Key Highlights
- The Company ended the quarter with positive equity of
$203.1 million . - Generated second quarter 2026 sales volumes of 12,407 barrels of oil equivalent per day (“Boe/d”) (~45% oil, 70% liquids)
- Lease operating and workover expense per BOE reduced by ~12% vs Q1 2026
- Placed 17.4 million shares of common stock under its ATM program for net proceeds of
$30.3 million during Q2 2026 and an additional 14.9 million shares for net proceeds of$25.6 million subsequent to quarter end. The proceeds have allowed the Company to:- Reduce net debt (gross debt less cash and reinvestment proceeds) to
$74.2 million vs$108.3 million in Q1 2026 and leverage ratio to 1.36x in Q2 2026 vs 1.79x in Q1 2026 - Complete a refinancing of its term loan yielding interest payment savings and reduced amortization
- Redeem and convert a portion of its outstanding preferred equity subsequent to quarter end - preferred liquidation value of
$42 million was extinguished for$19 million in cash and 3.5 million common shares
- Reduce net debt (gross debt less cash and reinvestment proceeds) to
- Completed preparations for drilling under new joint exploration and development agreement with drilling expected to commence prior to end of
August 2026
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
“The second quarter of 2026 was extremely active. We exhibited significant progress across every part of our business,” said
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
Lease operating and workover expense was
For the second quarter of 2026, the Company reported net income available to common stockholders of
Liquidity and Balance Sheet
As of
On
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:
Delayed Draw Facility: Up to
Amortization: Scheduled quarterly principal amortization commences with the fiscal quarter ending
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
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
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
About Battalion
Contact
Chief Executive Officer & Principal Financial Officer
832-538-0300
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating revenues: | ||||||||||||||||
| Oil, natural gas and natural gas liquids sales: | ||||||||||||||||
| Oil | $ | 49,152 | $ | 36,291 | $ | 85,434 | $ | 75,991 | ||||||||
| Natural gas | (6,904 | ) | 935 | (8,397 | ) | 3,758 | ||||||||||
| Natural gas liquids | 5,730 | 5,350 | 10,003 | 10,212 | ||||||||||||
| Total oil, natural gas and natural gas liquids sales | 47,978 | 42,576 | 87,040 | 89,961 | ||||||||||||
| Other | 151 | 236 | 263 | 326 | ||||||||||||
| Total operating revenues | 48,129 | 42,812 | 87,303 | 90,287 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Production: | ||||||||||||||||
| Lease operating | 9,189 | 10,670 | 19,283 | 21,028 | ||||||||||||
| Workover and other | 622 | 2,309 | 1,640 | 3,742 | ||||||||||||
| Taxes other than income | 2,981 | 2,522 | 5,305 | 5,322 | ||||||||||||
| Gathering and other | 12,268 | 10,958 | 23,518 | 22,958 | ||||||||||||
| General and administrative | 4,066 | 2,567 | 8,326 | 6,980 | ||||||||||||
| Depletion, depreciation and accretion | 12,222 | 13,939 | 24,584 | 27,019 | ||||||||||||
| Total operating expenses | 41,348 | 42,965 | 82,656 | 87,049 | ||||||||||||
| Income (loss) from operations | 6,781 | (153 | ) | 4,647 | 3,238 | |||||||||||
| Other income (expenses): | ||||||||||||||||
| Net gain (loss) on derivative contracts | 13,051 | 11,548 | (34,913 | ) | 20,850 | |||||||||||
| Interest expense and other | (4,324 | ) | (6,599 | ) | (9,841 | ) | (13,269 | ) | ||||||||
