Pacific Energy Development to Present at 31st Annual Roth
Conference
Houston,
Texas, March 11, 2019 – PEDEVCO Corp. d/b/a Pacific Energy
Development (NYSE American: PED) (the “Company”)
today announced that J. Douglas Schick, President of the Company,
and Mr. Ivar Siem, a member of the Company’s Board of
Directors and head of its Operating Committee, will be attending
and jointly participating in one-on-one meetings at the
31st
annual ROTH Conference at The Ritz-Carlton, Laguna Niguel,
California on March 18th and 19th, 2019. Mr. Schick
will also be participating in a panel discussion titled
“What’s Up with the Hz San Andres.”
A
pre-recorded Company webinar and presentation slides will be posted
and available on the ROTH Conference main webcast page at
http://wsw.com/webcast/roth33/ped.
About Pacific Energy Development (PEDEVCO Corp.)
PEDEVCO
Corp, d/b/a Pacific Energy Development (NYSE American: PED), is a
publicly-traded energy company engaged in the acquisition and
development of strategic, high growth energy projects in the United
States. The Company’s principal assets are its San Andres
Asset located in the Northwest Shelf of the Permian Basin in
eastern New Mexico, and its D-J Basin Asset located in the D-J
Basin in Weld and Morgan Counties, Colorado. Pacific Energy
Development is headquartered in Houston, Texas.
Cautionary Statement Regarding Forward Looking
Statements
All
statements in this press release that are not based on historical
fact are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and the provisions
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Acts”). In particular, when used in the preceding
discussion, the words "estimates," "believes," "hopes," "expects,"
"intends," "plans," "anticipates," or "may," and similar
conditional expressions are intended to identify forward-looking
statements within the meaning of the Act, and are subject to the
safe harbor created by the Act. Any statements made in this news
release other than those of historical fact, about an action, event
or development, are forward-looking statements. While management
has based any forward-looking statements contained herein on its
current expectations, the information on which such expectations
were based may change. These forward-looking statements rely on a
number of assumptions concerning future events and are subject to a
number of risks, uncertainties, and other factors, many of which
are outside of the Company's control, that could cause actual
results to materially differ from such statements. Such risks,
uncertainties, and other factors include, but are not necessarily
limited to, those set forth under Item 1A "Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended December
31, 2017 and subsequently filed Quarterly Reports on Form 10-Q
under the heading "Risk Factors". The Company operates in a highly
competitive and rapidly changing environment, thus new or
unforeseen risks may arise. Accordingly, investors should not place
any reliance on forward-looking statements as a prediction of
actual results. The Company disclaims any intention to, and
undertakes no obligation to, update or revise any forward-looking
statements, except as otherwise required by law, and also takes no
obligation to update or correct information prepared by third
parties that are not paid for by the Company. Readers are also
urged to carefully review and consider the other various
disclosures in the Company's public filings with the Securities
Exchange Commission (SEC).
Contacts
Pacific
Energy Development
1-855-733-3826
PR@pacificenergydevelopment.com
Exhibit 99.3
Cawley, Gillespie & Associates, Inc.
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petroleum consultants
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13640 BRIARWICK DRIVE, SUITE 100
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306 WEST SEVENTH STREET, SUITE 302
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1000 LOUISIANA STREET, SUITE 1900
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AUSTIN, TEXAS 78729-1107
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FORT WORTH, TEXAS 76102-4987
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HOUSTON, TEXAS 77002-5008
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512-249-7000
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817- 336-2461
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713-651-9944
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www.cgaus.com
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February
28, 2019
Mr.
Clayton J. Riddle
PEDEVCO
Corp., dba Pacific Energy Development
1250
Wood Branch Park Dr. Suite 400
Houston,
TX 77079
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Re:
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Evaluation
Summary
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PEDEVCO Corp. Interests
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Various
Oil Properties in Colorado & New Mexico
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Total
Proved Reserves
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As of
December 31, 2018
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Pursuant to the Guidelines of the Securities and
Exchange
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Commission for Reporting Corporate Reserves and
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Future Net Revenue
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Dear
Mr. Riddle:
As
requested, this report was completed on February 28, 2019 for
PEDEVCO Corp., doing business as Pacific Energy Development
(“PEDEVCO”), for the purpose of public disclosure by PEDEVCO in filings made with
the Securities and Exchange
Commission (SEC) in accordance
with the disclosure requirements set forth in the SEC
regulations. We evaluated 100% of the Colorado and New
Mexico proved reserves, as per information from PEDEVCO. This
report, with an effective date of December 31, 2018, was prepared
using constant prices and costs and conforms to the guidelines of
the SEC. A composite summary of the results of this evaluation are
presented below:
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Net
Reserves
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Oil
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434.7
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11,103.3
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11,538.0
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Gas
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341.0
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4,942.1
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5,283.1
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NGL
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16.8
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0.0
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16.8
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Revenue
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Oil
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- M$
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26,697.8
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656,612.3
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683,310.1
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Gas
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- M$
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934.7
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7,314.2
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8,248.9
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NGL
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- M$
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361.8
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0.0
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361.8
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Severance
Taxes
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- M$
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1,498.4
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47,134.6
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48,632.9
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Ad Valorem
Taxes
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- M$
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934.2
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33,196.3
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34,130.6
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Operating
Expenses
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- M$
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12,809.8
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66,232.2
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79,042.0
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Other
Deductions
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- M$
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1,196.9
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40,416.1
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41,613.0
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Investments
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- M$
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1,392.9
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213,043.9
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214,436.8
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Net Operating
Income
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- M$
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10,162.1
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263,903.5
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274,065.6
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(BFIT)
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Discounted
@ 10%
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- M$
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7,947.0
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173,344.2
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181,291.2
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(Present Worth)
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PEDEVCO Corp. Interests
February
28, 2019
Page
2
Future
revenue is prior to deducting state production taxes and ad valorem
taxes. Future net cash flow is after deducting these taxes, future
capital costs, and operating expenses, but before consideration of
federal income taxes. In accordance with SEC guidelines, the future
net cash flow has been discounted at an annual rate of ten percent
to determine its “present worth”. The present worth is
shown to indicate the effect of time on the value of money and
should not be construed as being the fair market value of the
properties.
