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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
Amendment
No. 3
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): April 9, 2024
Prairie
Operating Co.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-41895 |
|
98-0357690 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
602
Sawyer Street, Suite 710
Houston,
TX |
|
77007 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (713) 424-4247
N/A
(Former
Name or Former Address, If Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, par value $0.01 per share |
|
PROP |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging
Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory
Note
On
January 12, 2024, Prairie Operating Co. (the “Company”) filed a Current Report on Form 8-K to announce the Company’s
entry into an asset purchase agreement to acquire the assets of Nickel Road Operating LLC (“NRO”), which the Company subsequently
amended by filing Amendment No. 1 and Amendment No. 2 to the Current Report on Form 8-K/A on February 9, 2024 and March 19, 2024, respectively
(as so amended, the “Original 8-K”). This Amendment No. 3 to the Original 8-K (this “Amendment No. 3”), is being
filed with the Securities and Exchange Commission solely to amend and supplement Item 9.01 of the Original 8-K, as described in Item
9.01 below. This Amendment No. 3 makes no other amendments to the Original 8-K.
Item
9.01 Financial Statements and Exhibits.
(a)
Financial Statements of Businesses Acquired
The
report prepared by Cawley, Gillespie & Associates, Inc., independent petroleum engineers, relating to the reserves of NRO as of February
December 31, 2023, is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
(b)
Pro Forma Financial Information
The
unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2023 is filed as
Exhibit 99.2 hereto and incorporated herein by reference.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
Prairie
Operating Co. |
Date:
April 9, 2024 |
|
|
|
By:
|
/s/
Daniel T. Sweeney |
|
|
Daniel
T. Sweeney |
|
|
General
Counsel & Corporate Secretary |
Exhibit
23.1
CONSENT
OF INDEPENDENT PETROLEUM RESERVE EXPERTS
We
hereby consent to the references to our firm in the form and context in which they appear, and the inclusion of our report dated January
4, 2024 with respect to the estimates of reserves and future net revenues of Nickel Road Operating LLC, as of December 31, 2023, in this
Amendment No. 3 to the Current Report on Form 8-K/A of the Company, and to the incorporation by reference of such reports in the Registration
Statements (Nos. 333-272743 and 333-276998) on Form S-1 of the Company, filed with the U.S. Securities and Exchange Commission.
/s/
Cawley, Gillespie & Associates, Inc.
Fort
Worth, Texas
April
8, 2024
Exhibit 99.2
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
As
previously disclosed, Prairie Operating Co. (the “Company”) entered into an asset purchase agreement, dated January 11, 2024
(the “NRO Agreement”), by and among the Company, Nickel Road Development LLC, Nickel Road Operating LLC (“NRO”)
and Prairie Operating Co., LLC (“Prairie LLC”), to acquire certain assets of NRO for total consideration of $94.5
million (the “Purchase Price”), subject to certain closing price adjustments and other customary closing conditions (the
“NRO Acquisition”). The Purchase Price consists of $83.0 million in cash and $11.5 million in deferred cash payments. The
Company deposited $9 million of the Purchase Price into an escrow account on January 11, 2024 (the “Deposit”), which will
be released to NRO upon the earlier of the date of the closing of the NRO Acquisition pursuant to the NRO Agreement (the “Closing”)
and August 15, 2024. Portions of the Deposit are subject to earlier release under certain circumstances if the Closing has not occurred
on or prior to June 17, 2024.
The
Company is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial
aspects of the following:
| (i) | the
proposed issuance and sale of shares of common stock of the Company, par value $0.01 per share (“Common Stock”), in an
underwritten public offering (the “Offering”); |
| | |
| (ii) | the
NRO Acquisition; |
| | |
| (iii) | the
sale of all of the Company’s cryptocurrency miners (the “Mining Equipment”)
and the assignment of all of the Company’s rights and obligations under the Master
Services Agreement, dated February 16, 2023, by and between Atlas Power Hosting, LLC and
the Company, to a private purchaser pursuant to an asset purchase agreement, dated January
23, 2024 (the “Crypto Sale”); and |
| | |
| (iv) | the
merger of Creek Road Merger Sub, LLC, a Delaware limited liability company and a wholly owned
subsidiary of the Company (“Merger Sub”), with and into Prairie LLC, with Prairie
LLC surviving and continuing to exist as a Delaware limited liability company and a wholly
owned subsidiary of the Company pursuant to that certain Amended and Restated Agreement and
Plan of Merger, dated as of May 3, 2023, by and among the Company, Merger Sub and Prairie
LLC (the “Merger” and collectively, with the Offering, the NRO Acquisition and
the Crypto Sale, the “Transactions”). |
The
following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation
S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”
and presents the combination of historical financial information of the Company and Prairie LLC, adjusted to give effect to the Transactions
and subsequent events thereto (the “Subsequent Events”) as described in Note 3 below.
The
unaudited pro forma condensed combined balance sheet as of December 31, 2023 combines the historical balance sheet of the Company
as of December 31, 2023 on a pro forma basis as if the Transactions and the Subsequent Events, described in Note 3 below,
had been consummated on December 31, 2023.
The
unaudited pro forma condensed combined statements of operations for the year ended December 31, 2023 combine the historical statements
of operations of the Company, the historical statements of operations of Creek Road Miners, Inc. and the historical consolidated
statements of operations of NRO, as applicable, for such periods on a pro forma as if the Transactions and Subsequent Events, described
in Note 3 below, had been consummated on January 1, 2023.
