PEDEVCO Corp. Noble Capital Markets Virtual Equity Investor Conference

Mark, thank you, and sorry for the tongue twister. Yeah, interim CEO, President, and COO is a mouthful to say the least. Yes, interim CEO as of a couple of weeks ago. Board made a decision to go forward in a different direction, conducting a search now. We're thankful for Doug's contributions, and he's a friend of the business, obviously, and we're all still friends with him. I think what you'll see is a lot more of pushing PEDEVCO forward where we are. We're a differentiated Rockies focus, or have a differentiated Rockies focus with substantial growth potential. We're a growth vehicle in the E&P space, and we think you're going to see that more and more from us. We're going to call it the PEDEVCO difference. It's the PEDEVCO difference in what you get from a PEDEVCO and an investment in PEDEVCO.

I'll share a little bit more detail, diving into the company going forward. Then happy, please take notes and as you have questions, we'll make this a good conversation afterwards. Next slide. Normal disclaimers. Just remind you the presentation might have forward-looking statements. Things change. Those involve risk and uncertainty, so don't rely on them too hard. Actual results could differ. Normal disclaimers. You guys are used to that. PEDEVCO investment highlights. Who are we and what are we? We're going to spend a lot of time getting our story out. We think we have a very exciting story in terms of where we are and then where we're going. There was a Hart article that highlighted this company has gone from 130 barrels a day to closer to 7,000 barrels a day today. We still think this is just the beginning.

We've got an established production base across the DJ in Colorado and Wyoming, and then we've got a lot of acreage and our long-term development potential and growth potential in the Powder River Basin. We like our zip code. We like our location. It's why we have 300,000 net acres. We think that gives us scale, that we can have disciplined organic growth that's probably quite a bit stronger than a lot of our peers. Then we also have a conservative balance sheet that positions us well to consolidate across the Rockies. Both of those together, we think differentiate us quite a bit. We have an inventory of developable locations across our portfolio that we also think differentiates us from most companies our size. We have decades of inventory. Obviously, we're going to grow into that being a little bit more normal.

But 1,000 to 1,100 gross locations that could be drilled, depending on how you look at it. We're an oil-weighted investment. We're 88% liquids. Based on where we are invested today, we'll largely stay that way. We do have some gas optionality that you could see us in a higher gas price environment. We could wait. We have plays, the Mowry being one that produces a little bit more gas, that you could see us in a higher gas price environment allocate more capital to a more gassy play if it makes sense. Gas prices get a little higher, those begin to compete into the top of our portfolio. Existing inventory provides a lot of drilling potential, but even what we're doing in the second half of this year, we're going to participate in 15 gross wells.

Obviously prioritizing the best and highest rate of return, risk-adjusted rate of return investments. You'll see us gear that up even further into 2027. The team that has executed upon these assets is in place. We've drilled, completed, and operated wells across these assets for years. We have good relationships across the basin. Even though we're going through a transition, there will be continuity and a focus on execution. Margin expansion and financial strength. Something you'll hear if you're around our company very much is we try to be good at everything and be getting better at it all the time. You'll find in an E&P space, if you're good at everything, you're probably already ahead, and then if you're getting better, you're getting further ahead.

While we have a strong organic growth potential, we're also looking at our assets that we've been producing for a long time, and we're optimizing those. A big part of our capital spend this year and going into the first half of next year will be optimization spend across our assets, converting those from higher rate pumps to rod pumps and lowering our costs across the board. We're over halfway there to that $10 million-$12 million per year in annualized LOE savings from our program in 2026, and we'll finish that up in 2027. We're really focused on maximizing each barrel. You'll see us keep conservative leverage. We'll keep our RBL capacity and liquidity across the basin, and significant operating cash flow. PED at a glance. About $36 million or almost $37 million in adjusted EBITDA through the first half of the year.

