Amplify Energy Corp. (NYSE: AMPY) (“Amplify” or the “Company”)
announced today its operating and financial results for the fourth
quarter and full-year 2021, year-end 2021 proved reserves and
guidance for the full-year 2022.
Key Highlights
-
Southern California Release Incident (the “Incident”) Updates:
-
Amplify completed the PHMSA approved temporary repair of the
pipeline and safely and successfully flushed all remaining oil from
the pipeline in January 2022
-
Unified Command concluded its response and monitoring efforts and
stood down on February 2, 2022
-
Amplify filed a lawsuit against the two shipping companies and
vessels, whose anchors struck and damaged the pipeline, causing the
oil release in early October, and the Marine Exchange of Southern
California, which failed to notify Amplify of the anchor dragging
incidents
-
Amplify continues to work cooperatively with all regulatory
agencies to safely and promptly advance the permanent repair plan
for the pipeline
-
During the fourth quarter of 2021, the Company:
-
Achieved average total production of 20.8 MBoepd
-
Generated net cash provided by operating activities of $7.7
million
-
Delivered Adjusted EBITDA of $10.8 million
-
Generated $4.0 million of free cash flow
-
For full-year 2021, the Company:
-
Generated net cash provided by operating activities of $63.0
million
-
Delivered Adjusted EBITDA of $84.7 million
-
Generated $40.2 million of free cash flow
-
Amplify’s year-end 2021 total proved reserves of 120 million
barrels of oil equivalent (MMBoe), utilizing strip pricing as of
February 28, 2022, had a PV-10 value of approximately $1
billion
-
Initiated marketing process to potentially monetize the Company’s
non-operated Eagle Ford asset
-
As of February 28, 2022, net debt was $203 million, consisting of
$225 million outstanding on the revolving credit facility less $22
million of cash on hand
-
Net Debt to Last Twelve Months (“LTM”) EBITDA of 2.4x1
(1) Net debt as of December 31, 2021, and LTM
EBITDA as of the fourth quarter of 2021
Martyn Willsher, Amplify’s President and Chief
Executive Officer, commented, “This past quarter was challenging
with the events at Beta, but we are proud of our steadfast
commitments and efforts of the Unified Command to safely,
effectively and professionally respond to the oil release in
Southern California. A temporary repair of the pipeline has been
completed, and the line has been safely and successfully flushed of
all remaining oil. We are pursuing legal action against the two
shipping companies and the vessels whose actions damaged the
pipeline and caused the oil release in early October. The Company
has also filed suit against the Marine Exchange of Southern
California, which failed to notify us of the anchor strikes. We are
now focused on expeditiously obtaining the required regulatory
approvals to repair and restart our pipeline and bringing the Beta
field back online.
Willsher continued, “We are pleased with our
operating and financial results as we continue to execute on our
strategy of generating sustainable free cash flow through efficient
operations, accretive reinvestment and prudent asset optimization.
During 2021, we reduced outstanding debt by $25 million through
free cash flow generation in excess of $40 million, despite the
significant challenges that resulted from the pipeline
incident.”
“For 2022, we remain focused on managing costs,
generating free cash flow and improving the balance sheet. The
elevated commodity pricing environment also allows us to
opportunistically augment our workover program in Oklahoma and
explore additional non-operated development opportunities within
our East Texas asset and our recently announced marketing process
for our non-operated Eagle Ford asset is expected to accelerate our
commitment to delevering. Collectively, we believe that these
actions will drive value for our shareholders,” Mr. Willsher
concluded.
Southern California Pipeline
Incident
For more information and disclosures regarding
the Incident, please see our Annual Report on Form 10-K for the
year-end December 31, 2021 filed with the SEC.
2021 Year-End Proved Reserve
Update
The Company’s estimated proved reserves at SEC
pricing for year end 2021 totaled 121 MMBoe, which consisted of 119
MMBoe of proved developed reserves and 2 MMBoe of proved
undeveloped (“PUD”) reserves. As a result of the Incident, all
production and pipeline operations at the Beta field have been
suspended, and the asset’s proved developed producing (“PDP”)
reserves have been reclassified to the proved developed
non-producing (“PDNP”) category. Further, the Company has shifted
its resources to returning Beta to production, which has resulted
in a modification to the Company’s future PUD development plans and
a reduction in its PUD reserve estimates for 2021. Total proved
reserves were comprised of 37% oil, 20% NGLs, and 43% natural gas.
Geographically, 29% are in Oklahoma, 37% are in East Texas and
Northern Louisiana, 22% are in the Rockies, 10% are in southern
California, and 3% are in the Eagle Ford.
At year end 2021, as prepared utilizing SEC
pricing(1), Amplify’s proved reserves and proved developed reserves
had PV-10 values of approximately $920 million and $895 million,
respectively. Utilizing strip pricing as of February 28, 2022, the
Company’s year-end 2021 proved reserves and proved developed
reserves had PV-10 values of approximately $998 million and $969
million, respectively.
|
Estimated Net Proved Reserves |
|
Producing Wells |
|
|
% Oil and |
% Proved |
Standardized |
|
|
Region |
MMBoe |
NGL |
Developed |
Measure (1)(2) |
Gross |
Net |
|
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
Oklahoma |
35.0 |
47% |
100% |
269 |
326 |
233 |
Rockies (Bairoil) |
26.6 |
100% |
100% |
218 |
137 |
137 |
Southern California
(Beta) |
12.0 |
100% |
100% |
128 |
- |
- |
East Texas/ North
Louisiana |
44.5 |
25% |
98% |
250 |
1,592 |
885 |
Eagle Ford |
3.1 |
91% |
56% |
54 |
362 |
24 |
|
|
|
|
|
|
|
Total |
121.2 |
57% |
98% |
920 |
2,417 |
1,279 |
(1) Standardized measure is calculated using SEC
pricing, before market differentials, of $66.56/Bbl for oil and
NGLs and $3.60/MMBtu for natural gas(2) Beta Producing Wells of 63
gross (63 net) wells are excluded as a result of the Incident
Amplify’s reserves estimates were prepared by
its third-party independent reserve consultant, Cawley, Gillespie
& Associates, Inc.
