8-K

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

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FORM

8-K

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CURRENT

REPORT

Pursuant

to Section 13 or 15(d) of

the

Securities Exchange Act of 1934

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Date

of Report (Date of earliest event reported): November 27, 2024

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PrairieOperating Co.

(Exact name of registrant as specified in its charter)

Delaware	001-41895	98-0357690
(State<br> or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
55 Waugh Drive, Suite 400
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Houston, TX	77007
(Address<br> of principal executive offices)	(Zip Code)

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Registrant’stelephone number, including area code: (713) 424-4247

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N/A

(FormerName or Former Address, If Changed Since Last Report)

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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<br> to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant<br> to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications<br> pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title<br> of each class	Trading<br> Symbol(s)	Name<br> of each exchange on which registered
Common Stock, par value<br> $0.01 per share	PROP	The Nasdaq Stock<br> 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) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

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 8.01	Other Events.

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Prairie Operating Co. (the “Company”) is filing (i) 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 99.1, which are incorporated by reference into this Item 8.01, and (ii) the unaudited pro forma condensed combined financial information of the Company as of and for the nine months ended September 30, 2024, and for the year ended December 31, 2023, as set forth as Exhibit 99.2, which is incorporated by reference into this Item 8.01.

Item 9.01	Financial Statements and Exhibits.

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(a) Financial Statements of Business Acquired

The unaudited financial statements of NRO as of and for the nine months ended September 30, 2024, are filed as Exhibit 99.1 hereto and are 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 for the year ended December 31, 2023, are filed as Exhibit 99.2 hereto and are incorporated herein by reference.

(d) Exhibits

Exhibit
Number	Description
99.1	Unaudited financial statements of Nickel Road Operating LLC as of and for the nine months ended September 30, 2024.
99.2	Unaudited<br> Pro Forma Condensed Combined Financial Information as of and for the nine months ended September 30, 2024, and for the year<br> ended December 31, 2023.
104	Cover<br> Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

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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.
Date: November 27,<br> 2024	By:	/s/ Craig Owen
		Craig Owen
		Chief Financial Officer

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EXHIBIT

99.1

Nickel

Road Operating LLC and Subsidiaries

As

of September 30, 2024 and December 31, 2023 and for the Nine Months

Ended September 30, 2024 and 2023

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Table of Contents

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	Page
Consolidated Financial Statements
Consolidated Balance Sheets	1
Consolidated Statements of Operations	3
Consolidated Statements of Changes in Members’ Capital	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6

Consolidated Financial Statements

Nickel

Road Operating LLC and Subsidiaries

Consolidated

Balance Sheets

September

30, 2024 and December 31, 2023

	September 30,			December 31,
	2024			2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,597,806		$	336,115
Joint interest receivable		250,545			897,804
Accrued oil and gas sales		3,246,193			5,658,034
Derivative asset		-			270,925
Prepaid expenses		675,033			426,404
Total current assets		6,769,577			7,589,282
OIL AND GAS PROPERTIES, at cost (successful efforts method)
Proved properties		110,199,820			137,855,719
Unproved properties		1,545,199			1,690,690
Accumulated depletion		(51,685,812	)		(41,010,449	)
Total oil and gas properties		60,059,207			98,535,960
OTHER NON-CURRENT ASSETS
Right-of-use asset, net		182,526			325,933
Total other non-current assets		182,526			325,933
TOTAL ASSETS	$	67,011,310		$	106,451,175

See accompanying notes.

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Nickel Road Operating LLC and Subsidiaries

Consolidated Balance Sheets

September 30,2024 and December 31, 2023

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	September 30,			December 31,
	2024			2023
LIABILITIES AND MEMBERS’ CAPITAL
CURRENT LIABILITIES
Accounts payable	$	177,540		$	1,801,926
Accrued liabilities		9,327,919			12,178,821
Due to related party		140,831			114,346
Current maturities of long-term debt, net of deferred financing costs		-			3,800,000
Short-term lease liability		182,525			192,384
Total current liabilities		9,828,815			18,087,477
NON-CURRENT LIABILITIES
Long-term debt, net of current portion and deferred financing costs		-			16,660,116
Long-term lease liability		-			133,550
Asset retirement obligations		1,397,777			1,347,493
Total non-current liabilities		1,397,777			18,141,159
Total liabilities		11,226,592			36,228,636
COMMITMENTS AND CONTINGENCIES (Note 7)		-			-
MEMBERS’ CAPITAL
Contributed capital		64,025,830			64,025,830
Distributed capital		(64,300,000	)		(64,300,000	)
Retained earnings		56,058,888			70,496,709
Total members’ capital		55,784,718			70,222,539
TOTAL LIABILITIES AND MEMBERS’ CAPITAL	$	67,011,310		$	106,451,175

See accompanying notes.

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Nickel

Road Operating LLC and Subsidiaries

Consolidated

Statements of Operations

Periods

Ended September 30, 2024 and 2023

	2024			2023
REVENUES
Oil and gas sales	$	30,781,291		$	34,210,491
Total revenues		30,781,291			34,210,491
OPERATING EXPENSES
Production taxes		1,938,671			3,422,294
Lease operating		4,169,222			3,316,866
Depreciation, depletion, and amortization		10,725,647			12,852,983
General and administrative		3,017,990			3,098,777
Impairment		29,719,123			-
Total operating expenses		49,570,653			22,690,920
INCOME (LOSS) FROM OPERATIONS		(18,789,362	)		11,519,571
OTHER INCOME (EXPENSE)
Interest expense		(974,935	)		(1,524,751	)
Gain on sale of oil and gas properties		5,372,679			6,261,551
Gain (loss) on derivative instruments		(47,440	)		(472,048	)
Other income (expense)		1,237			(7,158	)
Total other income		4,351,541			4,257,594
NET INCOME (LOSS)	$	(14,437,821	)	$	15,777,165

See

accompanying notes.

