Battalion Oil Corporation

Third-quarter 2022 total revenue was $99.1 million, with oil making up 71% of revenue. Average daily production increased nearly 8% sequentially to 16,228 Boe/d from 15,044 Boe/d in Q2, and adjusted EBITDA increased 34% to $24.3 million from $18.2 million. The company reported GAAP net income to common shareholders of $105.9 million, or $6.42 per diluted share, and adjusted net income of $0.24 per diluted share after $101.9 million of selected items. Capex in Q3 was $48.5 million, bringing 9M22 oil and gas capex to $112.7 million. For 2022, the company reiterated capital activity, capex, and total production guidance, but lowered total oil production guidance because of a slightly lower-than-planned oil cut. Liquidity at September 30 was $48.5 million, including $33.5 million of cash and $15 million available under delayed draw term loans; the company also said it amended its term loan to address a current ratio issue and was in compliance for Q3 after the amendment.

Richard Little framed the quarter as proof that the company is successfully moving back into development mode after the new term loan last November. He emphasized that production growth, hedged pricing, and operational efficiency are now translating into higher EBITDA and cash flow, and he pointed to the new 3-well pad, two more wells due before year-end, and a promising Bone Spring test as reasons for confidence. His tone was upbeat but still cautious on the macro backdrop, saying the company is planning amid uncertainty while remaining careful on the 2023 capital budget.

Kevin Andrews highlighted the hard numbers behind the quarter: 16,228 Boe/d of production, $99.1 million of revenue, $24.3 million of adjusted EBITDA, and $105.9 million of GAAP net income. He also detailed $48.5 million of Q3 capex and $112.7 million of 9M22 oil and gas capex, mostly tied to drilling and completion. On liquidity and leverage, he said the company had $48.5 million of liquidity at quarter-end, including $33.5 million of cash and $15 million of delayed draw availability, and noted the term loan amendment fixed the current ratio compliance issue for the quarter.

There was no substantive analyst Q&A in the transcript; the call ended after management’s prepared remarks. The main incremental points were management’s repeated comments that 2023 realized pricing should improve materially as 2022 hedges roll off, production should keep ramping with late-2022 wells, and the AGI project remains on track for a first-quarter in-service date.