Amplify Energy Corp. (NYSE: AMPY) (“Amplify” or the “Company”)
announced today its operating and financial results for the second
quarter of 2022 and updated its full-year 2022 guidance.
Key Highlights
-
During the second quarter of 2022, the Company:
-
Achieved average total production of 20.4 MBoepd, which was held
flat compared to the first quarter, despite reduced production at
Bairoil attributable to the annual maintenance turnaround
-
Generated net cash provided by operating activities of $20.7
million and net income of $29.2 million
-
Delivered Adjusted EBITDA of $16.3 million
-
As of July 31, 2022, net debt was $185 million, consisting of $215
million outstanding under the revolving credit facility and $30
million of cash on hand
-
Net Debt to Last Twelve Months (“LTM”) EBITDA of 2.3x1
-
Updated the Company’s full-year 2022 guidance, increasing
expectations for production and Adjusted EBITDA
-
Southern California Release Incident (the “Incident”) Updates:
-
Amplify continues to work cooperatively with all regulatory
agencies to secure the remaining required approvals to safely and
promptly repair and restart the pipeline
-
As reported in Amplify’s first quarter earnings release, on April
15, 2022, Amplify received approval for its permanent pipeline
repair plan from the Pipeline and Hazardous Material Safety
Administration
(1) Net debt as of July 31, 2022, and LTM EBITDA
as of the second quarter of 2022
Martyn Willsher, Amplify’s President and Chief
Executive Officer, commented, “Amplify’s second quarter builds upon
the successes of our prior achievements and continues to lay the
foundation for generating incremental cash flow. The continued
strength in commodity prices, coupled with the acceleration of our
workover program in Oklahoma and non-operated development projects
in East Texas and the Eagle Ford which have exceeded timing and
performance expectations, has enabled us to increase full-year 2022
guidance expectations for the second time this year.”
Mr. Willsher concluded, “We continue to engage
with regulatory agencies in order to obtain the remaining required
approvals to expeditiously repair and restart our pipeline and
bring the Beta field back online. In anticipation of returning the
field to production we are focused on facility preparation
projects. Across the rest of the asset base, the Company will
continue to focus on enhancing operational performance and asset
investments to take advantage of the strong commodity price
environment and bolster free cash flow.”
Southern California Pipeline
Incident
For more information and disclosures regarding
the Incident, please see our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2022 filed with the Securities and Exchange
Commission (“SEC”).
Key Financial Results
During the second quarter of 2022, Amplify
generated $16.3 million of Adjusted EBITDA, a decrease of
approximately $8.6 million from $24.9 million in the prior quarter.
The decrease was primarily attributable to timing variances
regarding the recognition of loss of production income (“LOPI”)
insurance proceeds related to the Incident, partially offset by
higher commodity prices. For the second quarter, the Company
recognized $8.8 million of LOPI proceeds, which represents two
months of LOPI payments, compared to $17.5 million, or four months
LOPI payments, for the prior quarter. Amplify will continue to
recognize LOPI proceeds at the time they are approved by insurers
for the remainder of the policy period or until Beta is returned to
full production.
Free cash flow, defined as Adjusted EBITDA less
cash interest and capital spending, was negative $0.6 million in
the second quarter of 2022, compared to $14.9 million in the prior
quarter. The quarter-over-quarter decrease was primarily related to
increased capital spending for incremental capital workover
projects in Oklahoma, the timing of non-operated development
projects in East Texas, and the annual maintenance turnaround at
Bairoil, as well as the previously discussed differences in LOPI
payment recognition during the first and second quarters.
|
Second Quarter |
First Quarter |
$ in millions |
2022 |
2022 |
Net income (loss) |
$29.2 |
($48.6) |
Net cash provided by operating activities |
$20.7 |
$9.7 |
Average daily production (MBoe/d) |
20.4 |
20.4 |
Total revenues |
$121.8 |
$111.4 |
Adjusted EBITDA (a non-GAAP financial measure) |
$16.3 |
$24.9 |
Total capital |
$13.5 |
$6.9 |
Free Cash Flow (a non-GAAP financial measure) |
($0.6) |
$14.9 |
Revolving Credit Facility
On June 20, 2022, Amplify completed the
regularly scheduled redetermination of its borrowing base and
entered into an amendment to its credit agreement, which terminated
the automatic monthly reductions of the borrowing base and modified
the affirmative hedging covenant. The redetermination affirmed the
borrowing base at $225 million. The next regularly scheduled
borrowing base redetermination is expected to occur in the fourth
quarter of 2022.
