Company: PED
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001654954-25-003703
Chunk: 234

Company: PEDEVCO CORP
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 234
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 “Item 1A. Risk Factors”).

Our Core Areas

Permian Basin Asset

We hold our Permian Basin Asset through our wholly-owned subsidiary, PEDCO, with operations conducted through PEDCO’s wholly-owned operating subsidiary, RAZO. Our Permian Basin Asset was assembled through three acquisitions completed between 2018 and 2019. In the first acquisition, we acquired 100% of the assets of Hunter Oil Company, with an effective date of September 1, 2018, which created our core Permian position. In 2019, we acquired additional assets in two bolt-on acquisitions from private operators, and in November 2023 we divested approximately 8,035 gross leasehold acres and related wells in the non-core Milnesand and Sawyer Fields of our Permian Basin Asset to a private operator in order to reduce our asset retirement obligations and plugging and abandoning liabilities with respect to these non-core assets, thereby eliminating approximately $3.2 million in plugging and abandonment liabilities and freeing up our resources to allow us to better focus on development of our other assets. Our current Permian Basin Asset interests are all located in Chaves and Roosevelt Counties, New Mexico, where we currently operate 35 gross (33.5 net) wells, of which 28 wells are active producers, and two are active SWDs. As of December 31, 2024, our Permian Basin Asset acreage is located where indicated in the below map of the State of New Mexico and more specifically in the areas shaded in yellow in the subsequent sectional map.

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State of New Mexico

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In September 2023, the Company and Evolution Petroleum Corporation (“Evolution”) entered into a Participation Agreement (the “Participation Agreement”) for the joint development of a portion of the Company’s Permian Basin Asset known as the Chaveroo oilfield, located in Chaves and Roosevelt Counties, New Mexico (the “Chaveroo Field” and the “Chaveroo Farmout Transaction”). Pursuant to the Participation Agreement, the Company and Evolution identified twelve “Development Blocks” covering approximately 16,000 gross leasehold acres consisting of all leasehold rights from the surface to the base of the San Andres formation, where the Company currently holds leasehold interests (“Existing Leases”), in which the parties may jointly develop by drilling and completion of up to nine horizontal San Andres wells in each Development Block in accordance with the terms of the agreement, which terms