bv/s $ 0.18 debt (m) equity (m) november 20, 2014 $ 29.5

1

N O V E M B E R 2 0 , 2 0 1 4

I N D U S T R Y :

O I L & G A S

See Important Disclosures and Disclaimer on 2

PEDEVCO Corp.

(NYSE:PED)

Research Update: PED: Company continues to

develop Niobrara and resolves salt water disposal

The Company continues to develop its Niobrara asset with three wells expected to

produce in December. In addition, it has solved the issue of salt water disposal

that posed a hindrance to the Company’s production in the last two quarters.

Q3FY14 Results reported

The Company reported topline of $1.1M vs our estimates of $2.2M as a result of

salt water disposal causing the wells to slow production. Cost of revenue was

$0.5M vs $2.4M and SG&A was in line with projections at $2.2M. Lower than

expected topline led to a net loss of $4.5M vs net loss of $3.0M and reported EPS

of $(0.16) vs $(0.10).

Continues to develop Niobrara Play The Company continues to develop its play in the Niobrara region in Colorado. It

acquired another 850 plus net acres in an area that the Company believes is the

most prolific region in the Niobrara. The current acreage position has the

opportunity to drill over 1,000 gross wells, and the Company believes that it will

exit FY14 producing over 500boepd. We believe if the Company can further

develop and drill more wells in the Niobrara in a cost effective and quick manner,

it can continue its strategy of becoming a dominant energy company in the

Niobrara.

While solving issue of salt water disposal The Company ran into the issue of salt water disposal resulting in the shut in at the

time of discovery. It is worth nothing that PEDEVCO was not the only operator

who encountered this problem. The Company sought preferred access to salt water

disposal and on November 3rd

, it reached an agreement. The agreement allows the

company to go forward at its current capacity without any interruption. We believe

uninterrupted production is imperative for the Company to be able to make

deliverables in a timely fashion.

Changes to Model

We have adjusted our model to take into account the latest activity of the Company

and its results. For FY14 we have adjusted our topline to $5.6M to reflect the

Company latest results and lower oil prices. In addition, we project operating

expenses to be $7.5M (not including the loss from investments) resulting in a net

loss for FY14 of $13.8M and an EPS loss of $(0.48). For FY15, we expect

production to increase as the Company has established itself in the Niobrara. This

leads to our estimated top line of $12.1M with operating expenses increasing y-o-y

to $5.5M. As a result we project a net loss of $7.8M and an EPS loss of $(0.22) for

FY15.

Valuation We have used an EV per barrel (EV/barrel) methodology to arrive at the Company’s valuation. We are applying EV/Barrel of 13.0x on its core assets

resulting in a valuation range of $3.24 to $5.67 with the mid-point of the range at

$4.39. It is worth noting that PEDEVCO’s 5% interest in Caspian Energy has

significant upside if Caspian proves to be successful in Kazakhstan.

MARKET STATISTICS

Price $0.63

52-Week Range $0.62 - $3.31

Daily Vol. (3 Month Avg.) 68,954

Market Cap ($M) $19.5

Enterprise Value ($M) $40.2

Shares Outstanding (M) 31.0

Float (M) 21.0

Insider Ownership 17.0%

Institutional Ownership 8.4%

FINANCIAL SUMMARY

Equity (M) 5.5$

BV/S 0.18$

Cash (M) 8.9$

Debt (M) 29.5$

Debt/Cap 84%

FYE: Dec 2013 2014E 2015E

(in $000)

Rev 744$ 5,665$ 12,050$

Chng% 48% 662% 113%

EBITDA (10,088)$ (4,418)$ (4,119)$

EPS (0.86)$ (0.79)$ (0.22)$

EV/R 54.0x 7.1x 3.3x

EV/EBITDA nm nm nm

P/E nm nm nm

Dan D. Trang [email protected]

214-987-4121

COMPANY DESCRIPTION

PEDEVCO is an energy company engaged in the acquisition and development of high-value energy projects. The Company plans to focus initially on developing its shale oil and gas assets held in the US and then intends to seek conventional oil and gas asset acquisition opportunities in the US and Asia. PEDEVCO’s current operations are located primarily in the Niobrara Shale play in the DJ Basin in Colorado, and the Mississippian Lime play in Kansas. In September 2013, the Company announced an agreement to acquire a producing asset located in the pre-Caspian basin, Kazakhstan.

mailto:[email protected]

2

E Q U I T Y R E S E A R C H S T O N E G A T E S E C U R I T I E S

PEDEVCO Corp. | November 20, 2014

INVESTMENT FACTORS

PEDEVCO is involved in the evaluation, acquisition, and development of oil and gas exploration

projects; and is focused on its shale assets in the US. Also, the Company is vigilant about

conventional oil and gas asset acquisition opportunities in the US and Asia. A successful

exploration and production operation underscores the potential of PEDEVCO’s US shale assets, and

there is potential upside for the Company’s through its Kazakhstan assets that could open up new

international opportunities.

