Prairie Operating Co. (NASDAQ: PROP) entered into an agreement with the holder of its Series F Convertible Preferred Stock to reduce potential shareholder dilution from Anniversary Warrants, according to a company statement.

The Houston-based energy company will immediately repay $13.7 million in stated value of the Series F Convertible Preferred Stock. The holder waived a previously announced $3.0 million cash extension fee that was agreed to on March 25, 2026.

Under the agreement, shares covered by the Anniversary Warrant were reduced from 125% to 75% of the outstanding stated value of the Series F Preferred Stock. This reduction lowered the total potential issuance of Anniversary Warrants from approximately 77 million shares as of March 26, 2026, to approximately 34 million shares as of April 7, 2026.

The Anniversary Warrant issuance date was extended 90 days to July 8, 2026, allowing the company to continue pursuing solutions to eliminate future Anniversary Warrant issuances. In exchange for these modifications, the Series F holder received penny warrants exercisable for 4.0 million shares of Prairie's common stock.

"This agreement represents the partnership we have with our Series F holder and an important step in eliminating a material source of potential dilution for our shareholders," said Gregory S. Patton, Executive Vice President and Chief Financial Officer.

Prairie operates in the Denver-Julesburg Basin, focusing on oil, natural gas, and natural gas liquids development. The company noted that while there is no assurance the remaining Anniversary Warrant dilution will be reduced or eliminated, the framework provides a path toward resolution.

Roth Capital Partners is serving as financial advisor to Prairie for these transactions.