Prairie Operating Co. press release

Prairie Operating Co. Announces Second Quarter 2026 Results

2026-08-17

NASDAQ - Nasdaq Stock Market · Oil · Natural Gas · Natural Gas Liquids · United States · Corporate Finance

Total revenue of $98.9 million, an increase of approximately 45% year-over-year Net income attributable to Prairie Operating Co. common stockholders of $193.8 million Quarterly production of 21,866 Boe/d, an increase of approximately 4% year-over-year (50% oil) Adjusted EBITDA of $34.0 million

HOUSTON, Aug. 17, 2026 (GLOBE NEWSWIRE) -- Prairie Operating Co. (Nasdaq: PROP) (the “Company,” “Prairie,” “we,” “our,” or “us”) – an independent energy company engaged in the development and acquisition of oil, natural gas, and natural gas liquids (“NGL”) resources in the Denver-Julesburg (DJ) Basin – today announced its financial and operational results for the quarter ended June 30, 2026.

SECOND QUARTER 2026 RESULTS SUMMARY

Produced 2.0 MMBoe, or approximately 21,866 Boe/d, with 72% liquids (50% oil). Revenue of $98.9 million, an increase of approximately 45% year-over-year. Reported net income attributable to Prairie Operating Co. common stockholders of $193.8 million, or $1.75 basic earnings per share and $0.23 diluted earnings per share. Generated Adjusted EBITDA(1)of $34.0 million. Capital expenditures of $98.5 million. Net cash provided by operating activities of $52.0 million.

KEY HIGHLIGHTS FOR YEAR-TO-DATE 2026

Total production of 4.1 MMBoe, or approximately 22,500 Boe/d, with 72% liquids (49% oil). Daily production of approximately 27,000 Boe/d throughout the month of August. Total revenue of $182.3 million, an increase of 125% year-over-year. Adjusted EBITDA(1)of $71.1 million, an increase of 65% year-over-year. Continued execution with recently drilled wells coming in below AFE. Active hedging program, securing commodity price protection through the second quarter of 2029. Executed partial refinancing of the Series F Preferred Stock in April, reducing outstanding balance and significantly lowering warrant-related dilution, while extending the Anniversary warrant date to August 31, 2026.

(1)Adjusted EBITDA is a Non-GAAP measure, refer to “Non-GAAP Financial Measures” for reconciliations of GAAP to non-GAAP financial measures used throughout this press release.

Greg Patton, Chief Executive Officer, commented:

“Prairie delivered strong operational progress during the second quarter and throughout the first half of 2026. Our team continued to improve drilling performance, execute within budget and advance our development program across multiple pads in the DJ Basin, despite a planned pause in activity related to seasonal operating restrictions. We also achieved several important technical milestones, including successfully drilling our first three-mile lateral and testing a new wellbore design that demonstrated meaningful cost savings without changing the completion or production configuration.”

“These achievements reflect the continued improvement of our operating capabilities. As we move into the second half of the year, we remain focused on safe and consistent execution, applying proven efficiencies across our development program and allocating capital to the opportunities that generate the strongest returns. We believe this disciplined approach will support sustainable production growth, improved capital efficiency and long-term value creation for our shareholders.”

Michael Shelly, Executive Vice President and Chief Financial Officer, added:

“Prairie continued to strengthen its financial position and generated meaningful operating cash flow while continuing to fund an active capital program, expanded our commodity hedge portfolio to provide greater visibility and coverage of our future cash flows and made important progress simplifying our capital structure and reducing potential shareholder dilution.”

“As we move through the remainder of the year, our financial priorities remain centered on disciplined capital allocation, building liquidity and strengthening the balance sheet. We will continue to align capital spending with operating performance, pursue opportunities to enhance financial flexibility and support the Company’s development program in a manner designed to generate sustainable free cash flow through a range of commodity-price environments.”

Erik Thoresen, Chairman of the Board, concluded:

“During the second quarter, Prairie took several important steps to strengthen its leadership, governance and financial position. We added key members to the management team and reinvigorated the Board by welcoming a new director whose experience and perspectives will enhance our oversight and strategic decision-making.”

“These actions reflect the Board’s commitment to a strong alignment with management and shareholders. Together, we remain focused on disciplined execution, prudent capital allocation and continued cost improvement, all with the objective of creating sustainable, long-term shareholder value.”

Operations Update

Prairie maintained strong drilling execution during the second quarter of 2026, drilling 12 wells, including two Codell and ten Niobrara wells. Eight of the 12 wells were drilled in a single run, and all wells were completed below AFE. The wells consisted of two- and three-mile laterals and averaged approximately 19,100 feet in measured depth, with an average rate of penetration of 390 feet per hour and an average spud-to-rig-release time of 6.65 days.

