Company: PED
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001654954-25-003703
Chunk: 260

Company: PEDEVCO CORP
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 260
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 off-limits to new development. It is possible that future ballot initiatives will be proposed that could limit the areas of the state in which drilling would be permitted to occur or otherwise impose increased regulations on our industry. 

Passed in Colorado in 2019, SB 19-181 gives local governmental authorities increased authority to regulate oil and gas development. The authors of the legislation were clear that SB 19-181 was not intended to allow an outright ban on oil and gas development. However, anti-industry activists in Longmont, Colorado, have argued in court that SB 19-181 permits a local governmental authority to impose such a ban. We primarily operate in the rural areas of the Wattenberg Field in Weld and Morgan Counties, jurisdictions in which there has historically been significant support for the oil and gas industry.

In addition, on September 28, 2020, the COGCC (now the ECMC) voted in favor of a preliminary approval establishing a new 2,000-foot setback rule from buildings for drilling and fracturing operations statewide, increasing the previous 500-foot setback rule, which rule became effective January 1, 2021, and could likewise make it more difficult for us to undertake oil and gas development activities in Colorado, although given the distance of most of our current leases from buildings in Colorado, these setback rules have not yet had a significant impact on our operations, but may impact future development if we seek develop acreage within such setback boundaries.

Further, on May 10, 2022, the Colorado Legislature adopted SB 22-198, the “Orphaned Oil and Gas Well Enterprise” bill, which requires each oil and gas operator in Colorado to pay a mitigation fee to the “enterprise” for each well that has been spud but not yet plugged and abandoned. The ECMC submitted a notice of rulemaking on May 18, 2022, to implement SB 22-198 by amending the ECMC’s annual registration fee rules to require that an operator’s annual registration fee be paid to the enterprise as a “mitigation fee.” In addition, the newly established “Enterprise Board” now has the authority to adjust the dollar amount of the mitigation fee. The amendments became effective on June 30, 2022, and may increase the registration fees required for current and future oil and gas wells in Colorado. We anticipate that the ECMC, the Conservation Division of the New Mexico Energy, Minerals, Natural Resources Department, the New Mexico State Land Office, the New Mexico Environment Department