Filing Analysis
Prairie Operating Co. filed an 8-K to announce its financial results for the second quarter ended June 30, 2026. The filing serves as a formal announcement of quarterly earnings via a press release.
📋 Key Facts
- Reporting period: Quarter ended June 30, 2026.
- Announcement date: August 17, 2026.
- The company issued a press release (Exhibit 99.1) containing the full text of the results.
Prairie Operating Co. entered into a Letter Agreement with Hudson Bay PH XIX LLC to delay the issuance of warrants by one week, shifting key dates from August 7, 2026, to August 14, 2026.
🚩 Red Flags
- Existence of 'Penny Warrants' (exercise price of $0.01) indicates significant potential dilution for existing shareholders.
- The use of a fallback warrant mechanism suggests high volatility or uncertainty regarding the issuance of Series F Convertible Preferred Stock warrants.
📋 Key Facts
- Agreement dated August 7, 2026, with Hudson Bay PH XIX LLC ('High Trail').
- Amends the Securities Purchase Agreement dated March 24, 2025.
- Changes 'Anniversary Warrant Issuance Date' from August 7, 2026, to August 14, 2026.
- Extends issuance date for a 'Second Penny Warrant' (3,000,000 shares at $0.01 exercise price) to August 14, 2026.
- The Second Penny Warrant acts as a fallback if Anniversary Warrants are not issued by the new deadline.
Prairie Operating Co. announced a change in its Board of Directors, featuring the resignation of Stephen Lee and the election of Jennifer Grigsby to fill the resulting vacancy.
📋 Key Facts
- Stephen Lee resigned from the Board of Directors effective July 21, 2026.
- The Company stated Mr. Lee's resignation was not due to any disagreement regarding operations, policies, or practices.
- Jennifer Grigsby was elected to the Board on July 21, 2026.
- Ms. Grigsby will serve as Chair of the Compensation Committee and a member of the Nominating & Governance Committee and the Audit Committee.
Prairie Operating Co. received a notice from Nasdaq stating that its common stock has fallen below the $1.00 minimum bid price requirement for 30 consecutive business days. The company has an initial 180-day period to regain compliance.
🚩 Red Flags
- Non-compliance with Nasdaq Minimum Bid Price Requirement (Rule 5550(a)(2)).
- Potential for a reverse stock split to regain compliance.
- Risk of immediate delisting if price drops below $0.10.
📋 Key Facts
- Received Minimum Bid Price Notice on July 2, 2026.
- Closing bid price has been below $1.00 for the last 30 consecutive business days.
- Initial compliance period granted until December 29, 2026.
- Compliance requires the stock to close at or above $1.00 for at least ten consecutive business days.
- Risk of immediate delisting if the stock trades at or below $0.10 for ten consecutive trading days.
Prairie Operating Co. announced a major leadership transition on June 23, 2026, appointing Gregory S. Patton as CEO and Michael Shelly as EVP and CFO. The filing also details significant new equity compensation packages for both executives.
🚩 Red Flags
- Significant dilution potential due to large equity award grants (totaling 2.25 million new shares between two executives).
📋 Key Facts
- Gregory S. Patton appointed CEO; previously EVP and CFO of the company since April 2025.
- Michael Shelly appointed EVP and CFO; formerly Managing Director at Citigroup Inc's Natural Resources Investment Banking Group.
- Patton to receive an annualized base salary of at least $625,000 plus a target bonus of 100% of base salary.
- Shelly to receive an annualized base salary of at least $525,000 plus a target bonus of 100% of base salary.
- Patton granted 850,000 shares (425k performance-based RSUs and 425k time-based RSUs).
- Shelly granted 1,400,000 shares (560k performance-based RSUs and 840k time-based RSUs).
- The Compensation Committee amended 2025 PSU awards to set the 'Initial Value' of common stock at $2.75 per share.
Prairie Operating Co. entered into two significant agreements on June 10, 2026: a second amendment to its credit facility with Citibank and a letter agreement with Hudson Bay PH XIX LLC regarding the conversion of Series F Convertible Preferred Stock.
🚩 Red Flags
- Increased cadence of borrowing base redeterminations often indicates tighter lender oversight or volatility in the underlying collateral value.
- Modification of distributable free cash flow covenants may suggest the company was nearing a breach or requires more flexibility to manage liquidity.
📋 Key Facts
- Reaffirmed a borrowing base of $475,000,000 under the A&R Credit Agreement.
- Modified covenants related to distributable free cash flow and reporting/notice requirements.
- Increased the frequency of scheduled and interim borrowing base redeterminations.
- Agreement with Hudson Bay PH XIX LLC allows conversion of Series F Preferred Stock into up to 21,156,339 shares of common stock.
- Delayed the 'Anniversary Warrant Issuance Date' from July 8, 2026, to August 7, 2026.
- Reduced the warrant issuance calculation from 75% of the Stated Value to 65% of the Stated Value.
Prairie Operating Co. reported the results of its 2026 Annual Meeting of Stockholders held on June 3, 2026. The stockholders elected four directors to the Board and ratified the appointment of Deloitte & Touche LLP as the independent accounting firm for the 2026 fiscal year.
