HOUSTON, May 17, 2021 (GLOBE NEWSWIRE) — Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced results of operations for the first quarter 2021.
Highlights
- Completed four DUCs and spud two new wells in Monument Draw during the quarter
- Improved average completion costs from $575/lateral ft in 2020 down to $395/lateral ft in Q1 2021
- Production from recent completions outperforming expectations
- On track to deliver on 2021 production guidance despite operational shut-ins due to Winter Storm Uri
Management Comments
Richard Little, the Company’s CEO, commented, “Battalion delivered a strong first quarter despite the operational disruption caused by Winter Storm Uri and the ongoing challenges faced as a result of the COVID-19 pandemic. Our operations team did a great job keeping us up and running during a historically long cold snap. Their efforts keeping production up combined with strong realized pricing allowed us to outperform our Adjusted EBITDA targets for the first quarter.”
“The team continued their exceptional work as we brought four wells online and spud two additional wells during the quarter. Our focus on capital discipline and operational efficiency allowed us to realize historically low drilling and completion costs despite price increases in the service market. These new wells are performing above expectations, and it is just one of the many reasons we’re optimistic about hitting our production targets for 2021 despite the production shut-ins caused by the winter storms.”
“Our commitment to capital efficiency, prudent liquidity management, and operational excellence has left us well positioned to execute on our 2021 plan. We are eager to return to growth and are well positioned to take advantage of the opportunities the market offers us regardless of whether those opportunities come through M&A or the drill bit.”
Results of Operations
Average daily net production and total operating revenue during the first quarter 2021 were 14,333 barrels of oil equivalent per day (“Boepd”) (56% oil) and $55.5 million, respectively, as compared to production and revenue of 18,791 Boepd (55% oil) and $47.4 million, respectively, during the first quarter 2020. The decrease in total production year-over-year was primarily due to production declines in our non-core areas, including the divestiture of properties that produced ~800 Boepd, offset by increased production at Monument Draw as a result of our capital program. Also contributing to the decrease in total production is the temporary shut-in of production in February 2021 as a result of inclement weather during Winter Storm Uri. Despite the reduction in operating volumes, operating revenue increased year-over-year due to high realized natural gas prices during the quarter. As a result of high daily market prices experienced during the winter storm, Battalion was able to realize quarterly gas prices of $4.26 per Million cubic feet (“Mcf”) during the first quarter 2021 as compared to $1.16 per Mcf during the fourth quarter 2020.
Excluding the impact of hedges, Battalion realized 99% of the average NYMEX oil price during the first quarter of 2021. Realized hedge losses totaled approximately $9.7 million during the first quarter 2021.
Lease operating and workover expense was $7.77 per Boe in the first quarter of 2021 and $8.07 per Boe in the first quarter of 2020. Adjusted G&A was $3.24 per Boe in the first quarter of 2021 compared to $1.50 per Boe in the first quarter of 2020 (see Selected Operating Data table for additional information).
The Company reported a net loss to common stockholders for the first quarter of 2021 of $33.4 million and a net loss per basic and diluted share of $2.06. After adjusting for selected items, the Company reported net income to common stockholders for the first quarter of $2.7 million, or $0.17 per basic and diluted share (see Selected Item Review and Reconciliation for additional information). Adjusted EBITDA during the quarter ended March 31, 2021 was $15.3 million as compared to $8.8 million during the quarter ended December 31, 2020 (see Adjusted EBITDA Reconciliation table for additional information).
Liquidity and Balance Sheet
As of March 31, 2021, Battalion had $155.0 million of borrowings and $2.5 million of outstanding letters of credit issued under the Senior Revolving Credit Facility resulting in unused borrowing capacity of $32.5 million based on a borrowing base of $190.0 million. Total liquidity at March 31, 2021, inclusive of $1.7 million of cash and cash equivalents, was $34.2 million.
