Prairie Operating Co. Announces Acquisition of DJ Basin Assets from Bayswater Exploration and Production for Approximately $600 Million
Prairie Operating Co. (PROP) has announced a definitive agreement to acquire Bayswater Exploration and Production's DJ Basin assets for $602.75 million. The acquisition includes ~24,000 net acres in Weld County and adds ~26 mboepd of oil-weighted (69% liquids) net production.
The transaction will be funded through a combination of cash, up to ~5.2 million shares of Prairie common stock, and borrowings under an expanded credit facility with a $475 million borrowing base. The deal is expected to close in February 2025, with an economic effective date of December 1, 2024.
Key highlights include an increase to ~27,500 net BOEPD production, expanded footprint to ~54,000 net acres, and ~600 highly economic drilling locations providing ~10 years of inventory. The company's 2025 guidance projects production of 29,000-31,000 BOEPD, capital expenditures of $300-320 million, and adjusted EBITDA between $350-370 million.
Prairie Operating Co. (PROP) ha annunciato un accordo definitivo per acquisire gli assets di Bayswater Exploration and Production nel bacino DJ per $602,75 milioni. L'acquisizione include circa 24.000 acri netti nella contea di Weld e aggiunge circa 26 mboepd di produzione netta a prevalenza di petrolio (69% liquidi).
La transazione sarà finanziata tramite una combinazione di contanti, fino a circa 5,2 milioni di azioni ordinarie di Prairie e prestiti sotto una linea di credito ampliata con una base di prestito di $475 milioni. L'affare dovrebbe chiudersi a febbraio 2025, con una data economica effettiva del 1 dicembre 2024.
I punti salienti includono un aumento della produzione a circa 27.500 BOEPD netti, un'espansione dell'area a circa 54.000 acri netti e circa 600 posizioni di perforazione altamente economiche che forniscono circa 10 anni di inventario. Le previsioni dell'azienda per il 2025 prevedono una produzione di 29.000-31.000 BOEPD, spese in conto capitale di $300-320 milioni e un EBITDA rettificato tra $350-370 milioni.
Prairie Operating Co. (PROP) ha anunciado un acuerdo definitivo para adquirir los activos de Bayswater Exploration and Production en la cuenca DJ por $602.75 millones. La adquisición incluye aproximadamente 24,000 acres netos en el condado de Weld y añade aproximadamente 26 mboepd de producción neta con predominancia de petróleo (69% líquidos).
La transacción será financiada a través de una combinación de efectivo, hasta aproximadamente 5.2 millones de acciones ordinarias de Prairie y préstamos bajo una línea de crédito ampliada con una base de préstamo de $475 millones. Se espera que el acuerdo se cierre en febrero de 2025, con una fecha económica efectiva del 1 de diciembre de 2024.
Los aspectos más destacados incluyen un aumento a aproximadamente 27,500 BOEPD de producción neta, una expansión de la superficie a aproximadamente 54,000 acres netos y alrededor de 600 ubicaciones de perforación altamente económicas que proporcionan alrededor de 10 años de inventario. Las proyecciones de la empresa para 2025 estiman una producción de 29,000-31,000 BOEPD, gastos de capital de $300-320 millones y un EBITDA ajustado entre $350-370 millones.
프레리 오퍼레이팅 컴퍼니 (PROP)는 베이스워터 탐사 및 생산의 DJ 분지 자산을 6억 27만5천 달러에 인수하기 위한 확정 계약을 발표했습니다. 이번 인수에는 웰드 카운티에 위치한 약 24,000 에이커의 순수한 토지가 포함되며, 약 26 mboepd의 석유 비중이 높은 (69% 액체) 순 생산이 추가됩니다.
이번 거래는 현금, 최대 약 520만 주의 프레리 보통주 및 확장된 신용 시설의 차입금 조합을 통해 자금을 조달할 예정입니다. 차입 한도는 4억 7500만 달러입니다. 거래는 2025년 2월에 마감될 예정이며, 경제적 효력 발생일은 2024년 12월 1일입니다.
주요 하이라이트에는 약 27,500 BOEPD의 생산 증가, 약 54,000 에이커로의 발코트 확대, 약 600개의 매우 경제적인 드릴링 위치가 포함되어 있어 약 10년의 재고를 제공합니다. 회사의 2025년 가이던스는 29,000-31,000 BOEPD의 생산, 3억-3억 2천만 달러의 자본 지출, 그리고 3억 5천만-3억 7천만 달러의 조정 EBITDA를 예측하고 있습니다.
