Company Quick10K Filing
Amplify Energy
Price5.45 EPS3
Shares22 P/E2
MCap122 P/FCF2
Net Debt156 EBIT64
TEV278 TEV/EBIT4
TTM 2019-06-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-05
10-K 2020-12-31 Filed 2021-03-11
10-Q 2019-06-30 Filed 2019-08-05
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-06
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-12
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-03-10
10-Q 2016-09-30 Filed 2016-11-02
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-30 Filed 2015-11-04
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-02-26
10-Q 2014-09-30 Filed 2014-11-05
10-Q 2014-06-30 Filed 2014-08-06
10-Q 2014-03-31 Filed 2014-05-07
10-K 2013-12-31 Filed 2014-03-07
10-Q 2013-09-30 Filed 2013-11-07
10-Q 2013-06-30 Filed 2013-08-07
10-Q 2013-03-31 Filed 2013-05-10
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-15
10-K 2011-12-31 Filed 2012-03-30
8-K 2019-08-05
8-K 2019-08-02
8-K 2019-07-26
8-K 2019-07-24
8-K 2019-07-16
8-K 2019-05-15
8-K 2019-05-09
8-K 2019-05-05
8-K 2019-04-22
8-K 2019-03-22
8-K 2019-03-06
8-K 2019-01-31
8-K 2018-12-21
8-K 2018-11-07
8-K 2018-10-31
8-K 2018-08-08
8-K 2018-07-31
8-K 2018-07-25
8-K 2018-05-17
8-K 2018-05-15
8-K 2018-05-09
8-K 2018-05-04
8-K 2018-04-30
8-K 2018-04-27
8-K 2018-04-06
8-K 2018-03-23
8-K 2018-03-13
8-K 2018-03-07
8-K 2018-01-31
8-K 2018-01-09

AMPY 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Note 1. Organization and Basis of Presentation
Note 2. Summary of Significant Accounting Policies
Note 3. Revenue
Note 4. Acquisitions and Divestitures
Note 5. Fair Value Measurements of Financial Instruments
Note 6. Risk Management and Derivative Instruments
Note 7. Asset Retirement Obligations
Note 8. Long - Term Debt
Note 9. Equity (Deficit)
Note 10. Earnings per Share
Note 11. Long - Term Incentive Plans
Note 12. Leases
Note 13. Supplemental Disclosures To The Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows
Note 14. Related Party Transactions
Note 15. Commitments and Contingencies
Note 16. Income Taxes
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.1 ampy-ex101_306.htm
EX-10.2 ampy-ex102_307.htm
EX-31.1 ampy-ex311_7.htm
EX-31.2 ampy-ex312_8.htm
EX-32.1 ampy-ex321_6.htm

Amplify Energy Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
3.12.51.91.20.60.02012201420172020
Assets, Equity
0.20.1-0.0-0.2-0.3-0.42012201420172020
Rev, G Profit, Net Income
0.90.50.1-0.2-0.6-1.02012201420172020
Ops, Inv, Fin

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10–Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-35512

 

Amplify Energy Corp.

(Exact name of registrant as specified in its charter)

 

Delaware

 

82-1326219

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

500 Dallas Street, Suite 1700, Houston, TX

 

77002

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (713) 490-8900

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No    

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  

Accelerated filer  

Non-accelerated filer    

Smaller reporting company  

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).    Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes       No

Securities Registered Pursuant to Section 12(b):

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

AMPY

NYSE

 

As of April 30, 2021, the registrant had 37,976,522 outstanding shares of common stock, $0.01 par value outstanding.

 

 

 

 


 

AMPLIFY ENERGY CORP.

Table of Contents

 

 

 

 

 

Page

 

 

 

 

 

 

 

 

 

 

 

 

Glossary of Oil and Natural Gas Terms

 

1

 

 

Names of Entities

 

4

 

 

Cautionary Note Regarding Forward-Looking Statements

 

5

 

 

PART I—FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

 

8

 

 

Unaudited Condensed Statements of Consolidated Operations for the Three Months Ended March 31, 2021 and 2020

 

9

 

 

Unaudited Condensed Statements of Consolidated Cash Flows for the Three Months Ended March 31, 2021 and 2020

 

10

 

 

Unaudited Condensed Statements of Consolidated Equity for the Three Months Ended March 31, 2021 and 2020

