AMPY - Earnings call 3 2023 | Amplify Energy Corp.

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Operator

Welcome to Amplify Energy's Third Quarter 2023 Investor Conference Call. Amplify's operating and financial results were released yesterday after market close on November 6, 2023 and are available on Amplify's website at www.amplifyenergy.com. [Operator Instructions] Today's call is recorded. [Operator Instructions] I would now like to turn the conference call over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp.

James Frew

Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the third quarter of 2023.

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

to release those results our to Please during the filings refer actual factors from materially made press in for of a call. list differ cause forward-looking SEC may that statements and this

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

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

our efforts. call, quarter update President Martyn Willsher initiatives, Executive and Chief will performance an sustainability the update our on strategic and our provide an regarding During Officer, Amplify's third

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

on update will Following details financial book. balance hedge our on an and third sheet that, and provide discuss additional our I results, liquidity provide quarter

Finally, it for to over before Martyn questions. With the provide will Martyn. final I hand thoughts that, opening up call

Martyn Willsher

debt outstanding evaluate Amplify of operations enhancing at Thank and strategic shareholder you, reduction on to beta restart positioned Jim. in value. substantial have opportunities focused The

today. to initiatives near-term strategic in pleased more detail are several announce We

firm an our First, investment monetization Bairoil, in to company of the Wyoming. hired pursue has assets oil-producing banking

the first for commence also maximizing of of XXXX. marketing while We alternative shareholders. the with of our quarter divestiture will in asset considering the value goal structures a The complete are exploring process

first technical in-depth in current that potential low $X pricing nature greatly conducted asset and Economics of have the wells the the we field marginal add recommence cost beta, review of cost well be an we'll are with field. in the undeveloped production at of at IRRs excess completed of Second, of million The allows million. half for in XXXX. the attractive program can extremely increases oil for drilled in to variable us $X profitability this approximately enhancing XXX% to and with the development operating

this decline program, the outlined of wells savings combined in reservoir We the to profitably the asset. prior extend nature cost expect heavy initiatives the on and with of oil low development calls life

forward Lastly, in Beginning a variety into is which other compression, service subsidiary, we've areas. created East to a of Services, provide services maintenance other may and and to Magnify's services. to and look further the shareholders. potentially strategic leverage to profitability to ability than to these improve cost could executing alternatives providing lower which Amplify's at these greater capital while services will Magnify Over testing well Magnify lines well Oklahoma, reduce access services. critical amplify also time, over allowing we oilfield company the providing control Texas will Energy by company's accelerate return operated operating have and current initiatives owned wholly We expand Magnify wells. capabilities and

operations April, have back fewer late the Bairoil projections Since results online the restarting including of Amplify's internal in beta production turnaround third volumes continued have brought exceed initial in with September. financial of than wells quarter expected. experienced operational complications in and line projections planned impact to were and the

$XX.X generated third million $X.X EBITDA As a million. flow of adjusted quarter, cash the is initially result, free than anticipated. lower the production and are of comps higher company and In

report governance. This safety sound regarding stakeholders which its to our corporate transparency sustainability operating of dedication Yesterday, enhance our and sustainability inaugural provides increased our practices. performance to efforts feeders, business our issued business details long-term the environmental to report, Amplify and

to We from Dan I discuss continuing it our and now are the on over our committed milestones. will highlights sustainability to to disclosures turn quarter. operational updates improve to to With that, providing

Daniel Furbee

production Thank oil, oil you, NGLs the quarter Martyn. natural averaged barrels XX% and Total for consisting day XX,XXX of per approximately equivalent XX% of XX% gas.

As maintenance production field to by turnaround shut and was Bairoil for quarter facility in planned expected, third improvements. XX perform impacted at was the days our where

that of flooding several intermittent Installation electrification In addition interruptions our At to local days. required for we electric production from to significant turnaround, during the operation project a utilize accelerated the the beta, impacted onshore upgrades quarter. and power utility. class production more the

compared well treatments, rates quarter, fourth production levels planned Beta to coiled higher at scheduled new increase. as a return utilized continues Current stimulation and to we the beta returned the are we before are production. higher to XXXX. for Effective Bairoil levels generating gross additional tubing pre-turnaround asset higher to rates including having production production to production period back as volumes pre-shutdown effects drilling development to units with anticipate expect production returned well pre For rates production. wells We be jobs shutdown of to