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Nickel

Road Operating LLC and Subsidiaries

Consolidated

Statements of Changes in Members’ Capital

Periods

Ended September 30, 2024 and 2023

									Total
	Class A<br><br> <br>Capital			Class B<br><br> <br>Capital		Retained<br><br> <br>Earnings			Members’<br><br> <br>Equity
BALANCE, January 1, 2023	$	6,025,830		$	-	$	50,736,104		$	56,761,934
Net income		-			-		15,777,165			15,777,165
BALANCE, September 30, 2023	$	6,025,830		$	-	$	66,513,269		$	72,539,099
BALANCE, January 1, 2024	$	(274,170	)	$	-	$	70,496,709		$	70,222,539
Balance	$	(274,170	)	$	-	$	70,496,709		$	70,222,539
Net loss		-			-		(14,437,821	)		(14,437,821	)
Net income (loss)		-			-		(14,437,821	)		(14,437,821	)
BALANCE, September 30, 2024	$	(274,170	)	$	-	$	56,058,888		$	55,784,718
Balance	$	(274,170	)	$	-	$	56,058,888		$	55,784,718

See

accompanying notes.

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Nickel

Road Operating LLC and Subsidiaries

Consolidated

Statements of Cash Flows

Periods

Ended September 30, 2024 and 2023

	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	(14,437,821	)	$	15,777,165
Adjustments to reconcile net income to net cash from operating activities
Depreciation,<br> depletion, and amortization		10,725,647			12,852,983
Amortization of debt issuance costs		46,385			74,949
Gain on sale of oil and gas properties		(5,372,679	)		(6,261,551	)
Impairment		29,719,123			-
Unrealized (gain) loss on derivative instruments		270,925			(317,924	)
Change in operating assets and liabilities
Accounts receivable		3,059,100			(1,559,293	)
Prepaid expenses		(171,121	)		127,491
Accounts payables		(1,624,386	)		11,799,827
Accrued liabilities		(2,824,417	)		3,623,569
Net cash from operating activities		19,390,756			36,117,216
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of oil and gas properties		(1,917,733	)		(30,112,374	)
Proceeds from the sale of oil and gas properties		5,372,679			6,547,375
Net cash from (used in) investing activities		3,454,946			(23,564,999	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term and long-term debt		29,800,000			47,366,667
Repayment of short-term and long-term debt		(50,383,333	)		(59,333,334	)
Payments for debt issuance costs		(678	)		(163,652	)
Net cash used in financing activities		(20,584,011	)		(12,130,319	)
NET CHANGE IN CASH, CASH EQUIVALENTS		2,261,691			421,898
CASH, CASH EQUIVALENTS, beginning of period		336,115			3,476,039
CASH, CASH EQUIVALENTS, end of period	$	2,597,806		$	3,897,937
SUPPLEMENTAL CASH FLOW INFORMATION
Right-of-use asset obtained in exchange for lease obligations	$	-		$	388,011
Cash paid for interest	$	1,061,428		$	1,419,053

See

accompanying notes.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

Note 1 – Organization and Summary of Significant Accounting Policies

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Organization– Nickel Road Operating LLC, a Delaware limited liability company (the Company), was formed on July 25, 2017, for the purpose of engaging in the evaluation, acquisition, exploration, drilling, development, and production of oil and gas in the United States of America. The Company shall continue in existence until it is liquidated or dissolved under the terms of the Amended Limited Liability Company Agreement (the LLC Agreement).

As a Limited Liability Company (LLC), the amount of loss at risk for each individual member is limited to the amount of capital contributed to the LLC, and unless otherwise noted, the individual member’s liability for indebtedness of an LLC is limited to the member’s capital contributions.

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Basisof presentation – The Company follows accounting standards established by the Financial Accounting Standards Board (FASB). The FASB sets accounting principles generally accepted in the United States of America (GAAP) to ensure consistent reporting of the Company’s financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (ASC) or “Codification.”

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Useof estimates in the preparation of financial statements – 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 and unproved 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 the Company’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.

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Fairvalue of financial instruments – The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade receivables, trade payables, accrued liabilities, and derivative financial instruments. The carrying value of cash and cash equivalents, restricted cash, trade payables, accrued liabilities, and derivative financial instruments are considered to be representative of their fair market value due to the short maturity of these instruments. The carrying amount of debt reflected on the consolidated balance sheets approximates fair value as this debt has a variable interest rate that approximates a market interest rate.

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Principlesof consolidation – The accompanying consolidated financial statements are consolidated and include the accounts of the Company and its wholly owned subsidiaries, Source Rock Royalty LLC, Nickel Road Development LLC, and Peak Stone Properties LLC. All significant intercompany amounts have been eliminated in consolidation.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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Cashand cash equivalents – The Company considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to such balances, and management believes that the Company is not exposed to any significant risks on the balances.

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Accountsreceivable – Accounts receivable consist of uncollateralized joint interest owner obligations due within 30 days of the invoice date, uncollateralized accrued revenues due under normal trade terms, generally requiring payment within 30 days of production, and other miscellaneous receivables. All receivables are reviewed periodically, and appropriate actions are taken on past-due amounts and those deemed uncollectible, if any. No allowance for credit losses has been recorded as of September 30, 2024 and December 31, 2023. The accounts receivable balance on January 1, 2024 and 2023 was $6,556,000 and $4,059,000, respectively.