📋 Key Facts
- Annual Meeting held on June 3, 2026.
- Total outstanding shares entitled to vote as of April 15, 2026: 97,344,348.
- Total shares voted in person or by proxy: 65,706,444.
- Directors elected: Richard N. Frommer, Jonathan Gray, Stephen Lee, and Erik Thoresen.
- Deloitte & Touche LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2026.
Prairie Operating Co. announced its financial results for the first quarter ended March 31, 2026. The results were furnished as part of a standard quarterly earnings release.
📋 Key Facts
- The filing reports financial results for the fiscal quarter ended March 31, 2026.
- The announcement was made on May 14, 2026.
- The information was furnished under Item 2.02 (Results of Operations and Financial Condition) and is not deemed filed for liability purposes.
- Gregory S. Patton, Executive Vice President & CFO, signed the report.
Gizman I. Abbas has resigned from the Board of Directors of Prairie Operating Co., effective May 15, 2026. The company reported that the resignation was not due to any disagreements regarding operations, policies, or practices.
📋 Key Facts
- Gizman I. Abbas notified the Board of his resignation on April 22, 2026.
- The resignation is effective May 15, 2026.
- The company confirmed there were no disagreements with the Board or management regarding company operations, policies, or practices.
- A press release regarding the resignation was issued on April 22, 2026, and included as Exhibit 99.1.
Prairie Operating Co. entered into a restructuring agreement with Hudson Bay PH XIX LLC (High Trail) involving a $18.99 million cash repurchase of Series F Preferred Stock and the issuance of highly dilutive penny warrants. The agreement modifies conversion pricing mechanics to favor the investor and grants them significant participation rights in future financings.
🚩 Red Flags
- Issuance of up to 7,000,000 shares at a nominal $0.01 price, causing significant dilution.
- Implementation of 'death spiral' style pricing mechanics (lowest 2-day VWAP look-back) for conversions.
- Cash sweep requirement of 50% of net proceeds from future financings.
- Strict registration deadlines with 1% monthly cash penalties for failures.
- Significant cash outflow of $18.99M for a micro-cap company to retire preferred equity.
📋 Key Facts
- Repurchased 13,727 shares of Series F Preferred Stock for $18,999,047.64 in cash.
- Issued a 'First Penny Warrant' for 4,000,000 shares of common stock at an exercise price of $0.01.
- Potential issuance of a 'Second Penny Warrant' for 3,000,000 shares at $0.01 if certain conditions are not met by July 8, 2026.
- High Trail waived a $3.0 million cash extension fee in exchange for these terms.
- Granted High Trail 35% participation rights in any equity or equity-linked offerings for the next 18 months.
- Modified the 'Market Stock Payment Price' to use the average of the two lowest daily VWAPs during a 5-day period within a 35-day window.
Prairie Operating Co. amended its Securities Purchase Agreement to delay the issuance of Anniversary Warrants from April 7 to April 9, 2026. As a condition for this two-day extension, the company is obligated to pay the investors an aggregate fee of $3 million.
🚩 Red Flags
- The company is paying a $3 million penalty/fee for a mere 48-hour delay in fulfilling a securities issuance obligation.
- The underlying financing involves significant potential dilution, with warrants valued at 125% of the $148.25 million stated value.
- The need for an 'Amendment and Restatement of Amendment' suggests ongoing friction or technical difficulties in meeting financing covenants.
📋 Key Facts
- The amendment relates to a March 2025 agreement involving 148,250 shares of Series F Preferred Stock with a stated value of $1,000 per share ($148.25 million total).
- The 'Anniversary Warrant Issuance Date' was moved from April 7, 2026, to April 9, 2026.
- The company must pay an aggregate amount of $3 million to the buyers on April 9, 2026, unless waived by the buyers.
- Warrants to be issued are calculated as 125% of the Stated Value of the Series F Preferred Stock divided by a 10-day volume-weighted average price (VWAP).
Prairie Operating Co. (PROP) announced its financial results for the fiscal year ended December 31, 2025, via a press release on March 30, 2026. The filing is a routine disclosure of annual performance results and does not contain any immediate material changes to corporate structure or management.
📋 Key Facts
- The filing reports financial results for the fiscal year ended December 31, 2025.
- The announcement was made on March 30, 2026, via a press release (Exhibit 99.1).
- The report was filed under Item 2.02 (Results of Operations and Financial Condition).
- The filing was signed by Gregory S. Patton, Executive Vice President & Chief Financial Officer.
Prairie Operating Co. amended its Securities Purchase Agreement to delay the issuance of anniversary warrants related to its Series F Preferred Stock from March 26, 2026, to April 7, 2026. In exchange for this delay, the company is obligated to pay a $3 million fee to the investors by April 6, 2026.
🚩 Red Flags
- High cost of capital: A $3 million cash penalty for a 12-day delay in warrant issuance is an extremely expensive concession.
- Potential for massive dilution: The warrants are calculated based on 125% of the $148.25 million stated value of the preferred stock.
- Liquidity pressure: The requirement to pay $3 million in cash suggests the company may be facing strict terms or technical defaults that required this negotiated amendment.
