AMPY - Earnings call transcript Q4 2021

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Operator

00:07 Welcome to Amplify Energy's Fourth Quarter 2021 Investor Conference Call. Amplify’s operating and financial results were released yesterday after market closed on March 9, 2022 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. A replay of the call will be accessible until Thursday, March 24 by dialing 855-859-2056, and then entering conference ID number 8984535, or by visiting Amplify's website at www.amplifyenergy.com. like Senior the Financial Vice Amplify Corp. now to call Officer would Energy McGlynn, Jason President I to conference turn over of XX:XX and Chief

Jason McGlynn

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

statements, Amplify's may that we various reflect me we'd get are which Joining Willsher, like the contain some Executive of Chief to and and today call and on you of risks, assumptions. started, remarks our Officer. forward-looking Martyn remind views events current is President XX:XX expectations management's uncertainties, Before future to subject

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

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

comparable During to results provide program Pipeline Incident. For during and guidance an update the at updates www.amplifyenergy.com. disclosed this with was on Reserves you the detailed measures Also, additional our release sheet. year the the our for Proved website I disclosure, fourth will XX-K, and be XXXX measures start we follow Martin balance California those call, full review hedging us then up or year-end may Southern will our may be off expectations Martin our will earnings call. XXXX. then and with quarter of to read that non-GAAP measures Form our GAAP encourage XX:XX found filed on of financial yesterday's in afternoon. Reconciliation

remarks, conclude we prepared with session Martin question-and-answer will our will and call conference remarks. Following this a have closing

Martyn Willsher

the like few results Southern our update into Before would regarding quarterly and spend outlook, a get release. I XXXX XX:XX California we minutes providing the an to

I and for state we United robust California First and Southern the the as stress Department events gratitude The mobilized Command collaboration and response local and Diego agencies. their San and foremost, cannot California. to federal, enough This partners Fish professionalism effort Unified Guard, various a our States and to my other of Wildlife, Orange in counties Coast includes

we deployed had X,XXX rescue and officially Additionally, safely Separately, for work and and October on pipeline contractors numerous officially with it federal the by XXXX. damage any relevant work safety to down have successfully We XXXX, X, the oil of of completed safely XX:XX plan following with shut-in in dive December nearly States that operations the announced repair in and continue phase remained that causing and agencies oil regulatory the and the oil Command release event that the to pipeline concluded pipeline and designed advance removing this world-class cooperatively struck vessels by pipeline we impacted plan shipping back XX, and Beta United to week, complete the two our approved filed damage effort. a promptly clean-up bring repair engineering Unified whose counties all last and was in early the complaint online. release the permanent field X the X:XX Command and October. response pipeline February are this companies organizations anchor against regulators temporary for wildlife the also grateful On teams, response of and stepped phase on was we Unified the year. Working volunteers, the spill Guard then we the as Coast part response and

California, of could their Southern in because of at surrounding have cause entire the these Exchange the Marine this the actions XX:XX complaints environment October We their against safely these and to strikes of that to remain the employees filed notified way committed avoided. they and or our live which incident claims notify at, happened a should parties many release Amplify against where us protection anchor the XXXX been parties occurred. of failed This Amplify operating communities communities, ensures the any raise event filed of release never inactions when also families. We event.

the bringing with turn eagerly back approval burn and XX:XX to the cooperating continue investigating agencies results. of regulators overview and over field federal agencies online. and our from state await financial I permanent complete all and this call operational the Jason We plan Beta matter repair now permitting to to federal and will

Jason McGlynn

you, details fourth XX:XX first book, companies sheet. regarding results, then quarter our give provide our and update Thank of I'll an concluding comments balance Martin. other hedge with on

a As Oil mentioned the XX% day the in of XX,XXX of XXXX, fourth of third and the October operations down were mix in BOE our commodity volumes XX,XXX per for BOE day, decrease quarter suspension approximately of from XX% NGLs, result gas. X. release, Beta XX% a with earnings production this on at quarter the per oil, quarter averaged as

