PEDEVCO Q4 2025 Earnings Call - Merger Scales a Rocky-Focused Platform, now Selling a Story of Cost Cuts and Optionality

Operator: Today’s program is being recorded. I would now like to turn the call over to Laurent Weil of Elevate IR. Please go ahead, sir.

Laurent Weil, IR Representative, Elevate IR: Thank you, operator, and good morning everyone. Welcome to PEDEVCO’s fourth quarter and full year 2025 earnings call. With me today are Doug Shick, President and Chief Executive Officer, R.T. Dukes, Chief Operating Officer, and Bobby Long, Chief Financial Officer. Before we begin, I would like to remind everyone that today’s discussion includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. For more information, please refer to our 2025 Form 10-K and other SEC filings. The company undertakes no obligation to update or revise any forward-looking statements. During today’s call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA. Reconciliation to the most directly comparable GAAP measures are available in our earnings release and 10-K filing. These non-GAAP measures should not be considered in isolation or as substitutes for GAAP results.

I would also note that all per share and share count figures referenced today reflect the company’s 1-for-20 reverse stock split, which became effective on March 13, 2026, and has been applied retroactively for all periods presented. As of March 27, 2026, the company had 13,300,621 shares of common stock outstanding. As many of you know, this is PEDEVCO’s first earnings call as a combined company following the completion of the Juniper merger on October 31, 2025. Today, you will hear about both the reported results and the normalized earnings power of the combined platform, which we believe is the more relevant lens for evaluating the company going forward. Here is today’s agenda. Doug will begin with opening remarks outlining the company’s strategy and investment case, followed by R.T.

With an operational update, and then Bobby will walk through our financial performance. After our prepared remarks, the management team will open the call for questions. With that, I will turn it over to Doug.

Doug Shick, President and Chief Executive Officer, PEDEVCO: Thanks, Laurent, and good morning everyone. Thank you for joining us today for our first earnings call as a combined company. 2025 was a transformational year for PEDEVCO. Through the closing of our merger with the Juniper portfolio companies on October 31, we built a scaled, Rocky-focused energy platform, which we believe is unique in the public oil and gas space due to its extensive development inventory relative to its market cap. We went from producing approximately 1,500 barrels of oil equivalent per day to a combined rate that averaged over 5,300 BOE per day in the fourth quarter. Our proved reserves nearly doubled to 32.1 million BOE, or approximately $27 per share on a post-split basis.

We hold over 310,000 net acres across the DJ Basin, Powder River Basin, and Permian Basin with an approximately 88% liquids mix and well over a decade of identified inventory. Our independent reserve engineers’ valuation of our proved reserves provides a useful floor for the asset value discussion, and that valuation does not include over 1,000 additional identified drilling locations, a vast majority of which are high impact wells that can be pad drilled to multiple formations to maximize efficiency and cash returns on capital deployed. I also want to underscore the alignment at this company. Insiders, including the management team, own a significant majority of PEDEVCO, so we are focused on maximizing the value of the shares while minimizing risk.

Our largest investor, Juniper Capital, is a seasoned oil and gas private equity firm that has been investing in the space for over 20 years. Juniper invested approximately $18.6 million of new equity at the merger, which demonstrates their strong commitment to the company’s success. Turning to our fourth quarter results, it’s important to note that because the merger closed on October 31, our reported results only include a partial contribution from the acquired assets. In the fourth quarter, we generated $15.4 million of adjusted EBITDA on over 5,300 barrels of oil equivalent per day of production, reflecting an initial period of combined operations.

Bobby will walk you through the full bridge and our 2026 outlook, but the headline is this. Adjusted EBITDA in the fourth quarter grew 203% year-over-year, despite a 16% decline in realized crude oil prices, reflecting both the impact of the merger and the underlying operational strength. This merger wasn’t just about getting bigger. It was about building scale and adding capabilities to the team, which will allow for efficiencies and additional growth. We now have production and cash flow base that allows us to operate the business more efficiently and generate strong margins while utilizing our internally generated cash flow to further develop our extensive asset base. Importantly, the core business stands on its own. We do not have to do deals to be a good company because we have such an extensive development inventory already.

