Core Viewpoint - Prairie Operating Co. (PROP) and Civitas Resources (CIVI) are two independent energy firms competing in Colorado's DJ Basin, with PROP focusing on aggressive growth through acquisitions and CIVI emphasizing cost discipline and expansion into high-return Permian assets [1][2]. Group 1: Prairie Operating Co. (PROP) - Strategic Growth via Acquisitions: PROP has executed over $800 million in acquisitions since 2023, tripling its scale and adding 54,000 net acres and over 28,000 BOE/d in output [3][4]. - Financial Firepower and Production Growth: Adjusted EBITDA for 2025 is forecasted between $350 million and $370 million, with net income guidance of $69 million to $102 million, and expected production averaging 29,000 to 31,000 BOE/d in 2025, a more than 300% increase year over year [4][5]. - Strategic Hedging Locks in Upside: PROP has hedged about 85% of its 2025 daily production at $68.27/bbl WTI, providing visibility on cash flows and protecting against market volatility, with a hedge book valued at approximately $70 million [5]. Group 2: Civitas Resources (CIVI) - Cost Optimization and Cash Flow Strength: CIVI is targeting $100 million in additional annual free cash flow through a company-wide cost optimization plan, expecting to generate $1.3 billion in free cash flow in 2024 and $1.1 billion in 2025 [6]. - Focused Permian Expansion: CIVI has shifted 40% of its capital activity to the Delaware Basin, which has shown the highest returns, with operational gains reflected in faster drilling rates and enhanced capital efficiency [7]. - Robust Balance Sheet and Hedging Strategy: CIVI aims to achieve a $4.5 billion net debt target by year-end 2025, with nearly $200 million in hedge value secured, insulating free cash flow against oil price volatility [8]. Group 3: Price Performance and Valuation - Price Performance: Both PROP and CIVI have seen significant declines over the past year, with PROP down 71% and CIVI down 61%, attributed to weak oil prices and macro concerns [10]. - Valuation Comparison: PROP trades at 0.27X forward sales, significantly lower than CIVI's 0.56X, indicating a potential undervaluation [13]. - EPS Estimates: PROP's earnings are projected to surge by 382.9% in 2025, while CIVI's EPS is expected to fall by 29.3% in the same year, highlighting PROP's stronger growth trajectory [14][16]. Group 4: Conclusion - Both PROP and CIVI carry a Zacks Rank 3 (Hold), with CIVI offering strong free cash flow and disciplined cost control, while PROP presents exciting growth potential and an improving cash flow profile, positioning PROP slightly better at this moment [19].

PART I [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Q1 2025 unaudited financials show total assets at $775.4 million and liabilities at $553.1 million, driven by the Bayswater acquisition, generating $13.6 million in oil and gas revenues, but resulting in a $93.5 million net loss attributable to common stockholders Condensed Consolidated Balance Sheet Highlights (As of March 31, 2025 vs. Dec 31, 2024) | Account | March 31, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$775,445** | **$156,554** | | Cash and cash equivalents | $14,972 | $5,192 | | Property and equipment, net | $672,660 | $134,620 | | **Total Liabilities** | **$553,121** | **$103,786** | | Credit facility | $377,000 | $28,000 | | **Mezzanine Equity** | **$188,281** | **$0** | | **Total Stockholders' Equity** | **$34,043** | **$52,768** | Condensed Consolidated Statement of Operations (Three Months Ended March 31, 2025 vs. 2024) | Account | Q1 2025 ($ in thousands) | Q1 2024 ($ in thousands) | | :--- | :--- | :--- | | **Total Revenues** | **$13,590** | **$0** | | Income (loss) from operations | $1,753 | $(8,045) | | Net loss from continuing operations | $(2,617) | $(7,993) | | Net loss from discontinued operations | $0 | $(1,044) | | **Net loss attributable to Prairie Operating Co.