Battalion Oil Corporation Announces Third Quarter 2021 Results and Updates to 2021 Capital Expenditures Guidance

Houston, Texas, UNITED STATES


HOUSTON, Nov. 08, 2021 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced results of operations for the third quarter 2021 and provided an update on 2021 guidance for capital expenditures.

Highlights

  • Reported average daily production of 17,728 Boepd during third quarter 2021, a 14% increase over second quarter 2021, due largely to facility upgrades at Monument Draw and reduced well downtime
  • Adjusted EBITDA of $23.0 million, a 63% increase over second quarter 2021
  • Strong organic deleveraging, reducing net debt by >$10 million during the quarter
  • Increasing 2021 guidance for total capital expenditures; anticipate spudding first well of 2022 capital program in December 2021

Management Comments

Richard Little, the Company’s CEO, commented, “The third quarter of 2021 was an exceptional quarter for Battalion as we reported quarter-over-quarter production growth despite the completion of our 2021 capital program in the first half of the year. Our team put a significant amount of effort into facility upgrades in the first half of 2021, and it’s that improved flow assurance and reduced downtime that allowed us to maintain robust production through the quarter. Those strong operational results allowed us to take advantage of an improving commodity price environment as we generated substantial free cash flow and meaningfully paid down debt.”

Mr. Little continued, “As we enter the last quarter of 2021, our focus is clear: continue to optimize our operations as we prepare to accelerate activity in 2022 and beyond. On the production front, our field team remains diligent in their efforts to improve flow assurance and manage operating expenses despite a rising service cost environment. On the development side, as we work to finalize our 2022 capital program, we are taking important steps to mitigate cost increases by advance purchasing materials and protecting our cash flows through increased hedging activity. Additionally, we recently secured a rig contract as we aim to accelerate our 2022 capital program by spudding in December. As such, we have increased our 2021 capex guidance by $5 million.”

Mr. Little continued, “We are proud of our recent results, and our goal is to build on this momentum as we move forward.”

Results of Operations

Average daily net production and total operating revenue during the third quarter 2021 were 17,728 barrels of oil equivalent per day (“Boepd”) (53% oil) and $80.8 million, respectively, as compared to production and revenue of 17,076 Boepd (56% oil) and $39.8 million, respectively, during the third quarter 2020. The increase in revenues in the third quarter of 2021 as compared to the third quarter 2020 is primarily attributable to an approximate $24.25 per Boe increase in average realized prices (excluding the impact of hedges).

Excluding the impact of hedges, Battalion realized 98% of the average NYMEX oil price during the third quarter of 2021. Realized hedge losses totaled approximately $22.4 million during the third quarter 2021.

Lease operating and workover expense was $7.95 per Boe in the third quarter of 2021 and $7.00 per Boe in the third quarter of 2020. Adjusted G&A was $2.11 per Boe in the third quarter of 2021 compared to $2.09 per Boe in the third quarter of 2020 (see Selected Operating Data table for additional information).

The Company reported net income to common stockholders for the third quarter of 2021 of $13.1 million and net income per basic and diluted share of $0.80 and $0.79, respectively. After adjusting for selected items, the Company reported net income to common stockholders for the third quarter of 2021 of $9.7 million, or $0.60 per basic share and $0.59 per diluted share (see Selected Item Review and Reconciliation for additional information). Adjusted EBITDA during the quarter ended September 30, 2021, was $23.0 million as compared to $14.6 million during the quarter ended September 30, 2020 (see Adjusted EBITDA Reconciliation table for additional information).

Liquidity and Balance Sheet

As of September 30, 2021, Battalion had $155.0 million of borrowings and $2.0 million of outstanding letters of credit issued under the Senior Revolving Credit Facility resulting in unused borrowing capacity of $18.0 million based on a borrowing base of $175.0 million. Total liquidity at September 30, 2021, inclusive of $1.9 million of cash and cash equivalents, was $19.9 million.

In September 2021, the Company entered into the Fifth Amendment to its Senior Secured Revolving Credit Agreement which, among other things, modified the limits on swap agreements. Additionally, redeterminations of the borrowing base occur semi-annually on May 1 and November 1, with the lenders and the Company each having the right to one interim unscheduled redetermination between any two consecutive semi-annual redeterminations. The lenders have agreed to postpone the fall redetermination until December 2021.

Paycheck Protection Program Loan

Effective August 13, 2021, the principal amount of the Company’s Paycheck Protection Program Loan was reduced to approximately $0.2 million by the Small Business Administration and the Company recorded a gain on the extinguishment of the forgiven portion of the PPP Loan and related accrued interest of $2.1 million. The gain is presented in “Gain (loss) on extinguishment of debt” in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021.

