Thank you for joining us for this session of WTR Insights Conference featuring Prairie Operating Co. I am Jeff Robertson, Managing Director of Natural Resources here at Water Tower Research. We're pleased to be joined today by Rich Frommer, President and CEO, and Greg Patton, Chief Financial Officer. Rich, Greg, welcome. Thank you for taking the time to join us today. Thank you, Jeff. Before we begin, please note that Prairie's safe harbor statements can be found on the Investor Relations tab of the company's website, along with their most recent investor presentation. This fireside chat may not be reproduced, nor may a written transcript be distributed without the express written consent of Water Tower Research. We will aim to address investor questions submitted during today's conversation in a follow-up email or the Management Series Report that will follow this presentation. You can please enter your questions in the chat for the portal. Also, investors interested in scheduling a meeting with Prairie can indicate that interest within the portal, and we will work to accommodate schedules for those meetings. With the housekeeping items out of the way, I'd like to get started. Rich Frommer became President and CEO of Prairie in March 2026, and Greg Patton has been in the CFO position for over a year now. Prairie is an exploration and production company focused on oil and natural gas liquids in the DJ Basin in Colorado. The company closed an integrated transformative acquisition of Bayswater E&P in 2025, and in essence, they've effectively stood up and created a new operated production company and integrated multiple bolt-on acquisitions since its formation. The shares trade on the Nasdaq under the symbol PROP. Greg, I'd like to just start briefly. Can you share a brief introduction and really what drew you to Prairie? I'll start with that, Greg. I've been involved with the company since virtually soon after its forming, at first on the Advisory Board, and then in late 2024, a member of the Board of Directors. I've been on the Board of Directors through the transformative phases of the company. Really what was attracted to it initially was that their strategy and model was to be a DJ Basin-focused consolidator, and we thought that there was a number of smaller entities out there that needed to be rolled up, and that we could put a team together that would put us in the right place to do that. I'm a geologist by training, and I have a long history of building companies just along that way. I wanted to sit on the sidelines initially to help direct it. Recently, it's forced me to step into a more active role, and I'm happy to be here. Similar to Rich, Jeff, to answer your question, been here just over two years. I started in a role of EVP of Corporate Development. Predominantly here to utilize the skill set that I've built alongside Rich at Great Western, to utilize that skill set here in the DJ Basin. It's in my backyard. I love working in a company that's Colorado-based. I can say I live and work within the same fields that we develop. There was a real intricacy to being able to do that again and have that opportunity and that foresight to be able to be a consolidator, potentially, here in the DJ, to be part of a growth story, and to be part of a company that had a public currency, which was something a little different than we had at Great Western. All those factors really attracted me to Prairie two years ago. It was before we had producing assets. We were able to successfully complete the Nickel Road transaction, move into the Bayswater transaction, and it's been a great runway and asset-building process over the past two years. Really exciting times here at Prairie and the excitement and the thrill of being able to put something together, to do so in a mindset that is a little different, a little bit more dynamic than maybe what we've seen over the past five or six years, even dating back to as recent as 2014 with RSP and since the last kind of incepted small-cap public company. All of those factors combined is what led me to Prairie. You've both been involved in the DJ Basin for some time, even before you joined Prairie, as you laid out. What are the characteristics of the basin that really allow you to execute the strategy that you have in mind, and how is that either similar or different to other U.S. producing basins? The DJ Basin is an amazing basin. I've been involved with it all the way back into the late 1990s with HS Resources, which was one of the first companies to realize that, wow, we could downspace this Niobrara formation and repeatedly refrac those wells, and we brought them right back to where their original IPs were. This was just recognizing that the Niobrara is a world-class source rock and makes this basin just so attractive. The depth of the target, it's shallow enough that we generate pretty low-cost wells compared to a lot of the other plays. We've got the stacked pays of the Niobrara A, B, and C and the Codell. That combined with the lower cost delivers great ROIs. We also have a relatively high net royalty interests. The landowner's royalty is not as punitive as in some other basins. It translates to a low operating cost for our wells. We think it's very repeatable. We think of our operations almost as a factory because we're drilling these horizontal wells in two or three days, and it makes it one of the most attractive plays in the Lower 48. Rich, which formations in the DJ are your current most economic targets? Just given the life history of the field going from vertical wells to essentially being reborn with horizontal drilling, are there any technologies on the horizon that with an elevated higher oil price could open up new economic activity? Yeah. Like I mentioned, we have four stacked pays. The Codell is probably the most economic of the four. The A and B and C zones of the Niobrara are still very attractive. I think, as we go forward, what really is driving the economics in the basin is driving our well costs and our completion costs down. What we're starting to see now is the number of stages on the frack completions. Like I mentioned, the wells are only two or three days to drill. It's the completions that take quite a bit longer. We're starting to institute continuous fracking where we can frack multiple