Prairie Operating Lifts DJ Basin Output to 23,200 BOE/d on $83.4 Million Q1 Revenue, Hedges Cap Upside at $62.86 Against $101.17 WTI

Prairie Operating Co. (NASDAQ: PROP) reported first-quarter 2026 results after the close on Thursday, May 14, posting $83.4 million in revenue and adjusted EBITDA of $37.2 million, more than five times the prior-quarter run rate as the Denver-Julesburg Basin pure-play absorbed a full quarter of acquired Niobrara and Codell production. The company reaffirmed full-year guidance of 25,500 to 27,500 BOE/d, $200 million to $220 million of capital spending, and $240 million to $260 million in adjusted EBITDA.

Production hits 23,200 BOE/d, 48 percent oil

First-quarter total production reached 2.1 million BOE, or about 23,200 BOE per day, of which 999,000 barrels were oil, 3,538 million cubic feet was natural gas, and 497,000 barrels were NGLs. The 48 percent oil cut and 72 percent total liquids share put Prairie on the heavier end of DJ Basin operators, reflecting active development across the Niobrara A, B, and C benches and the Codell sandstone underneath northeastern Weld County, Colorado.

Realized prices before hedges came in at $67.91 per barrel for oil, $13.33 per barrel for NGLs, and $2.53 per Mcf for natural gas, for a blended netback of roughly $39.71 per BOE on the reported revenue and volumes. Lease operating expense was $7.11 per BOE and transportation and processing $1.20 per BOE.

Drilling efficiency: 17 wells, $100,000 under AFE

Prairie drilled 17 wells across two large pads in the quarter, 13 Niobrara and four Codell. At the Elder pad, nine wells averaged 6.2 days spud-to-rig release at about 18,435 feet measured depth. At the Opal Coalbank pad, eight wells averaged 5.5 days at about 18,373 feet. Thirteen of the seventeen wells were drilled in a single run, and every well came in below authorization for expenditure, with average savings exceeding $100,000 per well.

Net loss reflects derivative marks, not operations

The headline figure was a $174.4 million net loss attributable to common shareholders, or $2.16 per diluted share. The bulk of that loss was non-cash: unrealized derivative losses of $162.9 million on the hedge book, plus $31.9 million of fair value adjustments tied to embedded derivatives and warrants linked to the Series F convertible preferred stock. Operating cash flow was $42.3 million against capital expenditures of $34.1 million. Liquidity at March 31 stood at $113.5 million against $361.5 million drawn on the $475 million reserve-based credit facility.

Hedge book sits well underwater as WTI settles $101.17

Prairie's oil swaps run at $61.57 to $62.86 per barrel WTI for between 3.8 million and 4.7 million barrels per year through second quarter 2029, with parallel gas swaps for 10.9 million to 14.1 million MMBtu annually at $4.02 to $4.11 per MMBtu. On Thursday, WTI for June delivery settled at $101.17 per barrel and Brent for July settlement at $105.72 per barrel on the CME and ICE respectively, leaving the high end of the oil hedge stack roughly $38.31 per barrel below the screen and the low end about $39.60 below. Holding the screen flat and the hedge volumes flat, that translates to between $146 million and $186 million of foregone oil revenue per year while the contracts run. The swaps were originally executed to defend the borrowing base through the Bayswater-area acquisition financing that built Prairie's current Niobrara position.

A 28x smaller producer at a higher oil cut

Prairie sits at the opposite end of the North American scale curve from the giants that have reported this earnings season. Tourmaline Oil produced a record 666,089 BOE/d in first-quarter 2026 results, almost 29 times Prairie's volume but more than 80 percent gas at AECO realizations. Devon Energy closed its Coterra merger in early May, creating a 1.6 million BOE/d Permian-anchored shale operator. Prairie's pitch is the inverse: a single-basin, oil-heavy, lower share count operator with concentrated acreage and a willing balance sheet for tuck-in DJ deals. The Series F preferred stock that funded Bayswater fell to 98,000 shares from 121,500 at year-end after an April partial refinancing.

Macro context: Trump-Xi diplomacy steadies the front end

Oil traded in a tight range Thursday after the White House said President Donald Trump and Chinese President Xi Jinping agreed during a Beijing meeting that the Strait of Hormuz must remain open to global energy flows, with Xi offering to use Beijing's influence on Tehran. Iran has blockaded the strait since early March. Goldman Sachs has pushed its base case for Hormuz transit normalization from mid-May to end of June, projecting Brent above $95 through April and May before easing below $80 in the third quarter as flows resume. For Prairie, the upside lever, if WTI holds above $100 through the back half, is the unhedged portion of production growth between 23,200 BOE/d realized and the 25,500 to 27,500 BOE/d guidance range, which can be sold at near-screen prices.