| Loss on extinguishment of debt | — | — | (862 | ) | — | |||||||||||
| Total other income (expenses) | 8,727 | 4,949 | (45,616 | ) | 7,581 | |||||||||||
| Income (loss) before income taxes | 15,508 | 4,796 | (40,969 | ) | 10,819 | |||||||||||
| Income tax benefit (provision) | — | — | — | — | ||||||||||||
| Net income (loss) | $ | 15,508 | $ | 4,796 | $ | (40,969 | ) | $ | 10,819 | |||||||
| Preferred dividends | — | (8,270 | ) | (8,331 | ) | (20,090 | ) | |||||||||
| Undistributed earnings allocable to preferred stockholders | (6,434 | ) | — | — | — | |||||||||||
| Net income (loss) available to common stockholders | $ | 9,074 | $ | (3,474 | ) | $ | (49,300 | ) | $ | (9,271 | ) | |||||
| Net income (loss) per share of common stock available to common stockholders: | ||||||||||||||||
| Basic | $ | 0.34 | $ | (0.21 | ) | $ | (2.25 | ) | $ | (0.56 | ) | |||||
| Diluted | $ | 0.34 | $ | (0.21 | ) | $ | (2.25 | ) | $ | (0.56 | ) | |||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 26,430 | 16,457 | 21,947 | 16,457 | ||||||||||||
| Diluted | 45,172 | 16,457 | 21,947 | 16,457 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 83,097 | $ | 27,965 | ||||
| Accounts receivable, net | 14,406 | 12,071 | ||||||
| Assets from derivative contracts | 4,229 | 16,145 | ||||||
| Restricted cash | 5,294 | 91 | ||||||
| Prepaids and other | 462 | 892 | ||||||
| Total current assets | 107,488 | 57,164 | ||||||
| Oil and natural gas properties (full cost method): | ||||||||
| Evaluated | 833,063 | 890,050 | ||||||
| Unevaluated | 54,334 | 48,025 | ||||||
| Gross oil and natural gas properties | 887,397 | 938,075 | ||||||
| Less: accumulated depletion | (572,058 | ) | (547,982 | ) | ||||
| Net oil and natural gas properties | 315,339 | 390,093 | ||||||
| Other operating property and equipment: | ||||||||
| Other operating property and equipment | 4,682 | 4,678 | ||||||
| Less: accumulated depreciation | (2,843 | ) | (2,807 | ) | ||||
| Net other operating property and equipment | 1,839 | 1,871 | ||||||
| Other noncurrent assets: | ||||||||
| Assets from derivative contracts | 3,729 | 7,350 | ||||||
| Operating lease right of use assets | 666 | 840 | ||||||
| Other assets | 3,524 | 3,360 | ||||||
| Total assets | $ | 432,585 | $ | 460,678 | ||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 39,898 | $ | 39,734 | ||||
| Liabilities from derivative contracts | 6,667 | 633 | ||||||
| Current portion of long-term debt | 2,031 | 22,510 | ||||||
| Operating lease liabilities | 484 | 764 | ||||||
| Total current liabilities | 49,080 | 63,641 | ||||||
| Long-term debt, net | 156,208 | 180,955 | ||||||
| Other noncurrent liabilities: | ||||||||
| Liabilities from derivative contracts | 6,194 | 1,692 | ||||||
| Asset retirement obligations | 17,749 | 20,837 | ||||||
| Operating lease liabilities | 216 | 104 | ||||||
| Commitments and contingencies | ||||||||
| Temporary equity: | ||||||||
| Redeemable convertible preferred stock: 138,000 shares of | — | 226,241 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Redeemable convertible preferred stock: 130,197 shares of | 221,185 | — | ||||||
| Common stock: 100,000,000 shares of | 4 | 2 | ||||||
| Additional paid-in capital | 295,914 | 240,202 | ||||||
| Accumulated deficit | (313,965 | ) | (272,996 | ) | ||||
| Total stockholders' equity (deficit) | 203,138 | (32,792 | ) | |||||
| Total liabilities, temporary equity and stockholders' equity | $ | 432,585 | $ | 460,678 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 15,508 | $ | 4,796 | $ | (40,969 | ) | $ | 10,819 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
