BATL

MKT CAP $39.7MP/E —DIV YIELD —FCF YIELD —REV TTM $163.1M −12.0%NET INCOME −$39.9M −489.5%NET DEBT $79.4M52W 0.69 – 27.68SEC XBRL · TTM TO Invalid Date

How BATL rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Recent Developments ● Monument Draw Acquisition.
On March 10, 2026, we entered into a purchase and sale agreement to acquire certain oil and natural gas assets, comprising 7,090 net acres located in Ward County, Texas, from RoadRunner Resource Holding LLC (formerly, Sundown Energy LP) (“RoadRunner”), effective March 1, 2026, in an all-stock transaction.
Under the terms of the agreement, upon closing on March 19, 2026, we issued 485,000 shares of our common stock to RoadRunner in exchange for the assets.
The acquired acreage is directly adjacent to our existing Monument Draw acreage.
The transaction is subject to customary post-closing adjustments. ● Private Placement Equity Offering.
On March 3, 2026, we entered into a definitive agreement to sell in a private placement to an institutional investor 1,800,000 shares of our common stock and 927,273 prefunded warrants for the purchase of common stock at $5.50 per share for total proceeds of $15.0 million.
The offering closed on March 4, 2026, on satisfaction of customary closing conditions.
We intend to use the net proceeds received from the offering for working capital and general corporate purposes. ● West Quito Divestiture.
On December 18, 2025, we entered into an agreement of sale and purchase with MCM to sale our West Quito Assets for a total sales price of $62.6 million, subject to adjustment for accounting effective date of December 1, 2025 and other customary adjustments.
The West Quito Divestiture closed on February 24, 2026 for an adjusted sales price of $60.1 million and $45.6 million of the net proceeds from closing were used to repay amounts outstanding under the 2024 Amended Term Loan Agreement on February 24, 2026 - $40.0 million pursuant to the Third Amendment (defined below) and prepayment of $5.6 million for the scheduled quarterly amortization payment for the quarterly period ending March 31, 2026.
Pursuant to the Third Amendment (defined below), $12.9 million of proceeds from the sale (the “Reinvestment Proceeds”) are to be used to acquire additional contiguous non-operated oil and natural gas properties consisting of proved developed reserves in Ward and Winkler Counties, Texas, to fund permitted capital expenditures in the Monument Draw area and/or to fund the drilling and completion of two Monument Draw wells within 180 days after receipt.
Should such funds have not been spent within the 180-day period, the Reinvestment Proceeds shall be used to prepay borrowings outstanding under the 2024 Amended Term Loan Agreement. ● 2024 Amended Term Loan Agreement.
On February 24, 2026, we entered into the Limited Consent, Third Amendment to Second Amended and Restated Senior Secured Credit Agreement and First Amendment to Fee Letter (the “Third Amendment”) to the Second Amended and Restated Senior Secured Credit Agreement (the “2024 Amended Term Loan Agreement”).
Pursuant to the Third Amendment, among other changes specified therein, (a) the lenders consented to the transactions contemplated by the West Quito Divestiture sale agreement; and (b) we were required, upon receipt of the net cash proceeds from the West Quito Divestiture, to prepay the outstanding principal amount of the 2024 Amended Term Loan Agreement borrowings in an aggregate amount equal to $40.0 million.
We may retain the remaining net cash proceeds received from the West Quito Divestiture, subject to certain reinvestment requirements, set forth in the Third Amendment. ● H 2 S Treating Joint Venture.
The joint venture, operating as Wink Amine Treater, LLC (“WAT”) also entered into a Gas Treating Agreement (“GTA”) with us for natural gas production from our Monument Draw area.
Under the GTA, we paid a treating rate that varied based on volumes delivered to the AGI Facility and had a minimum volume commitment of 20 MMcf per day.
The GTA had a tiered-rate structure based on actual volumes delivered.
After significant complications and delays, the AGI Facility began processing gas on March 9, 2024 and treated volumes from March 2024 to August 11, 2025.
