Inside: Warren Buffett’s Stunning About-Face

Increased Renewables Don’t Change the Simple Fact…

Oil and Gas Demand is Rising Faster than Supply Can Keep Up

Editorial Feature | July 7, 2023 

JP Morgan projects oil will hit $150 a barrel by 2025, as demand outstrips supply by a projected 7 million bpdi. With little new supply coming online, wildcatters finding new resources are the most exciting part of the oil and gas industry today.

One tiny microcap, pioneering a cleaner, greener, and more efficient extraction method, just announced estimated reserves worth $2.4 billion.

Learn why debt-free Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD) projects exponential revenue growth over the next 12 months.

JP Morgan just released their energy report.

The world’s economy still runs on oil.

And demand is rising rapidly.

However, the world is producing less oil, not more.

That’s why the banking giant sees oil hitting $150 a barrel by 2025 — up from ~$90 today.

That’s without disruptions due to Russia’s war in Ukraine…

Without disruptions by a belligerent OPEC…

With every part of the supply chain running smooth as silk.

Should there be any threats to oil and gas supply, the price of a barrel could jump substantially higher.

This supply crunch is creating a unique opportunity…

A chance to enter one of the most profitable industries…

Right at the start of a secular bull run.

Even better, you will soon see how one tiny microcap — Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD)— is using its rich established oil field in Colorado to pioneer a cleaner, greener way to extract hydrocarbons from the ground.

The company just completed a 3rd-party estimate, showing 285 MMBoe in their Colorado location — worth about $2.4 billion at today’s prices.

Yet the company has a market cap just a fraction of that size.

Now that the reserves in the area have been defined, the company is in the process of getting permits for wells on the land, to start producing oil and natural gas.

Prairie could not have timed its operations any better.

For confirmation of that fact, just look to Warren Buffett’s recent investment strategy.

Why is Warren Buffett All-In on Oil?

Over a decade ago — coming out of the financial crisis of 2009 — Warren Buffett lost a good chunk of change on an investment in an oil company.

That followed a few other oil investments that turned sour.

That’s why, not long after, Buffett said he was done with oil, and would never invest in the sector again.

As of last year, he has changed his mind.

In fact, Buffett’s Berkshire Hathaway has been buying up oil and gas investments at a dizzying clip.

The company is now the largest shareholder of both Occidental Petroleum, and Chevron.

Why the turnaround?

Buffett is a practical investor.

And he understands that the world still runs on petroleum and will for years to come.

In addition, coming out of the pandemic, many oil companies were available at attractive valuations.

In addition, as a longtime proponent of value investing, Buffett surely loved that oil and gas was being overshadowed within the energy sector by the shiny new things that had come along.

These sorts of temporary distractions — which have everything to do with investor tastes, and nothing to do with actual valuations or profitability — provide the best buying opportunities.

Buffett understands, the oil sector is in a powerful position to go on a sustained bull run.

Why The World Needs More Oil

In many ways, the story of oil today is simple to tell.

Demand is growing. It is projected to rise 6% by 2028 — which, in a multi-trillion industry like fossil fuel energy, is significant.1

At the same time oil supply is shrinking.

This is partly because OPEC made a surprise cut to production in April.

But, perhaps more importantly, the crash in oil prices in 2020 brought all exploration and development to a halt.

When the pandemic shut down the world, the price of oil crashed.

With that crash, a number of producers were no longer profitable.

Many went under.

Some sold their assets at a loss.

And some companies saw the fire sale, knew the pandemic would pass, and gobbled up attractive claims at even more attractive prices.

That’s exactly what Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD) did.

And it proved prescient.

Coming out the pandemic, demand skyrocketed.

The economy’s appetite for oil grew so voracious, the US Strategic Reserve fell to its lowest level in decades:

Draining of the Reserve has since slowed down — but the supply crunch has not abated.2

That’s because it can take years to bring new oil production online.

There will be years of a supply crunch. By the time the market realizes it needs more oil, it’s too late.

That’s where we sit today.

However, this supply crunch could be a particularly nasty one.

  • Energy demand is growing — far faster than alternative energy can come online.
  • That renewable energy is dependent on fossil fuels regardless — renewables are reliant on freshly mined material, and the mining industry runs on hydrocarbons.
  • India is rapidly industrializing, as is Africa.
  • Southeast Asia is fast becoming the new factory of the world, as China’s population becomes middle income and too expensive.
  • The developed world is also seeing increasing energy demands thanks to new tech — everything from EV cars to smart speakers to the next must-have gadget.

Creating even more upward pressure, inflationary periods like today tend to supercharge the price of commodities like oil.