Key Financial Results
During the fourth quarter of 2021, Amplify
generated $10.8 million of Adjusted EBITDA, a decrease of
approximately $16.3 million from $27.1 million in the prior
quarter. The decrease was almost entirely attributable to Beta
production being offline for the quarter, partially offset by
higher commodity prices, lower lease operating expenses, and loss
of production income (“LOPI”) insurance payments related to the
Incident totaling $6.7 million for the period of November 15, 2021
through December 31, 2021. LOPI insurance is effective for
approximately 18 months following a qualifying event, but payments
do not start until after 45-days of non-production.
Free cash flow, defined as Adjusted EBITDA less
cash interest and capital spending, was $4.0 million in the fourth
quarter of 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter |
Third
Quarter |
$ in millions |
|
|
2021 |
|
2021 |
|
Net income (loss) |
|
$35.8 |
($13.5 |
) |
Net cash provided by operating activities |
|
$7.7 |
$18.9 |
|
Average daily production (MBoe/d) |
|
|
20.8 |
|
25.1 |
|
Total revenues |
|
$93.1 |
$97.0 |
|
Adjusted EBITDA (a non-GAAP financial measure) |
$10.8 |
$27.1 |
|
Total capital |
|
$3.5 |
$10.5 |
|
Free Cash Flow (a non-GAAP financial measure) |
$4.0 |
$13.1 |
|
|
|
|
|
Revolving Credit Facility
On November 10, 2021, the Company completed the
regularly scheduled semi-annual borrowing base redetermination
process, which reaffirmed the borrowing base at $245 million.
Beginning in February 2022, the borrowing base will be reduced by
$5 million per month until the spring borrowing base
redetermination, which is expected to be completed in the second
quarter of 2022.
As of February 28, 2022, Amplify had net debt of
$203 million, consisting of $225 million outstanding under its
revolving credit facility and $22 million of cash on hand. Net Debt
to LTM EBITDA was 2.4x (net debt as of February 28, 2022 and 4Q21
LTM EBITDA).
Corporate Production and Pricing
Update
During the fourth quarter of 2021, average daily
production was approximately 20.8 MBoepd, a decrease of 17% from
25.1 MBoepd in the third quarter, primarily due to the Incident and
the resulting suspension of production.
The Company’s product mix for the quarter
consisted of 31% crude oil, 18% NGLs, and 51% natural gas.
Total oil, natural gas and NGL revenues in the
fourth quarter of 2021 were approximately $86.3 million, before the
impact of derivatives, compared to $96.8 million in the third
quarter. The Company realized a loss on commodity derivatives of
$34.2 million during the quarter, compared to a $18.5 million loss
during the previous quarter, consisting of $38.2 million in
realized losses from active contracts, partially offset by a $4.0
million gain from in-the-money contracts related to the fourth
quarter of 2021 that were monetized in April 2020. The realized
hedging loss experienced during the quarter was primarily
attributed to the hedges placed earlier in 2020 when the commodity
pricing environment was materially lower and highlights the
substantial recovery in commodity prices throughout 2021.
The following table sets forth information
regarding average realized sales prices for the periods
indicated:
|
|
Crude Oil ($/Bbl) |
NGLs ($/Bbl) |
Natural Gas ($/Mcf) |
|
|
|
Three Months Ended December 31, 2021 |
|
Three Months Ended September 30, 2021 |
|
Three Months Ended December 31, 2021 |
|
Three Months Ended September 30, 2021 |
|
Three Months Ended December 31, 2021 |
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price exclusive of realized derivatives |
|
$ |
73.47 |
|
|
$ |
67.30 |
|
|
$ |
37.98 |
|
|
$ |
34.11 |
|
|
$ |
5.43 |
|
|
$ |
3.88 |
|
|
Realized
derivatives |
|
|
(35.35 |
) |
|
|
(16.37 |
) |
|
|
(3.29 |
) |
|
|
(2.48 |
) |
|
|
(2.78 |
) |
|
|
(1.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
sales price with realized derivatives exclusive of certain
deductions from revenue |
|
$ |
38.12 |
|
|
$ |
50.93 |
|
|
$ |
34.69 |
|
|
$ |
31.63 |
|
|
$ |
2.65 |
|
|
$ |
2.83 |
|
|
Certain
deductions from revenue |
|
|
- |
|
|
|
- |
|
|
|
(2.15 |
) |
|
|
(2.06 |
) |
|
|
(0.21 |
) |
|
|
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
sales price inclusive of realized derivatives and certain
deductions from revenue |
|
$ |
38.12 |
|
|
$ |
50.93 |
|
|
$ |
32.54 |
|
|
$ |
29.57 |
|
|
$ |
2.44 |
|
|
$ |
2.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
Lease operating expenses in the fourth quarter
of 2021 were approximately $29.4 million, or $15.34 per Boe, a
decrease of approximately $5.1 million compared to $34.5 million,
or $14.92 per Boe, in the third quarter of 2021. The decrease was
primarily attributable to lower expense workover projects at
Bairoil and Beta.
Severance and Ad Valorem taxes in the fourth
quarter were approximately $6.5 million, an increase of $0.5
million compared to $6.0 million in the third quarter. On a
percentage basis, Amplify paid approximately 7.6% of total oil, NGL
and natural gas sales revenue in taxes this quarter compared to
6.2% in the previous quarter. The quarter-over-quarter increase was
generally a result of higher commodity pricing and lack of revenue
at Beta resulting from the Incident.
Amplify incurred $6.1 million, or $3.20 per Boe,
of gathering, processing and transportation expenses in the fourth
quarter of 2021, compared to $5.0 million, or $2.18 per Boe, in the
previous quarter. The increase was primarily attributable to a
one-time accounting adjustment related to our non-operated Eagle
Ford property.
