• Adjusted EBITDA: $25.5 million for Q3 2024.
• Free Cash Flow: $3.6 million for Q3 2024.
• Total Production: Approximately 19,000 BOE per day for Q3 2024.
• Lease Operating Expenses: $33.3 million for Q3 2024.
• Net Income: $22.7 million for Q3 2024.
• Capital Investment: $18.2 million for Q3 2024.
• Interest Expense: $3.8 million for Q3 2024.
• Debt Outstanding: $120 million under revolving credit facility as of September 30, 2024.
• Leverage Ratio: Improved to 1.1 times from 1.2 times quarter over quarter.

• Warning! GuruFocus has detected 5 Warning Signs with AMPY.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amplify Energy Corp (NYSE:AMPY) generated $25.5 million of adjusted EBITDA and $3.6 million of free cash flow in Q3 2024, aligning with expectations.
• The company successfully drilled and brought online the C 59 well with strong results, exceeding initial projections.
• Amplify Energy Corp (NYSE:AMPY) issued its second annual sustainability report, highlighting significant progress in reducing emissions and enhancing corporate governance.
• The company has generated positive free cash flow in 17 of the last 18 quarters, demonstrating strong cash-generating potential.
• Amplify Energy Corp (NYSE:AMPY) completed a semi-annual redetermination of its borrowing base, increasing elected commitments by $10 million, enhancing liquidity.

Negative Points

• Total production for Q3 2024 averaged 19,000 BOE per day, a decrease from the previous quarter.
• Volatility in crude prices has affected the valuation process for potential asset transactions in Wyoming.
• Lease operating expenses were $33.3 million, reflecting a need for continued optimization.
• The company anticipates capital expenditure to be at or slightly above the high end of its annual guidance range due to accelerated development costs.
• Amplify Energy Corp (NYSE:AMPY) experienced increased net debt in Q3 2024 due to changes in working capital and development activity.

Q & A Highlights

Q: How many locations do you think you have de-risked with the development done so far at Beta, and how do you plan to balance de-risked locations versus new areas? A: Daniel Furbee, Senior Vice President and Chief Operating Officer, mentioned that the C 59 well proved up a significant portion of the southern part of the acreage, which was previously undrilled. They expect to add multiple locations and are excited about the potential. Martin Whillsher, President and CEO, added that they plan to add development programs from 2025 to 2029 and are confident in the return profile of these wells.

Q: Can you explain the cost differences between the first and second wells, and are you comfortable with the $5 to $6 million range? A: Daniel Furbee explained that the C 59 well had about eight extra days of drilling due to controlled drilling and tool failure, which increased costs. They still feel comfortable with the $5 to $6 million range, noting that if there are no issues, costs similar to the A 50 well are achievable.

Q: What is the expected decline rate for the wells at Beta, and what is the exit rate from IP at the end of the year? A: Daniel Furbee noted that the A 50 well did not see a sharp decline and is producing about 500 barrels a day. The decline profile is expected to be fairly flat due to the reservoir's characteristics, and they have high expectations for shallow declines moving forward.

Q: Can you provide more details on the monetization opportunities in the Haynesville, and what kind of value are you expecting? A: An unidentified company representative mentioned that they are exploring different opportunities, including creating new AMIs or acreage sales. They expect to realize these opportunities soon, potentially bringing several million dollars in value, depending on the structure of the deals.

Q: When do you envision a return of capital, and what are the triggers for it? A: An unidentified company representative stated that with the increase in credit facility commitments, the threshold for returning capital has increased to around $100 million. They hope to consider this in 2025, depending on development activity and timing assumptions on capital spending.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.