Core Points - Battalion Oil Corporation has entered into a merger agreement with Fury Resources, Inc., where Fury will acquire all outstanding shares of Battalion's common stock for $7.00 per share in cash [1] - The transaction is expected to close in the fourth quarter of 2024, pending stockholder approval and other closing conditions [2] - Fury Resources has secured capital commitments totaling $200 million in debt, $188 million in preferred stock, and $160 million in equity to facilitate the acquisition [2] Company Overview - Battalion Oil Corporation is an independent energy company focused on the acquisition, production, exploration, and development of onshore oil and natural gas properties in the United States [6] - Fury Resources, Inc. is a privately held exploration and production company targeting value creation through asset acquisition and exploitation in the Permian Basin [7] Shareholder Involvement - Luminus Management and Oaktree Capital Management, owning 61.61% of Battalion's common stock, have agreed to vote in favor of the merger, representing 38% of the total voting power [3] - The Rollover Stockholders will exchange their preferred shares for new preferred shares of Fury, indicating strong institutional support for the transaction [1][4] Management Commentary - Fury's Co-Founder and Chairman expressed confidence in the acquisition, highlighting the potential for rapid scaling and significant returns for investors [4] - Battalion's CEO acknowledged the efforts of both teams in reaching the merger agreement, emphasizing the focus on achieving the best outcome for shareholders [5]

Core Viewpoint - Battalion Oil Corporation (BATL) is facing challenges in Q2 2024 due to declining production and lower natural gas prices, but has effectively controlled costs and is pursuing strategic initiatives to improve its outlook [1]. Financial Performance - Battalion Oil reported a Q2 2024 loss per share of 80 cents, compared to a loss of 42 cents in the same quarter of 2023 [2]. - Total operating revenues decreased to $49.1 million from $54.3 million year-over-year, primarily due to reduced average daily production and lower natural gas prices [2]. Production Metrics - Average daily production in Q2 2024 was 12,857 barrels of oil equivalent per day (Boe/d), down from 14,253 Boe/d in Q2 2023 [3]. - Oil production fell to 577 thousand barrels (MBbls) from 636 MBbls, while natural gas production decreased from 2,155 MMcf to 1,929 MMcf [3]. Pricing Trends - The average realized price for crude oil increased to $79.20 per barrel from $72.59 per barrel year-over-year [4]. - Natural gas prices dropped significantly to a negative $1.10 per Mcf from 96 cents per Mcf in the prior-year period [4]. - The average realized price for NGLs rose modestly to $20.31 per barrel from $18.73 per barrel [4]. Loss and EBITDA - Battalion Oil reported a net loss of $8.7 million in Q2 2024, widening from a $5.7 million loss in Q2 2023 [5]. - Adjusted EBITDA slightly declined to $15.6 million from $16.8 million year-over-year [5]. Cost Management - The company maintained lease operating expenses effectively, aided by the operationalization of its acid gas injection facility, which reduced operational expenses by $4.26 per Boe [6]. - General and administrative expenses decreased from $4.04 per Boe to $2.85 per Boe due to payroll reductions [6]. Cash and Debt Position - As of June 30, 2024, Battalion Oil had cash and cash equivalents of $54.4 million, down from $57.5 million at the end of 2023 [7]. - Total indebtedness was $160.2 million, with $52.6 million classified as current debt [7]. Management Initiatives - Management emphasized ongoing cost reduction and production efficiency initiatives, including a successful $20 million preferred equity raise to support drilling and debt reduction [8]. Strategic Developments - The company is pursuing a merger with Fury Resources, with discussions ongoing to amend the purchase price from $9.80 to $7 per share [9]. - Battalion Oil completed a six-well drilling campaign ahead of schedule and under budget, with plans for continued drilling in Texas [9].