Fourth quarter cash G&A expenses were $6.2
million, an increase of $0.4 million from $5.8 million in the third
quarter of 2021.
Depreciation, depletion and amortization expense
for the fourth quarter of 2021 totaled $6.3 million, or $3.31 per
Boe, compared to $7.0 million, or $3.03 per Boe, in the prior
quarter.
Net interest expense was $2.8 million this
quarter, a decrease of $0.3 million from $3.1 million in the third
quarter of 2021.
Amplify had an effective tax rate of 0% and did
not record an income tax expense or benefit for the fourth quarter
of 2021.
Capital Spending Update
Cash capital spending during the fourth quarter
of 2021 was approximately $3.5 million, a $7.0 million decrease
from $10.5 million in the third quarter. A majority of capital
expenditures in the fourth quarter were related to the workover
program in Oklahoma and facilities upgrades and workovers at
Bairoil, while the suspension of operations at Beta contributed to
the majority of the decrease from the prior quarter.
The following table details Amplify’s capital
incurred during the quarter and full-year 2021:
|
|
Fourth
Quarter |
|
Year to
Date |
|
|
2021
Capital |
|
Capital |
|
|
Spend ($ MM) |
|
Spend ($ MM) |
Oklahoma |
|
$ |
1.7 |
|
|
$ |
9.2 |
Rockies
(Bairoil) |
|
$ |
1.1 |
|
|
$ |
4.9 |
Southern
California (Beta) |
|
$ |
(0.4 |
) |
|
$ |
10.7 |
East Texas /
North Louisiana |
|
$ |
0.6 |
|
|
$ |
0.6 |
Eagle Ford
(Non-Op) |
|
$ |
0.5 |
|
|
$ |
5.4 |
Total Capital Spent |
|
$ |
3.5 |
|
|
$ |
30.8 |
|
|
|
|
|
Asset Operational Update and
Statistics
Oklahoma:
-
Production: 581 MBoe; 6.3 MBoepd
-
Commodity Mix: 22% oil, 28% NGLs, 50% natural gas
-
LOE: $4.4 million; $7.61 per Boe
- Capex:
$1.7 million
Amplify’s operating strategy in Oklahoma remains
focused on prioritizing a stable free cash flow profile and
managing production through an active workover program. The
workover program is focused on rod-lift conversions and ESP
optimizations which reduce future operating expenses and downtime
and generate highly attractive returns in the current pricing
environment. As of December 31, 2021, Amplify has converted
approximately 51% of the field to rod lift. During 2022, Amplify
expects to further accelerate its workover program from 2021
levels, bringing additional wells and incremental production online
in the current commodity price environment.
Rockies (Bairoil):
-
Production: 334 MBoe; 3.6 MBoepd
-
LOE: $9.1 million; $27.30 per Boe
- Capex:
$1.1 million
The Company continued its CO2 injection and
water-alternating-gas pattern optimization at Bairoil to improve
production performance. The fourth quarter of 2021 delivered strong
operational reliability of the production facilities, and the
technical team continued extensive evaluation of the reservoir to
facilitate these efforts. Amplify intends to continue using new
technologies, along with targeted workover activity, to drive
further operational improvements and efficiencies.
Southern California (Beta):
-
Production: 5 MBoe; 0.1 MBoepd
-
LOE: $9.0 million
- Capex:
$(0.4) million
As previously disclosed, all of the Company’s
production and pipeline operations at the Beta field have been
suspended. Amplify’s focus remains on obtaining the required
regulatory approvals to repair and restart the pipeline as soon as
practical.
East Texas and North Louisiana:
-
Production: 5.3 Bcfe; 57.5 MMcfepd (882 MBoe; 9.6 MBoepd)
-
Commodity Mix: 5% oil, 20% NGLs, 75% natural gas
-
LOE: $5.2 million; $0.99 per Mcfe ($5.95 per Boe)
- Capex:
$0.6 million
Amplify’s East Texas operating strategy
continues to focus on prudent management of production by
prioritizing high-return workover projects and opportunistically
participating in non-operated development opportunities. During the
fourth quarter, the Company participated in three highly accretive
non-operated development wells that will provide additional free
cash flow in 2022. Amplify is actively pursuing additional
opportunities to bolster future free cash flow generation within
our asset base.
Non-Operated Eagle Ford:
-
Production: 111 MBoe; 1.2 MBoepd
-
Commodity Mix: 70% oil, 15% NGLs, 15% natural gas
-
LOE: $1.5 million; $13.81 per Boe
- Capex:
$0.5 million
Eagle Ford production outperformed during the
fourth quarter of 2021 as wells placed online earlier in the year
generally exceeded internal projections. Amplify’s Eagle Ford asset
continues to generate substantial margins and free cash flow.
Full-Year 2022 Guidance
The following guidance is subject to the
cautionary statements and limitations described under the
"Forward-Looking Statements" caption at the end of this press
release. Amplify's 2022 guidance is based on its current
expectations regarding capital expenditure levels and on the
assumption that market demand and prices for oil and natural gas
will continue at levels that allow for economic production of these
products. Due to uncertainty regarding Beta’s restart timeline, the
guidance below does not assume Beta returns to production in 2022.
Guidance will be updated when additional information is
available.