| Depletion, depreciation and accretion | 12,222 | 13,939 | 24,584 | 27,019 | ||||||||||||
| Stock-based compensation, net | 421 | — | 421 | (109 | ) | |||||||||||
| Unrealized gain on derivative contracts | (20,865 | ) | (7,248 | ) | 26,072 | (19,076 | ) | |||||||||
| Amortization of deferred financing costs | 264 | 397 | 612 | 792 | ||||||||||||
| Loss on extinguishment of debt | — | — | 862 | — | ||||||||||||
| Accrued settlements on derivative contracts | (30 | ) | 23 | 2,395 | (537 | ) | ||||||||||
| Other | 5 | 56 | 7 | 109 | ||||||||||||
| Cash flows from operations before changes in working capital | 7,525 | 11,963 | 13,984 | 19,017 | ||||||||||||
| Changes in working capital | 1,253 | (1,758 | ) | (3,101 | ) | 3,919 | ||||||||||
| Net cash provided by operating activities | 8,778 | 10,205 | 10,883 | 22,936 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Oil and natural gas capital expenditures | (4,205 | ) | (33,290 | ) | (7,818 | ) | (53,090 | ) | ||||||||
| Proceeds received from sale of oil and natural gas assets | — | — | 60,055 | — | ||||||||||||
| Other operating property and equipment capital expenditures | — | (8 | ) | — | (14 | ) | ||||||||||
| Other | (9 | ) | (64 | ) | (14 | ) | (370 | ) | ||||||||
| Net cash (used in) provided by investing activities | (4,214 | ) | (33,362 | ) | 52,223 | (53,474 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from borrowings | — | — | — | 63,000 | ||||||||||||
| Repayments of borrowings | — | (5,652 | ) | (45,635 | ) | (5,678 | ) | |||||||||
| Debt issuance costs | (407 | ) | (138 | ) | (1,064 | ) | (1,875 | ) | ||||||||
| Proceeds from issuance of common stock | 29,903 | — | 43,928 | — | ||||||||||||
| Net cash provided by (used in) financing activities | 29,496 | (5,790 | ) | (2,771 | ) | 55,447 | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 34,060 | (28,947 | ) | 60,335 | 24,909 | |||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 54,331 | 73,659 | 28,056 | 19,803 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 88,391 | $ | 44,712 | $ | 88,391 | $ | 44,712 | ||||||||
SELECTED OPERATING DATA (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Production volumes: | ||||||||||||||||
| Crude oil (MBbls) | 510 | 584 | 1,038 | 1,153 | ||||||||||||
| Natural gas (MMcf) | 2,012 | 2,136 | 4,066 | 3,935 | ||||||||||||
| Natural gas liquids (MBbls) | 283 | 242 | 546 | 444 | ||||||||||||
| Total (MBoe) | 1,129 | 1,182 | 2,262 | 2,253 | ||||||||||||
| Average daily production (Boe/d) | 12,407 | 12,989 | 12,497 | 12,448 | ||||||||||||
| Average prices: | ||||||||||||||||
| Crude oil (per Bbl) | $ | 96.38 | $ | 62.14 | $ | 82.31 | $ | 65.91 | ||||||||
| Natural gas (per Mcf) | (3.43 | ) | 0.44 | (2.07 | ) | 0.96 | ||||||||||
| Natural gas liquids (per Bbl) | 20.25 | 22.11 | 18.32 | 23.00 | ||||||||||||
| Total per Boe | 42.50 | 36.02 | 38.48 | 39.93 | ||||||||||||
| Cash effect of derivative contracts: | ||||||||||||||||
| Crude oil (per Bbl) | $ | (24.63 | ) | $ | 1.04 | $ | (15.70 | ) | $ | (2.93 | ) | |||||
| Natural gas (per Mcf) | 2.36 | 1.73 | 1.83 | 1.31 | ||||||||||||
| Natural gas liquids (per Bbl) | — | — | — | — | ||||||||||||
| Total per Boe | (6.92 | ) | 3.64 | (3.91 | ) | 0.79 | ||||||||||
| Average prices computed after cash effect of settlement of derivative contracts: | ||||||||||||||||
| Crude oil (per Bbl) | $ | 71.75 | $ | 63.18 | $ | 66.61 | $ | 62.98 | ||||||||
| Natural gas (per Mcf) | (1.07 | ) | 2.17 | (0.24 | ) | 2.27 | ||||||||||
| Natural gas liquids (per Bbl) | 20.25 | 22.11 | 18.32 | 23.00 | ||||||||||||
| Total per Boe | 35.58 | 39.66 | 34.57 | 40.72 | ||||||||||||
