Amplify Energy (AMPY) 7 Nov 242024 Q3 Earnings call transcript

Welcome to Amplify Energy's Third Quarter 2024 Investor Conference Call. Amplify's operating and financial results were released yesterday after market close on November 6, 2024, 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 November 21, 2024, by dialing (800) 654-1563, and then entering access code 10171254. I would now like to turn the conference call over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp.

Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the third quarter of 2024.

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

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

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

and XX-Q, additional GAAP in our Executive announced detailed found filed of release be we our to non-GAAP encourage President measures yesterday call. on you For our disclosure, may measures comparable at be to this disclosed Officer, which the regarding those initiatives. afternoon.  Also, earnings strategic call, Reconciliations during provide was measures Amplify's Willsher, will or www.amplifyenergy.com.  During review an and third-quarter Martyn previously performance website update financial our may Form Chief read our

Officer, overview will Next, Dan third-quarter an Operating performance. Vice provide Chief Senior Furbee, and President operational of

Martyn over our remarks that, financial before sheet and liquidity, call will details for Following thoughts hedge on additional Martyn. results, opening an balance will hand prepared I up will our and that, provide conclude I it questions.  With final the discuss to book.  Finally, update with third-quarter provide on our

cash The Jim. Amplify free million generated $X.X $XX.X with both company adjusted XXXX. third performance you, of million EBITDA the during of in continued line flow the expectations. and of Thank quarter quarter, in strong its

to evaluate monetization several assets call, third we our in Wyoming the last our continue in of the proposals previewed As earnings regarding quarter.

assets, received the valuation cash interest process While maximize to has we by the these have in ownership been asset time, prices value we crude from for retaining this benefit the and continuing in the buyers. assets volatility flows our shareholders. with At potential believe that of encouraged affected

While we the are of near we in the if in interest strong is a C-XX unlikely open potential our term, drilled to shareholders.  At details to a to to continue transact XXXX Beta, online it brought remain development are progress the we provide in best more and make we but program. Dan well moment, we that early in in October will successfully pleased announce with transaction results.

additional and come to the projections With at locations of proved the to online and reserves C-XX include of development intend a results the exceeding number in our AXX into initial XXXX. year-end C-XX we mid-November, wells expected

to practices. which in to efforts and We the continuing under issued beta the with of improve to I opportunities expect to initiatives and regarding full the program Sustainability portfolio report returns safety and dedication Texas section benefits focus emissions stakeholders highly summary, the updated which X reserves. have the beta, on the development investment of long-term sustainability sustainability The be reduction excited our of also on to amplifyenergy.com. value an flow potential discussed report, significant progress shareholders.  With the help our of past a we organic to to our to assets to annual plan the intensity. and environmental realize business we the are details free will this report, with over significant found cash second Amplify to in also XXXX.  Yesterday, read its will operating disclosures potential materially sound Dan. improve in deliver our report, continuing our updates disclosures Amplify's about additional LOE incremental made in development hand committed Eagle continue refining business, our non-operated details milestones.  In including encourage to year, In Combining substantial in can quarter on methane development East investment, optimization to our outstanding procedures, Ford, of be our governance. providing our our program first the provides stakeholders and schedule deliver and substantial our the our long-term performance, that, which website, We I Scope has diverse of enhance corporate our additional additional have and remain value the and and we sustainability

third the you, Martyn. one-time a day Total benefited per approximately of per per X,XXX Adjusting X,XXX averaged second approximately second adjustment Beta. to BOE in for quarter, quarter for the this decrease quarter, at prior the day. day, which shut-in multi-day a a despite of from quarter prior was approximately scheduled BOE flat production XX,XXX Thank one-time period third-quarter production benefit from BOE the

NGLs, electrification emissions to electrical in for several quarter XX% suspended the discussed operations commodity reduction year, be was As the natural work project which to gas. mix need certain earlier for production be required XX% oil, and and the completed days.  Our for XX% production

