PEDEVCO Provides Update on New Permian Basin Wells

Rhea-AI Summary

PEDEVCO Corp. provided an operational update on its three newly drilled and completed horizontal San Andres wells in the Permian Basin. The wells, drilled in Q4 2023 and completed in January 2024, have shown promising early production results, peaking at 300 to 375 BOEPD per well. The Company is pleased with the performance, experiencing better-than-expected declines and averaging over 750 BOEPD gross for the last 30 days. PEDEVCO is collaborating with Evolution Petroleum to plan the next phase of development for the Chaveroo oilfield in New Mexico.

Positive

• PEDEVCO drilled and completed three horizontal San Andres wells in the Permian Basin with Evolution Petroleum
• The wells peaked at 300 to 375 BOEPD per well in late February.
• The Company is satisfied with the early production results, averaging over 750 BOEPD gross for the last 30 days.
• PEDEVCO and Evolution entered into a Participation Agreement in September 2023 to jointly develop the Chaveroo oilfield.
• Evolution has farmed-in for a 50% WI in the initial three wells and will farm-in for an average 50% WI in future drilling locations.

Negative

• None.

Insights

Energy Sector Analyst

PEDEVCO's operational update on its new Permian Basin wells indicates a strategic expansion within a prolific oil region. The initial production figures are noteworthy, suggesting efficient drilling and completion techniques. The reported peak of approximately 300 to 375 BOEPD per well aligns with industry benchmarks for the San Andres formation, indicating competent execution. A shallow decline curve is particularly positive, as it implies a longer well life and potentially lower production costs over time. The partnership with Evolution Petroleum Corporation could leverage shared expertise and capital, potentially leading to operational synergies. Investors should monitor the company's ability to maintain production levels and control costs. The next development phase will be critical in evaluating the sustainability of the wells' performance and the partnership's effectiveness.

Financial Analyst

The financial implications of the reported operational success could be multifaceted for PEDEVCO and its shareholders. With over 750 BOEPD gross averaged over the last 30 days, revenue projections could see an uptick, assuming stable oil prices. The 100% working interest and 82% net revenue interest held by PEDEVCO before Evolution's farm-in could translate to significant revenue retention from these wells. However, Evolution's acquisition of a 50% working interest in future wells presents a dilution of earnings but also a reduction in capital expenditure risk. It is essential for investors to consider the balance sheet impact of the capital expenses associated with the drilling, as well as the potential for increased cash flow from production. The next phase of development and how both companies manage their capital allocation, will be key in assessing the long-term value proposition of PEDEVCO's stock.

HOUSTON, TX / ACCESSWIRE / April 17, 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 provided an operational update on its three newly drilled and completed horizontal San Andres wells in its Permian Basin Asset as follows:

• The Company drilled and completed three horizontal San Andres wells in its core Chaveroo Field in the Permian Basin with its strategic partner Evolution Petroleum Corporation.
• The wells were drilled in Q4 2023 and completed in January 2024, with first production commencing the last week of January 2024 on one well and early February 2024 for the other two wells.
• All three wells peaked at between approximately 300 to 375 gross barrels of oil equivalent ("BOEPD") per well (~80% oil) in late February.
• The Company is pleased with the early production results, with the wells currently performing in line with expectations, but with shallower, better-than-expected declines which have yielded an average of over 750 BOEPD gross for the last 30 days.
• The Company is working with Evolution to plan the next phase of development over the coming months.

As previously announced, in September 2023 the Company and Evolution entered into a Participation Agreement to jointly develop the Company's Chaveroo oilfield in the Northwest Shelf of southeastern New Mexico, a conventional oil-bearing San Andres field in the Permian Basin located in Chaves and Roosevelt Counties. The agreement covers approximately 16,000 gross acres with average working interest ("WI") and net revenue interest ("NRI") of 100% and 82%, respectively, all currently owned by PEDEVCO. Evolution has farmed-in for a 50% WI in these initial three wells, and will farm-in for an average 50% WI in all future horizontal drilling locations on a block-by-block basis in which it elects to participate, with PEDEVCO remaining the operator with a working interest equal to Evolution in all wells that we jointly develop.

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, and Laramie County, Wyoming. PEDEVCO is headquartered in Houston, Texas. More information about PEDEVCO can be found at www.pedevco.com.

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.

CONTACT:

PEDEVCO Corp.
(713) 221-1768
PR@pedevco.com

SOURCE: PEDEVCO Corp.

View the original press release on accesswire.com

FAQ

What is the update provided by PEDEVCO Corp. regarding its Permian Basin wells?

PEDEVCO Corp. provided an operational update on its three newly drilled and completed horizontal San Andres wells in the Permian Basin.

When were the wells drilled and completed?

The wells were drilled in Q4 2023 and completed in January 2024.

What was the peak production of the wells?

The wells peaked at between approximately 300 to 375 BOEPD per well in late February.

Who is PEDEVCO collaborating with for the development of the Chaveroo oilfield?

PEDEVCO is working with Evolution Petroleum for the development of the Chaveroo oilfield.

What agreement did PEDEVCO and Evolution enter into in September 2023?

PEDEVCO and Evolution entered into a Participation Agreement in September 2023 to jointly develop the Chaveroo oilfield.