A summary of the guidance is presented
below:
|
|
|
|
|
FY
2022E5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
Net Average Daily Production |
|
|
|
|
|
Oil (MBbls/d) |
|
|
|
5.8 |
|
- |
|
6.4 |
|
|
|
NGL (MBbls/d) |
|
|
|
3.3 |
|
- |
|
3.7 |
|
|
|
Natural Gas (MMcf/d) |
|
|
56.5 |
|
- |
|
62.5 |
|
|
|
Total (MBoe/d) |
|
|
|
18.5 |
|
- |
|
20.5 |
|
|
|
|
|
|
|
|
|
|
|
Commodity Price Differential / Realizations
(Unhedged) |
|
|
|
|
|
Oil Differential ($ / Bbl) |
|
($3.50 |
) |
- |
($4.00 |
) |
|
|
NGL Realized Price (% of WTI NYMEX) |
|
40 |
% |
- |
|
45 |
% |
|
|
Natural Gas Realized Price (% of Henry Hub) |
|
87 |
% |
- |
|
93 |
% |
|
|
|
|
|
|
|
|
|
|
Gathering, Processing and Transportation
Costs |
|
|
|
|
|
Oil ($ / Bbl) |
|
|
$0.01 |
|
- |
$0.05 |
|
|
|
NGL ($ / Bbl) |
|
|
$3.75 |
|
- |
$4.25 |
|
|
|
Natural Gas ($ / Mcf) |
|
$0.48 |
|
- |
$0.60 |
|
|
|
Total ($ / Boe) |
|
|
$2.10 |
|
- |
$2.60 |
|
|
|
|
|
|
|
|
|
|
|
Average Costs |
|
|
|
|
|
|
|
Lease Operating ($ / Boe) |
$16.50 |
|
- |
$18.50 |
|
|
|
Taxes (% of Revenue) (1) |
|
8.0 |
% |
- |
|
9.0 |
% |
|
|
Recurring Cash General and Administrative ($ / Boe) (2) |
$3.25 |
|
- |
$3.75 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA ($ MM) (3) |
$70 |
|
- |
$100 |
|
|
|
Cash Interest Expense ($ MM) |
$10 |
|
- |
$15 |
|
|
|
Capital Expenditures ($ MM) |
$20 |
|
- |
$30 |
|
|
|
Free Cash Flow ($ MM) (4) |
$40 |
|
- |
$70 |
|
|
|
|
|
|
|
|
|
(1) Includes production, ad valorem and franchise
taxes(2) Recurring cash general and administrative cost
guidance excludes reorganization expenses and non-cash
compensation(3) Refer to “Use of Non-GAAP Financial Measures”
for Amplify’s definition and use of Adjusted EBITDA, a non-GAAP
measure(4) Refer to “Use of Non-GAAP Financial Measures” for
Amplify’s definition and use of free cash flow, a non-GAAP
measure(5) Excludes production from our Southern California
(Beta) asset
Hedging Update
The following table reflects the hedged volumes
under Amplify’s commodity derivative contracts and the average
fixed, floor and ceiling prices at which production is hedged for
January 2022 through December 2023, as of March 9, 2022:
|
|
|
|
2022 |
|
|
2023 |
|
|
|
|
|
|
|
Natural Gas Swaps: |
|
|
|
|
|
Average
Monthly Volume (MMBtu) |
|
|
695,000 |
|
|
|
Weighted
Average Fixed Price ($) |
|
$ |
2.56 |
|
|
|
|
|
|
|
|
|
Natural Gas Collars: |
|
|
|
|
|
Two-way
collars |
|
|
|
|
|
Average Monthly Volume (MMBtu) |
|
|
775,000 |
|
|
690,000 |
|
Weighted Average Ceiling Price ($) |
|
$ |
3.44 |
|
$ |
3.84 |
|
Weighted Average Floor Price ($) |
|
$ |
2.56 |
|
$ |
2.92 |
|
|
|
|
|
|
|
Oil
Swaps: |
|
|
|
|
|
Average
Monthly Volume (Bbls) |
|
|
64,000 |
|
|
55,000 |
|
Weighted
Average Fixed Price ($) |
|
$ |
49.56 |
|
$ |
57.30 |
|
|
|
|
|
|
|
Oil
Collars: |
|
|
|
|
|
Two-way
collars |
|
|
|
|
|
Average Monthly Volume (Bbls) |
|
|
22,500 |
|
|
|
Weighted Average Ceiling Price ($) |
|
$ |
67.42 |
|
|
|
Weighted Average Floor Price ($) |
|
$ |
58.33 |
|
|
|
|
|
|
|
|
|
Three-way
collars |
|
|
|
|
|
Average Monthly Volume (Bbls) |
|
|
89,000 |
|
|
30,000 |
|
Weighted Average Ceiling Price ($) |
|
$ |
55.55 |
|
$ |
67.15 |
|
Weighted Average Floor Price ($) |
|
$ |
42.92 |
|
$ |
55.00 |
|
Weighted Average Sub-Floor Price ($) |
|
$ |
32.58 |
|
$ |
40.00 |
|
|
|
|
|
|
Amplify posted an updated investor presentation
containing additional hedging information on its website,
www.amplifyenergy.com, under the Investor Relations section.
Annual Report on Form 10-K
Amplify’s financial statements and related
footnotes will be available in its Annual Report on Form 10-K for
the year ended December 31, 2021, which Amplify expects to file
with the Securities and Exchange Commission on March 9, 2022.
About Amplify Energy
Amplify Energy Corp. is an independent oil and
natural gas company engaged in the acquisition, development,
exploitation and production of oil and natural gas properties.
Amplify’s operations are focused in Oklahoma, the Rockies, federal
waters offshore Southern California, East Texas / North Louisiana,
and the Eagle Ford. For more information, visit
www.amplifyenergy.com.
Conference Call
Amplify will host an investor teleconference
tomorrow at 10:00 a.m. Central Time to discuss these operating and
financial results. Interested parties may join the webcast by
visiting Amplify's website, www.amplifyenergy.com, and clicking on
the webcast link or by dialing (800) 489-9479 at least 15 minutes
before the call begins and providing the Conference ID: 8984535.
The webcast and a telephonic replay will be available for fourteen
days following the call and may be accessed by visiting Amplify’s
website, www.amplifyenergy.com, or by dialing (855) 859-2056 and
providing the Conference ID: 8984535.
