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    PED
    Earnings call· Jun 2026(Q2 FY26)

    PEDEVCO Q2 FY26 earnings call PED

    Aug 13, 2026 Source

    Executive summary

    PEDEVCO Q2 FY26 — Strong Financials and Expanded Development

    PEDEVCO delivered strong Q2 FY26 results, significantly increasing revenue and adjusted EBITDA, driven by higher realized oil prices and an expanded production base from the Juniper merger. The company accelerated debt repayment, improving its balance sheet, and is now poised to fund an expanded development program in H2 2026 and early 2027, leveraging resolved litigation and extensive asset analysis.

    Highlights

    5

    • Revenue increased more than fivefold year-over-year to $46.1 million and 15% sequentially.

    • Adjusted EBITDA was $18.7 million, representing a 3% sequential increase.

    • Net debt, adjusted for cash, reduced to $73 million from $98 million, achieving a debt-to-EBITDA ratio of approximately 1x.

    • Operating income more than doubled sequentially from $6.7 million to $15.4 million.

    • Permitting matters in the Powder River Basin improved due to resolved BLM litigation, enabling development of top-tier wells.

    Concerns

    3

    • Production declined 16% sequentially to 6,800 BOE per day, consistent with expected natural decline curves.

    • July production was lower than initially expected due to temporary shut-ins for Hastings well completion and accelerated optimization projects.

    • Realized settlement losses on derivative contracts amounted to $8.1 million cash items during the quarter.

    Guidance & targets

    1
    CategoryTargetConfidence
    Full-year 2026 Adjusted EBITDA
    $60 million to $70 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    D-J Basin
    Production from D-J Basin wells that came online in late 2025 reached peak production early this year and have since followed natural decline curves. Temporary shut-ins for Hastings well completion and accelerated optimization projects impacted July production, but volumes are expected to improve significantly in August.
    Net acres: 88,000Gross operated wells: 74Net operated wells: 67Gross non-operated wells: 110Net non-operated wells: 12.5Non-operated wells completed in Q1: 10 (working interest 1.1%-6.3%)Hastings well completed: Q3 (expected to contribute to Q3 volumes)
    		————
    Powder River Basin
    Permitting matters improved in Wyoming through resolved BLM litigation, allowing the company to permit top-tier wells for development in the next year or two. This underpins the second half development program.
    Net acres: 202,000Gross wells: 150Net wells: 130Gross non-operated wells: 16Net non-operated wells: 1.4
    		————
    Permian Basin
    The asset continues to provide a stable production base. The company remains focused on operating efficiency and evaluating lift conversions, well interventions, and other optimization opportunities to improve cost structure and margins in the basin.
    Net acres: 14,505Gross wells: 38Net wells: 34.5Operated wells: All
    		————

    Operational metrics

    16
    Revenue
    $46.1 millionup 561% year-over-year, up 15% sequentially
    Q2 FY26

    Reflects contribution from expanded asset base and higher average realized oil price.

    Adjusted EBITDA
    $18.7 millionup 3% sequentially
    Q2 FY26

    Compared to $3 million in the prior year period and $18.1 million in Q1 FY26.

    Operating income
    $15.4 millionmore than doubled sequentially
    Q2 FY26

    Compared to $6.7 million in Q1 FY26.

    Lease operating expense (LOE)
    $16.4 millionessentially flat sequentially
    Q2 FY26

    Absolute basis.

    General and administrative (G&A) expense
    $3.4 millionincreased year-over-year
    Q2 FY26

    Reflects additional payroll expense associated with the larger company and higher legal and audit costs.

    Depreciation, depletion, and amortization (DD&A)
    $10.2 millionup $6.3 million year-over-year
    Q2 FY26

    Driven by higher production and expanded asset base.

    Interest expense
    $2 million
    Q2 FY26

    Compared to no interest expense in the prior year period.

    Net income on derivative contracts
    $5 million
    Q2 FY26

    Hedge program aims to reduce cash flow volatility, protect capital plan, and maintain financial flexibility.

    GAAP Net Income
    $17.5 millioncompared to net loss of $1.7 million in Q2 FY25
    Q2 FY26

    Reflecting higher operating income and derivative contract gains.

    GAAP EPS
    $1.31
    Q2 FY26

    Reflects 1-for-20 reverse stock split effective March 13, 2026, applied retroactively.

    Cash
    $12.1 million
    as of June 30, 2026

    Maintained while accelerating debt repayment.

    Debt (revolving credit facility)
    $85 millionreduced by $13 million from $98 million at March 31, 2026
    as of June 30, 2026

    Accelerated debt repayment due to strong cash generation.

    Net debt (adjusted for cash)
    $73 millionbetter than forecasted
    as of June 30, 2026

    Achieved a debt to EBITDA ratio of approximately 1x.

    Funding availability (revolving credit facility)
    $40 million
    as of June 30, 2026

    Available under the facility.

    Debt to EBITDA ratio
    1xdown from 1.6x post-merger
    Q2 FY26

    Achieved through strong cash generation and debt repayment.

    Shares outstanding
    13.3 million
    as of June 30, 2026

    Reflects 1-for-20 reverse stock split effective March 13, 2026.

