PED

PEDEVCO Corp. 10-K Summary (Fiscal Year Ended December 31, 2025)

Business Context and Reporting Period

PEDEVCO Corp. (PED) is an independent oil and natural gas exploration and production company focused on legacy assets in the Denver-Julesberg (D-J) Basin, Powder River Basin (PRB), and Permian Basin. The reporting period covers the fiscal year ended December 31, 2025. A defining event of the period was the October 31, 2025, closing of mergers with North Peak Oil & Gas, LLC (NPOG) and Century Oil and Gas Sub-Holdings, LLC (COG), significantly expanding the Company's acreage and production footprint. Subsequent to year-end, the Company effected a 1-for-20 reverse stock split on March 13, 2026, and converted Series A Preferred Stock to common stock on February 27, 2026.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenues increased 16% to $45.8 million, driven by a 36% increase in production volumes following the Mergers, partially offset by a 19% decrease in realized crude oil prices ($59.78/Bbl vs. $73.50/Bbl).
• Net Loss: The Company reported a net loss of $10.4 million compared to net income of $12.3 million in 2024. This reversal was primarily due to $7.5 million in merger-related expenses, $1.4 million in interest expense, $1.4 million in credit loss on a note receivable, and an $8.1 million income tax expense (valuation allowance), offset by a $6.3 million gain on derivative contracts.
• Capital Structure: The Company entered into an Amended and Restated Credit Agreement with a $120 million initial borrowing base and drew $87 million at closing, plus subsequent draws totaling $98 million outstanding. A $35 million PIPE financing was also completed.
• Reserves: Proved reserves increased by 14.0 MBoe (77%) to 32.1 MBoe, primarily due to the acquisition of properties in the D-J and PRB.

Guidance, Outlook, and Risks

• 2026 Capital Program: Net capital expenditures are estimated between $16 million and $20 million. Approximately 90% is allocated to the D-J Basin for drilling and optimization projects (e.g., pump conversions, recompletions) to lower operating expenses.
• Liquidity: Management expects sufficient cash to meet needs for the next 12 months via operating cash flow, existing cash, the credit facility, and an "at-the-market" (ATM) offering program.
• Internal Controls: The Company identified material weaknesses in internal controls over financial reporting related to depletion calculations and tax provisions, necessitating restatements of 2023 and 2024 financial statements. Remediation plans are in place.
• Regulatory Risks: Significant risks include potential lease cancellations in the PRB due to ongoing Ninth Circuit litigation regarding BLM lease sales, and stringent environmental regulations in Colorado (ECMC) and New Mexico (OCD) regarding plugging and abandonment obligations.
• Derivatives: The Company has hedged approximately 75% of its crude oil production through November 2027 and 50% thereafter, subject to credit facility covenants.

Investor Verification Checklist

• Restatement Impact: Verify the specific adjustments made to the 2023 and 2024 financial statements regarding depletion and tax provisions to understand the historical baseline.
• Internal Control Remediation: Monitor the Company's progress in remediating the identified material weaknesses in internal controls over financial reporting.
• BLM Litigation Status: Track the outcome of the Ninth Circuit Court of Appeals ruling regarding BLM leases, as cancellation could impact ~84,000 net acres in the PRB (though lease bonuses may be refunded).
• Debt Covenants: Confirm compliance with the A&R Credit Agreement covenants, specifically the current ratio (min 1.0:1.0) and leverage ratio (max 3.0:1.0), given the recent working capital deficit.
• Reverse Stock Split: Note that all share and per-share data in the filing have been retroactively adjusted for the 1-for-20 reverse stock split effective March 13, 2026.