Company Quick10K Filing
Quick10K
Midstates Petroleum Company
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$4.36 20 $89
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-11-06 Earnings, Regulation FD, Exhibits
8-K 2019-11-06 Regulation FD, Exhibits
8-K 2019-08-29 Other Events, Exhibits
8-K 2019-08-06 Enter Agreement, Leave Agreement, M&A, Off-BS Arrangement, Shareholder Rights, Accountant, Control, Officers, Amend Bylaw, Regulation FD, Exhibits
8-K 2019-08-02 Shareholder Vote
8-K 2019-05-10 Earnings, Exhibits
8-K 2019-05-05 Enter Agreement, Officers, Regulation FD, Exhibits
8-K 2019-03-07 Earnings, Officers, Exhibits
8-K 2019-01-30 Earnings, Officers, Exhibits
8-K 2018-12-21 Officers
8-K 2018-11-15 Enter Agreement, Regulation FD, Exhibits
8-K 2018-11-08 Earnings, Exhibits
8-K 2018-11-07 Officers, Regulation FD, Exhibits
8-K 2018-09-17 Officers, Exhibits
8-K 2018-08-02 Earnings, Exhibits
8-K 2018-05-31 M&A, Shareholder Vote, Other Events, Exhibits
8-K 2018-03-29 Enter Agreement
8-K 2018-03-05 Officers
8-K 2018-01-23 Officers, Exhibits
XEC Cimarex Energy 4,292
PTEN Patterson Uti Energy 1,787
CPE Callon Petroleum 994
PACD Pacific Drilling 457
TTI Tetra Technologies 205
IO Ion Geophysical 112
LGCY Legacy Reserves 1
EPE EP Energy 0
CHKR Chesapeake Granite Wash Trust 0
SJT San Juan Basin Royalty Trust 0
MPO 2019-09-30
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 6. Exhibits.
EX-31.1 ampy-ex311_6.htm
EX-31.2 ampy-ex312_7.htm
EX-32.1 ampy-ex321_8.htm

Midstates Petroleum Company Earnings 2019-09-30

MPO 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 ampy-10q_20190930.htm 10-Q Q3 2019 ampy-10q_20190930.htm

 

 

 

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 September 30, 2019

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 October 31, 2019, the registrant had 39,430,953 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

 

3

 

 

Cautionary Note Regarding Forward-Looking Statements

 

4

 

 

PART I—FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

 

6

 

 

Unaudited Condensed Statements of Consolidated Operations for the Three and Nine Months Ended September 30, 2019 and 2018

 

7

 

 

Unaudited Condensed Statements of Consolidated Cash Flows for the Nine Months Ended September 30, 2019 and 2018

 

8

 

 

Unaudited Condensed Statements of Consolidated Equity for the Three and Nine Months Ended September 30, 2019 and 2018

 

9

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

10

 

 

Note 1 – Organization and Basis of Presentation

 

10

 

 

Note 2 – Summary of Significant Accounting Policies

 

11

 

 

Note 3 – Revenue

 

12

 

 

Note 4 – Acquisitions and Divestitures

 

13

 

 

Note 5 – Fair Value Measurements of Financial Instruments

 

15

 

 

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

 

22

 

 

Note 11 – Long-Term Incentive Plans

 

22

 

 

Note 12 – Leases

 

26

 

 

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

 

27

 

 

Note 14 – Related Party Transactions

 

28

 

 

Note 15 – Commitments and Contingencies

 

28

 

 

Note 16 – Income Taxes

 

28

 

 

 

 

 

Item 2.

 

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

 

29

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

37

Item 4.

 

Controls and Procedures

 

37

 

 

PART II—OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

39

Item 1A.

 

Risk Factors

 

39

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 3.

 

Defaults Upon Senior Securities

 

39

Item 4.

 

Mine Safety Disclosures

 

39

Item 5.

 

Other Information

 

39

Item 6.

 

Exhibits

 

39

 

 

 

Signatures

 

39

 

 

 

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.

MBoe/d: One million Boe per day.

BOEM: 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.

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.

NYMEX: New York Mercantile Exchange.

Oil: Oil and condensate.

1


 

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.

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

WTI: West Texas Intermediate.

 

2


 

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; and

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

 

 

3


 

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;

 

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.

4


 

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 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; and

 

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

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 Legacy Amplify’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 6, 2019 (“Legacy Amplify Form 10-K”), “Risk Factors” in Legacy Amplify’s definitive proxy statement filed on June 28, 2019 and “Part II—Item 1A. Risk Factors” appearing within this report and elsewhere in this report. 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.

