Financial Performance - PEDEVCO reported a net loss of $0.3 million for Q3 2025, compared to a net income of $2.9 million in Q3 2024, marking a decrease of $3.2 million[5]. - Q3 2025 revenue was $7.0 million, down $2.1 million or 23% from $9.1 million in Q3 2024[11]. - Adjusted EBITDA decreased by 24% to $4.3 million in Q3 2025, compared to $5.7 million in Q3 2024[8]. - The company reported a net loss of $1,834,000 for the three months ended September 30, 2025, compared to a net income of $735,000 for the same period in 2024[33]. - Net loss for the nine months ended September 30, 2025, was $1,861,000 compared to a net income of $6,369,000 for the same period in 2024[36]. - Operating income for the current period was a loss of $834,000, while the previous period reported an operating income of $2,831,000[34]. - EBITDA for the nine months ended September 30, 2025, was $8,876,000, down from $17,151,000 in 2024[38]. - Total other income for the current period was $345,000, compared to $489,000 in the previous period[34]. Production and Sales - Average production for Q3 2025 was 1,471 BOEPD, a decrease of 13% from 1,698 BOEPD in Q3 2024[5]. - The company’s current production stands at over 6,500 BOEPD, with over 88% being oil and liquids[22]. - Oil and gas sales for the three months ended September 30, 2025, were $6,961,000, a decrease of 23.1% compared to $9,050,000 for the same period in 2024[33]. - The average realized sales price for crude oil in Q3 2025 was $63.76 per barrel, a decrease of 11% from $57.97 per BOE in Q3 2024[10]. Expenses and Liabilities - Total operating expenses for Q3 2025 were $7.8 million, an increase of 12% from Q3 2024[5]. - Total operating expenses for the nine months ended September 30, 2025, were $25,240,000, an increase of 6.8% from $23,638,000 for the same period in 2024[33]. - Current liabilities rose to $14,636,000 as of September 30, 2025, from $6,908,000 as of December 31, 2024, indicating an increase of 112.5%[31]. - Share-based compensation expense increased to $1,486,000 for the nine months ended September 30, 2025, from $1,401,000 in 2024[36]. Cash and Assets - Cash and cash equivalents as of September 30, 2025, were $13.7 million, an increase from $6.6 million as of December 31, 2024[8]. - Cash and cash equivalents increased to $10,922,000 as of September 30, 2025, from $4,010,000 as of December 31, 2024, representing a significant increase of 172.5%[31]. - Cash and restricted cash at the end of the period was $13,669,000, compared to $7,164,000 at the end of the previous year[37]. - As of September 30, 2025, total assets increased to $135,888,000 from $128,349,000 as of December 31, 2024, reflecting a growth of approximately 5.4%[30]. Strategic Initiatives - The company participated in the drilling of eight non-operated wells in the D-J Basin, with first production expected in Q4 2025[20]. - On October 31, 2025, PEDEVCO announced a transformative merger with portfolio companies controlled by Juniper Capital Advisors, significantly increasing its production capacity and acreage[22]. - The company plans to integrate Juniper assets into its operations following the recent transaction, which includes a $35 million private placement of preferred stock[29]. - The company anticipates future production and cash flow improvements, contingent on oil and natural gas price stability and operational efficiencies[27]. Financial Metrics - PEDEVCO emphasizes the importance of EBITDA and Adjusted EBITDA as financial metrics, although they are not recognized under GAAP, to provide additional insights into operational performance[26]. - The company experienced an impairment of oil and gas properties amounting to $907,000 in the current period, with no impairment reported in the previous period[36]. - The company reported a gain on the sale of oil and gas properties of $2,923,000 for the current period, compared to $1,115,000 in the previous period[36]. - The weighted average number of common shares outstanding for the current period was 92,161,635, compared to 89,428,310 in the previous period[34].

HOUSTON, TX / ACCESS Newswire / November 17, 2025 / PEDEVCO Corp. (NYSE American:PED) ("PEDEVCO" or the "Company"), an energy company engaged in the acquisition and development of strategic, high growth energy projects in the United States, with a focus on the Rocky Mountain region, announced its financial results for the three months ended September 30, 2025 and provided an operations update, which financial results do not reflect the effect of the Company's October 31, 2025 transformative merger with cert ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 001-35922 PEDEVCO Corp. (Exact name of registrant as specified in its charter) | Texas | 22-3755993 | | --- | - ...

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Summary of PEDEVCO's Investor Conference Call Company and Industry - **Company**: PEDEVCO Corp (NYSEAM: PED) - **Industry**: Oil and Gas, specifically focused on the Rockies region including the DJ Basin and Powder River Basin Key Points and Arguments 1. **Merger Announcement**: PEDEVCO announced a transformative merger with Juniper Capital's Rockies portfolio, enhancing its position as a premier operator in the Rockies region [4][5][21] 2. **Increased Scale and Diversification**: The merger significantly increases PEDEVCO's scale and diversification, controlling over 328,000 net acres, with approximately 95% located in the Rockies [6][13] 3. **Production and Cash Flow**: The combined company is expected to generate substantial free cash flow, with current production exceeding 6,500 barrels of oil equivalent per day and projected EBITDA contributions in 2025 and beyond [5][21] 4. **Operational Synergies**: The merger allows for operational synergies, optimizing drilling and services, and leveraging PEDEVCO's disciplined development approach [5][22] 5. **Ownership Structure**: Juniper affiliates will own 53% of the combined company post-merger, ensuring alignment of interests and commitment to growth [7][22] 6. **Financial Position**: PEDEVCO has reinforced its balance sheet, increasing its borrowing base from $20 million to $120 million and drawing $87 million to fund the merger [9][18] 7. **Management Team**: The combined management team brings extensive operational and financial expertise, enhancing PEDEVCO's capacity for growth [11][12] 8. **Future Development Plans**: The company plans to focus on the DJ Basin for immediate development while considering the Powder River Basin for future growth opportunities [15][46] 9. **Consolidation Strategy**: PEDEVCO aims to consolidate small operators in the Rockies region, evaluating potential acquisitions for strategic fit and cash flow accretion [17][30] 10. **Long-term Growth Strategy**: The company is committed to a disciplined return-focused strategy, maximizing margins while maintaining a lean cost structure [20][23] Other Important Content - **Production Metrics**: The last twelve months combined production was approximately 8,500 barrels of oil equivalent per day, generating $96 million in EBITDA [6][21] - **Asset Quality**: The combined portfolio includes hundreds of delineated locations across multiple stacked formations, providing over a decade of low-risk drilling inventory [23][24] - **Market Positioning**: The merger positions PEDEVCO to capitalize on the fragmented operator landscape in the Rockies, aiming to become a leading publicly traded oil and gas company [17][22] - **Liquidity and Debt Management**: The company maintains a conservative credit profile with approximately $77 million in net debt and $43 million in liquidity available for future developments [18][19] This summary encapsulates the key aspects of PEDEVCO's investor conference call, highlighting the strategic significance of the merger and the company's future direction in the oil and gas industry.