As of July 31, 2022, Amplify had net debt of
$185 million, consisting of $215 million outstanding under its
revolving credit facility and $30 million of cash on hand. Net Debt
to LTM EBITDA was 2.3x (net debt as of July 31, 2022 and 2Q22 LTM
EBITDA).
Corporate Production and Pricing
Update
During the second quarter of 2022, average daily
production was approximately 20.4 MBoepd, held flat compared to
20.4 MBoepd in the first quarter of 2022, despite the Bairoil field
being shut-in for 10 days during the second quarter for our annual
turnaround. The Company’s product mix for the quarter consisted of
30% crude oil, 19% NGLs, and 51% natural gas.
Total oil, natural gas and NGL revenues in the
second quarter were approximately $112.9 million, before the impact
of derivatives, compared to $93.9 million in the prior quarter. The
Company realized a loss on commodity derivatives of $48.6 million
during the quarter, compared to a $30.9 million net loss during the
previous quarter.
The following table sets forth information
regarding average realized sales prices for the periods
indicated:
|
Crude Oil ($/Bbl) |
NGLs ($/Bbl) |
Natural Gas ($/Mcf) |
|
Three Months Ended June 30, 2022 |
|
Three Months Ended March 31, 2022 |
|
Three Months Ended June 30, 2022 |
|
Three Months Ended March 31, 2022 |
|
Three Months Ended June 30, 2022 |
|
Three Months Ended March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price exclusive of realized derivatives and certain
deductions from revenue |
$ |
105.79 |
|
|
$ |
90.22 |
|
|
$ |
43.80 |
|
|
$ |
41.24 |
|
|
$ |
6.87 |
|
|
$ |
4.93 |
|
Realized derivatives |
|
(54.37 |
) |
|
|
(38.30 |
) |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
(3.20 |
) |
|
|
(1.58 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price with realized derivatives exclusive of certain
deductions from revenue |
$ |
51.42 |
|
|
$ |
51.92 |
|
|
$ |
43.80 |
|
|
$ |
41.24 |
|
|
$ |
3.67 |
|
|
$ |
3.35 |
|
Certain deductions from revenue |
|
- |
|
|
|
- |
|
|
|
(4.62 |
) |
|
|
(1.38 |
) |
|
|
0.18 |
|
|
|
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price inclusive of realized derivatives and certain
deductions from revenue |
$ |
51.42 |
|
|
$ |
51.92 |
|
|
$ |
39.18 |
|
|
$ |
39.86 |
|
|
$ |
3.85 |
|
|
$ |
3.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
Lease operating expenses in the second quarter
of 2022 were approximately $33.3 million, or $17.91 per Boe, an
increase of approximately $0.4 million compared to $32.9 million,
or $17.92 per Boe, in the first quarter of 2022. The increase was
primarily attributable to increased facility maintenance projects
at Beta and workover expense projects at Bairoil, offset by lower
base operating expenses in the Eagle Ford.
Severance and Ad Valorem taxes in the second
quarter were approximately $8.6 million, an increase of $1.0
million compared to $7.6 million in the previous quarter. The
quarter-over-quarter increase was primarily related to higher
commodity prices during the second quarter of 2022. On a percentage
basis, Amplify paid approximately 7.6% of total oil, NGL and
natural gas sales revenue in taxes this quarter compared to 8.0% in
the previous quarter.
Amplify incurred $7.3 million, or $3.92 per Boe,
of gathering, processing and transportation expenses in the second
quarter of 2022, compared to $8.0 million, or $4.36 per Boe, in the
prior quarter. During the first quarter, Amplify recognized certain
natural gas revenue deductions as gathering, processing and
transportation expenses due to the Company’s election to take its
gas in-kind in Oklahoma. This resulted in an increase to Amplify’s
realized natural gas pricing during the past two quarters, which
was partially offset by related incremental gathering, processing
and transportation expenses.
Second quarter cash G&A expenses were $7.7
million this quarter, an increase of $0.6 million from $7.1 million
in the first quarter of 2022. The increase is primarily due to a
one-time increase in certain professional and advisor fees.
Depreciation, depletion and amortization expense
for the second quarter totaled $5.9 million, or $3.16 per Boe,
compared to $5.6 million, or $3.07 per Boe, in the prior
quarter.
Net interest expense was $3.1 million this
quarter, an increase of $0.7 million from $2.4 million in the first
quarter of 2022.
