Exhibit 99.1

 

 

 

Picture 1

 

Battalion Announces Fourth Quarter 2019 Results and Provides 2020 Guidance

 

HOUSTON, March 25, 2020 (GLOBE NEWSWIRE) – Battalion Oil Corporation (NYSEA: BATL, "Battalion” or the "Company") today reported results of operations for the three months and full year ended December 31, 2019.

 

2019 and Fourth Quarter Highlights

 

·

Increased 2019 annual oil production by 6% over 2018 to 10,356 barrels of oil per day (“Bopd”); fourth quarter 2019 oil production of 11,489 Bopd

·

Decreased fourth quarter 2019 operating costs to $18.28 per barrel of oil equivalent (“Boe”) from $36.98 per Boe in same quarter prior year and $30.40 per Boe in third quarter 2019

·

Decreased fourth quarter 2019 adjusted G&A costs to $3.22 per Boe from $5.08 per Boe in same quarter prior year and $4.92 per Boe in third quarter 2019 (see Selected Operating Data table for additional information)

·

Decreased Net Debt to Adjusted EBITDA of 1.54x as of year end

·

Secured substantial, low-cost sour gas processing capacity at Valkyrie of 35,000 lb per day during last half of 2019 with limited capital investment; further expansion to 70,000 lb per day commenced in December 2019 and online in March 2020 providing several years of flow assurance

 

Management Comments on Results

Richard Little, Battalion's Chief Executive Officer commented, "There has been a tremendous amount of work by the team to essentially stand up a new company.  Since the restructuring, we’ve consolidated offices into one location, reduced G&A by over 40%, integrated a strong technical team, reduced well costs by over 30%, doubled H2S treating capacity, reduced LOE by nearly 30%, applied for and received an acid gas injection well permit and relisted on the NYSE-American under the name Battalion Oil.  I’m proud that everything we’ve done together over the last several months affords us security and confidence as we face uncertainty. From a position of strength, we’re focused on organic growth and can be opportunistic and evaluate M&A responsibly.  We’ve been through these cycles before and appreciate what it takes to survive in challenging times.”

 

Results of Operations

Battalion ended 2019 with 133 gross (102 net) horizontal wells producing in the Delaware Basin. Annual net production was 10,356 Bopd for 2019 compared to 9,748 Bopd for 2018. For the three months ended December 31, 2019, oil production averaged 11,489 Bopd as compared to 11,848 Bopd for the same quarter last year.  Production was comprised of 57% oil, 19% natural gas liquids (“NGLs”) and 24% natural gas during the fourth quarter 2019. 

 

Battalion generated total revenues of $65.6 million for the fourth quarter of 2019.  The Company reported a net loss to common stockholders of $10.5 million or a net loss per basic and diluted share of $0.65 for the fourth quarter of 2019. After adjusting for certain items including the effect of unrealized derivative losses, restructuring and reorganization costs (see Selected Item Review and Reconciliation table for additional information), the Company reflected net income of $11.3 million or net income per basic and diluted share of $0.70 for the fourth quarter 2019. Adjusted EBITDA (see EBITDA Reconciliation table for additional information) totaled $32.6 million and $89.7 million for the fourth quarter of 2019 and full year, respectively.

 

Excluding the impact of hedges, Battalion realized 95% of the average NYMEX oil price during the fourth quarter of 2019.  Realized hedge gains totaled approximately $2.0 million during the fourth quarter 2019 and $13.0 million for the full year.

 

Total operating costs per unit were $18.28 per Boe for the fourth quarter of 2019, compared to $36.98 per Boe and $30.40 per Boe for the same quarter prior year and third quarter of 2019, respectively.  The decrease in per unit total operating costs was primarily driven by sour gas processing cost improvements following repairs, reductions of general and administrative costs and optimization of production operations.

