Mon, 2014-05-19

Title: Quarterly update – maintained valuation based on earnings result – Neutral rating and maintained target price of US$2.97

Synopsis: We update our coverage of PEDEVCO Corp. (NYSEMKT: PED) maintaining our target price of US$2.97 since our last report on April 9, 2014. Our current target price implies an upside of 53.0% to PED’s current share price following PED’s issuance of its 10-Q report. Although our Neutral rating reflects concern on the costly financing arrangement with RJ Resources, we believe that the company has achieved desired outcome so far after the Wattenberg acquisition. We remain positive toward management’s abilities, but at the same time, we recognize that the company is limited in its future financing options, which poses challenges to its operations. The company will take time to absorb the cost of the recent financing arrangement and the key factors discussed above will influence the timing of the possible revival of the company’s share performance. In the rest of the report, we recap on the current state of PED’s assets and operations to set a baseline after major acquisitions and discuss the company’s future outlook.

Report length: 5 pages (excluding legal disclaimer)

Boris Miao