Amplify had an effective tax rate of 0% and did
not record an income tax expense or benefit for the second quarter
of 2022.
Capital Spending Update
Cash capital spending during the second quarter
of 2022 was approximately $13.5 million, a $6.6 million increase
from $6.9 million in the prior quarter. The majority of the capital
expenditures in the second quarter were related to development
activity in East Texas and the Eagle Ford, facility maintenance at
Bairoil and Beta, and accelerated workover activity in Oklahoma to
capitalize on current commodity prices.
The following table details Amplify’s capital
incurred during the quarter and year-to-date:
|
|
Second
Quarter |
|
Year to
Date |
|
|
2022
Capital |
|
Capital |
|
|
Spend ($ MM) |
|
Spend ($ MM) |
Oklahoma |
|
$ |
3.7 |
|
$ |
5.6 |
Rockies
(Bairoil) |
|
$ |
2.8 |
|
$ |
3.5 |
Southern
California (Beta) |
|
$ |
1.7 |
|
$ |
1.7 |
East Texas /
North Louisiana |
|
$ |
3.6 |
|
$ |
5.2 |
Eagle Ford (Non-Op) |
|
$ |
1.7 |
|
$ |
4.4 |
Total Capital Spent |
|
$ |
13.5 |
|
$ |
20.4 |
|
|
|
|
|
Asset Operational Update and
Statistics
Oklahoma:
-
Production: 593 MBoe; 6.5 MBoepd
-
Commodity Mix: 21% oil, 28 % NGLs, 51% natural gas
-
LOE: $5.1 million; $8.58 per Boe
- Capex:
$3.7 million
Amplify’s operating strategy in Oklahoma remains
focused on prioritizing a stable free cash flow profile and
managing production through an active workover program. As
disclosed last quarter, the Company accelerated its workover
program and is now running three workover rigs focused on rod-lift
conversions and ESP optimizations, which reduce future operating
expenses and downtime and generate highly attractive returns in the
current pricing environment. As a result, production increased 8%
from the previous quarter. During the second half of 2022, Amplify
expects to continue the accelerated pace of its workover program,
bringing additional wells and incremental production online.
Rockies (Bairoil):
-
Production: 309 MBoe; 3.4 MBoepd
-
LOE: $13.4 million; $43.38 per Boe
- Capex:
$2.8 million
The Company completed its annual turnaround at
Bairoil during the second quarter, a ten-day, field-wide shut-in to
perform production facilities maintenance, on time and on budget.
The technical teams’ proactive approach to maintenance, in
conjunction with their continued evaluation of the reservoir, help
improve production performance and operational reliability while
facilitating CO2 injection and water-alternating-gas pattern
optimization. Amplify intends to continue using new technologies,
along with targeted workover activity and well stimulation, to
drive further operational improvements and efficiencies.
Southern California (Beta):
-
Production: 1 MBoe; 0.0 MBoepd
-
LOE: $7.6 million
- Capex:
$1.7 million
As previously disclosed, all of the Company’s
production and pipeline operations at the Beta field have been
suspended. Amplify remains focused on obtaining the remaining
required regulatory approvals to repair and restart the pipeline as
soon as practicable and preparing the platforms for a return to
production.
East Texas and North Louisiana:
-
Production: 5.1 Bcfe; 56.1 MMcfepd (851 MBoe; 9.3 MBoepd)
-
Commodity Mix: 5% oil, 20% NGLs, 75% natural gas
-
LOE: $5.6 million; $1.09 per Mcfe ($6.55 per Boe)
- Capex:
$3.6 million
Amplify’s East Texas operating strategy
continues to focus on prudent management of production by
prioritizing high-return workover projects and opportunistically
participating in non-operated development opportunities. The
Company participated in 3 gross (0.6 net) non-operated development
wells that were brought online late in the second quarter of 2022,
two months ahead of schedule, and initial production performance is
exceeding expectations. Amplify is actively pursuing additional
opportunities to bolster future free cash flow generation within
our asset base.
Non-Operated Eagle Ford:
-
Production: 104 MBoe; 1.1 MBoepd
-
Commodity Mix: 77% oil, 11% NGLs, 12% natural gas
-
LOE: $1.6 million; $15.39 per Boe
- Capex:
$1.7 million
Amplify continues to opportunistically
participate in attractive non-operated Eagle Ford development and
recompletion projects as they arise. The Company’s operating
partners completed 7 gross (0.4 net) new development wells during
the second quarter of 2022 and initial production performance has
exceeded internal expectations. Production increased 22% from the
previous quarter as a result of the new completions. We intend to
participate in several new development projects in the second half
of 2022, which are projected to be on-line in the first quarter of
2023.
