AMPY - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to Amplify Energy's First Quarter 2024 Investor Conference Call. Amplify's operating financial results were released yesterday after market close on May 8, 2024, and are available on Amplify's website at www.amplifyenergy.com. [Operator Instructions] Today's call is being recorded. A replay of the call will be accessible until May 23, 2024 by dialing (800) 654-1563 and then entering access code 59240315. I would now like to turn the conference over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. Please go ahead.

James Frew

Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the first quarter of 2024.

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

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

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

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

Willsher, our strategic Executive Martyn previously Chief announced Amplify's initiatives. and performance call, update our an quarter the provide first During regarding President review will Officer, and

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

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

prepared opening with questions. With Martyn. before it Martyn for will Finally, conclude our call the hand to remarks over up final thoughts, that, will I

Martyn Willsher

of higher adjusted have oil $X.X strong to performance, a for and quarter, had increased forecasted with generated of of annual expectations. Due both the XXXX. million we quarter remainder flow prices guidance. exceeding first Amplify our first our Jim. you, Thank crude quarter the of EBITDA with free during combined XXXX, company $XX.X stronger-than-expected million cash The

initiatives our as earnings our process on investor progressing find marketing is highlighted guidance posted strategic our expected. respect night. With release can to and to calls, previous Bairoil our the updated the You website last presentation in

the structures outstanding reduce considering shareholder goal monetization well accelerate return As to we evaluate of the as successful to asset options. Bairoil financing divestiture reminder, capital alternative debt value. a A and complete with as will of ability of are exploring our maximizing

will Dan a next call. At We program. about prices. more make on an Beta, details will development progress current process the we but to of our provide the oil this on we XXXX remain crude program, in regarding provide in continue of moment, potential especially encouraged light our update

Our have Beta a we insurance hard working initiatives to the to that to enhance been surety program plan. robust Bairoil upside of part our has at our place and currently valued. With risk was the other not that more key of put A bonds. our is replacing demonstrate in potential Amplify significant fully respect program assets prior both believe mitigation initiatives, overall to

our restructure in will a million over and long-term and from able initiatives hand of Oklahoma. value Beta. strategic captured and substantial year per Bairoil we at we additional our while that, simultaneously and summary, successfully the to unlock deliver portfolio iodine believe I'll the preexisting iodine and January X, plan guidance. In in its which from second third will which holistic on million $X our stream XXXX, our generate produce water a we for pursuing recently realizing are are Starting revenue royalty As a our this but prices, approach shareholders. With program, We provide higher to to to value of renegotiated insurance royalties, sinking taking We iodine it the to extraction annual as in produced. focus obligations, $X in generation an year. Also will party to this in revenue additional were note, iodine as partnership. other flow quarter, start Based per by cash on expect iodine to payments Amplify's lower current effective paid on continue million Amplify Dan. optimizing brine fund updated benefits result to of contracts this our approximately $X Amplify

Daniel Furbee

the day, quarter, shut-ins and NGLs, electrification quarter-over-quarter, was due lower this quarter and the first consisting to facility quarter processing planned averaged oil quarter more Bairoil increased interruptions later projects XX,XXX production ethane. you, oil, versus Thank result continued shutdown for as gas. at completed higher planned XX% per were higher XX% BOE than for approximately and be primarily third-party of scheduled Beta of Total XX% to volumes prior at emission a reduction Oil gas and production slightly necessary shrinks despite upgrades a the year. Though Martyn. previous for the natural production for

we As accordingly. our adjusted result, have guidance production a

quarter expenses operating were onetime and projects. lease maintenance for than quarter, these first driven the previous the taxes transportation $XX million. were processing in first In approximately million. $X.X and production $X.X annual planned LOE total, were were Gathering, million. costs higher For certain quarter, And $X.X higher costs million by costs

forecasting operating the to completed are expense decrease the lease We and to cost-saving in several the our with remainder year expenses quarter take the one-off of of total throughout first projects effect. many starting initiatives

throughout in operating offset by million. expand capital to this expected recompletion approximately net, workovers invested and acquiring The and projects. various electrification Ford, Magnify Eagle the for is continued by of be total XX year project to digital initiating the Magnify remaining our water participate $XXX,XXX Our XXXX partially will and mostly upgrades second facility $XXX,XXX Services. development Energy was assets, our were across high-return emission company reduction and and of is at to income by expected approximately majority Magnify investment as expenses business as allocated and hauling facility The equipment. Capital wells, program. continue quarter capital nonoperated X enhancements for asset Beta company's capital gross, net, continue income X.X lease generated workovers base, respect at nonoperated new in in compressors our approximately $XX.X was our remainder initiated our the development Beta, services this gross, activity, at growing Bairoil, projects. With facility across quarter. The invested the in and capital to of we the the X.X they was development for