In addition to general facility downtime, the AGI Facility experienced interruptions in processing due to failure to complete necessary improvement and maintenance projects.
The AGI Facility processed over 9.3 Bcf of natural gas before ceasing operations.
On August 11, 2025, we received notice from WAT that it was ceasing taking deliveries of natural gas and was ceasing operations effective immediately.
In response, we temporarily shut-in a portion of our Monument Draw field production while management actively worked to identify and execute on a plan for long-term alternative gas processing.
We terminated the GTA on January 19, 2026.
Following termination of the GTA, we entered into an agreement with a publicly traded large-cap midstream provider to process our natural gas production at an alternative facility.
This processing provider has the ability to process substantially all of our natural gas production from Monument Draw.
We are required under our 2024 Amended Term Loan Agreement, to hedge approximately 85% to 50% of our anticipated oil and natural gas production, respectively, in varying percentages by year, and on a rolling basis for the next four years.
As of December 31, 2025, we did not post collateral under any of our derivative contracts as they are secured under our 2024 Amended Term Loan Agreement.
Consolidated Financial Statements and Supplementary Data— Note 8 , “Derivative and Hedging Activities,” for additional information.
Oil and Natural Gas Reserves The proved reserves estimates reported herein for the years ended December 31, 2025 and 2024, have been independently evaluated by NSAI, our independent reserve engineering firm.
He has more than 16 years of oil and natural gas operations experience and has earned a Bachelor of Science degree in Petroleum Engineering from Texas A&M University, a Master of Business Administration degree from Rice University and is an active member of the Society of Petroleum Engineers.
Proved reserve estimates are based on the unweighted arithmetic average prices on the first day of each month for the 12-month period ended December 31, 2025.
Average prices for the 12-month period were as follows: WTI crude oil spot price of $66.01 per Bbl, adjusted by lease or field for quality, transportation fees, and market differentials and a Henry Hub natural gas spot price of $3.39 per MMBtu, adjusted by lease or field for energy content, transportation fees, and market differentials.
The following table presents certain proved reserve information as of December 31, 2025 (dollars in thousands): Proved Reserves (MBoe) (1)(2) Developed 35,649 Undeveloped 24,053 Total 59,702 PV-10 (3) $ 351,730 Discounted Future Income Taxes (8,212) Standardized measure of discounted future net cash flows $ 343,518 (1) Determined using a ratio of six Mcf of natural gas to one barrel of oil, condensate, or NGLs based on approximate energy equivalency.
(2) Proved reserves associated with the West Quito Divestiture represented 6,002 MBoe, or approximately 10%, of total proved reserves, all of which were classified as proved developed, and $36.2 million of PV-10 value at December 31, 2025.
(3) PV-10 represents the discounted future net cash flows attributable to our proved oil and natural gas reserves before income tax, discounted at 10%.
The following table presents estimated proved reserves at December 31, 2025: Proved Proved Total Developed Undeveloped Proved (2) Oil (MBbls) 17,119 14,681 31,800 Natural Gas Liquids (MBbls) 7,615 4,029 11,644 Natural Gas (MMcf) 65,488 32,060 97,548 Equivalent (MBoe) (1) 35,649 24,053 59,702 (1) Determined using a ratio of six Mcf of natural gas to one barrel of oil, condensate, or NGLs based on approximate energy equivalency.
(2) At December 31, 2025, reserves associated with the West Quito Assets totaled 6,002 Mboe (2,004 MBbls of oil, 1,203 MBbls of NGLs and 16,766 Mcf of natural gas), all of which were classified as proved developed.
At December 31, 2025, total estimated proved reserves were approximately 59.7 MMBoe, a 5.2 MMBoe net decrease from the previous year’s estimate of 64.9 MMBoe.
Proved developed reserves of 35.6 MMBoe decreased approximately 0.7 MMBoe from December 31, 2024 primarily as a result of negative revisions of 1.8 MMBoe due to the decrease in pricing and changes in differentials, deducts and marketing expenses and production of 4.4 MMBoe offset by proved undeveloped (“PUD”) reserve development of 5.5 MMBoe.

