Amplify Energy Corp. (NYSE:AMPY) Q4 2024 Earnings Conference Call March 6, 2025 11:00 AM ET Company Participants Jim Frew - SVP and CFO Martyn Willsher - President and CEO Dan Furbee - SVP and COO Conference Call Participants Jeff Grampp - Alliance Global Partners Subash Chandra - Benchmark Operator Welcome to Amplify Energy's Fourth Quarter 2024 Investor Conference Call. Amplify's operating and financial results were released yesterday after market close on March 5, 2025, and are available on Amplify's web ...

NYSE: AMPY Amplify Energy Corp. March 2025 Investor Presentation March 5, 2025 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. PV-10. Amplify defines PV-10, which is a non-GAAP financial measure that represents the pr ...

The price trend for Amplify Energy (AMPY) has been bearish lately and the stock has lost 8.6% over the past week. However, the formation of a hammer chart pattern in its last trading session indicates that the stock could witness a trend reversal soon, as bulls might have gained significant control over the price to help it find support.The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that ma ...

Company Performance - Amplify Energy reported quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.25 per share, and down from $1.07 per share a year ago, representing an earnings surprise of -48% [1] - The company posted revenues of $69.02 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 13.82%, and down from $78.99 million year-over-year [2] - Over the last four quarters, Amplify Energy has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during the same period [2] Stock Performance - Amplify Energy shares have declined approximately 24.2% since the beginning of the year, contrasting with the S&P 500's decline of -1.8% [3] - The company's earnings outlook is crucial for understanding future stock movements, with current consensus EPS estimates at $0.34 for the coming quarter and $1.30 for the current fiscal year [7] Industry Context - The Oil and Gas - Exploration and Production - United States industry, to which Amplify Energy belongs, is currently in the top 10% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Amplify Energy's stock performance [5][6]