 

11

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

12

 

 

Note 1 – Organization and Basis of Presentation

 

12

 

 

Note 2 – Summary of Significant Accounting Policies

 

13

 

 

Note 3 – Revenue

 

14

 

 

Note 4 – Acquisitions and Divestitures

 

14

 

 

Note 5 – Fair Value Measurements of Financial Instruments

 

14

 

 

Note 6 – Risk Management and Derivative Instruments

 

16

 

 

Note 7 – Asset Retirement Obligations

 

18

 

 

Note 8 – Long-term Debt

 

19

 

 

Note 9 – Equity (Deficit)

 

20

 

 

Note 10 – Earnings per Share

 

20

 

 

Note 11 – Long-Term Incentive Plans

 

20

 

 

Note 12 – Leases

 

22

 

 

Note 13 -Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Statements of Consolidated Cash Flows

 

24

 

 

Note 14 – Related Party Transactions

 

24

 

 

Note 15 – Commitments and Contingencies

 

24

 

 

Note 16 – Income Taxes

 

25

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

26

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

32

Item 4.

 

Controls and Procedures

 

33

 

 

PART II—OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

34

Item 1A.

 

Risk Factors

 

34

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

Item 3.

 

Defaults Upon Senior Securities

 

34

Item 4.

 

Mine Safety Disclosures

 

34

Item 5.

 

Other Information

 

34

Item 6.

 

Exhibits

 

34

 

 

 

Signatures

 

36

 

 

 

i


 

 

GLOSSARY OF OIL AND NATURAL GAS TERMS

Analogous Reservoir: Analogous reservoirs, as used in resource assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, analogous reservoir refers to a reservoir that shares all of the following characteristics with the reservoir of interest: (i) the same geological formation (but not necessarily in pressure communication with the reservoir of interest); (ii) the same environment of deposition; (iii) similar geologic structure; and (iv) the same drive mechanism.

Bbl: One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

Bbl/d: One Bbl per day.

Bcfe: One billion cubic feet of natural gas equivalent.

Boe: One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil.

BOEM: U.S. Bureau of Ocean Energy Management.

Btu: One British thermal unit, the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.

Development Project: A development project is the means by which petroleum resources are brought to the status of economically producible. As examples, the development of a single reservoir or field, an incremental development in a producing field or the integrated development of a group of several fields and associated facilities with a common ownership may constitute a development project.

Dry Hole or Dry Well: A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production would exceed production expenses and taxes.

Economically Producible: The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. For this determination, the value of the products that generate revenue are determined at the terminal point of oil and natural gas producing activities.

Exploitation: A development or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects.

Field: An area consisting of a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

Gross Acres or Gross Wells: The total acres or wells, as the case may be, in which we have a working interest.

ICE: Inter-Continental Exchange.

MBbl: One thousand Bbls.  

MBbls/d: One thousand Bbls per day.

MBoe: One thousand barrels of oil equivalent.

MBoe/d: One thousand barrels of oil equivalent per day.

MMBoe: One million barrels of oil equivalent.

Mcf: One thousand cubic feet of natural gas.

Mcf/d: One Mcf per day.

MMBtu: One million Btu.

MMcf: One million cubic feet of natural gas.

MMcfe: One million cubic feet of natural gas equivalent.

MMcfe/d: One MMcfe per day.

Net Production: Production that is owned by us less royalties and production due to others.

NGLs: The combination of ethane, propane, butane and natural gasolines that, when removed from natural gas, become liquid under various levels of higher pressure and lower temperature.

1


 

NYMEX: New York Mercantile Exchange.

Oil: Oil and condensate.

Operator: The individual or company responsible for the exploration and/or production of an oil or natural gas well or lease.

OPIS: Oil Price Information Service.

Plugging and Abandonment: Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another stratum or to the surface. Regulations of all states require plugging of abandoned wells.

Probabilistic Estimate: The method of estimation of reserves or resources is called probabilistic when the full range of values that could reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible outcomes and their associated probabilities of occurrence.

Proved Developed Reserves: Proved reserves that can be expected to be recovered from existing wells with existing equipment and operating methods.

