PEDEVCO Announces 2023 Financial Results
- 43% increase in production to 1,427 BOEPD in 2023.
- Adjusted EBITDA increased to $17.5 million.
- Reported revenue of $31 million, up 2% from 2022.
- Net income decreased to $0.3 million due to a one-time $4.3 million non-cash loss.
- Cash and cash equivalents of $20.7 million with zero debt.
- CEO emphasized operational and financial success in 2023 and growth potential in the Permian and D-J Basins.
- Net income decrease due to a one-time $4.3 million non-cash loss.
- Significant decrease in average realized sales price per Boe compared to 2022.
- Working capital surplus decreased by $9.4 million from 2022 to 2023.
- Expected net capital expenditures for 2024 estimated between $20-30 million.
Insights
The reported increase in production volume by 43% is a positive indication of operational efficiency and potential for future revenue growth. However, this has been somewhat offset by a decrease in commodity prices, which has led to only a marginal increase in revenue. The fact that the company achieved an 8% increase in Adjusted EBITDA despite the lower commodity prices suggests effective cost management strategies. The reduction in operating expenses and the absence of debt on the balance sheet are strong indicators of a robust financial structure, which could appeal to investors seeking companies with prudent financial management.
Furthermore, the divestiture of non-core assets, while resulting in a one-time loss, seems to be a strategic move to streamline operations and reduce future liabilities. The expected reduction in monthly LOE expenses due to this sale could improve profit margins moving forward. It is also worth noting the company's strong cash position, which provides flexibility for future investments and operations without the immediate need for external financing.
The company's focus on the Permian and D-J Basins is consistent with industry trends towards exploiting resources in these prolific areas. The strategic approach to participate in both operated and non-operated wells diversifies risk and may provide a balanced portfolio of assets. Approval for drilling up to 11 operated wells and the participation in 13 non-operated wells could signal significant production growth in the near term, which is critical in an industry where production rates are closely watched by investors.
However, the decrease in average realized sales prices for crude oil, natural gas and NGLs is a concern, as it reflects the volatility in commodity markets. While the company has managed to increase production, it is essential to monitor the price environment as it directly impacts revenue. The energy sector is highly susceptible to external factors such as geopolitical tensions and global energy demand and any adverse developments could potentially affect the company's future performance.
The financial results show a company adapting to market conditions by optimizing operations and reducing costs. The reduction in LOE and the decrease in DD&A expenses are indicative of effective asset management. This could position the company well against competitors in the energy sector, particularly in a lower price environment. The market will likely respond favorably to the company's disciplined approach to G&A expenses and its ability to maintain a positive cash flow trajectory.
It's also important to consider the broader market implications of the company's results. With the energy sector in a state of flux, due to both the transition to renewable energy sources and fluctuating oil prices, the company's ability to maintain profitability and a strong balance sheet could make it a more resilient player in the market. Investors may find the company's focus on maintaining liquidity and capital discipline reassuring, especially in preparation for the anticipated capital expenditures in 2024.
HOUSTON, TX / ACCESSWIRE / March 18, 2024 / PEDEVCO Corp. (NYSE American:PED) ("PEDEVCO" or the "Company"), an energy company engaged in the acquisition and development of strategic, high growth energy projects in the U.S., today announced its financial results for the year ended December 31, 2023.
Key Highlights Include:
- Produced an average of 1,427 barrels of oil equivalent per day ("BOEPD") (
74% oil) in 2023, increasing43% over average daily production in 2022. - Adjusted EBITDA, a non-GAAP financial measure (discussed in greater detail below), increased
8% to$17.5 million in 2023, compared to$16.1 million in 2022. - Reported revenue of
$31 million , increasing2% over 2022 revenue. - Reported operating loss of
$0.2 million and operating expenses (inclusive of general and administrative expenses, depreciation, depletion and amortization expenses and lease operating expenses) of$26.7 million , decreasing108% and3% , respectively, from 2022. - Reported net income of
$0.3 million , or$0.00 per basic diluted share outstanding, in 2023, compared to net income of$2.8 million , or$0.03 per diluted basic share outstanding, in 2022. - Decrease in net income primarily due to one-time
$4.3 million non-cash loss recognized on the sale of non-core vertical assets in two fields in our Permian Basin Asset and our EOR Operating Company subsidiary in New Mexico, which the Company estimates will reduce its plugging and abandonment liabilities by over$3.2 million , and significantly reduce monthly LOE expenses on our Permian Basin Asset going forward. - Reported cash and cash equivalents (including
$2.2 million in restricted cash) of$20.7 million as of December 31, 2023, and zero debt.