Transaction Overview - PEDEVCO and Juniper have merged, creating a Rockies-focused company poised for growth [11, 26] - Juniper and its affiliates will own approximately 53% of the pro forma shares after conversion, while existing PEDEVCO shareholders will own about 47% [15] - The merger is funded via an expanded $250 million reserve-based lending (RBL) facility, with an initial $120 million borrowing base [15] Pro Forma Company Highlights - The combined company boasts over 328,000 net acres, primarily in the DJ Basin and Powder River Basin [14] - Second quarter of 2025 net production reached 7,404 Boepd, a roughly 388% increase compared to PEDEVCO alone [13] - Liquids account for approximately 88% of the pro forma company's production [13] - Last Twelve Months (LTM) EBITDA is approximately $96 million [13] Financial Position - Pro forma net leverage is approximately 0.8x LTM EBITDA [14] - The company has $87 million in debt and $43 million in liquidity [47] - $35 million in new equity was provided by existing and new members of PEDEVCO management and Juniper [15]

Core Viewpoint - PEDEVCO Corp. has announced a merger with portfolio companies controlled by Juniper Capital Advisors, which will enhance its oil-weighted producing assets and leasehold interests in key basins [1] Group 1: Transaction Details - The merger involves portfolio companies that own substantial oil-weighted producing assets [1] - The transaction includes significant leasehold interests with future drilling inventory located in the Northern DJ and Powder River Basins [1]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) PEDEVCO reported a net loss of $1.7 million in Q2 2025, a significant decrease from a net income of $2.7 million in Q2 2024, driven by a credit loss write-off, reduced revenue, and impairment, partially offset by asset sales and tax benefit Q2 2025 Key Financial and Operational Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------- | :------ | :------ | :----------- | | Net (Loss) Income | ($1.7M) | $2.7M | -$4.4M | | Basic EPS | ($0.02) | $0.03 | -$0.05 | | Revenue | $7.0M | $11.8M | -$4.8M | | Operating Loss | ($2.2M) | $2.7M | -$4.9M | | Production (BOEPD) | 1,517 | 2,010 | -25% | | Adjusted EBITDA | $3.0M | $7.4M | -58% | - The decrease in net income was primarily due to a **$3.5 million reduction in operating income**, resulting from a full write-off of a note receivable and accrued interest, a **$4.8 million reduction in revenue**, and a **$0.5 million impairment** to oil and gas properties, partially offset by a **$1.0 million gain** on the sale of oil and gas properties and a **$0.5 million income tax benefit**[5](index=5&type=chunk) [Operational Highlights and Outlook](index=1&type=section&id=Operational%20Highlights%20and%20Outlook) Despite Q2 2025 production being hampered by temporary factors, PEDEVCO remains optimistic about future growth with new wells online and active participation in drilling programs, maintaining a strong financial position with over $10 million in cash and zero debt - Received first production from **four recently completed horizontal San Andres wells** in its core Chaveroo Field in the Permian Basin starting in May 2025[7](index=7&type=chunk)[20](index=20&type=chunk) - Participated in the drilling of **18 non-operated wells** in the D-J Basin across three projects, with completions expected in mid-August and early September 2025, and initial production anticipated in early to mid-Q4 2025, with an additional **six non-operated wells** planned for drilling in late Q4 2025[7](index=7&type=chunk)[21](index=21&type=chunk) - The company maintains a strong financial position with over **$10 million of cash** on its balance sheet, **zero debt**, and an untouched **$250 million RBL** in place with Citibank[4](index=4&type=chunk)[7](index=7&type=chunk) - Strategic focus includes disciplined growth, developing the Permian Basin Asset, growing operated and non-operated production in the D-J Basin Asset, controlling lease operating and G&A expenses, and seeking accretive M&A opportunities[4](index=4&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) [Summary of Financial Results](index=6&type=section&id=Summary%20of%20Financial%20Results) PEDEVCO experienced a significant shift from net income to net loss in Q2 2025 compared to Q2 2024, primarily due to a $1.378 million credit loss on a note receivable and a $0.510 million impairment of oil and gas properties, alongside a $4.8 million reduction in oil and gas sales revenue, partially offset by a $1.021 million gain on asset sales and a $0.490 million income tax benefit Summary of Financial Results (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Oil and gas sales | $6,972 | $11,811 | -$4,839 | | Total operating expenses | $8,859 | $9,173 | -$314 | | Gain on sale of oil and gas properties | $1,021 | $0 | +$1,021 | | Note receivable – credit loss | ($1,378) | $0 | -$1,378 | | Operating income (expense) | ($2,244) | $2,638 | -$4,882 | | Income tax benefit | $490 | $0 | +$490 | | Net (loss) income | ($1,676) | $2,681 | -$4,357 | | Basic EPS | ($0.02) | $0.03 | -$0.05 | [Production, Prices and Revenues](index=2&type=section&id=Production%2C%20Prices%20and%20Revenues) Total crude oil, natural gas, and NGL revenues decreased by 41% or $4.8 million in Q2 2025 compared to Q2 2024, driven by both unfavorable price and volume variances, with average realized sales prices declining and production volumes decreasing due to operational issues, natural declines, and asset sales Production and Revenue Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Average Production (BOEPD) | 1,517 | 2,010 | -25% | | Total Production (Boe) | 138,028 | N/A | N/A | | Liquids Production (% of total) | 86% | N/A | N/A | | Average Realized Crude Oil Price ($/bbl) | $61.65 | N/A | N/A | | Average Realized Natural Gas Price ($/Mcf) | $2.70 | N/A | N/A | | Average Realized NGL Price ($/bbl) | $26.24 | N/A | N/A | | Combined Average Realized Sales Price ($/Boe) | $50.51 | $64.61 | -22% | | Total Revenue Decrease | $4.8M | N/A | -41% | - Revenue decrease attributed to an unfavorable price variance of **$2.3 million** and an unfavorable volume variance of **$2.5 million**[11](index=11&type=chunk) - Production volume decreased due to several non-recurring items, including a large non-operated D-J Basin pad being offline, wells shut-in for offset fracs in the Permian, natural declines from Q4 2024 D-J Basin wells, and the sale of **17 operated D-J Basin wells** in April 2025 and **30 non-core non-operated D-J Basin wells** in late 2024[12](index=12&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses in Q2 2025 decreased by $0.3 million compared to Q2 2024, primarily due to lower direct and variable lease operating expenses and reduced depreciation, depletion, amortization, and accretion expenses associated with lower production volumes, partially offset by a $0.5 million impairment of oil and gas properties Total Operating Expenses (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :--------------------- | :--------------------- | :--------------------- | :----------- | | Total operating expenses | $8,859 | $9,173 | -$314 | [Lease Operating Expenses (LOE)](index=2&type=section&id=Lease%20Operating%20Expenses%20(LOE)) LOE decreased by $0.7 million in Q2 2025 to $2.8 million, primarily due to lower direct and variable expenses associated with reduced crude oil, natural gas, and NGL volumes Lease Operating Costs (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------- | :--------------------- | :--------------------- | :----------- | | Lease operating costs | $2,799 | $3,548 | -$749 | - The decrease was primarily due to lower direct and variable lease operating expenses associated with the **lower crude oil, natural gas, and NGL volumes**[13](index=13&type=chunk) [Depreciation, Depletion, Amortization and Accretion (DD&A)](index=2&type=section&id=Depreciation%2C%20Depletion%2C%20Amortization%20and%20Accretion%20(DD%26A)) DD&A expenses decreased by $0.4 million to $3.86 million in Q2 2025, mainly as a result of lower crude oil, natural gas, and NGL volumes DD&A Expenses (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------------------------ | :--------------------- | :--------------------- | :----------- | | Depreciation, depletion, amortization and accretion | $3,857 | $4,242 | -$385 | - The decrease was primarily the result of **lower crude oil, natural gas, and NGL volumes**[14](index=14&type=chunk) [Impairment of Oil and Gas Properties](index=2&type=section&id=Impairment%20of%20Oil%20and%20Gas%20Properties) The company recorded a $0.5 million impairment of oil and gas properties in Q2 2025, related to undeveloped leases in the D-J Basin that were allowed to expire or have no current drilling plans, with no impairment recorded in the prior period