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Significantcustomers – As of and for the period ended September 30, 2024, the Company’s two largest customers generated approximately 89% and 10% of sales, and one customer accounted for approximately 94% of accrued oil and gas sales.

As of and for the period ended September 30, 2023, the Company’s largest customer generated approximately 90% of sales, and one customer accounted for approximately 93% of accrued oil and gas sales.

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Oiland gas properties – The Company 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 periods ended September 30, 2024 and 2023 was approximately $10,675,000 and $12,810,000, respectively.

The

Company 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. As of September 30, 2024, the Company recorded approximately $28,954,000 impairment of proved oil and gas properties. There was no impairment of proved oil and gas properties as of September 30, 2023.

Unproved

properties are assessed periodically on a project-by-project basis to determine whether an impairment has occurred. 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. As of September 30, 2024, there was approximately $765,000 of impairment of unproved oil and gas properties. There was no impairment of unproved oil and gas properties as of September 30, 2023.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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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.

On

March 1, 2023, the Company entered into an Asset Purchase Agreement with a third party to sell a portion of the Company’s royalty interests in oil and gas properties. The Company sold various royalty interests in oil and gas properties held in the DJ Basin to a third party for $7,000,000; after purchase price adjustments total proceeds were approximately $6,503,000. The oil and gas properties sold by the Company had a carrying value of approximately $2,017,000, resulting in a gain of approximately $4,486,000.

On

January 11, 2024, the Company entered into an Asset Purchase Agreement with Prairie Operating Co., LLC (Prairie) to sell all of the Company’s interests in its oil and gas properties effective February 1, 2024, for cash proceeds of $83,000,000, of which $9,000,000 is held in escrow, subject to customary closing adjustments, and additional cash consideration of $11,500,000 for existing permitted locations drilled by Prairie.

On

August 15, 2024, the Company signed an amendment to the Asset Purchase Agreement (the Transaction) with Prairie. The amendment increased the cash proceeds for all of the Company’s oil and gas properties to $84,500,000 and changed the effective date to January 1, 2024, subject to customary closing adjustments. Additionally, of the $9,000,000 held in an escrow account, Nickel Road Operating, LLC will receive $6,000,000 and Prairie will receive $3,000,000.

The

Company received $6,000,000 of non-refundable escrow proceeds in August 2024 and incurred approximately $627,000 of transaction related costs. These proceeds were recorded as a gain on sale of oil and gas properties within the consolidated statements of operations during the period ended September 30, 2024. The Transaction closed on October 1, 2024. In October 2024, the Company received additional cash proceeds of approximately $49,616,000 in connection with the Transaction.

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Derivativefinancial instruments – The Company enters 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. The Company has elected not to apply hedge accounting to any of its derivative transactions; consequently, the Company 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.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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Assetretirement obligations – An asset retirement obligation associated with the retirement of a tangible long-lived asset is recognized as a liability in the period incurred, with an associated increase in the carrying amount of the related long-lived asset and oil and natural gas properties. The cost of the tangible asset, including the asset retirement cost, is depleted over the useful life of the asset. The asset retirement obligation is recorded at its estimated fair value, measured by reference to the expected future cash outflows required to satisfy the retirement obligation discounted at our credit-adjusted risk-free interest rate. Accretion expense is recognized over time, as the discounted liability is accreted to its expected settlement value. Accretion expense is recorded within “Depletion, depreciation, and amortization” in the consolidated statements of operations. If the estimated future cost of the asset retirement obligation changes, an adjustment is recorded to both the asset retirement obligation and the long-lived asset. Revisions to estimated asset retirement obligations can result from changes in retirement cost estimates, revisions to estimated inflation rates, and changes in the estimated timing of abandonment.

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Deferredfinancing costs – Deferred financing costs are capitalized and amortized over the contractual term of the related obligations. The unamortized balance of total debt issuance costs of approximately $

444,000

were recognized within prepaid expenses and long-term debt as a reduction of the current outstanding balance during the periods ended September 30, 2024 and December 31, 2023, respectively. During the periods ended September 30, 2024 and 2023 the Company recorded approximately $46,000 and $75,000 of amortization expense associated with the debt issuance costs, which is recorded as interest expense on the statement of operations. See Note 8 for further details.

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Revenuerecognition – The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue fromContracts with Customers. Revenue from the sale of oil, natural gas liquids (NGLs), and natural gas is recognized as the product is delivered to the customers’ custody transfer points, and collectability is reasonably assured. The Company fulfills the performance obligations under the customer contracts through daily delivery of oil, NGLs, and natural gas to the customers’ custody transfer points, and revenues are recorded on a monthly basis. The prices received for oil, NGLs, and natural gas sales under the Company’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, NGLs and natural gas, will decrease if market prices decline. The sales of oil, NGLs, and natural gas, as presented on the condensed consolidated statements of operations, represent the Company’s share of revenues, net of royalties and excluding revenue interests owned by others. When selling oil, NGLs, and natural gas on behalf of royalty owners or working interest owners, the Company is acting as an agent and, thus, reports the revenue on a net basis. To the extent actual volumes and prices of oil, NGLs, and natural gas 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.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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Incometaxes – The Company is an LLC, which is not subject to U.S. federal income taxes. Rather, the Company’s taxable income flows through to the owners, who are responsible for paying the applicable income taxes on the income allocated to them. For tax years beginning on or after January 1, 2018, the Company is subject to audit rules enacted as part of the Bipartisan Budget Act of 2015 (the Centralized Partnership Audit Regime). Under the Centralized Partnership Audit Regime, any IRS audit of the Company would be conducted at the Company level, and if the IRS determines an adjustment, the default rule is that the Company would pay an “imputed underpayment,” including interest and penalties, if applicable. The Company may, instead, elect to make a “push-out” election, in which case the partners for the period that is under audit would be required to take into account the adjustments on their own personal income tax returns.

