• A smaller, independent version of ExxonMobil, focused on drilling for oil and gas in the Delaware Basin of Texas.
• Like a more localized Pioneer Natural Resources, focused on extracting oil and gas from the Delaware Basin.

• Crude Oil: Oil extracted from underground reservoirs for refinement into various petroleum products.
• Natural Gas Liquids (NGLs): Hydrocarbon components separated from natural gas, used as feedstocks or fuels.
• Natural Gas: A fossil fuel composed primarily of methane, used for energy generation and heating.

Major Customers of Battalion Oil (BATL)

Battalion Oil Corporation is an upstream energy company engaged in the acquisition, production, exploration, and development of crude oil, natural gas liquids (NGLs), and natural gas. As such, it sells these raw commodities primarily to other businesses within the energy value chain, rather than directly to individual consumers.

While specific direct customers for Battalion Oil are typically not publicly disclosed due to the nature of commodity sales in a liquid market, their products would be purchased by various types of companies, including:

• Crude Oil Purchasers: These are companies involved in gathering, marketing, transporting, and refining crude oil.
  Examples of public companies that operate as crude oil marketers and refiners (and thus could be purchasers, though not directly confirmed for BATL) include:
  • Marathon Petroleum Corporation (MPC)
  • Valero Energy Corporation (VLO)
  • Phillips 66 (PSX)
  • Exxon Mobil Corporation (XOM) - also an integrated major
• Natural Gas and NGLs Purchasers: These include midstream companies that gather, process, and transport natural gas and NGLs, as well as marketers, petrochemical companies (for NGLs), and power generators/local distribution companies (for natural gas).
  Examples of public companies that operate in these segments (and thus could be purchasers, though not directly confirmed for BATL) include:
  • Enterprise Products Partners L.P. (EPD) - a major midstream operator for NGLs and natural gas
  • Energy Transfer LP (ET) - another large midstream company
  • Kinder Morgan, Inc. (KMI) - primarily natural gas pipelines and terminals
  • Targa Resources Corp. (TRGP) - focused on NGLs and natural gas gathering/processing
  • Williams Companies, Inc. (WMB) - primarily natural gas infrastructure

Battalion Oil's sales are primarily business-to-business transactions within the commodity markets for crude oil, natural gas, and NGLs, with transactions occurring with a diverse group of marketers, midstream operators, and end-users such as refiners and petrochemical plants.

Matthew (Matt) Steele, Chief Executive Officer and Principal Financial Officer

Mr. Steele is a seasoned executive who has founded and managed businesses across the energy, hospitality, real estate, and technology industries. He brings extensive experience in E&P Operations, Mergers & Acquisitions, and Capital Markets. Most recently, Mr. Steele served as the CEO of Bruin E&P Partners, an E&P company focused on the Bakken. Over the past decade, he has held CEO positions at numerous energy companies, including Steele Petroleum, Ursa Resources, Ursa Resources Group I and II, Bruin E&P, and BMFGCo. He currently serves on the Boards of Bruin Management LLC, Bowline Energy LLC, Carbon Path LLC, and the Honors College Advisory Board at the University of Houston. Mr. Steele holds a B.S. in Chemical Engineering with Honors from the University of Houston.

Daniel P. Rohling, Executive Vice President and Chief Operating Officer

Mr. Rohling joined Battalion Oil in July 2019 and possesses approximately 15 years of experience in oil and gas operations. Prior to his tenure at Battalion Oil, he was the Asset Vice President at Ajax Resources, LLC, which sold substantially all of its assets to Diamondback Energy, Inc. for $1.2 billion in October 2018. Mr. Rohling commenced his career at EP Energy Corporation (El Paso Corporation) as an engineer, where he held various roles in operations, reservoir engineering, business development, and management. He earned a Bachelor of Science degree in Petroleum Engineering from Texas A&M University.

Walter Mayer, Senior Vice President, General Counsel

Mr. Mayer joined Battalion Oil in March 2013 and has over eighteen years of legal experience, with a focus on the oil and gas industry. Before joining Battalion Oil, he served as Associate General Counsel at Petrohawk Energy Corporation starting in 2010 and remained following its acquisition by BHP Billiton. Earlier in his career, Mr. Mayer worked in the Litigation Group of Vinson & Elkins, where he concentrated on commercial energy litigation.