Impairment of Oil and Gas Properties (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :--------------------- | :--------------------- | :----------- | | Impairment of oil and gas properties | $510 | $0 | +$510 | - Impairment related to undeveloped leases representing **776 net acres** in the D-J Basin that were allowed to expire or have no plans to drill prior to expiration[15](index=15&type=chunk) [General and Administrative Expenses (G&A)](index=2&type=section&id=General%20and%20Administrative%20Expenses%20(G%26A)) G&A expenses increased by $0.3 million in Q2 2025, driven by additional payroll, audit fees, and software licensing fees, with share-based compensation also seeing a nominal increase Selling, General and Administrative Expense (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------------------------ | :--------------------- | :--------------------- | :----------- | | Selling, general and administrative expense | $1,693 | $1,383 | +$310 | - Increase primarily due to **additional payroll, audit fees, and software licensing fees**[16](index=16&type=chunk) - Share-based compensation increased nominally and is utilized for conserving cash resources for field development activities[16](index=16&type=chunk) [Interest and Other Income/Expense](index=2&type=section&id=Interest%20and%20Other%20Income%2FExpense) Interest income decreased nominally in Q2 2025 to $63,000, primarily due to additional cash usage for operations and no interest recognized on a fully written-off note receivable, while other income in the current period was related to sales tax refunds Interest and Other Income/Expense (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :-------------------- | :--------------------- | :--------------------- | :----------- | | Interest income | $63 | $93 | -$30 | | Other income (expense) | $15 | ($50) | +$65 | - Interest income decreased due to **additional cash usage for operations** and no interest recognized on the fully written-off note receivable[18](index=18&type=chunk) - Other income in the current period is related to **sales tax refunds**[18](index=18&type=chunk) [Working Capital and Liquidity](index=3&type=section&id=Working%20Capital%20and%20Liquidity) PEDEVCO's working capital surplus increased to $7.0 million as of June 30, 2025, from $6.3 million at December 31, 2024, mainly due to a proportional increase in production and sales, partially offset by an increase in payables related to the capital drilling program, maintaining a strong liquidity position with $11.2 million in cash and zero debt Working Capital and Liquidity (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :-------------------------- | :--------------------------- | :-------------------------- | :----- | | Total current assets | $17,591 | $13,215 | +$4,376 | | Total current liabilities | $10,564 | $6,908 | +$3,656 | | Working capital surplus | $7,027 | $6,307 | +$720 | | Cash and cash equivalents | $11,200 | $6,600 | +$4,600 | | Total Debt | $0 | $0 | $0 | - The **$0.7 million increase in working capital surplus** is primarily related to a proportional increase in production and sales, offset by a proportional increase in payables related to the current capital drilling program[19](index=19&type=chunk) [Adjusted EBITDA (Non-GAAP)](index=2&type=section&id=Adjusted%20EBITDA%20(Non-GAAP)) Adjusted EBITDA for Q2 2025 decreased by 58% to $3.0 million from $7.4 million in Q2 2024, reflecting the overall challenging financial performance during the quarter, including the credit loss and lower revenues Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | | :-------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Adjusted EBITDA | $3,032 | $7,385 | -$4,353 | - Adjusted EBITDA is a non-GAAP financial measure, defined as EBITDA before share-based compensation expense, impairment of oil and gas properties, gain on sale of oil and gas properties, gain on sale of fixed assets, and note receivable – credit loss[24](index=24&type=chunk) [Operational Update](index=3&type=section&id=Operational%20Update) [Permian Basin Activities](index=3&type=section&id=Permian%20Basin%20Activities) PEDEVCO successfully brought four new horizontal San Andres wells in its core Chaveroo Field in the Permian Basin online in May 2025, with early production results being satisfactory - Received first production in mid-Q2 from **four new horizontal San Andres wells** drilled and completed in its core Chaveroo Field in the Permian Basin in Q1 2025 and early Q2 2025[7](index=7&type=chunk)[20](index=20&type=chunk) - The Company is pleased with the early production results[20](index=20&type=chunk) [D-J Basin Activities](index=3&type=section&id=D-J%20Basin%20Activities) The company is actively participating in multiple non-operated drilling programs in the D-J Basin, including eight 2.5-mile lateral wells and four other non-operated wells with completions expected in Q3 2025 and initial production in Q4 2025, and six additional non-operated wells planned for late Q4 2025 - Participated in the drilling of **eight 2.5-mile lateral non-operated wells** (~7.5% working interest) with completion expected in mid-August 2025 and initial production in early Q4 2025[7](index=7&type=chunk)[21](index=21&type=chunk) - Participated in the drilling of **three 2.5-mile lateral and one 3-mile U-shaped lateral non-operated wells** (~44% working interest) with completion expected in early September 2025 and initial production in mid-Q4 2025[7](index=7&type=chunk)[21](index=21&type=chunk) - Participated in the drilling of **six 1.5-mile lateral non-operated wells** (~5% working interest) planned for late Q4 2025[7](index=7&type=chunk)[21](index=21&type=chunk) [Additional Information](index=3&type=section&id=Additional%20Information) [About PEDEVCO Corp.](index=3&type=section&id=About%20PEDEVCO%20Corp.) PEDEVCO Corp. is a publicly-traded energy company focused on acquiring and developing strategic, high-growth energy projects in the U.S., with principal assets in the Permian Basin (New Mexico) and D-J Basin (Colorado and Wyoming) - PEDEVCO Corp. (NYSE American: PED) is a publicly-traded energy company[23](index=23&type=chunk) - Engaged in the acquisition and development of strategic, high growth energy projects in the United States[23](index=23&type=chunk) - Principal assets are its Permian Basin Asset (Northwest Shelf of the Permian Basin in eastern New Mexico) and its D-J Basin Asset (Weld and Morgan Counties, Colorado, and Laramie County, Wyoming)[23](index=23&type=chunk) [Use of Non-GAAP Financial Information](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) This section defines EBITDA and Adjusted EBITDA as supplemental non-GAAP measures used to evaluate the company's performance, highlighting their limitations and the need for reconciliation to comparable GAAP measures, with Adjusted EBITDA specifically excluding share-based compensation, impairment, gains on asset sales, and credit losses - EBITDA represents net income before interest, taxes, depreciation and amortization[24](index=24&type=chunk) - Adjusted EBITDA is defined as EBITDA before share-based compensation expense, impairment of oil and gas properties, gain on sale of oil and gas properties, gain on sale of fixed assets, and note receivable – credit loss[24](index=24&type=chunk) - These non-GAAP measures are presented to provide additional useful information to investors due to various noncash items and are frequently used by analysts and investors in the industry, however, they have limitations and should not be viewed as an alternative to GAAP measures[24](index=24&type=chunk)[25](index=25&type=chunk) [Cautionary Statement Regarding Forward Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward%20Looking%20Statements) This section serves as a disclaimer for forward-looking statements made in the press release, emphasizing that actual results may differ materially due to various known and unknown risks and uncertainties, including commodity price volatility, operational risks, regulatory changes, and economic conditions, and the company undertakes no obligation to update these statements - Forward-looking statements are identified by words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms[26](index=26&type=chunk) - Actual results may differ materially due to known and unknown risks and uncertainties, including volatility of oil and natural gas prices, success in discovering/developing reserves, profitability risks, regulatory changes, and general economic conditions[26](index=26&type=chunk) - The company cautions against undue reliance on these statements and undertakes no obligation to update them publicly, except as required by applicable laws[26](index=26&type=chunk)[27](index=27&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows an increase in total assets to $136.8 