Form DEFA14A - Additional definitive proxy soliciting materials and Rule 14(a)(12) material

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 23, 2024 

 

Battalion Oil Corporation

(Exact name of registrant as specified in its charter)

  

Delaware		001-35467		20-0700684
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

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820 Gessner Road Suite 1100 Houston, Texas		77024
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: [phone]

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(Former name or former address, if changed since last report)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

◻    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

⌧    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

◻    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

◻    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock par value $0.0001		BATL		NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ◻

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
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Item 1.01

Entry into a Material Definitive Agreement

Fourth Amendment to Credit Agreement

On August 23, 2024, Battalion Oil Corporation, a Delaware corporation (the “Company”), and its wholly owned subsidiary, Halcón Holdings, LLC (the “Borrower”) entered into a Fourth Amendment (the “Fourth Amendment”) to its Amended and Restated Senior Secured Credit Agreement dated as of November 24, 2021 (as the same has been amended, restated, amended and restated, supplemented and modified from time to time prior to the date hereof, the “Credit Agreement”), by and among, inter alios, the Company, the Borrower, Macquarie Bank Limited, as administrative agent and certain other financial institutions party thereto, as lenders.

The Fourth Amendment amended the Credit Agreement to allow for a Current Ratio (as defined in the Credit Agreement), of “0.90 to 1.00” for the fiscal quarter ending September 30, 2024.

The foregoing description of the Fourth Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amendment. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Important Information for Investors and Stockholders

This communication is being made in respect of the proposed transaction involving the Company and Parent. In connection with the proposed transaction, the Company intends to file the relevant materials with the SEC, including a proxy statement on Schedule 14A and a transaction statement on Schedule 13e-3 (the “Schedule 13e-3”). Promptly after filing its definitive proxy statement with the SEC, the Company will mail the definitive proxy statement and a proxy card to each stockholder of the Company entitled to vote at the special meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement, the Schedule 13e-3 or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transaction. The materials to be filed by the Company will be made available to the Company’s investors and stockholders at no expense to them and copies may be obtained free of charge on the Company’s website at www.battalionoil.com. In addition, all of those materials will be available at no charge on the SEC’s website at www.sec.gov. Investors and stockholders of the Company are urged to read the proxy statement, the Schedule 13e-3 and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction because they contain important information about the Company and the proposed transaction.

The Company and its directors, executive officers, other members of its management and employees may be deemed to be participants in the solicitation of proxies of the Company stockholders in connection with the proposed transaction under SEC rules. Investors and stockholders may obtain more detailed information regarding the names, affiliations and interests of the Company’s executive officers and directors in the solicitation by reading the Company’s Annual Report on Form 10-K, as amended on Form 10-K/A, for the fiscal year ended December 31, 2023, and the proxy statement, the Schedule 13e-3 and other relevant materials that will be filed with the SEC in connection with the proposed transaction when they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the proposed transaction and the Schedule 13e-3 when they become available.

Forward-Looking Statements

All statements and assumptions in this communication that do not directly and exclusively relate to historical facts could be deemed “forward-looking statements.” Forward-looking statements are often identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “may,” “could,” “should,” “forecast,” “goal,” “intends,” “objective,” “plans,” “projects,” “strategy,” “target” and “will” and similar words and terms or variations of such. These statements represent current intentions, expectations, beliefs or projections, and no assurance can be given that the results described in such statements will be achieved. Forward-looking statements include, among other things, statements about the potential benefits of the proposed transaction; the prospective performance and outlook of the Company’s business, performance and opportunities; the ability of the parties to complete the proposed transaction and the expected timing of completion of the proposed transaction; as well as any assumptions underlying any of the foregoing. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause

