BATTALION OIL CORP (BATL)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $47.5M, down 4.8% YoY, with average production of 11,900 Boe/d (53% oil); adjusted EBITDA rose to $15.1M (+60.8% YoY) as operational costs improved and derivatives swung to gains .
• Diluted EPS was -$0.35; net loss available to common stockholders was $5.8M, reflecting sizable preferred dividends ($11.8M) despite reported net income of $6.0M .
• Operational execution remained strong: four Monument Draw wells completed and two West Quito wells drilled ahead of schedule, with ~$1.0M per well under AFE and recent wells tracking toward 1,000,000 BO ultimate recovery each .
• AGI facility treated ~18 MMcf/d on average in Q1, with post-quarter upgrades pushing daily rates over 30 MMcf/d—an important cost and throughput catalyst; liquidity improved to $73.6M cash (term loan outstanding $225.0M) .
• No formal financial guidance ranges were provided; consensus estimates (S&P Global) for Q1 appear unavailable, limiting beat/miss framing for EPS/revenue.*

What Went Well and What Went Wrong

What Went Well

• Monument Draw and West Quito execution: “Capital on first well post‑TD in West Quito is approximately $1.0 million under AFE and the 10,000 foot lateral well was drilled in record time for the area” .
• Recently completed Monument Draw wells are producing above type curve and “on track to deliver over 1,000,000 barrels of oil ultimate recovery each,” supporting inventory quality and returns .
• AGI facility throughput improvement: after quarter end, “daily rates have reached over 30 MMcf/d,” pointing to lower treating costs and improved volumes as equipment was added by the midstream partner .

What Went Wrong

• Revenues declined YoY ($47.5M vs $49.9M) due to ~1,089 Boe/d lower volumes, partially offset by higher realized prices; realized hedge losses were ~$2.5M, pressuring realized pricing .
• LOE and workover expense per Boe rose to $11.01 vs $10.55 YoY on inflationary maintenance, power and chemicals, while G&A per Boe increased to $4.12 (as‑reported), though adjusted G&A was $3.01 .
• Preferred dividends of $11.8M overwhelmed the $6.0M reported net income, resulting in a $5.8M net loss to common holders and diluted EPS of -$0.35 .

Financial Results

Consensus vs Actual (Q1 2025):

*Values retrieved from S&P Global; consensus not available.

Guidance Changes

No formal revenue/EPS/OpEx/Tax rate guidance ranges were provided in Q1 materials .

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document set.

Management Commentary

• “Capital on first well post‑TD in West Quito is approximately $1.0 million under AFE and the 10,000 foot lateral well was drilled in record time for the area.”
• “Recently completed wells in the Monument Draw field continue to produce above type curve and are on track to deliver over 1,000,000 barrels of oil ultimate recovery each.”
• “Subsequent to quarter end, the midstream partner has added equipment and daily rates have reached over 30 MMcf/d.”
• Liquidity snapshot: “As of March 31, 2025…$225.0 million of term loan indebtedness outstanding and…cash and cash equivalents of $73.6 million.”

Q&A Highlights

• No Q1 2025 earnings call transcript was found; therefore Q&A themes and clarifications are unavailable from primary sources in this review [ListDocuments returned none].

Estimates Context

• S&P Global consensus for Q1 2025 EPS and revenue appears unavailable for BATL; as a result, we cannot determine beats/misses versus Street for Q1 2025.*
• Given actual results (revenue $47.5M, EPS -$0.35), and the operational update (AGI >30 MMcf/d post‑quarter, continued well outperformance), sell‑side estimates—where they exist—may need to reflect improved throughput assumptions and lower gathering/treating costs post‑quarter, offset by hedge losses and preferred dividend headwinds .

*Values retrieved from S&P Global.

Key Takeaways for Investors

• Operational execution remains a core strength: wells ahead of schedule/under budget, with Monument Draw outperforming type curves and West Quito demonstrating record drilling times—supporting capital efficiency and EUR confidence .
• AGI facility improvements post‑quarter (>30 MMcf/d) are a near‑term catalyst for throughput and netbacks; monitor sustaining rates and any midstream changes (noting later Q2 commentary of AGI cessation in August) for volatility risk .
• Liquidity improved materially (cash $73.6M) after refinancing and incremental term loan; however, total term debt of $225.0M and preferred dividend burden ($11.8M in Q1) continue to constrain common equity earnings power .
• Cost structure shows progress: gathering costs down YoY; adjusted G&A at $3.01/Boe; maintain focus on LOE/workover trends amid inflation and lower average daily volumes .
• Hedge losses were a notable headwind in Q1; investors should assess hedge profile and sensitivity to NYMEX oil realizations going forward .
• With no formal guidance and limited consensus coverage, the narrative will be driven by operational milestones (well performance, AGI processing alternatives, pad turn‑in‑line timing) rather than headline beats/misses; short‑term trading likely reacts to throughput updates and cost progress .
• Medium‑term thesis hinges on sustaining capital efficiency, optimizing gas processing, and deleveraging/streamlining preferred capital over time to translate operating gains to common equity EPS and FCF .