2022 Guidance Update
The following guidance is subject to the
cautionary statements and limitations described under the
"Forward-Looking Statements" caption at the end of this press
release. Amplify's updated 2022 guidance is based on its current
expectations regarding capital expenditure levels and on the
assumption that market demand and prices for oil and natural gas
will continue at levels that allow for economic production of these
products. Due to uncertainty regarding Beta’s restart timeline, the
guidance below does not assume Beta returns to production in 2022.
Guidance will be updated when additional information is
available.
A summary of the guidance is presented
below:
|
|
FY
2022E (5)(6) |
|
|
|
|
|
|
|
|
|
|
|
|
Low |
|
High |
|
|
|
|
|
|
Net
Average Daily Production |
|
|
|
|
Oil (MBbls/d) |
6.1 |
- |
6.5 |
|
NGL (MBbls/d) |
3.6 |
- |
4.0 |
|
Natural Gas (MMcf/d) |
62.0 |
- |
66.0 |
|
Total (MBoe/d) |
20.0 |
- |
21.5 |
|
|
|
|
|
|
Commodity Price Differential / Realizations
(Unhedged) |
|
|
|
|
Oil Differential ($ / Bbl) |
($3.50) |
- |
($4.00) |
|
NGL Realized Price (% of WTI NYMEX) |
40% |
- |
45% |
|
Natural Gas Realized Price (% of Henry Hub) |
95% |
- |
100% |
|
|
|
|
|
|
Gathering, Processing and Transportation
Costs |
|
|
|
|
Oil ($ / Bbl) |
$0.65 |
- |
$0.75 |
|
NGL ($ / Bbl) |
$4.80 |
- |
$5.20 |
|
Natural Gas ($ / Mcf) |
$0.80 |
- |
$1.00 |
|
Total ($ / Boe) |
$3.50 |
- |
$4.00 |
|
|
|
|
|
|
Average Costs |
|
|
|
|
Lease Operating ($ / Boe) |
$17.00 |
- |
$18.00 |
|
Taxes (% of Revenue) (1) |
7.5% |
- |
8.5% |
|
Recurring Cash General and Administrative ($ / Boe) (2) |
$3.50 |
- |
$3.75 |
|
|
|
|
|
|
Adjusted EBITDA ($ MM) (3) |
$90 |
- |
$120 |
|
Cash
Interest Expense ($ MM) |
$13 |
- |
$15 |
|
Capital
Expenditures ($ MM) |
$30 |
- |
$40 |
|
Free
Cash Flow ($ MM) (4) |
$45 |
- |
$65 |
|
|
|
|
|
(1) Includes production, ad valorem and franchise
taxes(2) Recurring cash general and administrative cost
guidance excludes reorganization expenses and non-cash
compensation(3) Refer to “Use of Non-GAAP Financial Measures”
for Amplify’s definition and use of Adjusted EBITDA, a non-GAAP
measure(4) Refer to “Use of Non-GAAP Financial Measures” for
Amplify’s definition and use of free cash flow, a non-GAAP
measure(5) Excludes production from our Southern California
(Beta) asset (6) Amplify believes that a quantitative
reconciliation of such forward-looking information to the most
comparable financial measure calculated and presented in accordance
with GAAP cannot be made available
without unreasonable efforts.
A reconciliation of these non-GAAP financial measures
would require Amplify to predict the timing and likelihood of
future transactions and other items that are difficult to
accurately predict. Neither of these forward-looking measures, nor
their probable significance, can be quantified with a reasonable
degree of accuracy. Accordingly, a reconciliation of the most
directly comparable forward-looking GAAP measures is not
provided.
