Amplify Energy (AMPY)2024-08-07 20:16Financial Performance - In Q2 2024, Amplify Energy achieved average total production of 20.3 MBoepd, generating net cash from operating activities of $15.4 million and net income of $7.1 million, compared to a net loss of $9.4 million in the previous quarter[1][3]. - Adjusted EBITDA for Q2 2024 was $30.7 million, an increase of approximately $5.8 million from $24.9 million in Q1 2024, benefiting from a one-time $7.0 million accounting adjustment[3][4]. - Free cash flow for Q2 2024 was $9.2 million, up $6.9 million from the prior quarter, marking positive free cash flow in 16 of the last 17 fiscal quarters[3][4]. - Total revenues for Q2 2024, excluding hedges, were approximately $79.5 million, with oil, natural gas, and NGL revenues before derivatives at approximately $72.3 million[4][8]. - Total revenues for the three months ended June 30, 2024, were $79,503,000, an increase from $76,299,000 for the three months ended March 31, 2024, representing a growth of 2.3%[29]. - Net income for the three months ended June 30, 2024, was $7,119,000, compared to a net loss of $9,396,000 for the three months ended March 31, 2024, indicating a significant turnaround[29]. - Adjusted EBITDA rose to $30,749,000 for the three months ended June 30, 2024, up from $24,901,000 for the three months ended March 31, 2024, indicating a growth of approximately 23%[40]. - Free Cash Flow increased to $9,151,000 for the three months ended June 30, 2024, compared to $2,283,000 for the three months ended March 31, 2024, reflecting a substantial increase[40]. - The company reported net cash provided by operating activities of $15,389,000 for the three months ended June 30, 2024, up from $7,712,000 for the three months ended March 31, 2024, showing improved operational efficiency[34]. Production and Operations - The A50 development well at Beta achieved a peak IP30 oil rate of approximately 730 Bopd, exceeding company projections, with an expected payback period of about 4 months[1][13]. - Average daily production of oil is projected to be 8.9 MBbls/d for FY 2024, with a low estimate of 8.1 MBbls/d and a high estimate of 8.9 MBbls/d[15]. - Natural gas production is expected to reach 50.0 MMcf/d in FY 2024, with a low estimate of 44.0 MMcf/d[15]. - Production volumes for oil reached 10 MBbls and natural gas was 421 MMcf for the three months ended June 30, 2024, showing operational activity[44]. - Total production volumes remained stable at 1,843 MBoe for the three months ended June 30, 2024, compared to 1,842 MBoe for the three months ended March 31, 2024[32]. Financial Guidance and Projections - Amplify's updated guidance for 2024 includes expectations for crude oil prices at $76/Bbl and natural gas at $2.25/MMBtu, with 85% to 95% of capital investment allocated in the first three quarters[14]. - Adjusted EBITDA for FY 2024 is guided to be between $100 million and $120 million, compared to $95 million in the previous fiscal year[16]. - Free cash flow is projected to be between $30 million and $40 million for FY 2024, up from $25 million in the previous fiscal year[16]. - Capital expenditures are projected to rise to between $60 million and $65 million for FY 2024, compared to $50 million in the previous fiscal year[16]. - The company anticipates a total revenue increase from $4 million to $12 million in other revenue streams for FY 2024[15]. Cost Management - Lease operating expenses in Q2 2024 were approximately $36.3 million, or $19.70 per Boe, a decrease from the previous quarter[10]. - Lease operating expenses are expected to increase to $20.50 per Boe, up from $18.50 per Boe in the previous fiscal year[16]. - The average unit costs per Boe for lease operating expenses decreased to $19.70 for the three months ended June 30, 2024, from $20.78 for the previous quarter, indicating cost management improvements[30]. - Total costs and expenses decreased to $65,951,000 for the three months ended June 30, 2024, down from $85,381,000 for the three months ended March 31, 2024, a reduction of approximately 22.7%[29]. - General and administrative expenses decreased to $8,358,000 for the three months ended June 30, 2024, down from $9,800,000 in the previous quarter[43]. Debt and Liquidity - As of June 30, 2024, Amplify's net debt was $117.5 million, with a net debt to LTM Adjusted EBITDA ratio of 1.2x[1][5]. - Cash and cash equivalents decreased to $502,000 as of June 30, 2024, down from $2,989,000 as of March 31, 2024, indicating a liquidity contraction[33]. - Long-term debt increased to $118,000,000 as of June 30, 2024, compared to $115,000,000 as of March 31, 2024, reflecting a slight increase in financial leverage[33]. Investment Strategy - The company plans to invest $60-65 million in 2024, focusing on Beta development and non-operated drilling opportunities in East Texas and the Eagle Ford[11][14]. - Amplify has added oil and natural gas hedges, with natural gas swaps at a weighted-average price of $3.88 per MMBtu for 2026[18]. - The company executed crude oil swaps for 2025 at a weighted-average price of $74.10 per barrel[18]. - Capital expenditures were $18,004,000 for the three months ended June 30, 2024, compared to $19,092,000 for the three months ended March 31, 2024, indicating a reduction in spending[40]. Operational Focus - Amplify's operations are focused in multiple regions including Oklahoma, the Rockies, and offshore Southern California, indicating a diversified operational strategy[21]. - The company reported a non-cash revenue suspense release of $7,000,000 for the three months ended June 30, 2024, contributing to the adjusted EBITDA[40]. - The company incurred acquisition and divestiture related costs of $9,000 for the three months ended June 30, 2024, down from $14,000 in the previous quarter[40].