Exchange: OTC | Sector: Energy | Industry: Oil Gas Exploration Production
Q1 2025
Published: Oct 21, 2024
Earnings Highlights
Revenue of $0.01M up 0% year-over-year
EPS of $-0.01 increased by 61.5% from previous year
Gross margin of 100.0%
Net income of -469.25K
"N/A" - N/A
Laredo Oil Inc (LRDC) QQ1 2025 Results — Earnings Decline Amid Operating Burn in a Thin Margin E&P Environment
Executive Summary
Laredo Oil’s QQ1 2025 results show a stark revenue base against a fixed-cost structure, producing a negative EBITDA and net loss despite a 100% gross margin on the reported revenue. Revenue for the quarter was 6,048 USD (in thousands in the filing convention), with gross profit identical to revenue, reflecting minimal cost of revenue captured in the quarter but notable operating expenses totaling 663,557 USD. Operating income came to -664,311 USD and net income -469,252 USD, translating to an EPS of -0.0065. Cash flow from operations was -252,908 USD, and free cash flow was -2.01 million USD, signaling ongoing cash burn despite financing activity that provided 1.96 million USD in net financing inflows.
Net Income: -469,252; Net Income Margin: -77.59%; EPS: -0.0065; Weighted Avg Shares: 72,370,641
Cash Flow: Net cash provided by operating activities: -252,908; Capital expenditures: -1,757,052; Free Cash Flow: -2,009,960
Balance Sheet (selected): Total Assets: 4,673,565; Total Liabilities: 15,903,944; Total Stockholders’ Equity: -11,230,379; Current Ratio: 0.137; Cash and Cash Equivalents: 105,577; Short-Term Investments: 1,829,733; Net Debt: 2,925,635
Financial Highlights
Overview of critical quarterly metrics (Q1 2025, USD thousands unless stated):
- Revenue: 6,048; Gross Profit: 6,048; Gross Margin: 100% (grossProfit / revenue)
- Operating Expenses: 663,557; EBITDA: -328,809; Operating Income: -664,311; EBITDARatio: -54.37%
- Net Income: -469,252; Net Income Margin: -77.59%; EPS: -0.0065; Weighted Avg Shares: 72,370,641
- Cash Flow: Net cash provided by operating activities: -252,908; Capital expenditures: -1,757,052; Free Cash Flow: -2,009,960
- Balance Sheet (selected): Total Assets: 4,673,565; Total Liabilities: 15,903,944; Total Stockholders’ Equity: -11,230,379; Current Ratio: 0.137; Cash and Cash Equivalents: 105,577; Short-Term Investments: 1,829,733; Net Debt: 2,925,635
- Liquidity/Leverage: Low liquidity metrics with a heavy reliance on external financing; Current liabilities far exceed current assets; Debt outstanding approx. 3.03 million with negative equity, indicating solvency risk.
- Revenue Trend Indicators: QoQ revenue change -74.57% (Q4 2024 to Q1 2025). YoY metrics in the dataset show mixed signals due to baseline differences, with reported YoY values indicating margin/earnings dynamics rather than top-line resilience. EPS YoY: 61.54% (the absolute level remains negative given base losses).
- Cash Flow/Investment: Financing activities provided a net inflow of 1,955,081 USD, supporting liquidity despite a continued cash burn from operations and capex of ~1.76 million USD. Operating cash flow of -252,908 USD underscores the business’s cash burn in the period.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.05K
N/A
-74.57%
Gross Profit
6.05K
191.03%
-86.16%
Operating Income
-664.31K
50.86%
7.21%
Net Income
-469.25K
58.06%
35.39%
EPS
-0.01
61.54%
38.10%
Key Financial Ratios
currentRatio
0.14
grossProfitMargin
100%
operatingProfitMargin
-10984%
netProfitMargin
-7759%
returnOnAssets
-10%
returnOnEquity
4.18%
debtEquityRatio
-0.27
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0.03
priceToBookRatio
-2.9
priceEarningsRatio
-17.35
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript is provided in the data set. Consequently, no management quotes or call-specific thematic highlights can be cited. Any discussion of strategy, operational execution, or market conditions attributed to management would require the official transcript or a press release to quote accurately.
N/A
— N/A
N/A
— N/A
Forward Guidance
The quarterly filing does not include explicit forward guidance. Given the current earnings trajectory and balance sheet stresses, any credible forward-looking view would hinge on: (1) stabilization or improvement in oil prices to support revenue progression and potential EOR monetization; (2) significant reductions in routine operating expenses or a structural reset of SG&A; (3) access to additional financing or equity dilution mitigation to restore balance sheet liquidity; (4) potential capital-light strategic initiatives such as partnering on mature-field opportunities or asset monetization. Achievability hinges on management delivering sustained operating leverage, cost discipline, and a credible plan to deleverage the balance sheet within a reasonable time frame. Key monitoring factors for investors include crude price sensitivity, field production updates, capex trajectory, and any new financing arrangements or asset sales.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
LRDC Focus
1.00%
-109.84%
4.18%
-17.35%
PREKF
67.80%
54.70%
1.72%
33.88%
AETUF
31.60%
25.40%
2.47%
19.55%
VTLE
34.80%
28.50%
-2.36%
-7.08%
STR
49.60%
33.10%
0.54%
60.46%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
LRDC presents a high-risk, high-uncertainty investment proposition in QQ1 2025. The company is not generating sustainable operating cash flow and carries a leveraged balance sheet with negative equity. Near-term upside hinges on a meaningful improvement in operating efficiency, potential monetization of EOR opportunities, or another round of financing that can be deployed to support a path to positive cash flow. In the absence of explicit forward guidance, investors should view LRDC as a speculative position with potential if the company can demonstrably reduce burn, deleverage, and unlock value from mature-field assets. Compare to peers with more robust margins and cash generation; LRDC’s current metrics imply a material risk premium is warranted until there is a clear turnaround plan and execution cadence disclosed by management.
Key Investment Factors
Growth Potential
Limited near-term growth runway given a small revenue base and sustained cash burn; potential upside from successful EOR deployments on mature fields and any monetization of stranded or underutilized assets, particularly if oil prices strengthen.
Profitability Risk
High risk: negative equity, significant liabilities, and negative operating cash flow. Dependence on financing to cover cash needs; liquidity tension indicated by current ratio of 0.137. Sector volatility, regulatory shifts, and field-level operational risk add to downside.
Financial Position
Weak balance sheet with total liabilities ≈ 15.9M and negative equity, despite some liquidity buffers from cash and short-term investments (~2.0M combined). Substantial depreciation and amortization with ongoing capex suggests continued cash burn unless revenue improves meaningfully or cost structure is rebalanced.
SWOT Analysis
Strengths
Exposure to mature oil fields with potential upside from enhanced oil recovery (EOR) methods.
Strategic positioning around stranded oil recovery, which can be a cost-effective source of incremental production if successful.
Access to external financing to support liquidity in the near term.
Weaknesses
Severe earnings and cash-flow burn with negative stockholders’ equity.
Thin liquidity profile and near-term reliance on financing activities to fund operations.
Low revenue base in QQ1 2025 and high fixed operating costs relative to sales.