I've already mentioned the liquids mix and the acreage position that we have. 6,800 BOE a day in Q2. $73 million in net debt at the end of Q2. So already ahead of target. We thought it would take us 12 to 18 months to get our debt down to that one-time multiple. We really did it in about six to nine. So very proud of that. We feel like that's positioned us really well going forward as a company. Our PV-10, we would say this is on a conservative reserves evaluation as well. Obviously, I start talking about 1,000 locations that leads to PV that's much higher than this here, around $27 per share in PV-10. Then guidance that's $60 million-$70 million in EBITDA for 2026, and we haven't changed that so far. Then hopefully in the coming months, we'll share more about 2027 as well.

Financial highlights, I've touched on a few of these. Obviously, huge growth into this year from previous PEDEVCO pre-merger, a lot of that coming from the consolidated assets, and then also higher activity in Q4 2025 and Q1 of 2026 that grew us up to that peak production in Q1. Been tapering off, and it will be lumpy. We're small. We're going to grow consistently and repeatedly, but it's going to be up and down from quarter to quarter, and we're re-entering an investment phase that'll lead us into that growth in 2027. Revenue up, but EBITDA, as mentioned, CapEx low, that was mostly overhang from Q1. We have completed a DUC that we've shared publicly, and then also spud a well that we've shared publicly in Q3. We'll share more about that in Q3 results. Net income almost $18 million in Q2.

Our asset base, don't want to go unnoted, 90,000 acres in the DJ Basin. One, legacy assets from PEDEVCO, and then the assets that merged in that have created the modern PEDEVCO that has running room and significant upside. That is the bulk of our production in the DJ Basin. You'll see its percentage of our capital budget go up and down from year to year as we have some AMIs with other operators and our operated activity as we ramp up and down from time to time. Our long-term growth is in our larger acreage position in the Powder River Basin. That's where we have attractive targets from the sands down to the shales. We say a lot of times in the Powder River Basin that investments are led by the sands and land.

We've cleaned up some BLM things and gotten permits in place so we can execute on some of Turner, Parkman, and Sussex wells this year going into next. Over time, you'll see a shift into those shale plays in the Niobrara and the Mowry as well. We're excited about results there. A lot of our position is largely proven up by offset operators, larger operators in Anschutz, EOG, Oxy, Devon, and so forth have proved up a lot of our acreage. Now we're getting some of the best Mowry results ever in the basin. We're really excited about our position in the Mowry as well. A lot of long-term upside, long-term development potential for our company. Reserve valuation summary. I mentioned this already, I would say from the companies that I've been at, that this is a pretty conservative view of reserves, and we still end up with an R/P ratio that's over 10 years of current production compared to that inventory that we really have.

SEC pricing, that was pretty low, too. Obviously, we've realized a lot more than $65 a barrel this year. Third-party engineers reviewed this as well, continue to have that. Inventory and depth, just to call out where that is. In the DJ Basin, where you can develop units with as many as 8 to 10 and sometimes even more wells in the Niobrara, based off the thickness there, quite a bit of inventory in the DJ when you add the Codell to those Niobrara wells. Then the Powder, where we have stack pay that I've already touched upon.

The Niobrara, the Mowry, the Turner, the Parkman. You will see us continue to exploit that in what, in a conservative sense, really is some of the reserves we have not booked is its literal SEC reserves because we have offsets in some of those larger operators. It provides what we think are very attractive breakevens. We are going to be pretty consistent in that $60-$80 range in reinvesting our cash flow and growing this business. Somewhere in the 50s or lower is where we would think about scaling back, and we will be very happy with what we are doing. If commodity prices are higher, you might see us do a little bit more throughout each year or allocate some of that capital to additional acquisitions. Our operating margins and expanding those funds growth.

This is really a slide from earlier in the year just to show the changes since our merger at the end of last year. G&A synergies, probably 20% or 25%-30% reduction in G&A just through the combination. I think in reality, through this year, we have run even lower than that for the most part. LOE optimization, we are halfway through this program of saving $1 million per month, $800,000 to $1 million per month. We have finished the 2026 program. We pulled that forward. Ultimately, it led to no increase in capital spend, but it led to improved margins through 2026. We got halfway through the year and that was going really well. We decided to finish that up in Q3 instead of spacing it out between Q3 and Q4.