Battalion Oil Corporation Announces Fourth Quarter 2024 Financial and Operating Results

About this update from Battalion Oil Corporation

HOUSTON , March 31, 2025 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the fourth quarter of 2024. Key Highlights Completed the refinancing of our term loan on favorable terms resulting in an increase in liquidity Generated full-year sales volumes of 12,667 barrels of oil equivalent per day (“Boe/d”) (51% oil) Continued to lower capex per well, outperforming AFE estimates AGI facility online and treated 1.8 Bcf for the fourth quarter of 2024 Spud two additional wells in Monument Draw in December to commence 2025 six-well activity plan Year-end 2024 reserves of approximately 64.9 million barrels of oil equivalent (“MMBoe”) with a standardized measure of discounted future net cash flows of approximately $447.7 million Terminated the previously announced Merger Agreement with Fury Management Comments The Company concluded its 2024 six-well campaign ahead of planned timing and under budget on each pad. Final well capital remains under $950 per lateral foot. The completed pad wells are producing ahead of type curve with the newest pad averaging over 811 Boe/d across the initial 120 days online, the second pad exceeding 747 Boe/d across the initial 275 days online and the first pad exceeding 1,085 Boe/d across 404 days on production. In December 2024 , the Company also commenced drilling operations in Monument Draw as part of its 2025 six-well activity plan. As of the date of this release, the Company has drilled four of these wells in Monument Draw and has commenced completion operations on the first two wells. All wells are ahead of plan and under budget. The final two wells are permitted in the Company’s West Quito asset area with additional permits and drilling pads being built in Hackberry Draw. During the fourth quarter 2024, the acid gas injection (“AGI”) facility treated approximately 20 MMcf/d average and returned approximately 16 MMcf/d of sweet gas to the Company for sales to its midstream partner. To date, the AGI facility has processed more than 6.9 Bcf of sour gas and allowed the Company to realize substantial savings compared to treating alternatives. Results of Operations Average daily net production and total operating revenue during the fourth quarter of 2024 were 12,750 Boe/d (55% oil) and $49.7 million , respectively, as compared to production and revenue of 12,022 Boe/d (46% oil) and $47.2 million , respectively, during the fourth quarter of 2023. The increase in revenues in the fourth quarter of 2024 as compared to the fourth quarter of 2023 is primarily attributable to an approximate 728 Boe/d increase in average daily production partially offset by a $0.22 decrease in average realized prices (excluding the impact of hedges). Excluding the impact of hedges, Battalion realized 96.9% of the average NYMEX oil price during the fourth quarter of 2024. Realized hedge gains totaled approximately less than $0.1 million during the fourth quarter of 2024. Lease operating and workover expense was $11.26 per Boe in the fourth quarter of 2024 versus $11.87 per Boe in the fourth quarter of 2023. The decrease in lease operating and workover expense per Boe year-over-year is primarily a result of the increase in average daily production. Gathering and other expenses were $10.45 per Boe in the fourth quarter of 2024 versus $13.31 per Boe in the fourth quarter of 2023. The decrease in gathering and other expenses per Boe is primarily related to the start-up of the AGI facility and lower treating fees associated compared to the Valkyrie (liquid redox) plant. General and administrative expenses were $6.04 per Boe in the fourth quarter of 2024 compared to $4.93 per Boe in the fourth quarter of 2023. The increase in general and administrative expense is primarily attributable to an increase in audit, legal and transaction costs associated with the terminated merger with Fury Resources. Excluding non-recurring charges, general and administrative expenses would have been $3.22 per Boe in the fourth quarter of 2024 compared to $3.78 per Boe in the fourth quarter of 2023. For the fourth quarter of 2024, the Company reported a net loss available to common stockholders of $30.9 million and a net loss of $1.88 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 2024 of $0.7 million or an adjusted diluted net loss of $0.04 per common share ( see Reconciliation for additional information ). Adjusted EBITDA during the quarter ended December 31, 2024 was $18.0 million as compared to $10.0 million during the quarter ended December 31, 2023 ( see Adjusted EBITDA Reconciliation table for additional information ). Liquidity and Balance Sheet As of December 31, 2024 , the Company had $162.1 million of indebtedness outstanding. Total liquidity on December 31, 2024 , made up of cash and cash equivalents, was $19.7 million . On January 9, 2025 , the Company incurred incremental term loans in the aggregate principal amount of $63.0 million , resulting in a net increase in liquidity of $61.3 million . For further discussion on our liquidity and balance sheet, as well as recent developments, refer to Management’s Discussion and Analysis and Risk Factors