During the quarter, Prairie successfully drilled its first three-mile lateral, a Niobrara B well, in a single run and completed drilling operations at the Burnett Pad. Drilling operations at the Castor pad were subsequently completed during the first month of the third quarter. Second-quarter drilling activity included a planned pause between the Opal Coalbank and Burnett pads to accommodate seasonal restrictions associated with Colorado Parks and Wildlife.

On the Castor pad, Prairie completed two successful trials utilizing a 7-7/8-inch hole design, compared with the Company’s standard 8-1/2-inch design. The trials generated realized savings and utilized the same 5-1/2-inch production casing. As such, it does not alter the delivered well configuration for completion or production purposes. Based on these results, Prairie plans to deploy the smaller hole design across a significant portion of its upcoming Niobrara development program.

Year to date, Prairie has drilled 27 wells, including six Codell and 21 Niobrara wells, with 19 wells drilled in a single run. On average, the wells were delivered below AFE. Year-to-date wells averaged approximately 18,700 feet in measured depth, an average rate of penetration of 377 feet per hour and an average spud-to-rig-release time of 6.2 days. Prairie has completed drilling operations at the Elder, Opal Coalbank, Burnett and Castor pads during 2026.

| SECOND QUARTER 2026 RESULTS | | | | | | | | | | | | Key Financial Highlights | | | | | | | | | | | | | | Three Months Ended | | | | (In thousands, except per share amounts) | | June 30, 2026 | | | | Total revenues | | $ | 98,859 | | | Net income attributable to Prairie Operating Co. common stockholders | | $ | 193,794 | | | Earnings per share – basic | | $ | 1.75 | | | Earnings per share – diluted | | $ | 0.23 | | | Adjusted EBITDA | | $ | 34,010 | | | Capital expenditures (1) | | $ | 98,489 | | | | | | | |

(1)Excludes $12.4 million of capital costs included in accounts payable and accrued expenses as of June 30, 2026.

Revenue and Production

Revenue for the second quarter of 2026 was $98.9 million, including $93.5 million related to oil. Production for the second quarter of 2026 totaled 1,990 MBoe, or 21,866 Boe/d, and was comprised of approximately 50% oil and 72% liquids.

| | | Three Months Ended June 30, 2026 | | | | | Revenues (in thousands) | | | | | | | Oil revenue | | $ | 93,458 | | | | Natural gas revenue (1) | | | (4,292 | ) | | | NGL revenue | | | 9,693 | | | | Total revenues | | $ | 98,859 | | | | | | | | | | | Production: | | | | | | | Oil (MBbls) | | | 992 | | | | Natural gas (MMcf) | | | 3,299 | | | | NGL (MBbls) | | | 448 | | | | Total production (MBoe) (2) | | | 1,990 | | | | | | | | | | | Average sales volumes per day (Boe/d) | | | 21,866 | | | | | | | | | | | Average realized price (excluding effects of derivatives): | | | | | | | Oil (per Bbl) | | $ | 94.21 | | | | Natural gas (per Mcf) (1) | | $ | (1.30 | ) | | | NGL (per Bbl) | | $ | 21.64 | | | | Average realized price (per Boe) | | $ | 49.68 | | | | | | | | | | | Average sales price (including effects of derivatives): | | | | | | | Oil (per Bbl) | | $ | 59.79 | | | | Natural gas (per Mcf) (1) | | $ | (0.20 | ) | | | NGL (per Bbl) | | $ | 16.72 | | | | Average price (per Boe) | | $ | 33.25 | | | | | | | | | | | Average NYMEX prices: | | | | | | | WTI (per Bbl) | | $ | 84.29 | | | | Henry Hub (per MBtu) | | $ | 3.81 | | |

| | (1) | For the three months ended June 30, 2026, we realized negative natural gas revenue and average realized prices (excluding and including the effects of derivatives) due to lower gross sales, driven by decreased pricing during the quarter, compared to gathering and processing fees. | | | | | | | (2) | MBoe is calculated using six MMcf of natural gas equivalent to one MBbl of oil. | | | | |

Operating Costs

For the second quarter of 2026, lease operating expenses were $13.6 million, or $6.85 per Boe; transportation and processing expenses were $2.4 million, or $1.22 per Boe; ad valorem and production taxes were $8.0 million, or $4.01 per Boe; and general and administrative expenses were $12.0 million, or $6.01 per Boe.

