Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 6, 2025

Prairie Operating Co.

(Exact name of registrant as specified in its charter)

Delaware

001-41895

98-0357690

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

55 Waugh Drive
Suite 400
Houston, TX		77007
(Address of principal executive offices)		(Zip Code)

(713) 424-4247

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		PROP		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement.

Bayswater Acquisition

On February 6, 2025, Prairie Operating Co. and certain of its subsidiaries (collectively, the “Company” or “Prairie”) entered into a Purchase and Sale Agreement (the “Bayswater PSA”) with Bayswater Resources, LLC, Bayswater Fund III-A, LLC, Bayswater Fund III-B, LLC, Bayswater Fund IV-A, LP, Bayswater Fund IV-B, LP, Bayswater Fund IV-Annex, LP and Bayswater Exploration & Production, LLC (collectively, “Bayswater”), pursuant to which the Company agreed to acquire certain oil and gas assets from Bayswater (the “Acquired Properties”) for a purchase price of $602.75 million, payable in cash and, subject to certain conditions described in the Bayswater PSA, shares in an amount not to exceed 5,249,639 shares of the Company's common stock, par value $0.01 per share (the “Common Stock”), calculated in accordance with the Bayswater PSA (the “Equity Consideration”).

The Bayswater PSA provides that the Company and Bayswater will enter into a registration rights agreement at closing, in substantially the form attached to the Bayswater PSA, pursuant to which, among other things, the Company will agree to register the resale of the Equity Consideration under the Securities Act of 1933, as amended (the “Securities Act”).

The Company expects the Bayswater Acquisition to close in February 2025, subject to the funding of the New Credit Agreement (as defined below) and other customary closing conditions, with an economic effective date of December 1, 2024. The Bayswater PSA contains customary representations, warranties and covenants of the Company and Bayswater for a transaction of this nature.

The foregoing description of the Bayswater PSA is not complete and is qualified in its entirety by reference to the full text of the Bayswater PSA, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Commitment Letter for New Credit Agreement

As previously announced, on December 16, 2024 the Company entered into a reserve-based credit agreement with Citibank, N.A., as administrative agent, and the financial institutions party thereto (the “Existing Credit Agreement”) with a maximum credit commitment of $1.0 billion. As of January 31, 2025, the Existing Credit Agreement had a borrowing base of $44.0 million and an aggregate elected commitment of $44.0 million, each of which were subsequently increased to $60.0 million as of February 3, 2025. As of January 31, 2025, $34.0 million of revolving borrowings and no letters of credit were outstanding under the Existing Credit Agreement, and we also had cash and cash equivalents of approximately $3.0 million. The Existing Credit Agreement is scheduled to mature on December 16, 2026.

On February 3, 2025, the Company entered into the First Amendment to the Existing Credit Agreement (the "First Amendment"). The First Amendment, among other things, increased the borrowing base and the aggregate elected commitments to $60.0 million.

In connection with the Bayswater Acquisition, on February 6, 2025 the Company entered into a Commitment Letter with Citibank, N.A. as left lead arranger and the other joint lead arrangers party thereto: Keybank Capital Markets Inc., MUFG Bank, Ltd., Truist Securities, Inc., Fifth Third Bank, National Association, First-Citizens Bank & Trust Company, UMB Bank, N.A. and Cadence Bank (collectively, the “Lead Arrangers”), pursuant to which the Company received commitments, subject to certain conditions, to amend and restate the Existing Credit Agreement (as amended and restated, the “New Credit Agreement”), to, among other things, increase the borrowing base up to $475.0 million as of the closing of the Bayswater Acquisition and extend the maturity date to a date up to four years after the closing date of the Bayswater Acquisition. The Commitment Letter also provides that the New Credit Agreement will include changes to certain provisions of the Existing Credit Agreement, subject to agreement with the Lead Arrangers, to take into account the Bayswater Acquisition. The Company expects to enter into the New Credit Agreement prior to or substantially concurrently with the closing of the Bayswater Acquisition and intends to borrow approximately $315.0 million under the New Credit Agreement to fund a portion of the purchase price of the Bayswater Acquisition. However, there can be no assurance that the Company will enter into the New Credit Agreement within the anticipated time frame, or at all.

The Commitment Letter expires on the earlier of March 15, 2025 and the termination of the Bayswater PSA. The obligations of the Lead Arrangers to provide financing under the Commitment Letter are subject to certain customary conditions.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the Bayswater Acquisition is incorporated by reference into this Item 3.02.

The securities that may be sold in the Bayswater Acquisition will be issued without registration under the Securities Act in reliance upon the exemption provided under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder as securities offered and sold only to accredited investors (as defined in Rule 501(a) of Regulation D under the Securities Act) in a transaction not involving any public offering.

Forward-Looking Statements

The information presented in this Form 8-K include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included herein, are forward-looking statements, including statements about the Company’s ability to complete and successfully finance the Bayswater Acquisition on a timely basis, if at all, the Company’s financial performance following the Bayswater Acquisition, estimates of oil, natural gas and NGLs reserves, and estimates of future oil, natural gas and NGLs production. When used herein, including any oral statements made in connection herewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on the Company’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. The Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, including the Company’s ability to satisfy the conditions to closing the Bayswater Acquisition in a timely manner or at all, the Company’s ability to successfully finance the Bayswater Acquisition, the Company’s ability to recognize the anticipated benefits of the Bayswater Acquisition, the possibility that the Company is unable to achieve expected free cash flow accretion, production levels, drilling, operational efficiencies and other anticipated benefits of the Acquired Properties within the expected time-frames or at all, and the Company’s ability to successfully integrate the Acquired Properties. There may be additional risks not currently known by the Company or that the Company currently believes are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact the Company’s expectations can be found in the Company’s periodic filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K/A filed with the SEC on March 20, 2024, and any subsequently filed Quarterly Report on Form 10-Q and Current Report on Form 8-K. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

Item 7.01 Regulation FD Disclosure.

On February 7, 2025, the Company issued a press release announcing the Bayswater Acquisition and certain related information. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished pursuant to General Instruction B.2 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act or the Exchange Act unless specifically identified therein as being incorporated therein by reference.

Item 8.01 Other Events.

The Company is also filing:

	●	the audited combined statement of revenue and direct operating expenses of the Acquired Properties as of and for the years ended December 31, 2023 and 2022, as set forth in Exhibit 99.2, which is incorporated herein by reference;

	●	the unaudited combined statement of revenue and direct operating expenses of the Acquired Properties as of and for the nine months ended September 30, 2024 and 2023, as set forth in Exhibit 99.3, which is incorporated herein by reference;

	●	its management’s discussion and analysis of results of operations of the Acquired Properties, as set forth in Exhibit 99.4, which is incorporated herein by reference;

	●	the unaudited financial statements of Nickel Road Operating LLC (“NRO”) as of and for the nine months ended September 30, 2024, as set forth as Exhibit 99.5, which are incorporated herein by reference;

	●	its management’s discussion and analysis of financial condition and results of operations of NRO, as set forth in Exhibit 99.6, which is incorporated herein by reference;

	●	the unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2024 and as of and for the year ended December 31, 2023, as set forth in Exhibit 99.7, which is incorporated herein by reference; and

	●	the report of Cawley, Gillespie & Associates, Inc., independent petroleum engineers, relating to the pro forma estimated reserves of the Company as of November 30, 2024, as set forth as Exhibit 99.8, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The audited combined statement of revenue and direct operating expenses of the Acquired Properties as of and for the years ended December 31, 2023 and 2022 is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

The unaudited combined statement of revenue and direct operating expenses of the Acquired Properties as of and for the nine months ended September 30, 2024 and 2023 is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2024 and as of and for the year ended December 31, 2023 is attached hereto as Exhibit 99.7 and is incorporated herein by reference.

(d) Exhibits

Exhibit Number		Description

10.1		Purchase and Sale Agreement, dated as of February 6, 2025, by and between Prairie Operating Co., Otter Holdings, LLC, Prairie SWD Co., LLC, Prairie Gathering I, LLC, Bayswater Resources LLC, Bayswater Fund III-A, LLC, Bayswater Fund III-B, LLC, Bayswater Fund IV-A, LP, Bayswater Fund IV-B, LP, Bayswater Fund IV-Annex, LP and Bayswater Exploration & Production, LLC.

15.1		Letter of Plante & Moran, PLLC regarding Unaudited Financial Information.

23.1		Consent of Plante & Moran, PLLC, dated February 6, 2025.

23.2		Consent of Cawley, Gillespie & Associates, Inc., dated February 3, 2025.

99.1		Press Release, dated February 7, 2025.

99.2		Audited Combined Statement of Revenue and Direct Operating Expenses of the Acquired Properties as of and for the Years Ended December 31, 2023 and 2022.

99.3		Unaudited Combined Statement of Revenue and Direct Operating Expenses of the Acquired Properties as of and for the Nine Months Ended September 30, 2024 and 2023.

99.4		Management’s Discussion and Analysis of Results of Operations of the Acquired Properties.

99.5		Unaudited Financial Statements of NRO as of and for the Nine Months Ended September 30, 2024, as set forth as Exhibit 99.4 (incorporated herein by reference from Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 27, 2024).

99.6		Management’s Discussion and Analysis of Financial Condition and Results of Operations of NRO.

99.7		Unaudited Pro Forma Condensed Combined Financial Information of the Company as of and for the Nine Months Ended September 30, 2024 and as of and for the Year Ended December 31, 2023.

99.8		Report of Cawley, Gillespie & Associates, Inc. Relating to the Estimated Pro Forma Reserves of the Company as of November 30, 2024.

104		Cover Page Interactive Date File-formatted as Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PRAIRIE OPERATING CO.

	By:	/s/ Craig Owen
	Name:	Craig Owen
	Title:	Chief Financial Officer

Date: February 7, 2025

Exhibit 10.1

Execution Version

Purchase and Sale Agreement

between

Bayswater Resources LLC

Bayswater Fund III-A, LLC

Bayswater Fund III-B, LLC

Bayswater Fund IV-A, LP

Bayswater Fund IV-B, LP

Bayswater Fund IV-Annex, LP

and

Bayswater Exploration & Production, LLC

as Sellers

and

Prairie Operating Co.

as Buyer

and

Prairie Operating Co., LLC

Otter Holdings, LLC

Prairie SWD Co., LLC

and

Prairie Gathering I, LLC

as Buyer AssetCos

dated

February 6, 2025

TABLE OF CONTENTS

		Page

Article I Purchase and Sale		1

Section 1.1	Purchase and Sale	1
Section 1.2	Assets	2
Section 1.3	Excluded Assets	3
Section 1.4	Effective Time	5

Article II Purchase Price; Adjustments		5

Section 2.1	Base Purchase Price; Cash and Equity Consideration	5
Section 2.2	Adjustments to Base Purchase Price	6
Section 2.3	Proration of Costs and Revenues	7
Section 2.4	Preliminary Settlement Statement	9
Section 2.5	Final Settlement Statement; Accounting Referee	9

Article III Buyer’s Due Diligence; Disclaimers		11

Section 3.1	Access to Records	11
Section 3.2	Access to the Assets	11
Section 3.3	Effect of Access Agreement	12
Section 3.4	Disclaimers	13

Article IV Title AND ENVIRONMENTAL Matters		14

Section 4.1	No Title Representations or Warranties	14
Section 4.2	Preferential Rights and Consents	15
Section 4.3	Tag-Along Notice	17
Section 4.4	Waiver and Remedies	17
Section 4.5	Physical Condition of the Assets	17

Article V Sellers’ Representations and Warranties		18

Section 5.1	Organization, Existence, and Qualification	18
Section 5.2	Authorization, Approval, and Enforceability	18
Section 5.3	No Conflicts	18
Section 5.4	Liability for Brokers’ Fees	19
Section 5.5	No Bankruptcy	19
Section 5.6	Litigation	19
Section 5.7	Preferential Rights to Purchase and Required Consents	19
Section 5.8	Material Contracts	19
Section 5.9	Compliance with Laws; Permits	20
Section 5.10	Imbalance Volumes	21
Section 5.11	Suspense Funds	21
Section 5.12	Environmental Matters	21
Section 5.13	Burdens	22
Section 5.14	Seller Bonds	22
Section 5.15	Tax Matters	22
Section 5.16	Capital Projects	23
Section 5.17	Non-Consenting Wells	23
Section 5.18	Payout Balances	23

TABLE OF CONTENTS

(continued)

		Page

Section 5.19	Securities Act Representations	23
Section 5.20	Plugging and Abandonment	24
Section 5.21	Condemnation	24
Section 5.22	Leases; Surface Agreements	24
Section 5.23	Wells and Equipment	24
Section 5.24	Disclosures and Schedules	25

Article VI Buyer’s and Buyer AssetCos’ Representations		26

Section 6.1	Organization, Existence, and Qualification	26
Section 6.2	Authorization, Approval, and Enforceability	26
Section 6.3	No Conflicts	27
Section 6.4	Liability for Brokers’ Fees	27
Section 6.5	Litigation	27
Section 6.6	Securities Laws, Access to Data and Information	27
Section 6.7	Debt and Equity Commitments	28
Section 6.8	Buyer SEC Documents; Financial Statements	28
Section 6.9	Capitalization	29
Section 6.10	The Equity Consideration	29
Section 6.11	No Material Change	30
Section 6.12	Buyer’s Evaluation	30

Article VII Pre-Closing Covenants		30

Section 7.1	Covenants and Agreements of Sellers	30
Section 7.2	Covenants and Agreements of Buyer and each Buyer AssetCo	32
Section 7.3	Covenants and Agreements of the Parties	33
Section 7.4	Casualty Losses	34
Section 7.5	Other Regulatory Matters	35
Section 7.6	Millennial Assets	35

Article VIII Tax Matters		36

Section 8.1	Apportionment of Asset Taxes	36
Section 8.2	True-up for Certain Asset Taxes	37
Section 8.3	Tax Payments and Tax Returns	38
Section 8.4	Refunds	38
Section 8.5	Income Taxes	38
Section 8.6	Transfer Taxes	38
Section 8.7	Allocations for Federal Income Tax Purposes	39
Section 8.8	Post-Closing Tax Matters	39

Article IX Conditions Precedent to Closing		40

Section 9.1	Sellers’ Conditions Precedent	40
Section 9.2	Buyer’s Conditions Precedent	41

Article X Right of Termination		42

Section 10.1	Termination	42
Section 10.2	Remedies	42

TABLE OF CONTENTS

(continued)

		Page

Article XI Closing		43

Section 11.1	Date of Closing	43
Section 11.2	Time and Place of Closing	43
Section 11.3	Closing Obligations	44

Article XII Post-Closing Covenants		45

Section 12.1	Records	45
Section 12.2	Name Changes	45
Section 12.3	Improper or Unintended Transfers	46
Section 12.4	Change of Operator	46
Section 12.5	Further Assurances	46
Section 12.6	Acknowledgment of Suspense Funds	46
Section 12.7	Covenant Not To Compete	46
Section 12.8	Seller Cooperation	46

Article XIII Assumption; Indemnification		47

Section 13.1	Buyer’s and Buyer AssetCos’ Assumed Liabilities	47
Section 13.2	Indemnification	47
Section 13.3	Limitation on Sellers’ Indemnity Obligations	48
Section 13.4	Effect of Knowledge of Breach of Representation or Warranty	49
Section 13.5	Exclusive Remedy	49
Section 13.6	Procedure	49
Section 13.7	Express Negligence	51
Section 13.8	No Insurance	52
Section 13.9	Reservation as to Third Parties	52
Section 13.10	Reduction in Losses	52
Section 13.11	Tax Treatment of Indemnification Payments	52
Section 13.12	Notice of Claim	52
Section 13.13	No Rescission	53
Section 13.14	No Contingent Losses	54

Article XIV Miscellaneous		54

Section 14.1	Expenses	54
Section 14.2	Notices	54
Section 14.3	Sellers’ Representative	55
Section 14.4	Amendments	55
Section 14.5	Waiver	55
Section 14.6	Assignment	56
Section 14.7	Announcements	56
Section 14.8	Counterparts	57
Section 14.9	Dispute Resolution	57
Section 14.10	Governing Law	59
Section 14.11	Entire Agreement	59
Section 14.12	Binding Effect	59
Section 14.13	No Third-Party Beneficiaries	59
Section 14.14	No Recourse	59
Section 14.15	Time of the Essence	60
Section 14.16	No Partnership; No Fiduciary Duty	60
Section 14.17	Limitation on Damages	60
Section 14.18	Other Contract Interpretation	61

iii

TABLE OF CONTENTS

(continued)

EXHIBIT LIST

Exhibit		Title
Exhibit A-1		Leases
Exhibit A-2		Wells
Exhibit A-3		Fee Mineral Interests
Exhibit A-4		Disposal System
Exhibit A-5		Material Contracts
Exhibit A-6		Excluded Units
Exhibit A-7		Field Office
Exhibit B		Form of Assignment, Bill of Sale, and Conveyance
Exhibit C		Form of Buyer’s Officer’s Certificate
Exhibit D		Form of Seller’s Officer’s Certificate
Exhibit E		Form of Seller’s Certificate of Non-Foreign Status
Exhibit F		Form of Transition Services Agreement
Exhibit G		Form of Registration Rights Agreement
Exhibit H		Form of Cooperative Development Agreement
Exhibit I		Form of Saltwater Disposal Agreement
Exhibit J		Form of Assignment and Assumption Agreement

[Remainder of page left blank.]

TABLE OF CONTENTS

(continued)

Schedule List

Schedule		Title
Schedule 1.3(i)		Excluded Assets, Properties and Contracts
Schedule 2.2(c)(3)		Asset Tax Adjustment
Schedule 2.2(c)(8)		Stout Well Adjustment
Schedule 2.3(b) – Part 1		Property Expenses: Charge Codes
Schedule 2.3(b) – Part 2		Property Expenses: Wells
Schedule 3.2(d)		Insurance
Schedule 4.2(c)		Identified Restricted Assets
Schedule 4.3		Tag-Along Allocated Value
Schedule 5.6		Litigation
Schedule 5.7		Preferential Rights to Purchase and Required Consents
Schedule 5.9		Compliance with Laws
Schedule 5.10		Imbalance Volumes
Schedule 5.11		Suspense Funds
Schedule 5.12		Environmental Matters
Schedule 5.13		Burdens
Schedule 5.14		Seller Bonds
Schedule 5.15		Tax Matters
Schedule 5.16, Part I		Capital Projects
Schedule 5.16, Part II		Pending AFEs
Schedule 5.17		Non-Consent Elections
Schedule 5.18		Payout Balances
Schedule 5.20		Plugging and Abandonment
Schedule 5.23		Wells and Equipment
Schedule 7.3(e)		Midstream Agreements
Schedule 7.6 – Part 1		Millennial Assets
Schedule 7.6 – Part 2		Millennial Purchase Price
Schedule 9.1(c)		Assignments and Novations
Schedule 12.7		Covenant Not To Compete Area
Schedule K-1		Sellers’ Knowledge Persons
Schedule K-2		Buyer’s Knowledge Persons

Purchase and Sale Agreement

This Purchase and Sale Agreement (“Agreement”), dated February 6, 2025 (the “Execution Date”), is by and among Bayswater Resources LLC, a Delaware limited liability company (“Bayswater Resources”); Bayswater Fund III-A, LLC, a Delaware limited liability company (“Bayswater Fund III-A”); Bayswater Fund III-B, LLC, a Delaware limited liability company (“Bayswater Fund III-B”); Bayswater Fund IV-A, LP, a Delaware limited partnership (“Bayswater Fund IV-A”); Bayswater Fund IV-B, LP, a Delaware limited partnership (“Bayswater Fund IV-B”); Bayswater Fund IV-Annex, LP, a Delaware limited partnership (“Bayswater Fund IV-Annex”); and Bayswater Exploration & Production, LLC, a Colorado limited liability company (“Bayswater E&P” and, together with Bayswater Resources, Bayswater Fund III-A, Bayswater Fund III-B, Bayswater Fund IV-A, Bayswater Fund IV-B, and Bayswater Fund IV-Annex, each, individually, a “Seller,” and, collectively, the “Sellers”); and Prairie Operating Co., a Delaware corporation (“Buyer”); Prairie Operating Co., LLC, a Delaware limited liability company (“Prairie OpCo”); Otter Holdings, LLC, a Delaware limited liability company (“Prairie LeaseCo”); Prairie SWD Co., LLC, a Delaware limited liability company (“Prairie DisposalCo”); and Prairie Gathering I, LLC, a Delaware limited liability company (“Prairie GathererCo,” and, together with Prairie OpCo, Prairie Lease Co, and Prairie DisposalCo, each, individually, a “Buyer AssetCo,” and, collectively, the “Buyer AssetCos”). Buyer, Buyer AssetCos, and Sellers are each, individually, a “Party,” and are, collectively, the “Parties.” Capitalized terms used in this Agreement have the meaning given such terms in Annex I to this Agreement.

RECITALS

A. Sellers desire to sell the Assets.

B. Buyer and Buyer AssetCos, collectively, desire to purchase the Assets.

C. The Parties wish to accomplish the foregoing, all under the terms and conditions of this Agreement.

AGREEMENT

In consideration of the mutual promises, covenants, and warranties contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article I

Purchase and Sale

Section 1.1 Purchase and Sale. Upon and subject to the terms and conditions set forth in this Agreement, at the Closing, Sellers shall sell, transfer, and deliver to Buyer and Buyer AssetCos, collectively, and Buyer and Buyer AssetCos, collectively, shall purchase from Sellers, the Assets.

Section 1.2 Assets. The term “Assets” means all of each Seller’s right, title, and interest in and to the following, other than the Excluded Assets:

(a) the oil and gas leases (together with any and all other right, title and interest of such Seller in and to the leasehold estates created thereby) described on Exhibit A-1 (collectively, the “Leases”), and the lands covered thereby or pooled, unitized, or communitized therewith (the “Lands”);

(b) any oil, gas, water, disposal, and/or injection wells, whether producing, operating, plugged, shut-in, or temporarily or permanently abandoned, located on, under, or within the Lands, including the wells described in Exhibit A-2 (the “Wells”);

(c) the pipelines and facilities used or held for use in connection with the Wells or other Assets, including production units, flow lines and compression and measurement facilities, pipelines, gathering, processing, and treatment systems, and all tangible personal property, equipment, fixtures, and improvements used or held for use in connection with the Wells or other Assets (the “Facilities and Equipment”);

(d) the fee mineral interests described on Exhibit A-3 (the “Fee Mineral Interests”);

(e) all rights and interests in, under or derived from all unitization and pooling agreements, declarations, and orders in effect with respect to any of the Leases, Wells, or Lands;

(f) the saltwater disposal system described in Exhibit A-4 (the “Disposal System”), together with all tangible personal property that is necessary for or used or held for use in connection with the ownership, use, operation or maintenance of the Disposal System, including any injection wells and personal property of every kind and nature, which is necessary for, used or held for use for or in connection with the disposal wells;

(g) the licenses, surface use agreements, servitudes, rights-of-way, easements, and other similar surface rights to operate the Wells, Facilities and Equipment, Disposal System, or otherwise used in connection with the Wells, Facilities and Equipment, or Disposal System (including those rights-of-way, easements, and surface use agreements described in Exhibit A-5) that are used or held for use in connection with the exploration, development, drilling for, production, gathering, treatment, handling, processing, storing, transporting, sale, or disposal of Hydrocarbons or water produced from the properties and interests described in this Section 1.2 (all of such licenses, servitudes, rights-of-way, easements, surface use agreements, and other similar surface rights are the “Surface Agreements”);

(h) all Permits that are used or held for use in connection with the exploration, development, drilling for, production, gathering, treatment, handling, processing, storing, transporting, sale, or disposal of Hydrocarbons or water produced from the properties and interests described in this Section 1.2;

(i) all Applicable Contracts, including those Applicable Contracts described in Exhibit A-5, in each case only insofar as such Applicable Contracts (1) are transferable without payment of any fee or additional consideration to a third party (unless Buyer agrees in advance in writing to pay such fee or additional consideration), or (2) relate to the properties and interests described in this Section 1.2;

(j) all geological surveys, seismic records, gravity maps, gravity meter surveys, seismic surveys and other similar geological or geophysical surveys or data covering the Properties, in each case only to the extent such data is transferable without the payment of any fee or additional consideration to a third party (unless Buyer agrees in advance in writing to pay such fee or additional consideration) or the breach of any confidentiality restrictions owed to any Person other than any Seller or its Affiliates;

(k) all (1) Hydrocarbons produced from, allocated to, or attributable to the Properties on or after the Effective Time (or the proceeds from the sale of such Hydrocarbons); (2) all Hydrocarbon Inventory as of the Effective Time in respect of which the Base Purchase Price is increased in accordance with Section 2.2(b)(2) (or the proceeds thereof as determined in accordance with Section 2.2(b)(2)); and (3) all Imbalance Volumes;

(l) the files, electronic records (as such electronic records exist in their native format as of the Execution Date), and data of such Seller that, in such Seller’s reasonable discretion, relate to the operation and maintenance of the properties and interests described in this Section 1.2 (excluding the Excluded Assets, the “Records”);

(m) all rights, claims, and causes of action (including warranty and similar claims, indemnity claims, and defenses, and any and all contract rights, claims, revenues, recoupment rights, recovery rights, accounting adjustments, mispayments, erroneous payments, or other claims of any nature in favor of any such Seller), whether arising before, on, or after the Effective Time, to the extent such rights, claims, and causes of action relate to or cover any Assumed Liabilities or Property Expenses for which Buyer or any Buyer AssetCo is responsible under the terms of this Agreement; and

(n) field office lease and related yard described in Exhibit A-7.

Section 1.3 Excluded Assets. The Assets do not include, and each Seller hereby excepts and excludes from this Agreement and the Transaction and reserves to itself, each of the following (the “Excluded Assets”):

(a) All rights, claims, and causes of action (including warranty and similar claims, indemnity claims, and defenses, and any and all contract rights, claims, revenues, recoupment rights, recovery rights, accounting adjustments, mispayments, erroneous payments, or other claims of any nature in favor of such Seller), whether arising before, on, or after the Effective Time, to the extent such rights, claims, and causes of action relate to any of such Seller’s indemnity obligations under this Agreement;

(b) any accounts receivable, trade accounts, accounts payable (other than Suspense Funds or any penalties or interest associated with the Suspense Funds), or any other receivables affecting the properties and interests described in Section 1.2 accruing or attributable to the period before the Effective Time;

(c) refunds due such Seller by a third party for any overpayment of rentals, royalties, excess royalty interests, or production payments which are (i) attributable to the Assets with respect to any period of time prior to the Effective Time and (ii) not an Assumed Liability;

(d) all corporate, financial (including consolidated financial statements), Tax, and legal records of such Seller;

(e) subject to and except as otherwise provided in Section 7.4, all contracts of insurance and contractual indemnity rights;

(f) except to the extent related to an upward adjustment to the Base Purchase Price, all Hydrocarbons from or attributable to the Assets with respect to all periods prior to the Effective Time, and all proceeds attributable thereto;

(g) all claims for refunds, credits, or similar benefits with respect to any (1) Property Expenses allocated to Sellers under Section 2.3(b) or (2) any Seller Taxes;

(h) documents prepared or received by Sellers or their Affiliates with respect to (1) lists of prospective purchasers for such transactions compiled by Sellers, (2) bids submitted by other prospective purchasers of the Assets, (3) analyses by Sellers or their Affiliates of any bids submitted by any prospective purchaser, (4) correspondence between or among Sellers, their Representatives, and any prospective purchaser other than Buyer or any Buyer AssetCo, (5) personnel records and (6) correspondence between or among Sellers or any of their Representatives with respect to any of the bids, the prospective purchasers or the transactions contemplated by this Agreement;

(i) those assets, properties, and contracts described on Schedule 1.3(i);

(j) (1) any oil and gas leases, including any Leases described on Exhibit A-1, or fee minerals interests, including any Fee Minerals Interests described on Exhibit A-3, that cover the lands described on Exhibit A-6 (the “Excluded Units”) only insofar as such leases or fee mineral interests are included in the Excluded Units, (2) with respect to any wells with a producing interval within the lands included in the Excluded Units (the “Excluded Wells”), if such Excluded Wells are producing from a pooled unit that includes leases, fee mineral interests, or lands both inside the Excluded Units and outside the Excluded Units, any oil and gas leases, including any Leases described on Exhibit A-1, or fee minerals interests, including any Fee Minerals Interests described on Exhibit A-3, insofar as such leases or fee mineral interests cover the wellbore of the Excluded Wells (the “Excluded Interests”), (3) the Excluded Wells, (4) any tangible personal property, equipment, fixtures, and improvements exclusively used or held for the exclusive use in connection with the Excluded Wells or Excluded Units, and (5) any Applicable Contract or Surface Agreement only to the extent such Applicable Contract or Surface Agreement applies to the Excluded Units, Excluded Wells, or Excluded Interests;

(k) all equipment, supplies, fixtures, personal property, or improvements, including any pipelines, tubulars, and strings, in each case that has not been charged to the joint account under any Applicable Contract and that are located in the field yard at 33153 County Road 51, Greeley, Colorado 80631;

(l) the files, records, and data relating to the Assets that are maintained by such Seller or its Affiliates (1) on such Seller’s or its Affiliate’s email systems or (2) in emails, schedules, notes, calendars, contacts, or task lists of the employees of such Seller or its Affiliates;

(m) all geological surveys, seismic records, gravity maps, gravity meter surveys, seismic surveys and other similar geological or geophysical surveys or data covering any portion of the Properties, in each case only to the extent such data is not transferable (including any such data that is only transferable, for example, upon the payment of any fee or additional consideration (unless Buyer agrees in advance in writing to pay such fee or consideration)) or the transfer of which would result in a breach of any confidentiality restrictions owed to Persons other than Seller or its Affiliates;

(n) the Seller Bonds;

(o) other than any such contracts described on Exhibit A-5, all master service agreements and all drilling contracts;

(p) overhead recovery paid or payable to such Seller or its Affiliates by any Person, other than Seller or its Affiliates, for operation of the Assets prior to Closing;

(q) any logo, service mark, copyright, trade name, domain name, phone number, or trademark of or associated with such Seller or any Affiliate of such Seller or any business of such Seller or of any Affiliate of such Seller;

(r) any assets and properties excluded under the terms of this Agreement; and

(s) all of such Seller’s rights, titles, or interests in any assets or properties that are not included in the definition of the “Assets.”

Section 1.4 Effective Time. If the Transaction is consummated in accordance with the terms and provisions hereof, possession of the Assets shall be transferred from Sellers to Buyer and Buyer AssetCos at the Closing, but certain financial benefits and obligations of the Assets shall be transferred and assumed effective as of December 1, 2024, at 12:01 a.m. Mountain Time (the “Effective Time”), as further set forth in this Agreement.

Article II

Purchase Price; Adjustments

Section 2.1 Base Purchase Price; Cash and Equity Consideration;

(a) Base Purchase Price. The unadjusted purchase price for the Assets is Six Hundred Two Million Seven Hundred Fifty Thousand U.S. Dollars (U.S. $602,750,000.00) (the “Base Purchase Price”).

(b) Cash at Closing. At Closing, Buyer shall pay to an account designated in writing by Sellers’ Representative an amount of cash equal to (1) the Closing Amount, minus (2) the Base Amount, minus (3) the Shortfall Amount, if any (such resulting amount, the “Cash Consideration”).

Section 2.2 Adjustments to Base Purchase Price. All adjustments to the Base Purchase Price shall be made according to the factors described in this Section 2.2 and without duplication.

(a) [Reserved].

(b) Upward Adjustments. The Base Purchase Price shall be adjusted upward by the following, without duplication:

(1) an amount equal to all proceeds received and retained by Buyer, any Buyer AssetCo, or any of their Affiliates for the production, transportation, gathering, processing, treating, or sale of Hydrocarbons produced from or attributable to the Assets prior to the Effective Time, excluding Hydrocarbon Inventory;

(2) an amount equal to the value of all Hydrocarbon Inventory as of the Effective Time;

(3) an amount equal to all Property Expenses attributable to periods from and after the Effective Time that are paid or borne by Sellers or any of their Affiliates;

(4) to the extent not covered in the preceding paragraph, an amount equal to the prepaid expenses (other than any Taxes) attributable to the Assets from and after the Effective Time that were paid or borne by or on behalf of Sellers or their Affiliates and that have not been incurred as of the Effective Time, including insurance premiums, lease rentals, prepaid compressor and other rental charges, prepaid rights of way and license fees, and prepaid utility charges;

(5) an amount equal to all Asset Taxes allocable to Buyer or any Buyer AssetCo in accordance with Section 8.1 that are paid or borne by Sellers or any of their Affiliates;

(6) an amount equal to the upward adjustment contemplated by Section 2.2(d), if any;

(7) an amount equal to all overhead paid or payable to Sellers or their Affiliates by another Seller or its Affiliates between the Effective Time and Closing; provided, however, that such amount shall not exceed $300,000.00 per month for any full calendar month between the Effective Time and Closing or a prorated portion of $300,000.00 for any partial calendar month between the Effective Time and Closing; and

(8) any other amount provided for in this Agreement or as may be agreed to in writing by Buyer and Sellers’ Representative.

(1) An amount equal to all proceeds received and retained by Sellers or their Affiliates from the production, transportation, gathering, processing, treating, or sale of either (x) Hydrocarbons produced from or attributable to the Assets from and after the Effective Time or (y) Hydrocarbon Inventory, and in each case net of any Property Expenses, Burdens, transportation, quality or other deductions, differentials and post-production costs and expenses (other than Taxes) borne by Sellers or any of their Affiliates;

(2) an amount equal to all Property Expenses attributable to periods before the Effective Time that are paid or borne by Buyer, any Buyer AssetCo, or any of their Affiliates to unaffiliated third Persons;

(3) an amount equal to the result of (i) all Asset Taxes allocable to Sellers in accordance with Section 8.1 that are paid or borne by Buyer, any Buyer AssetCo, or any of their Affiliates (which, for the avoidance of doubt, do not include any 2024 Oil and Gas Property Taxes that have not yet become due and payable which are borne by Sellers pursuant to Section 8.3(a)(2)) minus (ii) the amount set forth on Schedule 2.2(c)(3) (the amount on such schedule, the “Asset Tax Adjustment”);

(4) an amount equal to the Suspense Funds;

(5) any Net Casualty Loss;

(6) an amount equal to the downward adjustment contemplated by Section 2.2(d), if any;

(7) the Millennial Purchase Price, if applicable;

(8) the amount set forth on Schedule 2.2(c)(8); and

(9) any other amount provided for in this Agreement or as may be agreed to in writing by Buyer and Sellers.

(d) Imbalance Volume Adjustments. The Parties shall adjust the Base Purchase Price at Closing and in the Final Settlement Statement under Section 2.5(a) (if needed) either up (if as of the Effective Time there is a net under-production or over-delivery Imbalance Volume), or down (if as of the Effective Time there is a net over-production or under-delivery Imbalance Volume), as appropriate, by an amount equal to the per barrel weighted average sales price received by Seller or its Affiliates from the Assets for the sale of similar quality oil in November 2024 for any oil pipeline imbalances. All Imbalance Volumes generated after the Effective Time will be the responsibility of Buyer and Buyer AssetCos.

Section 2.3 Proration of Costs and Revenues. For purposes of determining the amounts of the adjustments to the Base Purchase Price provided for in Section 2.2, the principles set forth in this Section 2.3 apply.

(a) Buyer (1) is entitled to all production of Hydrocarbons from or attributable to the Properties at and after the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receivables, receipts, and credits earned with respect to the Assets at or after the Effective Time, and (2) is responsible for (and entitled to any refunds with respect to) all Property Expenses incurred (i) at and after the Effective Time, and (ii) from and after the Cut-Off Date, prior to the Effective Time as provided in Section 13.1.

(b) Sellers (1) are entitled to all Hydrocarbon production from or attributable to the Properties prior to the Effective Time (and all products and proceeds attributable thereto), and to all other income, proceeds, receivables, receipts, and credits earned with respect to the Assets prior to the Effective Time, and (2) are responsible for (and entitled to any refunds with respect to) all Property Expenses incurred (i) prior to the Effective Time, and (ii) after the Effective Time solely with respect to those Property Expenses that have the charge codes described on Schedule 2.3(b) – Part 1 and are associated with those Wells described on Schedule 2.3(b) – Part 2, in the case of clauses (i) and (ii), subject to application of the Cut-Off Date under Section 2.3(f).

(c) “Earned” and “incurred,” as used in this Agreement, shall be interpreted in accordance with GAAP and COPAS standards, except as otherwise specified in this Agreement.

(d) For purposes of allocating production (and proceeds and accounts receivable with respect thereto), under this Section 2.3, (1) liquid Hydrocarbons shall be deemed to be “from or attributable to” the Properties when they pass through the pipeline connecting into the storage facilities into which they are run and (2) gaseous Hydrocarbons (including any natural gas liquids recovered by virtue of processing such gaseous Hydrocarbons) shall be deemed to be “from or attributable to” the Properties when they pass through the royalty measurement meters, delivery point sales meters, or custody transfer meters on the gathering lines or pipelines through which they are transported (whichever meter is closest to the well).

(e) Sellers shall utilize reasonable interpolative procedures, reasonably consistent with industry practice, to arrive at an allocation of production when exact meter readings or gauging and strapping data are not available.

(f) Cut-Off Date.

(1) Such amounts that are received or paid after Closing but prior to the date of the Final Settlement Statement will be accounted for in the Final Settlement Statement. Following the Final Settlement Date, but prior to the date that is 12 months following the Closing Date (the “Cut-Off Date”), (i) if any Party receives monies belonging to any other Party under this Section 2.3, including proceeds of production, then such amounts shall, within five Business Days after receipt, be paid by such receiving Party to the proper Party, (ii) if any Party pays monies for Property Expenses which are the obligation of any other Party under this Section 2.3, then such other Party shall, within five Business Days after the applicable invoice and proof of payment of such invoice were received by such other Party, reimburse the Party which paid such Property Expenses, (iii) if a Party receives an invoice for Property Expenses which are the obligation of any other Party under this Section 2.3, such Party receiving the invoice shall promptly (but in no event later than five Business Days after such receipt) forward such invoice to the Party obligated to pay the same, and (iv) if an invoice for Property Expenses is received by a Party, which is partially an obligation of two or more Parties under this Section 2.3, then the relevant Parties shall consult with each other, and each shall promptly (but in no event later than five Business Days after such receipt) pay its portion of such Property Expenses to the obligee thereof.

(2) From and after the Cut-Off Date, (i) no Seller shall have any further obligation with respect to any Property Expenses as described in Section 2.3(b); provided, however, Sellers will continue to be entitled to any refunds with respect to any Property Expenses paid by Sellers or their Affiliates; and (ii) Buyer will be entitled to proceeds of production for the Pre-Effective Time periods, in each case which were not set forth in the Preliminary Settlement Statement or Final Settlement Statement, as applicable.

Section 2.4 Preliminary Settlement Statement. Any adjustment to the Base Purchase Price at Closing shall be set out in a settlement statement (the “Preliminary Settlement Statement”) prepared by Sellers’ Representative and submitted to Buyer no later than two Business Days prior to the Closing Date for Buyer’s review and comment (as adjusted, the “Closing Amount”). For purposes of the Preliminary Settlement Statement, Sellers’ Representative may include as an adjustment Sellers’ Representative’s good faith estimate of any accrued revenues for the period between the Effective Time and the Closing that have not yet been received by Sellers. Sellers’ Representative shall provide Buyer written wire transfer instructions for payment of the Cash Consideration to each Seller, and Sellers’ Representative and Buyer shall cooperate in good faith to settle on the contents of the Preliminary Settlement Statement, and execute the same, at the Closing. If the Sellers’ Representative and Buyer cannot agree on the Preliminary Settlement Statement prior to such time, the Preliminary Settlement Statement as presented by Sellers’ Representative will be used to adjust the Base Purchase Price at Closing. The Preliminary Settlement Statement shall set forth the Closing Amount and associated calculations. After Closing, the Base Purchase Price shall be adjusted under the Final Settlement Statement finalized under Section 2.5(a).

Section 2.5 Final Settlement Statement; Accounting Referee.

(a) Final Settlement Statement. No later than the date that is 120 days after the Closing Date, Sellers’ Representative will prepare and deliver to Buyer, in accordance with customary industry accounting practices, the final settlement statement (the “Final Settlement Statement”) setting forth (1) each adjustment or payment that was not finally determined as of the Closing, (2) the calculation of such adjustment, and (3) the final adjustments to the Base Purchase Price (the Base Purchase Price, as determined under this Section 2.5, is the “Final Purchase Price”). At the same time it delivers such Final Settlement Statement to Buyer, Sellers’ Representative shall also deliver to Buyer (or give Buyer access to) such documentation including all relevant invoices with specific references and other information reasonably requested by Buyer supporting such adjustments shown in such Final Settlement Statement. No later than 20 days after receipt of Sellers’ Representative’s proposed Final Settlement Statement, Buyer shall deliver to Sellers’ Representative a written report (with supporting documentation including all relevant invoices with specific references and other information reasonably requested by Sellers’ Representative) containing any changes that Buyer proposes to make to the final adjustments to the Base Purchase Price proposed in the Final Settlement Statement delivered by Sellers’ Representative. Any changes not so specified in such written report from Buyer shall be deemed waived and Sellers’ Representative’s determinations with respect to all such elements of the Final Settlement Statement that are not addressed specifically in such written notice from Buyer shall prevail. Buyer’s failure to deliver to Sellers’ Representative a written report detailing proposed changes to the Final Settlement Statement by the end of such 20-day period shall be deemed an acceptance by Buyer of the Final Settlement Statement as submitted by Sellers’ Representative and shall not be subject to further Dispute, audit or arbitration. If Sellers’ Representative disagrees with any changes proposed by Buyer, Sellers’ Representative and Buyer shall cooperate in good faith to resolve any such Dispute no later than 30 days after Sellers’ Representative’s delivery of the proposed Final Settlement Statement. The date upon which such Disputes are resolved or upon which the Final Purchase Price is established is the “Final Settlement Date.” If the Final Purchase Price is more than the Closing Amount, Buyer shall pay Sellers’ Representative the amount of such difference. If the Final Purchase Price is less than the Closing Amount, Sellers’ Representative shall pay to Buyer the amount of such difference. Any payment by Buyer or Sellers’ Representative under this Section 2.5(a) shall be made by wire transfer of immediately available funds within five days of the Final Settlement Date. Subject to and except for the rights and obligations of the Parties described in Section 2.5(b), Section 8.2, or Article XIII (with respect to any obligation related to Taxes), the adjustments set out in the Final Settlement Statement shall be final settlement of the Parties with respect to all matters addressed in such Final Settlement Statement.

(b) Dispute Resolution. If Sellers’ Representative and Buyer are unable to resolve a Dispute as to the Final Settlement Statement and the adjustments to Base Purchase Price set forth therein by 60 days after Sellers’ Representative delivery of the proposed Final Settlement Statement, then either Sellers’ Representative or Buyer may submit the Disputed matters to be resolved by the Denver, Colorado, office of Grant Thornton, or, if such firm is not able or willing to serve, a nationally-recognized independent accounting firm or consulting firm mutually acceptable to both Sellers’ Representative and Buyer (the “Accounting Referee”), for review and final determination by arbitration. If Sellers’ Representative and Buyer have not agreed upon a mutually acceptable alternative firm to serve as Accounting Referee within 10 Business Days of receiving notice of Grant Thornton’s unavailability, either Sellers’ Representative or Buyer may, within 10 Business Days after the end of such initial 10 Business Day period, formally apply to the Denver, Colorado, office of JAG to choose the Accounting Referee. The arbitration proceeding shall be held in Denver, Colorado, and shall be conducted in accordance with CPR Rules to the extent such rules do not conflict with the terms of this Section 2.5(b). The Federal Arbitration Act shall govern the interpretation, enforcement and proceedings under this Section 2.5(b). The Accounting Referee’s award shall be made within 30 days after submission by Sellers’ Representative or Buyer, as applicable, of the Disputed matters absent an extension of such deadline for good cause (as determined by such Accounting Referee in its sole discretion). The award of such Accounting Referee shall be final and binding upon all Parties, without right of appeal. In making its determination, the Accounting Referee shall be bound by the rules set forth in this Article II and, subject to the foregoing, may consider such other matters as in the opinion of the Accounting Referee are necessary to make a proper determination. The Accounting Referee, however, may not render an award with respect to a disputed adjustment, in each case, in excess of the highest value for such disputed adjustment as claimed by Buyer or Sellers’ Representative, as applicable, or below the lowest value for such disputed adjustment as claimed by Sellers’ Representative or Buyer, as applicable. The Accounting Referee may not otherwise award damages, interest, or penalties to Buyer or Sellers’ Representative with respect to any disputed matter. Sellers’ Representative and Buyer shall each bear their own legal fees and other costs of presenting their case to the Accounting Referee. Buyer and Sellers’ Representative shall each bear one half of the costs and expenses of the Accounting Referee. Judgment on any award of an Accounting Referee may be entered by any court having jurisdiction thereof.

Article III

Buyer’s Due Diligence; Disclaimers

Section 3.1 Access to Records. From and after the Execution Date and until the Closing, and subject to Sections 7.3(a) and 7.3(b), Sellers will make the Records available to Buyer and its Representatives electronically (on an ftp or similar site) to permit Buyer and its Representatives to perform Buyer’s due diligence review. Buyer and Buyer AssetCos acknowledge that access to the Records will be limited to electronic versions. Subject to the consent and cooperation of third Persons, Sellers will use commercially reasonable efforts to assist Buyer in Buyer’s efforts to obtain, at Buyer’s expense, such additional information from third Persons as Buyer may reasonably request in writing for the purposes of Buyer’s due diligence review. Buyer and its Representatives may inspect (and, at Buyer’s expense, make copies of) the Records and such additional information only to the extent such inspection does not violate any legal privilege of Sellers or their Affiliates or contractual commitment of Sellers to a third Person that is not an Affiliate of any Seller Indemnified Party.

Section 3.2 Access to the Assets.