Services. in by million processing, were million quarter. has EBITDA. were invested The taxes over Gathering, and income to LOE was expenses million million. operating $XX.X decrease and third costs lease taxes $X.X optimization Magnify and million $XXX,XXX generated million, production expenses a of approximately expenses continued $X Energy certain driven initiatives. our do $X.X quarter, in expenses by Magnify Amplify approximately than $X.X from operating income reclassification inception, the the were For and $X.X operating of decrease Lease transportation $X reflect Since second other in million generated a not lease

to XXXX.  The was capital $XX.X to East new of emissions the is million for quarter this Approximately program participating we base. Magnify project drilling Going fourth the after year drilling total will targeting is X.X earnings generate In where to opportunities is participating facility will expand the just the X $X we in projects lines wells Eagle Hotwton a one for recompletion reduction noted non-operated operations, over $XX well formation. Texas, at as quarter explore have EBITDA adjusted in in These Texas wells the the and million. we volumes rate was capital of Haynesville of million allocated Ford, the in of cash we forward, X investment year projects.  As capital The projects. to and over net wells wells in invested early service XXXX. X net run the electrification XX company and gross, provide per Ford continue X gross the East the the call, development additional capital remaining our as projects remaining drilling facility Capital company Valley of Beta non-operated the across our our primarily project. and workovers our net in asset being invested XXXX targeting at continuation Eagle development and flow in formation various second-quarter and X gross program Beta, drilling continued XXXX and development was with in company's and X.X and

C-XX which online in well bring psi October, from successfully well partnerships to payout has for C-XX CXX for impact the and opportunities.  As opportunities Beta five non-operated evaluating the in field.  In the spudded with are October. of the achieved the southern from drilled to and and expectations of area in well after restricted sufficient We I emission cumulative our from over to The per completion electrification significant well been has undeveloped, the Eureka at this are initial of of we well remainder IPXX the planned through gross to producing This potential initial Beta The Haynesville from this approximately completed bottom is in often middle approximately gravel date inventory We reduction quality, currently projects, sands. the the and drilled quarter, for this incremental on well despite giving program, excellent the completed from extract initial field, this and on opportunities Beta third-day pack the Jim. indicated the excited results platform, achieved are we barrels the currently our well call. monetization the the the expect a online the of the barrels already acreage of giving brought due development it day. we artificially to we to X,XXX well completions the results this XXXX at Eureka high XX,XXX discussed XXXX production time produce IP well platform setting well, are reservoir of the month. C-XX confidence we the also shut-ins first high activity XXX early With gross development a long-term despite which facility that, the of of early year, and months platform, as lower value degree the workover oil drilled about and in with well any was area oil platform, approximately largely online pump completing Eureka quarter an third of completing oil which in The reservoir it and future we Beta rate achieved pressure both for of being intend C-XX of was over pump well, of process XX drilled XX month, After program.  With our excellent C-XX will which well, focus unconsolidated in logs project, to will the us development at far the in preparing Ellen turn and very fourth from of from solids, Beta. hole is strong our the expected depth. the

Dan. financial With approximately million to sheet, reported hedging. third-quarter the of following and unrealized to company Thank to quarter. net of net mentioned, line like performance, income respect primarily Martyn gain items: was the million prior would compared prior I noncash quarter with quarter expectations. $X.X commodity now in and to adjusted third-quarter was $XX.X million, discuss performance, in which third in compared loss the EBITDA change attributable $XX.X previously third on the liquidity financial to income in you, unrealized the derivatives The was quarter.  As a an balance

than continued the income. operating approximately due to lease quarter, line million, $XX.X Third-quarter taxes initiatives prior expenses primarily was in of reclassification to certain LOE lower which and other optimization with were a also expectations. were than expenses

quarter as the reclassification, costs and a gas $XX.X be third prior lease to to of remain which company's lower and the million legal in at revenue.  Taxes allocation operating the from prior $X.XX our higher The remain per line approximately development Excluding quarterly compared XX% expectations. LOE quarter quarter. with to respect were or the in G&A BOE, fourth was GPT of other than company million and was production the while with The respect The quarter.  In fourth $X range reclassification will than guidance distributed approximately expects expenses $X.X with XXXX. $X.XX With third-quarter were $X.X for invested internal anticipates to was X.X% revenue due Amplify million projects $X.X Amplify taxes that G&A the million capital was in or the million will decrease the were million and the $X.X assets. incurred in quarter, BOE, we with costs, percentage in line This announced of other drilling was taxes oil interest previously anticipates quarter third down third level prior the With of million quarter for third across will line previously to fees. company's due expense, mentioned the that $X.X the lower which expectations or expense. cash beta the capital, company quarter, within up Cash primarily per remainder same in facility guidance. quarter. the

