Overview of Financial Performance

Laredo Oil, Inc. is an oil exploration and production company that has been primarily focused on developing and implementing its Underground Gravity Drainage (UGD) method to recover “stranded” oil from mature oil fields. The company has also been engaged in conventional drilling operations to develop its mineral property interests in Montana.

Revenue and Profit Trends

• Laredo Oil generated modest revenues of $1,543 and $6,048 from its interest in oil and gas sales during the three-month periods ended August 31, 2025 and 2024, respectively.
• The company incurred operating expenses of $693,261 and $670,359 during the same respective periods, consisting primarily of general operating costs and lease operating expenses.
• Laredo Oil recognized other income of $16,000 in the quarter ended August 31, 2025, compared to $328,702 in the prior year period, which included payments from the Texakoma Development Agreement.
• Interest expenses increased to $276,319 in the most recent quarter, up from $133,643 a year earlier, due to the amortization of debt discounts on short-term notes.
• Overall, Laredo Oil has continued to operate at a net loss, with an accumulated deficit, as it works to develop its UGD technology and mineral properties.

Strengths and Weaknesses

Strengths:

• Proprietary UGD technology that the company believes can recover significant amounts of stranded oil at lower costs than traditional EOR methods
• Diversified mineral property interests in Montana, including the Lustre and Midfork fields
• Partnerships with experienced industry players like Texakoma and Erehwon to develop its acreage

Weaknesses:

• Ongoing net losses and need for additional financing to fund operations and development
• Challenges in making its conventional drilling projects economically viable, with wells encountering excess water
• Reliance on debt financing, which has increased interest expenses

Outlook

Laredo Oil’s future outlook remains uncertain as it continues to seek the necessary funding to fully implement its UGD technology and develop its mineral properties. The company has seen increased interest from investors in its UGD methods, both domestically and internationally, which it believes is due to a more favorable climate for U.S. energy projects. However, Laredo Oil will need to secure additional financing to achieve any meaningful production and cash flow from its assets. The company’s ability to continue as a going concern remains in doubt without a successful capital raise or other strategic actions.