☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Texas
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22-3755993
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(State
or other jurisdiction of incorporation or
organization)
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(IRS
Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.001 par value per share
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PED
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NYSE American
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☑
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Smaller reporting company ☑
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Emerging growth company ☐
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2
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3
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Consolidated
Statements of Shareholders’ Equity for the Three and Nine
Months Ended September 30, 2020, and 2019
(Unaudited)
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4
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5
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22
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29
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30
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30
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30
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30
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31
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September
30, 2020
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December
31, 2019
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Assets
|
|
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Current
assets:
|
|
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Cash
|
$8,382
|
$22,415
|
Accounts
receivable – oil and gas
|
944
|
4,602
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Prepaid
expenses and other current assets
|
219
|
73
|
Total
current assets
|
9,545
|
27,090
|
|
|
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Oil
and gas properties:
|
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Oil
and gas properties, subject to amortization, net
|
89,319
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76,952
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Oil
and gas properties, not subject to amortization, net
|
4
|
14,896
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Total
oil and gas properties, net
|
89,323
|
91,848
|
|
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Operating
lease – right-of-use asset
|
293
|
360
|
Other
assets
|
3,550
|
3,598
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Total
assets
|
$102,711
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$122,896
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Liabilities and Shareholders’ Equity
|
|
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Current
liabilities:
|
|
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Accounts
payable
|
$546
|
$12,099
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Accrued
expenses
|
324
|
1,972
|
Revenue
payable
|
829
|
827
|
PPP
loan – current
|
227
|
-
|
Operating
lease liabilities – current
|
103
|
97
|
Asset
retirement obligations – current
|
15
|
225
|
Total
current liabilities
|
2,044
|
15,220
|
|
|
|
Long-term
liabilities:
|
|
|
PPP
loan
|
144
|
-
|
Operating
lease liabilities
|
221
|
300
|
Asset
retirement obligations
|
2,018
|
1,874
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Total
liabilities
|
4,427
|
17,394
|
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Commitments
and contingencies
|
|
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Shareholders’
equity:
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Common
stock, $0.001 par value, 200,000,000 shares authorized; 72,463,340
and 71,061,328 shares issued and outstanding,
respectively
|
72
|
71
|
Additional
paid-in capital
|
203,099
|
201,027
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Accumulated
deficit
|
(104,887)
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(95,596)
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Total
shareholders’ equity
|
98,284
|
105,502
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Total
liabilities and shareholders’ equity
|
$102,711
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$122,896
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
|
||
Revenue:
|
2020
|
2019
|
2020
|
2019
|
Oil
and gas sales
|
$2,417
|
$3,129
|
$5,905
|
$8,767
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Lease
operating costs
|
1,054
|
1,691
|
3,326
|
4,756
|
Exploration
expense
|
1
|
27
|
31
|
50
|
Selling,
general and administrative expense
|
1,281
|
1,366
|
4,826
|
4,338
|
Depreciation,
depletion, amortization and accretion
|
2,974
|
3,952
|
