Amplify Energy Corp. (NYSE: AMPY) (“Amplify” or the “Company”)
announced today its operating and financial results for the first
quarter of 2022 and updated its full-year 2022 guidance.
Key Highlights
-
Southern California Release Incident (the “Incident”) Updates:
-
On April 15, 2022, Amplify received approval for its permanent
pipeline repair plan from the Pipeline and Hazardous Material
Safety Administration (“PHMSA”)
-
Amplify continues to work cooperatively with all regulatory
agencies to secure the remaining required approvals to safely and
promptly repair and restart the pipeline
-
During the first quarter of 2022, the Company:
-
Achieved average total production of 20.4 MBoepd
-
Generated net cash provided by operating activities of $9.7
million
-
Delivered Adjusted EBITDA of $24.9 million
-
Generated $14.9 million of free cash flow
-
Appointed Deborah (“Debbie”) G. Adams and Eric T. Greager to the
Amplify Board of Directors (the “Board”)
-
As of April 30, 2022, net debt was $197 million, consisting of $215
million outstanding under the revolving credit facility and $18
million of cash on hand
-
Net Debt to Last Twelve Months (“LTM”) EBITDA of 2.3x1
-
Updated the Company’s full-year 2022 guidance, increasing
expectations for production and Adjusted EBITDA
(1) Net debt as of April 30, 2022, and LTM
EBITDA as of the first quarter of 2022
Martyn Willsher, Amplify’s President and Chief
Executive Officer, commented, “Amplify is off to a strong start in
2022. We are leveraging the current commodity price environment to
exceed internal production forecasts, improve price realizations,
manage cost inflation and generate substantial free cash flow, all
without the benefit of the unhedged oil volumes currently offline
at our Beta field. For the remainder of 2022, we anticipate
allocating additional capital to high-return workover and
non-operated development projects, while remaining focused on
generating free cash flow and improving our balance sheet to
further drive stockholder value.”
Mr. Willsher continued, “We continue to engage
with regulatory agencies in order to obtain the remaining required
approvals to expeditiously repair and restart our pipeline and
bring the Beta field back online. I’m very pleased to report that
we have been making significant progress toward that effort. On
April 15th, we received approval from PHMSA for the permanent
repair plan and are currently awaiting approval from the Army Corps
of Engineers to commence repair operations.”
Southern California Pipeline
Incident
For more information and disclosures regarding
the Incident, please see our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2022 filed with the Securities and Exchange
Commission (“SEC”).
Board of Director Changes
On April 7, 2022, the Company announced the
appointment of Deborah (“Debbie”) G. Adams and Eric T. Greager to
the Board. Ms. Adams and Mr. Greager joined the Board following a
comprehensive process, conducted with the assistance of a
nationally recognized search firm, to complement the Board’s
existing credentials and qualifications. Ms. Adams was most
recently the Senior Vice President of Health, Safety, and
Environmental, Projects and Procurement at Phillips 66. Mr. Greager
is the former President, Chief Executive Officer, and Executive
Director of Civitas Resources, Inc.
Key Financial Results
During the first quarter of 2022, Amplify
generated $24.9 million of Adjusted EBITDA, an increase of
approximately $14.1 million from $10.8 million in the prior
quarter. The increase in the first quarter was attributable to loss
of production income (“LOPI”) insurance payments related to the
Incident and higher commodity prices, partially offset by higher
cash operating expenses. The Company recognized $17.5 million of
LOPI during the quarter, representing four months of LOPI insurance
payments. Amplify will continue to recognize LOPI proceeds at the
time they are approved by insurers for the remainder of the policy
period or until Beta is returned to full production.
