Amplify Energy (AMPY) 9 May 222022 Q1 Earnings call transcript

Welcome to Amplify Energy’s First Quarter 2022 Investor Conference Call. Amplify’s operating and financial results were released yesterday after market close on May 4, 2022 and are available on Amplify’s website at www.amplifyenergy.com. [Operator Instructions] Today’s call is being recorded. A replay of the call will be accessible until Thursday, May 19 by dialing 855-859-2056 and then entering conference ID number 6891368 or by visiting Amplify’s website at www.amplifyenergy.com. I would now like to turn the conference call over to Jason McGlynn, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. sir. ahead, go Please

welcome and Amplify first financial XXXX. and to quarter conference discuss operating results to morning Energy the call of Good for the

me Willsher, is Executive Joining call and Officer. President Chief Martyn the on Amplify’s today

expectations we and you some remind various are forward-looking which subject of like views current uncertainties, contain that reflect may to get management’s started, and remarks of Before would statements, to assumptions. we our future risks, events

for reasonable, undertakes are can reflected circumstances call. prove forward-looking that this intend earnings in and statements factors occurring to our may Although Please cause assurance forward-looking such such or actual give does press during to management these believes the materially made after that the list SEC in a from statements no that those to expectations results of forward-looking to events call. be filings no not it expectations this will differ statements reflect update correct to refer release and and obligation

addition, highlighted our here that records is will the be and from financial books, internal information derived unaudited In reports. financial

For to was yesterday Reconciliations be Also, encourage read financial you additional www.amplifyenergy.com. earnings our this non-GAAP during maybe found comparable measures release filed GAAP measures our disclosed measures of at afternoon. in XX-Q Form those detailed call. disclosure, on website our we that to may or

comments performance strategic of the projections current will our then Martyn an items hedging quarter Southern then full update and in during first provide regarding call, updates will will first the and highlights first goals. for guidance. regarding quarter sheet results quarter, by final the Martyn year. our and additional to assets, provide the During discuss regarding I deliver the followed remainder year program, our balance and guidance California detail revised

remarks, a our Following we question-and-answer will have session. prepared

to production. our to would assets update we progress into towards Before made returning I we results, quarterly Southern provide have get like an the California the regarding

most PHMSA the with our mid-April, permit approvals Corps we the with Engineers for working recent Corps required from of to During discussed Army permanent approval we where proceed the to PHMSA In I from the claims to commence Army the now the are Engineers and airplane, departmental cooperatively operations. of repair earnings obtain received call, of repair pipeline. remaining

Although production. X we cannot months when from safely approval and X the expect the date, requirements to within predict pipeline we to satisfy we an we the complete approval from restart receive can approved the to platform’s that repairs, regulatory return PHMSA court,

the in XX,XXX of barrels to quarter. equivalent fourth equivalent first for approximately oil per Now slightly oil quarter the barrels down on averaged Production XXXX. quarter XX,XXX the of day, day per of from

exceeded First This the million million stronger payments was attributable quarter quarter. EBITDA and to approximately production insurance projections primarily that adjusted previous $XX.X in internal income of recognized from additional quarter. of $XX realizations increase price the and were an was of approximately increase loss

we quarter first development Texas interest capitalize quarter Capital stated million call. As call. guidance, the XXXX to a and in has generate pricing of for increased cash $XXX will to Free the outlook in and adjusted call, and $XXX million accelerated expense, flow realizations, primarily our million, approximately the in current EBITDA cash and year to million $XXX have last flow, last outperformance from was our full since a on cumulative over programs. improve the projects Jason on cash detail prices Ford East non-operated $X.X focused spending during defined million was workover approximately free later increase continued Eagle significant free expect provides next years, first $XXX adjusted EBITDA, cash our $XX.X earnings XXXX CapEx improved of production and we Oklahoma commodity which result million production and flow and as to now to in X

currently production as our This Amplify which continues the for to to forward. operations. is third costs quarter and Oklahoma, efficiently brought free for In converting flow company three comprehensive running of North online The be rod company development development high-return in In will offline year. our production production workovers generate East committed to participating expense workover and and three Texas we wells support non-operated on part managing program joint and an ESPs pursuing program projects. going to incremental strategy to of update and lift. optimization are Now wells, expected Louisiana, this is for to our return cash and accelerated the in while

new to the arise. At time areas In by We actively high-return wells projects the they participate opportunities earlier continue of we be the year. quarter-over-quarter and as economic development area in end performed and development additional in X% online the viability. result quarter in in run in attractive projects a production with continue are gross, approximately opportunistically participate position developing evaluate improved is net X.X positive of this Ford, own highest workovers results of from stimulations second we X to interest Operators jointly their will wealth Eagle the increased that as we’ll expected and XXXX. Bairoil, the and which

