Amplify Energy (US:AMPY)2023-11-07 21:43Financial 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]