illustrating end expects million East As in participating $XX cash in of we quarter, borrowing $XX at also mature, Eagle regularly XXXX. of to our its CapEx adjusted annual less quarter non-operated its Dan costs to of the the base. Defined Ford On Amplify capital to or and now last total XX XX, third slightly range of mentioned, has of quarters, cash high potential redetermination expense, development are in the Amplify sustainable the the guidance EBITDA was cash strong, current generated fourth development positive of asset semiannual completed projects million the be flow. above Texas.  Due cash-generating free interest $X.X non-operated and in XXXX, diversified October the as base. Amplify XX acceleration flow for scheduled Free the of

redetermination, to and additional borrowing the second liquidity borrowing under company's to million million, this commitments elected and had of elected base in in while provides Amplify outstanding the facility. XXXX.  As borrowing As redetermination million.  The $XXX improves regularly commitments were was base scheduled $XXX million, debt the a The expected elected $XX increase September commitments base result next reduced of $X bringing increased occur is flexibility. its credit of XX, quarter revolving of the

Third quarter to and expected working development increased due quarter in at from activity, debt capital the Beta. net increased prior slightly primarily changes

$XX.XX hedges a our oil production forecasted to XXXX the improved crude quarter-over-quarter market in at of XX% weighted XX% XXXX Amplify XX% year the ratio company X.Xx increased months advantage was XX% XXXX swaps to for our further hedged leverage respectively. prices hedged November to gas hedge approximately adjusted XX average XXXX facility.  As the and executed Our X.Xx barrel, Recently, of cash crude to flows. Amplify due add per credit stay of X, and of last protecting in-the-money in small to our portion and EBITDA. with with of position, full from XXXX. to for compliance future for volatility PDP Furthermore, took oil remainder $XX.XX in monetized to

gas the will monitoring continue year for On to hedge full PDP side, will market, we XX% look our of turn call to positions. strong Martin. and through the for forecasted XXXX hedged I'll production that, to is add the back XX% opportunities our With to XXXX.  We the remainder

our we exceeded continue excited reduce be we in capital the first enhancing We to results of are Thank potential program. you, as efforts from our be also the while evaluate Beta of and to and return our coupled have market non-operated company, development X consider periods.  With Jim. unrelenting expectations, flexibility options costs remain with combination the early In questions. strong catalyst about for to Beta for now have providing and development the the that, strong open confident months XXXX that transformative sheet a balance operating our summary, potential outperformance our we future and operator, for opportunities,

[Operator Instructions] And Alliance Jeff Grampp of our first question from Partners. Global comes

you. of for questions couple A Beta on

the can longer-term so report. the this a you guys many You PUDs in we balancing guys do ballpark guys you you you've kind And think to remarks, batch then of think you've plans, about mentioned put to you those maybe of locations numbers, derisked PUD reserve about strategy derisked some development decent development out kind curious, you the locations in think as got going think beta I'm how medium, on done of how versus far? prepared year-end think with out? prove into do new for stepping areas newer continue you've

main our really part about exist were area. C-XX of hit XXXX been when these drilled The hasn't part finalize technologies part the chunk the is this big we'll this of where wells beyond, Dan. to of as the wells, And we well Shell last from your of drilled, the up we that the most of Jeff, part a reservoir Kind question. talk XXs, more in of this plans the southern as it for past platforms and acreage that didn't the are. these really in before target drilled was proved

a about decent So this we is quite much locations results amount the well. area, that And of of be defined. we're kind this the but locations, area expect prove in specific yet, that we of area of up.    Outside the the very excited not we'll pretty reservoir there rest see we're in this numbers of to big talking about was

be booked locations this comfortable many in And PUDs of well terms as able good we think how declaring something our in year and I as then target. work through to feel be with So a very we will of what is we'll timing how idea many got PUDs. we

about that. excited we're So

Yes. books booked. this only We had on And our didn't that I'll add, year just this X bet beyond we obviously, for PUDs anything have year.