the in scheduled turnaround for annual up which second Our reduce is maintenance production to June, for days quarter. XX will facility

continue operational improvements Jason turn of financial to of technological detailed now a implement call our the will and review enhance returns performance economic efficiencies and maximize program. provide results. to workover over to and operational We I to our the

our an balance million million results that for XX,XXX were BOE on the our comments and compared regarding quarter and million natural details million gas quarter $XX.X to XX% Total in I’ll quarter LOPI first quarter $XX.X Thank approximately oil, $XX.X our averaged with give Other of of XX% primarily first fourth day to commodity payments and XX% for quarter update first and of updated impact for gas. the fourth NGLs in with booked the a you, revenues guidance. the Production Martyn. first sheet the regarding provide approximately compared concluding $X.X details oil, during XXXX to per and related mix $XX.X XXXX. million on of hedge the NGL the book, were quarter revenues period. were of then before derivatives

BOE our The As loss earnings BOE $X.X or compared prior available $XX.X $XX.X or BOE, income $XX.XX the internet. discussed of of per Lease for to increase quarter expense expenses $XX.XX our production the this plant months the during asset processing improved from fourth approximately million the irrespective reclassification and million function an taking Oklahoma, to inflation million GP&T per of kind kind the of prior expenses The commodity our accounting This differential, reclassification pricing BOE is our as Oklahoma improved is taking a our XXXX. compared updated an $X.X BOE gas or in during Ad This company charges quarter of revenue deductions reclass. in a or $X.X million By the resulting increase fourth quarter. and in or call XX million following compared proceeds approximately BOE $X the were GP&T natural per to quarter approximately million from resulting across are pricing. base. due in of operating accounting from to for in in or in costs to increase reflected revenue greatly incremental Bairoil has is quarter quarter. gas increase the $X.XX in gas was increase Production the in Eagle totaled Ford quarter. attributable $X.XX higher of GP&T to Valorem guidance. was per our workover projects $X.XX primarily million from and primarily taxes fourth higher $X.XX $X.X this result in per per Oklahoma, the

was quarter quarter. $XX.X than $X.XX Cash highest previous BOE per the quarter compared to in million, in G&A quarter-over-quarter cash within was current $XX of higher the first activity attributable The first quarter of approximately year for quarter East $X.X was fourth in Texas the first spending $X.X and primarily the million, activity or in million quarter. and quarter First and of the Eagle planned on million in from the capitalize fourth to expectations. commodity the BOE expenses Adjusted Free EBITDA approximately totaled the prices. $XX.X capital are flow first million approximately the to XXXX, $XX an roughly XXXX. increase was G&A million workover Oklahoma in Cash increase the of of million XXXX. an quarter-over-quarter quarter the increase Ford quarter million of in fourth $X.X elevated or per increase $X.X $X.XX cash typically totaled

Currently, are commodities. the book. for XXXX XX% and we approximately Now across our all in hedged hedged XXXX hedge XX% balance to of

the Our remainder is year crude oil the to for approximately hedged and XXX% for hedged XX% of XX% to XX% production XXXX.

hedged for our to the positions as volumes, from XXXX look unhedged in We market environment. completely to additional to XXXX layer the XX% are the XXXX, our advantage I the we represent will side, would improved to balance commodity enabling the on NGL like XXXX production, for which took of and and are gas arise. collar that XX% XX% the we volatility our opportunities On hedged company approximately on of and in note current positions ceilings approximately price gas floor of recently present the improve in approximately XXXX. and benefit

on as be upside oil to prevailing those provide completely when depending will Beta Field crude reminder, which a may Lastly, volumes unhedged, we returned production, additional prices.

balance our Moving on to sheet.

$XXX had $XX million of and approximately under Amplify As of net of of outstanding XX, our revolving on April million facility consisting $XXX cash million, hand. credit debt

our XXXX, For debt balance the sheet to continue improving our the and of remainder free allocating reducing will majority total our flow outstanding. we of cash

is Our XXXX. quarter spring underway guidance. completed and during On to is redetermination be second borrowing expected to base currently the of

realization our the As also our production result the the and per strong performance. million of by XX,XXX of increased $XX we for to prices, detailed EBITDA. midpoint increased guidance release adjusted as approximately night, guidance adjusted to We guidance day. BOE last in year commodity full increased ranges a earnings XXXX we production production in XX% increase And have EBITDA midpoint and pricing our the of have

also kind realizations our will bottom line reflects improve forward. related to GP&T expect As taking our in which Oklahoma, in and gas associated improved going we costs discussed previously, guidance gas