Free cash flow, defined as Adjusted EBITDA less
cash interest and capital spending, was $14.9 million in the first
quarter of 2022.
|
First
Quarter |
Fourth Quarter |
$ in millions |
2022 |
2021 |
Net income (loss) |
($48.6) |
|
$35.8 |
Net cash provided by operating activities |
$9.7 |
|
$7.7 |
Average daily production (MBoe/d) |
20.4 |
|
20.8 |
Total revenues |
$111.4 |
|
$93.1 |
Adjusted EBITDA (a non-GAAP financial measure) |
$24.9 |
|
$10.8 |
Total capital |
$6.9 |
|
$3.5 |
Free Cash Flow (a non-GAAP financial measure) |
$14.9 |
|
$4.0 |
|
|
|
Revolving Credit Facility
Beginning in February 2022, the borrowing base
under the revolving credit facility has been and will continue to
be reduced by $5 million per month until the spring borrowing base
redetermination, which is currently underway and expected to be
completed in the second quarter of 2022. As of April 30, 2022, the
Company’s borrowing base is $230 million.
As of April 30, 2022, Amplify had net debt of
$197 million, consisting of $215 million outstanding under its
revolving credit facility and $18 million of cash on hand. Net Debt
to LTM EBITDA was 2.3x (net debt as of April 30, 2022 and 1Q22 LTM
EBITDA).
Corporate Production and Pricing
Update
During the first quarter of 2022, average daily
production was approximately 20.4 MBoepd, a slight decrease from
20.8 MBoepd in the fourth quarter of 2021. The Company’s product
mix for the quarter consisted of 32% crude oil, 18% NGLs, and 50%
natural gas.
Total oil, natural gas and NGL revenues in the
first quarter were approximately $93.9 million, before the impact
of derivatives, compared to $86.3 million in the prior quarter. The
Company realized a loss on commodity derivatives of $30.9 million
during the quarter, compared to a $34.2 million net loss during the
previous quarter.
During the first quarter, Amplify started
recognizing certain natural gas revenue deductions as gathering,
processing and transportation expenses due to the Company electing
to take its gas in-kind in Oklahoma. This resulted in an increase
to Amplify’s realized natural gas pricing during the quarter, which
was partially offset by increased gathering, processing and
transportation expenses.
The following table sets forth information
regarding average realized sales prices for the periods
indicated:
|
Crude Oil ($/Bbl) |
NGLs ($/Bbl) |
Natural Gas ($/Mcf) |
|
ThreeMonthsEndedMarch 31,2022 |
|
ThreeMonthsEndedDecember 31,2021 |
|
ThreeMonthsEndedMarch 31,2022 |
|
ThreeMonthsEndedDecember 31,2021 |
|
ThreeMonthsEndedMarch 31,2022 |
|
ThreeMonthsEndedDecember 31,2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price exclusive of realized derivatives and certain
deductions from revenue |
$ |
90.22 |
|
|
$ |
73.47 |
|
|
$ |
41.24 |
|
|
$ |
37.98 |
|
|
$ |
4.93 |
|
|
$ |
5.43 |
|
Realized derivatives |
|
(38.30 |
) |
|
|
(35.35 |
) |
|
|
- |
|
|
|
(3.29 |
) |
|
|
(1.58 |
) |
|
|
(2.78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price with realized derivatives exclusive of certain
deductions from revenue |
$ |
51.92 |
|
|
$ |
38.12 |
|
|
$ |
41.24 |
|
|
$ |
34.69 |
|
|
$ |
3.35 |
|
|
$ |
2.65 |
|
Certain deductions from revenue |
|
- |
|
|
|
- |
|
|
|
(1.38 |
) |
|
|
(2.15 |
) |
|
|
0.15 |
|
|
|
(0.21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price inclusive of realized derivatives and certain
deductions from revenue |
$ |
51.92 |
|
|
$ |
38.12 |
|
|
$ |
39.86 |
|
|
$ |
32.54 |
|
|
$ |
3.50 |
|
|
$ |
2.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
Lease operating expenses in the first quarter of
2022 were approximately $32.9 million, or $17.92 per Boe, an
increase of approximately $3.5 million compared to $29.4 million,
or $15.34 per Boe, in the fourth quarter of 2021. The increase was
primarily attributable to increased expense workover projects in
Oklahoma, Bairoil and the non-operated Eagle Ford, and higher
expenses as a result of inflation across our asset base.
