- Earnings call transcript Q3 2022

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Operator

Welcome to Amplify Energy Third Quarter 2022 Investor Conference Call. Amplify's operating and financial results were released yesterday, after market closed on November 01, 2022 and are available on Amplify's website at www.amplifyenergy.com.

During this conference call, 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 16th by dialing 800-654-1463 and then entering access code 10110635. to Vice conference Officer President Energy like Jason over of now Corp. Senior McGlynn, and would turn call the to Amplify I Chief Financial

Jason McGlynn

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

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

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 reflect future various risks, views current some subject like to events contain and remind

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

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

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

sheet prepared quarter, our guidance. comments to performance remarks results then and discuss and XXXX by regarding update. our the will will an greater third detail second Martyn and and assets provide update During quarter projections quarter goals. during operational hedging Martyn regarding the in strategic with Southern an call, conclude our in current program, California, followed provide our will update I an the highlights balance

question-and-answer have session this concluding then will a We before call.

Martyn Willsher

has update, made our permanent advance the resolution Beta final the significant production. assets. civil update and of our repair I Southern and progress return all to Amplify replace an quarterly needed will begin continues last the to California criminal field toward of procedures Since regarding with and pipeline the proceedings sections damaged to

The an As class the agreement against settlement its agreement to subsidiaries. currently Amplify final the be million noticed the that with will in principle we the plaintiffs $XX of company's of reached is civil policies. under with settle announced, hearing funded we approval in XXth. for action motion insurance On motion filed plaintiffs XXth, claims preliminary settlement for and previously court on all and a amount counsel October November the

vehicle During federal installments the over XXXX, probationary resolve a including to government the agreements The of Amplify also system of federal periods the increased also company with all third matters and agreed and company implement reached an matters measures, of $XX the these payable fine next aggregate few operated state resolution stemming years, new contemplates we the agency quarter had approximately installation response and of detection inspections state criminal The authorities reimbursement incident. involving that compliance leak announced of to remote costs. and certain certain and pipeline. subsidiaries authorities to million, from of

XXXX. repairing announced the shipping from back online. this approved strikes currently from the to With that proceed Engineers field October on resolution matters which operations Nationwide with damaged we Corps remove PHMSA XX and reviewed were of underway are Permit anchor of earlier Beta Repair plans, U.S. pipeline in the vessels year. pipeline we replace the Army by of the repair permit concentrating complete, two and received to the these sections and by Amplify the are sections had substantially safely bringing damaged On of Xst,

environment integrity the continue tests claims substantial PHMSA by impacted review the company corrective matters. anticipate work safety the to complete, work series PHMSA cooperatively pipeline regulations both damaged the to federal the are Xth, successful these pipeline the procedures safety federal repair We for as plan, that the will then state following agencies and commitments various and cleanup order. and release. we restart immediately XXXX We and finalized, As with required operators action of Beta Southern once communities as a against our damages will the various of reviews pipeline Repair course notify will to of October undergo bringing last California Exchange expected the made back operations and failed bringing that to XX owners begin and the first incident diligently our we with previously currently have support the by the pipeline, Marine Furthermore, the of actions during continue to efforts progressed vessels that field respective subject aggressively of the fields of back the and months and the anchor reflect We Amplify’s the of struck strikes. of the online. discussed. involved Beta and us end XXXX. online the by to process estimate approvals quarter the and remediation pursue and and