The
unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with:
|
(a) |
the
Company’s audited historical consolidated financial statements and related notes included in its Annual Report on Form 10-K/A
for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 20,
2024; |
|
|
|
|
(b) |
the
Company’s unaudited historical condensed consolidated financial statements and related notes for the three months ended March
31, 2023 included in its Quarterly Report on Form 10-Q/A for the period ended March 31, 2023, filed with the SEC
on June 16, 2023; |
|
(c) |
the
section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Prairie
Operating Co.” included in the Company’s Annual Report on Form 10-K/A for the year ended 2023, filed with
the SEC on March 20, 2024; |
|
|
|
|
(d) |
NRO’s
audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Amendment
to its Current Report on Form 8-K/A, filed with the SEC on March 19, 2024; and |
|
|
|
|
(e) |
the
section in this prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations
of Nickel Road Operating LLC”. |
The
unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily
reflect what the Company’s financial condition or results of operations would have been had the Transactions or Subsequent Events,
described in Note 3 below, occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information
do not project the Company’s future financial condition and results of operations. The actual financial position and results of
operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma
adjustments represent management’s estimates based on information available as of the date of this filing and certain assumptions
that management believes are factually supportable and are expected to have a continuing impact on the Company’s results of operations,
and are subject to change as additional information becomes available and analyses are performed.
Description
of the Merger and Related Transactions
On
May 3, 2023 (the “Merger Closing Date”), the Company completed the Merger, and upon consummation thereof, the Company changed
its name from “Creek Road Miners, Inc.” to “Prairie Operating Co.” (the “Merger Closing”). Prior
to the consummation of the Merger, the Company effectuated certain restructuring transactions in the following order and issued an aggregate
of 3,375,288 shares of Common Stock (excluding shares reserved for issuance and unissued subject to certain beneficial ownership limitations)
and 4,423 shares of Series D preferred stock, par value $0.01 per share (“Series D Preferred Stock”):
| (i) | the
Company’s Series A preferred stock, par value $0.0001 per share (“Series A Preferred
Stock”), Series B preferred stock, par value $0.0001 per share (“Series B Preferred
Stock”), and Series C preferred stock, par value $0.0001 per share (“Series C
Preferred Stock”), plus accrued dividends, were converted, in the aggregate, into shares
of Common Stock; |
| | |
| (ii) | the
Company’s 12% senior secured convertible debentures (the “Original Debentures”),
plus accrued but unpaid interest and a 30% premium, were exchanged, in the aggregate, for
(a) the 12% amended and restated senior secured convertible debentures (collectively, the
“AR Debentures”) in the principal amount of $1,000,000 in substantially the same
form as their respective Original Debentures, (b) shares of Common Stock and (c) shares of
Series D Preferred Stock; |
| | |
| (iii) | accrued
fees payable to the certain members of the board of directors of the Company in the amount
of $110,250 were converted into shares of Common Stock; |
| | |
| (iv) | accrued
consulting fees of the Company in the amount of $318,750 payable to Bristol Capital, LLC
(“Bristol Capital”) were converted into shares of Common Stock; and |
| | |
| (v) | all
amounts payable pursuant to certain convertible promissory notes were converted into shares
of Common Stock. |
Prior
to the Merger Closing, the Company’s then-existing warrants to purchase shares of Common Stock, warrants to purchase shares of
Series B Preferred Stock and options to purchase shares of Common Stock were cancelled and retired and ceased to exist without the payment
of any consideration to the holders thereof.
At
the effective time of the Merger, all membership interests in Prairie LLC were converted into the right to receive each member’s
pro rata share of 2,297,668 shares of Common Stock.
At
the effective time of the Merger, the Company assumed and converted options to purchase membership interests of Prairie LLC outstanding
and unexercised as of immediately prior to the effective time of the Merger into non-compensatory options to acquire 8,000,000 shares
of Common Stock for $7.14 per share (“Non-Compensatory Options”), which are only exercisable if specific production hurdles
are achieved, and the Company entered into option agreements at the effective time of the Merger with each of Gary C. Hanna, Edward Kovalik,
Paul Kessler and a third-party investor. An aggregate of 2,000,000 Non-Compensatory Options are subject to be transferred to the Series
D PIPE Investors (as defined below), based on their then percentage ownership of Series D Preferred Stock to the aggregate Series D Preferred
Stock issued in connection with the Series D PIPE outstanding and held by all Series D PIPE Investors as of the Merger Closing Date,
if the Company does not meet certain performance metrics by May 3, 2026.
In
addition, in connection with the Merger Closing, the Company consummated the purchase of oil and gas leases, including all of the right,
title and interest in, to and under certain undeveloped oil and gas leases in Weld County, Colorado in the DJ Basin of Exok, Inc., an
Oklahoma corporation (“Exok”), together with certain other associated assets, data and records, consisting of approximately
3,158 net mineral acres in, on and under approximately 4,494 gross acres from Exok for $3,000,000 pursuant to that certain Amended and
Restated Purchase and Sale Agreement, dated as of May 3, 2023 (the “Exok Agreement”), by and among the Company, Prairie LLC
and Exok (the “Exok Transaction”).
To
fund the Exok Transaction, the Company sold an aggregate of approximately $17.38 million of Series D Preferred Stock with a stated value
of $1,000 per share and convertible into shares of Common Stock at a price of $5.00 per share, Series A warrants to purchase 3,475,250
shares of Common Stock at an exercise price of $6.00 per share (“Series D A Warrants”) and Series B warrants to purchase
3,475,250 shares of Common Stock at an exercise price of $6.00 per share (“Series D B Warrants”) in a private placement (the
“Series D PIPE”) pursuant to securities purchase agreements, dated May 3, 2023, by and between the Company and each of the
investors thereto (the “Series D PIPE Investors”).
The
Merger has been accounted for as a reverse asset acquisition under existing GAAP. For accounting purposes, Prairie LLC was treated as
acquiring Merger Sub in the Merger. See Note 1 for further discussion.
Accordingly,
for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Prairie LLC
with the acquisition being treated as the equivalent of Prairie LLC issuing stock for the net assets of the Company. On the Merger Closing
Date, the assets and liabilities of the Company were recorded based upon relative fair values, with no goodwill or other intangible assets
recorded.
The
assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may
differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.
The pro forma adjustments do not consider borrowings, financings and other transactions that may have occurred subsequent to December
31, 2023 other than the Subsequent Events described in Note 3 below and reflected in the pro forma financial information,
nor do they reflect anticipated financings or other transactions that may occur in the future, other than the Offering.
