Core Viewpoint - Amplify Energy Corp. is currently monitoring reports of an oil sheen off the coast of Huntington Beach, California, and has stated that there is no indication that this sheen is related to its operations [1]. Company Overview - Amplify Energy Corp. is an independent oil and natural gas company involved in the acquisition, development, exploitation, and production of oil and natural gas properties [2]. - The company's operations are primarily located in Oklahoma, the Rockies (Bairoil), federal waters offshore Southern California (Beta), East Texas/North Louisiana, and the Eagle Ford (Non-op) [2].

Financial Data and Key Metrics Changes - The company reported a net income of approximately $43.6 million for Q4 2023, compared to a net loss of $13.4 million in the prior quarter, primarily due to non-cash unrealized gains on commodity derivatives [22] - For the full year 2023, adjusted EBITDA was $88 million, with Q4 adjusted EBITDA at $25.2 million, up $5.7 million from the prior quarter [23] - Free cash flow for the full year was $38 million, with Q4 free cash flow at $14.4 million, both in line with expectations [25] Business Line Data and Key Metrics Changes - Q4 production averaged 20,800 BOE per day, a 1% increase from the prior quarter, with oil making up 41% of total production, up from 31% in Q1 2023 [6][23] - Lease operating expenses (LOE) for Q4 averaged $18.14 per BOE, down 7% compared to the prior quarter, while full year LOE was $18.66 per BOE, slightly below the midpoint of guidance [23][24] Market Data and Key Metrics Changes - The company anticipates average daily production for 2024 to range between 19,000 and 21,000 BOE per day, with a commodity mix of approximately 42% oil, 16% NGLs, and 42% natural gas [29] - The company is approximately 70% to 75% hedged for crude oil production in 2024 and 85% to 90% hedged for natural gas [26] Company Strategy and Development Direction - The company is pursuing the monetization of its oil-producing assets in Bairoil, Wyoming, with the goal of maximizing shareholder value [8] - A full well development program at Beta is planned for 2024, with expectations of attractive IRRs exceeding 100% and payback periods of less than one year [9][20] - The company aims to optimize cash flow generation while focusing on strategic initiatives at Bairoil and Beta [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of production increases at Beta due to extensive cleanouts and workover programs [36] - The company expects to see substantial increases in oil production and a lower cost structure at Beta by Q4 2024, significantly enhancing cash flow [28] Other Important Information - The company reduced net debt by approximately $95 million in 2023, achieving a net debt to last 12-month adjusted EBITDA ratio of 1.1x [26] - Capital expenditures for 2024 are expected to be between $50 million and $60 million, with significant investments in Beta and electrification projects [27][16] Q&A Session Summary Question: Timing and expectations for Beta wells - Management anticipates initial results from the first well by early May, with better results expected by late May and June [33] Question: Sustainability of production levels at Beta - Management is confident in the sustainability of production increases due to extensive cleanouts and workover programs [36] Question: Cost inflation specifics and mitigation strategies - Management highlighted increases in regulated power costs and insurance costs as key inflationary pressures, with ongoing efforts to reduce power consumption [38][40]

Core Insights - Amplify Energy (AMPY) reported quarterly earnings of $1.07 per share, significantly exceeding the Zacks Consensus Estimate of $0.21 per share, and up from $0.74 per share a year ago, representing an earnings surprise of 409.52% [1] - The company generated revenues of $78.99 million for the quarter ended December 2023, surpassing the Zacks Consensus Estimate by 7.71%, although this is a decline from year-ago revenues of $98.95 million [1] - Over the last four quarters, Amplify Energy has exceeded consensus revenue estimates four times and EPS estimates two times [1] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $75.5 million, and for the current fiscal year, it is $1.30 on revenues of $319.61 million [4] - The estimate revisions trend for Amplify Energy is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [4] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the bottom 10% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [5] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [5]

