Bayswater Enters Sale Agreement for DJ Basin Assets

Bayswater Exploration & Production, a Denver-based oil and natural gas development company, has entered into a definitive purchase and sale agreement to sell certain assets in the Denver-Julesburg (DJ) Basin to Prairie Operating Co. (Nasdaq: PROP). The transaction, valued at $602.75 million, consists of cash and up to 5.2 million shares of Prairie common stock. The acquisition is expected to close in February 2025, subject to customary closing conditions, with an economic effective date of December 1, 2024.

The acquisition adds approximately 24,000 net acres in Weld County and 26 mboepd of oil-weighted (69% liquids) net production to Prairie's portfolio. It also includes 77.9 MMboe and approximately $1.1 billion in Proved PV-10 value. The transaction is expected to be immediately accretive to Prairie's per-share cash flow metrics and significantly increase its 2025 production, revenue, and adjusted EBITDA guidance.



| Reserve Category | Oil (MBbl) | NGL (MBbl) | Gas (MMcf) | Total (MBoe) | Liquids (%) | PV-10 ($MM) |
| --- | --- | --- | --- | --- | --- | --- |
| Proved Developed Producing (PDP) | 23,581 | 14,810 | 113,611 | 57,326 | 67% | $860 |
| Proved Developed Not Producing (PDNP) | 173 | 26 | 216 | 235 | 85% | $5 |
| Proved Undeveloped (PUD) | 25,547 | 8,970 | 72,088 | 46,531 | 74% | $495 |
| Total Proved | 49,301 | 23,806 | 185,914 | 104,093 | 70% | $1,360 |

The acquisition is expected to significantly increase Prairie's operational scale and footprint in the DJ Basin, adding highly economic drilling locations. It will also accelerate Prairie's development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for its shareholders.

"This acquisition delivers compelling strategic and financial advantages and reflects our disciplined, but opportunistic approach to rapidly expand our footprint in the DJ Basin," said Edward Kovalik, Chairman and CEO of Prairie Operating Co. "Not only will the addition of these high-quality assets be immediately accretive, but they will also accelerate our development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for our shareholders."

Gary Hanna, President of the Company, added, "This acquisition represents a transformative milestone for Prairie Operating Co. by significantly expanding our footprint and production of oil rich assets in the DJ Basin. Upon closing, we will be well-positioned to deliver significant organic production growth in 2025 and beyond."

The acquisition is expected to be funded through a combination of cash on hand, borrowings under Prairie's credit facility, and proceeds from one or more capital markets transactions. Prairie has received commitments to expand its borrowing base to $475 million as of the closing of the Bayswater Acquisition.

In conclusion, Bayswater's sale of its DJ Basin assets to Prairie Operating Co. is a strategic move that aligns with both companies' long-term goals. The acquisition will significantly increase Prairie's operational scale and footprint in the DJ Basin, while Bayswater can focus on its Texas operations and strengthen its balance sheet. The transaction is expected to be immediately accretive to Prairie's per-share cash flow metrics and drive sustainable, long-term value creation for its shareholders.