þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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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
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22-3755993
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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þ
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Explanatory Note | 1 | |
PART II | ||
Item 8. | Financial Statements and Supplementary Data | 9 |
Item 9A. | Controls and Procedures | 10 |
PART IV | ||
Item 15. | Exhibits and Financial Statement Schedules | 12 |
●
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Part II, Item 8. Financial Statements and Supplementary Data;
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●
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Part II, Item 9A. Controls and Procedures; and
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●
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Part IV, Item 15. Exhibits and Financial Statement Schedules.
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●
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pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
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●
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provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
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●
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provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
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Audited Financial Statements for Years Ended December 31, 2012 and 2011
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||||
Pedevco Corp.:
|
||||
F-2
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||||
F-4
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||||
F-5
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||||
F-6
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||||
F-7
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||||
F-8
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||||
Condor Energy Technology, LLC
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||||
F-41
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||||
F-42
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||||
F-43
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||||
F-44
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||||
F-45
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||||
F-46
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||||
White Hawk Petroleum, LLC
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||||
F-55
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||||
F-56
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||||
F-57
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||||
F-58
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||||
F-59
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F-60
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(b). List of Exhibits |
Exhibit No.
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Description
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2.1
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Agreement and Plan of Reorganization, dated January 13, 2012, by and among Blast Services, Inc., Blast Acquisition Corp., and Pacific Energy Development Corp. (17)
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2.2
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First Amendment to the Agreement and Plan of Merger, dated May 29, 2012, by and among Blast Services, Inc., Blast Acquisition Corp., and Pacific Energy Development Corp. (1)
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2.3
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Articles of Merger (Nevada) by Blast Acquisition Corp. and Pacific Energy Development Corp. (2)
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3.1
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Amended and Restated Certificate of Formation and Designation by Blast Acquisition Corp. and Pacific Energy Development Corp. (2)
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3.2
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Amended and Restated Certificate of Designation of Series A Preferred Stock (2)
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3.3
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Bylaws of Blast Energy Services, Inc. (3)
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3.4
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Amendment to the Bylaws (25)
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4.1
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Form of Common Stock Certificate for PEDEVCO Corp. (23)
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4.2
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Form of PEDEVCO Corp. Series A Preferred Stock Certificate (23)
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10.1
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2003 Stock Option Plan (4)
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10.2
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Blast Energy Services, Inc. 2009 Stock Incentive Plan (5)
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10.3
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Blast Energy Services, Inc. 2012 Equity Incentive Plan (6)
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10.4
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Blast Energy Services, Inc. 2012 Equity Incentive Plan - Form of Restricted Shares Grant Agreement (23)
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10.5
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Blast Energy Services, Inc. 2012 Equity Incentive Plan - Form of Stock Option Agreement (23)
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10.6
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Pacific Energy Development Corp. 2012 Equity Incentive Plan (23)
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10.7
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Pacific Energy Development Corp. 2012 Plan - Form of Restricted Shares Grant Agreement (23)
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10.8
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Pacific Energy Development Corp. 2012 Plan - Form of Stock Option Agreement (23)
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10.9
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Pacific Energy Development Corp. - Form of Restricted Shares Grant Agreement (23)
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10.10
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Pacific Energy Development Corp. - Form of Stock Option Agreement (23)
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10.11
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PEDEVCO Corp. - Form of Indemnification Agreement (26)
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10.12
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Note Purchase Agreement, dated February 24, 2011, by and between Blast Energy Services, Inc. and Centurion Credit Funding, LLC (12)
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10.13
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Senior Secured Promissory Note (First Tranche), dated February 24, 2011, by Blast Energy Service Inc. in favor of Centurion Credit Funding, LLC (12)
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10.14
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Senior Secured Promissory Note (Second Tranche), dated April 5, 2012, by Blast Energy Service Inc. and Centurion Credit Funding, LLC (13)
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10.15
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Guaranty, dated February 24, 2011, by Eagle Domestic Drilling Operations, LLC and Blast AFJ Centurion Credit Funding, LLC (12)
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10.16
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Security Agreement, dated February 24, 2011, by Blast Energy Services, Inc., Eagle Domestic Drilling Operations, LLC, Blast AFJ, Inc. and Centurion Credit Funding, LLC (12)
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10.17
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Stock Purchase Agreement, dated February 24, 2011, by and between Blast Energy Services, Inc. and Centurion Credit Funding, LLC (12)
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10.18
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Royalty Payment Letter, dated February 24, 2011, by Blast Energy Services, Inc. and Centurion Credit Funding, LLC (12)
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10.19
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Subordination and Intercreditor Agreement, dated February 24, 2011, by and among Blast Energy Services, Inc., Centurion Credit Funding, LLC and Berg McAfee Companies, LLC (12)
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10.20
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Second Amendment to Placement Agency Agreement, dated May 18, 2011, by and between Trident Partners, Ltd and Blast Energy Services, Inc. (14)
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10.21
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Warrant to Purchase Shares of Common Stock, dated February 2, 2011, issued in favor of Centurion Credit Funding, LLC (15)
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10.22
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First Amendment to Warrant, dated October 6, 2011, by and between Blast Energy Services, Inc. and Centurion Credit Funding, LLC (15)
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10.23
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Second Amendment to Warrant, dated December 16, 2011, by and between Blast Energy Services, Inc. and Centurion Credit Funding, LLC (16)
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10.24
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Placement Agent Warrant Agreement, dated December 22, 2011, by and among Blast Energy Services, Inc. and Trident Partners Ltd. (16)
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10.25
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Modification Agreement with Solimar Energy LLC, dated December 22, 2011, by and between Solimar Energy LLC and Blast Energy Services, Inc. (16)
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10.26
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Form of Voting Agreement, dated January 13, 2012, by and among Blast Energy Services, Inc., Pacific Energy Development Corp. and certain security and debt holders of Blast Energy Services, Inc. (17)
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10.27
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Form of Debt Conversion Agreement, dated January 13, 2012 (17)
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10.28
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BMC Debt Conversion Agreement, dated January 13, 2012, by and among Blast Energy Service, Inc., Berg McAfee Companies, LLC and Clyde Berg (17)
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10.29
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Amendment to the Note Purchase Agreement, dated January 13, 2012, by and between Blast Energy Service, Inc. and Centurion Credit Funding LLC (17)
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10.30
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Amendment to the First Tranche Promissory Note, dated January 13, 2012, by and between Blast Energy Service, Inc. and Centurion Credit Funding LLC (17)
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10.31
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Amendment to the Second Tranche Promissory Note, dated January 13, 2012, by and between Blast Energy Service, Inc. and Centurion Credit Funding LLC (17)
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10.32
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Amendment to the Security Agreement, dated January 13, 2012, by and among Blast Energy Service, Inc., Eagle Domestic Drilling Operations, LLC, Blast AFJ, Inc. and Centurion Credit Funding LLC (17)
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10.33
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Settlement Agreement and Release, dated May 1, 2012, by and among Blast Energy Service, Inc., Trident Partners Ltd. and Brian Schantz and Edward Flynn (18)
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10.34
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Fee Conversion and Settlement Agreement, dated May 1, 2012, by and among Blast Energy Services, Inc., Brian Frank and Lewis Mason (18)
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10.35
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Restated Placement Agent Warrant Agreement, effective December 11, 2011, restated as of May 1, 2011 (18)
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10.36
|
PEDCO Guarantee Agreement, dated July 27, 2012, by Pacific Energy Development Corp. in favor of Centurion Credit Funding LLC (17)
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10.37
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Third Amendment to Warrant, dated April 10, 2012, by and between Blast Energy Services, Inc. and Centurion Credit Funding LLC (19)
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10.38
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First Amendment to the Voting Agreement and Debt Conversion Agreement, dated May 29, 2012, by and among Blast Energy Services, Inc., Berg McAfee Companies, LLC and Clyde Berg (20)
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10.39
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Second Amendment to Senior Secured Promissory Note (First Tranche), dated May 29, 2012, by and between Blast Energy Services, Inc. and Centurion Credit Funding LLC (20)
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10.40
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Form of Lockup and Standstill Agreement, dated May 29, 2012, by and between Blast Energy Services and certain of its option and warrant holders (20)
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10.41
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Third Amendment to Senior Secured Promissory Notes (First and Second Tranche), dated August 30, 2012 by and among PEDEVCO Corp and Centurion Credit Funding LLC (21)
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10.42
|
Secured Promissory Note of Pacific Energy Development Company LLC, dated February 14, 2011, issued by Frank Ingriselli (23)
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10.43
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Agreement on Joint Cooperation, dated April 27, 2011, by Pacific Energy Development Company LLC and South Texas Reservoir Alliance LLC (23)
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10.44
|
Executive Employment Agreement, dated June 10, 2011, by Pacific Energy Development Corp and Frank Ingriselli (23)
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10.45
|
Executive Employment Agreement, dated June 10, 2011, by Pacific Energy Development Corp and Clark Moore (23)
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10.46
|
Secured Convertible Promissory Note, dated July 6, 2011, issued to Pacific Energy Development Corp by Global Venture Investments LLC (23)
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|
10.47
|
Purchase and Sale Agreement, dated August 23, 2011, by Pacific Energy Development Corp, Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd. and Crain Energy, Ltd. (23)
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|
10.48
|
Amendatory Letter Agreement No. 1 to Purchase and Sale Agreement, dated September 30, 2011, by and among Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd. and Crain Energy, Ltd., and Pacific Energy Development Corp. (23)
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|
10.49
|
Amendatory Letter Agreement No. 2 to Purchase and Sale Agreement, dated October 27, 2011, by and among Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., Crain Energy, Ltd., and Pacific Energy Development Corp. (23)
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|
10.50
|
Amendatory Letter Agreement No. 3 to Purchase and Sale Agreement, dated October 31, 2011, by and among Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., Crain Energy, Ltd., and Pacific Energy Development Corp. (23)
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|
10.51
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Consulting Agreement, dated September 19, 2011, by Pacific Energy Development Corp and South Texas Reservoir Alliance LLC (23)
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|
10.52
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Operating Agreement, dated October 31, 2011, by and between Condor Energy Technology LLC as Operator and the parties named therein (28)
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10.53
|
Series A Convertible Preferred Stock Warrant, dated October 31, 2011, issued to Global Venture Investments LLC by Pacific Energy Development Corp (23)
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10.54
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Condor Energy Technology LLC Operating Agreement, dated October 31, 2011, by MIE Jurassic Energy Corporation and Pacific Energy Development Corp (23)
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|
10.55
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Consulting Agreement, dated November 26, 2011, by and between Condor Energy Technology LLC and South Texas Reservoir Alliance LLC (23)
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|
10.56
|
Stock Purchase Agreement, dated December 16, 2011, by Pacific Energy Development Corp, the Shareholders of Excellong E&P-2, Inc., and Excellong, Inc. (23)
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|
10.57
|
Executive Employment Agreement, dated January 6, 2012, by Pacific Energy Development Corp and Jamie Tseng (23)
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10.58
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Amendatory Letter Agreement to Stock Purchase Agreement, dated February 9, 2012, between Pacific Energy Development Corp., the Shareholders of Excellong E&P-2, Inc. and Excellong, Inc. (23)
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|
10.59
|
Contract Operating Services Agreement, dated February 15, 2012, by and between South Texas Reservoir Alliance and Condor Energy Technology LLC (23)
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|
10.60
|
Amendatory Letter Agreement No. 2 to Stock Purchase Agreement, dated February 29, 2012, between Pacific Energy Development Corp., the Shareholders of Excellong E&P-2, Inc. and Excellong, Inc. (23)
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|
10.61
|
Amendatory Letter Agreement No. 3 to Stock Purchase Agreement, dated March 28, 2012, between Pacific Energy Development Corp., the Shareholders of Excellong E&P-2, Inc. and Excellong, Inc. (23)
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|
10.62
|
Promissory Note, dated March 7, 2012, by Condor Energy Technology LLC in favor of MIE Jurassic Energy Corporation (23)
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|
10.63
|
Form of Common Stock Warrant dated May 24, 2012, issued to MIE Jurassic Energy Corporation, May 24, 2012 (23)
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|
10.64
|
White Hawk Petroleum, LLC Amended and Restated Operating Agreement, dated May 23, 2012, by MIE Jurassic Energy Corporation and Pacific Energy Development Corp. (23)
|
|
10.65
|
White Hawk Petroleum, LLC Membership Unit Purchase Agreement, dated May 23, 2012, by MIE Jurassic Energy Corporation, Pacific Energy Development and White Hawk Petroleum, LLC (23)
|
|
10.66
|
Consulting Services Agreement, effective June 1, 2012, by and between South Texas Reservoir Alliance and Condor Energy Technology LLC (23)
|
|
10.67
|
Gas Purchase Contract, effective as of June 1, 2012, between Condor Energy Technology, LLC and DCP Midstream, LP (23)
|
|
10.68
|
Promissory Note, dated June 4, 2012, by White Hawk Petroleum, LLC in favor of Pacific Energy Development Corp. (23)
|
|
10.69
|
Promissory Note, dated June 4, 2012, by White Hawk Petroleum, LLC in favor of MIE Jurassic Energy Corporation (23)
|
|
10.70
|
Executive Employment Agreement, dated June 16, 2012, by Pacific Energy Development Corp. and Michael Peterson (23)
|
10.71
|
Form of Common Stock Warrant, dated July 27, 2012 (23)
|
|
10.72
|
Form of Placement Agent Series A Preferred Stock Warrant, dated July 27, 2012 (23)
|
|
10.73
|
Purchase and Sale Agreement, dated July 26, 2012, by and among Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., Crain Energy, Ltd., Ravco, Inc., Arentee Investments, Schibi Oil & Gas, Ltd., and Condor Energy Technology LLC (23)
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|
10.74
|
Amendatory Letter Agreement No. 1 to Purchase and Sale Agreement, dated September 21, 2012, by and among Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., Crain Energy, Ltd., Ravco, Inc., Arentee Investments, Schibi Oil & Gas, Ltd., and Condor Energy Technology LLC (23)
|
|
10.75
|
Form of Pacific Energy Development Corp Series A Preferred Stock Subscription Agreement (23)
|
|
10.76
|
Binding Strategic Cooperation Agreement, dated September 24, 2012, by PEDEVCO Corp and Guofa Zhonghai Energy Investment Co., Ltd.(22)
|
|
10.77
|
Promissory Note, dated September 24, 2012, by Condor Energy Technology LLC in favor of Pacific Energy Development Corp. (23)
|
|
10.78
|
Pacific Energy Technology Service, LLC Operating Agreement, dated October 4, 2012, by and between Pacific Energy Development Corp. and South Texas Reservoir Alliance LLC (23)
|
|
10.79
|
Fourth Amendment to Senior Secured Promissory Notes (First and Second Tranche), dated November 23, 2012, by and between Centurion Credit Funding LLC and PEDEVCO Corp. (24)
|
|
10.80
|
Closing Payment Extension Amendatory Letter Agreement, dated November 20, 2012, by and among PEDEVCO Corp, Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., and Crain Energy, Ltd. (24)
|
|
10.81
|
Term Assignment Evaluation Agreement, dated November 26, 2012, by and between Pacific Energy Development Corp. and MIE Jurassic Energy Corporation (26)
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|
10.82
|
Amendment No. 1 to Employment Agreement, dated January 11, 2013, by and between PEDEVCO Corp. and Michael L. Peterson (27)
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|
10.83
|
Amendment No. 1 to Employment Agreement, dated January 11, 2013, by and between PEDEVCO Corp. and Frank C. Ingriselli (27)
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10.84
|
Amendment No. 1 to Employment Agreement, dated January 11, 2013, by and between PEDEVCO Corp. and Clark R. Moore (27)
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|
10.85
|
Termination of Agreement for Purchase of Term Assignment; Agreement to Transfer Performance Deposit and Negotiate in Good Faith, dated February 8, 2013, by and among PEDEVCO Corp., Condor Energy Technology LLC, Berexco LLC, and Hinkle Law Firm LLC (29)
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|
10.86
|
Secured Subordinated Promissory Note, dated February 14, 2013, by and between Pacific Energy Development Corp. and MIE Jurassic Energy Corporation (30)
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|
14.1
|
Code of Ethics and Business Conduct (31)
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21.1
|
List of Subsidiaries of PEDEVCO Corp.(32)
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23.1
|
Consent of Ryder Scott Company, L.P.(32)
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|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
||
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
||
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*
|
||
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*
|
||
99.1
|
Consent of Elizabeth P. Smith (32)
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99.2
|
Consent of David C. Crikelair (32)
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99.3
|
Report of Ryder Scott Company, L.P. for reserves at December 31, 2012 (32)
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101.INS
|
XBRL Instance Document**
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|
101.SCH
|
XBRL Taxonomy Extension Schema Document**
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|
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**
|
*
|
Filed with this Annual Report on Form 10-K/A.