Additional in details were provided available and found the our website. currently presentation can guidance our yesterday be release on investor in latest earnings

guidance but With when the our does returns turn the guidance timeline, assume our to to now to expect call uncertainty due to will restart reminder, is Beta’s a regarding back XXXX, that, not additional As available. production information I Martyn. update in we data

strong free mature quarter last to substantial provided allowed is call. you, us improve full a base and this our has to ability the to performance our a Thank testament on generate cash from asset flow Jason. Amplify’s year guidance diversified

safely about free impact positive profile. especially significant the are a have will beta returning optimistic to which prospect of flow reduction, of We our assets cash

allowed is has environment Texas ahead the continue previously the drive to to workable As to marketing commitment our accelerate opportunities Eagle additional us Ford while development Eagle the XXXX, shareholder East look elevated of price non-operated additional could of evaluate Ford Furthermore, explore to our accretive within announced we and optimistically remainder asset transactions expected further accelerate process assets. commodity programs and that value. delevering, to we our

XXXX flow April detailed significant XX, current currently in XXXX. now Additionally, believe commodity X-year improved free remains million proved billion $XXX With undervalued Amplify with the presentation, that approximately free our cash of a pricing investor value $X.X strong our And we million year projections market. value over forecast to as and reserves our end of at PV-XX in share reserve our total improved cash pricing, in approximately internal as $XXX substantially flow. cumulative outlook,

remains stakeholders would protection of communities. highest insurers to Before the employees, to well-being and of I operating continuously and priority, surrounding and of safety we committed environment our and reiterate to and our are amount our an the business partners that concluding, like safely

Our substantial capital drive dedication and of operational generate for our flow for With long-term stewardship, allocation significant to delevering to has free we now efforts all safety, value are excellence, questions. and our ability stakeholders. demonstrated cash disciplined open environmental operator, that, to

[Operator Instructions] Capital. Your first John question comes ROTH of White with from the line

guys. Good morning,

morning, John. Good

is you detail, Corp more or not are amount the to XXXX. combination of returns You production that time of made you because a to those assuming two? for the – Engineers in it or wait on needed of have that due for a it Is is clear is little repairs to it have the Beta

will I that, take So John.

obviously in a determined, still while we XXXX. So for to are hoping be return it’s

to we’ve we waiting final as X approximately are on stated, X to expect permit months As speak. take that and we we

by guidance what online on felt from it getting of be. more exactly would hopeful like we certainly are we was clarity But So a perspective, date that online XXXX. without appropriate coming until it more to end Beta had we guidance issue

obviously would we time. October, in online that at the back update come guidance we if So reflect that to

encompasses of understandable. certainly X decision X and That’s to the repair that by time? In estimated Engineers Corp a months, the

the permit once that’s process basically there. hand, X-month from to we that’s a So, get in X

during Eagle see year? the But Eagle strong for at for Ford the Okay. know Thank that activity the you. of considering I the quarter are And strong the continued Ford do you activity divestiture. and you at rest

year well. may have as Yes, Jason it planning that lot Ford. economics an well strong add projects yes, uptick with I the wants that can we assumingly from Obviously, will start the we for the – to certainly extremely as the into to that but are are and across a more we seen always opportunity for still remainder at take looking have keep Eagle the XXXX he if potential obviously, and advantage online still in activity to stretch are we planned divesting coming of that the asset. But the to, continue of

only right gross Yes. are the our drilled And second drills. that both is there operators coming continually standpoint and X conversations the the completing anticipate net be could John, later coming wells, we is future on add projects, quarter. down we is were the new that which DUCs the what from I’ll that having thing activity the about we’re from refrac last positions online X now year, in pipeline the recompletion seeing a with

would anticipate through as So the activity we year. continue we additional

is the just ongoing. still again I’d like divestiture once And reiterate Yes. much very to process that

depending the outcome provides best – on kind company. of what are So for the pivot we we can

or appreciate marketing resources Are you the hired have an you I with internal property adviser? that.

adviser for an have it marketing We us.

Okay. and nice Well, progress with flow that the good most all, on your and Beta, that. luck cash congratulations The regulatory results. congratulations of on free on

you, Thank John.

I have. That’s all

remarks. in to turn this are over time. management call back And no I’ll closing further queue there questions at the for

company’s to of our joining outstanding through move my appreciation for dedication their expressing as say patience we you efforts this also and today. to continued to as everyone employees thank just all I’d I’d support like process. like for the like by conclude thank us to I always. stakeholders and for their

to questions. have out Thank As additional if to always, please don’t hesitate us any you. you reach

you Thank this And participating. concludes today’s call. conference for

disconnect. may now You