From here, acquisitions are about building on our strong foundation, and our focus for any acquisition will be to build upon what we already have, which is an efficient company that generates significant cash flow and owns a large amount of attractive development opportunities. We will weigh every potential acquisition relative to our existing opportunity set. We have significant development opportunities across all three basins and will pursue that development at a pace that reflects financial discipline. The management team and our large shareholders are focused on maintaining a strong company that can thrive in any commodity price environment. Looking ahead, our focus is straightforward. First, we will continue to optimize the business, driving down cost and improving margins across the asset base. We are also focused on prioritizing our extensive development opportunity set with a goal of maximizing the risk-adjusted returns on our capital deployed over many years.

With over 1,000 identified drilling opportunities across three basins in over a dozen different formations, we have substantial optionality on where to deploy capital. I want to give investors a clear message of what we are focused on. First, you will see our cash realized per barrel produced improve over the course of 2026 as our ongoing optimization projects continue to improve our cost structure. Second, you will see us execute on a capital plan that generates strong returns on capital while maintaining a strong balance sheet. Finally, you will see PEDEVCO maintain and grow its deep inventory of development opportunities, which we plan to more fully detail over the coming quarters. As we think about 2026, the macro environment has become more constructive in the recent weeks, with geopolitical developments supporting higher oil prices. That said, our approach does not change.

We’re not building a plan that depends on commodity prices moving in our favor. Our focus remains on maximizing the efficiency of every barrel produced and every dollar spent while generating consistent cash flows across cycles. If the current price environment holds, it provides incremental upside, both in terms of cash flow and the pace at which we can execute our development plans. We will remain disciplined in how we allocate capital, and we’ll scale activity in line with what our business can support. With that, I will turn it over to R.T. Dukes.

R.T. Dukes, Chief Operating Officer, PEDEVCO: Thanks, Doug, and good morning, everyone. I wanna start with what we view as the low-hanging fruit, high return activity we began immediately after the merger closed, which is our cost optimization on our existing production base. I’ll cover key operational highlights. As we look ahead to 2026, a key priority for us is indeed the execution of a comprehensive cost optimization program across our assets. When we completed the transformative merger with Juniper’s Rocky portfolio late last year, it significantly increased the scale and production of our company, and it presented an opportunity to optimize our overall cost structure. Specifically, we have identified around $10 million-$13 million in capital projects that we believe will drive meaningful lease operating expense or LOE reduction.

This includes things like converting high-cost jet pumps to more efficient rod pumps, as well as compression optimization projects, recompletions and well cleanouts. We expect these projects to reduce our LOE by up to $1 million per month, equating to $10 million-$12 million in annual savings. To give you a sense of where we stand, we’ve begun executing on a number of these optimization initiatives in the DJ Basin, including initial pump conversions and well work. This is an active, ongoing effort with identified projects and a clear plan of execution. As we move through 2026, we expect to make steady progress across these work streams and begin to see the impact in our cost structure and margins. We will report on that progress each quarter. Now turning to operations. The DJ Basin is the largest production base of the combined company.

We hold approximately 100,000 net acres across southeastern Wyoming and northern Colorado. The DJ contributed the large majority of Q4 and full-year production and is where a majority of the current 2026 capital budget is currently expected to be allocated. During 2025 in the DJ Basin, we participated in 32 wells, of which 31 began contributing production in late 2025, and one operated well will be completed in 2026. Of the 31 new wells that came online in late 2025, two of these wells were operated and 29 were non-op. In the Permian Basin, we drilled and completed four operated wells in 2025. On the production side, there are a couple of points worth highlighting. The development work initiated before and around the merger close is now being realized.

31 of the 32 wells that were in progress at closing are online and producing, and the development program is performing well. That activity is contributing to elevated production in Q1 2026, as those wells are still in their flush production phase. In fact, it’s important to keep in mind that Q1 will likely be a peak production quarter for 2026. Given the number of wells brought online in a short period of time, this is not a run rate that should be annualized for us for the year. As those wells move through their decline curves, we would expect production to settle close to the levels consistent with the merger time rate of approximately 6,400-6,500 BOE per day before accounting for natural declines in new activity. Through the merger, we added over 200,000 additional net acres in the Powder River Basin.

