☑
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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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
|
|
22-3755993
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(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification No.)
|
575 N. Dairy Ashford, Suite 210, Houston, Texas
|
|
77079
|
(Address
of principal executive offices)
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|
(Zip
Code)
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Title of each class
|
Trading Symbol(s)
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Name of each exchange on which registered
|
Common Stock, $0.001 par value per share
|
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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●
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business
strategy;
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●
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reserves;
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●
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technology;
|
●
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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;
|
●
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availability
of oil field labor;
|
●
|
the
amount, nature and timing of capital expenditures, including future
exploration and development costs;
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●
|
drilling
of wells;
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●
|
government
regulation and taxation of the oil and natural gas
industry;
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●
|
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, for example, 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.
|
|
Three Months Ended March 31,
|
|
|
2021
|
2020
|
Revenue:
|
|
|
Oil
and gas sales
|
$3,531
|
$2,832
|
|
|
|
Operating
expenses:
|
|
|
Lease
operating costs
|
1,286
|
1,522
|
Exploration
expense
|
-
|
30
|
Selling,
general and administrative expense
|
1,767
|
2,123
|
Depreciation,
depletion, amortization and accretion
|
1,561
|
3,437
|
Total
operating expenses
|
4,614
|
7,112
|
|
|
|
Gain
on sale of oil and gas properties
|
1,805
|
-
|
|
|
|
Operating
income (loss)
|
722
|
(4,280)
|
|
|
|
Other
income (expense):
|
|
|
Interest
expense
|
(1)
|
-
|
Interest
income
|
4
|
24
|
Other
income (expense)
|
3
|
(1)
|
Total
other income
|
6
|
23
|
|
|
|
Net
income (loss)
|
$728
|
$(4,257)
|
|
|
|
Loss
per common share:
|
|
|
Basic
|
$0.01
|
$(0.06)
|
Diluted
|
$0.01
|
$(0.06)
|
|
|
|
Weighted
average number of common shares outstanding:
|
|
|
Basic
|
76,839,795
|
71,996,295
|
Diluted
|
77,039,719
|
71,996,295
|
|
Three Months Ended March 31,
|
|
|
2021
|
2020
|
Cash
Flows From Operating Activities:
|
|
|
Net
income (loss)
|
$728
|
$(4,257)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation,
depletion, amortization and accretion
|
1,561
|
3,437
|
Gain
on sale of oil and gas properties
|
(1,805)
|
-
|
Amortization
of right-of-use asset
|
24
|
22
|
Share-based
compensation expense
|
684
|
853
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable – oil and gas
|
(749)
|
1,778
|
Prepaid
expenses and other current assets
|
(1)
|
(4)
|
Accounts