Reserves and Production - As of December 31, 2023, the total estimated proved reserves were approximately 98.1 MMBoe, consisting of approximately 42% oil, 38% natural gas, and 20% NGLs, with 98% classified as proved developed reserves[42] - The average net production for the three months ended December 31, 2023, was 20.8 MBoe/d, implying a reserve-to-production ratio of approximately 12.9 years[42] - The Oklahoma region accounted for approximately 30% of the estimated proved reserves and 27% of the average daily net production for the three months ended December 31, 2023, with 29.5 MMBbls of estimated net proved reserves[46] - The Bairoil properties contained 23.5 MMBbls of estimated net proved oil and NGLs reserves as of December 31, 2023, generating average net production of 3.4 MBoe/d for the same period[48] - The East Texas/North Louisiana region had 29.9 MMBoe of estimated proved reserves, with an average production of 8.0 MBoe/d, representing 38% of total reserves[45] - The average daily net production for the three months ended December 31, 2023, was 11.9 MBoe/d, with 3.0 MBoe/d from the Beta field and 8.0 MBoe/d from the East Texas/North Louisiana region[51][52] - The company produced from 2,516 gross (1,348 net) producing wells across its properties, with an average working interest of 54%[42] - The average net production from the Dacoma field for the year ended December 31, 2023, was 4.6 MBoe/d, down from 4.9 MBoe/d in 2022[47] - Total production volumes for the year ended December 31, 2023, were 2,145 MBoe with an average sales price of $30.36 per Boe[70] - The average net production for the year was 20.5 MBoe/d[70] Financial Performance and Risks - During 2023, commodity prices generally declined compared to the same period in 2022, leading to a decrease in revenues, with expectations of continued price volatility in 2024[43] - The standardized measure of discounted future net cash flows attributable to the company’s properties was approximately $626.1 million as of December 31, 2023[61] - The company added 868 MBoe of proved undeveloped reserves during the year ended December 31, 2023, primarily due to the addition of 4 Beta PUD locations[66] - Total costs incurred to develop proved undeveloped reserves were approximately $4.4 million, with $2.6 million incurred in fiscal year 2023[67] - The average unhedged sales price for oil was $78.22 per Bbl, and for natural gas, it was $2.64 per MMBtu as of December 31, 2023[61][62] - A prolonged decline in commodity prices could render many of the company's development and production projects uneconomical[172] - The company may incur impairment charges that could adversely affect its results of operations in the period taken[173] - Inflationary factors, such as increases in labor costs and material costs, may adversely affect the company's financial position and operating results[174] - A significant increase in the differential between benchmark prices and the wellhead price could significantly reduce cash flow and adversely affect financial condition[189] - The estimated reserves and future production rates are based on many assumptions that may turn out to be inaccurate, which could materially affect the quantities and present value of estimated reserves[191] Regulatory and Environmental Compliance - The company is subject to numerous risks, including volatility in oil, natural gas, and NGL prices, which could materially affect its financial condition and results of operations[35] - The company is subject to stringent federal, state, and local environmental regulations, which may impose significant compliance costs and affect operational growth[97] - The Oil Pollution Act of 1990 imposes strict liability on the company for oil spills, requiring significant financial assurance for environmental cleanup and restoration costs[106] - The company generates solid and hazardous wastes regulated under the Resource Conservation and Recovery Act, with potential future changes in classification that could increase disposal costs[107] - The company is required to develop and implement stormwater pollution prevention plans, which may incur costs related to monitoring and treatment[111] - The company has maintained compliance with all required discharge permits necessary for operations, mitigating risks of administrative, civil, and criminal penalties[112] - The company utilizes hydraulic fracturing extensively in onshore operations, which is subject to increasing scrutiny and potential regulatory changes[115] - The EPA's proposed rules aim to establish stricter standards for methane and VOC emissions from oil and gas facilities, with compliance deadlines extending over the next few years[123] - The company anticipates potential capital expenditures for air pollution control equipment to maintain compliance with air emissions regulations, which could impact operations[125] - The U.S. aims to reduce GHG emissions by 50-52% by 2030 compared to 2005 levels, with periodic updates on progress[127] Workforce and Safety - The company had 214 employees as of December 31, 2023, with no employees represented by labor unions[157] - The company emphasizes safety as a top priority, implementing a robust health and safety program that includes training, risk assessment, and incident reporting[158] - The compensation program is designed to attract and retain talent, aligning employee interests with those of stakeholders[160] - Employees are provided with training opportunities to develop skills in leadership, safety, and technical acumen, supporting career advancement[161] - As of December 31, 2023, approximately 17% of the total workforce self-identified as a racial or ethnic minority and approximately 18% self-identified as female[162] Market and Competitive Landscape - The company is dependent on a small number of significant customers, with three customers accounting for 10% or more of total reported revenues for the year ended December 31, 2023, posing a risk to revenue stability[219] - The competitive landscape in the oil and natural gas industry may hinder the company's ability to acquire properties and discover reserves, affecting overall business operations[223] - The company faces trade credit risk due to potential nonperformance by vendors and counterparties, which could impact financial condition and cash flows[222] - The cyclical nature of the industry may lead to shortages of rigs, equipment, and personnel, which could restrict the company's ability to conduct planned operations and affect financial performance[214] Debt and Financial Management - The company is required to maintain a maximum total debt to EBITDAX ratio of 3.00 to 1.00 under its Revolving Credit Facility[179] - The company must hedge at least 50% - 75% of its estimated production from total proved developed producing reserves[179] - The company’s Revolving Credit Facility allows borrowing up to the borrowing base, which is primarily based on the estimated value of oil and natural gas properties and commodity derivative contracts, subject to semiannual redetermination[185] - The company intends to maintain a portfolio of commodity derivative contracts covering at least 50%-75% of estimated production from proved developed producing reserves over a one-to-three-year period[188]

