Pedevco Corp. Reports $17.8 Million Net Income for Fiscal Year 2024

Pedevco Corp. (PEDEVCO) reported net income of $17.8 million, or $0.20 per share, for the fiscal year ended December 31, 2024, a significant increase from the $1.7 million, or $0.02 per share, reported in the restated fiscal year 2023. This increase was primarily driven by a $12.8 million income tax benefit, an $8.8 million rise in revenue, and the absence of a $4.3 million loss on the sale of the Milnesand and Sawyer fields experienced in 2023. These gains were partially offset by a $9.5 million increase in total operating expenses and a $0.3 million decrease in other income. Total revenues for 2024 reached $39.55 million, a 28% increase compared to the restated $30.78 million in 2023. This revenue increase stemmed from a 29% rise in total oil, natural gas, and NGL sales volumes, reaching 671,796 barrels of oil equivalent (Boe).

The increase in production volume resulted from participation in 24 new non-operated wells in the Denver-Julesberg (D-J) Basin and the completion of three operated wells in the Permian Basin. However, the average sales price per Mcf of natural gas decreased from $3.00 in 2023 to $2.00 in 2024, while the average sales price per barrel of crude oil and NGLs saw a slight increase. Operating expenses increased due to higher direct and variable lease operating expenses, a rise in depreciation, depletion, amortization, and accretion (DD&A) expense, and increased general and administrative expenses. The Company also incurred a net loss of $76,000 on the sale of oil and gas properties in 2024, compared to a $4.3 million loss in 2023.

Significant developments during the year included a participation agreement with Evolution Petroleum Corporation for joint development of the Chaveroo oilfield in New Mexico, generating $366,000 and $365,000 in proceeds in 2023 and 2024, respectively. The Company also entered into a joint development agreement in February 2025 with a private equity-backed D-J Basin operator, and a participation agreement and area of mutual interest agreement in August 2024 with another private operator. Furthermore, Pedevco divested approximately 8,035 gross leasehold acres in the Permian Basin, eliminating $3.2 million in plugging and abandonment liabilities. The company also sold non-core D-J Basin assets for a $735,000 gain. Capital expenditures for 2024 totaled $20.5 million, primarily for drilling and completion activities.

As of December 31, 2024, Pedevco held approximately 14,105 net acres in the Permian Basin and 18,669 net acres in the D-J Basin. The company's total estimated proved reserves were 18.1 MMBoe, comprising 14.2 MMbbls of crude oil and NGL reserves and 23.4 MMcf of natural gas reserves. The company employed 14 people at the end of 2024. Pedevco also established a $250 million reserve-based lending facility with Citibank, although no borrowings had been drawn down as of the end of 2024. The company noted a material weakness in its internal control over financial reporting related to the review of inputs to depreciation, depletion, and amortization calculations, as well as in the preparation of the tax provision.

Pedevco's outlook for 2025 anticipates net capital expenditures ranging from $27 million to $33 million, with 70% to 75% allocated to D-J Basin development. The company expects to fund its operations through projected cash flow, existing cash on hand, potential borrowings under the RBL, potential equity infusions from Dr. Simon G. Kukes, and potential public or private debt or equity financings, including up to $8 million in at-the-market offerings. The company also highlighted several risk factors, including commodity price volatility, the need for additional capital, the concentration of assets in two geographic areas, and the uncertainties inherent in oil and gas exploration and development.