INVESTOR UPDATE - Home Page - Battalion Oil

M A Y 2 0 2 1INVESTOR UPDATE

Disclaimer: Forward Looking StatementsThis presentation contains forward-looking statements that are intended to be covered by the safe harbor within the meaning of the Private Securities Litigation Reform Act of 1995 as stated in Section 27A of theSecurities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not strictly historical statements constituteforward-looking statements and may often, but not always, be identified by the use of such words such as “expects,” “believes,” “intends,” “anticipates,” “plans,” “estimates,” “guidance,” “target,” “potential,”“possible,” or “probable” or statements that certain actions, events or results “may,” “will,” “should,” or “could” be taken, occur or be achieved. The forward-looking statements include statements about theexpected future reserves, production, financial position, business strategy, revenues, earnings, costs, capital expenditures, liquidity and debt levels of the Company, and plans and objectives of management forfuture operations. Forward-looking statements are based on current expectations and assumptions and analyses made by Battalion and its management in light of experience and perception of historical trends,current conditions and expected future developments, as well as other factors appropriate under the circumstances. However, whether actual results and developments will conform to statements regarding oil,natural gas liquids or gas reserves is subject to a number of material risks and uncertainties, including but not limited to: further and substantial declines in oil, natural gas liquids or natural gas prices; risksrelating to any unforeseen liabilities; the level of success in exploration, development and production activities; adverse weather conditions that may negatively impact development or production activities; thetiming of exploration and development expenditures; inaccuracies of reserve estimates or assumptions underlying them; revisions to reserve estimates as a result of changes in commodity prices; impacts tofinancial statements as a result of impairment write-downs; risks related to levels of indebtedness and periodic redeterminations of the borrowing base under the Company’s credit agreement; Battalion’s abilityto generate sufficient cash flows from operations to meet the internally funded portion of its capital expenditures budget; Battalion’s ability to obtain external capital to finance exploration and developmentoperations and acquisitions; the ability to successfully complete any potential acquisitions for value and the risks related thereto; the impacts of hedging on results of operations; uninsured or underinsured lossesresulting from oil and natural gas operations; Battalion’s ability to replace oil and natural gas reserves; and any loss of senior management or key technical personnel. Battalion’s 2020 Annual Report on Form 10-K and subsequent, quarterly reports on Form 10-Q and current reports on Form 8-K, and other Securities and Exchange Commission (“SEC”) filings discuss some of the important risk factors identified that mayaffect Battalion’s business, results of operations, and financial condition. Battalion undertakes no obligation to revise or update publicly any forward-looking statements except as required by law.

This presentation includes references to certain non-GAAP financial information, such as adjusted EBITDA and adjusted general and administrative expense. These measures are presented based onmanagement's belief that they will enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison tosimilarly adjusted measurements of prior periods. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to GAAP. These financialmeasures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion'sperformance. Refer to the Appendix to this presentation for a reconciliation of the non-GAAP financial information to the most directly comparable GAAP measure.

This presentation has been prepared by Battalion and includes market data and other statistical information from third-party sources, including independent industry publications, government publications orother published independent sources. Although Battalion believes these third-party sources are reliable as of their respective dates, Battalion has not independently verified the accuracy or completeness of thisinformation. Some data are based on Battalion’s good faith estimates, which are derived from its review of internal sources as well as the 3rd-party sources described above.

Management’s use of the term estimated ultimate recovery (“EUR”) in this presentation describes estimates of potentially recoverable hydrocarbons that the SEC rules prohibit from being included in filings withthe SEC. These are more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized, particularly in areas or zones wherethere has been limited or no drilling history. We include EUR to demonstrate what we believe to be the potential for future drilling and production by Battalion.

Actual quantities that may be ultimately recovered may differ substantially from estimates. Factors affecting ultimate recovery include the scope of the operators' ongoing drilling programs, which will be directlyaffected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and otherfactors, and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of potential resources may also change significantly as the development of the propertiesunderlying Battalion's mineral interests provides additional data. This presentation also contains Battalion’s internal estimates of its potential drilling locations, which may prove to be incorrect in a number ofmaterial ways and may. Actual results may be substantially different than estimates.

