Prairie Operating Co. Year-End 2025 Earnings Call - Bayswater Integration Boosts Scale, Capital-Structure Remains the Real Overhang

Operator: Good morning, and welcome to the Prairie Operating Co. year-end 2025 earnings conference call. Today’s call is being recorded. At this time, I’d like to turn the call over to Wobbe Ploegsma, Vice President of Investor Relations and Capital Markets. Please go ahead.

Wobbe Ploegsma, Vice President of Investor Relations and Capital Markets, Prairie Operating Co.: Thank you, operator, and good morning, everyone. Thank you for joining Prairie Operating Company’s full year-end 2025 earnings call. Before we provide our prepared remarks, I would like to remind all participants that our comments today will include forward-looking statements which are subject to certain risks, uncertainties and assumptions. Actual results could differ materially from those in any forward-looking statements. Additionally, we may refer to non-GAAP measures. For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements, as well as the reconciliations of any non-GAAP financial measures, please see the company’s public filings, including the Form 8-K filed Monday, March 30, 2026. We have also posted an updated investor presentation to our website. Joining me today are Rich Frommer, Interim CEO and President, and Greg Patton, Executive Vice President and Chief Financial Officer.

With that, I’ll turn the call over to our Interim CEO and President, Rich Frommer.

Rich Frommer, Interim CEO and President, Prairie Operating Co.: Thanks, Wobby, and good morning, everyone. 2025 was a transformative year for Prairie. We successfully completed the full integration of the assets acquired from Bayswater Exploration & Production, while further expanding our inventory at attractive economics. In addition to our acquisitions, we delivered strong operational execution, meaningful production growth, and strengthens our balance sheet. For the full year, Prairie generated total production of approximately 6.75 million BOE or 18,500 BOE on average, and exited the year at a production rate of approximately 28,000 net BOE per day, reflecting the strong ramp in activity and execution of our development program. It’s important to note that the reported 18,500 BOE per day does not include the pro forma first quarter production from the Bayswater assets, which was incorporated into our original guidance.

By including those volumes, our full year production would have been approximately 24,000 BOE per day, representing almost a 4x increase in production year-over-year and in line with our guidance range. Throughout 2025, we executed a series of bolt-on acquisitions that further strengthened our core DJ Basin position. In total, we completed six transactions, adding approximately 44,000 net acres inclusive of the Bayswater, and expanded our portfolio with high quality proved inventory, all while maintaining accretive balance sheet metrics and a disciplined approach to capital allocation. Operationally, we brought on multiple pads online during the year, including the Noble, Simpson, Rauch, and the Opal Coal Bank, while advancing development across our broader asset base. These projects contributed meaningfully to our production growth and position us well for continued momentum into 2026.

From the financial standpoint, Prairie significantly strengthened its foundation in 2025, generating approximately $242 million in revenue and $156 million in Adjusted EBITDA, highlighting the scale and the earnings power of the platform. Similar to the production, this revenue and EBITDA figure does not include the pro forma contribution from Bayswater’s assets for the first quarter. When included, full year revenue and EBITDA would have been approximately $315 million and $220 million, respectively, modestly below our EBITDA guidance of $240 million. Subsequent to year-end, the company received an extension on the anniversary warrant date from March 26, 2026 to April 7, 2026, providing us additional time as we continue discussions related to our capital structure. Looking ahead, our strategy remains unchanged.

The board and management are aligned and focused on disciplined capital allocation, operational execution, and delivering sustainable growth and long-term shareholder value. With that, I’ll turn the call over to Greg.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Thanks, Rich, and good morning, everyone. I’ll review Prairie’s full year 2025 financial results. As well as highlights regarding our liquidity, hedging, and balance sheet. For the full year, Prairie generated total revenue of approximately $242 million, or $315 million inclusive of Bayswater. Driven by realized prices of $63.87 per barrel of oil, $17.93 per barrel of NGL, and $1.65 per Mcf of natural gas, including the impact of derivatives, representing almost a 3,000% increase in revenues year over year. Net loss attributable to common stockholders was $60.9 million, or $1.35 per share, primarily reflecting non-cash expenses associated with a Series F Preferred in other financial instruments.

