Q2 2024 Amplify Energy Corp Earnings Call

August 8, 2024

Operator: Welcome to Amplify Energy's second quarter 2024 investor conference call. Amplify's operating and financial results were released yesterday after market close on August 7th and are available on its website at www.amplifyenergy.com.

Operator: Welcome to Amplify Energy's second quarter 2024 investor conference call. Amplify's operating and financial results were released yesterday after market close on August 7th of 2024 and are available on Amplify's website at www.amplifyenergy.com.

Operator: Welcome to Amplify Energy's second quarter 2024 investor conference call.

Operator: Amplify's operating and financial results were released yesterday after market close on August 7th of 2024 and are available on Amplify's website at www.amplifyenergy.com.

Operator: During this conference call, all participants will be in a listen-only mode. Today's call is being recorded. A replay of this call will be accessible until August 22nd, 2024 by dialing 800-654-1563 and then entering access code 717-249-01. I would now like to turn the conference call over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. Please go ahead.

Operator: During this conference call, all participants will be in a listen-only mode. Today's call is being recorded. A replay of this call will be accessible until August 22nd, 2024 by dialing 800-654-1563 and then entering access code 717-24901. I would now like to turn the conference call over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. Please go ahead.

Operator: During this conference call, all participants will be in a listen-only mode.

Operator: Today's call is being recorded. A replay of this call will be accessible until August 22, 2024 by dialing 800-654-1563 and then entering access code 717-24901.

Operator: I would now like to turn the conference call over to Jim Frew, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. Please go ahead.

Jim Frew: Good morning and welcome to the Amplify Energy conference call to discuss operating and financial results for the second quarter of 2024. Before we get started, we would like to remind you that some of our remarks may contain forward-looking statements which reflect management's current views of future events and are subject to various risks, uncertainties, expectations, and assumptions. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove to be correct and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call.

James Frew: Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the second quarter of 2024. Before we get started, we would like to remind you that some of our remarks may contain forward-looking statements that reflect management's current views of future events and are subject to various risks, uncertainties, expectations, and assumptions. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove to be correct and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call.

Jim Frew: Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the second quarter of 2024. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove to be correct and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call. Please refer to our press release and SEC filings for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

Jim Frew: Good morning and welcome to the Amplify Energy conference call to discuss operating and financial results for the second quarter of 2024.

Jim Frew: Please refer to our press release and SEC filings for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. In addition, the unaudited financial information that will be highlighted here is derived from our internal financial books, records, and reports. For additional detailed disclosure, we encourage you to read our Form 10-Q, which was filed yesterday afternoon. Also, non-GAAP financial measures may be disclosed during this call.

James Frew: Please refer to our press release and SEC filings for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. In addition, the unaudited financial information that will be highlighted here is derived from our internal financial books, records, and reports. For additional, detailed disclosure, we encourage you to read our Form 10-Q, which was filed yesterday afternoon. Also, non-GAAP financial measures may be disclosed during this call.

Jim Frew: Before we get started, we would like to remind you that some of our remarks may contain forward-looking statements which reflect management's current views of future events and are subject to various risks, uncertainties, expectations, and assumptions.

Jim Frew: Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurances that such expectations will prove to be correct and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call.

Jim Frew: Please refer to our press release and SEC filings for a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call.

Jim Frew: In addition, the unaudited financial information that will be highlighted here is derived from our internal financial books, records, and reports. For additional detailed disclosure, we encourage you to read our Form 10-Q, which was filed yesterday afternoon. Next, Dan Furbee, Senior Vice President and Chief Operating Officer, will provide an overview of second quarter operational performance. Following that, I will discuss second quarter financial results, provide an update on our balance sheet and liquidity, and provide additional details on our hedge book. Finally, Martyn will conclude our prepared remarks with final thoughts before opening the call up for questions. With that, I will hand it over to Martyn.

Jim Frew: Also, non-GAAP financial measures may be disclosed during this call. Reconciliations of those measures to comparable GAAP measures may be found in our earnings release or on our website at www.amplifyenergy.com.

James Frew: Reconciliations of those measures to comparable gap measures may be found in our earnings release or on our website at www.amplifyenergy.com. During the call, Martyn Willsher, Amplify's President and Chief Executive Officer, will review our second quarter performance and provide an update regarding our previously announced strategic initiative. Next, Dan Furbee, Senior Vice President and Chief Operating Officer, will provide an overview of second quarter operational performance. Following that, I will discuss second quarter financial results, provide an update on our balance sheet and liquidity, and provide additional details on our hedge book. Finally, Martyn will conclude our prepared remarks with final thoughts before opening the call up for questions. With that, I will hand it over to Martyn.

Jim Frew: Reconciliations of those measures to comparable gap measures may be found in our earnings release or on our website at www.amplifyenergy.com. During the call, Martyn Willsher, Amplify's President and Chief Executive Officer, will review our second quarter performance and provide an update regarding our previously announced strategic initiatives. Next, Dan Furbee, Senior Vice President and Chief Operating Officer, will provide an overview of second quarter operational performance. Following that, I will discuss second quarter financial results, provide an update on our balance sheet and liquidity, and provide additional details on our hedge book. Finally, Martyn will conclude our prepared remarks with final thoughts before opening the call up for questions. With that, I will hand it over to Martyn.

Martyn Willsher: During the call, Martyn Willsher, Amplify's President and Chief Executive Officer, will review our second quarter performance and provide an update regarding our previously announced strategic initiatives.

Jim Frew: Next, Dan Furbee, Senior Vice President and Chief Operating Officer, will provide an overview of second quarter operational performance.

Jim Frew: Following that, I will discuss second quarter financial results, provide an update on our balance sheet and liquidity, and provide additional details on our hedge book.

Jim Frew: Finally, Martyn will conclude our prepared remarks with final thoughts before opening the call up for questions. With that, I will hand it over to Martyn.

Martyn Willsher: Jim. Amplify had a strong second quarter of 2024. The company generated $30.7 million of just a diva and $9.2 million of free cash during the quarter, with both exceeding expectations. Due to our strong and expected second quarter performance, combined with the company's election to participate in higher-term, non-operated development wells in East Texas and in Eagleford, we have revised our annual guidance. You can find our updates against our earnings lease and invest the presentation post-total website last night.