Forward-Looking Statements
This press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, included in this press release that address
activities, events or developments that the Company expects,
believes or anticipates will or may occur in the future are
forward-looking statements. Terminology such as “may,” “will,”
“would,” “should,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“pursue,” “target,” “outlook,” “continue,” the negative of such
terms or other comparable terminology are intended to identify
forward-looking statements. These statements include, but are not
limited to, statements about the Company’s expectations of plans,
goals, strategies (including measures to implement strategies),
objectives and anticipated results with respect thereto. These
statements address activities, events or developments that we
expect or anticipate will or may occur in the future, including
things such as projections of results of operations, plans for
growth, goals, future capital expenditures, competitive strengths,
references to future intentions and other such references. These
forward-looking statements involve risks and uncertainties and
other factors that could cause the Company’s actual results or
financial condition to differ materially from those expressed or
implied by forward-looking statements. These include risks and
uncertainties relating to, among other things: the ongoing impact
of the oil incident that occurred off the coast of Southern
California resulting from the Company’s pipeline operations at the
Beta field, the Company’s evaluation and implementation of
strategic alternatives; the Company’s ability to satisfy debt
obligations; the Company’s need to make accretive acquisitions or
substantial capital expenditures to maintain its declining asset
base, including the existence of unanticipated liabilities or
problems relating to acquired or divested business or properties;
volatility in the prices for oil, natural gas and NGLs, including
further or sustained declines in commodity prices; the Company’s
ability to access funds on acceptable terms, if at all, because of
the terms and conditions governing the Company’s indebtedness,
including financial covenants; general political and economic
conditions, globally and in the jurisdictions in which we operate,
including escalating tensions between Russia and Ukraine and the
potential destabilizing effect such conflict may pose for the
European continent or the global oil and natural gas markets; the
impact of legislation and governmental regulations, including those
related to climate change and hydraulic fracturing; and the
occurrence or threat of epidemic or pandemic diseases, including
the COVID 19 pandemic, or any government response to such
occurrence or threat. Please read the Company’s filings with the
Securities and Exchange Commission (the “SEC”), including “Risk
Factors” in the Company’s Annual Report on Form 10-K, and if
applicable, the Company’s Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, which are available on the Company’s
Investor Relations website at
https://www.amplifyenergy.com/investor-relations/sec-filings/default.aspx
or on the SEC’s website at http://www.sec.gov, for a discussion of
risks and uncertainties that could cause actual results to differ
from those in such forward-looking statements. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All
forward-looking statements in this press release are qualified in
their entirety by these cautionary statements. Except as required
by law, the Company undertakes no obligation and does not intend to
update or revise any forward-looking statements, whether as a
result of new information, future results or otherwise.
Use of Non-GAAP Financial
Measures
This press release and accompanying schedules
include the non-GAAP financial measures of Adjusted EBITDA, free
cash flow, net debt, and PV-10. The accompanying schedules provide
a reconciliation of these non-GAAP financial measures to their most
directly comparable financial measures calculated and presented in
accordance with GAAP. Amplify’s non-GAAP financial measures should
not be considered as alternatives to GAAP measures such as net
income, operating income, net cash flows provided by operating
activities, standardized measure of discounted future net cash
flows, or any other measure of financial performance calculated and
presented in accordance with GAAP. Amplify’s non-GAAP financial
measures may not be comparable to similarly titled measures of
other companies because they may not calculate such measures in the
same manner as Amplify does.
Adjusted EBITDA. Amplify
defines Adjusted EBITDA as net income or loss, plus interest
expense; income tax expense; depreciation, depletion and
amortization; impairment of goodwill and long-lived assets;
accretion of asset retirement obligations; losses on commodity
derivative instruments; cash settlements received on expired
commodity derivative instruments; losses on sale of assets;
unit-based compensation expenses; exploration costs; acquisition
and divestiture related expenses; amortization of gain associated
with terminated commodity derivatives, bad debt expense; and other
non-routine items, less interest income; gain on extinguishment of
debt; income tax benefit; gains on commodity derivative
instruments; cash settlements paid on expired commodity derivative
instruments; gains on sale of assets and other, net; and other
non-routine items. Adjusted EBITDA is commonly used as a
supplemental financial measure by management and external users of
Amplify’s financial statements, such as investors, research
analysts and rating agencies, to assess: (1) its operating
performance as compared to other companies in Amplify’s industry
without regard to financing methods, capital structures or
historical cost basis; (2) the ability of its assets to generate
cash sufficient to pay interest and support Amplify’s indebtedness;
and (3) the viability of projects and the overall rates of return
on alternative investment opportunities. Since Adjusted EBITDA
excludes some, but not all, items that affect net income or loss
and because these measures may vary among other companies, the
Adjusted EBITDA data presented in this press release may not be
comparable to similarly titled measures of other companies. The
GAAP measures most directly comparable to Adjusted EBITDA are net
income and net cash provided by operating activities.
Free cash flow. Amplify defines
free cash flow as Adjusted EBITDA, less cash income taxes; cash
interest expense; and total capital expenditures. Free cash flow is
an important non-GAAP financial measure for Amplify’s investors
since it serves as an indicator of the Company’s success in
providing a cash return on investment. The GAAP measures most
directly comparable to free cash flow are net income and net cash
provided by operating activities.
Net debt. Amplify defines net
debt as the total principal amount drawn on the revolving credit
facility less cash and cash equivalents. The Company uses net debt
as a measure of financial position and believes this measure
provides useful additional information to investors to evaluate the
Company's capital structure and financial leverage.
PV-10. Amplify defines PV-10 as
the estimated future gross revenue to be generated from the
production of proved reserves, net of estimated production. PV-10
is not a measure of financial or operating performance defined
under GAAP. Accordingly, this release reconciles total PV-10 to the
standardized measure of discounted future net cash flows, which is
the most directly comparable GAAP financial measure. Amplify
believes the presentation of PV-10 provides useful information
because it is widely used by investors in evaluating oil and
natural gas companies without regard to specific income tax
characteristics of such entities. PV-10 is not intended to
represent the current market value of our estimated proved
reserves. PV-10 should not be considered in isolation or as a
substitute for the standardized measure of discounted future net
cash flows as defined under GAAP.
