Prairie Operating Co. acquires DJ basin exploration, production assets for $94.5 million

January 14, 2024

(WO) – Prairie Operating Co. has entered into a definitive agreement to acquire the assets of Nickel Road Operating LLC ("NRO") for $94.5 million. The total consideration consists of $83 million in cash and $11.5 million in deferred cash payments.

Source: Nickel Road Operating LLC

The addition of NRO's assets strategically expands Prairie's core operating area, increases inventory of high rate-of-return drilling locations, and provides additional flexibility to the 2024 drill schedule. The transaction adds over 5,500 net leasehold acres and 62 fully permitted proven undeveloped ("PUD") drilling locations. The 84% liquids weighted assets produce approximately 3,370 net boed and add third-party engineered proven reserves estimated at 22.2 MMboe and $254 million in PV10 value, according to an independent, third-party reserve report by Cawley, Gillespie & Associates, Inc.

NRO's assets and operations are located near Prairie's existing DJ basin operations in largely rural Weld County, Colorado. The permitted PUDs are expected to payout in approximately 1 year from the onset of production and are economic in a low commodity price environment, with operational break-evens below $30/bbl WTI. In addition, existing infrastructure provides takeaway capacity and opportunities to improve efficiencies.

"This acquisition increases and strengthens our overall position within a top-tier U.S. shale basin and aligns with our strategy of creating value through accretive acquisitions," stated Ed Kovalik, Chairman and Chief Executive Officer of the Company. "Furthermore, the transaction positions us to accelerate our development program within free cash flow, supporting the Company's stated goal of debt-free, long-term growth."

Prairie Operating Co. is a publicly-traded company engaged in the development, exploration, and production of oil, natural gas, and natural gas liquids, with operations focused on unconventional oil and natural gas reservoirs located in Colorado focused on the Niobrara and Codell formations.

Lead image source: Nickel Road Operating LLC

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