Prairie expects the undeveloped drilling locations to pay out in about a year after beginning production. (Source: Shutterstock)
Prairie Operating Co. is getting deeper in Colorado with the acquisition of Nickel Road Operating LLC.
Houston-based Prairie Operating is acquiring the assets of Nickel Road Operating (NRO) for a total consideration of $94.5 million, the company announced Jan. 11.
The consideration includes $83 million in cash and $11.5 million in deferred cash payments.
NRO’s assets are operations located near Prairie’s existing footprint in the Denver-Julesburg (D-J) Basin—largely in rural Weld County, Colorado.
The deal includes 5,500 net contiguous acres (90% HBP) and 62 permitted undeveloped drilling locations.
The liquids-weighted assets produce approximately 3,370 boe/d (84% liquids; 66% oil) from 26 operated horizontal wells.
The assets include third-party proven reserves of around 22.2 MMboe, representing a PV-10 value of $254 million.
Prairie expects the undeveloped drilling locations to pay out in about a year after beginning production. The low-cost drilling locations are also expected to breakeven below a WTI price of $30/bbl.
“This acquisition increases and strengthens our overall position within a top-tier U.S. shale basin and aligns with our strategy of creating value through accretive acquisitions,” said Prairie Operating Chairman and CEO Ed Kovalik.
The acquisition is expected to close in the first half of 2024.
After closing, Prairie will have around 45,000 acres in Weld County, offset by high-profile operators like Chevron Corp., EOG, Occidental Petroleum and Civitas Resources, the company said in investor materials.
“Today’s target rich environment gives us ample opportunity to continue executing our acquisition strategy,” said Prairie’s President Gary Hanna. “These assets strategically enhance our existing operations, enabling us to capitalize on operational efficiencies in the D-J Basin.”
Hanna, a veteran of the oil and gas industry, has served as president and a board director at Prairie since May 2023, regulatory filings show. Hanna was previously chairman and interim CEO of Delaware Basin E&P Rosehill Resources.
Prairie Operating was formed last year between the merger of Creek Road Miners Inc., a publicly traded company using stranded gas assets to power cryptocurrency mining operations, and Prairie, a vehicle to acquire and develop oil and gas assets.
In conjunction with the merger, Prairie acquired undeveloped leasehold acreage in Weld County from Exok Inc. Prairie later exercised an option to acquire additional D-J Basin acreage from Exok.
After closing the Exok transactions, Prairie controlled approximately 37,189 acres in Weld County.
In December, Prairie received approval to list its common stock on the Nasdaq Capital Market exchange.
RELATED
Recommended Reading
Shell, Canadian Natural Resources to Swap Oil Sands, CCS Interests
2025-01-30 - In a swap transaction, Canadian Natural Resources Ltd. will own 100% interest in the Athabasca Oil Sands Project after acquiring a 10% interest from Shell Canada Ltd. in exchange for a 10% interest in carbon capture and storage facilities.
Kosmos Breaks Off Talks to Acquire UK’s Tullow
2024-12-17 - Kosmos Energy Ltd. gave no reason for breaking off acquisition talks with Tullow Oil, which the companies had said were at a preliminary stage.
GeoPark Ends Plans to Purchase Repsol’s Colombian Assets
2025-01-15 - Repsol’s partners exercised their rights to acquire Repsol Colombia O&G Ltd., which included interest in CPO-9 Block and SierraCol Energy Arauca LLC, after the purchase was announced.
GeoPark Signs SPA to Acquire Repsol’s Colombian Assets for $530MM
2024-12-02 - GeoPark Ltd. has signed a sale and purchase agreement with Respol Exploracion and Repsol E&P to acquire upstream oil and gas assets in Colombia.
China's CNOOC Sells US Assets to Britain's INEOS
2024-12-15 - The Chinese oil and gas major said CNOOC Energy Holdings U.S.A. entered into a sales agreement with a subsidiary of INEOS relating to CNOOC's upstream oil and gas assets in the U.S. part of the Gulf of Mexico.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.