Good morning, everyone. Thank you for joining us today. My name is Greg Patton, as James mentioned, CEO of Prairie Operating. I look forward to spending the next 15, 20 minutes with you all, going over a little bit about Prairie, a little bit about our background, where we stand currently today, and our plans and directives for the future. Just because we are public, here is a disclaimer with a forward-looking statement in it. I will not read it all for you to save you. Ultimately, just to cover our bases from a legal standpoint, we have included it for review and for purposes of the presentation. A little background on Prairie, and then we will go over some key highlights from Q2. We did just complete our earnings yesterday morning, with filing last Friday.
Ultimately, Prairie has been in inception since 2023, when it was incorporated as a public entity that was originally formed as a cryptocurrency company. The assets were sold out of that company. All the assets of the crypto basis are now gone at this point in time. Assets were put into the entity by the original founders. Those founders found unencumbered lands and leases that they added into that public company. They went through the SEC process to move it out of a crypto company and into a public oil and gas company. That all happened throughout 2023 and into 2024. I joined the company in 2024 when we started identifying producing assets that we intended to drill and complete and move forward from what was originally put together as all possible and probable reserves.
Those assets, which we will go over a little later in the presentation, there have been nine to date that constitute and form what Prairie Operating is today. Ultimately, throughout that process, we have continued to clean up resounding items and capital formation aspects that were put into place to start the company. We will talk a little bit about that more later. Some key highlights from Q2 that we just went over for the quarter. Ultimately, we successfully completed multiple acquisitions, as I mentioned, all here in rural Weld County, in the DJ Basin. This year, we have drilled and completed 27 wells to date, totaling approximately 40 targeted for the year, and we have over 550 wells producing under our operations today based off of those acquisitions that we have accumulated together.
Our inventory on a go-forward basis holds roughly 600 locations in our reserve report, which gives us approximately a 10-year drilling inventory if we were using a rate of 60 wells per rig per year on a one rig basis. Based off of the inception of the company and some of our key acquisitions, the Bayswater acquisition, the Edge acquisition, and the Nickel Road acquisition, which came with production, we did hedge the position that Prairie Operating for rolling 24 months, which put a very supportive hedge portfolio in place when oil prices were lower. Today, it is a deficit to the company. However, it provides us that foundational support on our PDP basis with hedges in the range of $60-$64. Our real target from now when rolling forward is on that development plan.
It's focusing on AFEs, it's focusing on enhancing our capital efficiencies and creating a clear path for the future in a concurrent rolling basis. All of that combined with the inception of Prairie, the new management team, which we'll talk through a little bit, the refreshment of the board that we talked through on our earnings call, all of that is really put together to provide value to our shareholders and continuing progressing forward, de-levering the company, and creating cash flow. A little bit high level in terms of where our assets are located, and ultimately, the footprint that we've put together. Again, a couple of key highlights we'll cover.
The map on your right, provided by Enverus, ultimately outlines very clearly where we are focused in the oil rim of the Wattenberg Basin, as well as a small position in the Northeast Extension and some additional locations in the Hereford. You can see that we are surrounded by other best-in-class operators in the basin, Bison, Chevron, SM, Oxy, and Verdad, which is now JAPEX. Ultimately, as we look at where we looked for assets, where we have contiguously put asset blocks together, we've done that in mind of keeping concentration of where our assets are producing, ultimately where our growth profile we intend to develop, and where we have runway to be able to deliver those producing assets on infrastructure and midstream downstream. Ultimately, we talked about Weld County, we talked about the footprint.
We've talked about how we plan to run one rig in a conservative nature until such time we have the progress moving forward to have a runway to be able to have the permits ahead of us, more than a two-year permit inventory, to be able to move to a second rig. At this point in time, we're a one rig, one frac crew company. Ultimately, again, focusing on those contiguous blocky acreage positions where we have those pathways for takeaway. Just a couple of key highlights. Again, 22,500 on average. Today, we are at 27,000 approximate barrels a day net. We have approximately 70,000 net acres, and our proved reserves include 118 MMBOE, which consists of 73% liquids, 50% of that is oil.
We have talked about the locations, and we have talked about the map, so we will move into a little bit of where we think the balance is for Prairie Operating moving forward, how we believe we are executing today, and some of the key aspects that we really focus on as a management team. Ultimately, it is a balance through growth through the drill bit, continuing to keep that inventory ahead of the drill bit, the permitting place in plan, and ultimately being able to execute within AFE.