Proved Reserves: Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time. The area of the reservoir considered as proved includes (i) the area identified by drilling and limited by fluid contacts, if any, and (ii) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or natural gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons, as seen in a well penetration, unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty. Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves which can be produced economically through application of improved recovery techniques (including fluid injection) are included in the proved classification when (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir, or an analogous reservoir or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price used is the average price during the twelve-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Realized Price: The cash market price less all expected quality, transportation and demand adjustments.

Reliable Technology: Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

Reserves: Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

Reservoir: A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reserves.

Resources: Resources are quantities of oil and natural gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable and another portion may be considered unrecoverable. Resources include both discovered and undiscovered accumulations.

Working Interest: An interest in an oil and natural gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

2


 

Workover: Operations on a producing well to restore or increase production.

WTI: West Texas Intermediate.

 

3


 

 

NAMES OF ENTITIES

As used in this Form 10-Q, unless we indicate otherwise:

“Amplify Energy,” “Company,” “we,” “our,” “us” or like terms refers to Amplify Energy Corp. (f/k/a Midstates Petroleum Company, Inc.) individually and collectively with its subsidiaries, as the context requires;

“Legacy Amplify” refers to Amplify Energy Holdings LLC (f/k/a Amplify Energy Corp.), the successor reporting company of Memorial Production Partners LP;

“Midstates” refers to Midstates Petroleum Company, Inc., which, merged with Legacy Amplify on August 6, 2019 and subsequently changed its name to “Amplify Energy Corp.”; and

“OLLC” refers to Amplify Energy Operating LLC, our wholly owned subsidiary through which we operate our properties.

 

 

4


 

 

CAUTIONARY NOTE REGARDING FORWARD–LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “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, that are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:

 

business strategies;

 

acquisition and disposition strategy;

 

cash flows and liquidity;

 

financial strategy;

 

ability to replace the reserves we produce through drilling;

 

drilling locations;

 

oil and natural gas reserves;

 

technology;

 

realized oil, natural gas and NGL prices;

 

production volumes;

 

lease operating expense;

 

gathering, processing and transportation;

 

general and administrative expense;

 

future operating results;

 

ability to procure drilling and production equipment;

 

ability to procure oil field labor;

 

planned capital expenditures and the availability of capital resources to fund capital expenditures;

 

ability to access capital markets;

 

marketing of oil, natural gas and NGLs;

 

acts of God, fires, earthquakes, storms, floods, other adverse weather conditions, war, acts of terrorism, military operations or national emergency;

 

the occurrence or threat of epidemic or pandemic diseases, such as the ongoing novel coronavirus (“COVID19”) pandemic, or any government response to such occurrence or threat;

 

expectations regarding general economic conditions;

 

competition in the oil and natural gas industry;

 

effectiveness of risk management activities;

 

environmental liabilities;

 

counterparty credit risk;

 

expectations regarding governmental regulation and taxation;

 

expectations regarding developments in oil-producing and natural-gas producing countries; and

 

plans, objectives, expectations and intentions.

5


 

 

All statements, other than statements of historical fact included in this report, are forward-looking statements. In some cases, you can identify forward-looking statements by 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. 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. Important factors that could cause our actual results or financial condition to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following risks and uncertainties:

 

our results of evaluation and implementation of strategic alternatives;

 

risks related to a redetermination of the borrowing base under our senior secured reserve-based revolving credit facility;

 

our ability to access funds on acceptable terms, if at all, because of the terms and conditions governing our indebtedness, including financial covenants;

 

our ability to satisfy debt obligations;

 

volatility in the prices for oil, natural gas and NGLs, including further or sustained declines in commodity prices;

 

the potential for additional impairments due to continuing or future declines in oil, natural gas and NGL prices;

 

the uncertainty inherent in estimating quantities of oil, natural gas and NGLs reserves;

 

our substantial future capital requirements, which may be subject to limited availability of financing;

 

the uncertainty inherent in the development and production of oil and natural gas;

 

our need to make accretive acquisitions or substantial capital expenditures to maintain our declining asset base;

 

the existence of unanticipated liabilities or problems relating to acquired or divested businesses or properties;

 

potential acquisitions, including our ability to make acquisitions on favorable terms or to integrate acquired properties;

 

the consequences of changes we have made, or may make from time to time in the future, to our capital expenditure budget, including the impact of those changes on our production levels, reserves, results of operations and liquidity;

