Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 09, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Entity File Number | 001-35467 | |
Entity Registrant Name | Battalion Oil Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0700684 | |
Entity Address, Address Line One | 820 Gessner Road | |
Entity Address, Address Line Two | Suite 1100 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 832 | |
Local Phone Number | 538-0300 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Trading Symbol | BATL | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,456,563 | |
Entity Central Index Key | 0001282648 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Oil, natural gas and natural gas liquids sales: | ||
Total oil, natural gas and natural gas liquids sales | $ 49,532 | $ 64,273 |
Other | 338 | 869 |
Total operating revenues | 49,870 | 65,142 |
Production: | ||
Lease operating | 11,586 | 11,691 |
Workover and other | 888 | 1,335 |
Taxes other than income | 2,991 | 3,190 |
Gathering and other | 17,286 | 16,517 |
General and administrative | 4,071 | 5,137 |
Depletion, depreciation and accretion | 13,025 | 16,148 |
Total operating expenses | 49,847 | 54,018 |
Income from operations | 23 | 11,124 |
Other income (expenses): | ||
Net (loss) gain on derivative contracts | (24,187) | 19,473 |
Interest expense and other | (7,039) | (7,786) |
Total other (expenses) income | (31,226) | 11,687 |
(Loss) income before income taxes | (31,203) | 22,811 |
Income tax benefit (provision) | 0 | 0 |
Net (loss) income | (31,203) | 22,811 |
Series A preferred dividends | (5,632) | (1,492) |
Net (loss) income available to common stockholders | $ (36,835) | $ 21,319 |
Net (loss) income per share of common stock available to common stockholders: | ||
Basic (in dollars per share) | $ (2.24) | $ 1.29 |
Diluted (in dollars per share) | $ (2.24) | $ 1.28 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 16,457 | 16,393 |
Diluted (in shares) | 16,457 | 16,535 |
Oil | ||
Oil, natural gas and natural gas liquids sales: | ||
Total oil, natural gas and natural gas liquids sales | $ 42,429 | $ 54,215 |
Natural gas | ||
Oil, natural gas and natural gas liquids sales: | ||
Total oil, natural gas and natural gas liquids sales | 2,047 | 2,900 |
Natural gas liquids | ||
Oil, natural gas and natural gas liquids sales: | ||
Total oil, natural gas and natural gas liquids sales | $ 5,056 | $ 7,158 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 48,941 | $ 57,529 |
Accounts receivable, net | 25,987 | 23,021 |
Assets from derivative contracts | 7,633 | 8,992 |
Restricted cash | 91 | 90 |
Prepaids and other | 919 | 907 |
Total current assets | 83,571 | 90,539 |
Oil and natural gas properties (full cost method): | ||
Evaluated | 776,504 | 755,482 |
Unevaluated | 58,909 | 58,909 |
Gross oil and natural gas properties | 835,413 | 814,391 |
Less: accumulated depletion | (458,604) | (445,975) |
Net oil and natural gas properties | 376,809 | 368,416 |
Other operating property and equipment: | ||
Other operating property and equipment | 4,648 | 4,640 |
Less: accumulated depreciation | (1,979) | (1,817) |
Net other operating property and equipment | 2,669 | 2,823 |
Other noncurrent assets: | ||
Assets from derivative contracts | 3,898 | 4,877 |
Operating lease right of use assets | 890 | 1,027 |
Other assets | 20,780 | 17,656 |
Total assets | 488,617 | 485,338 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 63,117 | 66,525 |
Liabilities from derivative contracts | 28,764 | 17,191 |
Current portion of long-term debt | 55,106 | 50,106 |
Operating lease liabilities | 614 | 594 |
Total current liabilities | 147,601 | 134,416 |
Long-term debt, net | 126,821 | 140,276 |
Other noncurrent liabilities: | ||
Liabilities from derivative contracts | 21,907 | 16,058 |
Asset retirement obligations | 17,866 | 17,458 |
Operating lease liabilities | 329 | 490 |
Other | 11,156 | 2,084 |
Commitments and contingencies (Note 8) | ||
Temporary equity: | ||
Series A redeemable convertible preferred stock: 118,000 shares and 98,000 shares of $0.0001 par value authorized, issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 131,624 | 106,535 |
Stockholders' equity: | ||
Common stock: 100,000,000 shares of $0.0001 par value authorized; 16,456,563 shares issued and outstanding as of March 31, 2024 and December 31, 2023 | 2 | 2 |
Additional paid-in capital | 315,507 | 321,012 |
Retained earnings (accumulated deficit) | (284,196) | (252,993) |
Total stockholders' equity | 31,313 | 68,021 |
Total liabilities, temporary equity and stockholders' equity | $ 488,617 | $ 485,338 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Stockholders' equity: | ||
Preferred stock, shares authorized | 118,000 | 98,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 118,000 | 98,000 |
Preferred stock, shares outstanding | 118,000 | 98,000 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 16,456,563 | 16,456,563 |
Common stock, shares outstanding | 16,456,563 | 16,456,563 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total |
Balances at Dec. 31, 2022 | $ 2 | $ 334,571 | $ (249,945) | $ 84,628 |
Balances (in shares) at Dec. 31, 2022 | 16,345 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | 22,811 | 22,811 | ||
Deemed dividends for Series A preferred stock | (1,492) | (1,492) | ||
Long-term incentive plan vestings (in shares) | 159 | |||
Tax withholding on vesting of restricted stock units | (454) | (454) | ||
Tax withholding on vesting of restricted stock units (in shares) | (47) | |||
Stock-based compensation and other | 327 | 327 | ||
Balances at Mar. 31, 2023 | $ 2 | 332,952 | (227,134) | 105,820 |
Balances (in shares) at Mar. 31, 2023 | 16,457 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | (4,748) | (4,748) | ||
Deemed dividends for Series A preferred stock | (997) | (997) | ||
Stock-based compensation and other | (754) | (754) | ||
Balances at Jun. 30, 2023 | $ 2 | 331,201 | (231,882) | 99,321 |
Balances (in shares) at Jun. 30, 2023 | 16,457 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | (53,799) | (53,799) | ||
Deemed dividends for Series A preferred stock | (3,863) | (3,863) | ||
Stock-based compensation and other | (827) | (827) | ||
Balances at Sep. 30, 2023 | $ 2 | 326,511 | (285,681) | 40,832 |
Balances (in shares) at Sep. 30, 2023 | 16,457 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | 32,688 | 32,688 | ||
Deemed dividends for Series A preferred stock | (5,695) | (5,695) | ||
Stock-based compensation and other | 196 | 196 | ||
Balances at Dec. 31, 2023 | $ 2 | 321,012 | (252,993) | 68,021 |
Balances (in shares) at Dec. 31, 2023 | 16,457 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net (loss) income | (31,203) | (31,203) | ||
Deemed dividends for Series A preferred stock | (5,632) | (5,632) | ||
Stock-based compensation and other | 127 | 127 | ||
Balances at Mar. 31, 2024 | $ 2 | $ 315,507 | $ (284,196) | $ 31,313 |
Balances (in shares) at Mar. 31, 2024 | 16,457 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (31,203) | $ 22,811 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depletion, depreciation and accretion | 13,025 | 16,148 |
Stock-based compensation, net | 99 | 227 |
Unrealized loss (gain) on derivative contracts | 19,761 | (21,004) |
Amortization/accretion of financing related costs | 1,701 | 1,798 |
Accrued settlements on derivative contracts | 1,433 | (555) |
Change in fair value of embedded derivative liability | (928) | (1,062) |
Other | 270 | 11 |
Change in assets and liabilities: | ||
Accounts receivable | (1,278) | 6,928 |
Prepaids and other | (12) | 103 |
Accounts payable and accrued liabilities | 1,048 | (26,094) |
Net cash provided by (used in) operating activities | 3,916 | (689) |
Cash flows from investing activities: | ||
Oil and natural gas capital expenditures | (24,599) | (28,611) |
Proceeds received from sale of oil and natural gas assets | 1,189 | |
Contract asset | (7,235) | |
Other operating property and equipment capital expenditures | (8) | (269) |
Other | (6) | (5) |
Net cash used in investing activities | (31,848) | (27,696) |
Cash flows from financing activities: | ||
Repayments of borrowings | (10,026) | (5,017) |
Payment of debt financing costs | (129) | |
Proceeds from issuance of preferred stock | 19,500 | 24,375 |
Merger deposit | 10,000 | |
Other | (454) | |
Net cash provided by financing activities | 19,345 | 18,904 |
Net decrease in cash, cash equivalents and restricted cash | (8,587) | (9,481) |
Cash, cash equivalents and restricted cash at beginning of period | 57,619 | 32,816 |
Cash, cash equivalents and restricted cash at end of period | 49,032 | 23,335 |
Supplemental cash flow information: | ||
Cash paid for interest | $ 6,571 | $ 7,265 |
FINANCIAL STATEMENT PRESENTATIO
FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | 1. FINANCIAL STATEMENT PRESENTATION Basis of Presentation and Principles of Consolidation Battalion Oil Corporation (“Battalion” or the “Company”) is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The consolidated financial statements include the accounts of all majority-owned, controlled subsidiaries. The Company operates in one segment which focuses on oil and natural gas acquisition, production, exploration and development. Allocation of capital is made across the Company’s entire portfolio without regard to operating area. All intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements reflect, in the opinion of the Company’s management, all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial position as of, and the results of operations for, the periods presented. Interim period results are not necessarily indicative of results of operations or cash flows for the full year and accordingly, certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), has been condensed or omitted. During interim periods, Battalion follows the accounting policies disclosed in its Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission (the “SEC”) on April 1, 2024. Please refer to the notes in the Annual Report on Form 10-K for the year ended December 31, 2023 when reviewing interim financial results. The Company has evaluated events or transactions through the date of issuance of these unaudited condensed consolidated financial statements. Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Estimates and assumptions that, in the opinion of management of the Company, are significant include oil and natural gas revenue accruals, capital and operating expense accruals, oil and natural gas reserves, depletion relating to oil and natural gas properties, asset retirement obligations (“AROs”), and fair value estimates. The Company bases its estimates and judgments on historical experience and on various other assumptions and information believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be predicted with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from the estimates and assumptions used in the preparation of the Company’s unaudited condensed consolidated financial statements. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. Amounts in the unaudited condensed consolidated balance sheets included in “Cash and cash equivalents” “Restricted cash” March 31, 2024 December 31, 2023 Cash and cash equivalents $ 48,941 $ 57,529 Restricted cash 91 90 Total cash, cash equivalents and restricted cash $ 49,032 $ 57,619 Restricted cash consists of funds to collateralize lines of credit. Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable are primarily receivables from joint interest owners and oil and natural gas purchasers. Accounts receivable are recorded at the amount due, less an allowance for doubtful accounts, when applicable. Payment of the Company’s accounts receivable is typically received within 30-60 days. The Company’s historical credit losses have been de minimis and are expected to remain so in the future assuming no substantial changes to the business or creditworthiness of the Company’s counterparties. Concentrations of Credit Risk The Company’s primary concentrations of credit risk are the risks of uncollectible accounts receivable and of nonperformance by counterparties under the Company’s derivative contracts. Each reporting period, the Company assesses the recoverability of material receivables using historical data, current market conditions and reasonable and supportable forecasts of future economic conditions to determine expected collectability of its material receivables. The Company’s exposure to credit risk under its derivative contracts is varied among major financial institutions with investment grade credit ratings, where it has master netting agreements which provide for offsetting of amounts payable or receivable between the Company and the counterparty. To manage counterparty risk associated with derivative contracts, the Company selects and monitors counterparties based on an assessment of their financial strength and/or credit ratings. At March 31, 2024, the Company’s derivative counterparties include two major financial institutions, both of which are secured lenders under the Amended Term Loan Agreement (as defined in Note 4, “ Debt Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures significant segment expenses and other segment items on an annual and interim basis, and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires an entity to disclose the title and position of the chief operating decision maker. ASU 2023-07 does not change how an entity identifies its operating segments, aggregates them or applies the quantitative thresholds to determine its reportable segments. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Entities should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2023-07 and expects limited impact on its disclosures with no impact to its consolidated financial statements upon adoption. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
OPERATING REVENUES
OPERATING REVENUES | 3 Months Ended |
Mar. 31, 2024 | |
OPERATING REVENUES | |
OPERATING REVENUES | 2. OPERATING REVENUES Substantially all of the Company’s oil, natural gas and natural gas liquids (“NGLs”) revenues are derived from the Delaware Basin in Pecos, Reeves, Ward and Winkler Counties, Texas. Revenue is presented disaggregated in the unaudited condensed consolidated statement of operations by major product, and depicts how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors in the Company’s single basin operations. Revenue is recognized when the following five steps are completed: (1) identify the contract with the customer, (2) identify the performance obligation (promise) in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when the reporting organization satisfies a performance obligation. Revenues from the sale of crude oil, natural gas and natural gas liquids are recognized, at a point in time, when a performance obligation is satisfied by the transfer of control of each unit (e.g. barrel of oil, Mcf of gas) of commodity to the customer. Revenue is measured based on contract consideration allocated to each unit of commodity and excludes amounts collected on behalf of third parties. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Because the Company’s performance obligations have been satisfied and an unconditional right to consideration exists as of the balance sheet date, the Company recognized amounts due from contracts with customers of $22.3 million and $19.8 million as of March 31, 2024 and December 31, 2023, respectively, as “Accounts receivable, net” For additional information regarding the Company’s operating revenues, refer to its Annual Report on Form 10-K for the year ended December 31, 2023. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 3 Months Ended |
Mar. 31, 2024 | |
OIL AND NATURAL GAS PROPERTIES | |
OIL AND NATURAL GAS PROPERTIES | 3. OIL AND NATURAL GAS PROPERTIES The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under this method of accounting, all costs of acquisition, exploration and development of oil and natural gas reserves (including such costs as leasehold acquisition costs, geological expenditures, treating equipment and gathering support facilities costs, dry hole costs, tangible and intangible development costs and direct internal costs) are capitalized as the cost of oil and natural gas properties when incurred. To the extent capitalized costs of evaluated oil and natural gas properties, net of accumulated depletion, exceed the discounted future net revenues of proved oil and natural gas reserves, net of deferred taxes, such excess capitalized costs are charged to expense. Additionally, the Company assesses all properties classified as unevaluated property on a quarterly basis for possible impairment. The Company assesses properties on an individual basis or as a group, if properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to depletion and the full cost ceiling test limitation. At March 31, 2024 and 2023, using first-day-of-the-month average West Texas Intermediate (“WTI”) crude oil spot prices and Henry Hub natural gas prices for the respective prior 12-month periods, the Company’s net book value of oil and natural gas properties at March 31, 2024 and 2023, did not exceed the ceiling test value of the Company’s reserves. Oil and natural gas prices utilized for the ceiling test calculations as of March 31, 2024 and 2023 were $77.64 per barrel and $91.38 per barrel of oil, respectively, and $2.45 per MMBtu and $5.96 per MMBtu for natural gas, respectively. Changes in commodity prices, production rates, levels of reserves, future development costs, transfers of unevaluated properties to the full cost pool, capital spending, and other factors will determine the Company’s ceiling test calculation and impairment analyses in future periods. of the Company’s oil and natural gas properties |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
DEBT | 4. DEBT The Company’s debt consisted of the following for the periods presented (in thousands): March 31, 2024 December 31, 2023 Term loan credit facility $ 190,000 $ 200,000 Other 188 215 Total debt (Face Value) 190,188 200,215 Less: Current portion of long-term debt (1) (55,106) (50,106) Other (2) (8,261) (9,833) Long-Term Debt, net $ 126,821 $ 140,276 (1) Amounts primarily reflect amortization payments due of $55.0 million and $50.0 million under the Amended Term Loan Agreement due within one year as of March 31, 2024 and December 31, 2023, respectively. (2) Amounts primarily reflect unamortized debt issuance costs of approximately $5.7 million and $6.9 million at March 31, 2024 and December 31, 2023, respectively, but also includes an unamortized debt discount associated with an embedded derivative separately presented and further described in Note 5, “Fair Value Measurements”. For the three months ended March 31, 2024 and 2023, the Company recorded approximately $1.7 million and $1.8 million, respectively, in interest expense reflecting the amortization/accretion of these amounts. Term Loan Credit Facility On November 24, 2021, the Company and its wholly owned subsidiary, Halcón Holdings, LLC (the “Borrower”) entered into an Amended and Restated Senior Secured Credit Agreement (the “Term Loan Agreement”) with Macquarie Bank Limited, as administrative agent, and certain other financial institutions party thereto, as lenders. On November 14, 2022, the Company paid approximately $2.4 million and entered into a further Amended Credit Agreement (the “Amended Term Loan Agreement”) with its lenders which modified certain provisions of its original Term Loan Agreement including, but not limited to, its Current Ratio financial covenant, interest rate benchmark, and prepayment premiums, all as further described below. On March 28, 2024, the Company entered into the Third Amendment to the Amended Term Loan Agreement (the “Third Amendment”) with its lenders. The Third Amendment, amended the Amended Term Loan Agreement to, among other things, (a) amend the approved plan of development (“APOD”) for certain properties, (b) remove the PDP Production Test and APOD Economic Test (each defined in the Term Loan Agreement), (c) require the Borrower to receive cash proceeds from equity issuances and/or cash contributions in an aggregate amount of not less than As of March 31, 2024, the Company had $190.0 million of indebtedness and $0.3 million of letters of credit outstanding under the Amended Term Loan Agreement. An additional $4.7 million is available for the issuance of letters of credit as of March 31, 2024 and as of the date of this filing. The maturity date of the Amended Term Loan Agreement is November 24, 2025. Borrowings under the Amended Term Loan Agreement bear a variable interest rate based on the Secured Overnight Financing Rate (“SOFR”) plus 0.15% plus a fixed applicable margin of 7.5%. The weighted average interest rate on the Company’s borrowings for the quarter ended March 31, 2024 was approximately 12.99%. The Company may elect, at its option, to prepay any borrowing outstanding under the Amended Term Loan Agreement subject to the following prepayment premiums: Period (after applicable borrowing date (1) ) Premium Months 0-12 Make-whole amount equal to 12 months of interest plus 2.00% Months 13-24 2.00% Months 25-36 1.00% Months 37-48 0.00% (1) Applicable borrowing dates are November 2021 for the original $200.0 million borrowed and April and November 2022 for the $20.0 million and $15.0 million in delayed draw borrowings, respectively. The Company’s prepayment premiums would differ from those noted in the table above if a change of control results in prepayment within the second anniversary of the amendment date, as a 2% prepayment premium will apply. The Company may be required to make mandatory prepayments under the Amended Term Loan Agreement in connection with the incurrence of non-permitted debt, certain asset sales, or with cash on hand in excess of certain maximum levels beginning in 2023. For each fiscal quarter after January 1, 2023, the Company is required to make mandatory prepayments when the Consolidated Cash Balance, as defined in the Amended Term Loan Agreement, exceeds $20.0 million. Until December 31, 2024, the forecasted capital expenditures for the succeeding fiscal quarter on the APOD wells (i.e. oil and natural gas wells located within a specified boundary as set by the Amended Term Loan Agreement) are excluded for purposes of determining the Consolidated Cash Balance. As of March 31, 2024, the Consolidated Cash Balance, as defined in the Amended Term Loan Agreement, did not exceed $20.0 million; therefore, no mandatory prepayment was necessary. The Company is required to make scheduled remaining amortization payments in the aggregate amount of $75.0 million from the fiscal quarter ending June 30, 2024 through the fiscal quarter ending September 30, 2025 with $12.5 million due at the end of each of the second and third quarters of 2024, $15.0 million