Company: PED
Filing Date: 2025-10-29
Form Type: 10-K/A
Source: 0001654954-25-012328
Chunk: 31

Company: PEDEVCO CORP
Filing Date: 2025-10-29
Form: 10-K/A
Chunk 31
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, to facilitate joint development of the SW Pony Prospect, the parties agreed to an approximately 16,900 gross acre Area of Mutual Interest wherein the Joint Development Party will transfer 30% of future interests acquired by the Joint Development Party in leaseholds to PRH, and PRH will transfer 70% of future interests acquired by PRH in leaseholds to the Joint Development Party, in each case at an acquisition cost proportionate to their respective interests. The assigned interests will be subject to an overriding royalty, such that the assigning party shall deliver to the other party leasehold interests with an 80% net revenue interest, and the parties agreed that the Joint Development Party will be the operator of the combined leaseholds. The Participation Agreement specifically addresses the Harlequin Wells, which are existing wells within the SW Pony Prospect, whereby PRH acquired a 30% undivided interest in six Harlequin Wells as part of the leasehold assignment. The Company correspondingly paid $8.6 million in capital costs related to these wells.

In February 2025, the Company entered into a joint development agreement (“Agreement”) with a large, Denver, Colorado-based private equity-backed D-J Basin E&P Company with extensive operational experience (“Operator”), pursuant to which the parties agreed to jointly participate in the expansion and development of the Company’s Roth and Amber DSUs located in Weld County, Colorado, with the Operator paying to the Company $1.7 million, the Company agreeing to amend the Company’s existing Roth and Amber DSUs to increase each to ~1,600 acres and transferring operatorship of the DSUs to the Operator, and the parties agreeing to jointly participate in the development of the Roth and Amber DSUs.

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Sale of Non-Core D-J Basin Assets

On September 23, 2024, PRH sold 320 net acres to a third-party in the Company’s D-J Basin Asset for $750,000, and, with the Company recognizing a $735,000 gain from the sale of oil and gas properties.

Drilling and Completion, Leasing, and Mineral Lease Acquisition Activities

For the year ended December 31, 2024, the Company incurred $20.5 million of capital costs. These costs were primarily related to non-operated drilling and completion costs related to the Company’s participation in 24 new non-operated wells in the D-J Basin in which the Company participated and the Company’s completion operations with respect to three operated wells with a third-party in the Permian Basin,