Hedging Update
The following table reflects the hedged volumes
under Amplify’s commodity derivative contracts and the average
fixed, floor and ceiling prices at which production is hedged for
July 2022 through December 2023, as of August 3, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2023 |
|
|
|
|
|
|
Natural Gas Swaps: |
|
|
|
|
Average
Monthly Volume (MMBtu) |
|
695,000 |
|
|
|
Weighted
Average Fixed Price ($) |
$ |
2.56 |
|
|
|
|
|
|
|
|
Natural Gas Collars: |
|
|
|
|
Two-way
collars |
|
|
|
|
Average Monthly Volume (MMBtu) |
|
775,000 |
|
|
1,160,000 |
|
Weighted Average Ceiling Price ($) |
$ |
3.44 |
|
$ |
5.92 |
|
Weighted Average Floor Price ($) |
$ |
2.56 |
|
$ |
3.49 |
|
|
|
|
|
|
Oil
Swaps: |
|
|
|
|
Average
Monthly Volume (Bbls) |
|
57,000 |
|
|
55,000 |
|
Weighted
Average Fixed Price ($) |
$ |
48.27 |
|
$ |
57.30 |
|
|
|
|
|
|
Oil
Collars: |
|
|
|
|
Two-way
collars |
|
|
|
|
Average Monthly Volume (Bbls) |
|
15,000 |
|
|
|
Weighted Average Ceiling Price ($) |
$ |
71.00 |
|
|
|
Weighted Average Floor Price ($) |
$ |
60.00 |
|
|
|
|
|
|
|
|
Three-way
collars |
|
|
|
|
Average Monthly Volume (Bbls) |
|
89,000 |
|
|
30,000 |
|
Weighted Average Ceiling Price ($) |
$ |
55.55 |
|
$ |
67.15 |
|
Weighted Average Floor Price ($) |
$ |
42.92 |
|
$ |
55.00 |
|
Weighted Average Sub-Floor Price ($) |
$ |
32.58 |
|
$ |
40.00 |
Amplify posted an updated investor presentation
containing additional hedging information on its website,
www.amplifyenergy.com, under the Investor Relations section.
Quarterly Report on Form
10-Q
Amplify’s financial statements and related
footnotes will be available in its Quarterly Report on Form 10-Q
for the quarter ended June 30, 2022, which Amplify expects to file
with the SEC on August 3, 2022.
About Amplify Energy
Amplify Energy Corp. is an independent oil and
natural gas company engaged in the acquisition, development,
exploitation and production of oil and natural gas properties.
Amplify’s operations are focused in Oklahoma, the Rockies, federal
waters offshore Southern California, East Texas / North Louisiana,
and the Eagle Ford. For more information, visit
www.amplifyenergy.com.
Conference Call
Amplify will host an investor teleconference
tomorrow at 10:00 a.m. Central Time to discuss these operating and
financial results. Interested parties may join the call by dialing
(800) 343-5172 at least 15 minutes before the call begins and
providing the Conference ID: AEC2Q22. A telephonic replay will be
available for fourteen days following the call by dialing (844)
488-7474 and providing the Access Code: 72522130.
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, included in this press release that address
activities, events or developments that the Company expects,
believes or anticipates will or may occur in the future are
forward-looking statements. Terminology such as “may,” “will,”
“would,” “should,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“pursue,” “target,” “outlook,” “continue,” the negative of such
terms or other comparable terminology are intended to identify
forward-looking statements. These statements include, but are not
limited to, statements about the Company’s expectations of plans,
goals, strategies (including measures to implement strategies),
objectives and anticipated results with respect thereto. These
statements address activities, events or developments that we
expect or anticipate will or may occur in the future, including
things such as projections of results of operations, plans for
growth, goals, future capital expenditures, competitive strengths,
references to future intentions and other such references. These
forward-looking statements involve risks and uncertainties and
other factors that could cause the Company’s actual results or
financial condition to differ materially from those expressed or
implied by forward-looking statements. These include risks and
uncertainties relating to, among other things: the ongoing impact
of the oil incident that occurred off the coast of Southern
California resulting from the Company’s pipeline operations at the
Beta field, the Company’s evaluation and implementation of
strategic alternatives; the Company’s ability to satisfy debt
obligations; the Company’s need to make accretive acquisitions or
substantial capital expenditures to maintain its declining asset
base, including the existence of unanticipated liabilities or
problems relating to acquired or divested business or properties;
volatility in the prices for oil, natural gas and NGLs, including
further or sustained declines in commodity prices; the Company’s
ability to access funds on acceptable terms, if at all, because of
the terms and conditions governing the Company’s indebtedness,
including financial covenants; general political and economic
conditions, globally and in the jurisdictions in which we operate,
including escalating tensions between Russia and Ukraine and the
potential destabilizing effect such conflict may pose for the
European continent or the global oil and natural gas markets; the
impact of legislation and governmental regulations, including those
related to climate change and hydraulic fracturing; and the
occurrence or threat of epidemic or pandemic diseases, including
the COVID-19 pandemic, or any government response to such
occurrence or threat. Please read the Company’s filings with the
SEC, including “Risk Factors” in the Company’s Annual Report on
Form 10-K, and if applicable, the Company’s Quarterly Reports on
Form 10-K and Current Reports on Form 8-K, which are available on
the Company’s Investor Relations website at
https://www.amplifyenergy.com/investor-relations/sec-filings/default.aspx
or on the SEC’s website at http://www.sec.gov, for a discussion of
risks and uncertainties that could cause actual results to differ
from those in such forward-looking statements. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All
forward-looking statements in this press release are qualified in
their entirety by these cautionary statements. Except as required
by law, the Company undertakes no obligation and does not intend to
update or revise any forward-looking statements, whether as a
result of new information, future results or otherwise.