** | **$(2,617)** | **$(9,037)** | | Series F preferred stock deemed dividends | $(90,612) | $0 | | **Net loss attributable to common stockholders** | **$(93,474)** | **$(9,037)** | | **Loss per share, basic and diluted** | **$(3.49)** | **$(0.90)** | [Note 1 – Organization, Description of Business, and Basis of Presentation](index=14&type=section&id=Note%201%20%E2%80%93%20Organization%2C%20Description%20of%20Business%2C%20and%20Basis%20of%20Presentation) Prairie Operating Co. transformed into a DJ Basin-focused energy company after the Bayswater acquisition and exiting crypto mining, with management asserting sufficient liquidity despite a $54.7 million working capital deficit - The company is now focused on the acquisition and development of crude oil, natural gas, and NGLs in the DJ Basin[32](index=32&type=chunk) - The Bayswater Acquisition closed on **March 26, 2025**, for approximately **$482.5 million** in cash and **3,656,099 shares** of common stock[33](index=33&type=chunk)[34](index=34&type=chunk) - The company exited the cryptocurrency mining business in **January 2024**, with these activities now classified as discontinued operations[35](index=35&type=chunk) - As of **March 31, 2025**, the company had a working capital deficit of **$54.7 million** and an accumulated deficit of **$122.4 million**, but management believes there is no substantial doubt about its ability to continue as a going concern due to available liquidity under its credit facility[40](index=40&type=chunk)[44](index=44&type=chunk) [Note 3 – Acquisitions](index=22&type=section&id=Note%203%20%E2%80%93%20Acquisitions) This note details the Bayswater Acquisition (March 2025, $490.6 million) and NRO Acquisition (October 2024, $55.5 million), which fundamentally shifted the company's asset base to oil and gas production Bayswater Acquisition Preliminary Purchase Price Allocation (March 26, 2025) | Component | Amount (in thousands) | | :--- | :--- | | Cash consideration | $467,520 | | Common stock issued to sellers | $16,000 | | Direct transaction costs | $7,061 | | **Total consideration** | **$490,581** | | *Allocated to:* | | | Oil and natural gas properties | $509,954 | | Other assets & receivables | $54,902 | | Liabilities assumed | $(74,275) | NRO Acquisition Final Purchase Price Allocation (October 1, 2024) | Component | Amount (in thousands) | | :--- | :--- | | Cash consideration & Deposits | $55,270 | | Direct transaction costs | $239 | | **Total consideration** | **$55,509** | | *Allocated to:* | | | Oil and natural gas properties | $63,591 | | Liabilities assumed | $(8,186) | [Note 4 – Discontinued Operations](index=24&type=section&id=Note%204%20%E2%80%93%20Discontinued%20Operations) The company exited its cryptocurrency business on January 23, 2024, selling mining equipment for $1.0 million cash and a $1.0 million note, resulting in a $1.044 million loss from discontinued operations in Q1 2024 - On **January 23, 2024**, the company sold all its cryptocurrency miners for **$1.0 million** cash and a **$1.0 million** deferred payment note[83](index=83&type=chunk) Loss from Discontinued Operations | Period | Amount (in thousands) | | :--- | :--- | | Three Months Ended March 31, 2024 | $(1,044) | | Three Months Ended March 31, 2025 | $0 | [Note 10 – Debt](index=32&type=section&id=Note%2010%20%E2%80%93%20Debt) Q1 2025 saw a dramatic shift in debt, with the credit facility borrowing base increasing to $475 million ($377 million drawn), the $11.3 million Senior Convertible Note converting to equity, and the Subordinated Note partially paid down and restructured - The Amended & Restated Credit Agreement provides for a maximum commitment of **$1.0 billion** with a borrowing base of **$475.0 million** as of **March 31, 2025**[120](index=120&type=chunk) - As of **March 31, 2025**, **$377.0 million** was drawn on the credit facility, leaving **$98.0 million** in availability[121](index=121&type=chunk) - During Q1 2025, the remaining **$11.3 million** of the Senior Convertible Note was converted into **2.1 million shares** of common stock[134](index=134&type=chunk) - On **March 26, 2025**, the company paid down **$3.2 million** of the Subordinated Note, with the remaining **$1.5 million** outstanding converted to principal and accruing interest at **15%** per annum[139](index=139&type=chunk)[140](index=140&type=chunk) [Note 13 – Mezzanine Equity](index=39&type=section&id=Note%2013%20%E2%80%93%20Mezzanine%20Equity) To fund the Bayswater Acquisition, the company issued $148.3 million in Series F Preferred Stock, classified as mezzanine equity, which was adjusted to a $188.3 million redemption value, resulting in a $90.2 million