Prairie Operating(PROP) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights Prairie Operating Co. achieved record Q2 2025 results, driven by strategic acquisitions and strong operational execution, with significant growth in production, revenue, and Adjusted EBITDA Management Commentary Management emphasized record growth, successful asset integration, and a strengthened financial foundation for future returns - CEO Edward Kovalik highlighted tremendous growth, record production, and new highs in adjusted EBITDA, attributing success to disciplined capital allocation and strategic off-market acquisitions that expanded inventory and improved capital efficiency[5] - The company successfully integrated the Bayswater assets, expanded its team from 20 to 59 employees, and increased its portfolio of operated wells from 34 to over 360, laying the groundwork for lower costs and continued production growth[5] - CFO Gregory Patton noted the strengthening of Prairie's financial and operating foundation, with EBITDA growing more than six-fold, an expanded credit facility, and over $600.0 million in accretive acquisitions[10] - With leverage at approximately 1x and attractive pricing locked in through 2028, the company is well-positioned to generate cash flow, pursue strategic growth, and optimize cost structures to improve margins and returns[10] Q2 2025 Results Summary Q2 2025 saw substantial quarter-over-quarter growth in key financial and operational metrics, including revenue and production Q2 2025 Key Metrics vs. Prior Quarter | Metric | Q2 2025 Value | Quarter-over-Quarter Change | | :--- | :--- | :--- | | Total Revenue | $68.1 million | ~400% Increase | | Total Production | 21,052 Boe/d | ~540% Increase | | Net Income (to common stockholders) | $48.5 million | - | | Basic EPS | $1.04 | - | | Adjusted EBITDA | $38.6 million | >600% Increase | - The company acquired over $600.0 million of producing oil and gas assets and initiated a hedging program to secure commodity pricing through 2028[8] - The credit facility was amended, adding two banks to the syndicate and reaffirming the borrowing base at $475.0 million[8] Operational Performance The company demonstrated strong operational momentum, drilling 18 wells and completing 9, while improving efficiency and deploying innovative technologies - Drilled 18 and completed 9 wells during the quarter, with average spud-to-total-depth times improving to 5.3 days[11] - Successfully executed the 11-well Rusch pad in Weld County, with first production expected in Q3[12] - Implemented innovative U-shaped lateral well designs to maximize drainage and minimize surface impact[13] - Deployed an electric frac fleet, which significantly reduced emissions and completion costs, achieving an average of 14 stages per day[14] - Turned 17 wells to sales in H1 2025 and now operates over 360 wells, installing plunger lift systems on 30 wells to optimize production[15] Detailed Financial Results (Q2 2025) Prairie generated $68.1 million in total revenue and $48.5 million in net income, supported by $98.7 million in liquidity and strategic capital deployment Revenue and Production Q2 2025 revenue was primarily driven by oil sales, contributing to a total production of 1,916 MBoe Q2 2025 Revenue & Production Breakdown | Category | Value (in thousands, except per unit) | | :--- | :--- | | Revenues | | | Oil Revenue | $57,941 | | Natural Gas Revenue | $6,084 | | NGL Revenue | $4,075 | | Total Revenues | $68,100 | | Production | | | Oil (MBbls) | 883 | | Natural Gas (MMcf) | 3,388 | | NGL (MBbls) | 469 | | Total Production (MBoe) | 1,916 | | Average Daily Volume | 21,052 Boe/d | Q2 2025 Average Realized Prices | Commodity | Price (excluding derivatives) | | :--- | :--- | | Oil (per Bbl) | $65.66 | | Natural Gas (per Mcf) | $1.80 | | NGL (per Bbl) | $8.70 | Operating Costs Operating costs for Q2 2025 included lease operating expenses, gathering, transportation, processing, and G&A expenses Q2 2025 Operating Costs | Expense Category | Total (in thousands) | Per Boe | | :--- | :--- | :--- | | Lease operating expenses | $11,348 | $5.92 | | Gathering, transportation, and processing | $2,234 | $1.17 | | Ad valorem and production taxes | $6,416 | $3.35 | | General and administrative expenses | $16,443 | $8.58 | Acquisitions, Capital Expenditures, and Liquidity The company maintained $98.7 million in liquidity as of June 30, 2025, following significant cash expenditures for the Bayswater asset acquisition - As of June 30, 2025, the company had approximately $98.7 million of liquidity, comprising $88.0 million available under its credit facility and $10.7 million in cash[22] Cash Expenditures for Six Months Ended June 30, 2025 | Category | Amount (in thousands) | | :--- | :--- | | Cash paid for Bayswater asset purchase | $467,461 | | Capital expenditures – cash | $53,973 | | Leasehold purchases | $950 | Outlook and Hedging