Magnify of by partly quarter, $X.X by driven costs $X.X costs quarter, was generated million income approximately the approximately For the and were to processing operating The related lease and In of event. higher Beta flooding by $XX.X taxes third expenses transition services. were these million. $X Gathering, Bairoil increase the and were than million the expenses production Heritage were offset $XXX,XXX million. total, previous restart

effect. We expenses the to cost-saving expect our operating as reduce to coming in take quarters start initiatives

the and a significant artificial continuing to approximately the beta to Some compressors company's of $X.X the in converting million. in-source at for scale reduce usage, reducers quarter of to catalytic beta purchases eliminate platforms Oklahoma services. more mission investment wells lift to additional credit these electrifying portion selective capital insulation to efficient diesel total of Magnify provide initiatives method The and was include

assets. upgrade turnaround Bairoil. planned will which related facility data. in to of was will that efficiency majority With improve to additional the Capital the the platforms remainder facility the the primarily Jim. the it invested I will over of beta continuation The investments focus at projects of of facility electrification capital capital on that, and of this workovers XXXX for the and turn

James Frew

on $X.X primarily Thank commodity from balance financial company $XX.X and net a compared million I was net of sheet and prior like would Dan. to prices quarter derivatives you, unrealized the reported the third With performance, rising quarter quarter. during liquidity commodity decrease discuss the to performance, approximately to million now income in of attributable losses respect noncash hedging. to period. third financial loss The

up prior quarter. in The due from was the previously commodity quarter-over-quarter Martyn adjusted prices. $X.X million EBITDA was As mentioned, increase EBITDA quarter million, primarily third adjusted higher $XX.X to

of reaffirming forward, adjusted are for Looking we to $XXX EBITDA million range $XX of million XXXX. our guidance

prior With X% we averaged operating BOE the respect with compared were to quarter is were million $X.X $XX.XX Year-to-date, BOE, up quarter. line lease LOE costs, third basis, expenses versus has up the our per to guidance. a per On quarter. prior in which

think BOE and were lower, As LOE those X% initiatives. company are there and a lower to transportation per reduce basis. to were while the third costs quarter, several Dan is gathering, Comparing production X% quarter second opportunities processing taxes mentioned, we the on actively pursuing

the up Cash G&A in expectations. million, was which with from in million was the quarter $X.X line prior and quarter $X.X third

million XXXX million fourth the flat We to to $X.X off of quarter. quarter, third In up $X.X $X.X the expense, expect we primarily the incurred writing cash interest compared G&A to quarter, remain in due quarter prior the facility. million of was expense, million in cash with line less expectations. defined third $X.X EBITDA flow prior associated and the adjusted in with CapEx and credit Free as cash interest was

to flow in flow. are cash sustainable Similar third free quarters, has of of generated to illustrating EBITDA, Amplify potential. million. $XX X $XX our last $XX.X Amplify million generated XX to the adjusted free cash has cash our guidance flow generating positive free full strong cash of year we reaffirming the Cumulatively quarter, million

the October next semiannual in elected redetermination XXXX, scheduled is million. we to reaffirmed expected of redetermination XXXX. quarter The was completed of our On which of base, million with the at borrowing $XXX XX, $XXX occur commitments second regularly

of hand. million, debt million XX% As $XX company's of last debt was million, been approximately $XXX $XX XXXX. approximately net approximately and net revolving cash and Amplify EBITDA $XXX since Net X.Xx. facility reduced consisting million was $XX The of to XX, credit or million liquidity of under XX, outstanding December XX adjusted on October debt our has had months

like would to book. discuss I our Finally, hedge

future. Improving As increase attractive levels to support and the upside commodity next summer previously to facility. added the in prices our participation our trades our to positions prices that announced, substantially we oil cash gas in execute covering provide generation profile late production should us and at enabled X credit the covenants new under of derivative satisfy years

XX% the for oil November of was hedged crude X, to As in XX% and to XXXX hedged for of XXXX. to XXXX, XX% production XX% forecasted approximately and hedged XX% XXXX our XX% remainder

hedged to turn call the On of XX% that, XXXX. gas XX% With back XXXX through I'll for in to XX% XXXX Martyn. and we to hedged XX% the the side, are approximately remainder

Martyn Willsher

Thank you, Jim.

credit on manner of months, a deliver is increased Over Having deliberate our back assets. our Amplify portfolio mature positioned the to brought steadily past value new now and has a production its under from promises. company unlock facility. continued generating beta XX flow cash the refinancing debt online and in to additional successfully diversified

open on initiatives. are focused the operator, With XXXX strategic guidance reaffirm are we and now As that, we questions. for our near we end year executing full on our

Operator

[Operator to program it remarks. have over questions now appears Instructions] back at presenters the additional And for that time. our no will this or we closing turn I any

Martyn Willsher

you. Thank

have Kind and them to aggregate come investors. As always, through listen of to them. that we like respond us questions our to to in

So some to Jim, in. ask come that if you'd have questions like

James Frew

Yes.