million as of June 30, 2025, from $133.8 million at December 31, 2024, with current assets increasing due to higher cash and accounts receivable, while total liabilities also increased primarily due to higher accounts payable and revenue payable Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | Change | | :------------------------------------ | :--------------------------- | :-------------------------- | :----- | | Total assets | $136,818 | $133,845 | +$2,973 | | Total current assets | $17,591 | $13,215 | +$4,376 | | Cash and cash equivalents | $8,467 | $4,010 | +$4,457 | | Accounts receivable – oil and gas | $8,556 | $7,995 | +$561 | | Total liabilities | $16,166 | $12,745 | +$3,421 | | Total current liabilities | $10,564 | $6,908 | +$3,656 | | Accounts payable | $5,782 | $2,625 | +$3,157 | | Revenue payable | $2,467 | $1,266 | +$1,201 | | Total shareholders' equity | $120,652 | $121,100 | -$448 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations reflect a net loss of $1.676 million for Q2 2025, a reversal from a net income of $2.681 million in Q2 2024, primarily due to a significant decrease in oil and gas sales revenue, a credit loss on a note receivable, and an impairment of oil and gas properties, partially offset by a gain on asset sales and an income tax benefit Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Oil and gas sales | $6,972 | $11,811 | $15,708 | $19,927 | | Total operating expenses | $8,859 | $9,173 | $17,445 | $16,684 | | Operating income (expense) | ($2,244) | $2,638 | ($2,094) | $3,243 | | Net (loss) income | ($1,676) | $2,681 | ($1,536) | $3,454 | | Basic EPS | ($0.02) | $0.03 | ($0.02) | $0.04 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities significantly increased to $5.508 million from $0.295 million in the prior year, largely due to adjustments for non-cash items, while net cash used in investing activities decreased substantially to $1.040 million, primarily due to lower drilling and completion costs and cash received from asset sales, with the company ending the period with $11.214 million in cash and restricted cash Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net (loss) income | ($1,536) | $3,454 | | Net cash provided by operating activities | $5,508 | $295 | | Net cash used in investing activities | ($1,040) | ($12,333) | | Net cash provided by financing activities | $139 | $0 | | Net increase (decrease) in cash and restricted cash | $4,607 | ($12,038) | | Cash and restricted cash at end of period | $11,214 | $8,677 | - Cash paid for drilling and completion costs decreased from **$12.290 million** in the six months ended June 30, 2024, to **$3.675 million** in the same period of 2025[34](index=34&type=chunk) - Cash received for the sale of oil and gas properties amounted to **$2.635 million** in the six months ended June 30, 2025[34](index=34&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The reconciliation shows that Adjusted EBITDA for Q2 2025 was $3.032 million, down from $7.385 million in Q2 2024, and for the six months ended June 30, 2025, it was $7.301 million, compared to $12.106 million in the prior year, with key adjustments from net income including adding back DD&A, share-based compensation, impairment, and credit loss, while deducting income tax benefit and gain on asset sales Reconciliation of Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net (loss) income | ($1,676) | $2,681 | ($1,536) | $3,454 | | EBITDA | $1,691 | $6,923 | $5,253 | $11,181 | | Adjusted EBITDA | $3,032 | $7,385 | $7,301 | $12,106 | - Key adjustments for Q2 2025 include adding back **$3.857 million for DD&A**, **$474,000 for share-based compensation**, **$510,000 for impairment**, and **$1.378 million for note receivable credit loss**, while deducting **$490,000 for income tax benefit** and **$1.021 million for gain on sale of oil and gas properties**[35](index=35&type=chunk)

[Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns readers about forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially - The report contains **forward-looking statements** subject to **risks and uncertainties**, many beyond the company's control. Readers are cautioned not to place undue reliance on these statements, which are based on various factors and assumptions that could cause actual results to differ materially[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - **Forward-looking statements** cover areas such as business strategy, reserves, technology, cash flows, financial strategy, projected costs, oil and natural gas prices, timing of production, capital expenditures, government regulation, economic conditions, competition, and future acquisitions[12](index=12&type=chunk) [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents unaudited consolidated financial statements and management's discussion of financial condition and results [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, cash flows, and shareholders' equity, along with detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20(Unaudited)%20and%20December%2031,%202024) This section provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific dates | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $136,818 | $133,845 | $2,973 | 2.22% | | Total Liabilities | $16,166 | $12,745 | $3,421 | 26.84% | | Total Shareholders' Equity | $120,652 | $121,100 | $(448) | -0.37% | - Current assets **increased** by **$4.376 million**, primarily driven by a **$4.457 million increase** in cash and cash equivalents[14](index=14&type=chunk) - Current liabilities **increased** by **$3.656 million**, mainly due to a **significant rise** in accounts payable and revenue payable[14](index=14&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section details the company's revenues, expenses, and net income or loss over specific periods | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Oil and gas sales | $6,972 | $11,811 | $15,708 | $19,927 |\n| Total operating expenses | $8,859 | $9,173 | $17,445 | $16,684 |\n| Operating income (loss) | $(2,244) | $2,638 | $(2,094) | $3,243 |\n| Net (loss) income | $(1,676) | $2,681 | $(1,536) | $3,454 |\n| Basic EPS | $(0.02) | $0.03 | $(0.02) | $0.04 |\n| Diluted EPS | $(0.02) | $0.03 | $(0.02) | $0.04 | - The company reported a **net loss of** **$1.7 million** for the three months ended June 30, 2025, a **decrease** of **$4.4 million** compared to **net income of** **$2.7 million** in the prior year, primarily due to a **$1.4 million** note receivable **credit loss** and reduced operating income[99](index=99&type=chunk) - For the six months ended June 30, 2025, the **net loss** was **$1.5 million**, a **$5.0 million decrease** from the **$3.5 million net income** in the same period last year, driven by the note receivable write-off and **lower operating income**[111](index=111&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) This section outlines the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $5,508 | $295 |\n| Investing Activities | $(1,040) | $(12,333) |\n| Financing Activities | $139 | $- |\n| Net increase (decrease) in cash and restricted cash | $4,607 | $(12,038) | - **Net cash provided by operating activities significantly increased by** **$5.2 million** year-over-year, reaching **$5.508 million**, **despite a decrease in net income**, due to non-cash adjustments like **impairment** and **credit loss**[130](index=130&type=chunk) - **Net cash used in investing activities decreased by** **$11.3 million**, primarily due to **lower cash outlays** for drilling and completion costs and cash received from the sale of oil and gas properties[131](index=131&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) This section presents changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock Shares | 89,495,267 | 91,829,352 |\n| Common Stock Amount | $89 | $92 |\n| Additional Paid-in Capital | $227,013 | $228,098 |\n| Accumulated Deficit | $(106,002) | $(107,538) |\n| Total Shareholders' Equity | $121,100 | $120,652 | - **Total shareholders' equity** slightly **decreased** from **$121.1 million** at December 31, 2024, to **$120.652 million** at June 30, 2025, primarily due to a **net loss of** **$1.676 million** in Q2 2025, partially offset by share-based compensation and proceeds from **common stock** issuance[23](index=23&type=chunk) - The number of **common shares outstanding increased** from **89,495,267** at December 31, 2024, to **91,829,352** at June 30, 2025, due to the issuance of **restricted common stock** and **common stock** for cash proceeds[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements [NOTE 1 – BASIS OF PRESENTATION](index=7&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) This note describes the accounting principles and rules used in preparing the interim financial statements - The interim unaudited consolidated