Prairie Working Co. has closed its $84.5 million acquisition of the oil-weighted property of Nickel Street Working, LLC (NRO), a portfolio firm of Vortus Funding Advisors, LLC.
Positioned in Weld County, Colorado, the acquired property will add 5,592 internet leasehold acres, 89 accredited properly permits, and 26 operated horizontal wells offering accretive cashflow to Prairie’s present Denver-Julesburg (DJ) Basin operations, the corporate mentioned in a information launch.
The NRO acquisition was funded with proceeds from a personal placement of widespread inventory, an fairness facility, and money available, Prairie mentioned.
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“This transaction is a significant step ahead in our progress technique and an instance of delivering long-term worth for our shareholders,” Prairie Chairman and CEO Edward Kovalik mentioned. “With our Shelduck South growth now drilling properly 4 of the eight-well pad, we count on the manufacturing from each these property, mixed with our permitted Genesis places, to supply a major cashflow engine for progress by way of 2025 and past”.
Prairie mentioned it stays dedicated to “aggressively increasing manufacturing and properly stock, by way of each natural drilling and accretive strategic acquisitions”.
The corporate additionally plans to combine the acquired property into its present operations and deal with growing its in depth stock of drilling places throughout its DJ Basin acreage place.
Prairie introduced the NRO acquisition in January.
Based on an earlier assertion, the weighted property, consisting of 84 p.c liquids, produce roughly 3,370 internet barrels of oil equal (boepd) and add third-party engineered confirmed reserves estimated at 22.2 million barrels of oil equal (MMboe) and $254 million in PV10 worth, in keeping with an impartial, third-party reserve report cited by the corporate.
The property embody 62 absolutely permitted confirmed undeveloped (PUD) drilling places. The permitted PUDs are anticipated to payout in roughly one 12 months from the onset of manufacturing and are financial in a low commodity worth surroundings. Additional, present infrastructure supplies takeaway capability and alternatives to enhance efficiencies, Prairie famous.
Prairie mentioned the acquisition is predicted to be accretive to its shareholders throughout key monetary metrics together with manufacturing, reserves, and free money circulate. Moreover, the addition of NRO’s property strategically expands its core working space, will increase stock of excessive rate-of-return drilling places, and supplies further flexibility to the 2024 drill schedule.
“This acquisition will increase and strengthens our general place inside a top-tier U.S. shale basin and aligns with our technique of making worth by way of accretive acquisitions”, Kovalik mentioned. “Moreover, the transaction positions us to speed up our growth program inside free money circulate, supporting the corporate’s acknowledged purpose of debt-free, long-term progress”.
Final month, Prairie introduced the spud of Shelduck South 8E5NCM with Precision E-Drilling Rig 461 in Weld County, Colorado.
Based on a separate information launch, the Shelduck South growth will embody eight two-mile lateral wells alternating between the Niobrara B and C Chalks.
The drilling of all eight wells is predicted to be accomplished by late October. Hydraulic fracturing is anticipated to start in early November, with manufacturing starting in late December, the corporate acknowledged.
Prairie is utilizing Precision’s E-rig 461, powered by pure fuel mills with battery backup, and expects to totally electrify the Shelduck South manufacturing amenities by line energy.
The Shelduck South growth, a part of Prairie’s Genesis Bolt-on Belongings, encompasses roughly 1,280 mineral acres. The venture marks the beginning of Prairie’s growth program and anticipated manufacturing progress, it mentioned.
To contact the writer, e mail rocky.teodoro@rigzone.com
