Battalion Oil Expands Compression Capacity by 50% with New Contract

Battalion Oil Corporation has finalized a long-term contract increasing its sour gas compression capacity by 50%, raising flow capacity to over 50 million cubic feet per day. This enhancement, expected to be operational in early Q3 2026, aims to support ongoing production and future development in the Monument Draw area.

The company successfully acquired a built-for-purpose compressor, reducing lead times from 18-36 months to about two months without capital expenditure, although operating expenses will rise slightly. Battalion's recent asset sales, including a $60.1 million transaction for West Quito Draw assets, reflect its strategic financial maneuvers amidst liquidity pressures, including a $35.48 million negative levered free cash flow. The increase in compression capacity positions Battalion to optimize well performance and pursue new drilling opportunities.