(WO) — Battalion Oil has agreed to acquire 7,090 net acres in Ward County, Texas, expanding its Monument Draw position in the Permian basin through an all-stock transaction with RoadRunner Resource Holding LLC, formerly Sundown Energy LP.
Under the terms of the agreement, Battalion will issue 485,000 shares of common stock in exchange for the assets. The acreage directly adjoins the company’s existing Monument Draw holdings, increasing the scale and operational continuity of its position in the area.
The newly acquired leases are expected to add about 30 drilling locations targeting the Wolfcamp A, Wolfcamp B and 3rd Bone Spring formations, key reservoirs in the Permian basin.
The transaction also includes Sundown’s interest in an existing Battalion-operated well within the acreage, which the company said contributes an estimated $700,000 in value on a 10% discounted net present value basis.
Development of the acreage is expected to benefit from Battalion’s recent acid gas treating agreement with Targa Resources, which provides sour gas processing capacity for future development in the area.
Battalion previously partnered with Sundown on the acreage through a joint venture and operated drilling activities there, providing the company with operational and geological insight into the assets.
“We are excited to announce this strategic, all-stock transaction with Sundown,” said Matt Steele, Chief Executive Officer of Battalion Oil Corporation. “Having previously operated and drilled on this exact acreage during our joint venture, we have seen the exceptional well results firsthand. Consolidating this contiguous acreage into our Monument Draw position is a natural fit. Furthermore, our recent sour gas treating agreement with Targa means we have the infrastructure in place to efficiently develop these assets.”
The acquisition remains subject to customary closing adjustments, regulatory approvals and other conditions. The effective date of the transaction is March 1, 2026.