Amplify Energy (AMPY) - 2025 Q2 - Quarterly Results

Strategic Initiatives and Second Quarter 2025 Highlights The company is undergoing strategic portfolio simplification and debt reduction, while reporting strong Q2 2025 production and financial results Strategic Initiatives Update Amplify is simplifying its portfolio, reducing debt, and lowering costs via asset divestitures and organizational changes - The company is committed to simplifying its portfolio, focusing on its most attractive investment opportunities, becoming more oil-weighted, reducing debt, and lowering operating costs[2] - Engaged TenOaks Energy Advisors to explore the complete divestiture of assets in East Texas and Oklahoma, with offers expected to be solicited in Q3[5] - Divested non-operated assets in the Eagle Ford for $23 million, with the transaction closing on July 1, 2025[5] - Implemented changes in governance, including appointing the largest shareholder to the Board, reducing Board size from eight to five, and promoting Dan Furbee to CEO and Jim Frew to President and CFO[5] Second Quarter 2025 Key Highlights Amplify increased Q2 2025 production to 19.1 MBoepd, generating $23.7 million operating cash flow and $6.4 million net income Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | Average Total Production | 19.1 MBoepd (+7% vs Q1) | | Net Cash from Operating Activities | $23.7 million | | Net Income | $6.4 million | | Adjusted EBITDA | $19.0 million | | Adjusted Net Loss | $2.3 million | - The new C54 well at the Beta property, brought online in late-April, has the highest initial production rates of the four wells in the development program started last year[6][7] - Non-operated wells in East Texas, drilled by partners, are exceeding company forecasts[7] Financial and Operational Performance Amplify's Q2 2025 financial and operational performance, covering key results, liquidity, production, costs, and capital investments Key Financial Results Amplify reported a turnaround to net income in Q2 2025, with stable Adjusted EBITDA and expected negative free cash flow due to capital investments Q2 2025 vs Q1 2025 Financial Summary ($ in millions) | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net income (loss) | $6.4 | $(5.9) | | Adjusted EBITDA | $19.0 | $19.4 | | Adjusted net income (loss) | $(2.3) | $3.8 | | Free Cash Flow | $(10.1) | $(7.2) | | Total capital | $25.5 | $23.1 | - As of June 30, 2025, the company's Net Debt to LTM Adjusted EBITDA ratio was 1.5x[10] Revolving Credit Facility and Liquidity Update Amplify's borrowing base was reaffirmed at $145.0 million, then reduced to $135.0 million post-divestiture, with total debt at $130.0 million - The semi-annual borrowing base was reaffirmed at $145.0 million on May 29, 2025[12] - Following the Eagle Ford divestiture, the borrowing base was reduced to $135.0 million[12] - As of June 30, 2025, total debt was $130.0 million, with a Net Debt to LTM Adjusted EBITDA of 1.5x[12] Corporate Production and Pricing Q2 2025 average daily production increased to 19.1 MBoepd, with an oil-weighted shift to 48% of total production, despite lower realized commodity prices Production Volumes by Asset (MBOE) | Asset | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Bairoil | 286 | 280 | | Beta | 355 | 315 | | Oklahoma | 404 | 393 | | East Texas / North Louisiana | 584 | 570 | | Eagle Ford (Non-op) | 111 | 49 | | Total - MBoe/d | 19.1 | 17.9 | - The company's product mix became more oil-weighted, with crude oil representing 48% of total production in Q2 2025, compared to 41% in Q2 2024[15] Average Realized Sales Prices (exclusive of derivatives) | Product | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Crude Oil ($/Bbl) | $60.01 | $67.82 | | NGLs ($/Bbl) | $21.45 | $25.24 | | Natural Gas ($/Mcf) | $3.01 | $3.87 | Costs and Expenses Q2 2025 lease operating expenses were $38.6 million ($22.20/Boe), while cash G&A decreased 7% to $6.8 million, with expected LOE reductions ahead - Lease operating expenses were $38.6 million ($22.20/Boe) in Q2, a 5% decrease on a per-unit basis from Q1's $23.28/Boe[19] - Cash G&A expenses decreased by 7% quarter-over-quarter to $6.8 million[21] - Depreciation, depletion, and amortization (DD&A) expense was $9.8 million, or $5.61 per Boe[21] Capital Investment Update Amplify invested $25.5 million in Q2 2025 capital, totaling $48.6 million YTD, with 95% of the 2025 budget front-loaded by Q3 Capital Invested by Asset - Q2 2025 ($MM) | Asset | Q2 2025 Capital ($MM) | YTD 2025 Capital ($MM) | | :--- | :--- | :--- | | Bairoil | $4.5 | $5.8 | | Beta | $13.3 | $26.1 | | Oklahoma | $1.0 | $2.5 | | East Texas / North Louisiana | $2.8 | $6.2 | | Eagle Ford (Non-op) | $3.6 | $7.5 | | Total Capital Invested | $25.5 | $48.6 | - The company intends to invest approximately 95% of its 2025 capital by the end of the third quarter[23] - Capital investments are forecasted to drop significantly in the second half of 2025, with an estimated range of $21 million to $31 million, compared to $48.6 million in the first half[23] Outlook and Development This section outlines Amplify's 2025 operational plans, updated full-year guidance, and