Amplify Energy (AMPY) 10 Mar 232022 Q4 Earnings call transcript

Welcome to Amplify Energy’s Fourth Quarter 2022 Investor Conference Call. Amplify’s operating and financial results were released yesterday after market close on March 9, 2023 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 Friday, March 24, by dialing 800-654-1563 and then entering access code 21021351.

I would now like to turn the conference call over to Eric Willis, Senior Vice President and General Counsel of Amplify Energy Corp.

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

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

to it such expectations these believes in events such intend prove reasonable, that expectations this are after that assurance the not reflected circumstances call. correct or no can management forward-looking undertakes no . Although statements give does reflect and obligation be will forward-looking earnings occurring statements and to update to

cause our SEC materially list Please differ for forward-looking refer from those and release in press made to results call. actual during the this to that filings may statements a of factors

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

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

and have regarding Amplify’s with Willsher, we a sheet. the remarks call, and program Executive guidance in provide Officer, Martyn then will update prepared and During Martyn will XXXX our comments regarding California, quarter balance question-and-answer President and and financial hedging highlights will our Chief fourth an conclude Southern assets our Amplify’s strategy session. and operational

Eric. Thank you,

assets. scheduled to and update we I outlook, regarding quarterly successfully to announce safely an that get remove with into two completed in federal I evaluated the of will inspections, pleased XXXX underwent pipeline shipping we our Before regulators. safety operations replace the am and of our Upon from are and repair Southern California have begin series of the anchor being the by a which and the pipeline damaged XXXX. results also repairs, completion vessels the of strikes sections by results tests

restart to and additional the clarity when We market are timing. we will update production we approval awaiting currently have regulatory on

reached repair operators, related have addition, announced Amplify response well. agreed the and ultimately has with income as from overall our In we of $XX.X affirmative which demanded $XX a owners of vessels terms loss week, to claims incident, million the The with and resolves their resolution management insurers receiving to production resources payment Marine The and net a considerable pipeline incident. and LOPI respective of by employees, claims last property operations Directors. settlement approximately subrogation to includes and Amplify’s non-monetary restart or and The damage litigation as and focus the million. resulting Exchange Board team Amplify’s Amplify

and all this our direction a business preventable forward strategic unfortunate eager our the operations to company. We resuming safely from of as and of whole the move dedicate to are attention to event of Beta, and

East LOPI in XX,XXX adjustment primarily by partially million fourth by prior by the higher a Oklahoma a was This natural impacted further EBITDA Production offset Now production prices, related and by for X% and which the adjusted gas The partially impact positive attributable compared particularly compared lower day NGL in The prior payments $XX.X reduction natural gas Bairoil decrease and Boe to was prices, XX,XXX proceeds. commodity per quarter. $XX.X quarter-over-quarter hedge lower Texas. in settlement the fourth was was the quarter commodity approximately basis and to million significant to to of of Boe Eagle decrease Ford driven third approximately quarter. period XXXX differentials. were averaged on offset to production day, per in quarter Fourth quarter. slight quarter at the lower

Amplify mature, base. Despite was quarter our to EBITDA XXXX, decrease activity was adjusted $X.X sustainable fourth expense, Eagle cash fourth diversified to defined the of interest was asset reduction free million Oklahoma, approximately flow a flow lack quarter of primarily expenditures attributable in third The in generate Capital ability of for the XXXX. production a substantial a less in as million reduced the cash $XX.X and the development from at of substantial flow, decrease and Free $XX spending the quarter-over-quarter million Ford. in of over a million and decrease Beta full CapEx which cash EBITDA million, quarter year the XXXX. from demonstrates impact spend of the incident of $XX.X facility and benefits and capital Beta cash work-over Beta, of and $X.X reported during in adjusted

Moving quarter operations. higher day, were on Boe the third-party reduction compared number day Oklahoma, quarter to electrical issues conditions, our to in the from natural weather due declines. X,XXX primarily on an primarily quarter, wells adverse this the Lease costs a prior production resulting higher compression update averaged third a of In production operating increased Boe fourth XXX to from of from per per quarter expenditures online. and

enhancements. optimizations we future quarter, operating this workover natural to capital-intensive production to program lift rod to from XXXX, drop decided workover a X rate and as will focused inventory we through off-line we offset downtime. ESP believe and and artificial working continue X wells on fourth the of In expenses and declines our last conversions lift continue During reduce

quarter-over-quarter anticipate per production result minimum we Bairoil, XXXX, volume increased as the from XXX additional facility expires. expenses Lease averaged expense quarter, run as per of commitment GP&T projects. times. operating July increased workover and X,XXX our At lower prior a and the from NGL quarter resulting Boe day improved for Boe in day Starting approximately

improvements intend forward, to conversions efficiencies. well targeted we costs, while will Going reducing and on focus operational and operating drive further recompletions

prior production exceed during We costs results to XXXX while quarter due expectations, in high-return managing quarter per from the and averaged production X,XXX was second to beyond. to similar X,XXX committed previous accretive wells East day volumes production to intend revised from participate and day production in continue result quarter participating earlier Boe the projects. non-operated the a projects declines the day, online workable year. quarter and X,XXX to which production day properties. we fourth compared per and Ford, pursuing projects In XXX Texas than efficiently per fourth development per averaged North projects in Louisiana, our Boe in Boe new higher concluded Eagle in of from quarter joint In remain Boe in as the high-return third and the brought The

are be online participating of XX to in development currently net are refracs, second quarter projects, the one in gross, We which XXXX. including two projected

our to we oil forecasted update realize unhedged commodity off XXXX our XXXX. for of for on for current and XX% an oil additional Crude in environment. to the and gas XX% continue to book and Now the production hedged potential is XX% roll the the scheduled approximately X% hedge have Currently, upside capture hedge book, price we hedged to to in is benefits from XXXX. XX% approximately production XX% are and XXXX, our

