Core Insights - Prairie Operating Co. has announced the acquisition of assets from Edge Energy II LLC for $12.5 million, enhancing its position in the Denver-Julesburg Basin [1][2][7] - The acquisition adds approximately 11,000 net acres to Prairie's existing footprint, bringing the total to around 60,000 net acres [2][7] - The transaction is non-dilutive for shareholders, funded through the company's credit facility [1][7] Transaction Highlights - The acquisition includes current production of approximately 190 Barrels of Oil Equivalent per Day (Boepd) from 47 operated and non-operated wells [7] - Prairie holds a working interest of about 88% in the acquired assets [7] - The deal provides a future inventory of 40 development-ready locations with eight approved permits and eight additional permits in process [7] Development and Integration Plans - Development of the acquired assets is set to commence in August 2025, starting with the fully permitted Simpson pad [4] - The company plans to permit additional locations to facilitate near-term future development [4] - This acquisition is expected to deliver immediate scale and enhance cash flow growth through high-quality operated drilling inventory [2][4]

Core Insights - Prairie Operating Co. (PROP) and Flotek Industries (FTK) are small-cap energy stocks with market caps under $500 million, each pursuing distinct growth strategies [1][3] Prairie Operating Co. (PROP) - Strategic Focus: PROP is aggressively consolidating in Colorado's DJ Basin, acquiring significant land and production capabilities through deals like the $602 million Bayswater acquisition, which added 600 drilling locations and 26,000 barrels of oil-equivalent per day (BOE/d) [4][7] - Efficiency and Cost Management: The company employs a vertical integration model to reduce costs and enhance operational efficiency, allowing it to maintain margins even in fluctuating oil price environments [5][6] - Financial Projections: PROP anticipates adjusted EBITDA of $350-$370 million in 2025, with net income projected between $69 million and $102 million, and BOE/d production expected to average between 29,000 and 31,000, marking a 300% year-over-year increase [7] Flotek Industries (FTK) - Business Transformation: FTK has shifted from chemical sales to offering recurring data and service contracts, exemplified by its JP3 XSPCT Analyzer, which enhances revenue predictability and reduces errors in oil and gas transactions [8][10] - Strong Financial Performance: In Q1 2025, FTK reported 37% revenue growth, 41% higher gross profit, and a 244% increase in net income, with adjusted EBITDA expected to grow another 80% in 2025 [11] - Hybrid Revenue Model: FTK's blend of proprietary equipment with long-term analytics leases creates a stable revenue base, positioning it favorably in volatile markets [12] Stock Performance and Valuation - Stock Trends: FTK's stock surged 214% over the past year, while PROP's stock fell 66%, indicating a strong market preference for FTK's strategy [9][13] - Valuation Metrics: FTK trades at a forward price-to-sales (P/S) ratio of 1.99, reflecting investor confidence, while PROP trades at 0.34X forward sales, indicating market caution despite potential upside [15] Analyst Sentiment - Earnings Estimates: Flotek's EPS estimates have increased, suggesting positive momentum, while PROP's estimates have trended lower, indicating uncertainty [18][19] - Investment Outlook: FTK is rated as a strong buy, while PROP holds a hold rating, highlighting FTK's superior growth prospects and execution [20]

Core Insights - Prairie Operating Co. (PROP) is focusing on disciplined cost control and operational efficiencies as a competitive advantage in the DJ Basin [1][3] - The company is self-sourcing critical inputs and utilizing proprietary logistics to minimize costs and project timelines [2][8] - Prairie's strategy allows for scalable growth and margin preservation, providing a buffer against market volatility [3][6] Company Strategy - PROP is implementing a capital-light development program with a focus on short payback wells, allowing for flexibility while expanding production [1][8] - The company has 157 permits and over 586 gross locations in the DJ Basin, positioning itself effectively in a less competitive environment [6][8] - The shift of major players like Chevron and Civitas Resources away from the DJ Basin has created opportunities for Prairie to execute its strategy [4][5] Financial Performance - Shares of Prairie Operating Co. have decreased by 43% year to date [7] - The company trades at a forward price-to-sales ratio of 0.32, significantly below the sector average, indicating potential undervaluation [9] - Recent Zacks Consensus Estimates for 2025 and 2026 EPS have been revised down by 18% and 20%, respectively [11]

