Pedevco Corp.

Good afternoon, and welcome to Pedevco Corp's first quarter 2026 earnings conference call. All participants are in listen-only mode. After the prepared remarks, we will open the call for questions. I would now like to turn the call over to Laurent Weil of Elevate IR. Please go ahead.

Thank you, operator, and good afternoon, everyone. Welcome to Pedevco's first quarter 2026 earnings call. With me today are Doug Schick, President and Chief Executive Officer, Artie Dukes, Chief Operating Officer, and Bobby Long, Chief Financial Officer. Before we begin, I'd like to remind everyone that today's discussion includes forward-looking statements within the meaning of the federal securities laws, subject to risks and uncertainties that could cause actual results to differ materially from expectations. For more information, please refer to our first quarter 2026 Form 10Q and other SEC filings. The company undertakes no obligation to update or revise any forward-looking statements. During today's call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA and working capital, excluding derivative contract assets and liabilities. Reconciliations to the most directly comparable GAAP measures are available in our earnings release and in queue. These non-GAAP measures should not be considered in isolation or as a substitute for GAAP results. I would also like to note that all per share and share count figures referenced today reflect the company's 1 for 20 reverse stock split effective March 13, 2026, applied retroactively to all periods presented. As of March 31st, 2026, the company had approximately 13.3 million shares of common stock outstanding. Here is today's agenda. Doug will begin with opening remarks, followed by RT with an operational update, and then Bobby will walk through our financial performance. After our prepared remarks, the management team will open the call for questions. With that, I will turn it over to Doug.

Thanks, Laurent, and good afternoon, everyone. Thank you for joining us. In our first full quarter as a combined company following the Juniper merger, our results exceeded our internal expectations across all key metrics. Production averaged 8,091 BOE per day, revenue was $40.2 million, and adjusted EBITDA was $21.5 million. The 31 DJ Basin wells that came online in late 2025 mostly performed ahead of their type curves. which drove the production outperformance relative to our internal projections. Costs were in line with our expectations, and we made meaningful progress reducing the working capital deficit that existed at year-end. Taken together, Q1 reflected a business that is executing on the plan we laid out at the merger close. Now, before diving further into the quarter, I'd like to spend a moment on our development inventory review because I think it speaks to the depth and optionality this platform provides. Since the beginning of 2026, our team has been working through in-depth asset reviews to plan our future developments in late 2026 and 2027 and beyond, with a focus on creating substantial value for our shareholders. For the remainder of 2026, in the DJ Basin, we have one drilled, uncompleted well in which we hold over a 90% working interest that we plan to complete and bring online mid-summer 2026. Additionally, we are in constant communication with our partners about further 2026 development options in the DJ Basin. In the Powder River Basin, we hold over 200,000 net acres of early stage multi-formation inventory that we are advancing through technical evaluation with development decisions to follow as we gain further confidence in the highest return targets. In the Permian, our San Andreas wells continue to produce in line with expectations, and we are evaluating additional activity for the back half of the year. Across all three basins, any incremental capital commitments will be evaluated against our return thresholds and our liquidity position and the strength of our balance sheet. Higher commodity prices, when sustained, change the return profile of our inventory, but they do not change the discipline of our framework. The commodity price environment is constructed today, And if it remains so, we have both the inventory and the operational capacity to respond. We will not deploy capital ahead of returns that justify it. However, we are focused on creating value for our shareholders, and we have many ways to do so. We believe we have one of the deepest inventories relative to our size of any publicly traded oil and gas company, and we plan to demonstrate that over the coming quarters and years. Relating to our first quarter results, I want to first address our net reported loss of $25.6 million. That figure was driven almost entirely by $31.3 million net loss on derivative contracts, of which $27.9 million was a non-cash mark-to-market adjustment reflecting the movement of commodity prices above our hedge strike prices during the quarter. Excluding that item and other non-cash charges, the business generated $6.7 million of operating income and more importantly, 21.5 million of adjusted EBITDA. The EBITDA number is what we believe most accurately reflects the operating performance of the business in the quarter, and it represents a 404% increase over the 4.3 million we reported in Q1 2025. The full reconciliation from GAAP net loss to adjusted EBITDA is included in the press release. The balance sheet moved decisively in the right direction during the quarter. Our working capital deficit, excluding current assets and liabilities related to derivative contracts, improved by $27.1 million, from $34.1 million at year end to $7 million at March 31st. That improvement reflects the settlement of development capital and merger-related payables that were outstanding at year end and illustrates the strong cash generation of the expanded asset base. Adjusted for our cash on hand, including approximately $3.6 million of restricted cash that we expect to return to unrestricted status in the coming months, net debt at quarter end was approximately $87 million, $11 million below our funded debt of $98 million. We view this as an important milestone. Coming out of the merger, we carried a meaningful working capital deficit that was a function of the transaction and the development program underway at closing. One quarter in, that hangover has been largely resolved, resulting in strong liquidity. And WTI prices over the past couple of months have resulted in continued strong cash generation for the company. Our cost came in as expected across the board, demonstrating efficient integration of the combined asset base. Per unit lease operating expense, inclusive of recurring and non-recurring lease operating expense, workovers, gathering, processing, and transportation expense, and severance and ad valorem taxes came in at $22.46 per BOE, essentially flat with the $22.21 per BOE in the prior year. Total G&A was $3.1 million for the quarter, and cash G&A was $2.6 million for the quarter, which equates to a cash G&A of $3.59 per BOE. Q1 G&A included some residual merger integration costs. As those costs roll off throughout the balance of the year, we expect further improvement. I'm also happy to report that all of our capital expenditures incurred in Q4 2025 and paid in Q1, 2026 relating to the 31 wells that were in process at the time of the merger were within or under our expectations. Turning to production cadence, I want to be clear about what to expect for the remainder of 2026 because I think the context is important. Q1 benefited from the timing of the 31 DJ Basin wells that came online in late 2025, all which reached reached peak production in Q1, 2026. Production is expected to moderate through the middle quarters of the year as those wells follow their natural decline curves. Our second half development activity and optimization work are then expected to support incremental volumes heading into 2027. The first quarter of this year was expected to be a relatively high production quarter, and we want to make sure investors appreciate that. Our production for the balance of the year is expected to show some decline over the next quarter or two, and our second half production is likely to be impacted by our development spending and results over the next several months. Based on the $16 to $20 million of currently approved net capital expenditures, we continue to expect full-year average production of 6,500 to 7,000 BOE per day and $60 to $70 million of adjusted EBITDA. If we revise our development and capital plans in the future, we will communicate the revised production and adjusted EBITDA expectations as well. Looking ahead, we remain focused on executing the optimization program, planning our future development plans while maintaining capital discipline, and converting the platform we have built into a durable, Rockies-focused energy company while improving cash flow and returns for our shareholders. With that, I will turn it over to Archie Dukes.