Martyn Willsher: Amplify has a strong second quarter of 2024. The company generated $30.7 million of adjusted EBITDA and $9.2 million of free cash flow during the quarter with both exceeding expectations. Due to our stronger than expected second quarter performance combined with the company's election to participate in high return non-operated development wells in East Texas and Eagleford, we have revised our annual guidance. You can find our updated guidance in our earnings release and investor presentation posted to our website last night.

Martyn: Thank you, Jim. Amplify has a strong second quarter of 2024.

Martyn: The company generated $30.7 million of just-added EBITDA and $9.2 million of free cash flow during the quarter, with both exceeding expectations. Due to our stronger-than-expected second-quarter performance, combined with the company's election to participate in high-return, non-operated development wells in East Texas and Eagleford, we have revised our annual guidance.

Martyn: you can find our updateateda guidance our earnings lease and investive presentation pro totertalal website last night when respect to the strategic initiatives highlighted on our previous calls we receiive multiple bid for both an outright sale and partial monetization of our barrel assets following a comprehensive marketing process

Martyn Willsher: With respect to the strategic initiatives highlighted on our previous calls, we received multiple bids for both an outright sale and partial monetization of our bearable assets following a comprehensive marketing process. The company, working with its advisors, continues to actively evaluate these proposals and will provide updates as they become available. The company is committed to pursuing the path it believes will maximize shareholder value. At Beta, we continue to make progress in our 2024 development program.

Martyn: The company, working with its advisors, continues to actively evaluate these proposals and will provide updates as they become available. The company is committed to pursuing the path it believes will maximize shareholder value.

Martyn: At Beta, we continue to make progress in our 2024 development program. Dan will provide more details in a moment, but we are pleased to announce that we successfully drilled and brought online the 850 well in early June with very strong results. The cumulative production received to date from this well continues to exceed the upper band of our expectations, which were based on a limited subset of analogous wells previously drilled off the Beta platforms.

Martyn Willsher: Dan will provide more details in a moment, but we are pleased to announce that we successfully drilled and brought online the 850 well in early June with very strong results. The cumulative production received to date from this well continues to exceed the upper band of our expectations, which were based on a limited subset of analogous wells previously drilled off the Beta platforms. With the results of the 850 and comparable results from future development wells, we would anticipate increasing our expectations for undeveloped well productivity.

Martyn: with the results of the eight and fifty and comparable results from future development wells we would anticipate increasing our expectations for undeveloped well productivity

Martyn Willsher: In addition, it is important to note that our current SEC approved reserves of Beta only include the four wells we plan to drill in 2024. With continued success, we have a substantial number of additional development locations that we may add to our approved reserve inventory. The combination of increased productivity forecasts and additional locations has the potential to materially impact the value of our Beta reserves and demonstrate the strategic value of this prolific asset.

Martyn: In addition, it is important to note that our current SEC approved reserves of beta only include the four wells we plan to drill in 2024. With continued success, we have a substantial number of additional development locations that we may add to our approved reserve inventory.

Martyn: The combination of increased productivity forecasts and additional locations has the potential to materially impact the value of our beta reserves and demonstrate the strategic value of this prolific asset.

Martyn Willsher: In summary, we continue to focus on optimizing future cash flow generation by pursuing our strategic initiatives at Beryl and Beta and capitalizing on incremental, non-operated investment opportunities in East Texas and Eagleford. We believe this strategy will unlock the full potential of Amplify's diverse portfolio of assets and deliver substantial benefits and long-term value to our shareholders. With that, I will hand it over to Dan. Thank you.

Martyn: In summary, we continue to focus on optimizing future cash flow generations by pursuing our strategic initiatives at Beryl and Beta and capitalizing on incremental, non-operated investment opportunities in East Texas and Eagleford. We believe this strategy will unlock the full potential of Amplify's diverse portfolio of assets and deliver substantial benefits and long-term value to our shareholders.

Dan Furbee: Martyn. Total production for the second quarter averaged approximately 20,300 BOE per day. Second quarter production benefited from a one-time prior period adjustment of approximately 1,200 BOE per day, which was partially offset by production curtailment in East Texas related to significant flooding events. For over 100 days, the high level of the Sabine River impedes access to a significant number of wells in East Texas, forcing shut-ins across the asset base. The team did an excellent job of minimizing the impact of this flooding, and conditions have significantly improved as of this month.

Daniel Furbee: Total production for the second quarter averaged approximately 20,300 BOE per day. Second quarter production benefited from a one-time prior period adjustment of approximately 1,200 BOE per day, which was partially offset by production curtailments in East Texas related to significant flooding events. For over 100 days, the high level of the Sabine River impeded access to a significant number of wells in East Texas, forcing shut-ins across the asset base. The team did an excellent job of minimizing the impact of this flooding, and conditions have significantly improved as of this month.

Jim Frew: With that, I will hand it over to Dan.

Dan Furbee: Thank you, Martyn. Total production for the second quarter averaged approximately 20,300 BOE per day.

Dan Furbee: Second quarter production benefited from a one-time prior period adjustment of approximately 1,200 BOE per day, which was partially offset by production curtailments in East Texas related to significant flooding events.

Martyn: For over 100 days, the high level of the Sabine River impeded access to a significant number of wells in East Texas, forcing shut-ins across the asset base. The team did an excellent job of minimizing the impact of this flooding, and conditions have significantly improved as of this month.

Dan Furbee: Excluding the impact of the prior period adjustment, our production commodity mix for the quarter was 41% oil, 19% NGLs, and 40% natural gas. We will continue to explore additional services for Magnify in the coming quarters. The remaining capital was invested in various capital workovers and facility projects across our asset base. Capital for the second half of 2024 will primarily be allocated to continued development and facility enhancements at Beda and non-operated drilling projects in Eagleford and East Texas.

