PEDEVCO CORP
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
PED$14.88+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001654954-24-006414
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001654954-24-010652
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 80 current paragraphs.
46 unchanged; 18 reworded; 10 added; 4 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 20 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
*Lease Operating Expenses.*The increase of $0.7 million was primarily due to higher direct and variable lease operating expenses associated with the higher oil volume resulting from the increased number of wells and increased oil production during the current year’s period, compared to the prior year’s period, due to our participation in new wells in the D-J Basin, as well as production from our recently completed wells.
Current report
*Depreciation, Depletion, Amortization and Accretion.*The $1.3 million increase was primarily the result of higher crude oil, natural gas and NGL volumes resulting from the increased number of wells and increased oil production from our new wells, compared to the prior year’s period.
Current report
*General and Administrative Expenses (excluding share-based compensation).*The $0.1 million increase was primarily the result of additional payroll and software licensing fees.
Current report
Six Months Ended June 30, 2024 vs. Six Months Ended June 30, 2023
Current report
We reported net income for the six-month period ended June 30, 2024 of $3.4 million, or $0.04 per share, compared to net income for the six-month period ended June 30, 2023 of $3.3 million or $0.04 per share. The increase in net income of $0.1 million was primarily due to a $3.2 million increase in revenue, offset by an increase of $3.1 million in total operating expenses in the current period (all of which are discussed in more detail below).
Current report
Net Revenues
Current report
Total crude oil, natural gas and NGL revenues for the six-month period ended June 30, 2024, increased $3.2 million, or 19%, to $19.9 million, compared to $16.7 million for the same period a year ago, due to a favorable price variance of $1.1 million, due to the average sales price for crude oil and NGL realized by the Company increasing compared to the six-month period ended June 30, 2023, coupled with a favorable volume variance of $2.1 million. The increase in production volume is related to our participation in 13 new non-operated wells in the D-J Basin and the drilling and completion of three operated wells with a third-party in the Permian Basin both in the latter part of Q1 2024.
Current report
*Lease Operating Expenses.*The increase of $0.8 million was primarily due to higher direct and variable lease operating expenses associated with the higher oil volume resulting from the increased number of wells and increased oil production during the current year’s period, compared to the prior year’s period, due to our participation in new wells in the D-J Basin, as well as production from our recently completed wells.
Current report
*Depreciation, Depletion, Amortization and Accretion.*The $2.2 million increase was primarily the result of higher crude oil, natural gas and NGL volumes resulting from the increased number of wells and increased oil production from our new wells, compared to the prior year’s period.
Current report
*General and Administrative Expenses (excluding share-based compensation).*The $0.1 million increase was primarily the result of additional payroll and software licensing fees.
Removed paragraphs (4)
Previous report
*Lease Operating Expenses.*There was a nominal change in lease operating expenses for the three months ended March 2024, compared to the prior period, due to continued cost reduction measures designed to control costs which have been implemented on our operated properties in our Permian Basin and D-J Basin Assets, such as operation and lift efficiency improvements, combined with the divestiture of higher lifting cost wells associated with our sale of our wholly-owned EOR Operating Company, subsidiary, in our Permian Basin Asset in late 2023, resulting in a reduction in direct operating expenses, which were offset by a corresponding increase in direct operating expenses from our participation in operated and non-operated wells (noted above) when comparing the current period to the prior period.
Previous report
*Depreciation, Depletion, Amortization and Accretion.*The $0.9 million increase was primarily the result of an increase in capital costs for both our D-J Basin and Permian Basin Assets due to the drilling and completion of wells (noted above) in the current period when compared to the prior period.
Previous report
*General and Administrative Expenses (excluding share-based compensation).*There was a nominal increase in general and administrative expenses (excluding share-based compensation) as the Company continues to strive to contain costs and remain within budget from period to period.
Previous report
On January 1, 2023, we adopted ASU No. 2016-13,Measurement of Credit Losses on Financial Instruments, as issued by the FASB. This standard established the current expected credit loss model, a new impairment model for certain financial instruments, based on expected rather than incurred losses. Adoption of this standard is on a modified retrospective basis and had no impact on the Company’s financial position, results of operations, cash flows or net income per share.
Reworded paragraphs (18)
Previous wording
Certain abbreviations and oil and gas industry terms used throughout this Quarterly Report are described and defined in greater detail under “Glossary of Oil And Natural Gas Terms” on page 4 of our Annual Report on Form 10‑Kfor the year ended December 31, 2023, as filed with the Securities and Exchange Commission on March 18, 2024.