NRO
Acquisition
On
January 11, 2024, the Company entered into the NRO Agreement to acquire the assets of NRO for total consideration of $94.5 million, subject
to certain closing price adjustments and other customary closing conditions. The Purchase Price consists of $83.0 million in cash and
$11.5 million in deferred cash payments. The Company deposited $9 million of the Purchase Price into an escrow account on January 11,
2024, which will be released to NRO upon the earlier of the date of the Closing and August 15, 2024. Portions of the Deposit are subject
to earlier release under certain circumstances if the Closing has not occurred on or prior to June 17, 2024.
The
NRO Acquisition is expected to be accounted for as an asset acquisition in accordance with ASC 805. The estimated fair value of the consideration
to be paid by us and allocation of that amount to the underlying assets acquired, on a relative fair value basis, will be recorded on
our books as of the date of the Closing of the NRO Acquisition. Additionally, costs directly related to the NRO Acquisition are capitalized
as a component of the Purchase Price.
Subsequent
Events
Deposit
on NRO Acquisition
In
conjunction with the NRO Acquisition, the Company deposited $9 million of the Purchase Price into an escrow account on January 11, 2024,
which will be released to NRO upon the earlier of the date of the Closing and August 15, 2024, or earlier under certain circumstances.
Sale
of Cryptocurrency Mining Equipment
On
January 23, 2024, the Company completed the Crypto Sale, for consideration consisting of (i) $1.0 million in cash and (ii) $1.0 million
(plus accrued interest) in deferred cash payments to be made out of a portion of the future net revenues associated with the Mining Equipment.
See “Description of the Crypto Sale.”
Unaudited
Pro Forma Condensed Combined Balance Sheet
as
of December 31, 2023
| |
Prairie
Operating Co. (Historical) | | |
Nickel
Road (Historical) | | |
Nickel
Road Transaction Accounting Adjustments | | |
Cryptocurrency
Asset Sale Adjustments | | |
Subsequent
Event Adjustments | | |
Equity
Financing | | |
Combined
Pro Forma | |
| |
| | |
| | |
(See Note 6) | | |
(See Notes 5 and 6) | | |
(See Notes 3 and 6) | | |
(See Note 7) | | |
| |
Assets | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Current assets: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cash and
cash equivalents | |
$ | 13,036,950 | | |
$ | 336,115 | | |
$ | (74,000,000 | )(b) | |
$ | 1,000,000 | (c) | |
$ | (9,000,000 | )(a) | |
$ | 90,000,000 | | |
$ | 21,036,950 | |
| |
| | | |
| | | |
| (336,115 | )(j) | |
| | | |
| — | | |
| | | |
| | |
Accounts and other receivable | |
| 329,750 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 329,750 | |
Joint interest receivable | |
| — | | |
| 897,804 | | |
| (897,804 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Accrued oil and gas
sales | |
| — | | |
| 5,658,034 | | |
| (5,658,034 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Derivative asset, current | |
| — | | |
| 270,925 | | |
| (270,925 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Prepaid expenses | |
| 164,391 | | |
| 426,404 | | |
| (426,404 | )(j) | |
| — | | |
| — | | |
| — | | |
| 164,391 | |
Note
receivable | |
| — | | |
| — | | |
| — | | |
| 1,000,000 | (c) | |
| — | | |
| — | | |
| 1,000,000 | |
Total current assets | |
| 13,531,091 | | |
| 7,589,282 | | |
| (81,589,282 | ) | |
| 2,000,000 | | |
| (9,000,000 | ) | |
| 90,000,000 | | |
| 22,531,091 | |
Property and equipment | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Oil and natural gas
properties, successful efforts method of accounting | |
| 28,705,404 | | |
| — | | |
| 93,989,761 | (b) | |
| — | | |
| — | | |
| — | | |
| 122,695,165 | |
Proved properties | |
| — | | |
| 137,855,719 | | |
| (137,855,719 | )(b) | |
| — | | |
| — | | |
| — | | |
| — | |
Unproved properties | |
| — | | |
| 1,690,690 | | |
| (1,690,690 | )(b) | |
| — | | |
| — | | |
| — | | |
| — | |
Accumulated depletion | |
| — | | |
| (41,010,449 | ) | |
| 41,010,449 | (b) | |
| — | | |
| — | | |
| — | | |
| — | |
Cryptocurrency mining
equipment | |
| 4,293,422 | | |
| — | | |
| — | | |
| (4,293,422 | )(c) | |
| — | | |
| — | | |
| — | |
Less:
Accumulated depreciation, depletion and amortization | |
| (1,111,115 | ) | |
| — | | |
| — | | |
| 1,111,115 | (c) | |
| — | | |
| — | | |
| — | |
Total property and equipment,
net | |
| 31,887,711 | | |
| 98,535,960 | | |
| (4,546,199 | ) | |
| (3,182,307 | ) | |
| — | | |
| — | | |
| 122,695,165 | |
Deposits on oil and natural gas properties | |
| — | | |
| — | | |
| (9,000,000 | )(b) | |
| — | | |
| 9,000,000 | (a) | |
| — | | |
| — | |
Operating lease assets | |
| 155,253 | | |
| 325,933 | | |
| (325,933 | )(j) | |
| — | | |
| — | | |
| — | | |
| 155,253 | |
Deferred transaction
costs | |
| 108,956 | | |
| — | | |
| (108,956 | )(b) | |
| — | | |
| — | | |
| — | | |
| — | |
Total
assets | |
$ | 45,683,011 | | |
$ | 106,451,175 | | |
$ | (95,570,370 | ) | |
$ | (1,182,307 | ) | |
$ | — | | |
$ | 90,000,000 | | |
$ | 145,381,509 | |
Liabilities,
Members’ Capital and Stockholders’ Equity | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Current liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Accounts payable and
accrued expenses | |
$ | 5,374,494 | | |
$ | — | | |
$ | 66,044 | (b) | |
$ | — | | |
| — | | |