in the Company’s Form 10-K. Merger Agreement with Fury Resources Subsequent to several amendments to the previously disclosed Agreement and Plan of Merger, dated December 14, 2023 (as amended, the “Merger Agreement”) and upon the failure of Fury Resources, Inc. to meet the funding and closing requirements of the Merger Agreement, the Company terminated the Merger. Refinanced Term Loan Agreement On December 26, 2024 , the Company entered into the Second Amended and Restated Senior Secured Credit Agreement with Fortress Credit Corp. , as administrative agent, and certain other financial institutions, as lenders (the “2024 Term Loan Agreement”). Pursuant to the 2024 Term Loan Agreement, the Company entered into an initial term loan facility in the aggregate principal amount of $162.0 million , funded on December 26, 2024 and an incremental term loan facility in the aggregate principal amount of up to $63.0 million . On January 9, 2025 , the Company entered into the First Amendment to the 2024 Term Loan Agreement and incurred $63.0 million of Incremental Term Loans (the “2024 Amended Term Loan Agreement”), resulting in total outstanding borrowings of $225.0 million . The maturity date of the 2024 Amended Term Loan Agreement is December 26, 2028 . All obligations under the Company’s existing term loan agreement were refunded, refinanced and repaid in full by the loans under the 2024 Term Loan Agreement as the net proceeds of the 2024 Term Loan Agreement were used to repay all outstanding indebtedness under the existing term loan agreement in an aggregate amount of approximately $152.1 million , including accrued and unpaid interest, and to pay related fees and expenses related to the new credit agreement. The Company is required to make scheduled quarterly amortization payments in an aggregate principal amount equal to 2.50% of the aggregate principal amount of the loans outstanding commencing with the fiscal quarter ending June 30, 2025 . Under the 2024 Amended Term Loan Agreement, the Company must make scheduled amortization payments in the aggregate amount of $16.9 million in 2025 and $22.5 million in 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, 2023 , 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   BATTALION OIL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)       Three Months Ended   Years Ended     December 31 ,   December 31 ,     2024      2023     2024      2023                             Operating revenues:                         Oil, natural gas and natural gas liquids sales:                         Oil   $ 43,934     $ 39,562     $ 174,607     $ 183,634   Natural gas     447       2,429       (2,213 )     11,057   Natural gas liquids     5,118       4,921       20,822       23,814   Total oil, natural gas and natural gas liquids sales     49,499       46,912       193,216       218,505   Other     154       330       677       2,257   Total operating revenues     49,653       47,242       193,893       220,762                             Operating expenses:                         Production:                         Lease operating     11,082       10,656       45,275       44,864   Workover and other     2,127       2,480       5,215       7,149   Taxes other than income     2,366       2,266       11,238       11,943   Gathering and other     12,263       14,718       54,117       63,575   General and administrative     7,091       5,453       18,356       19,025   Depletion, depreciation and accretion     14,155       12,337       52,926       56,624   Impairment of contract asset     18,511       —       18,511       —   Total operating expenses     67,595       47,910       205,638       203,180   (Loss) income from operations     (17,942 )     (668 )     (11,745 )     17,582                             Other income (expenses):                         Net (loss) gain on derivative contracts     (1,624 )     42,430       2,308       12,689   Interest expense and other     4,853       (9,074 )     (14,956 )     (33,319 ) Loss on extinguishment of debt     (7,489 )     —       (7,489 )     —   Total other income expenses     (4,260 )     33,356       (20,137 )     (20,630 ) (Loss) income before income taxes     (22,202 )     32,688       (31,882 )     (3,048 ) Income tax benefit (provision)     —       —       —       —   Net (loss) income   $ (22,202 )   $ 32,688     $ (31,882 )   $ (3,048 ) Preferred dividends     (8,679 )     (5,695 )     (32,219 )     (12,047 ) Net (loss) income available to common stockholders   $ (30,881 )   $ 26,993     $ (64,101 )   $ (15,095 )                           Net (loss) income per share of common stock:                         Basic   $ (1.88 )   $ 1.64     $ (3.90 )   $ (0.92 ) Diluted   $ (1.88 )   $ 1.63     $ (3.90 )   $ (0.92 ) Weighted average common shares outstanding:                         Basic     16,457       16,457       16,457       16,441   Diluted     16,457       16,517       16,457       16,441     BATTALION OIL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts)       December 31, 2024    December 31, 2023 Current assets:             Cash and cash equivalents   $ 19,712     $ 57,529   Accounts receivable, net     26,298       23,021   Assets from derivative contracts     