Battalion Oil Corporation (NYSE American: BATL) ended the second quarter of 2026 with positive equity of $203.1 million after cutting net debt to $74.2 million, down from $108.3 million in the first quarter, the Houston-based producer said in its second-quarter results. The reduction brought Battalion's leverage ratio to 1.36 times, down from 1.79 times in the prior quarter.
The company reported net income available to common stockholders of $9.1 million, or $0.34 per share, on second-quarter production of 12,407 barrels of oil equivalent per day, about 45% oil. Total operating revenue was $48.1 million, up from $42.8 million a year earlier, a rise the company attributed to a $6.48 per-barrel increase in realized prices that was partially offset by an average daily production decline of about 582 barrels of oil equivalent. Excluding hedges, Battalion realized about 104% of the average NYMEX oil price during the quarter, though realized hedge losses totaled roughly $7.8 million. WTI crude averaged $84.65 a barrel as of June 15, according to the EIA.
After adjusting for selected items, Battalion reported an adjusted diluted net loss available to common stockholders of $4.9 million, or $0.11 per share, compared with an adjusted diluted net loss of $10.6 million, or $0.65 per share, a year earlier. Adjusted EBITDA was $12.3 million, down from $18.1 million in the second quarter of 2025.
Costs per barrel
Per-barrel operating costs moved in different directions during the quarter.
| Cost (per Boe) | Q2 2026 | Q2 2025 |
|---|---|---|
| Lease operating and workover | $8.69 | $10.98 |
| Gathering and other | $10.87 | $9.27 |
| General and administrative | $3.60 | $2.17 |
Battalion attributed the drop in lease operating and workover expense to lower maintenance, power and chemical costs and less workover activity. It tied the rise in gathering and other expenses to higher throughput under a long-term processing agreement it entered with a large-cap, publicly traded midstream provider in January 2026. General and administrative expenses rose on higher legal and professional fees and increased stock compensation; excluding non-recurring items, G&A was $2.83 per Boe in the second quarter of 2026 versus $2.11 a year earlier.
Balance sheet and refinancing
Battalion placed 17.4 million shares under its at-the-market equity program for net proceeds of $30.3 million during the quarter, and sold an additional 14.9 million shares for $25.6 million after the quarter closed. The company established the $150 million ATM program in May 2026.
On June 30, 2026, Battalion closed a refinancing of its senior secured credit facility, extending the maturity to December 31, 2029 and replacing a leverage-based pricing grid that had ranged from 7.75% to 8.50% with a fixed margin of 6.50% over SOFR, plus a 0.15% credit spread adjustment. The new agreement gives Battalion access to up to $175.0 million of additional delayed draw capacity, with scheduled quarterly principal amortization beginning in the fiscal quarter ending June 30, 2027. As of June 30, 2026, the company had $162.5 million of term loan debt outstanding and total liquidity of $88.4 million in cash, cash equivalents and reinvestment proceeds.
After the quarter ended, Battalion redeemed and converted a portion of its outstanding preferred equity, extinguishing $42 million of liquidation value for $19 million in cash and 3.5 million common shares. Chief executive Matt Steele said the company bought back the preferred stock at a substantial discount to its par value from a holder seeking liquidity.
Monument Draw
At its Monument Draw development, Battalion completed midstream expansion projects in April 2026 ahead of schedule and about 8% under budget, which the company said drove a 20% increase in gas throughput and record well productivity. Later that month, Battalion secured an additional 50% of sour gas compression capacity at no capital cost, raising gas handling capacity from 35 MMcf/d to more than 50 MMcf/d.
The company also completed preparations for drilling under a new joint exploration and development agreement covering up to eight wells at Monument Draw, with an initial four-well pad targeting the 3rd Bone Spring, Wolfcamp A and Wolfcamp B formations. Drilling is expected to begin before the end of August 2026.
"The second quarter of 2026 was extremely active," Steele said, pointing to midstream investments that came in ahead of schedule and under budget.
