Battalion Oil Corporation Announces Second Quarter 2026 Financial and Operating Results

HOUSTON, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the second quarter of 2026.

Key Highlights

The Company ended the quarter with positive equity of $203.1 million.
Generated second quarter 2026 sales volumes of 12,407 barrels of oil equivalent per day (“Boe/d”) (~45% oil, 70% liquids)
Lease operating and workover expense per BOE reduced by ~12% vs Q1 2026
Placed 17.4 million shares of common stock under its ATM program for net proceeds of $30.3 million during Q2 2026 and an additional 14.9 million shares for net proceeds of $25.6 million subsequent to quarter end. The proceeds have allowed the Company to:
- Reduce net debt (gross debt less cash and reinvestment proceeds) to $74.2 million vs $108.3 million in Q1 2026 and leverage ratio to 1.36x in Q2 2026 vs 1.79x in Q1 2026
- Complete a refinancing of its term loan yielding interest payment savings and reduced amortization
- Redeem and convert a portion of its outstanding preferred equity subsequent to quarter end - preferred liquidation value of $42 million was extinguished for $19 million in cash and 3.5 million common shares
Completed preparations for drilling under new joint exploration and development agreement with drilling expected to commence prior to end of August 2026

Management Comments

The Company continued to execute across all facets of its business during the second quarter of 2026, advancing its Monument Draw development program while further strengthening its balance sheet. In April 2026, the Company completed midstream expansion projects at Monument Draw ahead of schedule and approximately 8% under budget, driving a 20% increase in gas throughput and record well productivity. Later in April, the Company secured an additional 50% of sour gas compression capacity at Monument Draw, increasing gas handling capacity from 35 MMcf/d to more than 50 MMcf/d at no capital cost to Battalion, positioning the Company for continued production growth. In May 2026, the Company established a $150 million at-the-market (“ATM”) equity offering program, providing an efficient source of additional liquidity. The Company executed a definitive joint exploration and development agreement for up to eight wells in Monument Draw, with an initial four-well pad targeting the 3rd Bone Spring, Wolfcamp A and Wolfcamp B formations. This program is expected to spud in August 2026. On June 30, 2026, the Company closed a refinancing of its senior secured credit facility, extending the maturity to December 31, 2029, replacing the prior leverage-based pricing grid with a fixed margin of 6.50% over SOFR, and providing access to up to $175.0 million of additional delayed draw capacity.

“The second quarter of 2026 was extremely active. We exhibited significant progress across every part of our business,” said Matt Steele, Chief Executive Officer of Battalion. “Our midstream investments at Monument Draw came in ahead of schedule and under budget, and we are already seeing the benefit in record well productivity and increased throughput capacity. Additional compression secured during the quarter will further improve reliability starting in mid-Q3 and support production growth from our active drilling program. Establishing our ATM program gave us an efficient tool to continue strengthening the balance sheet. The ATM proceeds, asset sales, and free cash flow from the underlying business have allowed us to significantly reduce net debt. We are now under 1.5x levered – something the Company has never previously achieved. Given the improved balance sheet, we plan to judiciously utilize the limited shares available in our ATM going forward. Executing our joint exploration and development agreement in Monument Draw is the culmination of months of work and allows us to transition to multi-bench development while prudently deploying capital within cash on hand. Closing our refinancing at quarter end meaningfully lowers our cost of capital and enhances our financial flexibility as we move into this next phase of development at Monument Draw. The Company has never been in a stronger financial and operational position. In fact, we were recently able to utilize cash on hand to opportunistically buy back a portion of our preferred stock at a substantial discount to its par value from a holder seeking liquidity. Going forward, we will continue to focus on disciplined execution and creation of value for our shareholders.”

Results of Operations

Average daily net production and total operating revenue during the second quarter of 2026 were 12,407 Boe/d (45% oil) and $48.1 million, respectively, as compared to production and revenue of 12,989 Boe/d (49% oil) and $42.8 million, respectively, during the second quarter of 2025. The increase in revenues in the second quarter of 2026 as compared to the second quarter of 2025 is primarily attributable to a $6.48 increase per Boe in average realized prices (excluding the impact of hedges) partially offset by an approximate 582 Boe/d decrease in average daily production. Excluding the impact of hedges, Battalion realized approximately 104% of the average NYMEX oil price during the second quarter of 2026. Realized hedge losses totaled approximately $7.8 million during the second quarter of 2026.

