Greetings and welcome to the Prairie Operating Company Investor Update Call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce CEO Edward Kovalik. Please go ahead.
Good morning and thank you. This is Ed Kovalik, Chairman and CEO of Prairie Operating Company. Before we begin, a quick disclaimer: this call is intended to provide additional detail regarding our announced M&A transaction. It is not an offering of securities and does not relate to any potential or pending offering. With that said, I'm extremely excited to announce our highly accretive acquisition of assets from Bayswater for $602.75 million in cash and stock. This acquisition substantially increases our oil-weighted production on a pro forma basis to 28,000 BOE per day. It also provides immediate scale and operating leverage, adding an additional 24,000 net acres to our portfolio, making our total net acreage position about 54,000 net acres for an 80% increase in our acreage base.
Additionally, the transaction materially expands our inventory life to about 10 years, assuming a one-rig drilling program, with the addition of 69 highly- economic proven locations to develop, rounding up our total locations to develop to 586, which is about 10 years of life, as I mentioned. This transaction also significantly increases our free cash flow and funds our development program on a go-forward basis. It also optimizes our capital structure and materially increases our liquidity and provides us meaningful infrastructure synergies across our systems. The transaction is valued at attractive valuation metrics, which include a PV20 of the proved developed producing, or PDP, reserves, which amount to $23,500 per net flowing barrel. The assets fit extremely well with our existing portfolio of acquisitions that we have done to date, including the Exoak Acquisitions, the Nickel Road Acquisitions, and the Bolt-on Acquisition that we have done last year.
The assets are also liquid-rich, as are the rest of our existing assets located in rural Weld County. They're blocky with our existing assets and add a material amount of reserve value to our existing portfolio. Pro forma this acquisition will have about 104 million barrels of proved reserves, which are valued at $1.4 billion on a PV10 basis. I'd like to hand it over to Gary Hanna, President of the Company, to walk you through our development program.
Thank you, Ed. Appreciate that. This slide is indicative of why we believe that the DJ is a superior resource play. Our target formations, the Nio A, B, and C, as well as the Codell, are very well defined in this play. The DJ began life as a conventional play drilling a lot of deep vertical wells. We literally have thousands of penetrating wells through our horizons, as well as associated logs, that gives us a great deal of confidence in our mapping. Not on this slide is the talk a little bit about the 3D through the area. We have extensive 3D coverage. It's really not an exploration tool in our basin. It's a developmental tool. We use it to tie back to our well logs, use that as a design path for our drill, as well as steering through the drill phase.
It's a very, very valuable asset we have out here that we're lucky to have coverage over probably 90% of our acreage. Moving back to the slide for a minute, on the upper slide, upper top, you can see the development cube. We believe that the four wells through the A, B, and the C, and the six wells through the Codell are optimal to maximize wellbore performance on an individual well basis, as well as minimize any potential for a parent-child issue through the area. We've conservatively done these in this format for a total of 18 wells in any particular drilling and spacing unit. Moving over to the right side, this is indicative of where our acreage lies in the black oil section. We generally target about 70% oil in that area.
With that, I'll turn it over to Greg to talk a little bit about the particular.
For those following along, we have posted this presentation to our website. For anybody that is interested, you can go to our website at www.prairieopco.com and download this deck. The slide that Gary was referring to is slide six in that presentation. Greg, if you could walk us through our midstream takeaway.
Yeah, flipping to slide seven, and thanks, Ed. Really, as we look at this, we're really happy to say that we have a very significant portfolio with very aligned strategic partners already in place. As we kind of expand this footprint with this transaction, we look at kind of how we're going to operate, grow, expand. With our oil, gas, and water contracts in place, the strategic partners, NGL, Taproot, Rimrock, Summit Midstream, we feel very positive that we have a very creative structure in front of us, ample takeaway, ample expandability, access to downstream sales markets at Cushing, highly efficient and available space at Rimrock for processing our gas, and more to come there as we continue to grow and expand.
I'll just reiterate current access and capacity, contractually available, strategic partnerships in alignment for our growth portfolio, and the ability to deliver and get opportunistic pricing downstream. Ed, back to you.
This acquisition underscores the extremely compelling cost structure of our assets. In guiding everyone to page eight of the presentation that's posted, our break-even prices really reflect that economic profile. They're extremely competitive, second only to the Permian Basin, driven by very low drilling and completion costs that we have diligently spent time working on reducing in partnership with ProFrac and other vendors. We also have extremely low variable costs, both between our lease operating expenses and our gathering, processing, and transportation costs. There's further upside to cost savings in these numbers because we do have an oily position that's liquid-weighted. We produce a 38-42 API gravity crude for which we do get an uplift at Cushing of $1-$3 per barrel, which is not reflected in any of these numbers.
Moving on to really our conclusion of this call, our team is extremely excited about our opportunity to build a high-growth juggernaut in the DJ Basin through the drill bit and through accretive deep value M&A. This acquisition is consistent with the strategy that we have laid out from the beginning of founding our company almost two years ago. My team shares a passion for generating high investment returns, and we believe we can do that for Prairie. We thank you all as our shareholders and look forward to our next call.
Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.