Russell W. Greco, Vice President of Strategy and Planning

Mr. Greco joined Battalion Oil in August 2019, bringing approximately 13 years of experience in the oil and gas sector. Prior to Battalion Oil, he served as the Asset and Reservoir Manager of Sierra Resources, which subsequently sold substantially all of its assets to SilverBow Resources. Mr. Greco began his career at EP Energy Corporation (El Paso Corporation) as an engineer, undertaking various roles in operations, asset development, reservoir engineering, business development, and management. He holds a Bachelor of Science degree in Petroleum Engineering from Texas A&M University and an MBA from Rice University.

The key risks to Battalion Oil Corporation (BATL) primarily stem from its financial health, the inherent volatility of the energy market, and the capital-intensive nature of its operations.

1. Financial Instability and High Debt Burden: Battalion Oil has faced significant financial challenges, highlighted by an Altman Z-Score of 0.22, which places the company in a "distress zone" indicating potential financial instability. The company has reported a negative 3-year revenue growth rate of -12.4% and ongoing profitability issues with a net margin of -6.61%. Furthermore, Battalion Oil has a leveraged position with a debt-to-equity ratio of 1.1 and has been "quickly burning through cash," evidenced by negative levered free cash flow of approximately $24.84 million as of Q3 2025. In May 2025, the New York Stock Exchange issued a notice to the company, requiring it to address its financial issues, specifically shareholder equity, to avoid delisting. Historically, the company emerged from bankruptcy in early 2020 (as Halcón Resources) and has been focused on managing its high-cost debt. Despite recent asset sales and private placements to reduce debt and improve liquidity, concerns about its long-term financial stability persist.
2. Volatility of Oil and Natural Gas Prices: As an independent energy company, Battalion Oil's revenue and profitability are directly and significantly impacted by the fluctuating prices of oil and natural gas. Recent surges in the company's stock price have been linked to external geopolitical events and a tightening oil supply backdrop, demonstrating a reliance on unpredictable market forces rather than sustained internal growth. The company's performance remains highly sensitive to commodity price fluctuations.
3. Capital-Intensive Operations and Production Decline: The exploration and production of oil and natural gas is a highly capital-intensive business. Battalion Oil requires continuous capital expenditures to drill new wells and maintain production levels, as existing wells naturally decline over time. This ongoing need for capital can necessitate further funding, sometimes at unfavorable pricing, to meet working capital requirements and offset production declines.

The clear emerging threat to Battalion Oil is the **rapid acceleration of the global energy transition**, driven by significant advancements and widespread adoption of disruptive technologies. Specifically:

• **Electric Vehicles (EVs):** Rapid advancements in battery technology, leading to lower costs, extended range, and faster charging times, coupled with increasing government incentives and infrastructure development, are accelerating the global transition away from internal combustion engine vehicles. This poses a direct and growing threat to the demand for crude oil, particularly for transportation fuels, which is a primary component of Battalion Oil's production.
• **Renewable Energy and Energy Storage:** Continual cost reductions and efficiency improvements in solar and wind power generation, combined with breakthroughs in large-scale and long-duration energy storage solutions, are rapidly increasing their penetration into electricity grids. This directly threatens the long-term demand for natural gas as a primary fuel source for power generation, another significant part of Battalion Oil's asset portfolio.

These technological shifts and their accelerating adoption represent a fundamental displacement of fossil fuels in key sectors, analogous to how digital technologies disrupted previous incumbents.

Battalion Oil Corporation (symbol: BATL) operates primarily in the Delaware Basin, focusing on the acquisition, production, exploration, and development of crude oil, natural gas, and natural gas liquids (NGLs) in the United States.

Crude Oil

The global crude oil market size was valued at approximately 751.72 billion USD in 2024 and is projected to grow to 867.16 billion USD by 2033, with a compound annual growth rate (CAGR) of 1.6% from 2026 to 2033. In terms of volume, the global crude oil market reached about 101.40 million barrels per day (MB/d) in 2025, with projections to reach approximately 110.90 MB/d by 2035. The United States is the world's largest producer of oil, with a production of 22,844,371 barrels per day as of 2024. The Delaware Basin, where Battalion Oil operates, is the top oil-producing play in the U.S. shale patch, contributing around 3 million barrels of oil per day.

