[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** |

Financial Performance - Pedevco Corp. reported break-even quarterly earnings per share, missing the Zacks Consensus Estimate of $0.02, compared to earnings of $0.01 per share a year ago, representing an earnings surprise of -100% [1] - The company posted revenues of $8.74 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.11%, and this is an increase from year-ago revenues of $8.12 million [2] - Over the last four quarters, Pedevco has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Pedevco shares have lost about 17.8% since the beginning of the year, while the S&P 500 has gained 0.2% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.01 on $8.67 million in revenues, and $0.05 on $36 million in revenues for the current fiscal year [7] - The outlook for the industry, specifically the Oil and Gas - Mechanical and Equipment sector, is currently in the bottom 7% of over 250 Zacks industries, which may impact stock performance [8]

```markdown [Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard disclosure about forward-looking statements, highlighting their inherent risks and uncertainties. It lists various factors that could cause actual results to differ materially from expectations and states the company's policy not to update these statements unless legally required - Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company's control[10](index=10&type=chunk) - Factors that could cause actual results to differ include future financial performance, business strategy, projected plans, oil and natural gas realized prices, capital expenditures, government regulation, general economic conditions, and competition in the oil and natural gas industry[10](index=10&type=chunk)[14](index=14&type=chunk) - The company cannot guarantee future results, levels of activity, performance, or achievements and does not undertake any obligation to update or revise publicly any forward-looking statements except as required by law[10](index=10&type=chunk)[11](index=11&type=chunk) [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements for the three months ended March 31, 2025, and 2024, including balance sheets, statements of operations, cash flows, and shareholders' equity, along with detailed notes explaining the basis of presentation, business description, accounting policies, and specific financial line items [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202025%20(Unaudited)%20and%20December%2031%2C%202024) Consolidated Balance Sheets | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $145,575 | $133,845 | | Total Current Assets | $23,595 | $13,215 | | Total Oil and Gas Properties, net | $104,977 | $103,512 | | Total Liabilities | $23,860 | $12,745 | | Total Current Liabilities | $16,909 | $6,908 | | Total Shareholders' Equity | $121,715 | $121,100 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Oil and gas sales | $8,736 | $8,116 | | Total operating expenses | $8,586 | $7,511 | | Operating income | $150 | $617 | | Income before income taxes | $216 | $773 | | Income tax expense | $76 | $- | | Net income | $140 | $773 | | Basic Earnings per common share | $0.00 | $0.01 | | Diluted Earnings per common share | $0.00 | $0.01 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Consolidated Statements of Cash Flows | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $5,928 | $(4,295) | | Net cash provided by (used in) investing activities | $625 | $(926) | | Net cash provided by financing activities | $- | $- | | Net increase (decrease) in cash and restricted cash | $6,553 | $(5,221) | | Cash, cash equivalents and restricted cash at end of period | $13,160 | $15,494 | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024%20(Unaudited)) Consolidated Statements of Shareholders' Equity | Metric | December 31, 2024 | March 31, 2025 | | :------------------------------------ | :---------------- | :------------- | | Common Stock Shares | 89,495,267 | 91,339,385 | | Common Stock Amount (in thousands) | $89 | $91 | | Additional Paid-in Capital (in thousands) | $227,013 | $227,486 | | Accumulated Deficit (in thousands) | $(106,002) | $(105,862) | | Total Shareholders' Equity (in thousands) | $121,100 | $121,715 | - Issuance of **1,844,118 restricted common stock shares** during the three months ended March 31, 2025[26](index=26&type=chunk) - Share-based compensation expense was **$475,000** for both the three months ended March 31, 2025, and 2024[26](index=26&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) [NOTE 1 – BASIS OF PRESENTATION](index=7&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) The interim unaudited consolidated financial statements are prepared in accordance with GAAP and SEC rules, consistent with the latest 10-K. The company's future financial condition and liquidity are significantly influenced by the success of its drilling program, oil and natural gas discoveries, production speed, and prevailing commodity prices - Interim financial statements are prepared in accordance with GAAP and SEC rules, and should be read in conjunction with the audited financial statements in the 2024 Annual Report on Form 10-K[28](index=28&type=chunk)[29](index=29&type=chunk) - Future financial condition and liquidity are dependent on the success of the drilling program, the number and quantities of commercially viable oil and natural gas discoveries, the speed of bringing discoveries to production, and prevailing prices for oil and natural gas[31](index=31&type=chunk) [NOTE 2 – DESCRIPTION OF BUSINESS](index=7&type=section&id=NOTE%202%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS) PEDEVCO is an oil and gas company focused on the development, acquisition, and production of oil and natural gas assets. The company targets legacy proven properties in the Permian Basin (West Texas and eastern New Mexico) and the Denver-Julesberg Basin (Colorado and Wyoming), applying modern drilling and completion techniques - PEDEVCO is an oil and gas company focused on developing, acquiring, and producing oil and natural gas assets[32](index=32&type=chunk) - The company targets legacy proven properties in the Permian Basin and the Denver-Julesberg Basin, leveraging modern drilling and completion techniques[32](index=32&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) There have been no changes to the company's significant accounting policies since December 31, 2024. The company is currently evaluating the impact of recently issued FASB ASUs related to income tax disclosures (ASU 2023-09) and income statement expense disaggregation (ASU 2024-03) - No changes to the company's significant accounting policies since December 31, 2024[33](index=33&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes), effective December 31, 2025, which requires disaggregated information about effective tax rate reconciliation and income taxes paid[34](index=34&type=chunk) - The company is evaluating ASU 2024-03 (Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2026, which requires additional disclosure about specified expense categories[35](index=35&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) Total revenue from contracts with customers increased by 8% to $8.7 million for the three months ended March 31, 2025, compared to $8.1 million in the prior year. This increase was primarily driven by significant growth in natural gas and natural gas liquids