J. Douglas Schick, President of the Company, stated, "We are very encouraged by our strong operational and financial results in 2023, including a
Financial Summary:
For the year ended December 31, 2023, we reported a net income of
The decrease in net income of
We reported operating expenses in 2023 of
Adjusted EBITDA, a non-GAAP financial measure (discussed in greater detail below), increased
Cash and cash equivalents was
Production, Prices and Revenues:
Production for the year ended December 31, 2023 was 520,886 barrels of oil equivalent ("Boe"), comprised of 382,794 barrels of oil, 479,533 million cubic feet ("Mcf") of natural gas, and 58,170 Boe of natural gas liquids ("NGLs"). Liquids production comprised
For the year ended December 31, 2023, our average realized crude oil sales price was
Total crude oil, natural gas and NGL revenues for the year ended December 31, 2023, increased
Lease Operating Expenses ("LOE"):
Total LOE for 2023 was
Depreciation, Depletion, Amortization and Accretion ("DD&A"):
DD&A decreased from
General and Administrative Expenses ("G&A"):
There was an increase of
Share-based compensation, which is included in general and administrative expenses in the Statements of Operations, decreased nominally due to the forfeiture of certain employee stock-based options due to certain voluntary employee terminations in the prior period, offset by the issuance of restricted shares of common stock to board members in the current period. Share-based compensation is utilized for the purpose of conserving cash resources for use in field development activities and operations.
Gain on Sale of Oil and Gas Properties:
The Company sold its wholly owned subsidiary EOR Operating Company and related non-core vertical assets in November 2023 and recognized the corresponding loss of
Interest Income and Other Expense:
We earned
Working Capital and Liquidity:
At December 31, 2023, our total current assets of
Our expected net capital expenditures for 2024 are estimated to range between
We expect that we will have sufficient cash available to meet our needs over the foreseeable future, including to fund the remainder of our 2024 development program, discussed above, which cash we anticipate being available from (i) projected cash flow from operations, (ii) existing cash on hand, (iii) equity infusions or loans (which may be convertible) made available by our Chief Executive Officer and director, Dr. Simon G. Kukes, which funding he is under no obligation to provide, and (iv) funding through credit or loan facilities. In addition, we may seek additional funding through asset sales, farm-out arrangements, and credit facilities to fund potential acquisitions during the remainder of 2024.
More information regarding the Company's operating results for the years ended December 31, 2023 and 2022, including the Company's full financial statements and footnotes, can be found in the Company's Annual Report on Form 10-K which was filed earlier today with the Securities and Exchange Commission and is available at www.sec.gov .
About PEDEVCO Corp.
PEDEVCO Corp. (NYSE American: PED), is a publicly-traded energy company engaged in the acquisition and development of strategic, high growth energy projects in the United States. The Company's principal assets are its Permian Basin Asset located in the Northwest Shelf of the Permian Basin in eastern New Mexico, and its D-J Basin Asset located in the D-J Basin in Weld and Morgan Counties, Colorado. PEDEVCO is headquartered in Houston, Texas.
Use of Non-GAAP Financial Information
This earnings release discusses EBITDA and Adjusted EBITDA which are presented as supplemental measures of the Company's performance. These measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. EBITDA represents net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before share-based compensation expense, gain on sale of oil and gas properties, gain on forgiveness of PPP loan, and accounts payable settlements. EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We use EBITDA and Adjusted EBITDA as supplements to GAAP measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments. For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than PEDEVCO Corp. does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company's results as reported under GAAP. The Company's presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures, please see the section titled "Reconciliation of Net Income (Loss) attributable to PEDEVCO Corp., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA", included at the end of this release.