Daniel Furbee: Excluding the impact from the prior period adjustment, our production commodity mix for the quarter was 41% oil, 19% NGLs, and 40% natural gas. For the second quarter, these all other expenses were approximately $36.3 million, a $2 million decrease from the first quarter, gathering processing and transportation costs for $4.9 million, and production taxes for $4.6 million. The decrease in lease offering expenses is partly related to annual maintenance expenses taking place in the first quarter, as well as continued cost reduction efforts from the team, which are expected to persist for the remainder of the year.

Dan Furbee: Excluding the impact from the prior period adjustment, our production commodity mix for the quarter was 41% oil, 19% NGLs, and 40% natural gas. For the second quarter, lease offering expenses were approximately $36.31, a $2 million decrease from the first quarter. Gathering, processing, and transportation costs were $4.9 million, and production taxes with $4.6 million.

Dan Furbee: Excluding the impact from the prior period adjustment, our production commodity mix for the quarter was 41% oil, 19% NGLs, and 40% natural gas.

Dan Furbee: For the second quarter, lease operating expenses were approximately $36.31 million, a $2 million decrease from the first quarter. Gathering, processing, and transportation costs were $4.9 million, and production taxes were $4.6 million.

Dan Furbee: The decrease in lease offering expenses is partly related to annual maintenance expenses taking place in the first quarter, as well as continued cost reduction efforts from the team, which are expected to persist for the remainder of the year. These efforts include previously discussed initiatives with Amplify Energy Services, our wholly owned subsidiary. Magnify generated approximately $900,000 of adjusted EBITDA in a quarter through compression rentals, vacuum truck services, slip line work, and well testing services.

Dan Furbee: The decrease in lease authoring expenses is partly related to annual maintenance expenses taking place in the first quarter, as well as continued cost reduction efforts from the team, which are expected to persist for the remainder of the year.

Daniel Furbee: These efforts include previously discussed initiatives with Amplify Energy Services, our wholly owned subsidiary. Magnify Generated Approximately $900,000 of Justin Ivita in the quarter through compression rings, vacuum truck services, slip line work, and well-tested services. Since inception, Amplify has invested approximately $1.5 million in magnify, which is projected to generate a run rate of over $3 million per year after only one year. We will continue to explore additional services for Magnify in the coming quarters.

Dan Furbee: These efforts include previously discussed initiatives with Amplify Energy Services, our wholly owned subsidiary.

Dan Furbee: Magnify generated approximately $900,000 of adjusted EBITDA in the quarter through compression rentals, vacuum truck services, slip line work, and well testing services.

Dan Furbee: Since inception, Amplify has invested approximately $1.5 million in Magnify, which is projected to generate a run rate of adjusted EBITDA of over $3 million per year after only one year of operation, we will continue to explore additional services for Magnify in the coming quarters. The company's total capital investment for the quarter was $18 million.

Dan Furbee: Since inception, Amplify has invested approximately $1.5 million in Magnify, which is projected to generate a run rate adjustment EBITDA of over $3 million per year, after only one year of operation. We will continue to explore additional services for Magnify in the coming quarters.

Daniel Furbee: The company's total capital investment for the quarter was $18,000,000, and approximately $16,000,000 of this capital was invested in data where we continue our electrification and emission reduction facility project and our development drilling program. The remaining capital was invested in various capital workovers and facility projects across our asset base. Capital for the second half of 2024 will primarily be allocated to continued development and facility enhancements at Beta and non-operated drilling projects in Eagleford and East Texas.

Dan Furbee: Approximately $16 million of this capital was invested at Beta, where we continue our electrification and emission reduction facility project and our development drilling program. The remaining capital was invested in various capital workovers and facility projects across our asset base. Capital for the second half of 2024 will primarily be allocated to continuing development and facility enhancements at Beta and non-operated drilling projects in the Eagleford and East Texas. In the Eagleford, the company expects to participate in 14 gross 0.7 net new development wells and 2 gross 0.4 net recompletion projects.

Dan Furbee: The company's total capital investment for the quarter was $18 million. Approximately $16 million of this capital was invested in Beta, where we continue our electrification and emission reduction facility project and our development drilling program.

Dan Furbee: The remaining capital was invested in various capital workovers and facility projects across our asset base.

Speaker Change: Capital for the second half of 2024 will primarily be allocated to continued development and facility enhancements at Beta and non-operated drilling projects in the Eagleford and East Texas.

Daniel Furbee: In Eagleford, the company expects to participate in 14 gross 0.7 net new development wells and 2 gross 0.4 net recompletion projects. In East Texas, the company expects to participate in 4 gross 1 net wells, with 2 wells targeting the Hainesville Formation and the remaining 2 wells targeting the Cotton Valley Formation. These projects will provide additional volumes and cash flow in early 2025. The two new development wells in the Haynesville Shale represent a new opportunity for Amplify.

Dan Furbee: In the Eagleford, the company expects to participate in 14 gross 0.7 net new development wells and 2 gross 0.4 net recompletion projects.

Dan Furbee: In East Texas, the company expects to participate in 4 gross 1 net wells with 2 wells targeting the Hainesville Formation and the remaining 2 wells targeting the Cotton Valley Formation. These projects will provide additional volumes and cash flow in early 2025. The two new development wells in the Hainesville Shale represent a new opportunity for Amplify. As development of the Hainesville has continued to move west, and activity has increased near our acreage position.

Dan Furbee: In East Texas, the company expects to participate in four growth, one net wells, with two wells targeting the Hainesville Formation and the remaining two wells targeting the Cotton Valley Formation.

Dan Furbee: These projects will provide additional volumes and cash flow in early 2025. The two new development wells in the Haynesville Shale represent a new opportunity for Amplify. As development of the Haynesville has continued to move west, and activity has increased near our acreage position, we believe that we will be in a strong position to extract additional value from this area in the future. At BATA, we continue the third and final phase of the electrification and emission reduction project involving the installation of selective catalytic reducers on the platform generators and rig engines.

Dan Furbee: These projects will provide additional volume and cash flow in early 2025.

Dan Furbee: The two new development wells in the Hainesville Shale represent a new opportunity for Amplify. As development of the Hainesville has continued to move west, and activity has increased near our acreage position.