Financial Performance - The company reported a net loss of $45.5 million for the six months ended June 30, 2024, with a negative working capital of $69.1 million[148]. - Net income for the six months ended June 30, 2024, was a loss of $31.3 million, compared to a profit of $18.1 million in 2023[184]. - Operating revenues for the six months ended June 30, 2024, were $98.6 million, down from $118.2 million in 2023, reflecting a decrease of approximately 16.5%[184]. - Average daily production decreased to 12,857 Boe/d for the three months ended June 30, 2024, from 14,253 Boe/d in 2023, a decline of about 9.8%[185]. - The company recorded a net derivative gain of $1.2 million for Q2 2024, down from a gain of $4.5 million in Q2 2023, while for the first half of 2024, a net derivative loss of $22.9 million was reported compared to a gain of $23.9 million in the same period of 2023[197]. Cash Flow and Liquidity - As of June 30, 2024, the company had $54.4 million in cash and cash equivalents, with no additional borrowing capacity under the Amended Term Loan Agreement[148]. - The company anticipates requiring additional liquidity to continue operations and meet debt obligations over the next 12 months[152]. - Net cash flows provided by operating activities for the six months ended June 30, 2024, were $33.7 million, compared to a net cash outflow of $8.7 million for the same period in 2023[174]. - Cash flows used in investing activities for the six months ended June 30, 2024, were approximately $45.7 million, primarily for drilling and completion activities[175]. - The company is exploring strategic transactions and cost reduction opportunities to maintain liquidity and compliance with debt covenants[157]. Debt and Financing - The company is required to make scheduled payments totaling $62.5 million from September 30, 2024, to September 30, 2025, including $12.5 million due at the end of Q3 2024[149]. - As of June 30, 2024, the company had $160.2 million of indebtedness outstanding and $0.3 million of letters of credit under the Amended Term Loan Agreement[165]. - The weighted average interest rate on borrowings for the quarter ended June 30, 2024, was approximately 12.95%[165]. - The principal amount of term loan debt was $160.2 million as of June 30, 2024, with a weighted average interest rate of 12.98%[203]. - A 10% change in market interest rates would impact the company's cash flows by approximately $2.6 million per year based on the current variable interest rate debt[203]. Capital Expenditures and Investments - Capital expenditures for oil and natural gas totaled $44.8 million for the six months ended June 30, 2024, compared to $32.6 million for the same period in 2023, representing a 37% increase[176][177]. - The company has advanced capital contributions totaling approximately $18.5 million for workover operations at the AGI Facility as of June 30, 2024[142]. - The Acid Gas Injection facility has processed over 2.1 Bcf of gas since becoming operational on March 9, 2024, despite facing delays and higher costs[143]. Operational Efficiency - Lease operating expenses increased to $9.41 per Boe for the three months ended June 30, 2024, compared to $8.76 per Boe in 2023, marking a rise of approximately 7.4%[186]. - Workover and other expenses decreased to $0.81 per Boe for the three months ended June 30, 2024, from $2.03 per Boe in 2023, a reduction of about 60%[187]. - Gathering and other expenses were $12.1 million for the three months ended June 30, 2024, down from $16.8 million in 2023, a decrease of approximately 28.6%[189]. - General and administrative expenses decreased to $3.3 million for Q2 2024 from $6.0 million in Q2 2023, and to $7.3 million for the first half of 2024 from $11.0 million in the same period of 2023, primarily due to reduced payroll and benefits[193]. Strategic Transactions - The company entered into a merger agreement with Fury Resources, with a total transaction value of approximately $450.0 million, converting shares into $9.80 in cash[130]. - The company raised $19.5 million from the sale of Series A-3 Convertible Preferred Stock and an additional $19.5 million from Series A-4 Redeemable Convertible Preferred Stock[135]. - The company has incurred approximately $3.6 million in costs related to the merger as of August 8, 2024[134]. - The company plans to reduce operating and capital costs to improve cash flow and has obtained a support letter from investors to purchase up to $30 million of additional preferred equity securities[152]. Risk Management - The company hedges approximately 50% to 85% of its anticipated oil and natural gas production under its Term Loan Agreement, utilizing various derivative instruments to manage price risk[200]. - The company expects energy prices to remain volatile and has implemented a risk management policy to mitigate the impact of price fluctuations on operations[200]. - The Total Net Leverage Ratio covenant was not in compliance as of March 31, 2024, but was cured by a prepayment of $17.3 million on May 14, 2024[170].