Contacts
Jason McGlynn – Chief Financial Officer(832)
219-9055jason.mcglynn@amplifyenergy.com
Selected Operating and Financial Data
(Tables)
Amplify Energy Corp. |
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
|
Statements of Operations Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
Oil and natural gas sales |
|
$ |
86,269 |
|
|
$ |
96,841 |
|
|
Other revenues |
|
|
6,784 |
|
|
|
160 |
|
|
Total revenues |
|
|
93,053 |
|
|
|
97,001 |
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
Lease operating expense |
|
|
29,353 |
|
|
|
34,486 |
|
|
Pipeline incident loss |
|
|
1,599 |
|
|
|
- |
|
|
Gathering, processing and transportation |
|
|
6,131 |
|
|
|
5,047 |
|
|
Exploration |
|
|
25 |
|
|
|
9 |
|
|
Taxes other than income |
|
|
6,542 |
|
|
|
6,024 |
|
|
Depreciation, depletion and amortization |
|
|
6,332 |
|
|
|
7,000 |
|
|
General and administrative expense |
|
|
5,886 |
|
|
|
6,448 |
|
|
Accretion of asset retirement obligations |
|
|
1,693 |
|
|
|
1,665 |
|
|
Realized (gain) loss on commodity derivatives |
|
38,215 |
|
|
|
22,595 |
|
|
Unrealized (gain) loss on commodity derivatives |
|
(40,915 |
) |
|
|
24,058 |
|
|
Other, net |
|
|
(62 |
) |
|
|
- |
|
|
Total costs and expenses |
|
|
54,799 |
|
|
|
107,332 |
|
|
|
|
|
|
|
|
Operating Income (loss) |
|
|
38,254 |
|
|
|
(10,331 |
) |
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
Interest expense, net |
|
|
(2,772 |
) |
|
|
(3,078 |
) |
|
Other income (expense) |
|
|
269 |
|
|
|
(61 |
) |
|
Gain on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
Total Other Income (Expense) |
|
|
(2,503 |
) |
|
|
(3,139 |
) |
|
|
|
|
|
|
|
|
Income (loss) before reorganization items, net and income
taxes |
|
35,751 |
|
|
|
(13,470 |
) |
|
|
|
|
|
|
|
Reorganization items, net |
|
|
- |
|
|
|
- |
|
Income tax benefit (expense) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
35,751 |
|
|
$ |
(13,470 |
) |
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
Basic and diluted earnings (loss) per share |
|
$ |
0.94 |
|
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
|
Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
Oil and natural gas revenue: |
|
|
|
|
|
Oil Sales |
|
$ |
43,109 |
|
$ |
63,172 |
|
NGL Sales |
|
|
12,512 |
|
|
11,839 |
|
Natural Gas Sales |
|
|
30,648 |
|
|
21,830 |
|
Total oil and natural gas sales - Unhedged |
$ |
86,269 |
|
$ |
96,841 |
|
|
|
|
|
|
|
Production volumes: |
|
|
|
|
|
Oil Sales - MBbls |
|
|
586 |
|
|
939 |
|
NGL Sales - MBbls |
|
|
350 |
|
|
369 |
|
Natural Gas Sales - MMcf |
|
|
5,864 |
|
|
6,023 |
|
Total - MBoe |
|
|
1,913 |
|
|
2,312 |
|
Total - MBoe/d |
|
|
20.8 |
|
|
25.1 |
|
|
|
|
|
|
|
Average sales price (excluding commodity
derivatives): |
|
|
|
|
Oil - per Bbl |
|
$ |
73.47 |
|
$ |
67.30 |
|
NGL - per Bbl |
|
$ |
35.83 |
|
$ |
32.05 |
|
Natural gas - per Mcf |
|
$ |
5.23 |
|
$ |
3.62 |
|
Total - per Boe |
|
$ |
45.09 |
|
$ |
41.89 |
|
|
|
|
|
|
|
Average unit costs per Boe: |
|
|
|
|
|
Lease operating expense |
|
$ |
15.34 |
|
$ |
14.92 |
|
Gathering, processing and transportation |
|
$ |
3.20 |
|
$ |
2.18 |
|
Taxes other than income |
|
$ |
3.42 |
|
$ |
2.61 |
|
General and administrative expense |
|
$ |
3.08 |
|
$ |
2.79 |
|
Depletion, depreciation, and amortization |
|
$ |
3.31 |
|
$ |
3.03 |
|
|
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
|
Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
18,799 |
|
|
$ |
17,344 |
|
|
Accounts Receivable |
|
|
91,967 |
|
|
|
44,748 |
|
|
Other Current Assets |
|
|
15,018 |
|
|
|
10,740 |
|
|
|
Total Current Assets |
|
$ |
125,784 |
|
|
$ |
72,832 |
|
|
|
|
|
|
|
|
|
Net Oil and Gas Properties |
|
$ |
320,285 |
|
|
$ |
322,871 |
|
|
Other Long-Term Assets |
|
|
9,031 |
|
|
|
10,214 |
|
|
|
Total
Assets |
|
$ |
455,100 |
|
|
$ |
405,917 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Accounts Payable |
|
$ |
33,819 |
|
|
$ |
9,166 |
|
|
Accrued Liabilities |
|
|
57,826 |
|
|
|
28,238 |
|
|
Other Current Liabilities |
|
|
73,518 |
|
|
|
104,694 |
|
|
|
Total
Current Liabilities |
|
$ |
165,163 |
|
|
$ |
142,098 |
|
|
|
|
|
|
|
|
|
Long-Term Debt |
|
$ |
230,000 |
|
|
$ |
230,000 |
|
|
Asset Retirement Obligation |
|
|
102,398 |
|
|
|
101,077 |
|
|
Other Long-Term Liabilities |
|
|
22,380 |
|
|
|
32,893 |
|
|
|
Total
Liabilities |
|
$ |
519,941 |
|
|
$ |
506,068 |
|
|
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
|
Common Stock & APIC |
|
$ |
425,448 |
|
|
$ |
425,888 |
|
|
Warrants |
|
|
4,788 |
|
|
|
4,788 |
|
|
Accumulated Earnings (Deficit) |
|
|
(495,077 |
) |
|
|
(530,827 |
) |
|
|
Total
Shareholders' Equity |
|
$ |
(64,841 |
) |
|
$ |
(100,151 |
) |
|
|
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
|