The oil
reserves include oil and condensate. Oil volumes are expressed in
barrels (42 U.S. gallons). Gas volumes are expressed in thousands
of standard cubic feet (Mcf) at contract temperature and pressure
base.
Our
estimates are for proved reserves only and do not include any
probable or possible reserves nor have any values been attributed
to interest in acreage beyond the location for which undeveloped
reserves have been estimated. The Proved Developed category is the
summation of the Proved Developed Producing and Proved Developed
Non-Producing estimates. For this evaluation, Proved Developed
reserves and value are equal to Proved Developed Producing reserves
and value.
Presentation
The
report contains summaries by reserve category. The reserve
categories presented are: Total Proved (TP), Proved Developed
Producing (PDP) and Proved Undeveloped (PUD).
Hydrocarbon Pricing
The base SEC
oil and gas prices calculated for December 31, 2018, were $65.56
per barrel and $3.10 per MMBTU, respectively. As specified by the
SEC, a company must use a 12-month average price, calculated as the
unweighted arithmetic average of the first-day-of-the-month price
for each month within the 12-month period prior to the end of the
reporting period. The SEC base oil price is based upon WTI-Cushing
spot prices (Bloomberg) during 2018 and the SEC base gas price is
based upon Henry Hub spot prices (Platt’s Gas Daily) during
2018. A summary of pricing parameters for the New Mexico assets is
shown in the table below.
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Base
Price ($/BBL, $/MMBtu)
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65.56
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3.10
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Chaveroo
Differential ($/BBL, $/MMBtu)
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-6.42
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-1.62
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Milnesand
Differential ($/BBL, $/MMBtu)
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-6.43
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-1.62
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Chaveroo
Net Price ($/BBL, $/Mcf)
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59.14
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1.48
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Milnesand
Net Price ($/BBL, $/Mcf)
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59.13
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1.48
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The
base prices were adjusted for differentials on a per-field basis
for the New Mexico assets and on a per-operator basis for the
Colorado assets, which may include local basis differentials,
transportation, gas shrinkage, gas heating value (BTU content)
and/or crude quality and gravity corrections. For New Mexico
properties, supplemental differential data was applied based upon
Mid-Cushing price differentials from January 2018 through August
2018 to bridge the gap in data available from PEDEVCO. After these
adjustments, the net realized prices over the life of the proved
properties were estimated to be $59.22 per barrel for oil and $1.56
per MCF for gas. All economic factors were held constant in
accordance with SEC guidelines.
PEDEVCO Corp. Interests
February
28, 2019
Page
3
Expenses, Investments and Taxes
New Mexico Assets:
Lease
operating expenses (LOE) for each producing well were estimated
from 2018 monthly lease operating statements. All economic
parameters, including lease operating expenses and investments,
were held constant (not escalated) throughout the life of these
properties.
Chaveroo Field LOE
was applied at $1,597 per producing well per month. Milnesand Field
LOE was applied at $2,541 per producing well per month. For new
horizontal drills in both fields, operating costs were applied
starting at $15,000 per well per month for the first 12 months,
then $10,000 per well per month for 24 months and $4,000 thereafter
for the life of the well.
Capital
costs for PUD drills, facility upgrades and abandonment were
provided by PEDEVCO. Infill drilling at Chaveroo Field was
scheduled to cost $1,933,309 per 3200-foot horizontal drill (4),
$2,223,993 per 4500-foot horizontal drill (46), $2,310,000 per
5500-foot horizontal drill (3), $2,597,019 per 7000-foot horizontal
drill (11) and $7,500,000 for water-handling facility upgrades.
Infill drilling at Milnesand Field was scheduled to cost $2,237,318
per 4500-foot horizontal drill (15), $2,327,000 per 5500-foot
horizontal drill (2), $2,620,609 per 7000-foot horizontal drill
(10) and $7,500,000 for water-handling facility upgrades.