This is a longer-dated position with meaningful resource potential across multiple formations, including the Parkman, Sussex, Niobrara, Turner, Mowry, Teapot, Shannon, and Frontier. With break-even oil prices in some of those formations as low as $30 per barrel, other active operators in this area are targeting many of them already on offset acreage with some of the largest and most sophisticated oil and gas companies like EOG, Devon, Oxy, and Continental, amongst others. Our development timing in the PRB will be driven by commodity prices, cash flow, and our expected returns, which are continually being revised based on results of third-party drilling near our assets. In the Permian, we hold approximately 14,000 net acres on the Northwest Shelf with the San Andres formation as our primary target. This asset provides a long-term, low decline, oil-concentrated asset, providing steady cash flow. Production continues to perform in line with expectations.

Across the portfolio, our focus is on maintaining flexibility, controlling costs, and allocating capital to the highest return opportunities. With those highlights, I’ll turn it over to Bobby.

Bobby Long, Chief Financial Officer, PEDEVCO: Thank you, R.T., and good morning, everyone. I will cover four areas today. Our financial results for the fourth quarter and full year 2025, our 2026 outlook, the balance sheet and liquidity framework, and our capital program. Starting with our fourth quarter results, we generated $23.1 million of revenue, $15.4 million of Adjusted EBITDA, and production of 483,159 BOE. These results reflect two months of contribution from the acquired assets following the October 31 merger close and provide the most relevant view of the combined platform. On a GAAP basis, reported results reflect several items tied to the merger and transition.

For the full year, we reported a net loss of $10.4 million, driven by $7.5 million of non-recurring merger costs, $8.1 million of deferred income tax expense, $1.4 million of interest expense on our credit facility, a $1.4 million note receivable write-off, and $2.8 million of additional accelerated share-based compensation. These were partially offset by gains on derivatives and asset sales. Adjusted EBITDA removes the non-cash and non-recurring items and gives you a clearer view of operating performance. Regarding unit economics, full year direct LOE was 11.62 per BOE, up from 10.36, driven entirely by higher costs of the acquired assets. As the optimization efforts take effect, we expect per unit LOE to decline through 2026, with meaningful improvement visible by mid-year.

Cash G&A, excluding merger costs, should settle into $3.50-$4 per BOE range as a larger production base absorbs overhead. Turning to our 2026 outlook, as noted in our earnings release, we are projecting full year 2026 Adjusted EBITDA of $60 million-$70 million. That range is based on average realized oil prices of $65 per barrel and average realized gas prices of $3.50 per Mcf, and it reflects our current expected capital program. I want to be clear about what is and is not in that range. It assumes the base production profile plus the benefit of our cost optimization work. It does not assume incremental operated development beyond what has been planned. If we elect to pursue additional high return development, there will be upside to that range.

This highlights the flexibility of the company. With our deep inventory, we have many levers to pull to increase returns to shareholders. On to the balance sheet. At December 31, we had $87 million drawn under our senior secured revolving credit facility led by Citibank. The facility has a $120 million borrowing base under a $250 million maximum commitment and matures October 31, 2029. Since year-end, we drew an additional $11 million, bringing the total to $98 million as of February 5, 2026, with approximately $25 million of total liquidity remaining. Our spring redetermination will provide updated view on borrowing base capacity.

Turning to the capital program, our currently known capital expenditures for 2026 are $16 million-$20 million, approximately $6 million-$7 million for DJ Basin drilling completion capital, including approximately $3 million of 2025 carryover, and approximately $10 million-$13 million for the optimization projects RT described. Approximately 90% of the current capital budget is allocated to the DJ Basin. However, as noted previously, the amounts and allocation are likely to be revised over time. We expect to fund the program through operating cash flow, existing cash, and facility availability. At $65 oil, we project a leverage ratio of approximately 1.2-1.3x net debt to EBITDA by year-end. Any decisions to expand the capital program will be governed by commodity prices, cash flow, and our commitment to conservative leverage.

