AMPY - Earnings call transcript Q3 2020

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Operator

Welcome to Amplify Energy's Third Quarter 2020 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 conference call, all participants will be placed in a listen-only mode. Today's call is being recorded. And a replay of the call will be accessible until Thursday, November 19 by dialing 855-859-2056 and then entering conference ID 1783609, or by visiting Amplify's website www.amplifyenergy.com. to of conference Corp. Business like McGlynn, to now President Vice Development would turn over the Jason I Amplify Energy

Jason McGlynn

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

on Martyn Amplify's Joining Executive the Interim today Financial Chief and Officer. call Chief is me Willsher, Officer

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

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

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

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

Martyn Willsher

you, Thank Jason.

details an balance of our the on over quarter. will comments turn sheet. our Jason the additional hedging provide liquidity will program third our I financial and provide call, quarter to this to then for call I position performance, overview and During

approximately volumes XX,XXX per quarter the remarks. to was XXXX day, oil with by Notably, oil our the will volumes day barrels increased second second Beta. we production and exceeded per our BOE in increase barrels which the Production production approximately, quarter XX,XXX per at quarter. questions statements, in This closing primarily attributable will and averaged Following from conclude to mirrored internal relief royalty prepared XX,XXX expectations. quarter for take X% I during performance, third day

it long-lived, and internal all However, reduced note despite is to that sustainable areas These asset the low-decline or important expense. results capital weather assets. third-party of met demonstrate our interruptions maintenance value exceeded intermittent expectations

August, our budget cost We continue and of we quarter we quarter, was third operate adjusted a focus in of interest considerable hedged approximately with and free operated $X cash assets. will forecast efforts. collars. and less EBITDA work of our non-operated and the cash profile as Ford fourth internal Remaining have year expense million our Since cost in cost at adjusted added reduction production Currently, the meaningfully of our which primarily XXXX. approximately initiatives Capital mix a slightly anticipate associated Third the of above to approximately initiatives. flow for crude spending amount to oil production, result earnings hedged for in driven third with XXXX We've $X and strong last high fourth as call capital XX% facility quarter capital in the our million a we million, and attractive Free XXXX. quarter hedging be exceeding flow expenses was was exceptional million, as CapEx internal XXXX maintenance our oil projects estimates our expectations, of have return hedges significantly significant where oil crude minimal pricing our cash was swaps the crude execute again for Eagle the $XX.X was program. spending execution and by EBITDA additional reduction capital validating on cost-saving quarter asset. a $XX on and across our in defined

greater Our recovery. which book incremental intend our as collar in positions for year, are the to the participation and more we'll XXXX layer over heavily allows. weighted to upside We months, to of to half add the market market in XXXX begin and allow the will back hedge hedges coming on the XXXX

and was the have order of volumes most during oil very to we those moving in the As capture monetize recovery that explained company call, company, rehabbed market fully contracts to the crude at oil participate to beneficial in into improved economics. XXXX we year. and in This second time crude trade quarter position our the dislocation accrued earnings next locking

potential Our environment. program capturing will cash flows, also price improving then upside while future commodity allow hedging us and protect to

As XX, under a the section. XXXX, mark-to-market hedge Relations net current details asset today Investor of website and quarter $XX our position on Amplify's of October was million. value additional our our was posted presentation hedge on earlier XXXX contains third positions

scheduled recent million liquidity we of $X our flow. reductions a compliance cash Since Moving generated base redetermination, our reduced free position. XXXX with internally facility discussion borrowing and spring indebtedness a monthly credit the and onto current redetermination have using

$XX October total Amplify hand. outstanding million had of with XX, million net of under our credit debt million, revolving As facility cash $XXX of $XXX and on

rate reductions reductions utilize further the of for borrowing November. debt underway, currently XXXX borrowing concluded, excess and spring capital process projects. Amplify return base anticipate now to and XXXX before we completing cash is process the flow end Amplify's With of higher base additional fall for redetermination the expects redetermination

base to that this anticipate COVID-XX Jason position substantial for supports Although, mind, free borrowing call that commodity we flow redetermination a our With and spring in the a over volatility, liquidity result generation. in price current process cash disruptions now related solid will the a ongoing the McGlynn. foundation turn I'll XXXX as market pandemic and Jason? reduced provide to was result the of

