Management Change/Compensation (Form 8-K)

On June 18, 2026, the Board of Directors (the "Board") of the Battalion Oil Corporation (the "Company"), upon the recommendation of the Board's Compensation Committee, approved (i) an updated compensation program for the Company's non-employee directors, effective July 1, 2026; and (ii) certain change in control-related compensation arrangements for the Company's executive officers and other key employees (the "Retention and Incentive Plan"), which replace the arrangements previously approved by the Board on March 4, 2025.

Non-Employee Director Compensation

Under the Company's non-employee director compensation program, each non-employee director will receive an annual cash retainer of $225,000. The Chairman of the Board will receive an additional annual cash retainer of $75,000, and committee chairs will each receive an additional annual cash retainer of $25,000 per committee chaired. The compensation will be payable in quarterly installments and prorated for partial-year service.

This program replaces the Company's prior non-employee director compensation arrangements.

Change in Control Retention and Incentive Arrangements

The Retention and Incentive Arrangements provide for the establishment of a cash bonus pool of $5.0 million (the "Bonus Pool"), payable upon the consummation of a change in control transaction and allocable among eligible executive officers and key employees as determined by the Board. Beginning January 1, 2027, the Bonus Pool will be subject to annual adjustment based on the Consumer Price Index for All Urban Consumers (CPI-U), plus an additional 200 basis points. The Bonus Pool will expire on December 31, 2030.

The Board also approved a performance-based incentive program (the "Waterfall Merger Incentive Program") pursuant to which an additional incentive pool will be established in connection with a qualifying change in control transaction based on the increase in the Company's value above an established base amount (the "Base Amount") measured from May 1, 2026 (the "Base Date"). The size of the incentive pool is determined by the internal rate of return ("IRR") implied by the growth in the Company's value from the Base Date to the closing date of the qualifying transaction, calculated using the XIRR function in Microsoft Excel. The amount of such incentive pool will be determined based on specified internal rate of return thresholds, with payout percentages ranging from 10% to 20% of the increase in value above the Base Amount. Payments under the Waterfall Merger Incentive Program may be made in cash, equity, or a combination thereof, and will expire on December 31, 2030.

Awards under the Retention and Incentive Arrangements will be subject to the consummation of a qualifying change in control transaction and final allocation determinations by the Board. Certain executive officers and key employees are eligible to participate in the Retention and Incentive Arrangements.

2020 LTIP RSU Vesting Confirmation

The Board also confirmed that the vesting condition applicable to 35,419 restricted stock units previously awarded on February 20, 2020 under the Company's 2020 Long-Term Incentive Plan (the "2020 Plan") has been satisfied. The award agreement governing such restricted stock units provided for automatic vesting upon the occurrence of a change of control event, the Board determined that such threshold has been reached and that the applicable vesting condition has accordingly been satisfied in accordance with the terms of the award agreement. This disclosure is confirmatory in nature; the vesting of such restricted stock units occurred automatically upon determination of the satisfaction of the contractual condition and did not require further Board authorization.

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