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Focused on Capital and Operational Efficiency

Strong Execution Leads to Superior Results2021 Priorities

Generate Free Cash Flow

Continued Capital Efficiency

Drive Down Op Cost per BOE

Advance AGI Discussions

Meaningful GTO Improvements

Expand Midstream Capacity

Proactive Hedging Strategy

Actively Manage Liquidity

Improve Credit Metrics

Evaluate Growth Opportunities

De-Risk Bone Spring

Maintain Focus on ESG

Enhance Diversification of Board

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Capital Discipline Managing supply chain to secure D&C cost savings

ESG Zero OSHA recordables and reduced flare intensity

Hedge Book ~85% of remaining 2021 expected oil production hedged

Well Performance Recent Monument Draw completions outperforming type curve

AGI Progress Meaningfully advanced AGI discussions

Liquidity Strong liquidity position ($34.2mm) as we exit an active Q1

M&A Substantial pipeline of M&A opportunities

Oil-Rich Position in the Delaware Basin

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§ Q1 production of ~14,333 Net Boepd (56% oil)

§ Commenced drilling two well pad in Monument Draw after successful completion campaign on four wells in Q1 2021

§ Minimized downtime and safety concerns during Winter Storms

§ Ethane rejection in Q1 by midstream providers drove lower production (boe basis), higher revenue

§ Operating Breakeven @ $10.00/Boe

§ D&C Breakeven @ $28.00/Bbl WTI

§ Q1 production ~6,940 Net Beopd (66% oil)

§ 42 Gross PDP Wells with ~85% WI (66% oil)

§ Net Acreage: ~19,800









Mon

umen

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est Q

uito

Hac

kber

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MonumentWest Quito

Hackberry

Current Leasehold Position: ~41,500 Net Acres / 2,000+ Gross Drilling Locations

Net Operated Production Summary (Boepd)

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15,000

20,000

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

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Jan-21

Feb-21

Mar-21Q2 2020 Q3 2020 Q4 2020 Q1 2021

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Capitalization & Liquidity SummaryAdjusted LTM EBITDA of $62 MM§ Go-forward EBITDA largely insulated from price fluctuation

due to hedge book

Improved Midstream Agreements§ Amended midstream contracts to provide operational

flexibility and improve pricing

Strong Commodity Pricing§ Higher commodity price environment offset impact of lower

production due to winter storms

Proactive Hedge Management§ Opportunistically layering on additional hedges as new

production comes online

Spring Borrowing Base Redetermination§ $190mm borrowing base reducing to $175mm by Sep 2021§ Sufficient cash flow and liquidity to execute on 2021 plan

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Q1 2021 Key Financial Highlights

$0,000 3/31/21

RBL Indebtedness 155,000$ Less: Cash & Cash Equivalents (1,671)

RBL Borrowing Base 190,000$

Less: RBL Indebtedness (155,000)

Less: Letters of Credit Issued (2,545)

Plus: Cash & Cash Equivalents 1,671

Total Liquidity, Net 34,126$

Adjusted EBITDA, LTM 61,927$

Net Leverage, LTM 2.48x

Total Indebtedness, Net 153,329$

2021-2022 Hedge Positions

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Downside Fixed Price Hedged Oil Volume (Bopd)

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2,000

4,000

6,000

8,000

10,000

1 2 3 4 5 6 7 8

Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022

Bopd 8,566 9,330 8,000 7,837 7,570 6,704 5,428 5,500

Price $47.06 $45.39 $43.34 $43.96 $47.21 $47.79 $49.14 $50.37

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2,500'

5,000'

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10,000'

12,500'

15,000'

17,500'

20,000'

22,500'0 10 20 30 40 50 60

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h (ft

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Days

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Total Well Cost per Lateral Foot

Q1 2021 Drilling & Completion PerformanceMonument Draw Drilling Performance

2019/2020 BATL WellsPrevious HK and Offset Wells

2021 Plan Well2021 Q1 Actual

$1,565

$1,241$1,093

$842

$-

$500

$1,000

$1,500

$2,000

1H '19… 2H '19… FY '20… YTD '21…

Last 12 Well Avg. EUR (MBOE)

0200400600800

1,0001,2001,4001,6001,8002,000

Well1

Well2

Well3

Well4

Well5

Well6

Well7

Well8

Well9

Well10

Well11

Well12

AVG

Appendix

Selected Operating Data

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Three Months EndedMarch 31,

2021 2020Production volumes:

Crude oil (MBbls) 719 937Natural gas (MMcf) 2,133 2,539Natural gas liquids (MBbls) 215 350

Total (MBoe) 1,290 1,710Average daily production (Boe/d) 14,333 18,791

Average prices:Crude oil (per Bbl) $ 57.40 $ 44.74Natural gas (per Mcf) 4.26 0.14Natural gas liquids (per Bbl) 22.83 13.58