Daniel Furbee: As development of the Haynesville has continued to move west, and activity has increased near our acreage position, with the incremental optionality provided by the Haynesville opportunities, we believe that we will be in a strong position to extract additional value from this area in the future. At Beta, we continue the third and final phase of the electrification and emission reduction project involving the installation of selective catalytic reducers on the platform generators and rig engines.

Dan Furbee: With the incremental optionality provided by the Hainesville opportunities, we believe that we will be in a strong position to extract additional value from this area in the future. At BATA, we continue the third and final phase of the electrification and emission reduction project involving the installation of selective catalytic reducers on the platform generators and rig engines. We are on schedule to complete this multi-year project in the fourth quarter of this year, which will lower operating expenses by reducing diesel usage and emission credit purchases, increase redundancy across our operations, and bring us in line with regional air quality standards. We are projected to invest $14 million towards this project this year, and once completed, we do not anticipate significant facility capital investments of beta in the coming years.

Dan Furbee: With the incremental optionality provided by the Haynesville opportunities, we believe that we will be in a strong position to extract additional value from this area in the future.

Dan Furbee: At BATA, we continue the third and final phase of the electrification and emission reduction project involving the insulation of selective catalytic reducers on the platform generators and rig engines.

Dan Furbee: We are on schedule to complete this multi-year project in the fourth quarter of this year, which will lower operating expenses by reducing diesel usage and emission credit purchases, increase redundancy across our operations, and bring us in line with regional air quality standards. These early production results exceed the high end of the cumulative production range presented in our investor deck. We invested approximately $4.2 million as well, and at current oil prices, we project a quick payback of approximately four months.

Daniel Furbee: We are projected to invest $14 million towards this project this year, and once completed, we do not anticipate significant so many capital investments of data in the coming year. With the fixed cost improvements from these upgrades and the use of modern technologies in our drilling program, we believe we can recover the massive remaining reserves in the beta field. As for the development program, we successfully drilled and completed the A50 well from the Ellen platform in less than 30 days and brought it online in early June.

Dan Furbee: We are projected to invest $14 million towards this project this year, and once completed, we do not anticipate significant facility capital investments of beta in the coming years.

Dan Furbee: With the fixed cost improvements from these upgrades and the use of modern technologies in our drilling program, we believe we can recover the massive remaining reserves in the beta field. As for the development program, we successfully drilled and completed the A50 well from the Ellen platform in less than 30 days and brought it online in early June. The well achieved a gross peak IP30 oil rate of approximately 730 barrels of oil per day.

Dan Furbee: As for the development program, we successfully drilled and completed the A50 well from the Ellen platform in less than 30 days and brought it online in early June . The well achieved a gross peak IP30 oil rate of approximately 730 barrels of oil per day.

Daniel Furbee: The well achieved a gross peak IP30 oil rate of approximately 730 barrels of oil per day. Rates from the well after approximately two months of production were in excess of 650 barrels of oil per day. These early production results exceed the high end of the cumulative production range presented in our investor deck. We invested $4.2 million as well, and at current oil prices, we project a quick payback of approximately four months.

Dan Furbee: Rates from the well after approximately two months of production were in excess of 650 barrels of oil per day. These early production results exceed the high end of the cumulative production range presented in our investor deck. We invested approximately $4.2 million as well, and at current oil prices, we project a quick payback of approximately four months. The excellent results of this well reinforce the substantial upside that can be achieved through a successful development campaign utilizing modern technology to drill extended reach laterals to parts of the beta field that were not accessible in previous drilling programs.

Dan Furbee: Rates from the well after approximately two months of production were in excess of 650 barrels of oil per day.

Dan Furbee: These early production results exceed the high end of the cumulative production range presented in our investor deck. We invested approximately $4.2 million as well. And at current oil prices, we project a quick payback of approximately four months.

Daniel Furbee: The excellent results of this well reinforce the substantial upside that can be achieved through a successful development campaign utilizing modern technology to drill extended-reach laterals to parts of the beta field that were not accessible in previous drilling programs. In the third quarter, we are drilling the C-59 well from the Eureka platform and then intend to drill a second well in Eureka before returning to Ellen, likely late in the fourth quarter, to finish the A-45 well, which was deferred earlier this year. And with that, I will turn it over to Jim.

Speaker Change: The excellent results of this well reinforce the substantial upside that can be achieved through a successful development campaign utilizing modern technology to drill extended-reach laterals to parts of the beta field that were not accessible in previous drilling programs.

Dan Furbee: In the third quarter, we are drilling the C-59 well from the Eureka platform and then intend to drill a second well in Eureka before returning to Ellen, likely late in the fourth quarter, to finish the A-45 well, which was deferred earlier this year. And with that, I will turn it over to Jim.

Dan Furbee: In the third quarter, we are drilling the C-59 well from the Eureka platform and then intend to draw a second well in Eureka before returning to Ellen, likely late in the fourth quarter, to finish the A-45 well, which was deferred earlier this year. And with that, I will turn it over to Jim.

Jim Frew: and I would now like to discuss the following items, second quarter financial performance, balance sheet and liquidity, and hedging. With respect to second quarter financial performance, the company reported net income of approximately $7.1 million compared to a $9.4 million net loss in the prior quarter. The change was primarily attributable to lower non-cash unrealized losses on commodity derivatives in the quarter.

Jim Frew: Again, I would now like to discuss the following items, second quarter financial performance, balance sheet and liquidity, and hedging. With respect to second quarter financial performance, the company reported net income of approximately 7.1 million dollars compared to a 9.4 million dollar net loss in the prior quarter. The change was primarily attributable to lower non-cash unrealized losses on commodity derivatives in the quarter.

James Frew: Again, I would now like to discuss the following items, second quarter financial performance, balance sheet and liquidity, and hedging. With respect to second quarter financial performance, the company reported net income of approximately $7.1 million compared to a $9.4 million net loss in the prior quarter. The change was primarily attributable to lower non-cash unrealized losses on commodity derivatives in the quarter.

