Prairie Operating Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 12, 2025

Key Takeaways

  • Positive Sentiment: Generated $38.6 million in adjusted EBITDA in Q2, a new company record reflecting strong asset performance, disciplined capital allocation, and cost control.
  • Positive Sentiment: Achieved record production of 21,052 BOE/day (50% oil), a 540% increase quarter-over-quarter, driven by core asset performance and integration of recent acquisitions.
  • Positive Sentiment: Completed two accretive acquisitions (Nickel Road and Bayswater), adding over 35,000 net acres, boosting proved reserves by 77.9 MMBOE, amending the $1 billion credit facility, and hedging ~85% of production.
  • Positive Sentiment: Maintained cost leadership with AFE well costs at $5.6 million versus peers’ $6.5–7.2 million, targeting further reduction to $5 million through national RFPs, rotary-steerable drilling, U-turn laterals, and an electric frac fleet.
  • Positive Sentiment: Raised full-year guidance to 24–26k BOE/day production, $260–280 million CapEx, and $240–260 million adjusted EBITDA, highlighting confidence in a strong second-half ramp and seamless integration.
AI Generated. May Contain Errors.
Earnings Conference Call
Prairie Operating Q2 2025
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good afternoon, and welcome to the Prairie Operating Company Second Quarter twenty twenty five Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Wabi Plozma, Vice President Investor Relations and Capital Markets. Please go ahead.

Speaker 1

Thank you, operator. Good morning, everyone, and thank you for joining us for Prairie Operating Company's second quarter twenty twenty five earnings call. Before we provide our remarks, I would like to remind all participants that our comments today will include forward looking statements, which are subject to certain risks, uncertainties and assumptions. Actual results could differ materially from those in any forward looking statements. Additionally, we may refer to non GAAP measures.

Speaker 1

For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward looking statements as well as the reconciliations from any non GAAP financial measures, please see the company's public filings, including the Form eight ks filed today. We have also posted an updated investor presentation on our website. Joining me today are Ed Koblik, Chairman, CEO and Co Founder Gary Hanna, President and Co Founder and Greg Patton, Executive Vice President and Chief Financial Officer. With that, I'll turn the call over to our Chairman, CEO and Co Founder, Ed Kobelich. Thanks, Bobby, and

Speaker 2

good morning, everyone. I appreciate you guys joining us today. The 2025 marks a major step forward for Prairie as we continue to execute across all facets of our business operationally, financially and strategically. I'm incredibly proud of the progress our team has made. Moving forward, our focus remains on delivering long term sustainable value through disciplined growth, strong capital efficiency and opportunistic portfolio expansion.

Speaker 2

We generated $38,600,000 in adjusted EBITDA in the second quarter, a new company record that reflects the strength of our asset base, disciplined capital allocation and continued focus on cost control. Capital expenditures totaled $56,600,000 for the quarter fully aligned with our one rig development program that targets approximately 60 wells per year on an annualized basis. This measured high return approach allows us to grow efficiently while maintaining operational control and balance sheet flexibility. Since inception, Prairie has prioritized cost leadership as a core pillar of our strategy. Through disciplined execution and the implementation of rigorous cost management systems, we've driven our most recent AFEs down to $5,600,000 as compared to offset peers' AFEs of $6,500,000 to $7,200,000 These savings translate directly into higher IRRs and we believe we still have room for improvement.

Speaker 2

Our operations and procurement teams are continuously refining our cost structures to unlock further reductions across all drilling and completions activities. During the quarter, Prairie achieved several key milestones that underscore the strength of our company and the momentum behind our strategy. We delivered record production 21,052 barrels of oil equivalent per day, approximately 50% of which was oil representing over a 540% increase quarter over quarter. This growth was driven by continued strong performance from our core assets and the integration of our recently acquired properties. Importantly, our strategy is built not just on organic growth, but on continued consolidation.