|
**
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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Each document listed in this Exhibit Index that has been previously filed with the SEC is incorporated by reference into this Annual Report on Form 10-K/A.
|
(1)
|
Previously filed on May 31, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
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(2)
|
Previously filed on August 2, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(3)
|
Previously filed on March 6, 2008 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(4)
|
Previously filed on November 20, 2003 as an exhibit to the Registrant’s Report on Form 10-QSB incorporated herein by reference.
|
|
(5)
|
Previously filed on August 14, 2009 as an exhibit to the Registrant’s Report on Form 10-Q incorporated herein by reference.
|
|
(6)
|
Previously filed on August 2, 2012 as an exhibit to the Registrant’s Report on Form 8-K.
|
|
(7)
|
Previously filed on February 9, 2010 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(8)
|
Previously filed on September 23, 2010 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(9)
|
Previously filed on November 2, 2010 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(10)
|
Previously filed on January 5, 2011 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(11)
|
Previously filed on January 13, 2011 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(12)
|
Previously filed on March 2, 2011 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(13)
|
Previously filed on April 12, 2011 as an exhibit to the Registrant’s Report on Form 10-K incorporated herein by reference.
|
|
(14)
|
Previously filed on August 22, 2011 as an exhibit to the Registrant’s Report on Form 10-Q incorporated herein by reference.
|
|
(15)
|
Previously filed on November 14, 2011 as an exhibit to the Registrant’s Report on Form 10-Q incorporated herein by reference.
|
|
(16)
|
Previously filed on December 27, 2011 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(17)
|
Previously filed on January 20, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(18)
|
Previously filed on May 18, 2012 as an exhibit to the Registrant’s Report on Form 10-Q incorporated herein by reference.
|
|
(19)
|
Previously filed on April 16, 2012 as an exhibit to the Registrant’s Report on Form 10-K incorporated herein by reference.
|
|
(20)
|
Previously filed on May 31, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(21)
|
Previously filed on September 6, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(22)
|
Previously filed on October 1, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(23)
|
Previously filed on October 10, 2012 as an exhibit to the Registrants Registration Statement on Form S-1.
|
|
(24)
|
Previously filed on November 27, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(25)
|
Previously filed on December 6, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(26)
|
Previously filed on December 13, 2012 as an exhibit to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 incorporated herein by reference.
|
|
(27)
|
Previously filed on January 16, 2013 as an exhibit to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 incorporated herein by reference.
|
|
(28)
|
Previously filed on February 5, 2013 as an exhibit to the Registrant’s Amendment No. 3 to Registration Statement on Form S-1 incorporated herein by reference.
|
|
(29)
|
Previously filed on February 12, 2013 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(30)
|
Previously filed on February 19, 2013 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(31)
|
Previously filed on August 8, 2012 as an exhibit to the Registrant’s Report on Form 8-K incorporated herein by reference.
|
|
(32)
|
Previously filed on March 25, 2013 as an exhibit to the Registrant’s Report on Form 10-K incorporated herein by reference.
|
PEDEVCO Corp.
|
|||
Date: April 25, 2013
|
By:
|
/s/ Frank C. Ingriselli
|
|
Frank C. Ingriselli
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
Date: April 25, 2013
|
By:
|
/s/ Michael L. Peterson
|
|
Michael L. Peterson
|
|||
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Frank C. Ingriselli
|
President, Chief Executive Officer and Chairman of the Board of Directors
|
April 25, 2013
|
||
Frank C. Ingriselli
|
(Principal Executive Officer)
|
|||
/s/ Michael L. Peterson
|
Chief Financial Officer, Executive Vice President and Director
|
April 25, 2013
|
||
Michael L. Peterson
|
(Principal Financial and Accounting Officer)
|
|||
/s/ Jamie Tseng
|
Senior Vice President and Director
|
April 25, 2013
|
||
Jamie Tseng
|
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Assets
|
(Restated)
|
(Restated)
|
||||||
Current assets:
|
||||||||
Cash
|
$
|
2,478,250
|
$
|
176,471
|
||||
Accounts receivable – oil and gas
|
16,571
|
-
|
||||||
Accounts receivable – oil and gas - related party
|
112,488
|
302,315
|
||||||
Accounts receivable – related party
|
83,064
|
-
|
||||||
Deferred merger costs
|
-
|
111,828
|
||||||
Prepaid expenses and other current assets
|
133,900
|
26,533
|
||||||
Total current assets
|
2,824,273
|
617,147
|
||||||
Oil and gas properties:
|
||||||||
Oil and gas properties, subject to amortization, net
|
2,420,688
|
-
|
||||||
Oil and gas properties, not subject to amortization, net
|
925,382
|
1,724,234
|
||||||
Total oil and gas properties, net
|
3,346,070
|
1,724,234
|
||||||
Equipment, net of accumulated depreciation
|
87,883
|
4,694
|
||||||
Notes receivable – related parties
|
2,786,064
|
-
|
||||||
Investments – equity method
|
2,098,334
|
588,453
|
||||||
Investments – cost method
|
4,100
|
4,100
|
||||||
Total assets
|
$
|
11,146,724
|
$
|
2,938,628
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
132,243
|
$
|
145,428
|
||||
Accounts payable – related party
|
922,112
|
-
|
||||||
Accrued expenses
|
1,449,014
|
1,904,647
|
||||||
Accrued expenses – related party
|
36,168
|
-
|
||||||
Notes payable – related party
|
2,170,065
|
-
|
||||||
Total current liabilities
|
4,709,602
|
2,050,075
|
||||||
Long-term liabilities:
|
||||||||
Asset retirement obligations
|
59,298
|
-
|
||||||
Total liabilities
|
4,768,900
|
2,050,075
|
||||||
Commitments and contingencies
|
||||||||
Redeemable Series A convertible preferred stock: 555,556 shares issued and outstanding
|
1,250,000
|
-
|
||||||
Shareholders’ equity:
|
||||||||
Series A convertible preferred stock, $0.001 par value, 100,000,000 shares authorized, 6,234,845 and 2,222,223 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively
|
6,235
|
2,222
|
||||||
Common stock, $0.001 par value, 200,000,000 shares authorized; 7,183,501 and 5,167,423 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively
|
7,184
|
5,167
|
||||||
Stock subscriptions receivable | (276,326 | ) | - | |||||
Additional paid-in capital
|
18,167,419
|
1,644,841
|
||||||
Accumulated deficit
|
(12,776,688
|
) |
(763,677
|
)
|
||||
Total shareholders’ equity
|
5,127,824
|
888,553
|
||||||
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
11,146,724
|
$
|
2,938,628
|
For the Year Ended
|
Period from
February 9, 2011 (Inception) through
|
|||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(Restated)
|
(Restated)
|
|||||||
Revenue:
|
||||||||
Oil and gas sales
|
$ | 503,153 | $ | - | ||||
Operating expenses:
|
||||||||
Lease operating costs
|
281,103 | - | ||||||
Selling, general and administrative expense
|
3,729,525 | 717,130 | ||||||
Impairment of goodwill
|
6,820,003 | - | ||||||
Impairment of oil and gas properties
|
180,262 | - | ||||||
Depreciation, depletion, amortization and accretion
|
131,332 | 662 | ||||||
Loss on settlement of payables | 139,874 | - | ||||||
Total operating expenses
|
11,282,099 | 717,792 | ||||||
Gain on sale of equity method investments
|
64,168 | - | ||||||
Loss from equity method investments
|
(357,612 | ) | (25,875 | ) | ||||
Operating loss
|
(11,072,390 | ) | (743,667 | ) | ||||
Other income (expense):
|
||||||||
Interest expense
|
(986,248 | ) | (12,912 | ) | ||||
Interest income
|
36,359 | - | ||||||
Other expense
|
- | (7,098 | ) | |||||
Gain on debt extinguishment
|
9,268 | - | ||||||
Total other expense
|
(940,621 | ) | (20,010 | ) | ||||
Net loss
|
$ | (12,013,011 | ) | $ | (763,677 | ) | ||
Net loss per common share:
|
||||||||
Basic and diluted
|
$ | (1.94 | ) | $ | (0.19 | ) | ||
Weighted average common shares outstanding:
|
||||||||
Basic and diluted
|
6,205,024 | 4,024,469 |
Series A Convertible Preferred Stock
|
Common Stock
|
Additional Paid-In Capital
|
Stock
Subscriptions
Receivable
|
Accumulated Deficit
|
Totals
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||||||
Balances at February 9, 2011
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
- |
$
|
-
|
$
|
-
|
|||||||||||||||||||
Issuance of common stock for cash
|
-
|
-
|
3,473,334
|
3,473
|
6,947
|
-
|
10,420
|
|||||||||||||||||||||||||
Issuance of common stock for interest in Rare Earth JV
|
-
|
-
|
1,366,668
|
1,367
|
2,733
|
-
|
4,100
|
|||||||||||||||||||||||||
Issuance of Series A preferred stock for cash
|
1,422,223
|
1,422
|
-
|
-
|
741,266
|
742,688
|
||||||||||||||||||||||||||
Issuance of Series A preferred stock upon conversion of notes payable
|
800,000
|
800
|
-
|
-
|
899,200
|
900,000
|
||||||||||||||||||||||||||
Issuance costs for Series A preferred stock
|
-
|
-
|
-
|
-
|
(106,865
|
)
|
(106,865
|
)
|
||||||||||||||||||||||||
Issuance of common stock for services
|
-
|
-
|
95,199
|
95
|
28,465
|
28,560
|
||||||||||||||||||||||||||
Issuance of common stock in exchange for services
|
-
|
-
|
232,222
|
232
|
69,435
|
69,667
|
||||||||||||||||||||||||||
Stock compensation
|
3,660
|
3,660
|
||||||||||||||||||||||||||||||
Net loss
|
(763,677
|
)
|
(763,677
|
)
|
||||||||||||||||||||||||||||
Balances at December 31, 2011 (Restated)
|
2,222,223
|
$
|
2,222
|
5,167,423
|
$
|
5,167
|
$
|
1,644,841
|
- |
$
|
(763,677
|
)
|
$
|
888,553
|
||||||||||||||||||
Issuance of Series A preferred stock net of placement agent cost
|
3,684,448
|
3,684
|
-
|
-
|
8,011,387
|
8,015,071
|
||||||||||||||||||||||||||
Issuance of Series A preferred stock to related party for services
|
76,667
|
77
|
-
|
-
|
172,423
|
172,500
|
||||||||||||||||||||||||||
Issuance of Series A preferred stock for acquisition of oil and gas properties
|
122,812
|
123
|
-
|
-
|
276,203
|
(276,326
|
)
|
-
|
||||||||||||||||||||||||
Issuance of Series A preferred stock for settlement of payables
|
93,250
|
93
|
-
|
-
|
559,405
|
-
|
559,498
|
|||||||||||||||||||||||||
Issuance of Series A preferred stock for debt extension
|
44,445
|
45
|
-
|
-
|
279,956
|
-
|
280,001
|
|||||||||||||||||||||||||
Issuance of restricted common stock for compensation
|
-
|
-
|
785,000
|
785
|
234,715
|
-
|
235,500
|
|||||||||||||||||||||||||
Exercise of common stock options
|
-
|
-
|
20,000
|
20
|
4,780
|
-
|
4,800
|
|||||||||||||||||||||||||
Issuance of common stock in connection with Blast merger
|
-
|
-
|
474,291
|
475
|
4,491,750
|
-
|
4,492,225
|
|||||||||||||||||||||||||
Issuance of common stock for debt conversions
|
-
|
-
|
529,172
|
529
|
1,516,234
|
-
|
1,516,763
|
|||||||||||||||||||||||||
Beneficial conversion feature
|
-
|
-
|
-
|
-
|
667,418
|
-
|
667,418
|
|||||||||||||||||||||||||
Cashless exercise of options - common stock
|
-
|
-
|
161,086
|
161
|
( 161
|
)
|
-
|
-
|
||||||||||||||||||||||||
Cashless exercise of warrants- common stock
|
-