(a) Access. To the extent that Sellers may do so as an operator or non-operator of the Assets, Sellers shall grant Buyer, Buyer AssetCos, and their Representatives access to the Assets during Sellers’ normal business hours so Buyer, Buyer AssetCos, and their Representatives may conduct, at Buyer’s sole risk and expense, a non-intrusive, on-site surface inspection of all or any portion of the Assets. Buyer and Buyer AssetCos shall (and shall cause Buyer’s and Buyer AssetCos’ Representatives to) give Sellers’ Representative reasonable (and in no event any less than 48 hours’) prior written notice before entering onto any of the Assets, and Sellers or their designee(s) shall have the right to accompany Buyer, Buyer AssetCos, and their Representatives whenever they are on site of the Assets. Buyer, Buyer AssetCos, and their Representatives shall not have access to, and shall not be permitted to conduct any environmental inspection with respect to, any Assets to which Sellers do not have the authority to grant access for such due diligence. Neither Buyer, Buyer AssetCos, nor their Representatives shall conduct a Phase II environmental site assessment or any sampling, boring, drilling, or other invasive investigation activities of any environmental media (all of such assessments or sampling are “Invasive Activities”) without the prior notice and written consent of Sellers’ Representative, which consent Sellers’ Representative may withhold for any or no reason in its sole and absolute discretion. If Buyer, Buyer AssetCos, or their Representatives prepares any environmental assessment or report of any Asset, Buyer and Buyer AssetCos shall keep, and shall cause such Representatives to keep, such report or assessment confidential and furnish copies thereof (including any and all drafts) to Sellers’ Representative within one week of receipt thereof by Buyer, Buyer AssetCos, or their Representatives. In connection with any on-site inspections, if any, prior to Closing, Buyer and Buyer AssetCos (1) shall comply with, and will cause their Representatives to comply with, all requirements of the operators of the Assets and all provisions of any lease agreements related to the Assets, (2) shall not materially interfere with, and will cause their Representatives not to materially interfere with, the normal operation of the Assets or Sellers’ businesses, and (3) represents that they and their Representatives are adequately insured for such activities in compliance with Section 3.2(d).

(b) Indemnity. Without limiting Buyer’s rights under Section 9.2, Section 13.2(a) or Article X, Buyer and each Buyer AssetCo waives and releases, and shall defend, indemnify, save, and hold the Seller Indemnified Parties harmless from and against any and all Losses arising out of, resulting from, or relating to the access afforded to Buyer, Buyer AssetCos and their Representatives under this Agreement or the activities of Buyer, Buyer AssetCos or their Representatives related to such access or any Invasive Activities, even if such Losses arise out of or result from, solely or in part, the sole, active, passive, concurrent, or comparative negligence, strict liability, or other fault or violation of Law of or by a member of the Seller Indemnified Parties. This Section 3.2(b) will survive the termination of this Agreement.

(c) Clean-Up. Upon completion of Buyer’s due diligence under Section 3.2(a), Buyer shall, at its sole cost and expense (1) repair all damage done to the Assets by Buyer, any Buyer AssetCo, or their Representatives in connection with their access and any Invasive Activities, (2) restore the Assets to the same or better condition in existence prior to commencement of any such access and any Invasive Activities, and (3) remove all equipment, tools, or other property brought onto the Assets by Buyer, any Buyer AssetCo, or their Representatives in connection with their access or any Invasive Activities. Any disturbance to the Assets (including the real property associated with such Assets) resulting from Buyer’s, any Buyer AssetCo’s, or their Representatives’ due diligence will be promptly corrected by Buyer. This Section 3.2(c) will survive the termination of this Agreement.

(d) Insurance. During all periods that Buyer, any Buyer AssetCo, and/or their Representatives are on the Assets, Buyer and Buyer AssetCos shall maintain, at their sole expense and with insurers reasonably satisfactory to Sellers’ Representative, policies of insurance of the types and in the amounts set forth in Schedule 3.2(d). Such coverage shall name the Seller Indemnified Parties as additional insureds and contain a waiver on the part of the insurer (by subrogation or otherwise) of all rights against the Seller Indemnified Parties. Buyer shall provide evidence of such insurance to Sellers’ Representative prior to entering upon the Assets.

Section 3.3 Effect of Access Agreement. Effective as of the Execution Date, Bayswater E&P and Buyer hereby terminate the Access Agreement dated January 16, 2025, between such Parties.

Section 3.4 Disclaimers.

(a) Except for the express representations and warranties of Sellers contained in this Agreement (or confirmed in Seller’s Certificate), the Agreement Regarding Employees and any other Transaction Document and the Special Warranty in the Assignment, Buyer and each Buyer AssetCo acknowledges and agrees that the Assets are being conveyed by Sellers to Buyer and the Buyer AssetCos without warranty of any kind, express, implied, statutory, common Law, or otherwise, and the Parties hereby expressly disclaim, waive, and release (and Buyer and Buyer AssetCos acknowledge they have not relied upon) any warranty of merchantability, condition, or safety and any warranty of fitness for a particular purpose, in each case whether express, implied, statutory, common Law, or otherwise; and, subject to the express representations and warranties of Sellers contained in this Agreement (or confirmed in Seller’s Certificate), the Agreement Regarding Employees and any other Transaction Document and the Special Warranty in the Assignment, Buyer and Buyer AssetCos accept the Assets, “as is, where is, with all faults, and without recourse.” Except for the express representations and warranties of Sellers contained in this Agreement (or confirmed in the Seller’s Certificate), the Agreement Regarding Employees and any other Transaction Document and the Special Warranty in the Assignment, all descriptions of the Wells, Facilities and Equipment, personal property, fixtures, structures, and other Assets heretofore or hereafter furnished to Buyer and Buyer AssetCos by or on behalf of Sellers have been and shall be furnished solely for Buyer’s and Buyer AssetCos’ convenience, and have not constituted and shall not constitute a representation or warranty of any kind by Sellers, and Buyer and each Buyer AssetCo acknowledges it has not relied upon any representation or warranty concerning the same. Except for the express representations and warranties of Sellers contained in this Agreement (or confirmed in Seller’s Certificate), the Agreement Regarding Employees and any other Transaction Document and the Special Warranty in the Assignment, each of Buyer and Buyer AssetCos expressly waives (and Buyer and each Buyer AssetCo acknowledges it has not relied upon) the warranty of fitness and the warranty against vices and defects, whether apparent or latent, imposed by any Law.

(b) Except for the express representations and warranties of Sellers contained in this Agreement (or confirmed in Seller’s Certificate), the Agreement Regarding Employees and any other Transaction Document and the Special Warranty in the Assignment, Sellers hereby expressly disclaim and negate (and each Buyer and Buyer AssetCos acknowledges it has not relied upon) any implied or express warranty at common Law, by statute, or otherwise relating to (1) the accuracy, completeness, or materiality of any of the Records or other information furnished with respect to this Agreement or the Transaction Documents; (2) the contents, character or nature of any report of any petroleum engineering consultant, or any engineering, geological or seismic data or interpretation relating to the Assets; (3) the existence or extent of reserves or the value of the Assets based thereon; (4) the condition or state of repair of any of the Assets; (5) the ability of the Properties to produce Hydrocarbons, including production rates, decline rates, and recompletion opportunities; (6) regulatory matters; (7) the present or future value of the anticipated income, costs, or profits, if any, to be derived from the Assets; (8) the environmental condition of the Assets; (9) any projections as to events that could or could not occur; or (10) the Tax attributes of any Assets. Any data, information, or other Records furnished by or on behalf of Sellers or any of their Affiliates, except as to any Schedule, are provided to Buyer and Buyer AssetCos as a convenience and each of Buyer’s and Buyer AssetCos’ reliance on or use of the same is at each of Buyer’s and Buyer AssetCos’ sole risk, and each of Buyer and Buyer AssetCos acknowledges it has not relied upon the same.

(c) The disclaimers and denials of warranty in this Section 3.4 also extend to any express or implied representation or warranty as to the prices each of Buyer and each Buyer AssetCo and Sellers are or will be entitled to receive from production of Hydrocarbons or other substances from the Properties (and each of Buyer and each Buyer AssetCo acknowledges it has not relied upon the same), it being acknowledged, agreed, and expressly understood that all reserve, price, and value estimates upon which each of Buyer and Buyer AssetCos has relied or is relying have been derived by the individual and independent evaluation of each of Buyer and Buyer AssetCos. Buyer and each Buyer AssetCo also stipulates, acknowledges, and agrees that reserve reports are only estimates of projected future Hydrocarbon volumes, future finding costs, and future oil and/or gas sales prices, all of which factors are inherently impossible to predict accurately even with all available data and information.

(d) Except for the express representations and warranties of Sellers in Section 5.12, Sellers have not and will not make (and each of Buyer and Buyer AssetCos acknowledges it has not relied upon) any representation or warranty regarding any matter or circumstance relating to Environmental Laws, the release of hazardous materials into the environment, or the protection of human health, safety, natural resources, or the environment, or any other environmental condition of the Assets, and nothing in this Agreement, any other Transaction Document, or otherwise shall be construed as such a representation or warranty, and subject to the express representations and warranties of Sellers in Section 5.12 and Seller’s obligations pursuant to Article XIII of this Agreement, each of Buyer and Buyer AssetCos shall be deemed to be taking the Assets “as is” and “where is” with all faults for purposes of their environmental condition, and each of Buyer and Buyer AssetCos has made or caused to be made such environmental inspections or environmental assessments as each of Buyer and Buyer AssetCos deems appropriate.

(e) The Parties hereby acknowledge that, to the extent required by Law, the disclaimers contained in this Agreement are “conspicuous” for the purposes of such Law.

Article IV

Title AND ENVIRONMENTAL Matters

Section 4.1 No Title Representations or Warranties. Except for the express representations and warranties of Sellers contained in this Agreement (or confirmed in Seller’s Certificate) and the Special Warranty in the Assignment executed at Closing, no Seller makes any warranty or representation, express, implied, statutory, common law, or otherwise, with respect to such Seller’s title to any of the Assets, and each of Buyer and Buyer AssetCos hereby acknowledges and agrees that, except as set forth in Article XIII or as otherwise expressly set forth in this Agreement or any Transaction Document, its sole remedy for any defect of title is its rights to terminate this Agreement under Section 10.1.

Section 4.2 Preferential Rights and Consents. No later than 5:00 p.m., Mountain Time, on the date that is three Business Days after the Execution Date, Sellers’ Representative shall (1) deliver notices to the applicable Persons holding Consents (other than Customary Post-Closing Consents) requesting that the holders of such Consents grant their consent to the Transaction, or (2) deliver notices to the applicable Persons required in connection with any applicable preferential rights to purchase any Assets that are triggered by the execution of this Agreement or the consummation of the Transaction, in the case of each of clauses (1) and (2), in accordance with the applicable agreements and contracts creating such Consents or preferential rights to purchase, as applicable. Sellers’ Representative shall use commercially reasonable efforts to obtain all Consents (other than Customary Post-Closing Consents) prior to Closing. Prior to Closing, if Buyer discovers other Assets affected by Consents (other than Customary Post-Closing Consents) or preferential rights to purchase, Buyer shall notify Sellers’ Representative as soon as practicable thereafter, and Sellers’ Representative shall use commercially reasonable efforts to obtain such Consents and/or to give the notices required in connection with such preferential rights to purchase prior to Closing. For the avoidance of doubt, “commercially reasonable efforts,” as used in this Section 4.2, shall not include the payment of consideration by any Seller or the assumption by any Seller of any other obligation, liability, or Loss.

(a) Consents. If a Required Consent has not been obtained as of Closing or any other Consent is denied in writing with respect to any Asset (a “Restricted Asset”), then (1) the Restricted Asset shall be excluded from the Assets at Closing, (2) the Base Purchase Price will not be adjusted, and (3) Sellers’ Representative shall use commercially reasonable efforts (and Buyer shall assist Sellers’ Representative as reasonably requested) to obtain the Consent of the third Persons required under this Agreement. With respect to any such Restricted Asset as to which the necessary approval or consent for the assignment or transfer to Buyer or any Buyer AssetCo is obtained or waived by the holder thereof following Closing, then promptly (but in no event later than 15 Business Days) after the date such approval or consent is obtained or waived (i) for no additional consideration, the Parties shall execute and deliver all documents and take all such actions with respect to such Restricted Asset required under Section 11.3, with any necessary conforming changes, (ii) such Restricted Assets shall be deemed to constitute Assets under this Agreement for all purposes and shall not constitute Excluded Assets, and (iii) the “Closing Date” with respect to such Restricted Assets shall be deemed to be the date such Assets were conveyed from Sellers to Buyer or the applicable Buyer AssetCo in accordance with this Section 4.2(a). Notwithstanding the foregoing obligations of any Seller under this Section 4.2(a), no Seller shall be required to renew or extend any Restricted Asset at the end of its primary term; provided, however, if such Seller elects to renew or extend any such Restricted Asset, such Seller shall deliver notice of that renewal or extension to Buyer and Buyer shall promptly reimburse such Seller for all costs (including brokerage costs) to renew or extend such Restricted Asset.

(b) Treatment of Restricted Assets Prior to Obtaining Required Consents. Except as set forth in Section 4.2(c), with respect to any Restricted Asset, the Parties acknowledge that promptly following Closing and until the date the applicable Required Consent has been obtained or waived, each Party shall use commercially reasonable efforts to enter into such arrangements (such as subleasing, sublicensing, or subcontracting) to provide to Buyer and the applicable Buyer AssetCo the economic and, to the extent permitted under applicable Law, operational equivalent of the transfer of all Restricted Assets and all Assumed Liabilities to Buyer and the applicable Buyer AssetCo as of the Closing and the performance by Buyer or the applicable Buyer AssetCo of its obligations with respect thereto. Buyer shall, as agent or subcontractor for Sellers, pay, perform, and discharge fully the liabilities and obligations of Sellers under and in respect of the applicable Restricted Asset from and after the Closing Date. To the extent permitted under applicable Law, each Seller shall, at Buyer’s expense, hold in trust for and pay to Buyer promptly upon receipt thereof, all Restricted Assets and all income, proceeds, and other monies received by such Seller to the extent related to the Restricted Assets in connection with the arrangements under this Section 4.2(b). Each Seller shall be permitted to set off against such amounts all direct costs associated with the retention and maintenance of the Restricted Assets. No Seller that holds title to any of the Restricted Assets shall take any unreasonable actions that shall cause the title to such Restricted Assets to revert until the applicable Required Consent is obtained or waived.

(c) Treatment of Identified Restricted Assets Prior to Obtaining Consent. With respect to those Assets described on Schedule 4.2(c) (such Assets, the “Identified Restricted Assets”), the Parties acknowledge that until the date the applicable Required Consent associated with such Identified Restricted Assets has been obtained or waived, Buyer will contract operate the Identified Restricted Assets under the terms of the Transition Services Agreement.

(d) Preferential Purchase Rights.

(1) If any preferential right to purchase any portion of the Assets is exercised and the sale to such preferential right holder closes prior to the Closing Date, then that portion of the Assets affected by such preferential right to purchase shall be excluded from the Assets at Closing and deemed to constitute an Excluded Asset, and the Base Purchase Price shall be adjusted downward by an amount equal to fair market value of such affected Assets.

(2) If (i) any preferential right to purchase any portion of the Assets is not exercised prior to the Closing Date, or if such right is exercised prior to the Closing Date but the closing of such sale will not happen prior to the Closing Date, then in each such case Sellers shall convey such Asset to Buyer or the applicable Buyer AssetCo at Closing without any adjustment to the Base Purchase Price and such Asset shall constitute a part of the Assets for all purposes hereunder; or (ii) a preferential right to purchase is not discovered prior to Closing and the affected Asset is conveyed to Buyer or the applicable Buyer AssetCo at Closing, and the preferential right to purchase is exercised after Closing, then in each such case Buyer or such Buyer AssetCo shall convey such affected Asset to the party exercising such right on the same terms and conditions under which Sellers conveyed such Asset to Buyer or the applicable Buyer AssetCo (with the purchase price being the fair market value for the affected Asset) as adjusted under Section 2.2 and such other adjustments as may be permitted to reflect any other post-Closing expenditures Buyer or any Buyer AssetCo has made with respect to such Asset, and Buyer or the applicable Buyer AssetCo shall retain all amounts paid by the party exercising such preferential right to purchase. Promptly following the Closing Date, Buyer shall prepare, execute, and deliver a form of purchase and sale agreement and conveyance of such Asset to such exercising party, such purchase and sale agreement and conveyance to be in form and substance as provided in this Agreement.

(e) Creditworthiness. If the holder of any Consent (including the Required Consents and the holders of the Consents in those Applicable Contracts described on Schedule 7.3(e)) requires that the Buyer deliver proof of its creditworthiness for the approval of such Consent, or, with respect to the novation of those Applicable Contracts on Schedule 7.3(e), the approval of such novation, then Buyer shall deliver to such holder any reasonably requested credit information or other information concerning the business, operations, property, condition (financial or otherwise), prospects, or creditworthiness of Buyer.

Section 4.3 Tag-Along Notice. Buyer and each Buyer AssetCo acknowledges the existence of the “tag-along rights” conferred upon Incline Niobrara Partners, LP, Incline Energy, LLC, and Incline Operating, LLC (together, the “Incline Parties”) under Section 11.a. of that certain Letter Agreement, dated December 1, 2020, by and among the Incline Parties, Bayswater Resources, Bayswater Fund IV-A, Bayswater Fund IV-B, and Bayswater E&P (the “Letter Agreement”). The Parties hereby acknowledge that (a) Sellers’ Representative shall promptly notify the Incline Parties in writing of the disposition of Assets contemplated by this Agreement in accordance with the Letter Agreement under a notice reasonably acceptable to Buyer, (b) the Incline Parties may elect to sell their respective interests in the Assets that are covered by the Letter Agreement (collectively, the “Tag Interests”) in accordance with the Letter Agreement, and (c) if Closing shall occur under this Agreement, and the Incline Parties timely elect to sell their respective Tag Interests in accordance with the terms of the Letter Agreement, then Buyer shall purchase the Tag Interests on the same terms and conditions as provided in this Agreement with respect to such Tag Interests in accordance with the Letter Agreement. The Parties agree that the portion of the Base Purchase Price attributable to the Tag Interests is as set forth on Schedule 4.3.

Section 4.4 Waiver and Remedies. Buyer and each Buyer AssetCo waives for all purposes all objections, claims, and Losses associated with the environmental condition of the Assets, except for any rights pursuant to Article XIII of this Agreement or any other rights specifically enumerated in this Agreement or any Transaction Document, including those rights set forth in Article IX, Article X and Article XI of this Agreement.

Section 4.5 Physical Condition of the Assets.

(a) Buyer’s and Buyer AssetCos’ Acknowledgement of Use of the Assets. Each of Buyer and Buyer AssetCos acknowledges that the Assets have been used for the exploration, development, and production of Hydrocarbons and possibly for the storage and disposal of Hydrocarbons, produced water, Hazardous Substances, or other substances related to standard oil field operations. Physical changes in, on, or under the Assets or adjacent lands may have occurred as a result of such uses. The Assets also may contain previously plugged and abandoned wells, buried pipelines, buried pits, treating, dehydration, water treating and water transportation equipment, storage tanks, and other equipment, whether or not of a similar nature, the locations of which may not now be known by Sellers or be readily apparent by a physical inspection of the Assets.

(b) Asbestos, NORM or TE-NORM, and other Hazardous Substances. Each of Buyer and Buyer AssetCos acknowledges that some equipment located on the Assets may contain asbestos, NORM or TE-NORM, and/or Hazardous Substances. In this regard, each of Buyer and Buyer AssetCos expressly understands that NORM or TE-NORM may affix or attach itself to the inside of wells (including the Wells), materials, pipes, facilities, and equipment as scale or in other forms, and that wells (including the Wells), materials, pipes, facilities, and equipment located on the Assets may contain NORM or TE-NORM; and NORM or TE-NORM-containing material and other wastes or Hazardous Substances may have been buried, come in contact with the soil, or otherwise been disposed of on or under the Assets. Each of Buyer and Buyer AssetCos also expressly understands that special procedures may be required for the removal and disposal of asbestos, NORM or TE-NORM, and/or Hazardous Substances from the Assets where any may be found.

Article V

Sellers’ Representations and Warranties

Each Seller, severally and not jointly, makes the following representations and warranties on behalf of itself and no other Seller:

Section 5.1 Organization, Existence, and Qualification. Such Seller is duly organized, validly existing and in good standing under the laws of its state of formation and is qualified to conduct business in each state in which its ownership of assets or operations requires such qualification.

Section 5.2 Authorization, Approval, and Enforceability. Such Seller has the requisite power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and perform its obligations under this Agreement and the other Transaction Documents to which it is a party. The execution, delivery, and performance by such Seller of this Agreement and the other Transaction Documents to which such Seller is a party and the Transaction have been duly and validly authorized by all necessary action on the part of such Seller. This Agreement and the Agreement Regarding Employees has been (and all other Transaction Documents to which such Seller is a party and all other documents required under this Agreement to be executed and delivered by such Seller at Closing will be) duly executed and delivered by such Seller, and this Agreement and the Agreement Regarding Employees constitutes, and at Closing the other Transaction Documents to which such Seller is or will be a party will constitute, the legal, valid, and binding obligations of such Seller, enforceable in accordance with their terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium, and other Laws for the protection of creditors, as well as to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at Law.

Section 5.3 No Conflicts. Except for (i) the Consents and approvals and waivers from third Persons contemplated in Section 4.2, and (ii) all Customary Post-Closing Consents, the execution, delivery, and performance of this Agreement by such Seller will not (a) violate any provision of such Seller’s governing documents, (b) create a lien or encumbrance (other than a Permitted Encumbrance) on the Assets or trigger an outstanding security interest in or right to buy any of the Assets that will remain in existence after Closing, (c) violate or be in conflict with any agreement or instrument to which such Seller is a party and which affects the Assets, or (d) violate or be in conflict with any judgment, decree, or order applicable to such Seller as a party in interest or any Law applicable to such Seller or any of the Assets, in each case, except for any matters as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

Section 5.4 Liability for Brokers’ Fees. Such Seller has not incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the Transaction for which either Buyer or Buyer AssetCos shall have any responsibility whatsoever.

Section 5.5 No Bankruptcy. There are no bankruptcy proceedings pending, being contemplated by, or, to any Seller’s Knowledge, threatened against such Seller.

Section 5.6 Litigation. Except as set forth on Schedule 5.6, there are no material actions, suits, proceedings, claims, or investigations by any person, entity, administrative agency, or Governmental Authority pending or, to such Seller’s Knowledge, threatened in writing, against such Seller and affecting the Assets.

Section 5.7 Preferential Rights to Purchase and Required Consents. Schedule 5.7 describes (a) the preferential rights to purchase affecting the Assets, and (b) the Required Consents, in each case of clauses (a) and (b), that are required with respect to, or are applicable to, the transfer of the Assets in connection with the Transaction.

Section 5.8 Material Contracts.

(a) Except for (x) the Leases, (w) any Surface Agreement, (y) any joint operating agreements, unit agreements, pooling agreements, or pooling orders or (z) any instrument creating or evidencing an interest in the Assets or any real or immovable property related to or used in connection with the operations of any Assets, Exhibit A-5 sets forth all Applicable Contracts of the type described below (the “Material Contracts”):

(1) any Applicable Contract that can reasonably be expected to involve payments or proceeds in excess of $250,000.00 during the current year or any subsequent fiscal year (including any such agreements for the sale, gathering, processing, exchange, storage, or transportation of production, or otherwise relating to the marketing of production from the Assets of such Seller);

(2) other than office equipment leased in the ordinary course of such Seller’s businesses, any agreement to sell, lease, farmout, exchange, or otherwise dispose of all or any part of the Assets, respectively, from and after the Effective Time, but excluding rights of reassignment upon intent to abandon an Asset and excluding sales, in the ordinary course of such Seller’s businesses, of any Hydrocarbons or obsolete inventory and equipment;

(3) any Applicable Contract that contains a non-competition agreement or restriction or any agreement that purports to restrict, limit, or prohibit the manner in which, or the locations in which such Seller or any of its Affiliates conducts business, including any area of mutual interest agreements;

(4) any Applicable Contract containing a take-or-pay, advance payment, or prepayment provision;

(5) any Applicable Contract between such Seller, on the one hand, and any Affiliate of such Seller or any other Seller or any Affiliate of such other Seller, on the other hand;

(6) any agreements for the sale, exchange, gathering, marketing, processing and/or transportation of Hydrocarbons with a term exceeding 30 days;

(7) any agreement whereby the sole purpose of such agreement is for such Seller to provide indemnification with respect to the Assets;

(8) any agreement pursuant to which any Seller has granted any Person a right of first refusal, a preemptive right of purchase, or other option to acquire any Asset;

(9) any agreement containing any minimum drilling commitments, minimum volume commitments, or acreage or volume dedications;

(10) any agreement or contract securing indebtedness for borrowed money that will be binding on Buyer, Buyer AssetCo, or the Assets after Closing; and

(11) any agreement that constitutes a material modification in respect of any of the foregoing.

(b) Such Seller is not in, and such Seller has not received, a written notice of a material breach or material default of the terms of the Material Contracts; and to such Seller’s Knowledge, no other Person who is a party to any Material Contract is in material breach or material default of any of the terms of the Material Contracts. To such Seller’s Knowledge, no event has occurred, which after notice or lapse of time or both, would constitute a material default by such Seller to any Material Contract.

(c) Each Seller has made, and, prior to the Closing Date, will continue to make, available to Buyer for inspection a true, correct and complete copy of each Material Contract (including all amendments and modifications thereto).

(d) Except with respect to the breach of any maintenance of uniform interest clauses, such Seller is not in, and such Seller has not received, a written notice of a material breach or material default of the terms of any Applicable Contract that is a joint operating agreement; and to such Seller’s Knowledge, no other Person who is a party to any such joint operating is in material breach or material default of any of the terms of such joint operating agreement. To such Seller’s Knowledge, no event has occurred, which after notice or lapse of time or both, would constitute a material default by such Seller to any Applicable Contract that is a joint operating agreement.

Section 5.9 Compliance with Laws; Permits. Except as disclosed on Schedule 5.9:

(a) such Seller’s Seller-Operated Properties and the operation by such Seller of the Seller-Operated Properties are in compliance in all material respects with the provisions and requirements of all Laws (excluding Environmental Laws, which are addressed exclusively in Section 5.12 and Article IV, and Taxes, which are addressed exclusively in Section 5.15) of all Governmental Authorities having jurisdiction with respect to the Seller-Operated Properties or the ownership, operation, development, maintenance, or use thereof, and such Seller has not received a written notice of any breach or noncompliance with respect to such provisions and requirements of all such Laws;

(b) (1) such Seller has all material Permits required to own and, with respect to such Seller’s Seller-Operated Properties, to operate, such Seller’s Seller-Operated Properties; (2) all such material Permits are in full force and effect and there are no material uncured violations of such Permits; and (3) no Seller has received written notice from a Governmental Authority of any uncured material violation under any such Permit; and

Section 5.10 Imbalance Volumes. Except as set forth on Schedule 5.10, there are no Imbalance Volumes attributable to the Assets as of the date set forth on Schedule 5.10.

Section 5.11 Suspense Funds. Except as described in Schedule 5.11, and as of the date set forth on such Schedule, neither such Seller nor such Seller’s Affiliates holds (in escrow or otherwise) any Suspense Funds.

Section 5.12 Environmental Matters. Except as described in Schedule 5.12:

(a) Such Seller’s Seller-Operated Properties and the operation by such Seller of the Seller-Operated Properties, and to such Seller’s Knowledge any other Property, are in compliance in all material respects with the provisions and requirements of all Environmental Laws, including holding and complying in all material respects with all Permits required under applicable Environmental Laws for the conduct of such Seller’s business at the Seller-Operated Properties and, to such Seller’s Knowledge at any other Property (“Environmental Permits”) and, to such Seller’s Knowledge, there are no facts, circumstances or conditions that would reasonably be expected to result in early termination, cancellation, suspension, revocation or material adverse modification of any such Environmental Permits.

(b) In the last three years, and except for such matters that have been resolved, there has been no Release of Hazardous Substances by such Seller, and to such Seller’s Knowledge by any other Person, at the Seller-Operated Properties in violation of Environmental Laws or that would reasonably be expected to require further investigation or material remediation pursuant to Environmental Laws.

(c) To Seller’s Knowledge, there are no facts, conditions or circumstances related to environmental matters concerning the Properties that could result in material Liabilities pursuant to Environmental Laws.

(d) With regard to the Seller-Operated Properties, or to Seller’s Knowledge any other Property, in the last three years, and except for such matters that have been resolved, such Seller has not received any written notice, report or other information regarding any actual or alleged material violation of Environmental Laws or Losses pursuant to Environmental Laws and Seller is not aware of any facts, conditions or circumstances that would reasonably be expected to give rise to such a notice, report or other information.

(e) Such Seller has not entered into any agreements, consents, orders, decrees, judgments, or other directives of or with any Governmental Authorities based on any prior violations of Environmental Laws that relate to the future use of any of the Properties and that require any action to bring such Property into compliance with Environmental Laws.

(f) Such Seller has made available true, correct and complete copies of all material and final, or the most recent draft if no final version has been issued, environmental reports, inspections, investigations, studies, audits, tests, reviews or other analysis, evaluations, assessments, sample results, and all material correspondence or other material documentation related to compliance with Environmental Laws or Losses under Environmental Laws, in each case as relates to the Properties.

(g) The representations and warranties set forth in this Section 5.12 are the sole and exclusive representations and warranties regarding Environmental Laws, Hazardous Substances and other environmental matters.

Section 5.13 Burdens. Except as set forth in Schedule 5.13 or for such items that are being held in suspense (including the Suspense Funds), such Seller has properly and timely paid in all material respects all Burdens due by such Seller with respect to the Properties and such Seller has received no written notice from any Third Party alleging nonpayment of any such Burden due by such Seller with respect to the Properties.

Section 5.14 Seller Bonds. Schedule 5.14 sets forth all of the Seller Bonds as of the Execution Date.

Section 5.15 Tax Matters. Except as set forth in Schedule 5.15:

(a) all material Asset Taxes that are or have become due (including all Oil and Gas Property Taxes assessed for the 2023 tax year, payable in 2024 but based on 2022 production) have been timely and properly paid in full except for Asset Taxes that are being contested in good faith by appropriate proceedings identified on Schedule 5.15;

(b) there are no liens on any of the Assets attributable to unpaid Taxes except for Permitted Encumbrances;

(c) all material Tax Returns required to be filed by such Seller with respect to Asset Taxes have been timely and properly filed and are correct and complete in all material respects;

(d) no Asset is subject to any Tax partnership agreement or provisions, or is otherwise treated, or required to be treated, as held in an arrangement, requiring a partnership Income Tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code or any similar state statute;

(e) there is not currently in effect any extension or waiver of any statute of limitations of any jurisdiction regarding the assessment or collection of any Asset Taxes or the filing of any Tax Return related to Asset Taxes;

(f) there are no audits or administrative or judicial proceedings by any Governmental Authority pending or in progress relating to or in connection with any Asset Taxes, and such Seller has not received written notice of any pending or threatened claim from any Governmental Authority for assessment of any Asset Taxes which remains outstanding; and

(g) no written claim has been made by any Governmental Authority in a jurisdiction in which such Seller does not file a Tax Return with respect to Asset Taxes that such Seller is or may be subject to taxation or required to file Tax Returns with respect to Asset Taxes in that jurisdiction.

Section 5.16 Capital Projects.

(a) As of the Execution Date, Schedule 5.16, Part I is a list and description of all Wells or other capital projects in progress and associated costs or estimates thereof to the extent such costs or estimates as of the Execution Date exceed $250,000 per Well or project, net to such Seller’s interest (the “Capital Projects”).

(b) As of the Execution Date, and except for any Assets listed on Schedule 5.16, Part I, Schedule 5.16, Part II is a list and description of all other authorizations for expenditures or other current commitments relating to the Assets to drill or rework wells, build gathering systems, or for other capital expenditures (“AFEs”) that, in each case, are outstanding as of the Execution Date and will be binding upon Buyer, Buyer AssetCos, or the Properties after the Effective Time, other than any AFEs outstanding as of the Execution Date that do not exceed $250,000, net to such Seller’s interest.

(c) Each Party acknowledges and agrees that the amounts shown on Schedule 5.16 with respect to all Capital Projects and AFEs are estimates.

Section 5.17 Non-Consenting Wells. As of the Execution Date, Schedule 5.17 sets forth each Well in which such Seller has elected (or is deemed to have elected) to be a nonconsenting party.

Section 5.18 Payout Balances. As of the Execution Date, Schedule 5.18 sets forth the status of any payout balance, as of the dates shown on Schedule 5.18, for each Seller-Operated Property that is a horizontal Well that is subject to a reversion or other adjustment at some level of cost recovery or payout.

Section 5.19 Securities Act Representations. Each Seller is an “accredited investor” (as defined in Rule 501(a) of Regulation D of the Securities Act) and is aware that the issuance of the Equity Consideration is being made in reliance on a private placement exemption from registration under the Securities Act. Each Seller is acquiring the Equity Consideration for its own account, and not with a view toward, or for sale in connection with, any distribution thereof in violation of any federal or state securities or “blue sky” law, or with any present intention of distributing or selling the Equity Consideration in violation of the Securities Act. Each Seller has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Equity Consideration and is capable of bearing the economic risks of such investment. Each Seller has been provided a reasonable opportunity to undertake and has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision regarding the Equity Consideration. Each Seller has been advised that the Equity Consideration has not been registered under the Securities Act, or any non-U.S. securities, state securities or “blue sky” Laws, and therefore cannot be resold unless registered under such laws or unless an exemption from registration thereunder is available.

Section 5.20 Plugging and Abandonment. Except as disclosed in Schedule 5.20, with regard to the Seller-Operated Properties, and, to such Seller’s Knowledge, with regard to any Assets operated by Third Parties:

(a) there are no Wells that the operator of such Well currently is obligated by applicable Law to plug and abandon;

(b) there are no Wells in which such Seller has an interest that are subject to exceptions to a requirement to plug and abandon issued by a Governmental Authority having jurisdiction over the applicable Lease or Fee Mineral Interest;

(d) there are no Wells in which such Seller has an interest that have been plugged and abandoned but have not been plugged in accordance, in all material respects, with all applicable requirements of each Governmental Authority having jurisdiction over the Assets.

Section 5.21 Condemnation. There is no actual or, to such Seller’s Knowledge, threatened, taking (whether permanent, temporary, whole, or partial) of any part of the Assets by reason of condemnation or the threat of condemnation.

Section 5.22 Leases; Surface Agreements. Except as set forth in Schedule 5.13, such Seller is not in material breach or default under any Lease or Surface Agreement and such Seller has not received any written notice of breach or default under any Lease or Surface Agreement, which breach or default has not been fully cured or otherwise fully resolved. To Seller’s Knowledge, there are no conditions or circumstances that reasonably could be expected to lead to claims by lessors of termination or cancellation of Leases or Surface Agreements.

Section 5.23 Wells and Equipment. Except as set forth on Schedule 5.23, with respect to the Seller-Operated Properties, and, to such Seller’s Knowledge, with respect to any Assets operated by Third Parties, (a) all Wells and Facilities and Equipment that are part of the Assets are in a state of repair adequate to maintain normal operations in accordance with past practices, ordinary wear and tear excepted, and (b) the Wells do not contain junk, fish, or other mechanical obstructions that have materially impeded or interfered with production, recompletions, or stimulations. No portion of the Disposal System is located on any land not covered by a Surface Agreement, Lease or Fee Mineral Interest.

Section 5.24 Disclosures and Schedules.

(a) Effect of Disclosures. The mere inclusion of an item on a Schedule shall not be deemed an admission (1) that such item represents a material exception or material fact, event or circumstance or that such item has had, would have or would reasonably be expected to have, a Material Adverse Effect; (2) that such item is otherwise in any way material to Sellers or the Assets and/or the operation of the Assets; or (3) of liability under any applicable Law, to Buyer, any Buyer AssetCo, or to any third party, but, in each case, rather is intended only to qualify the representations, warranties and covenants in this Agreement and to set forth other information required by the Agreement. The disclosure of any item, matter or document on a Schedule shall not imply any representation, warranty or undertaking not expressly given in this Agreement nor shall such disclosure be taken as extending the scope of any of the representations and warranties set forth in this Agreement. Likewise, the inclusion of a matter on a Schedule in relation to a representation or warranty shall not be deemed an indication that such matter necessarily would, or may, breach such representation or warranty absent its inclusion on such Schedule. Matters reflected in the Schedules are not necessarily limited to matters required by this Agreement to be reflected in the Schedules, and neither the specification of any dollar amount in any warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Schedules is intended to imply that such amount, or a higher or lower amount, or the item so included, or any other item, is or is not material, and no Party shall use the specification of any such amount or the inclusion of any such item in any dispute or controversy between or among the Parties as to whether any obligation, item or matter not described herein or included in the Schedules is or is not material for purposes of this Agreement or the transactions contemplated hereby. The information set forth on the Schedules or Exhibits shall not be used as the sole basis for interpreting the terms “material”, “materially”, “materiality”, “Material Adverse Effect”, or any similar qualification in this Agreement. Neither the specification of any item or matter in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Schedules is intended to imply that such item or matter, or another item or matter, is or is not in the ordinary course of business, and no Party shall use the specification or the inclusion of any such item or matter in any dispute or controversy between or among the Parties as to whether any obligation, item or matter described or not described herein or included or not included in the Schedules is or is not in the ordinary course of business for purposes of this Agreement.

(b) Effect of Schedules. All Section headings in the Schedules correspond to the Sections of this Agreement and are included for reference only; provided, however, that information provided in any Section of the Schedules shall constitute disclosure for purposes of each Section of this Agreement where such information is relevant.

(1) With respect to the representations and warranties of each Seller contained in this Agreement, such Seller may, by written notice to Buyer and Buyer AssetCos, supplement or modify the Schedules at any time no later than two Business Days prior to the Closing Date to reflect any matters that arise from circumstances first occurring after the Execution Date and that would have been required to be disclosed on one or more Schedules if such matter was in existence on the Execution Date; provided, that each Seller’s ability to update Schedules does not include any matters that arose as a result of any breach of any Seller’s obligations or covenants set forth in Article VII; provided, further, that any update provided by any Seller pursuant to this Section 5.24(c) shall be disregarded for purposes of determining whether a Closing condition set forth in Section 9.2 has been satisfied.

(2) For all purposes of this Agreement, including for purposes of determining whether the conditions set forth in Section 9.2 have been satisfied, all matters disclosed pursuant to any such update shall be disregarded, and the Schedules to this Agreement shall be deemed to include only that information contained therein on the Execution Date; provided, that if Closing shall occur, (i) if the matters disclosed in any such update(s), individually or in the aggregate, cause Buyer’s conditions to Closing set forth in this Agreement to not be satisfied, but Buyer nonetheless agrees to proceed with the Closing, then the matters disclosed pursuant to any such update(s) which caused Buyer’s conditions to Closing set forth in this Agreement not to be satisfied shall be waived, and Buyer shall not be entitled to make any claim with respect thereto pursuant to the terms of this Agreement, or (ii) if the matters disclosed in any such update(s), individually or in the aggregate, do not cause Buyer’s conditions to Closing set forth in this Agreement to not be satisfied and any such matter occurred prior to the Execution Date, Buyer shall be entitled to make any claim with respect thereto pursuant to the terms of this Agreement, including with respect to indemnification under Section 13.2(a).

Article VI

Buyer’s and Buyer AssetCos’ Representations

Buyer and Buyer AssetCos’, jointly and severally, make the following representations and warranties:

Section 6.1 Organization, Existence, and Qualification. Buyer is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Prairie OpCo is a limited liability company duly registered, validly existing and in good standing under the Laws of the State of Delaware. Prairie LeaseCo is a limited liability company duly registered, validly existing and in good standing under the Laws of the State of Delaware. Prairie DisposalCo is a limited liability company duly registered, validly existing and in good standing under the Laws of the State of Delaware. Prairie GathererCo is a limited liability company duly registered, validly existing and in good standing under the Laws of the State of Delaware. Each of Buyer and Buyer AssetCo is qualified to conduct business in Colorado and each other jurisdiction where failure to be so qualified could materially adversely affect its properties or assets, the consummation of the Transaction, or the Assets following the consummation of the Transaction.

Section 6.2 Authorization, Approval, and Enforceability. Buyer and each Buyer AssetCo has the requisite power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and perform its obligations under this Agreement and the other Transaction Documents to which it is a party. The execution, delivery, and performance by Buyer and each Buyer AssetCo of this Agreement and the other Transaction Documents to which it is a party and the Transaction have been duly and validly authorized by all necessary action on the part of Buyer or such Buyer AssetCo, as applicable. This Agreement and the Agreement Regarding Employees has been (and all other Transaction Documents to which Buyer or any Buyer AssetCo is a party and all other documents required under this Agreement to be executed and delivered by each Buyer and Buyer AssetCo at Closing will be) duly executed and delivered by Buyer and such Buyer AssetCo, and this Agreement and the Agreement Regarding Employees constitutes, and at Closing the other Transaction Documents to which Buyer or such Buyer AssetCo is or will be a party and such other documents will constitute, the legal, valid, and binding obligations of Buyer and each Buyer AssetCo, as applicable, enforceable in accordance with their terms, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium, and other Laws for the protection of creditors, as well as to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at Law.

Section 6.3 No Conflicts. The execution, delivery and performance of this Agreement by Buyer and each Buyer AssetCo will not (a) violate any provision of Buyer’s or any Buyer AssetCo’s, as applicable, governing documents, (b) violate or be in conflict with any provision of any agreement or instrument to which Buyer or any Buyer AssetCo is a party, (c) violate or be in conflict with any judgment, decree, or order applicable to Buyer or any Buyer AssetCo as a party in interest or any Law applicable to Buyer or such Buyer AssetCo, or (d) create a lien or encumbrance (other than a Permitted Encumbrance) on Buyer’s or any Buyer AssetCo’s assets or trigger an outstanding security interest in or right to buy any of Buyer’s or any Buyer AssetCo’s assets, in each case, except for any matters as would not, individually or in the aggregate, reasonably be expected to adversely affect Buyer’s or any Buyer AssetCo’s ability to consummate the Transaction and perform its obligations under this Agreement and the other Transaction Documents to which it is or will be a party, or that individually or in the aggregate, have or would reasonably be expected to result in a Material Adverse Effect. As of Closing, Buyer and each Buyer AssetCo, as applicable, meets the requirements of applicable Law to hold any Leases issued by any Governmental Authorities and to become operator of the Assets. There are no consents or other restrictions on assignment, including requirements for consents from third Persons to any assignment, in each case, that Buyer or any Buyer AssetCo is required to obtain in connection with the Transaction by Buyer or any Buyer AssetCo.

Section 6.4 Liability for Brokers’ Fees. Neither Buyer nor any Buyer AssetCo has incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the Transaction for which any Seller shall have any responsibility whatsoever.

Section 6.5 Litigation. There are no actions, suits, proceedings, claims, or investigations by any person, entity, administrative agency, or Governmental Authority pending or, to Buyer’s Knowledge, threatened in writing against Buyer or any Buyer AssetCo before any Governmental Authority that are reasonably likely to (i) have a Material Adverse Effect on the Buyer or any Buyer AssetCo or (ii) adversely affect Buyer’s or any Buyer AssetCo’s ability to (a) consummate the Transaction or (b) assume the Assumed Liabilities.

Section 6.6 Securities Laws, Access to Data and Information. Buyer and each Buyer AssetCo acknowledges that the Assets are or may be deemed to be “securities” under the Securities Act, and certain applicable state securities or “blue sky” Laws and that resale thereof is or may therefore be subject to the registration requirements of such acts. The Assets are being acquired solely for Buyer’s or any Buyer AssetCo’s own account for the purpose of investment and not with a view to resale, distribution, or granting a participation therein in violation of any securities Laws. Buyer and each Buyer AssetCo is an “accredited investor,” as such term is defined in Rule 501(a) of Regulation D of the Securities Act, and is familiar with the Assets and is a knowledgeable, experienced, and sophisticated investor in the oil and gas business. Buyer and each Buyer AssetCo understands and accepts the risks and absence of liquidity inherent in ownership of the Assets. Buyer and each Buyer AssetCo has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment in the Assets.

Section 6.7 Debt and Equity Commitments. Buyer has delivered to Sellers’ Representative true and complete copies of the executed commitment letter, dated as of the date hereof, among Buyer and the financial institution party thereto (including all exhibits, schedules, and annexes thereto) (as may be amended or modified in accordance with the terms hereof, the “Commitment Letter”), under which the financial institutions party thereto have committed, subject to the terms and conditions set forth therein, to lend the amounts set forth therein (the “Debt Financing”) for the purposes of funding the Transaction contemplated by this Agreement, and related fees and expenses and the refinancing of certain outstanding indebtedness of the Buyer. As of the date hereof, the Commitment Letter is in full force and effect and constitutes the legal, valid, and binding obligation of Buyer and each of the other parties thereto. Prior to the date hereof, the commitments contained in the Commitment Letter have not been withdrawn or rescinded in any respect (and no party thereto has indicated an intent to so withdraw or rescind) or otherwise amended or modified in any respect. As of the date hereof, Buyer is not in breach of any of the terms or conditions set forth in the Commitment Letter and no event has occurred which, with or without notice, lapse of time or both, could reasonably be expected to constitute a breach by Buyer or failure by Buyer to satisfy a condition precedent set forth therein. As of the date hereof, Buyer has fully paid any and all commitment fees or other fees on the dates and to the extent required by the Commitment Letter. There are no conditions precedent or other contingencies relating to the funding of the full amount of the proceeds of the Debt Financing except as stated in the Commitment Letter. The aggregate proceeds contemplated by the Commitment Letter, together with available cash on hand of Buyer, shall be sufficient to enable Buyer to pay the Cash Consideration and consummate the Transaction contemplated by this Agreement.

Section 6.8 Buyer SEC Documents; Financial Statements. Buyer has filed or furnished with the U.S. Securities and Exchange Commission (the “SEC”) all reports, schedules, forms, statements and other documents (including exhibits) required to be filed or furnished by it under the Exchange Act or the Securities Act since the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (all such documents collectively, the “Buyer SEC Documents”). The Buyer SEC Documents at the time filed with or furnished to the SEC (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and (c) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. The consolidated financial statements of Buyer, and the related notes thereto, included in the Buyer SEC Documents at the time filed or furnished to the SEC (i) were prepared in accordance with GAAP applied on a consistent basis during the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC) and (ii) fairly presented (subject, in the case of unaudited statements, to normal, recurring and year-end audit adjustments and the absence of footnote disclosure) in all material respects the consolidated financial position of the business of Buyer and its consolidated subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended. The pro forma financial information and the related notes thereto included in the Buyer SEC Documents have been prepared in accordance with the applicable requirements of the Securities Act and the Exchange Act, as applicable.

