Amplify Energy Corp. Q2 FY2024 earnings call

• Amplify had a strong second quarter with adjusted EBITDA and free cash flow exceeding expectations. - Revised annual guidance due to stronger Q2 performance and participation in high-return non-operated wells. - Received multiple bids for outright sale or partial monetization of barrel assets and is evaluating proposals. - Beta made progress in 2024 development program, with the A50 Well successfully drilled and brought online in early June with strong results. - Magnify Energy Services has generated adjusted EBITDA and has a projected run rate adjusted EBITDA of over $3 million per year after one year of operations. - Capital for the second half of 2024 will be allocated to continued development at Beta and non-operated drilling projects in Eagle Ford and East Texas.

During the second quarter, Amplify Energy generated $30.7 million of adjusted EBITDA and $9.2 million of free cash flow. Total production averaged approximately 20,300 Boe per day. Lease operating expenses were approximately $36.3 million, gathering, processing and transportation costs were $4.9 million, and production taxes were $4.6 million. Magnify Energy Services, a wholly-owned subsidiary, generated approximately $900,000 of adjusted EBITDA in the quarter. The company's total capital investment for the quarter was $18 million, with approximately $16 million invested in Beta. Revenue contribution details for product segments weren't explicitly broken down by percentage in the transcript, but key absolute figures for adjusted EBITDA, free cash flow, production, and capital investment were provided.

• Revised annual guidance based on stronger Q2 performance and participation in non-operated wells, available in earnings release and investor presentation. - Full year 2024 capital investment expected to be $60 million to $65 million. - Crude oil production hedging: ~70%-75% hedged for 2H 2024, 55%-60% hedged for 2025, 10%-15% hedged for 2026. - Gas production hedging: 85%-90% hedged for remainder of 2024 and full year 2025, 80%-85% hedged for 2026.

• Forward-looking statements are subject to various risks, uncertainties, expectations, and assumptions. Actual results may differ materially from forward-looking statements. Risks related to market conditions, commodity price fluctuations, hedging effectiveness, and the execution of strategic initiatives such as asset sales and development programs.

Q: Jeff Grampp asked about constraints to accelerating Beta wells in 2025 and well cost repeatability.

A: Martyn Willsher mentioned they'll look at accelerating wells in the second half based on results and have flexibility in capital allocation; Dan Furbee stated confidence in drilling wells for less than the initial $5 million to $6 million estimate.

Q: John White inquired about capital returns post-Bairoil sale.

A: Martyn Willsher said it's inappropriate to speculate on the Board's decision regarding capital returns like stock buyback or dividend at that time, as the process of evaluating barrel asset proposals is ongoing.

Q: Subash Chandra asked about the value proposition of the Haynesville play.

A: Martyn Willsher discussed that Haynesville is prospective on their acreage, allows learning about optionality, and they feel comfortable with returns even with current gas prices, as free cash flow can enable options for participation or increased activity in California.

Q: Jeff Robertson asked about LOE at Beta and RBL redetermination.

A: Dan Furbee talked about LOE trends being affected by workovers and drilling, with expected downward trend post-electrification project; Jim Frew mentioned it's early to speculate on RBL redetermination given ongoing barrel monetization discussions, but free cash flow generation is a positive factor.