Lease operating and workover expense was $8.69 per Boe in the second quarter of 2026 versus $10.98 per Boe in the second quarter of 2025. The decrease in lease operating and workover expense per Boe year-over-year is primarily the result of lower maintenance, power, and chemical costs and lower workover activity. Gathering and other expenses were $10.87 per Boe in the second quarter of 2026 versus $9.27 per Boe in the second quarter of 2025. The increase in gathering and other expenses per Boe is primarily related to greater throughput volumes resulting from entry into a long-term processing agreement with a publicly traded large-cap midstream provider in January 2026. General and administrative expenses were $3.60 per Boe in the second quarter of 2026 compared to $2.17 per Boe in the second quarter of 2025. The increase in general and administrative expenses for the second quarter of 2026 is primarily due to higher professional fees including legal costs and increased stock compensation expense. Excluding non-recurring charges, general and administrative expenses would have been $2.83 per Boe in the second quarter of 2026 compared to $2.11 per Boe in the second quarter of 2025.

For the second quarter of 2026, the Company reported net income available to common stockholders of $9.1 million and net income of $0.34 per share available to common stockholders. After adjusting for selected items, the Company reported an adjusted diluted net loss available to common stockholders for the second quarter of 2026 of $4.9 million or an adjusted diluted net loss of $0.11 per common share compared to an adjusted diluted net loss available to common stockholders for the second quarter of 2025 of $10.6 million or an adjusted diluted net loss of $0.65 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended June 30, 2026 was $12.3 million as compared to $18.1 million during the quarter ended June 30, 2025 (see Adjusted EBITDA Reconciliation table for additional information).

Liquidity and Balance Sheet

As of June 30, 2026, the Company had $162.5 million of term loan indebtedness outstanding and total liquidity made up of cash and cash equivalents and reinvestment proceeds of $88.4 million.

On June 30, 2026, the Company entered into the Third Amended and Restated Senior Secured Credit Agreement (the “New Credit Agreement”) which amended and restated in its entirety the Second Amended and Restated Senior Secured Credit Agreement dated December 26, 2024, as amended (the "Existing Credit Agreement"). Outstanding term loans under the Existing Credit Agreement continued under the New Credit Agreement as closing date term loans, against a maximum closing date term loan commitment of $162.5 million and no new cash borrowing.

Key terms of the New Credit Agreement include:

Interest Rate: SOFR plus a fixed applicable margin of 6.50% per annum (or ABR plus 5.50%), along with a 0.15% credit spread adjustment. The fixed margin replaces the leverage-based pricing grid under the Existing Credit Agreement, under which the SOFR margin ranged from 7.75% to 8.50% depending on the Company's Total Net Leverage Ratio.

Maturity: December 31, 2029.

Delayed Draw Facility: Up to $175.0 million of discretionary delayed draw term loan capacity, available on an uncommitted basis and subject to each lender's sole discretion to provide commitments.

Amortization: Scheduled quarterly principal amortization commences with the fiscal quarter ending June 30, 2027.

Financial Covenants: Includes maintenance covenants relating to Total Net Leverage Ratio, Current Ratio, Asset Coverage Ratio and minimum Liquidity, each commencing with the fiscal quarter ending September 30, 2026.

For additional details on liquidity, financial position, and recent developments, please refer to Management’s Discussion and Analysis included in Battalion’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.

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, 2025, and other filings submitted by the Company to the 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

Matthew B. Steele
Chief Executive Officer & Principal Financial Officer
832-538-0300


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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Operating revenues:
Oil, natural gas and natural gas liquids sales:
Oil	$	49,152		$	36,291		$	85,434		$	75,991
Natural gas		(6,904	)		935			(8,397	)		3,758
Natural gas liquids		5,730			5,350			10,003			10,212
Total oil, natural gas and natural gas liquids sales		47,978			42,576			87,040			89,961
Other		151			236			263			326
Total operating revenues		48,129			42,812			87,303			90,287

Operating expenses:
Production:
Lease operating		9,189			10,670			19,283			21,028
Workover and other		622			2,309			1,640			3,742
Taxes other than income		2,981			2,522			5,305			5,322
Gathering and other		12,268			10,958			23,518			22,958
General and administrative		4,066			2,567			8,326			6,980
Depletion, depreciation and accretion		12,222			13,939			24,584			27,019
Total operating expenses		41,348			42,965			82,656			87,049
Income (loss) from operations		6,781			(153	)		4,647			3,238