 

potential shortages of, or increased costs for, drilling and production equipment and supply materials for production, such as CO2;

 

potential difficulties in the marketing of oil and natural gas;

 

changes to the financial condition of counterparties;

 

uncertainties surrounding the success of our secondary and tertiary recovery efforts;

 

competition in the oil and natural gas industry;

 

general political and economic conditions, globally and in the jurisdictions in which we operate;

 

the impact of climate change and natural disasters, such as earthquakes, tidal waves, mudslides, fires and floods;

 

the impact of legislation and governmental regulations, including those related to climate change and hydraulic fracturing;

 

the risk that our hedging strategy may be ineffective or may reduce our income;

 

the cost and availability of insurance as well as operating risks that may not be covered by an effective indemnity or insurance;

 

actions of third-party co-owners of interests in properties in which we also own an interest; and

 

other risks and uncertainties described in “Item 1A. Risk Factors.”

6


 

 

The forward-looking statements contained in this report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or that the events or circumstances described in any forward-looking statement will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in “Part I—Item 1A. Risk Factors” of Amplify’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2021 (“Form 10-K”). All forward-looking statements speak only as of the date of this report. We do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

7


 

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except outstanding shares)

 

 

March 31,

 

 

December 31,

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

$

16,801

 

 

$

10,364

 

Accounts receivable, net

 

35,424

 

 

 

30,901

 

Prepaid expenses and other current assets

 

12,297

 

 

 

15,572

 

Total current assets

 

64,522

 

 

 

56,837

 

Property and equipment, at cost:

 

 

 

 

 

 

 

Oil and natural gas properties, successful efforts method

 

780,757

 

 

 

775,167

 

Support equipment and facilities

 

142,346

 

 

 

142,208

 

Other

 

9,431

 

 

 

9,102

 

Accumulated depreciation, depletion and impairment

 

(616,578

)

 

 

(609,231

)

Property and equipment, net

 

315,956

 

 

 

317,246

 

Long-term derivative instruments

 

1,522

 

 

 

873

 

Restricted investments

 

4,623

 

 

 

4,623

 

Operating lease - long term right-of-use asset

 

2,394

 

 

 

2,500

 

Other long-term assets

 

2,541

 

 

 

2,680

 

Total assets

$

391,558

 

 

$

384,759

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

6,364

 

 

$

798

 

Revenues payable

 

24,944

 

 

 

22,563

 

Accrued liabilities (see Note 13)

 

20,550

 

 

 

22,677

 

Short-term derivative instruments

 

30,391

 

 

 

10,824

 

Total current liabilities

 

82,249

 

 

 

56,862

 

Long-term debt (see Note 8)

 

255,516

 

 

 

260,516

 

Asset retirement obligations

 

98,201

 

 

 

96,725

 

Long-term derivative instruments

 

5,355

 

 

 

847

 

Operating lease liability

 

404

 

 

 

266

 

Other long-term liabilities

 

3,107

 

 

 

3,280

 

Total liabilities

 

444,832

 

 

 

418,496

 

Commitments and contingencies (see Note 15)

 

 

 

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

 

 

 

Preferred stock, $0.01 par value: 50,000,000 shares authorized; no shares issued and outstanding at March 31, 2021 and December 31, 2020

 

 

 

 

 

Warrants, 2,173,913 and 2,173,913 warrants issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

4,788

 

 

 

4,788

 

Common stock, $0.01 par value: 250,000,000 shares authorized; 37,969,324 and 37,663,509 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

 

381

 

 

 

378

 

Additional paid-in capital

 

423,892

 

 

 

424,104

 

Accumulated earnings (deficit)

 

(482,335

)

 

 

(463,007

)

Total stockholders' equity (deficit)

 

(53,274

)

 

 

(33,737

)

Total liabilities and equity

$

391,558

 

 

$

384,759

 

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

8


 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS

(In thousands, except per share amounts)

 

 

For the Three Months Ended

 

 

March 31,

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

Oil and natural gas sales

$

72,331

 

 

$

57,787

 

Other revenues

 

138

 

 

 

349

 

Total revenues

 

72,469

 

 

 

58,136

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Lease operating expense

 

28,906

 

 

 

35,723

 

Gathering, processing and transportation

 

4,579

 

 

 