Section 6.9 Capitalization. The authorized capital stock of Buyer is as set forth in the Buyer SEC Documents. As of the Execution Date, (a) 26,248,199 shares of Buyer common stock were issued and outstanding, (b) 5,981.7 shares of preferred stock of Buyer were issued and outstanding, and (c) 5,627,028 shares of common stock were authorized and available for issuance under the existing equity incentive plans described in the Buyer SEC Documents (the “Equity Compensation Plans”). All the outstanding shares of capital stock of Buyer have been duly authorized and validly issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Buyer SEC Documents and with respect to this Agreement and any equity securities issued by Buyer in connection with financing the Transaction, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in Buyer or any of its subsidiaries, nor any Contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of Buyer, any such convertible or exchangeable securities or any such rights, warrants or options, except for awards granted from time to time under the Equity Compensation Plans; the capital stock of Buyer conforms in all material respects to the description thereof contained in the Buyer SEC Documents; and all the outstanding shares of capital stock or other equity interests of each of Buyer’s subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned directly or indirectly by Buyer, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party, except for liens, charges, encumbrances, security interests, restrictions on voting or transfer or other claims disclosed in the Buyer SEC Documents.

Section 6.10 The Equity Consideration. The Equity Consideration to be issued by Buyer hereunder has been duly authorized and, when issued and delivered as contemplated by Section 2.1(c), will be duly and validly issued, fully paid, and nonassessable. The Equity Consideration will conform to the descriptions thereof in the Buyer SEC Documents as filed on or prior to the Execution Date. The issuance of the Equity Consideration is not, and will not be, subject to any preemptive or similar rights.

Section 6.11 No Material Change. Since the date Buyer’s most recent quarterly report, (a) there has not been any change in the capital stock or other equity interest (other than the issuance of shares of common stock upon exercise of options described as outstanding in, and grants, exercises, forfeitures, withholdings and similar ordinary course changes relating to awards under the Equity Compensation Plans), pursuant to the conversion of Series D preferred stock, or the Standby Equity Purchase Agreement, all as previously disclosed in the Buyer’s SEC Documents)change in short-term debt or long-term indebtedness for borrowed money of the Buyer, any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Buyer on any class of capital stock, or any Material Adverse Effect, or any development involving a prospective Material Adverse Effect, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Buyer and its subsidiaries taken as a whole; (b) none of the Buyer or any of its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business), other than any agreement contemplated by the Transaction, that is material to the Buyer and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Buyer and its subsidiaries taken as a whole; and (c) neither the Buyer nor any of its subsidiaries has sustained any loss or interference with its business that is material to the Buyer and its subsidiaries taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or Governmental Authority, except in each case of the foregoing clauses (a), (b), and (c), as otherwise disclosed in the Buyer SEC Documents (and in the case of clause (c), as filed on or prior to the Execution Date).

Section 6.12 Buyer’s Evaluation. Buyer is experienced and knowledgeable in the oil and gas business and is aware of its risks. Buyer acknowledges and agrees that no Seller makes representations or warranties, express, implied, statutory, or otherwise, or written or oral, as to Assets, the accuracy or completeness of the Background Materials or any other information relating to the Assets furnished or to be furnished to Buyer or its Representatives by or on behalf of the Sellers, including any estimate of the value of the Assets or reserves or any projections as to future events.

Article VII

Pre-Closing Covenants

Section 7.1 Covenants and Agreements of Sellers.

(a) Operations Prior to Closing. Except (x) as consented to in writing by Buyer or provided for in this Agreement and (y) as necessary to respond to or address any emergency health and safety measures, from the Execution Date to Closing, each Seller will (i) operate its Assets in a good and workmanlike manner reasonably consistent with past practices and in compliance in all material respects with applicable Laws and the terms of the Leases and the Applicable Contracts, and (ii) maintain all books and records of such Seller consistent with past practices and in accordance with generally accepted accounting principles. Subject to Section 7.1(b), from the Execution Date to the Closing Date, each Seller will pay or cause to be paid its proportionate share of all costs and expenses incurred in connection with operation of its Assets, and each Seller will notify Buyer of any ongoing activities and major capital expenditures in excess of $250,000 per activity (net to Sellers’ interest) conducted on the Assets; provided, however, except as prohibited under Section 7.1(b), each Seller may make any election it desires with respect to such expenditures without the prior consent of Buyer.

(b) Negative Covenants on Operations. Except for (y) those matters set forth in the Interim Period Operating Plan or (z) unless a Seller obtains the prior written consent of Buyer to act otherwise, which consent may not be unreasonably withheld, delayed, or conditioned, such Seller will use good faith efforts within the constraints of the applicable operating agreements and other Applicable Contracts not to:

(1) except for (y) Capital Projects and AFEs as described on Part I or Part II of Schedule 5.16, all of which are deemed to be approved, or (z) other than with respect to any Seller-Operated Properties, elections to participate or not participate in the drilling, completing, testing, equipping, plugging and abandoning, or any other operation typically proposed under an industry-standard joint or unit operating agreement, all of which each Seller may make in its sole and exclusive discretion, approve any operations on the Assets anticipated to cost the owner of the Assets more than $250,000 per operation or activity, net to such Seller’s interest (excepting emergency operations required under presently existing contractual obligations and operations necessary to avoid material monetary penalty or forfeiture provisions of any Applicable Contract or order of any Governmental Authority, all of which will be deemed to be approved, provided such Seller promptly notifies Buyer of any emergency operation or operation necessary to avoid monetary penalty or forfeiture excepted in this Agreement);

(2) convey, dispose of, or otherwise encumber all or any material part of the Assets (other than replacement of equipment, other asset retirement obligations, or sale of Hydrocarbons in the regular course of business);

(3) let lapse any of Sellers’ insurance now in force with respect to the Assets;

(4) modify or terminate any Material Contract, Surface Agreement or Lease or enter into any contract which would constitute a Material Contract, Surface Agreement, or Lease (other than any Leases entered into under Section 7.1(c)) if such contract was entered into as of the Execution Date; or

(5) waive, release, assign, settle, or compromise any claim, action, or proceeding relating to the Assets, other than waivers, releases, assignments, settlements, or compromises that involve only the payment of monetary damages not in excess of $250,000 individually or in the aggregate (excluding amounts to be paid under insurance policies).

(c) Ongoing Leasing Activity. Buyer and each Buyer AssetCo acknowledges that Sellers have an ongoing lease acquisition program and intend, at and after the Execution Date, to acquire additional leases, each of which will be deemed Leases under this Agreement. Sellers may acquire any such Leases without the prior consent of Buyer, and the lease acquisition costs (including lease bonuses, brokers’ fees, and other similar or related costs) associated therewith are Property Expenses; provided, however, Sellers’ Representative must obtain Buyer’s prior written consent, which consent will not be unreasonably withheld, conditioned, or delayed, to acquire any such Leases if Sellers’ Representative believes, acting reasonably, that the lease acquisition costs associated with such Leases will exceed $250,000.

(d) Financing Cooperation. Prior to the Closing Date, the Sellers shall, and shall cause their subsidiaries to, and shall use commercially reasonable efforts to cause their and their respective officers, employees, advisors and other representatives and affiliates to, use commercially reasonable efforts to provide, at the Buyer’s sole cost and expense, such assistance and cooperation as the Buyer may reasonably request in connection with obtaining the Debt Financing on the terms and conditions described in or contemplated by the Commitment Letter or any registered or unregistered equity financing (the “Equity Financing”), including by using such commercially reasonable efforts in furtherance of the following (in each case, subject to applicable confidentiality obligations): (1) as promptly as reasonably practicable, furnishing the Buyer, its affiliates and the actual and prospective Financing Sources with information in Sellers’ reasonable control and reasonably requested by the Buyer or the Financing Sources and required in connection with the Commitment Letter, (2) cooperating with the Financing Sources’ reasonable due diligence investigation and evaluation of the Assets, (3) facilitating the releases of liens on or over the Assets on or after the Closing, (4) providing financial information, lease operating statements, and any applicable reserve report or reserve information and other similar information relating to the Assets in Sellers’ reasonable control and reasonably requested by the Buyer and all reasonably requested updates thereto, (5) providing information in Sellers’ reasonable control and reasonably requested by the Buyer for their preparation of materials for bank information memoranda, offering memoranda, prospectuses and documents, marketing materials and similar documents required in connection with any Debt Financing or equity financing (including customary authorization letters required in connection therewith) (each of the foregoing, an “Offering Document”), provided that Sellers shall not be required to assume any liability with respect to the content of any Offering Document, (6) requesting the independent auditors and reserve engineer of the Sellers to provide reasonable assistance to the Buyer, consistent with their professional practice, including by participating in due diligence sessions (if reasonably requested by Buyer), to provide their consent to use of their audit reports or reserve reports, as applicable, relating to the Assets (if applicable) on customary terms and to deliver (x) in the case of all financial information related to the Assets reasonably requested to be included in any offering document, customary “comfort” letters (including “negative assurance” comfort and change period comfort) and (y) in the case of a reserve report (and any update thereto) a customary reserve engineer letter, as applicable, covering items reasonably requested by Buyer in any Offering Document; and (7) with respect to financial information and data in respect of the Assets, assisting Buyer with the preparation of pro forma financial information and pro forma financial statements of the Buyer and its Subsidiaries to the extent required by SEC rules and regulations or necessary or reasonably requested by the Buyer or the Financing Sources, it being agreed that the Sellers will not be required to actually prepare any such pro forma financial information or pro forma financial statements or provide any information or assistance relating to (A) the proposed debt and equity capitalization or any assumed interest rates, dividends (if any) and fees and expenses relating to such debt or equity capitalization, (B) any post-closing or pro forma cost savings, synergies, capitalization, ownership or other pro forma adjustments desired to be incorporated into any information used in connection with the Debt Financing or any equity offering or (C) any financial information related to Buyer or any of its Subsidiaries, and shall not be required to assume any liability with respect to the content of such financial statements or information.

Section 7.2 Covenants and Agreements of Buyer and each Buyer AssetCo.

(a) Replacement Bonding.

(1) Bonding. Buyer and each Buyer AssetCo acknowledges that none of the Seller Bonds are transferable to Buyer or any Buyer AssetCo under this Agreement. On or before the Closing Date, Buyer shall obtain, or cause to be obtained in the name of Buyer or the applicable Buyer AssetCo, such surety instruments, bonds, letters of credit, or guarantees, to the extent such instruments are necessary to permit, as of Closing, (i) the release or return of the Seller Bonds, and (ii) Buyer or an applicable Buyer AssetCo to be named as operator of any Seller-Operated Properties.

(2) Delivery of Evidence of Bonds. At or prior to Closing, Buyer shall deliver to Sellers’ Representative evidence of the posting of surety instruments, bonds, letters of credit, or guarantees with the applicable Governmental Authority meeting the requirements of such Governmental Authority to own and operate the Assets or evidence that such bonds, letters of credit, or guarantees that Buyer has previously posted with such Governmental Authorities are adequate to secure the release of the Seller Bonds.

(b) Debt and Equity Financing. Buyer shall use its reasonable best efforts to cause the financing contemplated by the Commitment Letter, subject to the terms and conditions set forth therein, to be available at the Closing; provided, however, that if funds in the amounts set forth in the Commitment Letter become unavailable to Buyer on the terms and conditions set forth therein, Buyer shall use its reasonable best efforts to obtain the funds necessary to consummate the Transaction on substantially similar terms and conditions as set forth in the Commitment Letter.

Section 7.3 Covenants and Agreements of the Parties.

(a) Confidentiality. Effective upon Closing, the Mutual Confidentiality Agreement, dated December 27, 2024, by and between Buyer and Bayswater Management Company LP (the “Confidentiality Agreement”) will be automatically deemed terminated. Notwithstanding anything to the contrary in the Confidentiality Agreement, and only to the extent reasonably required by such Sections, until Closing (1) any Seller may disclose the existence of this Agreement and the identity of the Buyer to comply with Section 4.2, and (2) the Parties may disclose the existence of this Agreement and the identities of the Parties to comply with Section 7.3(e). Effective as of Closing, and for a period of two years following the Closing Date, and except as required by Law or rule (including a rule of any stock exchange), each Party and each of their Affiliates, and its and their Representatives shall hold in strict confidence the terms of this Agreement.

(b) Injunctive Relief. The Parties agree that each Party will not have an adequate remedy at Law if the other Party violates any of the terms of Section 7.3(a). In such event, each Party will have the right, in addition to any other right it may have, to obtain injunctive relief to restrain any breach or threatened breach of the terms of Section 7.3(a), and/or to seek specific performance of such terms.

(c) Communication Between the Parties. If prior to Closing a Party obtains Knowledge that the other Party is in breach of any of its covenants, representations, or warranties under this Agreement, such Party shall promptly inform the other Party of such breach and the Party alleged to be in breach may attempt to remedy or cure such breach prior to Closing.

(d) Employees and Non-Solicitation.

(1) Except as provided in the Agreement Regarding Employees and as set forth in Section 7.3(d)(2), for a period beginning on the Execution Date and ending on the date that is 12 months after the Closing Date, Buyer and each Buyer AssetCo shall not, and shall cause their Affiliates and its and their Representatives to not, directly or indirectly, in any capacity and either separately, jointly or in association with others, solicit, induce, or attempt to induce, on behalf of Buyer, any Buyer AssetCo, or any other Person, any individual who is an employee or contractor of any Seller or its Affiliates as of the Execution Date or Closing Date (a “Seller Employee”) to leave their employment or terminate their engagement with any Seller or its Affiliates. Notwithstanding the foregoing restrictions in this Section 7.3(d), Buyer, each Buyer AssetCo, and their Affiliates and its and their Representatives shall not be precluded from (i) soliciting or hiring Seller Employees six months after the later of (x) the date of termination of their employment or engagement with Seller or its Affiliates, as applicable, and (y) the last date on which such Seller Employee receives severance or other termination payments from any Seller or its Affiliates, as applicable, or (ii) conducting general solicitations for employment or other services contained in a newspaper, other periodical, or on the internet.

(2) Prior to the Closing Date, and pursuant to the Agreement Regarding Employees, Sellers shall make available to Buyer certain Seller Employees associated with the Assets and Buyer shall make offers of employment to such Seller Employees as Buyer requires to operate the Assets. Buyer and Sellers shall work together in good faith to negotiate any transition services agreements or employee-related agreements as necessary.

(e) Midstream Agreements. As to each of the Applicable Contracts described on Schedule 7.3(e) (the “Midstream Agreements”), from the Execution Date until Closing, Sellers and Buyer shall, and each Seller shall cause its Affiliates to, use their commercially reasonable efforts to obtain any Consents to assignment required under the Midstream Agreements. In connection with such efforts, the Parties hereby acknowledge that for the purposes of Buyer’s obligations under this Section 7.3(e), “commercially reasonable efforts” shall include Buyer agreeing to post with respect to the Midstream Agreements any reasonable credit support reasonably requested in writing to be posted by the counterparties to the Midstream Agreements.

Section 7.4 Casualty Losses. Prior to Closing, if a portion of the Assets is damaged or destroyed by fire, vandalism, theft, or other casualty, which in each case is beyond the reasonable control of Seller, or is taken in condemnation or under right of eminent domain (“Casualty Loss”), the Parties shall nevertheless proceed to Closing; provided that, if and only to the extent that the resulting Losses from such Casualty Losses exceed $500,000 in the aggregate, net to the interest of Sellers, the Base Purchase Price shall be reduced under Section 2.2(c)(5) by the cost to replace or repair such Asset as reasonably estimated by Sellers up to the fair market value thereof (the net reduction being the “Net Casualty Loss”), subject to clause (a) of the immediately-succeeding sentence. Sellers, at their sole option, may elect to (a) cure such Casualty Loss by replacing (at Sellers’ expense and without charge therefor under Section 2.2) any personal property that is the subject of a Casualty Loss with equipment of similar grade and utility; if Sellers elect to so cure the Casualty Loss, Buyer shall purchase the affected Asset at Closing without any reduction to the Base Purchase Price, (b) subject to Buyer’s consent, assign the affected Assets to Buyer at Closing without any reduction to the Base Purchase Price and indemnify Buyer with respect to such Casualty Loss, or (c) subject to Buyer’s consent, assign the affected Assets to Buyer at Closing without any reduction to the Base Purchase Price and pay to Buyer all insurance or indemnification proceeds recovered in connection with such Casualty Loss. Without limiting clause (c) of the preceding sentence, Sellers shall retain all rights to insurance, condemnation awards, and other claims against third Persons with respect to the Casualty Loss except to the extent the Parties otherwise agree in writing.

Section 7.5 Other Regulatory Matters. (a) Sellers, Buyer, and each Buyer AssetCo shall (and shall cause their respective Affiliates to) use commercially reasonable efforts to make, in a timely manner, all required filings (if any) with, prepare applications to, and conduct negotiations with Governmental Authorities as required to consummate the Transaction, (b) each Party shall, to the extent permitted under applicable Law, reasonably cooperate with and use commercially reasonable efforts to assist the other with respect to such filings, applications and negotiations, and (c) Buyer shall bear the cost of all filing or application fees payable to any Governmental Authority with respect to the Transaction, regardless of whether Buyer, any Buyer AssetCo, any Seller, or any Affiliate of any of them is required to make the payment.

Section 7.6 Millennial Assets. Buyer and each Buyer AssetCo acknowledges that, as of the Execution Date, one or more Sellers are currently discussing with Millennial a potential transaction (such potential transaction, the “Millennial Transaction”) whereby one or more of the Sellers would acquire those assets and properties described on Schedule 7.6 – Part 1 (such assets and properties, the “Millennial Assets”) from Millennial. At Closing, the following will occur with respect to the Millennial Assets:

(a) If closing of the Millennial Transaction occurs on or before Closing, then the Millennial Assets will be (1) included in the Assignment and (2) be deemed to be Assets for all purposes of this Agreement and there will be no adjustment to the Base Purchase Price under Section 2.2(c)(7).

(b) If closing of the Millennial Transaction does not occur on or before Closing, then (1) the Base Purchase Price will be reduced at Closing under Section 2.2(c)(7) by the amount set forth on Schedule 7.6 – Part 2 (such amount, the “Millennial Purchase Price”), (2) the Millennial Assets will be deemed Excluded Assets, (3) Buyer and Sellers’ Representative shall enter into an escrow agreement, in form and substance reasonably acceptable, with the Escrow Agent (the “Escrow Agreement”), and (4) Buyer shall deposit the Millennial Purchase Price with the Escrow Agent to be held in escrow pursuant to the Escrow Agreement. At and after Closing the Parties will proceed as follows:

(1) If, after Closing but on or before 45 days after Closing (such date, the “Millennial Deadline”), the applicable Sellers close the Millennial Transaction, then the Parties will promptly (but in any event within five Business Days) proceed to a closing of the Millennial Assets. At such closing, (i) the applicable Sellers will deliver the Millennial Assets to Buyer or the applicable Buyer AssetCo, as of the Effective Time, using a form of assignment substantially similar to the Assignment, and (ii) Buyer and Sellers’ Representative will execute joint written instructions pursuant to the Escrow Agreement directing the Escrow Agent to release the Millennial Purchase Price to the Sellers’ Representative. Further, effective as of such closing, (A) the Millennial Assets will be deemed to be Assets for all purposes of this Agreement, (B) the Base Purchase Price will be deemed to include the Millennial Purchase Price, (C) there will be no adjustment to the Base Purchase Price under Section 2.2(c)(7), and (D) any adjustments to the Base Purchase Price on account of the Millennial Assets being included as part of the Assets will be included as part of the Final Settlement Statement.

(2) If the applicable Sellers do not close the Millennial Transaction by the Millennial Deadline, then (i) the Millennial Assets will remain Excluded Assets, and (ii) Buyer and Sellers’ Representative will execute joint written instructions pursuant to the Escrow Agreement directing the Escrow Agent to release the Millennial Purchase Price to Buyer.

Article VIII

Tax Matters

Section 8.1 Apportionment of Asset Taxes.

(a) Property Taxes.

(1) Due to the fact that the assessed value for Oil and Gas Property Taxes is based on the value of production for the period prior to the period of assessment, Oil and Gas Property Taxes shall be apportioned between the Parties in accordance with the relative ownership period during which the underlying production of Hydrocarbons occurred upon which such applicable Oil and Gas Property Taxes is based with liability for such Taxes allocated to Sellers for Oil and Gas Property Taxes relating to pre-Effective Time production of Hydrocarbons and to Buyer for Oil and Gas Property Taxes relating to post-Effective Time production of Hydrocarbons. For example, all Oil and Gas Property Taxes assessed for the 2023 tax year, payable in 2024 but based on 2022 production, and all Oil and Gas Property Taxes assessed for the 2024 tax year, payable in 2025 but based on 2023 production, shall be allocated entirely to Sellers, and Oil and Gas Property Taxes assessed for the 2025 tax year, payable in 2026 but based on 2024 production, shall be allocated between Sellers and Buyer in accordance with their proportionate ownership periods during 2024 before and after the Effective Time.

(2) Liability for Other Property Taxes or other Asset Taxes (other than Oil and Gas Property Taxes) imposed on a periodic basis shall be allocated to Sellers for all periods (and portions thereof) ending prior to the Effective Time and to Buyer for all periods (and portions thereof) beginning at or after the Effective Time as described further in this Section 8.1(a)(2). Other Property Taxes or other Asset Taxes (other than Oil and Gas Property Taxes) imposed on a periodic basis with respect to any tax period that includes, but does not end at, the Effective Time, shall be allocated between the portion of such Tax period ending prior to the Effective Time and the portion of such Tax period beginning at or after the Effective Time by prorating each such Property Tax based on the number of days in the applicable Tax period that occur before the day on which the Effective Time occurs, on the one hand (which shall be Sellers’ responsibility), and the number of days in such Tax period that occur on and after the day on which the Effective Time occurs, on the other hand (which shall be Buyer’s responsibility).

(b) Severance Taxes. Liability for Severance Taxes or other Asset Taxes that are attributable to the severance or production of Hydrocarbons (including Oil and Gas Property Taxes as further described in Section 8.1(a)(1)) shall be allocated based on severance or production occurring before the Effective Time (which shall be Sellers’ responsibility) and from and after the Effective Time (which shall be Buyer’s responsibility). Liability for Severance Taxes or other Asset Taxes that are based upon or related to sales or receipts or imposed on a transactional basis (other than Asset Taxes described in the immediately preceding sentence) shall be allocated based on transactions giving rise to such Asset Taxes occurring before the Effective Time (which shall be Sellers’ responsibility) and from and after the Effective Time (which shall be Buyer’s responsibility).

Section 8.2 True-up for Certain Asset Taxes.

(a) To the extent the actual amount of an Asset Tax is not determinable at the time an adjustment to the Base Purchase Price is to be made under Section 2.2, (1) the Parties shall utilize the most recent information available in estimating the amount of such Asset Tax for purposes of such adjustment, and (2) upon the later determination of the actual amount of such Asset Tax, timely payments will be made from one Party to another Party to the extent necessary to cause each Party to bear the amount of such Asset Tax that is allocable to such Party under Section 8.1.

(b) No later than 10 days prior to the due date for payment of the 2025 Oil and Gas Property Taxes, Sellers’ Representative and Buyer shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver (1) the Asset Tax Adjustment to the applicable Governmental Authority to be applied against any 2025 Oil and Gas Property Tax then due; and (2) any interest earned on the Asset Tax Adjustment to Buyer. If the Escrow Agent is unable (or unwilling) to make such wire transfer or is otherwise unable to pay the applicable Governmental Authority directly, then Sellers’ Representative and Buyer shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver the Asset Tax Adjustment (plus any interest earned on the Asset Tax Adjustment) to Buyer, and Buyer will promptly (but in any event no later than two Business Days after receipt) pay the Asset Tax Adjustment to the applicable Governmental Authority to be applied against payment of any 2025 Oil and Gas Property Tax. If either Sellers’ Representative or Buyer has reason to believe, based on reasonable, publicly available evidence, that the other Party intends to dissolve or otherwise windup prior to the payment of the 2025 Oil and Gas Property Tax, such Party will send written notice to the other Party referencing its concern and including supporting documentation and, within two Business Days of receipt of such written notice, Sellers’ Representative and Buyer shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver the Asset Tax Adjustment (plus any interest earned on the Asset Tax Adjustment) to the notifying Party and such Party shall pay the Asset Tax Adjustment to the applicable Governmental Authority to be applied against payment of any 2025 Oil and Gas Property Tax.

Section 8.3 Tax Payments and Tax Returns. Except as required by applicable Laws, (a) Sellers shall be responsible for timely remitting all (1) Asset Taxes due prior to the Closing Date (including all Oil and Gas Property Taxes assessed for the 2023 tax year, payable in 2024 but based on 2022 production), and (2) all 2024 Oil and Gas Property Taxes, in each case, to the applicable Governmental Authority, (b) Buyer shall be (1) except for any 2024 Oil and Gas Property Taxes, responsible for timely remitting all Asset Taxes due on or after the Closing Date with respect to periods beginning prior to the Closing Date (subject, in each case, to Buyer’s right to reimbursement by Sellers under Section 8.2) to the applicable Governmental Authority and (2) refunding any amounts withheld from any Person that are in excess of the amounts actually due from such Person with respect to such Asset Taxes, (c) Sellers shall prepare and timely file any Tax Return for Asset Taxes required to be paid by Sellers pursuant to clause (a) above and (d) Buyer shall prepare and timely file any Tax Return for Asset Taxes required to be paid by Buyer pursuant to clause (b) above. Each Party shall prepare all such Tax Returns described in this Section 8.3 on a basis consistent with past practice except to the extent otherwise required by applicable Laws. Each Party shall provide the other Party with a copy of any Tax Return required to be filed by such Party pursuant to this Section 8.3 for such other Party’s review at least 10 days prior to the due date for the filing of such Tax Return (or within a commercially reasonable period after the end of the relevant Tax period, if such Tax Return is required to be filed less than 10 days after the close of such Tax period), and the filing Party shall consider in good faith all reasonable comments of the other Party provided to such filing Party at least five Business Days in advance of the due date for the filing of such Tax Return. The Parties agree that (y) this Section 8.3 is intended to solely address the timing and manner in which certain Asset Tax Returns are filed and the Asset Taxes shown thereon are paid to the applicable Governmental Authority, and (z) nothing in this Section 8.3 shall be interpreted as altering the manner in which Asset Taxes are allocated to and economically borne by the Parties (other than any penalties, interest, or additions to tax attributable to any Party’s breach of its obligations under this Section 8.3 which shall be borne by the breaching Party).

Section 8.4 Refunds. Buyer shall be entitled to all rights to any refunds of Asset Taxes allocable to Buyer under Section 8.1 regardless of when received. Sellers shall be entitled to all rights to any refunds of Asset Taxes allocable to Sellers under Section 8.1, regardless of when received. If a Party or its Affiliate receives a refund to which another Party is entitled under this Section 8.4, such receiving Party shall forward to the other Party the amount of such refund within 30 days after such refund is received, net of any reasonable costs or expenses (including Taxes) incurred by such receiving Party in procuring such refund.

Section 8.5 Income Taxes. Sellers shall retain responsibility for, and shall bear and pay, all Income Taxes incurred by or imposed on each Seller, their direct or indirect owners or Affiliates, or any combined, unitary, or consolidated group of which any of the foregoing is or was a member, and no such Taxes shall be taken into account as adjustments to the Base Purchase Price under Section 2.2.

Section 8.6 Transfer Taxes. All Transfer Taxes shall be borne and paid by Buyer. All Tax Returns with respect to Transfer Taxes shall be timely filed by the Party responsible for such filing under applicable Law. If required by applicable Law, Sellers shall, in accordance with applicable Law, calculate and remit any sales or similar Taxes that are required to be paid as a result of the transfer of the Assets to Buyer, and Buyer shall promptly reimburse Sellers therefor. The Parties shall cooperate with one another in the preparation of any Tax Returns and other related documentation with respect to such Transfer Taxes (including any exemption certificates and forms as each may request to establish an exemption from (or otherwise reduce) or make a report with respect to such Transfer Taxes).

Section 8.7 Allocations for Federal Income Tax Purposes. Buyer, Buyer AssetCos, and Sellers acknowledge that, under Section 1060 of the Code, Buyer, each Buyer AssetCo (other than any Buyer AssetCo that is disregarded from Buyer for federal Income Tax purposes), and each Seller must report information regarding the allocation of the Final Purchase Price and any other amounts treated as consideration for federal Income Tax purposes (collectively, the “Allocation Amount”) to the United States Secretary of Treasury by attaching Department of Treasury, Internal Revenue Service, Form 8594 to their federal Income Tax returns for the Tax period that includes the Closing Date. Within 60 days following the Final Settlement Date, Sellers’ Representative shall provide to Buyer (i) the allocation of the Allocation Amount among the Sellers, and (ii) the allocation of each Seller’s respective portion of the Allocation Amount, among each class of assets provided for in Treasury Regulations Section 1.338-6 in accordance with Section 1060 of the Code, and the regulations thereunder (collectively, the “Allocation Schedule”). Buyer shall provide Sellers’ Representative with any comments to the draft Allocation Schedule within 30 days after the date of receipt by Buyer. If Buyer does not deliver to Sellers’ Representative any written notice of objection to the Allocation Schedule within such 30-day period, the Allocation Schedule shall be deemed to have been agreed upon and shall be final, conclusive and binding on the Parties. If a written notice of objection is timely delivered by Buyer to Sellers’ Representative, Buyer and Sellers’ Representative will use commercially reasonable efforts to resolve their differences and agree on an Allocation Schedule. Any such agreed upon Allocation Schedule shall be final, conclusive and binding on the Parties. If the Parties are able to agree to agree upon an Allocation Schedule (a) any subsequent adjustments to the Allocation Amount for U.S. federal income Tax purposes shall be allocated in a manner consistent with the Allocation Schedule as finally determined hereunder, (b) the Parties shall each prepare their respective Forms 8594 with respect to the Transaction in a manner consistent with the final Allocation Schedule, as revised to take into account subsequent adjustments to the Allocation Amount for U.S. federal income Tax purposes, and (c) the Parties shall not take any Income Tax position (whether in audits, on Tax Returns, or otherwise) that is inconsistent with the final Allocation Schedule, as revised to take into account subsequent adjustments to the Allocation Amount for U.S. federal income Tax purposes, unless required to do so by applicable Law; provided, however, that no Party shall be unreasonably impeded in its ability and discretion to negotiate, compromise, and/or settle any Tax audit, claim, or similar proceedings in connection with such Allocation Schedule. If Buyer and Sellers’ Representative are unable to reach an agreement on the Allocation Schedule within 30 days after the later of Buyer’s receipt of Seller’s draft Allocation Schedule and Seller’s receipt of any written notice of objection timely submitted by Buyer, then each Party shall be entitled to adopt its own position regarding the Allocation Schedule.

Section 8.8 Post-Closing Tax Matters. After Closing, Buyer, Buyer AssetCos, and Sellers shall:

(a) reasonably cooperate and assist the other (1) in preparing any Tax Returns regarding any Tax relating to the Assets, or the Transaction, and (2) in qualifying for any exemption or reduction in Tax that may be available;

(b) reasonably cooperate in preparing for any audits, examinations, or other Tax proceedings by, or disputes with, taxing authorities regarding any Tax relating to the Assets or the Transaction;

(c) make available to the other, and to any taxing authority as reasonably requested, any information, records, and documents relating to a Tax incurred or imposed in connection with the Assets or the Transaction;

(d) provide timely notice to the other in writing of any pending or threatened Tax audit, examination, or assessment that could reasonably be expected to affect the other’s Tax liability under applicable Law or this Agreement (a “Tax Controversy”), and to promptly furnish the other with copies of all correspondence with respect to any Tax Controversy;

(e) allow the other to participate, at its own expense, in any Tax Controversy, and not settle any Tax Controversy without the prior written consent of the other, which may not be unreasonably withheld, conditioned, or delayed; and

(f) retain all books and records with respect to Tax matters pertinent to the Assets relating to any Tax period beginning before the Closing Date until sixty (60) days after the expiration of the statute of limitations of the respective Tax periods (taking into account any extensions thereof) and to abide by all record retention agreements entered into with any Governmental Authority.

Article IX

Conditions Precedent to Closing

Section 9.1 Sellers’ Conditions Precedent. The obligations of Sellers at Closing are subject to the satisfaction or waiver by Sellers at or prior to Closing of the following conditions precedent:

(a) (1) All Non-Fundamental Representations of Buyer and Buyer AssetCos contained in this Agreement are and shall be true and correct in all respects (without giving effect to any limitation or qualification as to materiality or material adverse effect) at and as of the Execution Date and at and as of Closing in accordance with their terms as if such representations and warranties were remade at and as of Closing (except to the extent such representations and warranties are made as of a specified date, in which case such representations and warranties shall be true and correct as of such specified date), except where the failure to be so true and correct, individually or in the aggregate has not materially impaired or would not reasonably be expected to materially impair the ability of Buyer or any Buyer AssetCo to consummate the Transaction and perform its obligations under this Agreement, (2) all Fundamental Representations of Buyer and Buyer AssetCos contained in this Agreement are and shall be true and correct in all respects at and as of the Execution Date and at and as of Closing in accordance with their terms as if such representations and warranties were remade at and as of Closing, (3) Buyer and each Buyer AssetCo shall have performed and satisfied all covenants and agreements required by this Agreement and the Agreement Regarding Employees to be performed and satisfied by Buyer or any Buyer AssetCo at or prior to Closing in all material respects, and (4) Buyer shall have delivered the Buyer’s Certificate to Sellers confirming the foregoing;

(b) other than an order affecting only a portion of the Assets that is treated as a Casualty Loss, no order shall have been entered by any court or Governmental Authority having jurisdiction over the Parties or the subject matter of this Agreement that restrains or prohibits the Transaction and that remains in effect at the time of Closing;

(c) Sellers’ receipt of satisfactory assignments and novations of the Applicable Contracts set forth on Schedule 9.1(c);

(d) Buyer’s closing of the Debt Financing; and

(e) Buyer and each Buyer AssetCo shall be ready, willing, and able to perform each of the actions and deliver those deliverables specified in Section 11.3 as required to be delivered by or on behalf of Buyer or such Buyer AssetCo at Closing.

Section 9.2 Buyer’s Conditions Precedent. The obligations of Buyer at Closing are subject to the satisfaction or waiver at or prior to Closing of the following conditions precedent:

(a) (1) All Non-Fundamental Representations of Sellers contained in this Agreement are and shall be true and correct in all respects (without giving effect to any limitation or qualification as to materiality or material adverse effect) at and as of the Execution Date and at and as of Closing in accordance with their terms as if such representations and warranties were remade at and as of Closing (except to the extent such representations and warranties are made as of a specified date, in which case such representations and warranties shall be true and correct as of such specified date), except where the failure to be so true and correct, individually or in the aggregate either (x) has not materially impaired or would not reasonably be expected to materially impair the ability of Sellers to consummate the Transaction and perform its obligations under this Agreement or (y) has not or would not reasonably be expected to result in a Material Adverse Effect, (2) all Fundamental Representations of Sellers contained in this Agreement are and shall be true and correct in all respects at and as of the Execution Date and at and as of Closing in accordance with their terms as if such representations and warranties were remade at and as of Closing, (3) Sellers shall have performed and satisfied all covenants and agreements required by this Agreement and the Agreement Regarding Employees to be performed and satisfied by Sellers at or prior to Closing in all material respects, and (4) each Seller shall have delivered the Seller’s Certificates to Buyer confirming the foregoing;

(d) each Seller shall be ready, willing, and able to perform each of the actions and deliver those deliverables specified in Section 11.3 as required to be delivered by or on behalf of such Seller at Closing.

Article X

Right of Termination

Section 10.1 Termination. This Agreement may be terminated prior to Closing as follows:

(a) by mutual written consent of Sellers’ Representative and Buyer;

(b) by Sellers’ Representative, if, through no fault of Sellers, the Closing does not occur on or before 5:00 p.m., Mountain Time on the Outside Date;

(c) by Buyer, if, through no fault of Buyer or any Buyer AssetCo, the Closing does not occur on or before 5:00 p.m., Mountain Time on the Outside Date;

(d) by Sellers’ Representative, at or after the Scheduled Closing Date, if the conditions set forth in Section 9.1 are not satisfied or are not capable of satisfaction at such time through no fault of Sellers and are not waived by Sellers’ Representative;

(e) by Buyer, at or after the Scheduled Closing Date, if the conditions set forth in Section 9.2 are not satisfied or are not capable of satisfaction at such time through no fault of Buyer or any Buyer AssetCo and are not waived by Buyer;

(f) by either Sellers’ Representative or Buyer, if the other Party materially breaches its covenants, obligations, or agreements as set forth in this Agreement and such material breach is not remedied within five days’ notice from the non-breaching Party; or

(g) as set forth in Section 10.2(c);

provided, however, that without limiting the Parties’ rights under Section 10.1(a), no Party will be entitled to terminate this Agreement under Sections 10.1(b), 10.1(c), 10.1(d), 10.1(e), 10.1(f), or 10.1(g), as applicable, if such Party (or any of its affiliated entities which are also a party hereto) is in breach of this Agreement and such breach results (or would result, if Closing were then scheduled to occur) in a failure of a condition set forth in Section 9.1 or Section 9.2, as applicable. Any termination under Sections 10.1(a) through 10.1(g) is effective upon the non-terminating Party’s receipt of the terminating Party’s written notice of termination.

Section 10.2 Remedies.

(a) If this Agreement is terminated under Section 10.1, this Agreement shall become void and of no further force or effect, except for the provisions of Sections 3.2(b) (Access to the Assets – Indemnity), 7.3(a) (Confidentiality), 7.3(b) (Injunctive Relief), this 10.2 (Remedies), and Article XIV (Miscellaneous), and such parts of Annex I (Definitions) as are necessary to give effect to the foregoing, all of which shall continue in full force and effect in accordance with their terms. If Buyer or Sellers terminate this Agreement under Section 10.1, neither Buyer, any Buyer AssetCo, nor Sellers shall have any liability to any other Party for termination of this Agreement; provided, however, that (1) if the Closing does not occur by the Outside Date or (2) if this Agreement is terminated by Sellers under Sections 10.1(a), 10.1(d), or 10.1(f) prior to the Outside Date, then, in each case, Buyer shall promptly reimburse Sellers’ Representative up to $250,000.00 for any costs or expenses incurred by Sellers or their Affiliates to prepare carveout financial statements regarding the Properties for purposes of effectuating the Transaction or any potential securities filing that may be required in connection with the Transaction.

(b) If, on or before the Target Closing Date, Buyer has the right to terminate this Agreement pursuant to Section 10.1(e) or 10.1(f), in either case as a result of Sellers’ willful and intentional breach of this Agreement, then Buyer shall be entitled to, in lieu of terminating this Agreement, specific performance of this Agreement as Buyer’s sole and exclusive remedy therefore. THE PARTIES HEREBY ACKNOWLEDGE THAT BUYER WOULD SUFFER IRREPARABLE DAMAGE IN THE EVENT OF SELLERS’ WILLFUL AND INTENTIONAL BREACH OF THIS AGREEMENT AND THE EXTENT OF DAMAGES TO BUYER OCCASIONED BY THE FAILURE OF THE TRANSACTION TO BE CONSUMMATED WOULD BE IMPOSSIBLE OR EXTREMELY DIFFICULT TO ASCERTAIN. Except as set forth in Section 7.3(b), after the Target Closing Date, Buyer will not have any right to seek (or be entitled to) specific performance, and Buyer’s sole and exclusive rights to terminate this Agreement are as set forth in Section 10.1 and remedies for any termination of this Agreement is as set forth in Section 10.2(a).

(c) If Closing does not occur on or before the Target Closing Date, then Sellers’ Representative and Buyer will work in good faith to amend this Agreement to reflect a new Base Purchase Price as determined by the Parties. As part of those good faith efforts, Sellers’ Representative and Buyer may use and evaluate any factors, market conditions, business objectives, or other considerations to determine whether such Parties will or will not enter into a written agreement to amend this Agreement. If the Parties are not able to agree to a revised Base Purchase Price by 5:00 pm, Mountain Time, on the date that is three Business Days prior to the Outside Date, then either Party may terminate this Agreement.

Article XI

Closing

Section 11.1 Date of Closing. The closing of the Transaction (“Closing”) shall be held on the latter to occur of (a) February 15, 2025 (the “Target Closing Date”), or (b) if the conditions set forth in Section 9.1 or Section 9.2 have not been satisfied as of the Target Closing Date, then the date that is two Business Days after the date upon which such conditions have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by applicable Law, waiver of those conditions) (as applicable, the “Scheduled Closing Date”). The date Closing actually occurs is called the “Closing Date.”

Section 11.2 Time and Place of Closing. The Closing shall be held at the offices of Davis Graham & Stubbs LLP in Denver, Colorado, or at such other time and place as Buyer and Sellers’ Representative may agree in writing.

Section 11.3 Closing Obligations. At Closing, the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a) Sellers and Buyer (or the applicable Buyer AssetCo) shall execute, acknowledge and deliver to each other instruments in the form of the Assignment, Bill of Sale and Conveyance attached as Exhibit B (the “Assignment”) in multiple counterparts for each county in which the Assets are located, and any applicable counterpart forms of any Governmental Authorities, conveying the Assets to Buyer (or the applicable Buyer AssetCo) as of the Effective Time, with only the Special Warranty, in such number of counterparts as reasonably requested by each Party.

(b) Buyer and Sellers shall execute and deliver the Preliminary Settlement Statement delivered under Section 2.4.

(c) Buyer shall (1) deliver the Cash Consideration (minus the aggregate of (i) the Millennial Purchase Price, if required under Section 7.6(b), and (ii) the Asset Tax Adjustment) to the account at a bank designated by Sellers by wire transfer of immediately available funds, or by such other method as reasonably requested by Sellers, and (2) deposit with the Escrow Agent the aggregate of (i) the Millennial Purchase Price, if required under Section 7.6(b), and (ii) the Asset Tax Adjustment.

(d) Buyer shall issue to the Sellers’ Representative the Equity Consideration.

(e) Buyer shall deliver to Sellers the Officer’s Certificate dated as of the Closing Date, in substantially the form attached as Exhibit C (the “Buyer’s Certificate”).

(f) Each Seller shall deliver to Buyer the Officer’s Certificate dated as of the Closing Date, in substantially the form attached as Exhibit D (the “Seller’s Certificates”).

(g) Each Seller (or with regard to any Seller that is a disregarded entity for U.S. federal Income Tax purposes, the sole-regarded owner of such Seller) shall execute and deliver to Buyer a Certificate of Non-Foreign Status in substantially the form attached as Exhibit E.

(h) Bayswater E&P and Buyer shall execute and deliver to each other a Transition Services Agreement, in substantially the form attached as Exhibit F.

(i) Buyer and Sellers’ Representative shall execute and deliver a Registration Rights Agreement, in substantially the form attached as Exhibit G.

(j) Sellers and Buyer shall execute and deliver to each other a Cooperative Development Agreement, in substantially the form attached as Exhibit H.

(k) Sellers and Buyer shall execute and deliver to each other a Saltwater Disposal Agreement, in substantially the form attached as Exhibit I.

(l) Sellers and Buyer shall execute and deliver to each other an Assignment and Assumption Agreement, in substantially the form attached as Exhibit J.

(m) Sellers’ Representative, Buyer, and the Escrow Agent shall execute and deliver to each other the Escrow Agreement if required under Section 7.6(b).

(n) Buyer shall provide evidence that it has provided replacement instruments as required under Section 7.2(a).

(o) Sellers shall deliver releases of those security instruments burdening the Assets that secure indebtedness for borrowed monies by any Seller, in each case in form and substance reasonably acceptable to Buyer.

(p) Buyer, Buyer AssetCos, and Sellers shall execute and deliver to each other all required change of operator and similar notices required by Laws of any Governmental Authorities.

(q) Sellers, Buyer, and Buyer AssetCos shall take such other actions and deliver such other documents as are contemplated by this Agreement or as are reasonably requested by the other Party in order to consummate the Transaction.

Article XII

Post-Closing Covenants

Section 12.1 Records. Sellers shall make the electronic Records (as such electronic Records exist in their native format as of the Execution Date) available to Buyer as soon as is reasonably practical, but no later than 45 Business Days (or such later time as may be necessary in the reasonable discretion of Sellers) after the Closing. If Buyer requests in writing physical copies of the Records that are in Sellers’ or their Affiliates’ possession, (a) Sellers will (and shall cause their Affiliates to) provide physical copies of such Records to Buyer within 30 Business Days following such request, and (b) Buyer shall pay all costs incurred by Sellers and Sellers’ Affiliates in retrieving and transferring such Records. Sellers may retain copies of the Records and shall have the right to review and copy the Records during standard business hours upon reasonable notice for so long as Buyer retains the Records. Buyer shall maintain the Records in compliance with all applicable Laws governing document retention. Buyer will not destroy or otherwise dispose of Records after Closing unless Buyer first gives Sellers reasonable notice and an opportunity to copy the Records to be destroyed. Buyer acknowledges and agrees that Sellers will provide the Records as they are currently maintained by Sellers and Sellers shall not have any obligation to manipulate electronic data or otherwise convert or supply to Buyer the Records in a format not currently maintained by Sellers as of the Execution Date. In addition, upon reasonable notice provided to Buyer, Sellers shall be entitled to access the Records, as necessary, for the purposes of complying with their obligations with respect to the Excluded Assets and any other matter for which Sellers must indemnify Buyer.

Section 12.2 Name Changes. As promptly as practicable, but, in any case, within 30 days after the Closing, Buyer shall, at its sole cost and expense, eliminate the name “Bayswater” and any variants thereof from the Assets and, except with respect to such grace period for eliminating existing usage, shall have no right to use any logos, trademarks, or trade names belonging to Sellers or any of their Affiliates.

Section 12.3 Improper or Unintended Transfers. If, following Closing, any Party determines that there was inadvertently transferred to Buyer or any Buyer AssetCo one or more assets (including Applicable Contracts) that are not Assets under this Agreement, such Party shall promptly notify the other Party thereof, and such assets shall be transferred and conveyed by Buyer or the applicable Buyer AssetCo to Sellers as promptly as practicable thereafter. As promptly as practicable, but, in any case, within 30 days after the Closing, Buyer shall, at its sole cost and expense, remove any property included in the Assets that is physically on an Excluded Asset.

Section 12.4 Change of Operator. As promptly as practicable after Closing, Sellers’ Representative shall file all change of operator forms executed at Closing with the applicable Governmental Authorities. Buyer and each Buyer AssetCo shall use its best efforts to ensure that such change of operator forms are approved promptly after Closing.

Section 12.5 Further Assurances. From time to time after Closing, Sellers, Buyer, and Buyer AssetCos shall each execute, acknowledge, and deliver to the other such further instruments and take such other action as may be reasonably requested in order to accomplish more effectively the purposes of the Transaction.