Other income (expenses):
Net gain (loss) on derivative contracts		13,051			11,548			(34,913	)		20,850
Interest expense and other		(4,324	)		(6,599	)		(9,841	)		(13,269	)
Loss on extinguishment of debt		—			—			(862	)		—
Total other income (expenses)		8,727			4,949			(45,616	)		7,581
Income (loss) before income taxes		15,508			4,796			(40,969	)		10,819
Income tax benefit (provision)		—			—			—			—
Net income (loss)	$	15,508		$	4,796		$	(40,969	)	$	10,819
Preferred dividends		—			(8,270	)		(8,331	)		(20,090	)
Undistributed earnings allocable to preferred stockholders		(6,434	)		—			—			—
Net income (loss) available to common stockholders	$	9,074		$	(3,474	)	$	(49,300	)	$	(9,271	)

Net income (loss) per share of common stock available to common stockholders:
Basic	$	0.34		$	(0.21	)	$	(2.25	)	$	(0.56	)
Diluted	$	0.34		$	(0.21	)	$	(2.25	)	$	(0.56	)
Weighted average common shares outstanding:
Basic		26,430			16,457			21,947			16,457
Diluted		45,172			16,457			21,947			16,457

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

	June 30, 2026			December 31, 2025
Current assets:
Cash and cash equivalents	$	83,097		$	27,965
Accounts receivable, net		14,406			12,071
Assets from derivative contracts		4,229			16,145
Restricted cash		5,294			91
Prepaids and other		462			892
Total current assets		107,488			57,164
Oil and natural gas properties (full cost method):
Evaluated		833,063			890,050
Unevaluated		54,334			48,025
Gross oil and natural gas properties		887,397			938,075
Less: accumulated depletion		(572,058	)		(547,982	)
Net oil and natural gas properties		315,339			390,093
Other operating property and equipment:
Other operating property and equipment		4,682			4,678
Less: accumulated depreciation		(2,843	)		(2,807	)
Net other operating property and equipment		1,839			1,871
Other noncurrent assets:
Assets from derivative contracts		3,729			7,350
Operating lease right of use assets		666			840
Other assets		3,524			3,360
Total assets	$	432,585		$	460,678

Current liabilities:
Accounts payable and accrued liabilities	$	39,898		$	39,734
Liabilities from derivative contracts		6,667			633
Current portion of long-term debt		2,031			22,510
Operating lease liabilities		484			764
Total current liabilities		49,080			63,641
Long-term debt, net		156,208			180,955
Other noncurrent liabilities:
Liabilities from derivative contracts		6,194			1,692
Asset retirement obligations		17,749			20,837
Operating lease liabilities		216			104
Commitments and contingencies
Temporary equity:
Redeemable convertible preferred stock: 138,000 shares of $0.0001 par value authorized, issued and outstanding, $193,757 aggregate liquidation preference at December 31, 2025		—			226,241
Stockholders' equity (deficit):
Redeemable convertible preferred stock: 130,197 shares of $0.0001 par value authorized, issued and outstanding, $198,276 aggregate liquidation preference at June 30, 2026		221,185			—
Common stock: 100,000,000 shares of $0.0001 par value authorized; 38,892,112 and 16,456,563 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		4			2
Additional paid-in capital		295,914			240,202
Accumulated deficit		(313,965	)		(272,996	)
Total stockholders' equity (deficit)		203,138			(32,792	)
Total liabilities, temporary equity and stockholders' equity	$	432,585		$	460,678

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Cash flows from operating activities:
Net income (loss)	$	15,508		$	4,796		$	(40,969	)	$	10,819
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and accretion		12,222			13,939			24,584			27,019
Stock-based compensation, net		421			—			421			(109	)
Unrealized gain on derivative contracts		(20,865	)		(7,248	)		26,072			(19,076	)
Amortization of deferred financing costs		264			397			612			792
Loss on extinguishment of debt		—			—			862			—
Accrued settlements on derivative contracts		(30	)		23			2,395			(537	)
Other		5			56			7			109
Cash flows from operations before changes in working capital		7,525			11,963			13,984			19,017
Changes in working capital		1,253			(1,758	)		(3,101	)		3,919
Net cash provided by operating activities		8,778			10,205			10,883			22,936

Cash flows from investing activities:
Oil and natural gas capital expenditures		(4,205	)		(33,290	)		(7,818	)		(53,090	)
Proceeds received from sale of oil and natural gas assets		—			—			60,055			—
Other operating property and equipment capital expenditures		—			(8	)		—			(14	)
Other		(9	)		(64	)		(14	)		(370	)
Net cash (used in) provided by investing activities		(4,214	)		(33,362	)		52,223			(53,474	)