📋 Key Facts
- Amendment to Securities Purchase Agreement and Form of Anniversary Warrant signed March 25, 2026.
- The original agreement involved 148,250 shares of Series F Preferred Stock with a stated value of $1,000 per share ($148.25 million total).
- The 'Anniversary Warrant Issuance Date' was moved from the one-year anniversary of the closing (March 26, 2026) to April 7, 2026.
- The company must pay an aggregate amount of $3 million to the buyers on April 6, 2026, unless waived by the buyers.
Prairie Operating Co. announced the simultaneous departure of its CEO/Chairman Edward Kovalik and President Gary Hanna. Richard N. Frommer has been appointed Interim CEO while the company searches for a permanent replacement.
🚩 Red Flags
- Simultaneous departure of the two highest-ranking executive officers.
- Significant cash outlays for severance and bonuses exceeding $3.9 million in total for the departing pair.
- The inclusion of a three-year voting agreement suggests a move to neutralize potential shareholder friction from the departing insiders.
📋 Key Facts
- Edward Kovalik resigned as CEO and Chairman effective March 2, 2026.
- Gary Hanna retired as President and Director effective March 2, 2026.
- Kovalik will receive a lump sum severance of $2,531,250 plus a $750,000 bonus.
- Hanna will receive a $675,000 bonus and accelerated vesting of time-based restricted stock units.
- Departing executives agreed to vote their shares in favor of Board recommendations for the next three years.
- Richard N. Frommer, former CEO of Great Western Petroleum, was appointed Interim President and CEO.
- Erik Thoresen was appointed Chairman of the Board.
Prairie Operating Co. filed an 8-K to announce its financial results for the quarter ended September 30, 2025. The filing serves as a formal notification of the release of quarterly earnings via press release.
📋 Key Facts
- Report date: November 14, 2025
- Reporting period: Quarter ended September 30, 2025
- The company issued a press release (Exhibit 99.1) containing the financial results.
- Information under Item 2.02 is not deemed 'filed' for purposes of the Exchange Act.
Prairie Operating Co. has dismissed its current auditor, Ham, Langston & Brezina, L.L.P., and appointed Deloitte & Touche LLP as its new independent registered public accounting firm, effective September 18, 2025.
🚩 Red Flags
- Auditor change in a micro-cap company can sometimes signal underlying disagreements, though no disagreement was explicitly reported here.
📋 Key Facts
- Dismissed Ham, Langston & Brezina, L.L.P. (HL&B) effective September 18, 2025.
- Appointed Deloitte & Touche LLP as the new independent auditor for fiscal year ending December 31, 2025.
- The dismissal followed a competitive request for proposals process.
- The company stated there were no disagreements with HL&B regarding accounting principles, financial statement disclosure, or auditing scope for the years 2023, 2024, and interim 2025.
Prairie Operating Co. announced amended and restated employment agreements for its CEO, President, and CFO, effective August 13, 2025. The changes primarily involve adjustments to base salaries and incentive bonus structures to align with market practices.
🚩 Red Flags
- Retroactive pay increases to executive officers can sometimes be viewed as aggressive compensation management, though here they are paired with reduced bonus percentages.
📋 Key Facts
- CEO Ed Kovalik's annual base salary increased from $550,000 to $750,000 (retroactive to Jan 1, 2025).
- CEO Ed Kovalik's target annual incentive bonus opportunity reduced from 250% to 125% of base salary.
- President Gary C. Hanna's annual base salary increased from $550,000 to $675,000 (retroactive to Jan 1, 2025).
- President Gary C. Hanna's target annual incentive bonus opportunity reduced from 250% to 125% of base salary.
- CFO Gregory S. Patton's annual base salary increased to $550,000 (retroactive to Jan 1, 2025).
- CFO Patton's agreement includes severance benefits equal to 3x the sum of base salary and target bonus if terminated without cause or for good reason within 12 months of a change in control.
- Compensation adjustments were guided by independent consultant Zayla (a Gallagher company).
Prairie Operating Co. filed an 8-K to announce its financial results for the quarter ended June 30, 2025 via a press release.
📋 Key Facts
- Report date: August 12, 2025
- Reporting period: Quarter ended June 30, 2025
- The filing is an announcement of results under Item 2.02.
Prairie Operating Co. entered into an Equity Distribution Agreement with Citigroup Global Markets Inc. and Truist Securities, Inc. to facilitate the sale of common stock up to $75 million via an 'at-the-market' (ATM) offering.
🚩 Red Flags
- Potential for significant shareholder dilution due to the $75M ATM offering capacity.
- Requirement to use proceeds for redeeming Series F Convertible Preferred Stock could divert capital away from operational growth/drilling.
📋 Key Facts
- Entered into an Equity Distribution Agreement on June 20, 2025.
- Aggregate offering price cap: $75,000,000.
- Managers: Citigroup Global Markets Inc. and Truist Securities, Inc.
- Commission rate: Up to 3.00% of gross sales price.
- Method of sale: At-the-market (ATM) offering on Nasdaq Capital Market.