As we think about our organic growth, top right-hand side of the presentation in front of you, ultimately, we think about the value that we are able to accrete by doing our own organic leasing, building onto that contiguous acreage block that is in place today, and utilizing some of our best practices in order to really focus on the cost basis return that we are getting for the deployment of capital, the DSUs we are able to form, and the returns we are able to bring back to shareholders after drilling and completing. Obviously, it is the DJ, bottom right-hand side of your screen. Proactively managing our regulatory and environmental concerns is first and foremost for us as well.
As we think about how the community is incorporated into our daily activities, as we think about those operations that involve our ranchers, and ultimately community members that live and work within that community, it is highly effective for us to be able to continue our practices, keeping those environmental practices first and foremost. While they are regulated and required by the state, we also take the extra measures to ensure that we are proactively working with those landholders, with those community members, the CMC, governing bodies, et cetera, to ensure that we have that operational leeway to continue to move forward and be a best-in-class operator in those aspects. Bottom left-hand side of your screen, obviously, all those factors incorporated require us to be able to put the money to work.
Being able to put the money to work in accretive assets that provide a return back to our shareholders, back to the company, maintain that free cash flow effect where we are spending less than we are bringing in, and it allows us to retain that balance sheet strength. Ultimately, that is a key aspect for the company as we continue to move forward. There will be periods where we outspend cash flow and then periods where cash flow return. As we think about applying this to this year, as we think about our recent guidance, as we think about our recent results, ultimately Q2 and Q3 are high in capital deployment. Q4 is a slower period for us that will allow us to return that free cash flow back to the balance sheet for year-end results.
Top left-hand side, obviously, that's the continued accretive execution on future acquisitions to be able to continue to build that foundational basis for us to continue to grow. Our goal as a public entity is consolidation within the Rockies. As we think about that growth pattern, as we think about expanding into the future, ultimately, we want to balance that with our capital deployment in the drill bit, couple it with the capital deployment for acquisitions, whether that be through just direct land acquisitions, additional leasehold, mergers, et cetera, and so forth. The fundamental basis the company's put together gives us a platform to be able to do all of that. Again, we covered some year-end highlights. The key piece that I'll point to here is ultimately moving into the back half of the year. We have re-guided guidance.
We have slowed down a little bit on the year as we've implemented and put in place that new management team, the new board of directors, and that refresh. As we think about the total daily production, our guide is going to be 23,000-25,000 net barrels a day. Our EBITDA $180 million-$190 million, and our capital expenditures are $185 million-$195 million on the year. When we think about the logistics of the basin and we think about how we develop, we do develop in the Niobrara and the Codell formations. Our wine rack in the top right-hand side of your screen ultimately presents 12 wells in the Niobrara, four wells in the Codell for a total of 16 wells.
The key piece I'll point out there is we develop and we look at different core areas of our acreage position, 16 wells per section is not necessarily what we'll be developing. As we think about areas that have been a step out for us, as we look at areas that we have wells that are producing currently, as we look at other offset operators and the density that they're drilling in, our target number of locations on a go-forward basis is more in that 6-12 wells per DSU, and our average lateral length is 2 mi. However, we do have an assortment of 3-mi laterals mixed into our asset base and incorporated into our reserves.
Again, circling back one more time, because of our organic growth and the consolidation of the assets that we'll flip to on the next side and just talk a little bit about the history. Ultimately, our goal is to create a company that sustains production, grows incrementally, and returns free cash flow back to our shareholders and investors. There's been a significant focus on the second bullet point, focus on leadership and the organizational growth. The company started two years ago with 12 employees. Today, we have 72. As we think about the board composition, we've moved from an investor-based board into an oil and gas supported board. As we think about that growth and sustainability on a go-forward basis, it allows us to prioritize the cost-saving strategies.
It allows us to focus on the day-to-day operations, and it allows us to continue to refine what we're doing as a startup entity and grow into those shoes, which is a public entity that we really didn't get the chance to have over the last 18 months. Those operational efficiencies that I talk about are technologies that our offset operators and others in the basin have been deploying, whether that be different frack technologies, whether that be different drill bit technologies. Every incremental dollar back into our AFEs or cost savings is beneficial to the company. It's beneficial to our shareholders, and ultimately, we're continuing to learn, grow, and evolve as we move forward. All those things factored together create this disciplined capital allocation approach. That balance between leasing, acquisitions, AFEs, and how we're progressing as we move forward as an organization.