Adjusted EBITDA totaled approximately $156 million, a significant improvement from the prior year and a clear reflection of the company’s strong operational and financial performance. As Rich noted, this figure does not include the pro forma contribution from the Bayswater assets for the first quarter. Including those amounts, full-year adjusted EBITDA would have been approximately $220 million, modestly below our guidance of $240 million. Notably, we achieved our production guidance while deploying significantly less capital than originally planned. Approximately 35% below our stated CapEx guidance, underscoring the capital efficiency and strength of our operational execution. Net cash provided by operating activities was $153.9 million, and capital expenditures totaled approximately $183.4 million, coming in approximately $90 million below the midpoint of our guidance.

On a per BOE basis, lease operating expense was $6.14. Transportation and processing was $1.32. Production and ad valorem taxes were $3.15, and G&A was $7.50 per BOE, of which $5.29 was attributable to cash G&A, reflecting our continued focus on cost control and increased efficiencies. As of December 31, 2025, Prairie had approximately $109 million of liquidity, with a borrowing base and elected commitment of $475 million under its credit facility. Our hedging program remains a key component of our strategy, with a significant portion of expected production hedged at attractive prices through 2029, providing strong cash flow visibility and downside protection.

Prairie ended the year with 121.1 million BOE of proved reserves, including a balanced mix of proved, developed, and undeveloped reserves with a PV-10 value of approximately $1.2 billion, underscoring the significant value of our assets. Overall, 2025 marked a transformative step forward in strengthening Prairie’s financial position, scaling the business, and positioning the company for continued growth. I will now go over an operational overview. Operationally, 2025 was a defining year for Prairie. We successfully completed the integration of acquired assets, assumed full operational control, and executed a multiple pad development program across our DJ Basin footprint. Importantly, we achieved a 0.0 safety record for the year, reflecting a perfect safety performance with 0 incidents, an outcome that underscores the dedication, discipline, and operational excellence of our field team.

As previously mentioned, during the year, we completed and turned to sales wells across multiple pads, including Noble, Simpson, Rush, and Opal Coal Bank. Results to date have met or exceeded expectations and continue to validate the quality of our inventory and execution. In addition to new development, Prairie remained focused on optimization initiatives, including workovers and artificial lift enhancements, which contributed to improved base production, performance, and efficiency. We also secured key agreements for services and infrastructure in 2026, ensuring operational continuity and supporting our future development. The team executed at a high level throughout the year, delivering strong results while managing integration and maintaining capital discipline.

Management and the board of directors remain closely aligned around a shared commitment to disciplined capital allocation, continued optimization of the company’s capital structure, and the delivery of sustainable long-term value for shareholders. The leadership team is focused on enhancing financial strength, driving operational excellence, and executing with integrity across all aspects of the business. With that, I’ll hand it back to Rich for closing remarks.

Rich Frommer, Interim CEO and President, Prairie Operating Co.: Thanks, Greg. As we look ahead to 2026, we are initiating full year guidance reflecting the strength of our asset base and the momentum exiting 2025. We expect average production of approximately 25,500 to 27,500 BOE per day, with capital expenditures of $200 million-$220 million. Adjusted EBITDA expected to range between $240 million and $260 million, assuming a weighted average WTI price of $60-$64, including our hedges. Our approach remains consistent, prioritizing high return organic growth, maintaining balance sheet strength, and preserving flexibility to pursue accretive opportunities. Prairie exits 2025 with significantly greater scale, a deep inventory of high quality locations, and a proven operating platform. We believe we are well positioned to deliver continued operational and financial success into 2026 and beyond.

On behalf of our board, I want to thank the entire Prairie team for their dedication and execution throughout 2025, and I want to thank our shareholders for their continued trust and support as we enter the next phase of growth. With that, I’ll turn the call back over to the operator to open the line for questions.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. Again, that’s star one to register a question at this time. Our first question is coming from Leo Mariani of Roth. Please go ahead.