financial statements are prepared in accordance with GAAP and SEC rules, reflecting normal recurring adjustments. Results for interim periods are not necessarily indicative of full-year results[24](index=24&type=chunk) - The Company's future financial condition and liquidity are dependent on the success of its drilling program, commercially viable oil and natural gas discoveries, speed to production, exploration and development costs, and prevailing commodity prices[26](index=26&type=chunk) [NOTE 2 – DESCRIPTION OF BUSINESS](index=7&type=section&id=NOTE%202%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS) This note outlines the company's primary business activities and strategic focus in the oil and gas industry - **PEDEVCO** is an oil and gas company focused on developing, acquiring, and producing oil and natural gas assets, particularly **legacy proven properties** in the **Permian Basin** (West Texas and eastern New Mexico) and the **Denver-Julesberg Basin** (Colorado and Wyoming)[27](index=27&type=chunk) - The company believes horizontal development in the **Permian Basin** and Wattenberg/Wattenberg Extension in the **D-J Basin** are among the most economic plays in the U.S. and plans to optimize existing assets and seek accretive acquisitions[27](index=27&type=chunk) [NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=7&type=section&id=NOTE%203%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note summarizes the key accounting policies and recent accounting pronouncements relevant to the company's financial reporting - There have been **no changes** to the Company's significant accounting policies since December 31, 2024[28](index=28&type=chunk) - The **FASB issued ASU 2023-09 (Income Taxes) effective December 31, 2025**, and **ASU 2024-03 (Income Statement Expenses) effective after December 15, 2026**, which the Company is currently evaluating for impact[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [NOTE 4 – REVENUE FROM CONTRACTS WITH CUSTOMERS](index=8&type=section&id=NOTE%204%20%E2%80%93%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note disaggregates revenue by product type and explains the company's revenue recognition policies | Product Type (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Oil sales | $6,180 | $10,952 | $13,254 | $18,406 |\n| Natural gas sales | $323 | $290 | $1,165 | $623 |\n| Natural gas liquids sales | $469 | $569 | $1,289 | $898 |\n| Total oil and gas sales | $6,972 | $11,811 | $15,708 | $19,927 | - **Total oil and gas sales decreased by** **41%** for the three months ended June 30, 2025, and by **21%** for the six months ended June 30, 2025, primarily due to **unfavorable crude oil prices** and **lower production volumes**[32](index=32&type=chunk)[102](index=102&type=chunk)[113](index=113&type=chunk) [NOTE 5 – CASH](index=8&type=section&id=NOTE%205%20%E2%80%93%20CASH) This note provides details on the company's cash and restricted cash balances and their changes | Cash Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Cash | $8,467 | $4,010 |\n| Restricted cash | $2,747 | $2,597 |\n| Total cash and restricted cash | $11,214 | $6,607 | - **Total cash and restricted cash increased by** **$4.607 million** from December 31, 2024, to June 30, 2025. The **increase** in restricted cash is related to **additional collateral** for a **surety bond** required by the Colorado Bureau of Land Management[33](index=33&type=chunk) [NOTE 6 – OIL AND GAS PROPERTIES](index=8&type=section&id=NOTE%206%20%E2%80%93%20OIL%20AND%20GAS%20PROPERTIES) This note details the company's oil and gas property assets, including capital costs, impairment, and dispositions | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Oil and gas properties, subject to amortization | $210,039 | $217,944 |\n| Oil and gas properties, not subject to amortization | $14,738 | $13,260 |\n| Total oil and gas properties, net | $103,512 | $102,417 | - The Company incurred **$8.455 million** in **capital costs** for the six months ended June 30, 2025, primarily for **completion operations** on four recently drilled wells in the **Permian Basin**[35](index=35&type=chunk) - An **impairment of** **$0.742 million** was recorded for **undeveloped D-J Basin leases** (**1,007** net acres) that expired or had no drilling plans[36](index=36&type=chunk) - In February 2025, the Company entered a **joint development agreement** in the **D-J Basin**, receiving **$1.7 million** and **transferring operatorship** of Roth and Amber DSUs. In April 2025, it **sold operated production** in Weld County, Colorado, for **$0.606 million**, recognizing a **gain of** **$1.021 million**[37](index=37&type=chunk)[39](index=39&type=chunk) [NOTE 7 – NOTE RECEIVABLE](index=9&type=section&id=NOTE%207%20%E2%80%93%20NOTE%20RECEIVABLE) This note explains the write-off of a promissory note due to default and the recognition of a credit loss - Tilloo Exploration and Production LLC **defaulted on its promissory note**, failing to make payments since January 8, 2025. Due to sustained default and remote recovery prospects, the Company **fully wrote off the outstanding balance**, recognizing a **$1.267 million bad debt expense** and an additional **$0.111 million** for post-closing adjustments, totaling **$1.378 million in credit loss**[42](index=42&type=chunk)[43](index=43&type=chunk) [NOTE 8 – ASSET RETIREMENT OBLIGATIONS](index=9&type=section&id=NOTE%208%20%E2%80%93%20ASSET%20RETIREMENT%20OBLIGATIONS) This note details the company's obligations related to asset retirement, including changes in estimates and settlements | Metric (in thousands) | Six Months Ended June 30, 2025 | | :-------------------- | :----------------------------- | | Balance at beginning of period | $6,371 |\n| Accretion expense | $369 |\n| Liabilities settled | $(297) |\n| Disposition of liabilities | $(505) |\n| Changes in estimates, net | $119 |\n| Balance at end of period | $6,057 | - The Company **reimbursed the New Mexico Oil and Gas Conservation Division** **$0.297 million** for **plugging and abandoning costs** related to **299** **inactive legacy wells** in the **Permian Basin** Asset, in **full compliance with a Stipulated Final Order**[47](index=47&type=chunk) [NOTE 9 – COMMITMENTS AND CONTINGENCIES](index=10&type=section&id=NOTE%209%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses the company's operating lease commitments, drilling commitments, and legal contingencies - The Company has an **operating lease** for office space in Houston, Texas, expiring February 28, 2027, with **remaining monthly payments** of approximately **$0.0158 million**-**$0.016 million**. The **weighted-average remaining lease term** is **1.7** years with a **7.90% discount rate**[50](index=50&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - **Leasehold drilling commitments** include **129** net acres expiring in the **D-J Basin** during the remainder of 2025 and **5,371** net acres expiring within the next two years. The Company plans to **hold this acreage through drilling or lease extensions**[55](index=55&type=chunk) - The Company is **not currently a party to any material legal proceedings** and believes any **ultimate liability** from future claims will not have a **material adverse effect** on its financial condition[56](index=56&type=chunk)[58](index=58&type=chunk) - Tilloo Exploration & Production, LLC **alleged misrepresentations** related to the Milnesand Sale and defaulted on the Tilloo Note. The Company **disputes the allegations** and is **pursuing remedies to collect outstanding amounts**[59](index=59&type=chunk) [NOTE 10 – SHAREHOLDERS' EQUITY](index=11&type=section&id=NOTE%2010%20%E2%80%93%20SHAREHOLDERS'%20EQUITY) This note details changes in shareholders' equity, including restricted stock awards and common stock issuances - During the six months ended June 30, 2025, the Company **granted** **2,105,000** **restricted stock awards** to employees[60](index=60&type=chunk) - In June 2025, the Company **sold** **489,967** shares of **common stock** through an '**at the market offering**' (**ATM Offering**) for **net proceeds of** **$0.354 million**, with **$7.6 million remaining available for future sales** under the **ATM Offering**[60](index=60&type=chunk)[61](index=61&type=chunk)[125](index=125&type=chunk) [NOTE 11 – SHARE-BASED COMPENSATION](index=12&type=section&id=NOTE%2011%20%E2%80%93%20SHARE-BASED%20COMPENSATION) This note describes the company's share-based compensation plans, including restricted stock and stock options - On January 23, 2025, **1,844,118** **restricted common stock shares were granted** to officers and employees with a **total fair value of** **$1.568 million**, **vesting over** **34** months[64](index=64&type=chunk) - **Stock-based compensation expense for restricted stock was** **$0.419 million** (Q2 2025) and **$0.838 