Stonegate Capital Partners has initiated coverage on Pedevco Corp. (NYSE: PED), following the company's exit from fiscal year 2025 as a substantially larger, oil-weighted Rockies platform after completing the Juniper merger. The coverage initiation comes as Pedevco demonstrates significant operational growth despite facing financial headwinds from merger integration costs.
For the full fiscal year 2025, Pedevco reported a 35% year-over-year increase in production to 910.1 thousand barrels of oil equivalent (Mboe), or 2,494 barrels of oil equivalent per day (Boe/d). Revenue grew 16% to $45.8 million, while adjusted EBITDA increased 18% to $27.0 million. These gains occurred despite a challenging pricing environment that saw a 19% decline in realized crude oil prices. The company reported a net loss of $10.4 million for FY25, compared to net income of $12.3 million in FY24, with the reversal attributed to merger costs, accelerated share-based compensation, new interest expense, a note write-off, and tax expense.
The fourth quarter of 2025 provides the first glimpse of the combined platform's performance, with production increasing 143% year-over-year to 483.2 Mboe (5,310 Boe/d). Revenue more than doubled to $23.1 million, while adjusted EBITDA nearly tripled to $15.4 million. Management emphasized that these results included only two months of contribution from the acquired assets, suggesting that normalized earnings power provides a more accurate lens for evaluating the company's potential. The merger has created a bridge to production exceeding 6,500 Boe/d and expanded the company's portfolio to over 310,000 net acres.
Pedevco now reports 32.1 million barrels of oil equivalent (MMBoe) of proved reserves with a PV-10 value of $357.7 million, along with more than 1,000 drilling locations beyond proved reserves. The company has identified optimization work estimated at $10 million to $13 million that could reduce lease operating expenses (LOE) by up to $1 million per month, supporting meaningful margin upside potential. Stonegate Capital Partners' coverage provides investors with detailed analysis of these developments, which can be accessed through their research platform at https://www.stonegateinc.com.
The initiation of coverage by Stonegate Capital Partners represents a significant milestone for Pedevco as it seeks to communicate its post-merger story to the investment community. The firm's analysis highlights how the Juniper transaction has fundamentally transformed Pedevco's operational scale and resource base in the Rockies region. For industry observers, the coverage provides insight into how smaller exploration and production companies are consolidating to achieve critical mass in competitive energy markets.
Investors monitoring the energy sector will find particular interest in Pedevco's ability to grow production and revenue despite declining oil prices, though the net loss underscores the substantial costs associated with strategic mergers. The identified optimization opportunities suggest potential for improved profitability as integration efforts progress. The expanded acreage position and drilling inventory position Pedevco for sustained development activity, while the proved reserves and PV-10 valuation provide a foundation for asset-based valuation approaches.