Leo Mariani, Analyst, Roth: Yeah. Hi, guys. I was hoping you could shed a little bit more color on production. You know, you guys had a 28,000 barrel a day exit rate. Your guide for the year is a little bit, you know, lower than that. Could you maybe just talk us through, like, roughly where you think we’re gonna be in the first quarter on production, and what do you think the kind of cadence is throughout the year? Has production been going down recently? Is it expected to go back up, you know, at some point throughout the year? Just any color on cadence and production would be very helpful.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Yeah. Good morning, Leo. Greg Patton here. Happy to talk about our plan a little bit for 2026. As you mentioned, we exited the year on a highlight for the year, ultimately developing new locations. We are reoccupying pads that have incremental additional locations available to them in the first quarter. I define that as not infilling wells, but more so utilizing that pad to drill other pads. Our Blem Schneider is a key example, for those of you on the phone, where we did have to go in and shut down the entire Blem facility and operations. Our Q1 production number is down. That number, you’re going to see an average of Q1 more in the 23-ish range.

Ultimately, that’s just because of that shut-in production, not necessarily normal declines, as we would all anticipate exiting the year from 28,000 barrels a day, but because we had to shut in incremental pads. Same scenario on our Elder pad, where we drilled three different DSUs from the Elder pad, that we’ve gone and reoccupied. In that first quarter of the year, the Blem, the Elder, as we’ve drilled those incremental locations in our drill plan for the year, is going to have the lowest production. Bringing those all back online, plus the new flush production on those two pads as we get into the second quarter here, we’ll continue to ramp up and act as a continual gradual increase throughout the year to exit the year again. That’s a little bit of color in and around Q1 moving into Q2.

There will be, at the end of Q2, some offset fracs that we anticipate. They don’t seem to be significant at this point in time, depending on how far away ultimately those fracs propagate. We believe that it’s ultimately a gradual incline from this point forward to the end of the year.

Leo Mariani, Analyst, Roth: Okay. That was helpful. I hope you could maybe just talk a little about some of the well performance that the company has seen here. Just looking at, you know, some of the details in your release, the Opal Coal Bank wells were around 725 BOE per day. Noble with sort of subsequent wells were lower at 550, and the Simpson, kind of your latest wells, were even lower at 500. Are you guys doing anything differently on the wells here? It seems like the performance has been declining a bit in the more recent wells versus some prior wells. Maybe just talk to that a bit and kind of what you’re seeing there.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Yeah. Opal Coal Bank was definitely an above performer for us in how it flowed back. Very happy with the results of Opal Coal Bank. Noble has done well, but has been impacted by some offset operators, Chevron predominantly. In terms of their frack program. We’ve been fighting those wells with those offset fracks over the last several months. Hopefully, we get that a little bit more stabilized here as we move into the second quarter of the year. The Simpson wells have you know in our minds performed quite well. In terms of getting them online, they took longer than anticipated. We had some trouble with equipment getting there on time, predominantly our gas lift systems.

As those gas lift systems got there on time, and we were able to bring those wells online more in accordance with how we’d like to flow them back, they’ve been performing at type curve. As we kind of look forward, we believe that they’re gonna stay on that kind of trend line, albeit it has taken significantly longer to get them there than we originally anticipated. But we’re still very optimistic of what those wells can perform based off of, you know, just dynamics and pressures that we’re seeing on site, feedback we’re getting on our daily route reviews from our operators, et cetera.

Leo Mariani, Analyst, Roth: Okay. That’s helpful. I was also hoping you could just kinda speak to what roughly the current share count is of the company. I know the share count’s been going up, you know, for y’all for a bit of time here. Where is it roughly here today? Can you provide some more color on kinda where you are in the process on the preferred refinancing, you know, restructuring? I know you bought the extension on the time here, which I guess will be coming up in about a week. Any color on that would be great.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Absolutely and always appreciate the transparency there in questions in and around the pref. We know ultimately, it’s been highly accretive to us to be able to secure these assets, operate as we have, but it does have some dilutive qualities to it, as we’re all aware of. Obviously, the waiver I think clearly indicates that we’re in good communication with that pref holder, being High Trail Capital/Hudson Bay Capital Management. They’ve been a great partner with us as we’ve continued to grow and expand. They’ve utilized that pref in the manners that it was set forth to do and convert it. I’ll kinda transition the two questions or blend them together here, Leo. Ultimately, as that pref is converted, our share count has increased.