Current wording
Certain abbreviations and oil and gas industry terms used throughout this Quarterly Report are described and defined in greater detail under “Glossary of Oil And Natural Gas Terms” on page 4 of our Annual Report on Form 10‑K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on March 18, 2024.
Previous wording
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited financial statements of the Company for the three months ended March 31, 2024, above.
Current wording
Certain capitalized terms used below but not otherwise defined, are defined in, and shall be read along with the meanings given to such terms in, the notes to the unaudited financial statements of the Company for the three and six months ended June 30, 2024, above.
Previous wording
We are an oil and gas company focused on the acquisition and development of oil and natural gas assets where the latest in modern drilling and completion techniques and technologies have yet to be applied. In particular, we focus on legacy proven properties where there is a long production history, well defined geology and existing infrastructure that can be leveraged when applying modern field management technologies. Our current properties are located in the San Andres formation of the Permian Basin situated in West Texas and eastern New Mexico (the “Permian Basin”) and in the Denver-Julesberg Basin (“D-J Basin”) in Colorado and Wyoming. As of March 31, 2024, we held approximately 22,681 net Permian Basin acres located in Chaves and Roosevelt Counties, New Mexico, through our wholly-owned subsidiary, Pacific Energy Development Corp. (“PEDCO”), and which are operated by our wholly-owned operating subsidiary, Ridgeway Arizona Oil Corp. (“RAZO”), which asset we refer to as our “Permian Basin Asset.” Also as of March 31, 2024, we held approximately 19,214 net D-J Basin acres located in Weld and Morgan Counties, Colorado, and Laramie County, Wyoming, through our wholly-owned subsidiary, PRH Holdings LLC (“PRH”), and which are operated by our wholly-owned operating subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which asset we refer to as our “D-J Basin Asset.” As of March 31, 2024, we held interests in 303 gross and 301.5 net wells in our Permian Basin Asset, of which 29 are active producers, two are active injectors and two are active salt water disposal wells, all of which are held by PEDCO and operated by RAZO, and interests in 110 gross (26.2 net) wells in our D-J Basin Asset held by PRH, all of which 18 gross (16.2 net) wells are operated by Red Hawk and currently producing, 75 gross (10.0 net) wells are non-operated, and 17 wells have an after-payout interest.
Current wording
We are an oil and gas company focused on the acquisition and development of oil and natural gas assets where the latest in modern drilling and completion techniques and technologies have yet to be applied. In particular, we focus on legacy proven properties where there is a long production history, well defined geology and existing infrastructure that can be leveraged when applying modern field management technologies. Our current properties are located in the San Andres formation of the Permian Basin situated in West Texas and eastern New Mexico (the “Permian Basin”) and in the Denver-Julesberg Basin (“D-J Basin”) in Colorado and Wyoming. As of June 30, 2024, we held approximately 22,721 net Permian Basin acres located in Chaves and Roosevelt Counties, New Mexico, through our wholly-owned subsidiary, Pacific Energy Development Corp. (“PEDCO”), and which are operated by our wholly-owned operating subsidiary, Ridgeway Arizona Oil Corp. (“RAZO”), which asset we refer to as our “Permian Basin Asset.” Also as of June 30, 2024, we held approximately 19,244 net D-J Basin acres located in Weld and Morgan Counties, Colorado, and Laramie County, Wyoming, through our wholly-owned subsidiary, PRH Holdings LLC (“PRH”), and which are operated by our wholly-owned operating subsidiary, Red Hawk Petroleum, LLC (“Red Hawk”), which asset we refer to as our “D-J Basin Asset.” As of June 30, 2024, we held interests in 303 gross and 301.5 net wells in our Permian Basin Asset, of which 28 are active producers, two are active injectors and two are active salt water disposal wells, all of which are held by PEDCO and operated by RAZO, and interests in 110 gross (26.2 net) wells in our D-J Basin Asset held by PRH, all of which 18 gross (16.2 net) wells are operated by Red Hawk and currently producing, 75 gross (9.9 net) wells are non-operated, and 17 wells have an after-payout interest.