Prairie Operating Co. (PROP) a annoncé un accord définitif pour acquérir les actifs de Bayswater Exploration and Production dans le bassin DJ pour 602,75 millions de dollars. L'acquisition comprend environ 24 000 acres nets dans le comté de Weld et ajoute environ 26 mboepd de production nette à poids pétrolier (69 % liquides).
La transaction sera financée par une combinaison de liquidités, jusqu'à environ 5,2 millions d'actions ordinaires de Prairie, et des emprunts dans le cadre d'une ligne de crédit élargie avec une base d'emprunt de 475 millions de dollars. L'accord devrait se conclure en février 2025, avec une date économique effective du 1er décembre 2024.
Les points forts incluent une augmentation de la production à environ 27 500 BOEPD nets, une extension de la superficie à environ 54 000 acres nets et environ 600 emplacements de forage très économiques fournissant environ 10 ans d'inventaire. Les prévisions de l'entreprise pour 2025 projettent une production de 29 000 à 31 000 BOEPD, des dépenses d'investissement de 300 à 320 millions de dollars et un EBITDA ajusté entre 350 et 370 millions de dollars.
Prairie Operating Co. (PROP) hat eine verbindliche Vereinbarung bekannt gegeben, um die Vermögenswerte von Bayswater Exploration and Production im DJ Basin für 602,75 Millionen Dollar zu erwerben. Die Übernahme umfasst ca. 24.000 Nettowalkflächen im Weld County und fügt ca. 26 mboepd an ölgewichteter (69% Flüssigkeiten) Nettoproduktion hinzu.
Die Transaktion wird durch eine Kombination aus Bargeld, bis zu ca. 5,2 Millionen Aktien der Prairie-Gesellschaft und Krediten im Rahmen einer erweiterten Kreditfazilität mit einer Kreditbasis von 475 Millionen Dollar finanziert. Der Deal soll im Februar 2025 abgeschlossen werden, mit einem wirtschaftlichen Stichtag am 1. Dezember 2024.
Wichtige Highlights umfassen einen Anstieg auf ca. 27.500 netto BOEPD Produktion, eine erweiterte Fläche von ca. 54.000 Nettowalkflächen und ca. 600 hochwirtschaftliche Bohrstandorte, die ca. 10 Jahre Inventar bereitstellen. Die Prognosen des Unternehmens für 2025 sehen eine Produktion von 29.000-31.000 BOEPD, Investitionsausgaben von 300-320 Millionen Dollar und ein angepasstes EBITDA zwischen 350-370 Millionen Dollar vor.
- Adds 77.9 MMboe and $1.1 Billion in Proved PV-10 value
- Immediately accretive to per-share cash flow metrics
- Low leverage ratio of ~1.0x expected at closing
- Increases production by ~26 mboepd (69% liquids)
- Expands drilling inventory with ~600 new locations
- Infrastructure synergies to reduce development costs
- Significant capital expenditure increase to $300-320 million for 2025
- Potential shareholder dilution from ~5.2 million new shares
- Increased debt from new borrowings for acquisition funding
Insights
This $602.75 million acquisition marks a transformative moment for Prairie Operating, substantially expanding its DJ Basin footprint with compelling economics. The transaction metrics reveal an attractive valuation at approximately
The asset quality is particularly noteworthy, with 69% liquids-weighted production and substantial proved reserves of 104 MMboe. The PV-10 value of
Key strategic benefits include:
- Immediate scale increase to ~27,500 BOEPD
- Enhanced operational leverage across ~54,000 net acres
- 10-year drilling inventory with ~600 high-quality locations
- Projected 2025 EBITDA of
$350-370 million
The financing structure, leveraging an expanded credit facility while maintaining a conservative ~1.0x leverage ratio, positions Prairie for sustainable growth without overleveraging. The addition of infrastructure synergies and operational efficiencies should drive meaningful cost reductions and enhance returns on invested capital.
The technical merits of this acquisition are compelling, particularly the asset quality and development potential. The 69% liquids content positions these assets at the sweet spot of DJ Basin economics, while the proved developed producing (PDP) reserves of 57,326 MBoe provide immediate cash flow generation.