$ | — | | |
$ | 5,440,538 | |
Accounts payable | |
| — | | |
| 1,801,926 | | |
| (1,801,926 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Accrued liabilities | |
| — | | |
| 12,178,821 | | |
| (12,178,821 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Accrued interest and
expenses - related parties | |
| — | | |
| 114,346 | | |
| (114,346 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Current maturities of
long-term debt | |
| — | | |
| 3,800,000 | | |
| (3,800,000 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Operating lease liabilities,
current | |
| 41,890 | | |
| 192,384 | | |
| (192,384 | )(j) | |
| — | | |
| — | | |
| — | | |
| 41,890 | |
Deferred
purchase price, current | |
| — | | |
| — | | |
| 3,123,533 | (b) | |
| — | | |
| — | | |
| — | | |
| 3,123,533 | |
Total current liabilities | |
| 5,416,384 | | |
| 18,087,477 | | |
| (14,897,900 | ) | |
| — | | |
| — | | |
| — | | |
| 8,605,961 | |
Long-term liabilities: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term debt, net
of current portion and deferred financing costs | |
| — | | |
| 16,660,116 | | |
| (16,660,116 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Deferred purchase price,
long-term | |
| — | | |
| — | | |
| 6,855,806 | (b) | |
| — | | |
| — | | |
| — | | |
| 6,855,806 | |
Asset retirement obligations | |
| — | | |
| 1,347,493 | | |
| (512,072 | )(b) | |
| — | | |
| — | | |
| — | | |
| 835,421 | |
Operating
lease liabilities, long-term | |
| 93,817 | | |
| 133,550 | | |
| (133,550 | )(j) | |
| — | | |
| — | | |
| — | | |
| 93,817 | |
Total
long-term liabilities | |
| 93,817 | | |
| 18,141,159 | | |
| (10,449,931 | ) | |
| — | | |
| — | | |
| — | | |
| 7,785,045 | |
Total liabilities | |
| 5,510,201 | | |
| 36,228,636 | | |
| (25,347,831 | ) | |
| — | | |
| — | | |
| — | | |
| 16,391,006 | |
Commitments and contingencies | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Members’ capital | |
| — | | |
| 70,222,539 | | |
| (70,222,539 | )(j) | |
| — | | |
| — | | |
| — | | |
| — | |
Stockholders’ equity: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Preferred stock; 50,000
shares authorized: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Series D convertible
preferred stock; $0.01 par value; 20,627 shares issued and outstanding | |
| 206 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 206 | |
Series E convertible
preferred stock; $0.01 par value; 20,000 shares issued and outstanding | |
| 200 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 200 | |
Common stock; $0.01
par value; 500,000,000 shares authorized and 9,826,719 shares issued and outstanding, actual* and 19,469,921 shares issued and outstanding,
as adjusted | |
| 98,267 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 96,432 | | |
| 194,699 | |
Additional paid-in capital | |
| 118,927,814 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 89,903,568 | | |
| 208,831,382 | |
Accumulated
deficit | |
| (78,853,677 | ) | |
| — | | |
| — | | |
| (1,182,307 | )(c) | |
| — | | |
| — | | |
| (80,035,984 | ) |
Total
stockholders’ equity | |
| 40,172,810 | | |
| — | | |
| — | | |
| (1,182,307 | ) | |
| — | | |
| 90,000,000 | | |
| 128,990,503 | |
Total
liabilities, members’ capital and stockholders’ equity | |
$ | 45,683,011 | | |
$ | 106,451,175 | | |
$ | (95,570,370 | ) | |
$ | (1,182,307 | ) | |
$ | — | | |
$ | 90,000,000 | | |
$ | 145,381,509 | |
Unaudited
Pro Forma Condensed Combined Statement of Operations
Year
Ended December 31, 2023
| |
Prairie Operating Co. (Historical) | | |
Creek Road Miners, Inc. (As
Adjusted) | | |
Nickel Road (Historical) | | |
Creek Road Miners, Inc. Acquisition
Adjustments | | |
Nickel Road Transaction Accounting
Adjustments | | |
Cryptocurrency Asset Sale
Adjustments | | |
Equity Financing | | |
Combined Pro Forma | |
| |
| | | |
| (See
Note 2) | | |
| | | |
| (See
Note 6) | | |
| (See
Note 6) | | |
| (See
Notes 5 and 6) | | |
| (See
Note 7) | | |
| | |
Revenue: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cryptocurrency mining | |
$ | 1,545,792 | | |
$ | 73,584 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | (1,619,376 | )(c) | |
$ | — | | |
$ | — | |
Oil and gas sales | |
| — | | |
| — | | |
| 48,169,114 | | |
| — | | |
| (899,352 | )(h) | |
| — | | |
| — | | |
| 47,269,762 | |
Total revenues | |
| 1,545,792 | | |
| 73,584 | | |
| 48,169,114 | | |
| — | | |
| (899,352 | ) | |
| (1,619,376 | ) | |
| — | | |
| 47,269,762 | |
Operating costs and expenses: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Cryptocurrency mining costs (exclusive of depreciation and amortization shown
below) | |
| 548,617 | | |
| 80,140 | | |
| — | | |
| — | | |
| — | | |
| (628,757 | )(c) | |
| — | | |
| — | |
Depreciation, depletion and amortization | |
| 983,788 | | |
| 116,724 | | |
| 16,115,889 | | |
| 141,885 | (d) | |
| (11,236,147 | )(g) | |
| (1,242,397 | )(c) | |
| — | | |
| 4,879,742 | |
Production taxes | |
| — | | |
| — | | |
| 4,408,520 | | |
| — | | |
| (438,939 | )(h) | |
| — | | |
| — | | |
| 3,969,582 | |
Lease operating | |
| — | | |
| — | | |
| 4,616,425 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,616,425 | |
General and administrative | |
| 16,269,045 | | |
| 1,119,277 | | |
| 4,068,463 | | |
| 170,120 | (e) | |
| — | | |
| — | | |
| — | | |
| 21,626,905 | |
Stock based compensation | |
| — | | |
| 170,120 | | |
| — | | |
