Executive Summary

Q2 2025 delivered rapid scaling post-Bayswater integration: revenue $68.1M, adjusted EBITDA $38.6M (company record), and production 21,052 Boe/d (~50% oil); management emphasized cost discipline (AFE ~$5.6M) and operational efficiency .
FY25 guidance was materially raised: average production 24–26k Boe/d, capex $260–$280M, adjusted EBITDA $240–$260M (vs prior 7–8k Boe/d, $120–$130M capex, $100–$140M EBITDA), underpinned by hedging (85% of production) and a $475M borrowing base .
Versus S&P Global consensus, Q2 missed on revenue ($68.1M vs $122.5M*) and EPS ($0.18 diluted vs $0.96*), driven by timing of the Bayswater close, fewer wells turned in line, offset shut-ins, and a weighted-average NGL pricing methodology that depressed reported realizations; management expects a significant H2 ramp with 35 TILs in 2025 .
Liquidity stood at ~$98.7M (revolver availability $88.0M + cash $10.7M); leverage ~1x on adjusted 12-month basis; hedge book secures oil at ~$68.04/bbl and gas at ~$4.30/MMBtu through YE25, supporting cash flow visibility .

What Went Well and What Went Wrong

What Went Well

Record adjusted EBITDA ($38.6M) and strong production scaling (21,052 Boe/d), reflecting successful integration and execution; “We delivered record production [and] achieved new highs in adjusted EBITDA” .
Cost leadership and drilling efficiency: AFEs ~$5.6M, spud-to-TD 5.3 days; “We see a clear line of sight to getting [AFE] down to $5,000,000 for two-mile” .
Strategic M&A and hedging: closing Bayswater and executing hedges covering ~85% of production; reaffirmed $475M borrowing base and expanded syndicate (Citi, BofA, WTXNB) .

What Went Wrong

Consensus misses: revenue and EPS below S&P Global estimates; diluted EPS reported at $0.18 versus consensus ~$0.96*; revenue $68.1M versus ~$122.5M* .
Realization pressure in NGLs (weighted-average price $8.70/bbl), below broader industry averages; management attributed gap to accounting methodology .
Production below some external expectations due to timing of Bayswater closing, fewer TILs in H1, and offset shut-ins (e.g., Chevron activity), with ramp pushed into H2 .

Financial Results

P&L vs Prior Periods and Prior Year

Metric	Q2 2024	Q1 2025	Q2 2025
Revenues ($USD Millions)	N/A*	$12.82*	$68.10
Net Income - Continuing Ops ($USD Millions)	$(8.51)	$(2.62)*	$35.68
Diluted EPS - Continuing Ops ($USD)	$(3.49)	$(3.38)*	$0.18
Net Cash from Operations ($USD Millions)	$(5.12)*	$16.93*	$9.70
Capital Expenditure ($USD Millions)	$(1.90)*	$(528.58)*	$56.61

Values retrieved from S&P Global.

Notes:

Management also disclosed adjusted EBITDA of $38.56M for Q2 2025 (non-GAAP) .
Net income attributable to common stockholders was $48.50M in Q2 2025; the divergence from continuing ops net income reflects preferred stock items and fair value adjustments per the 8-K reconciliation .

Commodity Mix and Production (Q2 2025)

Item	Q2 2025
Oil Revenue ($USD Thousands)	$57,941
Natural Gas Revenue ($USD Thousands)	$6,084
NGL Revenue ($USD Thousands)	$4,075
Total Production (MBoe)	1,916
Average Daily Volumes (Boe/d)	21,052
Oil (MBbls)	883
Gas (MMcf)	3,388
NGL (MBbls)	469

Realized Prices and Operating Cost KPIs (Q2 2025)

KPI	Q2 2025
Realized Oil Price ($/Bbl, excl. hedges)	$65.66
Realized Gas Price ($/Mcf, excl. hedges)	$1.80
Realized NGL Price ($/Bbl, excl. hedges)	$8.70
LOE ($/Boe)	$5.92
Gathering/Transportation/Processing ($/Boe)	$1.17
Ad Valorem & Production Taxes ($/Boe)	$3.35
G&A ($/Boe)	$8.58
DD&A ($/Boe)	$6.37

Actuals vs S&P Global Consensus (Q2 2025)

Metric	Consensus*	Actual	Beat/Miss
Revenue ($USD Millions)	$122.52*	$68.10	Miss
Diluted EPS ($)	$0.96*	$0.18	Miss
# of Estimates (Revenue / EPS)	3 / 4*	—	—

Values retrieved from S&P Global.

Drivers of variance (company commentary): timing of Bayswater close and ramp (nine fewer wells turned in line in H1), offset shut-ins from neighboring completions, and NGL pricing methodology that reduced reported realizations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Average Daily Production (Boe/d)	FY 2025	7,000–8,000	24,000–26,000	Raised
Capital Expenditures ($USD Millions)	FY 2025	$120–$130	$260–$280	Raised
Adjusted EBITDA ($USD Millions, non-GAAP)	FY 2025	$100–$140	$240–$260	Raised
Hedging Coverage	FY 2025	Not specified	~85% of current daily production; oil ~$68.04/bbl, gas ~$4.30/MMBtu through YE25	Implemented/Expanded
Borrowing Base	Current	$475M	$475M reaffirmed; syndicate expanded	Maintained/Enhanced Liquidity

