Battalion Oil Corporation (NYSE:BATL) Q4 2021 Earnings Conference Call March 8, 2022 11:00 AM ET Company Participants Chris Lang - Manager of Finance Richard Little - Chief Executive Officer Daniel Rohling - Chief Operating Officer Kevin Andrews - Chief Financial Officer Conference Call Participants Operator Welcome to the Battalion Oil Q4 2021 Earnings Call. As a reminder, today’s conference is being recorded. I’ll now turn it over to Battalion Oil Corporation’s Finance Manager, Chris Lang, to open the cal ...

Battalion Oil Corporation (NYSE:BATL) Q3 2021 Earnings Conference Call November 9, 2021 11:00 AM ET Company Participants Chris Lang - Manager of Finance Richard Little - Chief Executive Officer Kevin Andrews - Chief Financial Officer Conference Call Participants Operator Welcome to the Battalion Oil Third Quarter 2021 Earnings Call. As a reminder, today's conference is being recorded. Now, I'll turn it over to Manager of Finance, Chris Lang. You may begin. Chris Lang Good morning. I'm joined by a few of my ...

Battalion Oil Corporation (NYSE:BATL) Q2 2021 Earnings Conference Call August 10, 2021 11:00 AM ET Company Participants Chris Lang - Manager, Finance Richard Little - Chief Executive Officer Kevin Andrews - Executive Vice President and Chief Financial Officer Daniel Rohling - Executive Vice President and Chief Operating Officer Conference Call Participants Noel Parks - Tuohy Brothers Operator Good morning. Welcome to the Battalion Oil Second Quarter 2021 Earnings Call. I'd now like to turn the conference ov ...

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Battalion Oil reported a Q1 2021 net loss of $33.4 million, reversing prior year's net income, primarily due to derivative losses [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2021 net loss of $33.4 million, reversing prior year's net income, primarily due to significant derivative contract losses | Financial Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total operating revenues** | **$55,518** | **$47,399** | | Income (loss) from operations | $13,706 | $(2,179) | | Net gain (loss) on derivative contracts | $(45,711) | $118,299 | | **Net income (loss)** | **$(33,375)** | **$114,491** | | Basic net income (loss) per share | $(2.06) | $7.07 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased slightly to $350.6 million, while liabilities rose, decreasing stockholders' equity to $57.0 million | Balance Sheet Item | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Total current assets | $44,468 | $47,836 | | Net oil and natural gas properties | $300,874 | $289,605 | | **Total assets** | **$350,599** | **$346,497** | | Total current liabilities | $118,762 | $83,176 | | Long-term debt | $155,086 | $158,489 | | **Total liabilities** | **$293,588** | **$256,539** | | **Total stockholders' equity** | **$57,011** | **$89,958** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $13.4 million, used for investing and debt repayment, leading to a $2.6 million net cash decrease | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $13,358 | $12,343 | | Net cash used in investing activities | $(12,719) | $(47,648) | | Net cash provided by (used in) financing activities | $(3,263) | $25,968 | | **Net decrease in cash** | **$(2,624)** | **$(9,337)** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, COVID-19 impacts, debt, significant derivative losses, and sour gas treating commitments - The company monitors COVID-19 impacts, which depressed commodity prices and revenues, with future uncertainties remaining[28](index=28&type=chunk) Debt Instrument | Debt Instrument | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Senior revolving credit facility | $155,000 | $158,000 | | Paycheck Protection Program loan | $2,209 | $2,209 | | **Total debt** | **$157,209** | **$160,209** | - Q1 2021 saw a **$45.7 million net loss** on derivatives, a sharp reversal from Q1 2020's **$118.3 million net gain**[91](index=91&type=chunk) - Minimum volume commitment for sour gas treating through June 2022 totals **$7.3 million** for 2021 and **$4.8 million** for 2022[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 revenue growth from higher prices, production decline, 2021 capital plans, and liquidity management Key Operating Metrics | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Average Daily Production (Boe/d) | 14,333 | 18,791 | | Average Realized Price ($/Boe) | $42.84 | $27.50 | | Total Operating Revenues (in millions) | $55.5 | $47.4 | - The 2021 capital expenditure budget is projected to be between **$40.0 million** and **$50.0 million** for drilling and infrastructure[129](index=129&type=chunk) - Post-quarter, the Senior Credit Agreement was amended, reducing the borrowing base to **$185.0 million** by June 2021 and **$175.0 million** by September 2021[126](index=126&type=chunk)[129](index=129&type=chunk)[148](index=148&type=chunk) - A waiver for the Current Ratio covenant was obtained for Q3 2020, with suspension until Q4 2021, aiding liquidity management[131](index=131&type=chunk)[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages commodity price and interest rate risks, hedging 65-85% of production and noting interest rate sensitivity - Risk management policy aims to hedge **65% to 85%** of anticipated production for up to 30 months using derivatives[168](index=168&type=chunk) - Exposed to interest rate risk, with **98.6%** of debt at floating rates; a 10% rate change impacts cash flow by **$0.5 million** annually[173](index=173&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes - Management concluded that disclosure controls and procedures were **effective** as of March 31, 2021[174](index=174&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings are not expected to materially affect the company's financial condition or results of operations - Resolution of pending legal proceedings is not expected to materially affect operating results or financial position[101](index=101&type=chunk)[175](index=175&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the 2020 Annual Report on Form 10-K were reported - No changes to the risk factors described in the 2020 Annual Report on Form 10-K were reported[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired **23,680 shares** from employees for tax withholding on vested restricted stock units - In February 2021, **23,680 shares** were surrendered by employees at **$11.16 per share** for tax withholding on vested RSUs[177](index=177&type=chunk)[179](index=179&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) Post-quarter, the Senior Secured Revolving Credit Agreement was amended, reducing the borrowing base and revising covenants - The Fourth Amendment reduces the borrowing base to **$185.0 million** by June 2021 and **$175.0 million** by September 2021, increasing interest margins and revising covenants[178](index=178&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists documents filed as exhibits with the Form 10-Q, including credit agreement amendments