Houston-based Prairie Operating Co. (NASDAQ:PROP) has filed an 8-K with the Securities and Exchange Commission (SEC) to disclose recent financial statements and pro forma financial information following a significant business acquisition. The filing occurred on Wednesday, revealing unaudited financial data for the newly acquired Nickel Road Operating LLC (NRO) and pro forma financials for Prairie Operating Co.
The documents submitted include the unaudited financial statements for NRO for the nine months ending September 30, 2024, indicating the financial performance of NRO leading up to the acquisition. Additionally, the filing provides unaudited pro forma condensed combined financial information for Prairie Operating Co., which encompasses the nine months ended September 30, 2024, and the fiscal year ended December 31, 2023.
These pro forma financials are meant to illustrate the combined company's financial position as if the acquisition had taken place at the beginning of the periods presented.
Prairie Operating Co., which operates within the crude petroleum and natural gas industry under the SIC code 1311, has undergone several name changes in its history, previously known as Creek Road Miners, Inc., Wizard Brands, Inc., and Wizard Entertainment, Inc. The company is domiciled in Delaware with its principal executive offices located at 55 Waugh Drive, Suite 400, Houston, TX.
In other recent news, Prairie Operating Co. has seen significant changes in its board composition with the appointment of Richard N. Frommer as an independent director and the immediate resignation of board member Paul L. Kessler. Frommer, a veteran in the energy industry, brings over four decades of oil and gas experience to the company. Kessler's departure, as reported in the company's filing with the Securities and Exchange Commission, was not due to disagreements with Prairie Operating Co.'s operations, policies, or practices.
These recent developments also include strategic financial moves. Prairie Operating Co. renegotiated terms with Nickel Road Development LLC and Nickel Road Operating LLC, resulting in a $14.5 million reduction from the original cash consideration. The company also secured $24 million from the full exercise of Series E B Warrants by Watermill Capital Partners (WA:CPAP).
In addition to board and financial changes, Prairie Operating Co. is advancing its growth plans with the new Shelduck South project. This project targets the Niobrara B and C formations across 1,260 mineral acres, with production set to commence in the fourth quarter of 2024. Lastly, Prairie Operating Co. is set to join the Russell 3000 Index, signaling the company's growth strategies and progress.
InvestingPro Insights
Prairie Operating Co. (NASDAQ:PROP) presents a complex financial picture following its recent acquisition. According to InvestingPro data, the company's market capitalization stands at $193.26 million, reflecting its current market valuation. Despite the strategic expansion, PROP's financial metrics reveal some challenges. The company reported a negative operating income of -$32.71 million for the last twelve months as of Q3 2024, with a concerning operating income margin of -2116.23%.
InvestingPro Tips highlight that PROP holds more cash than debt on its balance sheet, which could provide some financial flexibility as it integrates the newly acquired Nickel Road Operating LLC. However, the stock price has taken a significant hit over the last six months, with a total return of -33.78% during that period. This volatility aligns with another InvestingPro Tip indicating that PROP's stock price movements are quite volatile.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide deeper insights into Prairie Operating Co.'s financial health and market position. These additional tips could be particularly valuable in light of the recent acquisition and the company's evolving financial landscape.
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