Amplify Energy Corp. Q3 FY2023 earnings call

• Hired an investment banking firm to pursue monetization of oil-producing assets in Bairoil, Wyoming, with marketing process commencing Q1 2024.
• Recommenced development program at beta in H1 2024 with economics attractive at current oil pricing (IRRs well over 100% for wells costing ~$5M-$6M).
• Created Magnify Energy Services to provide oilfield services, starting in East Texas and Oklahoma, to reduce costs and improve profitability.
• Third quarter operational and financial results in line with projections; production at beta exceeded initial projections, and Bairoil restarted operations with fewer complications.
• Issued inaugural sustainability report detailing safety, environmental, and governance efforts.

Total production for the third quarter averaged approximately 20,600 barrels of oil equivalent per day, consisting of 38% oil, 18% NGLs and 44% natural gas. The company generated adjusted EBITDA of $19.5 million and free cash flow of $6.1 million in the third quarter.

• Reaffirmed 2023 adjusted EBITDA guidance of $80 million to $100 million.
• Reaffirmed 2023 full year free cash flow guidance of $30 million to $50 million.
• Borrowing base reaffirmed at $150 million with elected commitments of $135 million as of October 19, 2023.

Q: What is Magnify’s potential?

A: Magnify is a way to better control costs and reliability of daily field services, with quick payback on investments in services like compression and well testing.

Q: About Bairoil marketing process?

A: They believe Bairoil is a great asset with strong cash flow, considering outright sale or alternative structures to maximize value, with marketing process starting Q1 2024.

Q: Information around beta?

A: Beta is back to pre-shutdown production levels and going higher, with cost reduction initiatives starting to flow through, and plans for a development program in 2024 with 4 wells planned initially, potentially increasing based on progress