| Average cost per Boe: | ||||||||||||||||
| Production: | ||||||||||||||||
| Lease operating | $ | 8.14 | $ | 9.03 | $ | 8.52 | $ | 9.33 | ||||||||
| Workover and other | 0.55 | 1.95 | 0.73 | 1.66 | ||||||||||||
| Taxes other than income | 2.64 | 2.13 | 2.35 | 2.36 | ||||||||||||
| Gathering and other | 10.87 | 9.27 | 10.40 | 10.19 | ||||||||||||
| General and administrative, as adjusted (1) | 2.83 | 2.11 | 2.92 | 2.54 | ||||||||||||
| Depletion | 10.62 | 11.47 | 10.64 | 11.64 | ||||||||||||
| (1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below: | ||||||||||||||||
| General and administrative: | ||||||||||||||||
| General and administrative, as reported | $ | 3.60 | $ | 2.17 | $ | 3.68 | $ | 3.10 | ||||||||
| Stock-based compensation: | ||||||||||||||||
| Non-cash | (0.37 | ) | - | (0.19 | ) | (0.02 | ) | |||||||||
| Non-recurring charges and other: | ||||||||||||||||
| Cash | (0.40 | ) | (0.06 | ) | (0.57 | ) | (0.54 | ) | ||||||||
| General and administrative, as adjusted(2) | $ | 2.83 | $ | 2.11 | $ | 2.92 | $ | 2.54 | ||||||||
| Total operating costs, as reported | $ | 25.80 | $ | 24.55 | $ | 25.68 | $ | 26.64 | ||||||||
| Total adjusting items | (0.77 | ) | (0.06 | ) | (0.76 | ) | (0.56 | ) | ||||||||
| Total operating costs, as adjusted(3) | $ | 25.03 | $ | 24.49 | $ | 24.92 | $ | 26.08 | ||||||||
| _______________ | ||||||||||||||||
| (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. | ||||||||||||||||
RECONCILIATION (Unaudited) (In thousands, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| As Reported: | ||||||||||||||||
| Net income (loss) available to common stockholders - diluted(1) | $ | 15,508 | $ | (3,474 | ) | $ | (49,300 | ) | $ | (9,271 | ) | |||||
| Impact of Selected Items: | ||||||||||||||||
| Unrealized (gain) loss on derivatives contracts: | ||||||||||||||||
| Crude oil | $ | (22,813 | ) | $ | (16,782 | ) | $ | 26,995 | $ | (22,326 | ) | |||||
| Natural gas | 1,948 | 9,534 | (923 | ) | 3,250 | |||||||||||
| Total mark-to-market non-cash charge | (20,865 | ) | (7,248 | ) | 26,072 | (19,076 | ) | |||||||||
| Loss on extinguishment of debt | — | — | 862 | — | ||||||||||||
| Non-recurring charges | 454 | 73 | 1,289 | 1,222 | ||||||||||||
| Selected items, before income taxes | (20,411 | ) | (7,175 | ) | 28,223 | (17,854 | ) | |||||||||
| Income tax effect of selected items | — | — | — | — | ||||||||||||
| Selected items, net of tax | (20,411 | ) | (7,175 | ) | 28,223 | (17,854 | ) | |||||||||
| Net loss available to common stockholders, as adjusted(2) | $ | (4,903 | ) | $ | (10,649 | ) | $ | (21,077 | ) | $ | (27,125 | ) | ||||
| Diluted net income (loss) per common share, as reported | $ | 0.34 | $ | (0.21 | ) | $ | (2.25 | ) | $ | (0.56 | ) | |||||
| Impact of selected items | (0.45 | ) | (0.44 | ) | 1.29 | (1.09 | ) | |||||||||
| Diluted net loss per common share, excluding selected items(2)(3) | $ | (0.11 | ) | $ | (0.65 | ) | $ | (0.96 | ) | $ | (1.65 | ) | ||||
| Net cash provided by operating activities | $ | 8,778 | $ | 10,205 | $ | 10,883 | $ | 22,936 | ||||||||
| Changes in working capital | (1,253 | ) | 1,758 | 3,101 | (3,919 | ) | ||||||||||
| Cash flows from operations before changes in working capital | 7,525 | 11,963 | 13,984 | 19,017 | ||||||||||||
| Cash components of selected items | 484 | 50 | (1,106 | ) | 1,759 | |||||||||||
| Income tax effect of selected items | — | — | — | — | ||||||||||||
| Cash flows from operations before changes in working capital, adjusted for selected items(1) | $ | 8,009 | $ | 12,013 | $ | 12,878 | $ | 20,776 | ||||||||
| _______________ | ||||||||||||||||