In fact, during inflationary periods, commodities average 11.2% gains annually.3

The stage is set for even more dramatic increases in the price of oil in the short and mid term.

The demand for oil is clearly there. And it’s not going away.

Renewable Energy Cannot Save Us

97% of the world’s energy comes from oil, coal, or natural gas.4

That may surprise some. Renewables have been on a tear recently and have shown double-digit growth for years.

But that’s because they have made up such a tiny slice of the energy pie, even small gains can look like large percentage swings.

However, as the sector grows, renewables will come up against some hard speed limits — mostly due to resource availability.

This theme was echoed by industry players last week, at the Inaugural Energy Asia conference held in Kuala Lumpur, Malaysia.

 “We think the biggest realization that should come out of this conference … is oil and gas are needed for decades to come,” said John Hess, CEO of U.S. oil company Hess Corporation.

“Energy transition is going to take a lot longer, it’s going to cost a lot more money and need new technologies that don’t even exist today,” he continued 5.

Without a drastic upswing in mining for material like copper, lithium, rare earth metals, and other components necessary for renewable energy, we can only make so many windmills or solar panels.

To grow from 3% to 30% of the energy mix, renewables would demand 10 times as many resources.

However, the markets for resources like lithium and copper are already stretched thin by the increase in demand from renewables.

Indeed — the entire mining industry is entering a secular bull — as energy demands are high enough, we need more of everything.

A Proven Claim in a Rich Basin

As already mentioned, when the pandemic shuttered a number of exploration and development companies, Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD) went on a buying spree.

The company acquired leasehold on over 37,000 acres of oil-rich Colorado country at a substantial discount.

Indeed — Prairie bought this acreage for only $1200 an acre.

With possible reserves worth $2.4 billion today, that appears quite the bargain.

In addition, Prairie has the exercised the lease on another 10,000 line-of-sight acres.

As you can see in the above map, this part of Colorado is rich in oil deposits, and oil wells.

  • It is rural, reducing the potential for conflict with the local community.
  • There are no schools, churches, libraries, or civilian infrastructure to avoid or complicate drilling projects.
  • All of this makes for a streamlined permitting process
  • While there is little civilian infrastructure, the area has long hosted drilling activities, and has extensive infrastructure for oil & gas operations, including pipeline transport.
  • Prairie’s leases are atop legacy oil reserves, now accessible in greater part thanks to improvements in technology, primarily fracking.

This Colorado basin contains one of the better oil deposits in North America.

In fact, there’s something very rare and special about this basin.

It contains not one oil field underground, but two, at two different levels, formed at two different times.

This greatly increases the profit potential of each acre.

In fact, Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD) reports that each new well will pay for itself in less than 12 months.

With so much oil already proven underground, Prairie is quickly preparing for development.

By 2024, Prairie expects to begin pumping oil and natural gas out of the ground.

At the onset of production, the mix will be about 87% oil, before falling to 75% oil and 25% natural gas.

Prairie forecasts their Colorado basin holdings will hit peak production in 2032, at over 17,000 boepd.

At an average price of $80 per barrel, that would equal about $1.4 million per day, or $514 million in revenue per year.

With low operating costs , that means Prairie Operating Co. should be incredibly profitable in the years ahead.

With its current-day market cap around $25 million, the next few years will likely be very fruitful for Prairie investors.

However, while Prairie has a proven, large revenue stream coming online over the coming months, that is not the end of the company’s potential.

Seizing the Moment

The oil and gas market is still adjusting after the ups and downs of the pandemic… and there are still bargains yet to be found.

This is partially because the supply crunch feels like it has eased.

It hasn’t.

However, after the initial price shocks that came with the Ukraine war, the markets have settled down.

This gives the false impression that demand has eased, or supply has leapt. Neither are true.

Instead, recent price fluctuations have been mostly about logistical problems and costs. They have been more immediate and have drowned out the long-term trends.

But the long-term trends remain. And the companies that cannot survive long enough to reach production are still selling to savvy buyers.

That’s why the Prairie Operating Co. is still buying.

The company carries no debt.

In fact, one billionaire investor has led the most recent pivotal funding round, creating a large infusion of capital.

By the time the Colorado basin wells are producing next year, there will likely be a new slate of projects filling the company’s ledgers.

And there are few better companies to bring wells online than Prairie.

Because the company is pioneering a greener, cleaner approach to the oil industry — while creating an extra revenue stream and reducing waste.

Making Oil Production More Environmentally Friendly

Today, extracting oil comes with a lot of waste.

The most visible sign of that waste is gas flaring.

That’s the always-lit source of natural gas as it comes out of the ground.

It’s necessary to have gas flaring as an outlet to relieve pressure underground.