payable
|
267
|
(3,373)
|
Accrued
expenses
|
161
|
254
|
Revenue
payable
|
43
|
(4)
|
Net
cash provided by (used in) operating activities
|
913
|
(1,294)
|
|
|
|
Cash
Flows From Investing Activities:
|
|
|
Cash
paid for drilling and completion costs
|
(582)
|
(8,720)
|
Proceeds
from the sale of oil and gas property
|
1,871
|
-
|
Net
cash provided by (used in) investing activities
|
1,289
|
(8,720)
|
|
|
|
Cash
Flows From Financing Activities:
|
|
|
Proceeds
from issuance of shares, net of offering costs
|
8,303
|
-
|
Net
cash provided by financing activities
|
8,303
|
-
|
|
|
|
|
|
|
Net
increase (decrease) in cash and restricted cash
|
10,505
|
(10,014)
|
Cash
and restricted cash at beginning of period
|
11,324
|
25,712
|
Cash
and restricted cash at end of period
|
$21,829
|
$15,698
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
Cash
paid for:
|
|
|
Interest
|
$-
|
$-
|
Income
taxes
|
$-
|
$-
|
|
|
|
Noncash
investing and financing activities:
|
|
|
Change
in accrued oil and gas development costs
|
$173
|
$4,128
|
Changes
in estimates of asset retirement costs, net
|
$45
|
$210
|
Issuance
of restricted common stock
|
$1
|
$1
|
|
Common Stock
|
|
|
|
|
|
Shares
|
Amount
|
Additional Paid-in
Capital
|
Accumulated Deficit
|
Totals
|
Balances at December 31, 2020
|
72,463,340
|
$72
|
$203,850
|
$(128,286)
|
$75,636
|
Issuance of
restricted common stock
|
960,000
|
1
|
(1)
|
-
|
-
|
Rescinded
restricted common stock
|
(16,667)
|
-
|
-
|
-
|
-
|
Issuance of
common stock to non-affiliate
|
5,968,500
|
6
|
8,297
|
-
|
8,303
|
Cashless
exercise of stock options
|
86,430
|
-
|
-
|
-
|
-
|
Share-based
compensation
|
-
|
-
|
684
|
-
|
684
|
Net
income
|
-
|
-
|
-
|
728
|
728
|
Balances at March 31, 2021
|
79,461,603
|
$79
|
$212,830
|
$(127,558)
|
$85,351
|
|
Common Stock
|
|
|
|
|
|
Shares
|
Amount
|
Additional Paid-in
Capital
|
Accumulated Deficit
|
Totals
|
Balances at December 31, 2019
|
71,061,328
|
$71
|
$201,027
|
$(95,596)
|
$105,502
|
Issuance of
restricted common stock
|
1,119,000
|
1
|
(1)
|
-
|
-
|
Rescinded
restricted common stock
|
(55,000)
|
-
|
-
|
-
|
-
|
Share-based
compensation
|
-
|
-
|
853
|
-
|
853
|
Net
loss
|
-
|
-
|
-
|
(4,257)
|
(4,257)
|
Balances at March 31, 2020
|
72,125,328
|
$72
|
$201,879
|
$(99,853)
|
$102,098
|
|
Three Months Ended
March 31,
|
|
|
2021
|
2020
|
Oil
sales
|
$3,433
|
$2,703
|
Natural
gas sales
|
75
|
89
|
Natural
gas liquids sales
|
23
|
40
|
Total
revenue from customers
|
$3,531
|
$2,832
|
|
March 31,
2021
|
December 31,
2020
|
Cash
|
$18,532
|
$8,027
|
Restricted
cash included in other assets
|
3,297
|
3,297
|
Total
cash and restricted cash
|
$21,829
|
$11,324
|
|
Balance at
December 31, 2020
|
Additions
|
Disposals
|
Transfers
|
Balance at March
31, 2021
|
Oil and gas
properties, subject to amortization
|
$146,950
|
$755
|
$(66)
|
$-
|
$147,639
|
Oil and gas
properties, not subject to amortization
|
4
|
-
|
-
|
-
|
4
|
Asset retirement
costs
|
1,108
|
50
|
(5)
|
-
|
1,153
|
Accumulated
depreciation, depletion and impairment
|
(81,064)
|
(1,433)
|
-
|
-
|
(82,497)
|
Total oil and gas
assets
|
$66,998
|
$(628)
|
$(71)
|
$-
|
$66,299
|
|
Three Months
Ended
March 31,
2021
|
Balance at the
beginning of the period (1)
|
$1,907
|
Accretion
expense
|
121
|
Changes in
estimates, net