Liquidity and Capital Spending

As of December 31, 2019, Battalion's liquidity was $99.4 million consisting of $5.7 million in cash on hand plus availability under its revolving credit facility less letters of credit outstanding.

 

During the fourth quarter of 2019, Battalion incurred capital expenditures of $36.3 million, including $24.0 million on drilling and completions (“D&C”) and $11.3 million on infrastructure. Annual capital expenditures for 2019 were $258.9 million, including $161.7 million on drilling and completions and $84.1 million on infrastructure compared to $585.3 million in 2018 and $438.3 million and $147.0 million from D&C and infrastructure, respectively.

 

As of March 25, 2020, Battalion had 7,000 Bopd of oil hedged for the remainder of 2020 at an average price of $56.26 per barrel.  For 2021, the Company has 4,750 Bbl/d of oil hedged at an average price of $53.42 per barrel.  For 2022, the Company has 4,000 Bbl/d of oil hedged at an average price of $52.38 per barrel. As of March 20, 2020, the mark-to-market value of derivative contracts was approximately $125 million.

 

Operations Update

In the second half of 2019, Battalion brought online six new wells with compelling performance, including IP-30s of over 1,780 Boepd on average. The Company operated one rig during the second half of 2019 concentrated in Monument Draw, while maintaining minimum drilling obligations in West Quito Draw.  D&C activity in the second half of the year resulted in substantial savings, including over 30% reduction in average well costs to under $900/ft.

 

In addition to the improvements made to D&C, Battalion conducted an overhaul of sour gas treating operations. Shortly after commissioning the Valkyrie sour gas treating plant, in the second quarter of 2019, consistent downtime led to a short-term drop in production from cycling wells. Following comprehensive modifications to the chemical treating process as well as reconstructing certain critical mechanical components of the facility, capacity doubled to 35,000 lb per day and was fully operational during the fourth quarter of 2019 providing more capacity than required for the Company’s year-end 2019 proved developed producing wells. As a result of these activities, unit processing costs were reduced by over 70%. In December 2019, the Company initiated construction of a third processing train, which was commissioned in March 2020, doubling capacity yet again. The Company’s expansion to 70,000 lb per day of sulfur processing capabilities secures substantial, low-cost capacity for H2S treating, supporting a one rig program for several years of future development.

 

Furthermore, Battalion received permits from the Texas Railroad Commission and the Texas Commission on Environmental Quality to construct and operate an acid gas injection (“AGI”) well by converting an existing producing gas well, providing an advantaged position over other producers in addressing a growing obstacle to horizontal development in the Delaware Basin.

 

Mr. Little continued, “Our team remained committed to diligent execution while simultaneously working to transform the entire company.  We have done a tremendous job driving down well costs and operating expenses and are now well positioned for organic growth when the market eventually turns around. I’m especially pleased with the result of our Valkyrie plant expansion.  This facility can now treat 100% of our produced gas for at least the next couple of years.  While other producers have been wary of the risks associated with sour gas production, this team has embraced the challenge and solved our capacity constraint issues. We’ve continued to be a leader in this area of the basin in dealing with sour gas production. Now that we have received our AGI permit, we have the platform in place for significant growth in the not-so-distant future. 

 

Given the transformational change this company has experienced, I’m excited about the future. Holistically, it’s why we point out that “Battalion” isn’t just a change in name only, it’s the beginning of a new company and a new culture predicated on discipline, accountability, and high-end performance.”