due at the end of the fourth quarter of 2024 and the first quarter of 2025, and $10.0 million due at the end of each of the second and third quarters of 2025. The Company will be required to make a final payment of $115.0 million at maturity on November 24, 2025. Amounts outstanding under the Amended Term Loan Agreement are guaranteed by certain of the Borrower’s direct and indirect subsidiaries and secured by substantially all of the assets of the Borrower and such direct and indirect subsidiaries, and by the equity interests of the Borrower held by the Company. As part of the Amended Term Loan Agreement there are certain restrictions on the transfer of assets, including cash, to Battalion from the guarantor subsidiaries. The Amended Term Loan Agreement also contains certain financial covenants (as defined in the Amended Term Loan Agreement), including the maintenance of the following ratios: ● Asset Coverage Ratio of not less than 1.80 to 1.00 as of March 31, 2024 and the last day of each fiscal quarter thereafter ● Total Net Leverage Ratio of not greater than 2.50 to 1.00 as of March 31, 2024, and each fiscal quarter thereafter, and ● Current Ratio of not less than 1.00 to 1.00, determined as of the last day of any fiscal quarter period, as of March 31, 2024 and for each fiscal quarter thereafter. As of March 31, 2024, the Company was not in compliance with the Total Net Leverage Ratio covenant under the Amended Term Loan Agreement but was in compliance with the other financial covenants. Under the Amended Term Loan Agreement, the Company has a right to cure noncompliance with the Total Net Leverage Ratio covenant within 15 days of delivery of financial statements by making an optional prepayment in an amount not greater than the amount required for purposes of complying with the Total Net Leverage Ratio and such prepayment shall not be subject to the applicable prepayment premium. Once such prepayment is made, the Total Net Leverage Ratio shall be recalculated giving effect to the reduction in the outstanding amount of borrowings as if such prepayment had occurred on the last day of the quarter. Accordingly, on May 14, 2024, the Company made a prepayment of outstanding borrowings under the Amended Term Loan Agreement in the amount of $17.3 million resulting in total borrowings outstanding of $172.7 million. Upon giving effect to such prepayment for the calculation of the Total Net Leverage Ratio at March 31, 2024, the Company was in compliance with such financial covenant. See Note 13, “Subsequent Events,” The Amended Term Loan Agreement contains an APOD for the Company’s Monument Draw acreage through the drilling and completion of certain wells. The Amended Term Loan Agreement also contains certain events of default, including non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy. In conjunction with entering into the original Term Loan Agreement in November 2021, the Company agreed to pay a premium to the lenders upon a future change of control event in which a majority of the board of directors or the Chief Executive Officer (the “CEO”) or the Principal Financial Officer positions do not remain held by the same persons as before the change of control event (“Change of Control Call Option”). The premium is reduced over time through the payment of interest and certain fees. The Change of Control Call Option is accounted for as an embedded derivative not clearly and closely related to the host debt instrument. Accordingly, the Company recorded the initial fair value separately on the unaudited condensed consolidated balance sheet within “Other noncurrent liabilities” “Interest expense and other” Fair Value Measurements |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 5. FAIR VALUE MEASUREMENTS The Company’s determination of fair value incorporates not only the credit standing of the counterparties involved in transactions with the Company resulting in receivables on the Company’s unaudited condensed consolidated balance sheets, but also the impact of the Company’s nonperformance risk on its own liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company separates the fair value of its financial instruments using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 measurements are inputs that are observable for assets or liabilities, either directly or indirectly, other than quoted prices included within Level 1. The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no transfers between fair value hierarchy levels for any period presented. The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities associated with commodity-based derivative contracts that were accounted for at fair value as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 Level 1 Level 2 Level 3 Total Assets Assets from commodity-based derivative contracts $ — $ 11,531 $ — $ 11,531 Liabilities Liabilities from commodity-based derivative contracts $ — $ 50,671 $ — $ 50,671 December 31, 2023 Level 1 Level 2 Level 3 Total Assets Assets from commodity-based derivative contracts $ — $ 13,869 $ — $ 13,869 Liabilities Liabilities from commodity-based derivative contracts $ — $ 33,249 $ — $ 33,249 Derivative contracts listed above as Level 2 include fixed-price swaps, collars, basis swaps and WTI NYMEX rolls that are carried at fair value. The Company records the net change in the fair value of these positions in “Net (loss) gain on derivative contracts” “Derivative and Hedging Activities,” The Company’s derivative contracts are with major financial institutions with investment grade credit ratings which are believed to have minimal credit risk. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties in the derivative contracts; however, the Company does not anticipate such nonperformance. As discussed in Note 4, “Debt,” “Other noncurrent liabilities” “Interest expense and other” Change of Control Call Option Balance at December 31, 2023 $ 2,084 Change in fair value (928) Balance at March 31, 2024 $ 1,156 Estimated fair value amounts have been determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of cash, cash equivalents and restricted cash, accounts receivable, and accounts payable approximates their carrying value due to their short-term nature. The estimated fair value of borrowings under the Company’s Amended Term Loan Agreement approximates carrying value because the interest rates approximate current market rates. The Company follows the provisions of the FASB’s Accounting Standards Codification (“ASC”) 820, Fair Value Measurement “Asset Retirement Obligations,” |
DERIVATIVE AND HEDGING ACTIVITI
DERIVATIVE AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2024 | |
DERIVATIVE AND HEDGING ACTIVITIES | |
DERIVATIVE AND HEDGING ACTIVITIES | 6. DERIVATIVE AND HEDGING ACTIVITIES The Company is exposed to commodity price risks relating to its ongoing business operations. In accordance with the Company’s policy and the requirements under the Amended Term Loan Agreement, it generally hedges a substantial, but varying, portion of anticipated oil and natural gas production for future periods. Derivatives are carried at fair value on the unaudited condensed consolidated balance sheets as assets or liabilities, with the changes in the fair value included in the unaudited condensed consolidated statements of operations for the period in which the change occurs. The Company has elected not to designate any of its derivative contracts for hedge accounting. Accordingly, the Company records the net change in the mark-to-market valuation of these derivative contracts, as well as all payments and receipts on settled derivative contracts, in “Net (loss) gain on derivative contracts” It is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial or commodity hedging institutions deemed by management as competent and competitive market makers. As of March 31, 2024, the Company did not post collateral under any of its derivative contracts as they are secured under the Company’s Term Loan Agreement. The Company’s crude oil and natural gas derivative positions at any point in time may consist of fixed-price swaps, costless put/call collars, basis swaps and WTI NYMEX rolls further described as follows: ● Fixed-price swaps are designed so that the Company receives or makes payments based on a differential between fixed and variable prices for crude oil and natural gas. ● Costless collars consist of a sold call, which establishes a maximum price the Company will receive for the volumes under contract and a purchased put that establishes a minimum price and are generally utilized less frequently by the Company than fixed-price swaps. ● Basis swaps effectively lock in a price differential between regional prices (i.e. Midland) where the product is sold and the relevant pricing index under which the oil production is hedged (i.e. Cushing). ● WTI NYMEX roll agreements account for pricing adjustments to the trade month versus the delivery month for contract pricing. The following table summarizes the location and fair value amounts of all commodity derivative contracts in the unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands): Balance sheet location March 31, 2024 December 31, 2023 Balance sheet location March 31, 2024 December 31, 2023 Current assets $ 7,633 $ 8,992 Current liabilities $ (28,764) $ (17,191) Other noncurrent assets 3,898 4,877 Other noncurrent liabilities (21,907) (16,058) $ 11,531 $ 13,869 $ (50,671) $ (33,249) The following table summarizes the location and amounts of the Company’s realized and unrealized gains and losses on derivative contracts in the Company’s unaudited condensed consolidated statements of operations (in thousands): Location of net (loss) gain Three Months Ended on derivative contracts on March 31, Type Statement of Operations 2024 2023 Commodity derivative contracts: Unrealized (loss) gain Other income (expenses) $ (19,761) $ 21,004 Realized loss Other income (expenses) (4,426) (1,531) Total net (loss) gain $ (24,187) $ 19,473 At March 31, 2024, the Company had the following open crude oil and natural gas derivative contracts: Instrument 2024 2025 2026 2027 Crude oil: Fixed-price swap: Total volumes (Bbls) 1,335,277 1,435,236 1,029,685 786,989 Weighted average price $ 63.50 $ 61.77 $ 63.59 $ 61.87 Basis swap: Total volumes (Bbls) 1,337,833 1,451,319 1,036,713 791,105 Weighted average price $ 0.27 $ 0.25 $ 0.05 $ 0.44 WTI NYMEX roll: Total volumes (Bbls) 1,323,220 1,451,319 1,036,713 791,105 Weighted average price $ 0.25 $ 0.13 $ (0.01) $ (0.03) Natural gas: Fixed-price swap: Total volumes (MMBtu) 4,316,091 4,326,712 2,431,053 2,135,815 Weighted average price $ 3.52 $ 3.42 $ 3.96 $ 3.71 Two-way collar: Total volumes (MMBtu) 875,400 1,651,321 2,063,812 1,355,000 Weighted average price (call) $ 4.81 $ 5.12 $ 5.26 $ 5.57 Weighted average price (put) $ 3.48 $ 3.72 $ 3.70 $ 3.66 Basis swap: Total volumes (MMBtu) 5,184,315 5,950,283 4,455,681 3,472,222 Weighted average price $ (0.87) $ (0.68) $ (0.77) $ (0.73) The Company presents the fair value of its derivative contracts at the gross amounts in the unaudited condensed consolidated balance sheets. The following table shows the potential effects of master netting arrangements on the fair value of the Company’s derivative contracts at March 31, 2024 and December 31, 2023 (in thousands): Derivative Assets Derivative Liabilities Offsetting of Derivative Assets and Liabilities March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 