The LLC Agreement does not stipulate how the Company will address imputed underpayments. If the Company receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time. Any payments that the Company ultimately makes on behalf of its current partners will be reflected as a dividend, rather than as a tax expense, at the time that such dividend is declared.

The Company has not recorded any liabilities as of September 30, 2024 or December 31, 2023 related to uncertain tax provisions. As of September 30, 2024 and December 31, 2023, the Company made no provision for interest or penalties related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and in various states. There are currently no federal or state income tax examinations underway for these jurisdictions.

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Leases– The Company accounts for leases in accordance with ASC Topic 842, Leases, (Topic 842), which requires lessees to recognize operating and finance leases with terms greater than 12 months on the consolidated balance sheet. The Company evaluates a contractual arrangement at its inception to determine if it is a lease or contains an identifiable lease component. Certain leases may contain both lease and non-lease components. The Company’s policy for all asset classes is to combine lease and non-lease components together and account for the arrangement as a single lease.

Certain assumptions and judgments made by the Company when evaluating a contract that meets the definition of a lease under Topic 842 include those to determine the discount rate and lease term. Unless implicitly defined, the Company determines the present value of future lease payments using an estimated incremental borrowing rate based on a yield curve analysis that factors in certain assumptions, including the term of the lease and credit rating of the Company at lease inception. The Company evaluates each contract containing a lease arrangement at inception to determine the length of the lease term when recognizing a right-of-use (ROU) asset and corresponding lease liability. When determining the lease term, options available to extend or early terminate the arrangement are evaluated and included when it is reasonably certain an option will be exercised. Exercising an early termination option may result in an early termination penalty depending on the terms of the underlying agreement. The Company excludes from the balance sheet leases with terms that are less than one year.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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An ROU asset represents a lessee’s right to use an underlying asset for the lease term, while the associated lease liability represents the lessee’s obligations to make lease payments. At the commencement date, which is the date on which a lessor makes an underlying asset available for use by a lessee, a lease ROU asset and corresponding lease liability is recognized based on the present value of the future lease payments. The initial measurement of lease payments may also be adjusted for certain items, including options that are reasonably certain to be exercised, such as options to purchase the asset at the end of the lease term, or options to extend or early terminate the lease. Excluded from the initial measurement of an ROU asset and corresponding lease liability are certain variable lease payments, such as payments made that vary depending on actual usage or performance.

Subsequent to initial measurement, costs associated with the Company’s operating leases are either expensed or capitalized depending on how the underlying ROU asset is utilized and in accordance with GAAP requirements. When calculating the Company’s ROU asset and liability for a contractual arrangement that qualifies as an operating lease, the Company considers all of the necessary payments made or that are expected to be made upon commencement of the lease. As discussed above, excluded from the initial measurement are certain variable lease payments. Please refer to Note 6 – Leases for additional discussion.

Note 2 – Members’ Capital

The

Company is a limited liability company with membership interests issued and held by various members. The LLC Agreement authorizes Class A units and Class B units. Class A members are eligible to receive distributions. As of September 30, 2024 and December 31, 2023, approximately 64.7 Class A units were outstanding to members.

Upon

formation, 100 Class B units were granted to certain executives. Class B units are intended to provide compensation to the Class B member upon a liquidation event, subject to returns as described in the LLC Agreement. The requirements to provide compensation to the Class B members had not been met under the arrangement, nor was it considered probable the requirements would be met. Therefore, the grant-date fair values were inconsequential, and no amounts were recorded as of September 30, 2024 and December 31, 2023 in the accompanying consolidated financial statements.

By the terms of the LLC Agreement, distributions occur according to their respective equity interests, as defined. During the periods ending September 30, 2024 and 2023 the Company made no distributions to members.

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

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Note 3 – Asset Retirement Obligations

Asset retirement obligations represent the estimated present value of the amount to plug, abandon, and remediate producing properties at the end of their productive lives in accordance with applicable laws. The following table summarizes the Company’s asset retirement obligation transactions for the periods ending September 30, 2024 and 2023:

Schedule of Asset Retirement Obligations

	2024		2023
Asset retirement obligations, beginning of year	$	1,347,493	$	1,167,701
Accretion of discount		50,284		43,456
Asset retirement obligation, end of year	$	1,397,777	$	1,211,157

Note 4 – Hedging and Derivative Financial Instruments

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Commodityderivative agreements – The Company utilizes swap and collar contracts to hedge the effect of price changes on a portion of its future oil and natural gas production. The objective of the Company’s hedging activities and the use of derivative financial instruments is to achieve more predictable cash flows. The use of derivatives involves the risk that the counterparties to such instruments will be unable to meet the financial terms of such contracts. The derivative contracts may be terminated by a non-defaulting party in the event of default by one of the parties to the agreement.

The Company has elected not to apply hedge accounting to any of its derivative transactions, and, consequently, the Company recognizes mark-to-market gains and losses in earnings currently, rather than deferring such amounts in accumulated other comprehensive income for those commodity derivatives that would otherwise qualify as cash flow hedges. All derivative instruments are recorded on the balance sheet at fair value.

All

derivative transactions settled during the nine-months ended September 30, 2024. The Company recognized cash proceeds of $223,000 during the nine-months ended September 30, 2024 and no derivative assets or liabilities remained on the Company’s balance sheet as of September 30, 2024.

