PEDEVCO CORP
For the period ended Mar 31, 2025. Filed May 15, 2025.
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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.
Mar 31, 2025 · Filed May 15, 2025
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 2024-09-30; filed 2024-11-14.
0001654954-24-014468
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001654954-25-005762
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 87 previous paragraphs and 74 current paragraphs.
44 unchanged; 22 reworded; 8 added; 14 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 20 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 (8)
Current report
Participations Agreements Related to D-J Basin Assets
Current report
On August 21, 2024, the Company, through PRH, entered into a five-year Participation Agreement with a large private equity-backed D-J Basin exploration and production company with extensive operational experience (“Joint Development Party”), whereby the Joint Development Party assigned to PRH a 30% interest in approximately 7,607 net acres of existing oil and gas leases and PRH assigned to the Joint Development Party a 70% interest in approximately 3,166 net acres of oil and gas leases, all located within the SW Pony Prospect in the D-J Basin in Weld County, Colorado. Additionally, to facilitate joint development of the SW Pony Prospect, the parties agreed to an approximately 16,900 gross acre Area of Mutual Interest wherein the Joint Development Party will transfer 30% of future interests acquired by the Joint Development Party in leaseholds to PRH, and PRH will transfer 70% of future interests acquired by PRH in leaseholds to the Joint Development Party, in each case at an acquisition cost proportionate to their respective interests. The assigned interests will be subject to an overriding royalty, such that the assigning party shall deliver to the other party leasehold interests with an 80% net revenue interest, and the parties agreed that the Joint Development Party will be the operator of the combined leaseholds. The Participation Agreement specifically addresses the Harlequin Wells, which are existing wells within the SW Pony Prospect, whereby PRH acquired a 30% undivided interest in six Harlequin Wells as part of the leasehold assignment. The Company correspondingly paid $8.6 million in capital costs related to these wells.
Current report
In February 2025, the Company entered into a joint development agreement (“Agreement”) with a large, Denver, Colorado-based private equity-backed D-J Basin E&P Company with extensive operational experience (“Operator”), pursuant to which the parties agreed to jointly participate in the expansion and development of the Company’s Roth and Amber DSUs located in Weld County, Colorado, with the Operator paying to the Company $1.7 million, the Company agreeing to amend the Company’s existing Roth and Amber DSUs to increase each to 1,600 acres and transferring operatorship of the DSUs to the Operator, and the parties agreeing to jointly participate in the development of the Roth and Amber DSUs.
Current report
*Depreciation, Depletion, Amortization and Accretion.*The $0.1 million decrease was primarily the result of an increase in our 2025 depletable reserve base relative to the production increase noted above.
Current report
Impairment of Oil and Gas Properties. The Company recorded an impairment of oil and gas properties of $0.2 million related to undeveloped leases representing 232 net acres in the D-J Basin that it allowed to expire or currently have no plans to drill prior to expiration, in the current period. There was no impairment in the prior period.
Current report
The Company has $8.0 million of availability under a December 20, 2024, Sales Agreement (the “Sales Agreement”), entered into with Roth Capital Partners, LLC (the “Lead Agent”) and A.G.P./Alliance Global Partners (“AGP”, and collectively with the Lead Agent, the “Agents”), pursuant to which the Company may sell securities from time to time in an “at the market offering” (the “ATM Offering”). The Company will pay the Lead Agent a commission of 3.0% of the gross sales price of any shares sold under the Sales Agreement. The Company also agreed to reimburse the Agents for their reasonable and documented out-of-pocket expenses in an amount not to exceed $75,000, in connection with entering into the Sales Agreement and for the Agents’ reasonable and documented out-of-pocket expenses related to quarterly maintenance of the Sales Agreement on a quarterly basis in an amount not to exceed $5,000. The Company has not sold any securities under the ATM Offering as of the date of this report.
