Pedevco Q1 Earnings Call Highlights
Pedevco (NYSEAMERICAN:PED) reported first-quarter 2026 results that management said exceeded internal expectations in the company’s first full quarter following its merger with Juniper, with higher production from DJ Basin wells driving a sharp year-over-year increase in revenue and Adjusted EBITDA.
President and Chief Executive Officer Doug Schick said production averaged 8,091 barrels of oil equivalent per day in the quarter, while revenue totaled $40.2 million and Adjusted EBITDA was $21.5 million. Schick said 31 DJ Basin wells that came online in late 2025 “mostly performed ahead of their type curves,” supporting production above the company’s internal projections.
“Q1 reflected a business that is executing on the plan we laid out at the merger close,” Schick said.
Derivative Loss Drives Reported Net Loss
The company reported a net loss of $25.6 million for the quarter. Schick said the loss was driven almost entirely by a $31.3 million net loss on derivative contracts, including a $27.9 million non-cash mark-to-market adjustment tied to commodity price movements above the company’s hedge strike prices.
Excluding that item and other non-cash charges, Schick said the business generated $6.7 million of operating income and $21.5 million of Adjusted EBITDA. He said Adjusted EBITDA increased 404% from $4.3 million in the first quarter of 2025.
Chief Financial Officer Bobby Long said revenue rose 360% from $8.7 million in the prior-year quarter, “almost entirely” because of higher volumes from the combined asset base. Oil revenue was $36.6 million, or about 91% of total revenue, while natural gas contributed $1.9 million and NGLs contributed $1.8 million. The company’s realized oil price was $68.39 per barrel, roughly flat year over year.
Total operating expenses were $33.5 million. Lease operating expense was $16.4 million, general and administrative expense was $3.1 million, and depletion, depreciation and amortization was $12.5 million. Long also noted a $1.6 million non-cash impairment related to expired DJ Basin acreage.
Balance Sheet and Liquidity Improve
Schick said the company made “meaningful progress” reducing the working capital deficit that existed at year-end. Working capital deficit, excluding current assets and liabilities related to derivative contracts, improved by $27.1 million, from $34.1 million at year-end to $7 million at March 31.
Long said net cash provided by operating activities was $10.5 million in the quarter, reflecting strong cash margins from the expanded production base, partially offset by about $10.7 million of cash used for working capital, primarily from settling accounts payable carried from year-end 2025.
At March 31, the company had $11.3 million of total cash and restricted cash and $98 million outstanding under its revolving credit facility, compared with a $120 million borrowing base. Long said that left about $22 million of availability. Adjusting for cash and restricted cash, net debt was approximately $87 million, and total liquidity was about $33 million.
The company also had about $3.6 million of restricted cash tied to pre-merger surety bond requirements. Long said that amount is expected to be released within 90 days after the company entered a new surety program that does not require cash collateral.
Operations Focus on DJ Basin Completion and Cost Reductions
Chief Operating Officer R.T. Dukes said Pedevco incurred $3.8 million of capital expenses during the quarter on 10 non-operated DJ Basin wells, with working interests ranging from about 1% to 6.3%. All 10 wells are online and producing.
The company plans to complete a drilled but uncompleted well in the DJ Basin in Wyoming, where it holds more than a 90% working interest. First production is expected in early third quarter, which Dukes said should contribute to second-half volumes.
In the Powder River Basin, Pedevco holds approximately 202,000 acres. Dukes said there was no operated drilling or completion activity during the first quarter, and production outperformed internal plans with no major downtime or operational issues, helped by a relatively mild winter. In the Permian Basin, where the company holds approximately 14,505 net acres, there was no development activity in the quarter, and the asset performed in line with expectations.
Dukes said the company’s 2026 operational optimization budget of $10 million to $13 million is focused on pump conversions, well interventions and well cleanouts. The company is moving some wells from jet pumps and electric submersible pumps to rod pumps, which management said have lower operating costs and lower ongoing workover commitments.
Through its 2026 and 2027 optimization programs, Pedevco is targeting lease operating expense reductions that could reach up to $1 million per month in cost savings. Dukes said the company expects measurable improvement in total lease operating expenses as activity ramps in the third and fourth quarters, with the full benefit more visible in 2027.
Guidance Reiterated Despite Expected Production Decline
Management reiterated full-year 2026 guidance for average production of 6,500 to 7,000 BOE per day and Adjusted EBITDA of $60 million to $70 million, based on currently approved net capital expenditures of $16 million to $20 million.
Schick said first-quarter production benefited from the timing of the 31 DJ Basin wells that came online in late 2025 and reached peak production in the first quarter. He said production is expected to moderate through the middle quarters of 2026 as those wells follow natural decline curves, with second-half development and optimization work expected to support incremental volumes heading into 2027.
“Q1 was a high watermark for the year for production,” Schick said in closing remarks, adding that the production cadence was planned at the time of the merger.
The company said any incremental capital commitments across the DJ Basin, Powder River Basin and Permian Basin will be evaluated against return thresholds, liquidity and balance sheet strength. Schick said higher sustained commodity prices can improve the return profile of the company’s inventory, but “they do not change the discipline” of its capital framework.
Analysts Ask About Optimization, Development Timing and Hedging
During the question-and-answer session, Roth Capital Partners analyst Nicholas Pope asked how much of the optimization Capital program had been deployed in the first quarter. Dukes said the company “really started in earnest in Q2,” though it converted two wells to rod pumps in the first quarter, below budget and performing to plan.
Pope also asked about the split between DJ Basin and Powder River Basin development plans. Dukes said the company is completing the DJ Basin drilled but uncompleted well this summer, while optimization projects are planned across the Powder River Basin, DJ Basin and Permian Basin. He said the company has not disclosed a specific basin-by-basin split for those projects.
Stonegate Capital Partners analyst Dave Storms asked whether the optimization program applies across the company’s entire portfolio. Dukes said it is fair to say the program applies across “the bulk of the portfolio,” because the company operates ESPs and jet pumps across its assets and sees opportunities to move wells to more efficient lift methods.
Storms also asked about the company’s ability to move quickly if the commodity environment remains constructive. Schick said the Permian assets and many DJ Basin assets can move quickly, while the Powder River Basin currently has longer lead times.
On hedging, Schick said the company was required by its bank group to hedge 75% of production when the merger closed in October and is currently hedged in the high 60% range. He said some three-way hedges allow participation in upside that the company otherwise would not have, and that changes in the oil futures curve could create hedging opportunities for late 2026 and 2027.
About Pedevco (NYSEAMERICAN:PED)
Pedevco Corp is an independent oil and gas exploration and production company incorporated in Delaware and listed on the NYSE American under the ticker symbol PED. The firm focuses on acquiring, developing and producing hydrocarbon assets, with a strategic emphasis on shallow water and onshore properties in Trinidad and Tobago. Since its listing, Pedevco has pursued opportunities to expand reserves through targeted exploration and development projects in one of the Caribbean's most prolific hydrocarbon-producing regions.
The company's portfolio centers on two primary concession areas in Trinidad and Tobago: the O-55 shallow water offshore block and the onshore Block 3(a) license.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
Source MarketBeat