Dan Furbee: Thank you, Dan. I would now like to discuss the following items, second quarter financial performance, balance sheet and liquidity, and hedging.

Jim Frew: With respect to second quarter financial performance, the company reported net income of approximately 7.1 million dollars compared to a 9.4 million dollar net loss in the prior quarter.

Jim Frew: The change was primarily attributable to lower non-cash unrealized losses on commodity derivatives in the quarter.

James Frew: As Martyn previously mentioned, second quarter adjusted EBITDA was $30.7 million, which was well above expectations. In addition to the strong operating performance outlined by Dan, Amplify benefited from a one-time prior period accounting adjustment. In the first half of the year, the company undertook a comprehensive review of its suspense accounts.

Jim Frew: As Martyn previously mentioned, second quarter adjusted EBITDA was $30.7 million, which was well above expectations. In addition to the strong operating performance outlined by Dan, Amplify benefited from a one-time prior period accounting adjustment. In the first half of the year, the company undertook a comprehensive review of its suspense accounts.

Jim Frew: As Martyn previously mentioned, second quarter adjusted EBITDA was $30.7 million, which was well above expectations.

Jim Frew: In addition to the strong operating performance outlined by Dan, Amplify benefited from a one-time prior period accounting adjustment.

Jim Frew: In the first half of the year, the company undertook a comprehensive review of its expense accounts.

Jim Frew: Based on the results of our research, we determined that a portion of our suspense balance should be released and credited to Amplify. The net impact of these adjustments positively impacted Adjusted EBITDA by approximately $7 million in the second quarter. Second quarter lease operating expenses were approximately $36.3 million, which was in line with expectations. LOE was lower than the prior quarter, primarily due to one-time costs that impacted the prior quarter.

James Frew: Based on the results of our research, we determined that a portion of our suspense balance should be released and credited to Amplify. The net impact of these adjustments positively impacted adjusted EBITDA by approximately $7 million in the second quarter. 2nd quarter of lease operating expenses were approximately $36.39, which was in line with, L.O.E. was lower than the prior quarter, primarily due to one-time costs that impacted the prior quarter. Amplify expects second half LOE to be lower than the first half with full year LOE remaining within the original guidance range. With respect to other costs, second quarter GPT costs were $4.9 million or $2.66 per BOE, while production taxes were $4.6 million or 6.4% of oil and gas revenues.

Speaker Change: Based on the results of our research, we determined that a portion of our suspense balance should be released and credited to Amplify.

Jim Frew: The net impact of these adjustments positively impacted adjusted EBITDA by approximately $7 million in the second quarter. Second quarter lease operating expenses were approximately $36.3 million, which was in line with expectations. LOE was lower than the prior quarter primarily due to one-time costs that impacted the prior quarter. With respect to other costs, second quarter GPT costs were $4.9 million or $2.66 per BOE, while production taxes were $4.6 million or 6.4% of oil and gas revenues. In the second quarter, we incurred $3.6 million of interest expense, up $0.1 million compared to the prior quarter.

Jim Frew: The net impact of these adjustments positively impacted adjusted EBITDA by approximately $7 million in the second quarter.

Jim Frew: Second quarter lease operating expenses were approximately thirty six point three million dollars which was in line with expectations.

Jim Frew: LOE was lower than the prior quarter primarily due to one-time costs that impacted the prior quarter.

Jim Frew: Amplify expects second half LOE will be lower than the first half with full year LOE remaining within the original guidance range, with respect to other costs, second quarter GPT costs were $4.9 million or $2.66 per BOE, while production taxes were $4.6 million or 6.4% of oil and gas revenues. Due to low gas prices in 2024, we expect Avalon taxes will be lower for the remainder of the year and we have updated guidance to reflect that change.

Jim Frew: Amplify expects second half LOE will be lower than the first half with full year LOE remaining within the original guidance range.

Jim Frew: With respect to other costs, second quarter GPT costs were $4.9 million or $2.66 per BOE, while production taxes were $4.6 million or 6.4% of oil and gas revenue.

James Frew: Due to low gas prices in 2024, we expect Avalon taxes will be lower for the remainder of the year, and we have updated guidance to reflect that change. Cast G&A in the second quarter was $6.6 million, or $3.57 per BOE, which was down $1.3 million from the prior quarter. This decrease was in line with expectations and primarily due to year-end processes that increased costs in the first quarter. The company anticipates that quarterly cash G&A expenses will be relatively flat through the remainder of the year. And as a result, we have not adjusted our original G&A guidance range.

Jim Frew: Due to low gas prices in 2024, we expect Avalon taxes will be lower for the remainder of the year and we have updated guidance to reflect that change.

Jim Frew: Cast G&A in the second quarter was $6.6 million, or $3.57 per BOE, which was down $1.3 million from the prior quarter. This decrease was in line with expectations and primarily due to year-end processes that increased costs in the first quarter. The company anticipates that quarterly cash G&A expenses will be relatively flat through the remainder of the year. And as a result, we have not adjusted our original G&A guidance range.

Jim Frew: Cash G&A in the second quarter was $6.6 million or $3.57 per BOE, which was down $1.3 million from the prior quarter.

Jim Frew: this decrease was in line with expectations in primarily due to year-end processes that increased costs in the first quarter

Jim Frew: The company anticipates that quarterly cash G&A expenses will be relatively flat through the remainder of the year, and as a result, we have not adjusted our original G&A guidance range.

James Frew: In the second quarter, we incurred $3.6 million of interest expense, up $0.1 million compared to the prior quarter. With respect to capital, Amplify invested $18 million in the second quarter, which was in line with internal expectations. As Dan mentioned, we have now elected to participate in non-operated development projects totaling $7 to $9 million in Eagleford and East Texas and have updated our guidance accordingly. We now expect to invest $60 to $65 million of capital in 2024. Free Cash Lab, defined as just EBITOP, less CAPX, and cash interest expense, was $9.2 million for the second quarter of 2024.