Production and Reserves - In Q4 2023, Amplify Energy achieved average total production of 20.8 MBoepd, a 1% increase from 20.6 MBoepd in the prior quarter[11]. - Amplify's year-end 2023 total proved reserves were 98 million barrels of oil equivalent (MMBoe), with a PV-10 value of approximately $757 million using SEC pricing[4]. - Total production volumes for the three months ended December 31, 2023, were 1,910 MBoe, compared to 1,897 MBoe in the previous quarter, showing a slight increase[39]. - Total production volumes increased to 1,910 MBOE for the quarter ended December 31, 2023, compared to 1,897 MBOE for the quarter ended September 30, 2023, representing a 0.7% increase[41]. Financial Performance - For the full year 2023, net cash provided by operating activities was $141.6 million, with a net income of $392.8 million[2]. - The company generated $25.2 million of Adjusted EBITDA in Q4 2023, an increase of approximately 29% from $19.5 million in the prior quarter[6]. - Total revenues for the three months ended December 31, 2023, were $78,985,000, an increase from $76,770,000 for the three months ended September 30, 2023, representing a growth of 2.6%[37]. - Net income for the three months ended December 31, 2023, was $43,578,000, compared to a net loss of $13,403,000 for the previous quarter, indicating a significant turnaround[37]. - Adjusted EBITDA increased to $25,190 million for the quarter ended December 31, 2023, up from $19,483 million for the quarter ended September 30, 2023, a rise of 29.0%[51]. - Net income for the twelve months ended December 31, 2023, was $392,750, compared to $57,875 for the same period in 2022, representing a significant increase[53]. - Adjusted EBITDA for the twelve months ended December 31, 2023, was $88,032, down from $93,822 in 2022, indicating a decrease of approximately 6.0%[53]. - Free Cash Flow for the twelve months ended December 31, 2023, was $38,025, compared to $43,623 in 2022, reflecting a decline of about 12.8%[53]. Cash Flow and Investments - Free cash flow for Q4 2023 was $14.4 million, representing a 136% increase compared to the prior quarter[8]. - Cash capital investment in Q4 2023 was approximately $7.1 million, a decrease from $9.7 million in the prior quarter[18]. - Amplify's total capital invested in Q4 2023 was $7.1 million, with a full-year total of $33.7 million[20]. - The projected capital investments for 2024 are between $50 million and $60 million, with 40% allocated to Beta development[21][22]. - The company plans to invest 85% to 95% of its capital in the first three quarters of 2024 primarily for the Beta development program[23]. Debt and Leverage - The company reduced net debt by approximately $95 million in 2023, with net debt as of December 31, 2023, at $94 million[2]. - Cash and cash equivalents rose significantly to $20,746 million as of December 31, 2023, compared to $6,387 million as of September 30, 2023, an increase of 225.5%[42]. - Total assets increased to $737,674 million as of December 31, 2023, from $717,105 million as of September 30, 2023, a growth of 2.8%[42]. - Total liabilities decreased to $346,638 million as of December 31, 2023, down from $371,068 million as of September 30, 2023, a reduction of 6.6%[42]. Operational Efficiency - Lease operating expenses in Q4 2023 were approximately $34.6 million, or $18.14 per Boe, a decrease from the previous quarter[16]. - Lease operating expenses per Boe decreased to $18.14 in Q4 2023 from $19.54 in Q3 2023, indicating improved cost efficiency[39]. - The company aims to reduce operating costs through initiatives with Magnify Energy Services, which added $0.5 million to Adjusted EBITDA in 2023[22]. Future Outlook - Amplify initiated the Beta development program in March 2024, with the first well spud[2]. - The company expects 2024 to be a transformative year, focusing on high-return development opportunities at Beta and further reducing leverage[3]. - The company expects net average daily oil production in 2024 to range from 8.0 MBbls/d to 8.9 MBbls/d, and natural gas production from 47.0 MMcf/d to 52.5 MMcf/d[24]. - Amplify anticipates Adjusted EBITDA for 2024 to be between $90 million and $110 million[24]. - Initial production results from the four-well development program at Beta are expected in Q2 2024, with projected IRRs exceeding 100%[22]. Incidents and Challenges - The company reported a pipeline incident loss of $4,299,000 for the quarter, a significant increase from $559,000 in the previous quarter, highlighting operational challenges[37]. - The company reported a pipeline incident loss of $19,981 for the twelve months ended December 31, 2023, compared to $11,277 in 2022, indicating an increase of approximately 77.5%[53]. - The company anticipates ongoing evaluation and implementation of strategic alternatives to address financial and operational challenges, including potential acquisitions and capital expenditures[31].

