AMPY - Earnings call transcript Q3 2018

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Operator

Welcome to the Amplify Energy's Third Quarter 2018 Investor Conference Call. Amplify’s operating and financial results were released earlier today and are available on Amplify’s website at www.amplifyenergy.com.

During this presentation, all participants will be in a listen-only mode. Today’s call is being recorded. A replay of the call will be accessible until Wednesday, November 21st by dialing 855-859-2056 and then entering conference ID number 9465818 or by visiting Amplify’s website, www.amplifyenergy.com. to President conference of and Corp. like Willsher, to Amplify now Vice Senior Chief would turn over the Martyn Energy I Financial Officer go Please ahead.

Martyn Willsher

operating discuss Amplify Good the quarter on third call and will follow stakeholders President results. appreciate results, today. our conference to and and us We financial on the by with joining strategic Mariani, morning call for updating welcome XXXX. direction to will the begin Ken update operating you the Chief and results Officer, and Energy I company’s an Amplify’s financial Executive our

we management’s First, and assumptions. our are remind views future to current team. expectations are that statements remarks certain on some management assumptions and with to and regard would of uncertainties to and various like risks, based of events forward-looking reflect may subject remarks contain Amplify’s you These

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

but to, about discussion XXXX list differ during from of our made this fourth cause results not statements may and actual release full-year are those to to statements guidance. materially quarter filings statements and our call. refer for forward-looking a Forward-looking of, Please in press include, SEC limited and factors the that

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

be in Ken? I to Also, comparable release expect Reconciliations during on disclosure, to Mariani. in to to Ken of over may be call. Form we disclosed our this which Quarterly non-GAAP detailed now our website measures those you GAAP Report encourage press we may additional financial For at file later today. will mind, turn measures call With this www.amplifyenergy.com. XX-Q, read the our measures or on found

Ken Mariani

last us joining operational this in the today. an review as for third stakeholders our will our provide quarter. Since on appreciate asset I a certain as Martyn. update been the our call the on our My you, team and Thank quarter, over go-forward internal has well remarks progress performance key earnings hard Board finalize conclude prepare initiatives, last and our stakeholders. strategy working to our Amplify leadership call, strategic

allowed first subject the release $XX.X U.S. million key an third the since Beta to was cash release was trust to which of pursuant The in conditions release from finalized the during initiative that satisfied. certain This account. order quarter for the decommissioning cash have our made Court, Bankruptcy of been

$XX remain $XX.X the us been added A-rated release, to with projects. liquidity of Following million surety to by sheet, This obligations bonds and cash Beta’s in cash and million future significant supported balance fund decommissioning provides has fully our cash.

we Another is are of announce facility. key excited to the initiative refinancing credit Amplify’s revolving

us credit and by $XXX will to new as is our administrative and led we of The initial by million. Bank facility this additional cost as flexibility Our be extremely of strategy. base has savings liquidity, provided go-forward facility an new borrowing pursue Montreal, important agent,

identified the additional Company projected expected XX% opportunities allow Company $XX quarter Amplify’s flat is the at expansion by in and with expects be the back prices. shut-in increase was XX We facility by XXX approximately the million the at on production expanded operational capacity Rockies. Company’s invest assuming locations investment XXXX recycling approximately these by Bairoil generate properties, the milestone seismic Company believe in numerous The production in already oil strategic wells The the quarter recent of survey. MMcf/d, be important increase currently approximately The Another by are to will the XX% to to with million return Boe/d $XX COX online. bring possible made of during supported returns XX anticipates WTI field excess $XX in expanding drilling approximately which additional to decision WTI $XX incremental will of Bairoil that fourth wells and completed by flat there drilling prices. a facility of XXXX. PVXX value, with XD the rates four that of assuming will also in

first drilled and is initial with excess EBITDA, expectations net generated X,XXX day, the Boe/d, X.X additional but $XX.X turnaround range to Eagle Bairoil this driven our the production in currently quarter be Company’s Field, with for In from production of more This guidance decrease annual anticipated of production gross, million. will in addition, guidance. from which with in reduction over XXXX. quarter Amplify the the approximately anticipate was quarter The Ford these primarily expected quarter production quarter by these return wells which we to our expect scheduled that per sale Ford during Eagle year We in at Texas than we the in the assets with days. midpoint maintenance natural XX the production results previous participating the XX% the above quarter was of MMcfe previous $XX wells had Production XX Boe/d properties, quarter the adjusted shut-in quarterly XXX wells of for wells third that in from in during rates. a South X,XXX perform third our of and of at million of line approximately to declines of second $XX XXX%. line third as continued averaged wells’ quarter, Amplify’s approximately rates line peak averaged increase

six production expectations. XX% previously expenses was initiated expected Both Beta from third the previous due LOE of Field, volumes. production per guidance increase or reflects upward production. a $X.XX quarter levels following in completed line will October were in Mcfe $XX.X trend anticipated was fourth impact in successfully, primarily quarter quarter Additionally, scheduled unit the Lease which This a quarter the per result these million were in the day has the reduced guidance. to maintenance second to Company and turnarounds with our to reflected returned Mcfe. issued early per of in operating since turnaround and

primarily hired impacts, going production to expedite activities We LOE properties. fourth on on primarily We the a rig into quarter, increase increase expect workover of our that to outlook in of Due XsXXX increase these fourth workover high have instead we an to to back activity that area crew those currently production. second recently of backlog bringing a our projects due timing in will Beta XXXX. wells in the again rate return and of anticipate quarter