Jason McGlynn

Martin. you, Thank

quarter attributed quarter. strong the exceeded across expectations. As areas mentioned and all result be took asset with XX,XXX averaged Beta royalty third at the approximately our effect This the for internal was the beginning of prior previously and production which performance day, relief, which to outstanding per of flat quarter third BOE can

oil internal per our mix and this or release, volumes natural for were earnings production crude XX% quarter-over-quarter, a expenses the lease the our BOE operating or quarter X% due basis resulting a continued in prior outperformance. in our basis. for our was million exceeding dollar reduction in of and $XX.X quarter $XX.XX per quarter operating down considerably to year gas. instituted a the and on by XX% The third total of earlier execution both and BOE initiatives cost-saving mentioned million Lease $XX.X expectations As NGLs $XX.XX oil, expenses production from XX% third BOE, grew per

was and to and $X.X in $X.XX related BOE $X.X increased the other million related Taxes $X.X outstanding or or operational XXXX, per the this compared gas Again, during non-cash Amplify transaction million to will million primarily move we remains million in continue and remainder million capitalize BOE third As look out compensation this debt close second dollars million, $X.X in oil up non-recurring per to or to to was million approximately gas revenues quarter. to and G&A identify costs of of and quarter. increase and increases BOE bad of to to quarter. efficiency, committed reduction excellence XXXX. operating team including in or $X.X was our oil to this on per the an expense XXXX $X.X additional and of efforts. into the quarter quarter $X.XX the BOE was during revenue $X.XX $X.X quarter income increase increase primarily second per GP&T cost compared for and expense. $X.XX quarter and the This the

by approximately to the $X.X non-cash That end G&A $X.XX totaled of million that, way annualized to quarter per the cost an BOE in $X.X delivering third of for $XX BOE our Excluding million or This in run operator, validates approximately company's and savings the of and cash cash million concludes quarter statements. non-recurring million. paved $X.XX G&A in prepared of the or quarter the per now XXXX. for $X.X questions. reduction costs, With expenses are annualized ready rate we the the reoccurring compared G&A achieving third the second commitment

Operator

of going line Thank question from come you. Northland. [Operator is Instructions] And the our to Grampp, Jeff first

Jeff Grampp

guys. morning, Good

Martyn Willsher

Good morning, Jeff.

Jeff Grampp

start sense can be is the kind do of a be on do you was borrowing but cut don't you the a kind able the front. possibility, of yet, base to extended, going of if Or removed? to think be a banks want forced think do you know, -- are amortization a in magnitude? you to do to And obviously, the feature number I imagine wanted you of or might any have have hand you table, that sense directionally flat kind there have ups but Martyn, it the Hey, flattish? I at least off be

Martyn Willsher

process. since our implemented. an to far on But increased the think we I last and that we've initiatives assumption, have we executed cost obviously, reduction redetermination had So, get as have obviously the through prices as

that think with reduc outcome is base And reductions I a flat likely no point, this believe a at flat result is flat mandatory point. at so, attainable. this but I very guarantees No the borrowing a -- additional most

Jeff Grampp

clear. very Okay. That's

deployment your here thoughts capital in here capital kind great on have kind maybe beyond multi Do sense of of kind of generically, just gas be the into guys projects you? winter of maintenance or gas capital how flexibility. from and prices you're side, you rallying make we see these at CapEx about exposure seem get the obviously you of million few it it guys mandatory thinking On terms commodity the would for to

Martyn Willsher

Yeah.

hard we but obviously, a fairly look operated that some be gas project that could of of So, of budget, also interest working have us. non-operated some there's to a taking -- to of a projects. XXXX potential, as a part projects mixture significant look our There's we're in, those interest at

from and an looking those. make for projects all sure certainly making managing we're those managing we're and cash payback sense perspective. -- period and flow So, at IRR both free that Obviously,

years certainly, so, in -- of will they'd couple the they're of couple kind process been months. we that out table more last the than fleshed on and be over next budget of So, much in our the

Jeff Grampp

Okay. me. one for Great. Last

a that? side side, can kind kind I the Just of the on any color on or Board is or you kind has of on CEO of know, undergoing to search us interim the formalize things, provide of that, you're looking

Martyn Willsher

months six got focus we Well, last has primary executed side. just the for obviously, -- operation everything sure making we've on been the our

-- CEO, I so going ongoing review and we'll far search different there's As into coming months the in a something as that expected for no know, this I and XXXX.

Jeff Grampp

Okay.

Thanks for time guys. the good. Sounds

Martyn Willsher

Jeff. Thanks,

Jason McGlynn

Thanks, Jeff.

Operator

Our of Coker the Noel & will from line Parks, next come question Palmer.

Noel Parks

morning. Good

Martyn Willsher

Good morning, Noel.