the in first came around was Magnify. So think I that question

what about So something for take? the that's be? guys know, going is So How Magnify's first obviously, question Dan, What that? around time. are And if it you announced thinking could the potential? you're we've I that don't is to

Daniel Furbee

reliability way help We Magnify costs the see really the field of we control services us Yes. We question. better the daily. and is in a to use appreciate

obviously services. of trouble we've past some instances inflation seen years, certain where prices, been the couple Over on and pressure there's getting

us in-housing services help will some our we So think by control these density. better to of

spent pretty we've of on amount far, endeavor, of and Thus this has payback the nominal on a months. investment a been capital matter this

every other mostly very in-house. costs we out we Thanks mentioned, testing can to services. bring equipment we overall, and are like high-margin way as it's in help the our payback, -- some services try LOE quick we low-decline assets think mature, high is a these ancillary type this And just that question. well of that. And system very So our can. assets of But the for to important remarks expect do squeeze of compression, bit we we

James Frew

I Another take. can question, I guess,

Bairoil we're questions cetera. the been our what are So asset, around process, some timing, that marketing there, why there's about thinking plans et

that asset. great of if have on and to operating a is, value infrastructure more all else, with it's believe generates have can they the cash leverage a for we based flow a It foremost, it decline significant great any asset. and But they low it being where It's somebody a may amount kind first guess, I So might especially of area. team. said, in us, it's

to an So bank run do we're process. a We've investment hired dual that. going to

structures. with We'll as asset been sale that other an pursue well industry of will have Certainly, there lot both we that's a in outright pursue something asset-backed parallel securitization and in our recently announcing so as asset. alternative folks modification

to value XX% be allowed credit return for return pro has facility or Most that our notably, maximize some above capital to the need we forma have and restrictions shareholders. goal current parcel would to is to do. any part capital on we availability capacity when and of are we Our

appropriate of if return the any at to So the that we disposal. we monetize accelerate at kind capital value allow asset may certainly, to have our of us options would that were

initiate what I'd say the that the we're we the upon first year, a value. process if announce We I the process. think when believe but to will so real we'll hold the with have no quarter to exceeds to only pressure more be thorough adviser run we Lastly, guess our asset, following investment we'll transact next we sell under value bank

covers items Bairoil. I most So related that think to

came was it the and So any thing, that updates strategic guess, of kind the of X around up was information beta. I final part

So Martyn, do that? you want to take

Martyn Willsher

important beta. which to already thanks full up an we've and team is higher, time, spending going effort production, and back and beta us, to of Dan get the efforts asset Obviously, been to at money, that operating out it the to Certainly. is, asset

to So really the this, through Obviously, year been see next an haven't money credits flow we encouraged to also start that about we've reduction in nature where them to initiatives, has on which financials, that we and impact the into on. had also things and initiating we we've quarter done we've financials which you'll are. cost seen the reduced start fourth going but and as that we of emissions will substantially diesel but usage, into spend flow

So is there beyond. But coming this the is here fourth quarter XXXX looked back incredible develop all at we've in asset. that opportunity we did to and through is and also this an

As before, even variable in cost is less. production -- and this shore is incremental the to moving generated costs we've this us asset just and mentioned largely -- little with bringing and it's power, very fixed from a online a there's new electricity power

And X million call to current months have XX very $X to short wells are of, it, so that million these $X at pricing. paybacks

of forward. potential And these we're wells by intrigued going really the

done. workovers So we've got -- we've the of we waited been until most

of kind of then quickly next development we expecting through we're some there. program. Obviously, to try pivot that planning currently officially We're the the majority into year about are and We the workers beginning and the of of finish have end off wells. the X year going -- to flexibility

at go, X-well better really more obviously, how 'XX, year. The going into X-well levels program wells we throughout and But on things quarter excited already in flexibility we we're currently but -- and program planned depending the a there but higher going next the were number have potentially going fact in we're and things that as I of increase can forward, at back it's like 'XX said, pre-shutdown the progress. the about

of development be program that. on And top will that again, once

support. any all and lender questions, of our close excited potential thank my the reach I'd if their and of always, So our from for our patience also think questions. to asset. call to and for employees aggregated the that as of efforts saying we -- appreciation to express today. got shareholders for But want outstanding dedication. ask call available all by are their to Obviously, I'd kind I are their for out. to who And don't that's you that just all like participating base. the on additional the about shareholders to questions really you please shareholder like and But syndicate hesitate our there we Thank to

Operator

Thank you, today's That Thank participation. concludes everyone. your for teleconference. you

may You disconnect. now

Amplify Energy (AMPY) 7 Nov 232023 Q3 Earnings call transcript