Brian's Big Idea: Prairie Operating Company (PROP)

In this special edition of Brian’s Big Idea we have a conversation with the CEO of Prairie Operating Company PROP, Edward Kovalik. Brian and Edward talk about the unique investment opportunity of a small cap oil and gas company that started just 18 months ago.

When you think about oil basins, the Permian in Texas is probably the first thing that comes to mind but there is another Basin in Colorado. The DJ Basin is home to Prairie Operating Company and several other major operators that Kovalik names in the video.

The importance of a non-leveraged operation cannot be understated in the world of big oil. PROP's structure doesn’t use free cash flow for debt service, something rare in the space.

The company just completed the acquisition of Nickel Creek, and the CEO said that he believes the company will continue to grow via acquisition in the near future. Add in the idea that the major oil companies have significant amounts of debt that will be maturing in the next few years, and you have a great recipe for plug-and-play acquisitions.

The company looks to slowly increase its production over the course of 2025 and could easily move from 3,000 barrels per day to 5,000 barrels per day. The CEO also gives an update on the number wells that have been drilled at present and from other news releases we know we can expect that number to triple by the end of the first half of 2025.

Whether you are a growth investor or a value investor, this stock is worth a deep dive. There is a lot of obvious growth coming as more wells are drilled, but at the current price, the stock has some excellent valuation multiples that will attract value investors as well.

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