8,323
|
8,985
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Total
operating expenses
|
5,310
|
7,036
|
16,506
|
18,129
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Gain
on sale of oil and gas properties
|
-
|
-
|
-
|
920
|
|
|
|
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Operating
loss
|
(2,893)
|
(3,907)
|
(10,601)
|
(8,442)
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Other
income (expense):
|
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Interest
expense
|
(1)
|
-
|
(1)
|
(824)
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Interest
income
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4
|
15
|
36
|
22
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Other
income (expense)
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597
|
(14)
|
1,275
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(117)
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Total
other income (expense)
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600
|
1
|
1,310
|
(919)
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Net
loss
|
$(2,293)
|
$(3,906)
|
$(9,291)
|
$(9,361)
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Loss
per common share:
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Basic
and diluted
|
$(0.03)
|
$(0.07)
|
$(0.13)
|
$(0.21)
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Weighted
average number of common shares outstanding:
|
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Basic
and diluted
|
72,250,014
|
56,213,568
|
72,124,339
|
44,517,500
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Common
Stock
|
|
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Shares
|
Amount
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Additional
Paid-in Capital
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Accumulated
Deficit
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Totals
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Balances at January 1, 2020
|
71,061,328
|
$71
|
$201,027
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$(95,596)
|
$105,502
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Issuance of
restricted common stock
|
1,119,000
|
1
|
(1)
|
-
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-
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Rescinded
restricted common stock
|
(55,000)
|
-
|
-
|
-
|
-
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Stock-based
compensation
|
-
|
-
|
853
|
-
|
853
|
Net
loss
|
-
|
-
|
-
|
(4,257)
|
(4,257)
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Balances at
March 31, 2020
|
72,125,328
|
72
|
201,879
|
(99,853)
|
102,098
|
Stock-based
compensation
|
-
|
-
|
719
|
-
|
719
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Net
loss
|
-
|
-
|
-
|
(2,741)
|
(2,741)
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Balances at
June 30, 2020
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72,125,328
|
72
|
202,598
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(102,594)
|
100,076
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Issuance of
restricted common stock
|
240,000
|
-
|
-
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-
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-
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Rescinded
restricted common stock
|
(74,000)
|
-
|
-
|
-
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-
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Issuance of
restricted common stock to non-affiliate
|
70,000
|
-
|
-
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-
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-
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Issuance of
restricted common stock to affiliate
|
70,000
|
-
|
-
|
-
|
-
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Cashless
exercise of stock options
|
32,012
|
-
|
-
|
-
|
-
|
Stock-based
compensation
|
-
|
-
|
501
|
-
|
501
|
Net
loss
|
-
|
-
|
-
|
(2,293)
|
(2,293)
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Balances at September 30, 2020
|
72,463,340
|
$72
|
$203,099
|
$(104,887)
|
$98,284
|
|
Common Stock
|
|
|
|
|
|
Shares
|
Amount
|
Additional Paid-in Capital
|
Accumulated Deficit
|
Totals
|
Balances at January 1, 2019
|
15,808,445
|
$16
|
$101,450
|
$(84,494)
|
$16,972
|
Issuance of
common stock for debt conversion
|
29,480,383
|
29
|
55,046
|
-
|
55,075
|
Share-based
compensation
|
-
|
-
|
299
|
-
|
299
|
Net
loss
|
-
|
-
|
-
|
(2,995)
|
(2,995)
|
Balances at
March 31, 2019
|
45,288,828
|
45
|
156,795
|
(87,489)
|
69,351
|
Issuance of
restricted common stock
|
160,000
|
-
|
-
|
-
|
-
|
Issuance of
common stock to non-affiliates
|
1,500,000
|
1
|
2,999
|
-
|
3,000
|
Issuance of
common stock to affiliate
|
6,818,181
|
7
|
14,993
|
-
|
15,000
|
Warrants
exercised
|
60,056
|
-
|
-
|
-
|
-
|
Share-based
compensation
|
-
|
-
|
398
|
-
|
398
|