Section 12.6 Acknowledgment of Suspense Funds. With respect to the Suspense Funds, (a) Buyer and each Buyer AssetCo acknowledges that the Suspense Funds change on a day-by-day basis, and such Suspense Funds may increase or decrease on a day-to-day basis, (b) any Base Purchase Price adjustment under Section 2.2(c)(4) as determined in the Preliminary Settlement Statement will likely be different than any Base Purchase Price adjustment under Section 2.2(c)(4) as determined as part of the Final Purchase Price due to the day-to-day change of any Suspense Funds, and (c) the Suspense Funds may have associated penalties and interest associated with such Suspense Funds, and the Suspense Funds and any penalties and interest associated with such Suspense Funds are an Assumed Liabilities.

Section 12.7 Covenant Not To Compete. For a period commencing on the Closing Date and ending 18 months following the Closing Date, no Seller shall acquire any oil and gas leases within the lands described on Schedule 12.7.

Section 12.8 Seller Cooperation. From and after the Execution Date, Sellers will provide Buyer with such assistance, support and information as Buyer and any of its representatives reasonably request in writing in connection with Buyer’s preparation of any SEC filings related to this Agreement, the Transaction, and the financing of the Transaction, including any pro forma financial or operational data and information.

Article XIII

Assumption; Indemnification

Section 13.1 Buyer’s and Buyer AssetCos’ Assumed Liabilities. Effective as of Closing, Buyer and Buyer AssetCos, jointly and severally, hereby assume and agree to pay, perform, fulfill, and discharge all of Sellers’ obligations, duties, liabilities and other Losses with respect to, arising from, based upon, or attributable to the Assets, regardless of whether such obligations, duties, liabilities and other Losses arose prior to, on, or after the Effective Time (the “Assumed Liabilities”), including (a) the Assumed Environmental Liabilities, (b) the administration and payment of the Suspense Funds or the payment of any interest or penalties associated with such Suspense Funds, (c) those applicable to or related to the ownership, development, exploration, operation, and maintenance of the Assets and the production, transportation, processing, and marketing of Hydrocarbons from the Assets, including the payment of Property Expenses, whether imposed under or required by Applicable Contracts, the Leases, applicable Law, or otherwise, (d) the administration and payment of Burdens on the Assets, (e) the Plugging and Abandonment Obligations, (f) Losses relating to or arising from any contamination or condition arising out of or attributable to any offsite disposal, removal, arrangement, or transportation of Hazardous Substances from the Assets, (g) the performance and discharge of all obligations, covenants, and agreements arising from or relating to the Leases and Applicable Contracts or other agreements included within the Assets, and (h) the make-up and balancing obligations for gas from the Wells, including any Imbalance Volumes; provided, however, the Assumed Liabilities shall not include, and Buyer and Buyer AssetCos do not assume to the extent and for the periods Sellers are obligated under this Agreement to indemnify any Buyer Indemnified Party under Section 13.2(a), any Losses that Sellers are obligated under this Agreement to indemnify any Buyer Indemnified Party. By assuming any liabilities or obligations in this Section 13.1, the Parties do not intend to admit, and are not deemed to have admitted, any liability to any third Person. Buyer’s and Buyer AssetCos’ assumption of the Assumed Liabilities shall not affect the Parties’ agreement with respect to adjustments to the Base Purchase Price under Section 2.2.

Section 13.2 Indemnification.

(a) Seller’s Indemnification of Buyer and Buyer AssetCos. From and after the Closing, subject to the limitations set forth in this Agreement, each Seller shall severally, but not jointly, defend, indemnify, save, and hold harmless the Buyer Indemnified Parties from and against all Losses to the extent caused by, arising out of, or resulting from:

(1) the Specified Liabilities;

(2) any Property Expense for which an upward adjustment was made to the Base Purchase Price pursuant to Section 2.2(b)(3) that was borne but not paid by Sellers or any of their Affiliates;

(3) any matter for which Sellers have agreed to indemnify Buyer and Buyer AssetCos under this Agreement, under any Transaction Document, or in the Agreement Regarding Employees;

(4) any breach of representations or warranties made by such Seller in this Agreement, under any Transaction Document, or in the Agreement Regarding Employees; and

(5) any breach of any covenants or agreements of such Seller under this Agreement, under any Transaction Document, or in the Agreement Regarding Employees.

(b) Buyer’s and Buyer AssetCos’ Indemnification of Seller. From and after the Closing, Buyer and each Buyer AssetCo, jointly and severally, shall defend, indemnify, save, and hold harmless the Seller Indemnified Parties from and against all Losses to the extent caused by, arising out of, or resulting from:

(1) the Assumed Liabilities;

(2) Buyer Taxes;

(3) any matter for which Buyer or any Buyer AssetCo has agreed to indemnify such Seller under this Agreement, under any Transaction Document, or in the Agreement Regarding Employees;

(4) any breach of representations or warranties made by Buyer or any Buyer AssetCo in this Agreement, under any Transaction Document, or in the Agreement Regarding Employees; and

(5) any breach of any covenants or agreements of Buyer or any Buyer AssetCo under this Agreement, under any Transaction Document, or in the Agreement Regarding Employees.

The indemnification obligations described in Section 13.2(a) or this Section 13.2(b) apply to the Losses described in such provisions EVEN IF SUCH LOSSES ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT, OR CONCURRENT), STRICT LIABILITY, OR OTHER LEGAL FAULT OF THE OTHER PARTY OR ANY INDEMNIFIED PARTIES.

(c) Release. The Buyer Indemnified Parties shall be deemed to have released the Seller Indemnified Parties at the Closing from any Losses for which Buyer or any Buyer AssetCo has agreed to indemnify Sellers under this Agreement, and the Seller Indemnified Parties shall be deemed to have released the Buyer Indemnified Parties at Closing from any Losses for which Sellers have agreed to indemnify Buyer or any Buyer AssetCo under this Agreement.

Section 13.3 Limitation on Sellers’ Indemnity Obligations. With respect to all claims for indemnification made by the Buyer Indemnified Parties, the following limitations shall apply:

(a) Threshold. If the Loss that is the subject of a Direct Claim or a Third-Party Claim for indemnification by the Buyer Indemnified Parties does not exceed the De Minimis Threshold per event or circumstance, then the Buyer Indemnified Parties shall not be entitled to indemnification from any Seller for such Loss, and the Buyer Indemnified Parties shall be deemed to have released all Sellers from (1) all Losses related to, arising from, or associated with such Direct Claim or Third-Party Claim and (2) any duty to defend, indemnify, save, or hold Buyer Indemnified Parties harmless for such Direct Claim or Third-Party Claim.

(b) Deductible. Sellers shall not have any liability for indemnification to the Buyer Indemnified Parties under Section 13.2(a)(4) until and unless the aggregate amount of all liability for all Losses that exceed the De Minimis Threshold exceeds a deductible equal to the Indemnity Deductible, after which point the Buyer Indemnified Parties shall be entitled to claim such Losses solely for the amount in excess of the Indemnity Deductible, subject to the other limitations set forth in this Agreement.

(c) Cap. In no event shall Sellers’ liability to defend, indemnify, save, and hold the Buyer Indemnified Parties harmless from and against aggregate Losses under Section 13.2(a)(4) exceed 10% of the Base Purchase Price and Sellers shall have no obligation or liabilities under Section 13.2(a) with respect to any Losses suffered by the Buyer Indemnified Parties that in the aggregate exceed 100% of the Base Purchase Price.

Section 13.4 Effect of Knowledge of Breach of Representation or Warranty. Except with respect to any disclosures set forth in any supplement pursuant to Section 5.24(c), no Party to this Agreement may pursue any remedy for the breach of any representation or warranty to the extent such Party has Knowledge of such breach on or prior to the Closing and such Party proceeds with Closing.

Section 13.5 Exclusive Remedy. Except for any and all rights for injunctive relief or specific performance expressly provided in this Agreement, in each case, with respect to the breach of this Agreement or any other Transaction Document, the Buyer Indemnified Parties’ sole and exclusive recourse against Sellers, and the Seller Indemnified Parties’ sole and exclusive recourse against Buyer and Buyer AssetCos, after the Closing for any Loss or claim of Losses arising out of or relating to this Agreement, is the indemnification provisions of this Article XIII, excluding any Loss or claim of Losses arising out of Fraud.

Section 13.6 Procedure. All claims for indemnification under this Agreement shall be asserted and resolved as follows:

(a) Claim Notice. The Party seeking indemnification under the terms of this Agreement (“Indemnified Party”) shall submit a written notice (“Claim Notice”) to the other Party (“Indemnifying Party”) which, to be effective, must state: (1) the Indemnified Party’s good faith estimate of the amount claimed by such Indemnified Party to be owing, (2) the basis for such claim, with supporting documentation, if available, and (3) a list identifying to the extent reasonably possible each separate item of Loss for which payment is so claimed to such Indemnified Party. The amount claimed shall be paid by the Indemnifying Party to the extent required in this Agreement within 30 days after receipt of the Claim Notice, or after the amount of such payment has been finally established, whichever last occurs.

(b) Third-Party Claim.

(1) Within 60 days after the Indemnified Party receives notice of a claim, assertion, legal action, arbitration, investigation, or other matter or proceeding brought by any Person that is not a Party or an Affiliate of a Party and that may result in a Loss for which indemnification may be sought under this Agreement (a “Third-Party Claim”), the Indemnified Party shall deliver a Claim Notice regarding such Third-Party Claim to the Indemnifying Party. The failure of the Indemnified Party to so notify the Indemnifying Party shall not relieve the Indemnifying Party of liability under this Agreement except to the extent that the defense of such Third-Party Claim is materially prejudiced by the failure to give such notice. If the Indemnifying Party or its counsel so requests, the Indemnified Party shall furnish the Indemnifying Party with copies of all pleadings and other information with respect to such Third-Party Claim. The Indemnified Party is authorized, prior to the election by the Indemnifying Party to assume the defense of such Third-Party Claim, to file any motion, answer, or other pleading that it shall deem necessary and appropriate to protect its interests or those of the Indemnifying Party and that is not prejudicial to the Indemnifying Party, all costs of which shall be included as Losses in respect of such claim for indemnification.

(2) At the election of the Indemnifying Party, which shall be made within 45 days after receipt of the Claim Notice, the Indemnified Party shall permit the Indemnifying Party to assume control of the defense of such Third-Party Claim (to the extent only that such Third-Party Claim relates to a Loss for which the Indemnifying Party may be liable). If the Indemnifying Party elects to assume control of the defense of the Third-Party Claim, (i) any expense incurred by the Indemnified Party thereafter for investigation or defense of the matter shall be borne by the Indemnified Party, and (ii) the Indemnified Party shall give all reasonable information and assistance, other than pecuniary, that the Indemnifying Party shall deem necessary to the proper defense of such Third-Party Claim and reasonably request. The Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in, but not control, the defense of the Third-Party Claim. If the Indemnifying Party elects to defend the Third-Party Claim under this Section 13.6(b)(2), then the Indemnifying Party shall work diligently to defend or otherwise resolve the Third-Party Claim.

(3) If the Indemnifying Party does not elect to assume control of the defense of the Third-Party Claim within the 45-day period provided in Section 13.6(b)(2), the Indemnified Party will use its commercially reasonable efforts to defend, at the Indemnifying Party’s expense, any claim, assertion, legal action, or other matter to which such other Party’s indemnification under this Article XIII applies until the Indemnifying Party assumes such defense and, if settlement has been offered and the Indemnifying Party has not at such time admitted its obligation to defend and indemnify the Indemnified Party against such Third-Party Claim, the Indemnified Party shall send written notice to the Indemnifying Party of any proposed settlement and the Indemnifying Party shall have the option for 10 days following receipt of such notice to (i) admit in writing its obligation to indemnify the Indemnified Party from and against the liability and consent to such settlement, (ii) if liability is so admitted, reject, in its reasonable judgment, the proposed settlement, or (iii) deny liability. Any failure by the Indemnifying Party to timely respond to such notice shall be deemed to be an election under clause (iii) of the preceding sentence.

(4) The Indemnifying Party shall not, without the written consent of the Indemnified Party (which shall not be unreasonably withheld, conditioned or delayed), enter into any judgment, compromise, settlement, or discharge with respect to the Third-Party Claim without the prior written consent of the Indemnified Party unless such judgment, compromise, settlement, or discharge (i) provides for the payment by the Indemnifying Party of money as the sole relief for the claimant, (ii) involves no finding or admission of any violation of Law or the rights of any Indemnified Party, (iii) does not encumber any of the assets of any Indemnified Party (including the Assets) or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business, and (iv) includes, as a condition of any entry of judgment, settlement, compromise, discharge, or other resolution, a complete and unconditional release of each Indemnified Party from any and all liabilities in respect of such Third-Party Claim.

(c) Direct Claims. If an Indemnified Party determines that it has a claim for indemnification under this Agreement against the Indemnifying Party other than as a result of a Third-Party Claim (a “Direct Claim”), the Indemnified Party and the Indemnifying Party shall negotiate in good faith for a 30-day period beginning on the date the Indemnified Party provides the Claim Notice to the Indemnifying Party for such Direct Claim. If the Indemnified Party and the Indemnifying Party are unable to reach a resolution as to such Direct Claim within the 30-day period, the Indemnified Party will be entitled to seek appropriate remedies in accordance with the terms of this Agreement, subject to the limitations on recovery in this Article XIII. Promptly following the final determination or agreement by the Parties of the amount of any Losses for which the Indemnifying Party is obligated to indemnify the Indemnified Party under this Agreement in respect of such Direct Claim, the Indemnifying Party shall pay such Losses, if any, to the Indemnified Party by wire transfer of immediately available funds. If the Indemnified Party is required to institute any proceedings in order to recover Losses, the cost of such proceedings (including costs of investigation and reasonable attorneys’ fees and disbursements) will be added to the amount of Losses payable to the Indemnified Party if and only to the extent the Indemnified Party recovers and it is determined by the Arbitrators to be entitled to such treatment.

(d) Non-Party Indemnified Parties. Any claim for indemnity under this Agreement (including this Article XIII) by any Person other than Buyer, any Buyer AssetCo, or any Seller must be brought and administered by the applicable Party to this Agreement. No Indemnified Party or Person other than any Seller, Buyer, or any Buyer AssetCo shall have any rights against any Seller, Buyer, or any Buyer AssetCo under this Agreement (including this Article XIII) except as may be exercised on its behalf by Buyer, such Buyer AssetCo, or such Seller, as applicable, under this Article XIII. Each of the Parties may elect to exercise or not exercise indemnification rights under this Article XIII on behalf of the other Indemnified Party affiliated with such Party in its sole discretion and shall have no liability to any such other Indemnified Party for any action or inaction under this Article XIII. Without limiting the rights of Sellers under and to the extent provided under Section 10.2, (1) no past, present, or future director, officer, employee, incorporator, member, partner, stockholder, agent, attorney, advisor, or Representative or Affiliate of any named Party to this Agreement, and (2) no past, present, or future director, officer, employee, incorporator, member, partner, stockholder, agent, attorney, advisor, or Representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort, equity or otherwise) for any one or more of the representations, warranties, covenants, agreements, or other obligations or liabilities of the Parties under this Agreement (whether for indemnification or otherwise) of or for any claim based on, arising out of, or related to this Agreement or the Transaction.

Section 13.7 Express Negligence. The defense, indemnification, hold harmless, release, Assumed Liabilities, RETAINED LIABILITIES, waiver, and limitation of liability provisions provided for in this Agreement will be applicable whether or not the liabilities, losses, costs, expenses, and damages in question arose or resulted solely from the gross, sole, active, passive, concurrent, or comparative negligence, strict liability, or other fault or violation of Law of or by any Indemnified Party. This statement complies with the express negligence rule and is conspicuous.

Section 13.8 No Insurance. The indemnifications provided in this Agreement shall not be construed as a form of insurance.

Section 13.9 Reservation as to Third Parties. Nothing in this Agreement is intended to limit or otherwise waive any recourse any Party may have against any third Person for any obligations or liabilities that may be suffered by or incurred with respect to the Assets, the Specified Liabilities, or the Assumed Liabilities.

Section 13.10 Reduction in Losses. Each Indemnified Party shall use commercially reasonable efforts to mitigate any Losses to the extent required by Law or by using commercially reasonable efforts to maintain existing insurance coverage with respect to the Assets, the Specified Liabilities or the Assumed Liabilities and validly making and diligently pursuing claims relating to the Assets, the Specified Liabilities, or the Assumed Liabilities under this Agreement, including any insurance claims or claims against third Persons. The amount of any Losses for which an Indemnified Party is entitled to indemnity under this Article XIII shall be reduced by (a) the amount of insurance proceeds actually realized by the Indemnified Party or its Affiliates with respect to such Losses, and (b) any amounts or benefits received (whether in the form of cash, credit or some other beneficial arrangement) from any third Person in respect of such Loss.

Section 13.11 Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the Parties as an adjustment to the Base Purchase Price for U.S. federal and applicable state income Tax purposes, unless otherwise required by applicable Law.

Section 13.12 Notice of Claim.

(a) Sellers’ Representations and Warranties. As a condition precedent to any indemnity under this Article XIII with respect to the alleged breach by any Seller of any of such Seller’s representations or warranties in this Agreement or in the Agreement Regarding Employees, and subject to Section 13.12(e), Sellers’ Representative must have received a Claim Notice on or before (1) with respect to the Non-Fundamental Representations, 5:00 p.m., Mountain Time, on the date that is six months after the Closing Date; (2) with respect to the representations set forth in Section 5.15, the date that is 60 days after the expiration of all applicable statute of limitations, and (3) with respect to the Fundamental Representations, the representations and warranties of Sellers set forth in Section 5.15, and the Special Warranty in the Assignment, 5:00 p.m., Mountain Time, on the date that is 24 months after the Closing Date.

(b) Sellers’ Covenants. As a condition precedent to any indemnity under this Article XIII with respect to the alleged breach by any Seller of any of such Seller’s covenants and performance obligations set forth in this Agreement or in the Agreement Regarding Employees, and subject to Section 13.12(e), Sellers’ Representative must have received a Claim Notice on or before (1) with respect to each of the covenants and performance obligations of such Seller set forth in this Agreement to be performed prior to or at Closing, 5:00 p.m., Mountain Time, on the date that is six months after the Closing Date, and (2) with respect to each of the covenants and performance obligations of such Seller set forth in this Agreement or any Transaction Document to be performed after Closing, 5:00 p.m., Mountain Time, on the date that is 60 days after the expiration of all applicable statute of limitations.

(c) Sellers’ Specified Liabilities. As a condition precedent to any indemnity under this Article XIII with respect to Specified Liabilities, and subject to Section 13.12(e), Sellers’ Representative must have received a Claim Notice on or before the date that is:

(1) with respect to those Specified Liabilities described in clauses (b), (c), (e), and (f) of the definition thereof, on the date that is 6 months after the Closing Date;

(2) with respect to those Specified Liabilities described in clause (g) of the definition thereof, on the date that is one year after the Closing Date;

(3) with respect to those Specified Liabilities described in clause (h) of the definition thereof, on the date that is two years after the Closing Date; and

(4) with respect to all other Specified Liabilities, on the date that is 60 days after the expiration of all applicable statute of limitations.

(d) Buyer’s and Buyer AssetCos’ Representations and Covenants. As a condition precedent to any indemnity under this Article XIII with respect to the alleged breach by Buyer or any Buyer AssetCo of any of Buyer’s or any Buyer AssetCo’s representations, warranties, covenants and performance obligations of Buyer or any Buyer AssetCo in this Agreement or in the Agreement Regarding Employees, and subject to Section 13.12(e), Buyer must have received a Claim Notice on or before (1) with respect to the Non-Fundamental Representations, 5:00 p.m., Mountain Time, on the date that is six months after the Closing Date; and (2) with respect to the Fundamental Representations, 5:00 p.m., Mountain Time, on the date that is 24 months after the Closing Date.

(e) Survival After Claim. Notwithstanding Sections 13.12(a) through 13.12(d), if a Claim Notice has been properly delivered under Section 13.6 on or before the date any representation, warranty, covenant, indemnity or performance obligation would otherwise expire under Sections 13.12(a) through 13.12(d) alleging a right to indemnification or defense for Losses arising out of, relating to, or attributable to the breach of such representation, warranty, covenant, indemnity or performance obligation, such representation, warranty, covenant, indemnity or performance obligation shall continue to survive until the claims asserted in such Claim Notice that are based on the breach of such representation, warranty, covenant, indemnity or performance obligation have been fully and finally resolved or by agreement of the Parties and satisfied.

(f) Reasonableness. The Parties acknowledge that the time limitations set forth in this Section 13.12 for making a claim for indemnification based upon a Direct Claim or Third-Party Claim are reasonable.

Section 13.13 No Rescission. Notwithstanding anything in this Agreement to the contrary, no breach of any representation, warranty, covenant or agreement contained in this Agreement will give rise to any right on the part of Buyer or any Buyer AssetCo, after Closing, to rescind this Agreement or the Transaction and Buyer and each Buyer AssetCo hereby waives any and all rights to pursue such remedy.

Section 13.14 No Contingent Losses. No Seller will be required to indemnify any Buyer Indemnified Party to the extent any Loss is contingent, unless and until such contingent Loss becomes an actual Loss of such Buyer Indemnified Party that is due and payable. No Buyer Indemnified Party will have the right to assert any (a) claim for indemnification of a Loss or (b) claim with respect to which such Person has taken action (or caused action to be taken) to accelerate the time period in which such matter is asserted or payable.

Article XIV

Miscellaneous

Section 14.1 Expenses. Except as specifically provided otherwise in this Agreement, all fees, costs, and expenses incurred by any Party in negotiating this Agreement or in consummating the Transaction shall be paid by the Party incurring the same, including engineering, land, title, legal and accounting fees, consultant, and other professional costs and expenses; provided, however, that if Closing occurs, Buyer shall promptly reimburse Sellers up to $250,000.00 for any costs or expenses incurred by Sellers or their affiliates to prepare carveout financial statements regarding the Properties for purposes of effectuating the Transaction or any potential securities filing that may be required in connection with the Transaction. Buyer shall be solely responsible and pay for (a) all recording fees related to the transfer of the Assets (and, for the sake of clarity, shall be responsible for the recording of documents in the appropriate county offices and in the files of the applicable Governmental Authorities), and (b) any and all fees, costs, and similar charges required in connection with the transfer of any of the Assets.

Section 14.2 Notices. All notices and communications required or permitted under this Agreement shall be in writing and addressed as set forth below. Any communication or delivery under this Agreement shall be deemed to have been duly made and the receiving Party charged with notice (a) if personally delivered, when received, (b) if sent by electronic mail, upon the sending Party’s receipt of a confirmation email (including read-receipt or other automatic delivery confirmation) from the receiving Party that the receiving Party received the notice or communication email transmission, when received, (c) if mailed, five Business Days after mailing, certified mail, return receipt requested, or (d) if sent by overnight courier, one day after sending (provided, that if such day is not a Business Day, such notice or communication shall be deemed received on the first Business Day thereafter). All notices shall be addressed as follows:

If to any Seller:

Bayswater Exploration & Production, LLC

730 17th Street, Suite 500

Denver, Colorado 80202

	Attn:	[Redacted]
	Email:	[Redacted]

And with a copy to (which will not constitute notice):

Davis Graham & Stubbs LLP

3400 Walnut Street, Suite 700

Denver, Colorado 80205

	Attn:	[Redacted]
	Email:	[Redacted]

If to Buyer or any Buyer AssetCo:

Prairie Operating Co.

50 S Steele Street

Suite 330

Denver, Colorado 80209

	Attn:	[Redacted]
	Email:	[Redacted]

And with a copy to (which will not constitute notice):

Norton Rose Fulbright

1550 Lamar Street

Suite 2000

Houston, Texas 77010

	Attn:	[Redacted]
	Email:	[Redacted]

Any Party may, by written notice so delivered to the other Party, change the address or individual to which delivery shall thereafter be made.

Section 14.3 Sellers’ Representative. Each Seller hereby designates Bayswater E&P as its authorized agent (the “Sellers’ Representative”) for the purposes of acting in the name and stead of such Seller. Between Sellers, Buyer, or any Buyer AssetCo, any decision, act, waiver, consent, or instruction of Sellers’ Representative shall constitute a decision of all Sellers and shall be final, binding and conclusive upon each Seller, and Buyer and Buyer AssetCos may rely upon any such decision, act, waiver, consent, or instruction without any obligation to inquire of any such Seller and any failure to act or perform any obligation imposed upon Sellers’ Representative shall be deemed to be a failure to act of each Seller. Such designation shall be effective unless and until revoked by written notice to Buyer from Sellers’ Representative.

Section 14.4 Amendments. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Buyer and each Seller. Notwithstanding anything to the contrary contained herein, Sections 6.7, 7.1(d) (only with respect to those obligations of Buyer or any Buyer AssetCo, but not with respect to any obligations of any Seller or its Affiliates), 14.4, 14.9(a), 14.9(d), 14.10, 14.13, 14.14 and 14.17 (and any other provision of this Agreement to the extent an amendment, supplement, waiver or other modification of such provision would modify the substance of such Sections that are listed above) may not be amended, supplement, waived or otherwise modified in any manner that is adverse in any respect to the Financing Sources without the prior written consent of the Financing Sources.

Section 14.5 Waiver. Except as expressly provided in this Agreement:

(a) no Party shall be deemed to have waived or discharged any claim arising out of this Agreement, or any power, right, privilege, remedy, or condition under this Agreement, unless the waiver or discharge of such claim, power, right, privilege, remedy, or condition is expressly set forth in a written instrument duly executed and delivered by or on behalf of the Party (or any of its affiliated entities which are a party hereto) against whom the waiver or discharge is sought to be enforced;

(b) a waiver or discharge made on one occasion or a partial waiver or discharge of any power, right, privilege, remedy, or condition shall not preclude any other or further exercise or enforcement of such power, right, privilege, or remedy or requirement to satisfy such condition; and

(c) no failure or delay on the part of any Party to exercise or enforce any claim, power, right, privilege, remedy, or condition under this Agreement or to require the satisfaction of any condition under this Agreement and no course of dealing between or among the Parties shall operate as a waiver, discharge, or estoppel of any such claim, power, right, privilege, remedy, or condition.

Section 14.6 Assignment. No Party may assign this Agreement or any of its rights or interests under this Agreement, or delegate any of its obligations or liabilities under this Agreement, without the prior written consent of the other Party, which consent may be withheld for any or no reason in such Party’s sole and absolute discretion and may be conditioned on the receipt of a written assumption of such obligations from the delegate. Any such purported assignment or delegation in breach of the previous sentence is void. The obligations of Buyer and each Buyer AssetCo under this Agreement (including the assumption of the Assumed Liabilities in Section 13.1), and the terms, conditions and covenants relating thereto, shall be a covenant running with the lands, and a burden upon Buyer’s and each Buyer AssetCo’s interest in the Assets and the interest of its permitted successors and assigns. Notwithstanding the foregoing, nothing in this Agreement shall prohibit a Party, or such Party’s successors and assigns, from selling or disposing of an interest in the Assets after the Closing to another Person, subject to the other terms of this Agreement and all applicable agreements, instruments, obligations, covenants and burdens binding on the Assets, provided that such sale or disposition shall not relieve the selling or disposing Party of any condition, covenant or obligation under this Agreement or other Transaction Document and that such sale or disposition by Buyer or any Buyer AssetCo, their successors and assigns shall require the transferee to expressly assume the obligations set forth in this Agreement with respect to the transferred Assets, otherwise such assignment or transfer shall be null and void.

Section 14.7 Announcements. No press release or other public announcement, or public statement or public comment in response to any inquiry, relating to this Agreement or the Transaction shall be issued or made by Sellers, Buyer, Buyer AssetCos, or any of their respective Affiliates, without the prior written consent of Buyer and Sellers’ Representative, respectively. Notwithstanding the immediately preceding sentence:

(a) a press release or other public announcement, regulatory filing, statement or comment made without such consent shall not be in violation of this Section 14.7 if (1) it is made in order to comply with applicable Laws or stock exchange rules and (2) in the reasonable judgment of the Party or Affiliate making such release or announcement, based upon advice of counsel, obtaining consent from the other Party would prevent dissemination of such release or announcement in a sufficiently timely fashion to comply with such applicable Laws or rules;

(b) in all instances Buyer, on the one hand, or Sellers’ Representative, on the other hand, shall provide prompt notice of any such proposed release, announcement, statement, or comment to the other Party and shall provide the other Party with the opportunity to provide comments with respect to such proposed press release or publicity (which comments shall be considered in good faith by the proposing Party); and

(c) Sellers and their Affiliates are permitted to issue a press release after the execution of this Agreement after consulting with Buyer under Section 14.7(b).

Section 14.8 Counterparts. This Agreement may be executed by Buyer, Buyer AssetCos, and Sellers in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument. The exchange of copies of this Agreement and of signature pages by electronic image scan transmission in .pdf format or in other electronic format such as DocuSign shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by electronic image scan transmission in .pdf format or in other electronic format such as DocuSign are deemed to be their original signatures for all purposes. Any Party that delivers an executed counterpart signature page by electronic scan transmission in .pdf format or in other electronic format such as DocuSign shall promptly, following the request of the other Party, deliver a manually-executed counterpart signature page to each other Party; provided, however, that the failure to do so shall not affect the validity, enforceability, or binding effect of this Agreement.

Section 14.9 Dispute Resolution.

(a) Except for (1) Disputes as to the Final Purchase Price, which shall be resolved under Section 2.5(b), and (2) those matters described in Section 14.9(b), the Parties shall resolve all Disputes by submission to binding arbitration in Denver, Colorado, such arbitration to be conducted as follows. The arbitration proceeding shall be conducted in accordance with the then-active Commercial Arbitration Rules and Mediation Procedures of the AAA to the extent such rules do not conflict with the terms of this Section 14.9. The arbitration shall be before a three-person panel of neutral arbitrators (each, an “Arbitrator,” and, collectively, the “Arbitrators”), consisting of one Arbitrator selected by each of Buyer and Sellers’ Representative, and the third Arbitrator shall be selected by mutual agreement of the two Arbitrators selected by Buyer and Sellers’ Representative. Buyer and Sellers’ Representative shall endeavor to select Arbitrators with experience in oil and gas transactions. The Arbitrators shall conduct a hearing no later than 60 calendar days after selection of the third Arbitrator and shall render a written decision within 30 calendar days of the hearing. At the hearing, the Parties may present such evidence and witnesses as they may choose, with or without counsel. Adherence to formal rules of evidence is not required but the arbitration panel shall consider any evidence and testimony that it determines to be relevant, in accordance with procedures that it determines to be appropriate. Any award entered in the arbitration shall be made by a written opinion stating the reasons and basis for the award made and any payment due under the arbitration shall be made within 15 calendar days of the Arbitrators’ decision. The final decision may be filed in a court of competent jurisdiction and may be enforced by any Party as a final judgment of such court. Each Party shall bear its own costs and expenses of the arbitration; provided, however, that the costs of employing the Arbitrators shall be borne 50% by Sellers and 50% by Buyer. IN ENTERING INTO THIS AGREEMENT, THE PARTIES ARE KNOWINGLY AND VOLUNTARILY WAIVING THEIR RIGHTS TO A TRIAL BY JURY (INCLUDING IN ANY ACTION INVOLVING ANY FINANCING SOURCE UNDER THE DEBT FINANCING).

(b) The Parties shall continue to perform their respective obligations under this Agreement while any Dispute is pending. Notwithstanding anything in this Section 14.9 to the contrary, any Party may proceed to any court of competent jurisdiction to (1) obtain provisional injunctive, ancillary, or other equitable relief if such action is necessary to avoid irreparable harm or to preserve the status quo pending the resolution of the Dispute in accordance with the provisions of this Section 14.9, or (2) enter and enforce any judgment on the award rendered by the Arbitrators in accordance with applicable Laws. The arbitration of the underlying Dispute will proceed in accordance with the terms of this Section 14.9 during the pendency of the proceeding to obtain such provisional injunctive, ancillary, or other equitable relief.

(c) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SUBMISSION OF ANY DISPUTE FOR SETTLEMENT BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH THIS Section 14.9 AND, subject to Section 14.9(b), HEREBY WAIVES THE RIGHT TO PROCEED TO COURT OR ANY OTHER FORUM THAT MAY APPLY TO IT BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR FOR ANY OTHER REASON EXCEPT RECOURSE TO COURTS FOR ENFORCEMENT OF ARBITRAL AWARDS OR OTHER ORDER OF THE ARBITRATORS ISSUED IN AN ARBITRATION PURSUANT TO THIS Section 14.9 OR SEEKING ANY INTERIM OR CONSERVATORY MEASURES OF THE CPR Rules OR AS DESCRIBED IN THIS Section 14.9. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY SUIT, ACTION, OR PROCEEDING SEEKING TO ENFORCE ANY ARBITRAL AWARD OR OTHER ORDER OF THE ARBITRATORS ISSUED IN AN ARBITRATION PURSUANT TO THIS Section 14.9 OR SEEKING ANY INTERIM OR CONSERVATORY MEASURES PURSUANT TO THE CPR Rules AGAINST ANY PARTY IN ANY OTHER JURISDICTION PERMITTED BY LAW.

(d) Notwithstanding anything herein to the contrary, each Seller (1) agrees that, subject to Section 14.4 it will not bring or support any action, cause of action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Sources in any way relating to this Agreement or any of the transactions contemplated by this Agreement, including but not limited to any dispute arising out of or relating in any way to the Debt Financing or the performance thereof or the transactions contemplated thereby, in any forum other than exclusively in the Supreme Court of the State of New York, County of New York, sitting in the Borough of Manhattan or, if under applicable law exclusive jurisdiction is vested in the federal courts, the United States District Court for the Southern District of New York sitting in the Borough of Manhattan (and appellate courts thereof), (2) submits for itself and its property with respect to any such action to the exclusive jurisdiction of such courts, (3) agrees that service of process, summons, notice or document by registered mail addressed to it at its address provided in Section 14.2 shall be effective service of process against it for any such action brought in any such court, (4) waives and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of, and the defense of an inconvenient forum to the maintenance of, any such action in any such court, and (5) agrees that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 14.10 Governing Law. This Agreement and the Transaction and any arbitration or Dispute resolution conducted pursuant hereto shall be construed in accordance with, and governed by, the Laws of the State of Colorado (except that, with respect to issues related to real property for Assets located in a specific state, the Laws of such state shall govern), without reference to the conflict of Laws principles thereof. Notwithstanding anything herein to the contrary, the Parties agree that any claim, controversy, dispute or cause of action of any kind or nature (whether based upon contract, tort or otherwise) involving a Financing Source that is in any way related to this Agreement or any of the other transactions contemplated hereby, including any dispute arising out of or relating in any way to the Debt Financing (including with respect to the Commitment Letter or the definitive agreements with respect to the Debt Financing to be entered into in connection with the Closing) shall be governed by, and construed in accordance with, the Laws of the State of New York.

Section 14.11 Entire Agreement. This Agreement, including the Exhibits and Schedules, the Confidentiality Agreement, the Agreement Regarding Employees, and the other Transaction Documents constitutes the entire understanding among the Parties with respect to the subject matter hereof, superseding all negotiations, prior discussions, and prior agreements and understandings relating to such subject matter.

Section 14.12 Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns.

Section 14.13 No Third-Party Beneficiaries. Subject to Section 13.6(d), except for the Buyer Indemnified Parties and the Seller Indemnified Parties, all of which Persons are expressly made third-party beneficiaries to this Agreement for purposes of Article XIII, this Agreement is intended to benefit only the Parties and their respective successors and permitted assigns, except that the Financing Sources shall be express third party beneficiaries of Sections 6.7, 14.4, 14.9(a), 14.9(d), 14.10, 14.13, 14.14 and 14.17, each of such Sections shall expressly inure to the benefit of the Financing Sources and the Financing Sources shall be entitled to rely on and enforce the provisions of such Sections.

Section 14.14 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement or any other Transaction Document, Buyer and each Buyer AssetCo, on its own behalf and on behalf of its Affiliates and its and their Representatives, covenants, agrees and acknowledges that no Person other than Sellers (and their successors or assignees, as applicable) has any obligation hereunder and that, neither Buyer, any Buyer AssetCo, their Affiliates or its or their Representatives have any right of recovery under this Agreement or any other Transaction Document against, and no personal liability under this Agreement or any Transaction Document shall attach to, any of Sellers’ former, current or future equity holders, controlling persons, directors, officers, employees, general or limited partners, members, managers, Affiliates or agents, or any former, current or future equity holder, controlling person, director, officer, employee, general or limited partner, member, manager, Affiliate or agent of any of the foregoing (collectively, each of the foregoing but not including Sellers, a “Non-Recourse Party”), through Buyer, any Buyer AssetCo, or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil, by or through a claim by or on behalf of Buyer or any Buyer AssetCo against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable Law, whether in contract, tort or otherwise. Notwithstanding anything to the contrary contained herein, no Seller Related Party (other than Buyer) shall have any rights or claims against any Financing Source in connection with this Agreement, the Debt Financing or the transactions contemplated hereby or thereby, and no Financing Source shall have any rights or claims against any Seller Related Party (other than Buyer) in connection with this Agreement, the Debt Financing or the transactions contemplated hereby or thereby, whether at law or equity, in contract, in tort or otherwise; provided, however, following consummation of the Transactions, the foregoing will not limit the rights of the parties to the Debt Financing under any commitment letter related thereto. No Financing Source shall be subject to any special, consequential, punitive or indirect damages or damages of a tortious nature.

Section 14.15 Time of the Essence. Time is of the essence in this Agreement.

Section 14.16 No Partnership; No Fiduciary Duty. This Agreement shall not create and it is not the purpose or intention of the Parties to create any partnership, mining partnership, joint venture, general partnership, or other partnership relationship and none shall be inferred, and nothing in this Agreement shall be construed to establish a fiduciary relationship between the Parties for any purpose.

Section 14.17 Limitation on Damages. NO PARTY (OR ANY FINANCING SOURCE) SHALL BE LIABLE TO ANY OTHER PARTY OR TO ANY OTHER PARTY’S INDEMNIFIED PARTIES FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR INCIDENTAL DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS AGREEMENT OR THE BREACH THEREOF (INCLUDING CLAIMS PURSUANT TO Section 10.2 OR ARTICLE XIII) OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER TORT, NEGLIGENCE, STRICT LIABILITY, BREACH OF CONTRACT, WARRANTY, INDEMNITY, OR OTHERWISE, INCLUDING LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS OF PROFIT OR REVENUE, DIMINUTION IN VALUE, OR BUSINESS INTERRUPTIONS. IN FURTHERANCE OF THE FOREGOING, EACH PARTY RELEASES THE OTHER PARTY AND WAIVES ANY RIGHT OF RECOVERY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR INCIDENTAL DAMAGES SUFFERED BY SUCH PARTY REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE CAUSED BY ANY OTHER PARTY’S NEGLIGENCE (AND REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE, PASSIVE, OR GROSS NEGLIGENCE), FAULT, OR LIABILITY WITHOUT FAULT. The exclusion of SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR INCIDENTAL DAMAGES as set forth in the preceding sentence shall not apply to any such damages recovered by third parties against a BUYER Indemnified Party or a Seller Indemnified Party, as the case may be, in connection with Losses that may be indemnified under this Agreement. THE PARTIES ACKNOWLEDGE THAT THE AGREEMENTS CONTAINED IN THIS Section 14.17 ARE AN INTEGRAL PART OF THE TRANSACTION, AND THAT, WITHOUT THESE AGREEMENTS, THE PARTIES WOULD NOT ENTER INTO THIS AGREEMENT.

Section 14.18 Other Contract Interpretation.

(a) Headings. The headings of the Articles and Sections of this Agreement are for guidance and convenience of reference only and shall not limit or otherwise affect any of the terms or provisions of this Agreement.

(b) Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transaction is not affected in any adverse manner to Sellers or Buyer. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transaction is fulfilled to the greatest extent possible; provided, however, that if the limitations set forth in Section 13.12 are determined to be unenforceable, the applicable notice period will be the shortest time that is enforceable under applicable Law.

(c) Agreement Not to be Construed Against Drafter. The Parties have participated jointly in negotiating and drafting this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.

(d) Miscellaneous Interpretation. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference will be to an Article, Section, Exhibit or Schedule to this Agreement unless otherwise indicated. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” Unless the context otherwise requires, (1) “or” is disjunctive but not necessarily exclusive, (2) words in the singular include the plural and vice versa, (3) the words “herein,” “hereof,” “hereby,” “hereunder,” and words of similar nature refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited, and (4) the use in this Agreement of a pronoun in reference to a Party includes the masculine, feminine or neuter, as the context may require. The Schedules and Exhibits attached to this Agreement are deemed to be part of this Agreement and included in any reference to this Agreement. If the date of performance falls on a day that is not a Business Day, then the actual date of performance will be the next succeeding day that is a Business Day. References to any Law or agreement shall mean such Law or agreement as it may be amended from time to time. All references to “dollars” or “$” refers to United States Dollars.

[Signature pages follow.]

Sellers have executed this Agreement as of the Execution Date.

	Sellers

	Bayswater Resources LLC

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Fund III-A, LLC

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Fund III-B, LLC

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Fund IV-A, LP

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Fund IV-B, LP

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Fund IV-Annex, LP

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

	Bayswater Exploration & Production, LLC

	By:	/s/ Lynn S. Belcher
	Name:	Lynn S. Belcher
	Title:	Executive Vice President

Sellers’ Signature Page to Purchase and Sale Agreement

Buyer and each Buyer AssetCo has executed this Agreement as of the Execution Date.

	Buyer

	Prairie Operating Co.

	By:	/s/ Edward Kovalik
	Name:	Edward Kovalik
	Title:	Chief Executive Officer

	Buyer OpCo

	Prairie Operating Co., LLC

	By:	/s/ Edward Kovalik
	Name:	Edward Kovalik
	Title:	Chief Executive Officer

	Buyer LeaseCo

	Otter Holdings, LLC

	By:	/s/ Edward Kovalik
	Name:	Edward Kovalik
	Title:	Chief Executive Officer

	Buyer DisposalCo

	Prairie SWD Co., LLC

	By:	/s/ Edward Kovalik
	Name:	Edward Kovalik
	Title:	Chief Executive Officer

	Buyer GathererCo

	Prairie Gathering I, LLC

	By:	/s/ Edward Kovalik
	Name:	Edward Kovalik
	Title:	Chief Executive Officer

Buyer’s Signature Page to Purchase and Sale Agreement

Annex I

Definitions

“2024 Oil and Gas Property Taxes” means those Oil and Gas Property Taxes that are assessed in calendar year 2024, based on calendar year 2023 production, and payable in calendar year 2025.

“2025 Oil and Gas Property Taxes” means those Oil and Gas Property Taxes that are assessed in calendar year 2025, based on calendar year 2024 production, and payable in calendar year 2026.

“AAA” means the American Arbitration Association.

“Accounting Referee” is defined in Section 2.5(b).

“Additional Equity Shares” means:

(a) if the Shortfall Amount is a positive number, then a number of shares of Buyer’s common stock, $0.01 par value per share, equal to (1) the Shortfall Amount, divided by (2) the product of (i) the per share price paid by the public in the equity offering under the Financings multiplied by (ii) 97.25%, or

(b) if the Shortfall Amount is zero, then zero shares.

“AFEs” is defined in Section 5.16(b).

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such Person. As used in this definition, the term “control” and its derivatives means, with respect to any Person, the possession, directly or indirectly, of more than 50% of the equity interest or the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

“Agreement” is defined in the preamble.

“Agreement Regarding Employees” means that certain Agreement Regarding Employees by and among the Parties dated as of the Execution Date.

“Allocation Amount” is defined in Section 8.7.

“Allocation Schedule” is defined in Section 8.7.

“Applicable Contracts” means all Contracts to which any Seller is a party or is bound that relate to any of the Assets that will be binding on Buyer, a Buyer AssetCo, or the Assets after the Closing, including: communitization agreements; net profits agreements; production payment agreements; area of mutual interest agreements; joint venture agreements; confidentiality agreements; farmin and farmout agreements; bottom hole agreements; crude oil, condensate, and natural gas purchase and sale, gathering, transportation, and marketing agreements; hydrocarbon storage agreements; acreage contribution agreements; operating agreements; balancing agreements; pooling declarations or agreements; unitization agreements; processing agreements; saltwater disposal agreements; facilities or equipment leases; vehicle leases and other similar contracts and agreements.

Annex I - Page 1

“Arbitrators” is defined in Section 14.9(a).

“Asset Tax Adjustment” is defined in Section 2.2(c)(3).

“Asset Taxes” means all Property Taxes (including Other Property Taxes), Oil and Gas Property Taxes, and Severance Taxes.

“Assets” is defined in Section 1.2.

“Assignment” is defined in Section 11.3(a).

“Assumed Environmental Liabilities” means all Losses (including any damage to natural resources (including soil, air, surface water, or groundwater) and expenses for the modification, repair, replacement, investigation, remediation or removal of facilities on any of the Assets) brought or assessed by any and all Persons relating to (a) noncompliance with Environmental Laws, (b) the presence, disposal, or Release of any Hazardous Substances of any kind in, on, from or under the Assets, and (c) any matters described in Section 4.5 or Schedule 5.12, which, with respect to clauses (a), (b), or (c) is created or attributable to any period of time, whether arising before, on, or after the Closing Date.

“Assumed Liabilities” is defined in Section 13.1.

“Background Materials” means the Records, data room materials, and other materials made available to Buyer by Sellers or any of their Affiliates including documents reflecting (a) indices, compilations, or summaries of other documents (including summaries of any of the Material Contracts); (b) reserve estimates, engineering, geological, geophysical, or other interpretive information; or (c) projections, predictions, or other estimation of future events.

“Base Amount” means $2,750,000.00.

“Base Equity Shares” means a number of shares of Buyer’s common stock, $0.01 par value per share, equal to: (a) the Base Amount, divided by (b) the product of (1) the per share price paid by the public in the equity offering under the Financings multiplied by (2) 97.25%.

“Base Purchase Price” is defined in Section 2.1(a).

“Bayswater E&P” is defined in the preamble.

“Bayswater Fund III-A” is defined in the preamble.

Annex I - Page 2

“Bayswater Fund III-B” is defined in the preamble.

“Bayswater Fund IV-A” is defined in the preamble.

“Bayswater Fund IV-Annex” is defined in the preamble.

“Bayswater Fund IV-B” is defined in the preamble.

“Bayswater Resources” is defined in the preamble.

“Burdens” means any royalties (including landowner’s, overriding, and nonparticipating), net profits interests, production payments, or other similar burdens measured by or payable out of production of Hydrocarbons.

“Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Colorado are generally open for business.

“Buyer” is defined in the preamble.

“Buyer AssetCo” is defined in the preamble.

