Prairie Operating has agreed to acquire certain assets in the Denver Julesburg Basin (DJ Basin) in the US from Bayswater Exploration and Production and certain of its associated entities in a deal worth around $603m.
According to the Nasdaq-listed Prairie Operating, the deal will considerably expand its operational scale and presence in the DJ Basin, while adding highly economic drilling sites.
Through the deal, the Houston-based firm adds nearly 24,000 leased acres in Weld County, including 300 producing horizontal wells located on 30 pads. The production gained by Prairie Operating will be 25,000 barrels of oil equivalent per day (BOEPD), of which 69% is liquids.
The deal also gives access to a Bayswater-operated saltwater disposal system alongside nine newly drilled horizontal wells, which are yet to be completed.
Post-completion of the acquisition, Prairie Operating is expected to see an average daily production of 29,000-31,000BOEPD in 2025.
Prairie Operating chairman and CEO Edward Kovalik said: “This acquisition delivers compelling strategic and financial advantages and reflects our disciplined, but opportunistic approach to rapidly expand our footprint in the DJ Basin.
“Not only will the addition of these high-quality assets be immediately accretive, but they will also accelerate our development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for our shareholders.”
The consideration of the deal will be a mix of cash and up to nearly 5.2 million shares of Prairie Operating.
Bayswater said that it is still committed to Colorado with operations in the DJ Basin. After the closing of the deal, the privately held firm will hold onto and operate 70 horizontal wells with a combined production of nearly 18,000BOED.
The company also has an acreage of 50,000 acres in the Northern Midland Basin in Texas, which is actively being developed. This includes 140 horizontal wells with production of around 20,000BOED, the Tejon Treating and Carbon Solutions gas gathering and treating business which operates in the Midland Basin, and a large saltwater disposal system.
Bayswater president and CEO Steve Struna said: “We remain committed to operating in the DJ Basin and look forward to rebuilding our Colorado footprint with newly raised capital and continuing to responsibly produce Colorado oil and natural gas—the cleanest energy molecules on the planet.”
Subject to the meeting of customary conditions, the deal is anticipated to close this month. It has an economic effective date of 1 December 2024.
Prairie Operating has engaged Citi and Norton Rose Fulbright US as its exclusive financial adviser and legal adviser, respectively, for the transaction.
