

$

(2.09

)

 

$

(4.88

)

 

$

(4.14

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

16,338

 

 

 

16,268

 

 

 

16,320

 

 

 

16,250

 

Diluted

 

16,510

 

 

 

16,268

 

 

 

16,320

 

 

 

16,250

 

BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

June 30, 2022

 

December 31, 2021

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

43,640

 

 

$

46,864

 

Accounts receivable, net

 

53,002

 

 

 

36,806

 

Assets from derivative contracts

 

6,146

 

 

 

1,383

 

Restricted cash

 

135

 

 

 

1,495

 

Prepaids and other

 

927

 

 

 

1,366

 

Total current assets

 

103,850

 

 

 

87,914

 

Oil and natural gas properties (full cost method):

 

 

 

 

 

Evaluated

 

632,004

 

 

 

569,886

 

Unevaluated

 

64,760

 

 

 

64,305

 

Gross oil and natural gas properties

 

696,764

 

 

 

634,191

 

Less - accumulated depletion

 

(362,257

)

 

 

(339,776

)

Net oil and natural gas properties

 

334,507

 

 

 

294,415

 

Other operating property and equipment:

 

 

 

 

 

Other operating property and equipment

 

4,045

 

 

 

3,467

 

Less - accumulated depreciation

 

(1,027

)

 

 

(1,035

)

Net other operating property and equipment

 

3,018

 

 

 

2,432

 

Other noncurrent assets:

 

 

 

 

 

Assets from derivative contracts

 

3,972

 

 

 

2,515

 

Operating lease right of use assets

 

539

 

 

 

721

 

Other assets

 

3,329

 

 

 

2,270

 

Total assets

$

449,215

 

 

$

390,267

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

$

97,334

 

 

$

62,826

 

Liabilities from derivative contracts

 

91,750

 

 

 

58,322

 

Current portion of long-term debt

 

15,000

 

 

 

85

 

Operating lease liabilities

 

377

 

 

 

369

 

Asset retirement obligations

 

401

 

 

 

 

Total current liabilities

 

204,862

 

 

 

121,602

 

Long-term debt, net

 

188,372

 

 

 

181,565

 

Other noncurrent liabilities:

 

 

 

 

 

Liabilities from derivative contracts

 

58,138

 

 

 

7,144

 

Asset retirement obligations

 

11,686

 

 

 

11,896

 

Operating lease liabilities

 

162

 

 

 

352

 

Other

 

1,408

 

 

 

4,003

 

Commitments and contingencies

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock: 100,000,000 shares of $0.0001 par value authorized;

 

 

 

 

 

16,337,910 and 16,273,913 shares issued and outstanding as of

 

 

 

 

 

June 30, 2022 and December 31, 2021, respectively

 

2

 

 

 

2

 

Additional paid-in capital

 

332,766

 

 

 

332,187

 

Retained earnings (accumulated deficit)

 

(348,181

)

 

 

(268,484

)

Total stockholders' equity

 

(15,413

)

 

 

63,705

 

Total liabilities and stockholders' equity

$

449,215

 

 

$

390,267

 

BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

13,047

 

 

$

(33,929

)

 

$

(79,697

)

 

$

(67,304

)

Depletion, depreciation and accretion

 

12,601

 

 

 

11,249

 

 

 

22,821

 

 

 

21,844

 

Stock-based compensation, net

 

473

 

 

 

485

 

 

 

857

 

 

 

1,079

 

Unrealized loss (gain) on derivative contracts

 

(12,837

)

 

 

34,817

 

 

 

78,201

 

 

 

70,869

 

Amortization of deferred loan costs

 

908

 

 

 

 

 

 

1,807

 

 

 

 

(Gain) loss on sale of other assets

 

(96

)

 

 

 

 

 

(96

)

 

 

 

Reorganization items

 

 

 

 

 

 

 

(744

)

 

 

 

Accrued settlements on derivative contracts

 

1,843

 

 

 

2,404

 

 

 

14,652

 

 

 

6,972

 

Change in fair value of Change of Control Call Option

 

(563

)

 

 

 

 

 

(2,595

)

 

 

 

Other income (expense)

 

 

 

 

(170

)

 

 

 

 

 

(287

)

Cash flows from operations before changes in working capital

 

15,376

 

 

 

14,856

 

 

 

35,206

 

 

 

33,173

 

Changes in working capital

 

910

 

 

 

886

 

 

 

(6,873

)

 

 

(4,073

)

Net cash provided by (used in) operating activities

 

16,286

 

 

 

15,742

 

 

 

28,333

 

 

 

29,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas capital expenditures

 

