Prairie Operating Co. Expands DJ Basin Holdings with $12.5M Deal
Prairie Operating Co. Strengthens Its Portfolio with Strategic Acquisition
Prairie Operating Co. (Nasdaq: PROP), an independent energy company based in Houston, has recently announced a significant acquisition that is poised to enhance its operations in the Denver-Julesburg (DJ) Basin. This strategic purchase, valued at $12.5 million in cash, marks a substantial step in the company’s efforts to bolster its resource base and accelerate growth.
Edward Kovalik, the Chairman and CEO of Prairie Operating Co., expressed excitement about the acquisition. He stated that it represents both a strategic and accretive move for the company. The deal primarily serves to expand the company's footprint with the addition of high-value assets that include developed drilling locations and a substantial working interest.
Details of the Acquisition
Prairie Operating Co.'s acquisition involves the purchase of assets from Edge Energy II LLC, which will increase Prairie's acreage in the DJ Basin to approximately 60,000 net acres. This move not only reflects a significant geographical expansion but also creates a robust combination of current production capabilities and future growth potential.
The assets acquired include approximately 11,000 net acres, which will enhance Prairie’s existing production capabilities while also providing depth to its inventory. Currently, the company is achieving around 190 Boepd from 47 wells that are either operated or non-operated, highlighting the immediate benefits derived from this transaction.
Strategic Insights from Leadership
Kovalik emphasized the strategic nature of this acquisition by pointing out its alignment with Prairie's capital allocation strategy. With a high working interest of approximately 88%, the company is well-positioned to leverage the development-ready drilling locations included in the deal. The company is also set to benefit from the existing production and cash flows that the new assets will bring in.
Future Development Plans
Prairie Operating Co. has expressed clear intentions to commence development of the new assets shortly, with plans to begin work on the fully permitted Simpson pad starting this August. This location is expected to facilitate immediate scale and production while also creating a pathway for future drilling locations to be permitted.
The company aims to permit additional potential locations to secure consistent future production growth. This proactive approach is indicative of Prairie's commitment to maximizing the value of its newly acquired assets efficiently.
Company Background and Operational Focus
Prairie Operating Co. is dedicated to the responsible development and acquisition of oil and natural gas resources across the United States, with a keen focus on the resource-rich DJ Basin. Concentrating on the Niobrara and Codell formations, the company aims to deliver sustainable value through disciplined capital management and operational efficiency.
Prairie’s commitment to responsible operations goes beyond mere numbers. The company emphasizes growth alongside environmental stewardship, engaging in practices that prioritize sustainability and community impact.
Conclusion: A Bright Future Ahead
This new acquisition reflects Prairie Operating Co.'s determination to not only grow but thrive in an ever-competitive energy market. As the company integrates these assets into its portfolio, it stands to enhance its operational capacity and financial performance in the coming years.
Frequently Asked Questions
What is the purpose of Prairie Operating Co.'s recent acquisition?
The acquisition aims to expand Prairie's footprint in the DJ Basin and enhance cash flow through the addition of developed drilling locations and production capabilities.
What financial impact does the acquisition have for shareholders?
The transaction is non-dilutive, meaning it does not impact shareholders’ ownership percentages while expanding the company's resource base.
How much acreage has Prairie Operating Co. added with this deal?
Prairie has acquired approximately 11,000 net acres, increasing its total holdings in the DJ Basin to about 60,000 net acres.
What production capabilities does the acquired assets bring?
The newly acquired assets are expected to contribute around 190 Boepd from 47 operated and non-operated wells, enhancing immediate production capacity.
When does the company plan to begin development of the acquired assets?
Prairie Operating Co. plans to commence development activities on the Simpson pad in August 2025, with additional locations being permitted for future development.
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