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward-looking statements, including information about management's view of PEDEVCO's future expectations, plans and prospects, within the meaning of the federal securities laws, including the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements within the meaning of the Act and such laws, and are subject to the safe harbor created by the Act and applicable laws. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of PEDEVCO and its subsidiaries to be materially different than those expressed or implied in such statements. The forward-looking statements include projections and estimates of the Company's corporate strategies, future operations, development plans and programs, including the costs thereof, drilling locations, estimated oil, natural gas and natural gas liquids production, price realizations, projected operating, general and administrative and other costs, projected capital expenditures, efficiency and cost reduction initiative outcomes, statements regarding future production, costs and cash flows, liquidity and our capital structure. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, risks of our operations not being profitable or generating sufficient cash flow to meet our obligations; risks relating to the future price of oil, natural gas and NGLs; risks related to the status and availability of oil and natural gas gathering, transportation, and storage facilities; risks related to changes in the legal and regulatory environment governing the oil and gas industry, and new or amended environmental legislation and regulatory initiatives; risks relating to crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changing economic, regulatory and political environments in the markets in which the Company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; actions of competitors or regulators; the potential disruption or interruption of the Company's operations due to war, accidents, political events, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the Company's control; risks related to the need for additional capital to complete future acquisitions, conduct our operations, and fund our business on favorable terms, if at all, the availability of such funding and the costs thereof; risks related to the limited control over activities on properties we do not operate and the speculative nature of oil and gas operations in general; risks associated with the uncertainty of drilling, completion and enhanced recovery operations; risks associated with illiquidity and volatility of our common stock, dependence upon present management, the fact that Dr. Simon G. Kukes, our CEO and member of the Board, beneficially owns a majority of our common stock, and our ability to maintain the listing of our common stock on the NYSE American; pandemics, governmental responses thereto, economic downturns and possible recessions caused thereby; inflationary risks and recent increased interest rates, and the risks of recessions and economic downturns caused thereby or by efforts to reduce inflation; risks related to military conflicts in oil producing countries; changes in economic conditions; limitations in the availability of, and costs of, supplies, materials, contractors and services that may delay the drilling or completion of wells or make such wells more expensive; the amount and timing of future development costs; the availability and demand for alternative energy sources; regulatory changes, including those related to carbon dioxide and greenhouse gas emissions; and others that are included from time to time in filings made by PEDEVCO with the Securities and Exchange Commission, many of which are beyond our control, including, but not limited to, in the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" sections of its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the U.S. Securities and Exchange Commission, including, but not limited to its Annual Report on Form 10-K for the year ended December 31, 2023. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on PEDEVCO's future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. PEDEVCO cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. The internal projections, expectations, or beliefs underlying our 2024 capital budget are subject to change in light of numerous factors, including, but not limited to, the prevailing prices of oil and gas, actions taken by businesses and governments, ongoing results, prevailing economic circumstances, commodity prices, and industry conditions and regulations.
PEDEVCO CORP.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,515 | $ | 29,430 | ||||
Accounts receivable - oil and gas | 5,790 | 2,430 | ||||||
Note receivable, current | 42 | - | ||||||
Prepaid expenses and other current assets | 260 | 249 | ||||||
Total current assets | 24,607 | 32,109 | ||||||
Oil and gas properties: | ||||||||
Oil and gas properties, subject to amortization, net | 79,186 | 79,372 | ||||||
Oil and gas properties, not subject to amortization, net | 12,407 | 775 | ||||||
Total oil and gas properties, net | 91,593 | 80,147 | ||||||
