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What Makes Prairie Operating Co. a Strong Buy Right Now?
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Prairie Operating Co. (PROP - Free Report) made headlines with its $602 million acquisition of Bayswater assets, a move that has significantly altered its growth trajectory. The deal, which includes 24,000 net acres and 26,000 barrels of oil equivalent per day (BOE/d) in production, also brings in 600 gross drilling locations and an estimated $1.1 billion in future cash flow, boosting its long-term potential.
The acquisition positions PROP as a high-growth player in the Denver-Julesburg (DJ) basin. The region has seen explosive growth, thanks to companies like Chevron (CVX - Free Report) and Occidental Petroleum (OXY - Free Report) , which have driven efficiencies and capital into the area. PROP is following that blueprint—with the added advantage of a rural, low-regulation operating area that accelerates permitting and drilling timelines.
About the Company
Headquartered in Houston, Prairie Operating Co. is an independent energy firm focused on unlocking value in the DJ Basin, particularly within the Niobrara and Codell formations. Its acreage is strategically located near major operators like Chevron and Occidental Petroleum, giving it access to established infrastructure and market networks. Operating in a sparsely populated, rural setting also means that Prairie Operating Co. encounters fewer permitting hurdles, helping speed up its development timeline and streamline the path to production.
Image Source: Prairie Operating Co.
Prairie Operating Co.’s Operational Momentum in the DJ Basin
Unlike its peers that face regulatory drag, Prairie Operating Co. operates primarily in rural Weld County, which means fewer barriers to development. The company is rapidly executing on key projects, including nine DUC wells at the Opal Coalbank site and an 11-well Rusch Pad program, both of which are on or ahead of schedule. This level of efficiency gives Prairie Operating Co. a distinct advantage in capital deployment and return timing.
Strategic Hedging Locks in Upside
One of the more underappreciated aspects of Prairie Operating Co.’s story is its proactive hedging strategy. It has locked in about 85% of its remaining 2025 daily production at $68.27/bbl WTI and $4.28/MMBtu Henry Hub. For 2026 through Q1 2028, the hedges average $64.29/bbl and $4.09/MMBtu. This not only secures visibility on future cash flows but also shields the company from downside risk in a volatile energy market. In fact, the hedge book is giving it about $70 million in built-in value at today’s prices. Prairie Operating Co.’s program also stands out for its scope and timing, implemented just before a pullback in commodity prices.
Development Momentum: Rusch and Opal Pads
Prairie Operating Co. is not just buying acreage—it’s actively developing it. The company has launched an 11-well program at its Rusch Pad in Weld County, Colorado. This includes two-mile laterals targeting the Niobrara and Codell formations—proven zones for high returns. Production is expected to begin in early August. Simultaneously, completions are underway at the Opal Coalbank Pad, which includes nine drilled but uncompleted (DUC) wells acquired from Bayswater. These projects highlight Prairie Operating Co.’s efficient capital deployment and potential for rapid cash flow growth.
PROP’s Financial Firepower and Production Growth
Prairie Operating Co.'s financial metrics are quickly scaling post-acquisition. Adjusted EBITDA for 2025 is forecasted between $350 million and $370 million, a massive leap from the $140 million previously projected. Net income guidance stands between $69 million and $102 million, while the company maintains a low leverage ratio of 1.0x. With $475 million in liquidity, PROP has the balance sheet strength to fund growth without diluting shareholders. On the production side, Prairie Operating Co. expects to average 29,000 to 31,000 BOE/d in 2025, representing a more than 300% increase year over year.
Pullback Sets the Stage for Prairie Operating Co.’s Potential Turnaround
Despite its fundamentals, PROP stock has lagged, falling 33% year to date and touching a 52-week low of $3.35 in April.
Image Source: Zacks Investment Research
However, this pullback offers an attractive entry point, especially with the Zacks Consensus Estimate for 2025 EPS going up 23% in the past month. Prairie Operating Co. is now expected to deliver around 389% EPS growth year over year, which is exceptional even by high-growth standards.
Image Source: Zacks Investment Research
Conclusion
Prairie Operating Co. is following a well-structured growth path—making smart acquisitions, deploying capital efficiently in the field, using hedges to lock in cash flows, and scaling operations rapidly. Its recent transformative deal has not only expanded its footprint but also paved the way for sharp increases in output and earnings. Surrounded by major players like Chevron and Occidental, Prairie is proving it can compete by combining strategic ambition with disciplined execution. With robust financial guidance, ambitious production goals and growing analyst confidence, PROP stock stands out as a Zacks Rank #1 (Strong Buy) right now.