LOPI per per oil, instant, BOE quarter oil the Total XXXX day XX:XX quarter Beta. of change production through decrease the the by the from $X.X XXXX attributable due the million was $X.XX was derivatives, less quarter. or reduced of in and million million or XX compared accounting third quarter per revenues BOE suspension $X.X is related comparison, GP&T offset non-operated December months previous million pricing, lower in quarter $XX.X Lease third this of $XX.XX of XXXX. $X.X activity primarily million compared production quarter. per lower expenses Our in quarter offset partially were commodity function higher The loss approximately For income barrels or Beta, prices, from to $X.X operating loss G&A taxes quarter. gas BOE of BOE Fourth property. field million $X.X $X.XX Incident. largely fourth million following our This related the average produced to approximately for increase X:XX were the payments $XX.XX primarily the BOE XX:XX attributable and or this insurance BOE impact by of XX, to a for or days million the November XX:XX insurance to quarter. before other XX Ford quarter insurance per a totaled or to $X.XX compared per increase revenues third workover Production The with quarter in $X.XX NGL to $X.X the quarter. a improved XX, production. revenue million expenses, prior to receipt after approximately of the third a $X.X $XX Ad Eagle or crude $XX.X of at for payments quarter. $XX.X third starting effective primarily totaled million cash period compared the million compared payments income commodity Other in for of totaled was Valorem million to quarter, to than $X lease adjustment in operating during $X one-time non-production. million the Beta per is BOE EBITDA the third the BOE, result $X.X $XX.X compared approximately at $XX.X in in was million of an fourth million quarter. $X.XX $X.XX natural million revenues per Adjusted X,XXX of operations the in or The of as approximately the and to fourth per were the of to the partially higher the received decrease

commodity commodities, in hedged was the that for and XXXX, a production XXXX cash we in $X of the Currently, Despite lots incident, price to to XX% cash XX:XX at approximately production quarter interest of impact Beta, represent flow XXXX executed third which entered our of million expense rising an trades balance XX% Beta loss which hedge quarter late of Cash fourth is approximately and a price Beta. primarily offsetting XX:XX EBITDA $X are price November our for adjusted for of fourth quarter. positions, the less XXXX. the decrease Now the operations oil XX% unhedged into XX% mitigate over to defined an average quarter-over-quarter from to substantial hedged company in million, of the due our in hedge note participate suspension to I to of company million as of The over the over CapEx adjusted XX% production and which Amplify compares estimated crude are book, like position XXX,XXX environment. was within spending $XX.XX Additionally, at of barrel, production a hedge negative completely of XXXX. NGLs, approximately the quarter year year relations. of barrels XX% entered capital from would Free our XXXX. was current at million were to approximately strong $X on XXXX, and XXXX diversified of projections being had in These decrease XXXX. exceeded $XX.X was the the into our for outperformance positions current Beta, production impact of $XX for $XXX crude and barrel. and remainder a base XXX% all the at per hedged attributable asset and for enabling of of in offsetting million across internal approximately XXXX crude company to cash specifically result the the the free which pricing of weighted full of the flow XX:XX the million reported EBITDA $X.X

back is bring section. details expeditiously positions as additional will when investor our XX:XX crude Amplify’s what's be under Relations mentioned yesterday the earlier, Moving those to and presentation our online restored. we our working posted completely Beta the contains and unhedged Lastly, production Mark field barrels website regarding balance onto sheet. Investor oil March are XXXX to current

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

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

back over asset transactions could that turn our the accelerate We non-operated considering to Martyn. Ford now our additional will call are I deleveraging the Eagle XX:XX balance sheet. are and currently of marketing

