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Battalion Oil Corporation (NYSE American: BATL) said it has executed a letter of intent (LOI) with an unaffiliated industry partner outlining key terms for a Joint Development Agreement (JDA).
The LOI contemplates a JDA for an up to eight-well Monument Draw program in Ward County, Texas. The structure is designed to provide shared capital and an accretive carry to Battalion while accelerating development of the company’s core inventory.
Battalion would continue to operate the wells and retain a majority working interest in the program. The development targets the 3rd Bone Spring, Wolfcamp A, and Wolfcamp B formations in Monument Draw.
The program is intended to support Battalion’s transition to cube development across its primary benches, reflecting an approach used by offset operators in the area to maximize recovery and capital efficiency across the stacked-pay column.
Battalion said the JDA would complement its recently announced expansion of sour gas compression capacity in Monument Draw, which is expected to come online in early Q3 2026 and help unlock maximum production capability across the company’s Ward and Winkler County assets.
Battalion said the proposed transaction is subject to negotiation and execution of definitive documentation and final approval by the company’s board of directors.
Separately, the company said it is negotiating an accretive refinance of long-term debt and an oil transport and marketing partnership to further enhance the corporate benefit of the JDA.
Matt Steele, Chief Executive Officer of Battalion Oil, said the shared capital structure and accretive carry are intended to allow Battalion to accelerate development of its core Monument Draw inventory while maintaining operatorship and a majority working interest. He also said the partnership, combined with the compression expansion and well-level economics, is intended to support continued increases in production and returns through well optimization, new drilling activity, and strategic M&A.
The company noted that the release includes forward-looking statements under U.S. securities laws, including statements about the proposed JDA, the timing and likelihood of executing definitive documentation, and anticipated production, liquidity, capital spending, drilling and completion plans. Battalion said actual results could differ materially due to risks and uncertainties, including the possibility that the JDA may not be executed on the terms contemplated by the LOI or at all.
Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
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