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1. A smaller ExxonMobil for Permian Basin oil and gas.

2. An independent oil and gas producer, like a regional Chevron.

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• Crude Oil: Crude oil extracted from underground reservoirs and sold to refineries.
• Natural Gas: Natural gas extracted from underground reservoirs and sold to power generators, industrial users, and local distribution companies.
• Natural Gas Liquids (NGLs): A mixture of hydrocarbons, such as ethane, propane, and butane, separated from natural gas and sold as feedstocks or fuels.

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Prairie Operating (symbol: PROP) is an independent upstream oil and natural gas company primarily focused on the Permian Basin. As such, it sells crude oil and natural gas primarily to other companies rather than directly to individuals.

Based on the company's latest available financial filings (e.g., 2023 Form 10-K), Prairie Operating states that **no single customer accounted for 10% or more of its total revenues** for the fiscal years ended December 31, 2023, or December 31, 2022.

The company sells its crude oil and natural gas production to a diversified base of purchasers on the spot market or under short-term contracts. Therefore, there are no individually identifiable "major customers" that meet the typical disclosure thresholds for public companies.

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• Aris Water Solutions, Inc. (ARIS)
• Select Water Solutions, Inc. (WTTR)

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The key risks to Prairie Operating (PROP) are primarily financial in nature, compounded by the inherent volatility of the energy sector and challenges in executing its growth strategy.

1. Financial Instability, Debt, and Dilution: Prairie Operating faces significant financial risks, characterized by a substantial debt burden, persistent net losses, and the potential for considerable shareholder dilution. The company's high debt-to-equity ratio, which exceeds levels many analysts view as risky, raises concerns about its ability to service obligations, particularly during periods of low commodity prices. Furthermore, the company has undertaken numerous stock issuances to raise capital, leading to substantial dilution for existing shareholders and limiting prospects for capital appreciation. Prairie Operating has consistently reported net losses, indicating difficulty in achieving sustainable profitability.
2. Commodity Price Volatility: As an independent oil and natural gas company, Prairie Operating's revenues and cash flows are highly sensitive to the volatile prices of crude oil, natural gas, and natural gas liquids. While the company may utilize hedging strategies to mitigate some of this exposure, a prolonged decline in commodity prices could severely impact its financial condition and ability to meet capital expenditure obligations.
3. Acquisition and Operational Execution Risks: Prairie Operating has pursued an aggressive growth strategy, including significant acquisitions like the Bayswater Acquisition. These acquisitions carry inherent risks, such as the potential for the deals to not close as scheduled, challenges in successfully integrating acquired assets, and the possibility of not achieving the anticipated financial and operational benefits. Additionally, the company's ambitious production targets, which involve a substantial increase in output, demand flawless execution in an operationally challenging environment, particularly concerning horizontal drilling in the DJ Basin. Regulatory hurdles, cost overruns, or operational delays could derail these plans.

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There are two clear emerging threats for Prairie Operating (PROP):

1. The accelerating global energy transition and electrification, particularly in the transportation sector with the rapid growth of electric vehicles, poses a long-term threat to the demand for crude oil and natural gas. This shift could lead to peak oil demand sooner than previously anticipated, impacting future revenue streams and asset valuations for companies focused on fossil fuel production.
2. Increasing Environmental, Social, and Governance (ESG) pressures are leading to a significant reallocation of capital away from traditional fossil fuel companies. Financial institutions and institutional investors are tightening lending criteria, raising the cost of capital, and divesting from oil and gas producers, making it harder for companies like PROP to secure financing for exploration, development, and expansion projects.

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The addressable market for Prairie Operating (symbol: PROP) primarily revolves around the exploration, development, and production of crude oil, natural gas, and natural gas liquids (NGLs) in the United States.

The main products and services of Prairie Operating are:

• Crude Oil Production
• Natural Gas Production
• Natural Gas Liquids (NGLs) Production
• Oil and Gas Exploration and Production (E&P)

The addressable market size for the Oil Drilling & Gas Extraction industry in the United States is estimated to be $484.6 billion in 2025.