Investment Positives

An experienced management team of experts PEDEVCO has an experienced management team with a proven track record of delivering in the

international oil and gas industry. The Company’s president and CEO, Frank C Ingreselli is an

international oil and gas industry veteran with more than 33 years of industry experience, including

as the president of Texaco International Operations Inc. whose parent company is Chevron

(NYSE:CVX). The Company’s Chief Technology Advisor and Director of Exploration, Dr. Y. M.

Shum is an industry veteran with more than 40 years of experience in the international petroleum

industry. The Company’s management team has developed and commercialized some of the

industry's most profitable and successful energy ventures through its unique business insights and

technical knowledge. We believe expert management, with experience in the fields of international

business development, petroleum engineering, geology, petroleum field development as well as

petroleum operations and finance, will continue to provide significant advantage to the Company.

Assets in US located in the Wattenberg, Niobrara and Mississippian shale formations PEDEVCO’s existing core operating areas span across 40,987 gross (19,784 net) acres totally,

representing a significant unconventional resource play The majority of the Company’s interests are

near areas of considerable E&P activity by major oil and gas entities. PEDEVCO has about 2,542

potential gross drilling locations on its acreage, indicating substantial drilling inventory for the

coming years (after the acquisition from Continental). The Company has planned drilling about 10

wells on its shale acreage through the end of 2014. With two successful test announcements in

September 2013, PEDEVCO now has 45 (40 from recent acquisition from Continental) producing

wells on its gross acres Niobrara asset. The developments highlight the management’s experience

and insight in selecting rich sites and the potential of the Company’s existing assets. The fourth

original horizontal well on the Niobrara asset has tested a peak oil production rate of 972 barrel oil

per day (bopd) and peak natural gas production rate of 800 million cubic feet gas per day (mcfgd)

(or combined 1,105 barrel oil equivalent per day - boepd) whereas the fifth original well has tested

at an initial production rate of 414 bopd and 408 mcfgd (482 boepd). We believe the core operating

areas represent significant upside for the Company as it begins its drilling operations.

Strategic partnership with MIE Holdings and STXRA PEDEVCO is supported by robust strategic alliances and investors that bring deep experience and

expertise. The Company has a strategic relationship with MIE Holding, one of the largest

independent oil & gas companies in China, which offers technical as well as financial support. MIE

Holdings has drilled and is currently operating more than 2,000 oil wells in China. South Texas

Reservoir Alliance, LLC (STXRA) is one of the key advisors to the Company. STXRA brings with

itself proven expertise in drilling and completing horizontal wells, including experience in hydraulic

fracturing technologies and in the operation of shale wells and fields. In October 2012, PEDEVCO

entered into a 70/30 joint venture with STXRA and formed a technical services subsidiary, Pacific

Energy Technology Services. The joint venture is expected to provide technological services to

third parties. We believe, PEDEVCO would continue to obtain technical and financial assistance

from its partners in evaluating, acquiring, and developing petroleum resources.

3



Investment Challenges / Risks

Vulnerable to commodity prices

As an upstream oil and gas company, PEDEVCO’s revenue generation is directly linked with the

prices it is able to realize on its hydrocarbon sales. The Company’s realized oil prices depend upon

international crude oil prices. In a recessionary phase such as 2008-09, international oil prices could

be affected by a significant reduction in oil demand. Lower-than-expected international crude oil

and gas prices could damage the Company’s top-line growth.

Company has incurred substantial losses Over the last five years, the Company’s operations have not been profitable, with an accumulated

deficit of $53.1M as of September 2014. We expect the Company to continue to incur substantial

net losses in the coming quarters, considering its ongoing drilling program. In order to fund its

future business operations, the Company’s management heavily depends upon the expected cash

flows from its existing oil and gas assets and from those that it may acquire. Any delays or failure in

generating enough cash flow from business operations or obtaining external funds, under such

circumstances, could pose a serious threat to the Company’s existence.

