Pedevco Targets Rockies Growth, $10M Cost Cuts Amid CEO Search

Key Points

• Pedevco is targeting Rockies growth, with more than 15 gross wells planned for the second half of 2026 across the DJ and Powder River basins, including Parkman, Sussex and Niobrara projects.
• The company reaffirmed 2026 pro forma EBITDA guidance of $60 million to $70 million and aims to reduce annualized lease operating expenses by more than $10 million, with more than half of the target already achieved.
• During its CEO search, Pedevco will maintain operational continuity while pursuing disciplined acquisitions, conservative leverage of about one times net debt to EBITDA and organic production and cash-flow growth.

Pedevco NYSEAMERICAN: PED outlined plans to advance development across its Rockies asset base, reduce operating costs and pursue disciplined consolidation opportunities as the company undergoes a leadership transition.

R.T. Dukes, who recently became interim president, chief executive officer and acting chief operating officer, said the board is searching for a permanent CEO through the fourth quarter. Dukes said the company’s existing operating and technical teams would provide continuity during the transition.

“The leadership transition is not going to be a crazy shift for PEDEVCO, but just continuity and a continued focus on execution is where we are now,” Dukes said during the Lytham Partners Fall 2026 Investor Conference.

Rockies Development Focus

Dukes described Pedevco as an oil-weighted Rockies producer with approximately 300,000 net acres, including more than 90,000 net acres in the DJ Basin and more than 200,000 acres in the Powder River Basin. The company reported second-quarter production of 6,800 barrels of oil equivalent per day, with liquids accounting for 88% of output.

The DJ Basin accounted for roughly 5,500 BOE per day during the second quarter, primarily from the Niobrara formation in Colorado and the Codell formation in Wyoming, according to Dukes. The Powder River Basin produced an average of about 800 BOE per day in the quarter.

The company has identified more than 1,000 gross drilling locations, with Dukes later citing more than 1,100 gross identified locations. He said the Powder River acreage includes stacked targets, including the Parkman, Turner, Sussex, Niobrara and Mowry formations.

Pedevco expects to participate in and drill more than 15 gross wells during the second half of the year. The program includes a Parkman well in Wyoming, Sussex wells and Niobrara wells, as well as completion activity involving a drilled-but-uncompleted well in the DJ Basin. Some completions are expected to extend into the first quarter of 2027.

Financial Targets and Cost Reductions

The company reaffirmed pro forma 2026 EBITDA guidance of $60 million to $70 million. For the second quarter, Pedevco reported $46 million in revenue, nearly $19 million in adjusted EBITDA, close to $18 million in net income and capital spending of $5 million. First-half EBITDA was nearly $37 million.

Dukes said the company aims to reduce lease operating expenses by more than $10 million on an annualized basis through its current program and planned work next year. He said Pedevco is already more than halfway toward that target.

The company also cited general and administrative synergies from its 2024-2025 merger, which Dukes said had already been realized through the current year. Management expects cost initiatives and development execution to support operating-margin expansion.

• Maintain a conservative balance sheet, targeting net debt to EBITDA of about one times.
• Direct capital toward Rockies development opportunities with favorable risk-adjusted returns.
• Provide further detail on its 2027 development plan in coming months.
• Evaluate acquisition and consolidation opportunities in the fragmented Rockies region.

Consolidation Strategy

Dukes said Pedevco’s balance sheet and regional operating experience could position it to pursue acquisitions, though he emphasized financial discipline. The company is evaluating opportunities across the basins where it operates and intends to focus on transactions that are strategically compelling and accretive over the long term.

Management said its priorities are organic production and cash-flow growth, margin expansion, conservative leverage and selective acquisitions. Dukes added that the company’s two largest owners and management control more than 85% of the entity, which he described as strong insider alignment.

About Pedevco (NYSEAMERICAN:PED)

PEDEVCO Corp. is an independent energy company engaged in the acquisition, development and production of oil and natural gas properties in the United States. The company focuses on building a portfolio of producing and development-stage assets in established onshore basins.

PEDEVCO's operations have included properties in the Permian Basin of New Mexico and the Denver-Julesburg (D-J) Basin of Colorado. Its activities generally include operating wells, developing undeveloped acreage and pursuing additional oil and natural gas acquisition opportunities.

The company was formerly known as Pacific Energy Development Corp.

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