million, an now enable quarter program range $X.XX to the begin us earlier with in at $X.X wells $XX now fourth the guidance of if to also second compared to associated - approximately the workover million East bulk range crew $X.XX XXXX. spend we year decide and the Rockies. is However, Capital of Expansion will for of Mcfe. quarter LOE spending increased Plant Capital the in per Ford in spending in drill Texas these remainder of range. Eagle additional was to $X.XX and and projects XXXX, capital and in the we of for expect Beta the in million facilities annual the rig to Mcfe Due was the quarter changes, full hiring a our The $XX the - be to third $XX forecasted Bairoil per $X.XX year to activity. for turnaround and to drilling be within LOE the be XXXX

never stronger. Following sheet balance an has exciting quarter looked for Amplify, our

fourth metric assets, now management significant execute is and Month EBITDA team, net evaluating is of on to than best debt our free these to strategic developments initiatives. currently $XX quarter more our With of flexibility positive $XX in of Directors, the liquidity strong now to future and XX forecasted of the trailing a million million Our base million. we The flow have with coordination cash X.Xx, is all has Board Company producing additional the results. to Martyn to forward over use financial look our to our upcoming investment shareholders will and details that We and in free the flow I and in our and mind, to our the strategic to return capital call offshore opportunities months. a California With shareholders. of discuss further liquidity on our would Rockies, funding to turn to consider on communicating executing reducing decisions plan debt in $XXX cash like additional

Martyn Willsher

from levels by guidance severance third third the the midpoint Adjusted to working was the million our production in financial level. for compensation Thank our and additional $X.X like anticipated due better primarily for for million. the expenses plus capital was the results credit was of quarter above of which start favorable due was to result new activity million than reduced cash Adjusted discussing decline This the activities gas-weighted strong quarter, $X.X quarter $XX.X G&A operating which updated the the of liquidity, EBITDA some quarter, range pricing. for followed second was guidance to $XX from of by costs. to third and quarter reversal the million $XX $XX.X you, from which details to the EBITDA hedge million, positions million realized properties reduced was quarter due lower adjustments non-cash million, included was commodity $XX.X million. facility, $X.X This more of of Ken. year. Net I’d the on our and for

approximately annualized our expectations. the was one- from more these extremely and run to rate levels This to G&A than on in is XX% basis. $X.X Excluding XXXX for third time pleased continue or and reduction an expenses, future quarter with million a expected line achieve we million are in periods of $X cash

and revolver for focus less guidance $XX enhance define periods. expense to continue future our EBITDA $XX as G&A Cash quarter, million. We proceeds and million which liquidity. These were capital million will of interest the $XX was and the expenditures, adjusted used pay Flow, our down on in to range we cash within Free

on credit liquidity mentioned, the we the closed initial Markets, with Bank for $X base of approximately Regions lenders be first U.S. of expected to The Bank reduces the of new Montreal, with credit new April of agent, new million joint by credit basis, and in a As facility This based a year. Amplify’s Capital secured facility on credit reserve- and million will November facility. increases $X and Lynch, syndicate with Merrill semi-annual senior $XXX by administrative XXXX. interest expense as a redetermination lead for revolving a new Citibank, America arrangers matures Ken facility X, are $XX per November an redetermined Bank credit new million. borrowing Bank XXXX, and facility on Xnd, BMO

the ability needed. lien flexibility for the debt Additional of new credit to unsecured structure include hedging, and and utilize if capital second in benefits facility additional our

shareholders. through optionality dividends have now interests our the we or return it best addition, is to In the if capital share in of buybacks

borrowing facility impact borrowing Amplify’s $XXX Xth, November on million base Liquidity of $XXX credit includes which of of cash the million, of was consisting capacity its credit. of with outstanding. million, and $XXX million $XXX As million million on $XX outstanding $X.X letters in revolving was available of hand

Moving August on additional update was hedge liability to our recent as most not our net hedge our executed current and has $XX of a current hedges November mark-to-market position. any million position Amplify hedge since of on Xth, Xth.

credit strategy our we With consistent of year-end hedge additional a our is focusing new with intend properties. facility, our the on in to before oil volumes weighted manner completion that now of

presentation our a intend a will limiting under on costless swaps-only maintain to collars investor downside. allow website our deferred section. us Amplify’s the also to mixture portfolio today was hedge upside which We and additional relations puts, our hedge swaps, current while positions posted to shift with of from

the and crew quarter $X year capex increased we in expected last fourth back our at initiated Beta has quarter revised LOE we we to the have for projects Bairoil the Our are earlier and guidance quarter. midpoint, the rig the flow by have call to quarter increases, Adjusted full $XX will year, spending. field. been in the reflects and projects fourth for fourth midpoint capital increased of free issued today remarks. approximately EBITDA at is workover be full over and Full year $XX to million for Beta over development turn the million Despite increase projecting LOE million the now I cash and $XXX million closing despite guidance still as for the Ken additional

Ken Mariani

Thank Martyn. you,

results increase for than as since a last of our The a new with significant development operational Xth, success and great more on third August as call in earnings million quarter was liquidity exciting $XXX solid well Amplify, opportunities.

you This believe our previously, please reach a remarks. progress. and for position we us to now in joining our out concludes as any are and on with stakeholders on hesitate As mentioned to will plans strong questions. update to us our we always, prepared financial our Thank execute continue don’t to go-forward today

Operator

call. concludes This conference today's

disconnect. You may now

Amplify Energy (AMPY) 11 Nov 182018 Q3 Earnings call transcript