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actual results to differ materially from those described in such statements, many of which are outside of the Company’s control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, (i) the risk that the proposed transaction may not be completed in a timely manner or at all; (ii) the failure to receive, on a timely basis or otherwise, the required approvals of the proposed transaction by the Company’s stockholders; (iii) the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals); (iv) the possibility that competing offers or acquisition proposals for the Company will be made; (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the proposed transaction, including in circumstances, which would require the Company to pay a termination fee; (vi) the effect of the announcement or pendency of the proposed transaction on the Company’s ability to attract, motivate or retain key executives and employees, its ability to maintain relationships with its customers, suppliers and other business counterparties, or its operating results and business generally; (vii) risks related to the proposed transaction diverting management’s attention from the Company’s ongoing business operations; (viii) the amount of costs, fees and expenses related to the proposed transaction; (ix) the risk that the Company’s stock price may decline significantly if the Merger is not consummated; (x) the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; and (xi) other factors as set forth from time to time in the Company’s filings with the SEC, including its Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2023, as may be updated or supplemented by any subsequent Quarterly Reports on Form 10-Q or other filings with the SEC. Readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this communication or to reflect the occurrence of unanticipated events except as required by law.

Item 9.01

Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.		Description
10.1	​	Fourth Amendment to Amended and Restated Senior Secured Credit Agreement dated as of August 23, 2024, by and among Halcón Holdings, LLC, as borrower, Macquarie Bank Limited, as administrative agent and the lenders party hereto, the guarantors party hereto and Battalion Oil Corporation, as holdings.
104	​	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BATTALION OIL CORPORATION
August 28, 2024	By:	/s/ Matthew B. Steele
	Name:	Matthew B. Steele
	Title:	Chief Executive Officer

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Exhibit 10.1

Execution Version

FOURTH AMENDMENT TO AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

This FOURTH AMENDMENT TO AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT (this “Fourth Amendment”) is entered into as of August 23, 2024, by and among Halcón Holdings, LLC, a Delaware limited liability company (the “Borrower”), Macquarie Bank Limited, as administrative agent (in such capacity, the “Administrative Agent”) for the lenders party from time to time to the Credit Agreement referred to below (the “Lenders”), the Lenders party hereto, the Guarantors party hereto and Battalion Oil Corporation, a Delaware corporation (“Holdings”).

RECITALS

WHEREAS, the Borrower, the Administrative Agent and the Lenders are party to that certain Amended and Restated Senior Secured Credit Agreement dated as of November 24, 2021 (as amended by that certain First Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of August 2, 2022, that certain Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of November 14, 2022, that certain Corrective Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of June 6, 2023, and that certain Third Amendment to Amended and Restated Senior Secured Credit Agreement, dated as of March 28, 2024, the “Credit Agreement”);

WHEREAS, pursuant to the Credit Agreement, the Lenders have made Loans to the Borrower and provided certain other credit accommodations to the Borrower; and

WHEREAS, the Borrower has requested that the Lenders agree to amend certain provisions of the Credit Agreement, and the Lenders party hereto, which constitute the Majority Lenders, have agreed to amend the Credit Agreement upon the terms and conditions set forth herein and to be effective as of the Fourth Amendment Effective Date (as defined below).

NOW THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Loan Parties, the Administrative Agent and the Lenders party hereto hereby agree as follows:

Section 1.Defined Terms.  Each capitalized term used herein, but not otherwise defined herein, has the meaning given such term in the Credit Agreement, as amended by this Fourth Amendment (the “Amended Credit Agreement”).

Section 2.Amendments to Credit Agreement.

2.1Section 9.01(b). Section 9.01(b) of the Credit Agreement is hereby amended and restated in its entirety as reflected below:

(b)Current Ratio.  The Borrower will not permit the Current Ratio, as of the last day of any fiscal quarter (commencing with the fiscal quarter ending December 31, 2021), to be less than the applicable level set forth in the following table for the applicable fiscal quarter:

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Fiscal Quarter	Current Ratio
Fiscal quarters ending December 31, 2021 through and including June 30, 2022	1.00 to 1.00
Fiscal quarter ending September 30, 2022	0.90 to 1.00
Fiscal quarter ending December 31, 2022	0.70 to 1.00
Fiscal quarter ending March 31, 2023	0.75 to 1.00
Fiscal quarters ending June 30, 2023 through and including June 30, 2024	1.00 to 1.00
Fiscal quarter ending September 30, 2024	0.90 to 1.00
Each fiscal quarter thereafter	1.00 to 1.00

Section 3.Conditions Precedent to Fourth Amendment.  This Fourth Amendment shall not become effective until the date of satisfaction or waiver of the following conditions (the “Fourth Amendment Effective Date”):

3.1Signature Pages.  The Administrative Agent shall have received counterparts to this Fourth Amendment duly executed by the Lenders constituting all Lenders party to the Credit Agreement and each Loan Party.

