Prairie Operating Co.

What they do

Prairie Operating Co. acquires and develops crude oil, natural gas, and NGLs in the DJ Basin, primarily in rural Weld County, Colorado. As of June 30, 2026, it held approximately 68,500 net leasehold acres. The company has grown through acquisitions, including the Bayswater, Edge, and Summit/Crown deals, and operates a drilling program across multiple pads.

Revenue drivers

• Crude oil production — Primary revenue source; Q1 2026 oil realized price (excluding hedges) was $67.91 per barrel, with 48% oil liquids in total production.
• Natural gas liquids (NGLs) — Second largest revenue stream; Q1 2026 realized NGL price of $13.33 per barrel, contributing to 72% liquids overall.
• Natural gas — Additional revenue from gas sales; Q1 2026 realized price of $2.53 per Mcf.

Recent performance

For Q1 2026, revenue was $83.4 million, up over 500% quarter-over-quarter, driven by production of 2.1 MMBoe (about 23,200 Boe/d). Net loss attributable to common stockholders was $174.4 million, or $2.16 per share, due to preferred stock-related costs. Adjusted EBITDA was $37.2 million, up from $5.2 million in Q1 2025. Operating cash flow for Q1 2026 was $42.3 million, and capital expenditures incurred were $34.1 million. Annual revenue grew from $7.9 million in 2024 to $241.6 million in 2025, with net income of $32.1 million in 2025.

Strategy

Management plans to grow via drilling inventory and accretive acquisitions, focusing on low-cost, liquids-rich assets. The company aims to fund drilling with free cash flow and maintain low leverage, while using technology to improve well results and capital efficiency. Acquisitions in the core DJ Basin are a key part of the roll-up strategy. Proactive regulatory, environmental, and community management is also emphasized.

Risks

• Commodity price volatility — Oil, NGL, and gas prices fluctuate, directly impacting revenue and cash flow; hedging provides partial protection through Q2 2029.
• High leverage and debt obligations — Total liabilities were $739.0 million as of June 30, 2026, with long-term debt of $387.0 million as of June 30, 2025 (latest available), requiring significant cash flow to service.
• Preferred stock dilution overhang — Series F Preferred Stock and related warrants create potential dilution; partial repurchase reduced balance but warrants remain an overhang.
• Operational execution and drilling costs — Drilling and completion activities may exceed budget or underperform expected production rates; recent wells have been below AFE, but future performance is uncertain.

Outlook

Management raised 2026 capital expenditure guidance to $185-195 million, with $132.6 million spent as of June 30, 2026. Several pads are scheduled to come online during 2026, including Burnett and Castor, with completion activities continuing. The company expects continued production growth and aims to simplify its capital structure by addressing the remaining Series F Preferred.