Prairie Operating Co. Strengthens Its Position with Major Acquisition
Prairie Operating Co. Strengthens Its Position with Major Acquisition
In a significant move to boost its position within the energy sector, Prairie Operating Co. has successfully completed the acquisition of assets from Bayswater Exploration and Production. This transaction marks a crucial step forward for Prairie, particularly in the productive Denver-Julesburg (DJ) Basin.
Significant Growth in Production Capacity
The acquisition adds approximately 55,000 net acres to Prairie's portfolio, significantly enhancing its operational footprint. With this new asset base, the company anticipates an increase of around 25,700 net barrels of oil equivalent per day (BOEPD). This growth will provide a sustainable production model expected to last for nearly a decade, positioning Prairie to capitalize on market demands.
Focus on Operational Efficiency
Leadership from Prairie, including Chairman and CEO Edward Kovalik, highlighted the transformational nature of this acquisition. Kovalik emphasized the strategic benefits of integrating Bayswater's high-quality assets, which will streamline operations, increase production profiles, and enhance earnings potential. Prairie's mission continues to be focused on achieving growth while maintaining a low-cost structure in the oil production landscape.
A Financially Sound Strategy
This acquisition aligns with Prairie's robust financial health, evidenced by its strong balance sheet. The company expects its leverage ratio to remain favorable, ensuring sufficient liquidity and financial flexibility to pursue further growth opportunities. President Gary Hanna echoed this viewpoint, noting that the Bayswater assets complement their existing portfolio effectively, facilitating operational efficiency while promoting sustainable shareholder returns.
Transaction Overview and Future Implications
The acquisition, valued at approximately $602.75 million, was strategically funded through various channels including new issuances of preferred stock and a public offering of common stock. Following the transaction's completion, Prairie Operating Co. will have around 35.4 million shares of common stock outstanding. This structure allows the company to maintain financial resilience while expanding its resource capabilities.
Advising Partners in the Deal
In navigating this complex transaction, Prairie appointed Citi as its exclusive financial advisor, with legal representation by Norton Rose Fulbright US LLP. Citibank N.A. played a pivotal role in facilitating financing through an expanded credit facility, further showcasing the collaborative effort behind this strategic acquisition.
About Prairie Operating Co.
Founded and headquartered in Houston, Prairie Operating Co. is a prominent player in the independent energy sector, focusing on the development and acquisition of oil and natural gas resources within the United States. Their operations in the DJ Basin concentrate on extracting value from oil-rich formations, particularly the Niobrara and Codell formations. Prairie's commitment is to responsible energy development while maximizing shareholder value through disciplined growth strategies.
Investor Relations Contact
For further inquiries regarding investor relations or to learn more about Prairie Operating Co., you can reach out to Wobbe Ploegsma at info@prairieopco.com or by calling 832.274.3449.
Frequently Asked Questions
What are the primary benefits of the acquisition?
The acquisition enhances Prairie's production capacity significantly while also solidifying its position in the DJ Basin, leading to long-term growth prospects.
How will this acquisition impact Prairie's financial situation?
The deal is expected to be immediately accretive, maintaining a strong balance sheet with ample liquidity and enhancing free cash flow metrics.
What is Prairie's strategy following this acquisition?
Prairie aims to optimize operations and maximize production efficiencies, focusing on sustainable growth for its shareholders.
Who were the main advisors involved in the acquisition?
Citi served as the financial advisor, while legal counsel was provided by Norton Rose Fulbright US LLP, highlighting the professionalism behind the deal.
Where can I find more information about Prairie Operating Co.?
For comprehensive details about the company and its operations, visit www.prairieopco.com.
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