Note 5 – Fair Value Measurements

The Company follows ASC 820, Fair Value Measurements and Disclosures, which establishes a hierarchy for the inputs utilized in measuring fair value. The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

---

Level1 – Quoted prices for identical assets or liabilities in active markets;

---

Level2 – Quoted prices for similar assets or liabilities in active markets; and

---

Level3 – Unobservable inputs for the asset or liability, such as discounted cash models.

| 12 |

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

---

The Company did not have any assets or liabilities measured at fair value on a recurring basis as of September 30, 2024. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023:

Schedule of Assets and Liabilities Measured at Fair Value

	Level 1		Level 2		Level 3		Total
	Fair Value Measurement at December 31, 2023
	Level 1		Level 2		Level 3		Total
Derivative instruments	$	-	$	270,925	$	-	$	270,925
Total assets and liabilities measured at fair value	$	-	$	270,925	$	-	$	270,925

The inputs used to determine such fair value are primarily based upon observable market data for similar instruments, including the forward curve for commodity prices based on quoted market prices and would be classified within Level 2.

The Company follows the provisions of ASC 820 for nonfinancial assets and liabilities measured at fair value on a non-recurring basis. These provisions apply to the Company’s initial measurement and any subsequent revisions of oil and gas properties and asset retirement obligations, for which fair value is calculated using discounted future cash flows derived from management’s expectations. Significant Level 3 inputs are used in the fair value measurements of oil and gas properties and asset retirement obligations, see Note 1, Organizationand Summary of Significant Accounting Policies, for additional disclosure of these inputs.

Note 6 – Leases

The Company leases a compressor under a non-cancellable operating lease agreement. It has been determined that the lease does not constitute a finance lease. Operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. The Company believes any option to terminate is not reasonably certain for the operating lease agreement.

For the period ended September 30, 2024, components of lease expense were as follows:

Schedule of Components of Lease Expense

Total lease costs (operating and short-term)	$	801,000

For the period ended September 30, 2023, components of lease expense were as follows:

Total lease costs (operating and short-term)	$	734,000

All components of lease costs are expensed within lease operating expenses on the consolidated statement of operations.

| 13 |

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Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

---

For the period ended September 30, 2024, supplemental cash flow information related to leases was as follows:

Schedule of Supplemental Cash Flow Related to Lease

Cash paid for amounts included in measurement of lease liabilities
Operating cash flows used for operating leases (including short-term)	$	153,000
Right-of-use assets obtained in exchange for lease obligations (non-cash)
Operating leases	$	-
Weighted-average remaining lease term (years)
Operating leases		0.9
Weighted-average discount rate
Operating leases		4.9	%

There was no lease expense under ASC 842 during the period ended September 30, 2023.

The following is the future maturities of the annual undiscounted cash flows of the operating lease liability as of September 30, 2024:

Schedule of Future Maturities Operating Lease Liability

	Years Ending
Years Ending
September 30,
2025	$	187,000
Total minimum lease payments		187,000
Less imputed interest		(4,475	)
Present value of lease liability	$	182,525

Note 7 – Commitments and Contingencies

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Governmentregulation – Many aspects of the oil and gas industry are extensively regulated by federal, state, and local governments in all areas in which the Company has operations. Regulations govern such things as drilling permits, environmental protection, and pollution control, spacing of wells, the unitization and pooling of properties, reports concerning operations, royalty rates, and various other matters, including taxation. Oil and gas industry legislation and administrative regulations are periodically changed for a variety of political, economic, and other reasons. As of September 30, 2024 and December 31, 2023, the Company has not been fined or cited for any violations of governmental regulations that would have a material adverse effect upon the financial condition, capital expenditures, earnings, or competitive position of the Company in the oil and gas industry.

---

Litigation– From time to time, the Company may be involved in litigation related to claims arising out of its operations in the normal course of business. As of the date of this report, no legal proceedings are ongoing or pending that management believes could have a materially adverse effect upon the Company’s financial condition or results of operations.

| 14 |

| --- |

---

Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

---

Note 8 – Long-term Debt

---

Revolvingloan – On February 22, 2021, the Company entered into a revolving loan agreement (the Loan Agreement) with a maturity of February 22, 2024. The Loan Agreement provides for a maximum revolving loan (the Revolving Loan) of $35,000,000 with an initial borrowing base of $10,000,000. In October 2022, the Loan Agreement was amended. The total borrowing base and sublimit increased to $30,000,000 for the Revolving Loan.

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 the Company to maintain certain affirmative and negative covenants, including certain financial ratios defined in the Loan Agreement, and provides the lender with a first security interest in substantially all of the Company 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. Commitment fees equal to 0.5% of the undrawn amount are payable quarterly under this agreement.

On March 31, 2023, the Company amended its Loan Agreement to provide for a maximum Revolving Loan of $50,000,000 which matures on February 22, 2026. As of the date of the amendment the borrowing base was increased to $35,000,000, with a sublimit of $25,000,000, and continues to be 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%, the Company is required to maintain crude oil hedges of at least 60% of the Company’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, the Company amended its Loan Agreement to decrease the borrowing base to $33,000,000.

On January 31, 2024, the Company received a waiver of the minimum hedge transaction requirement from the lender through July 1, 2024. However, should the Company increase their utilization above 60%, then they will need to reapply required hedges, receive another waiver from the lender, or repay the loan in full.

In September 2024, the Company fully repaid the outstanding balance on the Revolving Loan and was fully released from the Revolving Loan effective October 1, 2024.

---

March2023 term loan –

The March 2023 amended Loan Agreement also allows for a new Term Loan (March 2023 Term Loan) in the amount

of $10,000,000 which commences on the date of the amendment and continues through July 31, 2023, after which the Lender shall have no further commitment to make an advance on the March 2023 Term Loan, so long as the aggregate advances do not exceed $10,000,000. 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, 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%. In June 2024, the Company fully repaid the outstanding balance on the March 2023 Term Loan.