X% was at Now, XX,XXX day activity approximately The workovers recent in in quarter. after onto accelerated driven Ford, in Oklahoma second the the Bairoil and for operations second in return increase Eagle averaged by third quarter-over-quarter development maintenance the increase quarter. quarter. XX,XXX Boe to turnaround Boe normal Production day, annual of the the per from an quarter per

half variances million, facilities spending quarter development to non-operated operating the of LOPI and was production, EBITDA commodity million in primarily related in $XX.X third restart $XXX settlement year. expenses, compared end to year adjusted activity in free which and of to quarter $XX.X Beta. cash million to timing accelerate Free Bairoil year, defined cash less expense XXXX Third as during now we commodity of CapEx anticipate first XXXX, the at Oklahoma, EBITDA generation third to Capital the to the flow current increase quarter proceeds The workover recognition the compares interest insurance expected was payments. Eagle and lower was $XX.X million at the approximately through Beta the in Ford flow in quarter. early higher and adjusted projecting prior million cash flow next attributable $XX hedge and prices. free regarding cumulative approximately cash lower was million With $X.X of maintenance

focused Now, Oklahoma, lift update returning program In artificial running wells our for and X workover an operations. continued optimization. on on we production offline our rigs

since of X% XXXX. quarter result quarterly of first highest the a increased the field production this X,XXX per and the rate quarter day, its from Oklahoma in As Boe third to achieved X,XXX program, approximately production

we normal workover active drive manage annual processing lower Boe to of and per operating the cost levels XXXX, completion of the to flow. last expenses. expect production resulting return day to of our X,XXX incremental For cash an continue maintenance turnaround facilities after operating Bairoil, remainder free in At program and profile quarter,

will and performance. We workover production and East targeted year. from the a quarter efficiently quarter, to in and North expectations the completions costs in two online joint while continue call provide turn now are pursuing Louisiana, and and over projects currently including have the high our be primarily and we increased XX% utilize Eagle similar from to quarter re-fracs, in development participated Jason the quarter the first projects, during production successful and Texas to return third previous to XXXX. to into we well -- to and XXXX. to exceed resulting net earlier development X.X which non-operated participate committed projected financial drive In improve projects. operational remain to Results gross, stimulations of the intend production participating return continued activity improvements in We're detailed further second In of efficiencies additional the operational activity high workover Ford, from in development I results. will review managing XX

Jason McGlynn

Boe long-term for XX% expects oil mix Thank averaged product Once third approximately derivatives further oil, Other to and and million you. Beta company to the production XX% Production for in $X.X the revenues to quarter million million XX,XXX in oil, to assets were compared $XXX.X revenues XX% Martin. diverse quarter. the day natural decline second Total next the our of weighted the a for mix profitability. million compared were per nature return with approximately $XX.X quarter $XXX.X low year, commodity before gas. increasingly the in of the to of XX% driving with impact oil third NGLs returns approximately quarter the NGL quarter. gas the second

payments For to compared LOPI quarter. represents the or $XX.X LOPI two LOPI the payments $X.X third million recognized months for quarter, the million months proceeds, of three of prior of company which

that $X.X was quarter future expiration would Texas the during payments or to the quarters continue $X.XX decline $XX.X per million expenses $XX.XX at quarter. our as following or million Boe GP&T to the Lease and we $XX.XX from taxes third returned Gas production. quarter compared the million insurance prior discussed full until this months $X.XX in $X.X to for the this primarily I per is Amplify’s ad $X.X of to or cost XX will East policy LOPI $X.XX per Boe in second lower note were call, incident of or receive or or is quarter. to were per million XXXX. policy year the million earlier date approximately to operating Beta NGL the GP&T Production $X.X effective Bairoil. of like the attributable in in Boe the this expires Oklahoma NBC the company decrease Boe, $XX earnings $X.XX expect As for June the until workover a valorem for the and NBC million second and compared prior Boe of per quarter, per expires or quarter to Boe

to a EBITDA $X.XX of and the second million quarter. $XX.X $X.XX million $XX.X million $XX.X increase Third due advisor quarter, fees. in and or from an million primarily in in third $X.X decrease quarter the G&A $X.X approximately Adjusted quarter, totaled prior the Boe totaled per to compared or million per certain in Boe cash professional

