Prairie Operating Company (PROP) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $98.9 million, up 45% year-over-year.

Oil Revenue: $93.5 million.

Production: Averaged 21,866 BOE per day, with liquids comprising 72% (50% oil).

GAAP Net Income: $109 million; net income attributable to common stockholders was $193.8 million ($1.75 per basic share, $0.23 per diluted share).

Adjusted EBITDA: $34 million.

Cash Capital Expenditures: Approximately $98.5 million for the quarter.

Year-to-Date Performance: Revenue of $182.3 million, up 125% year-over-year; adjusted EBITDA of $71.1 million, up 65%.

2Strategic Updates and Business Highlights

Transitioned management and Board to enhance oversight and strategic decision-making.

Completed partial refinancing of Series F Preferred stock, reducing outstanding balance and potential dilution.

Achieved operational milestones, including drilling 12 wells in Q2, all completed below AFE (Authorization for Expenditure).

Implemented a new smaller hole design that saved over $40,000 per well, with plans to apply this across the Niobrara development program.

Increased average month-to-date production for August to approximately 27,000 net BOE per day.

3Forward Guidance and Outlook

Adjusted full-year 2026 guidance:

Average daily production: 23,000 to 25,000 BOE per day.

Capital expenditures: $185 million to $195 million.

Adjusted EBITDA: $180 million to $190 million.

Focus on safe execution, disciplined capital allocation, and enhancing liquidity while aligning investment pace with operational performance.

4Bad News, Challenges, or Points of Concern

Negative natural gas pricing (-$1.30 per Mcf) due to lower gross sales and weaker market conditions.

Production from new wells (Opal Coalbank) was limited in Q2 due to timing; full contributions expected in subsequent quarters.

Concerns regarding the Series F Preferred stock refinancing, with ongoing discussions and multiple extensions indicating potential challenges in finalizing terms.

5Notable Q&A Insights

Production Trends: The Burnett pad is in flowback stages, with initial hydrocarbon production expected soon. Guidance suggests production could stabilize around 26,000 to 28,000 BOE per day in Q3.

Bank Facility: A new minimum production threshold was established to balance growth and liquidity, ensuring continued development.

Well Costs: Current costs for 2-mile laterals range from $5.2 to $5.6 million, with efficiencies gained through new drilling techniques.

Competitive Landscape: Bison's successful operations nearby have provided valuable data, but Prairie's ongoing development in the Hereford and Eastern extension areas remains a focus for potential production growth. Overall, Prairie Operating Company has shown strong financial performance and operational improvements, but faces challenges in natural gas pricing and the refinancing of preferred stock. The company is strategically positioned for growth with its ongoing development initiatives and cost-saving measures.