sales, while oil sales experienced a slight decrease NOTE 4 – REVENUE FROM CONTRACTS WITH CUSTOMERS | Product Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :---------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :------- | | Oil sales | $7,074 | $7,454 | $(380) | (5%) | | Natural gas sales | $842 | $333 | +$509 | 153% | | Natural gas liquids sales | $820 | $329 | +$491 | 149% | | Total revenue from customers | $8,736 | $8,116 | +$620 | 8% | [NOTE 5 – CASH AND CASH EQUIVALENTS](index=8&type=section&id=NOTE%205%20%E2%80%93%20CASH%20AND%20CASH%20EQUIVALENTS) The company's total cash, cash equivalents, and restricted cash significantly increased to $13.2 million at March 31, 2025, from $6.6 million at December 31, 2024. The increase in restricted cash is attributed to additional collateral required for a surety bond by the Colorado Bureau of Land Management NOTE 5 – CASH AND CASH EQUIVALENTS | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :------------------------------ | :------------------------------- | | Cash | $10,413 | $4,010 | | Restricted cash included in other assets | $2,747 | $2,597 | | Total cash and cash equivalents and restricted cash | $13,160 | $6,607 | - The increase in restricted cash is related to additional collateral for a surety bond required by the Colorado Bureau of Land Management for the company's Colorado operations[39](index=39&type=chunk) [NOTE 6 – OIL AND GAS PROPERTIES](index=8&type=section&id=NOTE%206%20%E2%80%93%20OIL%20AND%20GAS%20PROPERTIES) Total net oil and gas properties increased to $105.0 million at March 31, 2025. The company incurred $5.7 million in capital costs for completion operations in the Permian Basin and recorded a $0.2 million impairment for undeveloped D-J Basin leases. A joint development agreement in the D-J Basin resulted in a $1.7 million payment to the company and a transfer of operatorship NOTE 6 – OIL AND GAS PROPERTIES | Metric | Balance at Dec 31, 2024 (in thousands) | Additions (in thousands) | Disposals (in thousands) | Balance at Mar 31, 2025 (in thousands) | | :------------------------------------------ | :------------------------------------- | :----------------------- | :----------------------- | :------------------------------------- | | Oil and gas properties, subject to amortization | $210,039 | $442 | $(2,028) | $208,453 | | Oil and gas properties, not subject to amortization | $8,442 | $5,238 | $- | $13,680 | | Asset retirement costs | $4,326 | $1,085 | $- | $5,411 | | Accumulated depreciation, depletion and impairment | $(119,295) | $(3,272) | $- | $(122,567) | | Total oil and gas assets | $103,512 | $3,493 | $(2,028) | $104,977 | - Incurred **$5.68 million** in capital costs primarily related to completion operations for four operated wells in the Permian Basin[41](index=41&type=chunk) - Recorded an impairment of **$232,000** for undeveloped D-J Basin leases (232 net acres) that expired or have no future drilling plans[42](index=42&type=chunk) - Entered a joint development agreement in February 2025 for D-J Basin Roth and Amber DSUs, receiving **$1.7 million** and transferring operatorship to a third-party operator[43](index=43&type=chunk)[44](index=44&type=chunk) [NOTE 7 – NOTE RECEIVABLE](index=9&type=section&id=NOTE%207%20%E2%80%93%20NOTE%20RECEIVABLE) The company holds a $1.267 million secured promissory note from Tilloo Exploration and Production LLC, which defaulted on its initial payment due January 8, 2025, and subsequent payments. The company has issued a default notice and intends to pursue all available remedies, believing the note is fully secured - Note receivable from Tilloo Exploration and Production LLC totals **$1.267 million** (**$498,000** current, **$769,000** long-term including accrued interest) as of March 31, 2025[46](index=46&type=chunk) - Tilloo failed to make the initial installment payment due on January 8, 2025, and subsequent monthly payments[47](index=47&type=chunk) - The company issued a notice of default and intends to pursue all available remedies, including potential foreclosure, believing the note is fully secured[47](index=47&type=chunk) [NOTE 8 – ASSET RETIREMENT OBLIGATIONS](index=9&type=section&id=NOTE%208%20%E2%80%93%20ASSET%20RETIREMENT%20OBLIGATIONS) Asset retirement obligations increased to $7.5 million at March 31, 2025, from $6.4 million at the beginning of the period, primarily due to changes in estimates and accretion expense. The company reimbursed $53,000 and incurred an additional $173,000 for plugging and abandoning inactive wells in New Mexico NOTE 8 – ASSET RETIREMENT OBLIGATIONS | Metric | Three Months Ended March 31, 2025 (in thousands) | | :-------------------------------- | :----------------------------------------------- | | Balance at the beginning of the period | $6,371 | | Accretion expense | $293 | | Liabilities settled | $(226) | | Changes in estimates, net | $1,085 | | Balance at end of period | $7,523 | - Reimbursed the New Mexico Oil and Gas Conservation Division **$53,000** and incurred an additional **$173,000** in plugging and abandoning costs related to inactive legacy wells in the Permian Basin Asset[50](index=50&type=chunk) [NOTE 9 – COMMITMENTS AND CONTINGENCIES](index=10&type=section&id=NOTE%209%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company has an operating sublease for office space with a total lease liability of $203,000 as of March 31, 2025, expiring in February 2027. Leasehold drilling commitments include 776 net acres in the D-J Basin expiring in the remainder of 2025 and 4,821 net acres expiring within the next two years. The company is not currently involved in any material legal proceedings but is in a dispute with Tilloo regarding alleged misrepresentations in the Milnesand Sale and the Tilloo Note default - Operating lease liability for office space is **$203,000** as of March 31, 2025, with a weighted-average remaining lease term of **1.9 years**[55](index=55&type=chunk)[56](index=56&type=chunk) - Leasehold drilling commitments include **776 net acres** in the D-J Basin expiring during the remainder of 2025, and **4,821 net acres** expiring within the next two-year period[58](index=58&type=chunk) - The company is in a dispute with Tilloo Exploration & Production, LLC regarding alleged intentional misrepresentations in the Milnesand Sale and the subsequent default on the Tilloo Note[62](index=62&type=chunk) [NOTE 10 – SHAREHOLDERS' EQUITY](index=11&type=section&id=NOTE%2010%20%E2%80%93%20SHAREHOLDERS'%20EQUITY) During the three months ended March 31, 2025, the company granted an aggregate of 1,844,118 restricted stock awards to various employees - Granted an aggregate of **1,844,118 restricted stock awards** to employees during the three months ended March 31, 2025[63](index=63&type=chunk) [NOTE 11 – SHARE-BASED COMPENSATION](index=11&type=section&id=NOTE%2011%20%E2%80%93%20SHARE-BASED%20COMPENSATION) In January 2025, the company granted 1,844,118 restricted stock awards and options to purchase 464,000 shares. Stock-based compensation expense for the three months ended March 31, 2025, totaled $475,000, comprising $419,000 for restricted stock and $56,000 for options - On January 23, 2025, **1,844,118 restricted common stock shares** were granted to officers and employees with a total fair value of **$1,568,000**[65](index=65&type=chunk) - On January 23, 2025, options to purchase **464,000 shares** of common stock were granted