Part 1: Analysis of the Company's Performance
Amplify Energy Corp., a company engaged in the acquisition, development, exploitation, and production of oil and natural gas properties, witnessed decreased production in oil, natural gas, and NGL in the fiscal year 2022 due to Beta properties being shut-in because of the Incident and natural decline. However, the company had a 21% increase in oil and natural gas sales because of higher realized commodity prices offset by lower production changes. The company's total estimated proved reserves increased to 124.0 MMBoe in 2022 compared to 121.2 MMBoe in 2021. Amplify's assets consisted primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (Bairoil), federal waters offshore Southern California (Beta), East Texas/North Louisiana, and Eagle Ford (non-op). The company is the operator of record for properties containing 92% of its total estimated proved reserves.
The company is affected by external factors such as global and regional supply and demand dynamics for oil and gas as well as geopolitical and economic conditions. The relative prices of oil and natural gas are determined by these factors. Amplify has a competitive position in the industry, and its business activities are conducted through OLLC, its wholly-owned subsidiary, and its subsidiaries. The company manages to assess its performance by using a variety of financial and operational metrics such as production volumes, realized prices on the sale of production, cash settlements on commodity derivatives, lease operating expense, gathering, processing, and transportation, general and administrative expenses, and Adjusted EBITDA.
Part 2: Forward-looking Analysis
Amplify Energy Corp.'s forward-looking analysis indicates that the company's management plans to extend the maturity date from November 2, 2023, to May 31, 2024, reduce the maximum consolidated net leverage ratio requirement from 4.00 to 1.00 to 3.00 to 1.00, adjust the minimum hedging requirements, transition from London Inter-Bank Offered Rate to Secured Overnight Financing Rate based interest rates, and remove the borrower's ability to pay dividends through the maturity date. The company's recent development includes the Pipeline Incident Settlement, where vessels agreed to pay the company $96.5 million in a settlement. The Marine Exchange agreed to non-monetary terms as well. Amplify will dismiss all of its legal claims against these parties after payment is made. The director and certain officer departures and appointments of Jason McGlynn, Richard P. Smiley, and Eric T. Greager are expected to not impact the company's financials, operations, policies, or practices. James E. Craddock's appointment to the board of directors of Amplify is expected to have a positive impact on the company's operations as it adds to its expertise. Geopolitical and economic conditions and production levels, including weather cycles and other events, remain factors that could impact the company's future performance.