East at of participation the X electrification in wells. At the While we project is which in emission net, Elly Texas, X.X the electric completed replacing our and injection first with infrastructure reduction pumps on second pumps involved gross, Beta, phase successfully evaluating company the quarter, platform. diesel-driven

large we being Ellen saturation deliver March formation. flow the company's from and by the at the quality project, we additional will Amplify's cost spud which with third production program. do oil The objective Beta the interval completing expected by meet this the the in deadline near target involves engines in the not anticipate the the excellent proceeding air which the final free a is platform the from on successfully material future, now views to conjunction or regulations. After high the facility investments selective remains the facility the Beta results. development are fourth on project result Beta, to savings realized growth anticipate formation XXXX has installing phase AXX our company quarter going substantial on target and reached We SCRs, increase platform. Amplify as well compliance a of that reducers, catalytic logs also of Ellen project, and XXXX reinforce forward. In at as prescribed the with of cash our significantly district in rig

are our the issues, to Amplify experienced run with including to to for revised the During an to third an the electrification stability completion drilling and AXX equipment turn, planned Ellen rig when well a SCR able of into altered on to the production rig engine will the we leading deferring period of operations, hole to the achieve quarter casing not extended leading a completion of set casing our project issues. of availability to the require causing In formation, This the resulting is complete were design, finished phase through equipment failure, the of us are with the installation of us smaller well open, because for downtime casing well deadline, fourth high. we in engines. the project depth XXXX critical the the well. Due completion commencement we

cost-saving well spud we June, facility anticipated and expect our build-out third of initiatives these to at I transformational the across where this the development will overall be Services, turn we year wells we asset that with asset full anticipate we the expect profitability Jim. the including value in spud as investments realized XXXX month of of will Magnify here. that, in in quarter. With second and optimization Amplify's to with to Couple development continued drilling to and our We our execute the it realize Energy additional Beta, start development we value the continue a projects continued to base, to over a company this base. With and for efforts asset, increase plan X its completion significant be

James Frew

throughout now to to unrealized change a derivatives the first income financial million I like discuss respect increasing Dan. noncash first quarter. loss liquidity, of following performance, attributable net Thank reported prior net to compared you, due $XX.X million, was the prices first of sheet primarily quarter the balance $X.X approximately hedging. With the financial performance, quarter The company in to and quarter. commodity loss to a and would on items:

As $XX.X quarter expectations. million, mentioned, was previously first exceeded our EBITDA which adjusted Martyn

The annual range. with with strong higher operating oil to less due $XX.X averaged per was adjustment quarter year for curve million quarter, expenses. a original maintenance lease routine Beta XXXX. With downtime First crude a BOE. assumptions, quarter of occurred higher is our futures than the to costs, lease year other to large the full approximately that our within and to prices LOE for and in scheduled Amplify quarter remaining for prior be operating remainder the at the to LOE above expected addition expects revenue initial tailwind versus were providing in was fourth is onetime the plan. quarter, first part which also guidance guidance than $XX.XX expenses LOE respect than crude lower in first quarterly combined oil strong the

were quarter costs or per First BOE. million GPT $X.X $X.XX

prior X% quarter GPT versus First quarter. down was the

have the the office quarter, lower BOE, was into cost lease early primarily expectations termination $X.XX early with due This to quarter that flat range. In materially cost a costs compared G&A that was prior XXXX. Cash year-end result, our first year. G&A as throughout a in which QX million company anticipates And adjusting guidance quarterly adjusted and of be same million termination incurred in first our we these the the quarter the various the prior onetime in $XX.X from quarter. $X.X million will interest lower expense, associated capital the cash and the a $X.X original G&A of expenses and quarter. with not lease. By was ago. Amplify XXXX. for processes to line quarter the The down increase invested remainder costs, quarter, first year down was of in Tulsa first to expect up G&A we per the drivers or the will of impact million $X.X million compared annually million We $X.X continue $X.X versus

activity short also Beta, ramping planned at to another the in in of the Bairoil. at opted to up conduct take associated project. downtime addition second the company to Originally Amplify accelerate turnaround with to quarter, turnaround In first the quarter advantage a elected to the occur

was first electing result, XXXX capital our to an not than higher it in expected, because a quarter is capital acceleration, company was the adjust guidance. but As slightly