Interest

expense related to the Revolving Loan and the Term Loans for the periods ended September 30, 2024 and 2023, was approximately $929,000 and $1,450,000, respectively.

| 15 |

| --- |

---

Nickel

Road Operating LLC and Subsidiaries

Notes

to Consolidated Financial Statements

---

Note 9 – Related Parties

---

Management

fees – The Company receives management services from Nickel Road Management LLC under the Management Services Agreement dated March 30, 2018 (the Services Agreement). In accordance with the Service Agreement, Nickel Road Management LLC provides management services, including office space and employment of all employees. The Company pays Nickel Road Management LLC a monthly amount equal to the allocated costs for monthly general and administrative expenses approved by the managers (the Development Plan and Budget). The Services Agreement will remain in effect for three years and will automatically extend for successive one-year terms coinciding with the period covered by the Development Plan and Budget unless terminated under the terms of the Services Agreement. For the periods ended September 30, 2024 and 2023, the Company incurred service agreement reimbursement costs of approximately $2,942,000 and $2,947,000, respectively. For the periods ending September 30, 2024 and 2023, the Company had approximately $141,000 and $1,300 in management fees due to Nickel Road Management LLC, respectively. These balances are included accrued liabilities on the consolidated balance sheets.

Note 10 – Subsequent Events

The Company has reviewed all subsequent events through the date the consolidated financial statements were available to be issued.

| 16 |

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EXHIBIT99.2

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UNAUDITEDPRO 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.

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<br> closing of the NRO Acquisition;
(ii)	the<br> sale of all of the Company’s cryptocurrency miners (the “Mining Equipment”) and the assignment of all of the Company’s<br> rights and obligations under the Master Services Agreement, dated February 16, 2023, by and between Atlas Power Hosting, LLC and<br> the Company, to a private purchaser pursuant to an asset purchase agreement, dated January 23, 2024 (the “Crypto Sale”);<br> and
(iii)	the<br> merger of Creek Road Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Merger<br> Sub”), with and into Prairie LLC, with Prairie LLC surviving and continuing to exist as a Delaware limited liability company<br> and a wholly owned subsidiary of the Company pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated as<br> of May 3, 2023, by and among the Company, Merger Sub and Prairie LLC (the “Merger” and collectively, with the Private<br> Placement, the Senior Convertible Note issuance, the Subordinated Note and Warrants issuance, the closing of the NRO Acquisition,<br> 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 and subsequent events thereto (the “Subsequent Events”) as described in Note 4– Subsequent Events 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 and the Subsequent Events, described in Note 4 – Subsequent Events 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., and the historical consolidated statements of operations of NRO, as applicable, on a pro forma as if the Transactions 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<br> Company’s audited historical consolidated financial statements and related notes included in its Annual Report on Form 10-K/A<br> for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 20, 2024;
(b)	the<br> Company’s unaudited historical condensed consolidated financial statements and related notes for the nine months ended September<br> 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,<br> 2024;
(c)	the<br> 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<br> with the SEC on March 20, 2024;
(d)	NRO’s<br> unaudited consolidated financial statements for the nine months ended September 30, 2024, included in the Company’s Current<br> Report on Form 8-K, filed with the SEC on November 27, 2024;
(e)	NRO’s<br> audited consolidated financial statements for the year ended December 31, 2023, included in the Company’s Amendment to its<br> Current Report on Form 8-K/A, filed with the SEC on March 19, 2024; and
(f)	the<br> exhibit entitled “Information About NRO” included in the Company’s Current Report on Form 8-K, filed with<br> the SEC on October 4, 2024.

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 or Subsequent Events, described in Note 4 – Subsequent Events 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.

---

Descriptionof 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 3,375,288 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<br> Company’s Series A preferred stock, par value $0.0001 per share (“Series A Preferred Stock”), Series B preferred<br> stock, par value $0.0001 per share (“Series B Preferred Stock”), and Series C preferred stock, par value $0.0001 per<br> share (“Series C Preferred Stock”), plus accrued dividends, were converted, in the aggregate, into shares of Common Stock;
(ii)	the<br> Company’s 12% senior secured convertible debentures (the “Original Debentures”), plus accrued but unpaid interest<br> and a 30% premium, were exchanged, in the aggregate, for (a) the 12% amended and restated senior secured convertible debentures (collectively,<br> the “AR Debentures”) in the principal amount of $1,000,000 in substantially the same form as their respective Original<br> Debentures, (b) shares of Common Stock and (c) shares of Series D Preferred Stock;
(iii)	accrued<br> fees payable to the certain members of the board of directors of the Company in the amount of $110,250 were converted into shares<br> of Common Stock;
(iv)	accrued<br> consulting fees of the Company in the amount of $318,750 payable to Bristol Capital, LLC (“Bristol Capital”) were converted<br> into shares of Common Stock; and
(v)	all<br> 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.

---

NROAcquisition

---

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.

The NRO Acquisition will be accounted for as an asset acquisition in accordance with Accounting Standards Codification Topic 805 - Accountingfor 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 Purchase Price.

Saleof 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.”

SubsequentEvents

FinancingReceivable

SeniorConvertible 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.

SubordinatedNote. 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.

Pursuant to the Subordinated Note, the Company entered into a registration rights agreement (the “SPA Registration Rights Agreement”) with the Noteholders pursuant to which the Company agreed to file a registration statement registering the resale of the Common Stock underlying the Subordinated Note Warrants.