Stringent regulatory environment

Oil and natural gas exploration, development, production, and related operations in the US are

subject to extensive federal, state and local laws, rules, and regulations. Failure to comply with these

regulations can result in substantial penalties and halting of exploration and production activities.

Noncompliance with environmental regulation such as related to disposal of wastes and radioactive

materials from E&P activities could also lead to civil and criminal penalties imposed on the

Company, impacting its future financial performance. While PEDEVCO’s current exploration and

production operations are within the US, any future E&P operations outside the US will be subject

to various types of regulations imposed by different governments. In addition, there are risks that

entail hydraulic fracturing. Failure to comply with these regulations could adversely affect the

company.

4



VALUATION SUMMARY

PEDEVCO plans to focus primarily on developing its shale oil and gas assets in the US in the

Niobrara, and Mississippian shale formations. In addition, the Company has an interest in

Kazahkstan. In addition, the Company seeks conventional oil and gas asset acquisition opportunities

in the US and Asia. As the Company is in early stage of oil and gas exploration and development

activities, we have used EV per barrel (EV/barrel) methodology to arrive at the Company’s

valuation. We have considered only the core assets to value the Company. It is worth noting that in

our previous valuation from our initiation report, there was an error regarding the gross unproven

reserves (mboe), and we mistakenly put the net acreage inside our calculation instead.

EV/barrel Analysis

The Company’s core assets

include oil and gas acreage in the

Wattenberg, the Niobrara and the

Mississippian Lime play.

According to our estimates, these

prospects hold unproven reserves

of approximately 21.0B barrels.

Applying risk to reserve of 50%,

we value the Company’s total

unproven reserve estimate of

10.5B barrels.

We apply an EV/barrel of 13.0x

to risk adjusted reserves to value

the Company. Our target

EV/barrel multiple for

PEDEVCO is in line with an

industry median of 13.0x.

Following is the scenario analysis

based on our assumptions, which

result in a valuation range of

$3.24 to $5.67 with the mid-point

of the range at $4.39.

Exhibit 2: Sensitivity Analysis

Source: Company Reports, Stonegate Securities

The 5% interest in Caspian Energy deal could enhance value: We have not factored in the

additional revenues generated and the value created from PED’s interest in Caspian Energy. In

August 2014, the Company agreed to exchange its interest in Kazakhstan for 5% equity in Caspian

Energy(TO:CKZ.H). Caspian Energy is purely dedicated to oil and gas exploration and

development in Kazakhstan. The Company’s current marketcap is $6.6M, and as a result

PEDEVCO’s interest is minimal. If Caspian shows positive results, however, there could be

significant upside for PEDEVCO.

4.39 30% 40% 50% 60% 70%

11 $5.20 $4.46 $3.71 $2.97 $2.23

12 $5.67 $4.86 $4.05 $3.24 $2.43

13 $6.14 $5.27 $4.39 $3.51 $2.63

14 $6.62 $5.67 $4.73 $3.78 $2.84

15 $7.09 $6.08 $5.06 $4.05 $3.04

Risk to reserves

EV

/Ba

rrel

Exhibit 1: Valuation – Core Assets


Wattenberg Niobrara Mississippian

Gross unproven

reserves (mboe)33,673 3,395 6,560

Working Interest 50.00% 26.30% 49.10%

Net unproven

reserve16,837 893 3,221

Total net unproven reserve - mboe 20,950

Unproven Reserve (Net in mmboe) 21.0

Risk to Reserve 50%

Unproven Reserves (Net in mmboe) 10.5

EV/BOE 13.0x

Net Asset Value ($M) 136

Shares Outstanding (M) 31.0

Value per share ($) 4.39

5



We see the following important catalysts for the stock in FY14 and beyond:

More drilling and development in Niobrara/Wattenberg region …...……….…………FY14 & FY15

Potential joint ventures in various plays……………………………………...…….…..FY14 & FY15

6



BALANCE SHEETS

PEDEVCO Corp. (NYSE: PED)

Consolidated Balance Sheets (in thousands $)