Use of Non-GAAP Financial
Measures
This press release and accompanying schedules
include the non-GAAP financial measures of Adjusted EBITDA, free
cash flow and net debt. The accompanying schedules provide a
reconciliation of these non-GAAP financial measures to their most
directly comparable financial measures calculated and presented in
accordance with GAAP. Amplify’s non-GAAP financial measures should
not be considered as alternatives to GAAP measures such as net
income, operating income, net cash flows provided by operating
activities, standardized measure of discounted future net cash
flows, or any other measure of financial performance calculated and
presented in accordance with GAAP. Amplify’s non-GAAP financial
measures may not be comparable to similarly titled measures of
other companies because they may not calculate such measures in the
same manner as Amplify does.
Adjusted EBITDA. Amplify
defines Adjusted EBITDA as net income or loss, plus interest
expense; depreciation, depletion and amortization; accretion of
asset retirement obligations; losses on commodity derivative
instruments; cash settlements received on expired commodity
derivative instruments; acquisition and divestiture related costs;
share-based compensation expenses; exploration costs; loss on
settlement of AROs; bad debt expense; and pipeline incident loss.
Adjusted EBITDA is commonly used as a supplemental financial
measure by management and external users of Amplify’s financial
statements, such as investors, research analysts and rating
agencies, to assess: (1) its operating performance as compared to
other companies in Amplify’s industry without regard to financing
methods, capital structures or historical cost basis; (2) the
ability of its assets to generate cash sufficient to pay interest
and support Amplify’s indebtedness; and (3) the viability of
projects and the overall rates of return on alternative investment
opportunities. Since Adjusted EBITDA excludes some, but not all,
items that affect net income or loss and because these measures may
vary among other companies, the Adjusted EBITDA data presented in
this press release may not be comparable to similarly titled
measures of other companies. The GAAP measures most directly
comparable to Adjusted EBITDA are net income and net cash provided
by operating activities.
Free cash flow. Amplify defines
free cash flow as Adjusted EBITDA, less cash interest expense and
total capital expenditures. Free cash flow is an important non-GAAP
financial measure for Amplify’s investors since it serves as an
indicator of the Company’s success in providing a cash return on
investment. The GAAP measures most directly comparable to free cash
flow are net income and net cash provided by operating
activities.
Net debt. Amplify defines net
debt as the total principal amount drawn on the revolving credit
facility less cash and cash equivalents. The Company uses net debt
as a measure of financial position and believes this measure
provides useful additional information to investors to evaluate the
Company's capital structure and financial leverage.
