Pedevco Targets Rockies Growth, Cost Savings and Acquisitions Into 2027

Key Points

• Pedevco plans to accelerate Rockies development, targeting participation in about 15 gross wells from the second half of 2026 into early 2027, supported by roughly 300,000 net acres and an estimated 1,000–1,100 gross drilling locations.
• The company has reduced debt faster than expected and maintained 2026 adjusted EBITDA guidance of $60 million to $70 million. Its cost-optimization program is more than halfway toward annualized lease operating expense savings of $10 million to $12 million, with the full run rate expected around mid-2027.
• Pedevco is pursuing selective acquisitions in the fragmented Rockies market and recently nearly doubled its Mowry Shale position with a 5,700-net-acre Powder River Basin acquisition. Management expects to begin proving up the acreage within 18 to 24 months while continuing its search for a permanent CEO.

Pedevco NYSEAMERICAN: PED outlined plans to accelerate development across its Rocky Mountain oil and gas portfolio while pursuing selective acquisitions, as Interim President, Chief Executive Officer and Chief Operating Officer R.T. Dukes said the company has strengthened its balance sheet and is preparing for higher activity into 2027.

Dukes, speaking at Noble Capital Markets’ Emerging Growth Virtual Equity Conference, said the board recently chose to move in a different direction and has begun a search for a permanent CEO. He said the existing operational and financial teams provide continuity during the transition.

“We’re a growth vehicle in the E&P space,” Dukes said, describing the company’s strategy as a differentiated Rockies-focused platform with organic drilling inventory and consolidation potential.

Production Base and Asset Inventory

Pedevco said it has grown from approximately 130 barrels per day to closer to 7,000 barrels per day, with second-quarter production averaging 6,800 barrels of oil equivalent per day. The company operates primarily in the D-J Basin across Colorado and Wyoming and holds a larger long-term acreage position in the Powder River Basin.

The company reported roughly 300,000 net acres across its portfolio, including about 90,000 net acres in the D-J Basin and approximately 202,000 net acres in the Powder River Basin, in addition to Permian Basin assets. Dukes said Pedevco has an estimated 1,000 to 1,100 gross drilling locations, with inventory spanning the Niobrara, Codell, Mowry, Turner, Parkman and Sussex formations.

Pedevco’s production mix is approximately 88% liquids, according to Dukes. However, he said the company has gas-related optionality, including through the Mowry, that could become more competitive for capital allocation in a higher natural gas price environment.

In the Powder River Basin, Dukes said the company has cleaned up certain Bureau of Land Management matters and secured permits to pursue Turner, Parkman and Sussex activity. He also pointed to offset development by larger operators including Anschutz, EOG Resources, Occidental Petroleum and Devon Energy as support for the potential of Pedevco’s acreage.

Development Plans and Cost Optimization

Pedevco expects to participate in about 15 gross wells during the second half of 2026 and into early 2027. The company completed a drilled but uncompleted well during the third quarter and spudded another well, Dukes said, adding that the recently completed well was performing “on trend” only weeks into its production history.

Dukes said the company will prioritize projects based on risk-adjusted returns, permitting status, commodity conditions and service availability. Pedevco evaluates investments under lower oil-price assumptions, targeting projects that can deliver 25% to 30% internal rates of return when oil is closer to $60 per barrel than $90 per barrel, he said.

The company is also continuing an operating-cost optimization program focused in part on converting higher-rate pumps to rod pumps. Dukes said Pedevco is more than halfway toward targeted annualized lease operating expense savings of $10 million to $12 million. The company accelerated work under the program during 2026 and expects to realize the full savings run rate around the middle of the third quarter of 2027.

He added that merger-related synergies reduced general and administrative expenses by an estimated 20% to 30%, while the company’s lease operating expense initiative is expected to further improve margins.

Financial Position and 2027 Outlook

Pedevco reported adjusted EBITDA of nearly $37 million through the first half of the year, net income of almost $18 million in the second quarter and net debt of $73 million at the end of the quarter. Dukes said the company reached its goal of reducing debt toward one times EBITDA faster than expected, completing that progress in roughly six to nine months rather than the previously anticipated 12 to 18 months.

The company maintained its 2026 guidance for EBITDA of $60 million to $70 million. Dukes said Pedevco intends to provide additional details on 2027 plans in coming months.

While production and cash flow may be uneven quarter to quarter because of the company’s size and timing of investment, Dukes said investors should expect growth to accelerate as the drilling program expands. He characterized expected growth as potentially a multiple of the broader industry’s high-single-digit to low-double-digit growth rates, without providing a specific forecast.

Acquisition Strategy and Mowry Expansion

Pedevco is evaluating multiple acquisition opportunities in the fragmented Rockies market, according to Dukes. He said an acquisition would need to include a stable production base, development inventory that complements the company’s existing assets and sufficient scale to support more continuous development activity.

“We’re a Rockies consolidation opportunity and growth opportunity,” Dukes said, adding that the company is not looking to shift to international operations or distant basins.

The company recently acquired approximately 5,700 net acres in the Powder River Basin’s Mowry Shale, nearly doubling its position in that area. Dukes said Pedevco expects to begin proving up the position within the next 18 to 24 months, likely beginning with a well or pad rather than pursuing a large-scale development program immediately.

Dukes said management and insiders own approximately 85% of the company, which he said aligns management’s economics with those of shareholders. He identified production growth, cash-flow growth, margin expansion and balance-sheet flexibility as key measures for investors to monitor heading into 2027.

About Pedevco (NYSEAMERICAN:PED)

PEDEVCO Corp. (NYSE American: PED) 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 domestic energy assets and generating production through the development of existing properties.

PEDEVCO's activities have included oil and natural gas operations in major U.S. producing regions, including the Permian Basin and the Denver-Julesburg Basin. Its operations generally involve acquiring mineral and leasehold interests, drilling and completing wells, and managing production and related field activities.

The company was formerly known as Pacific Energy Development Corporation before adopting the PEDEVCO name.

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 contact@marketbeat.com.