Amplify Energy (US:AMPY)2023-03-10 18:18Financial Data and Key Metrics Changes - Fourth quarter production averaged approximately 20,800 Boe per day, a reduction of 1% compared to 21,000 Boe per day in the third quarter [9] - Fourth quarter adjusted EBITDA was approximately $21.9 million compared to $30.8 million in the prior quarter, primarily due to lower commodity prices [9] - Free cash flow for the fourth quarter was $12.3 million, with full year 2022 adjusted EBITDA reported at $93.8 million and over $43 million of free cash flow [10] Business Line Data and Key Metrics Changes - In Oklahoma, production averaged 6,600 Boe per day, a reduction of 200 Boe per day from the prior quarter due to adverse weather and third-party issues [11] - Bairoil production averaged 3,700 Boe per day, an increase of approximately 100 Boe per day quarter-over-quarter [12] - East Texas and North Louisiana production averaged 9,500 Boe per day, which was 300 Boe per day higher than the previous quarter [13] - Eagle Ford production averaged 1,100 Boe per day, down from 1,400 Boe per day in the third quarter [13] Market Data and Key Metrics Changes - The company experienced lower commodity prices, particularly for natural gas and NGLs, impacting overall financial performance [9][10] - The forecasted oil and gas production is hedged approximately 50% to 60% for 2023, with crude oil production approximately 30% to 40% hedged [14] Company Strategy and Development Direction - The company aims to resume operations at Beta and has a capital budget forecasted between $30 million and $40 million for 2023, focusing on emissions-reducing projects and joint development projects [16] - Management is exploring refinancing options for the revolving credit facility maturing in May 2024 and considering strategies for returning capital to shareholders [22] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about restarting production at Beta in early April 2023, pending regulatory approval [19] - The company anticipates generating approximately $30 million to $50 million of free cash flow for 2023, with adjusted EBITDA expected between $80 million and $100 million [17] - The management team is focused on enhancing shareholder value and evaluating strategic opportunities following the resolution of the Beta incident [18][22] Other Important Information - Amplify reached a $96.5 million settlement related to the pipeline incident, resulting in a net payment of approximately $85 million [7] - The company is working to improve its liquidity and leverage profile, with net debt of approximately $167 million as of February 28 [14] Q&A Session Summary Question: When will Beta restart production? - Management indicated that Beta is expected to restart in early April 2023, pending final regulatory sign-off [19] Question: What are the major impacts on free cash flow for 2023 through 2025? - The primary drivers are lower natural gas and NGL prices, with a more conservative approach to the ramp-up of Beta and increased short-term costs for workovers [20] Question: What is the company's strategy moving forward? - The company is pivoting from reacting to the Beta incident to focusing on getting Beta back online, refinancing the credit facility, and assessing portfolio strategies [22]