Severance and Ad Valorem taxes in the first
quarter were approximately $7.6 million, an increase of $1.1
million compared to $6.5 million in the previous quarter. On a
percentage basis, Amplify paid approximately 8.0% of total oil, NGL
and natural gas sales revenue in taxes this quarter compared to
7.6% in the previous quarter.
Amplify incurred $8.0 million, or $4.36 per Boe,
of gathering, processing and transportation expenses in the first
quarter of 2022, compared to $6.1 million, or $3.20 per Boe, in the
prior quarter. As noted previously, the increase in the first
quarter 2022 is primarily attributable to the Company marketing its
own natural gas in Oklahoma, resulting in a reclassification of
certain revenue deductions to gathering, processing and
transportation expenses.
Due to year-end processes, first quarter cash
G&A expenses are typically the highest of the year, and the
first quarter cash G&A expenses of $7.1 million was an expected
increase of $0.9 million from $6.2 million in the fourth quarter of
2021.
Depreciation, depletion and amortization expense
for the first quarter totaled $5.6 million, or $3.07 per Boe,
compared to $6.3 million, or $3.31 per Boe, in the prior
quarter.
Net interest expense was $2.4 million this
quarter, a decrease of $0.4 million from $2.8 million in the fourth
quarter of 2021.
Amplify had an effective tax rate of 0% and did
not record an income tax expense or benefit for the first quarter
of 2022.
Capital Spending Update
Cash capital spending during the first quarter
of 2022 was approximately $6.9 million, a $3.4 million increase
from $3.5 million in the prior quarter. A majority of the capital
expenditures in the first quarter were related to the planned
development activity in our Eagle Ford and East Texas assets and
accelerated workover activity in Oklahoma to capitalize on current
commodity prices.
The following table details Amplify’s capital
incurred during the quarter:
|
|
First
Quarter |
|
|
2022
Capital |
|
|
Spend ($ MM) |
Oklahoma |
|
$ |
1.9 |
Rockies
(Bairoil) |
|
$ |
0.6 |
Southern
California (Beta) |
|
$ |
0.0 |
East Texas /
North Louisiana |
|
$ |
1.7 |
Eagle Ford (Non-Op) |
|
$ |
2.6 |
Total Capital Spent |
|
$ |
6.9 |
|
|
|
Asset Operational Update and
Statistics
Oklahoma:
-
Production: 548 MBoe; 6.1 MBoepd
-
Commodity Mix: 21% oil, 28 % NGLs, 51% natural gas
-
LOE: $5.1 million; $9.36 per Boe
- Capex:
$1.9 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. During 2022, Amplify expects to further accelerate its
workover program and bring additional wells and incremental
production online.
Rockies (Bairoil):
-
Production: 342 MBoe; 3.8 MBoepd
-
LOE: $13.1 million; $38.37 per Boe
- Capex:
$0.6 million
The Company continued its CO2 injection and
water-alternating-gas pattern optimization at Bairoil to improve
production performance. The first quarter of 2022 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 and well
stimulation, to drive further operational improvements and
efficiencies.
Southern California (Beta):
-
Production: 17 MBoe; 0.2 MBoepd
-
LOE: $6.9 million
- Capex:
$0.0 million
As previously disclosed, other than in
connection with required regulatory flushing operations to secure
and temporarily repair the pipeline, all of the Company’s
production and pipeline operations at the Beta field have been
suspended. Amplify’s focus remains on obtaining the remaining
required regulatory approvals to repair and restart the pipeline as
soon as practicable.
East Texas and North Louisiana:
-
Production: 5.1 Bcfe; 56.4 MMcfepd (845 MBoe; 9.4 MBoepd)
-
Commodity Mix: 5% oil, 20% NGLs, 75% natural gas
-
LOE: $5.6 million; $1.10 per Mcfe ($6.61 per Boe)
- Capex:
$1.7 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. As
previously disclosed, the Company participated in three
non-operated development wells that are planned to be brought
online in the third quarter of 2022. Amplify is actively pursuing
additional opportunities to bolster future free cash flow
generation within our asset base.
