This article first appeared on GuruFocus .
Release Date: May 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Prairie Operating Co ( NASDAQ:PROP ) reported significant production growth with approximately 2.1 million BOE produced in Q1 2026.
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The company achieved operational efficiency by bringing new wells online and optimizing existing assets, with early well performance meeting or exceeding expectations.
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Significant progress was made in addressing the capital structure, including partial refinancing of the Series F Preferred, reducing potential dilution to common shareholders.
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Adjusted EBITDA for the quarter totaled $37.2 million, demonstrating the earnings power of the asset base.
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The company maintained a strong emphasis on safety, achieving a 0.0 safety record, reflecting commitment and professionalism.
Negative Points
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Prairie Operating Co ( NASDAQ:PROP ) reported a net loss attributable to common stockholders of approximately $174.4 million, primarily due to non-cash impacts related to derivative market-to-market adjustments.
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The oil cut decreased in Q1, partly due to production shut-ins, affecting overall production metrics.
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Lease operating expenses were relatively high at $7.11 per BOE, impacting cost efficiency.
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The company faces challenges in simplifying its capital structure, with ongoing efforts required to address the remaining Series F Preferred.
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Capital expenditures were lower than expected in Q1, indicating potential variability in spending patterns throughout the year.
Q & A Highlights
Q: Can you provide an update on current production levels and the impact of previous shut-ins? A: As of today, our production is approximately 23,200 barrels per day, similar to our first-quarter average. We are in the process of bringing wells back online, which were previously shut in for safety during development activities. This includes 10 Blem wells and 10 elder wells. We expect production to increase as these wells return to full strength and additional pads come online in the second quarter. - Greg Patton, Executive Vice President and CFO
Q: Could you elaborate on the status of the wells drilled in the first quarter and plans for the second quarter? A: The Blem pad wells are fully online, and the elder pad wells are in the process of flowback. The Opal Coalbank pad is currently undergoing fracking, expected to complete by the end of the second quarter. We are also drilling the Burnett pad with a new precision rig, which is performing well. - Greg Patton, Executive Vice President and CFO
Q: What are the actual well costs compared to the AFE for the two-mile laterals? A: The average AFE for these laterals ranges from $5.2 million to $5.6 million, depending on the step-out required. The actual costs incurred for the Blem and elder wells were between $5.4 million and $5.5 million, slightly below the targeted $5.6 million AFE. - Greg Patton, Executive Vice President and CFO
Q: Can you provide more detail on the Series F preferred refinancing efforts? A: We are actively engaged in discussions and evaluating multiple avenues, including equity, structured equity, and debt options. Our goal is to find the best solution for our shareholders, and we expect to provide more updates as we progress through the second quarter. - Greg Patton, Executive Vice President and CFO
Q: How does the current capital market environment affect your borrowing and hedging strategies? A: We completed a borrowing base redetermination in January and will enter another soon. The bank's price decks have not significantly changed, but we expect potential adjustments in the fall. Our hedging strategy remains opportunistic, with a requirement to hedge roughly 85% of production over the next 24 months. - Greg Patton, Executive Vice President and CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
