Battalion Oil(BATL) - 2024 Q3 - Quarterly Results

Production Performance - Average daily net production for Q3 2024 was 12,076 Boe/d (52% oil), a decrease from 12,717 Boe/d (46% oil) in Q3 2023[4] - Crude oil production increased to 577 MBbls in Q3 2024 from 539 MBbls in Q3 2023, representing a growth of 7.1%[18] - Natural gas production decreased to 1,844 MMcf in Q3 2024 from 2,054 MMcf in Q3 2023, a decline of 10.2%[18] - Total production volumes for Q3 2024 were 1,111 MBoe, down from 1,170 MBoe in Q3 2023, a decrease of 5.0%[18] - The Glacier and Rio pads continue to perform above expectations, with cumulative production averaging 370 Mboe (64% oil) and 132 Mboe (86% oil) respectively[3] Financial Performance - Total operating revenue for Q3 2024 was $45.3 million, down from $54.1 million in Q3 2023, primarily due to a $5.07 decrease in average realized prices[4] - The company reported a net income of $5.6 million or $0.34 per share for Q3 2024, with an adjusted diluted net loss of $21.5 million or $1.31 per share[5] - Net income for the three months ended September 30, 2024, was $21,628, compared to a net loss of $53,799 for the same period in 2023[15] - Net income available to common stockholders for Q3 2024 was $5.587 million, compared to a net loss of $57.662 million in Q3 2023[19] - The company reported a basic net income per share of $0.34 for the three months ended September 30, 2024, compared to a loss of $3.50 per share in the same period of 2023[15] Expenses and Costs - Lease operating and workover expense increased to $11.56 per Boe in Q3 2024 from $10.13 per Boe in Q3 2023, attributed to inflationary market increases[5] - Total operating expenses for the three months ended September 30, 2024, were $44,212, down from $47,289 in the same period of 2023, a decrease of 4.6%[15] - Total operating costs, as reported, were $28.50 per Boe in Q3 2024, slightly down from $28.94 per Boe in Q3 2023[18] - The company experienced a decrease in depletion, depreciation, and accretion expenses, which were $12,533 for the three months ended September 30, 2024, compared to $13,426 in the same period of 2023[21] Cash Flow and Liquidity - Total liquidity as of September 30, 2024, was $29.8 million, with $147.8 million of indebtedness outstanding[6] - Cash flows from operating activities showed a net cash used of $5,072 thousand for the three months ended September 30, 2024, compared to a net cash provided of $2,416 thousand in the same period last year[17] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(24,596) thousand for the three months ended September 30, 2024, compared to an increase of $24,076 thousand in the same period last year[17] - Cash, cash equivalents, and restricted cash at the end of the period were $29,925 thousand, down from $42,680 thousand at the end of the same period in 2023[17] Derivative Contracts and Unrealized Losses - The company reported a net gain on derivative contracts of $26,896 for the three months ended September 30, 2024, compared to a loss of $53,687 in the same period of 2023[15] - The company experienced a significant unrealized loss on derivative contracts of $(28,091) thousand for the three months ended September 30, 2024, compared to a gain of $46,805 thousand in the same period of 2023[17] - Unrealized losses on derivatives contracts were reported at $28,091 for the three months ended September 30, 2024, a significant improvement from unrealized gains of $46,805 in the same period of 2023[21] Strategic Developments - Battalion amended its merger agreement with Fury Resources, reducing the purchase price to $7.00 per share and requiring preferred equity holders to roll over 100% of their equity[2] - The company plans to hold a special meeting of stockholders on November 19, 2024, to vote on the merger agreement with Fury Resources[8] - Battalion Oil Corporation continues to focus on strategic adjustments to enhance financial performance, as indicated by the adjustments made in their EBITDA calculations[21] Adjusted EBITDA - Adjusted EBITDA for Q3 2024 was $13.5 million, slightly down from $13.6 million in Q3 2023[5] - Adjusted EBITDA for the three months ended September 30, 2024, was $13,458, slightly down from $13,625 in the same period of the previous year[21] - For the nine months ended September 30, 2024, Battalion reported an adjusted EBITDA of $38,473, down from $56,543 in the same period of 2023[21] - The company’s adjusted LTM EBITDA was reported at $48,445, indicating a focus on improving operational efficiency[23]