| (170,120 | )(e) | |
| — | | |
| — | | |
| — | | |
| — | |
Impairment of cryptocurrency mining equipment | |
| 17,072,015 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (17,072,015 | )(c) | |
| — | | |
| — | |
Impairment of oil and natural gas properties | |
| — | | |
| — | | |
| 5,077,697 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 5,077,697 | |
Exploration | |
| 263,757 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 263,757 | |
Total operating expenses | |
| 35,137,222 | | |
| 1,486,261 | | |
| 34,286,994 | | |
| 141,885 | | |
| (11,675,086 | ) | |
| (18,943,169 | ) | |
| — | | |
| 40,434,107 | |
Income (loss) from operations | |
| (33,591,430 | ) | |
| (1,412,677 | ) | |
| 13,882,120 | | |
| (141,885 | ) | |
| 10,775,733 | | |
| 17,323,793 | | |
| — | | |
| 6,835,654 | |
Other income (expense): | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 248,073 | | |
| — | | |
| 15,267 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 263,340 | |
Interest expense | |
| (121,834 | ) | |
| (214,344 | ) | |
| (2,025,960 | ) | |
| 120,076 | (f) | |
| 1,277,510 | (i) | |
| — | | |
| — | | |
| (964,552 | ) |
Gain on sale of oil and gas properties | |
| — | | |
| — | | |
| 5,925,755 | | |
| — | | |
| (5,925,755 | )(j) | |
| — | | |
| — | | |
| — | |
Realized loss on derivative instruments | |
| — | | |
| — | | |
| (1,021,596 | ) | |
| — | | |
| 1,021,596 | (j) | |
| — | | |
| — | | |
| — | |
Unrealized gain (loss) on derivative instruments | |
| — | | |
| — | | |
| 2,998,792 | | |
| — | | |
| (2,998,792 | )(j) | |
| — | | |
| — | | |
| — | |
Other income (expense) | |
| — | | |
| — | | |
| 4,227 | | |
| — | | |
| (4,227 | )(j) | |
| — | | |
| — | | |
| — | |
Loss on adjustment to fair value - warrant liabilities | |
| (39,797,994 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (39,797,994 | ) |
Loss on adjustment to fair value - AR Debentures | |
| (3,790,428 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (3,790,428 | ) |
Loss on adjustment to fair value - Obligation Shares | |
| (1,477,103 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,477,103 | ) |
Liquidated damages | |
| (548,144 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (548,144 | ) |
Total other income (expense) | |
| (45,487,430 | ) | |
| (214,344 | ) | |
| 5,896,485 | | |
| 120,076 | | |
| (6,629,668 | ) | |
| — | | |
| — | | |
| (46,314,881 | ) |
Income (loss) from operations before provision for income taxes | |
| (79,078,860 | ) | |
| (1,627,021 | ) | |
| 19,778,605 | | |
| (21,809 | ) | |
| 4,146,065 | | |
| 17,323,793 | | |
| — | | |
| (39,479,227 | ) |
Provision for income taxes | |
| — | | |
| — | | |
| (18,000 | ) | |
| — | | |
| 18,000 | (j) | |
| — | | |
| — | | |
| — | |
Income (loss) from continuing operations | |
$ | (79,078,860 | ) | |
$ | (1,627,021 | ) | |
$ | 19,760,605 | | |
$ | (21,809 | ) | |
$ | 4,164,065 | | |
$ | 17,323,793 | | |
$ | — | | |
$ | (39,479,227 | ) |
Income (loss) per common share: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Income (loss) per share, basic | |
$ | (16.51 | ) | |
$ | (4.02 | ) | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | (2.39 | ) |
Income (loss) per share, diluted | |
$ | (16.51 | ) | |
$ | (4.02 | ) | |
| | | |
| | | |
| | | |
| | | |
| | | |
$ | (2.39 | ) |
Weighted average common shares outstanding, basic(k) | |
| 4,788,412 | | |
| 428,611 | | |
| | | |
| 1,646,741 | | |
| | | |
| | | |
| 9,643,202 | | |
| 16,506,966 | |
Weighted average common shares outstanding, diluted(k) | |
| 4,788,412 | | |
| 428,611 | | |
| | | |
| 1,646,741 | | |
| | | |
| | | |
| 9,643,202 | | |
| 16,506,966 | |
Note
1. Basis of Pro Forma Presentation
The
NRO Acquisition is expected to be accounted for as an asset acquisition in accordance with ASC 805. The estimated fair value of the consideration
to be paid by us and allocation of that amount to the underlying assets acquired, on a relative fair value basis, will be recorded on
our books as of the date of the Closing of the NRO Acquisition. Additionally, costs directly related to the NRO Acquisition are capitalized
as a component of the Purchase Price.
The
Crypto Sale requires presentation as discontinued operations upon the issuance of future financial statements in accordance with GAAP.
Pursuant to the requirements of Article 3 of Regulation S-X, the Crypto Sale is considered a significant disposition and requires pro
forma presentation in accordance with Article 11 of Regulation S-X.
The
Merger was accounted for as a reverse asset acquisition under existing GAAP. For accounting purposes, Prairie LLC was treated as acquiring
Merger Sub in the Merger.
Accordingly,
for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Prairie LLC
with the acquisition being treated as the equivalent of Prairie LLC issuing stock for the net assets of the Company. On the Merger Closing
Date, the assets and liabilities of the Company were recorded based upon relative fair values, with no goodwill or other intangible assets
recorded.
The
unaudited pro forma condensed combined balance sheet as of December 31, 2023 combines the historical balance sheet of the Company
as of December 31, 2023 on a pro forma basis in accordance with Article 11 of Regulation S-X, as amended, as if the Transactions
and the Subsequent Events, described in Note 3 below, had been consummated on December 31, 2023.