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Prairie Operating Co. (PROP) is positioned for future revenue growth over the next 2-3 years, driven by several key strategic initiatives and operational advancements.

1. Increased Production through Drilling Programs: Prairie Operating is significantly expanding its production capabilities through active drilling and completion programs. The company's 2025 guidance initially projected an average daily production of 7,000 – 8,000 barrels of oil equivalent per day (BOEPD), marking an approximate 300% year-over-year increase. This guidance was later updated to an expected 24,000-26,000 BOE per day for 2025. The company plans to drill and complete 25-28 wells in 2025, with a focus on high-return opportunities within the Denver-Julesburg (DJ) Basin. Furthermore, an annualized one-rig development program aims for approximately 60 wells per year. Recent operational updates in September 2025 indicate that the Opal/Coalbank pad is outperforming expectations, with the remaining 2025 drilling schedule on track for 41 wells to be turned in line.
2. Strategic Acquisitions and Portfolio Expansion: Prairie Operating is actively pursuing and executing strategic acquisition opportunities to enhance its scale and value. In the second quarter of 2025 alone, the company completed over $600 million in asset purchases, thereby expanding its operational footprint in the DJ Basin. This strategy involves continued consolidation and evaluating a robust pipeline of accretive acquisition targets to complement existing assets with high-quality bolt-ons and transactions that improve overall scale.
3. Favorable Commodity Price Hedging Strategy: The company has implemented a comprehensive hedging strategy to mitigate the impact of commodity price fluctuations. Prairie Operating has secured favorable commodity price hedges through 2028, covering approximately 85% of its current production. This proactive approach provides stability in revenue streams by insulating the company from near-term price volatility and enables more reliable forecasting of cash flows and capital expenditures, supporting sustained investment in growth initiatives.
4. Operational Efficiencies and Cost Optimization: Prairie Operating is focused on continuous refinement of its cost structures and optimization of its asset base. This commitment to operational efficiency is expected to result in stronger margins, higher returns, and increased free cash flow. Improvements in capital efficiency and the seamless integration of recently acquired properties also contribute to robust financial performance, maximizing the profitability derived from increased production.

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Share Issuance

• Prairie Operating has significantly increased its shares outstanding, growing from 0.22 million in 2023 to 16.77 million in 2024 (a 7198.45% change) and further to 44.06 million by November 2025 (a 162.74% change in 2025 alone).
• In March 2025, Prairie Operating announced an underwritten public offering of $35.00 million in common stock, with an option for underwriters to purchase an additional $5.25 million in shares.
• The company received $9.5 million in net cash from financing activities during the first six months of 2024, primarily from the exercise of Series D B warrants, and $17.4 million from the issuance of Series D PIPE in the first six months of 2023.

Inbound Investments

• Prairie Operating reaffirmed a $1 billion Reserve Based Lending Facility with Citibank, N.A., and added Bank of America, N.A. and West Texas National Bank to the syndicate in June 2025.
• The company entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD., enabling it to sell up to $40.0 million in common stock over a two-year period to support its strategic initiatives.
• In October 2024, Prairie Operating issued a $15.0 million senior convertible note and a $5.0 million subordinated promissory note, with proceeds intended for its drilling program and working capital.

Outbound Investments

• Prairie Operating closed the acquisition of the Bayswater Assets for $602.8 million in March 2025, significantly expanding its oil and gas asset base in the DJ Basin.
• In October 2024, the company completed the acquisition of the Central Weld Assets from Nickel Road Development LLC for $49.6 million.
• The company made a $9.0 million deposit for the NRO Acquisition and acquired unproved oil and natural gas properties from Exok for $3.0 million during the six months ended June 30, 2023.

Capital Expenditures

• Prairie Operating's updated full-year guidance for 2025 capital expenditures is projected to be between $260.0 million and $280.0 million, primarily focused on high-return drilling opportunities in the DJ Basin.
• For the second quarter of 2025, capital expenditures amounted to $56.6 million, aligning with its development plan and high-return drilling program.
• The company incurred capital expenditures of -$602.15 million in the last 12 months (as of current date), reflecting significant investments likely related to large acquisitions or property development.