Prairie Operating to Acquire Nickel Road Operating’s Assets
Energy firm Prairie Operating Co, on Thursday, agreed to acquire the assets of Nickel Road Operating, oil and gas acquisition company in a cash deal for $94.5 million.
The deal value is split into $83 million in cash and $11.5 million in deferred cash payments and it is expected to close on February 1.
The company said the acquisition is expected to be accretive to Prairie’s shareholders across key financial metrics but not limited to production, reserves, and free cash flow. The assets acquired will boost Prairie’s core operating area, raising inventory of high rate-of-return drilling locations, and provide additional flexibility to the 2024 drill schedule, added the firm.
The deal is expected to add over 5,500 net leasehold acres and 62 fully permitted proven undeveloped (“PUD”) drilling locations, said the energy company.
The 84% liquids-weighted assets are estimated to produce about 3,370 net Boepd (barrels of oil equivalent per day) and add third-party engineered proven reserves projected at 22.2 MMboe (millions of barrels of oil equivalent) and $254 million in PV10 value (i.e., present value of the oil and gas firm based on its reserves), based on a report by Cawley, Gillespie & Associates.
“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 Ed Kovalik, Chief Executive of Prairie.
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