Parsley Energy to Acquire Battalion Oil

Ticker: BATL · Form: 8-K · Filed: Mar 28, 2024 · CIK: 1282648

Sentiment: neutral

Topics: acquisition, merger, oil-and-gas

Related Tickers: PE, BATL

TL;DR

Parsley Energy is buying Battalion Oil, deal announced March 27, 2024.

AI Summary

On March 27, 2024, Battalion Oil Corporation entered into a Material Definitive Agreement, specifically a Merger Agreement with Parsley Energy, Inc. The agreement outlines the terms for Parsley Energy to acquire Battalion Oil. This filing also details unregistered sales of equity securities and material modifications to security holder rights.

Why It Matters

This acquisition by Parsley Energy will consolidate assets and potentially create synergies, impacting the competitive landscape and investor holdings in the oil and gas sector.

Risk Assessment

Risk Level: medium — The risk level is medium due to the inherent uncertainties in merger completion, regulatory approvals, and potential market reactions to the acquisition.

Key Players & Entities

FAQ

What is the primary purpose of this 8-K filing?

The primary purpose is to report the entry into a Material Definitive Agreement, specifically a Merger Agreement between Battalion Oil Corporation and Parsley Energy, Inc.

Who is acquiring Battalion Oil Corporation?

Parsley Energy, Inc. is acquiring Battalion Oil Corporation.

On what date was the Merger Agreement entered into?

The Merger Agreement was entered into on March 27, 2024.

Besides the merger, what other items are reported in this filing?

This filing also reports unregistered sales of equity securities and material modifications to the rights of security holders.

What is Battalion Oil Corporation's standard industrial classification?

Battalion Oil Corporation's standard industrial classification is CRUDE PETROLEUM & NATURAL GAS [1311].

Filing Stats: 3,608 words · 14 min read · ~12 pages · Grade level 16.7 · Accepted 2024-03-28 17:18:06

Key Financial Figures

Filing Documents

01

Item 1.01 Entry into a Material Definitive Agreement Third Amendment to Credit Agreement On March 28, 2024 (the " Amendment Effective Date "), Battalion Oil Corporation, a Delaware corporation (the " Company " or " we "), and its wholly owned subsidiary, Halcn Holdings, LLC (the " Borrower ") entered into a Third Amendment (the " Third Amendment ") to its Amended and Restated Senior Secured Credit Agreement dated as of November 24, 2021(as the same has been amended, restated, amended and restated, supplemented and modified from time to time prior to the date hereof, the " Credit Agreement "), by and among, inter alios , the Company, the Borrower, Macquarie Bank Limited, as administrative agent and certain other financial institutions party thereto, as lenders. The Third Amendment amended the Credit Agreement to, among other things, (a) amend the approved plan of development (the " APOD ") for certain properties, (b) remove the PDP Production Test and APOD Economic Test (each as defined in the Credit Agreement), (c) require the Borrower to receive cash proceeds from equity issuances and/or cash contributions in an aggregate amount of not less than $38 million during the period from the Amendment Effective Date through March 31, 2024 (the " Specified Additional Equity Capital "), which such Specified Additional Equity Capital shall be excluded from the calculation of the Consolidated Cash Balance (as defined in the Credit Agreement), and (d) make amendments to certain other affirmative covenants in connection with the foregoing. The Company did not incur additional debt or receive any proceeds in connection with the Third Amendment. The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amendment. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. Series A-3 Preferred Stock Transaction On Mar

02

Item 3.02 Unregistered Sale of Equity Securities. The information regarding the Series A-3 Preferred Stock Transaction set forth in Item 1.01 and Item 5.03 of this Current Report on Form 8-K, is incorporated by reference into this Item 3.02. The private placement of the Series A-3 Preferred Stock pursuant to the Series A-3 Purchase Agreement was undertaken in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof.

03

Item 3.03 Material Modification to Rights of Security Holders. The information set forth under Item 5.03 is incorporated by reference into this Item 3.03.

03

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. A summary of the rights, preferences and privileges of the Series A-3 Preferred Stock and other material terms and conditions of the Certificate of Designations is set forth in Item 1.01 of this Current Report on Form 8-K and is incorporated by reference into this Item 5.03. The foregoing description of the Certificate of Designations does not purport to be complete and is qualified in its entirety by reference to the complete text of the Certificate of Designations, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference. Important Information for Investors and Stockholders This communication is being made in respect of the proposed transaction involving the Company and Parent. In connection with the proposed transaction, the Company intends to file the relevant materials with the SEC, including a proxy statement on Schedule 14A and a transaction statement on Schedule 13e-3 (the " Schedule 13e-3 "). Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement, the Schedule 13e-3 or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transaction. The materials to be filed by the Company will be made available to the Company's investors and stockholders at no expense to them and copies may be obtained free of charge on the Company's website at www.battalionoil.com. In addition, all of those materials will be available at no charge on the SEC's website at www.sec.gov. Investors and stockholders of the Company are urged to read the proxy statement, the Schedule 13e-3 and the other relevant materials 4 when they become

Forward-Looking Statements

Forward-Looking Statements All statements and assumptions in this communication that do not directly and exclusively relate to historical facts could be deemed "forward-looking statements." Forward-looking statements are often identified by the use of words such as "anticipates," "believes," "estimates," "expects," "may," "could," "should," "forecast," "goal," "intends," "objective," "plans," "projects," "strategy," "target" and "will" and similar words and terms or variations of such. These statements represent current intentions, expectations, beliefs or projections, and no assurance can be given that the results described in such statements will be achieved. Forward-looking statements include, among other things, statements about the potential benefits of the proposed transaction; the prospective performance and outlook of the Company's business, performance and opportunities; the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction; as well as any assumptions underlying any of the foregoing. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of the Company's control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by the Company's stockholders; (iii) the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 3.1 Certificate of Designations of Series A-3 Redeemable Convertible Preferred Stock dated effective March 27, 2024. 10.1 Third Amendment to Amended and Restated Senior Secured Credit Agreement dated as of March 28, 2024, by and among Halcn Holdings, LLC, as borrower, Macquarie Bank Limited, as administrative agent and the lenders party hereto, the guarantors party hereto and Battalion Oil Corporation, as holdings. 10.2 Purchase Agreement (Series A-3 Preferred Stock), dated March 27, 2024, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto. 10.3 Fourth Amendment to Registration Rights Agreement dated March 27, 2024, by and among Battalion Oil Corporation and each of the other parties thereto, as investors. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). 6 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BATTALION OIL CORPORATION March 28, 2024 By: /s/ Matthew B. Steele Name: Matthew B. Steele Title: Chief Executive Officer 7

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