Martyn Willsher

XX:XX $XX.XX year-end company's and approximately $XXX $XXX The PV-XX Amplify’s XX% proved Jason. with XX:XX our for of crude pricing proved of approximately as the XX% Yesterday, classified crude of million XX, barrels the we of of oil, million with approximately product gas, barrels equivalent with approximately gas. for XXX gas reserves developed. PV-XX strip February are per value was pricing announced of XXX proved XXXX year-end PV-XX natural million which reserves and reserves for SEC based reserves of proved Utilizing $X.XX proved of million and barrel developed billion of natural on $X of Thank reserves. MMBtu barrels equivalent proved XX% equivalent per you, is value value liquids, as a estimates XXXX oil XXX XX% as a XXXX, classified million natural mix of

restart to in plans company result XXXX. and reserve to PUD been locations suspended pursue operations a guidance PDP remain additional year we Beta the XXXX, can incident uncertainty in a production at reserves, development As has These all and to returns XX:XX update which our been company guidance development Due PUD reclassified should Beta our have regarding available and will be Additionally, at for additional to XXXX. Beta, our pipeline the production have PUD Further, but company timeline, has as assume have provided the future. reserves its is of available. for in returning expectations modification our resources the when does PDNP. full in the Beta as a not the production, shifted reduction XX:XX betas assets estimates to information we to guidance now and reclassified the field future resulted

gas. company well approximately complete natural approximately rod day Oklahoma forecast has forecast to approximately XX,XXX gross per anticipate ESP X.X reducing and with non-operated to Texas forecast million, expect we XX% spending million approximately initiated been X.X go the expenditures addition, million conversions $X were lift commodity and rod Our wells of as for adjusted Texas. optimizations. in XX,XXX and for oil, which XXXX XX Eagle ranges development full-year projects from Lastly, to workover In average million successful the Our mix of in XXXX. Ultimately, XX:XX that costs. at routine free as to net workovers BOE to facility million year project Ford development drilled of $XX $XX daily lift XXXX in CapEx and Texas in with of from Ford $X $X non-operated XX:XX capital NGLs, the generating across non-operated in Beta has in XXXX recurring maintenance non-operated we budgeted return our is $XX DUCs million cash and CapEx $X asset Bairoil, the conversion million for in the XX:XX million is and projects and operating million. million significantly the anticipating late work The $XXX EBITDA we incur approximately Approximately Eagle the $XX in approximately East of and maintenance year $XX comprised $XX for XX% gross facility million base. inflation X XX% production will to of East high towards East as net

provided be closing, presentation remain currently our website. current latest are earnings in substantially on cash our reserve guidance value can our undervalued and we in continue to due and release investor flow XX:XX In to Additional potential. significant details generation yesterday the the available in believe found we market

now also PV-XX approximately of XXXX $XXX $XXX our cash XX, of pricing projections currently our a billion and, as value detailed to of have approximately elevated our us value. to million explore our profile XX% year-end and in at additional our pricing our approximately environment in in are forecast total augment current focused proved February XXXX Ford presentation, free year is The strip and XX:XX sheet. cumulative Our $X investor on free three flow, which internal million as reserve delevering enhancing enterprise within Texas cash program non-operated our allows commodity opportunistically workover flow continuously balance sustainable opportunities development Oklahoma and Eagle We East assets.

announced dedication a transactions to expected our differentiates of and leader Additionally, to accretive cash non-operated that coupled enhancing as flow. recently shareholder we our corporate value. accelerate operational and generating could further are Ford additional diverse base process asset with our free to Eagle delivering Our in and the marketing asset evaluating sustainable commitment efficiencies, is drive mature Amplify XX:XX

transactions long-term Our XX:XX supplements strong free reinvestment, initiatives. outwork and open ability leverage operator, create of to mind, accretive and for through that asset With we our value shareholders flow, cash return for are significant now in capital questions.

Operator

with line question XX:XX do in from [Operator ROTH John your open. Capital. Instructions] a John, queue you White And have is

John White

results, and challenges despite morning Good XX:XX you're congratulations facing. on some nice the

Martyn Willsher

XX:XX Thank you, John.