Image: Bigstock
What Makes Prairie Operating Co. a Strong Buy Right Now?
Prairie Operating Co. (PROP - Free Report) made headlines with its $602 million acquisition of Bayswater assets, a move that has significantly altered its growth trajectory. The deal, which includes 24,000 net acres and 26,000 barrels of oil equivalent per day (BOE/d) in production, also brings in 600 gross drilling locations and an estimated $1.1 billion in future cash flow, boosting its long-term potential.
The acquisition positions PROP as a high-growth player in the Denver-Julesburg (DJ) basin. The region has seen explosive growth, thanks to companies like Chevron (CVX - Free Report) and Occidental Petroleum (OXY - Free Report) , which have driven efficiencies and capital into the area. PROP is following that blueprint—with the added advantage of a rural, low-regulation operating area that accelerates permitting and drilling timelines.
About the Company
Headquartered in Houston, Prairie Operating Co. is an independent energy firm focused on unlocking value in the DJ Basin, particularly within the Niobrara and Codell formations. Its acreage is strategically located near major operators like Chevron and Occidental Petroleum, giving it access to established infrastructure and market networks. Operating in a sparsely populated, rural setting also means that Prairie Operating Co. encounters fewer permitting hurdles, helping speed up its development timeline and streamline the path to production.
Prairie Operating Co.’s Operational Momentum in the DJ Basin
Unlike its peers that face regulatory drag, Prairie Operating Co. operates primarily in rural Weld County, which means fewer barriers to development. The company is rapidly executing on key projects, including nine DUC wells at the Opal Coalbank site and an 11-well Rusch Pad program, both of which are on or ahead of schedule. This level of efficiency gives Prairie Operating Co. a distinct advantage in capital deployment and return timing.
Strategic Hedging Locks in Upside
One of the more underappreciated aspects of Prairie Operating Co.’s story is its proactive hedging strategy. It has locked in about 85% of its remaining 2025 daily production at $68.27/bbl WTI and $4.28/MMBtu Henry Hub. For 2026 through Q1 2028, the hedges average $64.29/bbl and $4.09/MMBtu. This not only secures visibility on future cash flows but also shields the company from downside risk in a volatile energy market. In fact, the hedge book is giving it about $70 million in built-in value at today’s prices. Prairie Operating Co.’s program also stands out for its scope and timing, implemented just before a pullback in commodity prices.
Development Momentum: Rusch and Opal Pads
Prairie Operating Co. is not just buying acreage—it’s actively developing it. The company has launched an 11-well program at its Rusch Pad in Weld County, Colorado. This includes two-mile laterals targeting the Niobrara and Codell formations—proven zones for high returns. Production is expected to begin in early August. Simultaneously, completions are underway at the Opal Coalbank Pad, which includes nine drilled but uncompleted (DUC) wells acquired from Bayswater. These projects highlight Prairie Operating Co.’s efficient capital deployment and potential for rapid cash flow growth.
PROP’s Financial Firepower and Production Growth
Prairie Operating Co.'s financial metrics are quickly scaling post-acquisition. Adjusted EBITDA for 2025 is forecasted between $350 million and $370 million, a massive leap from the $140 million previously projected. Net income guidance stands between $69 million and $102 million, while the company maintains a low leverage ratio of 1.0x. With $475 million in liquidity, PROP has the balance sheet strength to fund growth without diluting shareholders. On the production side, Prairie Operating Co. expects to average 29,000 to 31,000 BOE/d in 2025, representing a more than 300% increase year over year.
Pullback Sets the Stage for Prairie Operating Co.’s Potential Turnaround
Despite its fundamentals, PROP stock has lagged, falling 33% year to date and touching a 52-week low of $3.35 in April.
However, this pullback offers an attractive entry point, especially with the Zacks Consensus Estimate for 2025 EPS going up 23% in the past month. Prairie Operating Co. is now expected to deliver around 389% EPS growth year over year, which is exceptional even by high-growth standards.
Conclusion
Prairie Operating Co. is following a well-structured growth path—making smart acquisitions, deploying capital efficiently in the field, using hedges to lock in cash flows, and scaling operations rapidly. Its recent transformative deal has not only expanded its footprint but also paved the way for sharp increases in output and earnings. Surrounded by major players like Chevron and Occidental, Prairie is proving it can compete by combining strategic ambition with disciplined execution. With robust financial guidance, ambitious production goals and growing analyst confidence, PROP stock stands out as a Zacks Rank #1 (Strong Buy) right now.
You can see the complete list of today’s Zacks #1 Rank stocks here.