Noel Parks

doing Hope, just down everyone questions. a well And there. couple was

performed monetizations your or was -- updated And the at You or year. you talk normal totals. the in Were earlier there the memory -- any the settlements? but did just refresh looking you in about did I monetizations just quarter, there were hedge

Martyn Willsher

before just mid-thirties. was chance monetizations There we Those during settlements in quarter environment. when quarter. normal end the have in No. the much XXXX And were we'd felt better the those the like this a the second the at hedge took strip rehedge volumes Cal of to year, place

XX, rehedged somewhere And locking depending in kind gain. between volumes, hedges, so, the of XX those and we've on that

And this kind during that we the of and on able so, idea always that were quarter. was to execute

Noel Parks

Great. what or more don't products. And you're or what sort -- for you're characterize price formally your seeing a of generally what expectations know trends different you importantly are on you're the could guide just but what watching maybe just realization, you what even for -- -- I generally

Martyn Willsher

to Yeah. Obviously, past, price we've got realizations. in the

think, the obviously, last, been a than call NGLs bit they've I little year recently over prior. it, seen stronger you've be

the obviously, better. better. are is, crude doing little Gas bit realizations to relative doing So, a

improved region Mid-Con has obviously the example, its as net well. For backs

areas the been think it's little position it's some large, There's But and a bit a where in have weaker. non-operated the think oil has I -- bit Ford been stronger. little So, that I by pricing improved. we are Eagle a Rockies

it's of little bit been mixed so, And of bag. kind a a

be realizations hopefully a implementing I those And guidance and give by can you on now of color for again prior best call, estimate next go-forward and for of kind so, for great XXXX -- kind our this quarter your the from think, we'll to questions. look for would be

Jason McGlynn

year, the a -- this Noel, thing side. there -- volatility of Yeah. is there's the I'll a movement commodity Jason only and lot disruption this add lot in is of

out XXXX that midway the little said mentioned some anticipate some stuff going said in in And there's in in we've Mid-Con area too. been we Martyn as our happening some norms of pricing. Beta, and bit And that we'd stuff back And Rockies. that's the sunset -- the out as dislocation farther a better forward pricing move that of actually as to kind of of but we had into

historical as I that QX for moving and said, more forward, we right kind we're is good now. think going where So, proxy at Martyn of a anticipate to norms back

Noel Parks

you've of we've in And with -- had Okay. oil $XX some is million last Great. look we and pretty past I least CapEx the on improving pricing bit COVID or good, corner couple $X gas if And just things maintenance been the months. just sort the certainly if about believe contango. of talked in had in turning were a we million. have that level -- for to baseline oil, And but disruption more we well, we of at started a little stabilized

of say are might on there you sort have of sorts XX we have any So, closing late of headed back sense that sort have at of projects we, least, now, quarter at of bit were higher strip. were in the that the low-hanging in that whether Do -- a a summer. little any if price, where sort burner, sort from of like fruit in front of we encouragement to

Martyn Willsher

online. basically that of some offline low-hanging now, we back of kind bringing in talked production address beginning this those XX economic ESP company, in Beta. especially Yeah. Oklahoma, at Those a the as have might make do -- at Obviously, year, across the of just over work environment. bringing that. XX, about at talked projects opportunities right number developing those more Obviously, that's we that some the about are of fruit of we've sense than they I'll right

projects so something and price fact well. -- the And if that talked more obviously, Texas attractive be that we'll Oklahoma as that's improvement lot revisit gas XXXX, a now, might some those see to already is Oklahoma then, And we both continued some and through projects. that small we East applies about potentially that

it's -- if clearance we're in above start a XX we that still I that but XXXX do to have flow especially like little of level, depressed this have moderately can we to activity levels in environment, point. going get increase also, -- but cash at be to in opportunities, conscious we while free So, bit very a that, in then maybe start some said, of and we're

Noel Parks

like And for an example roughly work payback that? the ESP the Great. substitution, a as especially opportunities, those what's over on project time

Martyn Willsher

that look year at or grading are high ones we Typically, a the less.

and if right kind of the inventory several both the there's improves, oil so, price in And those up the still greater ranking. price -- now. of And the price gas the obviously, number those of move

looking continues And so, be are those at are of because recover, obviously. things the as mixture NGLs, the oil and market to kinds gas, of they we'll a

And on there impact economics. so, has we're streams that three the all of the and cognizant

Noel Parks

Okay. Great. Thanks a lot.

Martyn Willsher

Thanks, Noel.

Jason McGlynn

Noel. Thanks,

Operator

time, At Thank no questions. we this further you. have

Martyn Willsher

All right. you. Thank

the for this company. So, and has year our challenging been industry

my COVID-XX like continued the its please expected company's and slow do With would questions. cannot employees today. persevere ongoing outstanding dedication. express reach opportunities. cash with has impact their we remainder been free for demonstrated for I any not forward to to demand to enough preparing appreciation XXXX our continued the to While to the XXXX, pandemic to current has and And always, their out I through execute the strong as for support these our and thank ability we for you as future us all prices for efforts times. us stakeholders organization recover, for and continued stakeholders difficult of joining also continuing to Thank resiliency of have additional hesitate to adapt the and environment. flow look to to

Operator

participating for conference call. today's Thank you on

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Amplify Energy (AMPY) 7 Nov 202020 Q3 Earnings call transcript