Pedevco Q2 Earnings Call Highlights

Pedevco (NYSEAMERICAN:PED) reported second-quarter 2026 results that reflected the larger production base acquired through its merger with the Juniper portfolio companies, while management highlighted debt reduction, operating-cost optimization and plans for a more active development program in the second half of the year.

President and Chief Executive Officer Doug Schick said production averaged approximately 6,800 barrels of oil equivalent per day during the quarter, totaling 618,912 BOE. Revenue reached $46.1 million and adjusted EBITDA was $18.7 million. Revenue increased more than fivefold from the prior-year period and about 15% from the first quarter, according to the company.

Schick said the year-over-year change reflects both the expanded asset base and higher realized oil prices following the October merger. The company now operates across the D-J, Powder River and Permian basins, with more than 300,000 net acres.

Production Decline Was Expected

Production declined 16% sequentially, which management said was consistent with its prior outlook. Schick attributed the decline to natural production declines from D-J Basin wells that began producing in late 2025 and reached peak output early this year.

Despite the lower production, revenue increased sequentially primarily because of oil prices. The company’s average realized oil price rose to $94.70 per barrel, up 53% from a year earlier. Operating income more than doubled sequentially to $15.4 million from $6.7 million.

Chief Operating Officer Reagan Dukes said D-J Basin production was affected in July by the completion of the Hastings well, which required certain nearby wells to be temporarily shut in. The company also accelerated several optimization projects into the third quarter. Dukes said volumes are expected to improve significantly in August as shut-in wells return to service and Hastings begins contributing to production.

In the Powder River Basin, Dukes said permitting conditions improved after environmental litigation involving the Bureau of Land Management was resolved. The development allows the company to permit certain top-tier wells it intends to develop over the next one to two years.

Optimization Efforts Target Lower Operating Costs

Lease operating expense was $16.4 million in the second quarter, essentially flat from the first quarter in absolute terms. Per-unit costs increased because production declined while overall costs remained relatively stable.

Management said it has accelerated an optimization program involving pump conversions, recompletions, well cleanouts and compression projects. Dukes said the work was pulled forward into the summer partly to avoid more difficult winter conditions and to achieve recurring operating-cost reductions sooner.

“The pump conversions, recompletions, well cleanouts, and compression projects are designed to lower our per-barrel lease operating expense on a recurring basis,” Dukes said. He added that the benefits are expected to build through the second half and be more apparent in the company’s 2027 operating-cost run rate.

Debt Reduction and Development Plans

Chief Financial Officer Bobby Long said the company repaid $13 million under its senior secured revolving credit facility during the quarter, reducing borrowings to $85 million as of June 30 from $98 million at the end of the first quarter. Pedevco ended the quarter with $12.1 million in cash, net funded debt of about $73 million and $40 million of remaining availability under the facility.

Schick said the company’s debt-to-EBITDA ratio had declined to about 1x, compared with approximately 1.6x following the merger. He said Pedevco believes it can fund its enhanced development program for the remainder of 2026 through cash flow.

The company recently completed a previously drilled D-J Basin well and plans to drill and participate in more than 20 gross wells across its asset base over the coming months. Management said it expects to announce further details of the capital program and development plan in the coming weeks.

Schick said the expanded program was not driven solely by commodity prices. Instead, it followed a review of the combined asset base and the availability of projects for near-term development. The resolution of permitting-related litigation in Wyoming also added projects that were not available earlier in the year.

During the question-and-answer session, Schick identified permitting as the principal development bottleneck in Colorado’s D-J Basin, while Wyoming projects face timing stipulations governing when drilling may occur. He said the company sees few significant bottlenecks in the Permian Basin.

Financial Results and Outlook

Pedevco reported GAAP net income of $17.5 million, or $1.31 per share, compared with a net loss of $1.7 million in the second quarter of 2025. The quarter included $5 million of net income on derivative contracts, consisting of $8.1 million in realized settlement losses and a $13.1 million non-cash unrealized mark-to-market gain.

Long said adjusted EBITDA increased to $18.7 million from $18.1 million in the first quarter and $3 million a year earlier. For the first half, adjusted EBITDA totaled $36.8 million.

The company reiterated its full-year 2026 adjusted EBITDA guidance of $60 million to $70 million. Management said the expanded development program is not expected to materially contribute until late 2026 and early 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.

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