Battalion Oil sets new retention and incentive plan

HOUSTON, TX – Battalion Oil Corp (NYSE American: BATL), an energy company with a market capitalization of $24.52 million and trailing twelve-month EBITDA of $103 million, has announced the adoption of a new Retention and Incentive Plan aimed at retaining key employees and incentivizing performance, according to the company’s latest SEC filing on March 7, 2025. InvestingPro data reveals the company faces significant challenges, with its stock price declining nearly 76% over the past year. The plan, effective as of March 4, will provide cash bonuses and other incentives to eligible employees, including executive officers.

Under the new plan, participants who remain with the company through December 31, 2026, are eligible for Retention Bonuses, with the first payment scheduled for early March 2025 and the second at the end of the retention term. The retention initiative comes as InvestingPro analysis shows the company’s current ratio at 0.47 and debt-to-equity ratio at 4.1, indicating potential liquidity challenges that make employee retention crucial. These bonuses are contingent upon continued employment and must be returned if the employee leaves or is terminated for cause before the end of the specified period.

Additionally, the plan includes a 50% advance on the target bonus for 2025, payable after the second quarter, also subject to employment conditions. A change in control event triggers the distribution of two Incentive Bonus Pools: a Base Pool (NASDAQ:POOL) of $4 million and an NIV Pool, which is contingent on the company’s growth in value. The NIV Pool’s funding is based on performance benchmarks and can range from 10% to 20% of the net increase in value, depending on the internal rate of return achieved.

As part of the plan, participants are required to waive rights to Equity Grant Units from a previous incentive plan, which will be rescinded and cancelled upon mutual agreement. The company’s named executive officers have entered into individual retention and award agreements, with specified bonus payments and shares in the Base and NIV Pools.

Furthermore, the Board has directed management to explore options for repurchasing common stock from participants, issued upon vesting of restricted stock units, at a price of $3.00 per share, in two phases and subject to continued employment at those times.

This strategic move by Battalion Oil Corp, a Delaware-incorporated company operating in the crude petroleum and natural gas sector, is based on the press release statement and aims to strengthen its workforce stability and align the interests of its employees with those of the company’s equity holders. With the stock trading at $1.46, down from its 52-week high of $7.08, InvestingPro subscribers have access to 8 additional key insights about Battalion’s financial health and market position, along with detailed valuation metrics and growth forecasts.

In other recent news, Battalion Oil Corp has secured an additional $63 million in incremental term loans, as detailed in a recent SEC filing. The loans were formalized through an amendment to the company’s existing credit facilities, with Fortress Credit Corp. acting as the administrative agent. The terms of these loans will align with the initial term loan facility established in December 2024, maintaining most of the existing credit agreement’s provisions. Additionally, Battalion Oil has terminated its merger agreement with Fury Resources, Inc., a decision approved by the company’s board of directors. The termination was due to the failure to close the transaction by the agreed deadline, allowing Battalion Oil to retain nearly $10 million as partial satisfaction of a termination fee. Furthermore, Fury Resources is required to pay an additional $15 million within two business days following the termination notice. Abraham Mirman, the guarantor of Fury Resources’ obligations, is also required to ensure payment of up to $2 million under a Limited Guarantee. These developments highlight Battalion Oil’s recent strategic financial moves and decisions.

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