at an exercise price of **$0.85 per share**, with an aggregate fair value of **$195,000**[67](index=67&type=chunk)[68](index=68&type=chunk) - Stock-based compensation expense for Q1 2025 was **$419,000** for restricted stock and **$56,000** for stock options, totaling **$475,000**[66](index=66&type=chunk)[69](index=69&type=chunk) NOTE 11 – SHARE-BASED COMPENSATION | Metric | Number of Stock Options | Weighted Average Exercise Price | | :-------------------------- | :---------------------- | :------------------------------ | | Outstanding at December 31, 2024 | 1,835,667 | $1.12 | | Granted | 464,000 | $0.85 | | Expired/Canceled | (215,667) | $1.68 | | Outstanding at March 31, 2025 | 2,084,000 | $1.00 | | Exercisable at March 31, 2025 | 1,156,666 | $1.14 | [NOTE 12 – EARNINGS PER COMMON SHARE](index=12&type=section&id=NOTE%2012%20%E2%80%93%20EARNINGS%20PER%20COMMON%20SHARE) Basic and diluted earnings per common share for the three months ended March 31, 2025, were $0.00, a decrease from $0.01 in the prior year, reflecting the lower net income. Share equivalents related to options were excluded from diluted EPS calculations as their inclusion would have been anti-dilutive NOTE 12 – EARNINGS PER COMMON SHARE | Metric | March 31, 2025 | March 31, 2024 | | :------------------------------------ | :------------- | :------------- | | Net income (in thousands) | $140 | $773 | | Weighted average common shares – basic | 90,868,110 | 88,753,838 | | Earnings per common share – basic | $0.00 | $0.01 | | Earnings per common share – diluted | $0.00 | $0.01 | - Share equivalents related to options (**2,294,000** for Q1 2025 and **2,092,334** for Q1 2024) were excluded from diluted EPS computation due to their anti-dilutive effect[74](index=74&type=chunk) [NOTE 13 – INCOME TAXES](index=13&type=section&id=NOTE%2013%20%E2%80%93%20INCOME%20TAXES) The company's effective tax rate increased to approximately 34.9% for the three months ended March 31, 2025, from 0.0% in the prior year, resulting in an income tax expense of $76,000. This change was primarily due to state income taxes and other tax adjustments, contrasting with a full valuation allowance in the previous period - Effective tax rate was approximately **34.9%** for Q1 2025, compared to **0.0%** for Q1 2024[75](index=75&type=chunk) - Recognized income tax expense of **$76,000** for Q1 2025, primarily due to state income taxes and other tax adjustments[75](index=75&type=chunk) [NOTE 14 – SEGMENT INFORMATION](index=13&type=section&id=NOTE%2014%20%E2%80%93%20SEGMENT%20INFORMATION) The company operates as a single reportable segment focused on oil and natural gas development, exploration, and production. Financial performance is assessed on a consolidated enterprise basis, with resource allocation decisions made across the entire portfolio based on project economics rather than geographic area - The company operates in one reportable operating segment: oil and natural gas development, exploration, and production[76](index=76&type=chunk) - Financial performance is assessed as a single enterprise, and resource allocation is made on a project basis across the entire portfolio, considering return on investment and market conditions, without regard to geographic area[76](index=76&type=chunk) [NOTE 15 – SUBSEQUENT EVENTS](index=13&type=section&id=NOTE%2015%20%E2%80%93%20SUBSEQUENT%20EVENTS) On April 3, 2025, effective January 1, 2025, the company sold all its operated production, including wellbore and surface equipment, in Weld County, Colorado, to a private buyer for an adjusted price of $606,000, while retaining ownership of its existing leasehold - On April 3, 2025, the company sold all of its operated production (wellbore and surface equipment) in Weld County, Colorado, for **$606,000**, effective January 1, 2025[78](index=78&type=chunk) - The company retained ownership in all its existing leasehold in the D-J Basin Asset despite the sale of operated production[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&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 performance, condition, and cash flows for the three months ended March 31, 2025, compared to the prior year. It covers the business overview, strategic initiatives, detailed results of operations, liquidity, capital resources, and critical accounting estimates [Introduction](index=13&type=section&id=Introduction) - This MD&A should be read in conjunction with the consolidated financial statements and notes in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the year ended December 31, 2024[80](index=80&type=chunk) - References to 'Company,' 'we,' 'us,' 'our,' 'PEDEVCO,' and 'PEDEVCO Corp.' refer to PEDEVCO Corp. and its wholly and majority-owned subsidiaries[83](index=83&type=chunk) [General Overview](index=14&type=section&id=General%20Overview) - PEDEVCO is an oil and gas company focused on acquiring and developing assets in the Permian Basin and D-J Basin, applying modern drilling and completion techniques to legacy proven properties[85](index=85&type=chunk) - As of March 31, 2025, the company held approximately **14,105 net Permian Basin acres** (35 gross, 33.5 net wells) and **18,572 net D-J Basin acres** (82 gross, 21.9 net wells)[85](index=85&type=chunk)[88](index=88&type=chunk) - Effective January 1, 2025, the company sold all **17 gross (15.4 net) operated wells** in its D-J Basin Asset to reduce plugging and abandonment liabilities and recurring operational expenses[88](index=88&type=chunk) [Strategy](index=15&type=section&id=Strategy) - The company's strategy is to optimize existing assets and opportunistically seek additional acreage, focusing on horizontal development and exploitation in the Permian and D-J Basins to increase stockholder value[89](index=89&type=chunk) - Key strategies include growing production, cash flow, and reserves through operated and non-operated projects, applying modern drilling and completion techniques, optimizing well density, maintaining operational control, leveraging acquisition expertise, and preserving financial flexibility[90](index=90&type=chunk) - Estimated net capital expenditures for 2025 range from **$27 million to $33 million**, with approximately **70% to 75%** allocated to D-J Basin development under joint development agreements[91](index=91&type=chunk) - The company expects to have sufficient cash for the next 12 months from projected cash flow, existing cash, potential equity infusions/loans, public/private debt or equity financings (including up to **$8.0 million** from an ATM offering), and an undrawn **$250 million** reserve-based lending facility (initial borrowing base of **$20 million**)[93](index=93&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Entered a joint development agreement in February 2025 for D-J Basin Roth and Amber DSUs, receiving **$1.7 million** and transferring operatorship, following a Participation Agreement in August 2024 for the SW Pony Prospect[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Results of Operations and Financial Condition](index=17&type=section&id=Results%20of%20Operations%20and%20Financial%20Condition) [Market Conditions and Commodity Prices](index=17&type=section&id=Market%20Conditions%20and%20Commodity%20Prices) The company's financial results are highly dependent on the volatile prices of natural gas and crude oil, which are influenced by external factors such as market supply and demand, weather