Non-Operated Eagle Ford:
-
Production: 85 MBoe; 0.9 MBoepd
-
Commodity Mix: 73% oil, 13% NGLs, 14% natural gas
-
LOE: $2.2 million; $25.33 per Boe
- Capex:
$2.6 million
Amplify continues to opportunistically
participate in attractive non-operated Eagle Ford development and
recompletion projects as they arise. The Company’s operating
partners are currently completing several new development wells in
areas where we hold interests, which the Company expects to be
brought online during the second quarter of 2022.
2022 Guidance Update
The following guidance is subject to the
cautionary statements and limitations described under the
"Forward-Looking Statements" caption at the end of this press
release. Amplify's updated 2022 guidance is based on its current
expectations regarding capital expenditure levels and on the
assumption that market demand and prices for oil and natural gas
will continue at levels that allow for economic production of these
products. Due to uncertainty regarding Beta’s restart timeline, the
guidance below does not assume Beta returns to production in 2022.
Guidance will be updated when additional information is
available.
A summary of the guidance is presented
below:
|
|
FY
2022E(5) |
|
|
|
|
|
|
|
|
|
|
|
|
Low |
|
High |
|
Net
Average Daily Production |
|
|
|
|
Oil (MBbls/d) |
5.9 |
|
- |
6.4 |
|
|
NGL (MBbls/d) |
3.4 |
|
- |
3.8 |
|
|
Natural Gas (MMcf/d) |
58.0 |
|
- |
62.0 |
|
|
Total (MBoe/d) |
19.0 |
|
- |
20.5 |
|
|
|
|
|
|
|
Commodity Price Differential / Realizations
(Unhedged) |
|
|
|
|
Oil Differential ($ / Bbl) |
($3.75 |
) |
- |
($4.15 |
) |
|
NGL Realized Price (% of WTI NYMEX) |
40 |
% |
- |
45 |
% |
|
Natural Gas Realized Price (% of Henry Hub) |
95 |
% |
- |
100 |
% |
|
|
|
|
|
|
Gathering, Processing and Transportation
Costs |
|
|
|
|
Oil ($ / Bbl) |
$0.90 |
|
- |
$1.00 |
|
|
NGL ($ / Bbl) |
$4.00 |
|
- |
$4.50 |
|
|
Natural Gas ($ / Mcf) |
$0.75 |
|
- |
$0.95 |
|
|
Total ($ / Boe) |
$3.50 |
|
- |
$4.00 |
|
|
|
|
|
|
|
Average Costs |
|
|
|
|
Lease Operating ($ / Boe) |
$16.50 |
|
- |
$18.50 |
|
|
Taxes (% of Revenue)(1) |
7.5 |
% |
- |
8.5 |
% |
|
Recurring Cash General and Administrative ($ / Boe)(2) |
$3.40 |
|
- |
$3.75 |
|
|
|
|
|
|
|
Adjusted EBITDA ($ MM)(3) |
$85 |
|
- |
$110 |
|
|
Cash
Interest Expense ($ MM) |
$10 |
|
- |
$15 |
|
|
Capital
Expenditures ($ MM) |
$25 |
|
- |
$35 |
|
|
Free
Cash Flow ($ MM)(4) |
$45 |
|
- |
$65 |
|
|
|
|
|
|
(1) Includes production, ad valorem and franchise
taxes(2) Recurring cash general and administrative cost
guidance excludes reorganization expenses and non-cash
compensation(3) Refer to “Use of Non-GAAP Financial Measures”
for Amplify’s definition and use of Adjusted EBITDA, a non-GAAP
measure(4) Refer to “Use of Non-GAAP Financial Measures” for
Amplify’s definition and use of free cash flow, a non-GAAP
measure(5) Excludes production from our Southern California
(Beta) asset
Hedging Update
The following table reflects the hedged volumes
under Amplify’s commodity derivative contracts and the average