Summary of Prairie Operating Company FY Conference Call Company Overview - Prairie Operating Company operates entirely in the DJ Basin in Northern Colorado, with approximately 65,000 gross acres and 47,500 net acres [3][4] - The company has a significant development runway with over 550 identified locations and three years' worth of permitted locations [4][5] - Recent acquisition of Bayswater for over $600 million, adding approximately 25,000 barrels equivalent per day of production, significantly transformed the company [5][6] Core Industry Insights - The DJ Basin is positioned as a cost-effective production area compared to other shale formations like the Permian Basin, with lower finding and development costs [6][7] - Production declines in the DJ Basin are less significant than in other basins, providing a competitive advantage [7][29] - The company aims to maintain a conservative leverage ratio around 1, with an active hedging program covering about 80% of production [9][10] Financial Strategy - The company is focused on unbundling costs to drive down operational expenses, targeting completion costs below $5 million [8][46] - A capital expenditure budget of approximately $325 million for the year, expected to be self-funded through production [36] - Plans to initiate dividend payments in 2026, contingent on production growth and market conditions [12][35] Environmental and Regulatory Considerations - The company emphasizes its commitment to sustainability, utilizing technology to meet stringent emissions regulations in Colorado [13][15] - All gas produced must be connected to pipelines, eliminating flaring and enhancing environmental performance [13][14] Growth and Acquisition Strategy - The company is pursuing both organic growth through drilling and opportunistic acquisitions, with a pipeline of potential acquisitions valued at around $2 billion [20][22] - The management believes there is a significant arbitrage opportunity in acquiring private assets at lower valuations and integrating them into a public company [20][49] - The company has secured takeaway capacity for 100,000 barrels equivalent per day, enhancing its position as a buyer in the market [32][38] Market Dynamics - The energy sector is currently undervalued, with the S&P 500 energy sector trading at about 15 times earnings, creating a favorable environment for acquisitions [49] - The company anticipates a reallocation of capital back into energy, which could improve valuations and trading multiples [49][50] Management and Expertise - The management team has extensive experience in the industry, with a focus on operational efficiency and cost management [26][28] - The company is committed to maintaining a disciplined approach to capital allocation and avoiding over-leveraging [33][53] Conclusion - Prairie Operating Company is strategically positioned to capitalize on growth opportunities in the DJ Basin through a combination of organic production increases and strategic acquisitions, while maintaining a focus on cost efficiency and sustainability [30][52]

Core Insights - Prairie Operating Co. (PROP) has established itself as a leading consolidator in the northern Denver-Julesburg (DJ) Basin through significant acquisitions, including Genesis, Nickel Road, and Bayswater, covering over 54,000 net acres and providing a 10-year inventory runway [1][3][4] Company Overview - The DJ Basin is geologically favorable with supportive local policies and infrastructure proximity, benefiting from a regional gas market that imports from Canada, potentially offering better pricing than the oversupplied Texas gas markets [2] - The $603 million Bayswater acquisition significantly expanded PROP's production capacity to 26,000 barrels of oil equivalent per day (BOE/d) and added 600 drilling locations across 24,000 net acres, enhancing operational leverage and financial stability [3][4] Competitive Landscape - The lack of near-term competition in the DJ Basin is advantageous for PROP, as larger operators like Chevron and Civitas Resources have shifted their focus to other basins, allowing PROP to capitalize on consolidation opportunities [6][7] - With over 586 gross locations and 157 permits, PROP is positioned as a mini-major in its niche, with a strong appetite for further acquisitions [7] Financial Performance and Valuation - PROP's shares have declined over 40% year to date, but the company anticipates a strong adjusted EBITDA of $350-$370 million post-acquisition, indicating robust free cash flow generation to support future growth without excessive debt [4][8][9] - The forward price-to-sales ratio for PROP is 0.29, significantly below the sector average, and the company holds a Value Score of A [10] - The Zacks Consensus Estimate for PROP's 2025 earnings suggests a remarkable 383% year-over-year increase, with substantial growth projections for upcoming quarters [11][12]

Core Viewpoint - Prairie Operating Co. has reaffirmed its multi-year Reserve-Based Lending credit facility with Citibank, indicating strong lender confidence in its asset base and execution strategy [1][3]. Financial Summary - The borrowing base of the credit facility is set at $475 million, with a maximum facility size of $1.0 billion and a maturity date of March 26, 2029 [2]. - The addition of Bank of America and West Texas National Bank to the lending syndicate enhances Prairie's financial flexibility and access to capital [3]. Company Overview - Prairie Operating Co. is an independent energy company focused on the development and acquisition of oil and natural gas resources in the Denver-Julesburg Basin, particularly in the Niobrara and Codell formations [4]. - The company emphasizes responsible resource development, aiming for consistent growth, capital discipline, and sustainable cash flow generation [4].

Core Insights - Prairie Operating Co. (PROP) has gained investor interest due to significant insider buying and a Buy rating from Citi with an $8.00 price target, while the stock trades below $4, indicating potential upside [1][19] Group 1: Company Developments - The company completed a $602 million acquisition of Bayswater assets, increasing its production capacity to 26,000 barrels of oil equivalent per day (BOE/d) and adding 600 drilling locations in Colorado's DJ Basin [3][8] - Prairie Operating Co. is actively working on production with nine drilled but uncompleted wells and an 11-well Rusch Pad program, expecting production to commence as early as August [4][8] - The company aims for a conservative capital structure post-acquisition, planning to reduce debt through preferred equity and warrant conversions [5] Group 2: Financial Performance - Adjusted EBITDA for 2025 is projected between $350 million and $370 million, a significant increase from the previous forecast of $140 million, with net income guidance between $69 million and $102 million [6] - Prairie Operating Co. expects to average 29,000 to 31,000 BOE/d in 2025, representing over a 300% year-over-year increase [6][9] - The company maintains a low leverage ratio of 1.0X and has $475 million in liquidity, providing financial strength to support growth without diluting shareholders [6] Group 3: Market Sentiment and Risks - Despite positive projections, the market remains cautious, with PROP shares down over 70% in the past year, reflecting concerns about dilution risk and inconsistent earnings [10][13] - The share count has nearly doubled in the past year, raising concerns about equity dilution and execution risks associated with rapid production scaling [7][9] - Commodity price forecasts indicate potential declines in Brent crude prices, which could impact Prairie's revenue and cash flow, compounded by regulatory uncertainties in Colorado [18]

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]