Production and Revenue - Battalion Oil Corporation reported average daily net production of 12,857 Boe/d (49% oil) and total operating revenue of $49.1 million for Q2 2024, compared to 14,253 Boe/d and $54.3 million in Q2 2023, reflecting a decrease in production of approximately 1,396 Boe/d [4]. - Total operating revenues for the six months ended June 30, 2024, were $98,974 million, a decrease of 17.1% compared to $119,414 million for the same period in 2023 [16]. - Total production volumes for crude oil in the three months ended June 30, 2024, were 636 MBbls, a decrease of 7% from 577 MBbls in the same period of 2023 [21]. - Average daily production for the six months ended June 30, 2024, was 12,923 Boe/d, down 15% from 15,221 Boe/d in the same period of 2023 [21]. - Total production of natural gas for the six months ended June 30, 2024, was 4,109 MMcf, a decrease of 10% from 4,562 MMcf in the same period of 2023 [21]. Financial Performance - Battalion's adjusted EBITDA for Q2 2024 was $15.6 million, down from $16.8 million in Q2 2023 [5]. - Adjusted EBITDA for the six months ended June 30, 2024, was $25,016 million, a decrease from $42,918 million in the same period of 2023, reflecting a decline of 41.5% [27]. - The company reported a net loss of $8.7 million or $0.53 per share for Q2 2024, with an adjusted diluted net loss of $13.2 million or $0.80 per share [5]. - For the three months ended June 30, 2024, the net loss available to common stockholders was $(8,691) million, compared to $(5,745) million for the same period in 2023, representing a year-over-year increase in loss of 51.5% [24]. - The company reported a diluted net loss per common share of $(0.53) for the three months ended June 30, 2024, compared to $(0.35) for the same period in 2023, indicating a worsening of 51.4% [24]. Expenses and Costs - Lease operating and workover expenses decreased to $10.22 per Boe in Q2 2024 from $10.79 per Boe in Q2 2023, primarily due to savings on chemicals and lower SWD costs [5]. - Total operating costs, as reported, for the three months ended June 30, 2024, were $26.29 per Boe, a decrease of 13% from $30.25 in the same period of 2023 [21]. - Average cost per Boe for lease operating expenses was $9.41 for the three months ended June 30, 2024, compared to $8.76 in the same period of 2023, indicating an increase of 7.4% [21]. Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $29,824 million for the three months ended June 30, 2024, compared to $9,338 million for the same period in 2023, reflecting a substantial increase of 219.5% [24]. - Cash flows from operations before changes in working capital were $9,212 million for the three months ended June 30, 2024, compared to $8,932 million for the same period in 2023, showing a growth of 3.1% [24]. - Cash used in investing activities for the six months ended June 30, 2024, was $45,706, compared to $31,739 for the same period in 2023, indicating an increase of 44% [20]. - Cash, cash equivalents, and restricted cash at the end of the period for June 30, 2024, totaled $54,521, compared to $18,604 at the end of June 30, 2023 [20]. Debt and Equity - As of June 30, 2024, Battalion had $160.2 million in outstanding indebtedness and total liquidity of $54.4 million [6]. - The company executed a $20.0 million preferred equity raise in May 2024 to support its drilling program and debt reduction [2]. - Total liabilities increased to $155,250 million as of June 30, 2024, compared to $134,416 million as of December 31, 2023 [18]. - Total stockholders' equity decreased to $22,670 million as of June 30, 2024, from $68,021 million as of December 31, 2023 [18]. - Long-term debt, net, decreased to $101,185 million as of June 30, 2024, from $140,276 million as of December 31, 2023 [18]. Mergers and Acquisitions - The proposed merger agreement with Fury Resources has been amended to reduce the purchase price from $9.80 to $7.00 per share, contingent on existing preferred equity holders rolling over their equity [7]. Operational Highlights - The AGI facility treated 1.82 Bcf in Q2 2024, reducing operating expenses by $4.26/Boe compared to Q1 2024, and processed an average of 20 MMcf/d [2][3]. - Battalion plans to complete the next two-well pad in Monument Draw by late Q3 or early Q4 2024, following the successful drilling of two additional wells in Q2 2024 [2][3].