Cash flows from financing activities:
Proceeds from borrowings		—			—			—			63,000
Repayments of borrowings		—			(5,652	)		(45,635	)		(5,678	)
Debt issuance costs		(407	)		(138	)		(1,064	)		(1,875	)
Proceeds from issuance of common stock		29,903			—			43,928			—
Net cash provided by (used in) financing activities		29,496			(5,790	)		(2,771	)		55,447

Net increase (decrease) in cash, cash equivalents and restricted cash		34,060			(28,947	)		60,335			24,909

Cash, cash equivalents and restricted cash at beginning of period		54,331			73,659			28,056			19,803
Cash, cash equivalents and restricted cash at end of period	$	88,391		$	44,712		$	88,391		$	44,712

BATTALION OIL CORPORATION SELECTED OPERATING DATA (Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
Production volumes:
Crude oil (MBbls)		510			584			1,038			1,153
Natural gas (MMcf)		2,012			2,136			4,066			3,935
Natural gas liquids (MBbls)		283			242			546			444
Total (MBoe)		1,129			1,182			2,262			2,253
Average daily production (Boe/d)		12,407			12,989			12,497			12,448

Average prices:
Crude oil (per Bbl)	$	96.38		$	62.14		$	82.31		$	65.91
Natural gas (per Mcf)		(3.43	)		0.44			(2.07	)		0.96
Natural gas liquids (per Bbl)		20.25			22.11			18.32			23.00
Total per Boe		42.50			36.02			38.48			39.93

Cash effect of derivative contracts:
Crude oil (per Bbl)	$	(24.63	)	$	1.04		$	(15.70	)	$	(2.93	)
Natural gas (per Mcf)		2.36			1.73			1.83			1.31
Natural gas liquids (per Bbl)		—			—			—			—
Total per Boe		(6.92	)		3.64			(3.91	)		0.79

Average prices computed after cash effect of settlement of derivative contracts:
Crude oil (per Bbl)	$	71.75		$	63.18		$	66.61		$	62.98
Natural gas (per Mcf)		(1.07	)		2.17			(0.24	)		2.27
Natural gas liquids (per Bbl)		20.25			22.11			18.32			23.00
Total per Boe		35.58			39.66			34.57			40.72

Average cost per Boe:
Production:
Lease operating	$	8.14		$	9.03		$	8.52		$	9.33
Workover and other		0.55			1.95			0.73			1.66
Taxes other than income		2.64			2.13			2.35			2.36
Gathering and other		10.87			9.27			10.40			10.19
General and administrative, as adjusted⁽¹⁾		2.83			2.11			2.92			2.54
Depletion		10.62			11.47			10.64			11.64

(1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below:

General and administrative:
General and administrative, as reported	$	3.60		$	2.17		$	3.68		$	3.10
Stock-based compensation:
Non-cash		(0.37	)		-			(0.19	)		(0.02	)
Non-recurring charges and other:
Cash		(0.40	)		(0.06	)		(0.57	)		(0.54	)
General and administrative, as adjusted⁽²⁾	$	2.83		$	2.11		$	2.92		$	2.54

Total operating costs, as reported	$	25.80		$	24.55		$	25.68		$	26.64
Total adjusting items		(0.77	)		(0.06	)		(0.76	)		(0.56	)
Total operating costs, as adjusted⁽³⁾	$	25.03		$	24.49		$	24.92		$	26.08
_______________
(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 charges 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) 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 RECONCILIATION (Unaudited) (In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025
*As Reported:*
Net income (loss) available to common stockholders - diluted⁽¹⁾	$	15,508		$	(3,474	)	$	(49,300	)	$	(9,271	)

*Impact of Selected Items:*
Unrealized (gain) loss on derivatives contracts:
Crude oil	$	(22,813	)	$	(16,782	)	$	26,995		$	(22,326	)
Natural gas		1,948			9,534			(923	)		3,250
Total mark-to-market non-cash charge		(20,865	)		(7,248	)		26,072			(19,076	)
Loss on extinguishment of debt		—			—			862			—
Non-recurring charges		454			73			1,289			1,222
Selected items, before income taxes		(20,411	)		(7,175	)		28,223			(17,854	)
Income tax effect of selected items		—			—			—			—
Selected items, net of tax		(20,411	)		(7,175	)		28,223			(17,854	)