wells at the same time. The pumps never shut down. We're just switching valves and going from one wellbore to the other to where we can get 20, 30, 40 stages per day of completion. That's a big driver. We're also seeing some experiments with uses of surfactants in the frack fluid that's starting to help in deliverability. It's really fine tweaking that we're seeing right now that's really driving the economics, mostly through driving costs lower and lower. Rich, given your past term as Chairman of the Colorado Oil and Gas Commission, I'm curious to know what your impressions or what's changed since Senate Bill 181 was passed and put into practice. Could you just give us your perspective on the state of the relationship between the industry and local and state regulators? Yeah. You're bringing back some memories of Senate Bill 181. I was the chairman of the board of the Colorado Oil and Gas Association back in 2019. So back then, I was working with a novice governor who had just been elected with a mandate to regulate our oil and gas industry. It was a balancing act to work with the administration back then and to represent our industry, to try to find a balance that allowed us to still get access without completely shutting down the whole basin. And we eventually got to that point. And just to be quite honestly, operating in Colorado is not a flavor for everyone. It takes special skill sets, and we've built out a team here with expertise from Bayswater to Bison, from Civitas to Chevron, of personnel who really know how to work through the regulatory environment. Today, it's not like Texas, but many people recognize there's hurdles here. We managed through those hurdles, and we're seeing the Commission issue over 1,000 permits per year, more than enough to fill what the industry needs. Oil prices are at a much different place than they started the year, and we don't know how long this volatility will last. Do elevated oil prices cause you to change anything in the field or how you plan to execute your 2026 plan? I'll let Greg answer that one. Yeah. Happy to, Rich. As we've really thought about the development plan for the year, it's really building a robust balance sheet and focusing on free cash flow. The best way we can do that is to keep one wagon wheel turning. That's a one rig, one frack crew program. It's where we get the best economies of scale. You're able to negotiate through the procurement processes to get a linear solid service stream. You're able to get the best discounts on the quantum that you're bringing in, whether that's sand or steel products. As we look at the oil price, and we look at, we'll say, the aggregation of the assets we've pulled together, the development of the team, the implementation of all of our systems in-house, putting together the accounting-based software, one rig and one frack crew is what's best optimized for the company this year. Oil prices may be a benefit to the bottom line. Some uplift we'll see in the EBITDA, which generates more free cash flow, especially with the locked-in contracts we've been able to procure. In terms of just systematically operating, unless there was a lot more scale via a large acquisition, we are a one rig, one frack crew program for this fiscal year. Greg, maybe from an operational standpoint, for curiosity, if Prairie gets into the position where it would make sense financially and operationally to add a second rig. Can you just briefly describe what are the challenges and maybe how long it might take to put oil in the tanks or into a sales line with the addition of a second rig? Sure. As we think about cycle time, a six to eight-well pad generally takes the better part of 90-120 days, depending on your lateral lengths, from spud to online date. As we're looking at a one rig and one frack crew program, that delivers roughly 60 wells per rig per year on a two-mile equivalent. It's a lot of wells. Getting those wells online into sales, as I mentioned, pretty quick here in the DJ. The rock's fairly easy to drill. Fracking is pretty straightforward, and so we have some very quick cycle times we're able to turn wells online in. The inverse issue to that is permit replenishment. As we think about our development plan, we think about 128 permitted pods in hand to date. Ultimately, that's a great number for us to have, just slightly over two years of permitted inventory. We're obviously actively permitting and leasing additional locations, looking at additional acquisitions, and all of that will sustain our future development plan and allow us space that we've also secured on pipe over the next seven years to be able to get those wells online and have deliverability to sell those hydrocarbons downstream. Just one follow-up on the permitting process, how long does it take now to get a permit in the DJ Basin? It's a great question, Jeff. As we've optimized and we've made it through the rulemakings, we're now in the rule-following stage of life. The rule-following stage of life has stipulations, has boundaries, depending on the areas that you're within, is all dynamically different within different areas in Colorado. As we look at our rural operations, our general time to get a permit ranges between that one year to 18-month type time period. It's decreased from 24 months, which is great for us, but there's still a planning prospect that has to be put in place to stay ahead of your rig. Now, that all being said, a permit has a three-year life. That three-year life of that permit, once it's issued, you either have to renew it, go through a new process, or drill. As I mentioned before, those 128 permitted pads in front of us gives us a runway to then have the process in place to add additional permits thereafter and just keep that cycle rolling for one rig and one frack crew, which we believe delivers us significant amount of free cash flow, and is the most optimized program we can operate under at this time. Greg, with respect to the one rig type program, you mentioned accounting integration of the Bayswater assets. I just would like you to both talk a little bit about the integration process on those assets, both on the financial side of the house, Greg, and maybe also on the operational side of the house. I'll cover the first part of that. The Bayswater deal was something I've been highly