Fiscal Year: December

FY 2012 Q1 Q2 Q3 Q4 FY 2013 Q1 Q2 Q3

ASSETS Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14

Current Assets

Cash & cash equivalents 2,478 3,982 1,773 2,264 6,613 6,613 8,483 5,015 8,891

Accounts receivables, net 212 307 373 310 236 236 1,908 2,570 1,872

Deferred financing costs - - 47 23 50 50 397 1,945 2,161

Prepaid expenses and other current assets 134 140 24 53 74 74 72 57 159

Total Current Assets 2,824 4,428 2,216 4,650 6,974 6,974 10,860 9,587 13,084

Oil and gas properties, net 3,346 9,007 9,120 8,939 8,803 8,803 20,408 21,661 23,159

Notes receivable - related party 2,786 3,689 4,298 5,025 - - 1,617 1,446 6,371

Acquired intangibles, net - - - - - - 4,094

Other assets - 100 2 42 - - 85 85 85

Investments 2,102 2,017 1,938 2,084 4 4 4 4 4

Deposite for business acquisition - - - 8,000 10,020 10,020 5,000 5,000 -

Other noncurrent assets - - - - - 6,396 4,486 -

Total Assets 11,147 19,325 17,636 28,769 25,801 25,801 44,370 42,269 46,796

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Notes payable, net of discount 2,170 9,584 9,745 9,957 9,760 9,760 9,994 7,679 8,119

Accounts payable 1,054 2,540 2,668 2,604 2,520 2,520 2,154 2,431 5,669

Accrued expenses 1,485 1,514 1,801 2,067 2,558 2,558 2,398 2,293 2,522

Revenue payable - - - - 1,134 1,408 1,261

Other current liabilities - 12 - - - - - 1,203 2,217

Total Current Liabilities 4,710 13,751 14,431 14,628 14,838 14,838 15,680 15,015 19,787 -

Long-Term Liabilities

Notes payable - related party - - - - - - 18,447 18,952 21,399

Asset retirement obligation 59 69 69 60 75 75 118 122 83

Total Long-Term Liabilities 59 69 69 60 75 75 18,565 19,074 21,482

Stockholders' Equity

Issued shares 7 14 14 23 26 26 27 27 29

Additional paid-in capital 18,167 20,026 20,206 43,208 51,783 51,783 51,547 53,804 56,114

Accumulated deficit (12,777) (14,258) (16,691) (18,756) (30,922) (30,922) (44,092) (48,288) (53,091)

Non-contolling interest in consolidated subsidiary - - - - - 2,644 2,637 2,475

Total Stockholders' Equity (deficit) 6,654 5,506 3,136 14,082 10,887 10,887 10,126 8,181 5,527

Total Liabilities and Stockholders' Equity 11,423 19,325 17,636 28,769 25,801 25,801 44,370 42,269 46,796

Ratios

Liquidity

Current Ratio 0.6x 0.3x 0.2x 0.3x 0.5x 0.5x 0.7x 0.6x 0.7x

Quick Ratio 0.6x 0.3x 0.2x 0.3x 0.5x 0.5x 0.7x 0.6x 0.7x

Working Capital (1,885) (9,322) (12,214) (9,978) (7,864) (7,864) (4,820) (5,428) (6,703)

Leverage

Debt To Equity 32.6% 174.1% 310.7% 70.7% 89.6% 89.6% 280.9% 325.5% 534.0%

Debt To Capital 24.6% 63.5% 75.7% 41.4% 47.3% 47.3% 73.7% 76.5% 84.2%

Capital Usage -Annualized

A/R Turns 2.0x 4.1x 1.8x 2.3x 1.8x 3.3x 3.8x 3.7x 2.0x

A/P Turns 0.4x 0.7x 0.6x 0.3x 0.3x 0.6x 1.9x 1.8x 0.5x



7


INCOME STATEMENTS


Consolidated Statements of Income (in thousands $, except per share amounts)


Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 E Q1 E Q2 E Q3 E Q4 E

FY 2012 Mar-13 Jun-13 Sep-13 Dec-13 FY 2013 Mar-14 Jun-14 Sep-14 Dec-14 FY 2014 E Mar-15 Jun-15 Sep-15 Dec-15 FY 2015 E

Revenues

Revenues 503.2$ 269.1$ 156.1$ 198.8$ 119.7$ 743.7$ 1,007.5$ 2,094.8$ 1,089.9$ 1,473.2$ 5,665.3$ 1,901.9$ 1,950.7$ 3,444.0$ 4,753.8$ 12,050.4$