Jim Frew: In the second quarter, we incurred $3.6 million of interest expense, $1.1 million compared to the prior quarter. With respect to capital, Amplify invested $18 million in the second quarter, which was in line with internal expectations. As Dan mentioned, we have now elected to participate in non-operated development projects totaling $7 to $9 million in the Eagleford and East Texas, and have updated our guidance accordingly. We now expect to invest $60 to $65 million of capital in 2024.

Jim Frew: In the second quarter, we incurred $3.6 million of interest expense, up $0.1 million compared to the prior quarter.

Jim Frew: With respect to capital, Amplify invested $18 million in the second quarter, which was in line with internal expectations. As Dan mentioned, we have now elected to participate in non-operated development projects totaling $7 to $9 million in Eagleford and East Texas and have updated our guidance accordingly. We now expect to invest $60 to $65 million of capital in 2024. Free cash flow, defined as adjusted EBITDA, less CapEx, and cash interest expense, was $9.2 million for the second quarter of 2024.

Jim Frew: With respect to capital, Amplify invested $18 million in the second quarter.

Jim Frew: which was in line with internal expectations. As Dan mentioned, we have now elected to participate in non-operated development projects totaling $7 to $9 million in the Eagleford and East Texas and have updated our guidance accordingly.

Jim Frew: We now expect to invest $60 to $65 million of capital in 2024.

Jim Frew: Free cash flow, defined as adjusted EBITDA, less CapEx, and cash interest expense, was $9.2 million for the second quarter of 2024. Amplify has now generated positive free cash flow in 16 of the last 17 quarters, illustrating the strong sustainable cash generating potential of our mature diversified asset base. As of June 30th, Amplify had net debt of approximately $117.5 million, consisting of $118 million outstanding under our revolving credit facility and $0.5 million of cash and cash equivalents.

Jim Frew: Free cash flow, defined as adjusted EBITDA, less CapEx, and cash interest expense, was $9.2 million for the second quarter of 2024.

Jim Frew: Amplify has now generated positive free cash flow in 16 of the last 17 quarters, illustrating the strong sustainable cash generating potential of our mature diversified asset base. At the end of the second quarter, the company's liquidity was $17.5 million, and net debt to last 12 months adjusted EBITDA was 1.2 times. The slight increase in net debt versus the prior quarter was primarily due to expected changes in working capital and increased investment activity, primarily at beta.

James Frew: Amplify has now generated positive free cash flow in 16 of the last 17 quarters, illustrating the strong sustainable cash generating potential of our mature diversified asset base. As of June 30th, Amplify had net debt of approximately $117.5 million, consisting of $118 million outstanding under our revolving credit facility and $0.5 million of cash and cash equivalents. At the end of the second quarter, the company's liquidity was $17.5 million, and net debt to last 12 months was 1.2 times. The slight increase in net debt versus the prior quarter was primarily due to expected changes in working capital and increased investment activity, primarily at beta.

Jim Frew: Amplify has now generated positive free banking quarters, illustrating the strong, sustainable cash-generating potential of our mature, diversified asset base.

Jim Frew: As of June 30th, Amplify had net debt of approximately $117.5 million, consisting of $118 million outstanding under our evolving credit facility and $0.5 million of cash and cash equivalents.

Jim Frew: At the end of the second quarter, the company's liquidity was $17.5 million, and net debt to last 12 months adjusted EBITDA was 1.2 times. The slight increase in net debt versus the prior quarter was primarily due to expected changes in working capital and increased investment activity, primarily at beta.

Jim Frew: At the end of the second quarter, the company's liquidity was $17.5 million, and net debt to last 12 months adjusted EBITDA was 1.2 times.

Jim Frew: The slight increase in net debt versus the prior quarter was primarily due to expected changes in working capital and increased investment activity, primarily at beta.

Jim Frew: The next redetermination of our barring base is expected in the fourth quarter of 2024. As of August 7th, our forecasted approved, developed, and producing crude oil production was approximately 70 to 75 percent hedged for the second half of 2024. 55 to 60 percent hedged for 2025 and 10 to 15 percent hedged in 2026. On the gas side, our forecasted PVP production is 85 to 90 percent hedged for the remainder of 2024 and for full year 2025, with 80 to 85% hedged in 2026.

James Frew: The next redetermination of our barring base is expected in the fourth quarter of 2024. As of August 7th, our forecasted approved, developed, and producing crude oil production was approximately 70 to 75 percent hedged for the second half of 2024. 55-60% hedged for 2025 and 10-15% hedged in 20-26. On the gas side, our forecasted PVP production is 85 to 90% hedged for the remainder of 2024 and for full year 2025, with 80 to 85% hedged in 2026.

Jim Frew: The next redetermination of our barring base is expected in the fourth quarter of 2024. As of August 7, our forecasted approved developed producing crude oil production was approximately 70 to 75% hedged for the second half of 2024. 55 to 60 percent hedged for 2025 and 10 to 15 percent hedged in 2026. On the gas side, our forecasted PDP production is 85-90% hedged for the remainder of 2024 and for, In the second quarter, we added gas hedges covering a portion of our expected 2026 production and crude hedges covering a portion of our 2025 expected production.

Jim Frew: The next redetermination of our barring base is expected in the fourth quarter of 2024.

Jim Frew: As of August 7th, our forecasted approved developed producing crude oil production was approximately 70-75% hedged for the second half of 2024, 55-60% hedged for 2025, and 10-15% hedged in 2026.

Jim Frew: On the gas side, our forecasted PVP production is 85-90% hedged for the remainder of 2024 and for full year 2025, with 80-85% hedged in 2026.

James Frew: In the second quarter, we added gas hedges covering a portion of our expected 2026 production and crude hedges covering a portion of our 2025 expected production. Amplify Executed 2026 natural gas swaps at a weighted average price of $3.88 per MNBPU and natural gas collars with a floor of $3.62 per MNBPU and a ceiling of $4.27 per MNBPU. Amplify also executed crude oil stops for 2025 at a weighted average price of $74.10 per barrel. We will continue monitoring the market to supplement our strong hedge positions going forward. And with that, I'll turn the call back to Martyn.

