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]