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BATTALION OIL CORP (BATL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $42.8M and diluted EPS to common was -$0.21; adjusted EBITDA rose to $18.1M. Revenue fell 12.9% YoY (lower realized prices) and 9.8% QoQ, while adjusted EBITDA grew 16.0% YoY and 20.3% QoQ on cost progress and hedging benefits .
  • Management completed the final two wells of the 2025 six‑well plan in West Quito, ~$1.0M under AFE per well, with initial rates outperforming legacy offsets and positive frac interference observed on nearby wells .
  • Bold negative operational surprise: the AGI facility ceased operations on Aug 11, prompting temporary shut‑ins in Monument Draw and a pivot to alternative processing routes; no formal production guidance was provided .
  • Liquidity/corporate: Q2 cash was $44.6M, term loan outstanding $219.4M; NYSE American accepted the Company’s compliance plan (Plan period through Nov 30, 2026), which could be a stock reaction catalyst tied to listing overhang reduction .

What Went Well and What Went Wrong

What Went Well

  • Drilling efficiency: “Both wells were drilled ahead of schedule and under AFE budget estimates by approximately $1.0 million per well,” with initial rates outperforming offsets; offset wells showed positive frac interference .
  • Cost trajectory: Gathering and other expenses fell to $9.27/Boe vs $10.36/Boe YoY, supported by central facility progress and AGI throughput; adjusted G&A fell to $2.11/Boe vs $2.49/Boe .
  • EBITDA momentum: Adjusted EBITDA increased to $18.1M vs $15.6M YoY; sequentially up from $15.1M in Q1 2025 .

What Went Wrong

  • Pricing headwinds: Revenue dropped to $42.8M from $49.1M YoY, primarily due to a $5.93/boe decline in realized prices (ex‑hedge) despite slightly higher volumes .
  • AGI shutdown risk: Effective Aug 11, AGI cessation drives temporary shut‑ins and operational uncertainty until alternative gas processing is secured .
  • Equity and cash compression: Net loss to common was $3.5M and diluted EPS -$0.21; cash fell to $44.6M vs $73.6M in Q1 amid higher capex and debt amortization starting Q2 .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Operating Revenues ($USD Millions)$49.653 $47.475 $42.812
Diluted EPS to Common ($)-$1.88 -$0.35 -$0.21
Net Income ($USD Millions)-$22.202 $6.023 $4.796
Net Income Margin (%)-44.7% (−22.202/49.653) 12.7% (6.023/47.475) 11.2% (4.796/42.812)
Adjusted EBITDA ($USD Millions)$18.019 $15.082 $18.137
Adjusted EBITDA Margin (%)36.3% (18.019/49.653) 31.8% (15.082/47.475) 42.3% (18.137/42.812)

KPIs

KPIQ4 2024Q1 2025Q2 2025
Average Daily Production (Boe/d)12,750 11,900 12,989
Oil Mix (%)55% 53% 49%
Total Volumes (MBoe)1,173 1,071 1,182
Avg Price per Boe (ex‑hedge) ($)42.20 44.24 36.02
Avg Price per Boe (after hedges) ($)42.22 41.88 39.66
LOE per Boe ($)9.45 9.67 9.03
Gathering & Other per Boe ($)10.45 11.20 9.27
G&A per Boe (as adjusted) ($)3.21 3.01 2.11

Additional context:

  • Realized hedge gains were ~$4.3M in Q2 2025; Q1 2025 saw $2.5M hedge losses; Q4 2024 had <$0.1M gains .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Production handling (Monument Draw)Post‑Q2 (effective Aug 11, 2025)Not providedTemporary shut‑ins; gas to be redirected to alternative processing options nearby Lowered (operational impact)
Debt amortization (term loan)FY 2025Not providedScheduled amortization: $16.9M in 2025 Established schedule
Debt amortization (term loan)FY 2026Not providedScheduled amortization: $22.5M in 2026 Established schedule
Formal financial guidance (revenue, margins, tax, dividend)Q3–FY 2025Not providedNot providedMaintained (no formal guidance)

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not found in our document catalog; the company site lists historical calls through 2022 and did not list a 2025 Q2 call .

