Stonegate Capital Partners has initiated coverage on Pedevco Corp. (NYSE: PED), a company that exited fiscal year 2025 as a substantially larger, oil-weighted Rockies platform following its merger with Juniper. The merger has positioned Pedevco with enhanced scale, including over 310,000 net acres and a significant inventory of drilling locations.
For fiscal year 2025, Pedevco reported a 35% year-over-year increase in production to 910.1 Mboe (2,494 Boe/d), while revenue rose 16% to $45.8 million. Adjusted EBITDA grew 18% to $27.0 million, despite a 19% decline in realized crude oil prices. However, the company reported a net loss of $(10.4) million, compared to net income of $12.3 million in fiscal 2024. The loss was attributed to merger-related costs, accelerated share-based compensation, new interest expense, a note write-off, and tax expense.
In the fourth quarter of fiscal 2025, which was the first quarter reflecting the combined platform, production surged 143% year-over-year to 483.2 Mboe (5,310 Boe/d). Revenue more than doubled to $23.1 million, and adjusted EBITDA nearly tripled to $15.4 million. Management emphasized that the quarter included only two months of contribution from the acquired assets, suggesting that normalized earnings power provides a better lens for evaluating the company's performance. The merger-close bridge to over 6,500 Boe/d and roughly over 310,000 net acres helps frame the larger earnings base now embedded in the portfolio.
Key takeaways from the coverage initiation include that the fourth quarter only reflected two months of acquired assets, yet production rose 143% year-over-year and adjusted EBITDA nearly tripled. Pedevco now holds 32.1 MMBoe of proved reserves, with a PV-10 of $357.7 million, and over 1,000 locations beyond proved reserves. Additionally, the company is pursuing $10 million to $13 million in optimization work that could reduce lease operating expenses by up to $1 million per month, supporting meaningful margin upside.
Stonegate Capital Partners, a leading capital markets advisory firm, provides investor relations, equity research, and institutional investor outreach services. Its affiliate, Stonegate Capital Markets (member FINRA), offers investment banking services. The full announcement, including downloadable images and bios, is available here.
