BATTALION OIL CORP 8-K

What Happened
Battalion Oil Corporation (through its wholly owned subsidiary Halcón Holdings, LLC) completed the sale of its West Quito Draw oil and gas assets in Ward County, Texas to MCM Delaware Resources, LLC. The transaction closed on February 24, 2026 (effective date December 1, 2025) for an approximate cash adjusted purchase price of $60.1 million, subject to customary post‑closing adjustments. On the same date, the borrower entered into a Limited Consent and Third Amendment to its senior secured credit agreement (with Fortress Credit Corp. as administrative agent) under which the lenders consented to the sale and the borrower must prepay $40,000,000 of outstanding loans from the net sale proceeds. The borrower may retain remaining proceeds subject to reinvestment requirements in the amended credit agreement.

Key Details

• Sale price: approximately $60.1 million in cash (subject to post‑closing adjustments).
• Mandatory loan prepayment: $40,000,000 required upon receipt of net proceeds under the Third Amendment to the credit agreement.
• Reserves impact: the disposed properties carried estimated proved reserves of ~8 MMBoe, representing about 12.4% of Battalion’s estimated proved reserves at year‑end 2024.
• Advisor: TenOaks Energy Advisors served as financial advisor to Battalion on the transaction.

Why It Matters
This transaction is material because it converts a portion of Battalion’s oil and gas assets into immediate cash and reduces outstanding debt by a fixed $40 million, which should lower leverage and interest exposure under the company’s credit facility. However, the sale also removes roughly 12.4% of the company’s reported 2024 proved reserves, which may affect future production and reserve-driven value metrics. Remaining proceeds are available for permitted reinvestment (development, capital expenditures in operated assets), general corporate purposes and liquidity management per the amended credit agreement. Investors should note the effective date (Dec 1, 2025) and that final proceeds may change with post‑closing adjustments.