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AGI facility operationsQ4: AGI processed ~20 MMcf/d, enabling treating cost savings ; Q1: treated ~18 MMcf/d avg; later reached >30 MMcf/d with added equipment AGI ceased operations Aug 11; temporary shut‑ins; alternative processing sought Deteriorating (operational disruption)
Drilling & capex per wellQ4: 2024 six‑well campaign ahead of plan; capital < $950 per lateral foot Final two wells of 2025 plan in West Quito; ~$1M under AFE per well; outperforming offsets; positive frac interference Improving (efficiency, well performance)
Liquidity & debtQ4: Refinanced term loan; $225M outstanding by Jan 9 ; Q1: cash $73.6M Q2: cash $44.6M; term loan $219.4M Mixed (lower cash; steady debt)
Listing complianceN/A in Q4/Q1NYSE American accepted compliance Plan; Plan period to Nov 30, 2026 Improving (governance/listing overhang)
Pricing/hedgesQ4: prices stable; minimal hedge gains ; Q1: higher ex‑hedge price, hedge losses Lower ex‑hedge price; ~$4.3M hedge gains Volatile (hedges offset price softness)

Management Commentary

  • “We appreciate the NYSE American’s acceptance of our compliance plan and the opportunity to demonstrate our commitment to restoring compliance… Our team is focused on executing the plan with discipline and urgency, while continuing to strengthen our operations and financial position.” — Matt Steele, CEO .
  • Activity update: “Both wells were drilled ahead of schedule and under AFE budget estimates by approximately $1.0 million per well. Initial production rates from these are outperforming legacy offset wells. Additionally, offset wells have observed positive frac interference, increasing their daily oil production.” — Management Comments (press release) .
  • AGI shutdown context: AGI treated ~2.2 Bcf in Q2 (~24 MMcf/d avg) and returned ~18 MMcf/d of sweet gas; on Aug 11, the facility ceased operations as “neither economically viable nor prudent,” prompting temporary shut‑ins and rerouting to alternative processing .

Q&A Highlights

An earnings call transcript for Q2 2025 was not available in our catalog or on the company’s events page; no Q&A highlights to report .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2025 was unavailable for EPS and Revenue; as such, beat/miss vs estimates cannot be determined. Values retrieved from S&P Global.*

MetricQ2 2025 ConsensusQ2 2025 Actual
Primary EPS Consensus Mean*N/A*-$0.21
Revenue Consensus Mean*N/A*$42.812M
EBITDA Consensus Mean*N/A*Adjusted EBITDA $18.137M

Key Takeaways for Investors

  • The quarter was operationally solid on drilling/capex efficiency and cost progress, but headline revenue contracted on price pressure; adjusted EBITDA resilience suggests improved cost structure and hedging support .
  • Bold risk: AGI cessation is the near‑term swing factor—expect temporary volume pressure and potential cost/treating shifts until alternate processing is fully secured; monitor Q3 volumes and per‑Boe costs closely .
  • Liquidity dropped to $44.6M with $219.4M term loan outstanding; quarterly amortization commenced in Q2 and is scheduled at $16.9M (2025) and $22.5M (2026), making cash generation and capex pacing critical .
  • Cost metrics are trending favorably (gathering, adjusted G&A), which can offset some price headwinds; sustainability of these gains post‑AGI will be key .
  • With NYSE American accepting the compliance Plan, the listing overhang is mitigated near‑term—execution vs Plan milestones will influence sentiment and access to capital .
  • Trading lens: Near‑term volatility likely around AGI replacement cadence and Q3 production prints; any clarity on processing, throughput normalization, and well performance could catalyze re‑rating.
  • Medium‑term thesis: If alternative processing is secured promptly and operational efficiency persists, Battalion’s improving EBITDA margins and drilling performance can underpin deleveraging and equity repair despite commodity‑price sensitivity .