HOUSTON, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter of 2024. Key Highlights AGI facility online and treated 1.82 Bcf for the second quarter 2024 reducing operating expenses by $4.26/Boe compared to the first quarter 2024On August 12, 2024, the AGI facility processed 26.6 MMcf/d which allowed the Company to return wells to production and realize approximately 7,500 Bbls ...

Core Viewpoint - Kuehn Law, PLLC is investigating potential claims related to proposed mergers to ensure that shareholder interests are protected and that the boards of the involved companies acted in a manner that maximizes shareholder value and disclosed all material information [1][2]. Group 1: Proposed Mergers - Battalion Oil Corporation is set to be acquired by Fury Resources, Inc. for $9.80 per share in cash [2]. - Dri-Quip, Inc. will be acquired by Innovex Downhole Solutions, Inc., with Dri-Quip stockholders expected to own approximately 52% of the combined company post-transaction [2]. - Perficient, Inc. has agreed to sell to an affiliate of BPEA Private Equity Fund VIII for $76.00 per share in cash [2]. - Reneo Pharmaceuticals, Inc. is merging with OnKure, Inc., with Reneo shareholders anticipated to own about 31% of the combined entity [2]. Group 2: Shareholder Involvement - Kuehn Law emphasizes the importance of shareholder participation in maintaining the integrity and fairness of financial markets, encouraging concerned shareholders to get involved [3]. - The firm covers all case costs and does not charge its investor clients, urging shareholders to act promptly due to the time-sensitive nature of legal rights [3].

Zacks Investment Research has recently initiated the coverage of Battalion Oil Corporation (BATL) , assigning an “Underperform” rating to the stock. This decision reflects ongoing challenges in the company’s operations and financial metrics.Battalion Oil's financial performance has been under pressure, with the first quarter of 2024 continuing a troubling trend. The company's operating revenues fell 23.3% year over year to $49.9 million on lower production volumes and reduced realized prices. Average daily ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35467 | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------|------ ...

Exhibit 99.1 Battalion Oil Corporation Announces First Quarter 2024 Financial and Operating Results HOUSTON, TEXAS – May 15, 2024 – Battalion Oil Corporation (NYSE American: BATL, "Battalion" or the "Company") today announced financial and operating results for the first quarter of 2024. Key Highlights ● Previously announced AGI project online in Q1 2024 and achieved new record of 32 MMcf/d of throughput ● Drilled and completed two wells in Monument Draw in Q1 2024 ● Generated first quarter 2024 sales volum ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Battalion Oil, an independent energy company, focuses on Delaware Basin assets, with **68.1 MMBoe** proved reserves and a pending **$450.0 million** merger - The company is an independent energy company focused on the acquisition, production, exploration, and development of onshore liquids-rich oil and natural gas assets, with current activities concentrated in the **Delaware Basin**[22](index=22&type=chunk)[23](index=23&type=chunk) Proved Reserves and Production (as of December 31, 2023) | Metric | Value | | :--- | :--- | | **Total Proved Reserves** | **68.1 MMBoe** | | - Oil | 34.6 MMBbls | | - NGLs | 14.9 MMBbls | | - Natural Gas | 111.7 Bcf | | Proved Developed | 59% | | **Average Daily Production (FY 2023)** | **13,784 Boe/d** | | **Acreage (Net)** | **39,867 acres** | - On December 14, 2023, Battalion entered into a merger agreement with Fury Resources, Inc., to be acquired for **$9.80 per share** in cash, representing a total transaction value of approximately **$450.0 million**[30](index=30&type=chunk) - To support liquidity, the company obtained a support letter from its largest shareholders for up to **$55.0 million** in preferred equity, selling **35,000 shares** for net proceeds of **$34.1 million** in December 2023[30](index=30&type=chunk) - The company's H2S treating joint venture facility experienced operational complications and cost overruns, requiring Battalion to advance approximately **$15.1 million** in capital contributions, with the facility now expected to process **20,000 Mcf** of natural gas per day by Q2 2024[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) Production Volumes, Prices, and Costs (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Average Daily Production (Boe/d)** | **13,784** | **15,438** | | **Average Realized Price (per Boe)** | **$43.43** | **$63.43** | | - Crude Oil ($/Bbl) | $76.04 | $94.36 | | - Natural Gas ($/Mcf) | $1.27 | $4.95 | | **Total Average Cost (per Boe)** | **$25.35** | **$24.39** | [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from its pending merger, volatile commodity prices, substantial debt, uncertain reserve estimates, and concentrated Delaware Basin operations - Failure to complete the merger with Fury Resources could **materially and adversely affect** the company's results of operations and stock price, incurring substantial transaction-related costs regardless