5


 

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except outstanding shares)

 

 

September 30,

 

 

December 31,

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

7,408

 

 

$

49,704

 

Restricted cash

 

325

 

 

 

325

 

Accounts receivable

 

32,554

 

 

 

29,514

 

Short-term derivative instruments

 

20,709

 

 

 

18,813

 

Prepaid expenses and other current assets

 

15,919

 

 

 

7,241

 

Total current assets

 

76,915

 

 

 

105,597

 

Property and equipment, at cost:

 

 

 

 

 

 

 

Oil and natural gas properties, successful efforts method

 

784,119

 

 

 

598,331

 

Support equipment and facilities

 

137,267

 

 

 

108,760

 

Other

 

12,431

 

 

 

6,625

 

Accumulated depreciation, depletion and impairment

 

(129,460

)

 

 

(85,535

)

Property and equipment, net

 

804,357

 

 

 

628,181

 

Long-term derivative instruments

 

17,715

 

 

 

2,469

 

Restricted investments

 

4,622

 

 

 

94,467

 

Operating lease - long term right-of-use asset

 

4,925

 

 

 

 

Other long-term assets

 

6,095

 

 

 

6,129

 

Total assets

$

914,629

 

 

$

836,843

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

6,472

 

 

$

2,345

 

Revenues payable

 

26,754

 

 

 

24,779

 

Accrued liabilities (see Note 13)

 

26,327

 

 

 

23,155

 

Short-term derivative instruments

 

209

 

 

 

139

 

Total current liabilities

 

59,762

 

 

 

50,418

 

Long-term debt (see Note 8)

 

278,000

 

 

 

294,000

 

Asset retirement obligations

 

89,104

 

 

 

75,867

 

Long-term derivative instruments

 

489

 

 

 

 

Operating lease liability

 

3,214

 

 

 

 

Other long-term liabilities

 

4,015

 

 

 

 

Total liabilities

 

434,584

 

 

 

420,285

 

Commitments and contingencies (see Note 15)

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Preferred stock, $0.01 par value: 50,000,000 shares authorized; no shares issued and outstanding at September 30, 2019 and Preferred stock, $0.0001 par value 45,000,000 shares authorized; no shares issued and outstanding at December 31, 2018

 

 

 

 

 

Warrants, 9,153,522 warrants issued and outstanding at September 30, 2019 and 2,173,913 warrants issued and outstanding at December 31, 2018, respectively

 

4,790

 

 

 

4,788

 

Common stock, $0.01 par value: 300,000,000 shares authorized; 39,978,099 shares issued and outstanding at September 30, 2019 and Common stock, $0.0001 par value 300,000,000 shares authorized; 22,181,881 shares issued and outstanding at December 31, 2018

 

209

 

 

 

3

 

Additional paid-in capital

 

435,019

 

 

 

355,872

 

Accumulated earnings

 

40,027

 

 

 

55,895

 

Total stockholders' equity

 

480,045

 

 

 

416,558

 

Total liabilities and equity

$

914,629

 

 

$

836,843

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

6


 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS

(In thousands, except per share amounts)

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil and natural gas sales

$

72,426

 

 

$

85,446

 

 

$

196,978

 

 

$

264,187

 

Other revenues

 

533

 

 

 

76

 

 

 

668

 

 

 

255

 

Total revenues

 

72,959

 

 

 

85,522

 

 

 

197,646

 

 

 

264,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expense

 

32,977

 

 

 

27,505

 

 

 

88,179

 

 

 

84,575

 

Gathering, processing and transportation

 

4,459

 

 

 

6,197

 

 

 

13,507

 

 

 

17,772

 

Exploration

 

3

 

 

 

9

 

 

 

24

 

 

 

3,031

 

Taxes other than income

 

5,135

 

 

 

4,717

 

 

 

13,008

 

 

 

15,289

 

Depreciation, depletion and amortization

 

15,617

 

 

 

13,355

 

 

 

39,696

 

 

 

39,932

 

General and administrative expense

 

27,034

 

 

 

8,219

 

 

 

46,908

 

 

 

35,739

 

Accretion of asset retirement obligations

 

1,428

 

 

 

1,272

 

 

 

4,071

 

 

 

4,419

 

(Gain) loss on commodity derivative instruments

 

(28,725

)

 

 

21,110

 

 

 