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2, Q-1)	Current Period (Q2 2025)	Trend
Cost leadership & AFEs	Not available in reviewed prior docs	AFEs ~$5.6M; path to ~$5.0M on two-mile wells via vendor competition and utilization	Improving
Operational efficiency	Not available in reviewed prior docs	Spud-to-TD 5.3 days; electric frac fleet; zipper frac efficiency (14–18 stages/day)	Improving
Hedging strategy	Not available in reviewed prior docs	~85% coverage; FY25 oil ~$68.04, gas ~$4.30; extended into 2026–2028	Increased risk management
Production ramp	Not available in reviewed prior docs	35 TILs in 2025; ramp weighted to H2; offset shut-ins impacted Q2	Ramping
M&A discipline	Not available in reviewed prior docs	Targeting 2–2.5x EBITDA multiples (off-market) vs some basin divestitures at ≥4x	Active, selective
Midstream/service contracts	Not available in reviewed prior docs	Secured takeaway optionality; contracts with ProFrac and Precision Drilling	Strengthening

Note: No prior-quarter transcripts or 8-K 2.02 earnings releases were found in our search window for Q1 2025 or Q4 2024; trend baselines are derived from Q2 commentary [ListDocuments outputs above].

Management Commentary

“We delivered record production, achieved new highs in adjusted EBITDA, and closed our third strategic acquisition in under a year — further solidifying our position as an oil-weighted consolidator in the DJ Basin.”
“We see a clear line of sight to getting [two-mile] AFE down to $5,000,000… running a full one rig program… and making [an] RFP process national.”
“We’re updating our full year production guidance… to 24,000 to 26,000 Boe/d… capex… $260 to $280 million… adjusted EBITDA… $240 to $260 million.”
“Hedges secure pricing of $68.04 per barrel of oil, $4.3 per MMBtu… through the remainder of 2025.”
“There are some really low hanging fruit… fewer than 10 wells that probably amount to 500 or more barrels per day of optimization.”

Q&A Highlights

M&A valuation discipline: Management cited off-market deals at 2–2.5x EBITDA and cautioned against chasing ≥4x multiples; reiterated robust pipeline and accretive focus .
Cost-down roadmap: Detailed path to ~$5.0M AFEs via utilization, competitive national RFPs, and out-of-basin vendors .
Production bridge: Ramp pushed by ~60-day delay in Bayswater close and nine fewer TILs in H1; offset shut-ins from Chevron completions; significant H2 ramp expected .
Rush pad timing: Completions on schedule with near-term first production; positive pressure indications .
NGL pricing: Weighted-average barrel basis methodology yielded $8.70/bbl; acknowledged broader market averages are higher .
Optimization: Workovers and gas lift/plunger lift delivering rapid paybacks; cited 400–500 bbl/day uplift from initial workovers .

Estimates Context

Q2 2025 S&P Global consensus vs actual: revenue $122.5M* vs $68.1M (miss), diluted EPS $0.96* vs $0.18 (miss). Coverage depth: 3 revenue estimates, 4 EPS estimates*.
Implications: Street likely needs to recalibrate for ramp timing (H2-weighted TILs), NGL realization methodology, and offset shut-ins; FY25 raised guidance and hedging should improve forward visibility .

Values retrieved from S&P Global.

Metric	Q2 2025 Consensus*	Q2 2025 Actual	Delta
Revenue ($USD Millions)	$122.52*	$68.10	$(54.42)
Diluted EPS ($)	$0.96*	$0.18	$(0.78)
# of Estimates (Revenue / EPS)	3 / 4*	—	—

Key Takeaways for Investors

Execution remains strong with record adjusted EBITDA and accelerating development; operating KPIs (AFE, spud-to-TD, electric frac) point to sustained cost advantages .
Despite Q2 consensus misses, management’s bridge (delayed close, fewer H1 TILs, offset shut-ins) and 35 TILs in 2025 support a materially higher H2 exit rate .
Hedging (~85% coverage, oil ~$68.04, gas ~$4.30) and reaffirmed $475M borrowing base de-risk cash flows and fund the ramp, with liquidity ~$98.7M and ~1x leverage .
Raised FY25 guidance (production, capex, adjusted EBITDA) is a potential catalyst for estimate revisions and narrative shift toward scale and free cash flow .
M&A discipline (2–2.5x EBITDA, off-market) and operational optimization (workovers/gas lift) can add incremental barrels at attractive IRRs, reinforcing returns focus .
Monitor realizations (especially NGLs) and service/cost markets; continued AFE compression toward $5.0M would expand returns and capital efficiency .
Near-term trading: Watch for H2 production updates (Rush pad results, TIL cadence), and any additional acquisition closings; hedge book reduces commodity beta while ramp drives volume upside .

Additional Reference Data

Liquidity: ~$98.7M (Revolver availability $88.0M + cash $10.7M) .
Credit facility: $475M borrowing base; aggregate elected commitments $475M; maturity 3/26/2029 .
Hedge detail (selected): Oil swaps weighted average $68.04 (H2’25), $64.42 (2026); Gas swaps $4.30 (H2’25), $4.08 (2026) .
Q2 operating cash flow: $9.7M; capex: $56.6M .

Disclosures: Adjusted EBITDA is a non-GAAP measure; see company’s reconciliation and cautionary statements .

Prairie Operating Co. (PROP)·Q2 2025 Earnings Summary