Reserves and Production - As of December 31, 2024, the total estimated proved reserves were approximately 93.0 MMBoe, with 44% oil, 37% natural gas, and 19% NGLs, and 88% classified as proved developed reserves[79]. - The average net production for the three months ended December 31, 2024, was 18.5 MBoe/d, resulting in a reserve-to-production ratio of approximately 13.8 years[79]. - Approximately 30% of the estimated proved reserves and 36% of average daily net production for the three months ended December 31, 2024, were located in the East Texas/North Louisiana region, with 28.0 MMBoe of estimated net proved reserves[97]. - The Beta field, which restarted production in April 2023, produced 1,170 MBbls of oil in 2024, with average net production of 3.2 MBoe/d[96]. - The Oklahoma region accounted for approximately 29% of estimated proved reserves and 26% of average daily net production, with 27.0 MMBbls of estimated net proved reserves[93]. - The company’s Eagle Ford properties contained 2.5 MMBoe of estimated net proved reserves, contributing to an average net production of 0.7 MBoe/d for the three months ended December 31, 2024[98]. - For the year ended December 31, 2024, total proved undeveloped reserves (PUDs) increased by 8,830 MBoe, including 9,390 MBoe from new PUD locations[113]. - Average net production for the year ended December 31, 2024, was 19.5 MBoe/d, with total production volumes of 7,144 MBoe[115]. Financial Performance - The average sales price for oil was $72.01 per Bbl, while natural gas averaged $2.13 per Mcf for the year ended December 31, 2024[115]. - The standardized measure of discounted future net cash flows attributable to the company’s properties was approximately $608.239 million[107]. - The company’s PV-10 value, representing the present value of estimated future cash inflows from proved reserves, was approximately $735.765 million[107]. - Approximately 27.2% of PUDs (524 MBoe) were developed during the twelve months ended December 31, 2024[114]. - The company incurred total capital expenditures of approximately $30.7 million during fiscal year 2024 for the development of PUDs[114]. - Major customers for the company included Phillips 66 (33% of total revenues), HF Sinclair Corporation (25%), and Southwest Energy LP (10%) for the year ended December 31, 2024[127]. - The company anticipates potential revenue impacts due to Phillips 66's planned refinery closure in late 2025, which historically accounted for a significant portion of sales[129]. Mergers and Acquisitions - The company entered into a merger agreement on January 14, 2025, with North Peak Oil & Gas, LLC and Century Oil and Gas Sub-Holdings, LLC, with the merger expected to close in the second quarter of 2025[80][85]. - The merger will result in the issuance of 26,729,315 shares of Common Stock, with existing stockholders expected to own approximately 61% and the acquired companies' equityholders approximately 39% of the combined company's outstanding equity[81]. Regulatory and Compliance - The company operates under stringent regulations from BOEM and BSEE, which oversee offshore oil and gas operations, impacting capital expenditures and competitive position[145]. - BOEM's final rule announced in April 2024 modifies criteria for financial assurance requirements for oil, gas, and sulfur lessees, potentially affecting compliance costs[146]. - BSEE's regulations, effective August 2023 and August 2024, impose new safety-related requirements for offshore production facilities, enhancing operational safety[147]. - The company is subject to civil and criminal penalties for non-compliance with hazardous substance and waste handling regulations, which could adversely affect operations[155]. - The Oil Pollution Act imposes strict liability on responsible parties for oil spills, requiring significant financial assurance for environmental cleanup[151]. - The company maintains compliance with the Clean Water Act and related regulations, which impose strict controls on pollutant discharges into navigable waters[156]. - Recent legislative changes and court rulings have created uncertainty regarding the definition of "waters of the United States," impacting regulatory compliance[156]. - Hydraulic fracturing is extensively used in onshore operations, with increased scrutiny and potential regulatory changes affecting operational costs[161]. - The company has secured permits for additional saltwater disposal wells to comply with regulations addressing seismic activity concerns in Oklahoma[160]. - The company believes it is in substantial compliance with all necessary environmental laws and regulations, mitigating potential liabilities[155]. Environmental and Climate Risks - The EPA's proposed rule in November 2021 aimed to establish stricter standards for methane and VOC emissions from oil and gas facilities, with a final rule announced in December 2023 requiring routine leak monitoring and phasing out routine flaring[170]. - The Methane Emissions and Waste Reduction Incentive Program, effective January 1, 2025, imposes a fee of $900 per ton for methane emissions exceeding thresholds, increasing to $1,200 in 2025 and $1,500 in 2026[174]. - California's legislation, effective January 1, 2026, will require companies exceeding financial thresholds to disclose their Scopes 1, 2, and 3 GHG emissions, with potential increased costs for compliance[175]. - The SEC Climate Rules require registrants to disclose material climate-related risks and GHG emissions, but these rules are currently stayed pending judicial review[176]. - The company recognized $0.4 million in Waste Emission Charges for the year ended December 31, 2024, under the new methane emissions program[174]. - Future implementation of federal climate change rules remains uncertain due to executive orders and potential legal challenges[178]. - The company may incur significant capital expenditures for air pollution control equipment to comply with stringent air emissions regulations[172]. - New regulations could delay oil and natural gas project developments and increase compliance costs, impacting overall operations and financial position[172]. - The potential impact of changes to the National Environmental Policy Act (NEPA) regulations remains uncertain, which could affect the company's operations[179]. - The U.S. Fish and Wildlife Service issued three final rules in April 2024 to expand protection options for species listed as threatened under the Endangered Species Act[180]. Operational Risks - The company operates in a highly competitive environment, with competitors having greater financial and technical resources, impacting property acquisition and capital access[134]. - The company maintains various insurance policies to mitigate operational risks, including commercial general liability and oil pollution liability, but acknowledges that not all potential risks are covered[141]. - The company’s operations are subject to various risks, including drilling failures and environmental hazards, which could lead to substantial financial losses[244]. - The company maintains insurance coverage against potential losses, but operational risks may not be fully insurable, which could adversely affect financial position and results[246]. - Production from Bairoil properties is reliant on CO2 supply; interruptions could materially impact future oil and gas production volumes[247]. - Many properties may have been partially depleted by offset wells, which could inhibit the ability to exploit and develop reserves[248]. - Future development activities are uncertain and may not yield economically viable production, affecting estimated reserves and financial condition[249]. - The company may incur material write-downs of unevaluated properties if drilling results are less than anticipated[250]. - The use of 2-D and 3-D seismic data may not accurately identify hydrocarbons, leading to potential financial losses[251]. - SEC rules limit the ability to book additional proved undeveloped reserves (PUDs), especially during periods of low commodity prices[252]. - Shortages of rigs, equipment, and supplies could delay operations and increase costs, impacting revenue forecasts[253]. Workforce and Diversity - Approximately 15% of the total workforce self-identified as a racial or ethnic minority and approximately 16% self-identified as female as of December 31, 2024[208]. - The company had 229 employees as of December 31, 2024, with none represented by labor unions[201]. - The company is committed to maintaining a safe and healthy work environment by complying with state and federal regulations concerning employee health and safety[205]. Debt and Financial Management - The company is required to maintain a maximum total debt to EBITDAX ratio of 3.00 to 1.00 and a current ratio of not less than 1.00 to 1.00 under its Revolving Credit Facility[225]. - A breach of any covenants could result in a default, leading to all borrowings being declared immediately due and payable, which may adversely affect operations[227]. - The company must dedicate a substantial portion of cash flow from operations to service existing debt, limiting available cash for operations and growth[229]. - The borrowing base under the Revolving Credit Facility is subject to semi-annual redetermination based on the estimated value of oil and natural gas properties, which could impact cash flows and business plans[230]. - The company intends to maintain a hedging strategy covering at least 50%-75% of estimated production from proved developed producing reserves, but this may not effectively mitigate commodity price volatility[232]. - The prices received for oil and natural gas production often reflect a regional discount to benchmark prices, which could significantly reduce cash flow[233]. - The company faces risks related to the accuracy of reserve estimates, which could materially affect the estimated quantities and present value of reserves[234]. - Future production rates and cash flows are highly dependent on the company's success in developing and exploiting current reserves, with potential for significant production decline rates[240]. - If capital spending is reduced to conserve cash, it may result in lower production and reduced revenues, impacting overall financial health[241]. Market and Economic Factors - The company’s revenues, operating results, and profitability depend primarily on prevailing commodity prices, which have historically been volatile[217]. - Inflationary factors, such as increases in labor costs and material costs, may adversely affect the company's financial position and operating results[223]. - The company does not expect any pending proposals before Congress to affect its operations differently than other oil and gas producers[198]. - Financial institutions are increasingly restricting investments in oil and gas, which could lead to reduced capital funding and higher costs[273]. - Negative public perception regarding climate change may increase litigation risks and regulatory scrutiny, impacting the company's operations[274].

