PEDEVCO (US:PED)2025-03-31 21:08Financial Performance - Total revenues for the year ended December 31, 2024, reached $39.55 million, a 28.5% increase from $30.78 million in 2023[129]. - Crude oil production totaled 492,396 barrels in 2024, up 28.8% from 382,794 barrels in 2023, with an average sales price of $73.50 per barrel[129]. - Natural gas production increased to 608,382 Mcf in 2024, compared to 479,533 Mcf in 2023, with an average sales price of $2.00 per Mcf[129]. - Total production for 2024 was 78,003 Bbls, an increase from 58,170 Bbls in 2023, representing a growth of 34%[130]. - Average sales price per Bbl increased to $27.48 in 2024 from $24.43 in 2023, reflecting a rise of 12.5%[130]. - The company incurred $20.5 million in capital costs for the year ended December 31, 2024, primarily related to non-operated drilling and completion costs[147]. Capital Expenditures and Investments - Estimated net capital expenditures for 2025 are projected to range between $27 million to $33 million, with $24.5 million to $30.5 million allocated for drilling and completion costs[97]. - Approximately 70% to 75% of the expected capital expenditures for 2025 will be allocated to development in the D-J Basin[97]. - The company anticipates sufficient cash flow to fund its 2025 development program, including projected cash flow from operations and existing cash on hand[99]. - The company plans to optimize existing assets and seek additional acreage to enhance stockholder value through strategic acquisitions[93]. - The company aims to apply modern drilling and completion techniques to historically underdeveloped properties to increase production and reserves[94]. Reserves and Production Potential - The report discusses the importance of proved reserves, which are reserves that have been confirmed to a high degree of certainty[71]. - The company highlights the significance of production costs, which include operating and maintaining wells and related facilities[69]. - The report mentions the present value of future net revenues (PV-10), calculated using a 10% discount rate, which reflects the estimated future revenues from proved reserves[67]. - Total estimated proved reserves as of December 31, 2024, were 18.1 million Boe, including 14.2 million Bbls of crude oil and NGL reserves[138]. - The company holds interests in 14,105 net acres in the Permian Basin and 18,669 net acres in the D-J Basin, indicating significant drilling potential[110]. - The D-J Basin Asset has grown to approximately 14,809 net acres in Weld and Morgan Counties, Colorado, and 3,860 net acres in Laramie County, Wyoming[127]. Regulatory Environment - The production of oil and natural gas is regulated by various federal and state laws, which may limit the number of wells that can be drilled and impose additional costs on operations[155]. - Each state imposes a production or severance tax on the production and sale of oil, NGL, and gas, affecting overall profitability[157]. - The Federal Energy Regulatory Commission (FERC) regulates interstate natural gas pipeline transportation rates, which can impact the revenues received from oil and gas sales[161]. - The FERC has the authority to impose civil penalties for violations of regulations, with penalties reaching up to $1.5 million per day per violation[162]. - Compliance with environmental regulations may require significant capital investments for air pollution control equipment, impacting future capital expenditures[172]. - The EPA has proposed new rules aimed at reducing methane emissions from oil and gas operations, which could impose additional operational requirements[173]. Operational Control and Management - The company retains operational control over its properties to efficiently manage capital expenditures and maximize returns[96]. - The management team has extensive experience in the oil and gas industry, with key members having over 25 years of relevant experience[108]. - The company has a borrowing base of $20 million and an aggregate maximum revolving credit amount of $250 million under its reserve-based lending facility[99]. - The company is committed to maintaining a disciplined financial profile to provide flexibility across various commodity and market cycles[96]. Joint Ventures and Agreements - A Participation Agreement with Evolution Petroleum Corporation was established for joint development of the Chaveroo oilfield, covering approximately 16,000 gross leasehold acres[123]. - A joint development agreement was entered into in February 2025, with the operator paying $1.7 million for participation in the expansion of the Roth and Amber DSUs[145]. Environmental and Safety Regulations - The company faces potential significant costs and delays due to new or more stringent federal, state, or local legal restrictions on hydraulic fracturing, which could adversely affect exploration and production activities[201]. - The Clean Water Act and state laws impose strict controls on the discharge of pollutants, which could delay the development of oil and natural gas projects[204]. - The Oil Pollution Act of 1990 imposes duties and liabilities on operators related to oil spill prevention, which could adversely affect the Company's operations[206]. - Stricter regulations on hazardous waste could increase costs for the Company and the oil and natural gas industry, potentially impacting financial performance[209]. - The company may be subject to joint and several liability for cleanup costs related to hazardous substances under CERCLA, which could be substantial[210]. - The company operates properties that have been used for oil and natural gas exploration, which may have released hazardous substances[211].