intertwined with on all aspects and fronts for the better part of the last year. We just crested the year anniversary from March 26, our closing date with Bayswater. We've been very happy with the assets. We've been very happy with the team that we acquired from Bayswater. They do a great job for us in the field. Last year, we had a 0.0 TRIR rating, which means the safety efforts that our team in the field put forth is utmost and first-class. It's the best in the industry. We're super proud of them. They've done a phenomenal job for us. The meshing with the different company-type teams, as Rich mentioned, Civitas, Chevron, PDC, Great Western, Bayswater, has been just phenomenal. They've created a great team, a great symbiotic basis in the field that they all operate under and together with. We're super happy with how that integration has worked. On the accounting front and on the corporate front here in the Denver office, we've continued to grow and expand, again, adding people from multiple different companies as things have consolidated and wound down here in the DJ. We're very happy with the team we formed, both on an engineering, land, accounting, and finance front. The accounting integration was something that we took a lot of pride and diligence in. We wanted to ensure that with the acquisitions that we've done to date, nine in total, seven of which had operated assets underneath them. We wanted to make sure that they were combined and integrated appropriately and under one accounting system to ensure continuity on a go-forward basis and to allow the most optimized and flexible basis to continue to add more acquisitions as we move forward. We've done that very successfully. We've just completed our full-year audit. We filed our 10-K, and we did that all under the supervision and audit of Deloitte. We're super happy to have them as a partner with us as well as we move forward. We feel very proud about the integration we were able to perform both in the field and in the accounting. Rich, maybe you'd comment on that from observation from your seat and from the Board's angle? Yeah. The Bayswater acquisition was transformative for us. Like Greg mentioned, we acquired some top-notch operators and employees with that acquisition. That being said, every operator has a little bit different way of doing things. We had to bring them around to the Prairie Operating way. Because we've got this broad cross-section of employees, we've got an opportunity to cherry-pick the best of what all the other operators have been doing and apply that to our operations. I think we've seen a number of some of those wells by just tweaking how we're pumping them. It's really improved the recovery factor. We're really excited about that and hope to apply that to more of our acquisitions going forward. Rich, on putting the team together, has the size of Prairie and maybe the entrepreneurial nature of a smaller independent allowed the company to attract talent as the industry has consolidated around you? Absolutely. I think, you compare us to a Chevron, and we have hired a few Chevron employees, it's like day and night, just the way the large operators operate versus we're pretty nimble. Greg and I will be in the field office up in Eaton, Colorado, there, speaking directly with the pumpers. When they have a problem, they know they can talk to the CEO or the CFO and say, "Hey, can you help me fix this?" We do that. We hear from them. At some other companies, they wouldn't see their managers for months at a time. It's a different environment being an entrepreneurial growth company. Fourth quarter capital spending came in lower than what was expected. Was that due to some timing issues with when things took place in the quarter, or was that through efforts to reduce costs across the business? As we were able to get through the second quarter last year, which was a difficult time for us, and there were some self-pronounced hiccups there. We did re-guide and reissue guidance at that time, and we beat that guidance. That guidance was given based off of our target AFE, and we were able to beat those target AFEs in some significance in some pads. Ultimately, we were able to develop whole production, as we mentioned in our earnings call, at the low end of our range and deliver significantly under the CapEx spend. That CapEx spend is a mixture of the performance of the team, the procurement process we went through, and the delivery of our operations on site for CapEx. As we brought wells online, we brought the same amount of wells online as we anticipated, same number of TILs. We just did so in a beating an AFE type fashion. We hope to continue that for 2026. Obviously, there's a lot of volatility in the market, and not every piece of product that we use is locked down contractually, but we do our best on a reoccurring monthly basis to ensure that we are getting the best services, the safest services. At the same point in time, we're very cost conscious in focusing on that AFE. In addition to the Bayswater acquisition last year, Prairie made a number of smaller bolt-on acquisitions, which included Edge Energy. How do you think about balancing capital allocation between organic development of the asset base that you have and incremental acquisition opportunities? Just to follow on that, in the current environment or as you think about 2026, how does the A&D market in the DJ Basin look to you? Yeah. We're going to always be, because we are entrepreneurial, we're going to be opportunistic. I'd say we have an equal measure of organic growth in front of us, where we're actively putting together drilling and spacing units by leasing on the ground. Plus, we're constantly looking to see what other small little mom- and- pops are out there. We're always active in the A&D market. Recently we've seen some new players come into the marketplace in the DJ Basin. I think we're going to see that they're going to have to go up a steep learning curve because it's not an easy place to operate, quite honestly, and you have to have expertise, and you have to understand the regulatory environment. That is definitely a consideration in the A&D. We still have private-equity-backed companies out there who are always looking to get a return for their private equity investors. We think we'll continue to see