Speaker 2

In addition to our development program, we have a robust pipeline of accretive acquisition targets being evaluated on an ongoing basis. Our goal is to complement our operated inventory with high quality bolt ons and scale enhancing transactions that support capital efficiency and cash flow generation. This dual track strategy, disciplined organic growth and selective high quality acquisitions positions Prairie to accelerate value creation in any macro environment. We are in the process of closing two additional acquisitions, adding approximately 18,000 net acres that are expected to close in the third quarter. By implementing and executing this strategy, we've closed two significant acquisitions since October 2024, all in off market transactions at attractive multiples.

Speaker 2

Each transaction close has added meaningful scale, efficiency and depth to our portfolio, significantly enhancing Prairie's standing as a returns focused oil weighted operator in the DJ Basin. Getting into the specifics of each deal, the Nickel Road acquisition completed late last year added more than 5,500 net acres and 26 operated wells in Wells County along with 89 approved permits and a robust drilling runway. The Bayswater acquisition which closed on March 26 was a defining moment for Perry. The transaction added approximately 29,000 net acres and over three fifty operated locations in Weld County, Colorado along with 77,900,000 barrels of oil equivalent improved reserves and $1,700,000,000 improved PV-ten value. This deal was a pivotal milestone for our company Successfully executing a transaction valued at over $600,000,000 with a market cap under $200,000,000 is a powerful validation of our team's ability to outperform expectations, command market confidence and deliver results with precision and credibility.

Speaker 2

These deals together with our organic development form the foundation of our company and highlight our ability to accretively grow, create value and scale quickly with discipline. I want to thank our entire team for their tireless work in sourcing, structuring and closing these transactions. We also enhanced our financial position by amending our $1,000,000,000 credit facility agreement with Citibank, expanding our lender syndicate to include Bank of America and West Texas National Bank, reaffirming our borrowing base at $475,000,000 with no other material changes. This significantly improves our liquidity and provides us with the flexibility needed to execute our strategy. Importantly, following the close of the Bayswater acquisition, we executed a comprehensive portfolio of hedges covering approximately 85% of our proved developed production inclusive of volumes from Bayswater through 2025.

Speaker 2

These hedges secured pricing helping to derisk our cash flows and support capital planning through future cycles regardless of broad market volatility in oil prices. As part of the integration process, we front loaded significant investments in systems and infrastructure across departments compatible with our mission of scaling the company towards 100,000 barrels of oil production. These new systems position us to minimize ongoing dependence and costs associated with outsourcing, putting us in a position to enhance shareholder value. We are firmly positioned as a growth company through the drill bit and as consolidator maintaining our commitment to capital efficiency and operational excellence. We are also on a clear path to achieving corporate cash flow breakeven.

Speaker 2

Our mission is to deliver sustainable free cash flow and return capital to shareholders ultimately through dividends and every aspect of our strategy is aligned with that goal. With that, I'll now turn the call over to our CFO, Greg Patton to walk through the financial and liquidity position in more detail. Thanks, Ed, and good morning, everyone. For the 2025, we delivered strong financial results. Adjusted EBITDA came in at approximately $38,600,000 representing over a 600% increase quarter over quarter.

Speaker 2

This improvement was driven by a combination of higher production volumes and improved commodity pricing, which together contributed to a strong financial performance. Net income for the quarter totaled $35,700,000 reflecting our disciplined capital deployment and the underlying strength of our asset base. From a top line perspective, we reported total revenue of $68,100,000 for the quarter, supported by realized prices of $65.66 per barrel of oil, dollars 8.7 per barrel for natural gas liquids and $1.8 per Mcf for natural gas. Net income for the quarter was $35,700,000 representing $1.04 per share outstanding. As mentioned, adjusted EBITDA totaled $38,600,000 underscoring the operational and financial progress we continue to make.

