Amplify Energy (AMPY) 8 Aug 24 2024 Q2 Earnings call transcript

Amplify Energy Corp. held a conference call on August 8, 2024, to discuss its second-quarter financial performance and strategic initiatives. The company reported a strong quarter, with adjusted EBITDA of $30.7 million and free cash flow of $9.2 million, both surpassing expectations. These impressive results, coupled with the company's strategic initiatives, set the stage for future growth and value creation.

Strong Second Quarter Performance

Amplify Energy generated $30.7 million of adjusted EBITDA and $9.2 million of free cash flow during the second quarter of 2024. This performance was driven by a combination of operational excellence and strategic decision-making. The company's strong financial results were partly attributed to a onetime prior period adjustment, which positively impacted the quarter's performance.

Strategic Initiatives

Amplify Energy's strategic initiatives include pursuing the sale or partial monetization of its Bairoil assets, which have received multiple bids following a comprehensive marketing process. The company is committed to maximizing shareholder value and will provide updates on the outcome of these discussions as they become available.

At Beta, the company continues to make progress in its 2024 development program, with the successful drilling and bringing online of the A50 Well in early June. The well's production exceeds expectations, demonstrating the potential for increased productivity and value from the asset. Additionally, Amplify Energy is exploring opportunities in the Haynesville Shale, which could provide additional volumes and cash flow in early 2025.

Financial Position and Liquidity

As of June 30, 2024, Amplify Energy had net debt of approximately $117.5 million, consisting of $118 million outstanding under its revolving credit facility and $0.5 million of cash and cash equivalents. The company's liquidity was $17.5 million, and net debt to last 12-month adjusted EBITDA was 1.2x. The company expects to invest $60 million to $65 million of capital in 2024, with a focus on continued development and facility enhancements at Beta and non-operated drilling projects in the Eagle Ford and East Texas.

Outlook and Future Prospects

Looking ahead, Amplify Energy's strategic initiatives and operational excellence position the company for continued growth and value creation. The company's focus on optimizing future cash flow generation through strategic initiatives at Bairoil and Beta, along with capitalizing on incremental non-operated investment opportunities, is expected to unlock the full potential of its diverse portfolio of assets. With a strong balance sheet and relentless focus on cost structure, Amplify Energy is well-positioned to capitalize on future opportunities and enhance shareholder value.