Total revenue 503.2 269.1 156.1 198.8 119.7 743.7 1,007.5 2,094.8 1,089.9 1,473.2 5,665.3 1,901.9 1,950.7 3,444.0 4,753.8 12,050.4

Cost of revenues

Cost of sales 412.4 292.8 386.0 224.5 182.2 1,085.5 1,085.0 1,021.4 465.2 1,088.5 3,660.1 1,777.9 1,895.0 3,386.2 4,663.3 11,722.4

Total cost of revenues 412.4 292.8 386.0 224.5 182.2 1,085.5 1,085.0 1,021.4 465.2 1,088.5 3,660.1 1,777.9 1,895.0 3,386.2 4,663.3 11,722.4

Gross (loss) profit 90.8 (23.7) (229.9) (25.7) (62.6) (341.8) (77.6) 1,073.3 624.8 384.7 2,005.2 124.0 55.7 57.8 90.5 328.0

Operating expenses

Selling, general and administrative expenses 3,729.5 1,260.1 1,288.3 1,500.9 364.4 7,149.1 2,356.2 1,653.3 2,198.4 1,208.0 7,415.9 1,293.3 1,189.9 1,446.5 1,663.8 5,593.5

Research and development - - - - - - - - - - - - - - - -

Loss on settlement of payables - - - - - - 38.8 - - - 38.8 - - - - -

Loss from equity method investments 357.6 85.3 282.3 (126.9) 5,537.3 5,778.0 8,906.9 - - - 8,906.9 - - - - -

Total operating expenses 4,087.1 1,345.4 1,570.6 1,374.0 5,901.7 12,927.1 11,301.9 1,653.3 2,198.4 1,208.0 16,361.6 1,293.3 1,189.9 1,446.5 1,663.8 5,593.5

Income (loss) from operations (1) (3,996.3) (1,369.1) (1,800.5) (1,399.6) (5,964.3) (13,269.0) (11,379.4) (580.0) (1,573.7) (823.3) (14,356.3) (1,169.3) (1,134.3) (1,388.6) (1,573.3) (5,265.6)

Other income (expense):

Interest income 36.4 44.5 41.9 53.9 56.6 196.9 63.9 67.9 75.4 75.4 282.6 75.4 75.4 75.4 75.4 301.4

Interest expense net (986.2) (174.6) (432.1) (492.5) (492.2) (1,591.4) (1,091.2) (3,006.2) (3,034.0) (711.0) (7,842.4) (711.0) (711.0) (711.0) (711.0) (2,844.1)

Other income/(expense) (1) - 15.3 - - - 15.3 (763.3) - - - (763.3) - - - - -

Total other income (expense): (949.8) (114.8) (390.2) (438.6) (435.6) (1,379.2) (1,790.6) (2,938.3) (2,958.6) (635.7) (8,323.2) (635.7) (635.7) (635.7) (635.7) (2,542.7)

Pre-tax income (loss) (1) (4,946.1) (1,483.9) (2,190.7) (1,838.2) (6,399.9) (14,648.2) (13,170.0) (3,518.2) (4,532.3) (1,459.0) (22,679.5) (1,805.0) (1,769.9) (2,024.3) (2,209.0) (7,808.2)

Net income (loss) (1) (4,946.1)$ (1,483.9)$ (2,190.7)$ (1,838.2)$ (6,399.9)$ (14,648.2)$ (13,170.0)$ (3,518.2)$ (4,532.3)$ (1,459.0)$ (22,679.5)$ (1,805.0)$ (1,769.9)$ (2,024.3)$ (2,209.0)$ (7,808.2)$

Net income (loss ) to common (4,946.1)$ (1,483.9)$ (2,190.7)$ (1,838.2)$ (6,399.9)$ (14,648.2)$ (13,170.0)$ (3,518.2)$ (4,532.3)$ (1,459.0)$ (22,679.5)$ (1,805.0)$ (1,769.9)$ (2,024.3)$ (2,209.0)$ (7,808.2)$

Basic EPS (loss) (0.27)$ (0.17)$ (0.16)$ (0.10)$ (0.24)$ (0.86)$ (0.50)$ (0.13)$ (0.16)$ (0.04)$ (0.79)$ (0.05)$ (0.05)$ (0.06)$ (0.06)$ (0.22)$