5,053

 

Exploration

 

16

 

 

 

16

 

Taxes other than income

 

4,613

 

 

 

3,986

 

Depreciation, depletion and amortization

 

7,347

 

 

 

15,556

 

Impairment expense

 

 

 

 

455,031

 

General and administrative expense

 

6,921

 

 

 

8,353

 

Accretion of asset retirement obligations

 

1,615

 

 

 

1,513

 

(Gain) loss on commodity derivative instruments

 

34,588

 

 

 

(107,713

)

Other, net

 

68

 

 

 

 

Total costs and expenses

 

88,653

 

 

 

417,518

 

Operating income (loss)

 

(16,184

)

 

 

(359,382

)

Other income (expense):

 

 

 

 

 

 

 

Interest expense, net

 

(3,112

)

 

 

(7,647

)

Other income (expense)

 

(26

)

 

 

16

 

Total other income (expense)

 

(3,138

)

 

 

(7,631

)

Income (loss) before reorganization items, net and income taxes

 

(19,322

)

 

 

(367,013

)

Reorganization items, net

 

(6

)

 

 

(186

)

Net income (loss)

 

(19,328

)

 

 

(367,199

)

Net (income) loss allocated to participating restricted stockholders

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

(19,328

)

 

$

(367,199

)

 

 

 

 

 

 

 

 

Earnings (loss) per share: (See Note 10)

 

 

 

 

 

 

 

Basic and diluted earnings (loss) per share

$

(0.51

)

 

$

(9.77

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic and diluted

 

37,829

 

 

 

37,568

 

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

9


 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(In thousands)

 

 

For the Three Months Ended

 

 

March 31,

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

(19,328

)

 

$

(367,199

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

7,347

 

 

 

15,556

 

Impairment expense

 

 

 

 

455,031

 

(Gain) loss on derivative instruments

 

34,526

 

 

 

(104,096

)

Cash settlements (paid) received on expired derivative instruments

 

(11,100

)

 

 

12,522

 

Bad debt expense

 

3

 

 

 

110

 

Amortization of deferred financing costs

 

139

 

 

 

309

 

Accretion of asset retirement obligations

 

1,615

 

 

 

1,513

 

Share-based compensation (see Note 11)

 

(204

)

 

 

(1,112

)

Settlement of asset retirement obligations

 

(162

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(4,525

)

 

 

8,381

 

Prepaid expenses and other assets

 

2,574

 

 

 

(349

)

Payables and accrued liabilities

 

4,849

 

 

 

(7,399

)

Other

 

(176

)

 

 

(178

)

Net cash provided by operating activities

 

15,558

 

 

 

13,089

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Additions to oil and gas properties

 

(3,788

)

 

 

(12,416

)

Additions to other property and equipment

 

(328

)

 

 

(304

)

Net cash provided by (used in) investing activities

 

(4,116

)

 

 

(12,720

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Advances on revolving credit facilities

 

 

 

 

25,000

 

Payments on revolving credit facilities

 

(5,000

)

 

 

(20,000

)

Dividends to stockholders

 

 

 

 

(3,786

)

Restricted shares returned to plan and retired

 

(5

)

 

 

(14

)

Net cash provided by (used in) financing activities

 

(5,005

)

 

 

1,200

 

Net change in cash, cash equivalents and restricted cash

 

6,437

 

 

 

1,569

 

Cash, cash equivalents and restricted cash, beginning of period

 

10,364

 

 

 

325

 

Cash, cash equivalents and restricted cash, end of period

$

16,801

 

 

$

1,894

 

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

 

10


 

 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

(In thousands)

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

Common Stock

 

 

Warrants

 

 

Additional

Paid-in Capital

 

 

Accumulated

Earnings

(Deficit)

 

 

Total

 

Balance at December 31, 2020

$

378

 

 

$

4,788

 

 

$

424,104

 

 

$

(463,007

)

 

$

(33,737

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

(19,328

)

 

 

(19,328

)

Share-based compensation expense

 

 

 

 

 

 

 

(204

)

 

 

 

 

 

(204

)

Restricted shares repurchased

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Other

 

3

 

 

 

 

 

 

(3

)

 

 

 

 

 

 

Balance at March 31, 2021

$

381

 

 

$

4,788

 

 

$

423,892

 