Contacts
Jason McGlynn – Chief Financial Officer(832)
219-9055jason.mcglynn@amplifyenergy.com
Selected Operating and Financial Data
(Tables)
Amplify Energy Corp. |
|
|
|
Selected Financial Data - Unaudited |
|
|
|
Statements of Operations Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
Revenues: |
|
|
|
|
Oil and natural gas sales |
$ |
112,878 |
|
|
$ |
93,872 |
|
|
Other
revenues |
|
8,899 |
|
|
|
17,561 |
|
|
Total revenues |
|
121,777 |
|
|
|
111,433 |
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
Lease
operating expense |
|
33,285 |
|
|
|
32,920 |
|
|
Pipeline
incident loss |
|
5,092 |
|
|
|
580 |
|
|
Gathering,
processing and transportation |
|
7,281 |
|
|
|
8,010 |
|
|
Exploration |
|
10 |
|
|
|
16 |
|
|
Taxes other
than income |
|
8,623 |
|
|
|
7,553 |
|
|
Depreciation, depletion and amortization |
|
5,864 |
|
|
|
5,635 |
|
|
General and
administrative expense |
|
8,628 |
|
|
|
7,771 |
|
|
Accretion of
asset retirement obligations |
|
1,749 |
|
|
|
1,720 |
|
|
Realized
(gain) loss on commodity derivatives |
|
48,596 |
|
|
|
30,943 |
|
|
Unrealized
(gain) loss on commodity derivatives |
|
(30,025 |
) |
|
|
62,461 |
|
|
Other,
net |
|
396 |
|
|
|
19 |
|
|
Total costs and expenses |
|
89,499 |
|
|
|
157,628 |
|
|
|
|
|
|
Operating Income (loss) |
|
32,278 |
|
|
|
(46,195 |
) |
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
Interest
expense, net |
|
(3,084 |
) |
|
|
(2,441 |
) |
|
Other income
(expense) |
|
26 |
|
|
|
22 |
|
|
Total Other
Income (Expense) |
|
(3,058 |
) |
|
|
(2,419 |
) |
|
|
|
|
|
|
Income
(loss) before reorganization items, net and income taxes |
|
29,220 |
|
|
|
(48,614 |
) |
|
|
|
|
|
Reorganization items, net |
|
- |
|
|
|
- |
|
Income tax benefit (expense) |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
Net income
(loss) |
$ |
29,220 |
|
|
$ |
(48,614 |
) |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic and
diluted earnings (loss) per share |
$ |
0.73 |
|
|
$ |
(1.27 |
) |
Selected Financial Data - Unaudited |
|
|
|
Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
Oil and natural gas revenue: |
|
|
|
|
Oil Sales |
$ |
58,918 |
|
$ |
52,374 |
|
NGL
Sales |
|
13,604 |
|
|
13,481 |
|
Natural Gas
Sales |
|
40,356 |
|
|
28,017 |
|
Total oil and natural gas sales - Unhedged |
$ |
112,878 |
|
$ |
93,872 |
|
|
|
|
|
Production volumes: |
|
|
|
|
Oil Sales -
MBbls |
|
557 |
|
|
581 |
|
NGL Sales -
MBbls |
|
347 |
|
|
338 |
|
Natural Gas
Sales - MMcf |
|
5,725 |
|
|
5,511 |
|
Total - MBoe |
|
1,858 |
|
|
1,837 |
|
Total - MBoe/d |
|
20.4 |
|
|
20.4 |
|
|
|
|
|
Average sales price (excluding commodity
derivatives): |
|
|
|
|
Oil - per
Bbl |
$ |
105.79 |
|
$ |
90.22 |
|
NGL - per
Bbl |
$ |
39.18 |
|
$ |
39.86 |
|
Natural gas
- per Mcf |
$ |
7.05 |
|
$ |
5.08 |
|
Total - per Boe |
$ |
60.74 |
|
$ |
51.10 |
|
|
|
|
|
Average unit costs per Boe: |
|
|
|
|
Lease
operating expense |
$ |
17.91 |
|
$ |
17.92 |
|
Gathering,
processing and transportation |
$ |
3.92 |
|
$ |
4.36 |
|
Taxes other
than income |
$ |
4.64 |
|
$ |
4.11 |
|
General and
administrative expense |
$ |
4.64 |
|
$ |
4.23 |
|
Depletion,
depreciation, and amortization |
$ |
3.16 |
|
$ |
3.07 |
Selected Financial Data - Unaudited |
|
|
|
Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in $000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
Cash and Cash Equivalents |
$ |
16,691 |
|
|
$ |
15,605 |
|
|
Accounts Receivable |
|
77,808 |
|
|
|
91,932 |
|
|
Other Current Assets |
|
15,724 |
|
|
|
14,500 |
|
|
|
Total Current Assets |
$ |
110,223 |
|
|
$ |
122,037 |
|
|
|
|
|
|
|
|
Net Oil and Gas Properties |
$ |
329,667 |
|
|
$ |
322,078 |
|
|
Other Long-Term Assets |
|
16,641 |
|
|
|
12,015 |
|
|
|
Total
Assets |
$ |
456,531 |
|
|
$ |
456,130 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