of completion[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) - The company's business is highly sensitive to **volatile oil and natural gas prices**, which impact revenues, cash flow, and the ability to fund capital expenditures[129](index=129&type=chunk) - As of December 31, 2023, the company had approximately **$200.0 million** of debt outstanding with **no additional borrowing capacity** under its Amended Term Loan Agreement, where failure to comply with financial covenants, such as the **Current Ratio**, could result in default[136](index=136&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - Reserve estimates are inherently uncertain, with approximately **41%** of the company's estimated proved reserves classified as **proved undeveloped** as of December 31, 2023, requiring significant future capital expenditures to recover[146](index=146&type=chunk)[151](index=151&type=chunk) - The business is **geographically concentrated** in the **Delaware Basin**, exposing it to regional supply/demand factors, transportation constraints, and other localized risks[166](index=166&type=chunk) - If the merger does not close, the company may be **unable to pay cash dividends** on its Redeemable Preferred Stock, leading to an increase in the liquidation preference and potential dilution for common stockholders upon conversion[122](index=122&type=chunk)[123](index=123&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[224](index=224&type=chunk) [Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) The company manages cybersecurity risk via internal processes and third-party experts, with Board oversight, and has identified no material incidents - The company employs a risk management strategy using internal processes and third-party experts to identify and mitigate cybersecurity threats[224](index=224&type=chunk) - The **Board of Directors** has ultimate oversight responsibility for cybersecurity, with the **Audit Committee** handling specific risk management functions and receiving quarterly updates from management[225](index=225&type=chunk)[227](index=227&type=chunk) - The company has **not identified any substantive cybersecurity incident** that would have a **material impact** on its business, operations, or financial statements[229](index=229&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) The company believes it holds satisfactory title to its properties, which are deemed adequate and suitable for future business operations - The company believes it holds **satisfactory title** to its properties, which are deemed **adequate and suitable** for future business operations[230](index=230&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20Legal%20Proceedings) The company is not a party to any governmental environmental proceedings involving potential monetary sanctions of **$300,000** or more - The company is not a party to any governmental environmental proceedings involving potential monetary sanctions of **$300,000** or more[231](index=231&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[232](index=232&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE American under "BATL"; no common stock dividends are anticipated, while **$95.6 million** in preferred stock was sold in 2023 - The company's common stock is traded on the **NYSE American** exchange under the ticker symbol "**BATL**"[232](index=232&type=chunk) - The company does **not anticipate declaring cash dividends** on its common stock in the foreseeable future, as it intends to retain earnings for business operations and is restricted by its Amended Term Loan Agreement[233](index=233&type=chunk) - In 2023, the company sold an aggregate of **98,000 shares** of redeemable convertible preferred stock in private placements for total net proceeds of **$95.6 million**[233](index=233&type=chunk) [Reserved](index=41&type=section&id=Item%206.%20Reserved) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Operating revenue decreased to **$220.8 million** in 2023, resulting in a **$3.0 million** net loss, with liquidity supported by **$95.6 million** preferred stock sales and **$50.0 million** debt due in 2024 Selected Financial Results (in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | **Total Operating Revenues** | **$220,762** | **$359,064** | | **Net (Loss) Income** | **($3,048)** | **$18,539** | | Net Cash from Operations | $17,589 | $78,801 | | Net Cash used in Investing | ($51,845) | ($126,130) | | Net Cash from Financing | $59,059 | $31,786 | - The decrease in revenue was primarily due to a **~$20.00 per Boe** decrease in average realized prices and lower production volumes in 2023 compared to 2022[278](index=278&type=chunk)[302](index=302&type=chunk) - As of December 31, 2023, the company had **$57.5 million** in cash and cash equivalents, **no additional borrowing capacity** under its Amended Term Loan Agreement, and **$50.0 million** in debt repayments due in 2024[254](index=254&type=chunk) - Management believes that cash on hand, proceeds from a March 2024 preferred equity sale, and cost reduction measures provide **sufficient liquidity** to fund operations and meet debt requirements for the next 12 months[259](index=259&type=chunk) - General