Battalion Oil Corporation Reports Q4 2025 Results: Strategic Moves and Financial Update

Key Highlights and Strategic Developments

• Full-Year Sales Volumes: Battalion Oil Corporation generated full-year sales volumes of 12,096 barrels of oil equivalent per day (Boe/d), with oil accounting for 51% of the mix.
• Proved Reserves: As of year-end 2025, proved reserves stood at approximately 59.7 million barrels of oil equivalent (MMBoe), with a standardized measure of discounted future net cash flows of \$343.5 million, based on SEC price deck assumptions (\$66.01 WTI Oil, \$3.39 Henry Hub Gas).
• Midstream Agreement and Production Surge: The company terminated its Gas Treating Agreement (GTA) with the AGI Facility and secured a long-term agreement with a large-cap midstream provider. This move enabled record throughput and allowed previously curtailed volumes to be brought online, contributing to a ~30% production increase from the core Monument Draw asset since early December 2025, achieved with minimal capital outlay.
• Asset Sale and Balance Sheet Impact: In February 2026, Battalion completed the sale of its West Quito assets for net proceeds of \$60.1 million. These assets represented 6.0 MMBoe, or approximately 10% of the company’s proved reserves as of December 31, 2025. The proceeds were partly used to prepay \$40 million in term loan debt.
• Equity and Strategic Acquisition: In March 2026, Battalion closed a private placement with an institutional investor, raising \$15 million through the sale of common stock and warrants. Concurrently, the company completed an all-stock acquisition of neighboring oil and gas assets (7,090 net acres) in Ward County, enhancing its contiguous position in the Monument Draw area.

Financial and Operating Results

• Q4 2025 Performance:
  • Average daily net production was 11,207 Boe/d (48% oil), down from 12,750 Boe/d (55% oil) in Q4 2024.
  • Total operating revenue was \$32.3 million, compared to \$49.7 million in the prior-year quarter. The decline was primarily due to an \$11.54 per Boe drop in realized prices (excluding hedges) and a 1,543 Boe/d decrease in production, mainly due to temporary curtailments at the AGI Facility.
  • Despite the production drop, the new treating agreement has since restored and improved reliability.
• Operating Costs:
  • Lease operating and workover expense increased to \$12.86 per Boe (Q4 2025) from \$11.26 per Boe (Q4 2024), largely due to higher repairs, maintenance, and power costs on lower production volumes.
  • Gathering and other expenses slightly decreased to \$10.27 per Boe from \$10.45 per Boe, reflecting efficiencies at central production facilities and cost savings from the new midstream agreement.
  • General and administrative (G&A) expenses decreased to \$4.42 per Boe from \$6.04 per Boe, mainly due to lower merger and refinancing costs. Excluding non-recurring items, G&A would have been \$2.84 per Boe (Q4 2025) versus \$3.21 per Boe (Q4 2024).
• Net Loss and Adjusted EBITDA:
  • Net loss available to common stockholders was \$12.5 million, or \$0.76 per share (Q4 2025).
  • Adjusted diluted net loss (excluding selected items) was \$19.2 million, or \$1.16 per share.
  • Adjusted EBITDA was \$13.4 million, compared to \$18.0 million in Q4 2024.
• Liquidity and Debt Position:
  • As of December 31, 2025, Battalion had \$208.1 million in term loan indebtedness and \$28.0 million in cash and cash equivalents.
  • Following the West Quito asset sale, \$40 million of term loan debt was prepaid, strengthening the balance sheet.

Operational Metrics and Price Realizations

• Fourth quarter average realized price per Boe was \$30.66 (excluding hedges), down from \$42.20 in Q4 2024. After accounting for hedge settlements, the average was \$40.28 per Boe.
• Q4 realized oil price was \$57.38 per barrel, natural gas price was (\$0.54) per Mcf, and NGL price was \$16.22 per barrel.
• The company realized 97% of the average NYMEX oil price in Q4 2025, with hedge gains totaling \$9.9 million for the quarter.

Strategic Commentary from Management

“We are excited to have successfully completed the divestiture of our West Quito assets and for entry into the securities purchase agreement, both of which resulted in significant additional capital. The all-stock acquisition of oil and gas assets in Ward County allows us to consolidate our contiguous acreage in Monument Draw and better positions us to maximize returns from our holdings, especially now that we have a reliable, long-term gas treating arrangement in the area,” said Matt Steele, Chief Executive Officer.

Potential Share Price Movers

• Asset Sales and Acquisitions: The sale of West Quito assets (10% of proved reserves) for \$60.1 million and the all-stock acquisition of Ward County assets could materially impact Battalion’s asset base, production profile, and balance sheet.
• Debt Reduction: The \$40 million prepayment of term loan debt strengthens the company’s financial position, potentially reducing interest expenses and leverage ratios.
• Capital Raise: The \$15 million equity and warrant issuance improves liquidity and may support future growth initiatives.
• Midstream Agreement: The termination of the AGI Facility contract and the new midstream deal have already resulted in a significant (30%) production increase at Monument Draw with minimal capital, directly enhancing cash flow and asset utilization.
• Production and Price Sensitivity: Investors should note the temporary production curtailments in Q4 2025, but also the quick rebound post-agreement, indicating operational flexibility and upside potential if commodity prices recover.

Forward Guidance and Risks

• Management expects to maximize returns from the consolidated Monument Draw position and benefit from the enhanced reliability of new midstream agreements.
• Risks remain from commodity price volatility, operational challenges, and any additional curtailments or cost pressures.
• Shareholders should monitor ongoing capital allocation, especially further asset sales, debt reductions, or acquisitions, as well as any impacts from macroeconomic trends or regulatory changes.

Contact

For further inquiries, investors can contact:
Matthew B. Steele, Chief Executive Officer & Principal Financial Officer, Battalion Oil Corporation, 832-538-0300

Disclaimer: This article is based on the latest publicly available financial and operational disclosures from Battalion Oil Corporation as of March 23, 2026. It is intended for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Investors should consider their unique financial circumstances and consult with professional advisors before making investment decisions. Actual future results may differ materially due to risks and uncertainties discussed in the company’s SEC filings and forward-looking statements included herein.

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