Natural Gas

The addressable market for natural gas in the U.S. is substantial. The U.S. natural gas market size is estimated to be 473.4 billion USD in 2025 and is projected to reach 601.8 billion USD by 2032, growing at a CAGR of 3.5% during this period. The U.S. natural gas distribution market alone was valued at 170.0 billion USD in 2024 and is expected to increase to 186.0 billion USD by 2032. The Delaware Basin is also a significant natural gas producing region, producing more than 12 billion cubic feet of gas per day.

Natural Gas Liquids (NGLs)

The U.S. natural gas liquids market size was estimated at 5.9 billion USD in 2024. This market is projected to grow from 6.22 billion USD in 2025 to 10.6 billion USD by 2035, exhibiting a CAGR of 5.4% during the forecast period. The North American Natural Gas Liquids market, heavily dominated by the United States with a 92.8% share in 2024, is estimated to grow from 7.08 billion USD in 2024 to 11.53 billion USD in 2033, with a CAGR of 5.57%.

• Strategic Acquisitions and Expanded Drilling Inventory: Battalion Oil is actively pursuing strategic acquisitions to expand its asset base and drilling opportunities. A recent example is the acquisition of 7,090 net acres in Ward County, Texas, in an all-stock transaction (effective March 1, 2026). This acquisition is anticipated to significantly enhance the company's contiguous footprint in the Monument Draw play, add approximately 30 high-quality drilling locations in prolific formations like the Wolfcamp A, Wolfcamp B, and 3rd Bone Spring, and allow for optimized long-lateral development and operational efficiencies.
• Increased Production through Enhanced Gas Processing Capacity: In January 2026, Battalion Oil announced a pivotal operational update regarding its gas treating arrangements. The company transitioned its gas processing to a large-cap midstream provider that completed a facility expansion in Q4 2025. This move significantly increased gas processing capacity to over 30 MMcf/d from a December 2025 average of approximately 17.4 MMcf/d, leading to an increase in the company's average oil production by approximately 1,200 net barrels per day in January 2026 compared to December 2025. This enhanced capacity and operational reliability are expected to drive higher production volumes.
• Favorable Commodity Price Environment: As an independent energy company, Battalion Oil's revenue is highly sensitive to the prices of crude oil and natural gas. Recent market commentary indicates that escalating geopolitical tensions, such as those in the Middle East, have contributed to a surge in oil prices, positively impacting Battalion Oil's stock performance. A sustained favorable commodity price environment is a significant external driver for revenue growth.
• Operational Efficiencies and Cost Optimization: Battalion Oil has demonstrated a focus on optimizing its operational efficiencies and managing costs, which indirectly supports revenue growth by improving profitability per barrel of oil equivalent. For instance, in Q2 2025, the company achieved $1.0 million in cost savings per well in its West Quito drilling program, and improved capital efficiency and cost control have been highlighted as key themes. The strategic acquisition of contiguous acreage also aims to streamline operations by enabling longer lateral wells and reducing infrastructure needs.

Capital Allocation Decisions for Battalion Oil (BATL)

Share Repurchases

• In Q3 2022, Battalion Oil spent $66,000 on share buybacks.
• In March 2025, the Board of Directors authorized management to explore options for repurchasing common stock from participants of a new Retention and Incentive Plan at $3.00 per share, in two phases.

Share Issuance

• In March 2026, Battalion Oil issued 1,800,000 common shares at $5.50 per share and 927,273 pre-funded warrants, raising approximately $15 million in gross proceeds through a private placement.
• In March 2026, the company issued 485,000 shares of its common stock as consideration for the acquisition of 7,090 net acres of oil and gas assets in Ward County, Texas.
• By November 2025, it was estimated that Battalion's preferred equity, totaling approximately $166 million, could be converted into around 21 million common shares.

Inbound Investments

• In March 2026, Battalion Oil secured approximately $15 million in funding through a private placement from a new institutional investor by issuing common stock and pre-funded warrants.
• In November 2023, Battalion Oil obtained commitments for an additional $55 million in preferred equity.
• In December 2023, Fury Resources, Inc. announced an agreement to acquire all outstanding common shares of Battalion Oil for approximately $450 million in cash.

Capital Expenditures

• In Q3 2025, Battalion Oil invested $10.8 million in capital expenditures.
• For the first quarter of 2025, capital expenditures were primarily focused on drilling operations, including completing four Monument Draw wells and drilling two wells in the West Quito area, as part of a six-well activity plan.
• Oil and natural gas capital expenditures were approximately $69.6 million in FY2024 and $51.8 million in FY2023.