8-K/A: PEDEVCO Finalizes North Peak Merger, Discloses Financials

PEDEVCO Corp. has completed its acquisition of North Peak Oil & Gas, filing amended financial statements and pro forma information detailing the combined entity's financial position and operational outlook.

Summary

• PEDEVCO Corp. filed an Amendment No. 2 to its Form 8-K to include audited and unaudited financial statements of North Peak Oil & Gas, LLC (North Peak) as searchable text and HTML, along with an updated consent from its independent registered public accounting firm.
• The filing relates to the merger of PEDEVCO Corp. with North Peak Oil & Gas, LLC and Century Oil and Gas Sub-Holdings, LLC (collectively, North Peak) which closed on October 31, 2025.
• Concurrently with the merger, investors subscribed for and purchased 6,363,637 shares of PEDEVCO Series A Preferred Stock for an aggregate of $35,000,004.
• North Peak owns approximately 281,000 net acres of oil-weighted producing assets and leasehold interests with future drilling inventory in the Northern DJ and Powder River Basins.
• North Peak reported a net loss of $4,353 thousand for the year ended December 31, 2024, a significant decline from a net income of $21,403 thousand in 2023.
• For the nine months ended September 30, 2025, North Peak reported a net loss of $13,032 thousand, compared to a net income of $770 thousand for the same period in 2024.
• Proved oil, NGL, and natural gas reserves for North Peak decreased significantly from 117,715,008 Boe as of December 31, 2023, to 50,061,114 Boe as of December 31, 2024, primarily due to downgrading 163 proved undeveloped locations.
• Prior to the merger, North Peak was not in compliance with several financial covenants for its EOC Loan, Amegy Notes, and Prudential Notes as of December 31, 2024, and September 30, 2025, but had obtained waivers for these non-compliances.
• As part of the merger, PEDEVCO Corp. paid off North Peak's outstanding current and long-term debt with all parties.

Sentiment

Score: 4

Explanation: While the merger completion and debt payoff are positive for North Peak's stability, the underlying financial performance of North Peak (significant losses, declining revenues, and substantial reserve downgrades) prior to the merger indicates considerable challenges. The overall sentiment is cautious due to these historical performance issues, despite the strategic benefits of the acquisition for PEDEVCO.

Positives

• The successful completion of the merger with North Peak Oil & Gas expands PEDEVCO's asset base with approximately 281,000 net acres in the Northern DJ and Powder River Basins.
• PEDEVCO's payment of North Peak's outstanding debt significantly de-risks North Peak's financial position post-merger, addressing prior covenant non-compliance issues.
• North Peak received $24.5 million in additional capital contributions since year-end 2024, indicating continued investment support.
• North Peak recorded a $2.0 million gain on a legal judgment in 2023, resolving a previous accrual for litigation.

Negatives

• North Peak reported a net loss of $4,353 thousand for the year ended December 31, 2024, a substantial decrease from a net income of $21,403 thousand in 2023.
• For the nine months ended September 30, 2025, North Peak's net loss widened to $13,032 thousand, compared to a net income of $770 thousand in the prior year period.
• Proved reserves experienced a significant downward revision of 66.3 MMBoe in 2024, primarily due to downgrading 163 proved undeveloped locations.
• North Peak's total revenues from crude oil, natural gas, and NGL sales decreased from $204,030 thousand in 2023 to $158,326 thousand in 2024.
• North Peak had negative working capital and was operating with a net loss for the year ended December 31, 2024, and the nine months ended September 30, 2025, raising going concern considerations prior to the merger.
• North Peak was not in compliance with several financial covenants related to its EOC Loan, Amegy Notes, and Prudential Notes as of December 31, 2024, and September 30, 2025, requiring waivers.