Speaker 2

Net cash provided by operating activities was $9,700,000 for the quarter. Looking at our results on a per barrel of oil equivalent basis, total operating expenses were $25.66 per BOE. This includes lease operating expenses of $5.92 per BOE, transportation and gathering costs of $1.17 per BOE and production and ad valorem taxes of $3.35 per BOE. General and administrative expenses were $8.58 per BOE. Depreciation, depletion and amortization expense was $6.37 per BOE.

Speaker 2

These metrics reflect our integration and system implementation costs, of which a significant portion are related to one time expenses. As we move forward, we will continue our focus on operational efficiency, cost control and the benefits of increased scale following recent acquisitions. Our CapEx was 56,600,000 for the quarter, consistent with our development plan and reflective of the continued execution of our high return drilling program. We remain on track with our full year capital budget, which is expected to range between $260,000,000 and $280,000,000 Turning to our financial position. As of 06/30/2025, our leverage ratio was approximately one times on an adjusted twelve month rolling average, with total liquidity of approximately $98,700,000 consisting of $88,000,000 of availability under our revolving credit facility and $10,700,000 in unrestricted cash.

Speaker 2

As a reminder, we amended our credit facility in March reaffirming the borrowing base and aggregate elected commitment to $475,000,000 with an overall facility size of $1,000,000,000 and a maturity date of March 26, 2029. This provides us ample financial flexibility to support our development program and evaluate strategic opportunities as they arise. Our hedging program remains central to our risk management approach. Following the Bayswater close, we put in place a comprehensive hedge portfolio to protect our expected production from commodity price fluctuation and volatility. These hedges secure pricing of $68.04 per barrel of oil, 4.3 per MMBtu of natural gas through the remainder of 2025 and $64.22 per barrel and $4.06 per MMBtu through the 2028.

Speaker 2

By locking in pricing for the majority of our production, we effectively insulate ourselves from near term commodity price volatility and position the company to more reliably forecast cash flows and capital expenditures. This proactive approach demonstrates our continued commitment to capital discipline and long term fiscal responsibility. Turning to reserves. Prairie ended the quarter with total proved reserves of approximately 100,000,000 BOE. Of this total, dollars 55,000,000 BOE is classified as proved developed producing PDP, with the remaining 45,000,000 BOE in the proved undeveloped PUD category.

Speaker 2

Our current development inventory includes over 600 gross drilling locations. These reserves reflect the quality of our asset base, the depth of our inventory and the long term value we are building through disciplined investment and operational execution. On integration, the transition of the recently acquired assets has been seamless. We've aligned systems, streamlined processes and attracted and brought on board key personnel from industry leading companies. The cultural alignment has exceeded expectations and our combined team is already delivering results.

Speaker 2

We've also taken key steps to ensure continuity and efficiency across our supply chain. We have focused a significant effort on building relationships with midstream providers, ensuring guaranteed takeaway optionality for the foreseeable future. Additionally, we have secured contracts with ProCrack and Precision Drilling, supporting our capital plans for 2026. These contracts collectively help manage costs and mitigate potential service disruptions. With that, I'll turn the call over to Gary Hanna, our President and Co Founder to provide a detailed operational update.

Speaker 3

Thanks, Greg. I'll start off by highlighting our safe operations across the company with no lost time or recordable incidents in Q1 and Q2. The environment, health and safety remains a top priority for Prairie, especially as we integrate acquired assets into our safety culture. As to field operations, the second quarter execution was very good including some technical innovations with continued momentum across our development program. We drilled 18 wells and completed nine wells during the quarter.

Speaker 3

We remain on track to exceed 35 total new wells turned in line by year end. Our average spud to total depth times continues to improve now averaging just five point three days, a testament to the focus and efficiency of our field teams. Cost discipline remains strong with well cost tracking within 5% of AFE and averaging D and C costs on the most recent wells of approximately $5,600,000 We continue to work to drive our two mile well AFE down towards $5,000,000 per well. A major highlight was the successful execution of our Rush Pad in Weld County, which includes eleven two mile lateral wells, eight targeting the Niobrara and three targeting the Codell. Eight of the wells were drilled in a single run using Schlumberger's NeoSteer rotary steerable system, driving average rates of penetration to over four fifty feet per hour, reducing drill costs and lowering our CO2 footprint.