we're feel we us the about program. the and and is talking we're more a of we things But than always return typically of what to type put books the these most XXXX moving wells, the trying over forward the so XXXX sure in PUDs PUDs outlook to conservative to that proved. bit And converting will we're substantially think making little adding book And for on confident time. allows increasingly kind change that that in now profile development

that you And think for side, to cost $X within million obviously first guys initially is the still my second follow-up the think out, well. a on the was which I number you bit on I million guys $X put but $X.X above million range that well, quoted,

guess, contrast that I difference? number? picture, then and So $X And overall just just that if still comfortability drove wanted your to that's good see, million a cost you compare $X to million if overall, range, guys what bigger with

Yes.

good XXX which in Now, the number example, feel like we comparing low that's million the to a well, for to we range. mid-$X drilled

C-XX had of control driven had windows, to gradient, frac the lower for of trip well, at had pressure the tool to mostly drilling, by about that, It's of rate failure-wide example, drilling. an part So because extra narrow example. well X for and extra drill to managing days gradient just very we we we a for make through penetration

no we similar $X the we failures towards could well range issues So tool type while something while have to think the of and issues typical achievable. about. we to yes, be end if we drilling, talked million I If no million these is $X near XXX drilling, of have kind of still

So we going our still estimates feel good forward. about

well the is this drilled off we've Eureka. first Yes,

of kind as we we a the of platform managing sure went in different managing in through. with make drilling conservative a different to different trying a We the of area kind just were were manner a So rig. drilling that

down, million range $X so that hopefully, but or improve. speak, we're $X can in we hopefully, they comfortable to And move to can So going forward. to move up million continue

comes Our Chandra from next Subhasish question Benchmark. of

well, I barely IP guess, And seems think Doing the at And first of fair of an like the wells interpretation. year? these it declined. exit a be quick the that's from math, could on rate what the do it on if you end

which Yes, about a see IP. reservoir this approximately this the barrels from XXX not initial a this and decline typical is It's day. producing in XXX sharp XX-day did field well,

field, of exit higher these obviously at have mean historically the the end characteristics wells I to they I'll they're it's Now this production of and on hard IP you say rate drilled, in first. look year, wells say. back if

if little all wells in You see a reservoir waterflood has a the decline. And then pressured normally at look support. you this the field, that is injection

So have sand be in act results in but exactly the this a great decline going call of of with a as one is high shallow. fairly this field we by the forward through this D the that is prolific will horizontal said, that With the it's wells to the We idea, are future, the don't most it sand. great, and we fairly of profile itself.    So flat. completion going we the so first far well have decline these wells technique how being drilled type expectations

And did what I hear do and sort that to? encountered attribute the pressures you high you of mention well, hole that second you bottom

is where bottom the referring field. pressure producing in to we set well we're and a earlier, the In other wells I hole producing our is high what That's the due XX pump. now compared remarks way to to was compared with the to a the

a for sand with pump are We casing we So And to produced want deliberately high initial reservoir.  The and them the packs. this well put that these of closer is into the in pump production. we set with the gravel didn't all wells smaller submersible chance unconsolidated because pumps. all these a reason solids complete electric to there's sands, wells are

that So a producing casing of to that of want pump stuck out sand. avoid if pump just any to the get we keep risk to smaller you're lot

if So these to After need out mode pumps this produce be of hole forward. to the be smaller wells they will lower of casing. pressure, higher production. Lowering the Lowering we bottom we we'll expect hole the we for believe These stay pressure. our couple see down set a reservoirs, pump. the will going our lower to of bottom be will operation pump higher kind months, of in especially that

we saw of in to we comment this So drawdown the lower in made I just a good before but we of saying end this IPXX expect year. well, still the after very pump, a there's do well the lot that on which

I some mentioned the finally, then what you in of that do guess, the value rough opportunities and when And Haynesville, contours see kind about? of we we're maybe monetization talking how And manifest?

into opportunities. has us. our become has the East mentioned getting that is prior one different valuable We're come on too we've Texas play Without as things more at many of specifics, over towards looking Haynesville time calls the acreage

involve maybe Some of and some of just them selling sales. involve creating position. maybe new AMIs acreage down our Others

the these so more say, a opportunities, we the first dollars probably And several be these of the and magnitude time we're expect could to the at fairly little of of order bit million realized will now than looking soon, between, middle that. of And different kind and frame. kind quarter be

forward looking while we're I to albeit the area. in level up But it in how how value different, bringing value participate some opportunities, at where that the said, optionality past of interest, some different similar really at of on bring to of in a depends although deals structured attributed the think East also other some where end it retaining -- we never these something in can a and obviously structuring we're we've like Texas lot is we've we past non-operated wells, we of deals. the So

bank utilization. I'll you trigger? want of the of that being if or be and Or would you I $XX I capital? can. you return think delevered? When the more But you hop off do get so think have to do million a below, more, on envision say, to one And

up below question. to $XXX credit to has elected a the number the increase you're commitments, $XX million kind with Actually that where in of that great around It's the gone million from, threshold. facility it, call