6,969       8,992   Restricted cash     91       90   Prepaids and other     982       907   Total current assets     54,052       90,539   Oil and natural gas properties (full cost method):             Evaluated     816,186       755,482   Unevaluated     49,091       58,909   Gross oil and natural gas properties     865,277       814,391   Less - accumulated depletion     (497,272 )     (445,975 ) Net oil and natural gas properties     368,005       368,416   Other operating property and equipment:             Other operating property and equipment     4,663       4,640   Less - accumulated depreciation     (2,455 )     (1,817 ) Net other operating property and equipment     2,208       2,823   Other noncurrent assets:             Assets from derivative contracts     4,052       4,877   Operating lease right of use assets     453       1,027   Other assets     2,278       17,656   Total assets   $ 431,048     $ 485,338                 Current liabilities:             Accounts payable and accrued liabilities   $ 52,682     $ 66,525   Liabilities from derivative contracts     12,330       17,191   Current portion of long-term debt     12,246       50,106   Operating lease liabilities     406       594   Total current liabilities     77,664       134,416   Long-term debt, net     145,535       140,276   Other noncurrent liabilities:             Liabilities from derivative contracts     6,954       16,058   Asset retirement obligations     19,156       17,458   Operating lease liabilities     84       490   Other     —       2,084   Commitments and contingencies             Temporary equity:             Redeemable convertible preferred stock: 138,000 shares and 98,000 shares     177,535       106,535   of $0.0001 par value authorized, issued and outstanding as of             December 31, 2024 and 2023, respectively             Stockholders' equity:             Common stock: 100,000,000 shares of $0.0001 par value authorized;             16,456,563 shares issued and outstanding as of December 31, 2024             and 2023     2       2   Additional paid-in capital     288,993       321,012   Accumulated deficit     (284,875 )     (252,993 ) Total stockholders' equity     4,120       68,021   Total liabilities and stockholders' equity   $ 431,048     $ 485,338     BATTALION OIL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)       Three Months Ended   Years Ended     December 31 ,   December 31 ,     2024      2023     2024      2023   Cash flows from operating activities:                         Net income (loss)   $ (22,202 )   $ 32,688     $ (31,882 )   $ (3,048 ) Adjustments to reconcile net (loss) income to net cash provided by                         operating activities:                         Depletion, depreciation and accretion     14,155       12,337       52,926       56,624   Impairment of contract asset     18,511       —       18,511       —   Stock-based compensation, net     12       161       152       (1,070 ) Unrealized gain on derivative contracts     1,648       (45,403 )     (11,116 )     (21,934 ) Amortization/accretion of financing related costs     1,469       1,826       6,418       7,615   Loss (gain) on extinguishment of debt     7,489       —       7,489       —   Accrued settlements on derivative contracts     1,505       (2,587 )     403       259   Change in fair value of embedded derivative liability     (761 )     530       (2,084 )     (2,052 ) Other expense (income)     46       214       324       358   Cash flow from operations before changes in working capital     21,872       (234 )     41,141       36,752   Changes in working capital     (15,186 )     6,758       (5,786 )     (19,163 ) Net cash provided by operating activities     6,686       6,524       35,355       17,589                             Cash flows from investing activities:                         Oil and natural gas capital expenditures     (12,847 )     (16,196 )     (64,625 )     (46,288 ) Proceeds received from sales of oil and natural gas assets     —       3,740       7,015       4,929   Acquisition of oil and natural gas properties     —       —       (47 )     —   Other operating property and equipment capital expenditures     (4 )     (17 )     (23 )     (153 ) Contract asset     —       (3,705 )     (7,737 )     (10,308 ) Other     (6 )     1,439       (26 )     (25 ) Net cash used in investing activities     (12,857 )     (14,739 )     (65,443 )     (51,845 )                           Cash flows from financing activities:                         Proceeds from borrowings     162,000       —       162,000       -   Repayments of borrowings     (147,726 )     (10,027 )     (200,109 )     (35,093 ) Payment of deferred financing costs     (8,225 )     —       (8,400 )     —   Proceeds from issuance of preferred stock     —       33,182       38,781       94,607   Merger deposit     (10,000 )     —       —       —   Other     —       (1 )     —       (455 ) Net cash (used in) provided by financing activities     (3,951 )     23,154       (7,728 )     59,059                             Net (decrease) increase in cash, cash equivalents and restricted cash     (10,122 )     14,939       (37,816 )     24,803                             Cash, cash equivalents and