8-K: PEDEVCO Announces Strong 2024 Financial Results with Increased Production and Revenue

PEDEVCO Corp. reports a 29% increase in average daily production and a 31% increase in adjusted EBITDA for the year ended December 31, 2024.

Summary

• PEDEVCO Corp. announced its financial results for the year ended December 31, 2024.
• The company reported an average daily production of 1,835 barrels of oil equivalent per day (BOEPD), with 73% oil and 85% liquids, representing a 29% increase over 2023.
• Adjusted EBITDA increased by 31% to $22.9 million in 2024, compared to $17.5 million in 2023.
• Revenue increased by 28% to $39.6 million in 2024.
• Operating income was reported at $4.7 million, with operating expenses at $34.8 million, increasing 281% and 37% respectively from 2023.
• Net income was $17.8 million, or $0.20 per basic diluted share, compared to $1.7 million, or $0.02 per diluted basic share, in 2023.
• The company had $6.6 million in cash and cash equivalents, including $2.6 million in restricted cash, and zero debt as of December 31, 2024.
• PEDEVCO has $20 million available for draw under a $250 million Citibank RBL.
• The company expects net capital expenditures for 2025 to range between $27 million and $33 million.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and growth in key metrics. The company's focus on strategic assets and partnerships suggests a well-defined strategy for future growth.

Positives

• Increased production, revenue, and EBITDA year-over-year.
• Strong cash position with zero debt.
• Untouched $250 million RBL with Citibank.
• Successful participation in D-J Basin wells.
• Strong results from new horizontal San Andres wells in the Permian Basin.
• Net income increased significantly to $17.8 million, or $0.20 per share, in 2024.
• Working capital surplus increased by $0.6 million.

Negatives

• Cash and cash equivalents decreased from $20.7 million to $6.6 million due to capital expenditures.
• Operating expenses increased by $9.5 million due to increased lease operating expenses and DD&A.
• Loss on sale of oil and gas properties of $76,000.
• Combined average realized sales price decreased 0.4% compared with 2023.
• G&A expenses (excluding share-based compensation) increased by $0.6 million.

Risks

• Volatility of oil and natural gas prices could impact future revenue and profitability.
• The company's success depends on discovering, estimating, developing, and replacing oil and natural gas reserves.
• The company may need additional capital to complete future acquisitions and fund operations.
• The company has limited control over activities on properties it does not operate.
• The company is dependent upon present management.
• The company's Executive Chairman beneficially owns a majority of the common stock.
• The company's internal projections, expectations, or beliefs underlying our 2025 capital budget are subject to change in light of numerous factors.

Future Outlook

The company plans to continue leveraging its strong balance sheet and partnerships to grow production, revenue, cash flow, and profit, as well as increase its asset base for the benefit of its shareholders through the remainder of 2025 and beyond.

Management Comments

• We are pleased with our strong operational and financial results in 2024, which represent a significant increase in our annual production, revenue, and EBITDA, while maintaining disciplined G&A and operating expenses, and exiting the year with a strong cash position, zero debt, and an untouched $250 million RBL in place with Citibank.
• We also continued to strengthen our positions in both the D-J Basin and the Permian Basin.

Industry Context

PEDEVCO's focus on strategic, high-growth energy projects in the U.S. aligns with the broader industry trend of optimizing production and leveraging partnerships to enhance operational efficiency and financial performance.

Comparison to Industry Standards

• It is difficult to compare PEDEVCO to industry standards without more specific information on its operational metrics (e.g., well costs, EURs) and financial ratios (e.g., leverage, profitability).
• However, the company's focus on the Permian and D-J Basins places it in competition with numerous other operators, including publicly traded companies like Devon Energy, EOG Resources, and Occidental Petroleum, as well as private equity-backed firms.
• PEDEVCO's reported production of 1,835 BOEPD is relatively small compared to these larger companies, but its growth rate and focus on cost control are positive indicators.

Stakeholder Impact

• Shareholders will benefit from increased production, revenue, and profitability.
• Employees may benefit from increased activity and potential for bonuses.
• The company's development plans could impact local communities and the environment.

Next Steps

• Continue development in the Permian with four recently drilled horizontal wells currently undergoing completion operations which they plan to turn in-line in Q2 2025.
• Continue to leverage strong balance sheet and partnerships to grow production, revenue, cash flow, and profit.
• Increase asset base for the benefit of shareholders.
• Allocate approximately 70% to 75% of expected capital expenditures for 2025 to development in the D-J Basin under the joint development agreement and Participation Agreement.

Key Dates

Keywords

PEDEVCO, financial results, production, EBITDA, revenue, Permian Basin, D-J Basin, oil and gas