Core Viewpoint - Amplify Energy Corp. reported strong operational and financial results for Q4 and full-year 2023, highlighting significant production increases, cash flow generation, and strategic initiatives for 2024 development [1][2][6]. Financial Performance - In Q4 2023, Amplify achieved average total production of 20.8 MBoepd, generating net cash from operating activities of $28.4 million and net income of $43.6 million [2][6]. - For the full year 2023, the company reported average total production of 20.5 MBoepd, net cash from operating activities of $141.6 million, and net income of $392.8 million [2][6]. - Adjusted EBITDA for Q4 2023 was $25.2 million, an increase from $19.5 million in Q3 2023, while free cash flow reached $14.4 million, up 136% from the previous quarter [6][7]. Proved Reserves - As of year-end 2023, Amplify's total proved reserves were estimated at 98 million barrels of oil equivalent (MMBoe), with a PV-10 value of approximately $757 million using SEC pricing [3][4]. - The reserves composition included 42% oil, 20% NGLs, and 38% natural gas, with significant portions located in Oklahoma, East Texas, and Bairoil [3][5]. Debt and Capital Structure - By December 31, 2023, Amplify had net debt of $94 million, with a net debt to last twelve months (LTM) Adjusted EBITDA ratio of 1.1x [8][2]. - The company reduced its net debt by approximately $95 million during 2023, improving its balance sheet [2][6]. Strategic Initiatives for 2024 - Amplify initiated the Beta development program in March 2024, focusing on high-return development opportunities expected to enhance future cash flows [2][20]. - The company also began the marketing process for its Bairoil assets, which could provide additional capital for debt reduction and operational flexibility [2][20]. - The 2024 capital investment plan is projected at $50 to $60 million, with a significant portion allocated to Beta development and facility projects [19][25]. Production and Pricing Update - Average daily production in Q4 2023 was 20.8 MBoepd, a slight increase from 20.6 MBoepd in Q3 2023, with Beta production up 12% [9][10]. - The company realized an average crude oil price of $75.31 per barrel in Q4 2023, down from $78.45 in Q3 2023 [11][43]. Cost Management - Lease operating expenses in Q4 2023 were approximately $34.6 million, or $18.14 per Boe, reflecting a decrease from the previous quarter [13][15]. - The company expects continued cost reduction efforts to enhance operational efficiency and profitability [13][21].