    Industry KPIs

    4
    MetricValueDetails
    D c efficiency rig activityover 20gross wells
    Realized price differential$94.07per barrel
    Basin level production volume6,800BOE per day
    Cost of supply unit cash costhigher

    Deals & partnerships

    1
    Juniper portfolio companiesExpanded footprint to over 300,000 net acres across D-J, Powder River, and Permian basins, with substantial oil-weighted production and deep development inventory.

    Merger occurred in October (prior year).

    Capital programs

    2
    Expanded Second Half Development Programunderway
    Funding: within cash flow
    Start: H2 2026

    Benefit: drill and participate in over 20 gross wells

    This program is enabled by stronger financial position, constructive commodity prices, and resolved litigation in Wyoming. Details will be announced in the coming weeks. Contribution not expected until late 2026 and early 2027.

    Optimization Programunderway
    Start: H1 2026

    Benefit: reduce recurring operating costs, improve margins, strengthen the cost structure

    Includes pump conversions, recompletions, well cleanouts, and compression projects. Pulled forward into the summer to beat worse weather. Benefits expected to build through H2 2026 and be more reflected in 2027 operating cost run rate.

    Risks & headwinds

    3
    Sequential production declineQ2 FY26

    16% from the first quarter

    Mitigation: Consistent with production expectations discussed on the last call, due to natural decline curves of D-J Basin wells that peaked early in the year.

    Higher per-unit lease operating expenseQ2 FY26

    Per unit costs were higher because production declined while absolute costs remained relatively stable.

    Mitigation: Optimization program focused on pump conversions, recompletions, well cleanouts, and compression projects is expected to reduce recurring operating costs going forward.

    Temporary production impact in D-J BasinJuly (Q3 FY26)

    July production was lower than initially expected

    Mitigation: Volumes are expected to improve significantly in August as wells return to service and the Hastings well begins contributing to volumes, following temporary shut-ins for completion and accelerated optimization projects.

    What to watch in Q3 FY26

    5

    Details of expanded capital program

    coming weeks (Q3 FY26)
    CurrentPlan to drill and participate in over 20 gross wells
    TargetAnnouncing the details of this expanded capital program and development plan in the coming weeks

    Why it matters

    This program represents a significant shift to active development and will drive future production and cash flow.

    We will be announcing the details of this expanded capital program and development plan in the coming weeks.

    Q&A highlights

    4

    Is the expanded development plan primarily commodity price-driven, or are there other factors influencing this decision?

    The expanded development plan is driven more by extensive asset analysis post-merger to prioritize high-return projects and the resolution of BLM litigation in Wyoming, which opened up new development opportunities. Commodity prices are a contributing factor but not the main driver.

    “No, it's partially commodity price driven, but really it's more a function of after the merger, we wanted to evaluate and do a deep dive on all of our assets and kind of prioritize what's available for development near term, what the returns are of all of our assets. So we were kind of ranking projects and prioritizing everything based on what's developed, what can be developed over the next six months. So that's kind of how we came up with the development program. It expanded significantly because some of the BLM litigation issues in Wyoming opened up, which brought in a few projects that we didn't have the ability to do earlier in the year. So that's really the reason for the expansion.”

    asked by David Storms · answered by John Schick

    2 min read5 chapters

    Detailed Narrative

    01

    Juniper Merger Impact and Scale

    The strategic merger with Juniper portfolio companies in October (prior year) significantly expanded PEDEVCO's operational footprint. The company now holds over 300,000 net acres across the D-J, Powder River, and Permian basins, boasting substantial oil-weighted production and a deep development inventory. This expansion is evident in Q2 FY26 revenue of $46.1 million, a more than fivefold increase from $7 million in Q2 FY25, demonstrating a substantial increase in scale and cash-generating capacity.

    02

    Balance Sheet Strengthening and Debt Reduction

    PEDEVCO made significant strides in strengthening its balance sheet during the quarter. The company repaid $13 million of debt under its senior secured revolving credit facility, reducing the outstanding balance to $85 million from $98 million at March 31st. Adjusted for cash, net funded debt stood at approximately $73 million at quarter-end, achieving a comfortable debt-to-EBITDA ratio of about 1x. This improved financial position provides greater flexibility for future capital allocation.

    03

    Shift to Active Development Program

    After a measured approach in the first half of 2026, focusing on production and cost optimization and debt reduction, PEDEVCO is now poised for a more active development program. This shift for H2 2026 and early 2027 is supported by a stronger financial position, a more constructive commodity price environment, and the resolution of certain litigation matters in Wyoming. The company plans to drill and participate in over 20 gross wells across its asset base, with details to be announced soon.

    04

    Optimization Program and Cost Management

    The company has accelerated a meaningful portion of its optimization program into the summer months to mitigate potential winter weather impact🌐s. This program includes pump conversions, recompletions, well cleanouts, and compression projects, all designed to lower recurring per-barrel lease operating expenses (LOE). Management expects the benefits of these initiatives to build through the second half of the year and be more fully reflected in the 2027 operating cost run rate, improving margins and strengthening the overall cost structure.

    05

    Commodity Price Environment and Strategy

    PEDEVCO benefited from higher realized commodity prices in Q2 FY26, with the average oil price increasing to $94.07 per barrel, up 53% year-over-year. While higher prices improve the return profile of the company's inventory, management emphasized that their approach is not dependent on elevated commodity prices. The core strategy remains focused on low-cost operations, maintaining a strong balance sheet, and deploying capital only where expected returns justify the investment.

    AI-generated summary of the company’s earnings call. Not investment advice.