|
-
|
37,529
|
38
|
( 38
|
)
|
-
|
|||||||||||||||||||||||||
Warrants issued to MIE for sale of equity interests in White Hawk
|
-
|
-
|
-
|
-
|
2,586
|
-
|
2,586
|
|||||||||||||||||||||||||
Conversion of preferred stock to common stock
|
(9,000
|
)
|
(9
|
)
|
9,000
|
9
|
-
|
-
|
-
|
|||||||||||||||||||||||
Stock compensation
|
-
|
-
|
-
|
-
|
305,920
|
-
|
305,920
|
|||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(12,013,011
|
)
|
(12,013,011
|
)
|
||||||||||||||||||||||||
Balances at December 31, 2012 (Restated)
|
6,234,845
|
$
|
6,235
|
7,183,501
|
$
|
7,184
|
$
|
18,167,419
|
$ |
(276,326
|
)
|
$
|
(12,776,688
|
)
|
$
|
5,127,824
|
For the Year Ended December 31, 2012
|
Period from
February 9, 2011 (Inception) through December 31, 2011
|
|||||||
(Restated)
|
(Restated)
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net loss
|
$
|
(12,013,011
|
)
|
$
|
(763,677
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Stock based compensation expense
|
621,420
|
73,327
|
||||||
Impairment of goodwill |
6,820,003
|
-
|
||||||
Impairment of oil and gas properties |
180,262
|
- | ||||||
Depreciation, depletion, amortization and accretion |
131,692
|
662
|
||||||
Loss on settlement of payables | 139,874 | - | ||||||
Gain on sale of equity method investments |
(64,168
|
) |
-
|
|||||
Loss from equity method investments
|
357,612
|
25,875
|
||||||
Amortization of debt discount
|
507,505
|
- | ||||||
Series A preferred stock issued for debt extension |
280,001
|
- | ||||||
Gain on debt extinguishment |
(9,268
|
) | - | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable – oil and gas
|
(14,006
|
)
|
-
|
|||||
Accounts receivable – oil and gas-related party
|
(112,488)
|
-
|
||||||
Accounts receivable - related party
|
216,686
|
(302,315
|
) | |||||
Prepaid expenses and other current assets
|
(94,532
|
)
|
(22,433
|
)
|
||||
Accounts payable
|
(38,253)
|
145,428
|
||||||
Accounts payable – related party
|
327,294
|
|||||||
Accrued expenses
|
(18,802)
|
32,775
|
||||||
Accrued expenses – related party
|
(22,164)
|
|||||||
Net cash used in operating activities
|
(2,804,343
|
)
|
(810,358
|
)
|
||||
Cash Flows From Investing Activities:
|
||||||||
Cash paid for oil and gas properties
|
(1,500,000
|
)
|
(2,899,542
|
)
|
||||
Cash paid for equipment
|
(1,358
|
)
|
(5,356
|
)
|
||||
Deferred costs
|
-
|
(111,828
|
) | |||||
Cash paid for acquisition of Blast Energy Services, Inc.
|
(454,614
|
)
|
-
|
|||||
Issuance of notes receivable – related parties
|
(2,786,064
|
)
|
-
|
|||||
Proceeds from sale of equity method investment
|
1,000,000
|
-
|
||||||
Net cash used in investing activities
|
(3,742,036
|
)
|
(3,016,726
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Proceeds from issuance of common stock
|
-
|
10,420
|
||||||
Proceeds from issuance of notes payable to related party
|
1,028,287
|
1,100,000
|
||||||
Repayment of notes payable
|
(200,000)
|
|||||||
Repayment of notes payable to related party
|
-
|
(200,000)
|
||||||
Proceeds on sales of Series A preferred stock
|
8,015,071
|
3,093,135
|
||||||
Proceeds from exercise of options for common stock
|
4,800
|
-
|
||||||
Net cash provided by financing activities
|
8,848,158
|
4,003,555
|
||||||
Net increase in cash
|
2,301,779
|
176,471
|
||||||
Cash at beginning of the year
|
176,471
|
-
|
||||||
Cash at end of the year
|
$
|
2,478,250
|
$
|
176,471
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
11,809
|
$
|
12,912
|
||||
Income taxes
|
$
|
-
|
$
|
-
|
||||
Noncash investing and financing activities:
|
||||||||
Accrual of oil and gas interest purchase obligations
|
$
|
-
|
$
|
1,871,872
|
||||
Conversion of notes payable into 800,000 shares of Series A preferred stock
|
$
|
-
|
$
|
1,800,000
|
||||
Contribution of 62.5% of oil and gas interest to equity method investor
|
$
|
-
|
$
|
3,071,640
|
||||
Issuance of common stock as part of oil and gas interest purchase
|
$
|
-
|
$
|
28,560
|
||||
Issuance of 555,556 shares of Series A preferred stock in exchange for acquisition of Excellong E&P-2, Inc.
|
$
|
1,250,000
|
$
|
-
|
||||
Contribution of Excellong E&P-2, Inc. to White Hawk as equity investment
|
$
|
3,734,986
|
$
|
-
|
||||
Cash paid on behalf of PEDEVCO to Excellong E&P-2, Inc. by MIE to acquire interest in White Hawk
|
$
|
1,000,000
|
$
|
-
|
||||
Cash paid on behalf of PEDEVCO to Condor by MIE for drilling operations
|
$
|
1,141,778
|
$
|
-
|
||||
Accrual of purchase adjustment for sale of White Hawk interest
|
$
|
58,332
|
$
|
-
|
||||
Warrants issued to MIE for sale of White Hawk equity interests
|
$
|
2,586
|
$
|
-
|
||||
Issuance of 76,667 shares of Series A preferred stock to settle payables
|
$
|
172,500
|
$
|
-
|
||||
Issuance of 1,366,668 shares of common stock in exchange for investment in Rare Earth JV
|
$
|
-
|
$
|
4,100
|
||||
Issuance of Series A convertible preferred stock in settlement of carried interest payable
|
$
|
419,624
|
$
|
-
|
||||
Issuance of Series A convertible preferred stock for stock subscriptions receivable | $ | 276,326 | - | |||||
Issuance of Series A convertible preferred stock to third party on behalf of Condor for oil and gas properties acquired
|
$
|
276,326
|
$
|
-
|
||||
Transfer of unproved properties to proved properties
|
$
|
697,016
|
$
|
-
|
||||
Issuance of common stock to settle accrued liabilities
|
$
|
487,218
|
$
|
-
|
||||
Issuance of common stock for convertible notes payable
|
$
|
1,029,545
|
$
|
-
|
||||
Beneficial conversion feature associated with convertible debt
|
$
|
667,418
|
$
|
-
|
||||
Conversion of Series A preferred stock to common stock
|
$
|
27
|
$
|
-
|
||||
Cashless exercise of common stock options and warrants
|
$
|
595
|
$
|
-
|
||||
Accrual of drilling costs
|
$
|
1,733,859
|
$
|
-
|
||||
Asset retirement costs capitalized
|
$
|
16,552
|
$
|
-
|
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
|
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
As Reported
|
As Restated
|
|||||||
Deferred costs
|
$ | 199,496 | $ | 111,828 | ||||
Total current assets
|
$ | 704,815 | $ | 617,147 | ||||
Equity method investment
|
$ | 607,653 | $ | 588,453 | ||||
Total assets
|
$ | 3,045,496 | $ | 2,938,628 | ||||
Accumulated deficit
|
$ | 587,142 | $ | 694,010 | ||||
Total shareholders’ equity
|
$ | 995,121 | $ | 888,553 |
As Reported | As Restated | |||||||
Equity in loss of equity method investment
|
$ | (6,675 | ) | $ | (25,875 | ) | ||
Loss from operations
|
$ | (560,457 | ) | $ | (648,125 | ) | ||
Net loss
|
$ | (587,142 | ) | $ | (694,010 | ) |
As Reported | As Restated | |||||||
Stock service receivable | $ | (69,667 | ) | $ | - | |||
Accumulated deficit
|
$ | (694,010 | ) | $ | (763,677 | ) | ||
Total shareholders' equity
|
$ | 888,553 | $ | 888,553 |
As Reported
|
As Restated
|
|||||||
Professional services
|
$ | 205,200 | $ | 274,867 | ||||
Loss from operation
|
$ | (648,125 | ) | $ | (717,792 | ) | ||
Net loss
|
$ | (694,010 | ) | $ | (763,677 | ) |
As Reported |
As Restated
|
|||||||
Notes receivable – related parties
|
$ | 3,062,390 | $ | 2,786,064 | ||||
Total assets
|
$ | 11,423,050 | $ | 11,146,724 | ||||
Series A convertible preferred stock
|
$ | 20,371 | $ | 18,704 | ||||
Additional paid in capital
|
$ | 18,138,916 | $ | 18,140,583 | ||||
Stock subscriptions receivable
|
$ | - | $ | (276,326 | ) | |||
Total shareholder’s equity
|
$ | (5,404,150 | ) | $ | (5,127,824 | ) | ||
Total liabilities and shareholders' equity
|
$ | 11,423,050 | $ | 11,146,724 |
Value of stock issued in acquisition
|
$
|
4,492,225
|
||
Cash advanced from PEDCO prior to merger
|
507,757
|
|||
Merger expenses
|
36,841
|
|||
Total Purchase Price
|
$
|
5,036,823
|
||
Current assets
|
978
|
|||
Fixed assets
|
112,089
|
|||
Oil and gas properties
|
127,088
|
|||
Current liabilities
|
(646,787
|
)
|
||
Asset retirement obligations assumed
|
(41,712
|
)
|
||
Long-term liabilities
|
(1,334,836
|
)
|
||
(1,783,180
|
)
|
|||
Goodwill
|
$
|
6,820,003
|
Loss on Extinguishment:
|
||||
Estimated fair value of debt after modification
|
$
|
1,494,749
|
||
Less: Carrying value of pre-modification debt
|
(1,334,836
|
)
|
||
Loss on debt extinguishment
|
$
|
159,913
|
Post-Modification Debt:
|
||||
Estimated fair value of debt after modification
|
$
|
1,494,749
|
||
Less: beneficial conversion feature recorded as debt discount
|
(667,418
|
)
|
||
Carrying value at date of Merger
|
$ |
827,331
|
Carrying value at merger
|
$
|
827,331
|
||
Accrued interest
|
75,699
|
|||
Accretion of beneficial conversion feature recorded as debt discount
|
667,418
|
|||
Less: amortization of debt premium
|
(159,913
|
)
|
||
Less: Principal and accrued interest of convertible note converted to common stock
|
(1,029,545
|
)
|
||
Less: Cash payments on principal
|
(211,809
|
)
|
||
Balance of note forgiven by Centurion
|
(169,181
|
)
|
||
Balance at December 31, 2012
|
$ |
-0-
|
January 1, 2012
|
Additions
|
Disposals
|
Transfers
|
December 31, 2012
|
||||||||||||||||
Unproved properties
|
1,724,234 | 78,427 | - | (697,016 | ) | 1,105,645 | ||||||||||||||
Proved properties
|
- | 5,532,519 | (3,750,000 | ) | 697,016 | 2,479,535 | ||||||||||||||
Asset retirement costs
|
- | 16,552 | - | - | 16,552 | |||||||||||||||
Accumulated depreciation depletion and impairment
|
- | (270,676 | ) | 15,014 | - | (255,662 | ) | |||||||||||||
Total oil and gas assets
|
1,724,234 | 5,356,822 | (3,734,986 | ) | - | 3,346,070 |
February 9, 2011
|
Additions
|
Disposals
|
Transfers
|
December 31, 2011
|
||||||||||||||||
Unproved properties
|
- | 4,914,624 | (3,190,390 | ) | - | 1,724,234 | ||||||||||||||
Proved properties
|
- | - | - | - | - | |||||||||||||||
Asset retirement costs
|
- | - | - | - | - | |||||||||||||||
Accumulated depreciation, depletion and impairment
|
- | - | - | - | - | |||||||||||||||
Total oil and gas assets
|
- | 4,914,624 | (3,190,390 | ) | - | 1,724,234 |
Purchase Consideration
|
Amount
|
|||
Cash paid at closing
|
$
|
2,827,387
|
||
Amount payable in cash or Series A Preferred Stock on November 13, 2012
|
1,000,000
|
(1)
|
||
Carried interest obligation
|
699,372
|
(2)
|
||
Common stock issued for services
|
28,560
|
(3)
|
||
Series A Preferred Stock issuable
|
172,500
|
(4)
|
||
Other acquisition costs
|
186,805
|
|||
Ending balance
|
$
|
4,914,624
|
(1)
|
The Company agreed to issue 444,445 shares of Series A Preferred Stock on November 13, 2012, subject to a guaranteed minimum value of $1 million of the preferred stock. At November 13, 2012, the Sellers had the option to elect to receive the fixed number of 444,445 shares or $1 million in cash, due and payable within five days of their written election to receive cash in lieu of the shares. The agreement does not provide the Sellers the option for a variable number of shares based on the per share value. The obligation of $1 million was recorded in accrued expenses on the date of the transaction. The Company received elections from the Sellers requesting payment of the obligation in cash due on or about November 20, 2012. On November 26, 2012, the Agreement was amended to provide for the payment of $100,000 to the Sellers, and 44,445 shares of the preferred stock valued at $100,000 to extend the $1 million payment to the Sellers until February 18, 2013. The fair value of $280,001 of the 44,445 preferred shares issued and the $100,000 payment were recorded as interest expense in 2012. The Company subsequently paid the $1 million on February 18, 2013.
