The transaction was executed as an all-stock deal, with Battalion issuing 485,000 shares of its common stock to RoadRunner, subject to customary closing adjustments. The acquisition is effective as of March 1, 2026, and is anticipated to provide Battalion with immediate production opportunities and proven geology, as it includes ownership interest in an existing Battalion-operated well on the acquired acreage. This well is estimated to contribute approximately $700,000 in net present value, discounted at 10%.
The newly acquired acreage directly adjoins Battalion's existing Monument Draw position, which encompasses 20,007 acres. This expansion is expected to facilitate optimized long-lateral development and operational efficiencies, allowing for a more contiguous and highly operational footprint in the area. Battalion's management expressed confidence in the asset's subsurface characteristics and expected well performance, given their previous experience operating on this acreage under a joint venture agreement with RoadRunner.
CEO Matt Steele commented on the acquisition, stating, "We are pleased to close this strategic, all-stock transaction with Sundown. Combining this acreage into our Monument Draw position strengthens our development runway, and with our sour gas treating solution now in place, we are well-positioned to develop this asset efficiently and at scale."
This acquisition is expected to add approximately 30 high-quality net locations targeting the prolific Wolfcamp A, Wolfcamp B, and 3rd Bone Spring formations, thereby meaningfully improving Battalion's drilling inventory. The company is also set to benefit from its recent acid gas treating agreement with Targa Resources, which secures ample sour gas treatment capacity to support future development on this acreage.
Overall, this acquisition marks a significant step in Battalion Oil Corporation's growth strategy, positioning the company for enhanced operational capabilities and increased production potential in the competitive oil and gas market.