restricted cash at beginning of period     29,925       42,680       57,619       32,816   Cash, cash equivalents and restricted cash at end of period   $ 19,803     $ 57,619     $ 19,803     $ 57,619     BATTALION OIL CORPORATION SELECTED OPERATING DATA (Unaudited)       Three Months Ended December 31 ,   Years Ended December 31 ,     2024     2023     2024     2023                             Production volumes:                         Crude oil (MBbls)     643       510       2,363       2,415   Natural gas (MMcf)     1,861       2,102       7,814       8,718   Natural gas liquids (MBbls)     220       246       971       1,163   Total (MBoe)     1,173       1,106       4,636       5,031   Average daily production (Boe/d)     12,750       12,022       12,667       13,784                             Average prices:                         Crude oil (per Bbl)   $ 68.33     $ 77.57     $ 73.89     $ 76.04   Natural gas (per Mcf)     0.24       1.16       (0.28 )     1.27   Natural gas liquids (per Bbl)     23.26       20.00       21.44       20.48   Total per Boe     42.20       42.42       41.68       43.43                             Cash effect of derivative contracts:                         Crude oil (per Bbl)   $ (8.99 )   $ (10.43 )   $ (11.32 )   $ (7.76 ) Natural gas (per Mcf)     3.12       1.12       2.30       1.09   Natural gas liquids (per Bbl)     —       —       —       —   Total per Boe     0.02       (2.69 )     (1.90 )     (1.84 )                           Average prices computed after cash effect of settlement of derivative contracts:                         Crude oil (per Bbl)   $ 59.34     $ 67.14     $ 62.57     $ 68.28   Natural gas (per Mcf)     3.36       2.28       2.02       2.36   Natural gas liquids (per Bbl)     23.26       20.00       21.44       20.48   Total per Boe     42.22       39.73       39.78       41.59                             Average cost per Boe:                         Production:                         Lease operating   $ 9.45     $ 9.63     $ 9.77     $ 8.92   Workover and other     1.81       2.24       1.12       1.42   Taxes other than income     2.02       2.05       2.42       2.37   Gathering and other     10.45       13.31       11.67       12.64   General and administrative, as adjusted (1)     3.21       3.63       2.72       3.39   Depletion     11.71       10.80       11.06       10.97                             (1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below:                           General and administrative:                         General and administrative, as reported   $ 6.04     $ 4.93     $ 3.96     $ 3.78   Stock-based compensation:                         Non-cash     (0.01 )     (0.15 )     (0.03 )     0.21   Non-recurring (charges) credits and other:                         Cash     (2.82 )     (1.15 )     (1.21 )     (0.60 ) General and administrative, as adjusted (2)   $ 3.21     $ 3.63     $ 2.72     $ 3.39   Total operating costs, as reported   $ 29.77     $ 32.16     $ 28.94     $ 29.13   Total adjusting items     (2.83 )     (1.30 )     (1.24 )     (0.39 ) Total operating costs, as adjusted (3)   $ 26.94     $ 30.86     $ 27.70     $ 28.74   ________________________ (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 RECONCILIATION (Unaudited) (In thousands, except per share amounts )       Three Months Ended   Years Ended     December 31 ,   December 31 ,     2024      2023     2024      2023   As Reported:                         Net (loss) income available to common stockholders - diluted (1)   $ (30,881 )   $ 26,993     $ (64,101 )   $ (15,095 )                           Impact of Selected Items:                         Unrealized loss (gain) on derivatives contracts:                         Crude oil   $ 96     $ (38,604 )   $ (10,371 )   $ (22,601 ) Natural gas     1,552       (6,799 )     (745 )     667   Total mark-to-market non-cash charge     1,648       (45,403 )     (11,116 )     (21,934 ) Impairment of contract asset     18,511       —       18,511       —   Loss (gain) on extinguishment of debt     7,489       —       7,489       —   Change in fair value of embedded derivative liability     (761 )     529       (2,084 )     (2,053 ) Non-recurring charges (credits)     3,310       1,268       5,609       3,042   Selected items, before income taxes     30,197       (43,606 )     18,409       (20,945 ) Income tax effect of selected items     —       —       —       —   Selected items, net of tax   $ 30,197     $ (43,606 )   $ 18,409     $ (20,945 )                           Net (loss) available to common stockholders, as adjusted (2)   $ (684 )   $ (16,613 )   $ (45,692 )   $ (36,040 )                                                     Diluted net (loss) income per common share, as reported   $ (1.88 )   $ 1.63     $ (3.90 )   $ (0.92 ) Impact of selected items     1.84       (2.65 )     1.12       (1.29 ) Diluted net (loss) per common share, excluding selected items (2)(3)   $ (0.04 )   $ (1.02 )   $ (2.78 )   $ (2.21 )                                                     Net cash provided by operating activities   $ 6,686     $ 6,524     $ 35,355     $ 17,589   Changes in working capital     15,186       (6,758 )     5,786       19,163   Cash flow from operations