Previous wording
Our strategy is to be the operator and/or a significant working interest owner, directly or through our subsidiaries and joint ventures, in the majority of our Permian Basin acreage so we can dictate the pace of development in order to execute our business plan. Our net capital expenditures for 2024 are estimated to range between $20 million to $30 million. This estimate includes a range of $17 million to $27 million for drilling and completion costs on our Permian Basin and D-J Basin Assets (of which we have incurred approximately $5.1 million through March 31, 2024) and approximately $3.0 million in estimated capital expenditures for electric submersible pump (ESP) purchases, rod pump conversions, recompletions, well cleanouts, leasing, facilities, remediation and other miscellaneous capital expenses (of which we have incurred approximately $0.3 million through March 31, 2024). This estimate does not include expenditures for acquisitions or other projects that may arise but are not currently anticipated. We periodically review our capital expenditures and adjust our capital forecasts and allocations based on liquidity, drilling results, leasehold acquisition opportunities, partner non-consents, proposals from third party operators, and commodity prices, while prioritizing our financial strength and liquidity. Our 2024 capital expenditure estimate does not include expenditures for unanticipated expenses that may arise, including for opportunistic leasehold acquisitions and other extraordinary projects for which we have not budgeted (for which we have incurred approximately $0.2 million for opportunistic leasing acquisitions through March 31, 2024). We also paid approximately $0.9 million in accrued capital expenditures for amounts related to our 2023 capital budget in 2024. We periodically review our capital expenditures and adjust our capital forecasts and allocations based on liquidity, drilling results, leasehold acquisition opportunities, partner non-consents, proposals from third party operators, and commodity prices, while prioritizing our financial strength and liquidity.
Current wording
Our strategy is to be the operator and/or a significant working interest owner, directly or through our subsidiaries and joint ventures, in the majority of our Permian Basin acreage so we can dictate the pace of development in order to execute our business plan. Our revised net capital expenditures for 2024 are estimated to range between $11 million to $18 million. This estimate includes a range of $8 million to $15 million for drilling and completion costs on our Permian Basin and D-J Basin Assets (of which we have incurred approximately $6.5 million through June 30, 2024) and approximately $3.0 million in estimated capital expenditures for electric submersible pump (ESP) purchases, rod pump conversions, recompletions, well cleanouts, leasing, facilities, remediation and other miscellaneous capital expenses (of which we have incurred approximately $0.5 million through June 30, 2024) . This estimate does not include expenditures for acquisitions or other projects that may arise but are not currently anticipated. We periodically review our capital expenditures and adjust our capital forecasts and allocations based on liquidity, drilling results, leasehold acquisition opportunities, partner non-consents, proposals from third party operators, and commodity prices, while prioritizing our financial strength and liquidity. Our revised 2024 capital expenditure estimate does not include expenditures for unanticipated expenses that may arise, including for opportunistic leasehold acquisitions and other extraordinary projects for which we have not budgeted (for which we have paid approximately $0.2 million for opportunistic leasing acquisitions through June 30, 2024). We also paid approximately $0.9 million in accrued capital expenditures for amounts related to our 2023 capital budget in 2024. We periodically review our capital expenditures and adjust our capital forecasts and allocations based on liquidity, drilling results, leasehold acquisition opportunities, partner non-consents, proposals from third party operators, and commodity prices, while prioritizing our financial strength and liquidity.
Previous wording
We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this Report and in the foreseeable future, including to fund our 2024 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available from Dr. Simon G. Kukes, our Chief Executive Officer and director, which funding Dr. Kukes is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2024.
Current wording
We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this Report and in the foreseeable future, including to fund the remainder of our 2024 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available from Dr. Simon G. Kukes, our Chief Executive Officer and director, which funding Dr. Kukes is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2024.
Previous wording
The following discussion and analysis of the results of operations for the three-month periods ended March 31, 2024, and 2023, should be read in conjunction with our consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The majority of the numbers presented below are rounded numbers and should be considered as approximate.
Current wording
The following discussion and analysis of the results of operations for the three-month and six-month periods ended June 30, 2024, and 2023, should be read in conjunction with our consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The majority of the numbers presented below are rounded numbers and should be considered as approximate.
Previous wording
We reported net income for the three-month period ended March 31, 2024, of $0.8 million, or $0.01 per common share, compared to net income for the three-month period ended March 31, 2023 of $1.8 million or $0.02 per share. The decrease in net income of $1.0 million, when comparing the current period to the prior year’s period, was primarily due to a $0.9 million increase in depletion expense, coupled with a nominal increase in lease operating expenses (each discussed in more detail below).
