Battalion Oil (BATL -3.67%), an independent oil and gas producer focused on the Delaware Basin, reported its second-quarter 2025 results on August 14, 2025. The company's main news this quarter includes a modest increase in production, improved capital efficiency, and a sharp drop in realized oil prices. Revenue (GAAP) came in at $42.8 million, down 12.8% from $49.1 million in Q2 2024, while non-GAAP adjusted net loss per share was $(0.65), improved from $(0.80) for Q2 2024. No analyst estimates were available for comparison. Overall, the quarter demonstrated progress in drilling efficiency and cost containment, though profitability was hampered by lower prices and the immediate shutdown of the AGI facility after quarter-end.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS (Non-GAAP) | $(0.65) | $(0.80) | 18.8 % |
| Revenue | $42.8 million | $49.1 million | (12.8 %) |
| Production Volume (Boe/d) | 12,989 | 12,857 | 1.0 % |
| Adjusted EBITDA | $18.1 million | $15.6 million | 16.0 % |
| Cash and Cash Equivalents | $44.6 million | $54.5 million | (18.2 %) |
Business Overview and Core Focus Areas
Battalion Oil develops, produces, and explores for oil and natural gas in the Delaware Basin of West Texas. The company manages more than 90 operated wells as of December 31, 2024, with a production mix of about 49% oil and 51% natural gas and natural gas liquids (NGLs).
The business is centered on liquids-rich acreage in a region known for its attractive oil content. Key success factors include efficiently managing drilling operations, maintaining cost discipline, and closely monitoring liquidity and balance sheet flexibility. The company also pursues hedging to help stabilize cash flows against commodity swings, and continually manages regulatory compliance and risk.
Quarterly Review: What Drove Results
Average production was 12,989 barrels of oil equivalent per day (Boe/d). The product split held steady, with oil still contributing 49% of production volumes. These production levels result from ongoing development of the company’s liquids-focused acreage, particularly in the West Quito area within the Delaware Basin.
Despite higher output, revenue slipped due to price declines. The realized oil price fell 21.6% year over year to $62.14 per barrel. This pricing downturn more than offset the slight gain in production, leading to revenue (GAAP) dropped to $42.8 million from $49.1 million in Q2 2024. Battalion Oil’s hedging program did provide some relief, generating $4.3 million in hedge gains.
Cost control was a key theme for the period. The company completed its annual six-well drilling plan ahead of schedule and under budget. Gathering costs and general and administrative (G&A) expenses both fell, the latter down to $2.11 per Boe from $2.49 per Boe (non-GAAP, vs Q2 2024), mostly attributed to lower merger-related costs. However, Workover spending—which covers well repairs and maintenance—rose sharply, nudging lease operating and workover expenses higher overall.
Adjusted EBITDA, a cash flow metric closely watched by the energy sector, increased 16% to $18.1 million compared to $15.6 million in Q2 2024. This reflected both expense reductions and hedge gains that partly offset the revenue drop from weaker commodity prices. Net loss available to common stockholders (GAAP) improved from $(8.7) million in Q2 2024 to $(3.5) million. However, Preferred dividend payments of $8.3 million continued to weigh on common equity returns. While net income (GAAP) was positive before preferred dividends, these distributions led to an overall loss for common shareholders.
After quarter-end, on August 11, Battalion Oil faced an unexpected challenge when its acid gas injection (AGI) facility, responsible for treating field gas and reducing emissions, was shut down effective August 11. The facility’s operator stated that continued operation was not viable. Battalion had to temporarily shut in a portion of its Monument Draw field and began rerouting gas to third-party processors. The impact on near-term production and cost structure remains uncertain as the company seeks alternatives.
On the balance sheet, Cash and equivalents (GAAP) were $44.6 million, compared to $54.5 million at Q2 2024. Term loan debt was $219.4 million as of June 30, 2025, and preferred stock rose to $197.6 million as of June 30, 2025. Liquidity improvements were helped by working capital changes and new financing, but future flexibility remains tied to commodity prices and ongoing cash flow generation. No new mergers or acquisitions were announced in the quarter, and G&A cost improvement partially reflected fewer merger-related expenses.
Looking Forward: Company Outlook and Investor Considerations
Battalion Oil management did not provide financial or operational guidance for upcoming quarters. No specific production, capital spending, or revenue targets were issued, likely reflecting uncertainty stemming from the AGI shutdown and commodity market conditions.
Investors should closely monitor Battalion Oil’s efforts to restore and optimize gas processing infrastructure. Production and cash flow trends will depend on the pace of redirecting gas volumes to new processors and on sustained capital discipline. Any additional updates regarding production, liquidity, or strategy in response to the AGI challenge will be important in upcoming periods. BATL does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