range. expectations, we several also those starting flow, the flow less asset XXXX. Free mature, in guidance mentioned, completed in quarter expense, occur has million May of into evaluating wells the As capital generating our increased million. to are cash $X.X which Despite $XXX strong, with participating development was EBITDA now our redetermination see commitments expect in fourth last of reaffirmed expected XXXX. XXXX. free XX next this in borrowing regularly the diversified Amplify defined production illustrating of potential we base, and was million free first semiannual from the has first exceeded cash wells the quarters, of and and generated flow at X, Eagle the cash and quarter, result accelerating interest of East in our as Texas, redetermination base. On Amplify sustainable XX cash scheduled adjusted $XXX the positive is cash elected we CapEx Dan in quarter The annual XXXX, Ford to of for

debt XX and $X of As consisting $XXX revolving under first cash $XX XX, net May for crude debt and the investment to in the XX% in and activity. On million end of our of $XXX had was XX% net XX% our prior million, of and quarter, approximately X, last to XXXX, production oil XX% XX% million, versus was capital facility to of Amplify The changes EBITDA in the due the equivalents. net quarter to expected was forecasted At X.Xx. increase to outstanding hedged months adjusted March XXXX, was increased company's and primarily credit liquidity XX% approximately working debt XXXX. hedged for million cash hedged

we In added our covering gas to side, we our the hedged to XXXX, hedges XXXX crude and a XXXX. and the are production On of through hedges portion XX% XX% XXXX in gas expected XX% production. a hedged quarter, for portion first of XX% XXXX expected covering

continue supplement back strong call to Martyn. turn the our going hedge will the forward. With to monitoring that, market We positions I'll

Martyn Willsher

Jim. you, Thank

updated and on Hub on commodity first As call, of quarter I $X.XX a mentioned continued results gas MMBtu. oil per that better-than-expected is of earlier provide based WTI now on prices, are in guidance and prices, increasing $XX natural based and barrel a Henry flat strength crude this oil guidance crude we

expects invest Beta the X previously disclosed, capital XX% quarters with to first projects. of connection As the primarily company to in the its the XX% year, in of

details our the in available investor found latest guidance currently and website. on were can provided our Additional earnings be in release presentation

as underway, our good workforce, return potential XXXX provide outperformance a potential We evaluate compelling capable optimistic development Beta sheet, for the With is initiatives strong and catalyst market the enhancing capital balance options. believe summary, to future. and also have and start. are a consider our about a a off motivated strategic monetization Bairoil we while flexibility In we to and

open on capital company. With to ways we through prudent to asset potential continue this the year our relentless value structure, questions. operator, shareholder pursuing will and Amplify that actively have that, the remain focus be diligent now is management, We transformative find managing the We our cost enhance are allocation. for to confident for initiatives

Operator

with will Alliance first Our Partners. from Instructions] Global question Grampp come [Operator Jeff

Jeffrey Grampp

Beta off start and To first mechanical issue that the with appeared here.

impact given applied in if to be any future wondering mitigate or prospectively, anticipated I to next production on And well rearising potential completion Specifically from learnings of the kind derisk then drillings? kind can any there's if plan? any the the guess, change there's issues to, wells of that

Daniel Furbee

we've answer the we that foresee your of all replaced issues with our during part was the in Jeff, it Yes, The this so is we is issues failures Dan. second thing to future. equipment components this the failed had on those the well, rig. not question, the good operation, do

very productivity completion, altered the much just that the the produce not intend still in well a like time expect design. the real one is in yes, any is logs have well. becoming from, impact this to well. The we've opposed that we by as to of on drilling going end we perform And And to and year For towards expect just different, real we the material and year, schedule. -- casing of of this good -- remaining this said, smaller the encouraged some we do not of zone differences we're

Jeffrey Grampp

Bairoil was little to Bairoil? expect another turnaround mentioned, the what's you be is if of strategy turnaround. I My talk Can that line more kind Great. turnaround the about at but guys change can another appreciate this then this bit that apologies year? more clarify follow-up, And be when might needed kind later the there that traditional may of -- you a timing? to limited expected detail. respect for time Or with Understood. you to

Martyn Willsher

go towards capacity a And done but XX months at we've every replacing added line and out Jeff, actually from able in kind over little we between potentially we're we've compression long stretched XX replace. we've like years looking to to as months. of turnaround now we probably X year, so because additional Traditionally, strategy. section been the the years, particular, turnarounds. This some a as were of we've things replaced more on bit needed them these that

instead wanted of so And out get that we way. the -- of to

in March; in we And late was planned it did it June originally. May, so

all X a what's we XX-day days. we of did usually basically, to in instead X- accelerate. turnaround, to was X And So it did

year. don't until we turnaround anticipate next so sometime another And

turnaround basically year. replacement. This be So this there another is won't the

less it's while on much impact also on costly, flood, year, ramp a shorter, because So production XX has when turnaround crude takes more days efficient overall up. total the to you're X it down back a COX a less for to that little

So because overall. it's redundancy, this we way. was of to we it kind more less impactful this by said, now can us like allowed doing annuals the year Like do because little compressor I during bit things efficiently do that things a have and

Operator

Subhasish comes [Operator from Instructions] question Our Chandra with next Benchmark.