in second a to the the of timing spending expenses noted commodity quarter LOPI quarter of during of the capital third low spending to compared reduced related related was for roll-off to and in payment of money quarter proceeds and As the quarter. capital increased East $X.X the Cash Onto quarters. was million decrease in in variance approximately a million recognition $X.X cash million, $X.X and settlement Bairoil. million operating over hedge third the previously quarter and book. previously addition to the flow the was quarter prior production, the reductions recognition fee insurance primarily scheduled payments. the primarily discussed, regarding hedges, to the capital hedge the Texas attributable Free second third $XX primarily for increase negative The out higher from was and lower

now are hedge will we As evidenced we the flow and price we're quarter, roll-off hedged balance Currently, by of the commodity book commodities. to the in benefits of in in hedged and cash free realize additional scheduled as XXXX roll-off all upside the capture the quarters. to money hedges coming our starting current of this for generation from across out the environment company XXXX the approximately additional XX% XX% continue

production of XX% Our the is for XX% year hedged and crude XXXX. remainder approximately the XX% for hedged oil to XX% to

On the approximately the to of for XXXX. we XX% for XX% balance gas side, to XX% XXXX XX% are hedged and hedged

crude As unhedged a on depending may reminder, which oil return those upside production, Beta field completely additional be volumes we prices. will prevailing provide when to

our sheet. Moving balance to on

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

of company's redetermination into reducing and The sheet of and fall continue our XXXX, to as cash the ranges underway guidance allocate debt will to year our base and further in majority process improving XXXX On as for adjusted flow. we'll the full outstanding. we our flow they is For currently total borrowing balance remainder provide guidance, last and night, earnings tightened the have EBITDA production, release available. to free we cash our updates detailed become XXXX free

back to were and investor available I'll be presentation now our in the the Additional can guidance latest Martyn. found currently provided on in release earnings call turn our details website.

Martyn Willsher

Thank you, Jason.

focused delevering balance our continuously profile free near-term rapidly on flow and Our enhancing remains strategy cash our sheet.

we strip our into anticipate progress the continues generating of roll-off XXXX XXXX improve to as continue we cash As free book is projecting XXXX. be we production. forecasted increasing at leverage to under Currently, current by of quarterly our flow $XXX the field expect our to and the we Beta cumulative to returned current are third flow, our but estimated approximately quarter and free one million pricing times to to cash to is free flow XXXX, hedge only materially not level cash profile

As are earlier, extend our which facility, fall various we solutions the lending current and or replace in matures currently the fall Jason base exploring mentioned group are the to on borrowing XXXX. working with of redetermination

employees particularly to like appreciation their express months. for I'd over efforts Lastly, the last the company's outstanding my to XX and dedication

progress the ships made have that legal our and resolution pipeline related towards our matters actively pursuing We to are incident against significant in to final the XXXX. caused of damage the claims

remain anticipation back early of XXXX. we with field in open online the on repair operations we Finally, Beta the operator, With focused progressing for questions. that, are now bringing

Operator

Absolutely. [Operator And our Capital. ROTH Instructions] White from comes first John question with

Your line is open.

John White

of like the progress the distracting. months. have of of of is lot legal detail going sure that's actual the lot on? operations? us you Good line been it pipe sections sections I'm I damage on there morning, Can replaced and past very Are new you some a matters on on? more going number is has made the exactly congratulations all progress on by a the or think being At But looks welding over there made. what give of Beta,

Martyn Willsher

Sure.

section pipe, So the repair to replaced line the removed That section, That's that's to speak, be to has the brought new replaced. so in about crack primary the pipe. the shorter little beach, of and in. an will right, where essentially kind biggest has actual a the to been two that's brought of occurred, section been of to are also XXX section replaced be easier. removed the section with progress port. XX and pipeline we that be now. will is then and a where foot clamps procedures to There has that section The obviously is has already biggest and bit that be the foot the the right Those of

long the oil can both timing, end quarter know by then and process then [DESI] once our weeks. to kind of start of I little it's ourselves is because hopefully we in But we through of the a bit more don't After that testing approved a mentioned So this as expect we're done before like part how putting inspections it'll that that, room that we a we in-line will is and just in tests are the and And said, the giving and take there series as reviewed ongoing, again. first and complete, then hydrostatic the take pipeline we few plan. expect statement, to restart of we that's PHMSA do Obviously, review. -- on be of prior to that.

