Battalion Oil(BATL) - 2020 Q3 - Quarterly Report

Special Note Regarding Forward-Looking Statements Forward-Looking Statements and Associated Risks This section highlights forward-looking statements on future operations, capital expenditures, production, cash flows, and financial position, outlining significant risks like commodity price volatility, COVID-19 impacts, indebtedness, and regulatory changes - Forward-looking statements cover planned capital expenditures, potential increases in oil and natural gas production, future cash flows, financial position, and business strategy[6] - Key risks include commodity price volatility, impacts of the COVID-19 pandemic on operations and demand, ability to generate sufficient cash flow, substantial indebtedness, and risks in reserve replacement and development[6][7] PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents unaudited condensed consolidated financial statements, distinguishing Successor and Predecessor periods post-Chapter 11 emergence Condensed Consolidated Statements of Operations (Unaudited) | Metric (in thousands, except per share) | Three Months Ended Sep 30, 2020 (Successor) | Three Months Ended Sep 30, 2019 (Predecessor) | Nine Months Ended Sep 30, 2020 (Successor) | Nine Months Ended Sep 30, 2019 (Predecessor) | | :-------------------------------------- | :------------------------------------------ | :-------------------------------------------- | :----------------------------------------- | :--------------------------------------------- | | Total operating revenues | $39,830 | $50,809 | $105,723 | $159,103 | | Total operating expenses | $175,420 | $115,245 | $334,479 | $1,221,885 | | Income (loss) from operations | $(135,590) | $(64,436) | $(228,756) | $(1,062,782) | | Net income (loss) | $(153,125) | $(63,284) | $(165,950) | $(1,040,687) | | Basic EPS | $(9.45) | $(0.40) | $(10.24) | $(6.55) | | Diluted EPS | $(9.45) | $(0.40) | $(10.24) | $(6.55) | - The company reported a significant net loss of $153.1 million for the three months ended September 30, 2020 (Successor), compared to a net loss of $63.3 million in the Predecessor period of 2019. For the nine months, the net loss was $166.0 million (Successor) versus $1.04 billion (Predecessor)[9] - Operating revenues decreased from $50.8 million (Predecessor) to $39.8 million (Successor) for the three-month period, and from $159.1 million (Predecessor) to $105.7 million (Successor) for the nine-month period[9] Condensed Consolidated Balance Sheets (Unaudited) | Metric (in thousands) | Sep 30, 2020 (Successor) | Dec 31, 2019 (Successor) | | :-------------------------------- | :----------------------- | :----------------------- | | Cash and cash equivalents | $1,827 | $5,701 | | Total current assets | $49,202 | $71,153 | | Net oil and natural gas properties| $346,144 | $506,144 | | Total assets | $413,093 | $584,666 | | Total current liabilities | $67,243 | $106,434 | | Long-term debt, net | $178,808 | $144,000 | | Total stockholders' equity | $152,790 | $316,650 | | Total liabilities and stockholders' equity | $413,093 | $584,666 | - Total assets decreased from $584.7 million at December 31, 2019, to $413.1 million at September 30, 2020, with net oil and natural gas properties also decreasing from $506.1 million to $346.1 million[12] - Total stockholders' equity significantly decreased from $316.7 million at December 31, 2019, to $152.8 million at September 30, 2020[12] Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | Metric (in thousands) | Dec 31, 2019 (Successor) | Sep 30, 2020 (Successor) | | :-------------------------------- | :----------------------- | :----------------------- | | Common Shares | 16,204 | 16,204 | | Stock Amount | $2 | $2 | | Additional Paid-In Capital | $327,108 | $329,198 | | Retained Earnings (Accumulated Deficit) | $(10,460) | $(176,410) | | Stockholders' Equity | $316,650 | $152,790 | - The accumulated deficit increased significantly from $10.5 million at December 31, 2019, to $176.4 million at September 30, 2020, primarily due to net losses incurred[13] - Stockholders' equity decreased by over 50% from $316.7 million to $152.8 million during the nine months ended September 30, 2020[13] Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2020 (Successor) | Nine Months Ended Sep 30, 2019 (Predecessor) | | :-------------------------------- | :----------------------------------------- | :--------------------------------------------- | | Net income (loss) | $(165,950) | $(1,040,687) | | Net cash provided by (used in) operating activities | $47,878 | $(33,233) | | Net cash provided by (used in) investing activities | $(92,503) | $(254,417) | | Net cash provided by (used in) financing activities | $36,177 | $257,793 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(8,448) | $(29,857) | | Cash, cash equivalents and restricted cash at end of period | $1,827 | $17,009 | - Operating activities generated $47.9 million in cash for the nine months ended September 30, 2020 (Successor), a significant improvement from the $33.2 million cash used in the Predecessor period of 2019[19] - Investing activities used $92.5 million in cash (Successor), primarily for oil and natural gas capital expenditures, which decreased from $254.4 million used in the Predecessor period[19] - Financing activities provided $36.2 million in cash (Successor), a substantial decrease from $257.8 million in the Predecessor period, reflecting changes in debt structure post-reorganization[19] 1. FINANCIAL STATEMENT PRESENTATION - Battalion Oil Corporation, an independent energy company, focuses on onshore liquids-rich oil and natural gas assets in the Delaware Basin, Texas, operating in one segment[21][22] - The company adopted fresh-start accounting effective October 1, 2019, post-Chapter 11 bankruptcy, rendering Predecessor financial statements non-comparable to Successor periods[25][