Gross Amounts - Consolidated Balance Sheet $ 11,531 $ 13,869 $ (50,671) $ (33,249) Amounts Not Offset - Consolidated Balance Sheet (11,531) (13,218) 11,531 13,218 Net Amount $ — $ 651 $ (39,140) $ (20,031) The Company enters into an International Swap Dealers Association Master Agreement (“ISDA”) with each counterparty prior to a derivative contract with such counterparty. The ISDA is a standard contract that governs all derivative contracts entered into between the Company and the respective counterparty. The ISDA allows for offsetting of amounts payable or receivable between the Company and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | 7. ASSET RETIREMENT OBLIGATIONS The Company records an ARO on oil and natural gas properties when it can reasonably estimate the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon costs. The Company records the ARO liability on the unaudited condensed consolidated balance sheets and capitalizes the cost in “Oil and natural gas properties” “Depletion, depreciation and accretion” The Company recorded the following activity related to its ARO liability (in thousands): Liability for asset retirement obligations as of December 31, 2023 $ 17,458 Accretion expense 234 Liabilities incurred 174 Liability for asset retirement obligations as of March 31, 2024 17,866 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Commitments In May 2022, the Company entered into a joint venture agreement with Caracara Services, LLC (“Caracara”) to develop a strategic acid gas treatment and carbon sequestration facility and entered into a gas treating agreement with Wink Amine Treater, LLC (“WAT”). The Company has a minimum volume commitment of 20,000 Mcf per day under the gas treating agreement, with certain rollover rights and start-up flexibility, for an initial term of five years from the in-service date of the facility. Under the gas treating agreement, the Company will pay a treating rate that begins at $1.65/Mcf and varies based on volumes delivered to the facility. At an initial treated volume of 12,000 Mcf/d, the commitment would be approximately $7.3 million for the first 12 months of the agreement. For additional information on this joint venture, see Note 11, “ Additional Financial Statement Information”. The Company has entered into various long-term gathering, transportation and sales contracts with respect to its oil and natural gas production from the Delaware Basin in West Texas. As of March 31, 2024, the Company had in place multiple long-term crude oil and natural gas contracts in this area and the sales prices under these contracts are based on posted market rates. Under the terms of these contracts, the Company has committed a substantial portion of its production from this area for periods ranging from one Contingencies In addition to the matter described below, from time to time, the Company may be a plaintiff or defendant in a pending or threatened legal proceeding arising in the normal course of its business. While the outcome and impact of currently pending legal proceedings cannot be determined, the Company’s management and legal counsel believe that the resolution of these proceedings through settlement or adverse judgment will not have a material effect on the Company’s unaudited condensed consolidated operating results, financial position or cash flows. Surface owners of properties in Louisiana, where the Company formerly operated, often file lawsuits or assert claims against oil and natural gas companies claiming that operators and working interest owners are liable for environmental damages arising from operations conducted on the leased properties. These damages are frequently measured by the cost to restore the leased properties to their original condition. Currently and in the past, the Company has been party to such matters in Louisiana. With regard to pending matters, the overall exposure is not currently determinable. The Company intends to vigorously oppose these claims. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2024 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK | 9. REDEEMABLE CONVERTIBLE PREFERRED STOCK The table below summarizes the Company’s Redeemable Convertible Preferred Stock issuances: Preferred Stock Issuance Date Shares Cash Dividend Rate PIK Dividend Rate Conversion Price Net Proceeds Received (in thousands) Series A 28-Mar-23 25,000 14.50% 16.00% $ 9.03 $ 24,400 Series A-1 6-Sep-23 38,000 14.50% 16.00% $ 7.63 $ 37,100 Series A-2 15-Dec-23 35,000 14.50% 16.00% $ 6.21 $ 34,100 Series A-3 27-Mar-24 20,000 14.50% 16.00% $ 6.83 $ 19,500 On March 27, 2024, the Company sold, in a private placement, an aggregate of 20,000 shares of Series A-3 Redeemable Convertible Preferred Stock (the “Series A-3 Preferred Stock”) in a private placement to certain funds managed by Luminus Management, LLC, Oaktree Capital Management, LP, and LSP Investment Advisors, LLC, the Company’s largest three existing stockholders (the “Investors”). The Company received $19.5 million in proceeds, net of $0.5 million in original issue discount. Each of the Investors has an employee that has been elected to and serves on the Company’s board of directors, comprised of six members. The issuance of Series A-3 Preferred Stock was approved by the Company’s board of directors upon recommendation by a special committee of disinterested directors that was established to evaluate the proposed terms of the Series A-3 Preferred Stock. Holders of Series A-3 Preferred Stock will have no voting rights with respect to the shares of Series A-3 Preferred Stock. The Series A-3 Preferred Stock will receive annual dividends, paid either in cash at a fixed rate of 14.5% annually or accrued at a fixed PIK accrual rate of 16.0% annually at the option of the Company. Currently, the Company’s Amended Term Loan Agreement prohibits the payment of cash dividends. PIK dividends will be cumulative, compound and accrue quarterly in arrears and will be added to the Liquidation Preference. The Series A-3 Preferred Stock Dividend Payment Date will commence on March 31, 2024, and the Conversion Price equaled $6.83, which may be adjusted from time to time. For accounting purposes, upon issuance of the preferred stock (collectively, the “Redeemable Convertible Preferred Stock”), the Company recorded the net proceeds as mezzanine equity (temporary equity) on the unaudited condensed consolidated balance sheets because it is not mandatorily redeemable but does contain a redemption feature at the option of the preferred holders that is considered not solely within the Company’s control. Due to the redeemable nature of the preferred stock, as further discussed below, at March 31, 2023, September 30, 2023, December 31, 2023 and March 31, 2024 the Company recorded non-cash deemed dividends of approximately $1.5 million, $1.1 million, $1.0 million and $0.5 million to increase the carrying value of the preferred stock to its redemption amounts of approximately $25.0 million, $38.0 million, $35.0 million and $20.0 million, respectively. For the three months ended March 31, 2024, the Company paid-in-kind (“PIK”) its dividend on the preferred stock of $5.1 million. As of March 31, 2024, the carrying value of the preferred stock, inclusive of PIK dividends, is approximately $131.6 million. Voting Rights. Dividends. Conversion Features. Redemption Features (Change of Control) Redemption Features (Issuer). ● at any time prior to 120 days following the closing date, 100% of the Liquidation Preference at such time; ● at any time on or after 120 days following the closing date but prior to the 180 days following the closing date, 102% of the Liquidation Preference at such time; ● at any time on or after 180 days following the closing date but on or prior to the first anniversary of the closing date, 105% of the Liquidation Preference at such time; ● at any time after the first anniversary of the closing date but on or prior to the second anniversary of the closing date, 108% of the Liquidation Preference at such time; and ● at any time after the second anniversary of the closing date, 120% of the Liquidation Preference at such time. Redemption Features (Change of Control) ● at any time on or prior to 150 days following the issuance date, and at the election of the Company, a cash payment equal to the Liquidation Preference or equity consideration equal to the 107.5% of the Liquidation Preference, or ● at any time after the one hundred fiftieth ( 150 th) day following the issuance date, the Company shall offer each Holder a cash payment equal to the Redemption Price. Holders shall also have the ability to elect conversion into common stock at the Conversion Ratio. Until (i) a termination of or certain amendments to the Amended Term Loan Agreement or (ii) one year past the maturity date of the Amended Term Loan Agreement, an election of the cash payment option by holders in a change of control scenario is not permitted. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 10. EARNINGS PER SHARE The following represents the calculation of earnings (loss) per share (in thousands, except per share amounts): Three Months Ended March 31, 2024 2023 Basic: Net (loss) income $ (31,203) $ 22,811 Less: Preferred stock dividend (5,632) (1,492) Less: Undistributed earnings allocable to preferred stockholders — (120) Net (loss) income available to common stockholders $ (36,835) $ 21,199 Weighted average basic number of common shares outstanding basic 16,457 16,393 Basic net (loss) income per share of common stock $ (2.24) $ 1.29 Diluted: Net (loss) income available to common stockholders basic $ (36,835) $ 21,199 Reallocation of undistributed earnings — 1 Net (loss) income available to common stockholders diluted $ (36,835) $ 21,200 Weighted average basic number of common shares outstanding basic 16,457 16,393 Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Vesting of restricted stock units Anti-dilutive 142 Weighted average diluted number of common shares outstanding diluted 16,457 16,535 Diluted net (loss) income per share of common stock $ (2.24) $ 1.28 The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share “Redeemable Convertible Preferred Stock” For the three months ended March 31, 2024, common stock equivalents, including options and restricted stock units (“RSUs”), totaling 0.3 million were anti-dilutive and not included in the computation of diluted earnings per share of common stock. For the three months ended March 31, 2023, common stock equivalents, including options and RSUs, totaling 0.5 million were not included in the computation of diluted earnings per share of common stock because the effect would have been anti-dilutive. |
ADDITIONAL FINANCIAL STATEMENT
ADDITIONAL FINANCIAL STATEMENT INFORMATION | 3 Months Ended |
Mar. 31, 2024 | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | 11. ADDITIONAL FINANCIAL STATEMENT INFORMATION Certain balance sheet amounts are comprised of the following (in thousands): March 31, 2024 December 31, 2023 Accounts receivable, net: Oil, natural gas and natural gas liquids revenues $ 22,298 $ 19,802 Joint interest accounts 2,108 2,138 Other 1,581 1,081 $ 25,987 $ 23,021 Prepaids and other: Prepaids $ 532 $ 490 Funds in escrow 346 345 Other 41 72 $ 919 $ 907 Other assets (Non-current): Investment in unconsolidated affiliate $ 1,007 $ 1,283 Contract asset 18,454 15,062 Funds in escrow 558 552 Other 761 759 $ 20,780 $ 17,656 Accounts payable and accrued liabilities: Trade payables $ 21,689 $ 24,915 Accrued oil and natural gas capital costs 11,730 15,337 Revenues and royalties payable 21,491 18,986 Accrued employee compensation 509 520 Accrued lease operating expenses 7,360 6,418 Other 338 349 $ 63,117 $ 66,525 Investment in Unconsolidated Affiliate. Commitments and Contingencies Contract Asset. |