opportunities ahead, and we'll be active with them. Prairie's guided to being free cash flow positive in 2026. Is there an inflection point that you can point to when you think that will take place? What are your plans to use available free cash flow? Yeah. Absolutely, Jeff. I am happy to jump in here. As we've guided for the year, in terms of EBITDA guidance, it is definitely down in the first quarter, and then hockey-sticked up through the fourth quarter. That's predominantly due to the revisitation of several pads that we had on our drill schedule with permits that were that expiration period I talked about earlier, to which we find significant amount of additional value to. These are pads that are a singular pad but may drill into three separate DSUs. It isn't necessarily infill drilling, albeit we will do some infill drilling this year, where we think is appropriate for the spacing. These are pads that we had to shut down all operations because it's one pad, one facility site, and it isn't safe to be producing on that pad while we're drilling and completing another DSU from that pad. Again, it's that concept of being scrappy. It's that concept of being able to utilize a pad for multiple purposes, which decreases our footprint in terms of the environmental type footprint, and allows us to be best-in-class operator in terms of the guidelines and rules that we have to follow within the state. As to answer your question directly, decline in the first quarter, flatline into the middle of the second quarter, and then hockey stick up through the back half of the year as all those pads come back online. We're already seeing that. Many of those pads that were shut in have already started to cut oil again as we've been flowing back. We'll be happy to kind of exhibit what those results look like through the first and second quarters. Greg, where would you expect to allocate free cash flow? That free cash flow obviously will be allocated to bolster the balance sheet, pay down the RBL, continue to create a liquidity factor for us to delever, and also give us opportunistic availability for paths that may present themselves in the future, whether that be organic in nature or acquisition based in nature. At this point in time, it's all about bolstering the balance sheet, delevering the company, and creating a solid platform for the future. The capital structure, in the wake of the Bayswater acquisition, has some complexity to it, which includes preferred equity and warrants. Prairie recently came to an agreement with the warrants or on the warrants for the Series F preferreds. Greg, can you walk us through the strategy there, and what are the key aspects of the security that people need to be aware of? Yeah, absolutely. As of March 26th, the one-year anniversary date, there was a designed anniversary warrant built into the COD of the preferred F. Ultimately, we've been in negotiations with the holder of the F, as well as in negotiations with other counterparts to work to find a solution to not have to issue those anniversary warrants, which would have been massively dilutive to current shareholders. As we came to a resolution, throughout the filings and the 8Ks that have been out in the last two weeks, we came to a very accretive solution that bought us another 90 days. It decreased the number of potential anniversary warrants from a coverage factor of 1.25 to 1 to 0.75 to 1. We also reduced the face value of the pref, which is a part of that anniversary warrant calculation. Ultimately, the amount of dilution at a minimum decreased by over 40 million shares of dilution from the issuance date, March 26th, until where we are at today, and it could decrease even further as further conversions and/or solutions generated by ourselves come to fruition. At this time, we don't have anything further we can disclose on that, but we can be very adamant on the fact that we're actively pursuing further solutions. Finally, to bring us to a close, Rich, you and Greg too for that matter, have been through multiple commodity price cycles and business cycles that have affected the industry broadly and specifically in the DJ Basin in Colorado. Can you talk a little bit about or share some color on how Prairie is dealing with the business cycles? Can you share any advice that you'd give for investors who might be going through their first cycle? Nothing like $100 oil to make a company healthy. Yeah, I've been directed by the Board to step into this role and to make sure that we keep a steady hand on the tiller of the ship. Having been through multiple up cycles and down cycles, I think that's what you're going to see us do. We're going to keep a steady hand. We don't get too excited when we're seeing extreme prices and reverse. When it goes the other way, we always have a solid hedge book to protect the bottom end of us. That keeps us in a very targeted band where our wells are very economic for us going forward. We have seen maybe some tightening in services, but we've got a good contract for our drilling rig. We got a great relationship with our frack company. We've locked in steel prices. Many of the big dollar items are pretty well set for us at least going forward through our next couple of years of drilling. Like we mentioned, generating more cash flow means we can delever the company. I guess the good times, we're going to enjoy them a ll we can. We'll always have our eye on the ball, Jeff. The team is very diligent about that as well. We're always making sure we're prepared for the next steps as well. That could be a downturn or it could be status quo. We're well-versed in all of them. That's great to hear. Execution is one of the important keys to creating value for a small E&P company. Yes, control the things you can control. Rich, Greg, thank you so much for taking the time to join us this afternoon for this session of WTR Insights. I'd also like to thank everyone who's participated. Please look for additional content on Prairie Operating Co. at www.watertowerresearch.com. Again, for those with further questions or for investors wishing to meet with management after this event, please reflect that interest through the conference portal. Our next conference session will be starting shortly, and we invite you to stay tuned. Thank you so much. Thank you, guys. Thanks, Jeff.