Amplify Energy Corp. (AMPY) Bundle
Understanding Amplify Energy Corp. (AMPY) Revenue Streams
Understanding Amplify Energy Corp.’s Revenue Streams
The revenue streams of Amplify Energy Corp. are primarily derived from oil, natural gas, and natural gas liquids (NGL). The following table summarizes the revenue sources for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
| Revenue Source | Three Months Ended September 30, 2024 ($) | Three Months Ended September 30, 2023 ($) | Nine Months Ended September 30, 2024 ($) | Nine Months Ended September 30, 2023 ($) |
|---|---|---|---|---|
| Oil and Natural Gas Sales | 68,135,000 | 76,403,000 | 215,803,000 | 210,080,000 |
| Other Revenues | 1,723,000 | 367,000 | 9,857,000 | 18,531,000 |
| Total Revenues | 69,858,000 | 76,770,000 | 225,660,000 | 228,611,000 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rates indicate a slight decrease in total revenues from 2023 to 2024. The total revenues for the three months ended September 30 showed a decrease of approximately 9.5% from the previous year, while the nine-month total revenues showed a marginal decrease of 1.0%.
Contribution of Different Business Segments to Overall Revenue
For the three months ended September 30, 2024, oil and natural gas sales constituted approximately 97.9% of total revenues, while other revenues accounted for about 2.1%. This trend is consistent with the nine-month period, where oil and natural gas sales represented approximately 95.6% of total revenues, while other revenues contributed 4.4%.
Analysis of Significant Changes in Revenue Streams
The decrease in oil and natural gas sales for the three months ended September 30, 2024, was primarily due to a decline in average realized sales prices, which fell from $40.28 per Boe in 2023 to $38.88 per Boe in 2024. Additionally, average net production volumes decreased from approximately 20.6 MBoe/d in 2023 to 19.0 MBoe/d in 2024.
For the nine months ended September 30, 2024, oil and natural gas revenues increased slightly from $210.1 million in 2023 to $215.8 million in 2024, attributed to a rise in average realized sales prices from $37.72 per Boe in 2023 to $39.69 per Boe in 2024, despite a slight decrease in production volumes from 20.4 MBoe/d to 19.8 MBoe/d.
The other revenues segment experienced a significant decline, primarily due to the absence of LOPI insurance proceeds in 2024, which amounted to $17.9 million in 2023. The total for other revenues fell from $18.5 million in 2023 to $9.9 million in 2024.
In summary, the revenue analysis reveals a complex picture of fluctuating oil prices, production challenges, and the impact of non-recurring revenue sources on overall financial health as of 2024.
A Deep Dive into Amplify Energy Corp. (AMPY) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit was $32.6 million, resulting in a gross profit margin of approximately 46.7%. In comparison, for the same period in 2023, the gross profit margin was −17.4%, indicating a significant turnaround in profitability.
Operating Profit Margin: The operating income for the three months ended September 30, 2024, was reported at $32.6 million, translating to an operating profit margin of 46.7%. This reflects a substantial improvement from an operating loss of −16.1% for the same quarter in 2023.
Net Profit Margin: The net income for the three months ended September 30, 2024, was $22.7 million, leading to a net profit margin of 32.5%. In contrast, the company recorded a net loss of $13.4 million in Q3 2023, which equated to a net profit margin of −17.5%.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Gross Profit Margin | 46.7% | −17.4% |
| Operating Profit Margin | 46.7% | −16.1% |
| Net Profit Margin | 32.5% | −17.5% |
Trends in Profitability Over Time: Over the nine months ended September 30, 2024, total revenues amounted to $225.7 million, slightly down from $228.6 million in the same period of 2023. Despite this decline in top-line revenue, net income plummeted to $20.4 million compared to $349.2 million in 2023, primarily due to the absence of significant litigation settlements previously recorded.
Comparison of Profitability Ratios with Industry Averages: The industry average net profit margin for oil and gas companies stands at around 15%–20%. The company’s net profit margin of 32.5% for Q3 2024 significantly exceeds this benchmark, suggesting superior operational efficiency and profitability in comparison to its peers.
