Key Highlights
Generated full-year sales volumes of 12,096 barrels of oil equivalent per day ("Boe/d") (51% oil)
Year-end 2025 proved reserves of approximately 59.7 million barrels of oil equivalent ("MMBoe") with a standardized measure of discounted future net cash flows of approximately $343.5 million at SEC price deck ($66.01 WTI Oil, $3.39 HH Gas)
Terminated GTA with AGI Facility; entered into a long-term agreement with large-cap midstream provider, achieved record throughput
Production from core Monument Draw asset has increased by ~30% since early December 2025 with minimal capital investment due to increased gas treating capacity and reliability
Completed the sale of our West Quito assets in February 2026 for net proceeds of $60.1 million (6.0 MMBoe, or approximately 10%, of our proved reserves at December 31, 2025)
Prepaid $40.0 million in term loan debt during February 2026
Closed a securities purchase agreement with an institutional investor to sell shares of common stock and warrants for gross proceeds of $15.0 million in March 2026
Closed an acquisition of neighboring oil and gas assets, comprising 7,090 net acres, in Ward County in an all-stock transaction, subject to customary post-closing adjustments in March 2026
Management Comments
The Company has made significant progress both operationally and strategically. Gathering and general and administrative expenses have been reduced on a $/Boe basis. The termination of the gas treating agreement ("GTA") and subsequent negotiation of a new long-term treating agreement allowed for curtailed volumes to be brought online and have resulted in substantial enhanced production reliability. The sale of common stock in the private placement and recent acquisition of contiguous acreage and production using Company common stock as consideration displays the future growth potential of the Company.
"We are excited to have successfully completed the divestiture of our West Quito assets and for entry into the securities purchase agreement, both of which resulted in significant additional capital. The all-stock acquisition of oil and gas assets in Ward County allows us to consolidate our contiguous acreage in Monument Draw and better positions us to maximize returns from our holdings, especially now that we have a reliable, long-term gas treating arrangement in the area," said Matt Steele, Chief Executive Officer of Battalion.
Results of Operations
Average daily net production and total operating revenue during the fourth quarter of 2025 were 11,207 Boe/d (48% oil) and $32.3 million, respectively, as compared to production and revenue of 12,750 Boe/d (55% oil) and $49.7 million, respectively, during the fourth quarter of 2024. The decrease in revenues in the fourth quarter of 2025 as compared to the fourth quarter of 2024 is primarily attributable to an $11.54 decrease per Boe in average realized prices (excluding the impact of hedges) as well as an approximate 1,543 Boe/d decrease in average daily production. Ceased operations at the AGI Facility and related curtailments resulted in a decrease in average daily production of approximately 4,300 Boe/d for the fourth quarter of 2025. This temporary curtailment has ended and production has resumed under our new long-term treating agreement. Excluding the impact of hedges, Battalion realized approximately 97% of the average NYMEX oil price during the fourth quarter of 2025. Realized hedge gains totaled approximately $9.9 million during the fourth quarter of 2025.
Lease operating and workover expense was $12.86 per Boe in the fourth quarter of 2025 versus $11.26 per Boe in the fourth quarter of 2024. The increase in lease operating and workover expense per Boe year-over-year is primarily the result of increased repairs and maintenance expenses and higher power costs combined with decreased production. Gathering and other expenses were $10.27 per Boe in the fourth quarter of 2025 versus $10.45 per Boe in the fourth quarter of 2024. The decrease in gathering and other expenses per Boe is primarily related to progress made during 2025 at the central production facilities yielding lower labor and repair costs as well as increased throughput combined with favorable rates for treatment at alternative facilities once the AGI Facility ceased operations. General and administrative expenses were $4.42 per Boe in the fourth quarter of 2025 compared to $6.04 per Boe in the fourth quarter of 2024. The decrease in general and administrative expenses for the fourth quarter of 2025 is primarily due to lower merger and refinancing costs. Excluding non-recurring charges, general and administrative expenses would have been $2.84 per Boe in the fourth quarter of 2025 compared to $3.21 per Boe in the fourth quarter of 2024.
For the fourth quarter of 2025, the Company reported a net loss available to common stockholders of $12.5 million and a net loss of $0.76 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 fourth quarter of 2025 of $19.2 million or an adjusted diluted net loss of $1.16 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended December 31, 2025 was $13.4 million as compared to $18.0 million during the quarter ended December 31, 2024 (see Adjusted EBITDA Reconciliation table for additional information).
Liquidity and Balance Sheet
As of December 31, 2025, the Company had $208.1 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents of $28.0 million.
On February 24, 2026, we entered into the Third Amendment to our 2024 Amended Term Loan Agreement whereby the lenders consented to the transactions contemplated by the West Quito Divestiture sale agreement and we were required, upon receipt of the net cash proceeds from the West Quito Divestiture, to prepay the outstanding principal amount of the 2024 Amended Term Loan Agreement borrowings in an aggregate amount equal to $40.0 million. We may retain the remaining net cash proceeds received from the West Quito Divestiture, subject to certain reinvestment requirements, set forth in the Third Amendment.