Statements of Cash Flows Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
7,682 |
|
|
$ |
18,884 |
|
Net cash provided by (used in) investing activities |
|
(6,175 |
) |
|
|
(11,678 |
) |
Net cash provided by (used in) financing activities |
|
(52 |
) |
|
|
(5,012 |
) |
|
|
|
|
|
|
|
Selected Operating and Financial Data (Tables) |
|
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Cash Provided from
Operating Activities: |
|
|
|
Net cash provided by operating activities |
|
$ |
7,682 |
|
|
$ |
18,884 |
|
|
Changes in working capital |
|
|
(5,930 |
) |
|
|
783 |
|
|
Interest expense, net |
|
|
2,772 |
|
|
|
3,078 |
|
|
Gain (loss) on interest rate swaps |
|
|
220 |
|
|
|
(47 |
) |
|
Cash settlements paid (received) on interest rate swaps |
|
487 |
|
|
|
485 |
|
|
Amortization of gain associated with terminated commodity
derivatives |
|
3,960 |
|
|
|
4,066 |
|
|
Amortization and write-off of deferred financing fees |
|
(133 |
) |
|
|
(133 |
) |
|
Exploration costs |
|
|
25 |
|
|
|
9 |
|
|
Plugging and abandonment cost |
|
|
72 |
|
|
|
- |
|
|
Pipeline incident loss |
|
|
1,599 |
|
|
|
- |
|
|
Other |
|
|
90 |
|
|
|
(45 |
) |
Adjusted EBITDA: |
|
$ |
10,844 |
|
|
$ |
27,080 |
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Cash Provided from
Operating Activities: |
|
|
Adjusted EBITDA: |
|
$ |
10,844 |
|
|
$ |
27,080 |
|
|
Less: Cash interest expense |
|
|
3,414 |
|
|
|
3,402 |
|
|
Less: Capital expenditures |
|
|
3,451 |
|
|
|
10,539 |
|
Free Cash Flow: |
|
$ |
3,979 |
|
|
$ |
13,139 |
|
|
|
|
|
|
|
|
|
Selected Operating and Financial Data (Tables) |
|
|
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months |
|
Twelve
Months |
|
|
|
|
|
Ended |
|
Ended |
|
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Cash Provided from
Operating Activities: |
|
|
|
|
Net cash provided by operating activities |
|
$ |
62,969 |
|
|
$ |
74,330 |
|
|
|
Changes in working capital |
|
|
(12,395 |
) |
|
|
10,661 |
|
|
|
Interest expense, net |
|
|
12,099 |
|
|
|
20,522 |
|
|
|
Gain (loss) on interest rate swaps |
|
|
217 |
|
|
|
(4,044 |
) |
|
|
Cash settlements paid (received) on interest rate swaps |
|
1,912 |
|
|
|
1,254 |
|
|
|
Cash settlements received on terminated commodity derivatives |
|
- |
|
|
|
(17,977 |
) |
|
|
Amortization of gain associated with terminated commodity
derivatives |
|
17,977 |
|
|
|
- |
|
|
|
Amortization and write-off of deferred financing fees |
|
(626 |
) |
|
|
(3,272 |
) |
|
|
Reorganization items, net |
|
|
6 |
|
|
|
566 |
|
|
|
Exploration costs |
|
|
57 |
|
|
|
56 |
|
|
|
Acquisition and divestiture related costs |
|
|
19 |
|
|
|
1,092 |
|
|
|
Severance payments |
|
|
- |
|
|
|
57 |
|
|
|
Plugging and abandonment cost |
|
|
307 |
|
|
|
577 |
|
|
|
Current income tax expense (benefit) |
|
|
- |
|
|
|
115 |
|
|
|
Non-cash inventory valuation adjustment |
|
|
- |
|
|
|
1,003 |
|
|
|
Pipeline incident loss |
|
|
1,599 |
|
|
|
- |
|
|
|
Other |
|
|
565 |
|
|
|
247 |
|
|
Adjusted EBITDA: |
|
$ |
84,706 |
|
|
$ |
85,187 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Cash Provided from
Operating Activities: |
|
|
|
Adjusted EBITDA: |
|
$ |
84,706 |
|
|
$ |
85,187 |
|
|
|
Less: Cash interest expense |
|
|
13,790 |
|
|
|
14,636 |
|
|
|
Less: Capital expenditures |
|
|
30,751 |
|
|
|
29,166 |
|
|
Free Cash Flow: |
|
$ |
40,165 |
|
|
$ |
41,385 |
|
|
|
|
|
|
|
|
|
Selected Operating and Financial Data (Tables) |
|
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Loss): |
|
|
|
|
Net income (loss) |
|
$ |
35,751 |
|
|
$ |
(13,470 |
) |
|
Interest expense, net |
|
|
2,772 |
|
|
|
3,078 |
|
|
Depreciation, depletion and amortization |
|
|
6,332 |
|
|
|
7,000 |
|
|
Accretion of asset retirement obligations |
|
|
1,693 |
|
|
|
1,665 |
|
|
(Gains) losses on commodity derivatives |
|
|
(2,700 |
) |
|
|
46,653 |
|
|
Cash settlements received (paid) on expired commodity derivative
instruments |
|
|
|
(38,215 |
) |
|
|
(22,595 |
) |
|
Amortization of gain associated with terminated commodity
derivatives |
|
3,960 |
|
|
|
4,066 |
|
|
Share-based compensation expense |
|
|
(298 |
) |
|
|
676 |
|
|
Exploration costs |
|
|
25 |
|
|
|
9 |
|
|
Loss on settlement of AROs |
|
|
(62 |
) |
|
|
- |
|
|
Bad debt expense |
|
|
(13 |
) |
|
|
14 |
|
|
Secondary offering expenses |
|
|
- |
|
|
|
(16 |
) |
|
Pipeline incident loss |
|
|
1,599 |
|
|
|
- |
|
|
Adjusted EBITDA: |
|
$ |
10,844 |
|
|
$ |
27,080 |
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Income
(Loss): |
|
|
|
|
Adjusted EBITDA: |
|
$ |
10,844 |
|
|
$ |
27,080 |
|
|
Less: Cash interest expense |
|
|
3,414 |
|
|
|
3,402 |
|
|
Less: Capital expenditures |
|
|
3,451 |
|
|
|
10,539 |
|
|
Free Cash Flow: |
|
$ |
3,979 |
|
|
$ |
13,139 |
|
|
|
|
|
|
|
|
