HOUSTON - Prairie Operating Co. (NASDAQ:PROP), an oil and gas company, has announced a definitive agreement to acquire the assets of Nickel Road Operating LLC for a total consideration of $94.5 million. The acquisition, effective February 1, 2024, includes $83 million in cash and $11.5 million in deferred cash payments.
The transaction is expected to enhance Prairie’s financial metrics, including production, reserves, and free cash flow, and strategically expand its core operating area. The acquired assets consist of over 5,500 net leasehold acres and 62 proven undeveloped drilling locations in Weld County, Colorado, near Prairie's existing operations in the DJ Basin. These assets currently produce approximately 3,370 net barrels of oil equivalent per day (Boepd), 84% of which are liquids.
The addition of these assets brings in third-party engineered proven reserves estimated at 22.2 million barrels of oil equivalent (MMboe) and a present value discounted at 10% (PV10) of $254 million, based on a report by independent reserve evaluator Cawley, Gillespie & Associates, Inc. using SEC pricing as of December 31, 2023.
Ed Kovalik, Chairman and CEO of Prairie, stated that the acquisition aligns with the company's strategy of value creation through accretive acquisitions and positions the company for debt-free, long-term growth. President Gary Hanna emphasized the strategic enhancement of Prairie's operations and the ability to capitalize on operational efficiencies.
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