Prairie Operating Co. Secures Strong Cash Flow with Strategic Hedging Program Ahead of Market Downturn

In the volatile world of energy, Prairie Operating Co. has made a bold move to secure its financial future. The Houston-based company, engaged in the development and acquisition of oil and natural gas resources in the Denver-Julesburg (DJ) Basin, has successfully executed a strategic hedging program. This program covers approximately 85% of its current daily production, implemented just before the recent pullback in oil and gas prices. The timing couldn't be more critical, as the global energy industry faces significant challenges, including concerns over an escalating global trade war and a looming economic slowdown.

The hedging program secures strong pricing for Prairie's production. For the remaining 2025 production, the terms are set at $68.27 per barrel WTI and $4.28 per MMBtu Henry Hub. For the 2026-1Q 2028 production, the terms are $64.29 per barrel WTI and $4.09 per MMBtu Henry Hub. This initiative is a powerful example of how Prairie is executing its broader growth plan with discipline and foresight. By securing these prices, Prairie has protected its cash flows and reduced risk, positioning the company to accelerate growth while delivering long-term shareholder value.

The strategic hedging program is not just about financial stability; it's about operational execution and cost efficiency. Prairie continues to advance development across its DJ Basin footprint, including the recently announced 11-well Rusch Pad targeting the Niobrara and Codell formations. This focus on operational execution, cost efficiency, and disciplined capital allocation is supported by a fortified balance sheet and a proactive risk management strategy. This approach allows Prairie to navigate market uncertainties more effectively, ensuring that it can continue to advance development across its DJ Basin footprint, including projects like the 11-well Rusch Pad targeting the Niobrara and Codell formations.

The acquisition of DJ Basin assets from Bayswater Exploration and Production presents several potential long-term benefits and risks that could impact the company's future growth and profitability. The acquisition significantly increases Prairie's production capabilities. The company expects an average daily production of 7,000 – 8,000 barrels of oil equivalent per day (BOEPD) in 2025, representing a ~300% increase year-over-year. This substantial increase in production is likely to drive higher revenue and profitability.

However, the global energy industry is facing significant challenges, including concerns over an escalating global trade war and a looming economic slowdown. These factors have led to a decline in oil prices, with global oil prices plunging over 8% and the US natural gas price at Henry Hub falling by around 7.5%. Such market volatility can impact Prairie's revenue and profitability, despite the hedging program.

The energy sector is subject to regulatory changes and political risks that can affect operations and profitability. For example, OPEC+ has decided to accelerate plans for output increases, which can further impact oil prices. Prairie must navigate these regulatory and political landscapes to maintain its growth trajectory.

In conclusion, Prairie Operating Co.'s strategic hedging program and acquisition of DJ Basin assets from Bayswater Exploration and Production offer substantial long-term benefits, including enhanced production, strategic hedging, and operational efficiency. However, the company must continue to execute its strategy effectively and manage these risks to realize the full potential of the acquisition. The company's focus on operational execution, cost efficiency, and disciplined capital allocation, supported by a fortified balance sheet, further underscores its commitment to risk management. This approach allows Prairie to navigate market uncertainties more effectively, ensuring that it can continue to advance development across its DJ Basin footprint, including projects like the 11-well Rusch Pad targeting the Niobrara and Codell formations.