(35,693

)

 

 

(23,801

)

 

 

(51,377

)

 

 

(37,593

)

Proceeds received from sale of oil and natural gas properties

 

 

 

 

(150

)

 

 

 

 

 

926

 

Other operating property and equipment capital expenditures

 

(545

)

 

 

 

 

 

(705

)

 

 

 

Proceeds received from sale of other operating property and equipment

 

96

 

 

 

 

 

 

96

 

 

 

 

Funds held in escrow and other

 

 

 

 

1

 

 

 

 

 

 

(2

)

Net cash provided by (used in) investing activities

 

(36,142

)

 

 

(23,950

)

 

 

(51,986

)

 

 

(36,669

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

20,000

 

 

 

66,000

 

 

 

20,000

 

 

 

82,000

 

Repayments of borrowings

 

 

 

 

(58,000

)

 

 

(85

)

 

 

(77,000

)

Debt issuance costs

 

 

 

 

 

 

 

(379

)

 

 

 

Other

 

(6

)

 

 

(5

)

 

 

(467

)

 

 

(268

)

Net cash provided by (used in) financing activities

 

19,994

 

 

 

7,995

 

 

 

19,069

 

 

 

4,732

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

138

 

 

 

(213

)

 

 

(4,584

)

 

 

(2,837

)

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

43,637

 

 

 

1,671

 

 

 

48,359

 

 

 

4,295

 

Cash, cash equivalents and restricted cash at end of period

$

43,775

 

 

$

1,458

 

 

$

43,775

 

 

$

1,458

 

BATTALION OIL CORPORATION 
SELECTED OPERATING DATA (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Production volumes:

 

 

 

 

 

 

 

 

 

 

 

Crude oil (MBbls)

 

674

 

 

 

805

 

 

 

1,344

 

 

 

1,524

 

Natural gas (MMcf)

 

2,355

 

 

 

2,055

 

 

 

4,670

 

 

 

4,188

 

Natural gas liquids (MBbls)

 

303

 

 

 

270

 

 

 

576

 

 

 

485

 

Total (MBoe)

 

1,369

 

 

 

1,417

 

 

 

2,698

 

 

 

2,707

 

Average daily production (Boe/d)

 

15,044

 

 

 

15,571

 

 

 

14,906

 

 

 

14,956

 

 

 

 

 

 

 

 

 

 

 

 

 

Average prices:

 

 

 

 

 

 

 

 

 

 

 

Crude oil (per Bbl)

$

109.71

 

 

$

64.52

 

 

$

101.54

 

 

$

61.16

 

Natural gas (per Mcf)

 

6.27

 

 

 

2.59

 

 

 

5.06

 

 

 

3.44

 

Natural gas liquids (per Bbl)

 

41.54

 

 

 

25.37

 

 

 

39.22

 

 

 

24.25

 

Total per Boe

 

73.99

 

 

 

45.24

 

 

 

67.72

 

 

 

44.10

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash effect of derivative contracts:

 

 

 

 

 

 

 

 

 

 

 

Crude oil (per Bbl)

$

(58.03

)

 

$

(22.55

)

 

$

(52.35

)

 

$

(18.13

)

Natural gas (per Mcf)

 

(2.39

)

 

 

(0.06

)

 

 

(1.54

)

 

 

(0.07

)

Natural gas liquids (per Bbl)

 

 

 

 

 

 

 

 

 

 

 

Total per Boe

 

(32.69

)

 

 

(12.89

)

 

 

(28.75

)

 

 

(10.32

)

 

 

 

 

 

 

 

 

 

 

 

 

Average prices computed after cash effect of settlement of derivative contracts:

 

 

 

 

 

 

 

 

 

 

 

Crude oil (per Bbl)

$

51.68

 

 

$

41.97

 

 

$

49.19

 

 

$

43.03

 

Natural gas (per Mcf)

 

3.88

 

 

 

2.53

 

 

 

3.52

 

 

 

3.37

 

Natural gas liquids (per Bbl)

 

41.54

 

 

 

25.37

 

 

 

39.22

 

 

 

24.25

 

Total per Boe

 

41.30

 

 

 

32.35

 

 

 

38.97

 

 

 

33.78

 

 

 

 

 

 

 

 

 

 

 

 

 

Average cost per Boe:

 

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

 

 

 

Lease operating

$

8.70

 

 

$

7.18

 

 

$

8.69

 

 

$

7.25

 

Workover and other

 

1.01

 

 

 

0.54

 

 

 

0.83

 

 

 

0.49

 

Taxes other than income

 

3.92

 

 

 

2.06

 

 

 