In May 2021, the Company entered into the Fourth Amendment to its Senior Secured Revolving Credit Agreement which, among other things, reduces the borrowing base to $185.0 million effective June 1, 2021 and further reduces the borrowing base to $175.0 million effective September 1, 2021.
Operations Update
During the first quarter of 2021, the Company completed and brought on production four drilled but uncompleted wells and spud two additional new wells in Monument Draw. The Company began completing the two new drill wells in May 2021.
Conference Call Information
Battalion Oil Corporation has scheduled a conference call for Tuesday, May 18, 2021, at 11:00 a.m. EDT (10:00 a.m. CDT). To participate in the conference call, dial +1 720-452-9102 or 800-437-2398 (toll free) a few minutes before the call begins and reference Battalion Oil Corporation confirmation code 5906562. The conference call recording will also be posted to Battalion’s website: www.battalionoil.com.
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, 2020 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
Manager, Finance
(832) 538-0551
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
| |
|
|
|
|
|
|
| |
|
Three Months Ended
|
| |
|
March 31,
|
| |
|
2021
|
|
|
2020
|
|
|
Operating revenues:
|
|
|
|
|
|
|
| Oil, natural gas and natural gas liquids sales: |
|
|
|
|
|
|
| Oil |
|
$ |
41,270 |
|
|
$ |
41,917 |
|
| Natural gas |
|
|
9,087 |
|
|
|
354 |
|
| Natural gas liquids |
|
|
4,909 |
|
|
|
4,753 |
|
| Total oil, natural gas and natural gas liquids sales |
|
|
55,266 |
|
|
|
47,024 |
|
| Other |
|
|
252 |
|
|
|
375 |
|
| Total operating revenues |
|
|
55,518 |
|
|
|
47,399 |
|
| |
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
| Production: |
|
|
|
|
|
|
| Lease operating |
|
|
9,467 |
|
|
|
12,489 |
|
| Workover and other |
|
|
560 |
|
|
|
1,323 |
|
| Taxes other than income |
|
|
3,192 |
|
|
|
2,915 |
|
| Gathering and other |
|
|
13,171 |
|
|
|
10,547 |
|
| Restructuring |
|
|
— |
|
|
|
418 |
|
| General and administrative |
|
|
4,827 |
|
|
|
3,856 |
|
| Depletion, depreciation and accretion |
|
|
10,595 |
|
|
|
18,030 |
|
| Total operating expenses |
|
|
41,812 |
|
|
|
49,578 |
|
|
Income (loss) from operations
|
|
|
13,706 |
|
|
|
(2,179 |
) |
| |
|
|
|
|
|
|
|
Other income (expenses):
|
|
|
|
|
|
|
| Net gain (loss) on derivative contracts |
|
|
(45,711 |
) |
|
|
118,299 |
|
| Interest expense and other |
|
|
(1,370 |
) |
|
|
(1,629 |
) |
| Total other income (expenses) |
|
|
(47,081 |
) |
|
|
116,670 |
|
| Income (loss) before income taxes |
|
|
(33,375 |
) |
|
|
114,491 |
|
| Income tax benefit (provision) |
|
|
— |
|
|
|
— |
|
|
Net income (loss)
|
|
$ |
(33,375 |
) |
|
$ |
114,491 |
|
| |
|
|
|
|
|
|
|
Net income (loss) per share of common stock:
|
|
|
|
|
|
|
| Basic |
|
$ |
(2.06 |
) |
|
$ |
7.07 |
|
| Diluted |
|
$ |
(2.06 |
) |
|
$ |
7.07 |
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
| Basic |
|
|
16,232 |
|
|
|
16,204 |
|
| Diluted |
|
|
16,232 |
|
|
|
16,204 |
|
| |
| |
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)