hedging strategies to manage commodity price risk 2025 Operations & Development Plan Amplify's 2025 plan focuses on accelerating the Beta program with new wells, leveraging strong IRRs, and optimizing East Texas and Bairoil assets - The company is drilling the C08 well at Beta, a direct offset to the highly successful C54 and C59 wells, which are projected to generate greater than 100% IRRs[27] - In East Texas, four new non-operated wells are currently producing 13 Mmcfe/d net to Amplify's interest, with expected IRRs greater than 45%[29] - At Bairoil, the company obtained certification under the CSA ANSI/ISO Standard, allowing portions of CO2 used to qualify for Section 45Q tax credits[32] Updated Full-Year 2025 Guidance Amplify updated its full-year 2025 guidance, adjusting production to 18.5-20.0 MBoepd, capital to $65-$80 million, and Adjusted EBITDA to $80-$100 million Updated Full-Year 2025 Guidance vs. Previous | Metric | Previous Guidance (May 12) | Updated Guidance (Aug 6) | | :--- | :--- | :--- | | Total Production (MBoe/d) | 19.0 - 20.5 | 18.5 - 20.0 | | Capital Expenditures ($MM) | $55 - $70 | $65 - $80 | | Adjusted EBITDA ($MM) | $80 - $110 | $80 - $100 | | Free Cash Flow ($MM) | $10 - $20 | $0 - $10 | - The guidance is based on assumed commodity prices of approximately $65.00/Bbl WTI for crude oil and $3.50/MMBtu Henry Hub for natural gas[33] Hedging Amplify expanded its hedging program, executing crude oil swaps for 2026-2027 at $62.79/Bbl and natural gas swaps/collars for 2027-2028 with $3.50/MMBtu floors - Recently executed crude oil swaps for portions of 2026 and 2027 at a weighted average price of $62.79[36] - Added natural gas swaps for 2027 and 2028 at an average price of $3.86 per MMBtu, and costless collars for the same period with weighted average floors of $3.50 per MMBtu[36] Hedged Volumes and Prices (July 2025 - Dec 2028) | Commodity | 2025 | 2026 | 2027 | | :--- | :--- | :--- | :--- | | Oil Swaps | | | | | Avg Monthly Vol (Bbls) | 170,000 | 146,500 | 45,667 | | Wtd Avg Price ($) | $70.32 | $65.77 | $62.57 | | Natural Gas Swaps | | | | | Avg Monthly Vol (MMBtu) | 560,000 | 515,000 | 197,500 | | Wtd Avg Price ($) | $3.75 | $3.80 | $3.96 | Unaudited Financial Statements and Non-GAAP Reconciliations This section presents Amplify's unaudited financial statements, covering operations, production, costs, balance sheet, cash flow, and non-GAAP reconciliations Statements of Operations Amplify reported Q2 2025 total revenues of $68.4 million, operating income of $12.6 million, and net income of $6.4 million ($0.15 per share) Statements of Operations Summary (in $000s) | Line Item | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Total Revenues | $68,361 | $72,050 | | Total Costs and Expenses | $55,802 | $76,044 | | Operating Income (loss) | $12,559 | $(3,994) | | Net income (loss) | $6,384 | $(5,861) | | Basic and diluted EPS | $0.15 | $(0.15) | Selected Production and Cost Data Q2 2025 total production reached 1,740 MBOE, with lease operating expenses at $38.6 million and capital expenditures totaling $25.5 million Q2 2025 Production and Capex by Asset | Asset | Production (MBOE) | Capex ($000s) | | :--- | :--- | :--- | | Bairoil | 286 | $4,488 | | Beta | 355 | $13,328 | | Oklahoma | 404 | $1,006 | | East Texas / North Louisiana | 584 | $2,800 | | Eagle Ford (Non-op) | 111 | $3,550 | | Total | 1,740 | $25,516 | Balance Sheet and Cash Flow Data As of June 30, 2025, Amplify reported $771.3 million in total assets, $360.0 million in liabilities, and $411.3 million in equity Balance Sheet Summary (in $000s) - June 30, 2025 | Category | Amount | | :--- | :--- | | Total Current Assets | $70,013 | | Total Assets | $771,307 | | Total Current Liabilities | $83,254 | | Long-term Debt | $130,000 | | Total Liabilities | $360,002 | | Total Shareholders' Equity | $411,305 | Cash Flow Summary (in $000s) - Q2 2025 | Activity | Amount | | :--- | :--- | | Net cash from operating activities | $23,689 | | Net cash used in investing activities | $(28,683) | | Net cash from financing activities | $4,994 | Non-GAAP Reconciliations Amplify provides non-GAAP reconciliations for Q2 2025, showing Adjusted EBITDA of $19.0 million, Free Cash Flow of negative $10.1 million, and Adjusted Net Loss of $(2.3) million Reconciliation of Net Income to Adjusted EBITDA (in $000s) - Q2 2025 | Line Item | Amount | | :--- | :--- | | Net income | $6,384 | | Interest expense, net | $3,594 | | Income tax expense | $1,915 | | DD&A | $9,765 | | (Gains) on commodity derivatives | $(22,162) | | Cash settlements on derivatives | $4,781 | | Other adjustments | $4,606 | | Adjusted EBITDA | $18,983 | Reconciliation to Free Cash Flow (in $000s) - Q2 2025 | Line Item | Amount | | :--- | :--- | | Adjusted EBITDA | $18,983 | | Less: Cash interest expense | $3,614 | | Less: Capital expenditures | $25,516 | | Free Cash Flow | $(10,147) | Reconciliation to Adjusted Net Income (Loss) (in $000s) - Q2 2025 | Line Item | Amount | | :--- | :--- | | Net income | $6,384 | | Unrealized (gains) on commodity derivatives | $(17,381) | | Other adjustments & tax effect | $8,727 | | Adjusted net (loss) | $(2,270) |