Prairie Operating Co. — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported second quarter 2026 revenue of $98.9 million, a 45% increase year-over-year.
• Year-to-date 2026 revenue totaled $182.3 million, a 125% increase year-over-year.
• Reported net income attributable to common stockholders of $193.8 million for the quarter, or $1.75 basic and $0.23 diluted earnings per share.
• Year-to-date net income attributable to common stockholders was $19.4 million, compared to a loss of $45.0 million in the prior year period.
• Generated Adjusted EBITDA of $34.0 million for the quarter and $71.1 million year-to-date, representing a 65% year-over-year increase.
• Net cash provided by operating activities was $52.0 million for the quarter and $94.3 million year-to-date.
• Capital expenditures were $98.5 million for the quarter and $132.6 million year-to-date (excluding $12.4 million in accrued expenses).
• Average realized price per Boe excluding derivatives was $49.68 for the quarter; including derivatives, it was $33.25.
• Lease operating expenses were $13.6 million ($6.85 per Boe); transportation and processing expenses were $2.4 million ($1.22 per Boe); ad valorem and production taxes were $8.0 million ($4.01 per Boe); and general and administrative expenses were $12.0 million ($6.01 per Boe).
• As of June 30, 2026, the company had a working capital deficit of approximately $125.5 million and $39.0 million available under a $475.0 million credit facility.
• Credit facility borrowing base and aggregate elected commitments were $475.0 million; outstanding borrowings were $436.0 million.

Guidance and Future Outlook

• Adjusted full-year 2026 average daily production guidance to 23,000 – 25,000 Boe/d.
• Adjusted full-year 2026 capital expenditures guidance to $185.0 million – $195.0 million.
• Adjusted full-year 2026 Adjusted EBITDA guidance to $180.0 million – $190.0 million.
• Daily production reached approximately 27,000 Boe/d in August 2026.
• Management indicated a focus on disciplined capital allocation, building liquidity, and strengthening the balance sheet for the remainder of the year.

Business Segments and Product Lines

• Second quarter production totaled 2.0 MMBoe (21,866 Boe/d), with 72% liquids (50% oil).
• Year-to-date production totaled 4.1 MMBoe (22,500 Boe/d), with 72% liquids (49% oil).
• Drilled 12 wells in the second quarter (2 Codell, 10 Niobrara), all completed below AFE; 8 drilled in a single run.
• Successfully drilled the first three-mile lateral (Niobrara B) and completed drilling at the Burnett and Castor pads.
• Completed trials on the Castor pad using a 7-7/8-inch hole design versus the standard 8-1/2-inch, generating cost savings without altering completion configuration.
• Year-to-date, 27 wells were drilled (6 Codell, 21 Niobrara), with 19 drilled in a single run.
• Revenue breakdown for the quarter: Oil $93.5 million, NGL $9.7 million, and negative natural gas revenue of $4.3 million due to gathering and processing fees exceeding gross sales.

Market and Competitive Landscape

• Operates in the Denver-Julesburg (DJ) Basin with a primary focus on Niobrara and Codell formations.
• Maintains an active hedging program securing commodity price protection through the second quarter of 2029.
• As of June 30, 2026, held crude oil swaps for 2,651,848 Bbls settling in 2026 at a weighted average price of $63.09/Bbl.
• Held natural gas swaps for 7,584,322 MMBtus settling in 2026 at a weighted average price of $4.08/MMBtu.
• Held NGL swaps for ethane, propane, iso butane, normal butane, and pentane plus with volumes extending through 2028.

Risks and Challenges

• Experienced negative natural gas revenue and average realized prices in the second quarter due to lower gross sales compared to gathering and processing fees.
• Faced seasonal operating restrictions from Colorado Parks and Wildlife, causing a planned pause in drilling activity between the Opal Coalbank and Burnett pads.
• Carries a working capital deficit of approximately $125.5 million as of June 30, 2026.
• Subject to risks associated with commodity price volatility, though mitigated by a hedging program extending to 2029.
• Forward-looking statements involve risks regarding future financial performance, business strategies, and market conditions.

Management Commentary and Tone

• CEO Greg Patton highlighted strong operational progress, improved drilling performance, and execution within budget despite seasonal pauses.
• Management noted technical milestones including the first three-mile lateral and cost-saving wellbore design trials.
• CFO Michael Shelly emphasized strengthened financial position, meaningful operating cash flow, and progress in simplifying the capital structure.
• Chairman Erik Thoresen noted steps to strengthen leadership, governance, and financial position, including adding new board members.
• Tone reflects confidence in disciplined execution, capital efficiency, and long-term value creation.

Other Key Points

• Executed partial refinancing of Series F Preferred Stock in April 2026, reducing the outstanding balance and extending the Anniversary warrant date to August 31, 2026.
• Entered into a Credit Facility amendment on August 14, 2026, modifying Current Ratio covenant requirements for the remainder of 2026 and adding a net monthly production covenant.
• Issued approximately 3.7 million shares of Common Stock to Bayswater Resources as part of the Bayswater acquisition in the prior year.
• General and administrative expenses included $3.3 million in non-cash stock-based compensation and $0.8 million in non-recurring litigation and severance settlement expenses.
• Total assets were $1.005 billion as of June 30, 2026, compared to $944.5 million as of December 31, 2025.
• Total liabilities were $739.0 million as of June 30, 2026.
• Series F convertible preferred stock outstanding decreased to 78,000 shares from 121,050 shares at the end of 2025.