HOUSTON, TX - Battalion Oil Corporation, a Delaware-based crude petroleum and natural gas company, has announced an extension to the deadline for completing its planned merger with Fury Resources, Inc., according to a recent SEC filing.
The transaction, initially set out in a Merger Agreement dated December 14, 2023, between Battalion Oil Corp, Fury Resources, Inc., and San Jacinto Merger Sub, Inc., has faced delays in securing the necessary alternative financing. As of today, Fury Resources has not secured definitive alternative financing sufficient to finalize the merger.
In response, Battalion Oil has waived its right to terminate the Merger Agreement due to these delays until 11:59 p.m. Central Time on December 19, 2024. This extension is intended to provide Fury Resources with additional time to obtain the required financing.
To accommodate this extension and the ongoing financing efforts, Battalion Oil plans to adjourn its special meeting of stockholders, initially scheduled for Friday, November 29, 2024, to Friday, December 27, 2024. The adjournment is to allow Fury Resources the opportunity to secure the financing and to enable stockholders to review any new disclosures related to the financing if secured.
Battalion Oil's board of directors and the special committee are currently assessing the company's options in light of the financing efforts and potential refinancing of the company's existing credit facility. While the company has not decided to terminate the Merger Agreement, it reserves all rights and remedies under the agreement and applicable law.
In other recent news, Battalion Oil Corp has been experiencing significant developments that could potentially impact investors. The merger with Fury Resources, Inc., initially expected to conclude by November 21, 2024, now faces delays due to Fury Resources' failure to meet the funding deadline. As a result, Battalion Oil has adjourned its special meeting of stockholders to provide Fury Resources additional time to secure alternative financing.
Additionally, Battalion Oil has adopted a Merger Incentive Plan, which grants Equity Grant Units to its employees upon the successful closing of a change of control transaction. This plan, established in September 2024, is set to expire on December 31, 2025.
Furthermore, the company has amended its credit facility to allow for a Current Ratio of "0.90 to 1.00" for the fiscal quarter ending September 30, 2024. These changes indicate a potential shift in the company's capital structure.
InvestingPro Insights
As Battalion Oil Corporation (BATL) navigates through its merger process with Fury Resources, Inc., recent InvestingPro data provides additional context to the company's financial situation. The company's market cap stands at $58.75 million, reflecting its current valuation amidst the ongoing merger negotiations.
InvestingPro Tips highlight that Battalion Oil is "quickly burning through cash" and that "short term obligations exceed liquid assets." These factors may explain the urgency in securing alternative financing for the merger and the potential need for refinancing the existing credit facility, as mentioned in the article.
Despite these challenges, an InvestingPro Tip notes that analysts predict the company will be profitable this year, which could be a positive sign for investors considering the merger's potential outcomes. Additionally, the stock has shown a "significant return over the last week," with a 25.26% price total return, possibly reflecting market reactions to the merger developments.
For a more comprehensive analysis, InvestingPro offers 7 additional tips for Battalion Oil, providing deeper insights into the company's financial health and market performance during this critical period.
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