Core Viewpoint - Amplify Energy (AMPY) is expected to report a year-over-year decline in earnings and revenues for the quarter ended December 2023, with the earnings report set to be released on March 6, 2024. The actual results will significantly influence the stock price, depending on whether they meet or exceed expectations [1]. Earnings Estimates - The consensus estimate for Amplify Energy's quarterly earnings is $0.21 per share, reflecting a year-over-year decrease of 71.6% [2]. - Expected revenues are projected at $73.33 million, down 25.9% from the same quarter last year [2]. - Over the last 30 days, the consensus EPS estimate has been revised 26.67% lower, indicating a reassessment by analysts [2]. Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model compares the Most Accurate Estimate to the Zacks Consensus Estimate, providing insights into potential earnings surprises [3]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [4]. Current Earnings Prediction for Amplify Energy - For Amplify Energy, the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [5]. - The stock currently holds a Zacks Rank of 5, indicating a bearish outlook [5][6]. Historical Performance - In the last reported quarter, Amplify Energy was expected to post earnings of $0.20 per share but instead reported a loss of $0.34, resulting in a surprise of -270% [7]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [7]. Conclusion - Amplify Energy does not appear to be a compelling candidate for an earnings beat based on current estimates and rankings. Investors should consider additional factors when deciding to invest in or avoid the stock ahead of the earnings release [8].

HOUSTON, Feb. 22, 2024 (GLOBE NEWSWIRE) -- Amplify Energy Corp. ("Amplify" or the "Company") (NYSE:AMPY) announced today that it will report fourth quarter 2023 financial and operating results after the U.S. financial markets close on March 6, 2024. Management will host a conference call at 10:00 a.m. CT on March 7, 2024 to discuss the Company's results. Interested parties are invited to participate in the conference call by dialing (800) 343-5172 (Conference ID: AEC4Q23) at least 15 minutes prior to the st ...

Anton Petrus/Moment via Getty Images Amplify Energy Corp. (NYSE:AMPY) is a producer of oil and natural gas. It is based in Houston, Texas and has operations in Oklahoma, Southern California, Texas, and it has stakes such as Bairoil in the Rocky Mountains which it is (imminently) planning to put up for sale in Q1 of 2024. This stock traded in the $20 per share range in 2017 and 2018 but trended down from there and plunged in 2020 due to the Covid stock market correction and remained weak due to a 2021 oil sp ...

Financial Data and Key Metrics Changes - The company reported a net loss of approximately $13.4 million in Q3 2023, compared to a net income of $9.8 million in the prior quarter, primarily due to noncash unrealized losses on commodity derivatives from rising commodity prices [16] - Adjusted EBITDA for Q3 2023 was $19.5 million, up $1.9 million from the prior quarter, driven by higher commodity prices [16] - Free cash flow for Q3 2023 was $6.1 million, with cumulative free cash flow generated amounting to $23.6 million [18] Business Line Data and Key Metrics Changes - Total production for Q3 2023 averaged approximately 20,600 barrels of oil equivalent per day, consisting of 38% oil, 18% NGLs, and 44% natural gas [12] - Lease operating expenses for Q3 2023 were $37.1 million, approximately $1.8 million higher than the previous quarter [14] - The company expects to reduce operating expenses in the coming quarters as cost-saving initiatives take effect [15] Market Data and Key Metrics Changes - The company has hedged approximately 65% to 70% of forecasted crude oil production for the remainder of 2023 and 2024, and 75% to 85% hedged for gas production during the same period [20] - Net debt as of October 31 was approximately $104 million, reduced by $79 million or 43% since December 31, 2022 [19] Company Strategy and Development Direction - The company is pursuing monetization of its oil-producing assets in Bairoil, Wyoming, with a marketing process set to commence in Q1 2024 [6] - A development program at the beta field is planned to recommence in the first half of 2024, with expected IRRs well in excess of 100% for new wells [7] - A wholly owned subsidiary, Magnify Energy Services, has been created to provide oilfield services, aiming to improve profitability by reducing costs [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to unlock additional value from its portfolio of cash flow-generating assets [21] - The company reaffirmed its full-year guidance for adjusted EBITDA of $80 million to $100 million and free cash flow of $30 million to $50 million for 2023 [16][18] Other Important Information - The company issued its inaugural sustainability report, detailing efforts to enhance long-term sustainability and corporate governance [11] - The company has been actively pursuing cost-saving initiatives, including electrification of platforms to reduce diesel usage [15] Q&A Session Summary Question: What is Magnify's potential? - Management sees Magnify as a way to better control costs and improve service reliability, with quick payback on investments [24][25] Question: What are the plans for the Bairoil asset? - The company believes Bairoil is a valuable asset and is exploring both outright sale and alternative structures to maximize value [26][27] Question: What is the status of the beta asset? - Management is optimistic about the beta asset's production levels and the potential for future development, with plans for a 4-well program in 2024 [29][31]