Just a little bit of history as we kind of flip through how we acquired the asset blocks that are here. I see many faces in the room today that we acquired these from. Thank you for working with us as we've done that. Ultimately, starting off this with that asset block, that possible and probable location that splits the Northeast extension in the Hereford Field in orange on the screen in front of you. Then a couple different components to that acquisition that put that together over time. Moving into the Nickel Road acquisition, ultimately our first producing asset, our first asset that had operations associated with it that allowed us to start building out that operations team to hire the pumpers, to get the experience in the field as we continue to grow and expand. Moving across your screen into February of 2024, adding on another bolt-on.
This was our Shelduck pad. That bolt-on was our first drilled and complete operated pad. So while we talked about field operations, this was our first D&C pad, ultimately moving into the Bayswater acquisition, kind of our foundational or monumental move in terms of production basis, going from 3,000 barrels a day upwards to 26,000 barrels a day. Bringing in a significant additional task force and workforce into the field, building out the corporate functions within the office, whether that be the accounting, the reserves group, et cetera and so forth. That transaction started and was signed up in December of 2024. We closed it in March of 2025. We took over operations in May of 2025, so here we are just one year later as the operator of those assets.
Moving into the lime green, which was additional leasehold that we were able to bolt onto and continue to build that contiguous acreage block. While small in nature and dollar amount, very significant in nature in terms of bolting up a significant DSU that we plan to develop. The fuchsia color on your page is the Edge acquisition. That added additional contiguous acreage block to the Bayswater and the Nickel Road acquisition. Ultimately, again, with that whole philosophy of building contiguous acreage blocks incrementally as we continue to move. Lastly, October of last year, closing the Crown acquisition, which included two extra DSUs that were constituted our drilling plan for the rest of this year moving into next year.
The last key highlights I've pointed out in the conversation point, but as you look at, ultimately, the number of locations, as you look at the production growth on the bottom right-hand side of your screen, it's been a very fast incremental production stream for Prairie. Ultimately, we're in the refinement stage now, which is allowing us to really take some time, step back, look at what the development plan is, align with our board, build a plan that the shareholders and ultimately our investors are comfortable with, continuing to deliver results on an ongoing basis, and start from a foundation here that we think is imperative for our sustainability moving forward in the future.
As we think about those asset positions and we think about infrastructure, one of the things that's crucial, especially here in the DJ, putting new permits in place as we move forward, is the ability to have midstream takeaway. Ultimately, with the restraints that the CECMC and the oil and gas requirements of Colorado overlay on top of us, this is a crucial aspect to us. We're thankful for our partners, NGL, Williams, Elevation, Black Diamond, Summit, Taproot, Phillips DCP, ultimately provide the takeaway optionality that is necessary for us to continue to grow and expand. As we do that, it's crucial that we have the infrastructure necessary to put it on those pipes.
Each incremental development stage that we've developed and moved into has been strategic in nature to work with those takeaway providers to ensure we have the capacity available and to ensure that we have the runway in the future to be able to take those hydrocarbons to Cushing, Mont Belvieu, wherever it is that we're selling those, as per the applicable marketing contracts, and get them sold downstream. We've talked a little bit about our inventory location as we think about dreaming into the future, as we think about our execution strategy moving forward. We think about those legacy locations that we acquired, 400 of them on the left-hand side of your screen. Those are those producing assets that we acquired from Nickel Road, from Bayswater, from Edge, from Crown. As we think about the assets that we've acquired.
Moving into the assets we acquired, second blocks there, and then into the organic leasing and growth, and that's those contiguous blocks we've been able to build in and around as we've acquired those assets. As we look forward into the future, we think about A&D opportunities. We think about carve-offs, we think about additional acreage blocks, and we think about the opportunity to be able to build on and expand. We think there's roughly another 150 locations in and amongst our acreage block to keep that contiguous acreage position and continue to grow on a go-forward basis. Ultimately, when we think about what that number is that 600 to 800 locations giving us a 10-year inventory life with one rig? We think that's an entirely and obtainable aspect as we continue to progress, move forward, refine, and grow.
