Production and Sales - Production volumes for 2024 include 96 MBbls of oil, 245 MMcf of natural gas, and 33 MBbls of NGL, totaling 170 MBoe[92] - Average sales prices for 2024 are $68.60 per MBbl for oil, $2.25 per MMcf for natural gas, and $24.03 per MBbl for NGL, with an average price of $46.70 per MBoe[92] - The company completed 8 development wells in 2024, with a net of 6.33 wells[95] - As of December 31, 2024, the company has 8 productive wells, all of which are operated[98] Land and Acreage - The company owns 36,895 gross acres and 23,769 net acres, with 15,810 net acres (66%) potentially expiring in the next three years if production is not established[100] Customer Concentration - The company’s two largest customers accounted for approximately 80% and 15% of oil, natural gas, and NGL revenues in Q4 2024[106] Delivery Commitments - The company has no delivery commitments as of December 31, 2024[107] Risk Management - The company engages in derivative contracts to hedge against price volatility in oil and natural gas, aiming to mitigate cash flow impacts[105] - International events have contributed to price volatility in oil and natural gas, affecting the company's operations and cash flows[109] Regulatory Compliance - The company believes it is in substantial compliance with applicable laws and regulations, although future changes could impact operations and costs[112] - The production of oil, natural gas, and NGLs is regulated by various local, state, and federal statutes, which include requirements for permits, bonding, and operational reports[115] Taxes and Fees - Colorado imposes a production or severance tax on the production and sale of oil, natural gas, and NGLs, which can affect overall profitability[115] Transportation Regulation - The Federal Energy Regulatory Commission (FERC) regulates interstate transportation rates for crude oil and natural gas, ensuring that tariff rates are just and reasonable[118] - FERC has the authority to impose civil penalties of up to $1,000,000 per day for violations of the Natural Gas Act, with adjustments for inflation[126] Waste Management and Environmental Regulations - The Resource Conservation and Recovery Act (RCRA) regulates the management of hazardous and nonhazardous wastes, which may impact operational costs[137] - The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) imposes joint and several liability for hazardous substance releases, potentially leading to significant cleanup costs[138] - The Clean Water Act (CWA) imposes strict controls on pollutant discharges into U.S. waters, requiring permits from the EPA or state agencies[140] - The Oil Pollution Act of 1990 establishes liability for oil spills, mandating responsible parties to develop response plans and conduct annual spill training[142] - Underground Injection Control (UIC) program regulates the disposal of produced water, with potential changes in regulations affecting operational costs[143] - The Clean Air Act (CAA) requires compliance with air emissions standards, which may delay project development due to permitting requirements[145] - New Source Performance Standards (NSPS) for methane and VOC emissions were finalized, requiring states to develop plans for existing sources within two years[146] Climate and Emissions Regulations - The SEC's final rule mandates climate-related risk disclosures for public companies, with large accelerated filers required to report GHG emissions starting in fiscal year 2025[151] - The Inflation Reduction Act of 2022 includes a methane emissions charge, starting at $900 per metric ton in 2024, potentially increasing operational costs[153] - Recent regulations may lead to increased costs for compliance with GHG emissions reporting and permitting obligations, affecting profitability[154] State-Specific Regulations - The Colorado Energy Commission has approved new rules affecting wellbore integrity and waste management, which may impact operational practices[163] - Colorado Senate Bill 19-181 (SB 181) significantly changed regulations, requiring more than 45% consent from mineral interest owners for pooling, and instituting a 16% royalty on oil and a 13% royalty on gas production[164] - Local governments now have greater control over oil and gas facility siting, which may lead to stricter regulations and increased operational costs[165] - The CECMC has implemented new rules affecting facility siting, cumulative impacts, and wellbore integrity, potentially increasing well costs and delaying drilling permits[167] - New rules adopted by the CDPHE aim to minimize methane and other emissions, increasing inspection frequencies and regulatory authority over oil and gas facilities[168] - On December 20, 2024, the CDPHE introduced rules requiring midstream operators to capture hydrocarbon emissions, which may raise costs for the industry[169] Operational Efficiency - The permit approval process for new multi-well pads can take between 90 to 150 days, followed by a 30-day public comment period[171] Employment and Office Space - As of December 31, 2024, the company employed 19 full-time employees and has not experienced any work stoppages[177] - The company has leased office space in Houston, Texas, and Denver, Colorado, for its operations[178] Stock Information - The company's common stock is listed on the Nasdaq Capital Market under the symbol "PROP"[182]
Prairie Operating(PROP) - 2024 Q4 - Annual Report