| |
|
|
|
|
|
|
| |
|
March 31, 2021
|
|
December 31, 2020
|
|
Current assets:
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
1,671 |
|
|
$ |
4,295 |
|
| Accounts receivable, net |
|
|
39,534 |
|
|
|
32,242 |
|
| Assets from derivative contracts |
|
|
672 |
|
|
|
8,559 |
|
| Prepaids and other |
|
|
2,591 |
|
|
|
2,740 |
|
| Total current assets |
|
|
44,468 |
|
|
|
47,836 |
|
|
Oil and natural gas properties (full cost method):
|
|
|
|
|
|
|
| Evaluated |
|
|
530,499 |
|
|
|
509,274 |
|
| Unevaluated |
|
|
75,880 |
|
|
|
75,494 |
|
| Gross oil and natural gas properties |
|
|
606,379 |
|
|
|
584,768 |
|
| Less – accumulated depletion |
|
|
(305,505 |
) |
|
|
(295,163 |
) |
| Net oil and natural gas properties |
|
|
300,874 |
|
|
|
289,605 |
|
|
Other operating property and equipment:
|
|
|
|
|
|
|
| Other operating property and equipment |
|
|
3,524 |
|
|
|
3,535 |
|
| Less – accumulated depreciation |
|
|
(1,257 |
) |
|
|
(1,149 |
) |
| Net other operating property and equipment |
|
|
2,267 |
|
|
|
2,386 |
|
|
Other noncurrent assets:
|
|
|
|
|
|
|
| Assets from derivative contracts |
|
|
828 |
|
|
|
4,009 |
|
| Operating lease right of use assets |
|
|
195 |
|
|
|
310 |
|
| Other assets |
|
|
1,967 |
|
|
|
2,351 |
|
|
Total assets
|
|
$ |
350,599 |
|
|
$ |
346,497 |
|
| |
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
$ |
74,073 |
|
|
$ |
58,928 |
|
| Liabilities from derivative contracts |
|
|
42,371 |
|
|
|
22,125 |
|
| Current portion of long-term debt |
|
|
2,123 |
|
|
|
1,720 |
|
| Operating lease liabilities |
|
|
195 |
|
|
|
403 |
|
| Total current liabilities |
|
|
118,762 |
|
|
|
83,176 |
|
|
Long-term debt
|
|
|
155,086 |
|
|
|
158,489 |
|
|
Other noncurrent liabilities:
|
|
|
|
|
|
|
| Liabilities from derivative contracts |
|
|
9,029 |
|
|
|
4,291 |
|
| Asset retirement obligations |
|
|
10,711 |
|
|
|
10,583 |
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
| Common stock: 100,000,000 shares of $0.0001 par value authorized; 16,267,157 and 16,203,979 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively |
|
|
2 |
|
|
|
2 |
|
| Additional paid-in capital |
|
|
330,551 |
|
|
|
330,123 |
|
| Retained earnings (accumulated deficit) |
|
|
(273,542 |
) |
|
|
(240,167 |
) |
| Total stockholders’ equity |
|
|
57,011 |
|
|
|
89,958 |
|
|
Total liabilities and stockholders’ equity
|
|
$ |
350,599 |
|
|
$ |
346,497 |
|
| |
| |
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
| |
|
|
|
|
|
|
| |
|
Three Months Ended
|
| |
|
March 31,
|
| |
|
2021
|
|
|
2020
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
(33,375 |
) |
|
$ |
114,491 |
|
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
| Depletion, depreciation and accretion |
|
|
10,595 |
|
|
|
18,030 |
|
| Stock-based compensation, net |
|
|
594 |
|
|
|
387 |
|
| Unrealized loss (gain) on derivative contracts |
|
|
36,052 |
|
|
|
(112,378 |
) |
| Reorganization items, net |
|
|
— |
|
|
|
(4,984 |
) |
| Accrued settlements on derivative contracts |
|
|
4,568 |
|
|
|
(4,923 |
) |
| Other income (expense) |
|
|
(117 |
) |
|
|
7 |
|