|
45
|
Balance at end of
period (2)
|
$2,073
|
|
Three Months Ended
|
|
March 31, 2021
|
Cash paid for amounts included in the measurement of lease
liabilities
|
$ 30
|
|
March 31, 2021
|
Operating
lease – right-of-use asset
|
$246
|
|
|
Operating
lease liabilities - current
|
$107
|
Operating
lease liabilities - long-term
|
167
|
Total
lease liability
|
$274
|
Remainder
of 2021
|
$89
|
2022
|
121
|
2023
|
82
|
Thereafter
|
-
|
Total
lease payments
|
292
|
Less
imputed interest
|
(18)
|
Total
lease liability
|
$274
|
|
Number of Options
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contract Term (Years)
|
Outstanding
at December 31, 2020
|
1,234,849
|
$2.43
|
2.7
|
Granted
|
550,000
|
$1.39
|
|
Exercised
|
(191,999)
|
$1.59
|
|
Expired/Canceled
|
(236,334)
|
$4.01
|
|
Outstanding
at March 31, 2021
|
1,354,516
|
$1.85
|
3.3
|
Exercisable
at March 31, 2021
|
532,515
|
$2.38
|
1.8
|
Numerator:
|
March 31,
2021
|
March 31,
2020
|
Net
income (loss)
|
$728
|
$(4,257)
|
|
|
|
Effect
of common stock equivalents
|
-
|
-
|
Net
income (loss) adjusted for common stock equivalents
|
$728
|
$(4,257)
|
|
|
|
Denominator:
|
|
|
Weighted
average common shares – basic
|
76,839,795
|
71,996,295
|
|
|
|
Dilutive
effect of common stock equivalents:
|
|
|
Options
and Warrants
|
199,923
|
-
|
|
|
|
Denominator:
|
|
|
Weighted
average common shares – diluted
|
77,039,719
|
71,996,295
|
|
|
|
Earnings
(loss) per common share – basic
|
$0.01
|
$(0.06)
|
|
|
|
Earnings
(loss) per common share – diluted
|
$0.01
|
$(0.06)
|
●
|
“Bbl”
refers to one stock tank barrel, or 42 U.S. gallons liquid volume,
used in this Report in reference to crude oil or other liquid
hydrocarbons;
|
●
|
“Boe”
refers to barrels of oil equivalent, determined using the ratio of
one Bbl of crude oil, condensate or natural gas liquids, to six Mcf
of natural gas;
|
●
|
“Bopd”
refers to barrels of oil day;
|
●
|
“Mcf”
refers to a thousand cubic feet of natural gas;
|
●
|
“NGL”
refers to natural gas liquids;
|
●
|
“Exchange
Act” refers to the Securities Exchange Act of 1934, as
amended;
|
●
|
“SEC”
or the “Commission” refers to the United States
Securities and Exchange Commission;
|
|
|
●
|
“SWD”
means a saltwater disposal well; and
|
●
|
“Securities
Act” refers to the Securities Act of 1933, as
amended.
|
|
Three Months Ended
March 31,
|
Increase
|
% Increase
|
|
|
2021
|
2020
|
(Decrease)
|
(Decrease)
|
Sale Volumes:
|
|
|
|
|
Crude
Oil (Bbls)
|
62,122
|
82,492
|
(20,370)
|
(25%)
|
Natural
Gas (Mcf)
|
32,900
|
60,866
|
(27,966)
|
(46%)
|
NGL
(Bbls)
|
802
|
3,879
|
(3,077)
|
(79%)
|
Total (Boe) (1)
|
68,407
|
96,515
|
(28,108)
|
(29%)
|
|
|
|
|
|
Crude
Oil (Bbls per day)
|
690
|
907
|
(217)
|
(24%)
|
Natural
Gas (Mcf per day)
|
366
|
669
|
(303)
|
(45%)
|
NGL
(Bbls per day)
|
9
|
43
|
(34)
|
(79%)
|
Total (Boe per day) (1)
|
760
|
1,062
|
(302)
|
(28%)
|
|
|
|
|
|
Average Sale Price:
|
|
|
|
|
Crude
Oil ($/Bbl)
|
$55.26
|
$32.76
|
$22.50
|
69%
|
Natural
Gas ($/Mcf)
|
2.28
|
1.47
|
0.81
|
55%
|
NGL
($/Bbl)
|
28.68
|
10.32
|
18.36
|
178%
|
|
|
|
|
|
|
|
|
|
|
Net Operating Revenues (in thousands):
|
|
|
|
|
Crude
Oil
|
$3,433
|
$2,703
|
$730
|
27%
|
Natural
Gas
|
75
|
89
|
(14)
|
(16%)
|
NGL
|
23
|
40
|
(17)
|
(43%)
|
Total Revenues
|
$3,531
|
$2,832
|
$699
|
25%
|
(1)