conditions, and inventory levels. The company anticipates continued price volatility for the remainder of the year - Financial results are highly dependent on the price of natural gas and crude oil, which are affected by factors outside the company's control[98](index=98&type=chunk) - Commodity prices are influenced by market supply and demand, weather conditions, inventory storage levels, and basis differentials[98](index=98&type=chunk) - The company expects prices to remain volatile for the remainder of the year[98](index=98&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Net income decreased by $0.7 million to $0.1 million in Q1 2025 from $0.8 million in Q1 2024, primarily due to a $1.1 million increase in total operating expenses (including a $0.2 million impairment) and income tax expense, partially offset by a $0.6 million increase in total revenues. The revenue increase was driven by higher production volumes, particularly from new non-operated D-J Basin wells - Net income for the three months ended March 31, 2025, was **$0.1 million** (**$0.00 per common share**), down from **$0.8 million** (**$0.01 per share**) in the prior year period[100](index=100&type=chunk) - The decrease in net income was primarily due to a **$1.1 million** increase in total operating expenses (including a **$0.2 million** impairment of oil and gas properties) and **$76,000** in income tax expense, partially offset by a **$0.6 million** increase in revenues[100](index=100&type=chunk) Results of Operations | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase (Decrease) | % Increase (Decrease) | | :---------------------- | :-------------------------------- | :-------------------------------- | :------------------ | :-------------------- | | Crude Oil (Bbls) | 102,699 | 100,903 | 1,796 | 2% | | Natural Gas (Mcf) | 166,733 | 131,939 | 34,794 | 26% | | NGL (Bbls) | 23,143 | 11,557 | 11,586 | 100% | | Total (Boe) | 153,631 | 134,450 | 19,181 | 14% | | Crude Oil ($/Bbl) | $68.88 | $73.87 | $(4.99) | (7%) | | Natural Gas ($/Mcf) | $5.05 | $2.52 | $2.53 | 100% | | NGL ($/Bbl) | $35.43 | $28.48 | $6.95 | 24% | | Total Revenues | $8,736 | $8,116 | $620 | 8% | - Total revenues increased by **$0.6 million** (**8%**) due to a favorable volume variance of **$0.7 million**, offset by an unfavorable price variance of **$0.1 million**. The volume increase is primarily from participation in **11 new non-operated D-J Basin wells**[104](index=104&type=chunk) Results of Operations | Expense Category | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Increase (Decrease) (in thousands) | % Increase (Decrease) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :--------------------------------- | :-------------------- | | Total Lease Operating Expenses | $3,412 | $2,531 | $881 | 35% | | Depreciation, Depletion, Amortization and Accretion | $3,346 | $3,485 | $(139) | (4%) | | Impairment of Oil and Gas Properties | $232 | $- | $232 | 5% | | Total General and Administrative Expense | $1,596 | $1,495 | $101 | 7% | | Interest Income | $64 | $149 | $(85) | (57%) | - Lease Operating Expenses increased by **$0.9 million** (**35%**) due to higher direct and variable costs associated with increased oil volume and new non-operated D-J Basin wells[106](index=106&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary cash sources in Q1 2025 were $8.7 million from sales of crude oil, natural gas, and NGLs, used mainly for drilling, completion, and operating costs. Working capital surplus increased by $0.4 million to $6.7 million. The company has $8.0 million available under an ATM offering and an undrawn $250 million reserve-based lending facility (initial $20 million borrowing base), expecting sufficient cash for its 2025 development program - Primary cash sources for Q1 2025 were **$8.7 million** from sales of crude oil, natural gas, and NGLs, primarily used for drilling, completion, and operating costs[111](index=111&type=chunk) - Working capital surplus increased by **$0.4 million** to **$6.7 million** at March 31, 2025, from **$6.3 million** at December 31, 2024[112](index=112&type=chunk) - The company has **$8.0 million** of availability under a December 2024 'at the market' (ATM) offering sales agreement, with no securities sold to date[113](index=113&type=chunk) - A **$250 million** reserve-based lending facility with Citibank, N.A., provides an initial borrowing base of **$20 million**, with no borrowings drawn down as of the report date[115](index=115&type=chunk) - The company expects to have sufficient cash to meet its needs over the next 12 months, including funding the 2025 development program, from operations, existing cash, potential equity/loans, ATM offerings, and the RBL facility[114](index=114&type=chunk) [Cash Flows](index=20&type=section&id=Cash%20Flows%20(in%20thousands)) Net cash provided by operating activities significantly increased by $10.2 million, moving from a use of $4.3 million in Q1 2024 to a provision of $5.9 million in Q1 2025. Investing activities also shifted from a net use to a net provision, primarily due to cash received from the sale of oil and gas properties Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash flows provided by (used in) by operating activities | $5,928 | $(4,295) | | Cash flows provided by (used in) investing activities | $625 | $(926) | | Cash flows provided by financing activities | $- | $- | | Net increase (decrease) in cash and restricted cash | $6,553 | $(5,221) | - Net cash provided by operating activities increased by **$10.2 million**, primarily due to a **$10.7 million** net increase in other components of working capital, partially offset by a decrease in net income and DDA[117](index=117&type=chunk) - Net cash provided by investing activities increased by **$1.6 million**, mainly due to cash received from the sale of oil and gas properties, offset by increased capital spending for drilling and completion activities[118](index=118&type=chunk) [Non-GAAP Financial Measures](index=20&type=section&id=Non-GAAP%20Financial%20Measures) The company presents EBITDA and Adjusted EBITDA as non-GAAP measures to provide additional analytical insight into its performance, excluding non-cash items and certain non-recurring or non-estimable items. Adjusted EBITDA for Q1 2025 was $4.3 million, a decrease from $4.7 million in Q1 2024 - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate performance, excluding interest, taxes, depreciation, amortization, share-based compensation, impairment of oil and gas properties, and gain on sale of fixed assets[119](index=119&type=chunk) Non-GAAP Financial Measures | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Net income | $140 | $773 | | EBITDA | $3,562 | $4,258 | | Adjusted EBITDA | $4,269 | $4,721 | [Critical Accounting Estimates](index=21&type=section&id=Critical%20Accounting%20Estimates) This section outlines the company's critical accounting policies that involve significant estimates and judgments. These include the successful efforts method for oil and gas properties, revenue recognition based on control transfer, asset retirement obligations (ARO) for future site reclamation, and stock-based compensation valuation using the Black-Scholes model with subjective assumptions - Uses the successful efforts method for oil and gas properties, capitalizing development wells and proved mineral interests, expensing geological/geophysical costs, and evaluating