before changes in working capital     21,872       (234 )     41,141       36,752   Cash components of selected items     2,611       4,707       6,012       3,301   Income tax effect of selected items     —       —       —       —   Cash flows from operations before changes in working capital, adjusted for selected items (1)   $ 24,483     $ 4,473     $ 47,153     $ 40,053   ________________________ (1)   Amount reflects net (loss) income 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 15, Earnings Per Share in our Form 10-K for the year ended December 31, 2024 . (2)   Net (loss) income 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. (3)   The impact of selected items for the three and twelve months ended December 31, 2024 were calculated based upon weighted average diluted shares of 16.5 million, due to the net (loss) available to common stockholders, excluding selected items. The impact of selected items for the three and twelve months ended December 31, 2023 were calculated based upon weighted average diluted shares of 16.5 million and 16.4 million shares, respectively, due to the net (loss) available to common stockholders, excluding selected items. BATTALION OIL CORPORATION ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands)       Three Months Ended December 31 ,   Years Ended December 31 ,     2024     2023     2024     2023                             Net income (loss), as reported   $ (22,202 )   $ 32,688     $ (31,882 )   $ (3,048 ) Impact of adjusting items:                         Interest expense     6,135       8,917       29,009       36,511   Depletion, depreciation and accretion     14,155       12,337       52,926       56,624   Impairment of contract asset     18,511       —       18,511       —   Stock-based compensation     12       161       152       (1,070 ) Interest income     (278 )     (525 )     (2,122 )     (1,243 ) Loss (gain) on extinguishment of debt     7,489       —       7,489       —   Unrealized loss (gain) on derivatives contracts     1,648       (45,403 )     (11,116 )     (21,934 ) Change in fair value of embedded derivative liability     (761 )     529       (2,084 )     (2,053 ) Merger Termination Payment     (10,000 )     —       (10,000 )     —   Non-recurring charges (credits) and other     3,310       1,268       5,609       2,728   Adjusted EBITDA (1)   $ 18,019     $ 9,972     $ 56,492     $ 66,515   ________________________ (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. BATTALION OIL CORPORATION ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands)       Three Months   Three Months   Three Months   Three Months     Ended   Ended   Ended   Ended     December 31 , 2024   September 30 , 2024   June 30 , 2024   March 31 , 2024                           Net income (loss), as reported   $ (22,202 )   $ 21,628     $ (105 )   $ (31,203 ) Impact of adjusting items:                         Interest expense     6,135       6,873       7,610       8,391   Depletion, depreciation and accretion     14,155       12,533       13,213       13,025   Impairment of contract asset     18,511       —       —       —   Stock-based compensation     12       5       36       99   Interest income     (278 )     (509 )     (634 )     (701 ) Loss (gain) on extinguishment of debt     7,489       —       —       —   Unrealized loss (gain) on derivatives contracts     1,648       (28,091 )     (4,434 )     19,761   Change in fair value of embedded derivative liability     (761 )     41       (436 )     (928 ) Merger Termination Payment     (10,000 )     —       —       —   Non-recurring charges (credits) and other     3,310       978       384       937   Adjusted EBITDA (1)   $ 18,019     $ 13,458     $ 15,634     $ 9,381                             Adjusted LTM EBITDA (1)   $ 56,492                     ________________________ (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. BATTALION OIL CORPORATION ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands)       Three Months   Three Months   Three Months   Three Months     Ended   Ended   Ended   Ended     December 31 , 2023   September 30 , 2023   June 30 , 2023   March 31 , 2023                           Net income (loss), as reported   $ 32,688     $ (53,799 )   $ (4,748 )   $ 22,811   Impact of adjusting items:                         Interest expense     8,917       9,219       9,366       9,009   Depletion, depreciation and accretion     12,337       13,426       14,713       16,148   Stock-based compensation     161       (686 )     (772 )     227   Interest income     (525 )     (293 )     (234 )     (191 ) Unrealized loss (gain) on derivatives contracts     (45,403 )     46,805       (2,332 )     (21,004 ) Change in fair value of embedded derivative liability     529       (1,878 )     358       (1,062 ) Non-recurring charges (credits) and other     1,268       831       477       152   Adjusted EBITDA (1)   $ 9,972     $ 13,625     $ 16,828     $ 26,090                             Adjusted LTM EBITDA (1)   $ 66,515                     ________________________ (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. Source: Battalion Oil Corporation 2025 GlobeNewswire, Inc., source Press Releases

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