The
unaudited pro forma condensed combined statements of operations for the year ended December 31, 2023 combines the historical statements
of operations of the Company and the historical consolidated statements of operations of NRO, as applicable, for such periods on a pro
forma basis as if the Transactions and Subsequent Events, described in Note 3 below, had been consummated on January 1, 2023.
The
pro forma basic and diluted earnings (loss) per share amounts presented in the unaudited pro forma condensed combined statements of operations
are based upon the number of shares of Common Stock outstanding, assuming the Transactions and Subsequent Events, described in Note 3
below, occurred on January 1, 2023.
The
unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with, the audited historical
financial statements of the Company as of and for the year ended December 31, 2023 and NRO as of and for the year ended December 31,
2023 and the notes thereto, as well as the disclosures contained in the section “Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Prairie Operating Co.” included in the Company’s Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2023, filed with the SEC on March 20, 2024, the unaudited historical
financial statements of the Company as of and for the three months ended March 31, 2023 and the notes thereto, included in the Company’s
Quarterly Report on Form 10-Q/A for the three months ended March 31, 2023, filed with the SEC on June 16, 2023 and the section in this
prospectus entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nickel Road
Operating LLC.”
The
unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily
reflect what the Company’s financial condition or results of operations would have been had the Transactions or Subsequent Events,
described in Note 3 below, occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information
do not project the Company’s future financial condition and results of operations. The actual financial position and results of
operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma
adjustments represent management’s estimates based on information available as of the date of this filing and certain assumptions
that management believes are factually supportable and are expected to have a continuing impact on the Company’s results of operations,
and are subject to change as additional information becomes available and analyses are performed.
Note
2. Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information
The
historical financial statements of Creek Road Miners, Inc. (“Creek Road”) included in the Company’s Quarterly Report
on Form 10-Q/A filed with the SEC on June 16, 2023 include the historical statement of operations of Creek Road for the three months
ended March 31, 2023. Given the Merger was not completed until May 3, 2023, for pro forma purposes herein in order to determine the Creek
Road, As Adjusted amounts, Creek Road’s results of operations for the three months ended March 31, 2023, have been added to Creek
Road’s results of operations for the period from April 1, 2023, through May 2, 2023, as reflected in the Pro Forma Condensed Combined
Statement of Operations for the year ended December 31, 2023.
| |
Creek Road | |
| |
For the Three Months Ended March
31, 2023 | | |
For the Period from April 1, 2023
through May 2, 2023 | | |
As Adjusted | |
Revenue: | |
| | | |
| | | |
| | |
Cryptocurrency mining | |
$ | — | | |
$ | 73,584 | | |
$ | 73,584 | |
Total revenues | |
| — | | |
| 73,584 | | |
| 73,584 | |
Operating costs and expenses: | |
| | | |
| | | |
| | |
Cryptocurrency mining costs (exclusive of depreciation and amortization shown
below) | |
| 6,305 | | |
| 73,835 | | |
| 80,140 | |
Depreciation, depletion and amortization | |
| 64,576 | | |
| 52,148 | | |
| 116,724 | |
General and administrative | |
| 576,289 | | |
| 542,988 | | |
| 1,119,277 | |
Stock based compensation | |
| 170,120 | | |
| — | | |
| 170,120 | |
Total operating expenses | |
| 817,290 | | |
| 668,971 | | |
| 1,486,261 | |
Income (loss) from operations | |
| (817,290 | ) | |
| (595,387 | ) | |
| (1,412,677 | ) |
Other income (expense): | |
| | | |
| | | |
| | |
Interest expense | |
| (154,076 | ) | |
| (60,268 | ) | |
| (214,344 | ) |
Total other income (expense) | |
| (154,076 | ) | |
| (60,268 | ) | |
| (214,344 | ) |
Income (loss) from operations before provision for income taxes | |
| (971,366 | ) | |
| (655,655 | ) | |
| (1,627,021 | ) |
Provision for income taxes | |
| — | | |
| — | | |
| — | |
Income (loss) from continuing operations | |
$ | (971,366 | ) | |
$ | (655,655 | ) | |
$ | (1,627,021 | ) |
Income (loss) per common share: | |
| | | |
| | | |
| | |
Income (loss) per share, basic | |
$ | (2.49 | ) | |
$ | (1.53 | ) | |
$ | (4.02 | ) |
Income (loss) per share, diluted | |
$ | (2.49 | ) | |
$ | (1.53 | ) | |
$ | (4.02 | ) |
Weighted average common shares outstanding, basic | |
| 428,611 | | |
| 428,611 | | |
| 428,611 | |
Weighted average common shares outstanding, diluted | |
| 428,611 | | |
| 428,611 | | |
| 428,611 | |
Note
3. Subsequent Events
Deposit
on NRO Acquisition
In
conjunction with the NRO Acquisition, the Company deposited $9 million of the Purchase Price into an escrow account on January 11, 2024,
which will be released to NRO upon the earlier of the date of the Closing and August 15, 2024, or earlier under certain circumstances.
Sale
of Cryptocurrency Mining Equipment
On
January 23, 2024, the Company completed the sale of all of the Mining Equipment for consideration consisting of (i) $1.0 million in cash
and (ii) $1.0 million (plus accrued interest) in deferred cash payments to be made out of a portion of the future net revenues associated
with the Mining Equipment. See “Description of Crypto Sale.”
Note
4. Preliminary Purchase Price
The
preliminary allocation of the total Purchase Price in the NRO Acquisition, on a relative fair value basis, is based upon management’s
estimates of and assumptions related to the fair value of assets to be acquired and liabilities to be assumed as of the date of the Closing
of the transaction using currently available information. Because the unaudited pro forma condensed combined financial information has
been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on our financial position
and results of operations may differ significantly from the pro forma amounts included herein.
The
preliminary purchase price allocation is subject to change due to several factors, including but not limited to changes in the estimated
fair value of assets acquired and liabilities assumed as of the date of the Closing of the transaction, which could result from changes
in future oil and natural gas commodity prices, reserve estimates, interest rates, as well as other factors.