- Intended use of proceeds: General corporate purposes, drilling program development, debt repayment, or potential acquisitions.
- Contingency: Net proceeds may be used to redeem Series F Convertible Preferred Stock if required by holders.
Prairie Operating Co. held its Annual Meeting of Stockholders on June 4, 2025, where shareholders approved an amendment to the company's Long-Term Incentive Plan (LTIP). The amendment doubles the number of shares available for issuance under the plan.
🚩 Red Flags
- Significant increase in potential dilution via the doubling of the LTIP share pool (from 7.5M to 15M shares).
📋 Key Facts
- Stockholders approved an Amendment to the 2024 Amended & Restated Prairie Operating Co. Long-Term Incentive Plan (LTIP) on June 4, 2025.
- The LTIP share pool increases from 7,500,000 shares to 15,000,000 shares.
- Seven directors were elected to the Board of Directors at the Annual Meeting.
- Stockholders ratified Ham, Langston & Brezina, L.L.P. as the independent registered public accounting firm for fiscal year 2025.
- As of the April 8, 2025 record date, 42,942,127 shares were outstanding.
Prairie Operating Co. held a special meeting of stockholders on May 8, 2025, where shareholders approved the issuance of common stock related to Series F Convertible Preferred Stock and warrants pursuant to Nasdaq Rule 5635. The approval allows for the conversion of preferred shares and exercise of warrants previously issued in a March 24, 2025, Securities Purchase Agreement.
🚩 Red Flags
- Potential dilution: The approval of share issuances via conversion of preferred stock and warrants typically leads to significant dilution for existing common shareholders.
📋 Key Facts
- Special meeting held on May 8, 2025.
- Shareholders approved the issuance of Common Stock upon conversion of Series F Convertible Preferred Stock (Proposal 1).
- Shareholders approved the issuance of Common Stock upon exercise of warrants related to the March 24, 2025, Securities Purchase Agreement (Proposal 2).
- A total of 18,412,167 shares attended the meeting, representing 68.28% of outstanding common stock.
- All three proposals (issuance approvals and adjournment) passed with significant majorities.
Prairie Operating Co. completed a significant acquisition of oil and gas assets from Bayswater for approximately $483.5 million, involving both cash and equity consideration. To facilitate this, the company amended its revolving credit facility with Citibank and entered into new registration rights agreements.
🚩 Red Flags
- High leverage/utilization: The company has utilized $377 million of its $475 million borrowing base, leaving minimal liquidity ($3M) before hitting the borrowing base limit.
- Restrictive covenants: Extensive limitations on incurring debt, making investments, or engaging in certain capital expenditures outside of borrowing base properties.
- Mandatory hedging: Requirement to hedge 80% of production through 2028 limits upside from price increases and impacts cash flow flexibility.
- Subordinated Note conversion: $1.46 million of debt converted to principal with a high interest rate of 15% per annum.
📋 Key Facts
- Completed acquisition of 'Acquired Properties' in the Denver-Julesburg Basin from Bayswater entities on March 26, 2025.
- Total adjusted closing purchase price: approximately $483.5 million ($467.5M cash; $15.0M held in escrow).
- Equity consideration issued to Bayswater Exploration & Production, LLC consists of 3,656,099 shares of common stock.
- Amended and Restated Credit Agreement with Citibank features a maximum credit commitment of $1.0 billion; current borrowing base is $475.0 million.
- As of March 26, 2025, the company has $3.0 million in available capacity under the credit facility.
- New hedging requirement: must hedge at least 80% of projected production from proved developed producing reserves through March 31, 2028.
- Financial maintenance covenants include a Net Leverage Ratio ≤ 3.00 to 1.00 and a Current Ratio ≥ 1.00 to 1.00.
Prairie Operating Co. closed a $139.1 million offering of Series F Preferred Stock to fund the acquisition of oil and gas properties from Bayswater Resources, LLC. The transaction includes highly punitive terms for common shareholders, including high cumulative dividends (increasing to 25% under certain conditions) and significant cash sweep rights.
🚩 Red Flags
- Highly dilutive terms: 25% cumulative dividend rate if credit agreement matures.
- Cash sweep provisions allow preferred holders to claim 25% of proceeds from new financing or dividends.
- Conversion floor at $1.15 provides significant downside protection for investors at the expense of common shareholders.
- Potential for massive dilution via warrants and conversion rights.
- The company must seek stockholder approval for conversions, though >50% of shares are already under voting agreements in favor.
📋 Key Facts
- Closed a Preferred Offering on March 26, 2025, resulting in approximately $139.1 million in net proceeds.
- Issued 148,250 shares of Series F Preferred Stock with a stated value of $1,000 per share.
- Series F Preferred Stock carries a cumulative dividend rate of 12% per annum, which increases to 25% after the six-month anniversary of the maturity of the company's reserve-based credit agreement.
- Holders have a cash sweep right for 25% of net proceeds from certain financing or investments/dividends.
- The offering includes warrants to purchase common stock equal to 125% of the stated value divided by the 10-day VWAP.
- Conversion price floor is set at $1.15 per share, regardless of market price.