John White

in guidance XX:XX insurance and are XXXX Regarding EBITDA guide cumulative your number. cash free flow numbers? the How payments much included those in

Martyn Willsher

month. for $X.X LOPI, per So XX:XX we're approximately million projecting

John White

XX:XX And what period? for -- over time

Martyn Willsher

for guidance, the For XX:XX full XX it’s months. the

any we back you -- sooner to online online. is than in we are utilizing update information getting kind guidance, when coming we and when LOPI get later as lieu Beta on while So, Beta obviously purposes know, and for we'll of conservative of hope Obviously, in we for are Beta have the of projection better rather XXXX. if that being online

Jason McGlynn

add for I'll waiting in months thing night, you inclusive of gives little last that of XX XX through LOPI periods on tracks works our K view that we is only a noted to as three-year it is The -- that Yeah. bit the how numbers. day XX:XX and long John is, a

John White

Okay. XX the free XX:XX number, in flow months correct? cash cumulative

Jason McGlynn

of days it XX:XX there, time from the instance It but you noted in runs have of we at non-payment of October and times. X XX XX multiple months started the as

bit the first into runs little through a So, it into quarter. XXXX

John White

reduced much. of in million a revolver February is very well XXXX? month the Thanks in that starting XX:XX Why being X started

Jason McGlynn

that went through midst with were in bank We right of the redetermination incident last this when we fall happened. the XX:XX our obviously, Yeah. group,

in we here it a little -- XXX starting were until and next of kicking quarter timeline. which this our pause the we the that be we that at we information group shortly, in with wanted year We off trying the as reaffirmed last February did, we what will and bank during third second noted on we and obviously bit our going quarter. amortization exactly So, completing redetermination anticipate everything of to on put understand started

John White

XX:XX Okay.

that revolver the is the So, correct? redetermination, in after the [indiscernible], reduction

Jason McGlynn

correct. is That XX:XX

John White

are follow-ups. back I'll XX:XX Okay. Well, I'll on those pass and come some with it my first-two.

Jason McGlynn

Okay. XX:XX

Operator

XX:XX in continue to questions no you queue. there Okay. questions. if with are White, want your And additional additional Mr.

John White

XX-K, been $XX detail XX:XX give regarding million your mentioned you, have for? In costs to costs incurred us Sure. more a or of on incurred? are Beta those operator. Could how $XXX what little be been you much has Thank that incurred. million us associated may And you tell

Martyn Willsher

I'll Yeah, that. take XX:XX

So, of the response is, projected first that remediation occurred under part Unified the that's for of all that direction Command. and actual

has Unified dissipated noted we Command (ph). As

being about include. had cost of of continuing had year, insurance collected of That the the and $XX the we've the it's the through so that. certain and received statement all certain the there we is that number that legal forward that and fees to to what received of we're also hits million XX to So The average million of XX/XX. a essentially through Xst that, March incurred that of $XX end XXX about Piece note was is about information then did deductible plenty is that gives the about and detail million, and cost there there. cost, -- for costs accounts on were remediation of we that. move an Through income little for from additional for, bit -- XX.X. what will XX booked $XX we payments you that legal million it doesn't XXX, left that XX.X out $X.X

by covered does it costs So that some other those there and all will moving of -- insurance which forward as insurance partially the include well. be things,

John White

incurred Okay. in $XX million XXXX? XX:XX

Martyn Willsher

that was Yes, booked. XX:XX

incurred, legal projected certain items. remediation related be to that's and wasn't but in all incurred it known what incurred to was the So,

John White

in much spent you know XX:XX was how XXXX? Do

Martyn Willsher

XX:XX the company. By

John White

XX:XX Yeah.

Martyn Willsher

XX:XX there insurance and About an $XX receivable million, about I noted. million was $XX then as

John White

that. you fourth Thank slide a months know with assumption a four in XX:XX your your for in is guidance, about restarting Beta despite in presentation included have you footnote not being an months, it your the has of reserves that I Beta on expectation?

