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HOUSTON - Prairie Operating Co. (NASDAQ:PROP), currently valued at $133 million in market capitalization, announced Wednesday it has acquired certain assets from Edge Energy II LLC for $12.5 million in cash, funded through the company’s credit facility. According to InvestingPro data, the company operates with a significant debt burden, with a debt-to-equity ratio of 11.16x.
The transaction adds approximately 11,000 net acres to Prairie’s Denver-Julesburg (DJ) Basin footprint, expanding its total holdings to around 60,000 net acres. The acquisition includes current production of approximately 190 barrels of oil equivalent per day from 47 operated and non-operated wells, with an average working interest of about 88%. Analysts tracked by InvestingPro expect Prairie’s revenue to grow by 43% this year, suggesting potential upside from expanded operations.
The assets also include 40 future drilling locations with two-mile laterals, eight approved permits, and eight additional permits in process. Prairie plans to begin development of the acquired assets in August 2025, starting with the fully permitted Simpson pad. While the company’s overall financial health score is rated as ’Weak’ by InvestingPro, analysts project the company will turn profitable this year, with an EPS forecast of $2.46 for 2025.
"This strategic and highly accretive bolt-on acquisition enhances our existing footprint in the DJ Basin," said Edward Kovalik, Chairman and CEO of Prairie Operating, according to the company’s press release.
The acquisition represents a non-dilutive transaction for shareholders as it was funded entirely through the company’s existing credit facility.
Prairie Operating is an independent energy company focused on the development and acquisition of oil and natural gas resources in the DJ Basin, primarily targeting the Niobrara and Codell formations.
The company stated in its announcement that it will begin permitting additional proved undeveloped locations to enable near-term future development beyond the initial Simpson pad drilling.
In other recent news, Prairie Operating Co. announced the reaffirmation of its Reserve-Based Lending credit facility, maintaining a borrowing base of $475 million with the potential to expand to $1 billion. This credit line, led by Citibank, N.A., is set to mature in 2029 and includes new participants like Bank of America, N.A., and West Texas National Bank. Roth/MKM initiated coverage on Prairie Operating with a Buy rating and a price target of $8.00, highlighting the company’s significant acreage in the DJ Basin and its focus on liquid production. Citi also initiated coverage with a Buy rating, citing Prairie’s recent acquisition of Bayswater as a testament to its consolidation capabilities and growth potential. Additionally, Prairie Operating appointed Maree K. Delgado as Senior Vice President of Accounting, bringing over 20 years of experience in the energy sector to the company. Delgado’s expertise is expected to support Prairie’s strategic growth plans in the DJ Basin. Furthermore, Prairie Operating is moving forward with its plans to turn approximately 28 wells online this year and aims to advance to a single-rig program targeting 60 wells annually. These developments underscore Prairie’s commitment to expanding its operations and financial agility in the energy sector.
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