Company: PED
Filing Date: 2025-10-31
Form Type: 10-K/A
Source: 0001654954-25-012381
Chunk: 157

Company: PEDEVCO CORP
Filing Date: 2025-10-31
Form: 10-K/A
Chunk 157
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 December 31, 2024 (in thousands):

|                                            |     | 2024 |       |   |
|:-------------------------------------------|:----|:-----|------:|:--|
| Balance at the beginning of the period (1) |     | $    | 2,313 |   |
| Accretion expense                          |     |      |   965 |   |
| Disposition of liabilities                 |     |      |  (160 | ) |
| Liabilities settled                        |     |      |  (248 | ) |
| Changes in estimates                       |     |      | 3,501 |   |
| Balance at end of period (2)               |     | $    | 6,371 |   |

| (1) | Includes $147,000 of current asset retirement obligations at December 31, 2023. |
| (2) | Includes $663,000 of current asset retirement obligations at December 31, 2024. |

In New Mexico, the Company, through its New Mexico operating subsidiary RAZO, has entered into a Stipulated Final Order (“SFO”) with the OCD pursuant to which, among other things, RAZO agreed to reimburse the OCD for actual costs incurred by the OCD for plugging and abandoning approximately 299 inactive legacy wells in the Permian Basin Asset at a rate of $ per gross barrel of oil sold by RAZO during any production reporting period, subject to a minimum payment of $ per month by RAZO. RAZO has been timely paying each reimbursement invoice received from the OCD in accordance with the SFO and is in full compliance with the SFO. The SFO superseded all previous Agreed Compliance Orders, as amended, entered into by and between RAZO and the OCD. During fiscal year 2024, the Company reimbursed the OCD $ in plugging and abandoning costs related to the SFO.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Lease Agreements

Currently, the Company has one operating sublease for office space that requires Accounting Standards Codification (“ASC”) Topic 842 treatment, discussed below.

The Company’s leases typically do not provide an implicit rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. The Company’s incremental borrowing rate would reflect the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term,