Abandonment costs for Chaveroo and Milnesand field wells were
applied at $20,000 per vertical well and $40,000 per horizontal
well, as provided.
Severance taxes
were applied at New Mexico rates of 7.09% of oil revenue and 7.94%
of gas revenue. Ad valorem taxes were applied at 5.00% of total
revenue as per PEDEVCO.
Colorado Assets:
Lease
operating expenses (LOE) were estimated from 2018 monthly lease
operating statements and applied on a per-operator basis. All
economic parameters, including lease operating expenses and
investments, were held constant (not escalated) throughout the life
of these properties.
Severance taxes
were applied at Colorado rates of 5.00% of oil revenue and 5.00% of
gas revenue. Ad valorem taxes were applied at 3.00% of total
revenue as per PEDEVCO.
SEC Conformance and Regulations
The
reserve classifications and the economic considerations used herein
conform to the criteria of the SEC. The reserves and economics are
predicated on regulatory agency classifications, rules, policies,
laws, taxes and royalties currently in effect except as noted
herein. PEDEVCO’s operations may
be subject to various levels of governmental controls and
regulations. These controls and regulations may include matters
relating to land tenure, drilling, production practices,
environmental protection, marketing and pricing policies,
royalties, various taxes and levies including income tax and are
subject to change from time to time. Such changes in governmental
regulations and policies may cause volumes of reserves actually
recovered and amounts of income actually received to differ
significantly from the estimated quantities.
This
evaluation includes 91 proved undeveloped locations in New Mexico,
of which 86 are commercial in this evaluation. Each of these
commercial drilling locations proposed as part of PEDEVCO’s
development plans conforms to the proved undeveloped standards as
set forth by the SEC. In our opinion, PEDEVCO has indicated they
have every intent to complete this development plan as
scheduled.
Furthermore,
PEDEVCO has demonstrated that they have the proper company
staffing, financial backing and prior development success to ensure
this development plan will be fully executed.
PEDEVCO Corp. Interests
February
28, 2019
Page
4
Reserves Estimation Methods
The
methods employed in estimating reserves are industry standard
methods that are appropriate for the assets evaluated. PDP reserves
for New Mexico and Colorado properties were forecast using
production performance reserve estimation methods. No PDNP reserves
were assigned for these assets. PUD reserves for each New Mexico
field were estimated using a blend of type curve analysis, material
balance calculations, volumetric estimates and analogy forecasting
techniques. No PUD reserves were assigned by us for the Colorado
properties.
Non-producing
reserve estimates were forecast using a blend of type curve
analysis, material balance calculations, volumetric estimates and
analogy forecasting techniques. These methods provide a relatively
high degree of accuracy for predicting proved undeveloped reserves
for PEDEVCO properties, due to the mature nature of their
properties targeted for development and an abundance of subsurface
control data. The assumptions, data, methods and procedures used
herein are appropriate for the purpose served by this
report.
General Discussion
The
estimates and forecasts were based upon interpretations of data
furnished by your office and available from our files. To some
extent information from public records has been used to check
and/or supplement these data. The basic engineering and geological
data were subject to third-party reservations and qualifications.
Nothing has come to our attention, however, that would cause us to
believe that we are not justified in relying on such data. All
estimates represent our best judgment based on the data available
at the time of preparation. Reserves estimates will generally be
revised as additional geologic or engineering data become available
or as economic conditions change. Moreover, estimates of
reserves may increase or decrease as a result of future operations,
effects of regulation by governmental agencies or geopolitical or
economic risks. As a result, the estimates of oil and gas
reserves have an intrinsic uncertainty. The reserves included
in this report are therefore estimates only and should not be
construed as being exact quantities. They may or may not be
actually recovered, and if recovered, the revenues therefrom, and
the actual costs related thereto, could be more or less than the
estimated amounts.
An
on-site field inspection of the properties has not been performed.
The mechanical operation or condition of the wells and their
related facilities have not been examined nor have the wells been
tested by Cawley, Gillespie & Associates, Inc. Possible
environmental liability related to the properties has not been
investigated nor considered. The cost of plugging and the salvage
value of equipment at abandonment have been included in this
evaluation.
Cawley,
Gillespie & Associates, Inc. is a Texas Registered Engineering
Firm (F-693), made up of independent registered professional
engineers and geologists that have provided petroleum consulting
services to the oil and gas industry for over 50 years. This
evaluation was supervised by W. Todd Brooker, President at Cawley,
Gillespie & Associates, Inc. and a State of Texas Licensed
Professional Engineer (License #83462). We do not own an interest
in the properties or PEDEVCO Corp., dba Pacific Energy Development,
and are not employed on a contingent basis. We have used all
methods and procedures that we consider necessary under the
circumstances to prepare this report. Our work-papers and related
data utilized in the preparation of these estimates are available
in our office.
Yours
very truly,
CAWLEY, GILLESPIE & ASSOCIATES, INC.
Texas Registered Engineering Firm F-693
W. Todd
Brooker, P. E.
President