fixed, floor and ceiling prices at which production is hedged for
April 2022 through December 2023, as of May 4, 2022:
|
|
|
|
|
|
2022 |
|
2023 |
|
|
|
|
|
|
Natural Gas Swaps: |
|
|
|
|
Average Monthly Volume (MMBtu) |
|
695,000 |
|
|
|
Weighted Average Fixed Price ($) |
$ |
2.56 |
|
|
|
|
|
|
|
|
Natural Gas Collars: |
|
|
|
|
Two-way collars |
|
|
|
|
Average Monthly Volume (MMBtu) |
|
775,000 |
|
|
1,000,000 |
|
Weighted Average Ceiling Price ($) |
$ |
3.44 |
|
$ |
5.33 |
|
Weighted Average Floor Price ($) |
$ |
2.56 |
|
$ |
3.32 |
|
|
|
|
|
|
Oil Swaps: |
|
|
|
|
Average Monthly Volume (Bbls) |
|
61,667 |
|
|
55,000 |
|
Weighted Average Fixed Price ($) |
$ |
49.17 |
|
$ |
57.30 |
|
|
|
|
|
|
Oil Collars: |
|
|
|
|
Two-way collars |
|
|
|
|
Average Monthly Volume (Bbls) |
|
20,000 |
|
|
|
Weighted Average Ceiling Price ($) |
$ |
68.31 |
|
|
|
Weighted Average Floor Price ($) |
$ |
58.75 |
|
|
|
|
|
|
|
|
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.
Quarterly Report on Form
10-Q
Amplify’s financial statements and related
footnotes will be available in its Quarterly Report on Form 10-Q
for the year ended March 31, 2022, which Amplify expects to file
with the SEC on May 4, 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: 6891368.
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: 6891368.
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
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-K 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 and net debt. 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.
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) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
Revenues: |
|
|
|
|
Oil and natural gas sales |
$ |
93,872 |
|
|
$ |
86,269 |
|
|
Other revenues |
|
17,561 |
|
|
|
6,784 |
|
|
Total revenues |
|
111,433 |
|
|
|
93,053 |
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
Lease operating expense |
|
32,920 |
|
|
|
29,353 |
|
|
Pipeline incident loss |
|
580 |
|
|
|
1,599 |
|
|
Gathering, processing and transportation |
|
8,010 |
|
|
|
6,131 |
|
|
Exploration |
|
16 |
|
|
|
25 |
|
|
Taxes other than income |
|
7,553 |
|
|
|
6,542 |
|
|
Depreciation, depletion and amortization |
|
5,635 |
|
|
|
6,332 |
|
|
General and administrative expense |
|
7,771 |
|
|
|
5,886 |
|
|
Accretion of asset retirement obligations |
|
1,720 |
|
|
|
1,693 |
|
|
Realized (gain) loss on commodity derivatives |
|
30,943 |
|
|
|
38,215 |
|
|
Unrealized (gain) loss on commodity derivatives |
|
62,461 |
|
|
|
(40,915 |
) |
|
Other, net |
|
19 |
|
|
|
(62 |
) |
|
Total costs and expenses |
|
157,628 |
|
|
|
54,799 |
|
|
|
|
|
|
Operating Income (loss) |
|
(46,195 |
) |
|
|
38,254 |
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
Interest expense, net |
|
(2,441 |
) |
|
|
(2,772 |
) |
|
Other income (expense) |
|
22 |
|
|
|
269 |
|
|
Total Other Income (Expense) |
|
(2,419 |
) |
|
|
(2,503 |
) |
|
|
|
|
|
|
Income (loss) before reorganization items, net and income
taxes |
|
(48,614 |
) |
|
|
35,751 |
|
|
|
|
|
|
Reorganization items, net |