Accounts Payable |
$ |
34,969 |
|
|
$ |
26,578 |
|
|
Accrued Liabilities |
|
48,904 |
|
|
|
53,896 |
|
|
Other Current Liabilities |
|
104,460 |
|
|
|
125,749 |
|
|
|
Total
Current Liabilities |
$ |
188,333 |
|
|
$ |
206,223 |
|
|
|
|
|
|
|
|
Long-Term Debt |
$ |
215,000 |
|
|
$ |
225,000 |
|
|
Asset Retirement Obligation |
|
105,354 |
|
|
|
104,118 |
|
|
Other Long-Term Liabilities |
|
31,235 |
|
|
|
33,792 |
|
|
|
Total
Liabilities |
$ |
539,922 |
|
|
$ |
569,133 |
|
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
Common Stock & APIC |
$ |
431,080 |
|
|
$ |
425,900 |
|
|
Warrants |
|
- |
|
|
|
4,788 |
|
|
Accumulated Earnings (Deficit) |
|
(514,471 |
) |
|
|
(543,691 |
) |
|
|
Total
Shareholders' Equity |
$ |
(83,391 |
) |
|
$ |
(113,003 |
) |
Selected Financial Data - Unaudited |
|
|
|
Statements of Cash Flows Data |
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
Ended |
|
Ended |
(Amounts in
$000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
20,677 |
|
|
$ |
9,719 |
|
Net cash
provided by (used in) investing activities |
|
(9,067 |
) |
|
|
(7,847 |
) |
Net cash
provided by (used in) financing activities |
|
(10,524 |
) |
|
|
(5,066 |
) |
Selected Operating and Financial Data (Tables) |
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Cash Provided from
Operating Activities: |
|
|
|
Net cash provided by operating activities |
$ |
20,677 |
|
|
$ |
9,719 |
|
|
Changes in
working capital |
|
(13,582 |
) |
|
|
11,373 |
|
|
Interest
expense, net |
|
3,084 |
|
|
|
2,441 |
|
|
Gain (loss)
on interest rate swaps |
|
286 |
|
|
|
557 |
|
|
Cash
settlements paid (received) on interest rate swaps |
|
93 |
|
|
|
214 |
|
|
Amortization
and write-off of deferred financing fees |
|
(203 |
) |
|
|
(133 |
) |
|
Exploration
costs |
|
10 |
|
|
|
16 |
|
|
Acquisition
and divestiture related costs |
|
36 |
|
|
|
5 |
|
|
Plugging and
abandonment cost |
|
785 |
|
|
|
19 |
|
|
Pipeline
incident loss |
|
5,092 |
|
|
|
580 |
|
|
Other |
|
- |
|
|
|
122 |
|
Adjusted EBITDA: |
$ |
16,278 |
|
|
$ |
24,913 |
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Cash Provided from
Operating Activities: |
|
|
Adjusted EBITDA: |
$ |
16,278 |
|
|
$ |
24,913 |
|
|
Less: Cash
interest expense |
|
3,357 |
|
|
|
3,125 |
|
|
Less:
Capital expenditures |
|
13,481 |
|
|
|
6,870 |
|
Free Cash Flow: |
$ |
(560 |
) |
|
$ |
14,918 |
|
Selected Operating and Financial Data (Tables) |
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
Ended |
|
Ended |
(Amounts in
$000s, except per share data) |
June 30, 2022 |
|
March 31, 2022 |
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Loss): |
|
|
|
Net income (loss) |
$ |
29,220 |
|
|
$ |
(48,614 |
) |
Interest expense, net |
|
3,084 |
|
|
|
2,441 |
|
Depreciation, depletion and amortization |
|
5,864 |
|
|
|
5,635 |
|
Accretion of asset retirement obligations |
|
1,749 |
|
|
|
1,720 |
|
(Gains) losses on commodity derivatives |
|
18,571 |
|
|
|
93,404 |
|
Cash settlements received (paid) on expired commodity derivative
instruments |
|
(48,596 |
) |
|
|
(30,943 |
) |
Acquisition and divestiture related costs |
|
36 |
|
|
|
5 |
|
Share-based compensation expense |
|
856 |
|
|
|
640 |
|
Exploration costs |
|
10 |
|
|
|
16 |
|
Loss on settlement of AROs |
|
396 |
|
|
|
19 |
|
Bad debt expense |
|
(4 |
) |
|
|
10 |
|
Pipeline incident loss |
|
5,092 |
|
|
|
580 |
|
Adjusted EBITDA: |
$ |
16,278 |
|
|
$ |
24,913 |
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Income
(Loss): |
|
|
|
Adjusted EBITDA: |
$ |
16,278 |
|
|
$ |
24,913 |
|
Less: Cash interest expense |
|
3,357 |
|
|
|
3,125 |
|
Less: Capital expenditures |
|
13,481 |
|
|
|
6,870 |
|
Free Cash Flow: |
$ |
(560 |
) |
|
$ |
14,918 |
|
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