3.2Representations and Warranties.  On and as of the Fourth Amendment Effective Date the representations and warranties contained in Section 4 hereof shall be true and correct.

3.3No Default or Event of Default. Immediately prior to, and after giving effect to, this Fourth Amendment, no Default or Event of Default shall exist.

3.4Fees and Expenses.  (i) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Fourth Amendment Effective Date and (ii) the Borrower shall have paid the reasonable and documented out-of-pocket fees and expenses of Sidley Austin LLP, counsel to the Administrative Agent, required to be paid by the Borrower pursuant to Section 12.03 of the Credit Agreement, to the extent invoiced prior to 1:00 p.m. Houston, Texas time on the Fourth Amendment Effective Date (or such later time as to which the Borrower may agree).

The Administrative Agent shall notify the Borrower and the Lenders of the Fourth Amendment Effective Date, and such notice shall be conclusive and binding.

Section 4.Representations and Warranties.  To induce the Lenders party hereto and the Administrative Agent to enter into this Fourth Amendment, each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent as follows:

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4.1Reaffirm Existing Representations and Warranties.  Each representation and warranty of such Loan Party contained in the Credit Agreement and the other Loan Documents is true and correct in all material respects on and as of the Fourth Amendment Effective Date after giving effect to this Fourth Amendment, except in the case of any representation and warranty which (A) expressly relates to a given date, such representation and warranty shall be true and correct in all material respects as of such given date and (B) is qualified by a materiality or Material Adverse Effect standard, in which case such representation and warranty shall be true and correct in all respects.

4.2No Default or Event of Default.  Immediately prior to, and after giving effect to, this Fourth Amendment, no Default or Event of Default has occurred and is continuing.

Section 5.Miscellaneous.

5.1Reaffirmation of Loan Documents.  Any and all of the terms and provisions of the Credit Agreement and the other Loan Documents shall, except as amended and modified hereby, remain in full force and effect and, to the knowledge of each Loan Party, such Loan Party has no defense to its obligations to pay the Secured Obligations when due.  Each Loan Party hereby agrees that the amendments and modifications herein contained shall not limit or impair any Liens securing the Secured Obligations or such Loan Party’s obligation to pay the Secured Obligations when due, each of which is hereby ratified and affirmed.

5.2No Waiver.  Neither the execution by the Administrative Agent or the Lenders party hereto of this Fourth Amendment, nor any other act or omission by Administrative Agent or the Lenders or their officers in connection herewith, shall be deemed a waiver by the Administrative Agent or the Lenders of any Defaults or Events of Default which may exist, which may have occurred prior to the date of the effectiveness of this Fourth Amendment or which may occur in the future under the Credit Agreement and/or the other Loan Documents.  Similarly, nothing contained in this Fourth Amendment shall directly or indirectly in any way whatsoever: (a) impair, prejudice or otherwise adversely affect the Administrative Agent’s or the Lenders’ right at any time to exercise any right, privilege or remedy in connection with the Loan Documents with respect to any Default or Event of Default, (b) except as expressly provided herein, amend or alter any provision of the Credit Agreement, the other Loan Documents, or any other contract or instrument, or (c) constitute any course of dealing or other basis for altering any obligation of the Borrower or any right, privilege or remedy of the Administrative Agent or the Lenders under the Credit Agreement, the other Loan Documents, or any other contract or instrument.  Nothing in this Fourth Amendment shall be construed to be a consent by Administrative Agent or the Lenders to any Default or Event of Default.  Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of similar import shall mean and be a reference to the Credit Agreement as modified hereby, and each reference in any other Loan Document to the Credit Agreement or any word or words of similar import shall be and mean a reference to the Credit Agreement as modified hereby.

5.3Counterparts.  This Fourth Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Fourth Amendment by telecopy, emailed pdf. or any other

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electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Fourth Amendment.  The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Fourth Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.  

5.4Complete Agreement.  THIS FOURTH AMENDMENT, THE AMENDED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

5.5Headings.  Section headings used in this Fourth Amendment are for convenience of reference only, are not part of this Fourth Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Fourth Amendment.