| Cash flows from operations before changes in working capital |
|
|
18,317 |
|
|
|
10,630 |
|
| Changes in working capital |
|
|
(4,959 |
) |
|
|
1,713 |
|
| Net cash provided by (used in) operating activities |
|
|
13,358 |
|
|
|
12,343 |
|
| |
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
| Oil and natural gas capital expenditures |
|
|
(13,792 |
) |
|
|
(48,157 |
) |
| Proceeds received from sale of oil and natural gas properties |
|
|
1,076 |
|
|
|
— |
|
| Funds held in escrow and other |
|
|
(3 |
) |
|
|
509 |
|
| Net cash provided by (used in) investing activities |
|
|
(12,719 |
) |
|
|
(47,648 |
) |
| |
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
| Proceeds from borrowings |
|
|
16,000 |
|
|
|
51,000 |
|
| Repayments of borrowings |
|
|
(19,000 |
) |
|
|
(25,000 |
) |
| Equity issuance costs and other |
|
|
(263 |
) |
|
|
(32 |
) |
| Net cash provided by (used in) financing activities |
|
|
(3,263 |
) |
|
|
25,968 |
|
| |
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(2,624 |
) |
|
|
(9,337 |
) |
| |
|
|
|
|
|
|
| Cash and cash equivalents at beginning of period |
|
|
4,295 |
|
|
|
10,275 |
|
| Cash and cash equivalents at end of period |
|
$ |
1,671 |
|
|
$ |
938 |
|
| |
| |
BATTALION OIL CORPORATION
SELECTED OPERATING DATA (Unaudited)
| |
|
|
|
|
|
|
| |
|
Three Months Ended
|
| |
|
March 31,
|
| |
|
2021
|
|
|
2020
|
|
| Production volumes: |
|
|
|
|
|
|
| Crude oil (MBbls) |
|
|
719 |
|
|
|
937 |
|
| Natural gas (MMcf) |
|
|
2,133 |
|
|
|
2,539 |
|
| Natural gas liquids (MBbls) |
|
|
215 |
|
|
|
350 |
|
| Total (MBoe) |
|
|
1,290 |
|
|
|
1,710 |
|
| Average daily production (Boe/d) |
|
|
14,333 |
|
|
|
18,791 |
|
| |
|
|
|
|
|
|
| Average prices: |
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
$ |
57.40 |
|
|
$ |
44.74 |
|
| Natural gas (per Mcf) |
|
|
4.26 |
|
|
|
0.14 |
|
| Natural gas liquids (per Bbl) |
|
|
22.83 |
|
|
|
13.58 |
|
| Total per Boe |
|
|
42.84 |
|
|
|
27.50 |
|
| |
|
|
|
|
|
|
| Cash effect of derivative contracts: |
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
$ |
(13.17 |
) |
|
$ |
5.47 |
|
| Natural gas (per Mcf) |
|
|
(0.09 |
) |
|
|
0.32 |
|
| Natural gas liquids (per Bbl) |
|
|
— |
|
|
|
— |
|
| Total per Boe |
|
|
(7.49 |
) |
|
|
3.46 |
|
| |
|
|
|
|
|
|
| Average prices computed after cash effect of settlement of derivative contracts: |
|
|
|
|
|
|
| Crude oil (per Bbl) |
|
$ |
44.23 |
|
|
$ |
50.21 |
|
| Natural gas (per Mcf) |
|
|
4.17 |
|
|
|
0.46 |
|
| Natural gas liquids (per Bbl) |
|
|
22.83 |
|
|
|
13.58 |
|
| Total per Boe |
|
|
35.35 |
|
|
|
30.96 |
|
| |
|
|
|
|
|
|
| Average cost per Boe: |
|
|
|
|
|
|
| Production: |
|
|
|
|
|
|
| Lease operating |
|
$ |
7.34 |
|
|
$ |
7.30 |
|
| Workover and other |
|
|
0.43 |
|
|
|
0.77 |
|
| Taxes other than income |
|
|
2.47 |
|
|
|
1.70 |
|
| Gathering and other, as adjusted (1) |
|
|
10.21 |
|
|
|
6.18 |
|
| Restructuring |
|
|
— |
|
|
|
0.24 |
|
| General and administrative, as adjusted (1) |
|
|
3.24 |
|
|
|
1.50 |
|
| Depletion |
|
|
8.02 |
|
|
|
10.29 |
|
| |
|
|
|
|
|
|
|