The
consideration transferred, assets acquired and liabilities assumed by the Company are expected to be initially recorded as follows:
Consideration: | |
| |
Cash consideration (1) | |
$ | 74,000,000 | |
Deposit on oil and gas properties (2) | |
| 9,000,000 | |
Deferred cash consideration (3) | |
| 9,979,340 | |
Direct transaction costs (4) | |
| 175,000 | |
Total consideration | |
$ | 93,154,340 | |
Assets acquired: | |
| | |
Oil and gas properties | |
$ | 93,989,761 | |
Liabilities assumed: | |
| | |
Asset retirement obligation, long-term | |
$ | 835,421 | |
(1) |
Includes
preliminary customary purchase price adjustments. |
|
|
(2) |
Represents
the Deposit paid by the Company to NRO (See Note 3). |
|
|
(3) |
Represents
the estimated fair value of $11.5 million of deferred cash consideration to be paid to NRO over a period of up to 18
months from the date of the Closing. |
|
|
(4) |
Represents
estimated transaction costs associated with the NRO Acquisition which have been capitalized in accordance with ASC 805-50. |
The
consideration will be allocated to the assets acquired and liabilities assumed on a relative fair value basis. The fair value measurements
of assets acquired and liabilities assumed, on a relative fair value basis, are based on inputs that are not observable in the market
and therefore represent Level 3 inputs. The fair value of oil and gas properties and asset retirement obligations were measured using
the discounted cash flow technique of valuation.
Significant
inputs to the valuation of oil and gas properties include estimates of: (i) reserves, (ii) future operating and development costs, (iii)
future commodity prices, (iv) future plugging and abandonment costs, (v) estimated future cash flows, and (vi) a market-based weighted
average cost of capital rate. These inputs require significant judgments and estimates and are the most sensitive and subject to change.
Note
5. Crypto Sale
On
January 23, 2024, we completed the Crypto Sale for consideration consisting of (i) $1.0 million in cash and (ii) $1.0 million (plus accrued
interest) in deferred cash payments to be made out of a portion of the future revenues associated with the Mining Equipment. For purposes
of the pro forma financial statements, this was a significant disposition and resulted in a net loss of $1.2 million. It requires
presentation within discontinued operations upon the issuance of future financial statements.
Note
6. Unaudited Pro Forma Adjustments
The
pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2023 and in the
unaudited pro forma condensed combined statements of operations for the year ended December 31, 2023 are as follows:
|
(a) |
Reflects
the adjustment for the Company’s Deposit utilized to partially fund the NRO Acquisition. |
|
|
|
|
(b) |
Reflects
the adjustment to record the assets acquired and liabilities assumed, on a relative fair value basis, in the NRO Acquisition along
with transfer of consideration. |
|
|
|
|
(c) |
Reflects
the adjustment to record the Crypto Sale. |
|
|
|
|
(d) |
Reflects
the adjustment to depreciation expense required to reflect a decrease in the estimated useful life of acquired
cryptocurrency mining assets of approximately one year. |
|
|
|
|
(e) |
Reflects
the reclassification of stock based compensation to conform to the Company’s financial statement presentation. |
|
|
|
|
(f) |
Reflects
the adjustment to interest expense from the conversion of notes payable and the Original Debentures. |
|
|
|
|
(g) |
Reflect
the adjustment for depreciation, depletion and amortization expense associated with the assets acquired in the NRO Acquisition reflecting
a decrease in depreciable asset base after the purchase price allocation along with a decrease in the units of production depletion
rate primarily due to the depletion of the $94 million acquisition costs over total proved reserves. |
|
|
|
|
(h) |
Reflects
the adjustments to reflect the NRO Acquisition based on information provided by NRO with respect to assets acquired and removing
amounts related to assets not acquired. |
|
|
|
|
(i) |
Reflects
the adjustment to recognize interest expense on the deferred cash consideration recognized pursuant to the preliminary purchase
price allocation (see Note 4) on an effective interest method. |
|
|
|
|
(j) |
Reflects
the adjustment to remove the financial statement effect of amounts related to assets that were not acquired
and liabilities that were not assumed in the NRO Acquisition. |
|
|
|
|
(k) |
The Combined Pro Forma weighted average shares outstanding
include the historical shares of Creek Road Miners, Inc. and Creek Road Miners, Inc. acquisition adjustment pursuant to the requirements
of accounting for the Merger as a reverse asset acquisition and as required to properly reflect the Merger as consummated on January
1, 2023. |
Note
7. Equity Financing
We
expect to generate gross proceeds of $100.0 million (before underwriting discounts and commissions and offering expenses) from the Offering,
which we intend to use to fund the remaining cash consideration in the NRO Acquisition and the remainder for general corporate
purposes. After deducting the underwriting discounts and commissions and offering expenses payable by us, the total net proceeds are
expected to be approximately $90.0 million. Based on the closing price of the Company’s Common Stock on March 8, 2024 of
$10.37, we expect to issue approximately 9.6 million shares of Common Stock (assuming no exercise of the underwriters’
option to purchase additional shares). The following table summarizes the estimated Common Stock to be issued resulting from a 10% fluctuation
in the market price of the shares of Common Stock:
| |
Share Price | | |
Common Stock Issued | |
As presented | |
$ | 10.37 | | |
| 9,643,202 | |
10% increase | |
| 11.41 | | |
| 8,764,242 | |
10% decrease | |
| 9.33 | | |
| 10,718,114 | |
Note
8. Supplemental Unaudited Combined Oil and Natural
Gas Reserves and Standardized Measure Information
The
following table sets forth information with respect to the historical and combined estimated proved oil and natural gas reserves
as of December 31, 2023 for Prairie and NRO. Future exploration, exploitation and development expenditures, as well as future
commodity prices and service costs, will affect the quantity of reserve volumes. The reserve estimates shown below were determined using
the average first day of the month price for each of the preceding 12 months for oil and natural gas for the year ended December 31,
2023. Estimated future costs to settle asset retirement obligations have been included in the calculation of the Standardized Measure
for each period present.