Total per Boe 42.84 27.50

Cash effect of derivative contracts:Crude oil (per Bbl) $ (13.17) $ 5.47Natural gas (per Mcf) (0.09) 0.32Natural gas liquids (per Bbl) — —

Total per Boe (7.49) 3.46

Average prices computed after cash effect of settlement of derivative contracts:Crude oil (per Bbl) $ 44.23 $ 50.21Natural gas (per Mcf) 4.17 0.46Natural gas liquids (per Bbl) 22.83 13.58

Total per Boe 35.35 30.96

Selected Operating Data ($/Boe)

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2) General and administrative, as adjusted, is a non-GAAP measure that excludes non-cash stock-based compensation charges relating to equity awards under our incentive stock plans, as well as other cash charges associated with transaction costs and other. The Company believes that it is useful to understand the effects that these charges have on general and administrative expenses and total operating costs and that exclusion of such charges is useful for comparison to prior periods.

3) Gathering and other, as adjusted, is a non-GAAP measure that excludes rig termination and stacking charges and other costs. The Company believes that it is useful to understand the effects that these charges have on gathering and other expense and total operating costs and that exclusion of such charges is useful for comparative purposes.

4) Represents lease operating expense, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in the reconciliation above.


2021 2020Average cost per Boe:

Production:Lease operating $ 7.34 $ 7.30Workover and other 0.43 0.77Taxes other than income 2.47 1.70

Gathering and other, as adjusted (1) 10.21 6.18Restructuring — 0.24General and administrative, as adjusted (1) 3.24 1.50Depletion 8.02 10.29

(1) Represents gathering and other and general and administrative costs per Boe, adjusted for items noted in the reconciliation below:

General and administrative:General and administrative, as reported $ 3.74 $ 2.26Stock-based compensation:

Non-cash (0.46) (0.23)Transaction costs and other:

Cash (0.04) (0.53)General and administrative, as adjusted(2) $ 3.24 $ 1.50

Gathering and other, as reported 10.21 6.17Rig termination and stacking charges and other — 0.01

Gathering and other, as adjusted(3) $ 10.21 $ 6.18

Total operating costs, as reported 24.19 18.20Total adjusting items (0.50) (0.75)

Total operating costs, as adjusted(4) $ 23.69 $ 17.45

Adjusted EBITDA Reconciliation (in thousands)

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1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance


2021 2020

Net income (loss), as reported $ (33,375) $ 114,491Impact of adjusting items:

Interest expense 1,496 1,714Depletion, depreciation and accretion 10,595 18,030Stock-based compensation 594 387Interest income (125) (97)Restructuring — 418(Gain) loss on sale of other assets (4) —Unrealized loss (gain) on derivatives contracts 36,052 (112,378)Transaction costs, rig termination and stacking charges and other 52 906

Adjusted EBITDA(1) $ 15,285 $ 23,471

Adjusted EBITDA Reconciliation (in thousands)

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1) Other adjustments to net income (loss), as reported include rig termination and stacking charges, transaction costs, and other non-recurring professional fees and costs.2) Adjusted EBITDA is a non-GAAP measure, which is presented based on management's belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial

performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion's performance.

3) Adjusted EBITDA for the three months ended September 30, 2020 and June 30, 2020, includes approximately $6.6 million and $16.4 million of net proceeds, respectively, from hedge monetizations that occurred during the periods.

Three Months Three Months Three Months Three MonthsEnded Ended Ended Ended

March 31, 2021 December 31, 2020 September 30, 2020 June 30. 2020

Net income (loss), as reported $ (33,375) $ (63,757) $ (153,125) $ (127,316)Impact of adjusting items:

Interest expense 1,496 1,853 1,964 1,842Depletion, depreciation and accretion 10,595 13,886 15,755 14,382Full cost ceiling impairment — 26,702 128,336 60,107Stock-based compensation 594 785 620 786Interest income (125) (171) (273) (232)Restructuring — — — 2,162(Gain) loss on sale of other assets (4) — — 52Unrealized loss (gain) on derivatives contracts 36,052 30,172 21,128 67,221Other(1) 52 (658) 210 4,211

Adjusted EBITDA(2)(3) $ 15,285 $ 8,812 $ 14,615 $ 23,215

Adjusted LTM EBITDA(2)(3) $ 61,927

Contact:Chris Lang(832) 538-0551

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