(19,231

)

 

 

67,218

 

(Gain) loss on sale of properties

 

 

 

 

(707

)

 

 

 

 

 

1,439

 

Other, net

 

224

 

 

 

639

 

 

 

401

 

 

 

519

 

Total costs and expenses

 

58,152

 

 

 

82,316

 

 

 

186,563

 

 

 

269,933

 

Operating income (loss)

 

14,807

 

 

 

3,206

 

 

 

11,083

 

 

 

(5,491

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(5,276

)

 

 

(5,336

)

 

 

(13,787

)

 

 

(17,395

)

Loss on lease

 

(4,237

)

 

 

 

 

 

(4,237

)

 

 

 

Other income (expense)

 

(104

)

 

 

(2

)

 

 

(104

)

 

 

 

Total other income (expense)

 

(9,617

)

 

 

(5,338

)

 

 

(18,128

)

 

 

(17,395

)

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

 

5,190

 

 

 

(2,132

)

 

 

(7,045

)

 

 

(22,886

)

Reorganization items, net

 

(33

)

 

 

(466

)

 

 

(684

)

 

 

(1,752

)

Income tax benefit (expense)

 

 

 

 

 

 

 

50

 

 

 

 

Net income (loss)

 

5,157

 

 

 

(2,598

)

 

 

(7,679

)

 

 

(24,638

)

Net (income) loss allocated to participating restricted stockholders

 

(128

)

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to common stockholders

$

5,029

 

 

$

(2,598

)

 

$

(7,679

)

 

$

(24,638

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share: (See Note 10)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

$

0.15

 

 

$

(0.10

)

 

$

(0.29

)

 

$

(0.98

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

33,707

 

 

 

25,073

 

 

 

26,093

 

 

 

25,037

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

7


 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(In thousands)

 

 

For the Nine Months Ended

 

 

September 30,

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

(7,679

)

 

$

(24,638

)

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

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

39,696

 

 

 

39,932

 

(Gain) loss on derivative instruments

 

(18,897

)

 

 

67,218

 

Cash settlements (paid) received on expired derivative instruments

 

2,315

 

 

 

6,287

 

Bad debt expense

 

266

 

 

 

 

Amortization and write-off of deferred financing costs

 

62

 

 

 

2,249

 

Accretion of asset retirement obligations

 

4,071

 

 

 

4,419

 

(Gain) loss on sale of properties

 

 

 

 

1,439

 

Share-based compensation (see Note 11)

 

4,073

 

 

 

3,090

 

Settlement of asset retirement obligations

 

(259

)

 

 

(600

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

11,328

 

 

 

7,252

 

Prepaid expenses and other assets

 

(1,968

)

 

 

1,698

 

Payables and accrued liabilities

 

(12,115

)

 

 

8,279

 

Other

 

4,995

 

 

 

(15

)

Net cash provided by operating activities

 

25,888

 

 

 

116,610

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Cash acquired from the Merger

 

19,250

 

 

 

 

Additions to oil and gas properties

 

(63,004

)

 

 

(46,002

)

Additions to other property and equipment

 

788

 

 

 

(167

)

Additions to restricted investments

 

(154

)

 

 

(413

)

Withdrawals of restricted investments

 

90,000

 

 

 

 

Proceeds from the sale of other property and equipment

 

31

 

 

 

 

Proceeds from the sale of oil and natural gas properties, net of cash and cash equivalents sold

 

 

 

 

18,088

 

Other

 

 

 

 

503

 

Net cash provided by (used in) investing activities

 

46,911

 

 

 

(27,991

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Advances on revolving credit facilities

 

103,000

 

 

 

21,000

 

Payments on revolving credit facilities

 

(119,000

)

 

 

(103,000

)

Repayment of Midstates revolving credit facility

 

(76,559

)

 

 

 

Deferred financing costs

 

(832

)

 

 

(18

)

Dividends to stockholders

 

(8,189

)

 

 

 

Costs incurred in conjunction with tender offer

 

(107

)

 

 

 

Common stock repurchased and retired under the share repurchase program

 

(13,251

)

 

 

 

Restricted units returned to plan

 

(313

)

 

 

(815

)

Other

 

156

 

 

 

9

 

Net cash provided by (used in) financing activities

 

(115,095

)

 

 

(82,824

)

Net change in cash, cash equivalents and restricted cash

 

(42,296

)

 

 

5,795

 

Cash, cash equivalents and restricted cash, beginning of period

 

50,029

 