| |
Prairie | | |
Nickel Road | | |
Pro Forma Combined | |
Estimated Proved Developed Reserves: | |
| | | |
| | | |
| | |
Oil (Bbl) | |
| — | | |
| 2,481,059 | | |
| 2,481,059 | |
Natural Gas (Mcf) | |
| — | | |
| 7,689,981 | | |
| 7,689,981 | |
Natural Gas Liquids (Bbl) | |
| — | | |
| 1,287,231 | | |
| 1,287,231 | |
Total (Boe)(1) | |
| — | | |
| 5,049,954 | | |
| 5,049,954 | |
Estimated Proved Undeveloped Reserves: | |
| | | |
| | | |
| | |
Oil (Bbl) | |
| — | | |
| 6,175,214 | | |
| 6,175,214 | |
Natural Gas (Mcf) | |
| — | | |
| 15,031,186 | | |
| 15,031,186 | |
Natural Gas Liquids (Bbl) | |
| — | | |
| 2,620,638 | | |
| 2,620,638 | |
Total (Boe)(1) | |
| — | | |
| 11,301,050 | | |
| 11,301,050 | |
Estimated Proved Reserves: | |
| | | |
| | | |
| | |
Oil (Bbl) | |
| — | | |
| 8,656,273 | | |
| 8,656,273 | |
Natural Gas (Mcf) | |
| — | | |
| 22,721,167 | | |
| 22,721,167 | |
Natural Gas Liquids (Bbl) | |
| — | | |
| 3,907,869 | | |
| 3,907,869 | |
Total (Boe)(1) | |
| — | | |
| 16,351,003 | | |
| 16,351,003 | |
(1) |
Assumes
a ratio of 6 Mcf of natural gas per Boe. |
The
following table sets forth summary information with respect to historical and combined oil and natural gas production for the year ended
December 31, 2023 for Prairie and NRO. The NRO oil and natural gas production data presented below was derived from the supplemental
oil and gas reserve information (unaudited) included in notes to the audited financial statements for the year ended December 31, 2023
of NRO and information provided by NRO.
| |
Prairie | | |
Nickel Road (Total) | | |
NRO (Unacquired) | | |
NRO Acquired(1) | | |
Pro Forma Combined | |
Oil (Bbl) | |
| — | | |
| 616,616 | | |
| (10,720 | ) | |
| 605,896 | | |
| 605,896 | |
Natural Gas (Mcf) | |
| — | | |
| 887,881 | | |
| (21,807 | ) | |
| 866,074 | | |
| 866,074 | |
Natural Gas Liquids (Bbl) | |
| — | | |
| 149,000 | | |
| (3,847 | ) | |
| 145,153 | | |
| 145,153 | |
Total (Boe)(2) | |
| — | | |
| 913,596 | | |
| (18,201 | ) | |
| 895,395 | | |
| 895,395 | |
(1) |
Represents
production data associated with the assets acquired from NRO. |
|
|
(2) |
Assumes
a ratio of 6 Mcf of natural gas per Boe. |
The
following unaudited combined estimated discounted future net cash flows reflect Prairie and NRO as of December 31, 2023. The unaudited
combined Standardized Measure of discounted future net cash flows are as follows:
| |
Prairie | | |
NRO (Total)(1) | | |
Combined | |
Future cash inflows | |
$ | — | | |
$ | 797,665,069 | | |
$ | 797,665,069 | |
Future production costs | |
| — | | |
| (304,141,326 | ) | |
| (304,141,326 | ) |
Future development costs | |
| — | | |
| (170,282,285 | ) | |
| (170,282,285 | ) |
Future income tax expense | |
| — | | |
| — | | |
| — | |
Future net cash flows | |
| — | | |
| 323,241,458 | | |
| 323,241,458 | |
10% annual discount for estimated timing of cash flows | |
| — | | |
| (149,312,372 | ) | |
| (149,312,372 | ) |
Standardized Measure of discounted future net cash flows | |
$ | — | | |
$ | 173,929,086 | | |
$ | 173,929,086 | |
(1) |
Represents
the total amounts as reported in NRO’s consolidated financial statements as of and for the year ended December 31, 2023. |
v3.24.1.u1
Cover
|
Apr. 09, 2024 |
Cover [Abstract] |
|
Document Type |
8-K/A
|
Amendment Flag |
true
|
Amendment Description |
On
January 12, 2024, Prairie Operating Co. (the “Company”) filed a Current Report on Form 8-K to announce the Company’s
entry into an asset purchase agreement to acquire the assets of Nickel Road Operating LLC (“NRO”), which the Company subsequently
amended by filing Amendment No. 1 and Amendment No. 2 to the Current Report on Form 8-K/A on February 9, 2024 and March 19, 2024, respectively
(as so amended, the “Original 8-K”). This Amendment No. 3 to the Original 8-K (this “Amendment No. 3”), is being
filed with the Securities and Exchange Commission solely to amend and supplement Item 9.01 of the Original 8-K, as described in Item
9.01 below. This Amendment No. 3 makes no other amendments to the Original 8-K.
|
Document Period End Date |
Apr. 09, 2024
|
Entity File Number |
001-41895
|
Entity Registrant Name |
Prairie
Operating Co.
|
Entity Central Index Key |
0001162896
|
Entity Tax Identification Number |
98-0357690
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
602
Sawyer Street
|
Entity Address, Address Line Two |
Suite 710
|
Entity Address, City or Town |
Houston
|
Entity Address, State or Province |
TX
|
Entity Address, Postal Zip Code |
77007
|
City Area Code |
(713)
|
Local Phone Number |
424-4247
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Common
Stock, par value $0.01 per share
|
Trading Symbol |
PROP
|
Security Exchange Name |
NASDAQ
|
Entity Emerging Growth Company |
false
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