|
- |
|
|
|
- |
|
Income tax benefit (expense) |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
Net income (loss) |
$ |
(48,614 |
) |
|
$ |
35,751 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic and diluted earnings (loss) per share |
$ |
(1.27 |
) |
|
$ |
0.94 |
|
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
|
Ended |
|
Ended |
(Amounts in $000s, except per share data) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
Oil and natural gas revenue: |
|
|
|
|
Oil Sales |
$ |
52,374 |
|
$ |
43,109 |
|
NGL Sales |
|
13,481 |
|
|
12,512 |
|
Natural Gas Sales |
|
28,017 |
|
|
30,648 |
|
Total oil and natural gas sales - Unhedged |
$ |
93,872 |
|
$ |
86,269 |
|
|
|
|
|
Production volumes: |
|
|
|
|
Oil Sales - MBbls |
|
581 |
|
|
586 |
|
NGL Sales - MBbls |
|
338 |
|
|
350 |
|
Natural Gas Sales - MMcf |
|
5,511 |
|
|
5,864 |
|
Total - MBoe |
|
1,837 |
|
|
1,913 |
|
Total - MBoe/d |
|
20.4 |
|
|
20.8 |
|
|
|
|
|
Average sales price (excluding commodity
derivatives): |
|
|
|
|
Oil - per Bbl |
$ |
90.22 |
|
$ |
73.47 |
|
NGL - per Bbl |
$ |
39.86 |
|
$ |
35.83 |
|
Natural gas - per Mcf |
$ |
5.08 |
|
$ |
5.23 |
|
Total - per Boe |
$ |
51.10 |
|
$ |
45.09 |
|
|
|
|
|
Average unit costs per Boe: |
|
|
|
|
Lease operating expense |
$ |
17.92 |
|
$ |
15.34 |
|
Gathering, processing and transportation |
$ |
4.36 |
|
$ |
3.20 |
|
Taxes other than income |
$ |
4.11 |
|
$ |
3.42 |
|
General and administrative expense |
$ |
4.23 |
|
$ |
3.08 |
|
Depletion, depreciation, and amortization |
$ |
3.07 |
|
$ |
3.31 |
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in $000s, except per share data) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
Cash and Cash Equivalents |
$ |
15,605 |
|
|
$ |
18,799 |
|
|
Accounts Receivable |
|
91,932 |
|
|
|
91,967 |
|
|
Other Current Assets |
|
14,500 |
|
|
|
15,018 |
|
|
|
Total Current Assets |
$ |
122,037 |
|
|
$ |
125,784 |
|
|
|
|
|
|
|
|
Net Oil and Gas Properties |
$ |
322,078 |
|
|
$ |
320,285 |
|
|
Other Long-Term Assets |
|
12,015 |
|
|
|
9,031 |
|
|
|
Total
Assets |
$ |
456,130 |
|
|
$ |
455,100 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
Accounts Payable |
$ |
26,578 |
|
|
$ |
33,819 |
|
|
Accrued Liabilities |
|
53,896 |
|
|
|
57,826 |
|
|
Other Current Liabilities |
|
125,749 |
|
|
|
73,518 |
|
|
|
Total
Current Liabilities |
$ |
206,223 |
|
|
$ |
165,163 |
|
|
|
|
|
|
|
|
Long-Term Debt |
$ |
225,000 |
|
|
$ |
230,000 |
|
|
Asset Retirement Obligation |
|
104,118 |
|
|
|
102,398 |
|
|
Other Long-Term Liabilities |
|
33,792 |
|
|
|
22,380 |
|
|
|
Total
Liabilities |
$ |
569,133 |
|
|
$ |
519,941 |
|
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
Common Stock & APIC |
$ |
425,900 |
|
|
$ |
425,448 |
|
|
Warrants |
|
4,788 |
|
|
|
4,788 |
|
|
Accumulated Earnings (Deficit) |
|
(543,691 |
) |
|
|
(495,077 |
) |
|
|
Total
Shareholders' Equity |
$ |
(113,003 |
) |
|
$ |
(64,841 |
) |
|
|
|
|
|
|
Selected Financial Data - Unaudited |
|
|
|
Statements of Cash Flows Data |
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months |
