Stonegate Capital Partners has initiated coverage on Pedevco Corp. (NYSE: PED), following the company's transformative merger with Juniper that has substantially expanded its operational scale and earnings potential. The coverage initiation comes as Pedevco exited fiscal year 2025 as a significantly larger, oil-weighted platform in the Rockies region.
For the full fiscal year 2025, Pedevco reported a 35% year-over-year increase in production to 910.1 thousand barrels of oil equivalent, translating to 2,494 barrels of oil equivalent per day. Revenue grew 16% to $45.8 million, while adjusted EBITDA increased 18% to $27.0 million. These gains were achieved despite a challenging pricing environment that saw realized crude oil prices decline by 19%. The company reported a net loss of $10.4 million for the year, compared to net income of $12.3 million in fiscal year 2024, with the shift attributed to merger-related costs, accelerated share-based compensation, new interest expense, a note write-off, and tax expense.
The fourth quarter of 2025, representing the first period reflecting the combined platform following the Juniper merger, demonstrated the transaction's immediate impact. Production surged 143% year-over-year to 483.2 thousand barrels of oil equivalent, or 5,310 barrels per day. Revenue more than doubled to $23.1 million, and 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 picture of the company's future performance.
The merger has positioned Pedevco with a production bridge to over 6,500 barrels of oil equivalent per day and a portfolio encompassing roughly over 310,000 net acres. The company now reports 32.1 million barrels of oil equivalent of proved reserves with a present value of $357.7 million, and has identified over 1,000 drilling locations beyond its proved reserves. Stonegate's analysis, available in their full report at https://www.stonegateinc.com, indicates that $10 million to $13 million of optimization work could reduce lease operating expenses by up to $1 million per month, supporting meaningful margin upside for the company.
This coverage initiation is significant for investors and the energy sector as it provides independent analysis of a company that has rapidly scaled through consolidation. Pedevco's performance, achieving substantial production and revenue growth despite lower commodity prices, demonstrates operational resilience and the strategic value of its expanded asset base. The identified cost optimization potential further highlights a path to improved profitability, which could influence investor perception of similar small-to-mid-cap exploration and production companies seeking growth through mergers and acquisitions in a volatile price environment.