 

2020 Guidance

Battalion had planned to spend between $123 and $138 million to keep one rig active throughout 2020 in order to spud approximately 10 wells and place online 12 to 14 wells. As a result of recent changes in market conditions and commodity prices, we are considering revisions to our 2020 capital budget which would lower anticipated capital expenditures to approximately $60 million to $76 million and include drilling four to six gross operated wells and putting online six to seven gross operated wells during the year. Since the acreage is substantially held by production, and the original capital program assumed most of the annual activity would be front-weighted to Q1 2020, Battalion has the latitude to consider releasing the rig beginning in June 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019 Actuals

 

FY 2020 Guidance

 

 

FY

 

Q4

 

Initial

 

Revised

Oil Production, MBopd

 

 

10.4

 

 

11.5

 

 

11.1

 

11.7

 

 

10.3

 

10.8

Total Production, MBoepd

 

 

18.0

 

 

20.3

 

 

18.5

 

19.5

 

 

17.5

 

18.5

Rig Count

 

4.0 → 1.0

 

 

1

 

 

 

 

 

1

 

 

 

 

 

0.4

Wells POL

 

 

17

 

 

 3

 

 

12

 

14

 

 

6

 

 7

Total D&C Capex, $MM

 

$

162

 

$

24

 

$

105

$

115

 

$

45

$

55

D&C Cost per Well, $/ft

 

$

1,350

 

$

855

 

$

1,000

$

1,250

 

$

800

$

1,100

LOE, $/Boe

 

$

7.98

 

$

6.86

 

$

6.00

$

7.50

 

$

6.00

$

7.50

Infrastructure Capex, $MM

 

$

84

 

$

11

 

$

15

$

20

 

$

12

$

18

H2S Capacity, MLbpd

 

 

35

 

 

35

 

 

 

 

 

70

 

 

 

 

 

70

G&A, $MM

 

$

42

 

$

 5

 

$

20

$

25

 

$

18

$

22

 

 

Proved Reserve Update

Battalion's estimated proved reserves as of December 31, 2019 were approximately 62.1 MMBoe, comprised of 63% oil, 17% NGL and 20% natural gas, with a standardized measure of $408.9 million.  Battalion's estimated proved reserves at December 31, 2019 were prepared by Netherland Sewell & Associates, Inc. in accordance with Securities and Exchange Commission guidelines using an average WTI price of $55.85 per barrel for oil and an average Henry Hub spot price of $2.578 per MMBtu for natural gas.

 

Fresh Start Accounting

Battalion adopted fresh-start accounting as of October 1, 2019, to coincide with the timing of the Company’s normal fourth quarter reporting period.  The Company evaluated and concluded that events between October 1, 2019 and October 8, 2019, the effective date of its emergence from chapter 11 bankruptcy proceedings, were immaterial and the use of an accounting convenience date of October 1, 2019 was appropriate. The adoption of fresh-start accounting resulted in the Company becoming a new entity for financial reporting purposes.  Upon the adoption of fresh-start accounting, Battalion's assets and liabilities were recorded at their fair values as of the fresh-start reporting date, and as a result, the Company's consolidated financial statements subsequent to October 1, 2019 are not comparable to its financial statements prior to October 1, 2019.  Please review Battalion's Annual Report on Form 10-K for the year ended December 31, 2019 for further details regarding fresh-start accounting and the financial information presented at the end of this release.

 

Conference Call Information

Battalion Oil Corporation has scheduled a conference call for Thursday, March 26, 2020, at 11:00 a.m. EDT (10:00 a.m. CDT).  To participate in the conference call, dial (888) 254-3590 for domestic and international callers a few minutes before the call begins and reference Battalion Oil Corporation confirmation code 5152270.  The conference call recording will also be posted to Battalion’s website: www.battalionoil.com.

 

Forward Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about anticipated production, liquidity, capital spending, drilling and completion plans, and forward guidance. Forward-looking statements may often, but not always, be identified by the use of such words such as "expects", "believes", "intends", "anticipates", "plans", "estimates", “projects”, "potential", "possible", or "probable" or statements that certain actions, events or results "may", "will", "should", or "could" be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and other filings submitted by the Company to the U.S. Securities and Exchange Commission (“SEC”), copies of which may be obtained from the SEC's website at www.sec.gov or through the Company's website at www.battalionoil.com. Readers should not place undue reliance on any such

forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company's expectations.

 

About Battalion

Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.