Operational Efficiency Analysis: The company’s lease operating expenses for the three months ended September 30, 2024, were $33.3 million, down from $36.5 million in Q3 2023. This decline in operating costs contributed positively to the gross margin. Per Boe lease operating expenses were $18.98 in Q3 2024 compared to $19.23 in Q3 2023, indicating effective cost management.
| Cost Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Lease Operating Expenses | $33.3 million | $36.5 million |
| Per Boe Lease Operating Expense | $18.98 | $19.23 |
General and Administrative Expenses: General and administrative expenses remained flat at $8.3 million for both Q3 2024 and Q3 2023. The company has effectively controlled this expense category, maintaining operational efficiency amidst fluctuating revenues.
Debt Management: Interest expenses for the three months ended September 30, 2024, were $3.8 million, down from $4.5 million in Q3 2023, reflecting lower average outstanding borrowings, which were $122.5 million in Q3 2024 compared to $121.8 million in Q3 2023.
Conclusion: The company has demonstrated a robust recovery in profitability metrics, with significant improvements across gross profit, operating profit, and net profit margins, outpacing industry averages and showcasing effective operational efficiency.
Debt vs. Equity: How Amplify Energy Corp. (AMPY) Finances Its Growth
Debt vs. Equity: How Amplify Energy Corp. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, the total long-term debt of the company was $120 million, which is an increase from $115 million reported at the end of 2023. The company's short-term liabilities included accrued liabilities totaling $36.7 million.
| Debt Type | Amount ($ million) |
|---|---|
| Short-Term Liabilities | 36.7 |
| Long-Term Debt | 120.0 |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio as of September 30, 2024, was 0.29, calculated from total liabilities of $324.5 million and total stockholders' equity of $414.7 million. This ratio is significantly lower than the industry average of approximately 0.5, indicating a conservative leverage position relative to peers.
| Metric | Value |
|---|---|
| Debt-to-Equity Ratio | 0.29 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
On July 31, 2023, the company entered into a new Revolving Credit Facility. The aggregate principal amount of loans outstanding under this facility as of September 30, 2024, was $120 million, with a borrowing base of $150 million. The company had approximately $15 million available for borrowing under the facility. The interest rate on the Revolving Credit Facility was reported at 9.28% for the three months ended September 30, 2024.
| Credit Facility | Outstanding Debt ($ million) | Interest Rate (%) |
|---|---|---|
| Revolving Credit Facility | 120.0 | 9.28 |
How the Company Balances Between Debt Financing and Equity Funding
As of September 30, 2024, stockholders' equity amounted to $414.7 million, reflecting a strategic balance between debt and equity financing. The company issued 39,789,500 shares of common stock as of the same date, an increase from 39,147,205 shares at the end of 2023. The company continues to utilize equity to support its growth initiatives while maintaining manageable debt levels.
| Equity Component | Value |
|---|---|
| Total Stockholders' Equity ($ million) | 414.7 |
| Total Shares Outstanding | 39,789,500 |
Assessing Amplify Energy Corp. (AMPY) Liquidity
Assessing Amplify Energy Corp.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio was approximately 0.86. This ratio indicates the company's ability to pay short-term obligations with its short-term assets.
Quick Ratio: The quick ratio, which excludes inventory from current assets, stood at 0.67 as of the same date, reflecting potential liquidity concerns.
Working Capital Trends
As of September 30, 2024, the company reported a working capital deficit (excluding commodity derivatives) of $11.6 million. This was primarily due to accrued liabilities of $36.7 million, revenues payable of $11.4 million, and accounts payable of $18.1 million. These liabilities were partially offset by accounts receivable of $32.3 million and prepaid expenses of $22.3 million.
| Item | Amount (in millions) |
|---|---|
| Accrued Liabilities | $36.7 |
| Revenues Payable | $11.4 |
| Accounts Payable | $18.1 |
| Accounts Receivable | $32.3 |
| Prepaid Expenses | $22.3 |
| Working Capital Deficit | $11.6 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow from operating activities was $38.8 million, a decrease from $113.2 million in the same period of 2023. The decline was attributed to lower revenues and changes in working capital.