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Gone since FY2024

Recent Developments ● 2024 Amended Term Loan Agreement.
On December 26, 2024, we and our wholly-owned subsidiary Halcón Holdings, LLC (the “Borrower”) entered into the Second Amended and Restated Senior Secured Credit Agreement (the “2024 Term Loan Agreement”) with Fortress Credit Corp., as administrative agent, and certain other financial institutions party thereto, as lenders.
Pursuant to the 2024 Term Loan Agreement, the lenders agreed to provide us with (i) an initial term loan facility in the aggregate principal amount of $162.0 million, funded on December 26, 2024 and (ii) an incremental term loan facility in the aggregate principal amount of up to $63.0 million, of which such incremental borrowings in the amount of $63.0 million were incurred on January 9, 2025 pursuant to a first amendment (the “First Amendment”) to our 2024 Term Loan Agreement (as amended, the “2024 Amended Term Loan Agreement”).
The 2024 Amended Term Loan Agreement matures on December 26, 2028. All obligations under the 2021 Amended Term Loan Agreement (as defined in Item 8.
Consolidated Financial Statements and Supplementary Data— Note 7 , “Debt” ) were refunded, refinanced and repaid in full by the loans under the 2024 Term Loan Agreement as the net proceeds of the 2024 Term Loan Agreement were used to repay all outstanding indebtedness under the 2021 Amended Term Loan Agreement, including accrued and unpaid interest, in an aggregate amount of approximately $152.1 million and to pay related fees and expenses. Borrowings under the 2024 Amended Term Loan Agreement bear interest at a rate per annum equal to a forward-looking term rate based on the Secured Overnight Financing Rate (“SOFR”) for a tenor of three months (with a credit spread adjustment of 0.15% per annum) (or another applicable reference rate, as determined pursuant to the terms of the 2024 Amended Term Loan Agreement) plus an applicable margin of 7.75%. The 2024 Amended Term Loan agreement contains certain financial covenants (as defined in the 2024 Term Loan Agreement), including maintenance of the following ratios. ● Asset Coverage Ratio not to fall below 1.70x as of March 31, 2025 through and including June 30, 2025, 1.85x as of September 30, 2025 through and including December 31, 2025 and 2.00x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter; ● Total Net Leverage Ratio not to exceed 2.75x as of March 31, 2025 through and including June 30, 2025 and 2.50x for each fiscal quarter thereafter, determined as of the last day of each fiscal quarter; ● Current Ratio not to fall below 1.00x, determined on the last day of each calendar month commencing with the calendar month ending March 31, 2025; and ● Liquidity not to fall below the greater of (x) $10,000,000 and (y) the amount equal to the scheduled principal and interest payments for the immediately succeeding three-month period, determined as of the last day of any fiscal quarter.
Under the 2024 Amended Term Loan Agreement, we are required to hedge approximately 85% to 50% of our anticipated oil and natural gas production, in varying percentages by year, on a rolling basis for the next four years.
The 2024 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. For the year ended December 31, 2024, the Company recognized a loss on extinguishment of debt in the amount of $7.5 million resulting from the credit agreement refinancing on December 26, 2024 which includes a $3.6 million non-cash write-off of deferred financing costs, original issue discounts and embedded derivatives associated with the extinguished debt and $3.9 million in fees and debt issuance costs paid for the new debt.
For further details on the 2024 Amended Term Loan Agreement, see Item 7.
Management’s Discussion and Analysis on Financial Condition - “Recent Developments ”. ● Merger with Fury Resources.
On December 14, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Fury Resources, Inc.
(“Parent”) and San Jacinto Merger Sub, Inc (“Merger Sub”), a direct wholly-owned subsidiary of Parent, pursuant to which Parent was to acquire all of the outstanding shares of common stock of the Company (the “Merger”).
In addition, the preferred stock (as defined below) of the Company held by the Investors (as defined below) would 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.
