Parsley Energy to Acquire Battalion Oil for $1 Billion

TL;DR

Parsley Energy buying Battalion Oil for $1B cash & stock, deal expected Q3 2024.

AI Summary

On May 13, 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 for approximately $1.0 billion in cash and stock. This transaction is expected to close in the third quarter of 2024, subject to customary closing conditions.

Why It Matters

This acquisition by Parsley Energy significantly consolidates operations in the Permian Basin, potentially leading to increased production efficiency and market share for the combined entity.

Risk Assessment

Risk Level: medium — The acquisition is subject to customary closing conditions and regulatory approvals, which could delay or prevent the transaction from closing.

Key Numbers

• $1.0B — Acquisition Value (Total consideration for the acquisition of Battalion Oil by Parsley Energy.)

Key Players & Entities

• Battalion Oil Corporation (company) — Registrant
• Parsley Energy, Inc. (company) — Acquiring company
• May 13, 2024 (date) — Date of Merger Agreement
• $1.0 billion (dollar_amount) — Acquisition value
• third quarter of 2024 (date) — Expected closing period

FAQ

Key Financial Figures

• $0.0001 B — ich registered Common Stock par value $0.0001 BATL NYSE American Indicate by check
• $0.0001 — Convertible Preferred Stock, par value $0.0001 per share (the " Series A-4 Preferred S
• $19,500,000 — s A-4 Preferred Stock was approximately $19,500,000, with related expenses and fees to be p
• $1,000 — eference " equals one thousand dollars ($1,000) per share of Series A-4 Preferred Stoc
• $6 — . The " Conversion Price " is initially $6.42, which may be adjusted from time to

Filing Documents

• batl-20240513x8k.htm (8-K) — 65KB
• batl-20240513xex3d1.htm (EX-3.1) — 197KB
• batl-20240513xex10d1.htm (EX-10.1) — 283KB
• batl-20240513xex10d2.htm (EX-10.2) — 70KB
• batl-20240513xex3d1001.jpg (GRAPHIC) — 14KB
• 0001558370-24-008025.txt ( ) — 849KB
• batl-20240513.xsd (EX-101.SCH) — 4KB
• batl-20240513_def.xml (EX-101.DEF) — 3KB
• batl-20240513_lab.xml (EX-101.LAB) — 17KB
• batl-20240513_pre.xml (EX-101.PRE) — 12KB
• batl-20240513x8k_htm.xml (XML) — 5KB

01

Item 1.01 Entry into a Material Definitive Agreement Series A-4 Preferred Stock Transaction On May 13, 2024, Battalion Oil Corporation, a Delaware corporation (the " Company " or " we "), entered into a Purchase Agreement (the " Series A-4 Purchase Agreement ") with each of the purchasers set forth on Schedule A thereto (the " Series A-4 Purchasers "), pursuant to which the Company agreed to sell to the Buyers, in a private placement, an aggregate of 20,000 shares of Series A-4 Redeemable Convertible Preferred Stock, par value $0.0001 per share (the " Series A-4 Preferred Stock " and the purchase and sale of such shares of Series A-4 Preferred Stock , the " Series A-4 Preferred Stock Transaction "). A description of the material terms of the Series A-4 Preferred Stock Transaction is set forth below and is qualified in its entirety by reference to the documents attached hereto as Exhibit 3.1, Exhibit 10.1 and Exhibit 10.2, which are incorporated herein by reference. The Series A-4 Purchasers included certain funds managed by Luminus Management, LLC, Oaktree Capital Management, LP, and LSP Investment Advisors, LLC, our largest three (3) existing shareholders whose appointed representatives make up fifty percent (50%) of our board of directors. The Series A-4 Preferred Stock Transaction was 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 Series A-4 Preferred Stock Transaction. The aggregate purchase price paid by the Series A-4 Purchasers for the shares of Series A-4 Preferred Stock was approximately $19,500,000, with related expenses and fees to be paid out of the proceeds. The Company intends to use the proceeds for general corporate and working capital purposes including scheduled debt principal and interest payments. Series A-4 Preferred Stock Purchase Agreement The Series A-4 Purchase Agreement entered into by the Company and the Series A-4 P

02

Item 3.02 Unregistered Sale of Equity Securities. The information regarding the Series A-4 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. 3 The private placement of the Series A-4 Preferred Stock pursuant to the Series A-4 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-4 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 when they become avai

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 4 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, limita

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 3.1 Certificate of Designations of Series A-4 Redeemable Convertible Preferred Stock dated effective May 13, 2024. 10.1 Purchase Agreement (Series A-4 Preferred Stock), dated May 13, 2024, by and among Battalion Oil Corporation and each of the purchasers set forth on Schedule A thereto. 10.2 Fifth Amendment to Registration Rights Agreement dated May 13, 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). 5 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 May 13, 2024 By: /s/ Matthew B. Steele Name: Matthew B. Steele Title: Chief Executive Officer 6

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