Risks

• The process of estimating crude oil, natural gas, and NGL reserves is complex and inherently imprecise, subject to material revisions based on development activity, production history, and changing economic conditions.
• Actual events and results may differ materially from forward-looking statements due to known and unknown risks, uncertainties, and assumptions.
• The Company is exposed to commodity price risk, which it attempts to manage through derivative instruments, but these instruments do not eliminate all price volatility.
• North Peak Oil and Gas is subject to credit risk from the concentration of its crude oil, natural gas, and NGL receivables with significant purchasers, although no credit losses have been experienced historically.
• Operations are subject to various federal, state, and local environmental laws and regulations, which may require significant expenditures for compliance.
• The Company is involved in various legal proceedings, including commercial disputes and claims from royalty and surface owners, which could potentially impact financial condition, results of operations, or cash flows.

Future Outlook

North Peak management, prior to the merger, believed that with committed capital from its members and continued improvements in production, it would be able to continue as a going concern for at least one year from the issuance of its combined financial statements. The pro forma financial information is provided for illustrative purposes only and does not necessarily indicate future consolidated results of operations for PEDEVCO.

Management Comments

• J. Douglas Schick, President and Chief Executive Officer of PEDEVCO Corp., signed the report.
• North Peak management believed that with committed capital from its members and continued improvements in production, it would be able to continue as a going concern for at least one year from the issuance of its combined financial statements.

Industry Context

The merger of PEDEVCO Corp. with North Peak Oil & Gas positions the combined entity with significant oil-weighted producing assets and drilling inventory in the established Denver-Julesburg (DJ) and Powder River Basins. This consolidation reflects a trend in the energy sector where companies seek to enhance their asset portfolios and operational scale, particularly in proven hydrocarbon basins, to optimize production and manage costs amidst commodity price fluctuations. The termination of North Peak's prior merger agreement with Amplify Energy Corp. due to 'extraordinary volatility in the market' highlights the inherent risks and dynamic nature of the oil and gas industry.

Comparison to Industry Standards

• The significant downward revision of North Peak's proved reserves by 66.3 MMBoe in 2024, primarily due to downgrading proved undeveloped locations, suggests a more conservative or challenging development outlook compared to industry peers maintaining or growing their reserve base.
• North Peak's pre-merger non-compliance with debt covenants, requiring waivers, indicates a weaker financial health relative to industry standards for leverage and liquidity, which typically prioritize robust balance sheets to withstand commodity price cycles.
• The acquisition of North Peak's assets in the DJ and Powder River Basins by PEDEVCO aligns with broader industry strategies of consolidating positions in prolific, low-cost basins to achieve economies of scale and operational efficiencies, similar to moves seen by larger independent producers in these regions.

Management Changes

Legal Proceedings

• North Peak was involved in litigation regarding ownership of revenue and working interests for certain wells, which resulted in a $2.0 million gain on legal judgment in 2023 following a favorable ruling by the Wyoming Supreme Court.

Related Party Transactions

• North Peak incurred management fees for operational and administrative support from an affiliate, totaling $7.3 million in 2024 and $6.8 million in 2023. For the nine months ended September 30, 2025 and 2024, these fees were $4.0 million and $5.4 million, respectively.

Stakeholder Impact

• Shareholders of PEDEVCO Corp. will see the company's asset base expand and its operational footprint grow in key oil and gas basins.
• New investors participated in a capital raise by purchasing PEDEVCO Series A Preferred Stock, indicating confidence in the combined entity's future.
• Creditors of North Peak Oil & Gas benefited from the payoff of outstanding debt by PEDEVCO Corp. as part of the merger, resolving prior covenant non-compliance issues.
• Employees and management of North Peak will now operate under the PEDEVCO Corp. structure, with potential changes in roles and responsibilities.

Next Steps

• PEDEVCO Corp. will continue to integrate North Peak's operations and assets into its existing business.
• The combined entity will proceed with development drilling in the Northern DJ and Powder River Basins, utilizing North Peak's leasehold interests and future drilling inventory.

Key Dates

Keywords

PEDEVCO, North Peak Oil & Gas, Merger, Acquisition, SEC Filing, 8-K/A, Financial Statements, Oil and Gas, DJ Basin, Powder River Basin, Energy, Reserves, Debt, Corporate Governance, Preferred Stock