The operational synergies are substantial:
- Contiguous acreage position enabling longer lateral development
- Existing infrastructure reducing capital intensity
- Operational scale driving procurement and service cost advantages
- Enhanced midstream optionality
The 600 highly economic drilling locations provide a decade of inventory at current activity levels, with the potential for additional location optimization through enhanced completion techniques and spacing optimization. The projected capital expenditure guidance of
- Adds ~24,000 net acres in Weld County and ~26 mboepd of oil-weighted (
69% liquids) net production - Adds 77.9 MMboe and ~
$1.1 Billion in Proved PV-10 value(1)(2) - Attractive valuation, highly accretive across key cash flow metrics
- Significantly increases 2025 production, revenue and adjusted EBITDA guidance
HOUSTON, Feb. 07, 2025 (GLOBE NEWSWIRE) -- Prairie Operating Co. (Nasdaq: PROP) (the “Company,” “Prairie,” “we,” “our” or “us”), today announced it has entered into a definitive purchase and sale agreement to acquire (the “Bayswater Acquisition”) certain assets (the “Bayswater Assets”) from Bayswater Exploration and Production and certain of its affiliated entities (collectively “Bayswater”), a premier operator in the Denver-Julesburg Basin (the “DJ Basin”). The transaction will significantly increase the Company’s operational scale and footprint in the DJ Basin and add highly economic drilling locations.
The purchase price of the acquisition is
“This acquisition delivers compelling strategic and financial advantages and reflects our disciplined, but opportunistic approach to rapidly expand our footprint in the DJ Basin,” said Edward Kovalik, Chairman and CEO of Prairie Operating Co. “Not only will the addition of these high-quality assets be immediately accretive, but they will also accelerate our development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for our shareholders.”
Gary Hanna, President of the Company, added, “This acquisition represents a transformative milestone for Prairie Operating Co. by significantly expanding our footprint and production of oil rich assets in the DJ Basin. Upon closing, we will be well-positioned to deliver significant organic production growth in 2025 and beyond.”
Key Prairie Highlights, Pro Forma for the Transaction:
- Transformational Increase in Oil-Weighted Production: ~27,500 net BOEPD (
69% liquids) - Expanded Footprint / Inventory Life: ~54,000 net acres, including ~600 highly economic drilling locations, providing ~10 years of drilling inventory
- Significantly Increases Free Cash Flow: Expected to be immediately accretive to per-share cash flow metrics
- Maintains Strong Balance Sheet: Expected leverage ratio of ~1.0x at closing with upsized committed credit facility and ample liquidity
- Meaningful Infrastructure Synergies: Leverages existing infrastructure to drive operational efficiencies and reduce development costs
- Attractive Valuation Metrics(1): PV-20 of Proved Developed Producing (“PDP”) reserves and
$23,500 per net flowing BOE
2025 Updated Guidance
Upon the closing of this acquisition, the combined Company’s 2025 pro forma outlook includes:
- Average Daily Production: 29,000 – 31,000 BOEPD
- Capital Expenditures (Capex):
$300 million –$320 million - Adjusted EBITDA(3): Expected to range between
$350 million and$370 million
*Based on an active hedging program and an average working interest (“WI”) of
Estimated Reserve Data
A summary of the estimated reserves and values of our properties (as adjusted to give effect to the Bayswater Acquisition), as of November 30, 2024, and as determined by Cawley, Gillespie & Associates, the Company’s independent Petroleum Reserve Evaluation Firm, using SEC pricing as of November 30, 2024 is set forth below.
| Our Pro Forma Net Reserves | ||||||||
| Reserve Category | Oil (MBbl) | NGL (MBbl) | Gas (MMcf) | Total (MBoe) | Liquids (%) | PV-10 ($MM)(4) | ||
| Proved Developed Producing (PDP) | 23,581 | 14,810 | 113,611 | 57,326 | 67 | % | ||
| Proved Developed Not Producing (PDNP) | 173 | 26 | 216 | 235 | 85 | % | ||
| Proved Undeveloped (PUD) | 25,547 | 8,970 | 72,088 | 46,531 | 74 | % | ||
| Total Proved | 49,301 | 23,806 | 185,914 | 104,093 | 70 | % | ||
(3) Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.
(4) PV-10 is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.
Webcast Access
Date: Friday, February 7, 2025
Time: 10:00am Eastern Time (9:00am Central Time)
Participant Listening: 877-407-9219 / +1 201-689-8852
The webcast may be accessed from the “Press & Media” page of Prairie’s website at: https://www.prairieopco.com/media
To participate via telephone, please register in advance here: https://event.choruscall.com/mediaframe/webcast.html?webcastid=DUzJKsjj
Participants can use Guest dial-in numbers above and be answered by an operator OR click the Call meTM link for instant telephone access to the event: https://hd.choruscall.com/InComm/?callme=true&passcode=13751732&h=true&info=company&r=true&B=6
The Call me™ link will be made active 15 minutes prior to scheduled start time. Upon registration, all telephone participants will be joined to the conference call in listen only. A replay of the webcast will be archived on the Company’s website for two (2) weeks following the call.
