Battalion Oil Signs LOI for Joint Development Agreement
Battalion Oil announced the execution of a letter of intent, or LOI, with an unaffiliated industry partner outlining the key terms of a Joint Development Agreement, JDA. Highlights include: Executed a LOI with an unaffiliated industry partner contemplating a JDA for an up to eight-well Monument Draw program that would provide shared capital and an accretive carry to Battalion while accelerating development of core inventory; Battalion would continue to operate the wells and retain a majority working interest in the program; Development targets the 3rd Bone Spring, Wolfcamp A, and Wolfcamp B formations in Monument Draw, building on the Company's recently announced expansion of sour gas compression capacity in Monument Draw; This drilling program is expected to deliver very attractive returns and prove out extensive additional drilling locations; Development transitions Battalion's operations to cube development across its primary benches, mirroring the successful co-development approach demonstrated by offset operators in the area and designed to maximize recovery and capital efficiency across the stacked-pay column; This is a key step in our progress toward a multi-year drilling program to generate significant shareholder value. Separately, the Company is also negotiating an accretive refinance of long-term debt and an oil transport and marketing partnership to further enhance the corporate benefit of this JDA.