In addition, many companies don’t collect natural gas if it isn’t found in economically viable quantities, or the infrastructure to handle it isn’t there.

That’s why the oil and gas industry has always been looking for ways to use gas flaring — and other types of oil and gas waste — and put it to good use.

Prairie Operating Co. has found the answer.

The company is using the waste gas from its wells to power a crypto mining division.

The main cost of mining crypto is energy.

By using gas flaring, you can use free energy — waste energy, actually – increasing efficiency and reducing the amount of methane that is released into the air.

One of the issues with gas flaring is it is quite variable. If something needs a constant flow of energy, it won’t work.

Crypto mining doesn’t have any issues with variability. Indeed, most crypto miners today will mine at different times of the day — whenever energy is cheapest.

Prairie Operating Co. doesn’t have to wait for cheap energy — it has free waste energy. But the mining operation can easily work when the free energy is flowing – and go into sleep mode when it is not.

This solves several problems.

  • It helps crypto mining become cleaner — as it is using waste energy that isn’t good for anything else.
  • It helps oil and gas extraction become cleaner — as there is no flaring, no waste energy, and much greater efficiency.
  • And it helps Prairie add one more uncorrelated income stream — smaller than its oil profits, but significant, nonetheless.

This is likely to prove a popular business model.

Already, there are companies like Crusoe trying to do something similar.

However, only Prairie Operating Co. owns the hydrocarbons, and the wells that produce them.

Other miners could get squeezed by producers that want a larger cut of the profits.

Prairie doesn’t have that problem.

6 Reasons to Consider an Investment in Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD)

  1. Oil demand is rising, and the world is suffering a supply shortage, and a shortage of new supply that can come online.
  2. Prairie Operating Group only has a $25 million market cap today, but it holds claims on land with reserves worth $2.4 billion.
  3. That Colorado leasehold is in an enviable position — near oil and gas infrastructure, but far from civilians and other local stakeholders.
  4. Prairie Operating Co. isn’t done shopping for bargains — assets that others have already proven but couldn’t afford to develop further.
  5. With an experienced management team that has drilled over 1,000 wells, combined with the advances of the last few years, Prairie Operating Co. is bringing a proven oilfield back to life.
  6. By using gas flaring and waste energy to power a crypto mining operation, Prairie Operating Co. (OTC: CRKRD)(OTC: CRKRD) is reducing waste and pollution, while adding an overhead-free income stream.

1https://www.instituteforenergyresearch.org/international-issues/iea-forecasts-global-oil-demand-peaking-by-2028/

2https://www.zerohedge.com/energy/oil-surges-supply-takes-center-stage

3https://www.economist.com/briefing/2023/06/21/inflation-is-as-corrosive-to-investing-as-it-is-to-the-real-economy?utm_campaign=r.the-economist-today

4https://youtu.be/wDOI-uLvTnY

5https://www.cnbc.com/2023/06/30/energy-transition-is-lagging-oil-demand-will-stay-industry-players.html

ihttps://oilprice.com/Latest-Energy-News/World-News/JPMorgan-Analyst-Sees-Energy-Supercycle-With-Oil-As-High-As-150.html

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This document contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), which reflect expectations regarding Prairie Operating Co future growth, future business plans and opportunities, expected activities, and other statements about future events, results or performance. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to: (a) revenue generating potential with respect to Prairie Operating Co industry; (b) market opportunity; (c) Prairie Operating Co business plans and strategies; (d) services that Prairie Operating Co intends to offer; (e) Prairie Operating Co milestone projections and targets; (f) Prairie Operating Co expectations regarding receipt of approval for regulatory applications; (g) Prairie Operating Co intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and (h) Prairie Operating Co expectations with regarding its ability to deliver shareholder value. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: (a) the ability to raise any necessary additional capital on reasonable terms to execute Prairie Operating Co business plan; (b) that general business and economic conditions will not change in a material adverse manner; (c) Prairie Operating Co ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; (d) Prairie Operating Co ability to enter into contractual arrangements; (e) the accuracy of budgeted costs and expenditures; (f) Prairie Operating Co ability to attract and retain skilled personnel; (g) political and regulatory stability; (h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; (i) changes in applicable legislation; (j) stability in financial and capital markets; and (k) expectations regarding the level of disruption as a result of COVID-19. Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of Prairie Operating Co to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: (a) Prairie Operating Co operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; (b) public health crises such as the COVID-19 pandemic may adversely impact Prairie Operating Co business; (c) the volatility of global capital markets; (d) political instability and changes to the regulations governing Prairie Operating Co business operations (e) Prairie Operating Co may be unable to implement its growth strategy; and (f) increased competition. Except as required by law, the Website Host undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise.

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