|
Three
Months |
|
Ended |
|
Ended |
(Amounts in
$000s, except per share data) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
9,719 |
|
|
$ |
7,682 |
|
Net cash
provided by (used in) investing activities |
|
(7,847 |
) |
|
|
(6,175 |
) |
Net cash
provided by (used in) financing activities |
|
(5,066 |
) |
|
|
(52 |
) |
|
|
|
|
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) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Cash Provided from
Operating Activities: |
|
|
|
Net cash provided by operating activities |
$ |
9,719 |
|
|
$ |
7,682 |
|
|
Changes in
working capital |
|
11,373 |
|
|
|
(5,930 |
) |
|
Interest
expense, net |
|
2,441 |
|
|
|
2,772 |
|
|
Gain (loss)
on interest rate swaps |
|
557 |
|
|
|
220 |
|
|
Cash
settlements paid (received) on interest rate swaps |
|
214 |
|
|
|
487 |
|
|
Amortization
of gain associated with terminated commodity derivatives |
|
- |
|
|
|
3,960 |
|
|
Amortization
and write-off of deferred financing fees |
|
(133 |
) |
|
|
(133 |
) |
|
Exploration
costs |
|
16 |
|
|
|
25 |
|
|
Acquisition
and divestiture related costs |
|
5 |
|
|
|
- |
|
|
Plugging and
abandonment cost |
|
19 |
|
|
|
72 |
|
|
Pipeline
incident loss |
|
580 |
|
|
|
1,599 |
|
|
Other |
|
122 |
|
|
|
90 |
|
Adjusted EBITDA: |
$ |
24,913 |
|
|
$ |
10,844 |
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Cash Provided from
Operating Activities: |
|
|
Adjusted EBITDA: |
$ |
24,913 |
|
|
$ |
10,844 |
|
|
Less: Cash
interest expense |
|
3,125 |
|
|
|
3,414 |
|
|
Less:
Capital expenditures |
|
6,870 |
|
|
|
3,451 |
|
Free Cash Flow: |
$ |
14,918 |
|
|
$ |
3,979 |
|
|
|
|
|
|
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) |
March 31, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income
(Loss): |
|
|
|
|
Net income (loss) |
$ |
(48,614 |
) |
|
$ |
35,751 |
|
|
Interest expense, net |
|
2,441 |
|
|
|
2,772 |
|
|
Depreciation, depletion and amortization |
|
5,635 |
|
|
|
6,332 |
|
|
Accretion of asset retirement obligations |
|
1,720 |
|
|
|
1,693 |
|
|
(Gains) losses on commodity derivatives |
|
93,404 |
|
|
|
(2,700 |
) |
|
Cash settlements received (paid) on expired commodity derivative
instruments |
|
(30,943 |
) |
|
|
(38,215 |
) |
|
Amortization of gain associated with terminated commodity
derivatives |
|
- |
|
|
|
3,960 |
|
|
Acquisition and divestiture related costs |
|
5 |
|
|
|
- |
|
|
Share-based compensation expense |
|
640 |
|
|
|
(298 |
) |
|
Exploration costs |
|
16 |
|
|
|
25 |
|
|
Loss on settlement of AROs |
|
19 |
|
|
|
(62 |
) |
|
Bad debt expense |
|
10 |
|
|
|
(13 |
) |
|
Pipeline incident loss |
|
580 |
|
|
|
1,599 |
|
|
Adjusted EBITDA: |
$ |
24,913 |
|
|
$ |
10,844 |
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow to Net Income
(Loss): |
|
|
|
|
Adjusted EBITDA: |
$ |
24,913 |
|
|
$ |
10,844 |
|
|
Less: Cash interest expense |
|
3,125 |
|
|
|
3,414 |
|
|
Less: Capital expenditures |
|
6,870 |
|
|
|
3,451 |
|
|
Free Cash Flow: |
$ |
14,918 |
|
|
$ |
3,979 |
|
|
|
|
|
|
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