(1) Represents gathering and other and general and administrative costs per Boe, adjusted for items noted in the reconciliation below:
|
| |
|
|
|
|
|
|
| General and administrative: |
|
|
|
|
|
|
| General and administrative, as reported |
|
$ |
3.74 |
|
|
$ |
2.26 |
|
| Stock-based compensation: |
|
|
|
|
|
|
| Non-cash |
|
|
(0.46 |
) |
|
|
(0.23 |
) |
| Transaction costs and other: |
|
|
|
|
|
|
| Cash |
|
|
(0.04 |
) |
|
|
(0.53 |
) |
| General and administrative, as adjusted(2) |
|
$ |
3.24 |
|
|
$ |
1.50 |
|
| |
|
|
|
|
|
|
| Gathering and other, as reported |
|
|
10.21 |
|
|
|
6.17 |
|
| Rig termination and stacking charges and other |
|
|
— |
|
|
|
0.01 |
|
| Gathering and other, as adjusted(3) |
|
$ |
10.21 |
|
|
$ |
6.18 |
|
| |
|
|
|
|
|
|
| Total operating costs, as reported |
|
|
24.19 |
|
|
|
18.20 |
|
| Total adjusting items |
|
|
(0.50 |
) |
|
|
(0.75 |
) |
| Total operating costs, as adjusted(4) |
|
$ |
23.69 |
|
|
$ |
17.45 |
|
___________________________
(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 plans, as well as other cash charges associated with transaction costs 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) Gathering and other, as adjusted, is a non-GAAP measure that excludes rig termination and stacking charges and other costs. The Company believes that it is useful to understand the effects that these charges have on gathering and other expense and total operating costs and that exclusion of such charges is useful for comparative purposes.
(4) 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
|
| |
|
March 31,
|
| |
|
2021
|
|
|
2020
|
|
As Reported:
|
|
|
|
|
|
|
| Net income (loss), as reported |
|
$ |
(33,375 |
) |
|
$ |
114,491 |
|
| |
|
|
|
|
|
|
Impact of Selected Items:
|
|
|
|
|
|
|
| Unrealized loss (gain) on derivatives contracts: |
|
|
|
|
|
|
| Crude oil |
|
$ |
34,811 |
|
|
$ |
(111,834 |
) |
| Natural gas |
|
|
1,241 |
|
|
|
(544 |
) |
| Natural gas liquids |
|
|
— |
|
|
|
— |
|
| Total mark-to-market non-cash charge |
|
|
36,052 |
|
|
|
(112,378 |
) |
| Restructuring |
|
|
— |
|
|
|
418 |
|
| Transaction costs, rig termination and stacking charges and other |
|
|
52 |
|
|
|
906 |
|
| Selected items, before income taxes |
|
|
36,104 |
|
|
|
(111,054 |
) |
| Income tax effect of selected items |
|
|
— |
|
|
|
— |
|
| Selected items, net of tax |
|
|
36,104 |
|
|
|
(111,054 |
) |
| |
|
|
|
|
|
|
As Adjusted:
|
|
|
|
|
|
|
| Net income (loss), excluding selected items (1) |
|
$ |
2,729 |
|
|
$ |
3,437 |
|
| |
|
|
|
|
|
|
| Basic net income (loss) per common share, as reported |
|
$ |
(2.06 |
) |
|
$ |
7.07 |
|
| Impact of selected items |
|
|
2.23 |
|
|
|
(6.86 |
) |
| Basic net income (loss) per common share, excluding selected items (1) |
|
$ |
0.17 |
|
|
$ |
0.21 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Diluted net income (loss) per common share, as reported |
|
$ |
(2.06 |
) |
|
$ |
7.07 |
|
| Impact of selected items |
|
|
2.23 |
|
|
|
(6.86 |
) |
| Diluted net income (loss) per common share, excluding selected items (1)(2) |
|
$ |
0.17 |
|
|
$ |