Net
loss
|
-
|
-
|
-
|
(2,460)
|
(2,460)
|
Balances at
June 30, 2019
|
53,827,065
|
53
|
175,185
|
(89,949)
|
85,289
|
Exercise of
stock options
|
9,782
|
-
|
-
|
-
|
-
|
Issuance of
restricted common stock
|
270,000
|
-
|
-
|
-
|
-
|
Issuance of
common stock to non-affiliates
|
8,400,000
|
9
|
11,991
|
-
|
12,000
|
Issuance of
common stock to affiliate
|
8,204,481
|
8
|
12,992
|
-
|
13,000
|
Share-based
compensation
|
-
|
-
|
326
|
-
|
326
|
Net
loss
|
-
|
-
|
-
|
(3,906)
|
(3,906)
|
Balances at September 30, 2019
|
70,711,328
|
$70
|
$200,494
|
$(93,855)
|
$106,709
|
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||
|
2020
|
2019
|
2020
|
2019
|
Oil
sales
|
$2,262
|
$3,059
|
$5,569
|
$8,549
|
Natural
gas sales
|
91
|
68
|
221
|
203
|
Natural
gas liquids sales
|
64
|
2
|
115
|
15
|
Total
revenue from customers
|
$2,417
|
$3,129
|
$5,905
|
$8,767
|
|
September
30, 2020
|
December
31, 2019
|
Cash
|
$8,382
|
$22,415
|
Restricted
cash included in other assets
|
3,297
|
3,297
|
Total
cash and restricted cash
|
$11,679
|
$25,712
|
|
Balance at
December 31,
|
|
|
|
Balance at
September 30,
|
|
2019
|
Additions
|
Disposals
|
Transfers
|
2020
|
Oil and gas
properties, subject to amortization
|
$107,164
|
$5,396
|
$-
|
$15,294
|
$127,854
|
Oil and gas
properties, not subject to amortization
|
14,896
|
402
|
-
|
(15,294)
|
4
|
Asset retirement
costs
|
1,547
|
(247)
|
-
|
-
|
1,300
|
Accumulated
depreciation and depletion
|
(31,759)
|
(8,076)
|
-
|
-
|
(39,835)
|
Total oil and gas
assets
|
$91,848
|
$(2,525)
|
$-
|
$-
|
$89,323
|
|
Nine Months Ended
September 30, 2020
|
Balance at the
beginning of the period (1)
|
$2,099
|
Accretion
expense
|
223
|
Liabilities
settled
|
(42)
|
Changes in
estimates
|
(247)
|
Balance at end of
period (2)
|
$2,033
|
|
Nine
Months Ended
|
|
September
30, 2020
|
Cash
paid for amounts included in the measurement of lease
liabilities
|
$87
|
|
September 30,
2020
|
Operating
lease – right-of-use asset
|
$293
|
|
|
Operating
lease liabilities - current
|
$103
|
Operating
lease liabilities - long-term
|
221
|
Total
lease liability
|
$324
|
Remainder
of 2020
|
$29
|
2021
|
118
|
2022
|
121
|
2023
|
82
|
Thereafter
|
-
|
Total
lease payments
|
350
|
Less
imputed interest
|
(26)
|
Total
lease liability
|
$324
|
|
Number
of Options
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contract Term (Years)
|
Outstanding
at December 31, 2019
|
753,349
|
$3.30
|
2.4
|
Granted
|
733,000
|
$1.68
|
|
Exercised
|
(37,500)
|
$0.3088
|
|
Expired/Canceled
|
(214,000)
|
$2.00
|
|
Outstanding
at September 30, 2020
|
1,234,849
|
$2.43
|
2.7
|
Exercisable
at September 30, 2020
|
648,518
|
$3.12
|
1.8
|
●
|
business
strategy;
|
●
|
currently
pending exchange Offer and planned Second-Step Merger with the
holders of Trust Common Units of, and, Sandridge Permian Trust (the
“Trust” and the “Sandridge Transaction”),
including the Company’s ability to consummate the Sandridge
Transaction, the possibility that the Company may be unable to
achieve the expected benefits of acquiring the Trust within the
expected time-frames or at all, the costs and business disruption
of the Sandridge Transaction, and other risks related to the
Sandridge Transaction;
|
●
|
reserves;
|
●
|
technology;
|
●
|
cash
flows and liquidity;
|
●
|
financial
strategy, budget, projections, and operating results;
|
●
|
oil and
natural gas realized prices;
|
●
|
timing
and amount of future production of oil and natural
gas;
|
●
|
availability
of oil field labor;
|
●
|
the
amount, nature, and timing of capital expenditures, including
future exploration and development costs;
|
●
|
drilling
of wells;
|
●
|
government
regulation and taxation of the oil and natural gas
industry;
|
●
|
marketing
of oil and natural gas;
|
●
|
exploitation
projects or property acquisitions;
|
●
|
costs
of exploiting and developing our properties and conducting other
operations;
|
●
|
general
economic conditions in the United States and around the world,
including the effect of regional or global health pandemics (such
as COVID-19);
|
●
|
the
effect of COVID-19 on the U.S. and global economy, the effect of
U.S. and global efforts to reduce the spread of the virus,
including ‘stay-at-home’ and other orders, and the
resulting effect of such pandemic and governmental responses
thereto on the market for oil and gas and the U.S. and global
economy in general;
|
●
|
competition
in the oil and natural gas industry;
|
●
|
effectiveness
of our risk management activities;
|
●
|
environmental
liabilities;
|
●
|
counterparty
credit risk;
|
●
|
developments
in oil-producing and natural gas-producing countries;
|
●
|
future
operating results;
|
●
|
future
acquisition transactions;
|
●
|
estimated
future reserves and the present value of such reserves;
and
|
●
|
plans,
objectives, expectations, and intentions contained in this
Quarterly Report that are not historical.