Current report
**Asset Retirement Obligations.**If a reasonable estimate of the fair value of an obligation to perform site reclamation, dismantle facilities or plug and abandon wells can be made, the Company will record a liability (an asset retirement obligation or “ARO”) on its consolidated balance sheet and capitalize the present value of the asset retirement cost in oil and gas properties in the period in which the retirement obligation is incurred. In general, the amount of an ARO and the costs capitalized will be equal to the estimated future cost to satisfy the abandonment obligation assuming the normal operation of the asset, using current prices that are escalated by an assumed inflation factor up to the estimated settlement date, which is then discounted back to the date that the abandonment obligation was incurred using an assumed cost of funds for the Company. After recording these amounts, the ARO will be accreted to its future estimated value using the same assumed cost of funds and the capitalized costs are depreciated on a unit-of-production basis over the estimated proved developed reserves. Both the accretion and the depreciation will be included in depreciation, depletion and amortization expense on our consolidated statements of operations.
Current report
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure about specified categories of expenses included in relevant expense captions presented on the income statement. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively or retrospectively. The Company does not expect the standard to have a material effect on its consolidated financial statements and has begun evaluating disclosure presentation alternatives.
Removed paragraphs (14)
Previous report
We also are committed to developing and monitoring environmental, social and governance (“ESG”) initiatives and the Board of Directors plans to evaluate the potential adoption of such initiatives from time to time, provided that no definitive ESG plans have been adopted to date.
Previous report
(1) Assumes 6 Mcf of natural gas equivalents to 1 barrel of oil.
Previous report
*Depreciation, Depletion, Amortization and Accretion.*The $0.1 million increase was primarily the result of higher crude oil 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.
Previous report
Gain on Sale of Oil and Gas Properties. The Company sold leasehold rights to 320 net acres located in the D-J Basin for net cash proceeds of $0.7 million and recognized a gain on sale of oil and gas properties of $0.7 million during the nine months ended September 30, 2024. We had no sales of oil and gas properties during the nine months ended September 30, 2023.
Previous report
Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023
Previous report
We reported net income for the nine-month period ended September 30, 2024 of $6.4 million, or $0.07 per share, compared to net income for the nine-month period ended September 30, 2023 of $4.3 million or $0.05 per share. The increase in net income of $2.1 million when comparing the current period to the prior year’s period was primarily due to a $4.9 million increase in revenues coupled with a $0.7 million gain on sale of oil and gas properties, offset by a $3.5 million increase in total operating expenses (each discussed in more detail below).
Previous report
Net Revenues
Previous report
(1) Assumes 6 Mcf of natural gas equivalents to 1 barrel of oil.
Previous report
Total crude oil, natural gas and NGL revenues for the nine-month period ended September 30, 2024, increased $4.9 million, or 21%, to $29.0 million, compared to $24.1 million for the same period a year ago, due to a favorable price variance of $1.1 million, coupled with a favorable volume variance of $3.8 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. 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. We also recognized additional production from our participation in another six wells in the D-J Basin which production began in the latter part of Q2 2024.
Previous report
Operating Expenses and Other Income
Previous report
*Depreciation, Depletion, Amortization and Accretion.*The $2.4 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.
Previous report
Gain on Sale of Oil and Gas Properties. The Company sold leasehold rights to 320 net acres located in the D-J Basin for net cash proceeds of $0.7 million and recognized a gain on sale of oil and gas properties of $0.7 million during the nine months ended September 30, 2024. We had no sales of oil and gas properties during the nine months ended September 30, 2023.
Previous report
Interest Income and Other (Expense) Income. Includes interest earned from our interest-bearing cash accounts, for which interest rates have remained relatively flat in the current period, compared to the prior 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. Other income in the prior period is primarily related to the sale of used pipe.
Previous report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). The amendments in this update expand segment disclosure requirements, including new segment disclosure requirements for entities with a single reportable segment among other disclosure requirements. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements.