“Buyer Indemnified Parties” means, individually and in any combination, (a) Buyer, each Buyer AssetCo, and their Affiliates, (b) as to each of the Persons described in clause (a), each of such Person’s Representatives, and (c) as to each of the Persons described in clauses (a) and (b), such Person’s successors, assigns, legal representatives, heirs, or devisees.

“Buyer SEC Documents” is defined in Section 6.8.

“Buyer Taxes” means (a) Transfer Taxes; (b) Income Taxes imposed by any applicable Law on Buyer or any Buyer AssetCo, any of Buyer’s or any Buyer AssetCo’s direct or indirect owners or Affiliates, or any consolidated, combined, or unitary group of which any of the foregoing is or was a member; (c) any Asset Taxes allocable to Buyer or any Buyer AssetCo under Section 8.1 (taking into account, and without duplication of, (1) such Asset Taxes effectively borne by Buyer or the applicable Buyer AssetCo as a result of the adjustments to the Base Purchase Price made under Section 2.2, as applicable, and (2) any payments made from one Party to another Party in respect of Asset Taxes under Section 8.1); and (d) any Taxes (other than the Taxes described in clauses (a), (b) or (c) of this definition) attributable to the ownership or operation of the Assets for any Tax period (or portion thereof) beginning at the Effective Time.

“Buyer’s Certificate” is defined in Section 11.3(d).

“Capital Projects” is defined in Section 5.16(a).

“Cash Consideration” is defined in Section 2.1(b).

“Casualty Loss” is defined in Section 7.4.

“Claim Notice” is defined in Section 13.6(a).

Annex I - Page 3

“Closing” is defined in Section 11.1.

“Closing Amount” is defined in Section 2.4.

“Closing Date” is defined in Section 11.1.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commitment Letter” is defined in Section 6.7.

“Confidentiality Agreement” is defined in Section 7.3(a).

“Consent” means, other than any preferential right to purchase, any required consents to assignment or other similar restrictions on assignment, in each case, that would be applicable in connection with the transfer of the Assets to Buyer or Buyer AssetCos or the consummation of the Transaction.

“Contract” means any written or oral contract, agreement or any other legally binding arrangement.

“COPAS” means the Council of Petroleum Accountant Societies of North America.

“CPR Rules” means CPR’s Administered Arbitration Rules in effect at the time the arbitration is commenced.

“Customary Post-Closing Consents” means the consents and approvals from Governmental Authorities for the assignment of the Assets to Buyer or Buyer AssetCos that are customarily obtained after the assignment of properties similar to the Assets.

“Cut-Off Date” is defined in Section 2.3(f).

“Debt Financing” is defined in Section 6.7.

“De Minimis Threshold” means $250,000.

“Direct Claim” is defined in Section 13.6(c).

“Disposal System” is defined in Section 1.2(f).

“Dispute” means any dispute, controversy, or claim (of any and every kind or type, whether based on contract, tort, statute, regulation or otherwise) arising out of, relating to, or connected with this Agreement, the Transaction, or the other Transaction Documents, including any dispute, controversy, or claim concerning the existence, validity, interpretation, performance, breach, or termination of this Agreement, the relationship of the Parties arising out of this Agreement, the Transaction, or the other Transaction Documents.

“Effective Time” is defined in Section 1.4.

Annex I - Page 4

“Environmental Law” means any Law in effect on or after the Execution Date relating to pollution, the regulation or protection of human health and safety (as it relates to exposure to Hazardous Substances) or the environment, or the preservation and restoration of environmental quality, damage to natural resources, protection of any endangered, threatened, or similarly protected species, birds, and other organisms, or the Release, generation, handling, storage, transportation, recycling, labeling, use, treatment, or disposal of Hazardous Substances.

“Environmental Permits” is defined in Section 5.12(a).

“Escrow Agent” means Amegy Bank of Texas.

“Escrow Agreement” is defined in Section 7.6(b).

“Equity Compensation Plans” is defined in Section 6.9.

“Equity Consideration” means the lesser of (a) the Additional Equity Shares, if any, plus the Base Equity Shares, and (b) the Maximum Share Amount.

“Equity Financing” is defined in Section 7.1(d).

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

“Excluded Assets” is defined in Section 1.3.

“Excluded Interests” is defined in Section 1.3(j).

“Excluded Units” is defined in Section 1.3(j).

“Excluded Wells” is defined in Section 1.3(j).

“Execution Date” is defined in the preamble.

“Facilities and Equipment” is defined in Section 1.2(c).

“Fee Mineral Interests” is defined in Section 1.2(d).

“Final Purchase Price” is defined in Section 2.5(a).

“Final Settlement Date” is defined in Section 2.5(a).

“Final Settlement Statement” is defined in Section 2.5(a).

“Financed Amount” means an amount, in dollars, equal to the Closing Amount minus the Base Amount.

“Financing Sources” means the agents, arrangers, lenders and other entities that have committed to provide or arrange all or any part of the Debt Financing or any initial purchaser, private placement agent or underwriter of any registered or unregistered equity offering, in all cases, in connection with the transactions contemplated hereby, including any such Persons that are parties to any joinder agreements, indentures or credit agreements entered into in connection therewith, together with their respective affiliates and their and their respective affiliates’ officers, directors, employees, controlling persons, agents and representatives and their respective successors and assigns.

Annex I - Page 5

“Financings” means, collectively, the Debt Financing and the Equity Financing.

“Fraud” means an actual, intentional, and willful misrepresentation by a Seller with respect to the making of any representation or warranty set forth in Article V or the special warranty of title in the Assignment and Bill of Sale or any other representation or warranty made by a Seller in any of the Transaction Documents; provided, that (a) the Party making such representation or warranty had Knowledge that the applicable representation or warranty, as may be qualified in this Agreement, was false at the time it was made, (b) the representation or warranty was made with the intention that the other Party rely thereon to its detriment, (c) the representation or warranty was relied upon by the other Party to such other Party’s detriment, and (d) “Fraud” does not include constructive fraud or other claims based upon constructive knowledge, negligent misrepresentation, recklessness, or other similar theories.

“Fundamental Representations” means (a) with respect to Sellers, the representations and warranties of Sellers set forth in Sections 5.1, 5.2, 5.3(a), and 5.4 and the certifications of the foregoing representations and warranties set forth in the Seller’s Certificates; and (b) with respect to Buyer and Buyer AssetCos, the representations and warranties of Buyer and Buyer AssetCos set forth in Sections 6.1, 6.2, 6.3(a), 6.4, and 6.8 through 6.11 and the certifications of the foregoing representations and warranties set forth in the Buyer’s Certificates.

“GAAP” means generally accepted accounting principles in the United States, consistently applied.

“Governmental Authority” means (a) any federal, state, local, municipal, tribal, or other government, (b) any governmental, regulatory, or administrative agency, commission, body, or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, regulatory, or taxing authority or other taxing power, and (c) any court or governmental tribunal.

“Hazardous Substances” means any pollutants, contaminants, toxins, or hazardous or extremely hazardous substances, materials, wastes, constituents, substances, compounds, or chemicals that are regulated by, or may form the basis of any liability under, any Environmental Laws, including petroleum or any fraction thereof, waste oil, hydrogen sulfide, polychlorinated biphenyls, urea formaldehyde, Hydrocarbons, NORM or TE-NORM, asbestos, man-made material fibers, and any other substances referenced in Section 4.5.

“Hydrocarbon Inventory” means, except for any Imbalance Volumes, all inventory of Hydrocarbons in storage or inventory (including any linefill).

“Hydrocarbons” means oil, gas, gas liquids, and all other hydrocarbons and non-hydrocarbons.

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“Imbalance Volumes” means those well, pipeline, gathering system, transportation system, and processing plant over-delivery or under-delivery Hydrocarbon imbalance volumes between the amount of Hydrocarbons produced from or allocated to the Assets, regardless of whether such over-production, under-production, over-delivery, under-delivery, or similar imbalance arises at the wellhead, pipeline, gathering system, transportation system, processing plant or other location, including any imbalances under gas balancing or similar agreements, imbalances under processing agreements, and imbalances under gathering or transportation agreements.

“Incline Parties” is defined in Section 4.3.

“Income Taxes” means (a) all Taxes based upon, measured by, or calculated with respect to (1) net income or net profits (including franchise Taxes and any capital gains, alternative minimum, and net worth Taxes, and any Taxes on items of Tax preference, but not including ad valorem, property, sales, use, goods and services, severance, production, real or personal property transfer or other similar Taxes), or (2) multiple bases (including corporate franchise, doing business or occupation Taxes) if one or more of the bases upon which such Tax may be based, measured by, or calculated with respect to, is described in clause (1) above, and (b) withholding Taxes measured with reference to or as a substitute for any Tax described in clause (a) above.

“Indemnified Party” is defined in Section 13.6(a).

“Indemnifying Party” is defined in Section 13.6(a).

“Indemnity Deductible” means an amount equal to 4.0% of the Base Purchase Price.

“Interim Period Operating Plan” is defined in Section 7.1(a).

“Invasive Activities” is defined in Section 3.2(a).

“JAG” means the Judicial Arbiter Group.

“Knowledge” means (a) with respect to Sellers, the actual or constructive knowledge, after due inquiry of such individuals’ direct reports, of the individuals named on Schedule K-1; and (b) with respect to Buyer and Buyer AssetCos, the actual or constructive knowledge, after due inquiry of such individuals’ direct reports, of the individuals named on Schedule K-2.

“Lands” is defined in Section 1.2(a).

“Law” means any applicable statute, law (including common law), rule, regulation, requirement, ordinance, order, code, ruling, writ, injunction, decree, or other official act of or by any Governmental Authority.

“Leases” is defined in Section 1.2(a).

“Letter Agreement” is defined in Section 4.3.

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“Loss” means any and all payments, demands, claims, notices of violations, notices of probable violations, filings, investigations, administrative proceedings, actions, causes of action, suits, other legal proceedings, judgments, assessments, damages, deficiencies, fees, penalties, fines, obligations, responsibilities, liabilities, payments, charges, losses, costs, and expenses (including costs and expenses of owning or operating the Assets, expert fees, court costs, costs of consultants, accountants, and other agents and experts, costs of enforcement, and costs of collection) of any kind or character (whether known or unknown, fixed or unfixed, conditional or unconditional, based on negligence, strict liability, or otherwise, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent, or other legal theory), including penalties and interest on any amount payable as a result of any of the foregoing, any legal or other costs and expenses incurred in connection with investigating or defending any of the foregoing, and all amounts paid in settlement of any of the foregoing. Without limiting the generality of the foregoing, the term “Losses” specifically includes any and all Losses arising from, attributable to, or incurred in connection with any (a) breach of contract, (b) loss or damage to property, injury to, or death of Persons, and other tortious injury, and (c) violations of applicable Laws, including Environmental Laws, and any other legal right or duty actionable at Law or equity.

“Material Adverse Effect” means any actions, events, occurrences, conditions, or matters that individually or in the aggregate would be reasonably likely to result in a material adverse effect on (a) the ownership, operation, or value of the Assets, as currently owned and operated, which is material to the ownership, operation, or value of the Assets, taken as a whole, or (b) Sellers’ ability to consummate the Transaction or perform their obligations under this Agreement; provided, however, that “Material Adverse Effect” shall not include general changes in industry or economic conditions; changes resulting from a change in commodity prices; changes in Laws or in regulatory policies, changes or conditions resulting from civil unrest or terrorism or acts of God or natural disasters; change or conditions resulting from the failure of a Governmental Authority to act or omit to act under Law or changes, conditions that are cured or eliminated by Closing or material adverse effects resulting from entering into this Agreement or the announcement of the Transaction; any action or omission of Sellers taken in accordance with the terms of this Agreement without the violation thereof or with the prior written consent of Buyer; civil unrest; any outbreak of disease (including COVID-19), epidemic, pandemic, or other health crisis or public health event, or the worsening of any such outbreak, epidemic, pandemic, crisis or event; any outbreak of hostilities or the worsening thereof; terrorist activities or war or any similar disorder; a change in Laws or COPAS standards and any interpretations thereof from and after the Execution Date; any reclassification or recalculation of reserves in the ordinary course of business; changes in service costs generally applicable to the oil and gas industry in the United States; strikes and labor disturbances; natural declines in well performance; or any failure by any Seller or the Assets to meet any internal or published projections, forecasts, or revenue or earnings predictions.

“Material Contracts” is defined in Section 5.8(a).

“Maximum Share Amount” means 5,249,639 shares of Buyer’s common stock, $0.01 par value per share.

“Midstream Agreements” is defined in Section 7.3(e).

“Millennial” means YTEF Drilling Capital, LLC, or its affiliates.

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“Millennial Assets” is defined in Section 7.6.

“Millennial Deadline” is defined in Section 7.6(b).

“Millennial Purchase Price” is defined in Section 7.6(b).

“Millennial Transaction” is defined in Section 7.6.

“Net Casualty Loss” is defined in Section 7.4.

“Non-Fundamental Representations” means, as applicable, the representations and warranties of Sellers or Buyer and Buyer AssetCos set forth in this Agreement and the Agreement Regarding Employees, excluding in each case the Fundamental Representations and the representations set forth in Section 5.15.

“Non-Recourse Party” is defined in Section 14.14.

“NORM” means naturally occurring radioactive material.

“NRI” means the interest in and to all Hydrocarbons produced, saved, and marketed from or allocated to a Well after giving effect to all Burdens thereon.

“Offering Document” is defined in Section 7.1(d).

“Oil and Gas Property Taxes” means State of Colorado ad valorem Taxes that are levied based upon the value of the Hydrocarbons produced from the Assets.

“Other Property Taxes” means all Property Taxes that are not Oil and Gas Property Taxes.

“Outside Date” means March 15, 2025.

“Parties” and “Party” are defined in the preamble.

“Permit” means any credit, permit, license, approval, waiver, or similar qualification or authorization issued or given by any Governmental Authority.

“Permitted Encumbrances” means:

(a) Burdens, if the net cumulative effect of such Burdens does not operate to reduce Sellers’ aggregate NRI in a Well below that stated in Exhibit A-2 for such Well;

(b) statutory liens or encumbrances arising out of operation of Law with respect to a Loss incurred in the ordinary course of business and that are not delinquent or that are being contested in good faith;

(c) liens for Taxes or assessments not yet due and delinquent or, if delinquent, that are being contested in good faith in the ordinary course of business by appropriate proceedings identified on Schedule 5.15 and, if so required by statute, for which a bond has been posted, or for which all of the applicable statutes of limitations regarding the assessment or collection of such delinquent Taxes or assessments have expired;

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(d) materialmen’s, mechanics’, operators’, or other similar liens arising in the ordinary course of business incidental to operation of the Assets that secure amounts not yet due or delinquent or, if delinquent, are being contested in good faith by appropriate proceedings;

(e) liens, security interests, or encumbrances created under Leases, operating agreements, communitization, unitization, and pooling agreements, production sales contracts or by operation of Law securing amounts not yet due or delinquent;

(f) any lien, security interest, or encumbrance affecting the Assets that is discharged by any Seller prior to, at, or in connection with Closing;

(g) easements, rights-of-way, servitudes, permits, surface leases and other surface rights on or over the Assets or any restrictions on access thereto that do not materially interfere with the ownership, use or operation of the affected Asset;

(h) conventional rights of reassignment normally actuated by an intent to abandon or release a lease and requiring notice to the holders of such rights;

(i) rights of a common owner of any interest in rights-of-way or easements currently held by Sellers and such common owner as tenants in common or through other common or joint ownership;

(j) the terms and conditions of the Material Contracts set forth on Exhibit A-5;

(k) rights reserved to or vested in any Governmental Authority to control or regulate any of the Assets in any manner, and all applicable Laws of general applicability in the area of the Assets;

(l) defects that have been cured by possession under applicable statutes of limitation for adverse possession or for prescription or similar Laws;

(m) all preferential rights and Consents (including all Required Post-Closing Consents);

(n) with respect to any interest in the Assets acquired through compulsory pooling, failure of the records of any Governmental Authority to reflect any Seller as the owner of any Assets;

(o) any liens, encumbrances, discrepancies, defects, or irregularities in title as to any depths or formations other than (1) with respect to any Well, the currently producing formation for such Well, (2) with respect to any Lease, the Codell or Niobrara Formations, or the portions thereof if such Lease covers less than the entirety of the Codell or Niobrara Formations;

(p) defects based on a Lease not containing a pooling clause;

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(q) defects based on or arising out of the failure of Sellers to enter into, be party to, or be bound by and pooling provisions, pooling agreements, or pooling order with respect to any horizontal Well that crosses more than one Lease;

(r) defects based solely on (1) lack of information in any Seller’s files, or (2) references to any unrecorded agreement in any recorded instrument to which any Seller is not a party if such Seller does not possess such unrecorded agreement, in each case unless Buyer provides evidence that the lack thereof has resulted in another Person’s actual and superior claim of title;

(s) defects in the chain of title consisting of (1) failure to recite marital status or (2) omissions of probate, heirship, or estate proceedings; unless Buyer provides evidence that the lack thereof has resulted in another Person’s actual and superior claim of title;

(t) defects arising out of the lack of powers of attorney or trustee authority from any Person to execute and deliver documents on such Person’s behalf, or the lack of corporate or other entity authorization, in each case unless Buyer provides evidence that the lack thereof has resulted in another Person’s actual and superior claim of title;

(u) defects arising out of a variation in corporate name, in each case unless Buyer provides evidence that the lack thereof has resulted in another Person’s actual and superior claim of title;

(v) defects arising from failure of any non-participating royalty owners to ratify a unit;

(w) any mortgagor liens burdening a lessor’s interest in the Leases, in each case only to the extent that it is not subject to foreclosure proceedings;

(x) with respect to any Lease issued by a Governmental Authority, defects consisting solely of the failure to file assignments or other documents in the records of such Governmental Authority, so long as such assignments or other documents are properly recorded in the applicable county, in each case unless Buyer provides evidence that the lack thereof has resulted in another Person’s actual and superior claim of title;

(y) defects arising from the failure to file an affidavit relating to the occurrence of a required contingency or expiration of an oil and gas lease for non-production;

(z) defects and irregularities arising out of the lack of a survey, unless a survey is expressly required by applicable Laws or regulations;

(aa) the matters described in Schedule 5.6 or Schedule 5.13;

(bb) failure to obtain waivers of maintenance of uniform interest, restriction on zone transfer, or similar provisions in operating agreements with respect to assignments in Sellers’ chain of title to any Asset or in connection with the Transaction;

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(cc) defects resulting from pending approval from any Governmental Authority of any communitization agreement, unitization agreement, pooling order, unit order, or unit contraction;

(dd) defects arising out of prior oil and gas leases not released of record;

(ee) any Imbalance Volumes set forth on Schedule 5.10;

(ff) the inability to access any surface location of any of the Properties other than the site of a currently-producing Well; and

(gg) the Leases and all other liens, encumbrances, Contracts, instruments, obligations, defects, and irregularities affecting the Assets that do not (1) materially interfere with the value, use, development, ownership, or operation of the affected Asset; (2) reduce the NRI of Sellers, in the aggregate, in any Well to be below the NRI stated in Exhibit A-2 for such Well; or (3) obligate Sellers, in the aggregate, to bear the WI in any Well greater than that WI stated in Exhibit A-2 for such Well.

“Person” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or any other entity.

“Plugging and Abandonment Obligations” means any and all responsibility, liability, and Losses for the following, arising out of or relating to the Assets, whether before, on, or after the Effective Time: (a) the necessary and proper plugging, replugging, and abandonment of the Wells or any other wells located within the Assets; (b) the necessary and proper removal, abandonment, and disposal of all structures, pipelines, equipment, operating inventory, abandoned property, trash, refuse, and junk located on or comprising part of the Assets; (c) the necessary and proper capping and burying of all associated flow lines located on or comprising part of the Assets in connection with any plugging, replugging, or abandonment of the Wells or any other wells located within the Assets; (d) to the extent not covered by clause (b), above, the necessary and proper removal, abandonment, and decommissioning of the Facilities and Equipment or otherwise comprising part of the Assets; (e) the necessary and proper restoration of the surface and subsurface of the lands covering the Leases, Lands, or other lands included in the Assets (including any required reclamation) to the condition required by applicable Laws and contracts; and (f) obtaining and maintaining all bonds, or supplemental or additional bonds, and compliance with financial assurance arrangements and plans that may be required contractually or by Governmental Authorities.

“Prairie DisposalCo” is defined in Section 2.4.

“Prairie GathererCo” is defined in Section 2.4.

“Prairie LeaseCo” is defined in Section 2.4.

“Prairie OpCo” is defined in Section 2.4.

“Preliminary Settlement Statement” is defined in Section 2.4.

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“Properties” means, collectively, the Leases, Lands, Wells, Fee Mineral Interests and Surface Agreements.

“Property Expenses” means (a) except for those expenses described in clause (b) of this definition, costs and expenses of every kind attributable to the Assets, including capital expenses, operating expenses, facilities and plant expenses, field office costs, employee costs related to all employees based in the field offices and allocable to the Assets at the reasonable discretion of the Seller, joint interest billings, any expense chargeable to the joint account under the applicable operating agreement, lease operating expenses, any waste water gathering and disposal costs which are passed through by Sellers or their Affiliates, marketing fees, lease rental and maintenance costs, lease acquisition costs (including lease bonuses, brokers’ fees, and other similar or related costs and including in connection with Sellers’ ongoing leasing program described in Section 7.1(c)), drilling expenses, completion expenses, workover expenses, geological, geophysical, and any other exploration, development, transportation, compression, processing, or maintenance expenditures chargeable under applicable agreements, any costs and expenditures for asset retirement obligations, including all environmental remediation, reclamation, and plugging and abandoning of wells, and un-utilized demand charges and other costs under the Midstream Agreements, in each case, incurred in the ordinary course in the ownership and operation of the Assets, and (b) overhead costs charged to the Assets under any Applicable Contracts by Third-Party operators who are not an Affiliate of Seller (excluding, for the avoidance of doubt, any general, administrative or overhead costs and expenses of Seller or its Affiliates charged to the Assets), but excluding in all cases all costs and expenses attributable to (1) obligations with respect to Imbalance Volumes for which the Base Purchase Price is adjusted under Section 2.2(d), (2) obligations to pay any Burdens or other interest owners revenues or proceeds attributable to sales of Hydrocarbons relating to the Assets, (3) any Suspense Funds for which the Base Purchase Price is adjusted under Section 2.2(c)(4), (4) obligations with respect to Asset Taxes (which shall be apportioned as of the Effective Time in accordance with Section 8.1) and Income Taxes, (5) any breach by any Seller of its representations and warranties set forth in this Agreement, any Transaction Documents, or in the Agreement Regarding Employees (and the cure, or attempted cure, thereof) or any Losses for which any Buyer Indemnified Party is entitled to indemnification under Section 13.2(a), (6) claims for indemnification or reimbursement from any Third Party with respect to costs of the types described in the preceding clauses (1) through (5), whether such claims are made pursuant to contract or otherwise, and (7) the Excluded Assets.

“Property Taxes” means all ad valorem, real property, personal property, and all other similar Taxes assessed against the Assets or based upon or measured by the ownership of the Assets, but not including Income Taxes, Severance Taxes, or Transfer Taxes.

“Records” is defined in Section 1.2(l).

“Release” means the actual spilling, leaking, disposing, discharging, emitting, depositing, dumping, ejecting, leaching, pumping, pouring, injecting, discarding, abandoning, placing, spreading, escaping, or any other release (including any subsurface migration resulting therefrom), however defined, whether intentional or unintentional, into the environment.

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“Representatives” means any stockholders, members, managers, officers, directors, employees, agents, consultants, lenders, auditors, accountants, attorneys, and representatives of a Person.

“Required Consent” means any Consent that, if not obtained by Closing, would, by the express terms of the applicable instrument or Applicable Contract (a) invalidate or terminate or give the holder of such Consent right the right to invalidate or terminate the conveyance of an Asset or (b) invalidate or terminate or give the holder of such Consent right the right to invalidate or terminate the underlying Asset, including any such restriction that by its express terms includes words such as or with similar effect as “the failure to obtain such Consent will void the assignment” or “the failure to obtain such Consent will void this lease”.

“Restricted Asset” is defined in Section 4.2(a).

“Scheduled Closing Date” is defined in Section 11.1.

“SEC” is defined in Section 6.8.

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” and “Sellers” are defined in the preamble.

“Seller Bonds” means, collectively, all surety instruments, bonds, letters of credit, or guarantees, if any, posted by Sellers with any Governmental Authority or third Persons and relating to the Assets.

“Seller Employee” is defined in Section 7.3(d).

“Seller Indemnified Parties” means, individually and in any combination, (a) each Seller and its Affiliates, (b) as to each of the Persons described in clause (a), each of such Person’s Representatives, and (c) as to each of the Persons described in clauses (a) and (b), such Person’s successors, assigns, legal representatives, heirs, or devisees.

“Seller Related Party” means the Sellers and each of their respective affiliates and their and their respective affiliates’ stockholders, partners, members, officers, directors, employees, controlling persons, agents and representatives.

“Seller Taxes” means (a) all Income Taxes imposed by any applicable Law on any Seller, any of Seller’s direct or indirect owners or Affiliates or any consolidated, combined, or unitary group of which any of the foregoing is or was a member; (b) any Asset Taxes allocable to Sellers under Section 8.1 (taking into account, and without duplication of, (1) such Asset Taxes effectively borne by Sellers as a result of the adjustments to the Base Purchase Price made under Section 2.2, as applicable, and (2) any payments made from one Party to another Party in respect of Asset Taxes under Section 8.2); (c) any Taxes imposed on or with respect to the ownership or operation of the Excluded Assets or that are attributable to any asset or business of any Seller that is not part of the Assets; and (d) any Taxes (other than the Taxes described in clauses (a), (b), or (c) of this definition) attributable to the acquisition, ownership or operation of the Assets, the production of Hydrocarbons therefrom or the receipt of proceeds therefrom for any Tax period (or portion thereof) ending prior to the Effective Time.

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“Seller-Operated Properties” means those Properties and other Assets that any Seller (or its Affiliates) is designated or was designated as operator under applicable Laws or Applicable Contract solely during the period of time such Properties are operated by any Seller (or its Affiliates).

“Seller’s Certificate” is defined in Section 11.3(f).

“Sellers’ Representative” is defined in Section 14.3.

“Severance Taxes” mean all extraction, production, sales, use, transfer, excise, severance, and all other similar Taxes with respect to the Assets that are based upon or measured by the acquisition, operation or ownership of the Assets, the production of Hydrocarbons therefrom or the receipt of proceeds therefrom, but not including Property Taxes, Income Taxes, and Transfer Taxes.

“Shortfall Amount” means an amount, in dollars, equal to lesser of (a) the amount by which the Financed Amount exceeds the amount actually raised by Buyer in the Financings, if any, and (b) (1) the Maximum Share Amount minus the Base Equity Shares, multiplied by (2) the per share price paid by the public in the equity offering under the Financings, multiplied by (3) 97.25%. If the amount actually raised by Buyer in the Financings exceeds the Financed Amount, then the Shortfall Amount will be deemed zero.

“Special Warranty” means that each Seller warrants to Buyer or the applicable Buyer AssetCo title to the Wells against the lawful claims of any Person claiming the same, or any part thereof, by, through, or under such Seller, but not otherwise, subject to and except for Permitted Encumbrances.

“Specified Liabilities” means:

(a) any Seller Taxes;

(b) any Third-Party Claims regarding personal injury, illness, or death occurring on or attributable to the ownership, use, or operation of the Assets prior to the Closing Date and during the period in which a Seller owned the Assets;

(c) any Third-Party Claims regarding the disposal of Hazardous Substances that were transported to, or disposed of, at off-site disposal facilities prior to the Closing Date and related to related to such Seller’s ownership or operation of the Assets;

(d) any liabilities related to the Excluded Assets;

(e) any fines and penalties assessed against any Seller by Governmental Authorities for any drilling, completion, operation, ownership or use of the Assets that occurred prior to the Closing Date, in each case with respect to any failure to comply with applicable Laws;

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(f) any unpaid costs and expenses due and payable by any Seller under any unit agreement prior to the Effective Time and that are not included as a downward adjustment to the Base Purchase Price in the Final Settlement Statement;

(g) any Losses suffered as a consequence of any payment or mispayment of any Burdens arising under the Leases prior to the Closing Date; and

(h) any Losses suffered as a consequence of any payment or mispayment of any Burdens arising under the Leases described on Schedule 4.2(c) prior to the Closing Date.

“Subsidiaries” means any Person in which a Party owns, directly or indirectly, any equity or other ownership interest or otherwise controls through contract or otherwise.

“Surface Agreements” is defined in Section 1.2(f).

“Suspense Funds” means funds held in suspense (whether positive or negative, and including funds held in suspense for unleased interests) that are attributable to the Assets or any interests pooled, unitized, or communitized therewith; provided, however, the term “Suspense Funds” does not include any interest or penalty on any such funds.

“Tag Interests” is defined in Section 4.3.

“Target Closing Date” is defined in Section 11.1.

“Tax” or “Taxes” means any and all taxes, including any interest, penalties, or other additions to tax, that may become payable in respect thereof, imposed by any Governmental Authority, which taxes shall include all income taxes, profits taxes, taxes on gains, alternative minimum taxes, estimated taxes, payroll taxes, employee withholding taxes, unemployment insurance taxes, social security taxes, welfare taxes, disability taxes, severance taxes, license charges, taxes on stock, sales taxes, harmonized sales taxes, use taxes, ad valorem taxes, privilege taxes, conservation taxes, value added taxes, excise taxes, goods and services taxes, franchise taxes, gross receipts taxes, occupation taxes, real or personal property taxes, land transfer taxes, stamp taxes, environmental taxes, transfer taxes, workers’ compensation taxes, windfall taxes, net worth taxes, and other taxes, duties, levies, customs, tariffs, imposts, assessments, unclaimed property, and escheat obligations and charges of the same or of a similar nature to any of the foregoing.

“Tax Controversy” is defined in Section 8.8(d).

“Tax Return” means any and all returns, reports, information returns, declarations, statements, certificates, bills, schedules, claims for refund, or other written information provided, or required to be provided, to a Governmental Authority with respect to any Tax, including any and all attachments, amendments, and supplements thereto.

“TE-NORM” means technologically-enhanced NORM.

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“Third Party” means a Person that is not a Party or an Affiliate of a Party.

“Third-Party Claim” is defined in Section 13.6(b)(1).

“Transaction” means the transactions contemplated by this Agreement.

“Transaction Documents” means each of the documents delivered at Closing under Section 11.3, the Agreement Regarding Employees, and all other documents, certificates, and instruments delivered under this Agreement or in connection with the Transaction.

“Transfer Taxes” means any and all transfer, sales, use, excise, goods and services, stock, conveyance, registration, real estate transfer, land transfer, stamp, documentary, notarial, filing, recording, and similar Taxes imposed on any transfer of the Assets under this Agreement (excluding Income Taxes and Property Taxes).

“Wells” is defined in Section 1.2(b).

“WI” means the percentage interest in and to a Well that is burdened with the obligation to bear and pay costs and expenses of exploration, drilling, maintenance, development, abandonment, and operations on or in connection with such Well required to be borne with respect thereto, but without regard to the effect of Burdens.

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Exhibit 15.1

AUDITOR’S ACKNOWLEDGMENT

We acknowledge the incorporation by reference in Prairie Operating Co.’s (“Prairie”) Registration Statement No. 333-282730 on Form S-3 of our independent auditor’s review report dated February 6, 2025 related to our review of the combined statement of revenues and direct operating expenses of certain oil and natural gas properties of Bayswater Resources, LLC, Bayswater Fund III-A, LLC, Bayswater Fund III-B, LLC, Bayswater Fund IV-A, LP, Bayswater Fund IV-B, LP, and Bayswater Fund IV-Annex, LP for the nine month periods ended September 30, 2024 and 2023 and the related notes to the combined financial statement appearing in this Current Report on Form 8-K of Prairie.

Denver, Colorado

	/s/ Plante & Moran, PLLC
February 6, 2025

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

We consent to the incorporation by reference in Prairie Operating Co.’s (“Prairie”) Registration Statement No. 333-282730 on Form S-3 of our independent auditor’s report dated February 6, 2025 related to the combined statement of revenues and direct operating expenses of certain oil and natural gas properties of Bayswater Resources, LLC, Bayswater Fund III-A, LLC, Bayswater Fund III-B, LLC, Bayswater Fund IV-A, LP, Bayswater Fund IV-B, LP, and Bayswater Fund IV-Annex, LP for the years ended December 31, 2023 and 2022 and the related notes to the combined financial statement appearing in this Current Report on Form 8-K of Prairie.

Denver, Colorado	/s/ Plante & Moran, PLLC

February 6, 2025

Exhibit 23.2

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS

As independent petroleum engineers, we hereby consent to the reference to our firm, in the context in which they appear, and to the references to, and to the inclusion of, our reserve report, dated January 27, 2025, with respect to the estimates of pro forma reserves of Prairie Operating Co. (the “Company”) as of November 30, 2024, included in or made part of this Current Report on Form 8-K of the Company, and to the incorporation by reference of such report in the Registration Statement on Form S-3 (No. 333-282730), including any amendments thereto (the “Registration Statement”), and the related Prospectus of the Company, filed with the U.S. Securities and Exchange Commission. We also hereby consent to the references to our firm contained in the Registration Statement, including under the caption “Experts” in the Prospectus.

	*CAWLEY, GILLESPIE & ASSOCIATES, INC.*
	*Texas Registered Engineering Firm F-693*

	By:	/s/ W. Todd Brooker
		W. Todd Brooker, P.E.
		President

Austin, Texas

February 3, 2025

Exhibit 99.1

Prairie Operating Co. Announces Acquisition of DJ Basin Assets from Bayswater Exploration and Production for Approximately $600 Million

	●	Adds ~24,000 net acres in Weld County and ~26 mboepd of oil-weighted (69% liquids) net production
	●	Adds 77.9 MMboe and ~$1.1 Billion in Proved PV-10 value⁽¹⁾⁽²⁾
	●	Attractive valuation, highly accretive across key cash flow metrics
	●	Significantly increases 2025 production, revenue and adjusted EBITDA guidance

HOUSTON, Texas, February 7, 2025 (GLOBE NEWSWIRE) — Prairie Operating Co. (Nasdaq: PROP) (the “Company,” “Prairie,” “we,” “our” or “us”), today announced it has entered into a definitive purchase and sale agreement to acquire (the “Bayswater Acquisition”) certain assets (the “Bayswater Assets”) from Bayswater Exploration and Production and certain of its affiliated entities (collectively “Bayswater”), a premier operator in the Denver-Julesburg Basin (the “DJ Basin”). The transaction will significantly increase the Company’s operational scale and footprint in the DJ Basin and add highly economic drilling locations.

The purchase price of the acquisition is $602.75 million. The transaction consideration will consist of cash and up to ~5.2 million shares of Prairie common stock. Prairie anticipates funding the cash portion of the consideration, net of expected purchase price adjustments, through a combination of cash on hand and borrowings under the Company’s credit facility, pursuant to which the Company has received commitments to expand its borrowing base to $475 million as of the closing of the Bayswater Acquisition, and proceeds from a public offering of Prairie Common Stock. The Company expects to complete the Bayswater Acquisition in February 2025, subject to customary closing conditions, with an economic effective date of December 1, 2024.

“This acquisition delivers compelling strategic and financial advantages and reflects our disciplined, but opportunistic approach to rapidly expand our footprint in the DJ Basin,” said Edward Kovalik, Chairman and CEO of Prairie Operating Co. “Not only will the addition of these high-quality assets be immediately accretive, but they will also accelerate our development plans, enhance operational efficiencies, and drive sustainable, long-term value creation for our shareholders.”

Gary Hanna, President of the Company, added, “This acquisition represents a transformative milestone for Prairie Operating Co. by significantly expanding our footprint and production of oil rich assets in the DJ Basin. Upon closing, we will be well-positioned to deliver significant organic production growth in 2025 and beyond.”

⁽¹⁾ PV-10 is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.

⁽²⁾The reserve information presented above is based solely on our internal evaluation and interpretation of reserves, production and other information provided to us by our counterparties in the course of our due diligence with respect to the Bayswater Acquisition and has not been independently verified or estimated. These forecasted amounts are based on various assumptions, including, among others, the level of our (and our other operators’) capital spending, commodity prices, rig availability, services availability, proppant availability, takeaway capacity as well as other factors. To the extent any of these factors change adversely, these estimates may not be achieved. Our actual operating results and financial condition may differ materially from these estimates.

Key Prairie Highlights, pro forma for the Transaction:

	●	Transformational Increase in Oil-Weighted Production: ~27,500 net BOEPD (69% liquids)
	●	Expanded Footprint / Inventory Life: ~54,000 net acres, including ~600 highly economic drilling locations, providing ~10 years of drilling inventory
	●	Significantly Increases Free Cash Flow: Expected to be immediately accretive to per-share cash flow metrics
	●	Maintains Strong Balance Sheet: Expected leverage ratio of ~1.0x at closing with upsized committed credit facility and ample liquidity
	●	Meaningful Infrastructure Synergies: Leverages existing infrastructure to drive operational efficiencies and reduce development costs
	●	Attractive Valuation Metrics⁽¹⁾: PV-20 of Proved Developed Producing (“PDP”) reserves and $23,500 per net flowing BOE

2025 Updated Guidance

Upon the closing of this acquisition, the combined Company’s 2025 pro forma outlook includes:

	●	Average Daily Production: 29,000 – 31,000 BOEPD
	●	Capital Expenditures (Capex): $300 million – $320 million
	●	Adjusted EBITDA⁽³⁾: Expected to range between $350 million and $370 million

*Based on an active hedging program and an average working interest (“WI”) of 75% or greater.

Estimated Reserve Data

A summary of the estimated reserves and values of our properties (as adjusted to give effect to the Bayswater Acquisition), as of November 30, 2024, and as determined by Cawley, Gillespie & Associates, the Company’s independent Petroleum Reserve Evaluation Firm, using SEC pricing as of November 30, 2024 is set forth below.

	Our Pro Forma Net Reserves
Reserve Category	Oil (MBbl)		NGL (MBbl)		Gas (MMcf)		Total (MBoe)		Liquids (%)			PV-10 ($MM)⁽⁴⁾
Proved Developed Producing (PDP)		23,581		14,810		113,611		57,326		67	%	$	860
Proved Developed Not Producing (PDNP)		173		26		216		235		85	%	$	5
Proved Undeveloped (PUD)		25,547		8,970		72,088		46,531		74	%	$	495
Total Proved		49,301		23,806		185,914		104,093		70	%	$	1,360

⁽³⁾Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.

⁽⁴⁾PV-10 is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below.

Webcast Access

Date: Friday, February 7, 2025

Time: 10:00am Eastern Time (9:00am Central Time)

Participant Listening: 877-407-9219 / +1 201-689-8852

The webcast may be accessed from the “Press & Media” page of Prairie’s website at: https://www.prairieopco.com/media

To participate via telephone, please register in advance here: https://event.choruscall.com/mediaframe/webcast.html?webcastid=DUzJKsjj

Participants can use Guest dial-in numbers above and be answered by an operator OR click the Call me^TM link for instant telephone access to the event: https://hd.choruscall.com/InComm/?callme=true&passcode=13751732&h=true&info=company&r=true&B=6

The Call me^TM link will be made active 15 minutes prior to scheduled start time. Upon registration, all telephone participants will be joined to the conference call in listen only. A replay of the webcast will be archived on the Company’s website for two (2) weeks following the call.

Advisors

Citi is serving as exclusive financial advisor and Norton Rose Fulbright US LLP is serving as legal advisor to Prairie. Citibank N.A. is also leading the committed financing under the Company’s anticipated expanded credit facility.

About Prairie Operating Co.

Prairie Operating Co. is a Houston-based publicly traded independent energy company engaged in the development and acquisition of oil and natural gas resources in the United States. The Company’s assets and operations are concentrated in the oil and liquids-rich regions of the Denver-Julesburg (DJ) Basin, with a primary focus on the Niobrara and Codell formations. The Company is committed to the responsible development of its oil and natural gas resources and is focused on maximizing returns through consistent growth, capital discipline, and sustainable cash flow generation. More information about the Company can be found at www.prairieopco.com.

Reconciliation of Non-GAAP Measures

Adjusted EBITDA

This press release also contains Adjusted EBITDA, which is a financial measure not presented in accordance with U.S. GAAP. Adjusted EBITDA is used by management to evaluate the performance of our business, make operational decisions, and assess our ability to generate cashflows. Management believes Adjusted EBITDA provides investors with helpful information to better understand the underlying performance trends of our business, facilitate period-to-period comparisons, and assess the company’s operating results.

Adjusted EBITDA is derived from Net income and is adjusted for income tax expense, depreciation, depletion, and amortization (DD&A), accretion of asset retirement obligations, non-cash stock-based compensation, and loss on unrealized commodity derivatives. We adjust net income for the items listed above to arrive at Adjusted EBITDA because these amounts can vary substantially between periods and companies within our industry depending upon accounting methods, book values of assets, capital structures, and the method by which assets were acquired. Additionally, the presentation of Adjusted EBITDA does not imply that our operating results will not be affected by unusual or non-recurring items.

Adjusted EBITDA has limitations as an analytical tool, including that it excludes certain items that affect our reported financial results. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, GAAP Net income or as an indicator of our operating performance or liquidity. Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

The following table reconciles Adjusted EBITDA to Net Income, which is the most directly comparable financial measure prepared in accordance with GAAP.

PV-10

This press release contains PV-10, which is a financial measure not presented in accordance with U.S. GAAP. PV-10 is derived from the Standardized Measure of Discounted Future Net Cash Flows (“Standardized Measure”), which is the most directly comparable GAAP financial measure for proved reserves. PV-10 is a computation of the Standardized Measure on a pre-tax basis. PV-10 is equal to the Standardized Measure at the applicable date, before deducting future income taxes discounted at 10%. Neither PV-10 nor standardized measure represents an estimate of the fair market value of the applicable crude oil, natural gas and NGLs properties. We believe that the presentation of PV-10 is relevant and useful to our investors as supplemental disclosure to the Standardized Measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our reserves before considering future corporate income taxes and our current tax structure. While the standardized measure is dependent on the unique tax situation of each company, PV-10 is based on prices and discount factors that are consistent for all companies.

The following table reconciles PV-10 to the standard measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure:

Forward-Looking Statements

The information included herein and in any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included herein, are forward-looking statements, including statements about our ability to complete and successfully finance the Bayswater Acquisition, our financial performance following the Bayswater Acquisition, estimates of oil, natural gas and NGLs reserves, estimates of future oil, natural gas and NGLs production, and the Company’s updated guidance set forth in this press release. When used herein, including any oral statements made in connection herewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on the Company’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date hereof. The Company cautions you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company, including our ability to satisfy the conditions to closing the Bayswater Acquisition in a timely manner or at all, our ability to successfully finance the Bayswater Acquisition, our ability to recognize the anticipated benefits of the Bayswater Acquisition, the possibility that we may be unable to achieve expected free cash flow accretion, production levels, drilling, operational efficiencies and other anticipated benefits of the Bayswater Assets within the expected time-frames or at all, and our ability to successfully integrate the Bayswater Assets . There may be additional risks not currently known by the Company or that the Company currently believes are immaterial that could cause actual results to differ from those contained in the forward-looking statements. Additional information concerning these and other factors that may impact the Company’s expectations can be found in the Company’s periodic filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Annual Report on Form 10-K/A filed with the SEC on March 20, 2024, and any subsequently filed Quarterly Report on Form 10-Q and Current Report on Form 8-K. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

Investor Relations Contact:

Wobbe Ploegsma

info@prairieopco.com

832.274.3449

Exhibit 99.2

Acquired Properties

Combined Statement of Revenue and Direct Operating Expenses

For the Years Ended December 31, 2023 and 2022

Table of Contents

	Page

Independent Auditor’s Report

Financial Statements

Combined Statement of Revenues and Direct Operating Expenses	4

Notes to Combined Statement of Revenues and Direct Operating Expenses	5

Supplemental Oil and Gas Information (Unaudited)	9

[Plante & Moran, PLLC Letterhead]

Independent Auditor’s Report

To the Members and Partners

Bayswater Resources, LLC

Bayswater Fund III-A, LLC

Bayswater Fund III-B, LLC

Bayswater Fund IV-A, LP

Bayswater Fund IV-B, LP

Bayswater Fund IV-Annex, LP

Opinion

We have audited the combined statement of revenues and direct operating expenses (the “combined financial statement”) of certain oil and natural gas properties of Bayswater Resources, LLC; Bayswater Fund III-A, LLC; Bayswater Fund III-B, LLC; Bayswater Fund IV-A, LP; Bayswater Fund IV-B, LP; and Bayswater Fund IV-Annex, LP (collectively, Bayswater) for the years ended December 31, 2023 and 2022 and the related notes to the combined financial statement.

In our opinion, the accompanying combined financial statement presents fairly, in all material respects, the revenues and direct operating expenses of certain oil and natural gas properties of Bayswater for the years ended December 31, 2023 and 2022 in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Combined Financial Statement section of our report. We are required to be independent of Bayswater and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter

As described in Note 1 to the combined financial statement, the combined statement of revenues and direct operating expenses was prepared for the purpose of presenting solely the revenues and direct operating expenses derived from certain oil and natural gas interests owned by Bayswater and is not intended to be a complete presentation of Bayswater’s assets, liabilities, revenues, or expenses. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Combined Financial Statement

Management is responsible for the preparation and fair presentation of the combined financial statement in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statement that are free from material misstatement, whether due to fraud or error.

In preparing the combined financial statement, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the certain oil and natural gas properties of Bayswater’s ability to continue as a going concern within one year after the date that the combined financial statement are issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Combined Financial Statement

Our objectives are to obtain reasonable assurance about whether the combined financial statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the combined financial statement.

- 2 -

To the Members and Partners

Bayswater Resources, LLC

Bayswater Fund III-A, LLC

Bayswater Fund III-B, LLC

Bayswater Fund IV-A, LP

Bayswater Fund IV-B, LP

Bayswater Fund IV-Annex, LP

In performing an audit in accordance with GAAS, we:

●	Exercise professional judgment and maintain professional skepticism throughout the audit.

●	Identify and assess the risks of material misstatement of the combined financial statement, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the combined financial statement.

●	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of Bayswater’s internal control. Accordingly, no such opinion is expressed.

●	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the combined financial statement.