Strategy Prairie issued updated full-year 2025 guidance, projecting strong production and Adjusted EBITDA, supported by a robust hedging program through 2028 2025 Full-Year Guidance Updated full-year 2025 guidance projects average daily production of 24,000 – 26,000 BOEPD and Adjusted EBITDA of $240.0 – $260.0 million Updated Full-Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Average Daily Production | 24,000 – 26,000 BOEPD | | Capital Expenditures | $260.0 – $280.0 million | | Adjusted EBITDA | $240.0 – $260.0 million | - Guidance is based on a commodity price deck of $60.00 – $64.00 per Bbl for oil and $4.00 per Mcf for gas[23] Commodity Hedging Program The company implemented a comprehensive hedging program covering approximately 85% of current daily production with contracts extending through 2028 - The company has executed a portfolio of hedges covering approximately 85% of its current daily production[24] Crude Oil Swaps Weighted Average Price | Period | Weighted Avg. Price ($/Bbl) | | :--- | :--- | | Jul-Dec 2025 | $68.04 | | 2026 | $64.42 | | 2027 | $64.16 | | 2028 | $63.47 | Natural Gas Swaps Weighted Average Price | Period | Weighted Avg. Price ($/MMBtu) | | :--- | :--- | | Jul-Dec 2025 | $4.30 | | 2026 | $4.08 | | 2027 | $4.07 | | 2028 | $4.00 | Financial Statements The condensed consolidated financial statements reflect transformative growth, with total assets increasing to $858.5 million and a shift to net income for Q2 2025 Condensed Consolidated Balance Sheets The balance sheet shows a substantial increase in total assets to $858.5 million as of June 30, 2025, primarily due to acquisitions Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $97,400 | $18,302 | | Total Property and Equipment, net | $738,313 | $134,620 | | Total Assets | $858,540 | $156,554 | | Total Current Liabilities | $161,638 | $63,009 | | Credit Facility | $387,000 | $28,000 | | Total Liabilities | $599,777 | $103,786 | | Total Stockholders' Equity | $94,173 | $52,768 | Condensed Consolidated Statements of Operations The statement of operations highlights a significant turnaround, moving from a net loss in Q2 2024 to a net income of $35.7 million in Q2 2025 Statement of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $68,100 | $0 | | Total Operating Expenses | $49,164 | $8,569 | | Income (Loss) from Operations | $18,936 | $(8,569) | | Net Income (Loss) from Continuing Operations | $35,683 | $(8,514) | | Net Income (Loss) to Common Stockholders | $48,503 | $(8,514) | | Basic EPS | $1.04 | $(3.49) | Condensed Consolidated Statements of Cash Flows Cash flow statements detail significant investing activities, primarily the Bayswater acquisition, financed through equity and credit facility borrowings Cash Flow Summary for Six Months Ended June 30 (in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $9,722 | $(8,448) | | Net cash used in investing activities | $(522,289) | $(11,841) | | Net cash provided by financing activities | $518,028 | $9,478 | | Net increase (decrease) in cash | $5,461 | $(10,811) | | Cash at end of period | $10,653 | $2,226 | - Investing activities were dominated by the $467.5 million cash payment for the Bayswater asset purchase, while financing included $148.3 million from Series F Preferred Stock and $359.0 million in Credit Facility borrowings[47] Non-GAAP Financial Measures The company utilizes Adjusted EBITDA, a non-GAAP measure, to assess performance, reporting $38.6 million for Q2 2025, a significant improvement from the prior year - Adjusted EBITDA is used by management to evaluate business performance, make operational decisions, and assess cash flow generation capabilities, adjusting net income for items like interest, taxes, DD&A, stock-based compensation, and unrealized derivative gains/losses[27][28] Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) from continuing operations | $35,683 | $(8,514) | | Adjustments | $2,881 | $1,456 | | Adjusted EBITDA | $38,564 | $(7,058) | Reconciliation for Full-Year 2025 Guidance (in millions) | | Low Range | High Range | | :--- | :--- | :--- | | Net income | $192 | $202 | | Adjustments | $48 | $58 | | Adjusted EBITDA | $240 | $260 | Other Disclosures This section provides standard legal and corporate disclosures, including cautionary statements on forward-looking information and details on public communication channels - The report contains forward-looking statements that involve risks and uncertainties, and readers are cautioned not to place undue reliance on them[32][33] - The company discloses material information through SEC filings, press releases, conference calls, its website, and official social media accounts on X (@PrairieOpCo) and LinkedIn[35][36] - Prairie Operating Co. is a Houston-based independent energy company focused on the development and acquisition of oil and gas resources in the DJ Basin, primarily in the Niobrara and Codell formations[37]