Shall You Invest In This Small Cap Energy Company Amidst The Current War Situation: Pedevco Corp (NYSEAMERICAN: PED)
PEDEVCO Corp (NYSEAMERICAN: PED) is an energy company. It is engaged in the acquisition, exploration, development, and production of oil and natural gas shale plays in the Denver-Julesberg Basin (D-J Basin) in Colorado. The D-J Basin contains hydrocarbon-bearing deposits in several formations, including the Niobrara, Codell, Greenhorn, Shannon, J-Sand, and D-Sand. Its principal operating properties are in the Wattenberg, Wattenberg Extension and Niobrara formation in the D-J Basin.
Highlights:
Recent Acquisition: February 7, 2022, PEDEVCO announced that it recently consummated the acquisition of certain additional D-J Basin assets located in Weld County, these assets include approximately 46.6 net leasehold acres located in the core of the Wattenberg Extension and interests in 14 horizontal wells currently producing from the acreage.
Project Completion: January 6, 2022, PEDEVCO announced today that it has completed the drilling of two new horizontal wells in its Permian Basin Asset, with the lateral lengths of each landing 100% in the targeted upper San Andres zone. The Company plans to begin completion operations in mid-January and expects first production from both wells to commence by mid-February 2022.
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 their depletable base due to the impairment of their oil and gas properties at the prior year end, when compared to the prior period.
- 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.
Constant Revenue Growth: Company has shown decent revenue growth and have recovered well after the Fall in March 2022, current global war situation has increased oil demands and hence oil prices are soaring. Quick look at company’s revenue for last 3 years.
Quick Look at Company’s Key Data
Last 6 months Chart
Stock Recommendation: Increased Oil Demand and current global export sanction can give a boost to the stock. Based on analysts offering the average price target is $2 with a high estimate of $2.5 and a low estimate of $2. MarketFacts gives a “Strong Buy” rating on the stock at the Price of $1.17 as of February 8th, 2022.
| CMP (USD) (8th Feb 2022) | $1.17 |
| Target Price (USD) | $2.00 |
| Recommendation | Strong Buy |
