Amplify Energy (AMPY)2025-03-05 21:57Reserves 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 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 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 900 per ton for methane emissions exceeding thresholds, increasing to 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].