Jim Frew: In the second quarter, we added gas hedges covering a portion of our expected 2026 production and crude hedges covering a portion of our 2025 expected production.

Jim Frew: Amplify executed 2026 natural gas swaps at a weighted average price of $3.88 per MNBTU and natural gas collars with a floor of $3.62 per MNBTU and a ceiling of $4.27 per MNBTU. Amplify also executed crude oil stops for 2025 at a weighted average price of $74.10 per barrel. We will continue monitoring the market to supplement our strong hedge positions going forward. And with that, I'll turn the call back to Martyn.

Jim Frew: Amplify executed 2026 natural gas swaps at a weighted average price of $3.88 per MMBTU and natural gas collars with a floor of $3.62 per MMBTU and a ceiling of $4.27 per MMBTU. We will continue monitoring the market to supplement our strong hedge positions going forward. And with that, I'll turn the call back to Martyn.

Jim Frew: Amplify executed 2026 natural gas swaps at a weighted average price of three dollars and eighty eight cents per MMBTU and natural gas collars with a floor of three dollars and sixty two cents per MMBTU and a ceiling of four dollars and twenty seven cents per MMBTU.

Jim Frew: Amplify also executed crude oil stops for 2025 at a weighted average price of $74.10 per barrel.

Jim Frew: We will continue monitoring the market to supplement our strong hedge positions going forward.

Martyn Willsher: Thank you, Jim. As I mentioned earlier on this call, we are updating guidance based on our strong first-half results and the company's election to participate in non-operated development wells in East Texas and Eagleford. Amplify's updated guidance is based on four-year 2024 commodity prices for WTI crude oil of $76 a barrel and Henry Hub natural gas of $2.25 per MMBTU. As previously disclosed, the company expects to invest 85% to 95% of its capital in the first three quarters of the year, primarily in connection with the beta projects.

Martyn Willsher: Thank you, Jim. As I mentioned earlier on this call, we are updating guidance based on our strong first-half results and the company's election to participate in non-operated development wells in East Texas and Eagleford. Amplify's updated guidance is based on four-year 2024 commodity prices for WTI crude oil of $76 a barrel and Henry Hub natural gas of $2.25 per MMBTU. As previously disclosed, the company expects to invest 85 to 95 percent of its capital in the first three quarters of the year, primarily in connection with the beta projects.

Jim Frew: And with that, I'll turn the call back to Martyn.

Martyn: Thank you, Jim. As I mentioned earlier on this call, we are updating guidance based on our strong first-half results and the company's election to participate in non-operated development wells in East Texas and Eagleford.

Speaker Change: Amplify's updated guidance is based on full-year 2024 commodity prices for WTI crude oil of $76 a barrel and Henry Hubb natural gas of $2.25 per MMBTU. As previously disclosed, the company expects to invest 85-95% of its capital in the first three quarters of the year, primarily in connection with the beta projects.

Martyn Willsher: Additional guidance details are provided in our earnings release and can be found in the latest investor presentation currently available on our website. In summary, the first half of 2024 has exceeded expectations and we are excited about the initial results of our development program at Beta. The successful development program at Beta is key to demonstrating the strategic potential of the asset and has the potential to materially increase cash flows and long-term value for the company.

Martyn Willsher: Additional guidance details are provided in our earnings release and can be found in the latest investor presentation currently available on our website. In summary, the first half of 2024 has exceeded expectations, and we are excited about the initial results of our development program at Beta. The successful development program at Beta is key to demonstrating the strategic potential of the asset and has the potential to materially increase cash flows and long-term value for the company.

Martyn: additional guidance details are provided in our earning release and be found in the latest invesesttor presentation currently available on our website

Martyn Willsher: In summary, the first half of 2024 has exceeded expectations, and we are excited about the initial results of our development program at Beta. A successful development program at Beta is key to demonstrating the strategic potential of the asset and has the potential to materially increase cash flows and long-term value for the company. We remain confident that the combination of our exciting Beta and non-operated development opportunities, coupled with our strong balance sheet and relentless focus on cost structure, have the potential to be transformative for the company, providing a catalyst for market outperformance while also enhancing our flexibility as we consider and evaluate potential capital return options in future periods. With that operator, we are now open to questions.

Martyn Willsher: In summary, the first half of 2024 has exceeded expectations, and we are excited about the initial results of our development program at Beda.

Martyn Willsher: The successful development program at Beta is key to demonstrating the strategic potential of the asset and has the potential to materially increase cash flows and long-term value for the company. We remain confident that the combination of our exciting Beta and non-operated development opportunities coupled with our strong balance sheet and relentless focus on cost structure have the potential to be transformative for the company, providing a catalyst for market outperformance while also enhancing our flexibility as we consider and evaluate potential capital return options in future periods.

Martyn Willsher: We remain confident that the combination of our exciting Beta and non-operated development opportunities coupled with our strong balance sheet and relentless focus on cost structure have the potential to be transformative for the company, providing a catalyst for market outperformance while also enhancing our flexibility as we consider and evaluate potential capital return options in future periods. With that operator, we are now open to questions.

Martyn Willsher: We remain confident that the combination of our exciting Beta and non-operated development opportunities, coupled with our strong balance sheet and relentless focus on cost structure, have the potential to be transformative for the company, providing a catalyst for market outperformance while also enhancing our flexibility as we consider and evaluate potential capital return options in future periods. With that operator, we are now open for questions.

Martyn Willsher: With that operator, we are now open for questions.

Operator: Thank you. If you would like to ask a question at this time, please press Star 1 on your telephone keypad. You may remove yourself at any time by pressing Star 2. Once again, to ask a question, please press Star 1. And we will take our first question from Jeff Grampp with Alliance Global Partners.

Operator: Thank you. If you would like to ask a question at this time, please press star 1 on your telephone keypad. You may remove yourself at any time by pressing star 2. Once again, to ask a question, please press star 1. And we will take our first question from Jeff Grant with Alliance Global Partners.

Operator: Thank you. If you would like to ask a question at this time, please press Star 1 on your telephone keypad. You may remove yourself at any time by pressing Star 2. Once again, to ask a question, please press Star 1, and we will take our first question from Jeff Grant with Alliance Global Partners.