Speaker 3

First production from the Rush Pad is on schedule for early in the third quarter and demonstrates the operational team's focus on capital efficiency. During the second quarter, Prairie achieved an engineering milestone with the deployment of advanced U shaped lateral designs and innovative well architecture that enables horizontal wells to loop back within the lease boundary effectively increasing the productive lateral length within a confined footprint. This technique allows us to target multiple reservoir zones and avoid lease line constraints, enhancing recovery without additional service locations. These U turn or UL laterals represent a cutting edge approach to subsurface development that to our knowledge has only been attempted in a limited number of wells across the DJ Basin. We successfully implemented this design at our single section noble pad where four of the seven wells incorporate U shaped trajectories to optimize drainage between two stacked producing zones.

Speaker 3

The wells required only fourteen hours of additional drill time versus standard linear two mile drills, but result in a 25% to 30% savings. Confident in our ability to drill and complete these wells efficiently, we're obviously exploring additional applications. Drilling of all seven surface holes was completed in May by Ensign and Precision's production rig began drilling the production intervals in early June. We also deployed an electric frac fleet significantly lowered emissions and reducing completion cost further aligning our operations with sustainability goals. In May, we initiated completions on the Opal Coldbank pad targeting nine previously drilled but uncompleted wells acquired in the Bayswater transaction.

Speaker 3

Our first super frac was executed with excellent efficiency averaging 14 stages per day and ramping up to 18 stages per day by the final week all while averaging twenty two hours of daily pumping time. Early pressure data is promising with frac pressures approximately 10% higher than offset activities suggesting the potential for superior well performance. Completion operations concluded in Q2 and the pad was opened to flow back in July. All nine wells began producing soil within the first week supported by strong average flowing tubing pressures exceeding 1,500 psi. As we have integrated the producing phase water and nickel growth assets, production optimization efforts have also been prioritized through continuous evaluation of each pad.

Speaker 3

This includes gas lift optimization, workover opportunities and maximizing surface facilities. As an example in Q2, we installed gas assisted plunger lift systems across 30 wells during the second quarter designed to enhance liquid recovery and improve overall well efficiency. Another 25 to 30 wells are under evaluation for implementation in Q3. Additionally, we have identified and executed three high return workovers in Q2 with more in the queue. Two wells were brought back online at June after successful reworks and the third on production at the July.

Speaker 3

Through Q2, our growth has been tremendous and today we operate over three sixty producing wells with more to come. Our operations team and throughout the organization has been rounded out with skilled and seasoned professionals making us highly scalable as we move forward. Altogether, our operational performance in the second quarter reflects Prairie's commitment to efficiency, innovation and disciplined growth. We are maximizing asset value while upholding the highest standards of environmental stewardship, capital returns and most importantly safety. Again, we remain uncompromising in our commitment to safety and environmental stewardship both core to Purdue's culture and long term value proposition.

Speaker 3

With that, I'll hand it back to Ed for closing remarks.

Speaker 2

Thank you, Gary. We are upwardly revising our initial full year twenty twenty five guidance provided in January to reflect closing the Bayswater transaction on March 26 as well as the enhanced visibility we now have across our platform after a successful quarter of integration. We are updating our full year production guidance from a range of 7,000 to 8,000 BOE per day to an increased range of 24,000 to 26,000 BOE per day. We are also updating our full year capital expenditure guidance for a range of 120,000,000 to $130,000,000 to an increased range of $260,000,000 to $280,000,000 Lastly, we are updating our full year adjusted EBITDA guidance from a range of $100,000,000 to $140,000,000 to an increased range of $240,000,000 to $260,000,000 based on a WTI price range of $60 to $70 per barrel. Our operational execution and performance year to date along with the momentum across our portfolio remains strong and we continue to benefit from improved capital efficiency and seamless integration of recent acquisitions.