UnauditedPro Forma Condensed Combined Balance Sheet

Asof September 30, 2024

		Nickel<br> Road<br> (Historical)		Nickel<br> Road Transaction Accounting<br> Adjustments			Subsequent<br> Event<br> Adjustments			Combined<br><br> Pro Forma
				(See Note 6)			(See Notes 4 and 6)
Assets
Current assets:
Cash and cash equivalents	40,052,362	$	2,597,806	$	(49,616,448)	(a)	$	16,250,000	(i)	$	6,685,914
					(2,597,806	)(h)
Note receivable	507,651		—		—			—			507,651
Joint interest receivable	—		250,545		(250,545)	(h)		—			—
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)		—			267,365
Short term financing receivable	16,250,000		—		—			(16,250,000)	(i)		—
Total current assets	57,077,378		6,769,577		(56,386,025)			—			7,460,930
Long-term assets:
Property and equipment
Oil and natural gas properties, successful efforts<br> method of accounting	42,061,414		—		66,099,986	(a)		—			108,161,400
Proved properties	—		110,199,820		(110,199,820)	(a)		—			—
Unproved properties	—		1,545,199		(1,545,199)	(a)		—			—
Other	93,849		—		—			—			93,849
Accumulated depletion	(711)		(51,685,812)		51,685,812	(a)		—			(711)
Total property and equipment, net	42,154,552		60,059,207		6,040,779			—			108,254,538
Deposits on oil and natural gas property purchases	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	$	(56,757,528)		$	—		$	117,428,506
Liabilities, Members’ Capital and Stockholders’<br> Equity
Current liabilities:
Accounts payable and accrued expenses	22,545,465	$	—	$	8,626,600	(a)	$	—		$	31,172,065
Accounts payable	—		177,540		(177,540)	(h)		—			—
Accrued liabilities	—		9,468,750		(9,468,750)	(h)		—			—
Senior convertible note, net	14,250,000		—		—			—			14,250,000
Subordinated promissory note – related party	5,281,141		—		—			—			5,281,141
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		(1,202,215)			—			53,639,134
Long-term liabilities:
Asset retirement obligations	—		1,397,777		(1,397,777)	(h)		—			1,627,182
					1,627,182	(a)
Operating lease liabilities, long-term	875,105		—		—			—			875,105
Total long-term liabilities	875,105		1,397,777		229,405			—			2,502,287
Total liabilities	45,887,639	$	11,226,592	$	(972,810)		$	—		$	56,141,421
Commitments and contingencies
Members’ capital	—	$	55,784,718	$	(55,784,718)	(h)	$	—		$	—
Stockholders’ equity:
Preferred stock; 50,000,000 shares authorized:
Series D convertible preferred stock; 0.01 par value;<br> 14,457 shares issued and outstanding (actual)	145		—		—			—			145
Common stock; 0.01 par value; 500,000,000 shares authorized<br> and 22,918,763 shares issued and outstanding (actual)	229,188		—		—			—			229,188
Additional paid-in capital	168,886,525		—		—			—			168,886,525
Accumulated deficit	(107,828,773)		—		—			—			(107,828,773)
Total stockholders’ equity	61,287,085		—		—			—			61,287,085
Total liabilities, members’<br> capital and stockholders’ equity	107,174,724	$	67,011,310	$	(56,757,528)		$	—		$	117,428,506

All values are in US Dollars.

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UnauditedPro Forma Condensed Combined Statement of Operations

NineMonths Ended September 30, 2024

	Prairie<br> Operating Co.<br> (Historical)			Nickel<br> Road<br> (Historical)			Nickel<br> Road Transaction Accounting<br> Adjustments			Combined<br><br> Pro Forma
								(See Note 6)
Revenue:
Oil and gas sales	$	—		$	30,781,291		$	—		$	30,781,291
Total revenues		—			30,781,291			—			30,781,291
Operating costs and expenses:
Depreciation, depletion and amortization		711			10,725,647			(8,169,879	)(f)		2,556,479
Production taxes		—			1,938,671			(452,478	)(h)		1,486,193
Lease operating expense		—			4,169,222			—			4,169,222
General and administrative expenses		24,905,341			3,017,990			—			27,923,331
Impairment		—			29,719,123			—			29,719,123
Exploration expenses		523,785			—			—			523,785
Total operating<br> costs and expenses		25,429,837			49,570,653			(8,622,357	)		66,378,133
(Loss) income from operations		(25,429,837	)		(18,789,362	)		8,622,357			(35,596,842	)
Other income (expense):
Interest income		538,833			—			—			538,833
Interest expense		—			(974,935	)		974,935	(h)		—
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			2,872,165
(Loss) income from operations before provision for income taxes		(27,930,351	)		(14,437,821	)		9,643,495			(32,724,677	)
Provision for income taxes		—			—			—			—
Net (loss) income from continuing<br> operations	$	(27,930,351	)	$	(14,437,821	)	$	9,643,495		$	(32,724,677	)
Earnings (loss) per common share:
Loss per share, basic and diluted	$	(2.24	)	$	—		$	—		$	(2.53	)
Weighted average common shares outstanding, basic and<br> diluted		12,939,342			—			—			12,939,342

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UnauditedPro Forma Condensed Combined Statement of Operations