| (In thousands, except per Boe amounts) | | Three Months Ended June 30, 2026 | | | | Lease operating expenses | | $ | 13,628 | | | Lease operating expenses per Boe | | $ | 6.85 | | | | | | | | | Gathering, transportation, and processing | | $ | 2,426 | | | Gathering, transportation, and processing per Boe | | $ | 1.22 | | | | | | | | | Ad valorem and production taxes | | $ | 7,983 | | | Ad valorem and production taxes per Boe | | $ | 4.01 | | | | | | | | | General and administrative expenses (1) | | $ | 11,952 | | | General and administrative expenses per Boe | | $ | 6.01 | |

| (1) | General and administrative expenses for the three months ended June 30, 2026, includes non-cash stock-based compensation of $3.3 million, or $1.66 per Boe, and non-recurring litigation and severance settlement expenses of $0.8 million, or $0.41 per Boe. | | | |

Liquidity and Capital Resources

As of June 30, 2026, we had a working capital deficit of approximately $125.5 million and availability of $39.0 million under the reserve based credit agreement with Citibank, N.A. (the “Credit Facility”). As of June 30, 2026, the Credit Facility had a borrowing base of $475.0 million and aggregate elected commitments of $475.0 million.

During the six months ended June 30, 2026, our cash expenditures for the development of oil and natural gas properties totaled $132.6 million, with an additional $12.4 million incurred in accounts payable and accrued expenses.

On August 14, 2026, we entered into an amendment to our Credit Facility agreement which, among other things, modifies the Current Ratio covenant requirement for the quarters ended June 30, 2026, through December 31, 2026. Additionally, the amendment includes a new covenant which requires our net monthly production to not fall below an average number specified in the agreement, which will be measured on a rolling three-month average, beginning September 30, 2026. After giving effect to the amendment, we are in compliance with all covenants under the Credit Facility as of June 30, 2026.

Adjusting 2026 Guidance

Prairie adjusts full-year guidance for 2026 as follows:

Average Daily Production: 23,000 – 25,000 Boe/d. Capital Expenditures: $185.0 million – $195.0 million. Adjusted EBITDA(1): $180.0 million – $190.0 million.

(1)Adjusted EBITDA is a Non-GAAP measure, refer to “Non-GAAP Financial Measures” for reconciliations of GAAP to non-GAAP financial measures used throughout this press release.

Commodity Hedges

As of June 30, 2026, we had the following outstanding crude oil and natural gas derivative contracts in place, which settle monthly and are indexed to NYMEX West Texas Intermediate, NYMEX Henry Hub, and Mont Belvieu OPIS, respectively:

| | | Settling July 1, 2026 through December 31, 2026 | | | Settling January 1, 2027 through December 31, 2027 | | | Settling January 1, 2028 through December 31, 2028 | | | Settling January 1, 2029 through December 31, 2029 | | | | | | | Crude Oil Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 2,651,848 | | | | 4,662,503 | | | | 2,862,307 | | | | 210,000 | | | Weighted average price ($/Bbl) | | $ | 63.09 | | | $ | 62.51 | | | $ | 62.17 | | | $ | 61.57 | | | Natural Gas Swaps: | | | | | | | | | | | | | | | | | | Notional volume (MMBtus) | | | 7,584,322 | | | | 14,082,126 | | | | 5,606,357 | | | | 400,000 | | | Weighted average price ($/MMBtu) | | $ | 4.08 | | | $ | 4.08 | | | $ | 4.02 | | | $ | 4.11 | | | Ethane Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 215,747 | | | | 400,675 | | | | 220,109 | | | | — | | | Weighted average price ($/Bbl) | | $ | 11.22 | | | $ | 10.70 | | | $ | 9.96 | | | $ | — | | | Propane Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 293,113 | | | | 522,684 | | | | 199,160 | | | | — | | | Weighted average price ($/Bbl) | | $ | 28.69 | | | $ | 26.85 | | | $ | 25.93 | | | $ | — | | | Iso Butane Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 41,114 | | | | 74,572 | | | | 35,088 | | | | — | | | Weighted average price ($/Bbl) | | $ | 35.41 | | | $ | 31.77 | | | $ | 30.77 | | | $ | — | | | Normal Butane Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 103,276 | | | | 184,140 | | | | 74,903 | | | | — | | | Weighted average price ($/Bbl) | | $ | 35.81 | | | $ | 31.95 | | | $ | 30.36 | | | $ | — | | | Pentane Plus Swaps: | | | | | | | | | | | | | | | | | | Notional volume (Bbls) | | | 86,958 | | | | 160,242 | | | | 78,806 | | | | — | | | Weighted average price ($/Bbl) | | $ | 55.12 | | | $ | 53.31 | | | $ | 52.81 | | | $ | — | |

Non-GAAP Financial Measures

This press release contains Adjusted EBITDA which is a financial measure not presented in accordance with U.S. GAAP. Adjusted EBITDA is used by management to evaluate the performance of our business, make operational decisions, and assess our ability to generate cashflows. Management believes Adjusted EBITDA provides investors with helpful information to better understand the underlying performance trends of our business, facilitate period-to-period comparisons, and assess the company’s operating results.