Just some key regulatory highlights, in those that because we're a DJ player, ultimately, we think about Weld County. It's a very supportive nature. The oil and gas industry is well established. They have their own commission. Ultimately, it's rural. The name Prairie came from how rural that we are. Ultimately, our assets are subject to less requirements, and there's less risk operating in those urban environments. However, that doesn't mean that we take less protocols or less practices in place. Senate Bill 24-229 and 24-230 were signed into law in 2024 and ultimately enacted a kind of blocking or delay in any future oil and gas guidance, especially with the moratorium that was established to keep those new laws and ballot initiatives from really moving forward until we get into 2028 at least.
We're hopeful that we continue to operate in this environment that we're in today, where we feel like we have good connectivity with the state. We feel like we have good connectivity or great connectivity with Weld County, and we look forward to that future process as we move forward, to be able to keep those regulatory environments in check, but yet operate within them, again, being that best-in-class operator within our communities and within the state. We're using that to our advantage right now. We're putting permits in place. We're working with those agencies to build those inventories for the future, and ultimately, we'll continue to do that over the next two years or year and a half as we progress out of 2026 through 2027 and into 2028.
When we think about just some highlights, and this goes for many operators here in the basin, some of those highlights that we really like to think about is the electrification that we've been able to bring into the basin. So whether that be the electrification of the rig that's supported either by line power and where accessible and/or diesel generation or nat gas generation to be able to support that electrified rig. As we think about the completions crew, we've been able to use hybrid fleets, full electric fleets, and a combination of the two as we move forward, again, bringing those best-in-class operations stats into our environment, being able to support the community in terms of emittance at the lowest levels possible.
Ultimately, they've been beneficial in terms of the technologies that have been able to deploy with the rigs and the frack crews to be able to provide the results that we anticipate with historical equipment, now with new technologies, and providing those best-in-class emittance. In terms of the production, again, we work within the requirements of the state, running air pneumatics, using no permanent hydrocarbon storage on site where possible, decreasing those tanks, thief hatches, et cetera, and so forth, and really moving as much power generation to the grid where applicable. Obviously, electric is a commodity that's needed across the board, and so where we can't get access to electrification, we still do run nat gas generation. We still do use field gas. Ultimately, we continue to progress with the state as the grids build out, as the power supply is available.
Corporate-wide, again, we do our best to be involved with the community. We do our best to be involved with the state, participating in the CECMC steering committees, rulemakings to ensure that we are a part of those processes. The members of the team that we've employed have many years of experience within the basin working with those processes. We're happy with the team and very proud of the team we've been able to put in place today to be able to continue to work with the state, to continue to lay that foundation, to continue to sustain us as we grow on a go-forward basis. I'd like to kind of lead towards the end here with the team. Ultimately, this team's not been together very long.
This team's been together roughly 18- 24 months in totality, some less than 12, but ultimately, we've built a good team environment. That team environment has really been able to allow us to be responsible when we're on the pad to really lay out those protocols and safety procedures to ensure everyone goes home at night. We're proud to be able to say that we've deployed the strategies I talked about on the last page with the dual fuel rigs, electrification, the bulk separation, and ultimately, new partnerships with Pioneer Energy to continue to think about those strategies and technologies that we can deploy on a go-forward basis to continue and enhance those procedures, all the while delivering a zero zero TRIR and no incident reports on site. Those things are really important to us. It's really important to our team members.
It's really important to our team members' families. We're happy to continue to emphasize that, to put a lot of resounding effort in and around that, and to ensure that all the things that we are enhancing, moving forward, and creating are done in a safe manner. I'll wrap up with just some key highlights on our employees. Introducing you to the new management team, again, Greg Patton, CEO. We're very happy to be able to announce and to be able to bring on board, he's been with us two weeks, Michael Shelly. Michael Shelly is our EVP and CFO. He came from Citi with over 20 years of experience.
He's been in the DJ and living here in Colorado for the last 10 years, and we're super excited to bring him on board and have him be a partner beside us as we continue to grow and expand this company on a go-forward basis. Bryan Freeman, our EVP of Operations, brings over 35 years of drilling experience across multiple different companies, basins, continents. We're so glad to have Bryan on board. He's a founder as well as part of our operations team, and he's integrated with the team, and we're super happy to have him. Lastly, Dan Sweeney, our EVP and Corporate General Counsel, bringing 25 years of experience alongside us as we continue to move forward. Those key members of our executive team, coupled with the other 68 employees in the company. We thank you for your time today.
We thank you for listening a little bit about Prairie Operating, and we look forward to talking to you in the breakout session.