Speaker 2

We remain disciplined in our approach and excited about what lies ahead for Prairie. We are committed to creating long term value for our shareholders through a combination of pursuing double digit organic growth through the drill bit and pursuing opportunistic and transformative M and A opportunities. Most importantly, the company is making great strides towards our core objective of returning cash to shareholders in the form of a regular dividend program. I want to thank our incredible team for their hard work and dedication. Prairie's foundation has never been stronger.

Speaker 2

We're incredibly well positioned to continue delivering exceptional results through the remainder of the year and beyond. Our growth story is only just beginning and we're thankful for your loyal support. With that, I'll turn the call back over to the operator to open the line for questions.

Operator

Thank you. We'll now be conducting a question and answer session. Our first question is from Chris Degner with Water Tower Research. Hello.

Speaker 2

Hi, Chris. Hey, Chris. Hey, Chris.

Speaker 4

Hey, Hey. Great to hear from you all and congrats on a good quarter and integrating the Bayswater acquisition. I'm just curious as you look around the M and A market, there's been a lot of activity up north and some asset sales that are non core from some of the larger operators in the basin. I'm just curious how you think about measuring the returns on those incremental development locations within your portfolio versus like other acquisitions? And like how do you measure the potential for returns and capital accretion?

Speaker 2

Yes. Thanks, Chris. As obvious, given our track record in acquiring assets and doing that large and small from bolt ons to significant acquisitions. We're really focused on accretive acquisitions. And as a result, we're highly selective, which is really to your question.

Speaker 2

We've seen some more recent press from peers in The Rockies with divestitures at multiples that are 4x EBITDA or greater. We've been really disciplined in executing deals between two and two point five times EBITDA. And we have a pretty robust pipeline of deals to continue executing on at those levels. So we really don't see ourselves chasing transactions up to those kinds of valuations. Also, all of the deals we've done to date have been off market transactions rather than through auctions, which I think has helped a lot.

Speaker 2

But for us to do accretive deals, we really need to do them within a multiple that is beneath our traded multiple. And assuming a Forex valuation on our company, our stock deserves to be about $9 to $10 per share. So I think that's a great multiple for us as an acquirer, but I think it's pretty expensive for target assets that we would acquire given our current trading valuation.

Speaker 4

Okay. As you think through some of the ways to execute on operational improvements, I think you mentioned you were going to take well costs from around $5,600,000 down to $5,000,000 Like what do you think are the key components that you'll be able to deliver to achieve those goals?

Speaker 2

That's a great question. And a really core pillar of our entire strategy is being cost focused, really to the level of being religious about it, frankly. When we started that process, we were quoted somewhere between 6,500,000.0 and $7,250,000 per well when you roll up all of the various line items in the AFEs. And to date, that's still what our offset peers are spending. We attacked that by going for the lowest hanging fruit first.

Speaker 2

So we've knocked down the big line items first and foremost. And now we're really going after the $50,000 here, 20,000 there. There's still some big things we can tackle, and we see a clear line of sight to getting that down to $5,000,000 for two mile AFE. Now running a full one rig program, which is 100% utilization, really helps us in terms of getting full efficiency out of our operations. It's also a good time to be a customer in the market.

Speaker 2

So we're able to really run competitive RFP processes across vendors, in every line item of our RFP. And we've also done some unorthodox things like inviting bids from out of basin companies. There's no reason why the DJ should be a walled garden, where local vendors are free to run up costs to their whims. So we've made it a national RFP process and brought in folks that are really capable, highly skilled and willing to compete. So that's the path that we're well on our way on now and we've still got some work to do and look forward to reporting our progress on our next call.

Speaker 4

Excellent. Well, thank you for the input and look forward to seeing you soon.

