Battalion Oil Secures 50% Additional Compression Capacity to Over 50 MMcfd
Battalion Oil contracted for 50% more sour gas compression, raising throughput from 35 MMcfd to over 50 MMcfd with zero capital investment and modest opex increase. New built-for-purpose compressor will be online in early Q3 2026, supporting current production and unlocking future drilling inventory.
1. Contract Expansion and Capacity Increase
Battalion Oil executed a long-term agreement to increase sour gas compression capacity by 50%, lifting flow capacity from 35 MMcfd to over 50 MMcfd across its Monument Draw assets in Ward and Winkler counties.
2. Financial Structure and Operating Costs
The transaction requires no upfront capital from the company and entails only a modest increase in operating expenses, preserving cash flow while significantly enhancing throughput capability.
3. Accelerated Deployment with Built-for-Purpose Equipment
Through an international sourcing effort, Battalion secured a custom compressor with a two-month lead time versus the typical 18–36 months, enabling facilities to be operational by early Q3 2026.
4. Production Impact and Future Development
With current well economics yielding over 80% IRR at hedged prices, the capacity boost will optimize existing wells, facilitate new drilling activity and support strategic M&A to expand the company’s inventory.