Diluted EPS (loss) (0.27)$ (0.17)$ (0.16)$ (0.10)$ (0.24)$ (0.86)$ (0.50)$ (0.13)$ (0.16)$ (0.04)$ (0.79)$ (0.05)$ (0.05)$ (0.06)$ (0.06)$ (0.22)$

Basic shares outstanding 18,615.1 8,880.0 13,913.8 18,560.2 26,631.9 16,996.5 26,221.2 26,670.1 29,081.2 33,443.4 28,854.0 34,112.2 34,794.5 35,316.4 35,952.1 35,043.8

Diluted shares outstanding 18,615.1 8,880.0 13,913.8 18,560.2 26,631.9 16,996.5 26,221.2 26,670.1 29,081.2 33,443.4 28,854.0 34,112.2 34,794.5 35,316.4 35,952.1 35,043.8

EBITDA (3,864.6) (1,230.6) (1,684.0) (1,298.1) (5,875.3) (10,088.1) (2,357.7) (214.9) (1,300.4) (545.1) (4,418.1) (884.4) (848.6) (1,102.1) (1,283.5) (4,118.5)

Margin Analysis

Gross margin 18.0% -8.8% -147.3% -12.9% -52.3% -46.0% -7.7% 51.2% 57.3% 26.1% 35.4% 6.5% 2.9% 1.7% 1.9% 2.7%

Selling, general and administrative expenses 741.2% 468.3% 825.3% 755.0% 304.5% 961.3% 233.9% 78.9% 201.7% 82.0% 130.9% 68.0% 61.0% 42.0% 35.0% 46.4%

Research and development 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Loss on settlement of payables 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.9% 0.0% 0.0% 0.0% 0.7% 0.0% 0.0% 0.0% 0.0% 0.0%

Loss from equity method investments 71.1% 31.7% 180.8% -63.8% 4627.7% 777.0% 884.1% 0.0% 0.0% 0.0% 157.2% 0.0% 0.0% 0.0% 0.0% 0.0%

Operating margin -794.2% -508.8% -1153.4% -704.0% -4984.5% -1784.3% -1129.5% -27.7% -144.4% -55.9% -253.4% -61.5% -58.1% -40.3% -33.1% -43.7%

EBITDA margin -768.0% -457.3% -1078.8% -653.0% -4910.1% -1356.5% -234.0% -10.3% -119.3% -37.0% -78.0% -46.5% -43.5% -32.0% -27.0% -34.2%

Pre-tax margin -982.9% -551.4% -1403.4% -924.7% -5348.6% -1969.8% -1307.3% -168.0% -415.8% -99.0% -400.3% -94.9% -90.7% -58.8% -46.5% -64.8%

Net income margin -982.9% -551.4% -1403.4% -924.7% -5348.6% -1969.8% -1307.3% -168.0% -415.8% -99.0% -400.3% -94.9% -90.7% -58.8% -46.5% -64.8%

Tax rate 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Growth Rate Analysis Y/Y

Total revenue na na -1.0% 13.5% -29.7% 47.8% 274.4% 1241.9% 448.3% 1131.2% 661.8% 88.8% -6.9% 216.0% 222.7% 112.7%

Total cost of revenues 58814.3% 58468.2% 529.7% 23.0% 8.4% 163.2% 270.5% 164.6% 107.2% 497.4% 237.2% 63.9% 85.5% 628.0% 328.4% 220.3%

Selling, general and administrative expenses 420.1% 98.7% 181.8% 47.0% -77.5% 91.7% 87.0% 28.3% 46.5% 231.5% 3.7% -45.1% -28.0% -34.2% 37.7% -24.6%

Operating income -437.4% -106.7% -363.0% -33.0% -215.1% -232.0% -731.1% 67.8% -12.4% 86.2% -8.2% 89.7% -95.6% 11.8% -91.1% 63.3%

EBITDA -341.3% -85.9% -347.8% -30.8% -220.4% -161.0% -91.6% 87.2% -0.2% 90.7% 56.2% 62.5% -294.9% 15.3% -135.5% 6.8%

Pre-tax income -547.6% -124.1% -465.5% -36.2% -151.2% -196.2% -787.5% -60.6% -146.6% 77.2% -54.8% 86.3% 49.7% 55.3% -51.4% 65.6%

Net income -547.6% -124.1% -465.5% -36.2% -151.2% -196.2% -787.5% -60.6% -146.6% 77.2% -54.8% 86.3% 49.7% 55.3% -51.4% 65.6%

