Third Quarter Revenues Increased 68% to $4.1 Million
HOUSTON, TX / ACCESSWIRE / November 15, 2021 / PEDEVCO Corp. (NYSE American:PED), 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 third quarter ended September 30, 2021 and provided an operations update.
Third Quarter 2021 Financial Summary
- Oil and gas production for the third quarter of 2021 was over 700 barrels of oil equivalent per day ("BOEPD") (83% oil), with revenues for the third quarter of 2021 increasing 68% to $4.1 million, as compared to revenue of $2.4 million in the same quarter last year. The increase in revenue was primarily due to a favorable price variance of $2.1 million, offset by an unfavorable volume variance of $400 thousand.
- Operating loss in the third quarter of 2021 totaled $357 thousand, compared to operating loss of $2.9 million in the same quarter last year. The increase in gross profit was primarily attributable to an increase in revenue of $1.7 million.
- Operating expenses in the third quarter of 2021 were $4.4 million, compared to $5.3 million in the same quarter last year. The decrease was primarily related to less depletion expense stemming a decrease in our depletable base due to the impairment of our oil and gas properties at the prior year end, when compared to the prior period. For the year ended December 31, 2020, due to falling oil and gas prices which had not yet recovered, we incurred a $19.3 million impairment of our oil and gas properties located in our D-J Basin Asset.
- Net loss in the third quarter of 2021 was $325 thousand, or a net loss of $0.00 per basic diluted share outstanding, compared to a net loss of $2.3 million, or a net loss of $0.03 per diluted basic share outstanding, in the same quarter last year.
- Adjusted EBITDA, a non-GAAP financial measure (discussed in greater detail below), increased 129% to $1.9 million, compared to $0.8 million in the same quarter last year.
- Cash (including $3.3 million in restricted cash) was $23.2 million as of September 30, 2021, compared with $22.6 million as of June 30, 2021, which cash amount increased by $6.5 million to $29.7 million following the October 6, 2021 closing of a registered direct offering of our common stock.
The Company plans to spud the first of two horizontal San Andres wells in its Chaveroo Field in the Permian Basin in the next few weeks. The Company expects to complete both wells in the fourth quarter of 2021, with first production from these two new drills expected in late December 2021 or January 2022.
In its D-J Basin Asset, the Company recently elected to participate in four horizontal Niobrara wells with a ~6.5% working interest at a net cost to the Company of ~$1.2 million that were drilled earlier in the year and completed in the 3rd quarter, with initial results and revenues expected in late 2021. The Company has also elected to participate in an additional eight horizontal Niobrara wells in which it holds a ~5% working interest at an expected net cost to the Company of ~$2.1 million that are slated for drilling by another operator in the first quarter of 2022. The Company expects to continue to receive well proposals in the D-J Basin as the area in and around the Company's acreage position is currently very active and highly economic at current pricing.
In addition, the Company continues to actively seek to leverage its ~$27 million of free cash and zero debt in its pursuit of accretive acquisition opportunities.
More information regarding the Company's operating results for the three and nine months ended September 30, 2021 and 2020, including the Company's full financial statements and footnotes, can be found in the Company's Quarterly Report on Form 10-Q 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 San Andres 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 stock-based compensation expense 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 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 safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the "Act") and other securities laws. 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. These risks include, but are not limited to, 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 related to the need for additional capital to complete future acquisitions, conduct our operations, and fund our business on favorable terms, if at all; 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; risk 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 Mr. Simon 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; COVID-19, governmental responses thereto, economic downturns and possible recessions caused thereby; and others that are included from time to time in filings made by PEDEVCO with the Securities and Exchange Commission, including, but not limited to, in the "Risk Factors" sections in 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. These reports are available at www.sec.gov. 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.
Reconciliation of Net Income (Loss) attributable to PEDEVCO Corp., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA* (in thousands)
|For the three months ended September 30,|
Depreciation, depletion, amortization and accretion
Account payables settlements
* 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.
SOURCE: PEDEVCO Corp.