|
Capital
Expenditures
|
|
Leasehold
Acquisitions
|
$95
|
Drilling
and Facilities
|
5,703
|
Total*
|
$5,798
|
|
Three
Months Ended
September
30,
|
Increase
|
%
Increase
|
|
|
2020
|
2019
|
(Decrease)
|
(Decrease)
|
Sale Volumes:
|
|
|
|
|
Crude
Oil (Bbls)
|
60,786
|
61,441
|
(655)
|
(1%)
|
Natural
Gas (Mcf)
|
44,051
|
43,725
|
326
|
1%
|
NGL
(Bbls)
|
5,072
|
780
|
4,292
|
550%
|
Total (Boe) (1)
|
73,200
|
69,509
|
3,691
|
5%
|
|
|
|
|
|
Crude
Oil (Bbls per day)
|
661
|
668
|
(7)
|
(1%)
|
Natural
Gas (Mcf per day)
|
479
|
475
|
4
|
1%
|
NGL
(Bbls per day)
|
55
|
8
|
47
|
588%
|
Total (Boe per day) (1)
|
795
|
756
|
40
|
5%
|
|
|
|
|
|
Average Sale Price:
|
|
|
|
|
Crude
Oil ($/Bbl)
|
$37.21
|
$49.80
|
$(12.59)
|
(25%)
|
Natural
Gas ($/Mcf)
|
2.06
|
1.57
|
0.49
|
31%
|
NGL
($/Bbl)
|
12.66
|
2.10
|
10.56
|
503%
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues (in thousands):
|
|
|
|
|
Crude
Oil
|
$2,262
|
$3,059
|
$(797)
|
(26%)
|
Natural
Gas
|
91
|
68
|
23
|
34%
|
NGL
|
64
|
2
|
62
|
3,100%
|
Total Revenues
|
$2,417
|
$3,129
|
$(712)
|
(23%)
|
(1)
|
Assumes
6 Mcf of natural gas equivalents to 1 barrel of oil.
|
|
Three
Months Ended
|
|
|
|
|
September
30,
|
Increase
|
%
Increase
|
|
|
2020
|
2019
|
(Decrease)
|
(Decrease)
|
Direct
Lease Operating Expenses
|
$763
|
$1,081
|
$(318)
|
(29%)
|
Workovers
|
2
|
276
|
(274)
|
(99%)
|
Other*
|
289
|
334
|
(45)
|
(13%)
|
Total
Lease Operating Expenses
|
1,054
|
1,691
|
(637)
|
(38%)
|
|
|
|
|
|
Exploration
Expenses
|
1
|
27
|
(26)
|
(96%)
|
Depreciation,
Depletion,
|
|
|
|
|
Amortization
and Accretion
|
2,974
|
3,952
|
(978)
|
(25%)
|
|
|
|
|
|
General
and Administrative (Cash)
|
$780
|
$1,040
|
$(260)
|
(25%)
|
Share-Based
Compensation (Non-Cash)
|
501
|
326
|
175
|
54%
|
Total
General and Administrative Expense
|
1,281
|
1,366
|
(85)
|
(6%)
|
|
|
|
|
|
Interest
Expense
|
$1
|
$-
|
$1
|
100%
|
Interest
Income
|
$4
|
$15
|
$(11)
|
(73%)
|
Other
Income (Expense)
|
$597
|
$(14)
|
$611
|
4,364%
|
|
Nine
Months Ended
September
30,
|
Increase
|
%
Increase
|
|
|
2020
|
2019
|
(Decrease)
|
(Decrease)
|
Sale Volumes:
|
|
|
|
|
Crude
Oil (Bbls)
|
179,167
|
163,089
|
16,078
|
10%
|
Natural
Gas (Mcf)
|
149,417
|
81,481
|
67,936
|
83%
|
NGL
(Bbls)
|
12,176
|
2,170
|
10,006
|
461%
|
Total (Boe) (1)
|
216,246
|
178,839
|
37,407
|
21%
|
|
|
|
|
|
Crude
Oil (Bbls per day)
|
654
|
597
|
57
|
10%
|
Natural
Gas (Mcf per day)
|
545
|
298
|
247
|
83%
|
NGL
(Bbls per day)
|
44
|
8
|
36
|
450%
|
Total (Boe per day) (1)
|
789
|
655
|
134
|
20%
|
|
|
|
|
|
Average Sale Price:
|
|
|
|
|
Crude
Oil ($/Bbl)
|
$31.08
|
$52.42
|
$(21.34)
|
(41%)
|
Natural
Gas ($/Mcf)
|
1.48
|
2.50
|
(1.02)
|
(41%)
|
NGL
($/Bbl)
|
9.41
|
6.80
|
2.61
|
38%
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues (in thousands):
|
|
|
|
|
Crude
Oil
|
$5,569
|
$8,549
|
$(2,980)
|
(35%)
|
Natural
Gas
|
221
|
203
|
18
|
9%
|
NGL
|
115
|
15
|
100
|
667%
|
Total Revenues
|
$5,905
|
$8,767
|
$(2,862)
|
(33%)
|
(1)