MERGER AGREEMENT
MERGER AGREEMENT | 3 Months Ended |
Mar. 31, 2024 | |
MERGER AGREEMENT | |
MERGER AGREEMENT | 12. MERGER AGREEMENT Agreement and Plan of Merger On December 14, 2023, the Company entered into an Agreement and Plan of Merger, as amended (the “Merger Agreement”) with Fury Resources, Inc., a Delaware corporation (“Parent”) and San Jacinto Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a direct, wholly owned subsidiary of Parent. The Merger Agreement provides, that upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Parent. Subject to the terms and conditions set forth in the Merger Agreement, each of the Company’s issued and outstanding shares of Common Stock, par value $0.0001 per share (“Common Stock”) shall be converted into the right to receive $9.80 in cash, without interest, which represents a total transaction value of approximately $450.0 million, and such shares shall otherwise cease to be outstanding, shall automatically be canceled and retired and cease to exist; and each outstanding share of redeemable convertible preferred stock will be contributed to Parent in exchange for new preferred shares of Parent , or sold to Parent for cash, in each case at a valuation based on the conversion or redemption value of such preferred stock. On January 24, 2024, Parent and the Company agreed to cause an amount equal to $10.0 million to be distributed from the escrow account to the Company and such is recorded as a deposit liability in “ Other” On April 24, 2024, pursuant to an amendment to the Merger Agreement dated April 16, 2024, Parent paid to the Company $0.1 million to be used by the Company to pay the Company’s costs and expenses associated with printing and mailing the definitive Proxy Statement for the Merger to the Company’s stockholders. The obligations of the Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary closing conditions, including, among other things: (a) the absence of any law or order of any Governmental Authority having jurisdiction over a party to the Merger Agreement prohibiting or making illegal the consummation of the Merger, and (b) the adoption of the Merger Agreement by a majority vote of the issued and outstanding shares of Company Common Stock. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On May 13, 2024, the Company sold, in a private placement, an aggregate of 20,000 shares of Series A-4 Redeemable Convertible Preferred Stock (the “Series A-4 Preferred Stock”) to the Investors. The Company received $19.5 million in proceeds, net of $0.5 million in original issue discount. The issuance of Series A-4 Preferred Stock was approved by the Company’s board of directors upon recommendation by a special committee of disinterested directors that was established to evaluate the proposed terms of the Series A-4 Preferred Stock. Holders of Series A-4 Preferred Stock will have no voting rights with respect to the shares of Series A-4 Preferred Stock. The Series A-4 Preferred Stock will receive annual dividends, paid either in cash at a fixed rate of 14.5% annually or accrued at a fixed PIK accrual rate of 16.0% annually at the option of the Company. Currently, the Company’s Amended Term Loan Agreement prohibits the payment of cash dividends. PIK dividends will be cumulative, compound and accrue quarterly in arrears and will be added to the Liquidation Preference. The Series A-4 Preferred Stock Dividend Payment Date will commence on June 30, 2024, and the Conversion Price equaled $6.42, which may be adjusted from time to time. On May 14, 2024, proceeds from the sale of the Series A-4 Preferred Stock were used to make a $17.3 million prepayment of outstanding borrowings and a payment of $0.3 million for the associated interest under the Amended Term Loan Agreement to cure noncompliance of the Total Net Leverage Ratio as of March 31, 2024. |
FINANCIAL STATEMENT PRESENTAT_2
FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation Battalion Oil Corporation (“Battalion” or the “Company”) is an independent energy company focused on the acquisition, production, exploration and development of onshore liquids-rich oil and natural gas assets in the United States. The consolidated financial statements include the accounts of all majority-owned, controlled subsidiaries. The Company operates in one segment which focuses on oil and natural gas acquisition, production, exploration and development. Allocation of capital is made across the Company’s entire portfolio without regard to operating area. All intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements reflect, in the opinion of the Company’s management, all adjustments, consisting of normal and recurring adjustments, necessary to present fairly the financial position as of, and the results of operations for, the periods presented. Interim period results are not necessarily indicative of results of operations or cash flows for the full year and accordingly, certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), has been condensed or omitted. During interim periods, Battalion follows the accounting policies disclosed in its Annual Report on Form 10-K, as filed with the United States Securities and Exchange Commission (the “SEC”) on April 1, 2024. Please refer to the notes in the Annual Report on Form 10-K for the year ended December 31, 2023 when reviewing interim financial results. The Company has evaluated events or transactions through the date of issuance of these unaudited condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Estimates and assumptions that, in the opinion of management of the Company, are significant include oil and natural gas revenue accruals, capital and operating expense accruals, oil and natural gas reserves, depletion relating to oil and natural gas properties, asset retirement obligations (“AROs”), and fair value estimates. The Company bases its estimates and judgments on historical experience and on various other assumptions and information believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be predicted with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from the estimates and assumptions used in the preparation of the Company’s unaudited condensed consolidated financial statements. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. These investments are carried at cost, which approximates fair value. Amounts in the unaudited condensed consolidated balance sheets included in “Cash and cash equivalents” “Restricted cash” March 31, 2024 December 31, 2023 Cash and cash equivalents $ 48,941 $ 57,529 Restricted cash 91 90 Total cash, cash equivalents and restricted cash $ 49,032 $ 57,619 Restricted cash consists of funds to collateralize lines of credit. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company’s accounts receivable are primarily receivables from joint interest owners and oil and natural gas purchasers. Accounts receivable are recorded at the amount due, less an allowance for doubtful accounts, when applicable. Payment of the Company’s accounts receivable is typically received within 30-60 days. The Company’s historical credit losses have been de minimis and are expected to remain so in the future assuming no substantial changes to the business or creditworthiness of the Company’s counterparties. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s primary concentrations of credit risk are the risks of uncollectible accounts receivable and of nonperformance by counterparties under the Company’s derivative contracts. Each reporting period, the Company assesses the recoverability of material receivables using historical data, current market conditions and reasonable and supportable forecasts of future economic conditions to determine expected collectability of its material receivables. The Company’s exposure to credit risk under its derivative contracts is varied among major financial institutions with investment grade credit ratings, where it has master netting agreements which provide for offsetting of amounts payable or receivable between the Company and the counterparty. To manage counterparty risk associated with derivative contracts, the Company selects and monitors counterparties based on an assessment of their financial strength and/or credit ratings. At March 31, 2024, the Company’s derivative counterparties include two major financial institutions, both of which are secured lenders under the Amended Term Loan Agreement (as defined in Note 4, “ Debt |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures significant segment expenses and other segment items on an annual and interim basis, and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires an entity to disclose the title and position of the chief operating decision maker. ASU 2023-07 does not change how an entity identifies its operating segments, aggregates them or applies the quantitative thresholds to determine its reportable segments. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Entities should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2023-07 and expects limited impact on its disclosures with no impact to its consolidated financial statements upon adoption. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures |
FINANCIAL STATEMENT PRESENTAT_3
FINANCIAL STATEMENT PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | |
Schedule Of Cash, Cash Equivalents And Restricted Cash | March 31, 2024 December 31, 2023 Cash and cash equivalents $ 48,941 $ 57,529 Restricted cash 91 90 Total cash, cash equivalents and restricted cash $ 49,032 $ 57,619 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
Schedule of debt | The Company’s debt consisted of the following for the periods presented (in thousands): March 31, 2024 December 31, 2023 Term loan credit facility $ 190,000 $ 200,000 Other 188 215 Total debt (Face Value) 190,188 200,215 Less: Current portion of long-term debt (1) (55,106) (50,106) Other (2) (8,261) (9,833) Long-Term Debt, net $ 126,821 $ 140,276 (1) Amounts primarily reflect amortization payments due of $55.0 million and $50.0 million under the Amended Term Loan Agreement due within one year as of March 31, 2024 and December 31, 2023, respectively. (2) Amounts primarily reflect unamortized debt issuance costs of approximately $5.7 million and $6.9 million at March 31, 2024 and December 31, 2023, respectively, but also includes an unamortized debt discount associated with an embedded derivative separately presented and further described in Note 5, “Fair Value Measurements”. For the three months ended March 31, 2024 and 2023, the Company recorded approximately $1.7 million and $1.8 million, respectively, in interest expense reflecting the amortization/accretion of these amounts. |