John White

think On for companies that. that. date detail you luck lawsuit has good to Thanks Are preponderance you don't of Guard the shipping as to Coast very it evidence do or it, That's anticipating that revealed understand much and but the good to settlement understand a comment, I I the the pretty on strong. you the trial want and is trial? to you're prior go going against your if

Martyn Willsher

take. the damage we do get spill but to into the -- evidence or are don't this there's quite that be of I lose of the noted when -- result production has field ongoing, it's We shift there case, mentioned strikes. or of the it to event frankly, these different want a really event, Well, anchor returned with this until damage. as ties about has were beta strongly nothing you've to It I strategy believe believe how time these that. we to caused. back caused substantial any itself, could continue of revenue actual this a amount – But damages that forms could in there that there's to

for to the are a individually versus a what of companies, suing difference insurance are actual the little itself. between we to tied for of behalf event contribution bit suing is spill which of the we what more on So there's the cost

be So an like process. I said, this to is going ongoing

I might time on these or bit think world, get. of of it companies said, little commercial in it quickly. I really are depends largest shipping how like might It a the settled just things the take so get two

John White

update. very detail back. and good appreciate again, Well it I'll I that pass

Operator

Tower question Robertson next Jeff comes Water our with Research. from And

Jeff Robertson

the where about some you XXXX talked allocation or work you X And impact before on Beta, restart for opportunities all opportunities, you secondly, questions. much even One, will those an to that just might redevelopment some operating on costs spill an has them? at had all in can have for previously of as update your restore production capital recompletion done either provide Martyn, or maybe stand process the you assets XXXX?

Martyn Willsher

great are Those questions.

start first. me the with operating Let cost

One of continued the done electrify the things is this we've platforms. we've to year

air things power. running obviously to going more with quality diesel shore This power other well. they're standards be So helps on and as versus

obviously been rate because further crude things When a sure cost months being online, going of that time while over-projecting we've that want we're been gate. reduce even we the of note one we're could offline we'll the first forward. the conservative we we projecting come make to time, changes So back volumes order online, making by XX down and of that have we out being is in XX, to for back fixed kind for some come straight what be the coming not reduced

anymore. -- about have including of And the the and production the not a of event, from XX% impact of production we that rate our is so to prior ramp-up the royalty of relief

we about time. up to ramp So up from XXX% XX% over

the We have the platform. crews already on

for back have whenever rigs the get online. ready We go we to

doing which can, late we'll still large then online some as were of focus. quickly prior projects to permits of the So obviously, get to -- back of for a valuable which in 'XX, planning to smaller do event, first as increase projects as our very primary were -- the were in do to for hand in XXXX We our even the real so all at and included, so all more potential where recall, field. what we couple that current X -- start Those are early have and in projects existing the responsibility still wells kind is production we we may the -- that's you had pricing.

So I back fully and of existing back you once depends would expect existing online how and online. on that get get will back exact can't I that yet, of Beta the we revisit an of most really kind timing of give the it the wells kind field we restored. quickly production we

Jeff Robertson

So are attractive, to is today's especially price very -- there's still still still in those commodity it -- fair say, opportunities development world?