non-cash deemed dividend - Issued **148,250 shares** of Series F Preferred Stock on **March 26, 2025**, for gross proceeds of **$148.3 million** to partially fund the Bayswater Acquisition[148](index=148&type=chunk) - The stock carries a **12%** cumulative dividend, payable in cash or, at the company's election, in common stock[149](index=149&type=chunk) - The Series F Preferred Stock is classified as mezzanine equity and was adjusted to its maximum redemption amount of **$188.3 million**, resulting in a deemed dividend of **$90.2 million** recognized on the statement of operations[155](index=155&type=chunk) [Note 18 – Subsequent Events](index=53&type=section&id=Note%2018%20%E2%80%93%20Subsequent%20Events) Post-quarter, the company implemented a significant hedging program covering 85% of daily production through Q1 2028 and completed the $15.0 million Additional Working Interest Acquisition related to the Bayswater deal - Post-quarter, the company hedged approximately **85%** of its daily production, securing prices of **$68.27/bbl** for the remainder of **2025** and **$64.29/bbl** for **2026** through Q1 2028[214](index=214&type=chunk) - On **April 11, 2025**, the company completed the Additional Working Interest Acquisition for **$15.0 million**, which was held in escrow at the close of the Bayswater deal[215](index=215&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation into a DJ Basin E&P operator, reporting Q1 2025 revenues of $13.6 million, operating income of $1.8 million, and positive Adjusted EBITDA of $5.2 million, with liquidity bolstered by $98.0 million credit facility availability [Overview and Recent Developments](index=54&type=section&id=Overview%20and%20Recent%20Developments) The company, now a DJ Basin-focused E&P firm, closed the Bayswater Acquisition, secured financing, expanded hedging, and initiated new drilling and completion activities on its properties in early 2025 - Closed the Bayswater Acquisition on **March 26, 2025**, funded by a combination of cash on hand, a public offering of common stock, issuance of Series F Preferred Stock, and borrowings under its Credit Facility[222](index=222&type=chunk) - Post-acquisition, the company hedged approximately **85%** of its daily production through Q1 2028[223](index=223&type=chunk) - Launched an **11-well** development program at the Rusch Pad in **April 2025** and began completions on **9 acquired wells** at the Opal Coalbank pad in **May 2025**[224](index=224&type=chunk)[225](index=225&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Q1 2025 saw total revenues of $13.6 million from oil, gas, and NGL sales due to acquisitions, resulting in an operating income of $1.8 million compared to a prior-year loss, with a net loss from continuing operations of $2.6 million Q1 2025 Revenue and Production | Metric | Value | | :--- | :--- | | Total Revenues | $13.6 million | | Total Production | 295.0 MBoe | | Average Daily Production | 3,278 Boe/d | | Average Realized Price (pre-hedges) | $46.07 per Boe | Q1 2025 Operating Expenses | Expense Category | Amount (in thousands) | Per Boe | | :--- | :--- | :--- | | Lease operating expenses | $2,012 | $6.82 | | Gathering, transportation, and processing | $907 | $3.07 | | Ad valorem and production taxes | $957 | $3.24 | | Depreciation, depletion, and amortization | $2,117 | $7.18 | | General and administrative expenses | $5,551 | $18.82 | | **Total operating expenses** | **$11,837** | **$40.13** | - General and administrative expenses decreased by **$2.1 million** year-over-year, mainly due to lower stock-based compensation and investor relations costs[242](index=242&type=chunk) [Non-GAAP Financial Measures](index=60&type=section&id=Non-GAAP%20Financial%20Measures) The company reported a positive Adjusted EBITDA of $5.2 million for Q1 2025, a significant turnaround from a negative $6.7 million in Q1 2024, reflecting the positive cash flow impact of new production assets Reconciliation of Net Loss to Adjusted EBITDA | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net loss from continuing operations | $(2,617) | $(7,993) | | Adjustments (DD&A, Interest, etc.) | $7,817 | $1,272 | | **Adjusted EBITDA** | **$5,200** | **$(6,721)** | [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2025 liquidity was