- Includes a provision for an 'Additional Payment' totaling up to $19,875,000 in cash upon conversion or redemption.
Prairie Operating Co. announced a significant $140.8 million securities offering consisting of Series F Preferred Stock and warrants to fund the acquisition of oil and gas properties from Bayswater Resources, LLC. The deal includes high-yield dividend terms (up to 25%) and complex conversion/redemption features that may result in significant dilution.
🚩 Red Flags
- High dividend rate (up to 25%) creates significant cash flow pressure.
- Complex conversion and redemption features (Additional Payments, Absolute Floor Price) suggest highly non-standard terms typical of distressed or high-risk financing.
- Potential for massive dilution through warrants and preferred stock conversion rights.
- The 'Variable Rate Transaction' restriction suggests the company is constrained by existing debt/equity structures.
📋 Key Facts
- Expected net proceeds from Series F Preferred Stock offering: ~$140.8 million.
- Concurrent offering of $35.0 million in Common Stock is also planned.
- Series F Preferred Stock carries a cumulative dividend rate of 12% per annum, increasing to 25% after the six-month anniversary of the maturity of the company's reserve-based credit agreement.
- Warrants issued one year after the preferred shares allow purchase of common stock at 125% of the stated value divided by the 10-day VWAP.
- The offering is intended to fund the 'Bayswater Acquisition' of oil and gas properties from Bayswater Resources, LLC and its affiliates.
- Includes a cash sweep provision where holders can require redemption at 25% of net proceeds from certain financing or dividends.
Prairie Operating Co. provided supplemental financial data and pro forma information regarding its acquisition of oil and gas properties from Bayswater entities, previously announced on February 7, 2025.
🚩 Red Flags
- Superseding previous pro forma financial statements suggests revisions to earlier estimates or data provided in February 2025.
📋 Key Facts
- The filing provides audited combined revenue and direct operating expenses for the acquired properties for fiscal years 2023 and 2024 (Exhibit 99.2).
- Includes unaudited pro forma condensed combined financial information as of December 31, 2024 (Exhibit 99.4), which supersedes previous February 7, 2025 filings.
- Includes a report from Cawley, Gillespie & Associates, Inc. regarding estimated pro forma reserves as of December 31, 2024 (Exhibit 99.5).
- The acquisition involves multiple entities under the 'Bayswater' umbrella.
Prairie Operating Co. has amended its existing Purchase and Sale Agreement with Bayswater Resources LLC and related entities to extend the transaction's 'Outside Date' and adjust equity consideration terms.
🚩 Red Flags
- Short window for closing: The 'Outside Date' extension to March 20, 2025, provides a very narrow timeframe for completion of the transaction.
📋 Key Facts
- The PSA Amendment extends the 'Outside Date' for termination by either party to March 20, 2025.
- Equity consideration for Bayswater E&P is set at a base amount of $16.0 million.
- The number of shares issuable under the equity component is capped at 5,249,639 shares.
Prairie Operating Co. announced a planned transition in its executive leadership, involving the resignation of CFO Craig Owen and the appointment of Gregory S. Patton as the new CFO, effective April 1, 2025.
🚩 Red Flags
- Sudden departure of a C-suite officer (though mitigated by an orderly transition period).
📋 Key Facts
- Craig Owen resigned as Executive Vice President and Chief Financial Officer on March 7, 2025.
- Gregory S. Patton appointed as Chief Financial Officer, effective April 1, 2025.
- Mr. Patton currently serves as the Company's Executive Vice President of Commercial Development.
- The transition is designed to be orderly, with Mr. Owen staying until April 1 to assist in the handover.
- Compensation terms for the new CFO have not yet been determined.
Prairie Operating Co. has entered into a definitive agreement to acquire oil and gas assets from Bayswater Resources for $602.75 million, involving both cash and equity consideration. The transaction is contingent upon securing a new credit agreement to fund approximately $315 million of the purchase price.
🚩 Red Flags
- Significant execution risk: The acquisition's success is heavily dependent on securing a new credit agreement with multiple lead arrangers.
- Potential dilution: Issuance of up to 5.25 million shares as part of the equity consideration.
- High leverage requirement: The company needs to borrow $315 million to fund a portion of the deal, significantly increasing its debt profile.
📋 Key Facts
- Acquisition price: $602.75 million via cash and up to 5,249,639 shares of common stock.
- The transaction has an economic effective date of December 1, 2024.
- Company intends to borrow ~$315 million under a new credit agreement to fund the acquisition.
- New Credit Agreement aims to increase borrowing base up to $475.0 million and extend maturity by ~4 years.
- The deal is subject to closing in February 2025, contingent on funding the New Credit Agreement.
Prairie Operating Co. entered into a $1.0 billion reserve-based credit agreement with Citibank and amended an existing subordinated note with entities controlled by a company director. The filing details significant new debt obligations, restrictive covenants, and mandatory hedging requirements.
🚩 Red Flags
- Related-party transaction: The subordinated note is held by entities controlled by Jonathan H. Gray, a director of the Company.
- Restrictive covenants include significant limitations on capital expenditures, acquisitions, and debt incurrence.