 

Contact

John-Davis Rutkauskas

Director, Corporate Finance & IR

(832) 538-0551

BATTALION OIL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

Period from

 

 

Period from

 

 

 

 

October 2, 2019

 

 

October 1, 2019

 

Three Months

 

 

through

 

 

through

 

Ended

 

 

December 31, 2019

  

  

October 1, 2019

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

Oil

 

$

58,325

 

 

$

 —

 

$

53,858

Natural gas

 

 

1,719

 

 

 

 —

 

 

1,505

Natural gas liquids

 

 

5,071

 

 

 

 —

 

 

4,514

Total oil, natural gas and natural gas liquids sales

 

 

65,115

 

 

 

 —

 

 

59,877

Other

 

 

467

 

 

 

 —

 

 

467

Total operating revenues

 

 

65,582

 

 

 

 —

 

 

60,344

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

 

 

Lease operating

 

 

12,804

 

 

 

 —

 

 

9,571

Workover and other

 

 

1,655

 

 

 

 —

 

 

3,779

Taxes other than income

 

 

3,730

 

 

 

 —

 

 

2,975

Gathering and other

 

 

10,812

 

 

 

 —

 

 

29,308

Restructuring

 

 

1,175

 

 

 

 —

 

 

 —

General and administrative

 

 

5,111

 

 

 

 —

 

 

12,860

Depletion, depreciation and accretion

 

 

19,996

 

 

 

 —

 

 

25,130

(Gain) loss on sale of Water Assets

 

 

(506)

 

 

 

 —

 

 

(119,003)

Total operating expenses

 

 

54,777

 

 

 

 —

 

 

(35,380)

Income (loss) from operations

 

 

10,805

 

 

 

 —

 

 

95,724

 

 

 

 

 

 

 

 —

 

 

 

Other income (expenses):

 

 

 

 

 

 

 —

 

 

 

Net gain (loss) on derivative contracts

 

 

(16,692)

 

 

 

 —

 

 

159,228

Interest expense and other

 

 

(1,275)

 

 

 

 —

 

 

(12,493)

Reorganization items, net

 

 

(3,298)

 

 

 

(115,366)

 

 

 —

Total other income (expenses)

 

 

(21,265)

 

 

 

(115,366)

 

 

146,735

Income (loss) before income taxes

 

 

(10,460)

 

 

 

(115,366)

 

 

242,459

Income tax benefit (provision)

 

 

 —

 

 

 

 —

 

 

(95,791)

Net income (loss)

 

$

(10,460)

 

 

$

(115,366)

 

$

146,668

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share of common stock:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.65)

 

 

$

(0.71)

 

$

0.93

Diluted

 

$

(0.65)

 

 

$

(0.71)

 

$

0.93

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

16,204

 

 

 

161,502

 

 

158,148

Diluted

 

 

16,204

 

 

 

161,502

 

 

158,359

 

BATTALION OIL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

Period from

 

 

Period from

 

 

 

 

October 2, 2019

 

 

January 1, 2019

 

 

 

 

through

 

 

through

 

Year Ended

 

 

December 31, 2019

  

  

October 1, 2019

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

Oil

 

$

58,325

 

 

$

145,024

 

$

199,601

Natural gas

 

 

1,719

 

 

 

107

 

 

6,791

Natural gas liquids

 

 

5,071

 

 

 

13,229

 

 

19,137

Total oil, natural gas and natural gas liquids sales

 

 

65,115

 

 

 

158,360

 

 

225,529

Other

 

 

467

 

 

 

743

 

 

1,080

Total operating revenues

 

 

65,582

 

 

 

159,103

 

 

226,609

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Production:

 

 

 

 

 

 

 

 

 

 

Lease operating

 

 

12,804

 

 

 

39,617

 

 

25,075

Workover and other

 

 

1,655

 

 

 

5,580

 

 

8,574

Taxes other than income

 

 