0.21 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Net cash provided by (used in) operating activities |
|
$ |
13,358 |
|
|
$ |
12,343 |
|
| Changes in working capital |
|
|
4,959 |
|
|
|
(1,713 |
) |
| Cash flows from operations before changes in working capital |
|
|
18,317 |
|
|
|
10,630 |
|
| Cash components of selected items |
|
|
(4,516 |
) |
|
|
11,231 |
|
| Income tax effect of selected items |
|
|
— |
|
|
|
— |
|
| Cash flows from operations before changes in working capital, adjusted for selected items (1) |
|
$ |
13,801 |
|
|
$ |
21,861 |
|
____________________________
(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 months ended March 31, 2021 and 2020 were calculated based upon weighted average diluted shares of 16.4 million and 16.2 million, 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
|
| |
|
March 31,
|
| |
|
2021
|
|
|
2020
|
|
| |
|
|
|
|
|
|
| Net income (loss), as reported |
|
$ |
(33,375 |
) |
|
$ |
114,491 |
|
|
Impact of adjusting items:
|
|
|
|
|
|
|
| Interest expense |
|
|
1,496 |
|
|
|
1,714 |
|
| Depletion, depreciation and accretion |
|
|
10,595 |
|
|
|
18,030 |
|
| Stock-based compensation |
|
|
594 |
|
|
|
387 |
|
| Interest income |
|
|
(125 |
) |
|
|
(97 |
) |
| Restructuring |
|
|
— |
|
|
|
418 |
|
| (Gain) loss on sale of other assets |
|
|
(4 |
) |
|
|
— |
|
| Unrealized loss (gain) on derivatives contracts |
|
|
36,052 |
|
|
|
(112,378 |
) |
| Transaction costs, rig termination and stacking charges and other |
|
|
52 |
|
|
|
906 |
|
| Adjusted EBITDA(1) |
|
$ |
15,285 |
|
|
$ |
23,471 |
|
__________________________
(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
|
|
| |
|
March 31, 2021
|
|
December 31, 2020
|
|
September 30, 2020
|
|
June 30. 2020
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss), as reported |
|
$ |
(33,375 |
) |
|
$ |
(63,757 |
) |
|
$ |
(153,125 |
) |
|
$ |
(127,316 |
) |
|
|
Impact of adjusting items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
1,496 |
|
|
|
1,853 |
|
|
|
1,964 |
|
|
|
1,842 |
|
|
| Depletion, depreciation and accretion |
|
|
10,595 |
|
|
|
13,886 |
|
|
|
15,755 |
|
|
|
14,382 |
|
|
| Full cost ceiling impairment |
|
|
— |
|
|
|
26,702 |
|
|
|
128,336 |
|
|
|
60,107 |
|
|
| Stock-based compensation |
|
|
594 |
|
|
|
785 |
|
|
|
620 |
|
|
|
786 |
|
|
| Interest income |
|
|
(125 |
) |
|
|
(171 |
) |
|
|
(273 |
) |
|
|
(232 |
) |
|
| Restructuring |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,162 |
|
|
| (Gain) loss on sale of other assets |
|
|
(4 |
) |
|
|
— |
|
|
|
— |
|
|
|
52 |
|
|
| Unrealized loss (gain) on derivatives contracts |
|
|
36,052 |
|
|
|
30,172 |
|
|
|
21,128 |
|
|
|
67,221 |
|
|
| Other(1) |
|
|
52 |
|
|
|
(658 |
) |
|
|
210 |
|
|
|
4,211 |
|
|
| Adjusted EBITDA(2)(3) |
|
$ |
15,285 |
|
|
$ |
8,812 |
|
|
$ |
14,615 |
|
|
$ |
23,215 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted LTM EBITDA(2)(3) |
|
$ |
61,927 |
|
|
|
|
|
|
|
|
|
|
|
_________________________
(1) Other adjustments to net income (loss), as reported include rig termination and stacking charges, transaction costs, and other non-recurring professional fees and costs.