|
(2)
|
The Company agreed to provide the Sellers a carried interest for $699,372 of their share of future drilling costs and was recorded as a liability on the date of the transaction, of which $279,748 was paid in the three months ending June 30, 2012 and the remaining $419,624 was satisfied in the three months ending September 30, 2012 through the issuance on September 24, 2012 of 93,250 shares of the Company’s Series A Preferred Stock with a fair value of $559,498. The Company recorded a loss on settlement of payables of $139,874.
|
(3)
|
The Company issued 95,199 shares of common stock in 2011 in connection with the acquisition at a grant date fair value of $28,560 to a related party due diligence provider, South Texas Reservoir Alliance, LLC (“STXRA”).
|
(4)
|
The Company issued 76,667 shares of Series A Preferred Stock in February 2012 at a grant date fair value of $ 2.25 per share, or $172,500, to STXRA in exchange for the portion of working interests earned for worked performed in the transaction.
|
Cash paid at closing
|
$
|
1,500,000
|
||
Loan payable
|
1,000,000
|
(1)
|
||
Series A Preferred Stock issued
|
1,250,000
|
(2)
|
||
Total purchase price
|
$
|
3,750,000
|
(1)
|
Payable in 60 days following the closing. The amount was paid in May 2012 by an affiliate of MIE Holdings as consideration for the White Hawk sale described below.
|
(2)
|
The Company issued 555,556 shares of Series A Preferred Stock at a grant date fair value of $1,250,000. In accordance with the purchase agreement, the Company has a contingent obligation to repurchase up to the full 555,556 shares of Series A Preferred Stock at a price per share of $ 2.25 in the event that, on March 29, 2013 (the date that is twelve months from the closing date), the market value of the stock is less than $1,250,000, and the sellers demand repurchase. Accordingly, the Company has determined that the shares are redeemable at the option of the holder and has classified the Preferred Stock outside of shareholders’ equity on the accompanying balance sheet.
|
Asset:
|
Valuation
|
|||
Tangible equipment
|
$
|
147,000
|
||
Proved oil and gas reserves
|
2,958,936
|
|||
Unproved oil and gas leaseholds
|
629,050
|
|||
Total
|
$
|
3,734,986
|
For the Year Ended
December 31, 2011
|
||||||||||||||||||||||
PEDEVCO
|
E&P-2
|
Combined (1)
|
PEDEVCO
|
E&P-2
|
Combined
|
|||||||||||||||||
For the twelve months ending December 31, 2012 | For the period from January 1, 2012 to March 29, 2012 | |||||||||||||||||||||
Revenue
|
$
|
503,153
|
$
|
266,867
|
$
|
770,020
|
$
|
-
|
$
|
384,116
|
$
|
384,116
|
||||||||||
Lease operating costs
|
$
|
(281,103
|
) |
$
|
(44,099
|
)
|
$
|
(325,202
|
)
|
-
|
$
|
(41,422
|
)
|
$
|
(41,422
|
)
|
||||||
Net loss
|
$
|
(12,013,011
|
)
|
$
|
222,768
|
$
|
(11,790,243
|
)
|
$
|
(763,677
|
)
|
$
|
342,694
|
$
|
(420,983
|
)
|
||||||
Net loss per common share
|
$
|
(0.65
|
)
|
$
|
0.02
|
$
|
(0.63
|
)
|
$
|
(0.06
|
)
|
$
|
0.03
|
$
|
(0.03
|
)
|
||||||
(1.94 | ) | 0.06 | (1.88 | ) | (0.18 | ) | 0.09 | (0.09 | ) |
(1)
|
Operating activities of the properties acquired from E&P-2 for the period from March 29, 2012 through the date of the sale of a 50% interest in White Hawk on May 23, 2012 were recorded in the consolidated financial statements of the Company. Following the sale of the 50% White Hawk interest, the company’s proportionate share of operating activities of White Hawk have been reflected in the equity earnings of White Hawk attributable to the Company.
|
Cash received at closing
|
$ | 500,000 | ||
Cash received on June 29, 2012
|
500,000 | |||
Payment to Excellong E&P-2
|
1,000,000 | (1) | ||
Total cash consideration
|
2,000,000 | |||
Less: fair value of warrants issued at $ 3.75 per share
|
(1,586 | )(2) | ||
Less: fair value of warrants issued at $ 4.50 per share
|
(1,000 | )(2) | ||
Less: purchase price adjustment for net field income activity for March 2012 through sale date
|
(58,332 | )(3) | ||
Total sale price
|
$ | 1,939,082 |
(1)
|
$1.0 million in cash paid directly to the original sellers of E&P-2 on behalf of the Company on May 23, 2012, which was the amount due to such sellers 60 days following the acquisition;
|
(2)
|
On May 23, 2012, the Company issued 166,667 warrants valued at $1,586 to purchase common stock at $3.75 per share exercisable in cash for a period of two years and an additional 166,667 warrants valued at $1,000 to purchase common stock at $ 4.50 per share exercisable in cash for a period of two years; and
|
(3)
|
The effective date of the sale was March 1, 2012. Accordingly, production activity from the effective date until the closing date is reflected as a purchase price adjustment.
|
Asset:
|
Valuation
|
|||
Tangible equipment
|
$
|
76,015
|
||
Proved oil and gas reserves
|
1,863,067
|
|||
Total
|
$
|
1,939,082
|
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Computer equipment
|
$
|
6,714
|
$
|
5,356
|
||||
Tractor
|
-
|
-
|
||||||
Service trailer
|
-
|
-
|
||||||
AFJ Rig
|
112,089
|
-
|
||||||
Subtotal
|
118,803
|
5,356
|
||||||
Less:
|
||||||||
Accumulated depreciation
|
(30,920
|
)
|
(662
|
)
|
||||
Equipment, net
|
$
|
87,883
|
$
|
4,694
|
December 31,
|
December 31,
|
|||||||
|
2012
|
2011
|
||||||
Beginning balance
|
$ | 588,453 | $ | - | ||||
Contributions
|
- | 614,328 | ||||||
Equity in net loss at 20%
|
(428,100 | ) | (25,875 | ) | ||||
- | - | |||||||
Ending balance
|
$ | 160,353 | $ | 588,453 |
December 31,
2012 |
||||
Beginning balance
|
$ | 3,734,986 | ||
Sale of equity investment
|
(1,867,493 | ) | ||
Equity in net earnings at 50%
|
70,488 | |||
Ending balance
|
$ | 1,937,981 |
●
|
In October 2011, the Company issued 1,333,334 shares of its New Series A Preferred Stock and an 80% interest in Condor to a subsidiary of MIE Holdings, a related party, for proceeds of $3,000,000. No offering costs were incurred.
|
●
|
In October 2011, the Company repaid a $200,000 note payable to its president and chief executive plus accrued interest of $4,258. Upon receipt of these proceeds, the officer used the proceeds to purchase through an entity owned and controlled by him, 88,889 shares of the Company’s New Series A Preferred Stock at a price of $ 2.25 per share.
|
●
|
In October 2011, the Company converted the $900,000 note payable to Global Venture Investments, LLC into 800,000 shares of the Company’s New Series A Preferred Stock. Pursuant to the terms of the note, the note’s principal converted into New Series A Preferred Stock at a price of $ 1.125 per share, which was equal to 50% of the $ 2.25 price per share of the New Series A Preferred Stock. As required pursuant to the terms of the note, the Company also issued the note holder a warrant to purchase 160,000 shares of New Series A Preferred Stock with an exercise price of $ 2.25 per share.
|
●
|
In 2012, the Company issued 3,684,448 shares of New Series A Preferred Stock to investors for gross cash proceeds of $8,015,071. Offering costs were $246,423.
|
●
|
In February 2012, the Company issued 76,667 shares of New Series A Preferred Stock at a value of $172,500 to South Texas Reservoir Alliance LLC. (“STXRA”). A liability was accrued as of December 31, 2011 for this issuance, which issuance was made in full satisfaction of certain obligations to STXRA associated with the Niobrara Asset purchase.
|
●
|
In March 2012, the Company issued 555,556 shares of its New Series A Preferred Stock valued at $1,250,000 in connection with the acquisition of Excellong E&P-2. The Company has determined that the shares are redeemable at the option of the holder and has classified the preferred stock outside of shareholders' equity on the accompanying balance sheet. (See Note 8.)
|
●
|
In July 2012, the Company issued 122,812 shares of its New Series A Preferred Stock valued at $276,326 in exchange for a subscription receivable from Condor in connection with the acquisition of additional interests by Condor in the Niobrara formation of Weld and Morgan Counties, Colorado.
|
●
|
In September 2012, the Company issued 93,250 shares of its New Series A Preferred Stock valued at $559,498 for settlement of a payable due to Esenjay.
|
●
|
In November 2012, the Company issued 44,445 shares of its New Series A Preferred Stock to Esenjay pursuant to terms of a Modification Agreement wherein the Company extended the due date of a $1 million payment until February 18, 2013. These shares were recorded as additional interest expense of $280,001 based on the grant date fair value.
|
●
|
In October 2012, 9,000 shares of the Company’s New Series A Preferred Stock were converted by an investor into shares of the Company’s common stock.
|
●
|
In February 2011, the Company issued 3,473,334 shares of Common Stock to its founders in exchange for cash in the amount of $10,420.
|
●
|
In February 2011, the Company issued 1,366,668 shares of Common Stock in February 2011 to a company that is wholly owned by the Company’s president and chief executive officer in exchange for that company’s 6% interest in the Rare Earth JV. These shares were valued at $4,100.
|
●
|
In conjunction with the Niobrara Asset acquisition in 2011, 95,199 shares of the Company’s Common Stock valued at $28,560 were issued to STXRA to arrange the transaction and provide various technical and due diligence services to the Company.
|
●
|
In October 2011, the Company signed a letter of intent to merge with a Blast Energy, Inc., a publicly-traded oil and gas exploration and production company. In connection with this proposed merger, the Company issued 232,222 fully vested, nonforfeitable shares of Common Stock to certain investor relations consultants. The Company recorded $69,667 of stock-based compensation expense on the grant date.
|
●
|
In February 2012, the Company granted to five of its consultants and employees a total of 551,667 shares of its restricted Common Stock valued at $0. 30 per share. The Company recorded stock-based compensation expense of $165,500 on the date of grant. The shares are subject to forfeiture in the event the recipient is no longer an employee, officer, director or consultant to the Company, which risk of forfeiture lapses with respect to 50% of the shares six months from the date of grant, 20% twelve months from the date of grant, 20% eighteen months from the date of grant, and the final 10% twenty-four months from the date of grant, all contingent upon the recipient’s continued service with the Company. These awards were authorized and issued under the Company’s equity incentive plan adopted in February 2012. At December 31, 2012, 50% of these 551,667 shares were subject to forfeiture.
|
●
|
In September 2012, as a result of the 1:112 Reverse Split, 474,291 shares of common stock were issued to shareholders of Blast. (See Note 6).
|
●
|
In October 2012, 71,596 shares of common stock were issued in connection with the Blast merger in settlement of outstanding debt of the Company of $487,218. (See Note 6).
|
●
|
In December 2012, the Company granted 13,334 shares of its restricted Common Stock with a grant date fair value of $80,000 to an independent contractor for services proved pursuant to our 2012 Equity Incentive Plan.
|
●
|
In 2012, 457,576 shares of common stock were issued to Centurion pursuant to conversion of debt in the amount of $1,029,545. (See Note 11).
|
●
|
In June 2012, non-qualified stock options previously granted to South Texas Reservoir Alliance LLC (“STXRA”), were exercised at the $0.24 exercise price and STXRA paid $4,800 for the issuance of 20,000 shares of common stock.
|
●
|
In 2012, 161,086 shares of common stock were issued to employees and consultants in connection with the cashless exercise of common stock options.
|
●
|
In 2012, 37,529 shares of common stock were issued to an investor in connection with the cashless exercise of common stock warrants.
|
●
|
In October 2012, 9,000 shares of the Company’s New Series A Preferred Stock were converted by an investor into 9,000 shares of the Company’s Common Stock.
