Battalion Oil(BATL) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial and Operating Results Battalion Oil Corporation's Q1 2025 results highlight progress in its six-well drilling program, with operations ahead of schedule and under budget, and recently completed wells producing above expectations Overview and Key Highlights Battalion Oil Corporation's Q1 2025 highlights include ahead-of-schedule drilling, under-budget capital expenditure, and strong production from new wells, alongside improved AGI facility performance - The company is advancing its 2025 six-well activity plan, having completed four wells and drilling the final two ahead of schedule in the West Quito area[2] - Capital expenditure on the first well in West Quito was approximately $1.0 million below the Authorized for Expenditure (AFE) estimate, and a 10,000-foot lateral well was drilled in record time for the area[2] - Recently completed wells in the Monument Draw field are producing above type curve and are projected to each achieve an ultimate recovery of over 1,000,000 barrels of oil[2] - The Acid Gas Injection (AGI) facility treated an average of 18 MMcf/d during Q1 2025, with daily rates surpassing 30 MMcf/d post-quarter due to equipment additions[3] Financial and Operating Performance Q1 2025 saw decreased production and revenue, a net loss, but a significant increase in Adjusted EBITDA, with mixed trends in per-Boe operating costs Q1 Production and Revenue Comparison (YoY) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Average Daily Net Production | 11,900 Boe/d (53% oil) | 12,989 Boe/d (48% oil) | -8.4% | | Total Operating Revenue | $47.5 million | $49.9 million | -4.8% | | Realized Hedge Losses | $2.5 million | N/A | N/A | Operating Expenses per Boe (YoY) | Expense Category | Q1 2025 (/Boe) | Q1 2024 (/Boe) | Key Driver for Change | | :--- | :--- | :--- | :--- | | Lease Operating & Workover | $11.01 | $10.55 | Inflationary increases in maintenance, power, and chemicals | | Gathering and Other | $11.20 | $14.62 | Full quarter of volumes treated by the AGI facility | | General and Administrative | $4.12 | $3.44 | Higher payroll and benefits costs | Q1 2025 Profitability Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss available to common stockholders | ($5.8 million) | ($36.8 million) | | Net Loss per share | ($0.35) | ($2.24) | | Adjusted Diluted Net Loss | ($16.5 million) | N/A | | Adjusted Diluted Net Loss per share | ($1.00) | N/A | | Adjusted EBITDA | $15.1 million | $9.4 million | Financial Position and Liquidity As of March 31, 2025, the company reported $73.6 million in total liquidity and $225.0 million in outstanding term loan indebtedness - As of March 31, 2025, the Company had $225.0 million of term loan indebtedness outstanding[9] - Total liquidity was $73.6 million, composed of cash and cash equivalents[9] Financial Statements Unaudited Q1 2025 consolidated financial statements show a shift to net income, increased total assets, and positive cash flow from operations, driven by derivative gains and new debt Condensed Consolidated Statements of Operations Q1 2025 operations generated $47.5 million in revenue and $3.4 million in income, with a $9.3 million derivative gain leading to $6.0 million net income, but a $5.8 million net loss for common stockholders Q1 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $47,475 | $49,870 | | Income from operations | $3,391 | $23 | | Net gain (loss) on derivative contracts | $9,302 | ($24,187) | | Net income (loss) | $6,023 | ($31,203) | | Net loss available to common stockholders | ($5,797) | ($36,835) | | Diluted net loss per share | ($0.35) | ($2.24) | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $506.2 million, driven by cash growth, while total liabilities rose to $318.7 million, resulting in a $1.8 million stockholders' deficit Balance Sheet Comparison (in thousands) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $73,568 | $19,712 | | Total current assets | $111,443 | $54,052 | | Net oil and natural gas properties | $380,359 | $368,005 | | Total assets | $506,248 | $431,048 | | Total current liabilities | $96,080 | $77,664 | | Long-term debt, net | $196,833 | $145,535 | | Total liabilities | $318,656 | $249,393 | | Total stockholders' (deficit) equity | ($1,762) | $4,120 | Condensed Consolidated Statements of Cash Flows Q1 2025 saw $12.7 million net cash from operations, $20.1 million used in investing, and $61.2 million provided by financing, resulting in a $53.9 million net cash increase Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,731 | $3,916 | | Net cash used in investing activities | ($20,112) | ($31,848) | | Net cash provided by financing activities | $61,237 | $19,345 | | Net increase (decrease) in cash | $53,856 | ($8,587) | | Cash at end of period | $73,659 | $49,032 | Selected Operating Data Q1 2025 average daily production decreased to 11,900 Boe/d, while the post-hedge average realized price increased to $41.88 per Boe, and total adjusted operating costs decreased to $27.83 per Boe Q1 Production Volumes (YoY) | Production | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Crude oil (MBbls) | 569 | 566 | | Natural gas (MMcf) | 1,799 | 2,180 | | Natural gas liquids (MBbls) | 202 | 253 | | Total (MBoe) | 1,071 | 1,182 | | Average daily production (Boe/d) | 11,900 | 12,989 | Average Prices and Costs per Boe (YoY) | Metric (per Boe) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Average Price (pre-hedge) | $44.24 | $41.91 | | Cash effect of derivatives | ($2.36) | ($3.74) | | Average Price (post-hedge) | $41.88 | $38.17 | | Lease operating | $9.67 | $9.80 | | Gathering and other | $11.20 | $14.62 | | G&A, as adjusted | $3.01 | $2.57 | | Total operating costs, as adjusted | $27.83 | $30.27 | Non-GAAP Financial Measures and Reconciliations This section reconciles non-GAAP measures, including Adjusted Net Loss and Adjusted EBITDA, to GAAP figures, providing clarity on underlying operational performance Reconciliation of Net Loss to Adjusted Net Loss Q1 2025 reported net loss of $5.8 million was adjusted to a $16.5 million net loss, or ($1.00) per diluted share, primarily by removing an $11.8 million unrealized derivative gain Adjusted Net Loss Reconciliation (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss available to common stockholders (reported) | ($5,797) | ($36,835) | | Unrealized (gain) loss on derivatives | ($11,828) | $19,761 | | Non-recurring charges | $1,149 | $937 | | Net loss available to common stockholders (adjusted) | ($16,476) | ($17,065) | | Diluted net loss per share (adjusted) | ($1.00) | ($1.04) | Adjusted EBITDA Reconciliation Q1 2025 Adjusted EBITDA significantly improved to $15.1 million from $9.4 million in Q1 2024, with LTM Adjusted EBITDA reaching $62.2 million as of March 31, 2025 Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss), as reported | $6,023 | ($31,203) | | Interest expense | $7,189 | $8,391 | | Depletion, depreciation and accretion | $13,080 | $13,025 | | Unrealized (gain) loss on derivatives | ($11,828) | $19,761 | | Adjusted EBITDA | $15,082 | $9,381 | Quarterly Adjusted EBITDA Trend (in thousands) | Quarter | Adjusted EBITDA | | :--- | :--- | | Q2 2024 | $15,634 | | Q3 2024 | $13,458 | | Q4 2024 | $18,019 | | Q1 2025 | $15,082 | | LTM Adjusted EBITDA | $62,193 |