Production and Reserves - In Q4 2024, Amplify Energy achieved average total production of 18.5 MBoepd, a decrease from 19.0 MBoepd in Q3 2024[3] - Amplify's year-end 2024 total proved reserves were 93.0 MMBoe, with a PV-10 value of approximately $736 million, reflecting a decrease in proved developed reserves due to lower SEC pricing[11] - Expected net average daily production for FY 2025 ranges from 19.0 MBoe/d to 21.0 MBoe/d, with oil production projected between 8.5 MBbls/d and 9.4 MBbls/d[39] Financial Performance - For the full year 2024, Amplify generated net cash provided by operating activities of $51.3 million and reported a net income of $12.9 million[3] - Adjusted EBITDA for Q4 2024 was $21.8 million, down from $25.5 million in the previous quarter, primarily due to lower realized oil prices[15] - Total revenues for the three months ended December 31, 2024, were $69,021, a decrease of 1.2% from $69,858 for the three months ended September 30, 2024[59] - Oil and natural gas sales for the three months ended December 31, 2024, were $67,189, down from $68,135 in the previous quarter, reflecting a decrease of 1.4%[60] - Operating income for the three months ended December 31, 2024, was a loss of $6,650 compared to an operating income of $32,600 for the three months ended September 30, 2024[59] - Net income for the three months ended December 31, 2024, was a loss of $7,429, compared to a net income of $22,652 in the previous quarter[59] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $103,041 thousand, an increase from $88,032 thousand for the same period in 2023, representing a growth of approximately 17.0%[68] Cash Flow and Capital Expenditures - The company generated $18.0 million of free cash flow for the full year 2024, with positive free cash flow reported in 18 of the last 19 fiscal quarters[15] - Free cash flow for the three months ended December 31, 2024, was $2,925, a decrease from $3,599 in the previous quarter[64] - Total capital expenditures for the three months ended December 31, 2024, were $15,324, down from $18,224 in the previous quarter[61] - Cash capital investment in Q4 2024 was approximately $15.3 million, with 65% allocated to Beta development drilling and facility projects[26] Debt and Financial Position - As of December 31, 2024, Amplify had $127.0 million outstanding under its revolving credit facility, with a net debt to LTM Adjusted EBITDA ratio of 1.2x[17] - The company uses net debt as a measure of financial position, defined as the total principal amount drawn on the revolving credit facility less cash and cash equivalents[55] Future Plans and Investments - The company plans to complete six Beta development program completions in 2025, including deferred projects from 2024[3] - Projected capital investments for 2025 are estimated between $70 million and $80 million, with 41% allocated to Beta development[29] - Amplify plans to complete six wells at Beta in 2025, with the first well, C48, already drilled and completed[30] - The company expects to close the acquisition of Juniper Capital's portfolio companies, which include approximately 287,000 net acres, in Q2 2025[5] Market and Pricing - Amplify's product mix for Q4 2024 was 45% crude oil, 17% NGLs, and 38% natural gas, with total revenues of approximately $67.2 million before the impact of derivatives[20] - Average sales price for crude oil was $66.82 per barrel in Q4 2024, down from $71.74 in Q3 2024, while natural gas averaged $2.52 per Mcf, up from $1.84[21] Taxes and Expenses - Lease operating expenses increased to approximately $35.1 million in Q4 2024, or $20.57 per Boe, reflecting a $1.8 million increase from the prior quarter[22] - Severance and ad valorem taxes were approximately $5.4 million in Q4 2024, representing 8.0% of revenue, a decrease from $6.0 million in Q3 2024[23] - General and administrative expenses for the three months ended December 31, 2024, totaled $9,486 thousand, up from $8,251 thousand in the previous quarter, an increase of about 14.9%[74] Other Notable Events - Amplify completed the sale of undeveloped Haynesville acreage for $1.4 million and monetized 90% of its interests in certain units with Haynesville rights, generating net proceeds of $6.2 million[3] - The company recognized a pipeline incident loss of $2,405 thousand for the three months ended December 31, 2024[67] - Amplify will host an investor teleconference to discuss operating and financial results, scheduled for tomorrow at 10 a.m. Central Time[46] - Amplify plans to file its Annual Report on Form 10-K for the year ended December 31, 2024, with the SEC on March 5, 2025[43]