2021 Guidance

Total capital expenditures guidance has been increased to $45.0 to $55.0 million as Battalion anticipates spudding the first well of its 2022 capital program in December 2021.

Hedging Update

As of November 8, 2021, Battalion had 7,837 barrels per day (Bbl/d) of oil hedged for the fourth quarter of 2021 at an average price of $43.96 per barrel. Battalion also had basis and roll swaps in place for 7,837 Bbl/d in the fourth quarter of 2021 at ($0.25) per barrel and ($0.39) per barrel, respectively.

As of November 8, 2021, Battalion had 11,391 million British thermal units per day (MMBtu/d) of natural gas hedged for the fourth quarter of 2021 at an average price of $2.71 per MMBtu. The Company also had WAHA basis differential swaps in place for 11,391 MMBtu/d for the fourth quarter of 2021 at an average swap price of ($0.24) per MMBtu/d.

The Company has also entered into a significant amount of crude oil and natural gas hedges for 2022 – 2025 during the fourth quarter 2021, details of which may be found in our recently filed Quarterly Report on Form 10-Q.

Conference Call Information

Battalion Oil Corporation has scheduled a conference call for Tuesday, November 9, 2021, at 11:00 a.m. EDT (10:00 a.m. CDT). To participate in the conference call, dial +1 334-323-0501 or 800-353-6461 (toll free) a few minutes before the call begins and reference Battalion Oil Corporation confirmation code 2692329. 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, 2020, 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.


BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
     2021 2020 2021 2020
Operating revenues:            
Oil, natural gas and natural gas liquids sales:            
Oil $60,023  $33,638  $153,228  $91,313 
Natural gas  9,435   1,912   23,839   3,102 
Natural gas liquids  11,046   3,896   22,806   10,086 
Total oil, natural gas and natural gas liquids sales  80,504   39,446   199,873   104,501 
Other  312   384   827   1,222 
Total operating revenues  80,816   39,830   200,700   105,723 
             
Operating expenses:            
Production:            
Lease operating  11,979   10,091   31,615   32,880 
Workover and other  990   905   2,317   2,767 
Taxes other than income  3,082   2,722   9,186   7,130 
Gathering and other  15,934   13,500   43,436   39,275 
Restructuring           2,580 
General and administrative  4,491   4,111   13,349   13,237 
Depletion, depreciation and accretion  10,885   15,755   32,729   48,167 
Full cost ceiling impairment     128,336      188,443 
Total operating expenses  47,361   175,420   132,632   334,479 
Income (loss) from operations  33,455   (135,590)  68,068   (228,756)
             
Other income (expenses):            
Net gain (loss) on derivative contracts  (20,571)  (15,843)  (119,371)  67,695 
Interest expense and other  (1,900)  (1,692)  (5,017)  (4,889)
Gain (loss) on extinguishment of debt  2,068      2,068    
Total other income (expenses)  (20,403)  (17,535)  (122,320)  62,806 
Income (loss) before income taxes  13,052   (153,125)  (54,252)  (165,950)
Income tax benefit (provision)            
Net income (loss) $13,052  $(153,125) $(54,252) $(165,950)
             
Net income (loss) per share of common stock:            
Basic $0.80  $(9.45) $(3.34) $(10.24)
Diluted $0.79  $(9.45) $(3.34) $(10.24)
Weighted average common shares outstanding:            
Basic  16,270   16,204   16,257   16,204 
Diluted  16,428   16,204   16,257   16,204 


BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts)

       
     September 30, 2021    December 31, 2020
Current assets:      
Cash and cash equivalents $1,868  $4,295 
Accounts receivable, net  40,162   32,242 
Assets from derivative contracts  813   8,559 
Prepaids and other  1,195   2,740 
Total current assets  44,038   47,836 
Oil and natural gas properties (full cost method):      
Evaluated  550,522   509,274 
Unevaluated  76,136   75,494 
Gross oil and natural gas properties  626,658   584,768 
Less - accumulated depletion  (327,233)  (295,163)
Net oil and natural gas properties  299,425   289,605 
Other operating property and equipment:      
Other operating property and equipment  3,106   3,535 
Less - accumulated depreciation  (1,012)  (1,149)
Net other operating property and equipment  2,094   2,386 
Other noncurrent assets:      
Assets from derivative contracts  110   4,009 
Operating lease right of use assets  811   310 
Other assets  2,737   2,351 
Total assets $349,215  $346,497 
       