- Mandatory hedging requirement (80% production) limits upside from commodity price increases but protects cash flow.
- Security interest granted over 90% of PV-9 borrowing base properties and substantially all personal property.
📋 Key Facts
- Entered into a reserve-based credit agreement with Citibank, N.A. on December 16, 2024.
- Maximum credit commitment of $1.0 billion; current borrowing base is $44.0 million.
- As of Dec 16, 2024, $28.0 million in revolving borrowings are outstanding, leaving $7.2 million in available capacity.
- Credit agreement matures on December 16, 2026.
- Mandatory hedging requirement: Starting March 1, 2025, must hedge at least 80% of projected production through Dec 31, 2028.
- Amended and Restated Subordinated Note extends maturity to March 17, 2027.
- Financial maintenance covenants include a Net Leverage Ratio ≤ 2.50:1.00 and Current Ratio ≥ 1.00:1.00 starting Q1 2025.
Prairie Operating Co. has filed unaudited financial statements and pro forma condensed combined financial information following the acquisition of Nickel Road Operating LLC (NRO). The filing provides a look at the combined entity's financial position as of September 30, 2024.
🚩 Red Flags
- Information provided is 'unaudited', which carries higher risk than audited financials for recent acquisitions.
📋 Key Facts
- Filed unaudited financial statements for Nickel Road Operating LLC (NRO) for the nine months ended September 30, 2024.
- Provided unaudited pro forma condensed combined financial information as of September 30, 2024, and December 31, 2023.
- The filing is intended to show the impact of the NRO acquisition on the Company's consolidated financial position.
Prairie Operating Co. has terminated a Stockholders Agreement following the resignation of former director Paul L. Kessler and has elected Richard N. Frommer to fill the resulting Board vacancy.
🚩 Red Flags
- Termination of a Stockholders Agreement involving an affiliate of a former director and company executives can sometimes indicate shifts in control or internal governance disputes, though no specific conflict was detailed here.
📋 Key Facts
- Termination of a Stockholders Agreement dated May 3, 2023, effective November 15, 2024.
- The agreement involved Bristol Capital Advisors, LLC (an affiliate of former director Paul L. Kessler), Gary C. Hanna (President), and Edward Kovalik (CEO).
- Richard N. Frommer has been elected to the Board to fill the vacancy left by Mr. Kessler's resignation.
- Mr. Frommer previously served on the Company’s Advisory Board.
Prairie Operating Co. announced the resignation of Paul L. Kessler from its Board of Directors, effective October 30, 2024.
📋 Key Facts
- Paul L. Kessler resigned from the Board of Directors on October 30, 2024.
- The resignation was not due to any disagreement with the Company regarding operations, policies, or practices.
Prairie Operating Co. entered into a $40 million Standby Equity Purchase Agreement (SEPA) and secured a $5 million subordinated note from entities controlled by a company director. The company also closed a $49.6 million acquisition of oil and gas assets, funded through new debt and equity issuances.
🚩 Red Flags
- Related-party transaction: Subordinated Note issued to entities controlled by Director Jonathan H. Gray.
- Highly dilutive financing structure including SEPA (equity drawdown), convertible notes, and warrants.
- Significant debt obligations maturing in September 2025 ($15M Senior + $5M Subordinated).
- Subordinated Note includes a potential 2.0x return on capital, creating significant future dilution/liability.
📋 Key Facts
- Entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD for up to $40.0 million in common stock.
- Investor received an initial $15.0 million pre-paid advance via a Senior Convertible Note at 8.0% interest due Sept 30, 2025.
- Issued a $5.0 million Subordinated Promissory Note to entities controlled by Director Jonathan H. Gray with a 10.0% interest rate and up to 2.0x return on capital.
- Closed acquisition of Nickel Road Development LLC assets for $49.6 million on October 1, 2024.
- Issued 100,000 shares as a commitment fee to the SEPA investor.
- Sold 1,827,040 shares to an unnamed purchaser at $8.21 per share.
Prairie Operating Co. amended its asset purchase agreement for the NRO Acquisition and entered into a significant Consent & Agreement with a major shareholder (Narrogal Nominees Pty Ltd). The filing includes a massive warrant exercise and conversion by the holder, resulting in substantial new common stock issuance.
🚩 Red Flags
- Significant dilution: The conversion and warrant exercise resulted in the issuance of over 4.4 million new common shares.
- Concentrated ownership/Control shift: A single holder now has significantly increased potential ownership (up to 49.9%) and specific voting rights arrangements for holdings above 29.9%.
- Complex related-party dynamics: The Holder's role as a major creditor/owner involves complex waivers of negative covenants and mortgage releases.
📋 Key Facts
- Amended Asset Purchase Agreement (APA) for NRO Acquisition: Cash consideration at closing reduced from $84.5 million to approximately $57.0 million.
- Spud Fees reduced from a maximum of $11.5 million to $0.
- Holder (Narrogal Nominees Pty Ltd ATF Gregory K O’Neill Family Trust) exercised Series E B Warrant for 4 million shares, delivering $24.0 million in cash.