Core Insights - Amplify Energy Corp. reported its operating and financial results for Q4 and full-year 2024, highlighting a strategic focus on growth through acquisitions and operational efficiencies [1][3][4] Financial Performance - In Q4 2024, Amplify achieved average total production of 18.5 MBoepd, with net cash provided by operating activities of $12.5 million and a net loss of $7.4 million [2][13] - For the full year 2024, the company reported average total production of 19.5 MBoepd, net cash provided by operating activities of $51.3 million, and net income of $12.9 million [2][13] - Adjusted EBITDA for Q4 2024 was $21.8 million, a decrease from $25.5 million in the previous quarter, primarily due to lower realized oil prices [14][20] Reserves and Asset Valuation - As of year-end 2024, Amplify's total proved reserves were 93 MMBoe, with a PV-10 value of approximately $736 million, reflecting a decrease in proved developed reserves due to lower SEC pricing [9][10] - The company added 23 additional locations in proved undeveloped reserves, contributing approximately $200 million in PV-10 value [10] Strategic Initiatives - Amplify plans to complete a transformational combination with Juniper Capital, which includes substantial oil-weighted producing assets in the DJ and Powder River Basins, expected to close in Q2 2025 [4][5] - The company aims to enhance its competitive advantage through the expansion of its subsidiary, Magnify Energy Services, and by monetizing portions of its portfolio in East Texas [2][3] Production and Development Plans - In 2025, Amplify intends to complete six wells at Beta, with the first well, C48, already drilled and completed [27][28] - The company expects to invest approximately $70 to $80 million in capital expenditures for 2025, focusing on Beta development and facility upgrades [26][35] Market Position and Future Outlook - Amplify's strategic initiatives and operational accomplishments in 2024 are seen as foundational for future growth, with expectations to capitalize on an enhanced asset base in 2025 [3][35] - The company has taken steps to hedge future cash flows, executing crude oil swaps and natural gas collars to protect against market volatility [39][40]