Reworded paragraphs (22)
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 and nine months ended September 30, 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 months ended March 31, 2025, above.
Previous wording
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. The Company is subject to the informational requirements of the Exchange Act and files or furnishes reports, proxy statements and other information with the SEC. Such reports and other information filed by the Company with the SEC are available free of charge at our website (www.pedevco.com) under “Investors” – “SEC Filings”, when such reports are available on the SEC’s website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC atwww.sec.gov. The Company periodically provides other information for investors on its corporate website, www.pedevco.com. This includes press releases and other information about financial performance, information on corporate governance and details related to the Company’s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
Current wording
The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. The Company is subject to the informational requirements of the Exchange Act and files or furnishes reports, proxy statements and other information with the SEC. Such reports and other information filed by the Company with the SEC are available free of charge at our website (www.pedevco.com) under “Investors” – “SEC Filings”, when such reports are available on the SEC’s website. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The Company periodically provides other information for investors on its corporate website, www.pedevco.com. This includes press releases and other information about financial performance, information on corporate governance and details related to the Company’s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
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 September 30, 2024, we held approximately 14,552 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 September 30, 2024, we held approximately 19,453 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 September 30, 2024, we held interests in 300 gross and 298.5 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 120 gross (27.8 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, 85 gross (11.6 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 March 31, 2025, we held approximately 14,105 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, 2025, we held approximately 18,572 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, 2025, we held interests in 35 gross (33.5 net) wells in our Permian Basin Asset, of which 28 gross (26.5 net) wells were active producers, five gross (five net) wells were inactive, and two gross (two net) wells were active salt water disposal wells (“SWD’s”), all of which were held by PEDCO and operated by RAZO, and interests in 82 gross (21.9 net) wells in our D-J Basin Asset held by PRH, all of which 17 gross (15.4 net) wells were operated by Red Hawk and then-producing, 48 gross (6.5 net) wells were non-operated, and 17 wells had an after-payout interest. On April 3, 2025, and effective January 1, 2025, in order to reduce plugging and abandonment liabilities and recurring operational expenses, the Company sold all of its legacy 17 gross (15.4 net) operated wells in its D-J Basin Asset, with the Company retaining ownership in all its existing leasehold, which legacy wells no longer provided meaningful oil and gas production to the Company.
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 properties and 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 $21 million to $23 million. This estimate includes a range of $19 million to $22 million for drilling and completion costs on our Permian Basin and D-J Basin Assets (of which we have incurred approximately $16.4 million through September 30, 2024) and approximately $1.5 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 $1.2 million through September 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 $0.5 million for opportunistic leasing acquisitions through September 30, 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 D-J Basin strategy is to participate in projects we deem highly economic on an operated or non-operated basis as our acreage position does not always allow for us to serve as operator in the D-J Basin. Our net capital expenditures for 2025 are estimated at the time of this filing to range between $27 million to $33 million. This estimate includes a range of $24.5 million to $30.5 million for drilling and completion costs on our Permian Basin and D-J Basin Assets (of which we have incurred approximately $5.7 million through March 31, 2025) and approximately $2.5 million in estimated capital expenditures for electronic 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, 2025) . We anticipate that approximately 70% to 75% of our expected capital expenditures for 2025 will be allocated to development in the D-J Basin under our February 2025 joint development agreement entered into with a large private equity-backed D-J Basin operator and our Participation Agreement and Area of Mutual Interest (“AMI”) entered into in August 2024 with a private operator, each discussed below. These estimates do 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.
Previous wording
We plan to continue to evaluate D-J Basin well proposals as received from third party operators and participate in those we deem most economic and prospective. If new proposals are received that meet our economic thresholds and require material capital expenditures, we have flexibility to move capital from our Permian Asset to our D-J Basin Asset, or vice versa, as our Permian Asset is approximately 100% operated and held by production (“HBP”), allowing for flexibility of timing on development. Our 2024 development program is based upon our current outlook for the year and is subject to revision, if and as necessary, to react to market conditions, product pricing, contractor availability, requisite permitting, capital availability, partner non-consents, capital allocation changes between assets, acquisitions, divestitures and other adjustments determined by the Company in the best interest of its shareholders while prioritizing our financial strength and liquidity.