Speaker 2

Thanks, Chris.

Operator

Our next question is from Charles Meade with Johnson Rice.

Speaker 5

Yes. Good afternoon, Ed, to you and your whole team there. Ed, I don't want to belabor this very much because you guys just got your hands on the assets, the Bayswater assets just with few days ago before 2Q came. But we were looking for a little higher production number, but I'm sure that that's we just didn't have the right ramp in. But to that point, can you talk about what your learning curve has been like with these Bayswater assets?

Speaker 5

And perhaps give us an idea what your company level production was either as you exited 2Q or where it is today?

Speaker 2

Yes, I'm happy to answer that. It does speak to the ramp and the timing of the closing more than anything. At the time that we closed the transaction, did so with a twelveone effective date as of last year, where the Bayswater assets were producing about 26,000 barrels of oil a day based on about a 20% decline rate, which we anticipated at the time we closed. We've come down about 4,000 barrels a day on production on those assets. We also closed the acquisition about two months later than we originally anticipated.

Speaker 2

So essentially, it just pushed forward the ramp by that period of time. So we're turning in line nine fewer wells this year than we would have otherwise done had we closed that transaction earlier. But the ramp trajectory is the same. Nothing has changed there. We've had a little bit of offset shut ins from neighbors, primarily Chevron completing wells around us.

Speaker 2

So we've shut in some of our production as a result of that, but that's now coming back online pretty steadily and we see that kind of coming back to anticipated levels here between now and the next call we have. So all in all, really just a timing fact around closing and effective date.

Speaker 5

Got it. That is helpful detail. Thank you. And then the rush pad, I want to ask about, I think in the press release you say that you expect to complete that well or that pad rather in the third quarter. And as we're talking here this afternoon, we're close to the halfway mark.

Speaker 5

So can you give us an update on where you are with those completions and when you might be in a position to share rates?

Speaker 3

Yes. This is Gary. I'm happy to answer that. Yes, everything is on schedule as of today. We do anticipate that coming on in the very near future.

Speaker 3

We've had a very good production or I should say pressure information out of those wells. So we're pretty excited about the potential of those wells, but we can certainly keep you posted on that and it is on schedule for the end of the quarter.

Speaker 5

Thank you, Gary. Thank you, Ed.

Speaker 3

Thank you.

Speaker 2

You got it. Thank you.

Operator

Our next question is from Leo Mariani with Roth.

Speaker 6

Hi, guys. I just wanted to follow-up a little bit on the production here. Just with respect to what you guys had put out, maybe there was an issue in what was communicated in the press release. But on March 26, you guys talked about adding 25,700 net BOE per day of production from Bayswater. But if I heard you right, it sounds like that really wasn't the right number.

Speaker 6

It was something significantly lower than that, that was added. Maybe that's some kind of old number from several months before and the asset we've been declining for several months. Could you maybe just help me out with that? I'm just maybe I'm not reading the public information correctly here.

Speaker 2

Yes. No, the number we announced was the correct number based on the twelveone effective date, which is how that was couched at the time and based on what we could report at the time of announcing the closing of that transaction.

Speaker 6

Okay. Yes, I guess I didn't see those details in the release. It just made it sound like that was your March 26 production here. Okay. Moving on to your guidance here.

Speaker 6

If I'm doing the math right here, it looks like you guys are going need to average around 36,000 BOE per day in the 5000 to get to the lower end of your guidance. And given that you were at 21,000 in the second quarter, that would be a heck of a ramp. Could you maybe kind of bridge that gap and how you get to the 36,000 in the 2025?

Speaker 2

Sure, happy to. We are turning in line 35 total wells this year, with most of that concentrated in the second half of the year here, since we've only completed nine wells in the prior quarter. So you will see a pretty significant ramp through Q3 and Q4 with a materially higher exit rate of production than we stated as our average annualized production.