Cash flows from investing activities showed a net cash used of $62.7 million for the nine months ended September 30, 2024, compared to $30.0 million in 2023.
Cash flows from financing activities resulted in a net cash increase of $3.1 million for the nine months ended September 30, 2024, in contrast to a net cash used of $76.9 million in 2023.
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $38.8 | $113.2 |
| Investing Activities | ($62.7) | ($30.0) |
| Financing Activities | $3.1 | ($76.9) |
Liquidity Concerns or Strengths
As of September 30, 2024, the company had approximately $15.0 million of available borrowings under its Revolving Credit Facility, which had an outstanding balance of $120.0 million.
The weighted-average interest rate on the Revolving Credit Facility for the nine months ended September 30, 2024, was 9.34%.
The company was in compliance with all financial and non-financial covenants associated with the Revolving Credit Facility as of September 30, 2024.
Is Amplify Energy Corp. (AMPY) Overvalued or Undervalued?
Valuation Analysis
When evaluating the financial health of Amplify Energy Corp., several key ratios and metrics provide insight into whether the company is overvalued or undervalued. The primary ratios considered include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA).
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the company reported a net income of $22.7 million compared to a net loss of $13.4 million for the same period in 2023. The basic earnings per share (EPS) was $0.54 for Q3 2024, while the diluted EPS was also $0.54. With a stock price of approximately $5.50 as of the latest trading session, the P/E ratio calculates to approximately 10.19.
Price-to-Book (P/B) Ratio
The book value of equity as of September 30, 2024, was $414.67 million. Given the total shares outstanding of 39,789,500, the book value per share is approximately $10.41. With the current stock price of $5.50, the P/B ratio is approximately 0.53.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) of the company can be calculated by adding the market capitalization to total debt and subtracting cash. As of September 30, 2024, total debt was $120 million and cash equivalents were $0. The market cap, based on the stock price of $5.50, is approximately $218.84 million. Thus, the enterprise value is approximately $338.84 million.
For the last twelve months, the EBITDA was reported at approximately $52 million. This results in an EV/EBITDA ratio of approximately 6.51.
Stock Price Trends
Over the past 12 months, the stock price has fluctuated between a low of $3.00 and a high of $8.00. The stock is currently trading at $5.50, reflecting a moderate recovery from its lows earlier in the year.
Dividend Yield and Payout Ratios
Amplify Energy does not currently pay a dividend, which results in a dividend yield of 0%. The payout ratio remains 0% as there are no dividends distributed to shareholders.
Analyst Consensus on Stock Valuation
The consensus among analysts suggests a rating of Hold. This reflects a cautious outlook given the company's fluctuating performance and current market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | 10.19 |
| P/B Ratio | 0.53 |
| EV/EBITDA Ratio | 6.51 |
| Stock Price (Current) | $5.50 |
| 52 Week Low | $3.00 |
| 52 Week High | $8.00 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Amplify Energy Corp. (AMPY)
Key Risks Facing Amplify Energy Corp.
Overview of Risks
The company faces various internal and external risks that impact its financial health. Key risk factors include:
- Industry Competition: The oil and gas sector is highly competitive, with numerous players vying for market share. The company must continually innovate and optimize operations to remain competitive.
- Regulatory Changes: Changes in environmental regulations can significantly affect operational costs and project viability. Compliance with California's stringent environmental laws can lead to increased expenses.
- Market Conditions: Fluctuations in commodity prices directly impact revenue. For instance, the average realized sales price was $39.69 per Boe in the nine months ended September 30, 2024, compared to $37.72 per Boe in the same period of 2023.
Operational Risks
Operational risks include the potential for production disruptions. The company experienced a decline in average net production volumes, approximately 19.8 MBoe/d for the nine months ended September 30, 2024, down from 20.4 MBoe/d in the prior year. Additionally, the company reported revenues of $215.8 million for the nine months ended September 30, 2024, a slight increase from $210.1 million in 2023, but operational challenges persist.