5.6Governing Law.  THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  Section 12.09(b) through (d) of the Credit Agreement shall apply to this Fourth Amendment mutatis mutandis.

5.7Severability. Any provision of this Fourth Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

5.8Loan Document.  This Fourth Amendment shall constitute a Loan Document (as defined in the Credit Agreement), and all the terms and provisions of the Amended Credit Agreement relating to Loan Documents shall apply hereto.

[Signature Pages to Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly executed by their respective authorized officers on the date and year first above written.

BORROWER:	HALCÓN HOLDINGS, LLC
	By:	/s/ Matthew B. Steele
		Name:	Matthew B. Steele
		Title:	Chief Executive Officer and President
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HOLDINGS
(solely with respect to Article IX-A of the Amended Credit Agreement):
​	BATTALION OIL CORPORATION
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​	By:	/s/ Matthew B. Steele
​		Name:	Matthew B. Steele
​		Title:	Chief Executive Officer
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GUARANTORS:	BATTALION OIL MANAGEMENT, INC. HALCÓN ENERGY PROPERTIES, INC. HALCÓN OPERATING CO., INC. HALCÓN FIELD SERVICES, LLC HALCÓN PERMIAN, LLC
	By:	/s/ Matthew B. Steele
		Name:	Matthew B. Steele
		Title:	Chief Executive Officer and President
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ADMINISTRATIVE AGENT:	MACQUARIE BANK LIMITED, as Administrative Agent and a Lender
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​	By:	/s/ Robert Trevena
​	​	Name:	Robert Trevena
​	​	Title:	Division Director
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​	By:	/s/ Nathan Booker
​	​	Name:	Nathan Booker
​	​	Title:	Division Director
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​	(Signed in Sydney under MBL POA No. 3322, expiring 31 January 2025)

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[Signature Page to Fourth Amendment]

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LENDERS:
​	ARES CAPITAL CORPORATION, as a Lender
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​	By:	/s/ Michael Dieber
​	​	Name:	Michael Dieber
​	​	Title:	Authorized Signatory
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​	IVY XIX FINANCING, LLC, by Ivy Hill Asset Management, L.P., as Servicer
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​	By:	/s/ Steven Alexander
​	​	Name:	Steven Alexander
​	​	Title:	Authorized Signatory
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​	CION ARES DIVESTIFIED CREDIT FUND, as a Lender
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​	By:	/s/ Michael Dieber
​	​	Name:	Michael Dieber
​	​	Title:	Authorized Signatory
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​	FORTRESS CREDIT OPPORTUNITIES IX CLO LIMITED, as Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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​	FORTRESS CREDIT OPPORTUNITIES VI CLO LIMITED, as a Lender
​	By: FCOO CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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[Signature Page to Fourth Amendment]

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​	FORTRESS CREDIT OPPORTUNITIES XI CLO LIMITED, as a Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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​	FORTRESS CREDIT OPPORTUNITIES XIX CLO LLC, as a Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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​	FORTRESS CREDIT OPPORTUNITIES XV CLO LIMITED, as a Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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​	FLF II HOLDINGS FINANCE L.P., as a Lender
​	By: Fortress Lending Advisors II LLC, its investment manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Authorized Signatory
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​	FLF II MA-CRPTF HOLDINGS FINANCE L.P., as a Lender
​	By: FLF II MA-CRPTF Advisors LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Authorized Signatory
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[Signature Page to Fourth Amendment]

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​	FLF II GMS HOLDINGS FINANCE L.P., as a Lender
​	By: FLF II GMS Holdings Finance CM LLC, as servicer
​	By: Fortress Lending II Holdings LP, its sole member
​	By: Fortress Lending Advisors II LLC, its investment manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Authorized Signatory
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​	FORTRESS CREDIT OPPORTUNITIES XXI CLO LLC, as a Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Deputy Chief Financial Officer
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​	FORTRESS CREDIT OPPORTUNITIES XXIII CLO LLC, as a Lender
​	By: FCOD CLO Management LLC, its collateral manager
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​	By:	/s/ Vincent Randazzo
​	​	Name:	Vincent Randazzo
​	​	Title:	Authorized Signatory

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[Signature Page to Fourth Amendment]

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