●	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the certain oil and natural gas properties of Bayswater’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that supplementary information relating to oil and gas producing activities contained within Note 7 be presented to supplement the basic combined financial statement. Such information is the responsibility of management and, although not a part of the basic combined financial statement, is required by the United States Financial Accounting Standards Board, which, as described by Accounting Standards Codification 932-235-50, considers it to be an essential part of financial reporting for placing the basic combined financial statement in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic combined financial statement, and other knowledge we obtained during our audit of the basic combined financial statement. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

/s/ Plante & Moran, PLLC

February 6, 2025

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Acquired Properties

Combined Statement of Revenues and Direct Operating Expenses

For the Years Ended December 31, 2023 and 2022

	December 31, 2023		December 31, 2022
Revenues
Oil sales, net of deductions	$	415,000,112	$	392,931,218
Natural gas and liquids sales, net of deductions		51,831,604		118,273,043
Total revenues		466,831,716		511,204,261

Direct operating expenses
Lease operating expenses		39,898,053		24,351,475
Production and property taxes		31,325,533		40,141,557
Oil gathering expenses		8,542,616		3,151,379
Workover expenses		3,278,240		671,891
Lease operating expenses, related party		2,687,187		1,885,417
Total direct operating expenses		85,731,629		70,201,719

Revenues in excess of direct operating expenses	$	381,100,087	$	441,002,542

See accompanying notes to the Combined Statement of Revenues and Direct Operating Expenses

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 1 – Basis of Presentation

Under the terms of a contemplated Purchase and Sale Agreement between the Sellers (as defined below) and Prairie Operating Co. (“Prairie”) (the “Agreement”), Prairie would acquire certain oil and natural gas properties owned by Bayswater Resources, LLC, Bayswater Fund III-A, LLC, Bayswater Fund III-B, LLC, Bayswater Fund IV-A, LP, Bayswater Fund IV-B, LP, and Bayswater Fund IV-Annex, LP (collectively the “Sellers”) which include properties operated by an affiliated entity of the Sellers (together with the Sellers, “Bayswater”), non-operated properties, related proved reserves, and associated well equipment and infrastructure in Weld County, Colorado (the “Acquired Properties”).

The Bayswater entities are under common-control and thus the collective results of the Sellers, inclusive of the incremental working interests described above, have been combined in the accompanying Combined Statement of Revenues and Direct Operating Expenses. Upon combination, all intercompany accounts and transactions are eliminated.

The accompanying Combined Statement of Revenue and Direct Operating Expenses’ purpose is to present activity solely related to the revenues and direct operating expenses of the oil and natural gas interests of the Acquired Properties. It is not intended to be a complete presentation of the results of operations of the Acquired Properties and may not be representative of future operations as it does not include general and administrative expenses, interest income or expense, depreciation, depletion and amortization, income taxes or other income and expense items not directly associated with revenues from oil and gas.

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of the Combined Statement of Revenue and Direct Operating Expenses in conformity with GAAP required Bayswater’s management to make various assumptions, judgements and estimates to determine the reported amounts of revenues and direct operating expenses of the Acquired Properties for the periods reported. These estimates and assumptions are based on Bayswater’s best estimates and judgements. Changes in these assumptions, judgements and estimates will occur due to the passage of time and occurrence of future events. Accordingly, actual results could differ materially from amounts previously established.

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 2 – Summary of Significant Accounting Policies (continued)

Revenue Recognition

Oil and natural gas revenues from production on the Acquired Properties in which Bayswater shares an economic interest with other owners are recognized on the basis of Bayswater’s pro-rata interest and are recognized in the month production is delivered to the purchaser, at which point Bayswater’s performance obligations under its commodity sales contracts are satisfied and control of the commodity is transferred to the purchaser. For commodity sales contracts related to production from oil and gas properties operated by Bayswater, fees included in the contract that are incurred prior to control transfer are classified as oil gathering expenses on the Combined Statement of Revenues and Direct Operating Expenses and fees incurred after control transfers are included as a reduction to the transaction price and are netted within oil and gas sales on the Combined Statement of Revenues and Direct Operating Expenses. For commodity sales contracts related to production from non-operated oil and gas properties, all fees are included as a reduction to the transaction price and are netted within oil and gas sales on the Combined Statement of Revenues and Direct Operating Expenses. Provided that reasonable estimates can be made, revenue and receivables are accrued to recognize delivery of product to the purchaser in the month the performance obligation is satisfied. Differences between estimates and actual volumes and prices, if any, are adjusted upon final settlement.

Direct Operating Expenses

Direct operating expenses are recognized when incurred and include amounts required to operate the wells to produce, gather, transport, process and treat oil and natural gas. Direct operating expenses also include production and property taxes and expenses with support personnel, support services, equipment and facilities related to oil and natural gas production.

Concentrations of Credit Risk

There were no joint interest operators that accounted for 10% or more of the Acquired Properties’ total revenue in any of the periods presented. The following table presents purchasers that accounted for 10% or more of the Acquired Properties’ total revenue in at least one of the periods presented:

	Year Ended December 31, 2023			Year Ended December 31, 2022
Purchasers
A		58	%		27	%
B		9	%		19	%
C		6	%		14	%
D		-			19	%

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 3 – Related Party Transactions

The majority of the Acquired Properties are operated by an entity under common-control with the Sellers (the “Operator”). For these properties, the Operator assesses certain overhead charges to, among other things, operate producing oil and gas wells and to drill and complete new oil and gas wells. The amount and frequency of these charges are based on industry-standard agreements used between third party joint-owners of oil and gas properties. During the years ended December 31, 2023 and 2022, the Operator billed $2,687,187 and $1,885,417, respectively, in producing overhead fees to the Acquired Properties. The producing overhead is presented in lease operating expenses, related party on the Combined Statement of Revenues and Direct Operating Expenses.

Note 4 – Commitments and Contingencies

The activities of the Acquired Properties are subject to potential claims and litigation in the normal course of operations. Pursuant to the terms of the Agreement between Bayswater and Prairie, certain liabilities arising in connection with ownership of the Acquired Properties prior to the effective date are to be retained by Bayswater.

Management is not aware of any pending or threatened legal, environmental remediation or other commitments or contingencies that would have a material effect on the Acquired Properties, other than customary plugging and abandonment obligations associated with the Acquired Properties.

Gas Processing Agreement

The Acquired Properties are subject to a Natural Gas Gathering and Processing Agreement (the “Gas Agreement”) with a gas processing company (the “Gas Processing Company”), under which all natural gas produced from certain Weld County leases within certain drill spacing units under the Acquired Properties will be gathered and purchased by the Gas Processing Company. The Gas Agreement provides for payments based on volumes gathered and processed, as well as a guaranteed monthly payment of $98,778 intended to reimburse costs incurred by the Gas Processing Company in order to connect the gathering facility to the covered leases and drill spacing units. Per the Gas Agreement, guaranteed monthly payments commenced on the date of initial deliveries of natural gas, which was October 2019, and continue over 120 months.

Additionally, the Gas Agreement, as amended, allocates a portion of the Gas Processing Company’s firm commitments to transport natural gas liquids processed by the Gas Processing Company to the Acquired Properties beginning in July 2022 and continuing through October 2029. The commitments cover 3.6 million barrels of natural gas liquids over this period and, beginning in January 2023, are subject to monthly shortfall fees of $4.83 per barrel for any under-delivered volumes, subject to annual consumer price index-based escalations. As of December 31, 2023, the remaining commitments cover 2.3 million barrels of natural gas liquids. No shortfall payments have been required to date and none are expected to be made based on estimated NGL production forecasts.

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 4 – Commitments and Contingencies (continued)

Gas Processing Agreement (continued)

The estimated future commitment for the Acquired Properties under the Gas Agreement as of December 31, 2023 is presented in the table below:

	Guaranteed Monthly Payment		Maximum Shortfall Fee		Maximum Commitment
2024	$	927,516	$	2,603,287	$	3,530,803
2025		927,516		1,970,676		2,898,192
2026		927,516		1,608,528		2,536,044
2027		927,516		1,282,456		2,209,972
2028		927,516		895,490		1,823,006
Thereafter		695,637		278,045		973,682
Total	$	5,333,217	$	8,638,482	$	13,971,699

Oil Purchase Agreement

The Acquired Properties are also subject to a Crude Oil Purchase and Sale Agreement (the “Oil Agreement”) with an oil pipeline company (the “Oil Pipeline Company”), under which all oil produced from certain Weld County leases within certain drill spacing units under the Acquired Properties will be gathered and purchased by the Oil Pipeline Company. Additionally, the Oil Agreement, as amended in 2023, requires a minimum volume of 15.85 million barrels of oil from the Acquired Properties to be delivered each year beginning in 2023 and continuing through 2026. As of December 31, 2023, 12.7 million barrels of oil remained to be delivered. All oil delivered to the Oil Pipeline Company from the Acquired Properties under the Oil Agreement will be subject to a gathering fee of $1.68 - $1.91 per barrel, and under-delivered volumes will incur a fee of $1.73 - $1.91, subject to annual consumer price index-based escalations. There were no under-delivered volumes during the years ended December 31, 2023 and 2022.

The estimated future commitment for the Acquired Properties under the Oil Agreement as of December 31, 2023 is presented in the table below:

	Total Oil Gathering Fee Exposure

2024	$	5,564,918
2025		9,928,045
2026		5,795,084
Total	$	21,288,047

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 5 – Excluded Expenses

Indirect general and administrative expenses, interest expense, income taxes, depreciation, depletion, amortization, impairment, and other indirect expenses have not been allocated to the Acquired Properties by Bayswater and as such, have been excluded from the accompanying Combined Statement of Revenue and Direct Operating Expenses.

Note 6 – Subsequent Events

Subsequent events have been evaluated through February 6, 2025, the date the accompanying Combined Statement of Revenues and Direct Operating Expenses was available to be issued. There were no material subsequent events that require recognition or additional disclosure in the accompanying Combined Statement of Revenue and Direct Operating Expenses.

Note 7 – Supplemental Oil and Gas Information (Unaudited)

Oil and Natural Gas Reserves

The estimates of proved oil and natural gas reserves and discounted future net cash flows for the Acquired Properties as of December 31, 2023 and 2022, were prepared using historical data and other information by qualified petroleum engineers at Bayswater and audited by a third-party. The process of estimating quantities of proved oil and natural gas reserves is very complex, requiring significant subjective decisions to be made in the evaluation of available geologic, engineering and economic data for each reservoir. The data for any given reservoir may also change substantially over time as the result of numerous factors, including but not limited to, additional development activity, production history and continual reassessment of the viability of production under varying economic conditions. As a result, revisions to existing reserve estimates may occur from time to time.

The estimated proved net recoverable reserves presented below include only those quantities of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic, operating, and regulatory practices. In accordance with the Securities and Exchange Commission’s (“SEC”) guidelines, estimates of proved reserves from which present values are derived were based on unweighted 12-month average price of the first day of the month price for the period, and held constant. Proved developed reserves represent only those reserves estimated to be recovered through existing wells. All the Acquired Properties’ reserves set forth herein are in the United States and are proved reserves.

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Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 7 – Supplemental Oil and Gas Information (Unaudited) (continued)

Oil and Natural Gas Reserves (continued)

The Acquired Properties’ estimated quantities of proved oil and natural gas reserves and changes in net proved reserves are summarized below for the years ended December 31, 2023 and 2022:

	Crude Oil (Bbl)			Natural Gas Liquids (Bbl)			Natural Gas (Mcf)
Proved developed and undeveloped reserves - January 1, 2022		44,509,484			28,397,369			153,337,501
Oil and gas production		(4,261,872	)		(2,018,585	)		(13,303,386	)
Acquisition of reserves		4,050,976			2,102,982			12,200,238
Extensions and discoveries		-			-			-
Revisions of previous estimates		(764,010	)		(2,765,178	)		(796,325	)
Proved developed and undeveloped reserves - December 31, 2022		43,534,578			25,716,588			151,438,028

Proved developed reserves at beginning of year		18,191,757			13,452,077			72,799,599
Proved developed reserves at end of year		22,829,518			16,353,984			94,295,230
Proved undeveloped reserves at beginning of year		26,317,727			14,945,292			80,537,902
Proved undeveloped reserves at end of year		20,705,060			9,362,604			57,142,798

	Crude Oil (Bbl)			Natural Gas Liquids (Bbl)			Natural Gas (Mcf)
Proved developed and undeveloped reserves - January 1, 2023		43,534,578			25,716,588			151,438,028
Oil and gas production		(5,426,809	)		(1,983,172	)		(14,030,620	)
Acquisition of reserves		-			-			-
Extensions and discoveries		-			-			-
Revisions of previous estimates		(6,479,476	)		(4,566,309	)		(23,197,951	)
Proved developed and undeveloped reserves - December 31, 2023		31,628,293			19,167,107			114,209,457

Proved developed reserves at beginning of year		22,829,518			16,353,984			94,295,230
Proved developed reserves at end of year		19,869,387			13,663,700			80,473,539
Proved undeveloped reserves at beginning of year		20,705,060			9,362,604			57,142,798
Proved undeveloped reserves at end of year		11,758,906			5,503,407			33,735,918

- 10 -

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 7 – Supplemental Oil and Gas Information (Unaudited) (continued)

Standardized Measure

The Acquired Properties compute a standardized measure of future net cash flows and changes therein relating to estimated proved reserves in accordance with authoritative accounting guidance. The assumptions used to compute the standardized measure are those prescribed by the Financial Accounting Standards Board (“FASB”) and the SEC. These assumptions do not necessarily reflect the Company’s expectations of actual revenues to be derived from those reserves, nor their present value amount. The limitations inherent in the reserve quantity estimation process, as discussed previously, are equally applicable to the standardized measure computations since these reserve quantity estimates are the basis for the valuation process.

Future cash inflows and production and development costs are determined by applying prices and costs, including transportation, quality, and basis differentials, to the yearend estimated future reserve quantities. The following weighted average prices as adjusted for transportation, quality, and basis differentials were used in the calculation of the standardized measure:

	2023		2022
Crude Oil per Bbl	$	75.40	$	90.67
Natural Gas Liquids per Bbl	$	20.34	$	31.85
Natural Gas per Mcf	$	0.78	$	5.18

Future operating costs are determined based on estimates of expenditures to be incurred in developing and producing the proved reserves in place at the end of the period using yearend costs and assuming continuation of existing economic conditions. The standardized measure presented here does not include the effects of federal and state income taxes as the Sellers are partnerships and not subject to federal and state income taxes.

The standardized measure of discounted future net cash flows relating to the Acquired Properties’ proved oil and natural gas reserves is as follows (in thousands):

	December 31, 2023			December 31, 2022
Future cash inflows	$	2,864,222		$	5,436,468
Future production costs		(795,220	)		(1,158,321	)
Future development costs		(93,467	)		(353,044	)
Future net cash flows		1,975,535			3,925,103
Less: 10% annual discount to reflect timing of cash flows		(695,350	)		(1,570,156	)
Standardized measure of discounted future net cash flows	$	1,280,185		$	2,354,947

- 11 -

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 7 – Supplemental Oil and Gas Information (Unaudited) (continued)

Changes in Standardized Measure

Changes in the standardized measure of discounted future net cash flows before income taxes related to the proved oil and gas reserves of the Acquired Properties are as follows (in thousands):

	For the Years Ended
	December 31, 2023			December 31, 2022
Standardized measure – beginning of the year	$	2,354,947		$	1,379,395
Sales of oil and natural gas, net of production costs		(381,100	)		(441,003	)
Net changes in price and production costs		(831,988	)		1,064,036
Revisions of previous quantity estimates		(320,932	)		(65,342	)
Acquisition of reserves		-			108,069
Development costs incurred		266,702			149,257
Extensions and discoveries		-			-
Accretion of discount		235,495			137,940
Net change in future development costs		(19,569	)		34,072
Changes in timing and other		(23,370	)		(11,477	)
Standardized measure – end of year	$	1,280,185		$	2,354,947

- 12 -

Exhibit 99.3

Acquired Properties

Combined Statement of Revenue and Direct Operating Expenses

For the Nine Months Ended September 30, 2024 and 2023

Table of Contents

	Page

Independent Auditor’s Review Report

Financial Statements

Combined Statement of Revenues and Direct Operating Expenses	3

Notes to Combined Statement of Revenues and Direct Operating Expenses	4

[Plante & Moran, PLLC Letterhead]

Independent Auditor’s Review Report

To the Members and Partners

Bayswater Resources, LLC

Bayswater Fund III-A, LLC

Bayswater Fund III-B, LLC

Bayswater Fund IV-A, LP

Bayswater Fund IV-B, LP

Bayswater Fund IV-Annex, LP

Results of Review of Interim Financial Information

We have reviewed the combined statement of revenues and direct operating expenses (the “combined financial statement”) of certain oil and natural gas properties of Bayswater Resources, LLC; Bayswater Fund III-A, LLC; Bayswater Fund III-B, LLC; Bayswater Fund IV-A, LP; Bayswater Fund IV-B, LP; and Bayswater Fund IV-Annex, LP (collectively, Bayswater) for the nine-month periods ended September 30, 2024 and 2023 and the related notes to the combined financial statement.

Based on our review, we are not aware of any material modifications that should be made to the accompanying combined financial statement for it to be in accordance with accounting principles generally accepted in the United States of America.

Basis for Review Results

We conducted our review in accordance with auditing standards generally accepted in the United States of America (GAAS) applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. A review of interim financial information is substantially less in scope than an audit conducted in accordance with GAAS, the objective of which is an expression of an opinion regarding the financial information as a whole, and accordingly, we do not express such an opinion. We are required to be independent of Bayswater and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our review. We believe that the results of the review procedures provide a reasonable basis for our conclusion.

Emphasis of Matter

As described in Note 1 to the combined financial statement, the combined statement of revenues and direct operating expenses was prepared for the purpose of presenting solely the revenues and direct operating expenses derived from certain oil and natural gas interests owned by Bayswater and is not intended to be a complete presentation of Bayswater’s assets, liabilities, revenues, or expenses. Our conclusion is not modified with respect to this matter.

Responsibilities of Management for the Interim Financial Information

Management is responsible for the preparation and fair presentation of the combined financial statement in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of interim financial information that is free from material misstatement, whether due to fraud or error.

/s/ Plante & Moran, PLLC

February 6, 2025

-2-

Acquired Properties

Combined Statement of Revenues and Direct Operating Expenses

For the Nine Months Ended September 30, 2024 and 2023 (unaudited)

	September 30, 2024		September 30, 2023
Revenues
Oil sales, net of deductions	$	314,152,566	$	302,315,403
Natural gas and liquids sales, net of deductions		37,663,182		39,259,280
Total revenues		351,815,748		341,574,683

Direct operating expenses
Lease operating expenses		24,771,399		29,430,702
Production and property taxes		26,215,597		25,465,620
Oil gathering expenses		8,091,304		5,810,063
Lease operating expenses, related party		2,462,068		1,957,403
Workover expenses		1,756,092		1,517,490
Total direct operating expenses		63,296,460		64,181,278

Revenues in excess of direct operating expenses	$	288,519,288	$	277,393,405

See accompanying notes to the Combined Statement of Revenues and Direct Operating Expenses

-3-

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 1 – Basis of Presentation

The accompanying Combined Statement of Revenue and Direct Operating Expenses’ purpose is to present activity solely related to the revenues and direct operating expenses of the oil and natural gas interests of the Acquired Properties. It is not intended to be a complete presentation of the results of operations of the Bayswater Properties and may not be representative of future operations as it does not include general and administrative expenses, interest income or expense, depreciation, depletion and amortization, income taxes or other income and expense items not directly associated with revenues from oil and gas.

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

-4-

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 2 – Summary of Significant Accounting Policies (continued)

Revenue Recognition

Direct Operating Expenses

Concentrations of Credit Risk

	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Purchaser
A		53	%		39	%

-5-

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 3 – Related Party Transactions

The majority of the Acquired Properties are operated by an entity under common-control with the Sellers (the “Operator”). For these properties, the Operator assesses certain overhead charges to, among other things, operate producing oil and gas wells and to drill and complete new oil and gas wells. The amount and frequency of these charges are based on industry-standard agreements used between third party joint-owners of oil and gas properties. During the nine-months ended September 30, 2024 and 2023, the Operator billed $2,462,068 and $1,957,403, respectively, in producing overhead fees to the Acquired Properties. The producing overhead is presented in lease operating expenses, related party on the Combined Statement of Revenues and Direct Operating Expenses.

Note 4 – Commitments and Contingencies

Gas Processing Agreement

Additionally, the Gas Agreement, as amended, allocates a portion of the Gas Processing Company’s firm commitments to transport natural gas liquids processed by the Gas Processing Company to the Acquired Properties beginning in July 2022 and continuing through October 2029. The commitments cover 3.6 million barrels of natural gas liquids over this period and, beginning in January 2023, are subject to monthly shortfall fees of $4.83 per barrel for any under-delivered volumes, subject to annual consumer price index-based escalations. As of September 30, 2024, the remaining commitments cover 1.6 million barrels of natural gas liquids. No shortfall payments have been required to date and none are expected to be made based on estimated NGL production forecasts.

-6-

Acquired Properties

Notes to the Combined Statement of Revenues and Direct Operating Expenses

Note 4 – Commitments and Contingencies (continued)

Gas Processing Agreement (continued)

The estimated future commitment for the Acquired Properties under the Gas Agreement as of September 30, 2024 is presented in the table below:

	Guaranteed Monthly Payment		Maximum Shortfall Fee		Maximum Commitment
2024	$	231,879	$	64,994	$	296,873
2025		927,516		1,970,676		2,898,192
2026		927,516		1,608,528		2,536,044
2027		927,516		1,282,456		2,209,972
2028		927,516		895,490		1,823,006
Thereafter		695,637		278,045		973,682
Total	$	4,637,580	$	6,100,189	$	10,737,769

Oil Purchase Agreement

The Acquired Properties are also subject to a Crude Oil Purchase and Sale Agreement (the “Oil Agreement”) with an oil pipeline company (the “Oil Pipeline Company”), under which all oil produced from certain Weld County leases within certain drill spacing units under the Acquired Properties will be gathered and purchased by the Oil Pipeline Company. Additionally, the Oil Agreement, as amended in 2023, requires a minimum volume of 15.85 million barrels of oil from the Acquired Properties to be delivered each year beginning in 2023 and continuing through 2026. As of September 30, 2024, 8.2 million barrels of oil remained to be delivered. All oil delivered to the Oil Pipeline Company from the Acquired Properties under the Oil Agreement will be subject to a gathering fee of $1.68 - $1.91 per barrel, and under-delivered volumes will incur a fee of $1.73 - $1.91. There were no under-delivered volumes during the nine-month period ended September 30, 2023. During the nine-month period ended September 30, 2024, the Acquired Properties incurred under-delivered volume fees totaling $818,594, which is included in lease operating expenses on the Combined Statement of Revenue and Direct Operating Expenses.

The estimated future commitment for the Acquired Properties under the Oil Agreement as of September 30, 2024 is presented in the table below:

	Total Oil Gathering Fee Exposure

2024	$	1,127,941
2025		6,844,495
2026		5,795,084
Total	$	13,767,520

-7-

Note 5 – Excluded Expenses

Note 6 – Subsequent Events

-8-

Exhibit 99.4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS OF The ACQUIRED PROPERTIES

Certain aspects of the presentation of the results of operations of the Acquired Properties (as defined below) have been conformed for purposes of presenting comparable results. The following discussion and analysis of the results of operations of the Acquired Properties should be read in conjunction with the audited combined statement of revenue and direct operating expenses of the Acquired Properties for the years ended December 31, 2023 and 2022 and related notes and the unaudited combined statement of revenue and direct operating expenses of the Acquired Properties for the nine months ended September 30, 2024 and 2023, filed herewith.

General and Basis of Presentation

Substantially all of the revenue of the Acquired Properties is derived from the sale of oil, natural gas and NGLs. Oil, natural gas and NGL prices are inherently volatile and are influenced by many factors outside of Bayswater’s control.

Overview

The following table presents production volumes and financial highlights of the Acquired Properties for the nine months ended September 30, 2024 and 2023:

	Nine Months Ended September 30,
	2024				2023
	Period Total		Per Day		Period Total		Per Day
Production Sales Volume Data:
Oil (Mbbls)		4,103		15.0		3,986		14.6
Natural gas (MMcf)		12,238		44.7		10,261		37.6
Liquids (Mbbls)		1,631		6.0		1,481		5.4
Financial Data (thousands):
Revenue	$	351,816			$	341,575
Revenues in excess of direct operating expenses	$	288,519			$	277,393

Revenues for the nine months ended September 30, 2024 increased by $10.2 million compared to the nine months ended September 30, 2023, primarily due to an increase in sales volumes. Revenues in excess of direct operating expenses for the nine months ended September 30, 2024 increased by $11.1 million compared to the nine months ended September 30, 2023, primarily due to the increase in revenues.

Results of Operations

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023

	Nine Months Ended September 30,
	2024		2023		$ Change			% Change
	(Thousands)
Revenues:
Oil sales	$	314,153	$	302,315	$	11,837			4	%
Natural gas and liquids sales		37,663		39,259		(1,596	)		(4	)%
Total revenues	$	351,816	$	341,575	$	10,241			3	%

Oil Sales

Oil sales for the nine months ended September 30, 2024 increased $11.8 million, or 4%, from the nine months ended September 30, 2023, related to increased oil production and higher oil prices. The following table reflects oil prices and oil sales volumes for the nine months ended September 30, 2024 and 2023.

	Nine Months Ended September 30,
	2024		2023
Oil sales (per barrel)	$	76.56	$	75.85
Oil sales volumes (Mbbls)		4,103		3,986
Per day oil sales volumes (Mbbls/d)		15.0		14.6

Natural gas and liquids sales

Natural gas and liquids sales for the nine months ended September 30, 2024 decreased $1.6 million, or 4%, from the nine months ended September 30, 2023, related to lower natural gas sales prices, partially offset by higher production and slightly higher liquid prices. The following table reflects natural gas prices and natural gas production volumes for the nine months ended September 30, 2024 and 2023.

	Nine Months Ended September 30,
	2024		2023
Natural gas sales (per Mcf)	$	0.09	$	0.88
Natural gas sales volumes (MMcf)		12,238		10,261
Per day natural gas sales volumes (MMcf/d)		44.7		37.6

Liquids sales (per barrel)	$	22.45	$	20.38
Liquids sales volumes (Mbbls)		1,631		1,481
Per day liquids sales volumes (Mbbls/d)		6.0		5.4

Direct operating expenses analysis:

	Nine Months Ended September 30,										Per Boe⁽¹⁾ Expense
	2024		2023		$ Change			% Change			2024		2023
	(Thousands)										(Thousands)
Direct operating expenses:
Lease operating expenses	$	24,771	$	29,430	$	(4,659	)		(16	)%	$	3.9	$	4.10
Lease operating expenses, related party		2,462		1,957		505			26	%		0.32		0.27
Production and property taxes		26,216		25,465		750			3	%		3.37		3.55
Oil gathering expenses		8,091		5,810		2,281			39	%		1.04		0.81
Workover expenses		1,756		1,517		239			16	%		0.23		0.21
Total direct operating expenses	$	63,296	$	64,181	$	(885	)		(1	)%	$	8.14	$	8.94
Revenues in excess of direct operating expenses	$	288,519	$	277,393	$	11,126			4	%	$	37.11	$	38.65

(1) “Boe” means barrel of oil equivalent, using the ratio of six Mcf of natural gas to one barrel of crude oil or condensate.

Lease operating expenses decreased $4.2 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily related to decreases in water hauling and disposal expense, offset partially by increases related to increased operating activity and well counts.

Production and property taxes increased $0.8 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due to higher revenue from higher oil prices and higher oil sales volumes.

Oil gathering expenses increased $2.3 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily related to an increase in the oil sales volumes gathered and transported via pipeline.

Year ended December 31, 2023 vs. Year ended December 31, 2022

	Year ended December 31,
	2023		2022		$ Change			% Change
	(Thousands)
Revenues:
Oil sales	$	415,000	$	392,931	$	22,069			6	%
Natural gas and liquids sales		51,832		118,273		(66,441	)		(56	)%
Total revenues	$	466,832	$	511,204	$	(44,373	)		(9	)%

Oil Sales

Oil sales for the year ended December 31, 2023 increased $22.1 million, or 6%, from the year ended December 31, 2022, related to higher oil sales volumes, partially offset by lower oil sales prices. The following table reflects oil prices and oil sales volumes for the year ended December 31, 2023 and 2022.

	Year ended December 31,
	2023		2022
Oil sales (per barrel)	$	76.47	$	92.20
Oil sales volumes (Mbbls)		5,427		4,262
Per day oil sales volumes (Mbbls/d)		14.9		11.7

Natural Gas and liquids sales

Natural gas and liquids sales for 2023 decreased $66.4 million, or 56%, from 2022, related to lower natural gas sales prices. The following table reflects natural gas and liquids prices and natural gas and liquids production volumes for the years ended December 31, 2023 and 2022.

	Year ended December 31,
	2023		2022
Natural gas sales (per Mcf)	$	0.81	$	3.42
Natural gas sales volumes (MMcf)		14,031		13,303
Per day natural gas sales volumes (MMcf/d)		38.4		36.4

Liquids sales (per barrel)	$	20.37	$	36.08
Liquids sales volumes (Mbbls)		1,983		2,019
Per day liquids sales volumes (Mbbls/d)		5.4		5.5

Direct operating expenses analysis:

	Year ended December 31,										Per Boe Expense
	2023		2022		$ Change			% Change			2023		2022
	(Thousands)										(Thousands)
Direct operating expenses:
Lease operating expenses	$	39,898	$	24,351	$	15,547			64	%	$	4.09	$	2.87
Lease operating expenses, related party		2,687		1,885		802			43	%		0.28		0.22
Production and property taxes		31,326		40,142		(8,816	)		(22	)%		3.21		4.72
Oil gathering expenses		8,543		3,151		5,391			171	%		0.88		0.37
Workover expenses		3,278		672		2,606			(388	)%		0.34		0.08
Total direct operating expenses	$	85,732	$	70,202	$	15,530			22	%	$	8.79	$	8.26
Revenues in excess of direct operating expenses	$	381,100	$	441,003	$	(59,903	)		(14	)%	$	39.09	$	51.90

Lease operating expenses increased $16.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily related to increased operating activity and well counts, as well as an increase in water hauling and disposal expense.

Production and property taxes decreased $8.8 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, due to lower revenue from lower commodity prices.

Oil gathering expenses increased $5.4 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily related to an increase in the oil sales volumes gathered and transported via pipeline.

Workover expenses increased $2.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, related to maintenance activities to minimize the decline in production from producing wells.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosure of contingent liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The more significant reporting areas impacted by management’s judgments and estimates are as follows:

Revenue Recognition

Revenues are derived from the sale of produced oil, natural gas and natural gas liquids and are recognized when the recognition criteria of the Financial Accounting Standards Board (“FASB”) ASC Topic 606, Revenue from Contracts with Customers, are met, which generally occurs at the point in which title passes to the customers. Payment is generally received from one to three months after delivery. Provided that reasonable estimates can be made, revenues are accrued in the month the performance obligation is satisfied. Differences between estimates and actual volumes and prices, if any, are adjusted upon final settlement.

Oil and Gas Data

Oil and Natural Gas Reserves

	Crude Oil (Bbl)			Natural Gas Liquids (Bbl)			Natural Gas (Mcf)			BOE
Proved developed and undeveloped reserves
As of January 1, 2022		44,509,484			28,397,369			153,337,501			98,463,104
Oil and gas production		(4,261,872	)		(2,018,585	)		(13,303,386	)		(8,497,688	)
Acquisition of reserves		4,050,976			2,102,982			12,200,238			8,187,331
Extensions and discoveries		—			—			—			—
Revisions of previous estimates		(764,010	)		(2,765,178	)		(796,325	)		(3,661,909	)
December 31, 2022		43,534,577			25,716,589			151,438,029			94,490,838

Proved developed reserves at beginning of year		18,191,757			13,452,077			72,799,599			43,777,100
Proved developed reserves at end of year		22,829,517			16,353,985			94,295,231			54,899,375
Proved undeveloped reserves at beginning of year		26,317,727			14,945,293			80,537,902			54,686,003
Proved undeveloped reserves at end of year		20,705,060			9,362,604			57,142,798			39,591,463

	Crude Oil (Bbl)			Natural Gas Liquids (Bbl)			Natural Gas (Mcf)			BOE
Proved developed and undeveloped reserves
As of January 1, 2023		43,534,577			25,716,589			151,438,029			94,490,838
Oil and gas production		(5,426,809	)		(1,983,172	)		(14,030,620	)		(9,748,417	)
Extensions and discoveries		—			—			—			—
Revisions of previous estimates		(6,479,476	)		(4,566,309	)		(23,197,951	)		(14,912,110	)
December 31, 2023		31,628,293			19,167,109			114,209,457			69,830,311

Proved developed reserves at beginning of year		22,829,517			16,353,985			94,295,231			54,899,375
Proved developed reserves at end of year		19,869,387			13,663,701			80,473,539			46,945,345
Proved undeveloped reserves at beginning of year		20,705,060			9,362,604			57,142,798			39,591,463
Proved undeveloped reserves at end of year		11,758,906			5,503,407			33,735,918			22,884,966

As of December 31, 2023, proved developed and undeveloped reserves of the Acquired Properties were estimated to be 69,830 Mboe. During the year ended December 31, 2023, oil and gas production from the Acquired Properties were 9,748 Mboe and net downward revisions of 14,912 Mboe were recorded, primarily due to technical revisions attributable to decreased well performance. There were no extensions or discoveries during 2023 as all properties were proved reserves as of the beginning of the period. Proved undeveloped reserves were 22,885 Mboe as of December 31, 2023, representing 33% of total proved reserves compared to 39,591 Mboe of proved undeveloped reserves as of December 31, 2022, or approximately 42% of total proved reserves. The decrease was primarily due to the continued development of the Acquired Properties which resulted in 17,840 Mboe of beginning-of-the-year proved undeveloped reserves to be classified to proved developed reserves during 2023. Subsequent to December 31, 2023 through September 30, 2024, Bayswater continued to develop the Acquired Properties and in conjunction therewith, reclassified an additional 16,121 Mboe of the 22,887 Mboe year-end 2023 proved undeveloped reserves to proved developed reserves. All remaining proved undeveloped reserves are forecasted to be drilled and completed within five years.

As of December 31, 2022, proved developed and undeveloped reserves of the Acquired Properties were estimated to be 94,491 Mboe. During the year ended December 31, 2022, oil and gas production from the Acquired Properties were 8,4987 Mboe and net downward revisions of 3,662 Mboe were recorded, primarily due to technical revisions attributable to decreased well performance. The downward revisions and oil and gas production during the period were partially offset by the acquisition of 8,127 Mboe of undeveloped reserves and 60 Mboe of developed reserves during the period. There were no extensions or discoveries during the period as all properties were proved reserves. Proved undeveloped reserves were 39,593 Mboe as of December 31, 2022, representing 42% of total proved reserves compared to 54,668 Mboe of proved undeveloped reserves as of December 31, 2021, or approximately 56% of total proved reserves. The decrease was primarily due to the continued development of the Acquired Properties during 2022 which resulted in 28,760 Mboe of beginning-of-the-year proved undeveloped reserves to be classified to proved developed reserves during 2023, offset by the acquisition of proved undeveloped reserves discussed above.

Revisions represent the net changes in previous reserves estimates, either upward or downward, resulting from new information normally obtained from development drilling and production history or resulting from a change in economic factors, such as commodity prices, operating costs or development costs.

Oil, natural gas and NGLs reserve engineering is an estimation of accumulations of oil, natural gas and NGLs that cannot be measured exactly. The accuracy of any reserves estimate is a function of the quality of available data and engineering and geological interpretation and judgment. Accordingly, reserves estimates may vary from the quantities of oil, natural gas and NGLs that are ultimately recovered.

Standardized Measure

The Acquired Properties compute a standardized measure of future net cash flows and changes therein relating to estimated proved reserves in accordance with authoritative accounting guidance. The assumptions used to compute the standardized measure are those prescribed by the FASB and the SEC. These assumptions do not necessarily reflect Bayswater’s expectations of actual revenues to be derived from those reserves, nor their present value amount. The limitations inherent in the reserve quantity estimation process, as discussed previously, are equally applicable to the standardized measure computations since these reserve quantity estimates are the basis for the valuation process.

	2023		2022
Crude Oil per Bbl	$	75.40	$	90.67
Natural Gas Liquids per Bbl	$	20.34	$	31.85
Natural Gas per Mcf	$	0.78	$	5.18

Future operating costs are determined based on estimates of expenditures to be incurred in developing and producing the proved reserves in place at the end of the period using yearend costs and assuming continuation of existing economic conditions. The standardized measure presented here does not include the effects of federal income taxes as the Sellers are partnerships and not subject to federal income taxes.

The standardized measure of discounted future net cash flows relating to the Acquired Properties’ proved oil and natural gas reserves is as follows (in thousands):

	December 31, 2023			December 31, 2022
Future cash inflows	$	2,864,222		$	5,436,468
Future production costs		(795,220	)		(1,158,321	)
Future development costs		(93,467	)		(353,044	)
Future net cash flows		1,975,535			3,925,103
Less: 10% annual discount to reflect timing of cash flows		(695,351	)		(1,570,156	)
Standardized measure of discounted future net cash flows	$	1,280,184		$	2,354,947

Changes in Standardized Measure

Changes in the standardized measure of discounted future net cash flows before income taxes related to the proved oil and gas reserves of the Acquired Properties are as follows (in thousands):

	For the Years Ended
	December 31, 2023			December 31, 2022
Standardized measure – beginning of the year	$	2,354,947		$	1,379,395
Sales of oil and natural gas, net of production costs		(381,100	)		(441,003	)
Net changes in price and production costs		(831,988	)		1,064,036
Revisions of previous quantity estimates		(320,932	)		(65,342	)
Acquisition of reserves		-			108,069
Development costs incurred		266,702			149,257
Extensions and discoveries		-			-
Accretion of discount		235,495			137,940
Net change in future development costs		(19,569	)		34,073
Changes in timing and other		(23,370	)		(11,477	)
Standardized measure – end of year	$	1,280,184		$	2,354,947

Internal Controls and Qualifications of Technical Persons

In accordance with the Reserve Standards and guidelines established by the SEC, Ryder Scott, an independent petroleum engineering consulting firm, was engaged to audit the annual reserve estimates of the Acquired Properties as of December 31, 2023 and 2022. The technical persons responsible for preparing the reserves estimates presented herein meet the requirements regarding qualifications, independence, objectivity and confidentiality set forth in the Reserve Standards.

Bayswater maintains an internal staff of petroleum engineers and geoscience professionals who work closely with its reserve engineers to ensure the integrity, accuracy and timeliness of the data used to calculate its proved reserves relating to its assets. Bayswater’s internal engineers meet with independent reserve engineers periodically during the periods covered by the reserve report to discuss the assumptions and methods used in the proved reserve estimation process.

The preparation of Bayswater’s proved reserve estimates is completed in accordance with Bayswater’s internal control procedures. These procedures, which are intended to ensure reliability of reserve estimations, include the following:

	●	review and verification of historical production data, working interest, net revenue interest, lease operating statements, capital costs, severance and ad valorem taxes, which data is based on actual production as reported by Bayswater;

	●	verification of property ownership by Bayswater’s land department;

	●	preparation of reserve estimates by Bayswater’s Senior Vice President of Engineering;

	●	review by Bayswater’s Senior Vice President of Engineering of all of Bayswater’s reported proved reserves, including the review of all significant reserve changes and all new proved undeveloped reserves additions; and

	●	direct reporting responsibilities and final approval by Bayswater’s Senior Vice President of Engineering to Bayswater’s Valuation and Investment Committees.

John Arsenault, Senior Vice President of Engineering, is the technical person primarily responsible for overseeing the preparation of Bayswater’s reserves estimates. He has more than 30 years of experience in petroleum reservoir engineering, including reserve and economic evaluations, acquisition and divestitures, reservoir simulation and management. He has worked as an engineer with various consulting firms in his career, including several years with Schlumberger’s Reservoir Technologies Division, and MHA Petroleum Consultants. He has worked internationally in Mexico, Germany and Indonesia. Mr. Arsenault has significant experience with reserves evaluation and acquisition and development activities in the DJ Basin. While with Schlumberger, he managed offices in both Mexico and in the United States, leading large teams of integrated reservoir studies groups. He has extensive experience in hydraulic fracturing, having worked with the Gas Technology Institute on the implementation of various research projects. Mr. Arsenault has a BSc in Petroleum Engineering from the Colorado School of Mines.

Drilling Activity

The following table sets forth the exploratory and development wells completed (operated and non-operated) during the years ended December 31, 2023 and 2022:

	Year Ended December 31
	2023				2022
	Gross		Net		Gross		Net
Exploratory
Productive Wells		—		—		—		—
Dry Wells		—		—		—		—
Total Exploratory Wells		—		—		—		—
Development
Productive Wells		60		53.4		34		32.2
Dry Wells		—		—		—		—
Total Development Wells		60		53.4		34		32.2
Total		60		53.4		34		32.2

At December 31, 2023, 28 net (31 gross) wells were in the process of being drilled, completed, awaiting completion, or any other related material activities.

Production and Cost History

The following tables set forth information regarding net production of oil, natural gas and liquids and certain price and cost information for each of the periods indicated. The information set forth below related to the Acquired Properties consists of the historical results for the years ended December 31, 2023 and 2022:

	Year Ended December 31,
	2023		2022
Oil:
Total production (Mbbls)		5,427		4,262
Average sales price ($ per Bbl)	$	76.47	$	92.20
Natural Gas:
Total production (MMcf)		14,031		13,303
Average sales price ($ per Mcf)	$	0.81	$	3.42
Natural Gas Liquids:
Total production (Mbbls)		1,983		2,019
Average sales price ($ per Bbl),	$	20.37	$	36.08
Oil Equivalents:
Total production (MBoe)		9,748		8,498
Average daily production (MBoe/d)		26.7		23.3
Average direct operating expenses ($ per Boe)	$	8.79	$	8.26

Wells

The following table sets forth the number wells in which the Sellers owned a working interest as of December 31, 2023:

	Total
	Gross		Net
DJ Basin – Operated		316		271.2
DJ Basin – Non-operated		155		15.1

Developed and Undeveloped Acreage

The following table sets forth the Acquired Properties leasehold acreage as of December 31, 2023.

Developed Acres

Undeveloped Acres

Total Acres

Gross

Net

Gross

Net

Gross

Net

DJ Basin

25,856

21,906

2,619

2,374

28,475

24,280

All of the leases comprising the undeveloped acreage set forth in the table above will expire at the end of their primary terms unless an extension provision within the lease is exercised, the lease is extended by continuous operations, or production is established, in which event the lease will remain in effect until the cessation of production. The following table sets forth, as of December 31, 2023, the above undeveloped acreage subject to two-year extension provisions.

	2024				2025				2026
	Gross		Net		Gross		Net		Gross		Net
Extension Acres		0		0		545		545		0		0

All of the leases comprising the undeveloped acreage set forth in the tables above will expire at the end of their respective primary terms unless otherwise extended as described above. The following table sets forth, as of December 31, 2023, the expiration periods of the undeveloped acres, excluding the Extension Acres described above.

	2024				2025				2026
	Gross		Net		Gross		Net		Gross		Net
Expiration		640		640		640		640		160		160

Operations

The development plan for the Acquired Properties, as of December 31, 2023, assumed that all of the undeveloped acreage set forth in the tables above would be extended by continuous development and thereafter establishment of production, thereby negating the need to exercise the available extension provisions and nullifying the expiration periods.

General

Bayswater is the operator of substantially all of the Acquired Properties’ acreage. As operator, Bayswater obtains regulatory authorizations, designs and manages the development of a well and supervises operation and maintenance activities on a day-to-day basis. Bayswater does not own drilling rigs or the majority of the other oil field service equipment used for drilling or maintaining wells on the properties it operates. Independent contractors engaged by Bayswater provide a majority of the equipment and personnel associated with these activities. Bayswater utilizes the services of drilling, production and reservoir engineers and geologists and other specialists who work to improve production rates, increase reserves and lower the cost of operating Bayswater’s oil and natural gas properties.

Marketing

Bayswater markets all of the oil, natural gas and NGLs production from its operated properties. For the year ended December 31, 2023, the three largest customers with respect to the Acquired Properties generated approximately 73% of sales. For the year ended December 31, 2022, the largest customer with respect to the Acquired Properties generated approximately 27% of sales. The loss of any single purchaser could materially and adversely affect the revenues of the Acquired Properties in the short-term; however, Bayswater believes that the loss of any of its purchasers would not have a long-term material adverse effect on its results of operations as oil, natural gas and NGLs are fungible products with well-established markets and numerous purchasers.

The majority of the Acquired Properties’ production is party to crude oil purchase contracts, pursuant to which the counterparty is required to receive and purchase all crude oil produced from the wells. One of the crude oil purchase contracts to which the Acquired Properties are subject requires a minimum volume of oil to be delivered each year beginning in 2023 and continuing through 2026. If volumes are under-delivered during this period, the Acquired Properties incur a fee per barrel of under-delivered volumes. The oil produced from the Acquired Properties is primarily gathered and purchased via pipeline.

Additionally, the Acquired Properties are subject to various gas gathering and processing agreements pursuant to which it has dedicated acreage, which the counterparty is required to receive and purchase all natural gas produced from wells operated by Bayswater located within the dedicated area through the term of the contracts. In exchange for this land dedication, the Acquired Properties receive certain gathering and delivery rights. One of the gas gathering and processing agreements to which the Acquired Properties are subject requires a monthly minimum payment, beginning in October 2019 and continuing through September 2029, intended to reimburse costs incurred by the counterparty in order to connect the gathering facility to the covered lands. This gas gathering and processing agreement further allocates a portion of the counterparty’s firm commitments to transport natural gas liquids processed by the counterparty to the Acquired Properties beginning in July 2022 and continuing through September 2029. Beginning in January 2023, this commitment is subject to shortfall fees for any under-delivered volumes.

Exhibit 99.6

INFORMATION ABOUT NRO

Description of the Business

Certain aspects of the presentation of the results of operations of Nickel Road Operating LLC, a Delaware limited liability company, and its subsidiaries (herein referred to collectively as “NRO”), have been conformed for purposes of presenting comparable results. For full historical financial statements of NRO for the periods presented, please see the financial statements of NRO for the nine months ended September 30, 2024 and for the year ended December 31, 2023 previously filed.