Schedule of prepayment premiums | The Company may elect, at its option, to prepay any borrowing outstanding under the Amended Term Loan Agreement subject to the following prepayment premiums: Period (after applicable borrowing date (1) ) Premium Months 0-12 Make-whole amount equal to 12 months of interest plus 2.00% Months 13-24 2.00% Months 25-36 1.00% Months 37-48 0.00% (1) Applicable borrowing dates are November 2021 for the original $200.0 million borrowed and April and November 2022 for the $20.0 million and $15.0 million in delayed draw borrowings, respectively. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value of the Company's financial assets and liabilities | liabilities associated with commodity-based derivative contracts that were accounted for at fair value as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 Level 1 Level 2 Level 3 Total Assets Assets from commodity-based derivative contracts $ — $ 11,531 $ — $ 11,531 Liabilities Liabilities from commodity-based derivative contracts $ — $ 50,671 $ — $ 50,671 December 31, 2023 Level 1 Level 2 Level 3 Total Assets Assets from commodity-based derivative contracts $ — $ 13,869 $ — $ 13,869 Liabilities Liabilities from commodity-based derivative contracts $ — $ 33,249 $ — $ 33,249 |
Schedule of changes in fair value of the change of control call option | As discussed in Note 4, “Debt,” “Other noncurrent liabilities” “Interest expense and other” Change of Control Call Option Balance at December 31, 2023 $ 2,084 Change in fair value (928) Balance at March 31, 2024 $ 1,156 |
DERIVATIVE AND HEDGING ACTIVI_2
DERIVATIVE AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DERIVATIVE AND HEDGING ACTIVITIES | |
Summary of location and fair value of derivative contracts | The following table summarizes the location and fair value amounts of all commodity derivative contracts in the unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands): Balance sheet location March 31, 2024 December 31, 2023 Balance sheet location March 31, 2024 December 31, 2023 Current assets $ 7,633 $ 8,992 Current liabilities $ (28,764) $ (17,191) Other noncurrent assets 3,898 4,877 Other noncurrent liabilities (21,907) (16,058) $ 11,531 $ 13,869 $ (50,671) $ (33,249) |
Summary of the location and amounts of the Company's realized and unrealized gains and losses on derivative contracts | Balance sheet location March 31, 2024 December 31, 2023 Balance sheet location March 31, 2024 December 31, 2023 Current assets $ 7,633 $ 8,992 Current liabilities $ (28,764) $ (17,191) Other noncurrent assets 3,898 4,877 Other noncurrent liabilities (21,907) (16,058) $ 11,531 $ 13,869 $ (50,671) $ (33,249) |
Schedule of open derivative contracts | Location of net (loss) gain Three Months Ended on derivative contracts on March 31, Type Statement of Operations 2024 2023 Commodity derivative contracts: Unrealized (loss) gain Other income (expenses) $ (19,761) $ 21,004 Realized loss Other income (expenses) (4,426) (1,531) Total net (loss) gain $ (24,187) $ 19,473 At March 31, 2024, the Company had the following open crude oil and natural gas derivative contracts: Instrument 2024 2025 2026 2027 Crude oil: Fixed-price swap: Total volumes (Bbls) 1,335,277 1,435,236 1,029,685 786,989 Weighted average price $ 63.50 $ 61.77 $ 63.59 $ 61.87 Basis swap: Total volumes (Bbls) 1,337,833 1,451,319 1,036,713 791,105 Weighted average price $ 0.27 $ 0.25 $ 0.05 $ 0.44 WTI NYMEX roll: Total volumes (Bbls) 1,323,220 1,451,319 1,036,713 791,105 Weighted average price $ 0.25 $ 0.13 $ (0.01) $ (0.03) Natural gas: Fixed-price swap: Total volumes (MMBtu) 4,316,091 4,326,712 2,431,053 2,135,815 Weighted average price $ 3.52 $ 3.42 $ 3.96 $ 3.71 Two-way collar: Total volumes (MMBtu) 875,400 1,651,321 2,063,812 1,355,000 Weighted average price (call) $ 4.81 $ 5.12 $ 5.26 $ 5.57 Weighted average price (put) $ 3.48 $ 3.72 $ 3.70 $ 3.66 Basis swap: Total volumes (MMBtu) 5,184,315 5,950,283 4,455,681 3,472,222 Weighted average price $ (0.87) $ (0.68) $ (0.77) $ (0.73) |
Schedule of potential effects of master netting arrangements on the fair value of derivative contracts | Derivative Assets Derivative Liabilities Offsetting of Derivative Assets and Liabilities March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 Gross Amounts - Consolidated Balance Sheet $ 11,531 $ 13,869 $ (50,671) $ (33,249) Amounts Not Offset - Consolidated Balance Sheet (11,531) (13,218) 11,531 13,218 Net Amount $ — $ 651 $ (39,140) $ (20,031) |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ASSET RETIREMENT OBLIGATIONS | |
Schedule of activity related to ARO liability | The Company recorded the following activity related to its ARO liability (in thousands): Liability for asset retirement obligations as of December 31, 2023 $ 17,458 Accretion expense 234 Liabilities incurred 174 Liability for asset retirement obligations as of March 31, 2024 17,866 |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED STOCK (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
REDEEMABLE CONVERTIBLE PREFERRED STOCK | |
Summary of Preferred Stock issuances | Preferred Stock Issuance Date Shares Cash Dividend Rate PIK Dividend Rate Conversion Price Net Proceeds Received (in thousands) Series A 28-Mar-23 25,000 14.50% 16.00% $ 9.03 $ 24,400 Series A-1 6-Sep-23 38,000 14.50% 16.00% $ 7.63 $ 37,100 Series A-2 15-Dec-23 35,000 14.50% 16.00% $ 6.21 $ 34,100 Series A-3 27-Mar-24 20,000 14.50% 16.00% $ 6.83 $ 19,500 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
Schedule of calculation of earnings (loss) per share | The following represents the calculation of earnings (loss) per share (in thousands, except per share amounts): Three Months Ended March 31, 2024 2023 Basic: Net (loss) income $ (31,203) $ 22,811 Less: Preferred stock dividend (5,632) (1,492) Less: Undistributed earnings allocable to preferred stockholders — (120) Net (loss) income available to common stockholders $ (36,835) $ 21,199 Weighted average basic number of common shares outstanding basic 16,457 16,393 Basic net (loss) income per share of common stock $ (2.24) $ 1.29 Diluted: Net (loss) income available to common stockholders basic $ (36,835) $ 21,199 Reallocation of undistributed earnings — 1 Net (loss) income available to common stockholders diluted $ (36,835) $ 21,200 Weighted average basic number of common shares outstanding basic 16,457 16,393 Common stock equivalent shares representing shares issuable upon: Exercise of stock options Anti-dilutive Anti-dilutive Vesting of restricted stock units Anti-dilutive 142 Weighted average diluted number of common shares outstanding diluted 16,457 16,535 Diluted net (loss) income per share of common stock $ (2.24) $ 1.28 |
ADDITIONAL FINANCIAL STATEMEN_2
ADDITIONAL FINANCIAL STATEMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ADDITIONAL FINANCIAL STATEMENT INFORMATION | |
Schedule of additional financial statement information, balance sheet | Certain balance sheet amounts are comprised of the following (in thousands): March 31, 2024 December 31, 2023 Accounts receivable, net: Oil, natural gas and natural gas liquids revenues $ 22,298 $ 19,802 Joint interest accounts 2,108 2,138 Other 1,581 1,081 $ 25,987 $ 23,021 Prepaids and other: Prepaids $ 532 $ 490 Funds in escrow 346 345 Other 41 72 $ 919 $ 907 Other assets (Non-current): Investment in unconsolidated affiliate $ 1,007 $ 1,283 Contract asset 18,454 15,062 Funds in escrow 558 552 Other 761 759 $ 20,780 $ 17,656 Accounts payable and accrued liabilities: Trade payables $ 21,689 $ 24,915 Accrued oil and natural gas capital costs 11,730 15,337 Revenues and royalties payable 21,491 18,986 Accrued employee compensation 509 520 Accrued lease operating expenses 7,360 6,418 Other 338 349 $ 63,117 $ 66,525 |
FINANCIAL STATEMENT PRESENTAT_4
FINANCIAL STATEMENT PRESENTATION (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | |
Number of operating segments | 1 |
FINANCIAL STATEMENT PRESENTAT_5
FINANCIAL STATEMENT PRESENTATION - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
SUMMARY OF SIGNIFICANT EVENTS AND ACCOUNTING POLICIES | ||||
Cash and cash equivalents | $ 48,941 | $ 57,529 | ||
Restricted cash | 91 | 90 | ||
Total cash, cash equivalents and restricted cash | $ 49,032 | $ 57,619 | $ 23,335 | $ 32,816 |
OPERATING REVENUES - Revenue Re
OPERATING REVENUES - Revenue Recognition (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Accounts receivable | ||
Disaggregation of operating revenue | ||
Due from contracts with customers | $ 22.3 | $ 19.8 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES - Ceiling Test Value of Company's Reserves (Details) | 3 Months Ended | |
Mar. 31, 2024 $ / MMBTU $ / bbl | Mar. 31, 2023 $ / bbl $ / MMBTU | |
Ceiling Limitation Disclosures | ||
First-day-of-month 12-month average price for natural gas (in $/MMBtu) | $ / MMBTU | 2.45 | 5.96 |
First-day-of-month 12-month average price for crude oil used in ceiling test impairment (in dollars per barrel) | $ / bbl | 77.64 | 91.38 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
May 14, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Current and long-term debt | ||||
Debt | $ 190,188 | $ 200,215 | ||
Current portion of long-term debt(1) | (55,106) | (50,106) | ||
Other(2) | (8,261) | (9,833) | ||
Long-term debt, net | 126,821 | 140,276 | ||
Unamortized debt issuance costs | 5,700 | 6,900 | ||
Amortization/accretion of financing related costs | 1,701 | $ 1,798 | ||
Repayment of borrowings | 10,026 | $ 5,017 | ||
Term loan credit facility | ||||
Current and long-term debt | ||||
Debt | 190,000 | 200,000 | ||
Current portion of long-term debt(1) | (55,000) | (50,000) | ||
Term loan credit facility | Subsequent event | ||||
Current and long-term debt | ||||
Debt | $ 172,700 | |||
Repayment of borrowings | $ 17,300 | |||
Paycheck Protection Program Loan [Member] | ||||
Current and long-term debt | ||||
Debt | $ 188 | $ 215 |
DEBT - Term Loan Credit Facilit
DEBT - Term Loan Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Nov. 14, 2022 | Mar. 31, 2024 | Mar. 28, 2024 | Nov. 30, 2022 | Apr. 30, 2022 | Nov. 30, 2021 | |
Debt Instrument [Line Items] | ||||||
Lender fees paid | $ 129 | |||||
Term loan credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 20,000 | |||||
Amount available for issuance of letters of credit | $ 4,700 | |||||
Weighted average interest rate | 12.99% | |||||
Lender fees paid | $ 2,400 | |||||
Maturity date | Nov. 24, 2025 | |||||
Threshold new capital raising requirements for prepayment premiums | $ 38,000 | |||||
Amount outstanding | $ 190,000 | $ 200,000 | ||||
Letters of credit outstanding | $ 300 | |||||
Covenant compliance | As of March 31, 2024, the Company was not in compliance with the Total Net Leverage Ratio covenant under the Amended Term Loan Agreement | |||||
Aggregate scheduled amortization payments | $ 75,000 | |||||
Term loan credit facility | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Asset coverage ratio | 1.80% | |||||
Current ratio | 1% | |||||
Term loan credit facility | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Net Leverage Ratio | 2.50% | |||||
Amount outstanding | $ 20,000 | |||||
Term loan credit facility | Debt redemption, period one | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium percentage | 2% | |||||
Scheduled remaining amortization payment | $ 12,500 | |||||
Term loan credit facility | Debt redemption, period one | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 0 months | |||||
Term loan credit facility | Debt redemption, period one | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 12 months | |||||
Term loan credit facility | Debt redemption, period two | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium percentage | 2% | |||||
Scheduled remaining amortization payment | $ 15,000 | |||||
Term loan credit facility | Debt redemption, period two | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 13 months | |||||