(2) 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.
(3) Adjusted EBITDA for the three months ended September 30, 2020 and June 30, 2020, includes approximately $6.6 million and $16.4 million of net proceeds,
respectively,
from hedge monetizations that occurred during the periods.
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months
|
|
Three Months
|
|
Three Months
|
|
Three Months
|
|
| |
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
| |
|
March 31, 2020
|
|
December 31, 2019
(1)
|
|
September 30, 2019
|
|
June 30. 2019
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss), as reported |
|
$ |
114,491 |
|
|
$ |
(125,826 |
) |
|
$ |
(63,284 |
) |
|
$ |
(640,844 |
) |
|
|
Impact of adjusting items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
1,714 |
|
|
|
1,430 |
|
|
|
9,911 |
|
|
|
14,382 |
|
|
| Depletion, depreciation and accretion |
|
|
18,030 |
|
|
|
19,996 |
|
|
|
20,512 |
|
|
|
40,425 |
|
|
| Full cost ceiling impairment |
|
|
— |
|
|
|
— |
|
|
|
45,568 |
|
|
|
664,383 |
|
|
| Income tax provision (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(50,306 |
) |
|
| Stock-based compensation |
|
|
387 |
|
|
|
— |
|
|
|
(2,278 |
) |
|
|
1,025 |
|
|
| Interest income |
|
|
(97 |
) |
|
|
(128 |
) |
|
|
(13 |
) |
|
|
(17 |
) |
|
| Reorganization items, net |
|
|
— |
|
|
|
118,664 |
|
|
|
1,758 |
|
|
|
— |
|
|
| Restructuring |
|
|
418 |
|
|
|
1,175 |
|
|
|
3,223 |
|
|
|
654 |
|
|
| (Gain) loss on sale of other assets |
|
|
— |
|
|
|
(6 |
) |
|
|
2 |
|
|
|
— |
|
|
| (Gain) loss on sale of Water Assets |
|
|
— |
|
|
|
(506 |
) |
|
|
(164 |
) |
|
|
2,897 |
|
|
| Unrealized loss (gain) on derivatives contracts |
|
|
(112,378 |
) |
|
|
18,681 |
|
|
|
(11,571 |
) |
|
|
(10,764 |
) |
|
| Other(2) |
|
|
906 |
|
|
|
(901 |
) |
|
|
15,276 |
|
|
|
3,678 |
|
|
| Adjusted EBITDA(3)(4) |
|
$ |
23,471 |
|
|
$ |
32,579 |
|
|
$ |
18,940 |
|
|
$ |
25,513 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted LTM EBITDA(1)(3)(4) |
|
$ |
100,503 |
|
|
|
|
|
|
|
|
|
|
|
__________________________
(1)
For illustrative purposes, the Company has combined the Successor and Predecessor results to derive combined results for Adjusted EBITDA for the three months ended December 31, 2019 and the Adjusted LTM EBITDA as of March 31, 2020. The combination was generated by addition of comparable financial statement line items. However, because of various adjustments to the consolidated financial statements in connection with the application of fresh-start reporting, including asset valuation adjustments and liability adjustments, the results of operations for the Successor are not comparable to those of the Predecessor. The Company believes that subject to consideration of the impact of fresh-start reporting, combining the results of the Predecessor and Successor provides meaningful information about Adjusted LTM EBITDA that assists a reader in understanding the Company’s financial results for the applicable periods
.
(2) Other adjustments to net income (loss), as reported includes rig termination and stacking charges, prepetition reorganization costs, and other non-recurring professional fees and costs.
(3) 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.
(4) Adjusted EBITDA for the three months ended June 30, 2019 includes approximately $4.1 million of net proceeds from hedge monetizations that occurred during the period.