Martyn Willsher

even Yeah, more did are -- we lose pricing intended originally them. even when because has they but without so they're -- -- far jumped do up was obviously now more much they're that royalty those much when to and royalty relief relief, valuable we were projects

Jeff Robertson

Just a structure. hedge the pretty progress? evenly book are the Jason, hedges they the the will question roll-off for XXXX, on year as through spread or quarters

Jason McGlynn

even. fairly a mean, roll-off sizeable bit. production It's They'll I throughout year. the not volumes we're a little decrease projecting in

We joint on and have in fairly flat Beta of the of with offset Oklahoma that'll and help program Texas in some it that going benefits of East Eagle plus keeps the nature the assets Ford workover the of in development the and that's the notwithstanding kind Bairoil.

substantially. roll-off little but bit, it'll a So not

than are look year. what them, As a you the more kind had of we at this structures advantageous lot

about -- I have a more of and out speaking So ‘XX for mean, the lot just call And at under the we'll we and callers XXX they specifically this gas roll side, as only are to forward. benefit have we floor's $X. kind just point

with of upside right forward. roll sweet we kind potential that spot as So in some

Martyn Willsher

questions we investors to from at Jason? that we're this well well. So I as going various think as received take some point

Jason McGlynn

questions few did we continue and this Perfect. that a and time, as just received and we some have those Yeah, encourage number we'll we'll those way forward last future what our in of and with people investors a roll send from to of quarters. and we ask just to along here consolidated consistent continue with this

roll hasn't here to been inflationary is touched year of CapEx environment The our forecast. forward relation free first cash in that three our plans that and one flow through kind

are CapEx our aspect we the that? we question to is and slide seeing doing an cash mitigate other from in that's people what we raise flow free from did specific and So try inflationary different what to are

Martyn Willsher

person you thank Yeah, you. certainly. Thank question. the to this submitting And

our of First a increased ‘XX has East more that planning period. Texas development of through all, to A the we Eagle during related finalizing to ‘XX cycle. that lot and and little have with do Ford capital time bit of

incorporated Obviously, We have event. and obviously as side the and inflation ‘XX well. still strong very, seen even a non-op as partner into returns on already drilling are the the are very those ‘XX

not range seen lately, and seen LOE side everything It's on and immune chemicals of earlier disposal wide inflation, that but to it salt water we've things, somewhat kind we're a everything the certainly the year. we've across base So in mitigated between. in from to of

we of certainly capital forward that as our facilities of and around haven't accounted an forecast the capital seen manage well. of workover kind in a workover and level our inflationary going So, more are easier little forecast of there bit other that's kind perspective. have kind in Obviously, from we of projects and to that inflation for projects easier the kind and same do that

those. haven't So on seen inflation as we quite much

future more the the update -- flow So plans, we next that with future and forecast said, into to after XXXX and full-year the QX outlook. one revise of with that we'll we projections. get like as have, kind coming continue incorporated obviously, into granularity future And cash all with I

Jason McGlynn

a number or the pending of people additional an extension on is touched refinance? And to that the adjust provide the through we RBL we and last on that plans from received can question, that any been hasn't color maturity

Martyn Willsher

Certainly.

we So are talking in we mentioned, extension near-term. to an about currently the RBL lenders our as primarily

Beta easier lot a gets comes -- All back once this of online. on becomes financing

that give little us trying to bit for in amount a So extend are certain time flexibility. to more a of fairway we order

completely. banks. could It mean all new kind options to refinance. at and structure mean all -- any That kind financing RBL of look could with will a We fewer of an

quite it frankly, online. we near-term, out it back lot once could and attractive Beta there the is and a in more So there's becomes of but easier a lot alternatives do

So done. we bit give a trying get are to to time that little more ourselves

will will on months, the update something have have market we we coming the when we So and that. that in hopefully

Jason McGlynn

Great.

I think some Martyn to for comments. portion so concludes the of call, I'll closing turn Q&A that the it

Martyn Willsher

like Thank for you, Jason. to I'd thank in today. just participating everyone call the

work the to on side the finish quarter and the focus we early getting production as in online diligently year to can. continuing strong really Beta on first back are We as

We is you always, will continue our And to any our there hesitate of all on if stakeholders please update don't questions progress. as Thank to reach everyone. out.

Operator

you, gentlemen. Thank and ladies This today's concludes teleconference.

disconnect. now may You

Amplify Energy (AMPY) 2 Nov 222022 Q3 Earnings call transcript