PROP

Prairie Operating($PROP) Director Signals Turnaround With $493,000 Stock Purchase After 70% Collapse

05/23/2025 21:53

Small-cap oil and gas exploration and production company Prairie Operating Co ($PROP) has seen significant insider buying recently, even as its stock has plummeted over 70% in the past year. Notably, Director Jonathan Gray made a substantial investment on May 21, 2025, purchasing 131,500 shares at $3.75 per share, amounting to approximately $493,112. Another director, Erik Thoresen, also bought a total of 5,000 shares over three days from May 21-23. This insider buying activity comes at a critical time as the company faces serious performance challenges and financial hurdles. Prairie recently reported a quarterly adjusted loss of $0.67 per share, significantly missing analyst forecasts that had projected a profit of $0.40 per share. Even more concerning, the company reported zero revenue against expectations of $32.06 million. Interestingly, this recent buying contrasts sharply with insider activity from a year ago. In June 2024, multiple executives and directors—including CFO Robert Craig Owen who sold over 65,000 shares—conducted substantial sales at prices ranging from $10-13 per share. The timing of those sales now appears prescient given the subsequent share price collapse, making the current buying activity potentially significant as a signal that insiders believe the stock may have bottomed. The company's share price has steadily declined from over $13 in June 2024 to approximately $3.50 currently. One major catalyst for the decline came in February and March 2025, when Prairie announced plans for substantial stock offerings to finance the $602.8 million acquisition of DJ Basin assets from Bayswater Exploration. The company announced a $200 million stock offering in February, followed by an additional $35 million equity raise in March. These large capital raises and resulting dilution were poorly received by the market, with shares tumbling as much as 29.9% in a single day on February 7. Concerns about financing the acquisition persisted, with the company filing for a $500 million mixed shelf registration on April 22. However, the recent insider buying could be a powerful signal that management believes the stock is undervalued. Gray's approximately $493,000 investment represents a meaningful commitment considering the company's current market capitalization of about $116 million. This suggests insiders may view the current share price weakness as temporary and have confidence in the company's long-term outlook. Insider purchases are often viewed as positive signals to investors because executives and directors typically invest their personal funds when they have strong conviction about their company's future. Analysts also remain optimistic about Prairie's potential. The sole analyst covering the stock maintains a 'buy' rating with a 12-month price target ranging from $10.00 to $16.38—nearly triple the current share price. However, this target assumes successful integration of the Bayswater assets and improved productivity. Meanwhile, Prairie has taken steps to shore up its financial stability. On April 1, the company amended and restated its credit agreement with Citibank, securing a maximum credit commitment of $1 billion. This move appears designed to support the DJ Basin asset acquisition and development. Analysts expect Prairie to report quarterly revenue of $95.39 million and earnings of $0.84 per share when it announces results on May 13. If achieved, this would mark a significant turnaround from the company's recent streak of losses. Energy sector experts suggest that the insider buying may signal a financial inflection point for Prairie. The DJ Basin assets, located across Colorado and Wyoming, represent rich oil and gas deposits that could substantially enhance the company's production capacity and reserves. In summary, Prairie Operating Co's recent insider buying activity represents a noteworthy development, particularly given the stark contrast with insider selling behavior a year ago and the significant decline in share price. These purchases suggest internal confidence in the company's long-term growth strategy despite current financial challenges. The upcoming quarterly earnings report and progress on integrating the DJ Basin assets will be critical milestones in determining the company's future direction.

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