exploratory wells for economic viability[122](index=122&type=chunk)[123](index=123&type=chunk) - Recognizes sales revenues for oil, natural gas, and NGLs when control transfers to the customer, based on the contract price, which may include adjustments for market differentials and downstream costs[127](index=127&type=chunk)[128](index=128&type=chunk) - Records asset retirement obligations (ARO) for estimated future costs of site reclamation, dismantling facilities, or plugging wells, capitalizing the present value in oil and gas properties and subsequently accreting and depreciating it[130](index=130&type=chunk) - Estimates the fair value of employee stock option awards using the Black-Scholes option pricing model, which requires subjective assumptions such as expected volatility and expected life[131](index=131&type=chunk) [Recently Issued Accounting Pronouncements](index=22&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The company is evaluating two recently issued FASB ASUs: ASU 2023-09 (Income Taxes), effective December 31, 2025, for disaggregated tax information, and ASU 2024-03 (Income Statement Expenses), effective December 15, 2026, for additional expense disclosures. Neither is expected to have a material effect on the consolidated financial statements - Evaluating ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective December 31, 2025, for disaggregated information about effective tax rate reconciliation and income taxes paid[132](index=132&type=chunk) - Evaluating ASU 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective for annual periods beginning after December 15, 2026[133](index=133&type=chunk) - The company does not expect either ASU to have a material effect on its consolidated financial statements[133](index=133&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' PEDEVCO Corp. is not required to provide quantitative and qualitative disclosures about market risk under Item 305(e) of Regulation S-K - The company is not required to provide quantitative and qualitative disclosures about market risk as it is a 'smaller reporting company'[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CAO concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to un-remediated material weaknesses identified in the 2024 Form 10-K. No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025 - The CEO and CAO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to un-remediated material weaknesses identified in the 2024 Form 10-K[137](index=137&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[138](index=138&type=chunk) [PART II – OTHER INFORMATION](index=23&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal or governmental proceedings. While it may be involved in litigation in the normal course of business, it has implemented policies and procedures to mitigate environmental risks associated with its natural gas and oil operations - The company is not currently a party to any material legal or governmental proceedings[141](index=141&type=chunk) - Various policies, programs, and procedures have been implemented to reduce and mitigate environmental risks inherent in the natural gas and oil business[142](index=142&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) 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. Investors are advised to review those factors - No material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024[143](index=143&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not issue or sell any unregistered equity securities during the quarter ended March 31, 2025. There were also no uses of proceeds from the sale of registered securities or purchases of equity securities by the issuer during this period - The company did not issue or sell any unregistered equity securities during the quarter ended March 31, 2025[144](index=144&type=chunk) - There were no uses of proceeds from the sale of registered securities or purchases of equity securities by the issuer and affiliated purchasers[145](index=145&type=chunk)[146](index=146&type=chunk) [Item 3. Defaults Upon Senior Securities](index=23&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is included in the report's table of contents but contains no specific information, indicating that there were no defaults upon senior securities during the reported period - No information provided, implying no defaults upon senior securities[147](index=147&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as 'Not Applicable' in the report, indicating that the company does not have operations requiring mine safety disclosures - This item is marked as 'Not Applicable'[148](index=148&type=chunk) [Item 5. Other Information](index=24&type=section&id=Item%205.%20Other%20Information) During the quarter ended March 31, 2025, none of the company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements - None of the company's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025[149](index=149&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's 2021 Equity Incentive Plan and related forms, certifications from the CEO and CFO (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and various Inline XBRL documents - Exhibits include the PEDEVCO Corp. 2021 Equity Incentive Plan and related forms of restricted shares and stock option grant agreements[150](index=150&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed/furnished[150](index=150&type=chunk) - Inline XBRL Instance Document and Taxonomy Extension Documents are included[150](index=150&type=chunk) [Signatures](index=24&type=section&id=Signatures) The Quarterly Report on Form 10-Q was duly signed on behalf of PEDEVCO Corp. by J. Douglas Schick, President and Chief Executive Officer, and Paul A. Pinkston, Chief Accounting Officer, on May 15, 2025 - The report was signed by J. Douglas Schick, President and Chief Executive Officer, and Paul A. Pinkston, Chief Accounting Officer, on May 15, 2025[156](index=156&type=chunk) ```

Core Viewpoint - The article emphasizes the importance of value investing and highlights Pedevco (PED) as a strong value stock based on its financial metrics and Zacks Rank [2][4][6] Company Analysis - Pedevco (PED) currently holds a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for investment [4] - The stock has a Forward P/E ratio of 10.80, which is lower than the industry average of 11.86, suggesting it may be undervalued [4] - Over the past year, PED's Forward P/E has fluctuated between a high of 33.33 and a low of 9.88, with a median of 12.16 [4] - Pedevco has a P/B ratio of 0.41, significantly lower than the industry average of 0.99, further indicating potential undervaluation [5] - The P/B ratio has ranged from a high of 0.93 to a low of 0.38 over the past 12 months, with a median of 0.75 [5] - These financial metrics contribute to Pedevco's strong Value grade and suggest that the stock is likely undervalued at present [6]