Note receivable | 1,099 | - | ||||||
Operating lease - right-of-use asset | 316 | 71 | ||||||
Other assets | 2,443 | 3,783 | ||||||
Total assets | $ | 120,058 | $ | 116,110 | ||||
Liabilities and Shareholders` Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,580 | $ | 1,556 | ||||
Accrued expenses | 8,712 | 13,835 | ||||||
Revenue payable | 3,371 | 1,018 | ||||||
Operating lease liabilities - current | 89 | 81 | ||||||
Asset retirement obligations - current | 147 | 472 | ||||||
Total current liabilities | 18,899 | 16,962 | ||||||
Long-term liabilities: | ||||||||
Operating lease liabilities, net of current portion | 227 | - | ||||||
Asset retirement obligations, net of current portion | 2,166 | 2,689 | ||||||
Total liabilities | 21,292 | 19,651 | ||||||
Commitments and contingencies | ||||||||
Shareholders` equity: | ||||||||
Common stock, 87,250,267 and 85,790,267 shares issued and outstanding, respectively | 87 | 86 | ||||||
Additional paid-in capital | 225,156 | 223,114 | ||||||
Accumulated deficit | (126,477 | ) | (126,741 | ) | ||||
Total shareholders` equity | 98,766 | 96,459 | ||||||
Total liabilities and shareholders` equity | $ | 120,058 | $ | 116,110 | ||||
PEDEVCO CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except share and per share data)
| December 31, | ||||||||
Revenue: | 2023 | 2022 | ||||||
Oil and gas sales | $ | 30,784 | $ | 30,034 | ||||
Operating expenses: | ||||||||
Lease operating costs | 9,831 | 10,397 | ||||||
Selling, general and administrative expense | 6,008 | 5,854 | ||||||
Depreciation, depletion, amortization and accretion | 10,875 | 11,153 | ||||||
Total operating expenses | 26,714 | 27,404 | ||||||
Loss on sale of oil and gas properties | (4,268 | ) | - | |||||
Operating income (loss) | (198 | ) | 2,630 | |||||
Other income: | ||||||||
Interest income | 422 | 117 | ||||||
Other income | 40 | 97 | ||||||
Total other income | 462 | 214 | ||||||
Net Income | $ | 264 | $ | 2,844 | ||||
Loss per common share: | ||||||||
Basic | $ | 0.00 | $ | 0.03 | ||||
Diluted | $ | 0.00 | $ | 0.03 | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 87,031,692 | 85,513,095 | ||||||
Diluted | 87,031,692 | 85,513,095 | ||||||
PEDEVCO CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
| December 31, | ||||||||
| 2023 | 2022 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net income | $ | 264 | $ | 2,844 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 10,875 | 11,153 | ||||||
Share-based compensation expense | 2,043 | 2,097 | ||||||
Loss on sale of oil and gas properties | 4,268 | - | ||||||
Amortization of right-of-use asset | 100 | 102 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable - oil and gas | (3,360 | ) | (648 | ) | ||||
Note receivable | (19 | ) | - | |||||
Prepaid expenses and other current assets | (11 | ) | 77 | |||||
Accounts payable | (11 | ) | (159 | ) | ||||
Accrued expenses | 6,979 | 435 | ||||||
Revenue payable | 2,353 | 80 | ||||||
Net cash provided by operating activities | 23,481 | 15,981 | ||||||
Cash Flows From Investing Activities: | ||||||||
Cash paid for drilling and completion costs | (34,951 | ) | (12,252 | ) | ||||
Cash paid for other property and equipment | (45 | ) | - | |||||
Proceeds from the sale of oil and gas property | 366 | - | ||||||
Cash paid for issuance of note receivable | (1,122 | ) | - | |||||
Cash received from security deposit | 9 | - | ||||||
Cash paid for security deposit | - | (14 | ) | |||||
Net cash used in investing activities | (35,743 | ) | (12,266 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from the issuance of common stock, net | - | 35 | ||||||
Net cash provided by financing activities | - | 35 | ||||||
Net (decrease) increase in cash and restricted cash | (12,262 | ) | 3,750 | |||||
Cash and restricted cash at beginning of year | 32,977 | 29,227 | ||||||
Cash and restricted cash at end of year | $ | 20,715 | $ | 32,977 | ||||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash paid for: | ||||||||
Interest | $ | - | $ | - | ||||
Income taxes | $ | - | $ | - | ||||
Noncash investing and financing activities: | ||||||||
Change in accrued oil and gas development costs | $ | 7,674 | $ | 10,879 | ||||
Change in estimates of asset retirement costs | $ | 39 | $ | 618 | ||||
Issuance of restricted common stock | $ | 1 | $ | 2 | ||||
Reconciliation of Net Income (Loss) attributable to PEDEVCO Corp., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA* (in thousands)
| Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
Net income (loss) | $ | 264 | $ | 2,844 | ||||
Add (deduct) | ||||||||
Depreciation, depletion, amortization and accretion | 10,875 | 11,153 | ||||||
EBITDA | 11,139 | 13,997 | ||||||
Add (deduct) | ||||||||
Share-based compensation | 2,043 | 2,097 | ||||||
Loss on sale of oil and gas properties | 4,268 | - | ||||||
Adjusted EBITDA | $ | 17,450 | $ | 16,094 | ||||
* EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. See also "Use of Non-GAAP Financial Information", above.
CONTACT:
PEDEVCO Corp.
(713) 221-1768
PR@pedevco.com
SOURCE: PEDEVCO Corp.
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FAQ
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