HOUSTON, Feb. 07, 2025 (GLOBE NEWSWIRE) — Prairie Operating Co. (Nasdaq: PROP), today announced it has entered into a definitive purchase and sale agreement to acquire certain assets from Bayswater Exploration and Production and certain of its affiliated entities, a premier operator in the Denver-Julesburg Basin. The transaction will significantly increase the Company’s operational scale and footprint in the DJ Basin and add highly economic drilling locations.
The purchase price of the acquisition is $602.75 million. The transaction consideration will consist of cash and up to ~5.2 million shares of Prairie common stock. Prairie anticipates funding the cash portion of the consideration, net of expected purchase price adjustments, through a combination of cash on hand and borrowings under the Company’s credit facility, pursuant to which the Company has received commitments to expand its borrowing base to $475 million as of the closing of the Bayswater Acquisition, and proceeds from one or more capital markets transactions, subject to market conditions and other factors. The Company expects to complete the Bayswater Acquisition in February 2025, subject to customary closing conditions, with an economic effective date of December 1, 2024.
“This acquisition delivers compelling strategic and financial advantages and reflects our disciplined, but opportunistic approach to rapidly expand our footprint in the DJ Basin,” said Edward Kovalik, Chairman and CEO of Prairie Operating Co. “Not only will the addition of these high-quality assets be immediately accretive, but they will also accelerate our development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for our shareholders.”
Gary Hanna, President of the Company, added, “This acquisition represents a transformative milestone for Prairie Operating Co. by significantly expanding our footprint and production of oil rich assets in the DJ Basin. Upon closing, we will be well-positioned to deliver significant organic production growth in 2025 and beyond.”
Key Prairie Highlights, Pro Forma for the Transaction:
- Transformational Increase in Oil-Weighted Production: ~27,500 net BOEPD (69% liquids)
- Expanded Footprint / Inventory Life: ~54,000 net acres, including ~600 highly economic drilling locations, providing ~10 years of drilling inventory
- Significantly Increases Free Cash Flow: Expected to be immediately accretive to per-share cash flow metrics
- Maintains Strong Balance Sheet: Expected leverage ratio of ~1.0x at closing with upsized committed credit facility and ample liquidity
- Meaningful Infrastructure Synergies: Leverages existing infrastructure to drive operational efficiencies and reduce development costs
- Attractive Valuation Metrics(1): PV-20 of Proved Developed Producing (“PDP”) reserves and $23,500 per net flowing BOE
2025 Updated Guidance
Upon the closing of this acquisition, the combined Company’s 2025 pro forma outlook includes:
- Average Daily Production: 29,000 – 31,000 BOEPD
- Capital Expenditures (Capex): $300 million – $320 million
- Adjusted EBITDA(3): Expected to range between $350 million and $370 million
*Based on an active hedging program and an average working interest (“WI”) of 75% or greater.
Estimated Reserve Data
A summary of the estimated reserves and values of our properties (as adjusted to give effect to the Bayswater Acquisition), as of November 30, 2024, and as determined by Cawley, Gillespie & Associates, the Company’s independent Petroleum Reserve Evaluation Firm, using SEC pricing as of November 30, 2024 is set forth below.
| Our Pro Forma Net Reserves | ||||||||
| Reserve Category | Oil (MBbl) |
NGL (MBbl) |
Gas (MMcf) |
Total (MBoe) |
Liquids (%) |
PV-10 ($MM)(4) |
||
| Proved Developed Producing (PDP) | 23,581 | 14,810 | 113,611 | 57,326 | 67 | % | $860 | |
| Proved Developed Not Producing (PDNP) | 173 | 26 | 216 | 235 | 85 | % | $5 | |
| Proved Undeveloped (PUD) | 25,547 | 8,970 | 72,088 | 46,531 | 74 | % | $495 | |
| Total Proved | 49,301 | 23,806 | 185,914 | 104,093 | 70 | % | $1,360 | |
(3) Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.
(4) PV-10 is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.
Advisors
Citi is serving as exclusive financial advisor and Norton Rose Fulbright US LLP is serving as legal advisor to Prairie. Citibank N.A. is also leading the committed financing under the Company’s anticipated expanded credit facility, with Latham & Watkins LLP as legal advisor to Citibank N.A.
About Prairie Operating Co.
Prairie Operating Co. is a Houston-based publicly traded independent energy company engaged in the development and acquisition of oil and natural gas resources in the United States. The Company’s assets and operations are concentrated in the oil and liquids-rich regions of the Denver-Julesburg (DJ) Basin, with a primary focus on the Niobrara and Codell formations. The Company is committed to the responsible development of its oil and natural gas resources and is focused on maximizing returns through consistent growth, capital discipline, and sustainable cash flow generation. More information about the Company can be found at www.prairieopco.com.