3.83

 

 

 

2.25

 

Gathering and other

 

11.59

 

 

 

10.11

 

 

 

11.54

 

 

 

10.16

 

General and administrative, as adjusted(1)

 

2.90

 

 

 

2.69

 

 

 

3.09

 

 

 

2.95

 

Depletion

 

9.07

 

 

 

7.77

 

 

 

8.33

 

 

 

7.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1)   Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative:

 

 

 

 

 

 

 

 

 

 

 

General and administrative, as reported

$

3.36

 

 

$

2.84

 

 

$

3.55

 

 

$

3.27

 

Stock-based compensation:

 

 

 

 

 

 

 

 

 

 

 

Non-cash

 

(0.35

)

 

 

(0.34

)

 

 

(0.32

)

 

 

(0.40

)

Non-recurring charges and other:

 

 

 

 

 

 

 

 

 

 

 

Cash

 

(0.11

)

 

 

0.19

 

 

 

(0.14

)

 

 

0.08

 

General and administrative, as adjusted(2)

$

2.90

 

 

$

2.69

 

 

$

3.09

 

 

$

2.95

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating costs, as reported

$

28.58

 

 

$

22.73

 

 

$

28.44

 

 

$

23.42

 

Total adjusting items

 

(0.46

)

 

 

(0.15

)

 

 

(0.46

)

 

 

(0.32

)

Total operating costs, as adjusted(3)

$

28.12

 

 

$

22.58

 

 

$

27.98

 

 

$

23.10

 

____________________________


(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.

BATTALION OIL CORPORATION
SELECTED ITEM REVIEW AND RECONCILIATION (Unaudited)
(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

As Reported:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), as reported

$

13,047

 

 

$

(33,929

)

 

$

(79,697

)

 

$

(67,304

)

 

 

 

 

 

 

 

 

 

 

 

 

Impact of Selected Items:

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss (gain) on derivatives contracts:

 

 

 

 

 

 

 

 

 

 

 

Crude oil

$

(11,939

)

 

$

31,591

 

 

$

70,962

 

 

$

66,402

 

Natural gas

 

(898

)

 

 

3,226

 

 

 

7,239

 

 

 

4,467

 

Total mark-to-market non-cash charge

 

(12,837

)

 

 

34,817

 

 

 

78,201

 

 

 

70,869

 

Change in fair value of Change of Control Call Option

 

(562

)

 

 

 

 

 

(2,594

)

 

 

 

Rig termination and stacking charges

 

 

 

 

 

 

 

 

 

 

 

Non-recurring charges and other

 

149

 

 

 

(273

)

 

 

366

 

 

 

(221

)

Selected items, before income taxes

 

(13,250

)

 

 

34,544

 

 

 

75,973

 

 

 

70,648

 

Income tax effect of selected items

 

 

 

 

 

 

 

 

 

 

 

Selected items, net of tax

 

(13,250

)

 

 

34,544

 

 

 

75,973

 

 

 

70,648

 

 

 

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), excluding selected items(1)

$

(203

)

 

$

615

 

 

$

(3,724

)

 

$

3,344

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per common share, as reported

$

0.80

 

 

$

(2.09

)

 

$

(4.88

)

 

$

(4.14

)

Impact of selected items

 

(0.81

)

 

 

2.13

 

 

 

4.65

 

 

 

4.35

 

Basic net income (loss) per common share, excluding selected items(1)

$

(0.01

)

 

$

0.04

 

 

$

(0.23

)

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per common share, as reported

$

0.79

 

 

$

(2.09

)

 

$

(4.88

)

 

$

(4.14

)

Impact of selected items

 

(0.80

)

 

 

2.13

 

 

 

4.65

 

 

 

4.35

 

Diluted net income (loss) per common share, excluding selected items(1)(2)

$

(0.01

)

 

$

0.04

 

 

$

(0.23

)

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

16,286

 

 

$

15,742

 

 

$

28,333

 

 

$

29,100

 

Changes in working capital

 

(910

)

 

 

(886

)

 

 

6,873

 

 

 

4,073

 

Cash flows from operations before changes in working capital

 

15,376

 

 

 

14,856

 

 

 

35,206

 

 

 

33,173

 

Cash components of selected items

 

(1,694

)

 

 

(2,677

)

 

 

(13,542

)

 

 

(7,193

)

Income tax effect of selected items

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operations before changes in working capital, adjusted for selected items(1)

$

13,682

 

 

$

12,179

 

 

$

21,664

 

 

$

25,980

 

____________________________

(1)   Net income (loss) and earnings per share excluding selected items and cash flows from operations before changes in working capital adjusted for selected items are non-GAAP measures presented based on management's belief that they will enable a user of the financial information to understand the impact of these items on reported results. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flows from operations, as defined by GAAP. These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.

(2)  The impact of selected items for the three and six months ended June 30, 2022 were calculated based upon weighted average diluted shares of 16.3 million shares, respectively, due to the net income (loss) available to common stockholders, excluding selected items. The impact of selected items for the three and six months ended June 30, 2021 were calculated based upon weighted average diluted shares of 16.4 million shares, respectively, due to the net income (loss) available to common stockholders, excluding selected items.  

BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), as reported

$

13,047

 

 

$

(33,929

)

 

$

(79,697

)

 

$

(67,304

)

Impact of adjusting items:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

5,394

 

 

 

1,838

 

 

 

10,115

 

 

 

3,334

 

Depletion, depreciation and accretion

 

12,601

 

 

 

11,249

 

 

 

22,821

 

 

 

21,844

 

Stock-based compensation

 

473

 

 

 

485

 

 

 

857

 

 

 

1,079

 

Interest income

 

(1

)

 

 

(84

)

 

 

(1

)

 

 

(209

)

Unrealized loss (gain) on derivatives contracts

 

(12,837

)

 

 

34,817

 

 

 

78,201

 

 

 

70,869

 

Change in fair value of Change of Control Call Option

 

(562

)

 

 

 

 

 

(2,594

)

 

 

 

Non-recurring charges and other

 

53

 

 

 

(275

)

 

 

270

 

 

 

(277

)

Adjusted EBITDA(1)

$

18,168

 

 

$

14,101

 

 

$

29,972

 

 

$

29,386

 

____________________________

(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.

BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Three Months

 

Three Months

 

Three Months

 

Ended

 

Ended

 

Ended

 

Ended

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), as reported

$

13,047

 

 

$

(92,744

)

 

$

25,935

 

 

$

13,052

 

Impact of adjusting items:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

5,394

 

 

 

4,721

 

 

 

3,215

 

 

 

1,904

 

Depletion, depreciation and accretion

 

12,601

 

 

 

10,220

 

 

 

12,679

 

 

 

10,885

 

Stock-based compensation

 

473

 

 

 

384

 

 

 

450

 

 

 

481

 

Interest income

 

(1

)

 

 

 

 

 

(1

)

 

 

(3

)

Loss (gain) on extinguishment of debt

 

 

 

 

 

 

 

122

 

 

 

(2,068

)

Unrealized loss (gain) on derivatives contracts

 

(12,837

)

 

 

91,038

 

 

 

(21,332

)

 

 

(1,816

)

Change in fair value of Change of Control Call Option

 

(562

)

 

 

(2,032

)

 

 

 

 

 

 

Non-recurring charges (credits) and other

 

53

 

 

 

217

 

 

 

(718

)

 

 

559

 

Adjusted EBITDA(1)

$

18,168

 

 

$

11,804

 

 

$

20,350

 

 

$

22,994

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted LTM EBITDA(1)

$

73,316

 

 

 

 

 

 

 

 

 

 

____________________________

(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.

BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Three Months

 

Three Months

 

Three Months

 

Ended

 

Ended

 

Ended

 

Ended

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss), as reported

$

(33,929

)

 

$

(33,375

)

 

$

(63,757

)

 

$

(153,125

)

Impact of adjusting items:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

1,838

 

 

 

1,496

 

 

 

1,853

 

 

 

1,964

 

Depletion, depreciation and accretion

 

11,249

 

 

 

10,595

 

 

 

13,886

 

 

 

15,755

 

Full cost ceiling impairment

 

 

 

 

 

 

 

26,702

 

 

 

128,336

 

Stock-based compensation

 

485

 

 

 

594

 

 

 

785

 

 

 

620

 

Interest income

 

(84

)

 

 

(125

)

 

 

(171

)

 

 

(273

)

Unrealized loss (gain) on derivatives contracts

 

34,817

 

 

 

36,052

 

 

 

30,172

 

 

 

21,128

 

Non-recurring charges (credits) and other

 

(275

)

 

 

48

 

 

 

(658

)

 

 

210

 

Adjusted EBITDA(1)(2)

$

14,101

 

 

$

15,285

 

 

$

8,812

 

 

$

14,615

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted LTM EBITDA(1)(2)

$

52,813

 

 

 

 

 

 

 

 

 

 

____________________________

(1)   Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.

(2)   Adjusted EBITDA for the three months ended September 30, 2020 includes approximately $6.6 million of net proceeds from hedge monetizations that occurred during the period.