Current liabilities:      
Accounts payable and accrued liabilities $60,403  $58,928 
Liabilities from derivative contracts  74,287   22,125 
Current portion of long-term debt  149   1,720 
Operating lease liabilities  365   403 
Total current liabilities  135,204   83,176 
Long-term debt  155,000   158,489 
Other noncurrent liabilities:      
Liabilities from derivative contracts  9,536   4,291 
Asset retirement obligations  11,786   10,583 
Operating lease liabilities  446    
Commitments and contingencies      
Stockholders' equity:      
Common stock: 100,000,000 shares of $0.0001 par value authorized;      
16,273,913 and 16,203,979 shares issued and outstanding as of      
September 30, 2021 and December 31, 2020, respectively  2   2 
Additional paid-in capital  331,660   330,123 
Retained earnings (accumulated deficit)  (294,419)  (240,167)
Total stockholders' equity  37,243   89,958 
Total liabilities and stockholders' equity $349,215  $346,497 


BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
     2021 2020 2021 2020
Cash flows from operating activities:            
Net income (loss) $13,052  $(153,125) $(54,252) $(165,950)
Adjustments to reconcile net income (loss) to net cash            
provided by (used in) operating activities:            
Depletion, depreciation and accretion  10,885   15,755   32,729   48,167 
Full cost ceiling impairment     128,336      188,443 
Stock-based compensation, net  481   620   1,560   1,793 
Unrealized loss (gain) on derivative contracts  (1,816)  21,128   69,053   (24,029)
Reorganization items, net     (717)     (6,440)
Loss (gain) on extinguishment of debt  (2,068)     (2,068)   
Accrued settlements on derivative contracts  (203)  125   6,769   474 
Other income (expense)  58   (184)  (229)  280 
Cash flows from operations before changes in working capital  20,389   11,938   53,562   42,738 
Changes in working capital  (2,357)  (7,164)  (6,430)  5,140 
Net cash provided by (used in) operating activities  18,032   4,774   47,132   47,878 
             
Cash flows from investing activities:            
Oil and natural gas capital expenditures  (9,611)  (5,319)  (47,204)  (96,483)
Proceeds received from sale of oil and natural gas properties  21   3,000   947   3,500 
Funds held in escrow and other  11   (29)  9   480 
Net cash provided by (used in) investing activities  (9,579)  (2,348)  (46,248)  (92,503)
             
Cash flows from financing activities:            
Proceeds from borrowings  63,000   38,000   145,000   119,209 
Repayments of borrowings  (71,021)  (39,000)  (148,021)  (83,000)
Other  (22)     (290)  (32)
Net cash provided by (used in) financing activities  (8,043)  (1,000)  (3,311)  36,177 
             
Net increase (decrease) in cash and cash equivalents  410   1,426   (2,427)  (8,448)
             
Cash and cash equivalents at beginning of period  1,458   401   4,295   10,275 
Cash and cash equivalents at end of period $1,868  $1,827  $1,868  $1,827 


BATTALION OIL CORPORATION
SELECTED OPERATING DATA (Unaudited)

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2021 2020 2021 2020
Production volumes:            
Crude oil (MBbls)  872   877   2,396   2,589 
Natural gas (MMcf)  2,589   2,266   6,777   6,437 
Natural gas liquids (MBbls)  327   316   812   917 
Total (MBoe)  1,631   1,571   4,338   4,579 
Average daily production (Boe/d)  17,728   17,076   15,890   16,712 
             
Average prices:            
Crude oil (per Bbl) $68.83  $38.36  $63.95  $35.27 
Natural gas (per Mcf)  3.64   0.84   3.52   0.48 
Natural gas liquids (per Bbl)  33.78   12.33   28.09   11.00 
Total per Boe  49.36   25.11   46.07   22.82 
             
Cash effect of derivative contracts:            
Crude oil (per Bbl) $(24.19) $5.33  $(20.33) $15.96 
Natural gas (per Mcf)  (0.50)  0.27   (0.24)  0.37 
Natural gas liquids (per Bbl)            
Total per Boe  (13.73)  3.36   (11.60)  9.54 
             
Average prices computed after cash effect of settlement of derivative contracts:            
Crude oil (per Bbl) $44.64  $43.69  $43.62  $51.23 
Natural gas (per Mcf)  3.14   1.11   3.28   0.85 
Natural gas liquids (per Bbl)  33.78   12.33   28.09   11.00 
Total per Boe  35.63   28.47   34.47   32.36 
             