Net loss available to common stockholders, as adjusted⁽²⁾	$	(4,903	)	$	(10,649	)	$	(21,077	)	$	(27,125	)

Diluted net income (loss) per common share, as reported	$	0.34		$	(0.21	)	$	(2.25	)	$	(0.56	)
Impact of selected items		(0.45	)		(0.44	)		1.29			(1.09	)
Diluted net loss per common share, excluding selected items⁽²⁾⁽³⁾	$	(0.11	)	$	(0.65	)	$	(0.96	)	$	(1.65	)


Net cash provided by operating activities	$	8,778		$	10,205		$	10,883		$	22,936
Changes in working capital		(1,253	)		1,758			3,101			(3,919	)
Cash flows from operations before changes in working capital		7,525			11,963			13,984			19,017
Cash components of selected items		484			50			(1,106	)		1,759
Income tax effect of selected items		—			—			—			—
Cash flows from operations before changes in working capital, adjusted for selected items⁽¹⁾	$	8,009		$	12,013		$	12,878		$	20,776
_______________
(1) Amount reflects net (loss) income available to common stockholders on a diluted basis for earnings per share purposes as calculated using the two-class method of computing earnings per share which is further described in Note 14, Earnings Per Share in our Form 10-K for the year ended December 31, 2025. (2) Net (loss) income 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. (3) The impact of selected items for the three and six months ended June 30, 2026 were calculated based upon weighted average diluted shares of 45.2 and 21.9 million, respectively, due to the net income (loss) available to common stockholders, excluding selected items. The impact of selected items for the three and six months ended June 30, 2025 were calculated based upon weighted average diluted shares of 16.5 million due to the net loss available to common stockholders, excluding selected items

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2026			2025			2026			2025

Net income (loss), as reported	$	15,508		$	4,796		$	(40,969	)	$	10,819
Impact of adjusting items:
Interest expense		5,124			7,341			10,965			14,530
Depletion, depreciation and accretion		12,222			13,939			24,584			27,019
Stock-based compensation		421			-			421			48
Interest income		(612	)		(764	)		(936	)		(1,343	)
Loss on extinguishment of debt		—			—			862			—
Unrealized gain on derivatives contracts		(20,865	)		(7,248	)		26,072			(19,076	)
Non-recurring charges and other		454			73			1,289			1,222
Adjusted EBITDA⁽¹⁾	$	12,252		$	18,137		$	22,288		$	33,219
_______________
(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 (loss) income. 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
	June 30, 2026			March 31, 2026			December 31, 2025			September 30, 2025

Net income (loss), as reported	$	15,508		$	(56,477	)	$	1,795		$	(735	)
Impact of adjusting items:
Interest expense		5,124			5,841			6,987			7,318
Depletion, depreciation and accretion		12,222			12,362			11,603			13,522
Asset impairment		—			—			1,072			—
Stock-based compensation		421			—			—			—
Interest income		(612	)		(324	)		(414	)		(503	)
Loss on extinguishment of debt		—			862			—			—
Unrealized (gain) loss on derivatives contracts		(20,865	)		46,937			(9,313	)		(1,044	)
Non-recurring charges and other		454			835			1,631			324
Adjusted EBITDA⁽¹⁾	$	12,252		$	10,036		$	13,361		$	18,882

Adjusted LTM EBITDA⁽¹⁾	$	54,531
_______________
(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 (loss) income. 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
	June 30, 2025			March 31, 2025			December 31, 2024			September 30, 2024

Net income (loss), as reported	$	4,796		$	6,023		$	(22,202	)	$	21,628
Impact of adjusting items:
Interest expense		7,341			7,189			6,135			6,873
Depletion, depreciation and accretion		13,939			13,080			14,155			12,533
Asset impairment		—			—			18,511			—
Stock-based compensation		-			48			12			5
Interest income		(764	)		(579	)		(278	)		(509	)
Loss on extinguishment of debt		—			—			7,489			—
Unrealized (gain) loss on derivatives contracts		(7,248	)		(11,828	)		1,648			(28,091	)
Change in fair value of embedded derivative liability		—			—			(761	)		41
Merger Termination Payment		—			—			(10,000	)		—
Non-recurring charges and other		73			1,149			3,310			978
Adjusted EBITDA⁽¹⁾	$	18,137		$	15,082		$	18,019		$	13,458

Adjusted LTM EBITDA⁽¹⁾	$	64,696
_______________
(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.