Core Insights - EnerCom Denver is celebrating its 30th anniversary as the largest independent investor conference for the global energy sector, scheduled for August 17-20, 2025 [1][2][3] - The conference will feature presentations from over 70 companies, including public and private oil and gas firms, as well as energy transition companies [3][9] - The event provides significant networking opportunities for investment professionals, including one-on-one meetings with company executives [4][12] Conference Details - The conference will be held at the Westin Downtown Denver, with an expected in-person attendance of more than 1,000 participants, including institutional investors, family offices, and private equity funds [3][11] - The format includes 25-minute presentations followed by 50-minute Q&A sessions, along with networking opportunities during meals and informal gatherings [12] - A charity golf tournament will take place on August 17, 2025, benefiting IN! Pathways to Inclusive Higher Education, requiring a $150 donation to participate [10] Focus Areas - The conference will include a session dedicated to The Energy Transition and Emerging Technology, featuring quick-pitch presentations from start-up companies focused on alternative energy and sustainability [5][6] - EnerCom is currently accepting applications from start-ups in the energy sector to present at this session, emphasizing innovation and environmental solutions [6] Sponsorship and Participation - Sponsorship opportunities are available for companies looking to enhance their visibility within the energy sector [1][7] - Interested companies can contact EnerCom for presentation and sponsorship details, indicating a proactive approach to engaging with the investment community [7]

Company Overview - Amplify Energy (AMPY) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended December 2024, with earnings expected to be $0.25 per share, reflecting a decrease of 76.6% compared to the previous year [1][3] - Revenues are projected to reach $80.09 million, which is a 1.4% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on March 5, 2025, and could influence the stock price significantly depending on whether the actual results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 30.77% higher in the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP (Expected Surprise Prediction) model indicates that the Most Accurate Estimate for Amplify Energy is the same as the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [10][11] - Despite a Zacks Rank of 1 (Strong Buy), the lack of a positive Earnings ESP makes it challenging to predict an earnings beat [11] Historical Performance - In the last reported quarter, Amplify Energy had an earnings surprise of +68.75%, reporting $0.54 per share against an expectation of $0.32 [12] - Over the past four quarters, the company has surpassed consensus EPS estimates twice [13] Industry Context - W&T Offshore (WTI), another company in the oil and gas exploration and production sector, is expected to report a loss of $0.18 per share for the same quarter, indicating a year-over-year change of -200% [17] - W&T Offshore's revenues are expected to decline by 2.7% to $128.77 million, but it has an Earnings ESP of 22.22%, suggesting a higher likelihood of beating the consensus EPS estimate [18]

Core Viewpoint - Amplify Energy Corp. is set to report its fourth quarter 2024 financial and operating results on March 5, 2025, after U.S. market close, with a conference call scheduled for March 6, 2025, to discuss these results [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]. Investor Relations - Key contacts for investor relations include Jim Frew, SVP & Chief Financial Officer, and Michael Jordan, Director of Finance and Treasurer [3].