Prairie Operating Co. Common Stock Water Tower Research Virtual Insights Conference

conference. I am pleased to welcome CEO Greg Patton from Prairie Operating Co. to join us today. I am Jeff Robertson, managing director for Natural Resources here at Water Tower Research. Before we begin, I would like to note that Prairie's safe harbor disclosures regarding forward-looking statements can be found under the Investors tab of the company's homepage. Also, investors can submit questions through the conference portal, which we will seek to address in the follow-up management series report, and investors can also indicate, submit indications of interest in meeting with management in the portal, and our team will work to coordinate those. Prairie is a relatively new company, having closed a transformative Bayswater acquisition of assets in Colorado's DJ Basin in March of 2025 for about $600 million. The company was organized to pursue an acquisition and development growth model in the DJ Basin.

In the wake of the acquisition, management put the technical and financial architecture in place to manage the scale that the acquisition provided. Prairie's full year 2026 production guidance is 23,000-25,000 BOE per day, and management estimates that the current asset base, their current acreage position, could support about 600 future development wells. Greg, thank you for taking the time to join us today.

Thank you, Jeff. Happy to be here. Look forward to our time together.

Greg, can you provide a little bit of background on Prairie and why the company chose to build an asset base in the DJ Basin or focus on the DJ Basin?

Sure. Happy to, Jeff. As we date back to the inception of the company, roughly 3 years ago, the formation of the public E&P company occurred December of 2024. As that occurred, the company and its founders were looking for an aggregation of assets. As they looked in the Permian, as they looked in the Bakken, and multiple other basins around the continental onshore United States, there was obvious pressure for pricing, in terms of buying sticks, in terms of buying assets, in terms of buying future development locations. As the founders aggregated their thoughts, as they reviewed packages that were available on the market at that point in time, ultimately the general consensus was that the DJ was a highly accretive, developmental zone, that had additional inventory available for acquisition. They utilized that to their advantage.

As we look at the inception of Prairie, there's been 9 acquisitions to date. The original acquisition we call the Genesis acquisition. It was in between the Northeast extension and the Hereford field. Ultimately, that was utilized to build the inception of what Prairie is today and the E&P company, publicly traded on NASDAQ, as we stand today. Not overly scientific in terms of how the original position was formed. A lot more science and geology has gone into future acquisitions and development zones here within the DJ. However, it was predominantly the economics that drove the location, and the desire to be in an area that had development and had availability for future expansion. That's why we landed in the DJ from its inception.

DJ covers a pretty big geographic footprint in northeastern Colorado. Greg, can you talk a little bit about the parts of the DJ Basin where Prairie is interested and why you selected the acreage, or why you pursued the Bayswater acquisition the way you did?

Yeah, as we think about the larger DJ Basin there's outskirts to it. There's the Northeast extension, the Hereford field, Watkins to the south. As you get west of the DJ, you bridge over the mountains and into the Piceance Basin. As we think about the DJ, everyone thinks Colorado, and as we think about specifically, we're focused on oil-rich windows. So that drives us to the eastern plains of Colorado and into the core of the DJ. Predominantly, we're focused on the northeast extension, the Hereford and the greater Wattenberg fields, which are more of your northeastern drive, in terms of where our assets are located. As we think about where we aggregated those 9 acquisitions I talked about, it was predominantly in and around infrastructure availability, geological formations and zones that we're comfortable with, and areas that we could build contiguous acreage blocks.

Because obviously cost is a driver. Time adds cost as you're driving, as you're moving, reallocating, moving to different areas with your drilling rig. We wanted to have a very contiguous block. We're focused on those three northeastern areas, all in and around the northeastern part of the Greater Wattenberg, and then the Northeast extension and Hereford fields.

As you indicated, Prairie is a relatively new company, having formed I think in 2004, but with a team that draws from a lot of different operators that have worked the DJ Basin. Are there best practices that you all can implement from the different experiences of the people that have come together at Prairie?

Absolutely, Jeff. I mean, safety is first and foremost. As we think about being best in class around costs, that doesn't eliminate the fact that safety's number one. As we think about the practices that we've been able to put in place here, we've grown from roughly 14 employees as we started acquiring assets, to roughly 70 employees today. In that growth, expertises have been added in and amongst the different sectors of operations, engineering, geology, accounting, et cetera, and so forth. We've been blessed to be able to take advantage of some of the consolidation that has happened in this basin, that you've seen completed by SM, by Chevron, earlier on by Civitas and others.

We've been able to really pick a unique team that's diverse, comes from all of those different companies. There's an aggregation of employees here from roughly seven different companies across the DJ Basin. We're excited to have them. It's allowed us to build out those expertises that are needed in and amongst the windows that are most predominant to us. Again, safety first and foremost, operational effective and efficiency number two, and then really putting a lot of effort into our procurement, accounting, and reconciliation processes to ensure that we continue to drive those best returns to our shareholders, our stakeholders, and to our working interest partners.

Colorado has a pretty stringent regulatory environment for the oil and gas industry. How does Prairie navigate the various state regulations that affect what you all are able to do and when you are able to do it?

Great question. As we think back, my association with the DJ stems from early 2014 onward. As we think about the development of the DJ, we think about some of the political issues that Colorado has exhibited, has put in place, and has caused issues in and amongst the oil and gas community. The thing I can tell you after going through that period of time and the rulemakings that really started with Proposition 112 in 2018, moving forward through the late 2020s and into 2021, ultimately, many of those rulemakings are now rules. As we look at the process in which we have to follow to get a permit, to operate underneath that permit, and to continue to grow and expand on a go-forward basis, many of what was unknowns are now knowns, and it really just comes down to a matter of time.