Battalion Oil Corporation · AMEX:BATL
Battalion Oil — Investor Presentation (March 2020)
19 slides from Battalion Oil's investor presentation, March 2020
Slide 1: Investor Update March 2020
Photo credit: © 2020 Battalion Oil Corp. Q1 2020 Safety Stand Down, Ward County, Texas Pre-Dawn Drilling Safety Meeting INVESTOR UPDATE MARCH 2O2O
Slide 2: Disclaimer: Forward Looking Statements
Disclaimer: Forward Looking Statements This presentation contains forward-looking statements that are intended to be covered by the safe harbor within the meaning of the Private Securities Litigation Reform Act of 1995 as stated in Section 27A of the Securities Act of 1933, as amended (the “Securiti
Slide 3: Executive Summary
Executive Summary Key Milestones Since Q2 2019 1 WHY BATTALION? ✔ Financial Restructuring Battalion is not Halcon Consistent record of organic value creation ✔ Office Consolidation Broad & deep experience in Permian operations Focused on capital discipline & accountability ✔ Substantial G&A
Slide 4: Distinct Future from Halcon's Past; Organic Growth vs. M&A
Distinct Future from Halcon’s Past; Organic Growth vs. M&A Acquisition & Asset Ownership Summary vs. Historical Leverage & WTI Benchmark Price Halcon Battalion (First acquisition to exit) Appalachia Eagle Ford / Eaglebine Historical A&D Bakken / Three Forks Tuscaloosa Marine Shale Delaware: Hackberr
Slide 5: Current Management History Together Across Multiple Companies
Current Management History Together Across Multiple Companies Management’s Prior Experience Executive Management Team Richard H. Little, Chief Executive Officer Battalion management has evaluated and/or exploited among the most prolific hydrocarbon producing regions in the US 24 years of experie
Slide 6: Oil-Rich Position in the Delaware Basin with 1.0MMBo EURs
Oil-Rich Position in the Delaware Basin with 1.0MMBo EURs Highest-return field with 1.0 MMBo EUR wells Monument Net Acreage: ~22,216 with ~95% average W.I. ~8,100 Gross / ~5,600 Net oil production (76 % oil) 38 Gross producing wells Opportunities to trade land to optimize laterals / WI Wes
Slide 7: Significant Experience in Horizontal, Permian Development
Significant Experience in Horizontal, Permian Development S Midland: 180K net acres / 350+ HZ Wells N Midland: 25K net acres / 50+ HZ Wells BATL Delaware: 52K net acres / 9 HZ Wells Drilled Total D&C Cost ($/Ft) Total D&C Cost ($/Ft) Total D&C Cost ($/Ft) $407 $1,185 $1,530 (27)% (18)% $357 $1,096 $
Slide 8: Consistently Improving Operations and Lowering Costs
…Consistently Improving Operations and Lowering Costs Monument Draw West Quito Draw 0' BATL Well BATL Well 2,500' 5,000' 7,500' 10,000' 12,500' 15,000' 5,000’ Laterals 17,500' 7,500’ Laterals 20,000' 10,000’ Laterals 22,500' 0 10 20 30 40 50 60 0 10 20 30 40 50 60 8
Slide 9: Connecting Drilling Operations and Geosciences
…by Connecting Drilling Operations and Geosciences Shale Carbonate 1,000’ 2602 Using 3D seismic inversion, geosteering team elected to 2601 deviate from original drilling plan due to evidence of limestones (green) while drilling first of two twin wells Resulted in 40% higher ROP from 17,000’-20,
Slide 10: Connecting Completions Operations and Geosciences
…and by Connecting Completions Operations and Geosciences Managing Pump Design Stage by Stage to Mitigate Costs Mapping Carbonate Content to Lower Stimulation Cost Leveraging seismic inversion to draw correlations between frac gradient and stimulation cost Driving savings by mitigating impact of
Slide 11: Leading the Industry in Significant H2S Treating Capacity
Leading the Industry in Significant H2S Treating Capacity Commissioned liquid redox plant at Everest CPF Daily Throughput Capable of Handling Higher Concentrations in Q2 2019 with inconsistent run-times 30 18 Sulfur (MLbpd) Designed and implemented process and 25 15 mechanical changes in Q3 2019
Slide 12: Focus on Health & Safety Awareness and Improvement
Focus on Health & Safety Awareness and Improvement … Spill Occurrences per 1,000,000 bbl of Oil Production Performed 7,307 proactive EHS efforts in 2019 2.9 5.2 3.7 581 Orientation sessions with new contractors and 33% 48% 17% 30 Emergency Response Drills conducted in 2019 3.1 emphasizing safety
Slide 13: Striving for Environmental Stewardship & Social Responsibility
… And Striving for Environmental Stewardship & Social Responsibility Key Highlights Consolidated Corporate Office ✔ Peer group leader for low level of flaring intensity (1) ✔ Sulfur incinerator online in Q1’20 reducing emissions ✔ 20+ Vapor Recovery Units in Q1 2020 ✔ Nearly all oil production piped
Slide 14: Q4 2019 Financial Highlights
Q4 2019 Financial Highlights YE 2019 Capitalization & Liquidity Summary ✔ Increased annual oil production Annual growth of 6% over 2018 to 10,356 Bopd for FY 2019 with Q4 2019 oil production of 11,489 Bopd $0,000 12/31/19 Cash & Cash Equivalents $5,701 ✔ Decreased operating costs RBL Indebtedness $1
Slide 15: With Downside Protection in Place
With Downside Protection in Place ($125MM MTM Value @ 3/20) Downside Fixed Price Hedged Oil Volume (Bopd) 7,000 Swaps 6,000 2 Way Collars 5,000 4,000 3,000 2,000 1,000 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3
Slide 16: Uniquely Positioned Today to Scale Opportunistically
Uniquely Positioned Today to Scale Opportunistically LTM Net Leverage 3.50x 3.09x 2.96x 3.00x 2.81x 2.42x 2.50x Average: 2.00x 1.89x 2.00x 1.76x 1.85x 1.54x 1.50x 1.11x 1.00x 0.50x 0.00x Peer 1 BATL Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Total G&A ($/Boe) $6.00 $4.77 $4.85 $5.00 $4.64 $4.5
Slide 17: Reliable FCF from PDP & Near Term Inventory for Responsible Growth
Reliable FCF from PDP & Near Term Inventory for Responsible Growth YE 2019 SEC Audited Reserves Premium Drilling Inventory in Monument (10,000’ Lateral) 1st/2nd BS Upside 153 Locations 3rd BS Upside 151 Locations Wolfcamp A 99 Locations (24 PUDs) Oil Volume by Reservoir Category Wolfcamp B 113 Locat
Slide 18: Swiftly Calibrating Activity According to Market Environment
Swiftly Calibrating Activity According to Market Environment 2019 Actuals FY 2020 Guidance Suspending remaining 2020 FY Q4 Initial Revised discretionary activity to preserve cash flow Oil Production, MBopd 10.4 11.5 11.1 – 11.7 10.3 – 10.8 Total Production, MBoepd 18.0 20.3 18.5 – 19.5 17.5 – 18.5 R
Slide 19: Contact
Photo credit: © 2020 Battalion Oil Corp. Q1 2020 Safety Stand Down, Ward County, Texas Pre-Dawn Drilling Safety Meeting Contact: John-Davis Rutkauskas (832) 538-0551