|
Assumes
6 Mcf of natural gas equivalents to 1 barrel of oil.
|
|
Nine
Months Ended
September
30,
|
|
|
|
|
2020
|
2019
|
Increase
(Decrease)
|
%
Increase (Decrease)
|
Direct
Lease Operating Expenses
|
$2,502
|
$2,976
|
$(474)
|
(16%)
|
Workovers
|
139
|
956
|
(817)
|
(85%)
|
Gain
on settlement of ARO
|
(19)
|
-
|
(19)
|
100%
|
Other*
|
704
|
824
|
(120)
|
(15%)
|
Total
Lease Operating Expenses
|
3,326
|
4,756
|
(1,430)
|
(30%)
|
|
|
|
|
|
Exploration
Expenses
|
31
|
50
|
(19)
|
(38%)
|
Depreciation,
Depletion,
|
|
|
|
|
Amortization
and Accretion
|
8,323
|
8,985
|
(662)
|
(7%)
|
|
|
|
|
|
General
and Administrative (Cash)
|
$2,753
|
$3,315
|
$(562)
|
(17%)
|
Share-Based
Compensation (Non-Cash)
|
2,073
|
1,023
|
1,050
|
103%
|
Total
General and Administrative Expense
|
4,826
|
4,338
|
488
|
11%
|
|
|
|
|
|
Gain
on Sale of Oil and Gas Properties
|
$-
|
$920
|
$(920)
|
(100%)
|
Interest
Expense
|
$1
|
$824
|
$(823)
|
(100%)
|
Interest
Income
|
$36
|
$22
|
$14
|
64%
|
Other
Income (Expense)
|
$1,275
|
$(117)
|
$1,392
|
(1,190%)
|
|
Nine Months Ended
September 30,
|
|
|
2020
|
2019
|
Cash flows (used
in) provided by operating activities
|
$(24)
|
$6,494
|
Cash flows used in
investing activities
|
(14,379)
|
(33,031)
|
Cash flows provided
by financing activities
|
370
|
58,000
|
Net
(decrease) increase in cash and restricted cash
|
$(14,033)
|
$31,463
|
|
PEDEVCO Corp.
|
|
|
||
|
|
|
|
||
November 16, 2020
|
By:
|
/s/ Dr.
Simon Kukes
|
|
||
|
|
Dr.
Simon Kukes
|
|
||
|
|
Chief
Executive Officer
|
|
||
|
|
(Principal
Executive Officer)
|
|
|
PEDEVCO Corp.
|
|
|
||
|
|
|
|
||
November 16, 2020
|
By:
|
/s/ Paul
A. Pinkston
|
|
||
|
|
Paul A.
Pinkston
|
|
||
|
|
Chief
Accounting Officer
|
|
||
|
|
(Principal
Financial and Accounting Officer)
|
|
|
|
|
Incorporated By Reference
|
|||
Exhibit No.
|
|
Description
|
Form
|
Exhibit
|
Filing Date
|
File Number
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
|
|
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
|
|
101.INS*
|
|
XBRL
Instance Document
|
|
|
|
|
101.SCH*
|
|
XBRL
Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL*
|
|
XBRL
Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF*
|
|
XBRL
Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
101.LAB*
|
|
XBRL
Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE*
|
|
XBRL
Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|