and administrative expenses increased to **$20.1 million** in 2023 from **$15.4 million** in 2022, primarily due to professional fees and non-recurring costs related to the pending merger[308](index=308&type=chunk) - Interest expense increased to **$33.3 million** in 2023 from **$23.6 million** in 2022, mainly due to higher interest rates and amortization of financing costs[313](index=313&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity price and interest rate risks through hedging programs, with **$200.0 million** in variable-rate debt and a **10%** rate change impacting cash flow by **$2.6 million** - The company uses derivative instruments to hedge against commodity price volatility, with a requirement under its Amended Term Loan Agreement to hedge approximately **50% to 85%** of anticipated production on a rolling four-year basis[315](index=315&type=chunk) - The company is exposed to interest rate risk on its **$200.0 million** of variable-rate debt, where a **10%** change in market interest rates would impact annual cash flows by approximately **$2.6 million** as of December 31, 2023[319](index=319&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=55&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements include an unqualified auditor's report, highlighting reserve estimation as a critical matter, with proved reserves declining from **92.0 MMBoe** to **68.1 MMBoe** due to negative revisions - The report from Deloitte & Touche LLP expresses an **unqualified opinion** on the financial statements and highlights the estimation of proved oil and natural gas reserve quantities as a **critical audit matter** due to significant judgments involved[327](index=327&type=chunk)[332](index=332&type=chunk) Change in Total Proved Reserves (MBoe) | Description | 2022 (MBoe) | 2023 (MBoe) | | :--- | :--- | :--- | | **Beginning Balance** | **95,880** | **92,020** | | Extensions and discoveries | 7,018 | 5 | | Production | (5,635) | (5,031) | | Revision of previous estimates | (5,204) | (18,887) | | **Ending Balance** | **92,020** | **68,107** | - The **18.9 MMBoe** negative revision in 2023 includes a **13.0 MMBoe** downward revision from the removal of **Proved Undeveloped (PUD)** reserves due to decreased activity associated with managing cash flow, servicing debt, and recapitalizing the business[498](index=498&type=chunk)[500](index=500&type=chunk) Standardized Measure of Discounted Future Net Cash Flows (in thousands) | Metric | Dec 31, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Future cash inflows | $3,126,801 | $6,095,180 | | Future production & development costs | ($1,903,883) | ($2,937,500) | | Future income tax expense | ($28,551) | ($306,160) | | **10% Discounted Future Net Cash Flows** | **$598,481** | **$1,461,676** | - The company issued three series of Redeemable Convertible Preferred Stock in 2023 (Series A, A-1, and A-2), raising total net proceeds of approximately **$95.6 million**[442](index=442&type=chunk)[443](index=443&type=chunk)[444](index=444&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=95&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[515](index=515&type=chunk) [Controls and Procedures](index=95&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2023, with no material changes in internal control - Management concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[516](index=516&type=chunk) - **No changes** in internal control over financial reporting occurred during the fourth quarter of 2023 that materially affected, or are reasonably likely to materially affect, internal controls[517](index=517&type=chunk) [Other Information](index=95&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[517](index=517&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=95&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[517](index=517&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders [Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=96&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details equity compensation plans, with **384,358** securities outstanding and **1.1 million** available for future issuance as of December 31, 2023 Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Securities to be Issued Upon Exercise (A) | Weighted-Average Exercise Price | Securities Remaining for Future Issuance (Excluding A) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 384,358 | $28.32 | 1,067,966 | [Certain Relationships and Related Transactions, and Director Independence](index=96&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders [Principal Accountant Fees and Services](index=97&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item is incorporated by reference from the company's definitive proxy statement for its 2024 Annual Meeting of Stockholders Part IV [Exhibits and Financial Statement Schedules](index=97&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists consolidated financial statements and exhibits, including the merger agreement and debt documents, with financial statement schedules omitted [Form 10-K Summary](index=99&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company provides no summary under this item - None[532](index=532&type=chunk)