Fury Resources to acquire Battalion Oil for $450m

18 December 2023

The average daily net production during Q1 2023 for Battalion Oil was 12,717Boe/d, of which 46% was oil, while its total operating revenue during the period was $54.1m

Fury Resources, a privately held exploration and production company engaged in acquiring and exploiting assets in the Permian Basin, has agreed to acquire Battalion Oil in a deal worth around $450m.

Fury Resources to acquire Delaware Basin operator Battalion Oil. (Credit: ingrs from Pixabay)

Battalion Oil is an upstream company focused on the liquids-rich assets in the Delaware Basin in the US.

For the third quarter of 2023, the company had sales volumes of 12,717 barrels of oil equivalent per day (Boe/d). Its average daily net production during Q1 2023 was 12,717Boe/d, of which 46% was oil, while the total operating revenue during the period was $54.1m.

As per the terms of the deal, shareholders of the NYSE American-listed Battalion Oil will be paid $9.8 per share in cash.

The preferred stock of Battalion Oil owned by Luminus Management and funds and accounts managed by Oaktree Capital Management or their respective affiliates will be transferred to Fury Resources.

The transfer will involve either receiving new preferred shares of Fury Resources in exchange or selling the stocks to the company for cash. The valuation for the transaction will be determined based on the conversion or redemption value of the existing preferred stock.

Luminus Management and Oaktree Capital Management jointly hold a 61.6% ownership stake in Battalion Oil's common stock.

The duo has committed to casting their votes in favour of adopting the merger deal, specifically agreeing to 6.25 million shares of common stock. This total represents 38% of the overall voting power of Battalion Oil's capital stock.

Fury Resources board executive chairman Avi Mirman said: “We are excited to announce this transaction with Battalion and believe we are well positioned to drive value growth for our investors as we return the asset to active development.

“It has been a pleasure working with the Battalion team on this transaction, and we look forward to continuing that work as we move toward a successful close.”

The deal marks a return to the Delaware Basin for Fury Resources’ team, which now has Battalion Oil’s former CEO Richard Little. Fury Resources’ team is said to have a solid understanding of the subsurface along with the capital constraints that had previously restricted Battalion Oil’s capacity to exploit its Delaware Basin asset.

Battalion Oil CEO Matt Steele said: “It has been a pleasure working with Avi Mirman and his team to get the transaction to this point. Avi has a plan to become a premier player in the Delaware Basin.

“With the additional investment capital provided by the transaction, the company will finally be in a position to fully develop the Battalion asset base and position the company, its investors, and its employees for success.”

The deal, which is subject to the approval of Battalion Oil's stockholders and other conditions, is anticipated to close in Q1 2024.

Battalion Oil engaged the services of Houlihan Lokey Capital as its financial advisor, with legal counsel provided by Mayer Brown. Fury Resources, on the other hand, sought financial advice from Jefferies and legal guidance from K&L Gates.

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