|
Assumes
6 Mcf of natural gas equivalents to 1 barrel of oil.
|
|
Three
Months Ended
|
|
|
|
|
March
31,
|
Increase
|
%
Increase
|
|
|
2021
|
2020
|
(Decrease)
|
(Decrease)
|
Direct
Lease Operating Expenses
|
$926
|
$1,089
|
$(163)
|
(15%)
|
Workovers
|
118
|
166
|
(48)
|
(29%)
|
Other*
|
242
|
267
|
(25)
|
(9%)
|
Total
Lease Operating Expenses
|
$1,286
|
$1,522
|
$(236)
|
$(16%)
|
|
|
|
|
|
Exploration
Expenses
|
-
|
30
|
(30)
|
(100%)
|
Depreciation,
Depletion,
|
|
|
|
|
Amortization
and Accretion
|
$1,561
|
3,437
|
(1,876)
|
(55%)
|
|
|
|
|
|
General
and Administrative (Cash)
|
$1,083
|
$1,270
|
$(187)
|
$(15%)
|
Share-Based
Compensation (Non-Cash)
|
684
|
853
|
(169)
|
(20%)
|
Total
General and Administrative Expense
|
$1,767
|
$2,123
|
$(356)
|
$(17%)
|
|
|
|
|
|
Gain
on Sale of Oil and Gas Properties
|
$1,805
|
$-
|
$1,805
|
100%
|
|
|
|
|
|
Interest
Expense
|
$(1)
|
$-
|
$(1)
|
(100%)
|
Interest
Income
|
$4
|
$24
|
$(20)
|
(83%)
|
Other
Income (Expense)
|
$3
|
$(1)
|
$4
|
400%
|
|
Three Months
Ended
March
31,
|
|
|
2021
|
2020
|
Cash flows provided
by (used in) operating activities
|
$913
|
$(1,294)
|
Cash flows provided
by (used in) investing activities
|
1,289
|
(8,720)
|
Cash flows provided
by financing activities
|
8,303
|
-
|
Net
increase (decrease) in cash and restricted cash
|
$10,505
|
$(10,014)
|
|
|
|
|
Incorporated By
Reference
|
|||||||
Exhibit No.
|
|
Description
|
|
Form
|
|
Exhibit
|
|
Filing
Date
|
|
File
Number
|
|
|
Underwriting
Agreement, dated February 2, 2021, by and between U.S. Energy Corp.
and Kingswood Capital Markets, division of Benchmark Investments,
Inc
|
|
8-K
|
|
1.1
|
|
February
3, 2021
|
|
001-35922
|
|
|
10.1#
|
|
Purchase and Sale
Agreement, dated December 29, 2019, entered into by and among Red
Hawk Petroleum, LLC, DJ Homestead, LLC, and Petro Operating
Company, LLC
|
|
10-K
|
|
10.37
|
|
March
23, 2021
|
|
001-35922
|
|
|
Closing Letter,
dated March 18, 2021, entered into by and among Red Hawk Petroleum,
LLC, DJ Homestead, LLC, and Petro Operating Company,
LLC
|
|
10-K
|
|
10.38
|
|
March
23, 2021
|
|
001-35922
|
||
|
Form
of Lock-Up Agreement (February 2021 Offering)
|
|
8-K
|
|
10.1
|
|
February
3, 2021
|
|
001-35922
|
||
31.1*
|
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
32.1**
|
|
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
|
|
|
|
|
|
|
|
|
|
32.2**
|
|
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
|
|
|
|
|
|
|
|
|
|
PEDEVCO Corp.
|
|
|
||
|
|
|
|
||
May 17, 2021
|
By:
|
/s/ Simon
Kukes
|
|
||
|
|
Simon
Kukes
|
|
||
|
|
Chief
Executive Officer
|
|
||
|
|
(Principal
Executive Officer)
|
|
|
PEDEVCO Corp.
|
|
|
||
|
|
|
|
||
May 17, 2021
|
By:
|
/s/ Paul
A. Pinkston
|
|
||
|
|
Paul A.
Pinkston
|
|
||
|
|
Chief
Accounting Officer
|
|
||
|
|
(Principal
Financial and Accounting Officer)
|
|