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contract Term (years)
|
||||||||||
Outstanding at January 1, 2012
|
176,667 | $ | 0.24 | 9.75 | ||||||||
Granted under Blast merger
|
12,973 | 125.15 | ||||||||||
Granted
|
1,221,667 | 0.49 | ||||||||||
Exercised
|
(190,333 | ) | 0.46 | |||||||||
Forfeited and cancelled
|
(2,768 | ) | $ | 381.63 | ||||||||
Outstanding at December 31, 2012
|
1,218,206 | $ | 0.92 | 9.30 | ||||||||
Exercisable at December 31, 2012
|
561,372 | $ | 1.44 | 9.20 |
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contract Term (# years)
|
||||||||||
Outstanding at January 1, 2011
|
- | $ | - | - | ||||||||
Granted
|
176,667 | 0. 24 | ||||||||||
Exercised
|
- | - | ||||||||||
Forfeited and cancelled
|
- | - | ||||||||||
Outstanding at December 31, 2011
|
176,667 | $ | 0. 24 | 9.75 | ||||||||
Exercisable at December 31, 2011
|
- | $ | - | - |
Exercise Price
|
Weighted Average
Remaining Life (years)
|
Options Outstanding
|
Options Exercisable
|
|||||||||||
$ | 0.24 | 1.08 | 149,667 | 103,667 | ||||||||||
0.30 | 0.60 | 80,000 | 35,833 | |||||||||||
0.51 | 7.60 | 978,333 | 411,666 | |||||||||||
30.24 | 0.02 | 5,953 | 5,953 | |||||||||||
33.60 | - | 2,247 | 2,247 | |||||||||||
67.20 | - | 893 | 893 | |||||||||||
127.68 | - | 36 | 36 | |||||||||||
134.40 | - | 298 | 298 | |||||||||||
204.96 | - | 36 | 36 | |||||||||||
268.80 | - | 743 | 733 | |||||||||||
$ | 0.24 to $268.80 | 9.30 | 1,218,206 | 561,372 |
Exercise Price
|
Weighted Average
Remaining Life (years)
|
Options Outstanding
|
Options Exercisable
|
|||||||||
$ | 0. 24 | 9.75 | 176,667 | - |
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contract Term (# years)
|
||||||||||
Outstanding at January 1, 2012
|
193,334
|
$
|
1.89
|
4.04
|
||||||||
Granted under Blast merger
|
68,736
|
141.81
|
||||||||||
Granted
|
479,195
|
3.42
|
||||||||||
Exercised
|
( 106,890
|
)
|
1.56
|
|||||||||
Forfeited and cancelled
|
( 744
|
)
|
33.60
|
|||||||||
Outstanding at December 31, 2012
|
633,631 |
$
|
18.25
|
2.43
|
||||||||
Exercisable at December 31, 2012
|
633,631
|
$
|
18.25
|
2.43
|
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contract Term (# years)
|
||||||||||
Outstanding at January 1, 2011
|
- | $ | - | - | ||||||||
Granted
|
193,334 | 1.89 | 4.04 | |||||||||
Exercised
|
- | - | ||||||||||
Forfeited and cancelled
|
- | - | ||||||||||
Outstanding at December 31, 2011
|
193,334 | $ | 1.89 | 4.04 | ||||||||
Exercisable at December 31, 2011
|
193,334 | $ | 1.89 | 4.04 |
Exercise Price
|
Weighted Average Remaining Life (years)
|
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||
$ | 0.24 | 0.46 | 33,334 | 33,334 | ||||||||||
0.30 | 0.49 | 33,334 | 33,334 | |||||||||||
2.25 | 0.72 | 205,862 | 205,862 | |||||||||||
3.36 | 0.00 | 4,882 | 4,882 | |||||||||||
3.75 | 0.37 | 166,667 | 166,667 | |||||||||||
4.50 | 0.37 | 166,667 | 166,667 | |||||||||||
67.20 | 0.00 | 2,529 | 2,529 | |||||||||||
336.00 | 0.00 | 2,232 | 2,232 | |||||||||||
483.84 | 0.02 | 18,124 | 18,124 | |||||||||||
$ | 0.24 to $483.84 | 2.43 | 633,631 | 633,631 |
Exercise Price
|
Weighted Average Remaining Life (years)
|
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||
$ | 0.24 | 1.69 | 33,334 | 33,334 | ||||||||||
2.25 | 2.35 | 160,000 | 160,000 | |||||||||||
$ | 0.24 to $2.25 | 4.04 | 193,334 | 193,334 |
Year ended December 31, 2012
|
Period from February 9, 2011 (inception) to December 31, 2011
|
|||||||
Deferred tax assets
|
||||||||
Net operating loss carryovers
|
$ | 1,674,813 | $ | 272,936 | ||||
Less valuation allowance
|
$ | (1,674,813 | ) | $ | (272,936 | ) | ||
Total deferred tax assets
|
$ | - | $ | - |
2012 | 2011 | |||||||
Unproved oil and gas properties | $ | 1,105,644 | $ | 1,724,234 | ||||
Proved oil and gas properties | 2,496,081 | - | ||||||
Subtotal | 3,601,725 | 1,724,234 | ||||||
Accumulated depreciation, amortization and impairment | (255,655 | ) | - | |||||
Net capitalized costs | $ | 3,346,070 | $ | 1,724,234 |
(2) Costs Incurred in Oil and Gas Property Acquisition and Development Costs:
|
||||||||
2012
|
2011
|
|||||||
Acquisition of properties:
|
||||||||
Proved
|
$ | 95,906 | $ | - | ||||
Unproved
|
78,426 | 1,724,234 | ||||||
Exploration costs
|
- | - | ||||||
Development costs
|
1,703,159 | - | ||||||
Total | $ | 1,877,491 | $ | 1,724,234 |
(3) Results of Operations for Producing Activities:
|
||||||||
2012
|
2011
|
|||||||
Sales
|
$ | 503,153 | $ | |||||
Production costs
|
(281,103 | ) | - | |||||
Depletion, accretion and impairment
|
(311,594 | ) | - | |||||
Income tax benefit
|
- | - | ||||||
Results of operations
|
$ | (89,544 | ) | $ | - |
Estimated Quantities of Proved Oil and Gas Reserves
|
2012
|
|||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Proved Developed Producing
|
49.7 | 21.0 | ||||||
Proved Developed Non-Producing
|
31.8 | 53.0 | ||||||
Total Proved Developed
|
81.5 | 74.0 | ||||||
Proved Undeveloped
|
195.0 | 324.0 | ||||||
Total Proved as of December 31, 2012
|
276.5 | 398.0 |
2012
|
||||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Total Proved Reserves:
|
||||||||
Beginning of year
|
0.0 | 0.0 | ||||||
Extensions and discoveries
|
243.2 | 398.0 | ||||||
Revisions of previous estimates
|
0.0 | 0.0 | ||||||
Purchase of minerals in place
|
38.4 | 0.0 | ||||||
Production
|
(5.1 | ) | 0.0 | |||||
End of year proved reserves
|
276.5 | 398.0 | ||||||
End of Year proved developed reserves
|
81.5 | 74.0 | ||||||
End of Year proved undeveloped reserves
|
195.0 | 324.0 |
($ 000's)
|
||||
For the year ended December 31, 2012
|
||||
Future Cash Inflows
|
$ | 26,036 | ||
Future production costs
|
(5,496 | ) | ||
Future development costs
|
(9,914 | ) | ||
Future income tax expense
|
(2,487 | ) | ||
Future net cash flows
|
8,139 | |||
10% annual discount
|
(5,733 | ) | ||
Standardized measure of discounted future net cash flows
|
$ | 2,406 |
Changes in Standardized Measure of Discounted Future Cash Flows
|
||||
($ 000's)
|
||||
Beginning of year
|
$ | - | ||
Sales and transfers of oil and gas produced, net of production costs
|
(222 | ) | ||
Net changes in prices and production costs
|
- | |||
Extensions, discoveries, additions and improved recovery, net of related costs
|
2,074 | |||
Development costs incurred
|
- | |||
Revisions of estimated development costs
|
- | |||
Revisions of previous quantity estimates
|
- | |||
Accretion of discount
|
- | |||
Net change in income taxes
|
(708 | ) | ||
Purchases of reserves in place
|
1,262 | |||
Sales of reserves in place
|
- | |||
Changes in timing and other
|
- | |||
End of year
|
$ | 2,406 |
Capitalized costs relating to Oil and Gas producing activities of Equity Method Investees: | ||||||||||||||||
Company's share of Equity Method Investees- Condor Energy Technology, LLC
|
Company's share of Equity Method Investees- White Hawk Petroleum LLC
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Unproved oil and gas properties
|
$ | 604,168 | $ | 638,078 | $ | 314,525 | $ | - | ||||||||
Proved oil and gas properties | 1,462,109 | - | 1,953,131 | - | ||||||||||||
Subotal | 2,066,277 | 638,078 | 2,267,656 | - | ||||||||||||
Accumulated depreciation, amortization and impairment
|
(117,853 | ) | - | (107,236 | ) | - | ||||||||||
Net capitalized costs
|
$ | 1,948,424 | $ | 638,078 | $ | 2,160,420 | $ | - |
Company's share of Equity Method Investees- Total
|
||||||||
2012
|
2011
|
|||||||
Unproved oil and gas properties
|
$ | 918,693 | $ | 638,078 | ||||
Proved oil and gas properties
|
3,415,240 | - | ||||||
Subtotal | 4,333,933 | 638,078 | ||||||
Accumulated depreciation, amortization and impairment
|
(225,089 | ) | - | |||||
Net capitalized costs
|
$ | 4,108,844 | $ | 638,078 |
Company's share of Equity Method Investees- Condor Energy Technology, LLC
|
Company's share of Equity Method Investees- White Hawk Petroleum LLC
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Acquisition of properties
|
||||||||||||||||
Proved
|
$ | 6,790 | $ | - | $ | 1,490,034 | $ | - | ||||||||
Unproved
|
338,496 | 638,078 | 314,525 | - | ||||||||||||
Exploration costs
|
- | - | - | - | ||||||||||||
Development costs
|
1,082,913 | - | 463,097 | - | ||||||||||||
$ | 1,428,199 | $ | 638,078 | $ | 2,267,656 | $ | - |
Company's share of Equity Method Investees-Total
|
||||||||
2012
|
2011
|
|||||||
Acquisition of properties
|
||||||||
Proved
|
$ | 1,496,824 | $ | - | ||||
Unproved
|
653,021 | 638,078 | ||||||
Exploration costs
|
- | - | ||||||
Development costs
|
1,546,010 | - | ||||||
$ | 3,695,855 | $ | 638,078 |
Company's share of Equity Method Investees- Condor Energy Technology, LLC
|
Company's share of Equity Method Investees- White Hawk Petroleum LLC
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Sales
|
$ | 130,760 | $ | - | $ | 273,171 | $ | - | ||||||||
Production costs
|
(84,974 | ) | - | (76,257 | ) | - | ||||||||||
Depletion, accretion and impairment
|
(117,890 | ) | - | (107,903 | ) | - | ||||||||||
Income tax benefit
|
- | - | - | - | ||||||||||||
Results of operations
|
$ | (72,104 | ) | $ | 0 | $ | 89,011 | $ | 0 |
Company's share of Equity Method Investees-Total
|
||||||||
2012
|
2011
|
|||||||
Sales
|
$ | 403,931 | $ | - | ||||
Production costs
|
(161,231 | ) | - | |||||
Depletion, accretion and impairment
|
(225,792 | ) | - | |||||
Income tax benefit
|
- | - | ||||||
Results of operations
|
$ | 16,908 | $ | 0 |
Estimated Quantities of Proved Oil and Gas Reserves of Equity Method Investees
|
Company's share of Equity Method Investees- Condor Energy Technology, LLC
|
Company's share of Equity Method Investees- White Hawk Petroleum LLC
|
||||||||||||||
Oil
|
Gas
|
Oil
|
Gas
|
|||||||||||||
As of December 31, 2012
|
(MBbls)
|
(Mmcf)
|
(MBbls)
|
(Mmcf)
|
||||||||||||
Proved Developed Producing
|
8.3 | 13.8 | 11.2 | 20.5 | ||||||||||||
Proved Developed Non-Producing
|
20.8 | 34.4 | 0.0 | 0.0 | ||||||||||||
Total Proved Developed
|
29.1 | 48.2 | 11.2 | 20.5 | ||||||||||||
Proved Undeveloped
|
323.2 | 536.6 | 127.5 | 181.0 | ||||||||||||
Total Proved as of December 31
|
352.3 | 584.8 | 138.7 | 201.5 |
Estimated Quantities of Proved Oil and Gas Reserves of Equity Method Investees
|
Company's share of Equity Method Investees-Total
|
|||||||
Oil
|
Gas
|
|||||||
As of December 31, 2012
|
(MBbls)
|
(Mmcf)
|
||||||
Proved Developed Producing
|
19.5 | 34.3 | ||||||
Proved Developed Non-Producing
|
20.8 | 34.4 | ||||||
Total Proved Developed
|
40.3 | 68.7 | ||||||
Proved Undeveloped
|
450.7 | 717.6 | ||||||
Total Proved as of December 31
|
491.0 | 786.3 |
