PEDEVCO (PED) - 2023 Q3 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section provides important cautionary statements regarding forward-looking information, highlighting inherent risks and uncertainties PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited consolidated financial statements of PEDEVCO Corp. for the periods ended September 30, 2023, and December 31, 2022, including balance sheets, statements of operations, cash flows, and shareholders' equity, along with detailed notes explaining the basis of presentation, business description, significant accounting policies, and specific financial accounts Consolidated Balance Sheets This section provides a snapshot of the Company's financial position at specific dates, detailing assets, liabilities, and equity Consolidated Balance Sheet Highlights (amounts in thousands) | Metric | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :-------------------------------- | :----------------------- | :----------- | | Cash | $13,200 | $29,430 | | Total current assets | $19,157 | $32,109 | | Total assets | $110,883 | $116,110 | | Total current liabilities | $5,347 | $16,962 | | Total liabilities | $8,593 | $19,651 | | Total shareholders' equity | $102,290 | $96,459 | - Total assets decreased from $116.1 million at December 31, 2022, to $110.9 million at September 30, 2023, primarily due to a decrease in cash from $29.4 million to $13.2 million[16] - Total current liabilities significantly decreased from $17.0 million at December 31, 2022, to $5.3 million at September 30, 2023, mainly driven by a reduction in accrued expenses[16] Consolidated Statements of Operations This section details the Company's revenues and expenses over specific periods, leading to net income or loss Consolidated Statements of Operations Highlights (amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Oil and gas sales | $7,330 | $7,472 | $24,042 | $24,109 | | Total operating expenses | $6,474 | $6,451 | $20,069 | $18,611 | | Operating income | $856 | $1,021 | $3,973 | $5,498 | | Net income | $949 | $1,079 | $4,285 | $5,628 | | Basic income per common share | $0.01 | $0.01 | $0.05 | $0.07 | | Diluted income per common share | $0.01 | $0.01 | $0.05 | $0.07 | - Net income decreased by $0.13 million for the three months ended September 30, 2023, compared to the same period in 2022, primarily due to a $0.1 million decrease in net revenues[87] - Net income for the nine months ended September 30, 2023, decreased by $1.3 million compared to the same period in 2022, mainly due to a nominal decrease in revenue and a $1.5 million increase in total operating expenses[96] Consolidated Statements of Cash Flows This section outlines the cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Cash Flow Highlights (amounts in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $11,425 | $12,994 | | Net cash used in investing activities | $(27,655) | $(11,413) | | Net cash provided by financing activities | $- | $50 | | Net (decrease) increase in cash and restricted cash | $(16,230) | $1,631 | | Cash and restricted cash at end of period | $16,747 | $30,858 | - Net cash provided by operating activities decreased by $1.6 million, primarily due to a $1.3 million decrease in net income, partially offset by a $2.0 million increase in depreciation, depletion, and amortization[111] - Net cash used in investing activities increased by $16.2 million, driven by higher capital spending on drilling and completion activities[112] Consolidated Statements of Shareholders' Equity This section details changes in the Company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Shareholders' Equity Changes (amounts in thousands, except share amounts) | Metric | Dec 31, 2022 | Sep 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Common Stock Shares | 85,790,267 | 87,250,267 | | Common Stock Amount | $86 | $87 | | Additional Paid-in Capital | $223,114 | $224,659 | | Accumulated Deficit | $(126,741) | $(122,456) | | Total Shareholders' Equity | $96,459 | $102,290 | - Total shareholders' equity increased from $96.5 million at December 31, 2022, to $102.3 million at September 30, 2023, primarily due to net income and share-based compensation[24] - The Company issued 1,460,000 restricted stock awards to employees and board members during the nine months ended September 30, 2023[54][56][57] Notes to Unaudited Consolidated Financial Statements This section provides detailed explanations and additional information supporting the unaudited consolidated financial statements NOTE 1 – BASIS OF PRESENTATION 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[25] - Future financial condition and liquidity depend on drilling program success, oil and natural gas discoveries, production speed, exploration costs, and prevailing commodity prices[27] NOTE 2 – DESCRIPTION OF BUSINESS This note outlines the Company's primary business activities and strategic focus within 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 San Andres formation of the Permian Basin (West Texas and eastern New Mexico) and the Denver-Julesburg Basin (Colorado and Wyoming)[28] - The Company aims to optimize existing assets, opportunistically acquire additional acreage, and develop assets using modern drilling and completion techniques[29] NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note summarizes the key accounting policies applied in the preparation of the financial statements - No changes to significant accounting policies since December 31, 2022[30] - The Company adopted ASU No. 20