million** (YTD Q2 2025). The **remaining unamortized expense was** **$1.537 million** at June 30, 2025[65](index=65&type=chunk) - The Company **granted options to purchase** **464,000** **common shares at** **$0.85** per share, with an **aggregate fair value of** **$0.195 million**, **vesting fully by** November 2027[66](index=66&type=chunk) - **Stock option expense was** **$0.055 million** (Q2 2025) and **$0.111 million** (YTD Q2 2025). The **remaining unamortized expense was** **$0.210 million** at June 30, 2025[67](index=67&type=chunk) [NOTE 12 – EARNINGS (LOSS) PER COMMON SHARE](index=13&type=section&id=NOTE%2012%20%E2%80%93%20EARNINGS%20(LOSS)%20PER%20COMMON%20SHARE) This note presents the basic and diluted earnings per share calculations and related adjustments | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $(0.02) | $0.03 | $(0.02) | $0.04 |\n| Diluted EPS | $(0.02) | $0.03 | $(0.02) | $0.04 | - For periods with a **net loss** (Q2 2025 and YTD Q2 2025), **potentially dilutive securities** (options) were **excluded from diluted EPS calculation** as their inclusion would be **anti-dilutive**[70](index=70&type=chunk)[71](index=71&type=chunk) [NOTE 13 – INCOME TAXES](index=13&type=section&id=NOTE%2013%20%E2%80%93%20INCOME%20TAXES) This note discusses the company's effective tax rate, income tax benefits, and the impact of recent tax legislation - The Company's **effective tax rate was** **21.3%** for the six months ended June 30, 2025, compared to **0.0%** in the prior year, resulting in an **income tax benefit of** **$0.414 million** due to **recognized tax benefits**[72](index=72&type=chunk) - The '**One Big Beautiful Bill Act**' (OBBBA), signed into law on July 4, 2025, includes a **permanent extension of 100% bonus depreciation** and **modifications to interest expense limitations**. Its effects are **not reflected in the current financial statements**, and the Company is **evaluating its potential tax impacts**[73](index=73&type=chunk) [NOTE 14 – SEGMENT INFORMATION](index=14&type=section&id=NOTE%2014%20%E2%80%93%20SEGMENT%20INFORMATION) This note identifies the company's single reportable operating segment and how financial performance is managed - The Company operates in **one reportable operating segment**: **oil and natural gas development, exploration, and production**. **Financial performance is assessed as a single enterprise**, with **resource allocation made on a project basis** across the entire portfolio[74](index=74&type=chunk)[75](index=75&type=chunk) - The President and CEO serves as the **Chief Operating Decision Maker** (CODM), **reviewing consolidated forecasts and results**, including **return on capital, operating expenses, and cash flow**[74](index=74&type=chunk)[75](index=75&type=chunk) [NOTE 15 – SUBSEQUENT EVENTS](index=14&type=section&id=NOTE%2015%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the reporting period, such as board appointments - On July 7, 2025, John K. Howie was **appointed to the Board of Directors** and **granted** **150,000** shares of **restricted common stock**, **vesting on** July 7, 2026, **contingent on his continued service**[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial position, results of operations, and cash flows for the periods ended June 30, 2025 and 2024. It covers the business overview, strategic objectives, detailed analysis of financial performance, liquidity and capital resources, non-GAAP financial measures, and critical accounting estimates [Introduction](index=16&type=section&id=Introduction) This section provides context for the financial discussion, referencing prior reports and fiscal year details - This discussion should be **read in conjunction with** the **audited financial statements** in the 2024 Annual Report on Form 10-K and the **unaudited consolidated financial statements** in this quarterly report[78](index=78&type=chunk) - The Company's **fiscal year ends on** December 31st, with **interim results presented quarterly**[80](index=80&type=chunk) [General Overview](index=16&type=section&id=General%20Overview) This section provides an overview of PEDEVCO's business, asset holdings, and recent operational changes - **PEDEVCO** is an oil and gas company **focused on acquiring and developing assets** using **modern drilling and completion techniques**, particularly in **legacy proven properties** in the **Permian Basin** and **D-J Basin**[84](index=84&type=chunk) - As of June 30, 2025, the Company held approximately **14,105** **net Permian Basin acres** (**39** gross, **35.5** net wells) and **17,830** **net D-J Basin acres** (**71** gross, **6.9** net wells)[84](index=84&type=chunk) - In April 2025, the Company **sold all 17 of its legacy operated wells** in the **D-J Basin** to **reduce plugging and abandonment liabilities and operational expenses**, while **retaining leasehold ownership**[84](index=84&type=chunk) [Strategy](index=16&type=section&id=Strategy) This section outlines the company's strategic objectives for increasing stockholder value and planned capital expenditures - The Company aims to **increase stockholder value** by[87](index=87&type=chunk)[89](index=89&type=chunk) - **Growing production, cash flow, and reserves** through **developing operated drilling inventory** and **participating in non-operated projects**[89](index=89&type=chunk) - **Applying modern drilling and completion techniques** to **historically underdeveloped properties**[89](index=89&type=chunk) - **Optimizing well density and configuration** using **extensive geological and production data**[89](index=89&type=chunk) - **Maintaining operational control or forming partnerships** for major development projects[89](index=89&type=chunk) - **Leveraging technical and operational experience for accretive acquisition opportunities**[89](index=89&type=chunk) - **Preserving financial flexibility for organic and external growth**[89](index=89&type=chunk) - **Net capital expenditures for 2025 are estimated at** **$27 million** to **$33 million**, with **70-75%** **allocated to D-J Basin development** under **joint development agreements**[88](index=88&type=chunk) [Results of Operations and Financial Condition](index=18&type=section&id=Results%20of%20Operations%20and%20Financial%20Condition) This section analyzes the company's financial performance, including market conditions, commodity prices, and operational results [Market Conditions and Commodity Prices](index=18&type=section&id=Market%20Conditions%20and%20Commodity%20Prices) This section discusses the impact of volatile commodity prices and external factors on the company's financial results - Financial results are **highly dependent on natural gas and crude oil prices**, which are **influenced by external factors** like **market supply and demand, weather, inventory levels, and basis differentials**. **Prices are expected to remain volatile**[97](index=97&type=chunk) - **Finding and developing sufficient reserves at economical costs is crucial for long-term success**[97](index=97&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's operational performance across different periods [Three Months Ended June 30, 2025, vs. Three Months Ended June 30, 2024](index=18&type=section&id=Three%20Months%20Ended%20June%2030,%202025,%20vs.%20Three%20Months%20Ended%20June%2030,%202024) This section compares the company's financial results for the second quarter of 2025 against the same period in 2024 - **Net loss of** **$1.7 million** (or **$(0.02)** per share) for Q2 2025, compared to **net income of** **$2.7 million** (or **$0.03** per share) for Q2 2024, a **$4.4 million decrease**[99](index=99&type=chunk) - **Total revenues decreased by** **$4.8 million** (**41%**) to **$7.0 million**, driven by a **$2.3 million unfavorable price variance** (crude oil and NGL) and a **$2.5 million unfavorable volume variance**[101](index=101&type=chunk)[102](index=102&type=chunk) | Production Volume | Q2 2025 | Q2 2024 | Change | % Change | | :---------------- | :------ | :------ | :----- | :------- | | Crude Oil (Bbls) | 100,249 | 139,472 | (39,223) | (28%) |\n| Natural Gas (Mcf) | 119,493 | 145,574 | (26,081) | (18%) |\n| NGL (Bbls) | 17,863 | 19,083 | (1,220) | (6%) |\n| Total (Boe) | 138,028 | 182,817 | (44,789) | (24%) | | Average Sale Price | Q2 2025 ($) | Q2 2024 ($) | Change ($) | % Change | | :----------------- | :---------- | :---------- | :--------- | :------- | | Crude Oil ($/Bbl) | 61.65 | 78.52 | (16.87) | (21%) |\n| Natural Gas ($/Mcf) | 2.70 | 1.99 | 0.71 | 36% |\n| NGL ($/Bbl) | 26.24 | 29.84 | (3.60) | (12%) | - **Key expense changes include** a **$0.7 million decrease in Lease Operating Expenses**, a **$0.4 million decrease in Depreciation, Depletion, Amortization and Accretion**, and a **$0.5 million impairment of oil and gas properties**[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - A **$1.021 million gain on sale of oil and gas properties was recognized** from the sale of **D-J Basin** operated wells, **offset by a** **$1.378 million note receivable credit loss**[108](index=108&type=chunk)[109](index=109&type=chunk) [Six Months Ended June 30, 2025 vs. Six Months Ended June 30, 2024](index=20&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20vs.