Term loan credit facility | Debt redemption, period two | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 24 months | |||||
Term loan credit facility | Debt redemption, period three | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium percentage | 1% | |||||
Scheduled remaining amortization payment | $ 10,000 | |||||
Term loan credit facility | Debt redemption, period three | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 25 months | |||||
Term loan credit facility | Debt redemption, period three | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 36 months | |||||
Term loan credit facility | Debt redemption, period four | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium percentage | 0% | |||||
Scheduled remaining amortization payment | $ 115,000 | |||||
Term loan credit facility | Debt redemption, period four | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 37 months | |||||
Term loan credit facility | Debt redemption, period four | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment term | 48 months | |||||
Term loan credit facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Increase in basis spread on variable rate (as a percent) | 7.50% | |||||
Applicable margin (as a percent) | 0.15% | |||||
Delayed Draw Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Incremental borrowing that we can make if we meet certain criteria | $ 15,000 | $ 20,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Assets | ||
Asset transfers between levels | $ 0 | $ 0 |
Liabilities | ||
Liability transfers between levels | 0 | 0 |
Recurring | Total | ||
Assets | ||
Receivables from derivative contracts | 11,531 | 13,869 |
Liabilities | ||
Liabilities from derivative contracts | 50,671 | 33,249 |
Recurring | Level 2 | ||
Assets | ||
Receivables from derivative contracts | 11,531 | 13,869 |
Liabilities | ||
Liabilities from derivative contracts | $ 50,671 | $ 33,249 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change of Control Call Option (Details) - Change of Control Call Option $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Balance at the beginning of the period | $ 2,084 |
Change in fair value | (928) |
Balance at the ending of the period | $ 1,156 |
DERIVATIVE AND HEDGING ACTIVI_3
DERIVATIVE AND HEDGING ACTIVITIES - (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivative and hedging activities | ||
Asset derivative contracts | $ 11,531 | $ 13,869 |
Liability derivative contracts | (50,671) | (33,249) |
Derivatives not designated as hedging contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 11,531 | 13,869 |
Liability derivative contracts | (50,671) | (33,249) |
Derivatives not designated as hedging contracts | Commodity contracts | Current assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 7,633 | 8,992 |
Derivatives not designated as hedging contracts | Commodity contracts | Other noncurrent assets - receivables from derivative contracts | ||
Derivative and hedging activities | ||
Asset derivative contracts | 3,898 | 4,877 |
Derivatives not designated as hedging contracts | Commodity contracts | Current liabilities - liabilities from derivative contracts | ||
Derivative and hedging activities | ||
Liability derivative contracts | (28,764) | (17,191) |
Derivatives not designated as hedging contracts | Commodity contracts | Other noncurrent liabilities - liabilities from derivative contracts | ||
Derivative and hedging activities | ||
Liability derivative contracts | $ (21,907) | $ (16,058) |
DERIVATIVE AND HEDGING ACTIVI_4
DERIVATIVE AND HEDGING ACTIVITIES - Realized Unrealized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative and hedging activities | ||
Total net (loss) gain on derivative contracts | $ (24,187) | $ 19,473 |
Derivatives not designated as hedging contracts | Commodity contracts | ||
Derivative and hedging activities | ||
Total net (loss) gain on derivative contracts | (24,187) | 19,473 |
Derivatives not designated as hedging contracts | Commodity contracts | Other Income Expense | ||
Derivative and hedging activities | ||
Unrealized (loss) gain on commodity contracts | (19,761) | 21,004 |
Realized loss on commodity contracts | $ (4,426) | $ (1,531) |
DERIVATIVE AND HEDGING ACTIVI_5
DERIVATIVE AND HEDGING ACTIVITIES - Open Contracts (Details) | 3 Months Ended |
Mar. 31, 2024 MMBTU $ / MMBTU $ / bbl bbl | |
January 2023 - December 2023 | Fixed Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 4,316,091 |
January 2023 - December 2023 | Fixed Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.52 |
January 2023 - December 2023 | Fixed Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,335,277 |
January 2023 - December 2023 | Fixed Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 63.50 |
January 2023 - December 2023 | Basis Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 5,184,315 |
January 2023 - December 2023 | Basis Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | (0.87) |
January 2023 - December 2023 | Basis Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,337,833 |
January 2023 - December 2023 | Basis Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.27 |
January 2023 - December 2023 | WTI NYMEX Roll | Crude oil | Maximum | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,323,220 |
January 2023 - December 2023 | WTI NYMEX Roll | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.25 |
January 2023 - December 2023 | Collars | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 875,400 |
January 2023 - December 2023 | Call option | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 4.81 |
January 2023 - December 2023 | Put options | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.48 |
January 2024 - December 2024 | Fixed Swap | Natural Gas | Minimum | |
Derivative and hedging activities | |
Floor (in dollars per Mmbtu's/Bbl's) | 4,326,712 |
January 2024 - December 2024 | Fixed Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.42 |
January 2024 - December 2024 | Fixed Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,435,236 |
January 2024 - December 2024 | Fixed Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 61.77 |
January 2024 - December 2024 | Basis Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 5,950,283 |
January 2024 - December 2024 | Basis Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | (0.68) |
January 2024 - December 2024 | Basis Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,451,319 |
January 2024 - December 2024 | Basis Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.25 |
January 2024 - December 2024 | WTI NYMEX Roll | Crude oil | Maximum | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,451,319 |
January 2024 - December 2024 | WTI NYMEX Roll | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.13 |
January 2024 - December 2024 | Collars | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 1,651,321 |
January 2024 - December 2024 | Call option | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 5.12 |
January 2024 - December 2024 | Put options | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.72 |
January 2025 - December 2025 | Fixed Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 2,431,053 |
January 2025 - December 2025 | Fixed Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.96 |
January 2025 - December 2025 | Fixed Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,029,685 |
January 2025 - December 2025 | Fixed Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 63.59 |
January 2025 - December 2025 | Basis Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 4,455,681 |
January 2025 - December 2025 | Basis Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | (0.77) |
January 2025 - December 2025 | Basis Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,036,713 |
January 2025 - December 2025 | Basis Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.05 |
January 2025 - December 2025 | WTI NYMEX Roll | Crude oil | Maximum | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 1,036,713 |
January 2025 - December 2025 | WTI NYMEX Roll | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | (0.01) |
January 2025 - December 2025 | Collars | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 2,063,812 |
January 2025 - December 2025 | Call option | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 5.26 |
January 2025 - December 2025 | Put options | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.70 |
January 2026 - December 2026 | Fixed Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 2,135,815 |
January 2026 - December 2026 | Fixed Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.71 |
January 2026 - December 2026 | Fixed Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 786,989 |
January 2026 - December 2026 | Fixed Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 61.87 |
January 2026 - December 2026 | Basis Swap | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 3,472,222 |
January 2026 - December 2026 | Basis Swap | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | (0.73) |
January 2026 - December 2026 | Basis Swap | Crude oil | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 791,105 |
January 2026 - December 2026 | Basis Swap | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | 0.44 |
January 2026 - December 2026 | WTI NYMEX Roll | Crude oil | Maximum | |
Derivative and hedging activities | |
Volume in Bbl's | bbl | 791,105 |
January 2026 - December 2026 | WTI NYMEX Roll | Crude oil | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | $ / bbl | (0.03) |
January 2026 - December 2026 | Collars | Natural Gas | |
Derivative and hedging activities | |
Volume in Mmbtu's | MMBTU | 1,355,000 |
January 2026 - December 2026 | Call option | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 5.57 |
January 2026 - December 2026 | Put options | Natural Gas | Weighted Average | |
Derivative and hedging activities | |
Weighted Average Price (in dollars per Mmbtu's/Bbl's) | 3.66 |
DERIVATIVE AND HEDGING ACTIVI_6
DERIVATIVE AND HEDGING ACTIVITIES - Netting Arrangements (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Derivative Assets | ||
Gross Amounts Presented in the Consolidated Balance Sheet | $ 11,531 | $ 13,869 |
Amounts Not Offset in the Consolidated Balance Sheet | (11,531) | (13,218) |
Net Amount | 0 | 651 |
Derivative Liabilities | ||
Gross Amounts - Consolidated Balance Sheet | (50,671) | (33,249) |
Amounts Not Offset - Consolidated Balance Sheet | 11,531 | 13,218 |
Net Amount | $ (39,140) | $ (20,031) |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Activity related to ARO liability | |
Liability for asset retirement obligations at beginning of the period | $ 17,458 |
Accretion expense | 234 |
Liabilities incurred | 174 |
Liability for asset retirement obligations at end of period | $ 17,866 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
May 31, 2022 USD ($) MMcf / d $ / Mcf | Mar. 31, 2024 | |
Obligations under drilling rig commitments | ||
Commitment next year | $ | $ 7.3 | |
Minimum volume commitment | 20,000 | |
Volume commitment term | 5 years | |
Minimum | ||
Obligations under drilling rig commitments | ||
Treating rate paid | $ / Mcf | 1.65 | |
Gathering, transportation and sales | West Texas | Minimum | ||
Obligations under drilling rig commitments | ||
Period of commitment for production from the date of first production | 1 year | |
Gathering, transportation and sales | West Texas | Maximum | ||