Subhasish Chandra

on question A Yes. Beta.

past up platform development any year year production for this next some the work? of with every higher What has over the point? might being you quarter hindered independent do the picked at it being production since of think is argue made the still base where base now to And to of modifications So restart. of the it a production

Daniel Furbee

Yes, Dan. this is

So of we wells workovers. still have pre-shutdown need these a outside of that handful still developments,

reduce some But is at we facility large Beta think production probably talking be that. we're base been of maybe on realized is where could working now that that's development, incremental keep our now, production for incrementals. The before I there from So some purchase. then projects time and from produced being supplemented some yes, about, now, going as And mostly also all and our cost initiatives. [ power are we ] our usage savings drive of through with short essentially from to supplemented those power generated power we're to with for cost-saving going gas, diesel going come just to generation, generators,

District. Quality nearly we much to NOx currently Coast the that buy to we have buy won't that, have to of Air addition credits In South as under

reduce as will well. costs that So

side. So the cost that's savings mostly on

Subhasish Chandra

and related a of like costs Okay. the that Is quarter. I CapEx wasn't LOE, the a it CapEx, overages? in on that for there of the in Got lot doesn't And discussion that comment, AXX some the guess, the sound LOE reason from, fair direction, you. the first was

Martyn Willsher

Yes.

capital related is AXX to in March. think AFE. some I costs obviously the there started the We

taken other that one, what managed because projects project. April days year, during facility advantage of we be have this accelerated actually we'll will forward to, to So the facilities in of part of the the less some of managed two, there as and XX was the Beta, going kind and well. Most we've side, some we've on we've was be and during some year of downtime in, that March, at specifically is move because the turnaround; in to that of shrink downtime that originally opportunities to we've accelerated

And so as less year. forward we go impactful the through it's

at it side. So guidance. capital bit QX, overall overall had guidance, at the a on a It's little But tumultuous look especially not of on just if changing you as the and LOE to our same timing impact the things these of our kind had change forward, we're seen thus bring of we've an opportunities bring time. as changes we've then forward to acceleration and impact

Subhasish Chandra

sinking if you. ask Okay. just Got And can I on fund. the

cash the fair? this how any when million -- So $X or goes goes is I And Or balances that pretty million is works, on know start? that is there maybe a does something? stuff to don't of offsetting facility $XX sort clean the this something on million, to And $XX credit outlays? million $X but

Martyn Willsher

million, perfectly of federal million and essentially. it you this, Yes. portion this -- is state is was the the first There's time. the portion basically, there's and a the said state and $X federal it portion $X portion I No, of think

So $XX that's anticipate now is what $X going be would of it million. forward. where And million was I kind

group of right a several of right with replacing we really was change and people kind the group going basically that And in forward. for had ourselves we group and the as surety kind different there that so the basically process to that manage years move in that's forward, getting the been made reallocating

Subhasish Chandra

one Okay. and ask Good know. I'll If in to queue. I last the hop then could just one back

are bids Bairoil So are the final -- due? when

Martyn Willsher

And -- ] run of up will -- take be obviously, fact of, of complication first middle we're process structure the point, process a end we've you'll kind end of wrapping doing got round, kind well. a traditionally place or kind added negotiate with as the second that bids data round, So of and then [ dual the due of will to There's basically a towards May. of towards we're the this a PSA. that monetization

over the of happen and will this in advance the anticipate we next So summer potentially call.

market appropriate soon. And But at is coming we'll time. the so the obviously update that

Operator

I the for time, to management turn back this like call At closing any remarks. to additional would or

Martyn Willsher

all and you. Thank that, to express efforts like for of Thank don't our are for my employees of to any support. Thank this appreciation also year. I'd on to call the out. for like there With their continued stakeholders always, their just say please And so questions, to you far reach thank dedication outstanding I'd participating as everyone. all to hesitate you today. if you, our

Operator

This does Quarter Energy's Thank Call. conclude Conference First the Investor you. XXXX Amplify

may and disconnect at your line time, have wonderful a You this day.

Amplify Energy (AMPY) 9 May 242024 Q1 Earnings call transcript