Battalion signs definitive agreement for Delaware basin development program

Battalion Oil Corp., Houston, has executed a definitive agreement to jointly fund development of up to an 8-well program in Monument Draw, Ward County, Tex.

The program, under the formalized joint development agreement (JDA), targets the 3rd Bone Spring, Wolfcamp A, and Wolfcamp B formations in the Delaware basin and builds on a plan to expand sour gas compression capacity, the company said in a release May 28.

Initial development will focus on a 4-well pad expected to begin drilling in late second-quarter 2026 or early in the year’s third quarter.

Battalion said the agreement is a step in the transition to “true cube development” of its primary benches, an approach deployed by offset operators across the basin designed to maximize hydrocarbon recovery, optimize well spacing, and improve capital efficiency across the stacked-pay column.

The formalized agreement follows a letter of intent entered into earlier this year with an unnamed, unaffiliated industry partner. Terms were not disclosed.

In early May, Matt Steele, the company’s chief executive officer, said the “shared capital structure and accretive carry” of the agreement would allow Battalion to accelerate development of its core Monument Draw inventory “while maintaining operatorship and a majority of the working interest” in the wells.

Battalion noted results of recently completed wells offset to the initial JDA four-well pad. One offset well achieved cumulative production of 389,000 boe (53% oil) through 267 production days, Battalion said. The second achieved cumulative production of 123,000 boe (41% oil) through 82 production days from a 2,637-ft partially completed lateral. Battalion said it expects similar production from the JDA wells.