NRO is a private, independent, and private equity backed exploration and production company founded in 2017. NRO focuses on the acquisition, development, and production of oil and natural gas reserves in Weld County, Colorado, in the Greater Wattenberg Field of Colorado’s Denver-Julesburg Basin (the “DJ Basin”). NRO has developed its acreage by drilling horizontal wells targeting the Codell and Niobrara formations. As of December 31, 2023, NRO operated 26 wells in the DJ Basin and maintained 90 operated well permits issued by the Colorado Energy and Carbon Management Commission (“CECMC”) to drill undeveloped locations. Net production from NRO’s properties for the nine months ended September 30, 2024, was approximately 2,300 Boe per day, of which 63% was oil. According to a report prepared by Cawley, Gillespie & Associates, Inc. (“CG&A”), total proved reserves associated with NRO’s properties were 16.4 MMboe as of December 31, 2023, of which 31% were proved developed. NRO’s operations are all conducted onshore in the United States. On October 1, 2024, Prairie Operating Co. (“Prairie”), completed the previously announced $84.5 million acquisition of NRO’s oil-weighted assets (the “NRO Acquisition”).

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nickel Road Operating LLC

General and Basis of Presentation

NRO derived substantially all of its revenue from the sale of oil, natural gas and NGLs that are produced from interests in its properties. Oil, natural gas and NGL prices are inherently volatile and are influenced by many factors outside of NRO’s control. To achieve more predictable cash flows and to reduce its exposure to downward price fluctuations, NRO has historically used derivative instruments to hedge future sales prices and basis differentials on a portion of its oil, natural gas and NGL production. In January 2024, in connection with the Asset Purchase Agreement, dated January 11, 2024, by and among Prairie, Prairie LLC, Nickel Road Operating LLC and Nickel Road Development LLC (the “NRO Agreement”), NRO liquidated all of its outstanding hedges. NRO’s historical commodity derivative instruments include swaps and costless collars. NRO’s derivative strategy, including the volumes and commodities covered and the relevant fixed and market prices, was based in part on NRO’s management’s view of expected future market conditions, capital spending plans, and analysis of well-level economic return potential.

NRO focused its efforts on increasing oil, natural gas and NGLs production and reserves while controlling costs at a level that is appropriate for long-term sustainable operations. NRO’s future earnings and cash flows are dependent on its ability to manage revenues and overall cost structure at a level that allows for profitable production.

Divestiture of assets and acreage in 2022 and 2023

In July 2022, NRO closed on the divestiture of upstream assets including 2,752 net acres, 321 net royalty acres, and 17 producing horizontal wells (5 operated and 12 non-operated, royalty or overriding royalty) for $64 million (the “2022 NRO Divestiture”). The divested assets produced 672 Boe per day for the six months ended June 30, 2022, with total proved reserves of 3,024 Mboe as of December 31, 2021. This transaction is described further in NRO’s financial statements and footnotes.

In August 2023, NRO closed on the divestiture of upstream assets including 896 net royalty acres for $7 million (the “2023 NRO Divestiture” and, together with the 2022 NRO Divestiture, the “NRO Divestitures”). The divested assets produced 86 Boe per day in the seven months ended July 31, 2023, with 253 Mboe of proved reserves as of December 31, 2022. This transaction is described further in NRO’s financial statements and footnotes.

Overview

The following table presents NRO’s production volumes and financial highlights, inclusive of assets sold in the NRO Divestitures through the date of sale, for the nine months ended September 30, 2024 and 2023:

	Nine Months Ended September 30,
	2024					2023
	Period Total			Per Day		Period Total		Per Day
Production Sales Volume Data:
Oil (Mbbls)		398			1.5		439		1.6
Gas (MMcf)		794			2.9		585		2.1
NGLs (Mbbls)		102			0.4		105		0.4
Financial Data (thousands):
Revenue	$	30,781				$	34,210
(Loss) income from operations	$	(18,789	)			$	11,520

NRO’s revenues for the nine months ended September 30, 2024 decreased by $3.4 million compared to the nine months ended September 30, 2023, primarily due to a slight decrease in commodity prices and production volumes. NRO’s income from operations for the nine months ended September 30, 2024 decreased by $30.3 million compared to the nine months ended September 30, 2023, mostly due to an impairment of oil and gas properties in the nine months ended September 30, 2024.

Results of Operations

Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023

	Nine Months Ended September 30,
	2024		2023		$ Change			% Change
	(Thousands)
Revenues:
Oil revenue	$	29,820	$	32,800	$	(2,980	)		(9	)%
Gas revenue		344		521		(178	)		(34	)%
NGL revenue		617		889		(272	)		(31	)%
Total revenues	$	30,781	$	34,210	$	(3,429	)		(10	)%

Oil Revenue

Oil revenues for the nine months ended September 30, 2024 decreased $3.0 million, or 9%, from the nine months ended September 30, 2023, related to lower oil production and partially offset by higher oil prices. The following table reflects oil prices, the price impact of NRO’s derivative settlements and oil production volumes for the nine months ended September 30, 2024 and 2023.

	Nine Months Ended September 30,
	2024		2023
Oil revenue (per barrel)	$	74.94	$	74.69
Impact of net cash (paid) received related to settlement of derivatives (per barrel)⁽¹⁾		0.56		(1.58	)
Oil net price including all derivative settlements (per barrel)	$	75.50	$	73.11
Oil production volumes (Mbbls)		398		439
Per day oil production volumes (Mbbls/d)		1.5		1.6

(1)	Included in net gain (loss) on derivatives on the Condensed Consolidated Statements of Operations.

Gas Revenue

Natural gas revenue for the nine months ended September 30, 2024 decreased $0.2 million, or 34%, from the nine months ended September 30, 2023, related to lower natural gas sales prices, partially offset by higher production. The following table reflects natural gas prices, the price impact of NRO’s derivative settlements and natural gas production volumes for the nine months ended September 30, 2024 and 2023.

	Nine Months Ended September 30,
	2024		2023
Natural gas revenue (per Mcf)	$	0.43	$	0.89
Impact of net cash (paid) received related to settlement of derivatives (per Mcf)⁽¹⁾		—		(0.16	)
Natural gas net price including all derivative settlements (per Mcf)	$	0.43	$	0.73
Natural gas production volumes (MMcf)		794		585
Per day natural gas production volumes (MMcf/d)		2.9		2.1

(1)	Included in net gain (loss) on derivatives on the Condensed Consolidated Statements of Operations.

NGL revenue

NGL revenue for the nine months ended September 30, 2024 decreased $0.3 million, or 31%, from the nine months ended September 30, 2023, related to lower sales prices and lower production. The following table reflects NGL prices and NGL production volumes for the nine months ended September 30, 2024 and 2023. NRO did not have any derivative settlements related to its NGL volumes for the nine months ended September 30, 2024 and 2023.

	Nine Months Ended September 30,
	2024		2023
NGL revenue (per barrel)	$	6.05	$	8.47
NGL production volumes (Mbbls)		102		105
Per day NGL production volumes (Mbbls/d)		0.4		0.4

Operating expenses and (loss) income from operations analysis:

	Nine Months Ended September 30,											Per Boe ⁽¹⁾ Expense
	2024			2023		$ Change			% Change			2024			2023
	(Thousands)											(Thousands)
Operating Expenses:
Lease operating expenses	$	4,169		$	3,317	$	852			26	%	$	6.59		$	5.17
Production taxes		1,939			3,422		(1,483	)		(43	)%		3.07			5.33
Depletion, depreciation, and amortization		10,726			12,853		(2,127	)		(17	)%		16.97			20.03
General and administrative		3,018			3,099		(81	)		(3	)%		4.77			4.83
Impairment		29,719			-		29,719			NM			47.01			-
Total operating expenses	$	49,571		$	22,691	$	26,880			118	%	$	78.41		$	35.36
(Loss) income from operations	$	(18,789	)	$	11,520	$	(30,309	)		NM		$	(29.72	)	$	17.95

(1)	“Boe” means barrel of oil equivalent, using the ratio of six Mcf of natural gas to one barrel of crude oil or condensate.
NM:	A percentage calculation is not meaningful due to change in signs, a zero-value denominator, or a percentage change greater than 200.

Lease operating expenses increased $0.9 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, related to increased operating activity and service cost inflation.

Production taxes decreased $1.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due to lower revenue from lower commodity prices and lower oil sales volumes.

Depletion, depreciation and amortization decreased $2.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily related to lower property base from impairments in 2023 and lower proved reserves resulting from lower commodity prices.

General and administrative expenses decreased $0.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, related to lower expenses incurred on labor-related costs.

Impairment increased $29.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, related to the NRO Acquisition.

Results below included in (loss) income from operations:

	Nine Months Ended September 30,
	2024			2023			$ Change			% Change
	(Thousands)
(Loss) income from operations	$	(18,789	)	$	11,520		$	(30,309	)		NM
Loss on commodity derivatives		(47	)		(472	)		425			(90	)%
Net interest expense		(975	)		(1,525	)		550			(36	)%
Gain on sale of oil and gas properties		5,373			6,262			(889	)		(14	)%
Other income (expense)		1			(7	)		8			(114	)%
Net (loss) income	$	(14,438	)	$	15,777		$	(30,215	)		(192	)%

NM:	A percentage calculation is not meaningful due to change in signs, a zero-value denominator, or a percentage change greater than 200.

NRO had a $0.4 million decrease in derivative instruments for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 due to having no outstanding hedges as of September 30, 2024.

The $0.6 million decrease in interest expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 relates to lower average debt outstanding.

NRO recorded a $5.4 million gain on the sale of oil and gas properties for the nine months ended September 30, 2024, resulting from the NRO Acquisition. For the nine months ended September 30, 2023, NRO recorded a $6.3 million gain on the sale of oil and gas properties resulting from the 2023 NRO Divestiture.

Year ended December 31, 2023 vs. Year ended December 31, 2022

	Year ended December 31,
	2023		2022		$ Change			% Change
	(Thousands)
Revenues:
Oil revenue	$	46,309	$	57,744	$	(11,435	)		(20	)%
Gas revenue		702		3,977		(3,275	)		(82	)%
NGL revenue		1,158		4,339		(3,181	)		(73	)%
Total revenues	$	48,169	$	66,060	$	(17,891	)		(27	)%

Oil Revenue

Oil revenues for 2023 decreased $11.4 million, or 20%, from 2022, related to lower oil sales prices and the 2022 NRO Divestiture. The following table reflects oil prices, the price impact of NRO’s derivative settlements and oil production volumes for the year ended December 31, 2023 and 2022.

	Year ended December 31,
	2023			2022
Oil revenue (per barrel)	$	75.06		$	93.29
Impact of net cash (paid) received related to settlement of derivatives (per barrel)⁽¹⁾		(1.60	)		(32.15	)
Oil net price including all derivative settlements (per barrel)	$	73.46		$	61.14
Oil production volumes (Mbbls)		617			619
Per day oil production volumes (Mbbls/d)		1.7			1.7

(1)	Included in net gain (loss) on derivatives on the Condensed Consolidated Statements of Operations.

Gas Revenue

Natural gas revenue for 2023 decreased $3.3 million, or 82%, from 2022, related to lower natural gas sales prices and lower production. The following table reflects natural gas prices, the price impact of NRO’s derivative settlements and natural gas production volumes for the years ended December 31, 2023 and 2022.

	Year ended December 31,
	2023			2022
Natural gas revenue (per Mcf)	$	0.79		$	4.32
Impact of net cash (paid) received related to settlement of derivatives (per Mcf)⁽¹⁾		(0.04	)		(2.02	)
Natural gas net price including all derivative settlements (per Mcf)	$	0.75		$	2.30
Natural gas production volumes (MMcf)		888			920
Per day natural gas production volumes (MMcf/d)		2.4			2.5

(1)	Included in net gain (loss) on derivatives on the Condensed Consolidated Statements of Operations.

NGL revenue

NGL revenue for 2023 decreased $3.2 million, or 73%, from 2022, related to lower sales prices and lower production. The following table reflects NGL prices and NGL production volumes for the years ended December 31, 2023 and 2022. NRO did not have any derivative settlements related to its NGL volumes for the years ended December 31, 2023 and 2022.

	Year ended December 31,
	2023		2022
NGL revenue (per barrel)	$	7.77	$	26.78
NGL net price including all derivative settlements (per barrel)	$	7.77	$	26.78
NGL production volumes (Mbbls)		149		162
Per day NGL production volumes (Mbbls/d)		0.4		0.4

Operating expenses and income from operations analysis:

	Year ended December 31,										Per Boe Expense
	2023		2022		$ Change			% Change			2023		2022
	(Thousands)										(Thousands)
Operating Expenses:
Lease operating expenses	$	4,616	$	3,942	$	674			17	%	$	5.05	$	4.22
Production taxes		4,409		4,975		(566	)		(11	)%		4.82		5.33
Depletion, depreciation, and amortization		16,116		17,760		(1,644	)		(9	)%		17.63		19.01
Impairment		5,078		330		4,748			NM			5.56		0.35
General and administrative		4,068		4,260		(192	)		(5	)%		4.45		4.56
Total operating expenses	$	34,287	$	31,267	$	3,020			10	%	$	37.51	$	33.48
Income from operations	$	13,882	$	34,792	$	(20,910	)		(60	)%	$	15.19	$	37.25

NM:	A percentage calculation is not meaningful due to change in signs, a zero-value denominator, or a percentage change greater than 200.

Lease operating expenses increased $0.7 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, related to increased operating activity, well counts and service cost inflation.

Production taxes decreased $0.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, due to lower revenue from lower commodity prices and lower sales volumes.

Depletion, depreciation and amortization decreased $1.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily related to lower proved reserves resulting from lower commodity prices.

Impairment increased $4.7 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, related to the NRO Agreement.

General and administrative expenses decreased $0.2 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, related to lower expenses incurred on labor-related costs.

Results below included in income from operations:

	Year ended December 31,
	2023			2022			$ Change			% Change
	(Thousands)
Income from operations	$	13,882		$	34,792		$	(20,910	)		60	%
Gain on sales of oil and gas properties		5,926			25,331			(19,405	)		(77	)%
Gain (loss) on commodity derivatives		1,977			(18,464	)		20,441			NM
Net interest expense		(2,011	)		(895	)		(1,116	)		125	%
Other (expense) income		(13	)		15			(28	)		NM
Net income	$	19,761		$	40,779		$	(21,018	)		(52	)%

NM:	A percentage calculation is not meaningful due to change in signs, a zero-value denominator, or a percentage change greater than 200.

NRO recorded a $5.9 million gain on the sale of oil and gas properties for the year ended December 31, 2023, resulting from the 2023 NRO Divestiture. For the year ended December 31, 2022, NRO recorded a $25.3 million gain on the sale of oil and gas properties resulting from the 2022 NRO Divestiture.

NRO had a $20.4 million increase in the gain on derivative instruments for the year ended December 31, 2023, compared to the year ended December 31, 2022, due to decreasing commodity prices.

The $1.1 million increase in interest expense for the year ended December 31, 2023 compared to the year ended December 31, 2022, relates to higher average debt outstanding and an increase in interest rates.

Management’s Discussion and Analysis of Financial Condition and Liquidity

Overview and Liquidity

NRO’s primary sources of liquidity have historically been cash on hand, cash flows from operations, borrowings under its credit facilities and equity provided from investors. NRO expects that a combination of these sources will be sufficient to fund its working capital needs into the future.

Due to the NRO Acquisition, NRO did not drill any wells during the nine months of 2024. In 2023, NRO drilled and completed five wells, and in 2022, also drilled and completed five wells. For the years ended December 31, 2023 and 2022, NRO’s aggregate development, drilling and completion capital expenditures, excluding leasehold and acquisitions and divestitures, were approximately $31.9 million and $34.7 million, respectively.

Credit Facility

Revolving Loan – On February 22, 2021, NRO entered into a revolving loan agreement (the “Loan Agreement”) with UMB Bank, N.A. (“UMB” or the “Lender”), with a maturity of February 22, 2024. The Loan Agreement provides for a maximum revolving loan (the “Revolving Loan”) of $35.0 million with an initial borrowing base of $10.0 million. In October 2022, the Loan Agreement was amended. The total borrowing base and sublimit increased to $30.0 million for the Revolving Loan.

On March 31, 2023, NRO amended its Loan Agreement to provide for a maximum Revolving Loan of $50.0 million which matures on February 22, 2026. As of the date of the amendment the borrowing base was increased to $35.0 million, with a sublimit of $25.0 million, and is subject to regular redeterminations by the Lender. Permitted distributions are subject to limitations defined within the amendment and required hedge transactions are amended such that as of September 30, 2023, and thereafter, so long as the borrowing base utilization exceeds 60%, NRO is required to maintain crude oil hedges of at least 60% of NRO’s anticipated crude oil production for a period of not less than 12 months, to be complied with on a quarterly basis. On August 31, 2023, NRO amended its Loan Agreement to decrease the borrowing base to $33.0 million.

All sums advanced under the Revolving Loan, together with all accrued but unpaid interest thereon, are due in full at maturity. The Loan Agreement requires NRO to maintain certain affirmative and negative covenants, including certain financial ratios defined in the Loan Agreement and second amendment, and provides the Lender with a first security interest in substantially all of NRO’s assets. The interest rate of the Revolving Loan is the lesser of the (1) Wall Street Journal prime rate, plus the applicable margin, or (2) the Maximum Rate as defined per the Loan Agreement. The interest rate as of December 31, 2023, was 9.50%. Commitment fees equal to 0.5% of the undrawn amount are payable quarterly under this agreement.

In conjunction with the NRO Acquisition, NRO liquidated its open hedge positions in January 2024 resulting in net cash proceeds of approximately $223,000. On January 31, 2024, NRO received a waiver of the minimum hedge transaction requirement from the Lender through July 1, 2024. In September 2024, NRO fully repaid the outstanding balance on the Revolving Loan and was fully released from the Revolving Loan effective October 1, 2024.

March 2023 Term Loan – The March 2023 amended Loan Agreement also allows for a new Term Loan (“March 2023 Term Loan”) in the amount of $10.0 million. The March 2023 Term Loan shall be payable in monthly principal installments commencing on August 1, 2023, plus all accrued interest, and matures on July 1, 2024. The March 2023 Term Loan bears interest at a rate equal to the sum of the Prime Rate (as defined in the Loan Agreement), plus the Applicable Margin (as defined in the Loan Agreement); provided, however, that the interest rate on the March 2023 Term Loan shall never fall below 3.75%. As of July 1, 2024, this loan matured and was paid off in full.

September 2021 Term Loan – On September 1, 2021, the Loan Agreement was amended to establish a term loan (“September 2021 Term Loan”) in the amount of $12.0 million that matured on August 31, 2022. The September 2021 Term Loan was payable in monthly principal installments commencing January 31, 2022, plus all accrued interest. Interest for the September 2021 Term Loan was fixed at 5.25%. The September 2021 Term Loan also provides the lender with a first security interest in substantially all of NRO’s assets. As of December 31, 2023, this loan matured and was paid off in full.

Interest expense related to the Revolving Loan and the March 2023 Term Loan for the nine months ended September 30, 2024 and 2023, was approximately $1.0 million and $1.5 million, respectively.

Commodity Price Risk Management

NRO has historically entered into derivative contracts, primarily swaps and collars to hedge future crude oil and natural gas production in order to mitigate the risk of market price fluctuations. All derivative instruments are recorded on the consolidated balance sheets at fair value. NRO has elected not to apply hedge accounting to any of its derivative transactions; consequently, NRO recognizes mark-to-market gains and losses in earnings currently, rather than deferring such amounts in other comprehensive income for those commodity derivatives that qualify as cash flow hedges.

In January 2024, in connection with the NRO Agreement, NRO received a waiver of the minimum hedge and liquidated all of its open hedge positions, resulting in net cash proceeds of approximately $223,000. Therefore, NRO did not have any commodity derivative instruments outstanding as of September 30, 2024.

Sources (Uses) of Cash

	Nine Months Ended September 30,
	2024			2023
	(Thousands)
Net cash provided by (used in):
Operating activities	$	19,391		$	36,117
Investing activities		3,455			(23,565	)
Financing activities		(20,584	)		(12,130	)
Increase in cash, cash equivalents and restricted cash	$	2,262		$	422

Operating activities:

Net cash provided by operating activities decreased $16.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to lower oil sales volumes, natural gas and NGL prices and higher lease operating expenses, partially offset by lower production taxes.

Investing activities:

Net cash provided by investing activities increased by $27.0 million for nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the decrease of drilling and completion capital expenditures of oil and gas properties and leasehold and development capital expenditures of $28.2 million, partially offset by the decrease in proceeds from the sale of oil and gas properties of $1.2 million.

Financing activities:

Net cash used in financing activities during the nine months ended September 30, 2024 includes $20.6 million in net cash repayments on the Revolving Loan related to core business activities borrowings. Net cash used in financing activities during the nine months ended September 30, 2023 includes $12.0 million in net cash repayments on the Revolving Loan related to core business activities.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Depreciation, depletion, and amortization of oil and gas properties and the impairment of proved oil and gas properties are determined using estimates of oil and gas reserves. There are numerous uncertainties in estimating the quantity of reserves and in projecting the future rates of production and timing of development expenditures, including future costs to dismantle, dispose, and restore NRO’s properties. Oil and gas reserve engineering must be recognized as a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way.

The more significant reporting areas impacted by management’s judgments and estimates are as follows:

Oil and Gas Properties

NRO accounts for its oil and gas operations using the successful efforts method of accounting. Under this method, all costs associated with property acquisitions, successful exploratory wells, and development wells are capitalized. Items charged to expense generally include geological and geophysical costs, costs of unsuccessful exploratory wells, delay rentals, and oil and gas production costs. Capitalized costs of proved leasehold costs are depleted on a well-by-well basis using the units-of-production method based on total proved developed producing oil and gas reserves. Other capitalized costs of producing properties are also depleted based on total proved developed producing reserves. Depletion expense for the nine months ended September 30, 2024 and 2023 was approximately $10.7 million and $12.9 million, respectively.

NRO assesses its proved oil and gas properties for impairment whenever events or circumstances indicate that the carrying value of the assets may not be recoverable, but at least annually. The impairment test compares undiscounted future net cash flows to the assets’ net book value. If the net capitalized costs exceed future net cash flows, then the cost of the property is written down to the estimated fair value. Fair value for oil and natural gas properties is generally determined based on an analysis of discounted future net cash flows adjusted for certain risk factors.

Unproved properties are assessed periodically on a project-by-project basis to determine whether an impairment has occurred. NRO’s management’s assessment includes consideration of the results of exploration activities, commodity price predictions or forecasts, planned future sales, or expiration of all or a portion of such projects.

At December 31, 2023, NRO’s management determined there was an impairment of $5.1 million related to the NRO Acquisition. At December 31, 2022, NRO’s management determined there was an impairment of $0.3 million related to the expiration of non-core undeveloped leases. An impairment of $29.7 million related to the NRO Acquisition was recognized during the nine months ended September 30, 2024.

Gains and losses arising from sales of oil and gas properties are included in other income. However, a partial sale of proved properties within an existing field that does not significantly affect the unit-of-production depletion rate will be accounted for as a normal retirement with no gain or loss recognized. The sale of a partial interest within a proved property is accounted for as a recovery of cost. The partial sale of unproved property is accounted for as a recovery of cost when there is uncertainty of the ultimate recovery of the cost applicable to the interest retained.

Derivative Instruments

Prior to signing the NRO Agreement, NRO entered into derivative contracts, primarily swaps and collars, to hedge future crude oil and natural gas production in order to mitigate the risk of market price fluctuations. All derivative instruments are recorded on the consolidated balance sheets at fair value. NRO has elected not to apply hedge accounting to any of its derivative transactions; consequently, NRO recognizes mark-to-market gains and losses in earnings currently, rather than deferring such amounts in other comprehensive income for those commodity derivatives that qualify as cash flow hedges.

Revenue Recognition

NRO recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Revenue from the sale of oil, natural gas and NGLs is recognized when the product is delivered to the customers’ custody transfer points, and collectability is reasonably assured. NRO fulfills the performance obligations under the customer contracts through daily delivery of oil, natural gas and NGLs to the customers’ custody transfer points, and revenues are recorded on a monthly basis. The prices received for oil, natural gas and NGLs sales under NRO’s contracts are generally derived from stated market prices, which are then adjusted to reflect deductions, including transportation, fractionation, and processing. As a result, the revenues from the sale of oil, natural gas and NGLs will decrease if market prices decline. The sales of oil, natural gas and NGLs as presented on the condensed consolidated statements of income represent NRO’s share of revenues, net of royalties and excluding revenue interests owned by others. When selling oil, natural gas and NGLs on behalf of royalty owners or working interest owners, NRO acts as an agent and, thus, reports the revenue on a net basis. To the extent actual volumes and prices of oil, natural gas and NGLs sales are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and recorded.

Oil and Gas Data

Costs Incurred

The following table sets forth the costs incurred for property acquisitions, exploration, and development activities:

	Year ended December 31,
	2023		2022
Acquisition Costs:
Proved	$	134,895	$	1,028,411
Unproved		720,003		1,213,079
Exploration Costs
Geological and geophysical		—		—
Development costs		31,918,742		34,719,791
Total costs incurred	$	32,773,640	$	36,961,281

Oil and Natural Gas Reserves

The reserve estimates presented below were made in accordance with accounting principles generally accepted in the United States of America requirements for disclosures about oil and gas producing activities and Securities and Exchange Commission (“SEC”) rules for oil and gas reporting of reserve estimation and disclosure.

Proved reserves are the estimated quantities of oil, gas, and NGLs which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined, and the price to be used is the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

The tables below present a summary of changes in the NRO’s estimated net proved reserves for each of the years ended December 31, 2023, 2022, and 2021. All of NRO’s proved reserves are located in the state of Colorado in the United States of America. NRO engaged CG&A to audit internal engineering estimates of NRO’s total calculated proved reserves volumes and net PV-10 for each year presented. NRO emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established producing oil and gas properties. Accordingly, these estimates are expected to change as future information becomes available.

	Oil (Bbl)			Gas (Mcf)			Liquids (Bbl)			BOE
Proved Developed and Undeveloped Reserves
As of December 31, 2021		9,150,124			16,386,179			4,126,059			16,007,213
Revisions		(1,806,746	)		875,476			(850,846	)		(2,511,680	)
Extensions		2,238,184			5,752,187			1,031,821			4,228,703
Divestiture of reserves		(1,705,171	)		(3,197,920	)		(785,350	)		(3,023,508	)
Acquisition of reserves		—			—			—			—
Production		(618,787	)		(919,804	)		(161,585	)		(933,673	)
As of December 31, 2022		7,257,604			18,896,118			3,360,099			13,767,056
Revisions		177,709			485,626			(40,027	)		218,620
Extensions		1,992,949			4,513,455			786,530			3,531,722
Divestiture of reserves		(155,373	)		(286,151	)		(49,733	)		(252,798	)
Acquisition of reserves		—			—			—			—
Production		(616,616	)		(887,881	)		(149,000	)		(913,596	)
As of December 31, 2023		8,656,273			22,721,167			3,907,869			16,351,003

Proved developed reserves as of:
December 31, 2021		3,731,662			6,669,807			1,182,570			6,025,867
December 31, 2022		2,599,724			6,452,542			1,103,821			4,778,969
December 31, 2023		2,481,059			7,689,981			1,287,231			5,049,954

Proved undeveloped reserves as of:
December 31, 2021		5,418,462			9,716,372			2,943,489			9,981,346
December 31, 2022		4,657,880			12,443,576			2,256,278			8,988,087
December 31, 2023		6,175,214			15,031,186			2,620,638			11,301,050

During the year ended December 31, 2023, NRO’s total proved positive revisions of 219 Mboe were comprised of an increase of 333 Mboe from improved results from development, an increase of 58 Mboe due to the delayed reversionary interest and increased net volumes as a result of a decrease in commodity prices, and a decrease of 172 Mboe due to accelerated reversionary interests as a result of lower capital costs. NRO’s total proved extensions totaled 3,532 Mboe, comprised of the addition of 3,160 Mboe from nine net (nine gross) proved undeveloped locations and 372 Mboe from one net (one gross) proved developed well. NRO spent $22.1 million in development costs drilling four net (four gross) proved undeveloped locations, representing 1,496 Mboe of proved developed reserves as of December 31, 2023, a decrease of 191 Mboe from their respective proved undeveloped reserves at the beginning of 2023. NRO’s forecast shows all proved undeveloped reserves will be drilled within five years. NRO divested 253 Mboe of proved reserves related to the 2023 NRO Divestiture.

During the year ended December 31, 2022, NRO’s total proved negative revisions of 2,512 Mboe were comprised of 2,541 of negative changes to decline curve estimates based on reservoir engineering analysis and well performance, a decrease of 406 Mboe due to accelerated reversionary interests as a result of higher commodity prices and decreased net volumes, and an increase of 435 Mboe due to delayed reversionary interests and increased net volumes as a result of lower capital costs. NRO’s extensions totaled 4,229 Mboe, comprised of the addition of 3,811 Mboe from 13 net (16 gross) proved undeveloped locations and 418 Mboe from one net (one gross) proved developed well. NRO spent $22.9 million in development costs drilling four net (four gross) proved undeveloped locations, representing 1,568 Mboe of proved developed reserves as of December 31, 2022, a decrease of 280 Mboe from their respective proved undeveloped reserves at the beginning of 2022. NRO’s forecast shows all proved undeveloped reserves will be drilled within five years. NRO divested 3,024 Mboe of proved reserves related to the 2022 NRO Divestiture.

Proved Undeveloped Reserves (“PUDs”)

At December 31, 2023, NRO’s estimated PUD reserves were approximately 11,301 Mboe, an increase of 2,313 Mboe over the reserve estimate at December 31, 2022 of 8,988 Mboe.

	Oil (Bbl)			Gas (Mcf)			Liquids (Bbl)			BOE
Proved undeveloped reserves at December 31, 2021		5,418,465			9,716,371			2,943,486			9,981,346
Revisions		(767,075	)		1,143,414			(533,752	)		(1,110,258	)
Extensions		2,044,569			5,109,608			914,658			3,810,828
Divestiture of reserves		(1,061,102	)		(1,672,018	)		(506,523	)		(1,846,295	)
Acquisition of reserves		—			—			—			—
Conversions into proved developed reserves (prior year balance)		(976,977	)		(1,853,798	)		(561,591	)		(1,847,534	)
Proved undeveloped reserves at December 31, 2022		4,657,880			12,443,577			2,256,278			8,988,088
Revisions		545,132			1,207,503			145,810			892,193
Extensions		1,818,434			3,932,001			686,258			3,160,026
Divestiture of reserves		(27,183	)		(72,494	)		(13,048	)		(52,314	)
Acquisition of reserves		—			—			—			—
Conversions into proved developed reserves (prior year balance)		(819,049	)		(2,479,401	)		(454,660	)		(1,686,943	)
Proved undeveloped reserves at December 31, 2023		6,175,214			15,031,186			2,620,638			11,301,050

During the year ended December 31, 2023, the increase in PUD reserves was primarily attributable to extensions of 3,160 Mboe from nine net (nine gross) PUD locations. NRO’s PUD positive revisions of 892 Mboe were comprised of an increase of 720 Mboe attributable to improved results from development, an increase of 247 Mboe due to the delayed reversionary interest and increased net volumes as a result of a decrease in commodity prices, and a decrease of 75 Mboe due to accelerated reversionary interests as a result of lower capital costs. NRO converted into proved developed reserves 1,687 Mboe related to locations that were successfully drilled and completed. NRO divested 52 Mboe of PUD reserves related to the 2023 NRO Divesture.

At December 31, 2022, NRO’s estimated PUD reserves were approximately 8,988 Mboe, a decrease of 993 Mboe over the reserve estimate at December 31, 2021 of 9,981 Mboe. The decrease was primarily due to divestiture of 1,848 Mboe of PUD reserves related to the 2022 NRO Divestiture and conversion of 1,847 Mboe into proved developed reserves related to locations that were successfully drilled and completed. NRO’s negative revisions of 1,110 Mboe of PUD reserves were comprised of a decrease of 978 Mboe from recent well results for development well spacing patterns, a decrease of 345 Mboe due to the accelerated reversionary interest and decreased net volumes as a result of an increase in commodity prices, and an increase of 213 Mboe due to delayed reversionary interests as a result of higher capital costs. NRO’s extensions of 3,811 Mboe were from 13 net (16 gross) PUD locations.

Revisions represent changes in previous reserves estimates, either upward or downward, resulting from new information normally obtained from development drilling and production history or resulting from a change in economic factors, such as commodity prices, operating costs or development costs.

Capitalized Costs

The following table sets forth the capitalized costs relating to oil and gas properties and accumulated depletion:

	Year ended December 31,
	2023			2022
Proved oil and gas properties	$	137,855,719		$	113,415,744
Unproved oil and gas properties		1,690,690			1,068,954
Accumulated depletion		(41,010,449	)		(25,691,574	)
Net capitalized costs	$	98,535,960		$	88,793,124

Standardized Measure of Discounted Future Net Cash Flows

NRO computes a standardized measure of discounted future net cash flows and changes therein relating to estimated proved reserves in accordance with authoritative accounting guidance. Future cash inflows and production and development costs are determined by applying prices and costs, including transportation, quality, and basis differentials, to the year-end estimated future reserve quantities. Estimated future income taxes are computed using the current statutory income tax rates, including consideration for estimated future statutory depletion. The resulting future net cash flows are reduced to present value amounts by applying a 10 percent annual discount factor.

Future operating costs and production taxes are determined based on estimates of expenditures to be incurred in developing and producing the estimated proved reserves at the end of the period using year end costs and assuming continuation of existing economic conditions, plus estimated abandonment costs.

The assumptions used to compute the Standardized Measure of discounted future net cash flows are those prescribed by the Financial Accounting Standards Board and the SEC. These assumptions do not necessarily reflect NRO’s expectations of actual revenues to be derived from those reserves, nor their present value amount. The limitations inherent in the reserve quantity estimation process, as discussed previously, are equally applicable to the standardized measure of discounted future net cash flows computations since these reserve quantity estimates are the basis for the valuation process. The following prices used in the calculation of proved reserve estimates reflect the unweighted arithmetic average of the first-day-of-the-month price of each month within the trailing 12-month period in accordance with SEC rules. We then adjust these prices to reflect transportation, quality and location differentials over the period in estimating our net proved reserves.

	Year ended December 31,
	2023		2022
Oil ($/Bbl)	$	78.22	$	93.67
Gas ($/Mmbtu)	$	2.64	$	6.36

The Standardized Measure of discounted future net cash flows from NRO’s proved oil and gas reserves is presented in the following table:

	Year ended December 31,
	2023			2022
Future cash inflows	$	797,665,069		$	883,016,626
Future production costs and taxes		(304,141,326	)		(293,548,055	)
Future development costs		(170,282,285	)		(147,621,778	)
Future income tax expense		—			—
Future net cash flows		323,241,458			441,846,793
10% annual discount for estimated timing of cash flows		(149,312,372	)		(197,175,725	)
Standardized Measure of discounted future net cash flows	$	173,929,086		$	244,671,068

The following are the principal sources of changes in the standardized measure of discounted future net cash flows from NRO’s proved oil and gas reserves:

	Year ended December 31,
	2023			2022
Balance, beginning of year	$	244,671,068		$	259,924,928
Net change in prices and production costs		(98,531,959	)		66,158,782
Net change in future development costs		3,286,634			(18,682,942	)
Oil and gas net revenue		(39,144,165	)		(57,149,450	)
Extensions		31,061,825			52,216,906
Acquisition of reserves		—			—
Divestiture of reserves		(8,286,790	)		(48,657,637	)
Revisions of previous quantity estimates		3,822,640			(49,945,233	)
Previously estimated development costs incurred		21,453,129			15,239,276
Net change in taxes		—			—
Accretion of discount		24,467,107			25,992,493
Changes in timing and other		(8,870,403	)		(426,055	)
Balance, end of year	$	173,929,086		$	244,671,068

Internal Controls and Qualifications of Technical Persons

In accordance with the Reserve Standards and guidelines established by the SEC, CG&A estimated 100% of NRO’s proved reserve information as of December 31, 2023. The technical persons responsible for preparing the reserves estimates presented herein meet the requirements regarding qualifications, independence, objectivity and confidentiality set forth in the Reserve Standards.

NRO maintains an internal staff of petroleum engineers and geoscience professionals who work closely with its independent reserve engineers to ensure the integrity, accuracy and timeliness of the data used to calculate its proved reserves relating to its assets. NRO’s internal technical team members met with independent reserve engineers periodically during the period covered by the reserve report to discuss the assumptions and methods used in the proved reserve estimation process. NRO provides historical information to the independent reserve engineers for its properties such as ownership interest, oil and natural gas production, well data, commodity prices and operating and development costs.

The preparation of NRO’s proved reserve estimates is completed in accordance with NRO’s internal control procedures. These procedures, which are intended to ensure reliability of reserve estimations, include the following:

	●	review and verification of historical production data, working interest, net revenue interest, lease operating statements, capital costs, severance and ad valorem taxes, which data is based on actual production as reported by NRO;

	●	verification of property ownership by NRO’s land department;

	●	preparation of reserve estimates by NRO’s Co-President;

	●	review by NRO’s Co-President of all of NRO’s reported proved reserves, including the review of all significant reserve changes and all new proved undeveloped reserves additions; and

	●	direct reporting responsibilities and final approval by NRO’s Co-President to NRO’s Management Committee.

Andrew Haney, Co-President, is the technical person primarily responsible for overseeing the preparation of NRO’s reserves estimates. He has over 20 years of experience in the oil and gas industry with experience in reservoir engineering, production operations, drilling and planning for multiple public and private companies. He has a Bachelor of Science degree in Petroleum Engineering from the Colorado School of Mines and a Master of Science in Global Energy Management from the University of Colorado. He is a member of the Society of Petroleum Engineers.

Drilling Activity

The following table sets forth the exploratory and development wells completed (operated and non-operated) during the years ended December 31, 2023 and 2022:

	Year Ended December 31
	2023				2022
	Gross		Net		Gross		Net
Exploratory
Productive Wells		—		—		—		—
Dry Wells		—		—		—		—
Total Exploratory Wells		—		—		—		—
Development
Productive Wells		5		5		5		5
Dry Wells		—		—		—		—
Total Development Wells		5		5		5		5
Total		5		5		5		5

At December 31, 2023, NRO did not have any wells that were in the process of being drilled, completed, awaiting completion, or any other related material activities.

As a result of the NRO Acquisition, NRO did not drill and complete any wells during the nine months ended September 30, 2024.

Production and Cost History

The following tables set forth information regarding net production of oil, natural gas and NGLs and certain price and cost information for each of the periods indicated. The information set forth below related to NRO consists of the historical results for the nine months ended September 30, 2024 and 2023 and years ended December 31, 2023 and 2022:

	Nine Months Ended September 30,				Year Ended December 31,
	2024		2023		2023		2022
Oil:
Total production (Mbbls)		398		439		617		619
Average sales price ($ per Bbl), including derivatives	$	75.50	$	73.11	$	73.46	$	61.14
Average sales price ($ per Bbl), excluding derivatives	$	74.94	$	74.69	$	75.06	$	93.29
Natural Gas:
Total production (MMcf)		794		585		888		920
Average sales price ($ per Mcf), including derivatives	$	0.43	$	0.73	$	0.75	$	2.30
Average sales price ($ per Mcf), excluding derivatives	$	0.43	$	0.89	$	0.79	$	4.32
Natural Gas Liquids:
Total production (Mbbls)		102		105		149		162
Average sales price ($ per Bbl), including derivatives	$	6.05	$	8.47	$	7.77	$	26.78
Average sales price ($ per Bbl), excluding derivatives	$	6.05	$	8.47	$	7.77	$	26.78
Oil Equivalents:
Total production (MBoe)		632		642		914		934
Average daily production (Boe/d)		2,307		2,350		2,504		2,559
Average production costs ($ per Boe)⁽¹⁾⁽²⁾	$	11.65	$	9.17	$	9.29	$	8.33

(1)	Excludes ad valorem and severance taxes

(2)	Represents lease operating expense and gathering, transportation, and processing per Boe using total production volumes.

Wells

The following table sets forth the number wells in which NRO owned a working interest, all of which are operated as of December 31, 2023:

	Total
	Gross		Net
DJ Basin		26		25

Developed and Undeveloped Acreage

The following table sets forth NRO’s leasehold acreage as of December 31, 2023.

Developed Acres

Undeveloped Acres

Total Acres

Gross

Net

Gross

Net

Gross

Net

DJ Basin

5,035

4,707

901

819

5,938

5,525

All of the leases comprising the undeveloped acreage set forth in the table above will expire at the end of their primary terms unless an extension provision within the lease is executed or production has been established, in which event the lease will remain in effect until the cessation of production. The following table sets forth, as of December 31, 2023, the extension provisions of the undeveloped acres subject to leases summarized in the above table of developed and undeveloped acreage.

	2024				2025				2026
	Gross		Net		Gross		Net		Gross		Net
Extension Acres		234		234		—		—		3		3

All of the leases comprising the undeveloped acreage set forth in the acreage tables above will expire at the end of their respective primary terms unless production from the leasehold acreage has been established prior to such date, in which event the lease will remain in effect until the cessation of production. The following table sets forth, as of March 31, 2024, the expiration periods of the undeveloped acres that are subject to leases summarized in the above acreage tables.

	2024				2025				2026
	Gross		Net		Gross		Net		Gross		Net
Expiration		180		180		80		80		373		304

Operations

General

NRO is the operator of substantially all of its acreage. As operator, NRO obtains regulatory authorizations, designs and manages the development of a well and supervises operation and maintenance activities on a day-to-day basis. NRO does not own drilling rigs or the majority of the other oil field service equipment used for drilling or maintaining wells on the properties it operates. Independent contractors engaged by NRO provide a majority of the equipment and personnel associated with these activities. NRO utilizes the services of drilling, production and reservoir engineers and geologists and other specialists who work to improve production rates, increase reserves and lower the cost of operating NRO’s oil and natural gas properties.

Marketing

NRO markets all of the oil, natural gas and NGL production from its operated properties. For the nine months ended September 30, 2024, NRO sold all of its oil, natural gas and NGL production to four purchasers, one of which accounted for 89% of NRO’s sales and one customer accounted for approximately 94% of accrued oil and gas sales. For the nine months ended September 30, 2023, NRO’s largest customers accounted for 90% of NRO’s sales and one customer accounted for approximately 93% of accrued oil and gas sales.

As of and for the year ended December 31, 2023, NRO’s largest customer generated approximately 90% of sales, and one customer accounted for approximately 95% of accrued oil and gas sales. As of and for the year ended December 31, 2022, NRO’s two largest customers generated approximately 82% and 15% of sales, and one customer accounted for approximately 88% of accrued oil and gas sales. The loss of any single purchaser could materially and adversely affect NRO’s revenues in the short-term; however, NRO believes that the loss of any of its purchasers would not have a long-term material adverse effect on its results of operations as oil, natural gas and NGLs are fungible products with well-established markets and numerous purchasers.

The majority of NRO’s production is party to crude oil purchase contracts, pursuant to which the counterparty is required to receive and purchase all crude oil produced from wells operated by NRO delivered to a terminal located in Weld County. NRO predominantly utilizes trucking to deliver its crude oil to the purchasers.

NRO is a party to various gas gathering agreements pursuant to which it has dedicated acreage, which the counterparty is required to receive and purchase all natural gas produced from wells operated by NRO located within the dedicated area through the term of the contracts. In exchange for NRO’s land dedication, NRO receives certain gathering and delivery rights.

NRO is party to produced water agreements where it has dedicated its acreage to deliver produced water to certain water disposal facilities located throughout Weld County.

Title to Properties

NRO has obtained title opinions on substantially all of its producing properties and believes that it utilizes methods consistent with practices customary in the oil and gas industry and that its practices are adequately designed to enable it to acquire satisfactory title to its producing properties. Prior to completing an acquisition of producing oil and gas leases, NRO performs title reviews on the most significant leases and, depending on the materiality of the properties, NRO may obtain a title opinion or review previously obtained title opinions. NRO’s oil, natural gas and NGL producing properties are subject to customary royalty and other interests, liens for current taxes, liens under its existing credit facility and other burdens, none of which materially interfere with NRO’s use of its properties.

Employees

NRO does not have, and never has had, any employees. NRO’s key personnel are employees of an affiliated management company to which NRO pays a monthly service fee. NRO also contracts for the services of independent consultants involved in field operations, land, regulatory, accounting, financial and other disciplines as needed.

Offices

Since its inception, NRO has leased, or subleased, sufficient office space to support its business operations. Since October 1, 2023, NRO’s offices have been located at 3773 Cherry Creek North Drive, Suite 670, Denver, Colorado 80209.

Legal Proceedings

NRO is not a party to any lawsuits and, since its inception, has not been a party to any material lawsuits. NRO cannot predict whether it will in the future be subject to lawsuits in the normal course of its business. NRO’s management, however, believes that there are no facts surrounding its operations that would support any such lawsuits or lead to damages that could have a material adverse effect on its operations or its financial condition.

Exhibit 99.7

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

As previously disclosed, Prairie Operating Co. (the “Company”) entered into an asset purchase agreement, dated January 11, 2024 (the “NRO Agreement”), by and among the Company, Nickel Road Development LLC, Nickel Road Operating LLC (“NRO”), and Prairie Operating Co., LLC (“Prairie LLC”), to acquire certain assets of NRO for total consideration of $94.5 million (the “Purchase Price”), subject to certain closing price adjustments and other customary closing conditions (the “NRO Acquisition”). The Purchase Price consisted of $83.0 million in cash and $11.5 million in deferred cash payments. The Company deposited $9.0 million of the Purchase Price into an escrow account on January 11, 2024 (the “Deposit”).

On August 15, 2024, the Company and NRO agreed to amend certain terms of the NRO Agreement, (the “Amended NRO Agreement”). As a result, the total consideration was reduced to $84.5 million cash, subject to certain closing price adjustments and other customary closing conditions, and the deferred cash payments were removed (the “Amended Purchase Price”). Additionally on August 15, 2024, $6.0 million of the Deposit was released to NRO and $3.0 million was returned to the Company.

On October 1, 2024, the Company closed the NRO Acquisition and paid $49.6 million to the Sellers in cash reflecting the purchase price as adjusted for Deposit and customary closing price adjustments. In December 2024, the Company completed the final settlement with NRO, resulting in NRO paying the Company $2.6 million, (together with the Deposit and the $49.6 million paid on October 1, 2024, the “Final Purchase Price”).

On February 6, 2025, the Company entered into an asset purchase agreement (the “Bayswater PSA”) by and among the Company and Bayswater Resources, LLC and affiliates (the “Bayswater Entities”) to acquire certain assets for a total consideration of $602.75 million (the “Bayswater Purchase Price”), subject to certain closing price adjustments and other customary closing conditions (the “Bayswater Acquisition”).