 

$

(482,335

)

 

$

(53,274

)

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

Common Stock

 

 

Warrants

 

 

Additional

Paid-in Capital

 

 

Accumulated

Earnings

(Deficit)

 

 

Total

 

Balance at December 31, 2019

$

209

 

 

$

4,790

 

 

$

424,399

 

 

$

4,809

 

 

$

434,207

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

(367,199

)

 

 

(367,199

)

Share-based compensation expense

 

 

 

 

 

 

 

(1,112

)

 

 

 

 

 

(1,112

)

Restricted shares repurchased

 

 

 

 

 

 

 

(14

)

 

 

 

 

 

(14

)

Dividends

 

 

 

 

 

 

 

 

 

 

(3,786

)

 

 

(3,786

)

Balance at March 31, 2020

$

209

 

 

$

4,790

 

 

$

423,273

 

 

$

(366,176

)

 

$

62,096

 

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

 

 

11


 

 

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1. Organization and Basis of Presentation

General

Amplify Energy Corp. (“Amplify Energy,” or the “Company”), is a publicly traded Delaware corporation, in which our common stock is listed on the NYSE under the symbol “AMPY.”

We operate in one reportable segment engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Our management evaluates performance based on one reportable business segment as the economic environments are not different within the operation of our oil and natural gas properties. Our assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. The Company’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.

Basis of Presentation

Our Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the SEC. The results reported in these Unaudited Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Although we believe the disclosures in these financial statements are adequate, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC.

The Unaudited Condensed Consolidated Financial Statements have been prepared as if the Company is a going concern.

Material intercompany transactions and balances have been eliminated in preparation of our consolidated financial statements.

Use of Estimates

The preparation of the accompanying Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

Risk and Uncertainties

In March 2020, the World Health Organization declared a global pandemic related to the proliferation of COVID-19. The impact of COVID-19 and efforts to mitigate its spread caused significant volatility in U.S. and international markets and a substantial reduction in global and domestic demand for oil and natural gas. Actions by governmental authorities to mitigate the spread of COVID-19, such as imposing mandatory closures of all non-essential business facilities, seeking voluntary closures of business facilities, and imposing restrictions on, or advisories with respect to, travel, business operations and public gatherings or interactions, have further exacerbated the economic impact of the pandemic.

During 2020 as a result of the pandemic, there was sharp reduction in the demand for oil and natural gas and a precipitous decline in commodity prices, which were further impacted by disputes over production levels among oil-producing countries, the significant increase in production levels by such countries and limited storage capacity for natural gas, oil and refined products. The reductions in commodity prices impacted the Company’s cash flow from operating activities, contributed to a decrease in the Company’s borrowing base under its Revolving Credit Facility, and led to an impairment of our oil and natural gas properties.

Despite the gradual recovery in commodity prices in the second half of 2020 and the first quarter of 2021, the expectation of a successful phased rollout of a vaccine in 2021, and the successful realization and execution of our disciplined operational strategy and hedging program, there remains significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine the extent of the impact caused by the COVID-19 pandemic to the Company’s operations.

12


AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Employee Retention Credit

The Consolidated Appropriations Act extended and expanded the availability of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ("ARP Act"), enacted on March 11, 2021, extended and expanded the availability of the employee retention credit through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation expanded the group of qualifying business to include businesses with fewer than 500 employees and those who previously qualified for the Paycheck Protection Program (the “PPP Loan”). The employee retention credit is calculated to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company has determined that the qualifications for the credit were met in the first quarter of 2021 and an application has been filed accordingly.

Note 2. Summary of Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies and estimates as described in the Company’s annual financial statements included in our 2020 Form 10-K.

Current Expected Credit Losses

The Company adopted ASU 2019-10 Measurement of Credit Losses on Financial Instruments as of January 1, 2020. The provisions of the standard were interpreted to relate only to the Company’s accounts receivable, net. Trade receivables relate to one common pool, revenue earned on the sale of oil, natural gas and natural gas liquids. The performance obligation is satisfied at a point in time and revenue is recognized and a trade receivable is recorded from the sale when production is delivered to, and title has transferred to, the purchaser. The majority of the Company’s purchasers have been large, major companies in the industry with the wherewithal to pay.

