Prairie Operating(PROP) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Prairie generated approximately $242 million in revenue for 2025, or $315 million when including Bayswater's assets, reflecting a nearly 3,000% increase in revenues year-over-year [10][11] - Adjusted EBITDA totaled approximately $156 million, with a pro forma contribution from Bayswater assets bringing it to about $220 million, slightly below the guidance of $240 million [11][8] - The net loss attributable to common stockholders was $60.9 million, or $1.35 per share, primarily due to non-cash expenses [10] Business Line Data and Key Metrics Changes - Total production for 2025 was approximately 6.75 million BOE, averaging 18,500 BOE per day, with an exit rate of about 28,000 net BOE per day [5][6] - Including Bayswater's first quarter production, the full year production would have been approximately 24,000 BOE per day, representing almost a 4x increase year-over-year [6] Market Data and Key Metrics Changes - Realized prices were $63.87 per barrel of oil, $17.93 per barrel of NGL, and $1.65 per Mcf of natural gas [10] - Prairie ended the year with 121.1 million BOE of proved reserves, with a PV-10 value of approximately $1.2 billion [13] Company Strategy and Development Direction - The company remains focused on disciplined capital allocation, operational execution, and delivering sustainable growth and long-term shareholder value [9][15] - Prairie plans to maintain a capital expenditure range of $200 million to $220 million for 2026, with expected average production of approximately 25,500 to 27,500 BOE per day [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational and financial success moving into 2026, highlighting a strong asset base and momentum exiting 2025 [17] - The leadership team is committed to enhancing financial strength and operational excellence while maintaining flexibility for accretive opportunities [15][17] Other Important Information - Prairie executed a series of bolt-on acquisitions throughout 2025, adding approximately 44,000 net acres and expanding its portfolio with high-quality proved inventory [6][5] - The company achieved a 0.0 safety record for the year, reflecting a perfect safety performance with no incidents [13] Q&A Session Summary Question: Can you provide more details on production expectations for the first quarter and throughout the year? - Management indicated that Q1 production is expected to average around 23,000 BOE per day due to shut-in production, with a gradual increase anticipated throughout the year [21][22] Question: What is the current performance of recent wells compared to prior wells? - Recent wells have shown varied performance, with Opal Coal Bank performing well, while Noble and Simpson wells faced challenges due to offset operators and equipment delays [25][27] Question: What are the current share count and status of preferred refinancing? - The share count has increased from the low sixties at year-end, with ongoing conversions from preferred shares, indicating good communication with preferred holders [30][29] Question: How will cash flow be prioritized in 2026? - The company aims to use free cash flow for debt reduction and potential acquisitions, maintaining a conservative approach to financial management [34][35] Question: Are there any anticipated constraints from midstream systems? - Management does not foresee any constraints on production plans through 2026 or 2027, having aligned development plans with midstream partners [37][38] Question: Will there be flexibility in CapEx guidance based on market conditions? - The company plans to maintain a focus on balance sheet robustness and operational efficiencies, with potential adjustments based on market conditions [40][41]