Average cost per Boe:            
Production:            
Lease operating $7.34  $6.42  $7.29  $7.18 
Workover and other  0.61   0.58   0.53   0.60 
Taxes other than income  1.89   1.73   2.12   1.56 
Gathering and other, as adjusted (1)  9.77   8.59   10.01   7.83 
Restructuring           0.56 
General and administrative, as adjusted (1)  2.11   2.09   2.64   2.09 
Depletion  6.57      9.76   7.39   10.25 
             
(1) Represents gathering and other and general and administrative costs per Boe, adjusted for items noted in the reconciliation below:
             
General and administrative:            
General and administrative, as reported $2.75  $2.61  $3.08  $2.89 
Stock-based compensation:            
Non-cash  (0.29)  (0.39)  (0.36)  (0.39)
Non-recurring professional fees and other:            
Cash  (0.35)  (0.13)  (0.08)  (0.41)
General and administrative, as adjusted(2) $2.11  $2.09  $2.64  $2.09 
             
Gathering and other, as reported $9.77  $8.59  $10.01  $8.58 
Rig termination and stacking charges and other           (0.75)
Gathering and other, as adjusted(3) $9.77  $8.59  $10.01  $7.83 
             
Total operating costs, as reported $22.36  $19.93  $23.03  $20.81 
Total adjusting items  (0.64)  (0.52)  (0.44)  (1.55)
Total operating costs, as adjusted(4) $21.72  $19.41  $22.59  $19.26 

(2) General and administrative, as adjusted, is a non-GAAP measure that excludes non-cash stock-based compensation charges relating to equity awards under our incentive stock plan, as well as other cash charges associated with non-recurring professional fees and other. The Company believes that it is useful to understand the effects that these charges have on general and administrative expenses and total operating costs and that exclusion of such charges is useful for comparison to prior periods.
(3) Gathering and other, as adjusted, is a non-GAAP measure that excludes rig termination and stacking charges and other costs. The Company believes that it is useful to understand the effects that these charges have on gathering and other expense and total operating costs and that exclusion of such charges is useful for comparative purposes.
(4) Represents lease operating expense, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in the reconciliation above.

BATTALION OIL CORPORATION
SELECTED ITEM REVIEW AND RECONCILIATION (Unaudited)
(In thousands, except per share amounts)

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2021 2020 2021 2020
As Reported:            
Net income (loss), as reported $13,052  $(153,125) $(54,252) $(165,950)
             
Impact of Selected Items:            
Unrealized loss (gain) on derivatives contracts:            
Crude oil $(7,416) $19,354  $58,986  $(26,201)
Natural gas  5,600   1,774   10,067   2,172 
Total mark-to-market non-cash charge  (1,816)  21,128   69,053   (24,029)
Full cost ceiling impairment     128,336      188,443 
Loss (gain) on extinguishment of debt  (2,068)     (2,068)   
Restructuring           2,580 
Rig termination and stacking charges           3,383 
Non-recurring professional fees and other  568   210   347   1,944 
Selected items, before income taxes  (3,316)  149,674   67,332   172,321 
Income tax effect of selected items            
Selected items, net of tax  (3,316)  149,674   67,332   172,321 
             
As Adjusted:            
Net income (loss), excluding selected items (1)(2) $9,736  $(3,451) $13,080  $6,371 
             
Basic net income (loss) per common share, as reported $0.80  $(9.45) $(3.34) $(10.24)
Impact of selected items  (0.20)  9.24   4.14   10.63 
Basic net income (loss) per common share, excluding selected items (1)(2) $0.60  $(0.21) $0.80  $0.39 
             
             
Diluted net income (loss) per common share, as reported $0.79  $(9.45) $(3.34) $(10.24)
Impact of selected items  (0.20)  9.24   4.14   10.63 
Diluted net income (loss) per common share, excluding selected items (1)(2)(3) $0.59  $(0.21) $0.80  $0.39 
             
             
Net cash provided by (used in) operating activities $18,032  $4,774  $47,132  $47,878 
Changes in working capital  2,357   7,164   6,430   (5,140)
Cash flows from operations before changes in working capital  20,389   11,938   53,562   42,738 
Cash components of selected items  771   802   (6,422)  13,423 
Income tax effect of selected items            
Cash flows from operations before changes in working capital, adjusted for selected items (1)(2) $21,160  $12,740  $47,140  $56,161 

(1) Net income (loss) and earnings per share excluding selected items and cash flows from operations before changes in working capital adjusted for selected items are non-GAAP measures presented based on management's belief that they will enable a user of the financial information to understand the impact of these items on reported results. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flows from operations, as defined by GAAP. These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.
(2) For the three and nine months ended September 30, 2020, net income (loss) and earnings per share excluding selected items and cash flows from operations before changes in working capital include approximately $6.6 million and $22.9 million, respectively, of net proceeds from hedge monetizations that occurred during the periods.
(3) The impact of selected items for the three months ended September 30, 2021 and 2020 were calculated based upon weighted average diluted shares of 16.4 million and 16.2 million, respectively, due to the net income (loss) available to common stockholders, excluding selected items. The impact of selected items for the nine months ended September 30, 2021 and 2020 were calculated based upon weighted average diluted shares of 16.4 million and 16.2 million, respectively, due to the net income (loss) available to common stockholders, excluding selected items.


BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

             
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2021 2020 2021 2020
             
Net income (loss), as reported $13,052  $(153,125) $(54,252) $(165,950)
Impact of adjusting items:            
Interest expense  1,904   1,964   5,238   5,520 
Depletion, depreciation and accretion  10,885   15,755   32,729   48,167 
Full cost ceiling impairment     128,336      188,443 
Stock-based compensation  481   620   1,560   1,793 
Interest income  (3)  (273)  (212)  (602)
Restructuring           2,580 
Loss (gain) on extinguishment of debt  (2,068)     (2,068)   
(Gain) loss on sale of other assets  (9)     (15)  52 
Unrealized loss (gain) on derivatives contracts  (1,816)  21,128   69,053   (24,029)
Rig termination and stacking charges           3,383 
Non-recurring professional fees and other  568   210   347   1,944 
Adjusted EBITDA(1)(2) $22,994  $14,615  $52,380  $61,301 



(1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.
(2) Adjusted EBITDA for the three and nine months ended September 30, 2020 includes approximately $6.6 million and $22.9 million, respectively, of net proceeds from hedge monetizations that occurred during the period.


BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

             
  Three Months Three Months Three Months Three Months
  Ended Ended Ended Ended
  September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020
             
Net income (loss), as reported $13,052  $(33,929) $(33,375) $(63,757)
Impact of adjusting items:            
Interest expense  1,904   1,838   1,496   1,853 
Depletion, depreciation and accretion  10,885   11,249   10,595   13,886 
Full cost ceiling impairment           26,702 
Stock-based compensation  481   485   594   785 
Interest income  (3)  (84)  (125)  (171)
Loss (gain) on extinguishment of debt  (2,068)         
(Gain) loss on sale of other assets  (9)  (2)  (4)   
Unrealized loss (gain) on derivatives contracts  (1,816)  34,817   36,052   30,172 
Non-recurring professional fees and other  568   (273)  52   (658)
Adjusted EBITDA(1) $22,994  $14,101  $15,285  $8,812 
             
Adjusted LTM EBITDA(1) $61,192          

(1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.

BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands)

             
  Three Months Three Months Three Months Three Months
  Ended Ended Ended Ended
  September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019(1)
             
Net income (loss), as reported $(153,125) $(127,316) $114,491  $(125,826)
Impact of adjusting items:            
Interest expense  1,964   1,842   1,714   1,430 
Depletion, depreciation and accretion  15,755   14,382   18,030   19,996 
Full cost ceiling impairment  128,336   60,107       
Stock-based compensation  620   786   387    
Interest income  (273)  (232)  (97)  (128)
Reorganization items, net           118,664 
Restructuring     2,162   418   1,175 
(Gain) loss on sale of other assets     52      (6)
(Gain) loss on sale of Water Assets           (506)
Unrealized loss (gain) on derivatives contracts  21,128   67,221   (112,378)  18,681 
Rig termination and stacking charges     3,383       
Non-recurring professional fees and other  210   828   906   (901)
Adjusted EBITDA(2)(3) $14,615  $23,215  $23,471  $32,579 
             
Adjusted LTM EBITDA(1)(2)(3) $93,880          

(1) For illustrative purposes, the Company has combined the Successor and Predecessor results to derive combined results for Adjusted EBITDA for the three months ended December 31, 2019 and the Adjusted LTM EBITDA as of September 30, 2020. The combination was generated by addition of comparable financial statement line items. However, because of various adjustments to the consolidated financial statements in connection with the application of fresh-start reporting, including asset valuation adjustments and liability adjustments, the results of operations for the Successor are not comparable to those of the Predecessor. The Company believes that subject to consideration of the impact of fresh-start reporting, combining the results of the Predecessor and Successor provides meaningful information about Adjusted LTM EBITDA that assists a reader in understanding the Company’s financial results for the applicable periods.
(2) Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.
(3) Adjusted EBITDA for the three months ended September 30,2020 and June 30,2020 includes approximately $6.6 million and $16.4 million of net proceeds, respectively, from hedge monetizations that occurred during the period.

 

Contact Data