- Series E Preferred Stock was fully converted into 4,000,000 shares of Common Stock; Series D Preferred Stock saw conversion of 2,000 shares into 400,000 shares of Common Stock.
- Beneficial Ownership Limitation (BOL) Ceiling increased from 9.99% to 49.9% for both Series D and E preferred stock/warrants.
- Holder agreed to a 10-year Standstill preventing acquisition of more than 29.9% voting control via public markets.
Prairie Operating Co. reported the results of its Annual Meeting of Stockholders held on June 5, 2024. Key outcomes included the approval of a new Long-Term Incentive Plan (LTIP) and the election of seven directors.
📋 Key Facts
- Stockholders approved the 2024 Amended & Restated Prairie Operating Co. Long-Term Incentive Plan (LTIP).
- The LTIP reserves 7,500,000 shares of common stock for awards to employees, directors, and consultants.
- Seven director nominees were elected to the Board: Edward Kovalik, Gary C. Hanna, Paul L. Kessler, Jonathan Gray, Gizman I. Abbas, Stephen Lee, and Erik Thoresen.
- Stockholders ratified Ham, Langston & Brezina, L.L.P. as the independent registered public accounting firm for fiscal year 2024.
- An advisory vote determined that future 'say on pay' votes will occur every three years (next due no later than 2030).
- As of the April 8, 2024 record date, 11,133,889 shares were outstanding.
Prairie Operating Co. entered into an agreement with Bristol Investment Fund, Ltd., an entity affiliated with a Company director, to increase the beneficial ownership ceiling for certain warrants.
🚩 Red Flags
- Related-party transaction: The agreement is with an entity affiliated with a Company director (Paul L. Kessler).
- Significant concentration risk: An affiliate can now hold up to 19.99% of the company's outstanding shares via warrants, potentially leading to significant dilution and concentrated control.
📋 Key Facts
- The company entered into an Amendment and Waiver of Exercise Limitations Letter Agreement on April 8, 2024.
- The agreement involves Bristol Investment Fund, Ltd., which is affiliated with Director Paul L. Kessler.
- The amendment increases the Beneficial Ownership Limitation Ceiling for Series D PIPE Warrants (A and B warrants) from 9.99% to 19.99%.
- Bristol notified the company of its intent to immediately increase this ceiling.
Prairie Operating Co. filed an amendment to its previous 8-K regarding the acquisition of assets from Nickel Road Operating LLC (NRO). The filing provides supplemental petroleum engineering reports and unaudited pro forma financial information related to the transaction.
🚩 Red Flags
- Multiple amendments to a single asset acquisition filing (Amendment No. 1, 2, and now 3) can sometimes indicate complexities or delays in closing/valuation adjustments.
📋 Key Facts
- The filing is Amendment No. 3 to an original 8-K filed on January 12, 2024.
- Includes a reserve report for NRO as of December 31, 2023, prepared by Cawley, Gillespie & Associates, Inc.
- Provides unaudited pro forma condensed combined financial information as of and for the year ended December 31, 2023.
- The acquisition involves assets from Nickel Road Operating LLC (NRO).
Prairie Operating Co. is updating its Form S-1 registration statement to include new reserve reports from Cawley, Gillespie & Associates, Inc. and incorporate updated business disclosures. This filing supports an ongoing effort to register a common stock offering.
🚩 Red Flags
- Ongoing registration of common stock often indicates a need for capital, which can lead to significant shareholder dilution.
📋 Key Facts
- The company filed Amendment No. 2 to its Form S-1 (File No. 333-276998) regarding a common stock offering.
- Incorporated by reference updated disclosures for 'Summary – The Company', 'Business', and reserve data.
- Filed four distinct reserve reports from Cawley, Gillespie & Associates, Inc. dated March 15, 2024, covering Initial Genesis Assets (Dec 31, 2023 and Jan 31, 2024), Central Weld Assets (Jan 31, 2024), and Genesis Bolt-on Assets (Jan 31, 2024).
- The filing updates disclosures previously provided in a separate Form S-1 regarding the resale of securities.
Prairie Operating Co. is updating its Form S-1 registration statement to include new reserve reports from Cawley, Gillespie & Associates, Inc. for several asset groups as of January 31, 2024. This filing serves to support an amendment to a previous registration statement regarding the offering and resale of common stock.
🚩 Red Flags
- The filing is linked to an ongoing registration statement (S-1), indicating a need for capital through equity issuance which can lead to shareholder dilution.
📋 Key Facts
- The company is amending its Form S-1 (File No. 333-276998) to include updated disclosures.
- Incorporates reserve reports from Cawley, Gillespie & Associates, Inc. dated March 15, 2024.
- Reserve reports cover three specific asset groups: Initial Genesis Assets, Central Weld Assets, and Genesis Bolt-on Assets.
- The reserves are reported as of the period ending January 31, 2024.
Prairie Operating Co. filed an amendment to its previous 8-K to provide necessary financial statements and reserve reports related to the acquisition of Nickel Road Operating LLC (NRO). The filing includes audited financial statements for NRO and pro forma condensed combined financial information.
🚩 Red Flags
- The filing is an amendment (8-K/A), indicating the original disclosure was incomplete or required supplemental data for regulatory compliance.