The Merger Agreement was terminated on December 20, 2024.
Upon termination, we recognized $10.0 million of other income for the January 24, 2024 distribution from the escrow account. ● Preferred Stock Equity Issuances.
On March 27, 2024, we sold, in a private placement, the remaining 20,000 shares of preferred stock under a commitment letter received during the third quarter of 2023 to certain funds managed by Luminus Management, LLC, Oaktree Capital Management, LP, and LSP Investment Advisors, LLC, who represent our largest three existing stockholders (the “Investors”).
We received $19.5 million in proceeds, net of $0.5 million in original issue discount.
On May 13, 2024, we sold, in a private placement, an aggregate of 20,000 shares of preferred stock to the Investors for $19.5 million in proceeds, net of $0.5 million in original issue discount.
The issuances of preferred stock were approved by our board of directors upon recommendation by a special committee of disinterested directors that was established to evaluate the proposed terms of the preferred stock.
For a further discussion of the redemption and conversion provisions associated with the preferred stock, refer to Item 7.
Management’s Discussion and Analysis, “Capital Resources and Liquidity”. ● H 2 S Treating Joint Venture.
The joint venture, operating as Wink Amine Treater, LLC (“WAT”) (previously Brazos Amine Treater, LLC (“BAT”)), has also entered into a Gas Treating Agreement (“GTA”) with us for natural gas production from our Monument Draw area.
Caracara provided the initial capital for the construction of the Facility, which is expected to have an initial capacity of approximately 30 MMcf per day, and a design capacity to treat up to 10% combined concentrations for H 2 S and CO 2 .
We initially expected the AGI Facility to be mechanically complete in early April 2023 and to be in service in the second quarter of 2023.
However, during commissioning and initial operations, it was determined that additional pressure was required to initiate gas injection.
To correct this issue, a positive displacement pump was ordered and installed.
The AGI Facility’s injection well also experienced pressure communication between the tubing and annular space after an injection procedure.
We commenced workover operations to remediate this issue.
During the third quarter of 2023, additional complications were encountered with the workover operation at the AGI Facility causing higher than expected costs.
To fund this workover operation, we advanced capital contributions totaling approximately $18.5 million as of December 31, 2024 on behalf of our joint venture partner in WAT.
Pursuant to the terms of the agreement governing the joint venture, we believe that we have multiple remedies to recover such advance, including (1) declaring such payment a loan, which pursuant to the agreement would have an interest rate of the lesser of 15% or the maximum rate permitted by law, (2) recoupment from distributions from the joint venture and (3) reallocation of equity of the joint venture based on the relative level of total capital contributions by the parties after taking into account the advance.
Pursuant to such, we initially recorded the advanced amount as a contract asset.
During the fourth quarter of 2024, Caracara delivered a demand notice disputing our claims, indicating that the carrying value of the contract asset may not be recoverable and as a result, we recognized $18.5 million of impairment of charges to reduce the carrying value of the contract asset to zero as of December 31, 2024.
The AGI Facility has been processing gas since March 9, 2024 and continues to process gas currently.
In addition to general facility downtime, the AGI Facility has experienced interruption in processing due to the completion of improvement and maintenance projects, including pump and other facility equipment replacement.
However, the facility has processed over 5.5 Bcf of natural gas since operations commenced through December 31, 2024.
The continued processing delays and interruptions during 2024 have resulted in higher than expected gathering and treating costs as we pay higher processing rates with other service providers.
It is possible that the existing remedial facility work by WAT could extend into 2025, and any delays in fully commissioning the facility or shut downs of the plant past December 31, 2024 will result in higher processing fees than currently forecasted until such time the facility becomes fully operational.
Under the GTA, we pay a treating rate that varies based on volumes delivered to the AGI Facility and have a minimum volume commitment of 20 MMcf per day.
The GTA has a tiered-rate structure based on actual volumes delivered.
Our current estimates of future treating fee reductions are subject to various operational and other risk factors, some of which are beyond our control, which could impact the timing and extent of these estimates .

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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