The acquisition is expected to be accretive to Prairie’s shareholders across key financial metrics including production, reserves, and free cash flow. Furthermore, the addition of NRO’s assets strategically expands Prairie’s core operating area, increases inventory of high rate-of-return drilling locations, and provides additional flexibility to the 2024 drill schedule. The transaction adds over 5,500 net leasehold acres and 62 fully permitted proven undeveloped (“PUD”) drilling locations. The 84% liquids weighted assets produce approximately 3,370 net Boepd and add third-party engineered proven reserves estimated at 22.2 MMboe and
NRO’s assets and operations are located near Prairie’s existing
"This acquisition increases and strengthens our overall position within a top-tier
Strategic Drivers & Asset Overview: (1)
- 3,370 net Boepd (84% liquids) flowing from 26 operated horizontal wells
- 5,500 net contiguous acres across four lateral targets
- 90% held by production (“HBP”)
- 94% working interest in seven operated Drilling and Spacing Units (“DSUs”) 74% net revenue interest
- Adds 62 permitted PUDs
- Free cash flow expected to support full field development program
- No exposure to federal leases
- Key infrastructure in place to support development plan
Financial Highlights: (1)
- Expected to be immediately accretive to key financial metrics, including production, reserves, and cash flow
- Adds 22.2 MMboe and
$254 million in 1P PV10 value - Adds 5.3 MMboe and
$104 million in PDP PV10 value - Cash flow from PDP operations expected to be
~$40 million over the next twelve months - Average IRRs of 75% and discounted ROI of 1.9x
- Net payout after approximately 1 year of production per well
- Development Break-even below
$30 /bbl WTI
Transaction Metrics: (1)
Based on an effective date of
- PV15 of Proved Developed Producing (“PDP”) reserves
- Implied multiple of 2.3x NTM cash flow
$28,000 per net flowing Boe$17,000 per net acre$4.25 per Boe of 1P reserves of 22.2 MMboe, as determined by CG&A. Including approximately$182 million of net undiscounted future development capital results in a recycle ratio of approximately 3.6x times.
A summary of reserves and values as of
Reserve Category | Formation | Well Count | Net Oil (mbo) | Net NGL (mbngl) | Net Equiv. (mboe) | PV10 ($000s) | |||
PDP | |||||||||
Codell | 7 | 746 | 1,145 | 189 | 1,125 | 26,582 | |||
Niobrara | 19 | 1,909 | 6,733 | 1,160 | 4,191 | 77,313 | |||
Total | 26 | 2,655 | 7,878 | 1,349 | 5,317 | 103,895 | |||
PUD | |||||||||
Codell | 19 | 2,697 | 4,379 | 715 | 4,142 | 42,269 | |||
Niobrara | 43 | 6,141 | 19,483 | 3,392 | 12,780 | 107,252 | |||
Total | 62 | 8,838 | 23,862 | 4,107 | 16,922 | 149,521 | |||
TOTAL PROVED | 88 | 11,493 | 31,740 | 5,456 | 22,239 | 253,416 |
Note: PV10 is a non-GAAP financial measure. See the “Non-GAAP Financial Measure” section below.
- Based on CG&A reserve report using
SEC pricing as ofDecember 31, 2023 , and NRO provided lease operating statements and corporate financial statements
Additional Information
A company presentation describing the acquisition can be found on the Company’s website (www.prairieopco.com). The transaction is currently expected to close in the first half of 2024. The Company expects to fund the transaction through a combination of public and / or private issuance of common stock, cash on hand, and proceeds from existing warrant exercises.
Non-GAAP Financial Measures
PV10 is derived from the Standardized Measure of Discounted Future Net Cash Flows (“Standardized Measure”), which is the most directly comparable GAAP financial measure for proved reserves. PV10 is a computation of the Standardized Measure on a pre-tax basis. PV10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes discounted at 10 percent. We believe that the presentation of PV10 is relevant and useful to our investors as supplemental disclosure to the Standardized Measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our reserves before considering future corporate income taxes and our current tax structure. While the standardized measure is dependent on the unique tax situation of each company, PV10 is based on prices and discount factors that are consistent for all companies.
About
Forward-Looking Statements
The information included herein 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. All statements, other than statements of present or historical fact included herein, are forward-looking statements. When used herein, including any oral statements made in connection herewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on the Company’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Statements concerning oil and gas reserves also may be deemed to be forward looking statements in that they reflect estimates based on certain assumptions that the resources involved can be economically exploited. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. The Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company. These risks include, but are not limited to, the ultimate outcome of the acquisition of NRO by the Company; the Company’s ability to consummate the proposed transaction with NRO; the Company’s ability to finance the proposed transaction with NRO; the possibility that the Company may be unable to achieve expected free cash flow accretion, production levels, drilling, operational efficiencies and other anticipated benefits within the expected time-frames or at all and to successfully integrate NRO’s operations with those of the Company; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; uncertainties inherent in estimating quantities of oil, natural gas and NGL reserves and projecting future rates of production and the amount and timing of development expenditures; commodity price and cost volatility and inflation; general economic, financial, legal, political, and business conditions and changes in domestic and foreign markets; the risks related to the growth of the Company’s business; and the effects of competition on the Company’s future business. Should one or more of the risks or uncertainties described herein and in any oral statements made in connection therewith occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. There may be additional risks not currently known by the Company or that the Company currently believes are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact the Company’s expectations can be found in the Company’s periodic filings with the
Reserve Information
The Company obtained the reserve report information referenced herein from CG&A with respect to the reserves of NRO. The reserves were calculated in accordance with
Investor Relations Contact:
Wobbe Ploegsma
wp@prairieopco.com
832.274.3449
Source:
2024 GlobeNewswire, Inc., source