3,730

 

 

 

9,213

 

 

12,787

Gathering and other

 

 

10,812

 

 

 

36,057

 

 

60,090

Restructuring

 

 

1,175

 

 

 

15,148

 

 

128

General and administrative

 

 

5,111

 

 

 

36,550

 

 

62,056

Depletion, depreciation and accretion

 

 

19,996

 

 

 

90,912

 

 

77,527

Full cost ceiling impairment

 

 

 —

 

 

 

985,190

 

 

 —

(Gain) loss on sale of oil and natural gas properties

 

 

 —

 

 

 

 —

 

 

7,235

(Gain) loss on sale of Water Assets

 

 

(506)

 

 

 

3,618

 

 

(119,003)

Total operating expenses

 

 

54,777

 

 

 

1,221,885

 

 

134,469

Income (loss) from operations

 

 

10,805

 

 

 

(1,062,782)

 

 

92,140

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on derivative contracts

 

 

(16,692)

 

 

 

(34,332)

 

 

92,625

Interest expense and other

 

 

(1,275)

 

 

 

(37,606)

 

 

(43,015)

Reorganization items, net

 

 

(3,298)

 

 

 

(117,124)

 

 

 —

Total other income (expenses)

 

 

(21,265)

 

 

 

(189,062)

 

 

49,610

Income (loss) before income taxes

 

 

(10,460)

 

 

 

(1,251,844)

 

 

141,750

Income tax benefit (provision)

 

 

 —

 

 

 

95,791

 

 

(95,791)

Net income (loss)

 

$

(10,460)

 

 

$

(1,156,053)

 

$

45,959

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share of common stock:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.65)

 

 

$

(7.27)

 

$

0.29

Diluted

 

$

(0.65)

 

 

$

(7.27)

 

$

0.29

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

16,204

 

 

 

158,925

 

 

157,011

Diluted

 

 

16,204

 

 

 

158,925

 

 

157,295

 

 

BATTALION OIL CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

December 31, 2019

 

 

December 31, 2018

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,701

 

 

$

46,866

Accounts receivable, net

 

 

48,504

 

 

 

35,718

Assets from derivative contracts

 

 

4,995

 

 

 

57,280

Restricted cash

 

 

4,574

 

 

 

 —

Prepaids and other

 

 

7,379

 

 

 

4,788

Total current assets

 

 

71,153

 

 

 

144,652

Oil and natural gas properties (full cost method):

 

 

 

 

 

 

 

Evaluated

 

 

420,609

 

 

 

1,470,509

Unevaluated

 

 

105,009

 

 

 

971,918

Gross oil and natural gas properties

 

 

525,618

 

 

 

2,442,427

Less - accumulated depletion

 

 

(19,474)

 

 

 

(639,951)

Net oil and natural gas properties

 

 

506,144

 

 

 

1,802,476

Other operating property and equipment:

 

 

 

 

 

 

 

Other operating property and equipment

 

 

3,655

 

 

 

130,251

Less - accumulated depreciation

 

 

(378)

 

 

 

(8,388)

Net other operating property and equipment

 

 

3,277

 

 

 

121,863

Other noncurrent assets:

 

 

 

 

 

 

 

Assets from derivative contracts

 

 

224

 

 

 

12,437

Operating lease right of use assets

 

 

3,165

 

 

 

 —

Funds in escrow and other

 

 

703

 

 

 

2,181

Total assets

 

$

584,666

 

 

$

2,083,609

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

97,333

 

 

$

157,848

Liabilities from derivative contracts

 

 

8,069

 

 

 

3,768

Operating lease liabilities

 

 

923

 

 

 

 —

Asset retirement obligations

 

 

109

 

 

 

126

Total current liabilities

 

 

106,434

 

 

 

161,742

Long-term debt, net

 

 

144,000

 

 

 

613,105

Other noncurrent liabilities:

 

 

 

 

 

 

 

