Prairie Operating Co., Houston, has agreed to acquire the Denver-Julesberg (DJ) basin assets of Nickel Road Operating LLC, for a total consideration of $94.5 million.
The assets, near Prairie's existing DJ basin operations in largely rural Weld County, Colorado, include 5,526 net leasehold acres, 26 operated producing horizontal wells, 62 fully permitted proven undeveloped drilling locations in Wattenberg field targeting four commercially proven zones, and 90 operated well permits.
The 84% liquids weighted assets produce about 3,370 net boe/d and are 90% held by production with 94% working interest in seven operated drilling and spacing units with no exposure to federal leases.
“Nickel Road's operated position in the Northern Oil Rim of Wattenberg field is an attractive growth platform with the second largest approved permit inventory issued in the DJ basin,” and the assets “have delivered top tier results through optimization of well spacing and enhanced completion designs,” said Andrew Haney, co-president of Nickel Road.
Denver, Co.-based Nickel Road is supported by an equity commitment from Vortus Investment Advisors LLC, Fort Worth, Tex.
The deal total consists of $83 million in cash and $11.5 million in deferred cash payments. The effective date of the transaction is Feb. 1, 2024 with expected closing in first-half 2024.
Prairie Operating Co. is a publicly traded company engaged in the development, exploration, and production of oil, natural gas, and natural gas liquids with operations focused on unconventional oil and natural gas reservoirs in Colorado focused on the Niobrara and Codell formations.