 

 

6,392

 

Cash, cash equivalents and restricted cash, end of period

$

7,733

 

 

$

12,187

 

 

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

 

8


 

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY

(In thousands)

 

 

Stockholders' Equity

 

 

 

 

 

 

Common Stock

 

 

Warrants

 

 

Additional

Paid-in Capital

 

 

Treasury Stock

 

 

Accumulated

Earnings

(Deficit)

 

 

Total

 

Balance at December 31, 2018

$

3

 

 

$

4,788

 

 

$

355,872

 

 

 

 

 

 

$

55,895

 

 

$

416,558

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,477

)

 

 

(31,477

)

Costs incurred in conjunction with tender offer

 

 

 

 

 

 

 

(107

)

 

 

 

 

 

 

 

 

 

(107

)

Share-based compensation expense

 

 

 

 

 

 

 

1,443

 

 

 

 

 

 

 

 

 

 

1,443

 

Common stock repurchased and retired under the share repurchase program

 

 

 

 

 

 

 

(920

)

 

 

 

 

 

 

 

 

 

(920

)

Balance at March 31, 2019

$

3

 

 

$

4,788

 

 

$

356,288

 

 

$

 

 

$

24,418

 

 

$

385,497

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,641

 

 

 

18,641

 

Share-based compensation expense

 

 

 

 

 

 

 

1,479

 

 

 

 

 

 

 

 

 

 

1,479

 

Common stock repurchased and retired under the share repurchase program

 

 

 

 

 

 

 

(331

)

 

 

 

 

 

 

 

 

 

(331

)

Restricted shares repurchased

 

 

 

 

 

 

 

(199

)

 

 

 

 

 

 

 

 

 

(199

)

Balance at June 30, 2019

$

3

 

 

$

4,788

 

 

$

357,237

 

 

$

 

 

$

43,059

 

 

$

405,087

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

5,157

 

 

 

5,157

 

Equity transactions related to the Merger

 

206

 

 

 

2

 

 

 

91,038

 

 

 

 

 

 

 

 

 

91,246

 

Treasury shares acquired in the Merger

 

 

 

 

 

 

 

 

 

 

(2,723

)

 

 

 

 

 

(2,723

)

Retirement of treasury shares

 

 

 

 

 

 

 

(2,723

)

 

 

2,723

 

 

 

 

 

 

 

Share-based compensation expense

 

 

 

 

 

 

 

1,151

 

 

 

 

 

 

 

 

 

1,151

 

Common stock repurchased and retired under the share repurchase program

 

 

 

 

 

 

 

(12,000

)

 

 

 

 

 

 

 

 

(12,000

)

Dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,189

)

 

 

(8,189

)

Restricted shares repurchased

 

 

 

 

 

 

 

(115

)

 

 

 

 

 

 

 

 

(115

)

Other

 

 

 

 

 

 

 

431

 

 

 

 

 

 

 

 

 

431

 

Balance at September 30, 2019

$

209

 

 

$

4,790

 

 

$

435,019

 

 

$

 

 

$

40,027

 

 

$

480,045

 

 

 

 

 

 

 

Stockholders' Equity

 

 

Common Stock

 

 

Warrants

 

 

Additional

Paid-in Capital

 

 

Accumulated

Earnings

(Deficit)

 

 

Total

 

Balance at December 31, 2017

$

3

 

 

$

4,788

 

 

$

387,856

 

 

$

1,286

 

 

$

393,933

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

3,239

 

 

 

3,239

 

Share-based compensation expense

 

 

 

 

 

 

 

1,176

 

 

 

 

 

 

1,176

 

Restricted shares repurchased

 

 

 

 

 

 

 

(208

)

 

 

 

 

 

(208

)

Balance at March 31, 2018

$

3

 

 

$

4,788

 

 

$

388,824

 

 

$

4,525

 

 

$

398,140

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

(25,279

)

 

 

(25,279

)

Share-based compensation expense

 

 

 

 

 

 

 

336

 

 

 

 

 

 

336

 

Restricted shares repurchased

 

 

 

 

 

 

 

(301

)

 

 

 

 

 

(301

)

Balance at June 30, 2018

$

3

 

 

$

4,788

 

 

$

388,859

 

 

$

(20,754

)

 

$

372,896

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

(2,598

)

 

 

(2,598

)

Share-based compensation expense

 

 

 

 

 

 

 

1,578

 

 

 

 

 

 

1,578

 

Restricted shares repurchased