| (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 14, Earnings Per Share in our Form 10-K for the year ended (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 six months ended | ||||||||||||||||
ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income (loss), as reported | $ | 15,508 | $ | 4,796 | $ | (40,969 | ) | $ | 10,819 | |||||||
| Impact of adjusting items: | ||||||||||||||||
| Interest expense | 5,124 | 7,341 | 10,965 | 14,530 | ||||||||||||
| Depletion, depreciation and accretion | 12,222 | 13,939 | 24,584 | 27,019 | ||||||||||||
| Stock-based compensation | 421 | - | 421 | 48 | ||||||||||||
| Interest income | (612 | ) | (764 | ) | (936 | ) | (1,343 | ) | ||||||||
| Loss on extinguishment of debt | — | — | 862 | — | ||||||||||||
| Unrealized gain on derivatives contracts | (20,865 | ) | (7,248 | ) | 26,072 | (19,076 | ) | |||||||||
| Non-recurring charges and other | 454 | 73 | 1,289 | 1,222 | ||||||||||||
| Adjusted EBITDA(1) | $ | 12,252 | $ | 18,137 | $ | 22,288 | $ | 33,219 | ||||||||
| _______________ | ||||||||||||||||
| (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. | ||||||||||||||||
ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands) | ||||||||||||||||
| Three Months | Three Months | Three Months | Three Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Net income (loss), as reported | $ | 15,508 | $ | (56,477 | ) | $ | 1,795 | $ | (735 | ) | ||||||
| Impact of adjusting items: | ||||||||||||||||
| Interest expense | 5,124 | 5,841 | 6,987 | 7,318 | ||||||||||||
| Depletion, depreciation and accretion | 12,222 | 12,362 | 11,603 | 13,522 | ||||||||||||
| Asset impairment | — | — | 1,072 | — | ||||||||||||
| Stock-based compensation | 421 | — | — | — | ||||||||||||
| Interest income | (612 | ) | (324 | ) | (414 | ) | (503 | ) | ||||||||
| Loss on extinguishment of debt | — | 862 | — | — | ||||||||||||
| Unrealized (gain) loss on derivatives contracts | (20,865 | ) | 46,937 | (9,313 | ) | (1,044 | ) | |||||||||
| Non-recurring charges and other | 454 | 835 | 1,631 | 324 | ||||||||||||
| Adjusted EBITDA(1) | $ | 12,252 | $ | 10,036 | $ | 13,361 | $ | 18,882 | ||||||||
| Adjusted LTM EBITDA(1) | $ | 54,531 | ||||||||||||||
| _______________ | ||||||||||||||||
| (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. | ||||||||||||||||
ADJUSTED EBITDA RECONCILIATION (Unaudited) (In thousands) | ||||||||||||||||
| Three Months | Three Months | Three Months | Three Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Net income (loss), as reported | $ | 4,796 | $ | 6,023 | $ | (22,202 | ) | $ | 21,628 | |||||||
| Impact of adjusting items: | ||||||||||||||||
| Interest expense | 7,341 | 7,189 | 6,135 | 6,873 | ||||||||||||
| Depletion, depreciation and accretion | 13,939 | 13,080 | 14,155 | 12,533 | ||||||||||||
| Asset impairment | — | — | 18,511 | — | ||||||||||||
| Stock-based compensation | - | 48 | 12 | 5 | ||||||||||||
| Interest income | (764 | ) | (579 | ) | (278 | ) | (509 | ) | ||||||||
| Loss on extinguishment of debt | — | — | 7,489 | — | ||||||||||||
| Unrealized (gain) loss on derivatives contracts | (7,248 | ) | (11,828 | ) | 1,648 | (28,091 | ) | |||||||||
| Change in fair value of embedded derivative liability | — | — | (761 | ) | 41 | |||||||||||
| Merger Termination Payment | — | — | (10,000 | ) | — | |||||||||||
| Non-recurring charges and other | 73 | 1,149 | 3,310 | 978 | ||||||||||||
| Adjusted EBITDA(1) | $ | 18,137 | $ | 15,082 | $ | 18,019 | $ | 13,458 | ||||||||
| Adjusted LTM EBITDA(1) | $ | 64,696 | ||||||||||||||
| _______________ | ||||||||||||||||
| (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. | ||||||||||||||||
