Company: PED
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001654954-25-013092
Chunk: 6

Company: PEDEVCO CORP
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 6
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 equals Evolution’s share of the acreage portion for nine drilling locations therein), and upon completion of the wells in each Development Block, Evolution will have the right, but not the obligation, to acquire a 50% working interest share in the next Development Block in exchange for the payment of $450 per net acre of existing leases held by the Company in such block, and participate on a 50% working interest share basis in the drilling and completion of up to nine horizontal San Andres wells in such Development Block. Pursuant to the Participation Agreement, in June 2024, Evolution acquired a 50% working interest share in Existing Leases covering approximately 811 net acres located in the third, fourth and fifth Development Blocks in exchange for the payment of $365,000 in total proceeds to the Company. Additionally, in September 2025, Evolution acquired a 50% working interest share in Existing Leases covering approximately 640 net acres located in the eighth Development Block in exchange for the payment of $288,000 in total proceeds to the Company. Depletion expense recorded for production on proved properties for the three and nine months ended September 30, 2025 and 2024, amounted to $3,783,000, compared to $3,100,000, and $10,591,000, compared to $10,307,000, respectively.

NOTE 7 – NOTE RECEIVABLE On November 9, 2023, in accordance with the sale of our then wholly-owned subsidiary EOR Operating Company (“EOR”) to Tilloo Exploration and Production LLC (“Tilloo”), the Company entered into a five-year secured promissory note (the “Note”) with Tilloo, bearing interest at 10% per annum, with no payments due until January 8, 2025, and fully-amortized payments due monthly over the remaining four years of the term thereafter until maturity. The Note contains customary events of default and is secured by a lien over all the assets and capital shares of EOR created under a Security Agreement, a Security Agreement (Pledge of Corporate Securities), and a Mortgage entered into by and between the Company and Tilloo.  Tilloo failed to make its initial installment payment on January 8, 2025, and has not made any subsequent payments as of September 30, 2025. The Company issued a notice of default under the Note to Tilloo in mid-January 2025 and sought to work with Tilloo