Adjusted EBITDA is derived from net income (loss) attributable to Prairie Operating Co. and is adjusted for depreciation, depletion, and amortization, abandonment and impairment of unproved properties, non-cash stock-based compensation, interest expense, net, unrealized (gain) loss on derivatives, non-cash (gain) loss on adjustment to fair value – financial instrument liabilities, litigation and severance settlement expense, and income tax expense (benefit), all as applicable. We adjust net income (loss) attributable to Prairie Operating Co. for the items listed above to arrive at Adjusted EBITDA because these amounts can vary substantially between periods and companies within our industry depending upon accounting methods, book values of assets, capital structures, and the method by which assets were acquired. Adjusted EBITDA has limitations as an analytical tool, including that it excludes certain items that affect our reported financial results. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income calculated in accordance with GAAP or as an indicator of our operating performance or liquidity. Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

The following table presents the reconciliation of Net income (loss) attributable to Prairie Operating Co. to Adjusted EBITDA for the periods indicated:

| | | Three Months Ended June 30, | | | Six Months Ended June 30, | | | | | | | | | | | | | | | 2026 | | | 2025 | | | 2026 | | | 2025(1) | | | | | | | | | (In thousands) | | | | | | | | | | | | | | | | Net income (loss) attributable to Prairie Operating Co. | | $ | 109,017 | | | $ | 35,683 | | | $ | (43,656 | ) | | $ | 33,066 | | | Adjustments: | | | | | | | | | | | | | | | | | | Depreciation, depletion, and amortization | | | 17,075 | | | | 12,265 | | | | 32,919 | | | | 14,386 | | | Abandonment and impairment of unproved properties (2) | | | 196 | | | | — | | | | 608 | | | | — | | | Non-cash stock-based compensation | | | 3,307 | | | | 2,419 | | | | 9,040 | | | | 3,786 | | | Interest expense, net | | | 9,805 | | | | 9,030 | | | | 17,935 | | | | 10,336 | | | Unrealized (gain) loss on derivatives | | | (77,779 | ) | | | (23,206 | ) | | | 85,104 | | | | (23,090 | ) | | Non-cash (gain) loss on adjustment to fair value – financial instrument liabilities (3) | | | (48,233 | ) | | | 2,373 | | | | (16,382 | ) | | | 4,537 | | | Litigation and severance settlement expense | | | 808 | | | | — | | | | 4,154 | | | | — | | | Income tax expense (benefit) (4) | | | 19,814 | | | | — | | | | (18,580 | ) | | | — | | | Adjusted EBITDA | | $ | 34,010 | | | $ | 38,564 | | | $ | 71,142 | | | $ | 43,021 | |

| (1) | Net income (loss) attributable to Prairie Operating Co. for the six months ended June 30, 2025 includes revenue and related expenses attributable to the assets acquired from Bayswater beginning on March 26, 2025, the closing date of the Bayswater Acquisition, through June 30, 2025. | | (2) | Reflects the abandonment of unproved locations which we have deemed non–core and allowed to expire. | | (3) | Reflects the changes in the fair values of the financial instruments measured at fair value on a recurring basis. | | (4) | Reflects the deferred income tax expense and benefit recognized for the three and six months ended June 30, 2026, respectively. | | | |

The following table presents the reconciliation of expected full-year 2026 Net income attributable to Prairie Operating Co. to expected full-year 2026 Adjusted EBITDA:

| | | Full-year 2026 Guidance Range | | | | | | | | | | (In thousands) | | | | | | | | Net income attributable to Prairie Operating Co. | | $ | 18,000 | | | $ | 28,000 | | | Adjustments: | | | | | | | | | | Depreciation, depletion, and amortization | | | 52,000 | | | | 52,000 | | | Non-cash stock-based compensation | | | 18,000 | | | | 18,000 | | | Interest expense, net | | | 36,000 | | | | 33,000 | | | Unrealized (loss) on derivatives | | | (60,000 | ) | | | (60,000 | ) | | Non-cash loss on adjustment to fair value – financial instrument liabilities (1) | | | 96,000 | | | | 96,000 | | | Income tax expense (2) | | | 20,000 | | | | 23,000 | | | Adjusted EBITDA | | $ | 180,000 | | | $ | 190,000 | |

| (1) | Reflects the changes in the fair values of the financial instruments measured at fair value on a recurring basis. | | (2) | Reflects deferred income tax expense. | | | |

Cautionary Statement about Forward-Looking Statements

The information included in this press release and in any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements regarding future financial performance, business strategies, expansion plans, future results of operations, estimated revenues, losses, projected costs, prospects, plans and objectives of management. These forward-looking statements are based on our management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this press release, words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms or other similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained herein are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.