Current wording
We reported net income for the three-month period ended June 30, 2024, of $2.7 million, or $0.03 per common share, compared to net income for the three-month period ended June 30, 2023 of $1.6 million or $0.02 per share. The increase in net income of $1.1 million, when comparing the current period to the prior year’s period, was primarily due to a $3.2 million increase in revenues offset by a $2.1 million increase in total operating expenses (each discussed in more detail below).
Previous wording
Total crude oil, natural gas and NGL revenues for the three-month period ended March 31, 2024, decreased $48,000, or 1%, for the same period a year ago and there was not a significant change in volume or price when comparing periods. However, the Company notes that in the current period, production volumes increased related to our participation in 13 new non-operated wells in the D-J Basin and the drilling and completion of three operated wells with a third-party in the Permian Basin both in the latter part of the current period. These production volume increases were offset from the initial positive performance from our participation in 14 non-operated wells in the D-J Basin (eight of which began producing in early Q1 2023) followed by flat production declines for these and existing wells in the current period.
Current wording
Total crude oil, natural gas and NGL revenues for the three-month period ended June 30, 2024, increased $3.3 million, or 38%, to $11.8 million, compared to $8.5 million for the same period a year ago, due to a favorable price variance of $1.1 million, due to the average sales price for crude oil and NGL realized by the Company increasing compared to the three-month period ended June 30, 2023, coupled with a favorable volume variance of $2.2 million. The increase in production volume is related to our participation in 13 new non-operated wells in the D-J Basin and the drilling and completion of three operated wells with a third-party in the Permian Basin both in the latter part of Q1 2024.
Previous wording
*Includes severance, ad valorem taxes and marketing costs.
Current wording
*Includes severance, ad valorem taxes, assessment and marketing costs.
Previous wording
*Share-Based Compensation.*Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, decreased nominally due to the timing of share awards versus the Company’s stock price on the award dates. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Current wording
*Share-Based Compensation.*Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, decreased nominally due to the forfeiture of certain employee stock-based options due to certain voluntary employee terminations. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Previous wording
Interest Income and Other Income. Includes interest earned from our interest-bearing cash accounts, for which interest rates have increased in the current period and interest on our note receivable. Other income in the prior period is primarily related to the sale of used pipe, offset by a vendor dispute settlement in the prior period.
Current wording
Interest Income and Other Expense. Includes interest earned from our interest-bearing cash accounts, for which interest rates have increased in the current period and interest on our note receivable. Other expense in the current period primarily relates to the subsequent disposition of a cash escrow bank balance related to the sale of our wholly-owned subsidiary EOR Operating Company.
Previous wording
Gain on sale of fixed asset. Relates to the sale of a sale of a vehicle and the subsequent purchase of another vehicle in the current period.
Current wording
Gain on Sale of Fixed Asset. Relates to the sale of a vehicle and the subsequent purchase of another vehicle in the current period.
Previous wording
The primary sources of cash for the Company during the three-month period ended March 31, 2024 were from $8.1 million in sales of crude oil and natural gas. The primary uses of cash were funds used for drilling, completion and operating costs.
Current wording
The primary sources of cash for the Company during the six-month period ended June 30, 2024 were from $19.9 million in sales of crude oil and natural gas. The primary uses of cash were funds used for drilling, completion and operating costs.
Previous wording
At March 31, 2024, the Company’s total current assets of $20.3 million exceeded its total current liabilities of $15.5 million, resulting in a working capital surplus of $4.8 million, while at December 31, 2023, the Company’s total current assets of $24.6 million exceeded its total current liabilities of $18.9 million, resulting in a working capital surplus of $5.7 million. The $0.9 million decrease in our working capital surplus is primarily related to cash used to fund our current capital drilling program (described above).
Current wording
At June 30, 2024, the Company’s total current assets of $15.0 million exceeded its total current liabilities of $5.1 million, resulting in a working capital surplus of $9.9 million, while at December 31, 2023, the Company’s total current assets of $24.6 million exceeded its total current liabilities of $18.9 million, resulting in a working capital surplus of $5.7 million. The $4.2 million increase in our working capital surplus is primarily related to an increase in oil and gas receivables from production sales, offset by cash used to reduce payables related to our current capital drilling program (described above).
Previous wording
We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this report and in the foreseeable future, including to fund our 2024 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available from Dr. Simon G, Kukes, our Chief Executive Officer and director, which funding Dr. Kukes is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2024.