Obligations under drilling rig commitments | ||
Period of commitment for production from the date of first production | 20 years | |
Plan | ||
Obligations under drilling rig commitments | ||
Minimum volume commitment | 12,000 |
REDEEMABLE CONVERTIBLE PREFER_3
REDEEMABLE CONVERTIBLE PREFERRED STOCK (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||||||
Mar. 27, 2024 USD ($) shareholder Vote $ / shares shares | Dec. 15, 2023 USD ($) $ / shares shares | Sep. 06, 2023 USD ($) $ / shares shares | Mar. 28, 2023 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) Vote $ / shares | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | May 27, 2024 person | |
Class of Stock [Line Items] | ||||||||||
Deemed dividends for Series A preferred stock | $ 5,632 | $ 5,695 | $ 3,863 | $ 997 | $ 1,492 | |||||
Series A redeemable convertible preferred stock | $ 131,624 | 106,535 | ||||||||
Redeemable convertible preferred stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred Stock Voting Rights | Vote | 0 | |||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | |||||||||
Preferred Stock, Liquidation Preference, Value | $ 118,000 | |||||||||
Percentage of liquidation preference paid to redeem shares | 18% | 107.50% | ||||||||
Threshold of time following change of control | 20 days | |||||||||
Percentage of common stock value over Conversion Price threshold | 130% | |||||||||
Period past maturity date of term loan agreement if election of cash payment option is not permitted | 1 year | |||||||||
Series A redeemable convertible preferred stock redemption amount | $ 131,600 | |||||||||
Redeemable convertible preferred stock | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Threshold of time following change of control | 150 days | |||||||||
Redeemable convertible preferred stock | Cash Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 14.50% | |||||||||
Redeemable convertible preferred stock | PIK Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 16% | |||||||||
Deemed dividends for Series A preferred stock | $ 5,100 | |||||||||
Redeemable convertible preferred stock | Redemption Period One | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of liquidation preference paid to redeem shares | 100% | |||||||||
Redeemable convertible preferred stock | Redemption Period One | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 120 days | |||||||||
Redeemable convertible preferred stock | Redemption Period Two | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of liquidation preference paid to redeem shares | 102% | |||||||||
Redeemable convertible preferred stock | Redemption Period Two | Minimum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 120 days | |||||||||
Redeemable convertible preferred stock | Redemption Period Two | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 180 days | |||||||||
Redeemable convertible preferred stock | Redemption Period Three | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of liquidation preference paid to redeem shares | 105% | |||||||||
Redeemable convertible preferred stock | Redemption Period Three | Minimum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 180 days | |||||||||
Redeemable convertible preferred stock | Redemption Period Three | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 1 year | |||||||||
Redeemable convertible preferred stock | Redemption Period Four | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of liquidation preference paid to redeem shares | 108% | |||||||||
Redeemable convertible preferred stock | Redemption Period Four | Minimum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 1 year | |||||||||
Redeemable convertible preferred stock | Redemption Period Four | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 2 years | |||||||||
Redeemable convertible preferred stock | Redemption Period Five | ||||||||||
Class of Stock [Line Items] | ||||||||||
Percentage of liquidation preference paid to redeem shares | 120% | |||||||||
Redeemable convertible preferred stock | Redemption Period Five | Minimum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption feature, time period after closing date | 2 years | |||||||||
Redeemable Convertible Preferred Stock Series A | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net Proceeds Received | $ 24,400 | |||||||||
Shares issued | shares | 25,000 | |||||||||
Deemed dividends for Series A preferred stock | 1,500 | |||||||||
Conversion Price | $ / shares | $ 9.03 | |||||||||
Series A redeemable convertible preferred stock redemption amount | $ 25,000 | |||||||||
Redeemable Convertible Preferred Stock Series A | Cash Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 14.50% | |||||||||
Redeemable Convertible Preferred Stock Series A | PIK Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 16% | |||||||||
Redeemable Convertible Preferred Stock Series A-1 | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net Proceeds Received | $ 37,100 | |||||||||
Shares issued | shares | 38,000 | |||||||||
Deemed dividends for Series A preferred stock | 1,100 | |||||||||
Conversion Price | $ / shares | $ 7.63 | |||||||||
Series A redeemable convertible preferred stock redemption amount | $ 38,000 | |||||||||
Redeemable Convertible Preferred Stock Series A-1 | Cash Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 14.50% | |||||||||
Redeemable Convertible Preferred Stock Series A-1 | PIK Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 16% | |||||||||
Redeemable Convertible Preferred Stock Series A-2 | ||||||||||
Class of Stock [Line Items] | ||||||||||
Net Proceeds Received | $ 34,100 | |||||||||
Shares issued | shares | 35,000 | |||||||||
Deemed dividends for Series A preferred stock | 1,000 | |||||||||
Conversion Price | $ / shares | $ 6.21 | |||||||||
Series A redeemable convertible preferred stock redemption amount | $ 35,000 | |||||||||
Redeemable Convertible Preferred Stock Series A-2 | Cash Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 14.50% | |||||||||
Redeemable Convertible Preferred Stock Series A-2 | PIK Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 16% | |||||||||
Redeemable Convertible Preferred Stock Series A-3 | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred Stock Voting Rights | Vote | 0 | |||||||||
Net Proceeds Received | $ 19,500 | |||||||||
Shares issued | shares | 20,000 | |||||||||
Board of directors, members | person | 6 | |||||||||
Deemed dividends for Series A preferred stock | $ 500 | |||||||||
Number of Shareholders in Private Placement | shareholder | 3 | |||||||||
Issue discount | $ 500 | |||||||||
Conversion Price | $ / shares | $ 6.83 | |||||||||
Series A redeemable convertible preferred stock redemption amount | $ 20,000 | |||||||||
Redeemable Convertible Preferred Stock Series A-3 | Cash Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 14.50% | |||||||||
Redeemable Convertible Preferred Stock Series A-3 | PIK Dividend Rate | ||||||||||
Class of Stock [Line Items] | ||||||||||
Dividend rate (as a percent) | 16% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Basic: | |||||
Net (loss) income | $ (31,203) | $ 32,688 | $ (53,799) | $ (4,748) | $ 22,811 |
Less: Preferred stock dividend | (5,632) | (1,492) | |||
Less: Undistributed earnings allocable to preferred shareholders | (120) | ||||
Net (loss) income available to common stockholders | $ (36,835) | $ 21,199 | |||
Weighted average basic number of common shares outstanding basic | 16,457 | 16,393 | |||
Basic net (loss) income per share of common share (in dollars per share) | $ (2.24) | $ 1.29 | |||
Diluted: | |||||
Net (loss) income available to common stockholders - basic | $ (36,835) | $ 21,199 | |||
Reallocation of undistributed earnings | 1 | ||||
Net (loss) income available to common stockholders diluted | $ (36,835) | $ 21,200 | |||
Weighted average basic number of common shares outstanding basic | 16,457 | 16,393 | |||
Common stock equivalent shares representing shares issuable upon vesting of restricted stock units | 142 | ||||
Weighted average diluted number of common shares outstanding diluted | 16,457 | 16,535 | |||
Diluted net income (loss) per share of common stock (in dollars per share) | $ (2.24) | $ 1.28 | |||
Common stock equivalents excluded from computation of diluted earnings per share of common stock because of anti-dilutive effect | 300 | 500 |
ADDITIONAL FINANCIAL STATEMEN_3
ADDITIONAL FINANCIAL STATEMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | May 31, 2022 | |
Accounts receivable, net: | |||
Oil, natural gas and natural gas liquids revenues | $ 22,298 | $ 19,802 | |
Joint interest accounts | 2,108 | 2,138 | |
Other | 1,581 | 1,081 | |
Total | 25,987 | 23,021 | |
Prepaids and other: | |||
Prepaids | 532 | 490 | |
Funds in escrow | 346 | 345 | |
Other | 41 | 72 | |
Total | 919 | 907 | |
Other assets (Non-current): | |||
Investment in unconsolidated affiliate | 1,007 | 1,283 | |
Contract asset | 18,454 | 15,062 | |
Funds in escrow | 558 | 552 | |
Other | 761 | 759 | |
Total | 20,780 | 17,656 | |
Accounts payable and accrued liabilities: | |||
Trade payables | 21,689 | 24,915 | |
Accrued oil and natural gas capital costs | 11,730 | 15,337 | |
Revenues and royalties payable | 21,491 | 18,986 | |
Accrued employee compensation | 509 | 520 | |
Accrued lease operating expenses | 7,360 | 6,418 | |
Other | 338 | 349 | |
Total | 63,117 | $ 66,525 | |
Payments for equity method investment | 3,400 | ||
Wink Amine Treater, LLC | |||
Accounts payable and accrued liabilities: | |||
Equity interest | 5% | ||
Payments for equity method investment | $ 18,500 | ||
Minimum | |||
Accounts payable and accrued liabilities: | |||
Interest rate on advance | 15% |
MERGER AGREEMENT (Details)
MERGER AGREEMENT (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Apr. 24, 2024 | Dec. 14, 2023 | Mar. 31, 2024 | Jan. 24, 2024 | Dec. 31, 2023 | |
Merger Agreement [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||
Proceeds from merger deposit | $ 10,000 | ||||
Merger Agreement | |||||
Merger Agreement [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||
Consideration paid per share of common stock (in dollars per shares) | $ 9.80 | ||||
Total consideration | $ 450,000 | ||||
Amount to be distributed from escrow account | $ 10,000 | ||||
Proceeds from merger deposit | $ 100 |
SUBSEQUENT EVENTS - Preferred S
SUBSEQUENT EVENTS - Preferred Stock (Details) - Subsequent event $ / shares in Units, $ in Millions | May 14, 2024 USD ($) | May 13, 2024 USD ($) Vote $ / shares shares |
Term loan credit facility | ||
Subsequent Event [Line Items] | ||
Prepayment of outstanding borrowings | $ 0.3 | |
Series A4 Redeemable Convertible Preferred Stock | ||
Subsequent Event [Line Items] | ||
Shares issued | shares | 20,000 | |
Proceeds from preferred stock offering | $ 19.5 | |
Offering costs including placement agent fees | $ 0.5 | |
Preferred Stock Voting Rights | Vote | 0 | |
Conversion Price | $ / shares | $ 6.42 | |
Prepayment of outstanding borrowings | $ 17.3 | |
Cash Dividend Rate | Series A4 Redeemable Convertible Preferred Stock | ||
Subsequent Event [Line Items] | ||
Dividend rate (as a percent) | 14.50% | |
PIK Dividend Rate | Series A4 Redeemable Convertible Preferred Stock | ||
Subsequent Event [Line Items] | ||
Dividend rate (as a percent) | 16% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | |||||
Net Income (Loss) | $ (31,203) | $ 32,688 | $ (53,799) | $ (4,748) | $ 22,811 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |