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]
Insiders Are Buying Prairie Operating Co. - Should You Too?