Key Highlights
During the fourth quarter this year we generated the following: Daily production of 29.9 MBoe/d, which was within the range of quarterly guidance
Net cash provided by operating activities of
Adjusted EBITDA of
Free cash flow of
Returned nearly
Pro forma (1) Net Debt to Last Twelve Months ('LTM') EBITDA of 2.4x as of
As of
Current hedge book net positive value of
Amplify's year-end 2019 proved developed reserves had a PV-10 value of approximately
Retained Evercore as its financial advisor to actively pursue consolidation transactions focused on enhancing Amplify's low decline asset base, further strengthening the balance sheet and maximizing the Company's dividend yield and return of capital to its investors
'As with most energy producers, Amplify is beginning 2020 in the face of significant headwinds following the recent commodity price decline,' said
Pro forma numbers include
Dividend and Share Repurchase Program Update
Amplify's quarterly dividend of
Amplify also initiated a
Revolving Credit Facility and Liquidity
As of
Production Update
During the fourth quarter of 2019, Amplify produced 29.9 MBoe/d, which was at the low end of our guidance range for the quarter. These results were primarily the result of ordinary course start-up complications following completion of the Bairoil plant expansion and incremental wells temporarily offline in the Mississippi Lime region for workovers as Amplify focuses on improving base production declines. The company expects that many of the Mississippi Lime wells will be more cost effective following these workovers and will help drive production efficiencies in 2020.
The Bairoil plant expansion project came online in late October as anticipated, but due to start-up and compressor issues, the Company did not achieve consistent runtime until mid-January. Bairoil also experienced compressor outages, unrelated to the plant expansion, that further reduced CO2 processing capacity and had a negative impact on production. Although overall results were below expectations due to extended periods of low CO2 throughput, material increases in crude oil production at Bairoil were achieved intermittently during the fourth quarter when run times were stable. Despite these initial delays, Amplify is encouraged by the potential observed when the plant expansion was fully operational and remains confident that the expansion project will achieve the expected oil production increase of approximately 900 Bbls/d over the next twelve months.
Mississippi Lime production was also below our expectations, as power and weather events, contributed to incremental submersible pump failures and temporarily increased the number of offline wells during the quarter. To alleviate the production impact from offline wells, Amplify increased workover rig activity, operating between two to three workover rigs during November and December to get the wells back online and improve future well efficiency. As a result of these efforts, production has stabilized, and the backlog of offline wells has been substantially reduced heading into 2020.
Operations and Capital Spending Outlook
Amplify's capital spend for the fourth quarter was approximately
Amplify's 2020 capital program is anticipated to be between
On an area-by-area basis, Amplify's largest capital allocation in 2020 will be in
Amplify anticipates spending approximately
In the Eagle Ford, Amplify has budgeted a
At Bairoil, Amplify has budgeted approximately
Lastly in
2019 Year-End Proved Reserve Update
Proved reserves at
First Quarter and Full Year 2020 Guidance
The following guidance included in this press release is subject to the cautionary statements and limitations described under the 'Forward-Looking Statements' caption at the end of this press release. Amplify's 2020 guidance is based on its current expectations regarding capital expenditure levels and on the assumption that market demand and prices for oil and natural gas will continue at levels that allow for economic production of these products.
Hedging Update
Since Amplify's previous hedge update on
Amplify posted an updated hedge presentation containing additional information on its website, www.amplifyenergy.com, under the Investor Relations section.
Annual Report on Form 10-K
Amplify's financial statements and related footnotes will be available in its Annual Report on Form 10-K for the year ended
About
Forward-Looking Statements
This press release includes '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. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Amplify expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as 'will,' 'would,' 'should,' 'could,' 'expect,' 'anticipate,' 'plan,' 'project,' 'intend,' 'estimate,' 'believe,' 'target,' 'continue,' 'potential,' the negative of such terms or other comparable terminology are intended to identify forward-looking statements. Amplify believes that these statements are based on reasonable assumptions, but such assumptions may prove to be inaccurate. Such statements are also subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Amplify, which may cause Amplify's actual results to differ materially from those implied or expressed by the forward-looking statements. Please read the Company's filings with the
Use of Non-GAAP Financial Measures
This press release and accompanying schedules include the non-GAAP financial measures of Adjusted EBITDA and Free Cash Flow. The accompanying schedules provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with GAAP. Amplify's non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income, operating income, net cash flows provided by operating activities or any other measure of financial performance calculated and presented in accordance with GAAP. Amplify's non-GAAP financial measures may not be comparable to similarly titled measures of other companies because they may not calculate such measures in the same manner as Amplify does.
Adjusted EBITDA. Amplify defines Adjusted EBITDA as net income or loss, plus interest expense; income tax expense; depreciation, depletion and amortization; impairment of goodwill and long-lived assets; accretion of asset retirement obligations; losses on commodity derivative instruments; cash settlements received on expired commodity derivative instruments; losses on sale of assets; unit-based compensation expenses; exploration costs; acquisition and divestiture related expenses; amortization of gain associated with terminated commodity derivatives, bad debt expense and other non-routine items, less interest income; gain on extinguishment of debt; income tax benefit; gains on commodity derivative instruments; cash settlements paid on expired commodity derivative instruments; gains on sale of assets and other, net and other non-routine items. Adjusted EBITDA is commonly used as a supplemental financial measure by management and external users of Amplify's financial statements, such as investors, research analysts and rating agencies, to assess: (1) its operating performance as compared to other companies in Amplify's industry without regard to financing methods, capital structures or historical cost basis; (2) the ability of its assets to generate cash sufficient to pay interest and support Amplify's indebtedness and (3) the viability of projects and the overall rates of return on alternative investment opportunities. Since Adjusted EBITDA excludes some, but not all, items that affect net income or loss and because these measures may vary among other companies, the Adjusted EBITDA data presented in this press release may not be comparable to similarly titled measures of other companies. The GAAP measure most directly comparable to Adjusted EBITDA is net cash provided by operating activities.
Free Cash Flow. Amplify defines Free Cash Flow as Adjusted EBITDA, less cash income taxes; cash interest expense and total capital expenditures. Free cash flow is an important non-GAAP financial measure for Amplify's investors since it serves as an indicator of the Company's success in providing a cash return on investment.
Contact:
Tel: (832) 219-9047
Email: martyn.willsher@amplifyenergy.com
(C) 2020 Electronic News Publishing, source