Liabilities from derivative contracts

 

 

4,854

 

 

 

9,139

Asset retirement obligations

 

 

10,481

 

 

 

6,788

Operating lease liabilities

 

 

2,247

 

 

 

 —

Deferred income taxes

 

 

 —

 

 

 

95,791

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Predecessor Common stock: 1,000,000,000 shares of $0.0001 par value

 

 

 —

 

 

 

16

authorized;160,612,852 shares issued and outstanding

 

 

 —

 

 

 

1,095,367

Predecessor Additional paid-in capital

 

 

 

 

 

 

 

Common stock: 100,000,000 shares of $0.0001 par value

 

 

 

 

 

 

 

authorized; 16,203,940 shares issued and outstanding

 

 

 2

 

 

 

 —

Successor Additional paid-in capital

 

 

327,108

 

 

 

 —

Retained earnings (accumulated deficit)

 

 

(10,460)

 

 

 

101,661

    Total stockholders' equity

 

 

316,650

 

 

 

1,197,044

Total liabilities and stockholders' equity

 

$

584,666

 

 

$

2,083,609

 

BATTALION OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

Period from

 

 

Period from

 

 

 

 

October 2, 2019

 

 

October 1, 2019

 

Three Months

 

 

through

 

 

through

 

Ended

 

 

December 31, 2019

  

  

October 1, 2019

 

December 31, 2018

Cash flows from operating activities:

 

 

 

  

 

 

 

 

 

 

Net income (loss)

 

$

(10,460)

  

 

$

(115,366)

 

$

146,668

Adjustments to reconcile net income (loss) to net cash provided by (used

 

 

 

  

 

 

 

 

 

 

in) operating activities:

 

 

 

  

 

 

 

 

 

 

Depletion, depreciation and accretion

 

 

19,996

  

 

 

 —

 

 

25,130

(Gain) loss on sale of Water Assets

 

 

(506)

  

 

 

 —

 

 

(119,003)

Deferred income tax provision (benefit)

 

 

 —

  

 

 

 —

 

 

95,791

Stock-based compensation, net

 

 

 —

  

 

 

 —

 

 

3,025

Unrealized loss (gain) on derivative contracts

 

 

18,681

  

 

 

 —

 

 

(161,798)

Amortization and write-off of deferred loan costs

 

 

 —

  

 

 

 —

 

 

383

Amortization of discount and premium

 

 

 —

  

 

 

 —

 

 

53

Reorganization items, net

 

 

(3,615)

  

 

 

109,170

 

 

 —

Other expense (income)

 

 

253

  

 

 

 —

 

 

(2,922)

Cash flow from operations before changes in working capital

 

 

24,349

  

 

 

(6,196)

 

 

(12,673)

Changes in working capital

 

 

(10,695)

  

 

 

(302)

 

 

43,119

Net cash provided by (used in) operating activities

 

 

13,654

  

 

 

(6,498)

 

 

30,446

 

 

 

 

  

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

  

 

 

 

 

 

 

Oil and natural gas capital expenditures

 

 

(43,230)

  

 

 

 —

 

 

(106,381)

Proceeds received from sales of oil and natural gas assets

 

 

 —

  

 

 

 —

 

 

2,169

Acquisition of oil and natural gas properties

 

 

 —

  

 

 

 —

 

 

(387)

Other operating property and equipment capital expenditures

 

 

 —

  

 

 

 —

 

 

(37,606)

Proceeds received from sale of other operating property and equipment

 

 

 6

  

 

 

 —

 

 

213,847

Funds held in escrow and other

 

 

434

  

 

 

 —

 

 

 —

Net cash provided by (used in) investing activities

 

 

(42,790)

  

 

 

 —

 

 

71,642

 

 

 

 

  

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

  

 

 

 

 

 

 

Proceeds from borrowings

 

 

36,000

  

 

 

130,000

 

 

145,000

Repayments of borrowings

 