EPS - fully diluted -320.1% -44.0% -142.0% -26.7% -75.6% -224.4% -200.6% 16.2% -57.4% 81.8% 8.8% 89.5% 61.4% 63.2% -40.8% 71.7%

Share count - fully diluted 54.2% 55.6% 133.7% 7.5% 43.1% -8.7% 195.3% 91.7% 56.7% 25.6% 69.8% 30.1% 30.5% 21.4% 7.5% 21.5%

(1) For analytical purposes we have moved net gains

of sales & disposal of assets to other income(exp)

from operating expense; Historical financials also

Source: Company Reports, Stonegate Securities estimates

8 PEDEVCO Corp. | November 20, 2014


CASH FLOWS


Consolidated Statements of Cash Flows (cumulative)


FY 2012 Q1 Q2 Q3 FY 2013 Q1 Q2 Q3

Cash Flow from Operations Mar-13 Jun-13 Sep-13 Mar-14 Jun-14 Sep-14

Net income (loss) (12,013) (1,481) (3,914) (5,980) (18,145) (13,170) (17,365) (22,337)

Stock based compensation 621 254 434 1,208 3,198 1,060 1,551 2,855

Impairment of oil and gas properties 180 35 89 307 3,303 3 32 354

Loss on oil and gas property acquisition deposit 140 - 200 200 200 8,632 9,183 8,387

Depreciation depletion amortization and accretion 132 139 255 357 445 115 480 753

Loss on equity method investment 358 85 368 241 5,778 274 417 463

Amortization of debt discount 508 78 96 493 737 575 1,474 3,584

Other 271 - - 9 - 802 519 862

Accounts receivable 90 (95) (161) (98) 87 (1,321) (1,731) (1,034)

Inventories - 396 396 396

Prepaid expenses (95) 59 110 81 60 3 67 (85)

Accounts payable 289 (858) (465) (795) 1,877 (367) (69) 3,148

Accrued expenses (41) 109 291 662 211 542 749 1,090

Severance, impairment and other associated costs - - - - - 289 563 416

Net cash provided by operating activities (2,804) (1,679) (2,714) (3,372) (2,263) (2,166) (3,741) 1,069

Cash Flow from Investing

Cash paid for unproven leasehod cost (1,500) (3,775) (3,908) (4,022) (5,341) - - (274)

Cash paid for oil and gas property acquisition deposit - (100) (200) (8,200) (200) (28,523) (28,522) (28,522)

Cash paid for drilling cost (1) - (129) (131) (1,050) - (1,591) (3,639)

Issuance of notes receivable - related party (2,786) (903) (1,715) (2,461) (3,678) (1,892) (1,863) (1,834)

Cash paid for acquisition - - - (10,020) 2,889 13,199 -

Cash proceed from the sale of White Hawk investment 1,000 - - - 91 2,718 2,718 2,718

Cash paid for acquisition of Blast Energy Services, Inc. (455) - - - - 10,363 - -

Other - - - (2,000) - - - 13,383

Net cash used by investing activities (3,742) (4,778) (5,951) (16,814) (20,198) (14,444) (16,059) (18,167)

Cash Flow from Financing

Proceeds from private placement - related party - - - 12,000 - - - -

Proceeds from notes payable 1,028 7,960 8,000 8,000 8,000 19,357 19,357 21,226

Repayment of notes payable (200) - - - 393 (2,025) (1,904) (2,321)

Cash paid for deferred financing cost - (40) (40) (90) (5,382) (5,782) (5,658)

Proceeds from Series A preferred stock 8,015 - - - - 6,525 6,525 -

Proceeds from sale of common stock 5 - - - 18,282 5 5 6,525

Other - - - 11 11 - - (395)

Net cash provided (used) by financing activities 8,848 7,960 7,960.0 19,971 26,596 18,480 18,201 19,376

Net increase (decrease) in cash 2,302 1,504 (705) (215) 4,135 1,870 (1,598) 2,277

Cash and cash equivalents, beginning of year 177 2,478 2,478 2,478 2,478 6,614 6,614 6,614

Cash and cash equivalents, end of period 2,478 3,982 1,773 2,264 6,614 8,483 5,015 8,891




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bv/s $ 0.18 debt (m) equity (m) november 20, 2014 $ 29.5

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