XXXX net approximately of as X% $XX facility which by consisting On XX% million, XX% the our gas the of to excludes XXXX. this we debt outstanding will below balance Beta to in regards for side, Amplify February hedged sheet, to million our the revolving and by profile had month. XX% $XXX proceeds end of of million cash hedged nearly leverage settlement, XX, credit approximately under our to With of net are million on reduce significantly $XX and from $XXX hand. Xx the XX% for This

credit and XXXX. facility, new May with refinance working is to guidance, potential financial we existing company On provided matures the year which operational and explore in to solutions Currently, the capital full replace XXXX. for revolving to providers expectations yesterday, or

production natural XX,XXX Boe and for a with mix NGLs between ranges the and Our XX% year XX,XXX approximately per gas. of XX% forecast average day XX% oil, quantity daily

balance to production next the assumes one-time production million, million projects, and the facility the dedicated facility $XX across budget production restore Beta. of and emissions-reducing over Our to our Amplify’s at month between XXXX. to costs of full be capital be up associated which Beta. guidance well $XX other to to and and approximately Texas will base million workover asset to projects East Ford, in projects routine budget platform and Beta electrification work maintenance development is committed capital with be slowly The of and XXXX forecasted Eagle high-return will remainder $XX ramps joint returns of

generating $XX million. flow Ultimately, to we cash of the anticipate EBITDA approximately $XXX million of million $XX adjusted free to million from year $XX for

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

the and progress roll-off Beta. return bolstered we through prudent allocation, which continue as of profile cash our expect flow be enhancing to we capital management the production by of and hedge asset our free book will XXXX, Lastly, of into planned

to XXXX flow cash by X% current climb forecasted but on expected free of million $XXX our production cumulative pricing. at Currently, approximately to XXXX and average only strip generate is annually

Our with path us return with we and shareholder team to significant the capital and flexibility could of conjunction our as strategic production effort, from base that provides of evaluate value. management cash further Beta and Board forward potential the leverage enhance the improved free and return working diversified liquidity our profile, options. that asset consider strategic flow opportunities evaluate Amplify’s In

operator, now we questions. that, are for open With

you. Thank Yes.

well the received from this we time to since that will earnings. we we’ve usual, that at respond As released point, questions as some shareholders during

of the with in Obviously, plant restart. At in a guidance Beta as interest our come online exactly suggests, there start is in early April our this of we been We when to point, will restarting. consistent. are lot early That’s XXXX. has

date, date. getting a that obviously close and believe very very increasingly are We that start viable we still and to that’s are optimistic

get We just need the working right are have do. that to with we completed final we now, sign-off. regulators that And to everything

Secondarily, there what for profile major through has and the have flow been been there. free the ‘XX ‘XX cash questions impacts about

we $XXX NGL little by I we said, There and like ‘XX, well. is and was time, actually think like I as and was like primarily, been through said, bit put this an this a time the driven of prices. primarily natural gas really natural ‘XX largely which gas million. NGL out million, At Obviously, $XXX impact by that’s more last I driven are is prices.

we to fully year, of the we a ramp-up – in short-term the for ramp-up process a are potential and and which that that to during of that of in and the are to have see. by cost little you nature the get that kind up make conservative the enough more the production place is back sure forecast hopefully that to taking there We speed, bit approach in increased on end costs guidance we have allocating to things short-term workovers the online Beta,

might that commodity is the being current think but from end coming little bit down actually were Third, as last a up we well. with prices a end towards there conservative a little additional lot year, bit of LOE, of where I

those kind the are but NGL three drivers, primary prices So, of and being main the one. gas natural

strategy. is third about The questions

for largely think last at we the months, the to I process. reacting incident through XX have point, that been and obviously, working this

settlement to shareholders, utilizing generate recent involved the kind that strategies yield-based our ending we assets which to are free the for could going continue us, cash all in, ability had With program that was potential this returning the return directly the previously, like for of to and we forward. litigation flow, capital

do we the refinance need can that, to existing we Before do RBL.

we so considering that of but yet, strategy come direct those any plans kinds haven’t near-term. the in the with are And are we forward

multiple divesting considering clear, portfolio, a acquisition either. Obviously, at like do are with any part And we what just assets. whether to are to or be not we decisions of processes the time is this there certain asset always strategic

best from with facility this online, happened So, is refinancing what back to we Beta reacting pivot where credit move have and we from returning and where at do really there, and basically the to that. what portfolio really on especially we capital how deciding getting assessing the Beta been forward to

particularly their I this from all efforts like company’s months. express At dedication, the last my we think employees just questions I had shareholders. the over and that’s outstanding appreciation that for to closing, XX would the In time, to

this at I put would our We thank as laid in Beta us call out. everyone excited like go-forward to really pursue I today. the have incident and actively to are for point participating the behind strategy

to hesitate always, you. As not out. are if do Thank there any please questions, reach

your concludes teleconference. you Thank today’s That for participation.

You now disconnect. may