Company's share of Equity Method Investees- Condor Energy Technology, LLC
|
Company's share of Equity Method Investees- White Hawk Petroleum LLC
|
|||||||||||||||
As of December 31, 2012
|
Oil
|
Gas
|
Oil
|
Gas
|
||||||||||||
(MBbls)
|
(Mmcf)
|
(MBbls)
|
(Mmcf)
|
|||||||||||||
Total Proved Reserves:
|
||||||||||||||||
Beginning of year
|
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Extensions and discoveries
|
353.8 | 584.8 | 6.2 | 1.8 | ||||||||||||
Revisions of previous estimates
|
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Purchase of minerals in place
|
0.0 | 0.0 | 135.0 | 202.5 | ||||||||||||
Production
|
(1.5 | ) | 0.0 | (2.6 | ) | (2.8 | ) | |||||||||
End of year proved reserves
|
352.3 | 584.8 | 138.6 | 201.5 | ||||||||||||
End of Year proved developed reserves
|
29.1 | 48.2 | 11.2 | 20.5 | ||||||||||||
End of Year proved undeveloped reserves
|
323.2 | 536.6 | 127.5 | 181.0 |
Company's share of Equity Method Investees-Total
|
||||||||
As of December 31, 2012
|
Oil
|
Gas
|
||||||
(MBbls)
|
(Mmcf)
|
|||||||
Total Proved Reserves:
|
||||||||
Beginning of year
|
0.0 | 0.0 | ||||||
Extensions and discoveries
|
360.0 | 586.6 | ||||||
Revisions of previous estimates
|
0.0 | 0.0 | ||||||
Purchase of minerals in place
|
135.0 | 202.5 | ||||||
Production
|
(4.0 | ) | (2.8 | ) | ||||
End of year proved reserves
|
491.0 | 786.3 | ||||||
End of Year proved developed reserves
|
40.3 | 68.7 | ||||||
End of Year proved undeveloped reserves
|
450.7 | 717.6 |
Condor Energy Technology, LLC
|
White Hawk Petroleum, LLC
|
Company's share of Equity Method Investees- Total
|
||||||||||
For the year ended December 31, 2012 (000's)
|
||||||||||||
Future Cash Inflows
|
$ | 33,228 | $ | 14,594 | $ | 47,822 | ||||||
Future production costs
|
(6,784 | ) | (6,147 | ) | (12,931 | ) | ||||||
Future development costs
|
(15,044 | ) | (4,377 | ) | (19,421 | ) | ||||||
Future income tax expense
|
(4,457 | ) | (1,589 | ) | (6,046 | ) | ||||||
Future net cash flows
|
6,943 | 2,481 | 9,424 | |||||||||
10% annual discount
|
(6,446 | ) | (1,364 | ) | (7,810 | ) | ||||||
Standardized measure of discounted future net cash flows
|
$ | 497 | $ | 1,117 | $ | 1,614 |
Condor Energy Technology, LLC
|
White Hawk Petroleum, LLC
|
Company's share of Equity Method Investees- Total
|
||||||||||
Changes in Standardized Measure of Discounted Future Cash Flows (000s)
|
||||||||||||
December 31, 2011
|
$ | - | $ | - | $ | - | ||||||
Sales and transfers of oil and gas produced, net of production costs
|
(46 | ) | (197 | ) | (243 | ) | ||||||
Net changes in prices and production costs
|
- | - | - | |||||||||
Extensions, discoveries, additions and improved recovery, net of related costs
|
2,099 | 328 | 2,427 | |||||||||
Development costs incurred
|
- | - | - | |||||||||
Revisions of estimated development costs
|
- | - | - | |||||||||
Revisions of previous quantity estimates
|
- | - | - | |||||||||
Accretion of discount
|
- | - | - | |||||||||
Net change in income taxes
|
(1,556 | ) | (904 | ) | (2,460 | ) | ||||||
Purchases of reserves in place
|
- | 1,890 | 1,890 | |||||||||
Sales of reserves in place
|
- | - | - | |||||||||
Changes in timing and other
|
- | - | - | |||||||||
December 31, 2012
|
$ | 497 | $ | 1,117 | $ | 1,614 |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 756,545 | $ | 154,826 | ||||
Accounts receivable – oil and gas
|
302,773 | - | ||||||
Accounts receivable – working interest owners
|
3,191,093 | - | ||||||
Accounts receivable – working interest owners – related party
|
922,112 | - | ||||||
Prepaid expenses and other current assets
|
10,194 | - | ||||||
Total current assets
|
5,182,717 | 154,826 | ||||||
Oil and gas properties:
|
||||||||
Oil and gas properties, subject to amortization, net
|
7,090,316 | - | ||||||
Oil and gas properties, not subject to amortization
|
2,651,804 | 3,190,390 | ||||||
Total oil and gas properties, net
|
9,742,120 | 3,190,390 | ||||||
Deferred acquisition costs
|
990,220 | - | ||||||
Deposit for asset retirement obligations
|
85,000 | 85,000 | ||||||
Other assets
|
3,000 | - | ||||||
Total assets
|
$ | 16,003,057 | $ | 3,430,216 | ||||
Liabilities and Members’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 2,257,016 | $ | 38,163 | ||||
Accounts payable – related parties
|
100,180 | 203,750 | ||||||
Management services payable – related party
|
81,124 | 96,000 | ||||||
Advances from working interest owners
|
41,172 | - | ||||||
Revenue payable – working interest owners
|
286,386 | - | ||||||
Revenue payable – working interest owner – related party
|
112,488 | - | ||||||
Accrued interest – related parties
|
74,344 | 37 | ||||||
Total current liabilities
|
2,952,710 | 337,950 | ||||||
Asset retirement obligations
|
8,420 | - | ||||||
Notes payable – related parties
|
12,240,161 | 150,000 | ||||||
Total liabilities
|
15,201,291 | 487,950 | ||||||
Commitments and contingencies
|
||||||||
Members’ equity
|
801,766 | 2,942,266 | ||||||
Total liabilities and members' equity
|
$ | 16,003,057 | $ | 3,430,216 |
Period from
|
||||||||
October 12, 2011
|
||||||||
(Inception) through
|
||||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Revenue:
|
||||||||
Oil and gas sales
|
$ | 653,802 | $ | - | ||||
Operating expenses:
|
||||||||
Lease operating costs
|
424,872 | - | ||||||
Exploration expense
|
759,857 | 32,080 | ||||||
Selling, general and administrative expense
|
806,285 | 97,257 | ||||||
Depreciation, depletion, amortization and accretion
|
220,412 | - | ||||||
Impairment of oil and gas properties
|
369,037 | - | ||||||
Total operating expenses
|
2,580,463 | 129,337 | ||||||
Loss from operations
|
(1,926,661 | ) | (129,337 | ) | ||||
Other expense:
|
||||||||
Interest expense
|
(213,839 | ) | (37 | ) | ||||
Total other expense
|
(213,839 | ) | (37 | ) | ||||
Net loss
|
$ | (2,140,500 | ) | $ | (129,374 | ) |
Total Members' Equity | ||||
Balance at October 12, 2011 (Inception)
|
$ | - | ||
Contribution of oil and gas properties for members’ interests
|
3,071,640 | |||
Net loss
|
(129,374 | ) | ||
Balance at December 31, 2011
|
2,942,266 | |||
Net loss
|
(2,140,500 | ) | ||
Balance at December 31, 2012
|
$ | 801,766 |
Period from
|
||||||||
October 12, 2011
|
||||||||
(Inception) through
|
||||||||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
|
|||||||
Net loss
|
$ | (2,140,500 | ) | $ | (129,374 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation, depletion, amortization and accretion
|
220,412 | - | ||||||
Impairment of oil and gas properties
|
369,037 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable – oil and gas
|
(302,773 | ) | - | |||||
Accounts receivable – working interest owners
|
(3,191,093 | ) | - | |||||
Accounts receivable – working interest owners – related party
|
(2,063,890 | ) | - | |||||
Prepaid expenses and other assets
|
(13,194 | ) | - | |||||
Accounts payable
|
2,218,853 | 38,163 | ||||||
Accounts payable – related parties
|
(199,570 | ) | 299,750 | |||||
Management services payable – related party
|
81,124 | - | ||||||
Advances from working interest owners
|
41,172 | - | ||||||
Revenue payable – working interest owners
|
286,386 | - | ||||||
Revenue payable – working interest owner – related party
|
112,488 | |||||||
Accrued interest – related parties
|
212,901 | 37 | ||||||
Cash flows (used in)/provided by operating activities
|
(4,368,647 | ) | 208,576 | |||||
Cash flows from investing activities:
|
||||||||
Cash bond deposited for asset retirement obligations
|
- | (85,000 | ) | |||||
Cash paid for oil and gas properties
|
(1,457,139 | ) | (118,750 | ) | ||||
Cash paid for deferred acquisition costs
|
(990,220 | ) | - | |||||
Cash paid for oil and gas drilling operations
|
(5,399,293 | ) | - | |||||
Cash flows used in investing activities
|
(7,846,652 | ) | (203,750 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from related party notes payable
|
12,817,018 | 150,000 | ||||||
Net cash provided by financing activities
|
12,817,018 | 150,000 | ||||||
Net increase in cash
|
601,719 | 154,826 | ||||||
Cash at beginning of period
|
154,826 | - | ||||||
Cash at end of period
|
$ | 756,545 | $ | 154,826 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income taxes
|
$ | - | $ | - | ||||
Noncash investing and financing transactions:
|
||||||||
Contribution of oil and gas properties for members’ interests
|
$ | - | $ | 3,071,640 | ||||
Asset retirement costs acquired
|
$ | 8,237 | $ | - | ||||
Oil and gas drilling costs paid by MIEJ on behalf of PEDEVCO
|
$ | 1,141,778 | $ | - | ||||
Oil and gas properties acquired through issuance of PEDEVCO Series A preferred stock
|
$ | 276,326 | $ | - | ||||
Unproved oil and gas properties reclassified to proved properties
|
$ | 1,892,239 | $ | - | ||||
Accrued interest converted to notes payable – related parties
|
$ | 138,594 | $ | - | ||||
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
December 31,
|
December 31,
|
|||||||
Description
|
2012
|
2011
|
||||||
Beginning balance
|
$
|
3,190,390
|
$
|
-
|
||||
Additions:
|
||||||||
Unproved properties
|
1,733,465
|
3,190,390
|
||||||
Proved properties
|
5,399,293
|
-
|
||||||
Asset retirement costs
|
8,237
|
-
|
||||||
Disposals
|
-
|
-
|
||||||
Impairment
|
(369,037
|
)
|
-
|
|||||
Depletion and depreciation
|
(220,228
|
)
|
-
|
|||||
Ending balance
|
$
|
9,742,120
|
$
|
3,190,390
|
October 12, 2011
|
Additions
|
Disposals
|
Transfers
|
December 31, 2011
|
||||||||||||||||
Unproved properties
|
- | 3,190,390 | - | - | 3,190,390 | |||||||||||||||
Proved properties
|
- | - | - | - | - | |||||||||||||||
Asset retirement costs
|
- | - | - | - | - | |||||||||||||||
Accumulated depreciation, depletion and impairment
|
- | - | - | - | - | |||||||||||||||
Total oil and gas assets
|
- | 3,190,390 | - | - | 3,190,390 |
January 1, 2012
|
Additions
|
Disposals
|
Transfers
|
December 31, 2012
|
||||||||||||||||
Unproved properties
|
3,190,390 | 1,733,465 | - | (1,903,014 | ) | 3,020,841 | ||||||||||||||
Proved properties
|
- | 5,399,293 | - | 1,903,014 | 7,302,307 | |||||||||||||||
Asset retirement costs
|
- | 8,237 | - | - | 8,237 | |||||||||||||||
Accumulated depreciation, depletion and impairment
|
- | (589,265 | ) | - | - | (589,265 | ) | |||||||||||||
Total oil and gas assets
|
3,190,390 | 6,551,730 | - | - | 9,742,120 | |||||||||||||||
December 31,
|
||||
Description
|
2012
|
|||
Beginning balance
|
$
|
-
|
||
Liabilities incurred
|
8,237
|
|||
Accretion expense
|
184
|
|||
Ending balance
|
$
|
$8,421
|