As that share count has increased, you know, as we exited the year, we were in the low sixties in terms of what I’d say is the issued and outstanding share count. They’ve continued to convert. We’ve had some really good volume trading in our stock. We’re appreciative of the shareholder base that we have out there today. As we continue to execute, deliver results, et cetera, and so forth, High Trail has taken advantage of the market and been able to convert more of that outstanding. You know, giving those numbers exactly, we haven’t concluded Q1 yet, so I’ll refrain from doing that. At this time, I’ll tell you that the number has increased from that low sixties number at the end of the year.

Leo Mariani, Analyst, Roth: Okay, thanks.

Operator: Thank you. Our next question is coming from Chris Begner of Water Tower Research. Please go ahead.

Chris Begner, Analyst, Water Tower Research: Hi, good morning, everyone. I was curious about your cash flow priorities in 2026. It looks like you’re guiding to modest free cash flow generation. How do you think about using the available free cash flow? You can target debt reduction or potential acquisitions. If you were to look at acquisitions, how would you think about financing them?

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Thanks, Chris, and good morning. Good to hear from you. You know, yes, I think you read the guidance correctly in modest free cash flow generation through the year. Again, you know, that’s based on a mid-$60s price deck on average with our hedges. As we look at the current market, that could be more accretive to the company. Ultimately, you know, we don’t know what the year will hold, and so we’ve held a very conservative model and plan for the year. As we think about that cash flow generation and its uses per your question, it would be to build out the rest of the asset base in terms of our financials. We wanna build a robust financial balance sheet, which we have worked for and developed to this date.

Increasing the liquidity of the company, deleveraging the balance sheet further from what we did at the end of the year are all imperative goals of the board. You know, that’s the alignment that we have with the board and with management. As we kind of progress this all forward, you know, asset acquisitions are at the key of our kind of aspirations. We’ve done nine acquisitions to date that have bolstered and built the significance of our balance sheet and our reserves to date. We’ve done all of those at very accretive metrics. We’ll continue to look at acquisitions. If they’re accretive, we’ll think about bolting them on or tacking them on to our contiguous acreage blocks.

We’ve done that predominantly through cash flow and small draws on the RBL to support PDP as we’ve acquired it. I would think that we continue to do that, those same type of acquisitions and growth perspectives with the company. Not over-leveraging the balance sheet, not growing just to grow, maintaining a cash flow metric, albeit growing accretively where possible.

Chris Begner, Analyst, Water Tower Research: Excellent. One other question that I’ve got, and then I’ll let you go. Are there any anticipated constraints that you see from any of the midstream systems or gathering systems?

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Great question. The DJ’s obviously been plagued with constraints throughout the years as fluctuation in production grows and expands. That’s one of the benefits of how we build our acreage position and how we’ve engineered our midstream contracts. Ultimately, foundation basis started with NGL and growing an expandable basis with them to be able to carry our oil hydrocarbons to Cushing for sale. Number one. Number two, we have great partners with Williams and DCP on the gas contracts. As they’ve continued to grow in the basin and expand, you know, we have ensured that our development plan aligns with their expansion profiles and availability on their plants. There are some locations we have split connects in which provides an even better optionality use for us as we continue forward.

We do not anticipate any constraints on our plan through 2026 or 2027. We continue to monitor that on a regular basis, and, you know, be prepared for potential offset additional production coming online, as well as our expansion potential and how we can continue to grow with those systems.

Operator: Thank you. The next question is coming from John Davenport of Johnson Rice. Please go ahead.

John Davenport, Analyst, Johnson Rice: Hi, good morning, and thanks for taking our question today. I wanted to focus on, I guess, more the 2026 production CapEx guidance and maybe some flexibility around that, as the year goes on. You know, we’re in a different price environment than, say, a month ago or two months ago, and I’d be curious if how long of elevated prices would it take for you guys to up the dial on activity or if there’s or if you guys remain flat if even if prices were to remain elevated throughout the year.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: John, thanks for the question, and thanks for joining us this morning. Yeah. You know the goal, as I mentioned in some of our prior questions here, is to bolster the robustness of our balance sheet by continuing to create liquidity, and to pay down debt. That ultimately creates more value to our shareholders and our stakeholders based off of the assets that we’re able to have on our balance sheet, the reserves we’re able to grow. The one rig, one frack crew program that we have in place this year, albeit the rig outpaces the frack crew, so we’ll be taking a hiatus from the rig for roughly a month throughout the year.