 

(22,000)

  

 

 

(258,234)

 

 

(200,000)

Cash payments to Common Holders, Noteholders and Preferred Holders

 

 

 -

  

 

 

(4)

 

 

 -

Debt issuance costs

 

 

(1,471)

  

 

 

(8,764)

 

 

(321)

Common stock issued

 

 

 -

  

 

 

155,929

 

 

 -

Equity issuance costs and other

 

 

(2,503)

  

 

 

(53)

 

 

(38)

Net cash provided by (used in) financing activities

 

 

10,026

  

 

 

18,874

 

 

(55,359)

 

 

 

 

  

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

(19,110)

  

 

 

12,376

 

 

46,729

 

 

 

 

  

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

29,385

  

 

 

17,009

 

 

137

Cash, cash equivalents and restricted cash at end of period

 

$

10,275

  

 

$

29,385

 

$

46,866

 

BATTALION OIL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

Period from

 

 

Period from

 

 

 

 

October 2, 2019

 

 

January 1, 2019

 

 

 

 

through

 

 

through

 

Year Ended

 

 

December 31, 2019

  

  

October 1, 2019

 

December 31, 2018

Cash flows from operating activities:

 

 

 

  

 

 

 

 

 

 

Net income (loss)

 

$

(10,460)

  

 

$

(1,156,053)

 

$

45,959

Adjustments to reconcile net income (loss) to net cash provided by (used

 

 

 

  

 

 

 

 

 

 

in) operating activities:

 

 

 

  

 

 

 

 

 

 

Depletion, depreciation and accretion

 

 

19,996

  

 

 

90,912

 

 

77,527

Full cost ceiling impairment

 

 

 —

  

 

 

985,190

 

 

 —

(Gain) loss on sale of oil and natural gas properties

 

 

 —

  

 

 

 —

 

 

7,235

(Gain) loss on sale of Water Assets

 

 

(506)

  

 

 

3,618

 

 

(119,003)

Deferred income tax provision (benefit)

 

 

 —

  

 

 

(95,791)

 

 

95,791

Stock-based compensation, net

 

 

 —

  

 

 

(8,035)

 

 

15,266

Unrealized loss (gain) on derivative contracts

 

 

18,681

  

 

 

45,834

 

 

(84,274)

Amortization and write-off of deferred loan costs

 

 

 —

  

 

 

1,859

 

 

1,405

Amortization of discount and premium

 

 

 —

  

 

 

134

 

 

288

Reorganization items, net

 

 

(3,615)

  

 

 

108,887

 

 

 —

Other expense (income)

 

 

253

  

 

 

535

 

 

(1,608)

Cash flow from operations before changes in working capital

 

 

24,349

  

 

 

(22,910)

 

 

38,586

Changes in working capital

 

 

(10,695)

  

 

 

(16,821)

 

 

28,569

Net cash provided by (used in) operating activities

 

 

13,654

  

 

 

(39,731)

 

 

67,155

 

 

 

 

  

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

  

 

 

 

 

 

 

Oil and natural gas capital expenditures

 

 

(43,230)

  

 

 

(167,235)

 

 

(475,685)

Proceeds received from sales of oil and natural gas assets

 

 

 —

  

 

 

1,247

 

 

3,816

Acquisition of oil and natural gas properties

 

 

 —

  

 

 

(2,809)

 

 

(333,857)

Other operating property and equipment capital expenditures

 

 

 —

  

 

 

(85,613)

 

 

(116,995)

Proceeds received from sale of other operating property and equipment

 

 

 6

  

 

 

 —

 

 

216,083

Funds held in escrow and other

 

 

434

  

 

 

(7)

 

 

153

Net cash provided by (used in) investing activities

 

 

(42,790)

  

 

 

(254,417)

 

 

(706,485)

 

 

 

 

  

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

  

 

 

 

 

 

 

Proceeds from borrowings