🧾 What This Document Is

This is an 8-K filing with an Exhibit 99.1, which is a detailed press release announcing Prairie Operating Co.'s full-year 2025 financial and operational results. Public companies use these to quickly inform investors of major news. It’s not just a routine quarterly update; this report details a transformational year for the company after a major acquisition.

🏢 What The Company Does

In simple terms, Prairie is an oil and gas company. They drill for and sell oil, natural gas, and natural gas liquids (NGLs like propane). Their operations are focused in the Denver-Julesburg (DJ) Basin, a major energy-producing region in the U.S. 👉 Think of them as a mid-sized, focused producer that got significantly bigger in 2025.

💰 Financial Highlights: A Year of Explosive Growth

The numbers show a company that scaled up massively, mostly due to a big purchase.

• Revenue: $241.6 million for the year. Including the full effect of their new assets from the Bayswater acquisition, it was approximately $315 million. This is up about 3,000% from the prior year.
• Profitability Metric (Adjusted EBITDA): This is a key cash flow measure for energy companies. They reported a record $155.5 million (or ~$220 million including Bayswater), a 975%+ increase year-over-year.
• The Bottom Line: Despite the huge revenue jump, they posted a Net Loss of $60.9 million ($1.35 per share). Why the loss? A big chunk comes from non-cash accounting charges related to their preferred stock and derivatives, not from their core drilling operations.
• Production: This is the volume of oil and gas they produced. It skyrocketed to an average of 18,500 barrels of oil equivalent per day (Boe/d), a 3,900% increase. By the end of 2025, their daily production rate was even higher, at ~28,000 Boe/d.

🤝 The Deal That Changed Everything: Bayswater Acquisition

The single biggest driver of Prairie's 2025 results was the $602.75 million acquisition of assets from Bayswater Exploration & Production. They closed this deal on March 26, 2025, and spent the year integrating it. This purchase instantly gave them a much larger footprint, more wells, and the production capacity that led to the explosive growth numbers above.

🏗️ Operations Update: Hitting the Ground Running

Prairie was very active developing its new and existing assets throughout 2025. They moved quickly from acquiring land to drilling wells.

• They successfully drilled and brought online several major well pads (Rusch, Opal/Coalbank, Noble, Simpson) in Weld County, Colorado.
• By year-end, they had two more pads (Blehm, Schneider) in the completion phase and had just started drilling on another major pad (Elder East and West).
• This activity is why their current production rate (~28,000 Boe/d) is so much higher than the yearly average.

📦 Financial Position & Liquidity

• Balance Sheet: Their total assets grew to $944.5 million, up from $156.6 million a year ago, reflecting the new properties and operations.
• Debt: They have a $475 million credit facility (a loan) and had $366 million drawn on it at year-end. They also have various preferred stock instruments.
• Cash: They ended the year with only $20,000 in cash, but highlight $109 million in available liquidity from their undrawn credit line. This shows they are using their financing capacity to fund growth.

📊 Reserves: The Value in the Ground

Reserves are the estimated amount of oil and gas they can profitably extract. This is a snapshot of their future potential.

• Total Proved Reserves: 121.1 million barrels of oil equivalent (MBoe).
• Value (PV-10): Using SEC price assumptions, the pre-tax present value of these reserves is $1.22 billion. This is a key metric for valuing energy companies.
• Mix: 43% of reserves are "undeveloped," meaning they have plans to drill them in the future.

🔮 What's Next: 2026 Guidance

Prairie is guiding for more growth and stronger cash flow in 2026.

• Average Production: 25,500 – 27,500 Boe/d.
• Capital Spending (Capex): $200 - $220 million to keep drilling wells.
• Adjusted EBITDA: They expect $240 - $260 million, a significant increase from 2025.

🛡️ Hedging: Locking in Prices

Energy prices are volatile. Prairie uses "hedges" (financial contracts) to lock in future sales prices for their oil and gas. They have substantial hedges in place through 2029 at weighted-average prices like ~$62/barrel for oil and ~$4.08/MMBtu for natural gas. 👉 This protects their cash flow if prices fall, but also limits upside if prices soar.

⚖️ Big Picture: Strengths & Risks

• 👍 Strengths: Delivered massive scale-up, executed a major integration, maintains strong hedge protection, and has a clear development plan in a known basin (DJ Basin).
• ⚠️ Risks: The company is heavily indebted, has complex preferred stock obligations that create accounting losses, operates in a volatile commodity price environment, and must continue executing its drilling plan flawlessly to hit its targets.

🧠 The Analogy

Prairie is like a small-town restaurant that bought the building next door and doubled its size overnight. 2025 was the year of messy, busy construction (acquisitions and drilling). They're now a much bigger operation (28,000 Boe/d capacity), but they're still working out the kinks and paying off the loan for the renovation (debt and preferred stock charges), which makes the initial profit & loss statement look confusing despite the booming business.

📇 Key Contacts & People

• Interim Chief Executive Officer: Richard Frommer
• Investor Relations Contact: Wobbe Ploegsma
• Email: [email protected]
• Phone: 832-274-3449
• Company Social Media: @PrairieOpCo on X (Twitter), linkedin.com/company/prairie-operating-co

🧩 Final Takeaway

Prairie Operating Co. executed a massive growth leap in 2025 via acquisition, transforming its scale and cash-generating ability. While the headline net loss is confusing, the story is in the explosive growth in revenue, production, and EBITDA. The key for investors now is watching whether the company can effectively manage its new, larger scale and heavy debt load to turn that operational success into consistent net profitability.