The Company is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial aspects of the following:

	(i)	the NRO Acquisition;

	(ii)	the Bayswater Acquisition;

	(iii)	the sale of all of the Company’s cryptocurrency miners (the “Mining Equipment”) and the assignment of all of the Company’s rights and obligations under the Master Services Agreement, dated February 16, 2023, by and between Atlas Power Hosting, LLC and the Company, to a private purchaser pursuant to an asset purchase agreement, dated January 23, 2024 (the “Crypto Sale”); and

	(iv)	the merger of Creek Road Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger Sub”), with and into Prairie LLC, with Prairie LLC surviving and continuing to exist as a Delaware limited liability company and a wholly owned subsidiary of the Company pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated as of May 3, 2023, by and among the Company, Merger Sub and Prairie LLC (the “Merger” and collectively, with the closing of the NRO Acquisition, the Bayswater Acquisition, and the Crypto Sale, the “Transactions”).

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” and presents the combination of historical financial information of the Company and Prairie LLC, adjusted to give effect to the Transactions, subsequent events thereto (the “Subsequent Events”) as described in Note 4– Subsequent Events below, and the financing transactions thereto (“Financing Transactions”) described in Note 8 – Financing below.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024 combines the historical balance sheet of the Company and the historical consolidated balance sheet of NRO as of September 30, 2024, on a pro forma basis as if the Transactions, the Subsequent Events, described in Note 4 – Subsequent Events below, and the Financing Transactions described in Note 8 – Financing below had been consummated on September 30, 2024.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 combine the historical statements of operations of the Company, the historical statements of operations of Creek Road Miners, Inc., the historical consolidated statements of operations of NRO, and the historical statement of revenue and direct operating expenses of Bayswater, as applicable, on a pro forma basis as if the Transactions, the Subsequent Events, described in Note 4 – Subsequent Events below, and the Financing Transactions described in Note 8 – Financing below had been consummated on January 1, 2023.

The unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with:

	(a)	the Company’s audited historical consolidated financial statements and related notes included in its Annual Report on Form 10-K/A for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 20, 2024;

	(b)	the Company’s unaudited historical condensed consolidated financial statements and related notes for the nine months ended September 30, 2024 included in its Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 8, 2024;

	(c)	the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Prairie Operating Co.” included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2023, filed with the SEC on March 20, 2024;

	(d)	NRO’s unaudited consolidated financial statements for the nine months ended September 30, 2024, included in the Company’s Current Report on Form 8-K, filed with the SEC on November 27, 2024;

	(e)	NRO’s audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Amendment to its Current Report on Form 8-K/A, filed with the SEC on March 19, 2024;

	(f)	the exhibit entitled “Information About NRO” included in the Company’s Current Report on Form 8-K, filed with the SEC on October 4, 2024;

	(g)	Bayswater’s unaudited statement of revenue and direct operating expenses for the nine months ended September 30, 2024, included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025;

	(h)	Bayswater’s audited statement of revenue and direct operating expenses for the years ended December 31, 2023 and December 31, 2022, included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025; and

	(i)	the exhibit entitled “Management’s Discussion and Analysis of the Financial Condition and Results of Operations of the Acquired Properties” included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025.

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the Company’s financial condition or results of operations would have been had the Transactions, Subsequent Events, described in Note 4 – Subsequent Events below, or the Financing Transactions described in Note 8 – Financing below occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information do not project the Company’s future financial condition and results of operations. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this filing and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on the Company’s results of operations, and are subject to change as additional information becomes available and analyses are performed.

Description of the Merger and Related Transactions

On May 3, 2023 (the “Merger Closing Date”), the Company completed the Merger, and upon consummation thereof, the Company changed its name from “Creek Road Miners, Inc.” to “Prairie Operating Co.” Prior to the consummation of the Merger, the Company effectuated certain restructuring transactions in the following order and issued an aggregate of 3,860,898 shares of Common Stock (excluding shares reserved for issuance and unissued subject to certain beneficial ownership limitations) and 4,423 shares of Series D preferred stock, par value $0.01 per share (“Series D Preferred Stock”):

	(i)	the Company’s Series A preferred stock, par value $0.0001 per share (“Series A Preferred Stock”), Series B preferred stock, par value $0.0001 per share (“Series B Preferred Stock”), and Series C preferred stock, par value $0.0001 per share (“Series C Preferred Stock”), plus accrued dividends, were converted, in the aggregate, into shares of Common Stock;

	(ii)	the Company’s 12% senior secured convertible debentures (the “Original Debentures”), plus accrued but unpaid interest and a 30% premium, were exchanged, in the aggregate, for (a) the 12% amended and restated senior secured convertible debentures (collectively, the “AR Debentures”) in the principal amount of $1,000,000 in substantially the same form as their respective Original Debentures, (b) shares of Common Stock and (c) shares of Series D Preferred Stock;

	(iii)	accrued fees payable to the certain members of the board of directors of the Company in the amount of $110,250 were converted into shares of Common Stock;

	(iv)	accrued consulting fees of the Company in the amount of $318,750 payable to Bristol Capital, LLC (“Bristol Capital”) were converted into shares of Common Stock; and

	(v)	all amounts payable pursuant to certain convertible promissory notes were converted into shares of Common Stock.

At the effective time of the Merger, all membership interests in Prairie LLC were converted into the right to receive each member’s pro rata share of 2,297,668 shares of Common Stock.

The Merger was accounted for as a reverse asset acquisition under existing GAAP. For accounting purposes, Prairie LLC was treated as acquiring Merger Sub in the Merger. See Note 1 - Basis of Pro Forma Presentation for further discussion. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Prairie LLC with the acquisition being treated as the equivalent of Prairie LLC issuing stock for the net assets of the Company. On the Merger Closing Date, the assets and liabilities of the Company were recorded based upon relative fair values, with no goodwill or other intangible assets recorded.

The assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information. The pro forma adjustments do not consider borrowings, financings and other transactions that may have occurred subsequent to December 31, 2023 other than the Subsequent Events described in Note 4 – Subsequent Events below and reflected in the pro forma financial information, nor do they reflect anticipated financings or other transactions that may occur in the future, other than the Series F Preferred Stock and the issuance of convertible debt.

NRO Acquisition

On January 11, 2024, the Company entered into the NRO Agreement to acquire the assets of NRO for the Purchase Price, subject to certain closing price adjustments and other customary closing conditions. The Purchase Price consisted of $83.0 million in cash and $11.5 million in deferred cash payments. The Company deposited $9.0 million of the Purchase Price into an escrow account.

On August 15, 2024, the Company and NRO entered into the Amended NRO Agreement. As a result, the purchase price was amended to $84.5 million cash, subject to certain closing price adjustments and other customary closing conditions, and the deferred cash payments were removed. Additionally on August 15, 2024, $6.0 million of the Deposit was released to NRO and $3.0 million was returned to the Company.

On October 1, 2024, the Company closed the NRO Acquisition and paid $49.6 million to the Sellers in cash and in December 2024, the Company completed the final settlement with NRO resulting in NRO paying the Company $2.6 million.

The NRO Acquisition will be accounted for as an asset acquisition in accordance with Accounting Standards Codification Topic 805 - Accounting for Business Combinations (“ASC 805”). The estimated fair value of the consideration paid by the Company and the allocation of that amount to the underlying assets acquired, on a relative fair value basis, will be recorded on the Company’s books as of the date of October 1, 2024, (the “Acquisition Closing Date”) of the NRO Acquisition. Additionally, costs directly related to the NRO Acquisition will be capitalized as a component of the Final Purchase Price.

Bayswater Acquisition

On February 6, 2025, the Company entered into an asset purchase agreement (the “Bayswater PSA”) by and among the Company and Bayswater Resources, LLC and affiliates (the “Bayswater Entities”) to acquire certain assets for a total consideration of $602.75 million (the “Purchase Price”), subject to certain closing price adjustments and other customary closing conditions (the “Bayswater Acquisition”).

The Bayswater Acquisition will be accounted for as an asset acquisition in accordance with ASC 805. The estimated fair value of the consideration paid by the Company and the allocation of that amount to the underlying assets acquired, on a relative fair value basis, will be recorded on the Company’s books as of the closing date of the Bayswater Acquisition. Additionally, costs directly related to the Bayswater Acquisition will be capitalized as a component of the Purchase Price.

Sale of Cryptocurrency Mining Equipment

On January 23, 2024, the Company completed the Crypto Sale, for consideration consisting of (i) $1.0 million in cash and (ii) $1.0 million (plus accrued interest) in deferred cash payments to be made out of a portion of the future net revenues associated with the Mining Equipment. See “Description of the Crypto Sale.”

Subsequent Events

Acquisition of DrillCo Interest

In conjunction with the Bayswater Acquisition, the Company is expected to acquire an interest in a DrillCo partnership (“DrillCo”) not owned by Bayswater within 45 days of closing of the Bayswater Acquisition for $14.0 million. Bayswater does not currently own this interest, but is expected to acquire this interest within 45 days of closing of the Bayswater Acquisition. As such, DrillCo was not included in the historical financial results of Bayswater.

Credit Agreement

On December 16, 2024, the Company entered into a reserve-based credit agreement with Citibank, N.A., as administrative agent, and the financial institutions party thereto (the “Existing Credit Agreement”). As of December 16, 2024, the Existing Credit Agreement has a maximum credit commitment of $1.0 billion, a borrowing base of $44.0 million and an aggregate elected commitment of $44.0 million. The Existing Credit Agreement is scheduled to mature on December 16, 2026. The Company borrowed $28.0 million under the Existing Credit Agreement on December 17, 2024. Without the consent of each lender and the administrative agent, the aggregate amount of revolving borrowings and outstanding letters of credit cannot exceed 80% of aggregate elected commitment.

As of January 31, 2025, the Existing Credit Agreement had a borrowing base of $44.0 million and an aggregate elected commitment of $44.0 million. As of January 31, 2025, $34.0 million of revolving borrowings and no letters of credit were outstanding under the Existing Credit Agreement.

NRO Financing Receivable

Senior Convertible Note. On September 30, 2024, YA II PN, LTD., a Cayman Islands exempt limited company (“Yorkville”), advanced an initial $15.0 million (the “Pre-Paid Advance”) to the Company and the Company issued a convertible promissory note (the “Senior Convertible Note”), with an interest rate of 8.00% and a maturity date of September 30, 2025. Yorkville may convert the Pre-Paid Advance into shares of Common Stock at any time at the Conversion Price (as defined in the SEPA). The Company may, at any time, redeem all or a portion or the amounts outstanding under the Senior Convertible Note at 105% of the principal amount thereof, plus accrued and unpaid interest.

The Company did not receive the proceeds from the Senior Convertible Note until October 1, 2024; therefore, it recorded a $14.3 million short-term financing receivable related to the Senior Convertible Note as of September 30, 2024.

On December 16, 2024 and in conjunction with the Existing Credit Agreement, the Company paid down the Senior Convertible Note to $11.3 million. In January 2025, Yorkville converted $7.4 million of the Senior Convertible Note in exchange for 1.5 million shares of common stock.

Subordinated Note. On September 30, 2024 (the “Subordinated Note Effective Date”), the Company entered into a subordinated promissory note (the “Subordinated Note”) with First Idea Ventures LLC and The Hideaway Entertainment LLC (together, the “Noteholders”), in a principal amount of $5.0 million, with a maturity of September 30, 2025. The Subordinated Note has an interest rate of 10.00% and the Noteholders are entitled to a minimum return on capital of up to 2.0x upon the repayment, prepayment or acceleration of the obligations, or the occurrence of certain other triggering events under the Subordinated Note. The Subordinated Note is subordinated to the prior payment in full in cash to the Senior Convertible Note and any future senior secured revolving credit facility of the Company entered into after the Subordinated Note Effective Date. Pursuant to the terms of the Subordinated Note, the Company issued to the Noteholders warrants (the “Subordinated Note Warrants”) to purchase up to 1,141,552 shares of Common Stock, vesting in tranches based on the date of repayment of the Subordinated Note.

The Company did not receive a portion of the proceeds from the Subordinated Note until October 1, 2024; therefore, it recorded a $2.0 million short-term financing receivable related to the Subordinated Note as of September 30, 2024.

On December 16, 2024 and in conjunction with the Existing Credit Agreement, the Company paid down the Subordinated Note to $3.2 million.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2024

	Prairie Operating Co.			Nickel Road			Nickel Road Transaction Accounting			Bayswater Transaction Accounting			Subsequent Event			Financing			Combined
	(Historical)			(Historical)			Adjustments			Adjustments			Adjustments			Adjustments			Pro Forma
							(See Notes 5 and 7)			(See Notes 6 and 7)			(See Notes 4 and 7)			(See Notes 7 and 8)
Assets
Current assets:
Cash and cash equivalents	$	40,052,362		$	2,597,806		$	(47,003,746	)(a)	$	(479,900,000	)(k)	$	16,250,000	(i)	$	520,090,000	(r)	$	76,756,708
								(2,597,806	)(h)					32,333,725	(o)
														(5,065,633	)(o)
Note receivable		507,651			-			-			-			-			-			507,651
Joint interest receivable		-			250,545			(250,545	)(h)		-			-			-			32,570
								32,570	(a)
Accrued oil and gas sales		-			3,246,193			(3,246,193	)(h)		-			-			-			-
Prepaid expenses and other current assets		267,365			675,033			(675,033	)(h)		14,000,000	(s)		(14,000,000	)(s)		-			371,460
								104,095	(a)
Short term financing receivable		16,250,000			-			-			-			(16,250,000	)(i)		-			-
Total current assets		57,077,378			6,769,577			(53,636,658	)		(465,900,000	)		13,268,092			520,090,000			77,668,389

Long-term assets:
Property and equipment
Oil and natural gas properties, successful efforts method of accounting		42,061,414			-			61,032,167	(a)		522,429,283	(k)		14,048,168	(s)		-			639,571,032
Proved properties		-			110,199,820			(110,199,820	)(a)		-			-			-			-
Unproved properties		-			1,545,199			(1,545,199	)(a)		-			-			-			-
Other		93,849			-			-			18,066,343	(k)		-			-			18,160,192
Accumulated depreciation and depletion		(711	)		(51,685,812	)		51,685,812	(a)		-			-			-			(711	)
Total property and equipment, net		42,154,552			60,059,207			972,960			540,495,626			14,048,168			-			657,730,512
Deposits on oil and natural gas properties		6,382,314			-			(6,000,000	)(a)		-			-			-			382,314
Operating lease assets		1,063,659			182,526			(182,526	)(h)		-			-			-			1,063,659
Note receivable - non-current		239,249			-			-			-			-			-			239,249
Deferred transaction costs		229,756			-			(229,756	)(a)		-			-			-			-
Other non-current assets		27,816			-			-			-			-			-			27,816
Total assets	$	107,174,724		$	67,011,310		$	(59,075,980	)	$	74,595,626		$	27,316,260		$	520,090,000		$	737,111,940

Liabilities, Members’ Capital and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	22,545,465		$	-		$	7,713,940	(a)	$	70,000,000	(k)	$	-		$	-		$	100,259,405
Accounts payable		-			177,540			(177,540	)(h)		-			-			-			-
Accrued liabilities		-			9,468,750			(9,468,750	)(h)		-			-			-			-
Senior convertible note, net		14,250,000			-			-			-			(2,998,492	)(o)		-			3,900,000
														(7,351,508	)(o)
Subordinated promissory note - related party		5,281,141			-			-			-			(2,067,141	)(o)		-			3,214,000
Warrant liabilities - related party		2,758,206			-			-			-			-			-			2,758,206
Operating lease liabilities, current		177,722			182,525			(182,525	)(h)		-			-			-			177,722
Total current liabilities		45,012,534			9,828,815			(2,114,875	)		70,000,000			(12,417,141	)		-			110,309,333

Long-term liabilities:
Long-term debt, net of deferred financing costs		-			-			-			-			32,333,725	(o)		333,590,000	(p)		365,923,725
Asset retirement obligations		-			1,397,777			(1,397,777	)(h)		1,845,626	(k)		48,168	(s)		-			2,115,184
								221,391	(a)
Operating lease liabilities, long-term		875,105			-			-			-			-			-			875,105
Total long-term liabilities		875,105			1,397,777			(1,176,386	)		1,845,626			32,381,893			333,590,000			368,914,014
Total liabilities	$	45,887,639		$	11,226,592		$	(3,291,262	)	$	71,845,626		$	19,964,752		$	333,590,000		$	479,223,347

Commitments and contingencies

Members’ capital	$	-		$	55,784,718		$	(55,784,718	)(h)	$	-		$	-		$	-		$	-

Stockholders’ equity:
Preferred stock; 50,000 shares authorized:
Series D convertible preferred stock; $0.01 par value; 14,467 shares issued and outstanding (actual)		145			-			-			-			-			-			145
Common stock; $0.01 par value; 500,000,000 shares authorized and 22,918,763 shares issued and outstanding (actual) and 47,731,351 shares issued and outstanding (as adjusted)		229,188			-			-			3,161	(k)		15,080			229,885	(q)		477,314
Additional paid-in capital		168,886,525			-			-			2,746,839	(k)		7,336,428			186,270,115	(q)		365,239,907
Accumulated deficit		(107,828,773	)		-			-			-			-			-			(107,828,773	)
Total stockholders’ equity		61,287,085			-			-			2,750,000			7,351,508			186,500,000			257,888,593
Total liabilities, members’ capital and stockholders’ equity	$	107,174,724		$	67,011,310			(59,075,980	)		74,595,626		$	27,316,260		$	520,090,000		$	737,111,940

Unaudited Pro Forma Condensed Combined Statement of Operations

Nine Months Ended September 30, 2024

		Prairie Operating Co.			Nickel Road			Bayswater Revenue & Direct Operating		Nickel Road Transaction Accounting			Bayswater Transaction Accounting			Subsequent Event			Financing		Combined
		(Historical)			(Historical)			(Historical)		Adjustments			Adjustments			Adjustments			Adjustments		Pro Forma
										(See Notes 5 and 7)			(See Notes 6 and 7)			(See Notes 4 and 7)			(See Notes 7 and 8)

Revenue:
Oil and gas sales	$	-		$	30,781,291		$		$	-		$	343,724,444	(m)	$	8,557,991	(s)	$	-		$	383,063,726
Oil sales		-			-			314,152,566		-			(314,152,566	)(m)		-			-			-
Natural gas and liquids sales		-			-			37,663,182		-			(37,663,182	)(m)		-			-			-
Total revenues		-			30,781,291			351,815,748		-			(8,091,304	)		8,557,991			-			383,063,726
Operating costs and expenses:
Depreciation, depletion and amortization		711			10,725,647			-		(8,365,827	)(f)		49,221,079	(l)		1,310,892	(s)		-			52,892,502
Production taxes		-			1,938,671			26,215,597		(452,478	)(h)		-			684,973	(s)		-			28,386,763
Lease operating expense		-			4,169,222			24,771,399		-			2,462,068	(m)		1,983,826	(s)		-			33,386,515
Lease operating expense - related party		-			-			2,462,068		-			(2,462,068	)(m)		-			-			-
Oil gathering expenses		-			-			8,091,304		-			(8,091,304	)(m)		-			-			-
Workover expenses		-			-			1,756,092		-			-			-			-			1,756,092
General and administrative		24,905,341			3,017,990			-		-			-			-			-			27,923,331
Impairment of oil and natural gas properties		-			29,719,123			-		-			-			-			-			29,719,123
Exploration expenses		523,785			-			-		-			-			-			-			523,785
Total operating expenses		25,429,837			49,570,653			63,296,460		(8,818,305	)		41,129,775			3,979,691			-			174,588,111
(Loss) income from operations		(25,429,837	)		(18,789,362	)		288,519,288		8,818,305			(49,221,078	)		4,578,300			-			208,475,616

Other income (expense):
Interest income		538,833			-			-		-			-			-			-			538,833
Interest expense		-			(974,935	)		-		974,935	(h)		-			(1,263,964	)(o)		(20,015,400	)(p)		(21,279,364	)
Loss on issuance of debt		(3,039,347	)					-					-			-			-			(3,039,347	)
Realized gain on derivative instruments		-			223,485			-		(223,485	)(h)		-			-			-			-
Unrealized loss on derivative instruments		-			(270,925	)		-		270,925	(h)		-			-			-			-
Gain on sale of oil and gas properties		-			5,372,679			-		-			-			-			-			5,372,679
Other expenses		-			1,237			-		(1,237	)(h)		-			-			-			-
Total other (expense) income		(2,500,514	)		4,351,541			-		1,021,138			-			(1,263,964	)		(20,015,400	)		(18,407,199	)

(Loss) income from operations before provision for income taxes / Revenues in excess of direct operating expenses		(27,930,351	)		(14,437,821	)		288,519,288		9,839,443			(49,221,078	)		3,314,336			(20,015,400	)		190,068,416
Provision for income taxes		-			-			-		-			(44,368,443	)(n)		-			-			(44,368,443	)
(Loss) income from continuing operations	$	(27,930,351	)	$	(14,437,821	)	$	288,519,288	$	9,839,443		$	(93,589,512	)	$	3,314,336		$	(20,015,400	)	$	145,699,973

Earnings (loss) per common share:
Income (loss) per share, basic	$	(2.24	)																		$	3.86
Income (loss) per share, diluted	$	(2.24	)																		$	2.76
Weighted average common shares outstanding, basic		12,938,342											316,092	(k)		1,507,990	(o)		22,988,506	(q)		37,750,930
Weighted average common shares outstanding, diluted		12,938,342											316,092	(k)		1,507,990	(o)		38,017,524	(q)		52,779,948

Unaudited Pro Forma Condensed Combined Statement of Operations

Year Ended December 31, 2023

	Prairie Operating Co.			Creek Road Miners, Inc. (As			Nickel Road			Bayswater Revenue & Direct Operating		Creek Road Miners, Inc. Acquisition			Nickel Road Transaction Accounting			Bayswater Transaction Accounting			Cryptocurrency Asset Sale			Subsequent Event			Financing			Combined
	(Historical)			Adjusted)			(Historical)			(Historical)		Adjustments			Adjustments			Adjustments			Adjustments			Adjustments			Adjustments			Pro Forma
				(See Note 2)								(See Note 7)			(See Notes 5 and 7)			(See Notes 6 and 7)			(See Notes 3 and 7)			(See Notes 4 and 7)			(See Notes 7 and 8)
Revenue:
Cryptocurrency mining	$	1,545,792		$	73,584		$	-				$	-		$	-		$			$	(1,619,376	)(b)	$			$	-		$	-
Oil and gas sales		-			-			48,169,114			-		-			(899,352	)(g)		458,289,100	(m)		-			17,315,713	(s)		-			522,874,575
Oil sales		-			-			-			415,000,112		-			-			(415,000,112	)(m)		-			-			-			-
Natural gas and liquids sales		-			-			-			51,831,604		-			-			(51,831,604	)(m)		-			-			-			-
Total revenues		1,545,792			73,584			48,169,114			466,831,716		-			(899,352	)		(8,542,616	)		(1,619,376	)		17,315,713			-			522,874,575
Operating costs and expenses:
Cryptocurrency mining costs (exclusive of depreciation and amortization shown below)		548,617			80,140			-			-		-			-			-			(628,757	)(b)		-			-			-
Depreciation, depletion and amortization		983,788			116,724			16,115,889			-		141,885	(c)		(12,947,233	)(f)		58,737,663	(l)		(1,242,397	)(b)		1,562,571	(s)		-			63,468,890
Production taxes		-			-			4,408,520			31,325,533		-			(438,938	)(g)					-			1,060,612	(s)		-			36,355,727
Lease operating expense		-			-			4,616,425			39,898,053		-			-			2,687,187	(m)					2,547,479	(s)		-			49,749,144
Lease operating expense - related party		-			-			-			2,687,187		-			-			(2,687,187	)(m)		-			-			-			-
Oil gathering expenses		-			-			-			8,542,616		-			-			(8,542,616	)(m)		-			-			-			-
Workover expenses		-			-			-			3,278,240		-			-						-			-			-			3,278,240
General and administrative		16,269,045			1,119,277			4,068,463			-		170,120	(d)		-			-			-			-			-			21,626,905
Stock based compensation		-			170,120			-			-		(170,120	)(d)		-			-			-			-			-			-
Impairment of cryptocurrency mining equipment		17,072,015			-			-			-		-			-			-			(17,072,015	)(b)		-			-			-
Impairment of oil and natural gas properties		-			-			5,077,697			-		-			-			-			-			-			-			5,077,697
Exploration expenses		263,757			-			-			-		-			-			-			-			-			-			263,757
Total operating expenses		35,137,222			1,486,261			34,286,994			85,731,629		141,885			(13,386,170	)		50,195,047			(18,943,169	)		5,170,662			-			179,820,360
(Loss) income from operations		(33,591,430	)		(1,412,677	)		13,882,120			381,100,088		(141,885	)		12,486,818			(58,737,663	)		17,323,793			12,145,050			-			343,054,215

Other income (expense):
Interest income		248,073			-			15,267			-		-			-			-			-			-			-			263,340
Interest expense		(121,834	)		(214,344	)		(2,025,960	)		-		120,076	(e)		2,025,960	(h)		-			-			(1,685,286	)(o)		(26,687,200	)(p)		(28,588,588	)
Gain on sale of oil and gas properties		-			-			5,925,755			-		-			(5,925,755	)(h)		-			-			-			-			-
Realized loss on derivative instruments		-			-			(1,021,596	)		-		-			1,021,596	(h)		-			-			-			-			-
Unrealized gain on derivative instruments		-			-			2,998,792			-		-			(2,998,792	)(h)		-			-			-			-			-
Other income		-			-			4,227			-		-			(4,227	)(h)		-			-			-			-			-
Loss on adjustment to fair value - Warrant Liabilities		(39,797,994	)		-			-			-		-			-			-			-			-			-			(39,797,994	)
Loss on adjustment to fair value - AR Debentures		(3,790,428	)		-			-			-		-			-			-			-			-			-			(3,790,428	)
Loss on adjustment to fair value - Obligation Shares		(1,477,103	)		-			-			-		-			-			-			-			-			-			(1,477,103	)
Liquidated damages		(548,144	)		-			-			-		-			-			-			-			-			-			(548,144	)
Total other (expense) income		(45,487,430	)		(214,344	)		5,896,485			-		120,076			(5,881,218	)		-			-			(1,685,286	)		(26,687,200	)		(73,938,917	)

(Loss) income from operations before provision for income taxes / Revenues in excess of direct operating expenses		(79,078,860	)		(1,627,021	)		19,778,605			381,100,087		(21,809	)		6,605,600			(58,737,663	)		17,323,793			10,459,764			(26,687,200	)		269,115,298
Provision for income taxes		-			-			(18,000	)		-		-			18,000	(h)		(61,559,549	)(n)		-			-			-			(61,559,549	)
(Loss) income from continuing operations	$	(79,078,860	)	$	(1,627,021	)	$	19,760,605		$	381,100,088	$	(21,809	)	$	6,623,600		$	(120,297,212	)	$	17,323,793		$	10,459,764		$	(26,687,200	)	$	207,555,749

Earnings (loss) per common share:
Income (loss) per share, basic	$	(16.51	)	$	(4.02	)																								$	6.55
Income (loss) per share, diluted	$	(16.51	)	$	(4.02	)																								$	3.85
Weighted average common shares outstanding, basic		4,788,412			428,611	(j)							1,646,741	(j)					316,092	(k)					1,507,990	(o)		22,988,506	(q)		31,676,352
Weighted average common shares outstanding, diluted		4,788,412			428,611	(j)							1,646,741	(j)					316,092	(k)					1,507,990	(o)		45,191,444	(q)		53,879,290

Note 1 - Basis of Pro Forma Presentation

The NRO Acquisition will be accounted for as an asset acquisition in accordance with ASC 805. The estimated fair value of the consideration paid by the Company and allocation of that amount to the underlying assets acquired, on a relative fair value basis, will be recorded on the Company’s books as of the Acquisition Closing Date. Additionally, costs directly related to the NRO Acquisition will be capitalized as a component of the Final Purchase Price.

The Crypto Sale requires presentation as discontinued operations upon the issuance of future financial statements in accordance with GAAP. Pursuant to the requirements of Article 3 of Regulation S-X, the Crypto Sale is considered a significant disposition and requires pro forma presentation in accordance with Article 11 of Regulation S-X.

The Merger was accounted for as a reverse asset acquisition under existing GAAP. For accounting purposes, Prairie LLC was treated as acquiring Merger Sub in the Merger.

Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of Prairie LLC with the acquisition being treated as the equivalent of Prairie LLC issuing stock for the net assets of the Company. On the Merger Closing Date, the assets and liabilities of the Company were recorded based upon relative fair values, with no goodwill or other intangible assets recorded.

The unaudited pro forma condensed combined balance sheet as of September 30, 2024 combines the historical balance sheet of the Company and the historical consolidated balance sheet of NRO as of September 30, 2024 on a pro forma basis in accordance with Article 11 of Regulation S-X, as amended, as if the Transactions, the Subsequent Events, described in Note 4 – Subsequent Events below, and the Financing Transactions described in Note 8 – Financing had been consummated on September 30, 2024.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024 and for the year ended December 31, 2023 combine the historical statements of operations of the Company, the historical statements of operations of Creek Road Miners, Inc., the historical consolidated statements of operations of NRO, and the historical statement of revenue and direct operating expenses of Bayswater, as applicable, on a pro forma basis as if the Transactions, the Subsequent Events, described in Note 4 – Subsequent Events below, and the Financing Transactions described in Note 8 – Financing below had been consummated on January 1, 2023.

The pro forma basic and diluted earnings (loss) per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of shares of Common Stock outstanding, assuming the Transactions and the Financing Transactions described in Note 8 – Financing below, occurred on January 1, 2023.

The unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with, (i) the audited historical financial statements of the Company as of and for the year ended December 31, 2023 and the notes thereto, as well as the disclosures contained in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Prairie Operating Co.” included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2023, filed with the SEC on March 20, 2024, (ii) the unaudited historical financial statements of the Company as of and for the nine months ended September 30, 2024 and the notes thereto, as well as the disclosures contained in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Prairie Operating Co.” included in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2024, filed with the SEC on November 8, 2024, (iii) NRO’s audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Amendment to its Current Report on Form 8-K/A, filed with the SEC on March 19, 2024; (iv) NRO’s unaudited consolidated financial statements for the nine months ended September 30, 2024, included in the Company’s Current Report on Form 8-K, filed with the SEC on November 27, 2024; (v) the exhibit entitled “Information About NRO.” included in the Company’s Current Report on Form 8-K, filed with the SEC on October 4, 2024, (vi) Bayswater’s unaudited statement of revenue and direct operating expenses for the nine months ended September 30, 2024, included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025; (vii) Bayswater’s audited statement of revenue and direct operating expenses for the years ended December 31, 2023 and December 31, 2022, included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025; and (viii) the exhibit entitled “Management’s Discussion and Analysis of Results of Operations of the Acquired Properties” included in the Company’s Current Report on Form 8-K, filed with the SEC on February 6, 2025.

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the Company’s financial condition or results of operations would have been had the Transactions, Subsequent Events, described in Note 4 – Subsequent Events below, or the Financing Transactions described in Note 8 – Financing below occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information do not project the Company’s future financial condition and results of operations. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this filing and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on the Company’s results of operations and are subject to change as additional information becomes available and analyses are performed.

Note 2 - Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information

The historical financial statements of Creek Road Miners, Inc. (“Creek Road”) included in the Company’s Quarterly Report on Form 10-Q/A filed with the SEC on June 16, 2023 include the historical statement of operations of Creek Road for the three months ended March 31, 2023. Given the Merger was not completed until May 3, 2023, for pro forma purposes herein in order to determine the Creek Road, As Adjusted amounts, Creek Road’s results of operations for the three months ended March 31, 2023, have been added to Creek Road’s results of operations for the period from April 1, 2023, through May 2, 2023, as reflected in the Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2023.

	Creek Road
	For the Three Months Ended March 31, 2023			For the Period from April 1, 2023 through May 2, 2023			As Adjusted
Revenue:
Cryptocurrency mining	$	—		$	73,584		$	73,584
Total revenues		—			73,584			73,584
Operating costs and expenses:
Cryptocurrency mining costs (exclusive of depreciation and amortization shown below)		6,305			73,835			80,140
Depreciation, depletion and amortization		64,576			52,148			116,724
General and administrative		576,289			542,988			1,119,277
Stock based compensation		170,120			—			170,120
Total operating expenses		817,290			668,971			1,486,261
(Loss) income from operations		(817,290	)		(595,387	)		(1,412,677	)
Other expenses:
Interest expense		(154,076	)		(60,268	)		(214,344	)
Total other expenses		(154,076	)		(60,268	)		(214,344	)
(Loss) income from operations before provision for income taxes		(971,366	)		(655,655	)		(1,627,021	)
Provision for income taxes		—			—			—
(Loss) income from continuing operations	$	(971,366	)	$	(655,655	)	$	(1,627,021	)
Earnings (loss) per common share:
Loss per share, basic and diluted	$	(2.49	)	$	(1.53	)	$	(4.02	)
Weighted average common shares outstanding, basic and diluted		428,611			428,611			428,611

Note 3 - Cryptocurrency Asset Sale

On January 23, 2024, the Company completed the sale of all of the Mining Equipment for consideration consisting of (i) $1.0 million in cash and (ii) $1.0 million (plus accrued interest) in deferred cash payments to be made out of a portion of the future net revenues associated with the Mining Equipment. This sale requires presentation within discontinued operations upon the issuance of financial statements and, as such, requires an adjustment in the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2023.

Note 4 - Subsequent Events

Acquisition of DrillCo Interest

In conjunction with the Bayswater Acquisition, the Company is expected to acquire an interest in DrillCo not owned by Bayswater within 45 days of closing of the Bayswater Acquisition for $14.0 million. Bayswater does not currently own this interest, but is expected to acquire this interest within 45 days of closing of the Bayswater Acquisition. As such, DrillCo was not included in the historical financial results of Bayswater.”

Credit Agreement

On December 16, 2024, the Company entered into the Existing Credit Agreement. As of December 16, 2024, the Existing Credit Agreement has a maximum credit commitment of $1.0 billion, a borrowing base of $44.0 million and an aggregate elected commitment of $44.0 million. The Existing Credit Agreement is scheduled to mature on December 16, 2026. The Company borrowed $28.0 million under the Existing Credit Agreement on December 17, 2024. Without the consent of each lender and the administrative agent, the aggregate amount of revolving borrowings and outstanding letters of credit cannot exceed 80% of aggregate elected commitment.

NRO Financing Receivable

Senior Convertible Note. On September 30, 2024, Yorkville, advanced the Pre-Paid Advance to the Company and the Company issued the Senior Convertible Note, with an interest rate of 8.00% and a maturity date of September 30, 2025. Yorkville may convert the Pre-Paid Advance into shares of Common Stock at any time at the Conversion Price (as defined in the SEPA). The Company may, at any time, redeem all or a portion or the amounts outstanding under the Senior Convertible Note at 105% of the principal amount thereof, plus accrued and unpaid interest.

Subordinated Note. On September 30, 2024, the Company entered into the Subordinated Note with the Noteholders, in a principal amount of $5.0 million, with a maturity of September 30, 2025. The Subordinated Note has an interest rate of 10.00% and the Noteholders are entitled to a minimum return on capital of up to 2.0x upon the repayment, prepayment or acceleration of the obligations, or the occurrence of certain other triggering events under the Subordinated Note. The Subordinated Note is subordinated to the prior payment in full in cash to the Senior Convertible Note and any future senior secured revolving credit facility of the Company entered into after the Subordinated Note Effective Date. Pursuant to the terms of the Subordinated Note, the Company issued the Subordinated Note Warrants to purchase up to 1,141,552 shares of Common Stock to the Noteholders, vesting in tranches based on the date of repayment of the Subordinated Note.

On December 16, 2024 and in conjunction with the Existing Credit Agreement, the Company paid down the Subordinated Note to $3.2 million.

Note 5 - Preliminary Purchase Price - NRO Acquisition

The preliminary allocation of the total Final Purchase Price in the NRO Acquisition, on a relative fair value basis, is based upon management’s estimates of and assumptions related to the fair value of assets acquired and liabilities assumed as of the Acquisition Closing Date using currently available information. Because the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on the Company’s financial position and results of operations may differ significantly from the pro forma amounts included herein.

The preliminary purchase price allocation is subject to change due to several factors, including but not limited to changes in the estimated fair value of assets acquired and liabilities assumed as of the Acquisition Closing Date, which could result from changes in future oil and natural gas commodity prices, reserve estimates, interest rates, as well as other factors.

The consideration transferred, assets acquired and liabilities assumed by the Company are expected to be initially recorded as follows:

Consideration:
Cash consideration (1)	$	47,003,746
Deposit on oil and gas properties (2)		6,000,000
Direct transaction costs (3)		238,846
Total consideration	$	53,242,592
Assets acquired:
Oil and gas properties	$	61,032,167
Prepaid expenses, third-party JIB receivable, and other		136,665
	$	61,168,832
Liabilities assumed:
Accounts payable and accrued expenses (4)	$	7,704,850
Asset retirement obligation, long-term		221,391
	$	7,926,240

(1)	Includes final settlement statement payment of $2.6 million from NRO to the Company.
(2)	Represents the Deposit paid by the Company to NRO.
(3)	Represents estimated transaction costs associated with the NRO Acquisition which have been capitalized in accordance with ASC 805-50.
(4)	Represents the amounts associated with the assets acquired in the NRO Acquisition unpaid at the closing date and primarily relates to ad valorem tax liabilities of $6.3 million and suspended revenues of $1.2 million.

The consideration is allocated to the assets acquired and liabilities assumed on a relative fair value basis. The fair value measurements of assets acquired and liabilities assumed, on a relative fair value basis, are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair value of oil and gas properties and asset retirement obligations were measured using the discounted cash flow technique of valuation.

Significant inputs to the valuation of oil and gas properties include estimates of: (i) reserves, (ii) future operating and development costs, (iii) future commodity prices, (iv) future plugging and abandonment costs, (v) estimated future cash flows, and (vi) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates and are the most sensitive and subject to change.

Note 6 - Preliminary Purchase Price - Bayswater Acquisition

The preliminary allocation of the total Purchase Price in the Bayswater Acquisition, on a relative fair value basis, is based upon management’s estimates of and assumptions related to the fair value of assets acquired and liabilities assumed as of the closing date using currently available information. Because the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on the Company’s financial position and results of operations may differ significantly from the pro forma amounts included herein.

The preliminary purchase price allocation is subject to change due to several factors, including but not limited to changes in the estimated fair value of assets acquired and liabilities assumed as of the closing date, which could result from changes in future oil and natural gas commodity prices, reserve estimates, interest rates, as well as other factors.

The consideration transferred, assets acquired and liabilities assumed by the Company are expected to be initially recorded as follows:

Consideration:
Cash consideration (1)	$	472,000,000
Direct transaction costs (2)		7,900,000
Common stock issued to the sellers (3)		2,750,000
Total consideration	$	482,650,000
Assets acquired:
Oil and gas properties	$	522,429,283
Other assets		18,066,343
	$	540,495,626
Liabilities assumed:
Accounts payable and accrued expenses (4)	$	70,000,000
Asset retirement obligation, long-term		1,845,626
	$	71,845,626

(1)	Includes customary purchase price adjustments.
(2)	Represents estimated transaction costs associated with the Bayswater Acquisition which have been capitalized in accordance with ASC 805-50.
(3)	Represents approximately 0.3 million shares of common stock issued to the sellers.
(4)	Represents the amounts associated with the assets acquired in the Bayswater Acquisition unpaid at the closing date and primarily relates to ad valorem tax and severance tax liabilities of $30.0 million and suspended revenues of $40.0 million.

This preliminary allocation does not include the DrillCo acquisition, which will be included in the Bayswater Acquisition upon its closing and is currently estimated to increase oil and gas properties by $14.0 million and asset retirement obligation by $48.0 thousand, see Note 4 – Subsequent Events.

Note 7 - Unaudited Pro Forma Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of September 30, 2024 and in the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 are as follows:

(a)	Reflects the adjustment to record the assets acquired and liabilities assumed, on a relative fair value basis, in the NRO Acquisition along with transfer of consideration (see Note 5 – Preliminary Purchase Price – NRO Acquisition).

(b)	Reflects the adjustment to record the Crypto Sale (see Note 3 – Cryptocurrency Asset Sale).

(c)	Reflects the adjustment to depreciation expense required to reflect a decrease in the estimated useful life of acquired cryptocurrency mining assets of approximately one year (see Note 2 – Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information).

(d)	Reflects the reclassification of stock based compensation to conform to the Company’s financial statement presentation (see Note 2 – Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information).

(e)	Reflects the adjustment to interest expense from the conversion of notes payable and the Original Debentures.

(f)	Reflects the adjustment for depreciation, depletion and amortization expense associated with the assets acquired in the NRO Acquisition.

(g)	Reflects the adjustment required to remove the impact of assets not acquired using the information provided by NRO.

(h)	Reflects the adjustment to remove the financial statement effect of amounts related to assets that were not acquired and liabilities that were not assumed in the NRO Acquisition.

(i)	Reflects the Senior Convertible Note and Subordinated Note proceeds received on October 1, 2024 (see Note 4 – Subsequent Events).

(j)	The Combined Pro Forma weighted average shares outstanding include the historical shares of Creek Road Miners, Inc. and Creek Road Miners, Inc. acquisition adjustment pursuant to the requirements of accounting for the Merger as a reverse asset acquisition and as required to properly reflect the Merger as consummated on January 1, 2023.

(k)	Reflects the adjustment to record the assets acquired and liabilities assumed, on a relative fair value basis, in the Bayswater Acquisition along with transfer of consideration, inclusive of common shares issued to the sellers (see Note 6 – Preliminary Purchase Price – Bayswater Acquisition).

(l)	Reflects the adjustment for depreciation, depletion and amortization expense associated with the assets acquired in the Bayswater Acquisition.

(m)	Reflects the reclassification of oil sales, natural gas and liquids sales, lease operating expenses - related party and oil gathering expenses to conform to the Company’s financial statement presentation.

(n)	Reflects the estimated combined Company income tax expense resulting from the impact of including the revenue in excess of direct operating expenses from the Bayswater Acquisition to the Company’s income from continuing operations before income taxes.

(o)	Reflects the adjustment to record the January 31 2025 outstanding borrowings of $34.0 million, net of $1.7 million deferred financing costs, under the Existing Credit Agreement and the associated increase in interest expense along with the reduction of principal associated with the paydown of the Senior Convertible Note of $3.0 million, conversion of $7.4 million of the Senior Convertible Note into common stock, and the Subordinated Note of $2.1 million and the associated decrease in interest expense (see Note 4 – Subsequent Events).

(p)	Reflects the adjustment to record the additional borrowing under the New Credit Agreement, net of deferred financing costs, and the associated increase in interest expense (see Note 8 – Financing).

(q)	Reflects the adjustment to record the issuance of common stock to partially fund the Bayswater Acquisition (see Note 8 – Financing).

The Company’s diluted weighted average shares outstanding for the nine months ended September 30, 2024 include the following potentially dilutive securities:

Potentially Dilutive Security	Quantity		Stated Value Per Share		Total Value or Stated Value		Assumed Conversion Price		Resulting Common Shares
Merger Options, restricted stock units, and performance stock units ⁽¹⁾		9,050,909	$	—	$	—	$	—		1,050,909
Common stock warrants		228,004,372		—		—		—		9,064,951
Series D Preferred Stock		14,457		1,000		14,456,680		5.00		2,891,336
Senior Convertible Note ⁽²⁾		—		—		15,750,000		7.79		2,021,823

Total										15,029,018

	⁽¹⁾	Not exercisable or vested as of September 30, 2024.
	⁽²⁾	Reflects the conversion option of the $15.0 million Senior Convertible Note at 105% principal amount, pursuant to the SEPA.

The Company’s diluted weighted average shares outstanding for the year ended December 31, 2023 include the following potentially dilutive securities:

Potentially Dilutive Security	Quantity		Stated Value Per Share		Total Value or Stated Value		Assumed Conversion Price		Resulting Common Shares
Common stock options and restricted stock units ⁽¹⁾		8,547,574	$	—	$	—	$	—		547,574
Common stock warrants		386,569,653		—		—		—		13,529,938
Series D Preferred Stock		20,627		1,000		20,627,130		5.00		4,125,426
Series E Preferred Stock		20,000		1,000		20,000,000		5.00		4,000,000

Total										22,202,938

⁽¹⁾

Not exercisable or vested as of December 31, 2023.

(r)	Reflects the adjustment to record the net proceeds received from the additional borrowing under the New Credit Agreement and the issuance of common stock (see notes (p) and (q) above).

(s)	Reflects the adjustments to record the acquisition of DrillCo and the required adjustments (see Note 4 – Subsequent Events).

Note 8 - Financing

Debt Financing

In connection with the Bayswater Acquisition, the Company has entered into the Commitment Letter with Citibank, N.A. and the other lenders party thereto, which is referred to as the Commitment Letter, pursuant to which the Company has received commitments to amend and restate its Existing Credit Agreement, which is referred to as the New Credit Agreement, to increase the borrowing base to $475.0 million as of the closing of the Bayswater Acquisition and extend its maturity date to four years after the closing date. The Company also expects that the New Credit Agreement will include changes to certain provisions of its Existing Credit Agreement, subject to agreement with the lenders, to take into account the Bayswater Acquisition. The Company expects to enter into its New Credit Agreement prior to or substantially concurrently with the closing of the Bayswater Acquisition and intends to fund a portion of the purchase price of the Bayswater Acquisition using borrowings under its New Credit Agreement, resulting in an total outstanding balance of approximately $346.0 million. However, there can be no assurance that the Company will enter into its New Credit Agreement within the anticipated time frame, or at all.

Equity Financing

The Company expects to generate gross proceeds of $200.0 million (before underwriting discounts and commissions and offering expenses) from the Offering, which it partially intends to use to fund the cash consideration in the Bayswater Acquisition and the remainder for general corporate purposes. After deducting the underwriting discounts and commissions and offering expenses payable by the Company, the total net proceeds are expected to be approximately $186.5 million. Based on the closing price of the Company’s Common Stock on January 31, 2025 of $8.70, it expects to issue approximately 23.0 million shares of Common Stock (assuming no exercise of the underwriters’ option to purchase additional shares) and an additional 0.3 million shares of Common Stock to the sellers.

The following table summarizes the estimated Common Stock to be issued resulting from a 10% fluctuation in the market price of the shares of Common Stock:

	Share Price		Common Stock Issued
As presented	$	8.70		22,988,506
10% increase	$	9.57		20,898,642
10% decrease	$	7.83		25,542,784

Exhibit 99.8

Cover	Feb. 06, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 06, 2025
Entity File Number	001-41895
Entity Registrant Name	Prairie Operating Co.
Entity Central Index Key	0001162896
Entity Tax Identification Number	98-0357690
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	55 Waugh Drive
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77007
City Area Code	(713)
Local Phone Number	424-4247
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	PROP
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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