Current wording
We plan to continue to evaluate D-J Basin well proposals as received from third party operators and participate in those we deem most economic and prospective. If new proposals are received that meet our economic thresholds and require material capital expenditures, we have flexibility to move capital from our Permian Asset to our D-J Basin Asset, or vice versa, as our Permian Asset is 100% operated and nearly all held by production (“HBP”), allowing for flexibility of timing on development. Our 2025 development program is based upon our current outlook for the year and is subject to revision, if and as necessary, to react to market conditions, product pricing, contractor availability, requisite permitting, capital availability, partner non-consents, capital allocation changes between assets, acquisitions, divestitures and other adjustments determined by the Company in the best interest of its shareholders 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 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) funding available through our RBL, and (iv) 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/or other qualified investors. In addition, we may seek additional funding through asset sales and farm-out arrangements to fund potential acquisitions during the remainder of 2024 and into 2025.
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 2025 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 former CEO and recently appointed Executive Chairman of the Company's Board of Directors, which funding Dr. Kukes is under no obligation to provide, (iv) public or private debt or equity financings, including up to $8.0 million in securities which we may sell in the future in “at the market offerings”, pursuant to a Sales Agreement entered into on December 20, 2024, with Roth Capital Partners, LLC (the “Lead Agent”), and A.G.P./Alliance Global Partners (“AGP” and, together with the Lead Agent, the “Agents”)(discussed in greater detail below under “Liquidity and Capital Resources—Financing” (under which we have sold no shares to date), and (v) funding through credit or loan facilities, including under the Company’s reserve-based lending facility (“RBL”) with Citibank, N.A., as administrative agent, which provides for an initial borrowing base of $20 million and an aggregate maximum revolving credit amount of $250 million (of which none has been drawn down by the Company to date), as discussed in greater detail below under “Liquidity and Capital Resources”. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2025.
Previous wording
The following discussion and analysis of the results of operations for the three and nine-month periods ended September 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.
Current wording
The following discussion and analysis of the results of operations for the three-month periods ended March 31, 2025, and 2024, 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 September 30, 2024, of $2.9 million, or $0.03 per common share, compared to net income for the three-month period ended September 30, 2023 of $0.9 million or $0.01 per share. The increase in net income of $2.0 million when comparing the current period to the prior year’s period was primarily due to a $1.7 million increase in revenues coupled with a $0.7 million gain on sale of oil and gas properties, offset by a $0.4 million increase in total operating expenses (each discussed in more detail below).
Current wording
We reported net income for the three-month period ended March 31, 2025, of $0.1 million, or $0.00 per common share, compared to net income for the three-month period ended March 31, 2024 of $0.8 million or $0.01 per share. The decrease in net income of $0.7 million, when comparing the current period to the prior year’s period, was primarily due to a $1.1 million increase in total operating expense (which includes an impairment of oil and gas properties of $0.2 million), offset by an increase of revenues of $0.6 million and other income (each discussed in more detail below) combined with income tax expense of $76,000 (seeNote 13 – Income Taxes, in the notes to the consolidated financial statements above under “Part I – Financial Information—Item 1. Financial Statements”).
Previous wording
Total crude oil, natural gas and NGL revenues for the three-month period ended September 30, 2024, increased $1.7 million, or 23%, to $9.0 million, compared to $7.3 million for the same period a year ago, due to a favorable volume variance of $1.7 million. There was a negligible price variance over the periods. The increase in overall 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. We also recognized additional production from our participating in another six wells in the D-J Basin which production began in latter part of Q3 2024.