[Executive Summary & Key Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Key%20Highlights) PEDEVCO Corp. reported strong operational and financial results in 2024, marked by significant increases in annual production, revenue, and EBITDA, while maintaining financial discipline and strengthening its asset base [CEO Statement & Operational Overview](index=1&type=section&id=J.%20Douglas%20Schick%2C%20President%20and%20Chief%20Executive%20Officer%20of%20the%20Company%2C%20stated) PEDEVCO Corp. reported strong operational and financial results in 2024, marked by significant increases in annual production, revenue, and EBITDA. The company strengthened its positions in the D-J Basin and Permian Basin through participation in new wells and strategic agreements, while maintaining financial discipline with a strong cash position and zero debt - Increased **annual production, revenue, and EBITDA** in 2024, while maintaining disciplined G&A and operating expenses, and exiting the year with a **strong cash position and zero debt**[4](index=4&type=chunk) - Participated in the drilling and completion of **24 non-operated wells** in the D-J Basin (working interests ranging from ~7% to 28%) and is currently participating in an additional **6 non-operated wells** (~5% working interest) awaiting completion[4](index=4&type=chunk) - Completed **three new horizontal San Andres wells** in the Permian Basin early in the year and has **four recently drilled horizontal wells** currently undergoing completion operations, planned to turn in-line in Q2 2025[4](index=4&type=chunk) [Financial Performance Summary](index=1&type=section&id=Financial%20Summary%3A) For the year ended December 31, 2024, PEDEVCO reported a substantial increase in net income and EPS, driven by an income tax benefit and increased revenue, despite higher operating expenses. Adjusted EBITDA also saw significant growth, and the company ended the year with a strong cash position and no debt Key Financial Metrics (2024 vs. 2023) (in millions) | Metric | 2024 | 2023 | Change | | :----- | :--- | :--- | :----- | | Net Income | $17.8 | $1.7 | +$16.1 | | EPS | $0.20 | $0.02 | +$0.18 | | Revenue | $39.6 | $30.8 | +28% | | Operating Expenses | $34.8 | $25.3 | +37% | | Adjusted EBITDA | $22.9 | $17.5 | +31% | | Cash & Cash Equivalents | $6.6 | $20.7 | -$14.1 | | Debt | Zero | Zero | No Change | - Net income increase primarily due to a **$12.8 million income tax benefit** from net operating loss carryforwards and an **$8.8 million increase in revenue**, offset by a **$9.5 million increase in total operating expenses**[4](index=4&type=chunk)[5](index=5&type=chunk) - Average daily production increased **29% to 1,835 barrels of oil equivalent per day ("BOEPD")** (**73% oil, 85% liquids**) in 2024[8](index=8&type=chunk) [Detailed Financial Review](index=2&type=section&id=Detailed%20Financial%20Review) This section provides a comprehensive analysis of PEDEVCO's production volumes, realized prices, revenue drivers, and detailed operating expenses for the fiscal year 2024 [Production, Prices and Revenues](index=2&type=section&id=Production%2C%20Prices%20and%20Revenues%3A) In 2024, PEDEVCO experienced a significant increase in production volumes, leading to a 28% rise in total revenue, despite a negligible change in combined average realized sales price per Boe. Liquids comprised a substantial portion of total production Production and Revenue (Year Ended December 31, 2024) | Metric | 2024 | 2023 | Change | | :----- | :--- | :--- | :----- | | Total Production (Boe) | 671,796 | N/A | N/A | | Oil Production (barrels) | 492,396 | N/A | N/A | | Natural Gas Production (Mcf) | 608,382 | N/A | N/A | | NGL Production (Boe) | 78,003 | N/A | N/A | | Liquids % of Total Production | 85% | N/A | N/A | | Average Realized Crude Oil Price | $73.50/barrel | N/A | N/A | | Average Realized Natural Gas Price | $2.00/Mcf | N/A | N/A | | Average Realized NGL Price | $27.48/barrel | N/A | N/A | | Combined Average Realized Sales Price | $58.88/Boe | $59.10/Boe | -0.4% | | Total Revenue | $39.6 million | $30.8 million | +28% | - The **$8.8 million increase in total revenue** was primarily due to a favorable volume variance, resulting from participation in **24 new non-operated wells** in the D-J Basin and the drilling and completion of **three operated wells** in the Permian Basin[12](index=12&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased by $9.5 million in 2024, primarily driven by higher lease operating expenses and depreciation, depletion, amortization, and accretion (DD&A), both directly linked to increased production volumes. General and administrative expenses also saw a modest rise [Lease Operating Expenses (LOE)](index=2&type=section&id=Lease%20Operating%20Expenses%20%28%22LOE%22%29%3A) Lease operating expenses increased by $2.6 million in 2024, primarily due to higher direct and variable costs associated with increased oil and gas production volumes Lease Operating Expenses (LOE) (2024 vs. 2023) (in millions) | Metric | 2024 | 2023 | Change | | :----- | :--- | :--- | :----- | | Total LOE | $12.4 | $9.8 | +$2.6 | - The increase in LOE 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 and gas production**[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%28%22DD%26A%22%29%3A) Depreciation, depletion, amortization, and accretion expenses rose by $6.5 million in 2024, mainly driven by increased production and a higher accretion expense from a plugging and abandonment program Depreciation, Depletion, Amortization and Accretion (DD&A) (2024 vs. 2023) (in millions) | Metric | 2024 | 2023 | Change | | :----- | :--- | :--- | :----- | | DD&A | $15.9 | $9.4 | +$6.5 | - The increase in DD&A was primarily the result of an **increase in production** in the current period. Additionally, accretion expense increased by approximately **$0.4 million** in Q4 2024 due to the plugging and abandonment program in the Permian Basin Asset[14](index=14&type=chunk) [General and Administrative Expenses (G&A)](index=2&type=section&id=General%20and%20Administrative%20Expenses%20%28%22G%26A%22%29%3A) General and administrative expenses, excluding share-based compensation, increased by $0.6 million in 2024 due to higher staffing, bonuses, software, and professional services, while share-based compensation nominally decreased General and Administrative Expenses (G&A) (2024 vs. 2023) | Metric | 2024 | 2023 | Change | | :----- | :--- | :--- | :----- | | G&A (excl. share-based comp) | N/A | N/A | +$0.6 million | | Share-based compensation | N/A | N/A | Nominally decreased | - The increase of **$0.6 million in G&A** (excluding share-based compensation) was primarily due to increased contract and full-time staff related to increased activity, higher accrued bonuses, software licensing fees, and general increases in accounting and professional services[15](index=15&type=chunk) - Share-based compensation decreased nominally due to the forfeiture of certain employee stock-based options from voluntary employee terminations, utilized for conserving cash resources for field development[16](index=16&type=chunk) [Other Income and Expenses](index=2&type=section&id=Other%20Income%20and%20Expenses) The company reported a net loss on the sale of oil and gas properties in 2024 from multiple transactions, significantly lower than the prior year's loss. Interest income was earned from cash accounts, while other expenses related to a cash escrow disposition [Loss on Sale of Oil and Gas Properties, net](index=2&type=section&id=Loss%20on%20Sale%20of%20Oil%20and%20Gas%20Properties%2C%20net%3A) The net loss on the sale of oil and gas properties significantly decreased in 2024 to $76,000, compared to a $4.3 million loss in 2023, reflecting various asset dispositions and acquisitions Loss on Sale of Oil and Gas Properties, net (2024 vs. 2023) (in thousands) | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Total Net Loss on Sale | $76 | $4,300 | - In 2024, the company sold **30 gross (5.1 net) non-operated legacy D-J Basin well-bores** for a loss of **$865,000**, sold a legacy D-J Basin well-bore assignment for a gain of **$29,000**, and sold leasehold rights to **320 net acres** in the D-J Basin for a gain of **$735,000**[17](index=17&type=chunk) - In the prior period (2023), the company recognized a **$4.3 million loss** from the sale of its wholly-owned subsidiary EOR Operating Company and related assets (Milnesand Sale)[17](index=17&type=chunk) [Interest Income and Other Expense](index=2&type=section&id=Interest%20Income%20and%20Other%20Expense%3A) Interest income was $351,000 in 2024, while other expenses primarily related to the disposition of a cash escrow balance from the Milnesand Sale Interest Income (2024) (in thousands) | Metric | 2024 | | :----- | :--- | | Interest Income | $351 | - Other expense in 2024 primarily relates to the subsequent disposition of a cash escrow bank balance related to the Milnesand Sale. Other income in the prior period was primarily related to the sale of used pipe[18](index=18&type=chunk)[19](index=19&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Working%20Capital%20and%20Liquidity%3A) This section details PEDEVCO's working capital position, liquidity, and future capital expenditure plans, outlining funding strategies for ongoing and planned development activities [Working Capital and Liquidity Position](index=3&type=section&id=Working%20Capital%20and%20Liquidity%20Position) PEDEVCO maintained a healthy working capital surplus in 2024, which increased slightly compared to 2023, primarily due to a larger reduction in accounts payable and accrued expenditures relative to current assets Working Capital Surplus (2024 vs. 2023) (in millions) | Metric | December 31, 2024 | December 31, 2023 | | :----- | :------------------ | :------------------ | | Total Current Assets | $13.2 | $24.6 | | Total Current Liabilities | $6.9 | $18.9 | | Working Capital Surplus | $6.3 | $5.7 | - The **$0.6 million net increase in working capital surplus** was primarily related to a larger reduction in accounts payable and accrued expenditures compared to the corresponding smaller reduction in current assets, due to the timing of cash payments related to drilling activities[20](index=20&type=chunk) [Capital Expenditure Plans and Funding](index=3&type=section&id=Capital%20Expenditure%20Plans%20and%20Funding) The company estimates 2025 net capital expenditures between $27 million and $33 million, with the majority allocated to development in the D-J Basin. PEDEVCO anticipates sufficient cash to meet its needs through projected cash flow, existing cash, its RBL facility, potential equity/loans from Dr. Kukes, public/private financings, and asset sales Estimated 2025 Capital Expenditures (in millions) | Category | Estimated Range | | :------- | :-------------- | | Total Net Capital Expenditures | $27 - $33 | | Drilling & Completion (Permian & D-J) | $24.5 - $30.5 | | Other Capital Expenses | ~$2.5 | - Approximately **70% to 75% of expected capital expenditures** for 2025 will be allocated to development in the D-J Basin under new joint development and participation agreements[21](index=21&type=chunk) - Anticipated funding sources for 2025 development include projected cash flow from operations, existing cash on hand, borrowing under the **$250 million Citibank RBL facility** (initial **$20 million borrowing base**, none drawn), potential equity infusions or loans from Dr. Simon G. Kukes, public or private debt/equity financings (including up to **$8.0 million in 'at the market offerings'**), and funding through other credit facilities or asset sales[22](index=22&type=chunk) [Company Overview](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, Wyoming) - PEDEVCO Corp. (NYSE American: PED) is a publicly-traded energy company engaged in the acquisition and development of strategic, high growth energy projects in the United States[24](index=24&type=chunk) - The Company's principal assets are its Permian Basin Asset located in the Northwest Shelf of the Permian Basin in eastern New Mexico, and its D-J Basin Asset located in the D-J Basin in Weld and Morgan Counties, Colorado, and Laramie County, Wyoming[24](index=24&type=chunk) - PEDEVCO is headquartered in Houston, Texas[24](index=24&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) This section defines and reconciles non-GAAP financial measures, specifically EBITDA and Adjusted EBITDA, explaining their utility and limitations for investors [Use of Non-GAAP Financial Information](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) This section explains the company's use of non-GAAP financial measures, specifically EBITDA and Adjusted EBITDA, providing their definitions, the rationale for their presentation to investors, and important limitations to consider - **EBITDA** represents net income before interest, taxes, depreciation and amortization[25](index=25&type=chunk) - **Adjusted EBITDA** is defined as EBITDA before share-based compensation expense, loss on sale of oil and gas properties, net, and gain on sale of fixed assets[25](index=25&type=chunk) - These non-GAAP measures are presented because they provide additional useful information to investors due to various noncash items and are frequently used by analysts and investors in the industry, but should not be viewed as an alternative to GAAP measures[25](index=25&type=chunk) - Limitations include not reflecting cash expenditures, future requirements for capital expenditures, changes in working capital needs, significant interest expense, or cash income tax payments[26](index=26&type=chunk) [Reconciliation of Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20attributable%20to%20PEDEVCO%20Corp.%2C%20to%20Earnings%20before%20Interest%2C%20Taxes%2C%20Depreciation%20and%20Amortization%20%28EBITDA%29%20and%20Adjusted%20EBITDA%2A) The company provides a reconciliation of its GAAP net income to non-GAAP EBITDA and Adjusted EBITDA for the years ended December 31, 2024, and 2023, detailing the adjustments made Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | Metric | 2024 | 2023 (As Restated) | | :----- | :--- | :----------------- | | Net income | $17,789 | $1,699 | | Add (deduct): | | | | Income tax benefit | (12,751) | - | | Depreciation, depletion, amortization and accretion | 15,920 | 9,440 | | **EBITDA** | **$20,958** | **$11,139** | | Add (deduct): | | | | Share-based compensation | 1,859 | 2,043 | | Loss on sale of oil and gas properties, net | 76 | 4,268 | | Gain on sale of fixed assets | (12) | - | | **Adjusted EBITDA** | **$22,881** | **$17,450** | [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward%20Looking%20Statements) This section serves as a legal disclaimer, identifying forward-looking statements within the press release and outlining the inherent risks, uncertainties, and other factors that could cause actual results to differ materially from those projected. It emphasizes that the company undertakes no obligation to update these statements - The press release may contain forward-looking statements, 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 and similar expressions[27](index=27&type=chunk) - These statements involve known and unknown risks, uncertainties, and other factors, which may cause the results of PEDEVCO to be materially different than those expressed or implied, including volatility