Jason McGlynn

So, John, if could our in July are extrapolate. permitting XX:XX We while. short timeframe, for moving process can trying were permits Obviously, fairly this been for along we the to investors we've was what so have give in of we online there back order. kind a that be to we hopefully quite certainly do that bookends receive

if get be on book permits a worst-case as we the investors end So, online litigation, related that Obviously, and we've versus then don't reasonable best and anything of this of, of July. kind scenario -- reason, a projections versus of we're are the included is Beta estimate online. of for as obviously, is we which a related potential that. there to damage one we scenario inflicted pipeline soon, quickly complaint delays getting give is so our those terms trying and the in to can back to the things is offline case filed a obviously a Obviously,

it's So -- contingent that. is But reflected. would the damages related self-line, to you're obviously, be it all the that incurring and none of more you long

much things to the So flow we could not did to provide as but are we cash information those forecast, want investors. our reflected as in

John White

we XX:XX appreciate all that. I'm sure,

and have of the of permits waters waivers state do to how from pipeline federal going government? the part you're available, state government from in you So, the to the get federal number and many have approvals partisan is Beta federal permits waters,

Martyn Willsher

for state PHMSA is quite is So going questions along. of other certain that is and some have waiting permits. Core we've this jurisdiction are one from other is item. in There two the and things to XX:XX a is the they on asking of really those and this for federal damages process and the from the been in federal this the questions But some time waters move Engineers. repair in And involvement One way. answered permits is along a lot

we a that, towards so, so exact moving we're are, get time, towards going those we falls we of testing, in-line as that's two. kind we're a when permits. Once we're and don't which an matter definitive under hoping beta It's obviously hydrostatic said, PHMSA this the some ready have not start but jurisdiction, those like at as time to expeditiously to we're project why we're on some conclusion And but for get exactly of permits testing be timeline we working can getting doing inspections. in we those

once online again we absolutely rest permit back and that to is make Just in and that timeframe tested be said be back we think coming will online is could the that talking all July. and the pipeline like we the this it about until is soon so thoroughly nothing of certain we're shape that the got if by great in

reasonable once to back timeframe let’s three call That's get permits. interruptions, getting for no there So, it a the window. four-month online you is a if

John White

Okay. XX:XX

So, federal two state approval agencies no so, and agencies needed?

Martyn Willsher

time. said input this permit specific have requirement some XX:XX they Not Engineers at process, at I into no is of there but Core this the time.

John White

appreciate I XX:XX it.

the Regarding proposed say you who is? Ford. operator your Can non-operated of divestiture Eagle your

Jason McGlynn

XX:XX Yeah.

All interest majority in County, is primary up Karnes is other Devon Marathon it. as of there of of make the Murphy, are also is a of the and operator the operators of BPX rest but heart our

Martyn Willsher

the where interest. it's we of Murphy, as XX:XX But very majority have our largely

John White

there could is the remember of the would base? Marathon. borrowing Murphy in the or be What Eagle much I XX:XX impact? borrowing Yeah. is How Ford base

Jason McGlynn

give XX:XX group, can't on a too $XXX viewpoint can at deck Slide into in base, discuss the million. types really on reserve look PV-XX, what it's our a these little things you bit our We of you but get obviously we PD terribly out we much million of $XX bank the if that of X is with

working a percentage be decent could it could bit -- that but there. potentially be less, there little bit could be a could it may of and gives and happen what and and on use little that a gives number be that extrapolate idea a you good what more it's So, a kind you of well

John White

for wish you your And that. patience all in best Beta on luck started thank questions. and And the other my of XX:XX complaints your the you companies. I getting shipping against Again, I appreciate for

Jason McGlynn

appreciate XX:XX Thank you, it. Operator? John. Really

Operator

go are there this queue to And at closing please. We'll your remarks, XX:XX no time. further in questions

Martyn Willsher

I'd company who to Unified just appreciation also us express tirelessly personnel their employees our California working like my you to all Command have alongside please stakeholders all worked our to of and thank during both thank to I'd to for just Really other are for don't period. XX:XX everyone. banks hesitate for today. for that quarter. out, investors outstanding companies the to especially you support And and And everyone questions. like continued say joining if want our and stakeholders various this much always, fourth efforts, their and Thank insurance our reach very have well with us any as you,

Operator

This you today's XX:XX participating. Thank conference for call. concludes

You disconnect. may now

Amplify Energy (AMPY) 10 Mar 222021 Q4 Earnings call transcript