Current wording
Total crude oil, natural gas and NGL revenues for the three-month period ended March 31, 2025, increased $0.6 million or 8%, for the same period a year ago due to a favorable volume variance of $0.7 million, offset by an unfavorable price variance of $0.1 million over the period. The increase in overall production volume is primarily related to our participating in six non-operated wells in the D-J Basin which production began in the latter part of Q3 2024 and another five non-operated wells in the D-J Basin which production began in late Q4 2024.
Previous wording
* Includes severance, ad valorem taxes, workover adjustments and assessment and marketing costs.
Current wording
*Includes severance, ad valorem taxes and marketing costs.
Previous wording
Lease Operating Expenses.The increase of $0.3 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 wording
*Lease Operating Expenses.*The increase of $0.9 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 non-operated wells in the D-J Basin, as well as production from our completed wells in 2024.
Previous wording
*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 wording
*General and Administrative Expenses (excluding share-based compensation).*The $0.1 million increase was primarily the result of additional payroll and professional fees.
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 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 wording
*Share-Based Compensation.*Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, remained unchanged when comparing periods. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Previous wording
Interest Income. Includes interest earned from our interest-bearing cash accounts, for which interest rates have remained relatively flat in the current period, compared to the prior period and interest on our note receivable. There was no other income in the current period compared to a nominal amount in the prior period.
Current wording
Interest Income and Other Income. Includes interest earned from our interest-bearing cash accounts and interest on our note receivable, nominally decreased due to additional cash usage for our operations in the current period compared to the prior period. There was a nominal amount and decrease in other income when comparing periods.
Previous 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.
Current wording
Gain on Sale of Fixed Asset. Relates to the sale of a vehicle and the subsequent purchase of a replacement vehicle in the prior period.
Previous wording
The primary sources of cash for the Company during the nine-month period ended September 30, 2024, were from $29.0 million in sales of crude oil and natural gas and $0.8 million from a sale of oil and gas properties. 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 three-month period ended March 31, 2025 were from $8.7 million in sales of crude oil, natural gas and NGLs. The primary uses of cash were funds used for drilling, completion and operating costs.
Previous wording
At September 30, 2024, the Company’s total current assets of $11.0 million exceeded its total current liabilities of $5.2 million, resulting in a working capital surplus of $5.8 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 $0.1 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).
Current wording
At March 31, 2025, the Company’s total current assets of $23.6 million exceeded its total current liabilities of $16.9 million, resulting in a working capital surplus of $6.7 million, while at December 31, 2024, the Company’s total current assets of $13.2 million exceeded its total current liabilities of $6.9 million, resulting in a working capital surplus of $6.3 million. The $0.4 million increase in our working capital surplus is primarily related to a proportional increase in production and sales, offset by a proportional increase in payables related to our current capital drilling program, when comparing the current period to the prior period (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 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) funding available through our RBL, and (iv) 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/or other qualified investors. In addition, we may seek additional funding through asset sales and farm-out arrangements to fund potential acquisitions during the remainder of 2024 and into 2025.
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 remaining portion of our 2025 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from our operations, (ii) existing cash on hand, (iii) borrowing under our reserve-based lending facility with Citibank, N.A., as administrative agent, which provides for an initial borrowing base of $20 million and an aggregate maximum revolving credit amount of $250 million (of which none has been drawn down by the Company to date), as discussed below, (iv) equity infusions or loans (which may be convertible) made available from Dr. Simon G. Kukes, our former CEO and recently appointed Executive Chairman of the Company's Board of Directors, which funding Dr. Kukes is under no obligation to provide, (v) public or private debt or equity financings, pursuant to the ATM Offering noted above, and (vi) funding through other credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and partnerships to fund potential acquisitions during the remainder of 2025.
Previous wording
On September 11, 2024, we successfully closed a new $250 million reserve-based lending facility (“RBL” or “Facility”) with Citibank, N.A., as administrative agent, and the lenders (including Citibank, N.A.) from time to time party thereto. The Facility has a maturity of four years and provides for an initial borrowing base of $20.0 million and an aggregate maximum revolving credit amount of $250 million. The Company has not drawn down any borrowings under the Facility as of the date of this Report.