Current wording
We expect that we will have sufficient cash available to meet our needs over the next 12 months after the filing of this report and in the foreseeable future, including to fund the remainder of our 2024 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available from Dr. Simon G. Kukes, our Chief Executive Officer and director, which funding Dr. Kukes is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2024.
Previous wording
**Cash flows used in operating activities.**Net cash used in operating activities increased by $6.1 million for the current year’s period, when compared to the prior year’s period, primarily due to a decrease in net income of $1.0 million, offset by a $0.9 million increase in depreciation, depletion and amortization and by a $6.0 million net decrease to our other components of working capital (predominantly from our drilling and completion activity).
Current wording
**Cash flows used in operating activities.**Net cash used in operating activities decreased by $8.1 million for the current year’s period, when compared to the prior year’s period, primarily due to a $2.2 million increase in depreciation, depletion and amortization (predominantly from production increases noted above) and offset by a $10.3 million net decrease to our other components of working capital (predominantly from additional sales receivables and a corresponding decrease in payables from our recent drilling and completion activity which was largely completed in Q1 2024).
Previous wording
Cash flows used in investing activities. Net cash used in investing activities decreased by $16.1 million for the current year’s period, when compared to the prior year’s period, primarily due to the timing of cash payment amounts versus accrual amounts for capital spending relating to our drilling and completion activities. In the current period, we paid $0.9 million in cash for drilling and completion activities and incurred an increase in the change in accrued oil and gas development costs of $4.7 million, for a total of $5.6 million of capital costs, while compared to the prior period, where we paid $17.0 million in cash for drilling and completion activities and incurred a decrease in the change in accrued oil and gas development costs of $10.5 million for a total of $6.5 million of capital costs. Taken together, there was a net decrease of $0.9 million in capital costs incurred in the current period, compared to the prior period.
Current wording
Cash flows used in investing activities. Net cash used in investing activities decreased by $13.0 million for the current year’s period, when compared to the prior year’s period, primarily due to the timing of cash payment amounts versus accrual amounts for capital spending relating to our drilling and completion activities. In the current period, we paid $12.3 million in cash for drilling and completion activities and incurred a decrease in the change in accrued oil and gas development costs of $5.1 million, for a total of $7.2 million of capital costs, while compared to the prior period, where we paid $25.3 million in cash for drilling and completion activities and incurred a decrease in the change in accrued oil and gas development costs of $13.0 million for a total of $12.3 million of capital costs. Taken together, there was a net decrease of $5.1 million in capital costs incurred in the current period, compared to the prior period.
Previous wording
We have included EBITDA and Adjusted EBITDA in this Report as supplements to generally accepted accounting principles in the United States of America (“GAAP”) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. “EBITDA” represents net income before interest, taxes, depreciation and amortization. “Adjusted EBITDA” represents EBITDA, less share-based compensation and gain (loss) on disposal of fixed assets. Adjusted EBITDA excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than PEDEVCO Corp. does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with …
Excerpt shortened here; the source contains the full paragraph.
Current wording
We have included EBITDA and Adjusted EBITDA in this Report as supplements to generally accepted accounting principles in the United States of America (“GAAP”) measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. “EBITDA” represents net income before interest, taxes, depreciation and amortization. “Adjusted EBITDA” represents EBITDA, less share-based compensation and gain on sale of fixed assets. Adjusted EBITDA excludes certain items that we believe affect the comparability of operating results and can exclude items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than PEDEVCO Corp. does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most di…
Excerpt shortened here; the source contains the full paragraph.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
The following table sets forth the operating results and production data for the periods indicated:
Current report — wording carried from elsewhere
Operating Expenses and Other Income (Expense)
Current report — wording carried from elsewhere
The following table summarizes our production costs and operating expenses for the periods indicated (in thousands):
Current report — wording carried from elsewhere
*Includes severance, ad valorem taxes, assessment and marketing costs.
Current report — wording carried from elsewhere
*Share-Based Compensation.*Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, decreased nominally due to the forfeiture of certain employee stock-based options due to certain voluntary employee terminations. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Current report — wording carried from elsewhere
Interest Income and Other (Expense) Income. Includes interest earned from our interest-bearing cash accounts, for which interest rates have increased significantly in the current period, compared to the prior period. Other expense in the current period primarily relates to the subsequent disposition of a cash escrow bank balance related to the sale of our wholly-owned subsidiary EOR Operating Company. Other income in the prior period is primarily related to the sale of used pipe.