YearEnded December 31, 2023

	Prairie Operating Co. (Historical)			Creek<br> Road<br> Miners, Inc.<br> (As Adjusted)			Nickel<br> Road<br> (Historical)			Creek<br> Road Miners, Inc.<br> Acquisition<br> Adjustments			Nickel<br> Road Transaction Accounting Adjustments			Cryptocurrency<br> Asset<br> Sale Adjustments			Combined<br><br> Pro Forma
					(See Note 2)						(See Note 6)			(See Note 6)			(See Notes 3 and 6)
Revenue:
Cryptocurrency mining	$	1,545,792		$	73,584		$	—		$	—		$	—		$	(1,619,376	)(b)	$	—
Oil and gas sales		—			—			48,169,114			—			(899,352	)(g)		—			47,269,762
Total revenues		1,545,792			73,584			48,169,114			—			(899,352	)		(1,619,376	)		47,269,762
Operating costs and expenses:
Cryptocurrency mining costs (exclusive of depreciation<br> 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)		(12,684,123	)(f)		(1,242,397	)(b)		3,431,766
Production taxes		—			—			4,408,520			—			(438,938	)(g)		—			3,969,582
Lease operating expenses		—			—			4,616,425			—			—			—			4,616,425
General and administrative expenses		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 costs and expenses		35,137,222			1,486,261			34,286,994			141,885			(13,123,061	)		(18,943,169	)		38,986,132
(Loss) income from operations		(33,591,430	)		(1,412,677	)		13,882,120			(141,885	)		12,223,709			17,323,793			8,283,630
Other (expenses) income:
Interest income		248,073			—			15,267			—			—			—			263,340
Interest expense		(121,834	)		(214,344	)		(2,025,960	)		120,076	(e)		2,025,960	(h)		—			(216,102	)
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 (expenses) income		(45,487,430	)		(214,344	)		5,896,485			120,076			(5,881,218	)		—			(45,566,431	)
(Loss) income from operations before provision for income taxes		(79,078,860	)		(1,627,021	)		19,778,605			(21,809	)		6,342,491			17,323,793			(37,282,801	)
Provision for income taxes		—			—			(18,000	)		—			18,000	(h)		—			—
(Loss) income from continuing<br> operations	$	(79,078,860	)	$	(1,627,021	)	$	19,760,605		$	(21,809	)	$	6,360,491		$	17,323,793		$	(37,282,801	)
Earnings (loss) per common share:
Loss per share, basic and diluted	$	(16.51	)	$	(4.02	)	$	—		$	—		$	—		$	—		$	(5.43	)
Weighted average common shares outstanding, basic and<br> diluted		4,788,412			428,611	(j)		—			1,646,741	(j)		—			—			6,863,764

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Note1 - Basis of Pro Forma Presentation

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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 Amended 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 and the Subsequent Events, described in Note 4 – Subsequent Events 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 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., and the historical consolidated statements of operations of NRO, as applicable, on a pro forma basis as if the Transactions 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, 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 PrairieOperating 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 Discussionand 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; and (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.

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 or Subsequent Events, described in Note 4 – Subsequent Events 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.

Note2 - Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information

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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<br> 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

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Note3 - Cryptocurrency Asset Sale

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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.

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Note4 - Subsequent Events

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FinancingReceivable

SeniorConvertible 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.

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.

SubordinatedNote. 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.

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.

Pursuant to the Subordinated Note, the Company entered into the SPA Registration Rights Agreement with the Noteholders pursuant to which the Company agreed to file a registration statement registering the resale of the Common Stock underlying the Subordinated Note Warrants.

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Note5 - Preliminary Purchase Price

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The preliminary allocation of the total Amended 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)	$	49,616,448
Deposit on oil and gas properties (2)		6,000,000
Direct transaction costs (3)		229,756
Total consideration	$	55,846,204
Assets acquired:
Oil and gas properties	$	66,099,986
	$	66,099,986
Liabilities assumed:
Accounts payable and accrued expenses (4)	$	8,626,600
Asset retirement obligation, long-term		1,627,182
	$	10,253,782
(1)	Includes<br> customary purchase price adjustments.
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(2)	Represents<br> the Deposit paid by the Company to NRO.
(3)	Represents<br> estimated transaction costs associated with the NRO Acquisition which have been capitalized in accordance with ASC 805-50.
(4)	Represents<br> the amounts associated with the assets acquired in the NRO Acquisition unpaid at the closing date and primarily relates to ad valorem<br> tax liabilities of $6.7 million and suspended revenues of $1.1 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.

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Note6 - Unaudited Pro Forma Adjustments

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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<br> the adjustment to record the assets acquired and liabilities assumed, on a relative fair value basis, in the NRO Acquisition along<br> with transfer of consideration (see Note 5 – Preliminary Purchase Price).
(b)	Reflects<br> the adjustment to record the Crypto Sale (see Note 3 – Cryptocurrency Asset Sale).
(c)	Reflects<br> the adjustment to depreciation expense required to reflect a decrease in the estimated useful life of acquired cryptocurrency mining<br> assets of approximately one year (see Note 2 – Creek Road Miners, Inc. As Adjusted Historical Financial Statement Information).
(d)	Reflects<br> 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<br> the adjustment to interest expense from the conversion of notes payable and the Original Debentures.
(f)	Reflects<br> the adjustment for depreciation, depletion and amortization expense associated with the assets acquired in the NRO Acquisition reflecting<br> a decrease in depreciable asset base after the purchase price allocation along with a decrease in the units of production depletion<br> rate primarily due to the depletion of the $66.1 million acquisition costs over total proved reserves.
(g)	Reflects<br> the adjustment required to remove the impact of assets not acquired using the information provided by NRO.
(h)	Reflects<br> the adjustment to remove the financial statement effect of amounts related to assets that were not acquired and liabilities that<br> were not assumed in the NRO Acquisition.
(i)	Reflects<br> the Senior Convertible Note and Subordinated Note proceeds received on October 1, 2024 (see Note 4 – Subsequent Events).
(j)	The<br> Combined Pro Forma weighted average shares outstanding include the historical shares of Creek Road Miners, Inc. and Creek Road Miners,<br> Inc. acquisition adjustment pursuant to the requirements of accounting for the Merger as a reverse asset acquisition and as required<br> to properly reflect the Merger as consummated on January 1, 2023.