In general, we are focused on maintaining leverage of 1.5 times or less using conservative commodity price assumptions. We are not committing to a second half development acceleration at this time, though we are evaluating operating development options. As our cost optimization reaches full run rate and the combined platform generates a full year of cash flow, we expect the financial profile of this company to strengthen meaningfully into 2027. Thank you all for your attention. I will now turn it back to the operator for questions.

Operator: Certainly. Our first question for today comes from the line of Nicholas Pope from Roth Capital. Your question, please.

Nicholas Pope, Analyst, Roth Capital: Hey, good morning, everyone.

Bobby Long, Chief Financial Officer, PEDEVCO: Morning, Nick.

Nicholas Pope, Analyst, Roth Capital: Kind of curious about the capital program. Obviously prices have been pretty elevated here for the commodities. I guess what would it take to pivot to more activity? I guess specifically in the DJ Basin, like how drill ready is Devon at this point to add more activity if kind of higher prices persist for longer, and that becomes something y’all would kinda like to pursue just more activity in the basin? I guess, how ready are you? Are the pipes ready? Are the rigs ready? How long would it take to pivot to more activity if that’s what y’all decide to do at some point?

Bobby Long, Chief Financial Officer, PEDEVCO: Yeah. Nick, you know, considering the current price environment, we are doing extensive asset reviews on what our second half in 2027 development programs are going to look like. Particularly in the DJ Basin, there is flexibility to stand up a rig relatively quickly, like not in the next month, but you know, in the next few months if that opportunity exists. Also, we have significant partner-operated type developments that could be coming at us in the second half in 2027 in the DJ Basin. There’s

Doug Shick, President and Chief Executive Officer, PEDEVCO: There’s significant flexibility to increase the development program and CapEx program if prices warrant and if the curve, you know, if the backwardation in the curve kind of straightens out a little bit.

Nicholas Pope, Analyst, Roth Capital: In terms of permitting, what’s the timeframe to get prepared from a permitting standpoint? I guess maybe and is it different on both sides of that Colorado, Wyoming.

Doug Shick, President and Chief Executive Officer, PEDEVCO: Yeah. It’s different on both sides of the border, right? In Colorado, it takes a lot longer. We have one permitted DSU, which is 6-7 wells that is actionable. We also have another DSU in progress right now. You know, that’s 12-13 wells that could be ready in the next, call it, 6-9 months. On the Wyoming side, we have some infill opportunities on our North Silo field. We also have all of our partner-operated projects in Colorado that, you know, we don’t necessarily control the development of those. Those, some of those AFEs will likely be coming at us in the second half and into 2027 as well.

Nicholas Pope, Analyst, Roth Capital: Kind of moving over to the Powder River Basin, I guess, what steps are left in terms of evaluating the resource and the potential? I know, R.T., you hit a little bit on it. I guess what risks remain in kind of understanding that resource and maybe, you know, it sounds like maybe it’s a 2027 or kind of beyond, kind of plan to kind of target more activity up there. Curious what steps are remaining there to kind of understand the potential.

Doug Shick, President and Chief Executive Officer, PEDEVCO: There are some locations up there that are actionable sooner than 2027-2028. However, we’re currently going through our asset reviews to really understand that asset. You know, we’re working on a few different areas that we think are highly prospective, but we don’t have any announcements on anything, you know, any development plan up there in the next six months.

Nicholas Pope, Analyst, Roth Capital: Got it. All right. That’s great. I appreciate the time, guys.

Doug Shick, President and Chief Executive Officer, PEDEVCO: Thanks, Nick.

Nicholas Pope, Analyst, Roth Capital: Welcome.

Operator: Thank you. Our next question comes from the line of Dave Storms from Stonegate. Your question, please.

Dave Storms, Analyst, Stonegate: Morning, and thank you for taking my questions.

Doug Shick, President and Chief Executive Officer, PEDEVCO: Morning, Dave.

