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Prairie Operating(PROP) - 2024 Q2 - Quarterly Report
PROPPrairie Operating(PROP)2024-08-09 13:30

Financial Performance - For the three months ended June 30, 2024, the company reported a loss from operations of 8,568,797,anincreaseof8,568,797, an increase of 5.7 million compared to the same period in 2023 [103]. - Total operating costs and expenses for the six months ended June 30, 2024, were 16,613,438,reflectinganincreaseof16,613,438, reflecting an increase of 13.7 million compared to the same period in 2023 [103]. - General and administrative expenses for the three months ended June 30, 2024, increased by 5.7millioncomparedtothesameperiodin2023,primarilyduetoemployeeandbenefitexpenses[104].−Thenetcashusedinoperatingactivitiestotaled5.7 million compared to the same period in 2023, primarily due to employee and benefit expenses [104]. - The net cash used in operating activities totaled 8.4 million for the six months ended June 30, 2024, an increase of 3.4millionfrom3.4 million from 5.1 million in the same period of 2023 [117]. - The company had a net loss of 17.6millionforthesixmonthsendedJune30,2024,withanaccumulateddeficitof17.6 million for the six months ended June 30, 2024, with an accumulated deficit of 96.4 million [120]. Acquisition and Investments - The company entered into a securities purchase agreement for a total of 20.0million,whichincludes39,614sharesofcommonstockand20,000sharesofSeriesEPreferredStock[95].−TheNROAcquisitionfortheCentralWeldAssetsisvaluedat20.0 million, which includes 39,614 shares of common stock and 20,000 shares of Series E Preferred Stock [95]. - The NRO Acquisition for the Central Weld Assets is valued at 94.5 million, consisting of 83.0millionincashand83.0 million in cash and 11.5 million in deferred cash payments [100]. - The company anticipates closing the NRO Acquisition by August 15, 2024, subject to securing necessary financing [101]. - The company expects to raise approximately 74.0millionincashtoclosetheNROAcquisition,butcurrentlylackssufficientcashorcommittedcapitalforthispurpose[112].CashFlowandLiquidity−AsofJune30,2024,thecompanyreportedaworkingcapitaldeficitof74.0 million in cash to close the NRO Acquisition, but currently lacks sufficient cash or committed capital for this purpose [112]. Cash Flow and Liquidity - As of June 30, 2024, the company reported a working capital deficit of 7.9 million, compared to a working capital of 8.1millionasofDecember31,2023[117].−Cashandcashequivalentsdecreasedfrom8.1 million as of December 31, 2023 [117]. - Cash and cash equivalents decreased from 13.0 million as of December 31, 2023, to 2.2millionasofJune30,2024[117].−Thecompanyanticipatesthatitscashbalancewilldeclineuntilfinancingisobtainedthroughpublicorprivatecapitalmarkets[120].OperationalUpdates−ThecompanyplanstocommenceitsinitialdrillingprograminAugust2024,startingwithan8−wellpadtargetingtheNiobraraBandCformations[99].−AsofJune30,2024,thecompanyhasnothadanydrillingorcompletionoperationsonitsGenesisAssets,whichinclude24,351netmineralacres[98].−ThecompanydivestedallcryptocurrencyminingassetsinJanuary2024,withasaleconsiderationof2.2 million as of June 30, 2024 [117]. - The company anticipates that its cash balance will decline until financing is obtained through public or private capital markets [120]. Operational Updates - The company plans to commence its initial drilling program in August 2024, starting with an 8-well pad targeting the Niobrara B and C formations [99]. - As of June 30, 2024, the company has not had any drilling or completion operations on its Genesis Assets, which include 24,351 net mineral acres [98]. - The company divested all cryptocurrency mining assets in January 2024, with a sale consideration of 1.0 million in cash and 1.0millionindeferredcashpayments[102].−Thecompanyrecognizeda1.0 million in deferred cash payments [102]. - The company recognized a 1.0 million loss on the sale of cryptocurrency mining equipment during the six months ended June 30, 2024 [110]. - For the six months ended June 30, 2024, the net loss from discontinued operations decreased by 15.8millioncomparedtothesameperiodin2023,primarilyduetothecompletionoftheCryptoSaleinJanuary2024[110].InterestandIncome−InterestincomeforthethreemonthsendedJune30,2024,increasedto15.8 million compared to the same period in 2023, primarily due to the completion of the Crypto Sale in January 2024 [110]. Interest and Income - Interest income for the three months ended June 30, 2024, increased to 55,139, up from 43,037inthesameperiodin2023[105].−Netcashusedininvestingactivitiesincreasedto43,037 in the same period in 2023 [105]. - Net cash used in investing activities increased to 11.8 million for the six months ended June 30, 2024, compared to 3.3millioninthesameperiodof2023[118].FundingStrategy−Thecompanyplanstofunditsbusinessandstrategicplanswithcashonhandandproceedsfromwarrantexercises,withexpectationsof3.3 million in the same period of 2023 [118]. Funding Strategy - The company plans to fund its business and strategic plans with cash on hand and proceeds from warrant exercises, with expectations of 24.0 million from common stock warrants [121].