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BATTALION OIL CORPORATION Battalion Oil Corporation Announces Third Quarter 2021 Results and Updates to 2021 Capital Expenditures Guidance HOUSTON , Nov. 08 , 2021 ( GLOBE NEWSWIRE ) - Battalion Oil Corporation ( NYSE American : BATL , " Battalion " or the " Company " ) today announced results of operations for the third quarter 2021 and provided an update on 2021 guidance for capital expenditures . Highlights • Reported average daily production of 17,728 Boepd during third quarter 2021 , a 14 % increase over second quarter 2021 , due largely to facility upgrades at Monument Draw and reduced well downtime • Adjusted EBITDA of $ 23.0 million , a 63 % increase over second quarter 2021 • Strong organic deleveraging , reducing net debt by > $ 10 million during the quarter • Increasing 2021 guidance for total capital expenditures ; anticipate spudding first well of 2022 capital program in December 2021 Management Comments Richard Little , the Company's CEO , commented , " The third quarter of 2021 was an exceptional quarter for Battalion as we reported quarter - over - quarter production growth despite the completion of our 2021 capital program in the first half of the year . Our team put a significant amount of effort into facility upgrades in the first half of 2021 , and it's that improved flow assurance and reduced downtime that allowed us to maintain robust production through the quarter . Those strong operational results allowed us to take advantage of an improving commodity price environment as we generated substantial free cash flow and meaningfully paid down debt . " Mr. Little continued , " As we enter the last quarter of 2021 , our focus is clear : continue to optimize our operations as we prepare to accelerate activity in 2022 and beyond . On the production front , our field team remains diligent in their efforts to improve flow assurance and manage operating expenses despite a rising service cost environment . On the development side , as we work to finalize our 2022 capital program , we are taking important steps to mitigate cost increases by advance purchasing materials and protecting our cash flows through increased hedging activity . Additionally , we recently secured a rig contract as we aim to accelerate our 2022 capital program by spudding in December . As such , we have increased our 2021 capex guidance by $ 5 million . " Mr. Little continued , " We are proud of our recent results , and our goal is to build on this momentum as we move forward . " Results of Operations Average daily net production and total operating revenue during the third quarter 2021 were 17,728 barrels of oil equivalent per day ( " Boepd " ) ( 53 % oil ) and $ 80.8 million , respectively , as compared to production and revenue of 17,076 Boepd ( 56 % oil ) and $ 39.8 million , respectively , during the third quarter 2020. The increase in revenues in the third quarter of 2021 as compared to the third quarter 2020 is primarily attributable to an approximate $ 24.25 per Boe increase in average realized prices ( excluding the impact of hedges ) . Excluding the impact of hedges , Battalion realized 98 % of the average NYMEX oil price during the third quarter of 2021. Realized hedge losses totaled approximately $ 22.4 million during the third quarter 2021 . Lease operating and workover expense was $ 7.95 per Boe in the third quarter of 2021 and $ 7.00 per Boe in the third quarter of 2020. Adjusted G & A was $ 2.11 per Boe in the third quarter of 2021 compared to $ 2.09 per Boe in the third quarter of 2020 ( see Selected Operating Data table for additional information ) . The Company reported net income to common stockholders for the third quarter of 2021 of $ 13.1 million and net income per basic and diluted share of $ 0.80 and $ 0.79 , respectively . After adjusting for selected items , the Company reported net income to common stockholders for the third quarter of 2021 of $ 9.7 million , or $ 0.60 per basic share and $ 0.59 per diluted share ( see Selected Item Review and Reconciliation for additional information ) . Adjusted EBITDA during the quarter ended September 30 , 2021 , was $ 23.0 million as compared to $ 14.6 million during the quarter ended September 30 , 2020 ( see Adjusted EBITDA Reconciliation table for additional information ) . Liquidity and Balance Sheet As of September 30 , 2021 , Battalion had $ 155.0 million of borrowings and $ 2.0 million of outstanding letters of credit issued under the Senior Revolving Credit Facility resulting in unused borrowing capacity of $ 18.0 million based on a borrowing base of $ 175.0 million . Total liquidity at September 30 , 2021 , inclusive of $ 1.9 million of cash and cash equivalents , was $ 19.9 million . In September 2021 , the Company entered into the Fifth Amendment to its Senior Secured Revolving Credit Agreement which among other things , modified the limits on swap agreements . Additionally , redeterminations of the borrowing base occur semi - annually on May 1 and November 1 , with the lenders and the Company each having the right to one interim unscheduled redetermination between any two consecutive semi - annual redeterminations . The lenders have agreed to postpone the fall redetermination until December 2021 . Paycheck Protection Program Loan Effective August 13 , 2021 , the principal amount of the Company's Paycheck Protection Program Loan was reduced to approximately $ 0.2 million by the Small Business Administration and the Company recorded a gain on the extinguishment of the forgiven portion of the PPP Loan and related accrued interest of $ 2.1 million . The gain is presented in " Gain ( loss ) on extinguishment of debt " in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30 , 2021 . 2021 Guidance Total capital expenditures guidance has been increased to $ 45.0 to $ 55.0 million as Battalion anticipates spudding the first well of its 2022 capital program in December 2021 . Hedging Update As of November 8 , 2021 , Battalion had 7,837 barrels per day ( Bbl / d ) of oil hedged for the fourth quarter of 2021 at an average price of $ 43.96 per barrel . Battalion also had basis and roll swaps in place for 7,837 Bbl / d in the fourth quarter of 2021 at ( $ 0.25 ) per barrel and ( $ 0.39 ) per barrel , respectively . As of November 8 , 2021 , Battalion had 11,391 million British thermal units per day ( MMBtu / d ) of natural gas hedged for the fourth quarter of 2021 at an