Battalion Oil Corporation Announces Second Quarter 2026 Financial and Operating Results
HOUSTON, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter of 2026.
Key Highlights
Management Comments
The Company continued to execute across all facets of its business during the second quarter of 2026, advancing its Monument Draw development program while further strengthening its balance sheet. In April 2026, the Company completed midstream expansion projects at Monument Draw ahead of schedule and approximately 8% under budget, driving a 20% increase in gas throughput and record well productivity. Later in April, the Company secured an additional 50% of sour gas compression capacity at Monument Draw, increasing gas handling capacity from 35 MMcf/d to more than 50 MMcf/d at no capital cost to Battalion, positioning the Company for continued production growth. In May 2026, the Company established a $150 million at-the-market (“ATM”) equity offering program, providing an efficient source of additional liquidity. The Company executed a definitive joint exploration and development agreement for up to eight wells in Monument Draw, with an initial four-well pad targeting the 3rd Bone Spring, Wolfcamp A and Wolfcamp B formations. This program is expected to spud in August 2026. On June 30, 2026, the Company closed a refinancing of its senior secured credit facility, extending the maturity to December 31, 2029, replacing the prior leverage-based pricing grid with a fixed margin of 6.50% over SOFR, and providing access to up to $175.0 million of additional delayed draw capacity.
“The second quarter of 2026 was extremely active. We exhibited significant progress across every part of our business,” said Matt Steele, Chief Executive Officer of Battalion. “Our midstream investments at Monument Draw came in ahead of schedule and under budget, and we are already seeing the benefit in record well productivity and increased throughput capacity. Additional compression secured during the quarter will further improve reliability starting in mid-Q3 and support production growth from our active drilling program. Establishing our ATM program gave us an efficient tool to continue strengthening the balance sheet. The ATM proceeds, asset sales, and free cash flow from the underlying business have allowed us to significantly reduce net debt. We are now under 1.5x levered – something the Company has never previously achieved. Given the improved balance sheet, we plan to judiciously utilize the limited shares available in our ATM going forward. Executing our joint exploration and development agreement in Monument Draw is the culmination of months of work and allows us to transition to multi-bench development while prudently deploying capital within cash on hand. Closing our refinancing at quarter end meaningfully lowers our cost of capital and enhances our financial flexibility as we move into this next phase of development at Monument Draw. The Company has never been in a stronger financial and operational position. In fact, we were recently able to utilize cash on hand to opportunistically buy back a portion of our preferred stock at a substantial discount to its par value from a holder seeking liquidity. Going forward, we will continue to focus on disciplined execution and creation of value for our shareholders.”
Results of Operations
Average daily net production and total operating revenue during the second quarter of 2026 were 12,407 Boe/d (45% oil) and $48.1 million, respectively, as compared to production and revenue of 12,989 Boe/d (49% oil) and $42.8 million, respectively, during the second quarter of 2025. The increase in revenues in the second quarter of 2026 as compared to the second quarter of 2025 is primarily attributable to a $6.48 increase per Boe in average realized prices (excluding the impact of hedges) partially offset by an approximate 582 Boe/d decrease in average daily production. Excluding the impact of hedges, Battalion realized approximately 104% of the average NYMEX oil price during the second quarter of 2026. Realized hedge losses totaled approximately $7.8 million during the second quarter of 2026.
Lease operating and workover expense was $8.69 per Boe in the second quarter of 2026 versus $10.98 per Boe in the second 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 and lower workover activity. Gathering and other expenses were $10.87 per Boe in the second quarter of 2026 versus $9.27 per Boe in the second 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 $3.60 per Boe in the second quarter of 2026 compared to $2.17 per Boe in the second quarter of 2025. The increase in general and administrative expenses for the second quarter of 2026 is primarily due to higher professional fees including legal costs and increased stock compensation expense. Excluding non-recurring charges, general and administrative expenses would have been $2.83 per Boe in the second quarter of 2026 compared to $2.11 per Boe in the second quarter of 2025.
For the second quarter of 2026, the Company reported net income available to common stockholders of $9.1 million and net income of $0.34 per share available to common stockholders. After adjusting for selected items, the Company reported an adjusted diluted net loss available to common stockholders for the second quarter of 2026 of $4.9 million or an adjusted diluted net loss of $0.11 per common share compared to an adjusted diluted net loss available to common stockholders for the second quarter of 2025 of $10.6 million or an adjusted diluted net loss of $0.65 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended June 30, 2026 was $12.3 million as compared to $18.1 million during the quarter ended June 30, 2025 (see Adjusted EBITDA Reconciliation table for additional information).
Liquidity and Balance Sheet
As of June 30, 2026, the Company had $162.5 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents and reinvestment proceeds of $88.4 million.
On June 30, 2026, the Company entered into the Third Amended and Restated Senior Secured Credit Agreement (the “New Credit Agreement”) which amended and restated in its entirety the Second Amended and Restated Senior Secured Credit Agreement dated December 26, 2024, as amended (the "Existing Credit Agreement"). Outstanding term loans under the Existing Credit Agreement continued 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.
For additional details on liquidity, financial position, and recent developments, please refer to Management’s Discussion and Analysis included in Battalion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.
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, 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