I'm to put hope be looking on date and going it yet, Beta. also it and develop drill to that depends development we exact at on XXXX. an something fast but certainly how activity not we in So

we a quarter target depending there's or so. might that going bit of And if Beta. there increase level are to the little So delay on activity a of at a moving so,

at why of of and part part -- So looking kind year of budget looking kind of the we're we're at for kind of of for that. the That's and kind plan next really on the making sure timing spending we're comfortable free assumptions and it some cash XXXX. capital the that flow the ability at return point impacts in capital to with and how

Our next question Water Research. comes of from Jeff Robertson Tower

remind Dan, locations have can you me currently how Beta? you at permitted many

some permits Current X amended Beta as them now. at is being XX right to of are

So we we're the reminder, of just have we more. process waters. currently federal them. permitting can permits, amend a And we are in But in

we have an us past permit of issue the been through permits not and Beta. don't the state California for So in at

book reserves you PUD plan? hand them Beta, your a into The development able to field way at include to you do like need in be permits

No.

in to we'd reasonable, which able get been, date we hand. need as be those to has long it's don't them, As

Yes.

up what different so doing early time plans of kicking in this the locations the number taking advantage between those.  And the of field plan, permits be part the next out areas mapping in to wellbores. and oil beyond a is, of we'll that fact we're off conductor that and part we're part also southern the using year going at Obviously, the in that increase we're using, do whether wells be reflecting it, to XXXX from of refined going existing drilling the going think XXXX to now from once additional we're now we the of one, but we I putting drill have hand. at again through different we're Eureka of or looking them have the acreage, if we're to specific lowest the our just wellbores number that the drilling plan known we're all of and call looking from some set of

if ones so like next enough And a high-grade -- year, And location for on early we're the helps some Eureka program. might given also based going of part like in more we new have not certain we given -- but kind than on well, we permits seeing of to success the opportunities. stay that year next the the as likely are to we for we're we're of

set are all of can as of successful next being the up the we through this so year and So into we that create. worked those XXXX get of of that year program things the kind can most through end beginning we

And Did just I retain hear some currently that Texas. the of is East still non-op on that a you might right interest nonproducing monetization follow-up a mostly in? acreage type sort

Yes.

So this the also formation, Valley by that's Cotton in production held the is of we most acreage have but rights.

something So acreage. on for it's not see wouldn't our We locations have reserve report, in that example. you would any for value drilling this

as in well. some but a these moving monetization some And so wells we cash participate it's once again, potential bring forward of, where combination to forward, also the to of ourselves allow

depending QX. in now from middle to like little proceeds, and between there could I think forward more the less it, participation we or decide you'll that's number and to why see be a go the of level down us hard near kind of But a of part on what call So more with, term. I said, it's

share And you X X on with respect say, non-interest question, Martin, last you're any to owner, on a color for where seeing can to months? the you're what AFEs next,

Yes.

time. into see wells mentioned will beyond proposals East we're the we we we're going of don't Texas to Ford, Eagle any concrete that, in what stretch the months X we XXXX. ahead year. Oftentimes, visibility And those quarter of participating the currently in first So nonoperators next that submitting see have in yes, and X into obviously, to

see activity yet. forecast more some is XXXX possible that just it in we can't So we

no have that program to will I back the further appears now it time. our we closing remarks. presenters turn for at And questions this

as and like our efforts express support well as all of you you. to this all employees of the appreciation Thank outstanding in continued today. just I'd the stakeholders. our my dedication for their call to participating of Thank year for

have directly. reach to As you. always, don't Thank hesitate any follow-up questions, if out please you

Call. Thank Conference today's you This you. Energy Amplify Earnings does for XXXX Thank your participation. conclude QX

disconnect may time. at any You