of oil and natural gas prices, success in discovering reserves, profitability risks, regulatory changes, economic conditions, and the need for additional capital[27](index=27&type=chunk) - The company undertakes no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws[28](index=28&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents PEDEVCO Corp.'s audited consolidated financial statements, including the balance sheets, statements of operations, and cash flows for the specified fiscal periods [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheets provide a snapshot of PEDEVCO Corp.'s assets, liabilities, and shareholders' equity as of December 31, 2024, and 2023 Consolidated Balance Sheets (amounts in thousands) | Metric | December 31, 2024 | December 31, 2023 (As Restated) | | :------------------------------------------------ | :------------------ | :-------------------------------- | | **Assets** | | | | Cash and cash equivalents | $4,010 | $18,515 | | Accounts receivable – oil and gas | 7,995 | 5,790 | | Note receivable, current | 293 | 42 | | Prepaid expenses and other current assets | 917 | 260 | | **Total current assets** | **13,215** | **24,607** | | Oil and gas properties, subject to amortization, net | 95,070 | 81,872 | | Oil and gas properties, not subject to amortization, net | 8,442 | 12,407 | | **Total oil and gas properties, net** | **103,512** | **94,279** | | Note receivable | 933 | 1,099 | | Operating lease – right-of-use asset | 224 | 316 | | Deferred income taxes | 12,751 | - | | Other assets | 3,210 | 2,443 | | **Total assets** | **$133,845** | **$122,744** | | **Liabilities and Shareholders' Equity** | | | | Accounts payable | $2,625 | $6,580 | | Accrued expenses | 2,255 | 8,712 | | Revenue payable | 1,266 | 3,371 | | Operating lease liabilities – current | 99 | 89 | | Asset retirement obligations – current | 663 | 147 | | **Total current liabilities** | **6,908** | **18,899** | | Operating lease liabilities, net of current portion | 129 | 227 | | Asset retirement obligations, net of current portion | 5,708 | 2,166 | | **Total liabilities** | **12,745** | **21,292** | | Common stock | 89 | 87 | | Additional paid-in capital | 227,013 | 225,156 | | Accumulated deficit | (106,002) | (123,791) | | **Total Shareholders' Equity** | **121,100** | **101,452** | | **Total Liabilities and Shareholders' Equity** | **$133,845** | **$122,744** | [Consolidated Statements of Operations](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The consolidated statements of operations detail PEDEVCO Corp.'s revenues, operating expenses, and net income for the years ended December 31, 2024, and 2023 Consolidated Statements of Operations (amounts in thousands) | Metric | 2024 | 2023 (As Restated) | | :------------------------------------------ | :--- | :----------------- | | **Revenue:** | | | | Oil and gas sales | $39,553 | $30,784 | | **Operating expenses:** | | | | Lease operating costs | 12,449 | 9,831 | | Selling, general and administrative expense | 6,391 | 6,008 | | Depreciation, depletion, amortization and accretion | 15,920 | 9,440 | | **Total operating expenses** | **34,760** | **25,279** | | Loss on sale of oil and gas properties, net | (76) | (4,268) | | **Operating income** | **4,717** | **1,237** | | **Other income (Expense):** | | | | Interest income | 351 | 422 | | Gain on sale of fixed asset | 12 | - | | Other (expense) income | (42) | 40 | | **Total other income** | **321** | **462** | | **Income before income taxes** | **5,038** | **1,699** | | Income tax benefit | 12,751 | - | | **Net Income** | **$17,789** | **$1,699** | | **Earnings per common share:** | | | | Basic | $0.20 | $0.02 | | Diluted | $0.20 | $0.02 | | **Weighted average number of common shares outstanding:** | | | | Basic | 89,234,611 | 87,031,692 | | Diluted | 89,236,237 | 87,031,692 | [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The consolidated statements of cash flows present the sources and uses of cash for PEDEVCO Corp. across operating, investing, and financing activities for the years ended December 31, 2024, and 2023 Consolidated Statements of Cash Flows (amounts in thousands) | Metric | 2024 | 2023 (As Restated) | | :---------------------------------------------------- | :--- | :----------------- | | **Cash Flows From Operating Activities:** | | | | Net income | $17,789 | $1,699 | | Depreciation, depletion and amortization | 15,920 | 9,440 | | Share-based compensation expense | 1,859 | 2,043 | | Loss on sale of oil and gas properties, net | 76 | 4,268 | | Deferred income tax benefit | (12,751) | - | | Amortization of right-of-use asset | 110 | 100 | | Changes in operating assets and liabilities (net) | (10,275) | 5,931 | | **Net cash provided by operating activities** | **12,766** | **23,481** | | **Cash Flows From Investing Activities:** | | | | Cash paid for drilling and completion costs | (27,857) | (34,951) | | Proceeds from the sale of oil and gas property | 1,140 | 366 | | **Net cash used in investing activities** | **(26,874)** | **(35,743)** | | **Net decrease in cash and restricted cash** | **(14,108)** | **(12,262)** | | Cash and restricted cash at beginning of year | 20,715 | 32,977 | | **Cash and restricted cash at end of year** | **$6,607** | **$20,715** |

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 ☐ 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 (I.R.S. Emplo ...

Financial Performance - Pedevco Corp. reported quarterly earnings of $0.02 per share, matching the Zacks Consensus Estimate, and an increase from $0.01 per share a year ago [1] - The company posted revenues of $9.05 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 2.72%, and up from $7.33 million year-over-year [2] - Over the last four quarters, Pedevco has consistently surpassed consensus revenue estimates, achieving this four times [2] Stock Performance and Outlook - Pedevco shares have increased approximately 16.5% since the beginning of the year, while the S&P 500 has gained 25.5% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - Current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $9.68 million, and for the current fiscal year, it is $0.06 on revenues of $38.42 million [7] Industry Context - The Oil and Gas - Mechanical and Equipment industry, to which Pedevco belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Pedevco's stock performance [5]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Pedevco Corp. (PED) due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - Pedevco is expected to report quarterly earnings of $0.02 per share, reflecting a 100% year-over-year increase, with revenues projected at $8.81 million, a 20.2% increase from the previous year [3] Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst assessments [4] - The Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likelihood of actual earnings deviating from consensus estimates, with positive readings being more predictive of earnings beats [6][7] - A positive Earnings ESP combined with a strong Zacks Rank (1-3) shows a nearly 70% success rate for positive surprises [8] Historical Performance - Pedevco has not exceeded consensus EPS estimates in the last four quarters, with the last reported quarter matching expectations with earnings of $0.03 per share [12][13] Overall Assessment - Pedevco does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when evaluating the stock ahead of the earnings release [16]