(1) Capitalized costs relating to oil and gas producing activities at December 31:
|
2012
|
2011
|
||||||
Unproved oil and gas properties
|
$ | 3,020,841 | $ | 3,190,390 | ||||
Proved oil and gas properties
|
7,310,544 | - | ||||||
Subtotal | 10,331,385 | 3,190,390 | ||||||
Accumulated depreciation, amortization and impairment
|
(589,265 | ) | - | |||||
Net capitalized costs
|
$ | 9,742,120 | $ | 3,190,390 |
(2) Costs Incurred in oil and gas property acquisition and development costs:
|
||||||||
2012
|
2011
|
|||||||
Acquisition of properties
|
||||||||
Proved
|
$ | 33,951 | $ | - | ||||
Unproved
|
1,692,479 | 3,190,390 | ||||||
Exploration costs
|
- | - | ||||||
Development costs
|
5,414,565 | - | ||||||
$ | 7,140,995 | $ | 3,190,390 |
(3) Results of operations for producing activities:
|
||||||||
2012
|
2011
|
|||||||
Sales
|
$ | 653,802 | $ | - | ||||
Production costs
|
(424,872 | ) | - | |||||
Depletion, accretion and impairment
|
(589,449 | ) | - | |||||
Income tax benefit
|
- | - | ||||||
Results of operations
|
$ | (360,519 | ) | $ | - |
Estimated Quantities of Proved Oil and Gas Reserves
|
2012
|
|||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Proved Developed Producing
|
41.6 | 69.0 | ||||||
Proved Developed Non-Producing
|
103.8 | 172.0 | ||||||
Total Proved Developed
|
145.4 | 241.0 | ||||||
Proved Undeveloped
|
1,616.2 | 2,683.0 | ||||||
Total Proved as of December 31, 2012
|
1,761.6 | 2,924.0 | ||||||
2012 | ||||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Total Proved Reserves:
|
||||||||
Beginning of year
|
- | - | ||||||
Extensions and discoveries
|
1,769.0 | 2,924.0 | ||||||
Revisions of previous estimates
|
- | - | ||||||
Purchase of minerals in place
|
- | - | ||||||
Production
|
(7.4 | ) | - | |||||
End of year proved reserves
|
1,761.6 | 2,924.0 | ||||||
End of year proved developed reserves
|
145.4 | 241.0 | ||||||
End of year proved undeveloped reserves
|
1,616.2 | 2,683.0 |
($ 000's)
|
||||
For the year ended December 31, 2012
|
||||
Future cash inflows
|
$ | 166,139 | ||
Future production costs
|
(33,919 | ) | ||
Future development costs
|
(75,221 | ) | ||
Future income tax expense
|
||||
Future net cash flows
|
56,999 | |||
10% annual discount
|
(46,737 | ) | ||
Standardized measure of discounted future net cash flows
|
$ | 10,262 | ||
Changes in Standardized Measure of Discounted Future Cash Flows
|
||||
($ 000's)
|
||||
Beginning of year
|
$ | - | ||
Sales and transfers of oil and gas produced, net of production costs
|
(229 | ) | ||
Net changes in prices and production costs
|
- | |||
Extensions, discoveries, additions and improved recovery, net of related costs
|
10,491 | |||
Development costs incurred
|
- | |||
Revisions of estimated development costs
|
- | |||
Revisions of previous quantity estimates
|
- | |||
Accretion of discount
|
- | |||
Net change in income taxes
|
- | |||
Purchases of reserves in place
|
- | |||
Sales of reserves in place
|
- | |||
Changes in timing and other
|
- | |||
End of year
|
$ | 10,262 |
December 31,
|
||||
2012
|
||||
Assets
|
||||
Current assets:
|
||||
Cash and cash equivalents
|
$ | 66,816 | ||
Accounts receivable – operator
|
69,912 | |||
Accounts receivable – oil and gas
|
110,000 | |||
Total current assets
|
246,728 | |||
Oil and gas properties:
|
||||
Oil and gas properties, subject to amortization, net
|
3,544,790 | |||
Oil and gas properties, not subject to amortization
|
629,050 | |||
Oil and gas field equipment
|
147,000 | |||
Total oil and gas properties, net
|
4,320,840 | |||
Total assets
|
$ | 4,567,568 | ||
Liabilities and Members' Equity
|
||||
Current liabilities:
|
||||
Accounts payable – related party
|
$ | 2,273 | ||
Accrued expenses – related party
|
920 | |||
Total current liabilities
|
3,193 | |||
Asset retirement obligations
|
22,465 | |||
Notes payable - related parties
|
665,948 | |||
Total liabilities
|
691,606 | |||
Commitments and contingencies
|
- | |||
Members' equity
|
3,875,962 | |||
Total liabilities and members' equity
|
$ | 4,567,568 |
Period from
|
||||
May 11, 2012
|
||||
(Inception) through
|
||||
December 31,
|
||||
2012
|
||||
Revenue:
|
||||
Oil and gas sales
|
$ | 546,341 | ||
Operating expenses:
|
||||
Lease operating costs
|
152,514 | |||
Exploration expense
|
2,539 | |||
Selling, general and administrative expense
|
16,744 | |||
Depreciation, depletion and accretion
|
215,805 | |||
Total operating expenses
|
387,602 | |||
Income from operations
|
158,739 | |||
Other expense:
|
||||
Interest expense
|
(17,763 | ) | ||
Total other expense
|
(17,763 | ) | ||
Net income
|
$ | 140,976 |
Total
Members’ Equity
|
||||
Balance at May 11, 2012
|
$ | - | ||
Contribution of Excellong E&P,-2, Inc. for members’ interests
|
3,734,986 | |||
Net income
|
140,976 | |||
Balance at December 31, 2012
|
$ | 3,875,962 |
Period from
|
||||
May 11, 2012
|
||||
(Inception) through
|
||||
December 31,
|
||||
2012
|
||||
Cash flows from operating activities:
|
||||
Net income
|
$ | 140,976 | ||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||
Depreciation, depletion and accretion
|
215,805 | |||
Changes in operating assets and liabilities:
|
||||
Accounts receivable – operator
|
(69,912 | ) | ||
Accounts receivable – oil and gas
|
(110,000 | ) | ||
Accounts payable – related party
|
2,273 | |||
Accrued expenses– related party
|
920 | |||
Cash flows provided by operating activities
|
180,062 | |||
Cash flows from investing activities:
|
||||
Cash paid for drilling operations
|
(779,194 | ) | ||
Cash flows used in investing activities
|
(779,194 | ) | ||
Cash flows from financing activities:
|
||||
Proceeds from related party notes payable
|
665,948 | |||
Net cash provided by financing activities
|
665,948 | |||
Net increase in cash
|
66,816 | |||
Cash at beginning of period
|
- | |||
Cash at end of period
|
$ | 66,816 | ||
Supplemental disclosure of cash flow information:
|
||||
Cash paid for:
|
||||
Interest
|
$ | 16,844 | ||
Income taxes
|
$ | - | ||
Noncash investing and financing activities:
|
||||
Contribution of Excellong E&P,-2, Inc. for members’ interests
|
$ | 3,734,986 | ||
Asset retirement costs acquired
|
$ | 21,132 |
Level 1 – Quoted prices in active markets for identical assets or liabilities.
|
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Asset:
|
Valuation
|
|||
Tangible equipment
|
$
|
147,000
|
||
Proved oil and gas reserves
|
2,958,936
|
|||
Unproved oil and gas leaseholds
|
629,050
|
|||
Total
|
$
|
3,734,986
|
Natural
|
||||||||
Crude Oil
|
Gas
|
|||||||
(Bbls)
|
(Mcf)
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net recoverable oil and gas reserves from proved resources
|
7,390.0
|
16,448.7
|
||||||
Average working interests acquired
|
7.9
|
%
|
7.9
|
%
|
||||
Net recoverable oil and gas reserves, net to Company’s interest
|
583.8
|
1,299.4
|
Description
|
2012
|
|||
Balance at May 11, 2012
|
$ | - | ||
Properties contributed for members’ interests
|
3,734,986 | |||
Capitalized drilling costs
|
779,194 | |||
Asset retirement costs
|
21,132 | |||
Disposals
|
- | |||
Less: Accumulated depletion
|
(214,472 | |||
Balance at December 31, 2012
|
$ | 4,320,840 |
December 31,
|
||||
Description
|
2012
|
|||
Beginning balance
|
$
|
-
|
||
Liabilities acquired
|
21,132
|
|||
Accretion expense
|
1,333
|
|||
Ending balance
|
$
|
22,465
|
(1) Capitalized costs relating to oil and gas producing activities at December 31:
|
2012
|
2011
|
||||||
Unproved oil and gas properties
|
$ | 629,050 | $ | - | ||||
Proved oil and gas properties
|
3,906,262 | - | ||||||
Subtotal | 4,535,312 | - | ||||||
Accumulated depreciation, amortization and impairment
|
(214,472 | ) | - | |||||
Net capitalized costs
|
$ | 4,320,840 | $ | - |
(2) Costs incurred in oil and gas property acquisition and development costs:
|
||||||||
2012
|
2011
|
|||||||
Acquisition of properties
|
||||||||
Proved
|
$ | 2,980,068 | $ | - | ||||
Unproved
|
629,050 | - | ||||||
Exploration costs
|
- | - | ||||||
Development costs
|
926,194 | - | ||||||
$ | 4,535,312 | $ | - |
(3) Results of operations for producing activities:
|
||||||||
2012
|
2011
|
|||||||
Sales
|
$ | 546,341 | $ | - | ||||
Production costs
|
(152,514 | ) | - | |||||
Depletion, accretion and impairment
|
(215,805 | ) | - | |||||
Income tax benefit
|
- | - | ||||||
Results of operations
|
$ | 178,022 | $ | - |
Estimated Quantities of Proved Oil and Gas Reserves
|
2012
|
|||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Proved Developed Producing
|
22.3 | 41.0 | ||||||
Proved Developed Non-Producing
|
- | - | ||||||
Total Proved Developed
|
22.3 | 41.0 | ||||||
Proved Undeveloped
|
255.0 | 362.0 | ||||||
Total Proved as of December 31, 2012
|
277.3 | 403.0 | ||||||
2012 | ||||||||
Oil
|
Gas
|
|||||||
(MBbls)
|
(Mmcf)
|
|||||||
Total Proved Reserves:
|
||||||||
Beginning of year
|
- | - | ||||||
Extensions and discoveries
|
12.4 | 3.5 | ||||||
Revisions of previous estimates
|
- | - | ||||||
Purchase of minerals in place
|
270.0 | 405.0 | ||||||
Production
|
(5.1 | ) | (5.5 | ) | ||||
End of year proved reserves
|
277.3 | 403.0 | ||||||
End of year proved developed reserves
|
22.3 | 41.0 | ||||||
End of year proved undeveloped reserves
|
255.0 | 362.0 |
($ 000's)
|
||||
For the year ended December 31, 2012
|
||||
Future cash inflows
|
$ | 29,188 | ||
Future production costs
|
(12,293 | ) | ||
Future development costs
|
(8,753 | ) | ||
Future income tax expense
|
0 | |||
Future net cash flows
|
8,142 | |||
10% annual discount
|
(4,099 | ) | ||
Standardized measure of discounted future net cash flows
|
$ | 4,043 | ||
Changes in Standardized Measure of Discounted Future Cash Flows
|
||||
($ 000's)
|
||||
Beginning of year
|
$ | - | ||
Sales and transfers of oil and gas produced, net of production costs
|
(394 | ) | ||
Net changes in prices and production costs
|
- | |||
Extensions, discoveries, additions and improved recovery, net of related costs
|
657 | |||
Development costs incurred
|
- | |||
Revisions of estimated development costs
|
- | |||
Revisions of previous quantity estimates
|
- | |||
Accretion of discount
|
- | |||
Net change in income taxes
|
- | |||
Purchases of reserves in place
|
3,780 | |||
Sales of reserves in place
|
- | |||
Changes in timing and other
|
- | |||
End of year
|
$ | 4,043 |
1.
|
I have reviewed this Amendment No. 2 to the Annual Report on Form 10-K of PEDEVCO Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: April 25, 2013
|
By:
|
/s/ Frank C. Ingriselli | |
Frank C. Ingriselli
|
|||
President and CEO and
Principal Executive Officer
|
|||
1.