For additional details on liquidity, financial position, and recent developments, please refer to Business, Risk Factors and Management's Discussion and Analysis included in Battalion's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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. SteeleChief Executive Officer & Principal Financial Officer832-538-0300
BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(In thousands, except per share amounts)
Three Months Ended
Years Ended
December 31,
December 31,
2025
2024
2025
2024
Operating revenues:
Oil, natural gas and natural gas liquids sales:
Oil
$
28,635
$
43,934
$
142,951
$
174,607
Natural gas
(946
)
447
3,665
(2,213
)
Natural gas liquids
3,926
5,118
18,346
20,822
Total oil, natural gas and natural gas liquids sales
31,615
49,499
164,962
193,216
Other
659
154
1,081
677
Total operating revenues
32,274
49,653
166,043
193,893
Operating expenses:
Production:
Lease operating
11,387
11,082
44,804
45,275
Workover and other
1,873
2,127
6,454
5,215
Taxes other than income
1,898
2,366
9,842
11,238
Gathering and other
10,585
12,263
43,742
54,117
General and administrative
4,557
7,091
14,622
18,356
Depletion, depreciation and accretion
11,603
14,155
52,144
52,926
Asset impairment
1,072
18,511
1,072
18,511
Total operating expenses
42,975
67,595
172,680
205,638
Loss from operations
(10,701
)
(17,942
)
(6,637
)
(11,745
)
Other income (expenses):
Net (loss) gain on derivative contracts
19,233
(1,624
)
45,263
2,308
Interest expense and other
(6,737
)
4,853
(26,747
)
(14,956
)
Loss on extinguishment of debt
—
(7,489
)
—
(7,489
)
Total other income (expenses)
12,496
(4,260
)
18,516
(20,137
)
(Loss) income before income taxes
1,795
(22,202
)
11,879
(31,882
)
Income tax benefit (provision)
—
—
—
—
Net income (loss)
$
1,795
$
(22,202
)
$
11,879
$
(31,882
)
Preferred dividends
(14,337
)
(8,679
)
(48,706
)
(32,219
)
Net loss income available to common stockholders
$
(12,542
)
$
(30,881
)
$
(36,827
)
$
(64,101
)
Net loss income per share of common stock:
Basic
$
(0.76
)
$
(1.88
)
$
(2.24
)
$
(3.90
)
Diluted
$
(0.76
)
$
(1.88
)
$
(2.24
)
$
(3.90
)
Weighted average common shares outstanding:
Basic
16,457
16,457
16,457
16,457
Diluted
16,457
16,457
16,457
16,457
BATTALION OIL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(In thousands, except share and per share amounts)
December 31, 2025
December 31, 2024
Current assets:
Cash and cash equivalents
$
27,965
$
19,712
Accounts receivable, net
12,071
26,298
Assets from derivative contracts
16,145
6,969
Restricted cash
91
91
Prepaids and other
892
982
Total current assets
57,164
54,052
Oil and natural gas properties (full cost method):
Evaluated
890,050
816,186
Unevaluated
48,025
49,091
Gross oil and natural gas properties
938,075
865,277
Less - accumulated depletion
(547,982
)
(497,272
)
Net oil and natural gas properties
390,093
368,005
Other operating property and equipment:
Other operating property and equipment
4,678
4,663
Less - accumulated depreciation
(2,807
)
(2,455
)
Net other operating property and equipment
1,871
2,208
Other noncurrent assets:
Assets from derivative contracts
7,350
4,052
Operating lease right of use assets
840
453
Other assets
3,360
2,278
Total assets
$
460,678
$
431,048
Current liabilities:
Accounts payable and accrued liabilities
$
39,734
$
52,682
Liabilities from derivative contracts
633
12,330
Current portion of long-term debt
22,510
12,246
Operating lease liabilities
764
406
Total current liabilities
63,641
77,664
Long-term debt, net
180,955
145,535
Other noncurrent liabilities:
Liabilities from derivative contracts
1,692
6,954
Asset retirement obligations
20,837
19,156
Operating lease liabilities
104
84
Other
—
—
Commitments and contingencies
Temporary equity:
Redeemable convertible preferred stock: 138,000 shares
226,241
177,535
of $0.0001 par value authorized, issued and outstanding as of
December 31, 2025 and 2024
Stockholders' (deficit) equity:
Common stock: 100,000,000 shares of $0.0001 par value authorized;
16,456,563 shares issued and outstanding as of December 31, 2025
and 2024
2
2
Additional paid-in capital
240,202
288,993
Accumulated deficit
(272,996
)
(284,875
)
Total stockholders' (deficit) equity
(32,792
)
4,120
Total liabilities, temporary equity and stockholders' (deficit) equity
$
460,678
$
431,048