The Company, as operator on most of our wells, also records receivables on billings to our joint interest owners who participate in the operating costs of the wells they have an interest in. Historically, an allowance for doubtful accounts has been set up to recognize credit losses on joint interest billing (“JIB”) receivables based upon an aging analysis which is an appropriate method to estimate credit losses under the guidance. The Company will continue to assess the expected credit loss in the future as economic conditions change. We believe the majority of our revenue purchasers have the size and financial condition to currently meet their obligations. There could be added risk on the JIB accounts receivable as some wells could become uneconomic, with the revenue not enough to cover the operating expenses billed, which could result in additional write-offs. Accordingly, the Company will continue to closely monitor trade receivables.

New Accounting Pronouncements

Reference Rate Reform. In March 2020, the Financial Accounting Standard Board (the “FASB”) issued an accounting standard update which provides optional expedients and expectations for applying GAAP to contracts, hedging relationships and other transactions to ease financial reporting burdens to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this accounting standards update became effective March 12, 2020, and an entity may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the impact this guidance may have on the Company’s consolidated financial statements.

Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued an accounting standard update which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This accounting standards update removes the following exceptions: (i) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; (ii) exception to the requirements to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (iii) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (iv) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in the accounting standards update also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. The guidance became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the guidance effective January 1, 2021, with all of the anticipated and applicable effects to be required on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

13


AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3. Revenue

Revenue from contracts with customers

The Company has determined that its contracts for the sale of crude oil, unprocessed natural gas, residue gas and NGLs contain monthly performance obligations to deliver product at locations specified in the contract. Control is transferred at the delivery location, at which point the performance obligation has been satisfied and revenue is recognized. Fees included in the contract that are incurred prior to control transfer are classified as gathering, processing and transportation, and fees incurred after control transfers are included as a reduction to the transaction price. The transaction price at which revenue is recognized consists entirely of variable consideration based on quoted market prices less various fees and the quantity of volumes delivered.

Oil and natural gas revenues are recorded using the sales method. Under this method, revenues are recognized based on actual volumes of oil and natural gas sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. An asset or a liability is recognized to the extent there is an imbalance in excess of the proportionate share of the remaining recoverable reserves on the underlying properties. No significant imbalances existed at March 31, 2021.

Disaggregation of Revenue

We have identified three material revenue streams in our business: oil, natural gas and NGLs. The following table presents our revenues disaggregated by revenue stream.

 

For the Three Months Ended

 

 

March 31,

 

 

2021

 

 

2020

 

 

(in thousands)

 

Revenues

 

 

 

 

 

 

 

Oil

$

49,695

 

 

$

41,851

 

NGLs

 

7,670

 

 

 

5,122

 

Natural gas

 

14,966

 

 

 

10,814

 

Oil and natural gas sales

$

72,331

 

 

$

57,787

 

 

Contract Balances

Under our sales contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities. Accounts receivable attributable to our revenue contracts with customers was $33.1 million at March 31, 2021 and $25.6 million at December 31, 2020.

Note 4. Acquisitions and Divestitures

Acquisition and Divestiture Related Expenses

There were no material acquisitions or divestitures during the three months ended March 31, 2021 and 2020.

Note 5. Fair Value Measurements of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. A three-tier hierarchy has been established that classifies fair value amounts recognized or disclosed in the financial statements. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). All the derivative instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets were considered Level 2.

The carrying values of accounts receivables, accounts payables (including accrued liabilities), restricted investments and amounts outstanding under long-term debt agreements with variable rates included in the accompanying Unaudited Condensed Consolidated Balance Sheets approximated fair value at March 31, 2021 and December 31, 2020. The fair value estimates are based upon observable market data and are classified within Level 2 of the fair value hierarchy. These assets and liabilities are not presented in the following tables.

14


AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair market values of the derivative financial instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 were based on estimated forward commodity prices. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement in its entirety. The significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The following tables present the gross derivative assets and liabilities that are measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020 for each of the fair value hierarchy levels:

 

Fair Value Measurements at March 31, 2021 Using

 

 

Quoted Prices in

 

 

Significant Other

 

 

Significant

 

 

 

 

 

 

Active Market

 

 

Observable Inputs

 

 

Unobservable Inputs

 

 

 

 

 

 

(Level 1)

 

 

(Level 2)