Amplify Energy (AMPY) Q4 2023 earnings summary

Executive summary

• FY 2023 production averaged 20.5 MBoepd; net income was $392.8 MM, Adjusted EBITDA $88.0 MM and free cash flow $38.0 MM. Net debt fell ~$95 MM.

• Q4 production averaged 20.8 MBoepd; net income was $43.6 MM, Adjusted EBITDA $25.2 MM and free cash flow $14.4 MM.

• Positive free cash flow in 14 of the last 15 fiscal quarters; lower leverage, higher Beta production and potential Bairoil proceeds support capital-return optionality.

Financial highlights

• Year-end net debt was $94 MM, based on $115 MM drawn under the revolver less $21 MM cash; net debt / LTM Adjusted EBITDA was 1.1x, down from 2.0x.

• Q4 revenue was $79.0 MM; oil and gas sales before derivatives were $78.2 MM, with a $3.2 MM realized commodity-derivative loss.

• Q4 net income of $43.6 MM followed a $13.4 MM prior-quarter loss, primarily reflecting non-cash unrealized commodity-derivative gains; Adjusted EBITDA rose from $19.5 MM QoQ on lower LOE and slightly higher oil production.

• Operating cash flow was $28.4 MM in Q4 and $141.6 MM for FY 2023; Q4 free cash flow rose to $14.4 MM from $6.1 MM in Q3.

Outlook and guidance

• FY 2024 production guidance is 19.0–21.0 MBoepd: oil 8.0–8.9 MBbl/d, NGLs 3.0–3.3 MBbl/d and gas 47.0–52.5 MMcf/d.

• FY 2024 guidance: Adjusted EBITDA $90–$110 MM, capital expenditures $50–$60 MM and free cash flow $20–$40 MM; cash interest is $10–$15 MM.

• Guidance assumes WTI at $75/Bbl and Henry Hub at $2.50/MMBtu; 85%–95% of capital is expected in the first three quarters, primarily for Beta.

• Cash income taxes are expected at $4–$8 MM and excluded from free cash flow; 2024 LOE guidance is $136–$150 MM before Magnify Energy Services savings and $132–$148 MM after the estimated offset.

• Borrowing-base redetermination is expected in Q2 2024.