Amplify Energy (AMPY) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $7.1M, reversing a Q1 loss, with adjusted EBITDA of $30.7M and free cash flow of $9.2M, both above expectations, aided by a $7.0M one-time accounting adjustment.

• Beta A50 well exceeded expectations with a peak IP30 oil rate of 730 Bopd and a projected four-month payback; Beta electrification and emissions reduction project is on track for Q4 completion.

• Multiple bids received for outright sale or partial monetization of Bairoil assets; evaluation ongoing to maximize shareholder value.

• Diversified production from five U.S. basins with a 60/40 liquids/gas mix and ~13-year PD reserve life; ESG initiatives have reduced Scope 1 GHG emissions by ~50% since 2018.

• Focused on optimizing cash flow through strategic initiatives, disciplined capital allocation, and participation in high-return non-operated wells in East Texas and Eagle Ford.

Financial highlights

• Q2 2024 total revenues were $79.5M, with oil, natural gas, and NGL revenues at $72.3M; adjusted EBITDA was $30.7M, positively impacted by a $7.0M one-time adjustment.

• Lease operating expenses were $36.3M ($19.70/Boe), down from Q1, with further reductions expected in H2.

• Net debt at June 30, 2024, was $117.5M; net debt to LTM adjusted EBITDA at 1.2x.

• Free cash flow for Q2 was $9.2M; positive free cash flow generated in 16 of the last 17 quarters.

• Q2 2024 EPS was $0.17, compared to $(0.24) in Q1.

Outlook and guidance

• Updated 2024 guidance: capital expenditures expected at $60–65M, with 85–95% allocated in the first three quarters, mainly to Beta projects and non-operated wells in East Texas and Eagle Ford.

• Full-year production guidance maintained at 19.0–21.0 MBoepd; commodity price assumptions: WTI crude at $76/Bbl, Henry Hub gas at $2.25/MMBtu.

• 2024 FCF guidance: $30–$40M; Adjusted EBITDA: $95–$115M.

• Robust commodity hedging through 2026: 70–75% oil and 85–90% gas hedged for 2024.

• Full-year LOE and G&A expected to remain within original guidance ranges.