Selected Operating and Financial Data (Tables) |
|
|
|
|
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP
Financial Measures |
|
|
Adjusted EBITDA and Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months |
|
Twelve
Months |
|
|
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
|
December 31, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Loss): |
|
|
|
|
Net income (loss) |
|
$ |
(32,070 |
) |
|
$ |
(464,030 |
) |
|
Interest expense, net |
|
|
12,099 |
|
|
|
20,522 |
|
|
Gain (loss) on early extinguishment of debt |
|
|
(5,516 |
) |
|
|
- |
|
|
Income tax expense |
|
|
- |
|
|
|
115 |
|
|
Depreciation, depletion and amortization |
|
|
28,068 |
|
|
|
40,268 |
|
|
Impairment expense |
|
|
- |
|
|
|
476,936 |
|
|
Accretion of asset retirement obligations |
|
|
6,611 |
|
|
|
6,206 |
|
|
(Gains) losses on commodity derivatives |
|
|
142,439 |
|
|
|
(60,671 |
) |
|
Cash settlements received (paid) on expired commodity derivative
instruments |
|
|
|
(88,301 |
) |
|
|
62,389 |
|
|
Amortization of gain associated with terminated commodity
derivatives |
|
17,977 |
|
|
|
- |
|
|
Acquisition and divestiture related costs |
|
|
19 |
|
|
|
1,092 |
|
|
Reorganization items, net |
|
|
6 |
|
|
|
566 |
|
|
Share-based compensation expense |
|
|
1,612 |
|
|
|
(177 |
) |
|
Exploration costs |
|
|
57 |
|
|
|
56 |
|
|
Loss on settlement of AROs |
|
|
11 |
|
|
|
250 |
|
|
Bad debt expense |
|
|
95 |
|
|
|
294 |
|
|
Severance payments |
|
|
- |
|
|
|
57 |
|
|
Non-cash inventory valuation adjustment |
|
|
- |
|
|
|
1,003 |
|
|
Pipeline incident loss |
|
|
- |
|
|
|
311 |
|
|
Secondary offering expenses |
|
|
1,599 |
|
|
|
- |
|
|
Adjusted EBITDA: |
|
$ |
84,706 |
|
|
$ |
85,187 |
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Income
(Loss): |
|
|
|
|
Adjusted EBITDA: |
|
$ |
84,706 |
|
|
$ |
85,187 |
|
|
Less: Cash interest expense |
|
|
13,790 |
|
|
|
14,636 |
|
|
Less: Capital expenditures |
|
|
30,751 |
|
|
|
29,166 |
|
|
Free Cash Flow: |
|
$ |
40,165 |
|
|
$ |
41,385 |
|
Amplify refers to Standardized Measure as the
present value of estimated future net revenue to be generated from
the production of proved reserves, determined in accordance with
the rules, regulations or standards established by the SEC and the
Financial Accounting Standards Board (“FASB”) (using prices and
costs in effect as of the date of estimation), less future
development, production and income tax expenses and discounted at
10% per annum to reflect the timing of future net revenue. Future
income taxes, if applicable, are computed by applying the statutory
tax rate to the excess of pre-tax cash inflows over Amplify’s tax
basis in its oil and natural gas properties. Standardized measure
does not give effect to derivative transactions.
Amplify refers to PV-10 as the present value of
estimated future net cash flows of estimated proved reserves as
calculated in the respective reserve report using a discount rate
of 10%. This amount includes projected revenues, estimated
production costs, and estimated future development costs, and
estimated cash flows related to future asset retirement obligations
(“ARO”). PV-10 is not a measure of financial or operating
performance defined under GAAP. Accordingly, the following table
reconciles total PV-10 to the standardized measure of discounted
future net cash flows, which is the most directly comparable GAAP
financial measure. Amplify believes the presentation of PV-10
provides useful information because it is widely used by investors
in evaluating oil and natural gas companies without regard to
specific income tax characteristics of such entities. PV-10 is not
intended to represent the current market value of our estimated
proved reserves. PV-10 should not be considered in isolation or as
a substitute for the standardized measure of discounted future net
cash flows as defined under US GAAP. Additionally, standardized
measure is based on proved reserves as of fiscal year end
calculated using unweighted arithmetic average
first-day-of-the-month prices for the prior 12 months. GAAP does
not prescribe any corresponding GAAP measure for PV-10 of reserves
adjusted for pricing sensitivities. For these reasons, it is not
practicable for us to reconcile PV-10 at strip pricing to GAAP
Standardized Measure.
The following table provides a reconciliation of
PV-10 to the standardized measure of discounted cash flows (in
thousands):
|
As of |
As of |
December 31, |
December 31, |
2021 |
2020 |
SEC PV-10
($M) |
$919,845 |
$297,811 |
Present
value of future income tax, discounted at 10% ($M) |
$- |
$- |
Standardized measure of discounted future net cash flows ($M) |
$919,845 |
$297,811 |
|
|
|
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