Advisors
Citi is serving as exclusive financial advisor and Norton Rose Fulbright US LLP is serving as legal advisor to Prairie. Citibank N.A. is also leading the committed financing under the Company’s anticipated expanded credit facility, with Latham & Watkins LLP as legal advisor to Citibank N.A.
About Prairie Operating Co.
Prairie Operating Co. is a Houston-based publicly traded independent energy company engaged in the development and acquisition of oil and natural gas resources in the United States. The Company’s assets and operations are concentrated in the oil and liquids-rich regions of the Denver-Julesburg (DJ) Basin, with a primary focus on the Niobrara and Codell formations. The Company is committed to the responsible development of its oil and natural gas resources and is focused on maximizing returns through consistent growth, capital discipline, and sustainable cash flow generation. More information about the Company can be found at www.prairieopco.com.
Reconciliation of Non-GAAP Measures
Adjusted EBITDA
This press release also contains Adjusted EBITDA, which is a financial measure not presented in accordance with U.S. GAAP. Adjusted EBITDA is used by management to evaluate the performance of our business, make operational decisions, and assess our ability to generate cashflows. Management believes Adjusted EBITDA provides investors with helpful information to better understand the underlying performance trends of our business, facilitate period-to-period comparisons, and assess the company’s operating results.
Adjusted EBITDA is derived from Net income and is adjusted for income tax expense, depreciation, depletion, and amortization (DD&A), accretion of asset retirement obligations, non-cash stock-based compensation, and loss on unrealized commodity derivatives. We adjust net income for the items listed above to arrive at Adjusted EBITDA because these amounts can vary substantially between periods and companies within our industry depending upon accounting methods, book values of assets, capital structures, and the method by which assets were acquired. Additionally, the presentation of Adjusted EBITDA does not imply that our operating results will not be affected by unusual or non-recurring items.
Adjusted EBITDA has limitations as an analytical tool, including that it excludes certain items that affect our reported financial results. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, GAAP Net income or as an indicator of our operating performance or liquidity. Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
The following table reconciles Adjusted EBITDA to Net Income, which is the most directly comparable financial measure prepared in accordance with GAAP.
Reconciliation of Adjusted EBITDA to Net Income (in Millions)
PV-10
This press release contains PV-10, which is a financial measure not presented in accordance with U.S. GAAP. PV-10 is derived from the Standardized Measure of Discounted Future Net Cash Flows (“Standardized Measure”), which is the most directly comparable GAAP financial measure for proved reserves. PV-10 is a computation of the Standardized Measure on a pre-tax basis. PV-10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes discounted at
The following table reconciles PV-10 to the standard measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure:
Reconciliation of PV-10 to the Standard Measure of Discounted Future Net Cash Flows
Forward-Looking Statements
The information included herein and in any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included herein, are forward-looking statements, including statements about our ability to complete and successfully finance the Bayswater Acquisition, our financial performance following the Bayswater Acquisition, estimates of oil, natural gas and NGLs reserves, estimates of future oil, natural gas and NGLs production, and the Company’s updated guidance set forth in this press release. When used herein, including any oral statements made in connection herewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on the Company’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. The Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, including our ability to satisfy the conditions to closing the Bayswater Acquisition in a timely manner or at all, our ability to successfully finance the Bayswater Acquisition, our ability to recognize the anticipated benefits of the Bayswater Acquisition, the possibility that we may be unable to achieve expected free cash flow accretion, production levels, drilling, operational efficiencies and other anticipated benefits of the Bayswater Assets within the expected time-frames or at all, and our ability to successfully integrate the Bayswater Assets . There may be additional risks not currently known by the Company or that the Company currently believes are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact the Company’s expectations can be found in the Company’s periodic filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K/A filed with the SEC on March 20, 2024, and any subsequently filed Quarterly Report on Form 10-Q and Current Report on Form 8-K. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov.
Investor Relations Contact:
Wobbe Ploegsma
info@prairieopco.com
832.274.3449
Tables accompanying this announcement is available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/2887d588-6948-4d53-b85e-af27741c6839
https://www.globenewswire.com/NewsRoom/AttachmentNg/6a82a869-eea3-4d69-b087-417457b9dc27
FAQ
What is the total value of Prairie Operating's (PROP) Bayswater acquisition?
How much additional production will PROP gain from the Bayswater acquisition?
What is PROP's projected 2025 production guidance after the Bayswater acquisition?
How many additional drilling locations does PROP gain from the Bayswater acquisition?
What is PROP's expected adjusted EBITDA range for 2025 after the acquisition?
When is the Bayswater acquisition expected to close?