Dave Storms, Analyst, Stonegate: Morning. Just wanted to maybe start with some of the optimization initiatives. I know you mentioned the $10 million-$13 million that could be coming out this year. I guess, how far along do you feel like you are in the identification of what can be taken out? Could we see other projects of this size over the coming quarters? Is there any place that you’re looking, you know, maybe the first rocks that you’re looking under for those projects?

Doug Shick, President and Chief Executive Officer, PEDEVCO: Well, the optimization projects began pretty much right before the beginning of the year. RT, what do you think the timing is on that? I mean, we basically plan to have most of that work done by the third, fourth quarter of this year, on the LOE side. On the G&A side, you know, we’re working through merger costs and things like that and combining the entities and getting everything rationalized. You know, $13 million-$15 million of annualized EBITDA additions from optimization is really kind of a late 2026, 2027 event as we work through it through this year.

R.T. Dukes, Chief Operating Officer, PEDEVCO: Yeah, that’s right, Doug. You know, you know, leading into winter, we backed off, and then we’re picking back up coming out of the winter, you know, up in Wyoming on our field optimization and continue throughout the year and into midyear 2027.

Dave Storms, Analyst, Stonegate: That’s perfect. I really appreciate that. Maybe just following up on that. Post-merger, you know, you’ve had the company for a couple months now. I guess maybe some of your thoughts around the scale and production capacity as it currently sits relative to maybe your expectations pre-merger. I know you mentioned that you’re still looking at, you know, 6,400-6,500 BOE per day. I guess has anything else changed relative to where you thought you’d be, call it, last September, October?

Doug Shick, President and Chief Executive Officer, PEDEVCO: Yeah. I mean, I think our you know, when we did the merger, we had 32 wells in progress, right? The majority of those wells have outperformed their type curves. First quarter looks pretty good. As we stated in the script here, you know, you can’t extrapolate the first quarter over the entire year. However, we do think that, you know, we’ve got a very solid production base. As far as growing the asset organically, for a small cap E&P company, public E&P company this size, I don’t think anyone has as large of an inventory as we do, a multi-year inventory, you know, 10-year plus of inventory.

As we stated earlier, most of the near-term stuff is gonna be in the DJ Basin, and then with the Powder Basin or the Powder River Basin, kind of becoming our core focus in the next few years.

Dave Storms, Analyst, Stonegate: Understood. If I could just maybe sneak one more in. I know you guys are still getting your arms around this acquisition, but would just love to hear what your thoughts are around any current M&A opportunities in the market. Has the macro environment made this less conducive? Do you have any appetite if you see something attractive. Just any thoughts around any future M&A?

Doug Shick, President and Chief Executive Officer, PEDEVCO: Yeah, sure. I mean, you know, when we partnered with Juniper to do this, our entire goal of the company was to consolidate a public company in the Rockies, right? You know, we’ve got the DJ assets, we have the Powder River assets. There are extensive acquisition opportunities in the Powder River Basin. Lots of small operators up there, lots of acreage that we could go acquire to build, you know, a much larger position, and we plan to do that. Of course, over time, you know, as commodity prices change, acquisitions become either more difficult or less difficult. In higher price environments, you typically wanna drill your own inventory a little more. In lower price environments, you know, you wanna be more.

You wanna do more accretive acquisitions because you can kind of lock in your returns with hedging. You know, we’re gonna be active on all fronts, but acquisitions are opportunistic, right? There are some out there, but you know, we’re gonna be working to acquire, and we’re gonna be working to develop. Our goal here is to turn, you know, PEDEVCO from a small-cap company to a mid-cap company.

Dave Storms, Analyst, Stonegate: That’s great. Appreciate all the color, and good luck in the next quarter.

Doug Shick, President and Chief Executive Officer, PEDEVCO: All right. Thanks, Dave.

Operator: Thank you. This does conclude the question and answer session of today’s program. I’d like to hand the program back to Doug for any further remarks.

Doug Shick, President and Chief Executive Officer, PEDEVCO: Thank you, operator, and thank you all for your questions. 2025 was the year we built this platform. 2026 is the year we demonstrate its potential. We look forward to showing you our progress throughout the rest of the year. Thank you for your time, and thank you for your interest in PEDEVCO. Have a good day.

Operator: Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.