📋 Key Facts
- Amendment No. 2 supplements a previously filed asset purchase agreement with Nickel Road Operating LLC (NRO) dated January 12, 2024.
- Includes an independent petroleum engineer report from Cawley, Gillespie & Associates, Inc. regarding NRO reserves as of December 31, 2023.
- Includes audited financial statements for NRO for the years ended December 31, 2023, and December 31, 2022.
- Provides unaudited pro forma condensed combined financial information as of year-end 2023.
Prairie Operating Co. filed an 8-K to incorporate by reference disclosures from a Form S-1 registration statement regarding a common stock offering and the resale of securities. The filing also includes an updated reserve report from Cawley, Gillespie & Associates, Inc.
🚩 Red Flags
- Securities offering (potential dilution for existing shareholders).
📋 Key Facts
- The company filed a Form S-1 on February 9, 2024, to register an offering of common stock.
- The registration statement includes disclosures regarding the 'NRO Acquisition' and a 'Crypto Sale'.
- Includes Exhibit 99.1: A report from Cawley, Gillespie & Associates, Inc. regarding oil/gas reserves as of February 1, 2024.
- The filing incorporates by reference various sections of the S-1 including Risk Factors and Beneficial Ownership.
Prairie Operating Co. filed an amendment to its previous 8-K to provide necessary financial statements and reserve reports related to the acquisition of assets from Nickel Road Operating LLC (NRO). The filing includes audited financial statements for NRO and independent petroleum engineer reports regarding pro forma reserves.
📋 Key Facts
- Amendment to a January 12, 2024, 8-K regarding an asset purchase agreement with Nickel Road Operating LLC (NRO).
- Includes audited financial statements of NRO for years ended Dec 31, 2022, and Dec 31, 2021.
- Includes unaudited financial statements of NRO for periods ended Sept 30, 2023, and Sept 30, 2022.
- Includes a report from Cawley, Gillespie & Associates, Inc. regarding the Company's estimated pro forma reserves as of February 1, 2024.
- Provides unaudited pro forma condensed combined financial information for the nine months ended Sept 30, 2023, and year ended Dec 31, 2022.
Prairie Operating Co. announced the acquisition of several permitted oil and gas leases located in Weld County, Colorado.
📋 Key Facts
- Acquisition date: February 5, 2024
- Asset type: Permitted oil and gas leases
- Location: Weld County, Colorado
Prairie Operating Co. filed an amendment to its previous 8-K to provide pro forma financial information following the sale of all its cryptocurrency mining equipment on January 23, 2024.
🚩 Red Flags
- Complete divestiture of a business segment (cryptocurrency mining) suggests a significant shift in corporate strategy or a need for immediate liquidity.
📋 Key Facts
- The company completed the sale of all its cryptocurrency miners ('Mining Equipment') on January 23, 2024.
- The buyer in the transaction was Matthew Austin Lerman.
- This filing is an Amendment (8-K/A) to a previously filed report from January 24, 2024.
- The amendment provides unaudited pro forma condensed combined balance sheets and statements of operations as of September 30, 2023, and for the years ended 2022 and 2021 (Exhibit 99.1).
Prairie Operating Co. has completed the sale of all its cryptocurrency mining equipment to Matthew Austin Lerman for a total potential consideration of $2 million.
🚩 Red Flags
- Divestiture of a business unit (cryptocurrency mining) may indicate a shift in corporate strategy or a need for immediate liquidity.
- The deferred payment structure is heavily tied to the buyer's revenue performance, making the full $2 million realization contingent on the equipment's ongoing profitability.
📋 Key Facts
- Sale closed on January 23, 2024.
- Total consideration consists of $1.0 million in cash and $1.0 million in deferred cash payments.
- Deferred payments are structured as a percentage of monthly revenues from the equipment: 20% until $250,000 is reached, then 50% thereafter until the remaining balance plus interest is paid.
- The buyer also assumed all rights and obligations under the Company's Master Services Agreement with Atlas Power Hosting, LLC.
Prairie Operating Co. has entered into a definitive agreement to acquire the assets of Nickel Road Development LLC and Nickel Road Operating LLC for $94.5 million. The transaction is contingent upon securing satisfactory financing, which the company intends to obtain through equity issuance and cash on hand.
🚩 Red Flags
- Significant financing contingency: The deal depends on the company securing 'satisfactory financing,' which may lead to dilution or failure to close.
- High transaction value relative to typical micro-cap liquidity ($94.5M purchase price).
- Reliance on equity issuance (common stock) to fund the cash portion of the acquisition, posing significant dilution risk to existing shareholders.
📋 Key Facts
- Total purchase price: $94.5 million ($83.0M cash, $11.5M deferred cash).
- The Company deposited $9 million into an escrow account on January 11, 2024.
- Assets include Oil and Gas Leases, Mineral Fee Interests, producing/disposal wells, and units in the DJ Basin (Weld County, Colorado).
- Expected economic effective date: February 1, 2024.
- Outside date for closing is August 15, 2024.
- Financing to be sourced via public/private common stock issuance, cash on hand, and warrant exercises.