transformed to fund the Bayswater acquisition, raising $521.3 million through debt and equity, resulting in a $54.7 million working capital deficit but $98.0 million credit facility availability, deemed sufficient for future operations - As of **March 31, 2025**, the company had a working capital deficit of **$54.7 million** and cash of **$15.0 million**[257](index=257&type=chunk) Cash Flow Summary (Three Months Ended March 31) | Cash Flow | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | From Operating Activities | $16,932 | $(3,324) | | From Investing Activities | $(528,431) | $(10,127) | | From Financing Activities | $521,279 | $4,462 | - Financing activities in Q1 2025 were driven by **$349.0 million** in credit facility borrowings, **$148.3 million** from Series F Preferred Stock issuance, and **$43.8 million** from common stock issuance[260](index=260&type=chunk) - As of **March 31, 2025**, the company had **$98.0 million** of availability under its credit facility, which management believes is sufficient to meet obligations for the next **12 months**[264](index=264&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide this disclosure - Disclosure is not required for the company[287](index=287&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of **March 31, 2025**[290](index=290&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[293](index=293&type=chunk) PART II [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The Company is not involved in any material legal proceedings[294](index=294&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K have occurred - As of the date of this report, there have been no material changes in the risk factors disclosed in the company's **2024 Annual Report on Form 10-K**[295](index=295&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during Q1 2025 that were not previously disclosed in a Form 8-K - No unregistered sales of equity securities occurred during the quarter that were not otherwise disclosed in a Form 8-K[296](index=296&type=chunk) [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended **March 31, 2025**[300](index=300&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the quarterly report, including key transactional and governance documents like the Bayswater PSA and Amended Credit Agreement - The exhibit index lists key transactional and governance documents, including the Bayswater PSA (Exhibit 2.5), the Amended and Restated Credit Agreement (Exhibit 10.19), and Sarbanes-Oxley certifications (Exhibits 31.1, 31.2, 32.1, 32.2)[302](index=302&type=chunk)[304](index=304&type=chunk)

Company Overview - Prairie Operating Co. (PROP) is an independent energy firm headquartered in Houston, focusing on the Denver-Julesburg (DJ) Basin, particularly the Niobrara and Codell formations [3] - The company has strategically located acreage near major operators like Chevron and Occidental Petroleum, providing access to established infrastructure and market networks [3] Acquisition Impact - PROP made a significant $602 million acquisition of Bayswater assets, which includes 24,000 net acres and 26,000 barrels of oil equivalent per day (BOE/d) in production, along with 600 gross drilling locations and an estimated $1.1 billion in future cash flow [1] - This acquisition positions PROP as a high-growth player in the DJ Basin, benefiting from a rural, low-regulation operating area that accelerates permitting and drilling timelines [2] Operational Efficiency - Prairie Operating Co. operates primarily in rural Weld County, facing fewer regulatory barriers, which allows for rapid execution of key projects, including nine drilled but uncompleted (DUC) wells and an 11-well Rusch Pad program [6][9] - The company is actively developing its acreage, with production expected to begin at the Rusch Pad in early August and completions underway at the Opal Coalbank Pad [9] Financial Performance - Post-acquisition, PROP's adjusted EBITDA for 2025 is forecasted between $350 million and $370 million, a significant increase from the previous projection of $140 million [10] - The company expects to average 29,000 to 31,000 BOE/d in production for 2025, representing over a 300% increase year over year [10] Hedging Strategy - Prairie Operating Co. has implemented a proactive hedging