# Prairie Operating Co.

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/Prairie Operating Co.).

## Overview

Prairie Operating Co. is a U.S.-based independent oil and gas company focused on acquiring and developing crude oil, natural gas, and natural gas liquids. Its assets are concentrated in Weld County, Colorado, within the DJ Basin, where it operates producing wells and development acreage.

## Products & services

• Crude oil production and sales
• Natural gas production and sales
• Natural gas liquids (NGLs) production and sales
• Oil and gas property acquisition and development
• Well operations and drilling program execution

- **Crude oil sales** (79%) — Sales of produced crude oil from operated and acquired wells in the DJ Basin.
- **Natural gas sales** (9%) — Sales of produced natural gas from company-operated acreage and wells.
- **NGL sales** (12%) — Sales of natural gas liquids recovered from produced hydrocarbons.
- **Acquisition and development activities** (0%) — Oil and gas property acquisitions, drilling, completion, and development work.

- Crude oil production and sales
- Natural gas production and sales
- Natural gas liquids (NGLs) production and sales
- Oil and gas property acquisition and development
- Well operations and drilling program execution

## Customers

Prairie Operating sells primarily into the upstream energy value chain, where its production is marketed as crude oil, natural gas, and NGLs. Its direct counterparties are typically commodity purchasers and marketers, while its capital providers and lenders are also important stakeholders because the business is asset-intensive and financing-dependent.

- **Commodity buyers and marketers** (primary) — Buy produced crude oil, natural gas, and NGLs for resale, refining, or processing.
- **Midstream service counterparties** (primary) — Provide gathering, transportation, and processing services that move production to market.
- **Credit facility lenders** (primary) — Provide borrowing capacity secured by reserves and production cash flow.
- **Equity capital markets** (secondary) — Provide funding for acquisitions, drilling, and general corporate purposes.
- **Working-interest partners** (secondary) — Co-invest in selected wells or acreage development where Prairie is operator.

- Commodity purchasers buying crude oil, natural gas, and NGL volumes
- Midstream and marketing counterparties handling gathering and transport
- Lenders supporting reserve-based borrowing and development capital
- Equity investors funding acquisitions, drilling, and acreage expansion
- Working-interest partners participating in selected development projects

## Geography

Prairie Operating’s business is concentrated in rural Weld County, Colorado, within the DJ Basin. The company’s production, reserves, and development activity are tied to this single operating region, making local geology, infrastructure, permitting, and commodity economics especially important.

- **Weld County, Colorado / DJ Basin** (100%) — All disclosed assets and operations are concentrated in this U.S. basin.

- Operations are concentrated in Weld County, Colorado
- DJ Basin acreage is the core operating footprint
- Local geology drives drilling economics and reserve quality
- Colorado permitting and infrastructure affect development timing
- Single-basin concentration increases regional operating exposure

## Strategy

Prairie Operating’s strategy centers on operating its acreage, developing its reserve base, and using acquisitions to expand production in the DJ Basin. The company also relies on hedging, reserve-based borrowing, and access to equity capital to support drilling and acquisition activity.

- **Develop and operate DJ Basin acreage** (medium-term) — Core value creation comes from converting acreage and reserves into production.
- **Expand through acquisitions** (medium-term) — Acquisitions can add producing wells, reserves, and scale in a familiar basin.
- **Preserve liquidity and funding access** (short-term) — Capital is needed for drilling, acquisitions, and working capital in a cyclical industry.
- **Manage commodity price exposure** (short-term) — Oil and gas prices directly affect realized revenue and development economics.

- Operate substantially all acreage to control timing and capital allocation
- Advance drilling and development on acquired DJ Basin properties
- Use hedging to reduce exposure to commodity price volatility
- Maintain access to credit facility and capital markets for funding
- Pursue selective acquisitions that add producing wells and acreage

## Risks

Prairie Operating is exposed to commodity price volatility, reserve and drilling execution risk, and dependence on external financing. Its concentration in a single basin also creates regional operating and regulatory exposure, while its capital structure and derivative positions add financial and valuation risk.

- **Commodity price volatility** [high] — Revenue and capital spending depend on realized oil, gas, and NGL prices.
- **Liquidity and financing dependence** [high] — The business requires ongoing funding for drilling, acquisitions, and operations.
- **Reserve and drilling execution risk** [high] — Production growth depends on well performance, reserve quality, and completion results.
- **Regional concentration** [medium] — Most assets are in Weld County, so local permitting, infrastructure, and geology matter.
- **Derivative and fair value volatility** [medium] — Hedging instruments and embedded derivatives can create earnings volatility through remeasurement.

- Oil, gas, and NGL prices directly drive revenue and drilling returns
- Single-basin concentration increases local operational and regulatory risk
- Development outcomes depend on drilling success and reserve estimates
- Liquidity depends on credit access, equity issuance, and cash flow
- Derivative hedges can reduce volatility but add mark-to-market risk

## Accounting

Key accounting issues include reserve-based depletion, fair value measurement of derivatives and preferred stock, and the valuation of embedded instruments such as warrants. The company also relies on estimates for proved reserves, future cash flows, asset retirement obligations, and credit losses, all of which can materially affect reported earnings and balance sheet values.

- **Proved reserve estimates and depletion** — Changes in reserve estimates can materially alter expense recognition.
- **Commodity derivative fair value** — Can create non-cash gains or losses in reported earnings.
- **Fair value of Series F preferred stock and warrants** — Can affect liabilities/equity classification and periodic fair value changes.
- **Asset retirement obligations** — Affects liabilities and accretion expense over time.
- **Deferred tax asset realizability** — Can change tax expense and balance sheet valuation allowances.

- Reserve estimates affect depletion, impairment, and future cash flow assumptions
- Commodity derivatives are marked to fair value each period
- Subordinated note warrants and preferred stock require valuation judgments
- Asset retirement obligations depend on long-lived well closure estimates
- Credit loss and deferred tax asset realizability estimates affect earnings

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*Last updated: 2026-04-29T04:49:16.291807+00:00*