Battalion Oil agreed to be acquired by Fury Resources for $7 per share in cash. (Source: Shutterstock/ Battalion Oil Corp.)
Public Permian producer Battalion Oil agreed to a lowered buyout offer from private operator Fury Resources.
Under the updated proposal, Fury Resources will acquire Battalion’s outstanding common stock for $7 per share in cash, without interest, the companies said in an update to investors after markets closed on Sept. 19.
The updated terms value Battalion’s market capitalization at approximately $115.2 million, based on roughly 16.45 million outstanding Battalion (BATL) shares.
The deal also represents a 138% premium over BATL’s closing price of $2.94 per share (market cap ~$48 million) on Sept. 19.
Under the original deal between the two companies, announced in December 2023, Fury agreed to acquire BATL’s outstanding shares for $9.80 per share in cash.
“This transaction has taken longer than anyone at the table intended,” said Battalion CEO Matt Steele. “Despite that, the teams persevered to achieve the best outcome for BATL stockholders. The company and Fury will work diligently in the coming months to close this transaction and position Fury for a successful transition.”
Battalion’s preferred stockholders—Luminus Management LLC, Gen IV Investment Opportunities LLC and Oaktree Capital Management LP, and their affiliates—have agreed to roll over their preferred stock in exchange for new preferred shares issued by Fury.
The deal is expected to close in the fourth quarter, subject to closing conditions and approval by Battalion shareholders.
The Fury team includes members of Lilis Energy Inc. including former Lilis CEO Avi Mirman, who serves as Fury’s executive chairman.
“Our team has significant experience in the region, and we believe these assets present a compelling value proposition for our investors,” Mirman said. “With a deep inventory of high return locations and consolidation opportunities in the area, we believe this asset can be scaled quickly and provide a meaningful return to our investors.”
Fury said it has received several capital commitments to complete the Battalion acquisition, including $200 million in debt commitments from Fortress Credit Corp. and AI Partners Asset Management Co. Ltd.
Fury is expected to have approximately $100 million in cash on its balance sheet after closing, net of acquisition costs and fees.
Houlihan Lokey Capital, Inc. acted as financial adviser and Mayer Brown LLP is acting as legal counsel to Battalion Oil. Jefferies LLC acted as financial adviser and K&L Gates LLP is acting as legal counsel to Fury.
In its second-quarter earnings, Battalion said it was considering the lowered buyout offer from Fury.
Battalion owns interests in approximately 40,400 net acres in the Delaware Basin, primarily in Pecos, Reeves, Ward and Winkler counties, Texas. Battalion’s main asset—called Monument Draw—sits in the eastern part of the Delaware up against the Permian’s Central Basin Platform.
Battalion produced an average of 12,857 boe/d (49% oil) during the second quarter.
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