strategy, locking in about 85% of its remaining 2025 daily production at $68.27 per barrel for WTI and $4.28 per MMBtu for Henry Hub, providing visibility on future cash flows and shielding from market volatility [8] Analyst Outlook - Despite a 33% decline in stock price year to date, the recent pullback presents an attractive entry point, with a Zacks Consensus Estimate for 2025 EPS increasing by 23% in the past month [11][13] - The company is expected to deliver around 389% EPS growth year over year, indicating strong growth potential [13] Conclusion - Prairie Operating Co. is following a structured growth path through strategic acquisitions, efficient capital deployment, and robust financial guidance, positioning itself competitively in the energy sector [15]

Core Viewpoint - Prairie Operating Co. (PROP) has received a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining near-term stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, which can result in stock price movements [4]. Company Performance Indicators - The recent upgrade for Prairie Operating Co. indicates a positive outlook on its earnings, suggesting that the stock price may rise as investors respond to the improving business trend [5][10]. - Prairie Operating Co. is projected to earn $6.07 per share for the fiscal year ending December 2025, reflecting a substantial year-over-year increase of 389.1% [8]. - Over the past three months, the Zacks Consensus Estimate for Prairie Operating Co. has risen by 148.8%, indicating strong upward revisions in earnings estimates [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Prairie Operating Co. to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Prairie Operating Co. (PROP) has been beaten down lately with too much selling pressure. While the stock has lost 36% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.How to Determine if a Stock is OversoldWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscil ...

Previously announced drilling of Rusch Pad ahead of schedule Recently announced strategic hedging program "in the money" by ~$70 million HOUSTON, TX, April 28, 2025 (GLOBE NEWSWIRE) -- Prairie Operating Co. (Nasdaq: PROP) (the "Company" or "Prairie") – an independent energy company engaged in the development and acquisition of oil and natural gas resources in the Denver-Julesburg (DJ) Basin – today announced it is beginning completions of nine previously drilled but uncompleted ("DUC") wells acquired in the ...

HOUSTON, TX, April 10, 2025 (GLOBE NEWSWIRE) -- Prairie Operating Co. (NASDAQ:PROP) (the "Company" or "Prairie") – an independent energy company engaged in the development and acquisition of oil and natural gas resources in the Denver-Julesburg (DJ) Basin – today announced the successful execution of a strategic hedging program which covers approximately 85% of its current daily production, implemented prior to the recent pullback in oil and gas prices. The hedges were executed following the closing of Prai ...

A downtrend has been apparent in Prairie Operating Co. (PROP) lately with too much selling pressure. The stock has declined 35.1% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.Guide to Identifying Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicato ...

HOUSTON, TX, April 02, 2025 (GLOBE NEWSWIRE) -- Prairie Operating Co. (NASDAQ:PROP) (the "Company" or "Prairie"), today announced the launch of an 11-well development program at the Rusch Pad in Weld County, Colorado. The first well was spud on April 1, 2025, utilizing Precision E-Drilling Rig 461, as part of the Company's continued strategy to expand production and enhance operational efficiencies in the Denver-Julesburg ("DJ") Basin. The Rusch Pad development will consist of eleven two-mile lateral wells, ...

DENVER, March 27, 2025 /PRNewswire/ -- Bayswater Exploration and Production (Bayswater), a Denver-based oil and natural gas development company closed the sale of certain Denver Julesburg (DJ) Basin assets to Prairie Operating Co. (Nasdaq: PROP) in a cash and stock transaction valued at approximately $603 million. "We are pleased to get this deal across the finish line with Prairie Operating Co.," said Steve Struna, President and CEO of Bayswater. "Thank you to everyone who helped us get here, including Bay ...