Speaker 6

Okay. And then on your guidance there, do you have an oil cut on that 24,000 to 26,000 BOEs per day?

Speaker 2

Approximately 50%, but on a total liquid space trending closer to 75%.

Speaker 6

Okay. And then on your CapEx, it looks like you guys were spending at a lower rate here in second quarter. It looks like it's ramping up in the second half per your guidance. Do you expect CapEx to be kind of fairly split evenly between 3Q and 4Q? It looks like those numbers are going to be up a decent amount from where you were in the second quarter?

Speaker 6

Yes, I mean, I'll

Speaker 2

let our guidance speak for itself. We're not really guiding to quarterly CapEx right now, but that's pretty dead on with what we expect to spend for the year. Again, what we really had is just a approximate sixty day delay to starting the ramp, but the ramp is very much well on its way with great results from our drilling and completion execution. So we have no reason to believe we're not going to accomplish these kinds of numbers.

Speaker 6

Okay. And then on your NGL price for the quarter, think you guys said it was 8.7 a barrel in second quarter. I guess other industry prices were a lot closer to high teens or $20 So can you maybe provide a little color why that price was as low as it was? Maybe there was some accounting here or something.

Speaker 2

So that's just that's a weighted average NGL price calculated on a barrel basis. So ultimately that yes, I would agree with you the average is closer to the 15 marker But just based on the accounting methodology that we applied for it for the financials, it came out to the 8.7 mark. Hedging is correlative to the average market price.

Speaker 6

Okay. Thanks.

Operator

Our next question is from Tim Moore with Clear Street. Thanks. It's nice to have a full quarter of Bayswater owned under your belt. You already mentioned about the AFE drilling coming down lower than peers. But Ed, I'm just kind of curious if you can maybe add some more color on just what type of efficiencies and improvements maybe do you plan to do at Bayswater?

Operator

You've had time to walk around that for the full quarter. Is there anything else you're uncovering or thinking of some more best practices to apply or have you noticed any catch up maintenance CapEx you got to do there?

Speaker 2

Yes, I know that's a great question, Tim. Thank We've acquired over three forty wells and that leaves a lot of room for optimization. We also brought over most of the field personnel that had been working those wells with Bayswater. So now they're Prairie employees. And so we've taken the last quarter to really get up to speed and evaluate all ways in which we can optimize that production, both near term, midterm and long term.

Speaker 2

And so the big two categories that we're finding are workovers and gas lift optimization. And we've already begun in that endeavor and I'll let Gary share some details with you on that.

Speaker 3

Yes. Think first of all, I think it's safe to say that Bayswater is an excellent operator. It's one of the reasons we like the assets. So we really didn't see issues around deferred maintenance, But there's always room for improvement. So we've been systematically attacking every pad, every well.

Speaker 3

We executed on a number as I pointed out in the opening on plunger lift efficiencies, how much gas we're putting down, how much gas we're taking to sales and really optimizing that. We've been able to do certain things at the surface locations to improve upon those. We've now identified a lot of workover opportunities. So I pointed out we executed on three of those already with some really good results picked up four or 500 barrels just on those workovers. There's a lot of that work to do.

Speaker 3

Again, it's just focus. It's really getting into the weeds on these wells, learning about them, discovering what's going on with them and then attacking them. So that's our mission and we're very active in that regard.

Speaker 2

And I'll just finish by saying there are some really low hanging fruit where we've got a concentration of fewer than 10 wells that probably amount to 500 or more barrels per day of optimization. So that's the way we're approaching the whole opportunity set is going after the highest impact low hanging fruit first.

Operator

That's great. I got to imagine the IRRs and those workovers will be really terrific as you want do The more of

Speaker 2

payback is super fast.

Operator

That's terrific. Great. That's it for my questions. Thank you.

Speaker 2

Thank you, Tim.

Operator

Thank you. There are no further questions at this time. This does conclude today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker 3

Thank you all.

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