Battalion Oil Corporation's Strong Q4 2024 Performance Review
Battalion Oil Corporation Reports Impressive Fourth Quarter Results
HOUSTON – Battalion Oil Corporation (NYSE American: BATL, "Battalion" or the "Company") has released its financial and operational results for the fourth quarter of 2024, demonstrating a strong performance that resonates with the company's commitment to enhancing its operations.
Financial Highlights
Key achievements from the fourth quarter included the completion of a successful refinancing of the term loan on advantageous terms, which significantly bolstered liquidity. The Company reported full-year sales volumes reaching an impressive 12,667 barrels of oil equivalent per day (Boe/d), with 51% derived from oil production. An impressive feat was also accomplished as Battalion effectively lowered the capital expenditure (capex) per well, consistently outperforming the estimates outlined in their Authorization for Expenditure (AFE).
Operational Advancements
During this quarter, the acid gas injection (AGI) facility became operational, treating approximately 1.8 billion cubic feet (Bcf) of gas. Moreover, Battalion initiated drilling operations in Monument Draw as part of an ambitious six-well plan for 2025, with two additional wells spudded in December to kick off this effort. The Company ended 2024 with reserves estimated at around 64.9 million barrels of oil equivalent (MMBoe), translating to a standardized measure of discounted future net cash flows approximately valued at $447.7 million.
Production and Revenue Performance
In terms of production and revenue, Battalion recorded an average daily net production of 12,750 Boe/d (55% oil) and total operating revenue of $49.7 million for Q4 2024. This reflects an uptick from the previous year's fourth quarter figures of 12,022 Boe/d (46% oil) and total revenue of $47.2 million. The revenue growth of roughly $2.5 million was largely attributable to an increase in production, footed against a slight drop in average realized prices. Notably, Battalion managed to achieve 96.9% of the average NYMEX oil price for the quarter, alongside modest realized hedge gains.
Cost Management Strategies
Lease operating and workover expenses saw a decrease to $11.26 per Boe, compared to $11.87 per Boe observed in Q4 2023. This decline can be attributed to a rise in average daily production alongside a reduction in gathering and related expenses, which fell from $13.31 to $10.45 per Boe. The Company has also taken strides in managing general and administrative expenses, which rose to $6.04 per Boe versus $4.93 per Boe in the year prior.
Looking Towards the Future
Despite facing challenges, Battalion has made strategic moves to mitigate impacts on its operations, terminating a merger agreement with Fury Resources due to unmet conditions. The company remains focused on enhancing liquidity, having reported $162.1 million of indebtedness outstanding as of year-end 2024, alongside liquidity reserves totaling $19.7 million.
Recent Initiatives and Future Plans
On January 9, 2025, Battalion incurring additional term loans valued at $63 million further improved liquidity, showcasing the Company’s proactive approach to strengthening its balance sheet. As part of its ongoing strategy, Battalion emphasizes the importance of efficiently managing costs while maximizing production output.
Conclusion
The fourth quarter of 2024 has proven to be a pivotal period for Battalion Oil Corporation, as evidenced by robust financial results and operational accomplishments. The Company is well-positioned to continue its trajectory of growth and success, providing its stakeholders with valuable returns and solidifying its place in the energy sector.
Frequently Asked Questions
What were Battalion Oil Corporation's average production levels in Q4 2024?
Battalion reported an average daily production of 12,750 Boe/d in Q4 2024.
How did Battalion manage its operational costs in Q4 2024?
The Company successfully lowered lease operating and workover costs to $11.26 per Boe, thanks to increased production efficiencies.
What is the status of Battalion's merger with Fury Resources?
Battalion has terminated the merger agreement with Fury Resources due to the latter's failure to meet the required terms.
How much liquidity does Battalion Oil Corporation have as of December 31, 2024?
The Company reported a liquidity reserve of $19.7 million at the end of Q4 2024.
What are Battalion's future plans following this quarter's results?
The Company plans to continue aggressive drilling activities in 2025, further optimizing production while managing operational costs effectively.
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