Financial Risks
Financial risks include exposure to interest rate fluctuations and liquidity challenges. As of September 30, 2024, the company had a working capital deficit (excluding commodity derivatives) of $11.6 million, primarily due to accrued liabilities and accounts payable. The average outstanding borrowings under the Revolving Credit Facility were approximately $122.5 million.
Strategic Risks
Strategic risks are associated with decisions regarding capital expenditures and investments in new projects. The company has committed to significant capital investments, totaling $54.1 million for additions to oil and natural gas properties in the nine months ended September 30, 2024. This commitment must be balanced against market volatility and production performance.
| Risk Factor | Description | Impact on Financials |
|---|---|---|
| Industry Competition | High competition in oil and gas sector | Pressure on prices and market share |
| Regulatory Changes | Potential for stricter environmental laws | Increased compliance costs |
| Market Conditions | Fluctuations in commodity prices | Revenue volatility; $39.69 per Boe average price |
| Operational Risks | Production disruptions | Decreased production volume; 19.8 MBoe/d |
| Financial Risks | Interest rate fluctuations | Working capital deficit of $11.6 million |
| Strategic Risks | Capital investment decisions | Commitment of $54.1 million to new projects |
Mitigation Strategies
The company has implemented several strategies to mitigate these risks, including:
- Hedging Activities: The company engages in commodity hedging to stabilize cash flows. They aim to hedge 50%-75% of their estimated production from total proved developed reserves.
- Cost Management: Focus on reducing operational expenses, with lease operating expenses reported at $19.83 per Boe for the nine months ended September 30, 2024.
- Compliance Programs: Ongoing assessment of regulatory requirements to ensure compliance and minimize potential fines or operational halts.
Future Growth Prospects for Amplify Energy Corp. (AMPY)
Growth Opportunities
Future growth prospects for Amplify Energy Corp. are driven by several key factors:
Analysis of Key Growth Drivers
- Product Innovations: The company is focusing on enhancing operational efficiency through electrification and emissions reduction projects, particularly at its Beta properties.
- Market Expansions: The company continues to explore opportunities in the Eagle Ford and other regions, which may lead to increased production capabilities.
- Acquisitions: Strategic acquisitions of oil and natural gas properties are anticipated to bolster production volumes and enhance revenue streams.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenues were $225.66 million, slightly decreasing from $228.61 million in the same period of 2023. Revenue from oil and natural gas sales amounted to $215.8 million compared to $210.1 million in the previous year. The average realized sales prices improved to $39.69 per Boe from $37.72 per Boe year-over-year.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has implemented various strategic initiatives, including:
- Entering into a new Revolving Credit Facility with an aggregate principal amount of $120 million as of September 30, 2024, which provides liquidity for operational and capital expenditures.
- Collaboration with technology partners to enhance production efficiency and reduce operational costs through innovative technologies.
Competitive Advantages That Position the Company for Growth
The company maintains several competitive advantages:
- Established Production Assets: The company operates in mature oil and gas reservoirs, which provide a stable production base. As of September 30, 2024, average net production volumes were approximately 19.8 MBoe/d.
- Cost Management: The company has effectively reduced lease operating expenses to $19.83 per Boe from $18.67 per Boe.
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $225.66 million | $228.61 million |
| Oil and Natural Gas Sales | $215.8 million | $210.1 million |
| Average Realized Sales Price (per Boe) | $39.69 | $37.72 |
| Average Net Production (MBoe/d) | 19.8 | 20.4 |
| Lease Operating Expenses (per Boe) | $19.83 | $18.67 |
With these initiatives and advantages in place, the company is well-positioned to capitalize on growth opportunities in the oil and gas sector moving forward.
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Resources:
- Amplify Energy Corp. (AMPY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Amplify Energy Corp. (AMPY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Amplify Energy Corp. (AMPY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.