|
I have reviewed this Amendment No. 2 to the Annual Report on Form 10-K of PEDEVCO Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: April 25, 2013
|
By:
|
/s/ Michael L. Peterson | |
Michael L. Peterson
|
|||
Chief Financial Officer
Principal Financial and Accounting Officer
|
|||
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 25, 2013
|
By:
|
/s/ Frank C. Ingriselli | |
Frank C. Ingriselli
|
|||
President and CEO and
Principal Executive Officer
|
|||
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: April 25, 2013
|
By:
|
/s/ Michael L. Peterson | |
Michael L. Peterson | |||
Chief Financial Officer
|
|||
Principal Financial and | |||
Accounting Officer |
5. PRIRO YEAR RESTATEMENTS (Details 1) (USD $)
|
11 Months Ended | 12 Months Ended | 23 Months Ended | 35 Months Ended | 11 Months Ended |
---|---|---|---|---|---|
Dec. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
As Reported
|
Dec. 31, 2011
As Restated
|
|
Equity in loss of equity method investment | $ (25,875) | $ (357,612) | $ (6,675) | $ (25,875) | |
Loss from operations | (743,667) | (11,072,390) | (560,457) | (648,125) | |
Net loss | $ (763,677) | $ (12,013,011) | $ 12,776,688 | $ (587,142) | $ (694,010) |
8. BUSINESS ACQUISITION AND DISPOSAL (Details 4) (USD $)
|
Mar. 29, 2012
|
May 23, 2012
White Hawk [Member]
|
---|---|---|
Tangible equipment | $ 147,000 | $ 76,015 |
Proved oil and gas reserves | 2,958,936 | 1,863,067 |
Total | $ 3,734,986 | $ 1,939,082 |
7. OIL AND GAS PROPERTIES (Details 1) (USD $)
|
Dec. 31, 2012
|
---|---|
Oil And Gas Properties Details 1 | |
Cash paid at closing | $ 2,827,387 |
Amount payable in cash or Series A Preferred Stock on November 13, 2012 | 1,000,000 |
Carried interest obligation | 699,372 |
Common Stock issued for services | 28,560 |
Series A Preferred Stock issuable | 172,500 |
Other acquisition costs | 186,805 |
Ending balance | $ 4,914,624 |
17. INCOME TAXES (Details) (USD $)
|
11 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2012
|
|
Deferred tax assets | ||
Net operating loss carryovers - | $ 1,674,813 | $ 1,674,813 |
Less valuation allowance | (272,936) | (1,674,813) |
Total deferred tax assets |
9. PROPERTY AND EQUIPMENT (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Equipment, Gross | $ 118,803 | $ 5,356 |
Less: Accumulated Depreciation | (30,920) | (662) |
Equipment, Net | 87,883 | 4,694 |
Computer Equipment
|
||
Equipment, Gross | 6,714 | 5,356 |
Tractor
|
||
Equipment, Gross | ||
Service Trailer
|
||
Equipment, Gross | ||
AFJ Rig
|
||
Equipment, Gross | $ 112,089 |
6. MERGER AGREEMENT PACIFIC ENERGY DEVELOPMENT CORP. (Details Narrative) (USD $)
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Merger Agreement Pacific Energy Development Corp. Details Narrative | |
Loss on debt extinguishment | $ 159,913 |
Centurion forgave Principal and interest balance | $ 169,181 |
10. EQUITY METHOD INVESTMENTS (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condors financial information |
The Companys total investment in Condor at December 31, 2012 was $160,353, after recording its share of Condors losses for the year ended December 31, 2012 of $428,100.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
White Hawks financial information | The Companys total investment in White Hawk at December 31, 2012 was $1,937,981 after recording its share of White Hawks income for the year ended December 31, 2012 of $70,488.
|
10. EQUITY METHOD INVESTMENTS (Details) (USD $)
|
11 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2012
|
|
Equity Method Investments and Joint Ventures [Abstract] | ||
Beginning balance | $ 588,453 | |
Additions | 0 | |
Share of net loss at 20% | (25,875) | (428,100) |
Ending balance | $ 588,453 | $ 160,353 |
17. INCOME TAXES (Details Narrative) (USD $)
|
23 Months Ended |
---|---|
Dec. 31, 2012
|
|
Income Taxes Details Narrative | |
Net change in valuation allowance | $ 1,674,813 |
Federal net operating loss carryforwards | $ 4,692,988 |
19. SUBSEQUENT EVENTS
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Notes to Financial Statements | |
SUBSEQUENT EVENTS |
NOTE 19 SUBSEQUENT EVENTS
On December 13, 2012, we granted 13,334 shares of common stock with a grant date fair value of $80,000 to an independent contractor for services provided pursuant to our 2012 Equity Incentive Plan, which shares were issued in January 2013.
On December 19, 2012, a holder of a warrant exercisable for an aggregate of 666,667 shares of our Series A preferred stock exercised the warrant on a cashless net exercise basis, and was issued an aggregate of 47,059 shares of our Series A preferred stock in January 2013.
On January 11, 2013, the Company issued 177,778 shares of common stock upon conversion of 177,778 shares of Series A preferred stock held by a shareholder.
On January 27, 2013 the Company issued 6,659,680 shares of common stock on a 1 for 1 conversion of 6,659,680 outstanding Series A preferred stock, pursuant to the automatic conversion provisions our Series A Convertible Preferred Stock Amended and Restated Certificate of Designations.
On November 30, 2012, Condor Energy Technology LLC (Condor), a joint venture between the Company and MIEJ entered into an Agreement for Purchase of Term Assignment (the Original Mississippian Agreement) for the acquisition by Condor of interests in the Mississippian Lime covering approximately 13,806 net acres located in Comanche, Harper, Barber and Kiowa Counties, Kansas and Wood County, Oklahoma, and approximately 19.5 square miles of related 3-D seismic data, for an aggregate purchase price of $8,648,661. Pursuant to the Original Mississippian Agreement, Condor paid an initial deposit in the amount of $864,866 (the Initial Deposit), which was funded equally by MIEJ and the Company. On February 8, 2013, the Company, Condor and Berexco LLC (Berexco) entered into a Termination of Agreement for Purchase of Term Assignment; Agreement to Transfer Performance Deposit and Negotiate in Good Faith (the Mutual Termination and Deposit Transfer Agreement), in which Condor and Berexco mutually agreed, without fault of either party, to terminate the Original Mississippian Agreement. In the Mutual Termination and Deposit Transfer Agreement, the Company and Berexco agreed they would negotiate in good faith the terms and conditions of an alternative transaction whereby the Company would acquire the rights to the leases previously to be acquired under the Original Mississippian Agreement by Condor (the Proposed PEDEVCO-Berexco Transaction). The Initial Deposit continued to be held in escrow pending the entry into a new escrow agreement provided that if no agreement with respect to the Proposed PEDEVCO-Berexco Transaction was entered into by February 22, 2013, then the escrowed funds would be returned to the Company.
On February 22, 2013, Pacific Energy Development MSL LLC (PEDCO MSL), a wholly owned subsidiary of the Company, entered into an Agreement for Purchase of Term Assignment (the Purchase Agreement) with Berexco for the acquisition of interests in the Mississippian Lime covering approximately 6,763 net acres located in Comanche, Harper, Barber and Kiowa Counties, Kansas (the Mississippian Asset) and approximately 10.5 square miles of related 3-D seismic data, for an aggregate purchase price of $4,207,117. Pursuant to the Purchase Agreement, Berexco applied the Initial Deposit of $864,866 made in connection with the Original Mississippian Agreement to this new transaction. Closing is anticipated to occur in March 2013, subject to the satisfaction of certain customary closing conditions and the Company's ability to secure sufficient financing, of which there can be no assurances. In addition, PEDCO MSL and Berexco entered into an option agreement, dated February 22, 2013, pursuant to which Berexco granted to PEDCO MSL an exclusive option (an Option), expiring on May 30, 2013, to purchase a term assignment with respect to certain interests in the Mississippian Lime covering an additional approximately 7,043 net acres located in Comanche, Harper, Barber and Kiowa Counties, Kansas, and Woods County, Oklahoma and approximately 9.0 square miles of related 3-D seismic data, for an aggregate purchase price upon exercise of the Option of $4,216,544. The Company remains obligated to MIEJ to refund its portion of the Initial Deposit paid in the amount of $432,433.
On February 14, 2013, Pacific Energy Development Corp. (PEDCO), a wholly owned subsidiary of the Company, entered into a Secured Subordinated Promissory Note (the Note) with MIEJ, with an effective date of November 1, 2012. Under the Note, PEDCO may draw down multiple advances up to a maximum of $5 million under the Note, with repaid amounts not being permitted to be re-borrowed. Amounts borrowed under the Note may only be used by PEDCO to fund fees and expenses allocable to PEDCO with respect to its operations in the Niobrara asset located in Weld and Morgan Counties, Colorado (the Niobrara Asset). When drawn, principal borrowed under the Note carries an interest rate of 10.0% per annum. Principal and accrued interest under the Note shall be due and payable within ten (10) business days of the earlier to occur of (i) December 31, 2013 or (ii) the closing of a debt or equity financing transaction with gross proceeds to the Company of at least $10 million. The Note may be prepaid in full by PEDCO without penalty, and is secured by all of PEDCOs ownership and working interests in the FFT2H well located in the Niobrara Asset, and all corresponding leasehold rights pooled with respect to such well, and PEDCOs ownership and working interests in each future well drilled and completed in the Niobrara Asset. The Note converts amounts previously advanced by MIEJ to PEDCO in the amount of $2.17 million to fund operations in the Niobrara Asset through November 1, 2012, as well as an additional $2 million loaned by MIEJ to PEDCO under the Note for a total of $4.17 million outstanding on February 14, 2013. There is approximately $830,000 available for future borrowing by PEDCO under the Note. |
8. BUSINESS ACQUISITION AND DISPOSAL (Details) (USD $)
|
Dec. 31, 2012
|
Mar. 29, 2012
|
---|---|---|
Business Acquisition And Disposal Details | ||
Cash paid at closing | $ 1,500,000 | |
Loan payable | 1,000,000 | |
Series A Preferred Stock | 1,250,000 | |
Total purchase price | $ 5,036,823 | $ 3,750,000 |
6. MERGER AGREEMENT PACIFIC ENERGY DEVELOPMENT CORP. (Details) (USD $)
|
Dec. 31, 2012
|
Mar. 29, 2012
|
---|---|---|
Merger Agreement Pacific Energy Development Corp. Details | ||
Value of stock issued in acquisition | $ 4,492,225 | |
Cash advanced from PEDCO prior to merger | 507,757 | |
Merger expenses | 36,841 | |
Total Purchase Price | 5,036,823 | 3,750,000 |
Current assets | 978 | |
Fixed assets | 112,089 | |
Oil andgas properties | 127,088 | |
Current liabilities | (646,787) | |
Asset retirement obligations assumed | (41,712) | |
Long-term liabilities | (1,334,836) | |
Total | (1,783,180) | |
Goodwill | $ 6,820,003 |
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)
|
Dec. 31, 2012
|
---|---|
Summary Of Significant Accounting Policies Details Narrative | |
Cash uninsured amount | $ 2,215,587 |
8. BUSINESS ACQUISITION AND DISPOSAL (Details 2) (USD $)
|
Dec. 31, 2012
|
Mar. 29, 2012
|
May 23, 2012
White Hawk [Member]
|
---|---|---|---|
Cash received at closing | $ 1,500,000 | $ 500,000 | |
Cash received on June 29, 2012 | 500,000 | ||
Payment to Excellong E&P-2 | 1,000,000 | ||
Total cash consideration | 2,000,000 | ||
Less fair value of warrants issued at $1.25 per share | (1,586) | ||
Less fair value of warrants issued at $1.50 per share | (1,000) | ||
Less: purchase price adjustment for net field income activity for March 2012 through sale date | (58,332) | ||
Total sale price | $ 5,036,823 | $ 3,750,000 | $ 1,939,082 |
12. COMMITMENTS (Details Narrative) (USD $)
|
Dec. 31, 2012
|
---|---|
Commitments Details Narrative | |
Office lease obligation | $ 78,679 |
7. OIL AND GAS PROPERTIES (Details) (USD $)
|
11 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2012
|
|
Beginning Balance | $ 1,724,234 | |
Additions | 4,914,624 | 5,340,264 |
Disposals | (3,190,390) | (3,734,986) |
Transfer | ||
Ending Balance | 1,724,234 | 3,346,071 |
Unproved Properties
|
||
Beginning Balance | ||
Additions | 4,914,624 | 78,427 |
Disposals | 3,734,984 | |
Transfer | (697,016) | |
Ending Balance | 3,346,070 | 895,832 |
Proved Properties
|
||
Beginning Balance | ||
Additions | 5,532,506 | |
Disposals | (3,750,000) | |
Transfer | 697,016 | |
Ending Balance | 2,479,522 | |
Asset Retirement Costs
|
||
Beginning Balance | ||
Additions | 16,552 | |
Disposals | ||
Transfer | ||
Ending Balance | 16,552 | |
Accumulated Depreciation Depletion And Impairment
|
||
Beginning Balance | ||
Additions | (270,676) | |
Disposals | 15,014 | |
Transfer | ||
Ending Balance | $ (255,662) |
3. GOING CONCERN
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Notes to Financial Statements | |
GOING CONCERN | The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred losses from operations of $12,776,688 from the date of inception (February 9, 2011) through December 31, 2012 and has negative working capital and an accumulated deficit at December 31, 2012. Additionally, the Company is dependent on obtaining additional debt and/or equity financing to roll-out and scale its planned principal business operations. These factors raise substantial doubt about the Companys ability to continue as a going concern.
Managements plans in regard to these matters consist principally of seeking additional debt and/or equity financing combined with expected cash flows from current oil and gas assets held and additional oil and gas assets that it may acquire. There can be no assurance that the Companys efforts will be successful. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. |
13. PREFERRED STOCK (Details Narrative) (USD $)
|
11 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2011
|
Dec. 31, 2012
|
|
Series A convertible preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Series A convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock
|
||
Preferred stock issued during period | 6,666,667 | 13,845,703 |
Comapny Issued New Series A Preferred Stock to investors | 38,000 | 11,053,342 |
Cash proceed from issue of preferred stock | $ 3,093,135 | $ 8,015,071 |