That ultimately is our plan, and our plan is to generate as much free cash flow and hopefully some more with the market prices, to your question, by the end of the year. As we get to the fourth quarter, and that rig is potentially moving quicker, you know, there’s the chance that we have a couple of extra DUCs, a couple, you know, 1-3, maybe 5 extra DUCs, depending on how much faster it moves. But there’s only so much that frack crew can keep up with, and our goal is not to really step into a second frack crew.

The goal there is really to, again, just bolster the balance sheet, continue operational efficiencies across our capital structure, maintain our accretive AFEs and our cost basis within those AFEs, as I think we’ve exhibited throughout the end of the year, delivering accretive AFE results, and focus on our LOE and our operations of north of 500 wellbores. Ultimately, the team has done a phenomenal job of that. Really narrowing in, focusing on the LOE, continued delivery of that CapEx on the AFEs, that’s our true goal for the year. You know, we’ll look and see what 2027 brings and what sustained pricing brings in 2027. I think delivering those free cash flow results and focusing on that one rig, one frack crew is our priority.

John Davenport, Analyst, Johnson Rice: Got it. Well, I think that’s all for me. Thank you, guys.

Operator: Thank you. Our next question is coming from Tim Moore of Clear Street. Please go ahead.

Tim Moore, Analyst, Clear Street: Thanks. Yeah, I mean, it seems like you have a good tailwind maybe starting a month or two ago on AFE costs. I mean, you probably have better sand, water, steel costs maybe locked in. And like you mentioned, you don’t need a second frack crew. So I was wondering, you know, if your rig can drill about 60 wells a year, but your completion crew might be closer to low 40s pace. Do you help claw back some of those costs by maybe leasing the rig during down periods of spring or early summer to adjacent owners, and then you get a sneak peek maybe of what they’re doing to possibly become an acquisition target for you?

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: I mean, that sounds like a great strategy there. You know, I think we would take that or use that or maybe say that is our playbook. As we look at what that rig can do, it’s amazing what drill times have done in the basin, as we’ve all witnessed over the past 10 years, and they continue to get better and better and more and more defined. Utilizing that rig opportunistically while we have it contracted to be able to sub it out to maybe a potential acquisition target, I think is a great plan and something that we will probably focus on the year. As we think about the frack crew, you know, we’re partnered with Halliburton for the year, and their technologies and designs continue to get better and better.

Their sand loading and their hot swaps and things that they’re able to do on the fracture side continue to increase time and add the stages a day. You know, we’re hoping that we get more aligned on a one-for-one basis by the end of the year. Some of that’s our team getting symbiotic with the Halliburton team, and some of that’s just technologies continuing to increase. We look forward to what those things and optimization we can bring through technology, and through the utilization of multiple teams, Halliburton ourselves, Precision ourselves, in developing that on a go-forward basis. Yes, absolutely.

Utilizing that rig to sub it out to someone who may be of interest to us to add to our balance sheet later in time and keep good relationships, share in some of the maybe those technology upliftings is definitely on our minds.

Tim Moore, Analyst, Clear Street: That’s terrific color. I enjoyed seeing the E-Rig and meeting the Precision Drilling team when I was out there on the site a year and a half ago. Good luck with the refinancing for the convertible and the warrants, and that’s it for my questions.

Greg Patton, Executive Vice President and Chief Financial Officer, Prairie Operating Co.: Thank you, sir.

Operator: Thank you. Our next question is a follow-up coming from Chris Begner of Water Tower Research. Please go ahead.

Chris Begner, Analyst, Water Tower Research: Hello again. Just wanted to ask, now that we’ve gone through a management transition here, as you look forward, do you see any changes in strategy or ways that you might run the company differently? Thanks.

Rich Frommer, Interim CEO and President, Prairie Operating Co.: I’ll take that one, Chris. Chris, good to hear from you. This is Rich. Yeah, no, the board and the management has been aligned since the change. I really, I’ve been actively involved with the operations since the first of March. I can tell you clearly that the team is coordinated, focused, and really operating at a very high level without a hitch. I don’t foresee any changes in our operations with the current team in place.

Operator: Thank you. Ladies and gentlemen, this brings us to the end of today’s question-and-answer session. We would like to thank you for your interest and participation in today’s event. You may disconnect your lines at this time or log off the webcast and enjoy the rest of your day.