%20Six%20Months%20Ended%20June%2030,%202024) This section compares the company's financial results for the first six months of 2025 against the same period in 2024 - **Net loss of** **$1.5 million** (or **$(0.02)** per share) for YTD Q2 2025, compared to **net income of** **$3.5 million** (or **$0.04** per share) for YTD Q2 2024, a **$5.0 million decrease**[111](index=111&type=chunk) - **Total revenues decreased by** **$4.2 million** (**21%**) to **$15.7 million**, due to a **$2.1 million unfavorable crude oil price variance** and a **$2.1 million unfavorable volume variance**[112](index=112&type=chunk)[113](index=113&type=chunk) | Production Volume | YTD Q2 2025 | YTD Q2 2024 | Change | % Change | | :---------------- | :---------- | :---------- | :----- | :------- | | Crude Oil (Bbls) | 202,931 | 240,375 | (37,444) | (16%) |\n| Natural Gas (Mcf) | 286,227 | 277,514 | 8,713 | 3% |\n| NGL (Bbls) | 41,006 | 30,640 | 10,366 | 34% |\n| Total (Boe) | 291,642 | 317,267 | (25,625) | (8%) | | Average Sale Price | YTD Q2 2025 ($) | YTD Q2 2024 ($) | Change ($) | % Change | | :----------------- | :-------------- | :-------------- | :--------- | :------- | | Crude Oil ($/Bbl) | 65.32 | 76.57 | (11.25) | (15%) |\n| Natural Gas ($/Mcf) | 4.07 | 2.24 | 1.83 | 82% |\n| NGL ($/Bbl) | 31.43 | 29.33 | 2.10 | 7% | - **Operating expenses saw a** **$0.1 million increase in Lease Operating Expenses**, a **$0.5 million decrease in Depreciation, Depletion, Amortization and Accretion**, and a **$0.7 million impairment of oil and gas properties**[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - A **$1.021 million gain on sale of oil and gas properties was recognized**, alongside a **$1.378 million note receivable credit loss**[120](index=120&type=chunk)[121](index=121&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations and fund operations [Working Capital](index=22&type=section&id=Working%20Capital) This section details the changes in the company's working capital position and its contributing factors - **Working capital surplus increased by** **$0.7 million** to **$7.0 million** at June 30, 2025, from **$6.3 million** at December 31, 2024, due to a **proportional increase in production and sales**, **offset by increased payables**[124](index=124&type=chunk) [Financing](index=22&type=section&id=Financing) This section describes the company's financing activities, including equity offerings and available credit facilities - The Company **sold** **489,967** shares of **common stock** in June 2025 through an '**at the market offering**' (**ATM Offering**) for **net proceeds of** **$0.354 million**, with **$7.6 million still available for future sales**[125](index=125&type=chunk) - The Company expects to have **sufficient cash for the next 12 months** from **projected cash flow**, **existing cash**, potential equity infusions/loans from Dr. Simon G. Kukes, **public/private debt/equity financings** (including the **ATM Offering**), and its **$250 million reserve-based lending facility (RBL)** with Citibank (**initial borrowing base of** **$20 million**, **undrawn to date**)[127](index=127&type=chunk)[128](index=128&type=chunk) [Cash Flows](index=23&type=section&id=Cash%20Flows) This section analyzes the company's cash flows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $5,508 | $295 |\n| Investing Activities | $(1,040) | $(12,333) |\n| Financing Activities | $139 | $- |\n| Net increase (decrease) in cash and restricted cash | $4,607 | $(12,038) | - **Net cash provided by operating activities significantly increased by** **$5.2 million** year-over-year, primarily due to non-cash adjustments like **impairment** and **credit loss**, **despite a decrease in net income**[130](index=130&type=chunk) - **Net cash used in investing activities decreased by** **$11.3 million**, driven by **lower cash outlays** for drilling and completion and cash received from asset sales[131](index=131&type=chunk) - **Cash flows from financing activities were** **$0.139 million**, **solely from common stock sales via the ATM Offering**, with **no financing activities in the prior period**[132](index=132&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA for analytical purposes - The Company **presents EBITDA and Adjusted EBITDA as non-GAAP measures** to provide **additional financial analytical framework for investors and management decisions**[133](index=133&type=chunk) - **Adjusted EBITDA excludes non-cash items like share-based compensation, impairment, and gains/losses on asset sales or credit losses** to **enhance comparability**[133](index=133&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(1,676) | $2,681 | $(1,536) | $3,454 |\n| EBITDA | $1,691 | $6,923 | $5,253 | $11,181 |\n| Adjusted EBITDA | $3,032 | $7,385 | $7,301 | $12,106 | [Critical Accounting Estimates](index=24&type=section&id=Critical%20Accounting%20Estimates) This section discusses the significant accounting estimates and judgments that impact the company's financial statements [Oil and Gas Properties, Successful Efforts Method](index=24&type=section&id=Oil%20and%20Gas%20Properties,%20Successful%20Efforts%20Method) This section explains the accounting method used for oil and gas properties, including capitalization and amortization policies - The Company **uses the successful efforts method for oil and gas accounting**, **capitalizing costs for development wells, support equipment, facilities, and proved mineral interests**. **Geological and geophysical costs are expensed**[136](index=136&type=chunk) - **Exploratory well costs are capitalized pending determination of proved reserves**; **if not economically viable within one year or if major capital expenditures are not firmly planned, they are expensed as dry holes**[137](index=137&type=chunk) - **Depreciation, depletion, and amortization of capitalized oil and gas properties are calculated using the unit of production method on a field-by-field basis**[139](index=139&type=chunk) [Revenue Recognition](index=25&type=section&id=Revenue%20Recognition) This section details the company's policies for recognizing revenue from oil, natural gas, and NGL sales - **Revenue is derived from exploration and production activities**, **primarily selling oil to marketers/refiners, natural gas to pipelines/end-users, and NGLs to end-users/refiners**[140](index=140&type=chunk)[141](index=141&type=chunk) - **Sales revenues are recognized when control of the product transfers to the customer, typically at delivery**, **based on contract price which may include market differentials and downstream cost adjustments**[142](index=142&type=chunk) - **Revenues are recognized only for the Company's net share of production volumes**, **excluding sales on behalf of other working interest or royalty owners**[143](index=143&type=chunk) [Stock-Based Compensation](index=25&type=section&id=Stock-Based%20Compensation) This section describes the accounting for stock-based compensation, including valuation models and assumptions - The Company **measures the cost of employee services for equity awards based on grant-date fair value over the vesting period**, **using the Black-Scholes option pricing model**[144](index=144&type=chunk) - **Highly subjective assumptions, including expected volatility and expected life, are used in the Black-Scholes model**, with **volatility estimated from historical stock volatility and expected term using a simplified method**[144](index=144&type=chunk) [Recently Adopted and Recently Issued Accounting Pronouncements](index=25&type=section&id=Recently%20Adopted%20and%20Recently%20Issued%20Accounting%20Pronouncements) This section outlines new accounting standards and their potential impact on the company's financial reporting - The **FASB issued ASU 2023-09 (Income Taxes) effective December 31, 2025**, **requiring disaggregated tax rate reconciliation and income taxes paid information**[145](index=145&type=chunk) - The **FASB issued ASU 2024-03 (Income Statement Expenses) effective after December 15, 2026**, **requiring additional disclosure about specified expense categories**. The **Company does not expect a material effect but is evaluating presentation alternatives**[146](index=146&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' PEDEVCO Corp. is not required to provide the quantitative and qualitative disclosures about market risk - The Company is **exempt from providing market risk disclosures** as it **qualifies as a 'smaller reporting company' under SEC regulations**[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's disclosure controls and procedures, their evaluation, and any changes in internal control over financial reporting. Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to un-remediated material weaknesses identified in the prior annual report [Disclosure Controls and Procedures](index=25&type=section&id=Disclosure%20Controls%20and%20Procedures) This section defines the company's disclosure controls and procedures for financial reporting - **Disclosure controls and procedures are designed to ensure timely recording, processing, summarizing, and reporting of information required under the Exchange Act**[149](index=149&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=26&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports management's assessment of the effectiveness of disclosure controls and procedures - As of June 30, 2025, **management concluded that the Company's disclosure controls and procedures were not designed at a reasonable assurance level and were not effective**[150](index=150&type=chunk)[151](index=151&type=chunk) - This conclusion is due to **material weaknesses identified in the 2024 Annual Report on Form 10-K that have not yet been remediated**[151](index=151&type=chunk) [Changes in Internal Control over Financial Reporting](index=26&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section discloses any material changes in the company's internal control over financial reporting - There were **no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect, the Company's internal control over financial reporting**[152](index=152&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=26&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges the inherent limitations of any control system in providing absolute assurance - **Management acknowledges that any controls and procedures, regardless of design, can only provide reasonable assurance of achieving objectives due to inherent limitations and resource constraints**[153](index=153&type=chunk) [PART II – OTHER INFORMATION](index=31&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the Company's involvement in legal and regulatory proceedings, stating that it is not currently a party to any material legal proceedings and has implemented policies to mitigate environmental risks - The Company is **not currently a party to any material legal or governmental proceedings, nor is it aware of any contemplated against it**[155](index=155&type=chunk) - The **oil and gas business carries environmental risks**, and the **Company has implemented policies and programs to reduce and mitigate these risks**[156](index=156&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors previously disclosed in the Company's Annual Report on Form 10-K, indicating no material changes since that filing - There have been **no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024**[157](index=157&type=chunk) - **Investors are encouraged to review the risk factors in the Annual Report**, as **any of these factors could materially and adversely affect the Company's business, financial condition, operating results, and stock price**[157](index=157&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms that the Company did not issue or sell any unregistered equity securities during the quarter ended June 30, 2025, and had no proceeds from the sale of registered securities to report - The Company **did not issue or sell any unregistered equity securities during the quarter ended June 30, 2025**[158](index=158&type=chunk) - There were **no proceeds from the sale of registered securities to report**[159](index=159&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - There were **no defaults upon senior securities during the reporting period**[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is typically for companies with mining operations. The document does not contain any specific disclosures under this item, implying it is not applicable or there are no reportable events [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading plans adopted by certain directors and executive officers for the sale of common stock in connection with equity award vesting - On May 20, 2025, several executive officers (Paul A. Pinkston, J. Douglas Schick, Jody Crook, and Clark R. Moore) entered into **Rule 10b5-1(c) trading plans**[163](index=163&type=chunk) - These plans provide for the **sale of an aggregate of** **829,629** **shares of common stock in connection with the vesting of their equity awards** through May 19, 2027[163](index=163&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, certifications, and XBRL documents, indicating which are filed or furnished herewith and which are incorporated by reference - The **exhibits include the PEDEVCO Corp. 2021 Equity Incentive Plan and its first amendment, form of Restricted Shares Grant Agreement, form of Indemnification Agreement, and a letter from Marcum LLP**[164](index=164&type=chunk) - **Certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 (Sections 302 and 906) are filed or furnished**[164](index=164&type=chunk) - **Inline XBRL documents for the instance, taxonomy extension schema, calculation, definition, label, and presentation linkbase, and the cover page are included**[164](index=164&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) This section provides the official signatures and authorization for the report - The **report was signed on** August 14, 2025, by J. Douglas Schick, **President and Chief Executive Officer**, and Paul A. Pinkston, **Chief Accounting Officer**, **duly authorized on behalf of PEDEVCO Corp.**[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)

[Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) PEDEVCO's Q1 2025 saw production and revenue growth, but net income and Adjusted EBITDA declined due to higher operating expenses Q1 2025 vs Q1 2024 Key Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Average Production (BOEPD) | 1,707 | 1,478 | +15% | | Revenue | $8.74 million | $8.12 million | +8% | | Operating Income | $0.15 million | $0.62 million | -76% | | Net Income | $0.1 million | $0.8 million | -87.5% | | Adjusted EBITDA | $4.3 million | $4.7 million | -10% | - The company maintains a strong balance sheet with over **$10 million in cash**, **zero debt**, and an untouched **$250 million RBL** with Citibank[3](index=3&type=chunk) - Four new horizontal San Andres wells were drilled and completed in the Permian Basin, with **production starting in Q2 2025** and **exceeding initial expectations**[7](index=7&type=chunk) - **17 low-producing legacy wells** in the D-J Basin were divested to **reduce operating expenses and plugging and abandonment (P&A) liabilities**, while retaining acreage for future development[7](index=7&type=chunk)[18](index=18&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) Q1 2025 revenue grew 8% from higher production, but rising operating expenses caused net income to significantly decline [Operations Update](index=2&type=section&id=Operations%20Update) PEDEVCO completed four new Permian wells with strong initial production and divested 17 D-J wells to reduce liabilities - In Q1 and early Q2 2025, the company drilled and completed **four new horizontal San Andres wells** in the Permian Basin, with **production commencing mid-Q2 2025**[17](index=17&type=chunk) - Effective January 1, 2025, the company sold **17 low-producing operated wells** in the D-J Basin to **reduce operating expenses, G&A, and plugging liabilities**[18](index=18&type=chunk) - The sale of legacy wells is estimated to **save approximately $500,000 in aggregate plugging and abandonment liabilities**, and the company **retained ownership of all existing leaseholds** for future development[18](index=18&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Unaudited consolidated financial statements for Q1 2025 are presented, including Balance Sheets, Statements of Operations, and Cash Flows [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures like EBITDA and Adjusted EBITDA are presented, with Q1 2025 Adjusted EBITDA at $4.3 million, down from Q1 2024 - The company uses **EBITDA** and **Adjusted EBITDA** as **supplemental performance measures**, with Adjusted EBITDA defined before share-based compensation, impairment, and gain on asset sales[21](index=21&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net income | $140 | $773 | | Income tax expense | $76 | $0 | | Depreciation, depletion, amortization and accretion | $3,346 | $3,485 | | **EBITDA** | **$3,562** | **$4,258** | | Share-based compensation | $475 | $475 | | Impairment of oil and gas properties | $232 | $0 | | Gain on sale of fixed asset | $0 | $(12) | | **Adjusted EBITDA** | **$4,269** | **$4,721** |