PROP

• Organizational and Capital Structure Updates

  • Completed a partial refinancing of Series F Preferred stock, reducing the outstanding preferred balance and potential warrant-related dilution; extended the anniversary warrant deadline to August 31, 2026
  • Transitioned the management team and refreshed the Board of Directors to strengthen strategic oversight and decision-making
  • These actions improve liquidity, increase financial flexibility, and align leadership around disciplined long-term growth and shareholder value creation

• Operational Performance and Milestones

  • Drilled 12 wells in Q2 2026 (2 Codell, 10 Niobrara), 8 drilled in a single run, and all 12 completed below approved AFE (Authorization for Expenditure)
  • Achieved key technical milestones: successfully drilled the first 3-mile lateral Niobrara B well in a single run; tested a 7 7/8-inch hole design (compared to the standard 8.5-inch design) that delivered over $40,000 in savings per well with no impact on completion or production configuration; the smaller design will be rolled out to most upcoming Niobrara development
  • Year-to-date 2026 (through June): 27 wells drilled, 19 in a single run, all delivered below AFE; average spud-to-rig release time of 6.2 days, average rate of penetration of 377 feet per hour
  • As of mid-August 2026, average daily production reached ~27,000 net BOE per day, driven by full production contribution from recently completed Opal Coalbank wells

• Financial Performance

  • Q2 2026 GAAP net income attributable to common stockholders was $193.8 million ($1.75 per basic share, $0.23 per diluted share); adjusted EBITDA was $34 million; net operating cash flow was $52 million; cash capital expenditures were $98.5 million
  • First half 2026 adjusted EBITDA totaled $71.1 million, a 65% year-over-year increase; net operating cash flow was $94.3 million; total cash capital expenditures were $132.6 million
  • As of June 30, 2026, the reserve-based credit facility had $39 million of available liquidity, with a commodity hedge portfolio extending through Q2 2029 that provides downside protection and cash flow visibility

Management revised full year 2026 guidance to account for first half 2026 results, CIG pricing impacts from April-June, turn-in-line timing, and seasonal operating restrictions from Colorado Parks and Wildlife: * Average daily production: revised to 23,000 to 25,000 BOE per day * Capital expenditures: revised to $185 million to $195 million * Adjusted EBITDA: revised to $180 million to $190 million The revised guidance prioritizes preserving and increasing liquidity, maintains a disciplined approach to development, improves execution certainty, and protects financial flexibility while positioning the firm for long-term value creation.

Prairie Operating operates a single core operating segment focused on oil and gas development in the DJ Basin. For Q2 2026, the firm generated total revenue of $98.9 million, a 45% increase year-over-year. Oil revenue contributed $93.5 million, accounting for 94.5% of total Q2 revenue. Total production for the quarter was 2 million BOE (21,866 BOE per day), with 72% of production as liquids (50% oil), representing a 4% production increase year-over-year. For the first half of 2026, total revenue was $182.3 million, a 125% year-over-year increase, with total production of 4.1 million BOE (22,500 BOE per day), 72% liquids (49% oil).

• Commodity price risk: Natural gas pricing was negatively impacted by weak CIG market pricing in Q2 2026, resulting in a negative realized price of -$1.30 per Mcf; the firm mitigates this risk through an extensive hedging program extending through 2029
• Seasonal operating restrictions: Colorado Parks and Wildlife seasonal rules caused a planned pause in drilling activity between pads, which limited production contribution from new wells in Q2 2026; the updated guidance incorporates additional planning for these restrictions
• Capital structure risk: Remaining outstanding Series F Preferred stock carries warrant-related dilution risk, which management is actively working to address through further refinancing or redemption
• Credit facility constraint: The revised credit agreement includes a minimum production threshold that limits the pace of growth to preserve liquidity availability

Q: Leo Mariani asked if the 4-well Burnett pad is online, what initial production rates look like, and how August's 27,000 BOE per day production will trend through the end of 2026. He also asked about the minimum production threshold added to the reserve-based credit facility, the status of further Series F Preferred refinancing, and current well costs for 2-mile laterals. / A: Greg Patton responded that Burnett is still in flowback, not yet producing hydrocarbons, so its production is not included in the 27,000 BOE per day August figure. He noted production will stay around 26,000 to 28,000 BOE per day in Q3, with a small expected decline by the end of 2026. The production threshold was added as part of a credit facility modification to keep liquidity available for continued development while balancing growth pace. Management is actively working with the preferred holder on additional refinancing after multiple successful reductions to the outstanding balance, with more updates expected in Q3. Current well costs for standard 2-mile laterals are $5.2 million to $5.5 million, and $5.4 million to $5.6 million for extended-reach offset wells, with operational efficiencies like single-run drilling and smaller hole designs offsetting the incremental cost of extended reach laterals.

Q: Charles Meade asked if management is making continued progress reducing the outstanding Series F Preferred balance, and why the warrant extension is only to the end of August 2026 rather than pushing it to year-end. / A: Patton confirmed steady progress has been made: the original $148.5 million outstanding preferred balance has been reduced to $78 million as of Q2 end 2026, and the anniversary warrant coverage ratio has dropped from 1.25:1 to 0.65:1. Management is actively pursuing multiple solutions to further redeem the remaining preferred balance with the support of the preferred holder, and the refreshed Board has brought new potential approaches to the table. While a year-end extension would be simpler, management is working toward completing a deal as soon as possible rather than extending the deadline further for now.

Q: Charles Meade asked for expectations for production rates from the Burnett pad in the undrilled Hereford/Eastern DJ Basin extension area, where nearby operator Bison has recently had successful drilling results. / A: Patton responded that Bison's successful drilling in the area has already derisked the acreage adjacent to Prairie's position, and Prairie can use Bison's public production data from offset wells like Critter Creek and Jaws to model expected performance. Prairie's Burnett pad is located in the northwestern portion of this new acreage block. Initial production rates for Burnett are not yet confirmed, but management expects results that are consistent with the type curves seen from offset wells in the area.