Current wording
On September 11, 2024, the Company entered into a new $250 million reserve-based lending facility (the “Facility”) with Citibank, N.A., as administrative agent, and the lenders (including Citibank, N.A.) from time to time a party thereto. The Facility has a maturity of four years and provides for an initial borrowing base of $20.0 million and an aggregate maximum revolving credit amount of $250 million. The Company has not drawn down any borrowings under the Facility as of the date of this report. The RBL includes customary representations and warranties, and affirmative and negative covenants of the Company for a facility of that size and type, including prohibiting the Loan Parties from creating any indebtedness without the consent of the lenders, subject to certain exceptions, and requiring the Company to have a net leverage ratio (the ratio of (a) total net debt to (b) EBITDAX) of no less than 1.0 to 1.0 and a current ratio (the ratio of (i) consolidated current assets to (ii) consolidated current liabilities) of no less than 1.0 to 1.0. EBITDAX is defined as Earnings Before Interest, Taxes, Depreciation (or Depletion), Amortization, and Exploration Expense. Amounts, if any, that we borrow under the RBL, are due on September 11, 2028.
Previous wording
**Cash flows provided by operating activities.**Net cash provided by operating activities decreased by $2.9 million for the current year’s period, when compared to the prior year’s period, primarily due to an increase in net income of $2.1 million and a $2.4 million increase in depreciation, depletion and amortization (predominantly from production increases noted above), offset by a $0.7 million gain on sale of oil and gas properties and a fixed asset and a $6.7 million net decrease to our other components of working capital (predominantly from an increase in accruals and payables from our recent drilling and completion activity).
Current wording
**Cash flows provided by operating activities.**Net cash used in operating activities increased by $10.2 million for the current year’s period, when compared to the prior year’s period, primarily due to a decrease in net income of $0.6 million, coupled with a $0.1 million decrease in depreciation, depletion and amortization, offset by a $0.2 million impairment of oil and gas properties, and a $10.7 million net increase to our other components of working capital (predominantly from our drilling and completion activities).
Previous wording
Cash flows used in investing activities. Net cash used in investing activities decreased by $5.6 million for the current year’s period, when compared to the prior year’s period, primarily due to $4.8 million less in capital spending, coupled with $0.8 million in proceeds from the sale of oil and gas properties in the current period.
Current wording
Cash flows provided by (used in) investing activities. Net cash provided by investing activities increased by $1.6 million for the current year’s period, when compared to the prior year’s period, primarily due to cash received from the sale of oil and gas properties, offset by increased cash outlays from our capital spending relating to our drilling and completion activities.
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, gain on sale of oil and gas properties 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 …
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, impairment of oil and gas properties 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 me…
Excerpt shortened here; the source contains the full paragraph.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
The following table sets forth the operating results and production data for the periods indicated:
Previous report — wording carried elsewhere
The following table summarizes our production costs and operating expenses for the periods indicated (in thousands):
Previous report — wording carried elsewhere
* Includes severance, ad valorem taxes, workover adjustments and assessment and marketing costs.
Previous report — wording carried elsewhere
Lease Operating Expenses. The increase of $1.1 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.
Previous report — wording carried elsewhere
*General and Administrative Expenses (excluding share-based compensation).*The $0.2 million increase was primarily the result of additional payroll and software licensing fees.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
On September 11, 2024, we entered into a new $250 million reserve-based lending facility (the “RBL” or “Facility”) with Citibank, N.A., as administrative agent, and the lenders (including Citibank, N.A.) from time to time a party thereto. The Facility has a maturity of four years and provides for an initial borrowing base of $20.0 million and an aggregate maximum revolving credit amount of $250 million. The Company has not drawn down any borrowings under the Facility as of the date of this Report.