Operator: And we will take our first question from Jeff Grampp with Alliance Global Partners.

Jeff Grampp: Morning guys, and congrats on getting the beta news out. I wanted to, unsurprisingly, start there. So I think when you guys originally announced this development program, it included the four wells for this year, as you guys have talked about, and I think the plan was, I think, three wells in 25. Given the results so far, I know we still have a few more wells to continue to de-risk this, but what are the constraints to doing more than those three wells in 25? Or how do you guys just generally think about a potential acceleration case like this?

Jeff Grant: Morning guys, and congrats on getting the beta news out. I wanted to, unsurprisingly, start there. So, I think when you guys originally announced this development program, it included the four wells for this year, as you guys have talked about, and I think the plan was, I think, three wells in 25. Given the results so far, I know we still have a few more wells to continue to de-risk this, but what are the constraints to doing more than those three wells in 25? Or how do you guys just generally think about a potential acceleration case?

Jeff Grant: Morning guys, and congrats on getting the beta news out. I wanted to unsurprisingly start there. So, I think when you guys originally announced this development program, it included the four wells for this year, as you guys have talked about. And I think the plan was, I think, three wells in 25. Given the results so far, I know we still have a few more wells to continue to de-risk this, but what are the constraints to doing more than those three wells in 25? Or how do you guys just generally think about a potential acceleration case?

Jeff Grampp: Morning, guys, and congrats on getting the beta news out.

Jeff Grampp: i wanted to unsurprisingly start there so i think when you guys originally announced this development program it included the four wells for this year as as you got talked about and i think the plan was just i think three wells in twenty five

Jeff Grampp: Given the results so far, I know we still have a few more wells to continue to de-risk this, but what are the constraints to doing more than those three wells in 25, or how do you guys just generally think about a potential acceleration case there?

Martyn Willsher: Yeah, I think that's something that we're going to take a closer look at through the second half of this year, especially as we, you know, continue to get additional results. Obviously, we can drill and complete these in approximately 30 days.

Martyn Willsher: Yeah, I think that's something that we're going to take a closer look at through the second half of this year, especially as we, you know, continue to get additional results. Obviously, you know, we can drill and complete these in approximately 30 days.

Martyn Willsher: Yeah, I think that's something that we're going to take a closer look at through the second half of this year, especially as we continue to get additional results. Obviously, we can drill and complete these in approximately 30 days.

Martyn Willsher: Yeah, I think that's something that we're going to take a closer look at through the second half of this year, especially as we...

Martyn Willsher: So we, you know, we do mix in workovers using the same rigs during the course of the year. And, you know, we'll obviously always want to keep an eye on total capital, but we do have, you know, the flexibility to adjust that a little bit as we go forward. And that's something that we'll look at, like I said, as we continue to get additional results here in the third and fourth quarter.

Martyn Willsher: So we, you know, we do mix in workovers using the same rigs during the course of the year. And, you know, we'll, we obviously always want to keep an eye on total capital, but we do have, you know, the flexibility to adjust that a little bit as we go forward. And that's something that we'll look at, like I said, as we continue to get additional results here in the third and fourth quarter.

Martyn Willsher: continue to get additional results obviously we can drill and complete in approximately thirty days

Speaker Change: so we we do mix in workoververs using the same rigs duringam the course of the year and

Martyn Willsher: So we do mix in workovers using the same rigs during the course of the year. And we obviously always want to keep an eye on total capital, but we do have the flexibility to adjust that a little bit as we go forward. And that's something that we'll look at, like I said, as we continue to get additional results here in the third and fourth quarters.

Martyn Willsher: We obviously always want to keep an eye on total capital, but we do have the flexibility to adjust that a little bit as we go forward, and that's something that we'll look at, like I said, as we continue to get additional results here in the third and fourth quarter.

Dan Furbee: Okay, understood. And then on the cost front, I think you guys were originally targeting kind of five to six million. This one came in in kind of the low fours. What's your assessment of the repeatability of that? I mean, if anything, I would think, you know, the earlier wells would be on the more expensive side as you guys kind of ramp up efficiencies and learnings and things of that nature. What's the confidence level to continue to come in under that initial five to six range?

Jeff Grant: Okay, understood. And then on the well cost front, I think you guys were originally targeting kind of five to six million. This one came in in kind of the low fours. What's your assessment of the repeatability of that? I mean, if anything, I would think, you know, the earlier wells would be on the more expensive side as you guys kind of ramp up efficiencies and learnings and things of that nature. What's kind of the confidence level to continue to come in under that initial five to six range?

Dan Furbee: Okay, understood. And then on the well-cost front, I think you guys were originally targeting kind of five to six million. This one came in in kind of the low fours.

Dan Furbee: What's your assessment of the repeatability of that? I mean, if anything, I would think, you know, the earlier wells would be on the more expensive side, as you guys kind of ramp up efficiencies and learnings and things of that nature. What's kind of the confidence level to continue to come in under that initial five to six range?

Dan Furbee: Hey Jeff, this is Dan. The five to six million dollar estimate, so we made that you know obviously before we started drilling wells out here. The team did a great job on the 850. We're very efficient, got the well done on time, and you know we'll see as we go. We will get a few more wells under our belt before we lower our overall expectation, but it's certainly possible to fill these wells for less than five million dollars.

Dan Furbee: Hey Jeff, this is Dan. The five to six million dollar estimate, so we made that, you know, obviously before we started drilling wells out here. The team did a great job on the 850. We're very efficient, got the job well done on time, and you know we'll see as we go. We will get a few more wells under our belt before we lower our overall expectations, but it's certainly possible to drill these wells for less than five million dollars.

Dan Furbee: Hey Jeff, this is Dan. The five to six million dollar estimate, so we made that, you know, obviously before we started drilling wells out here. The team did a great job on the 850. We're very efficient, got the job well done on time, and you know we'll see as we go. We'll get a few more wells under our belt before we lower our overall expectation, but it's certainly possible to drill these wells for less than five million dollars.

Dan Furbee: Hey Jess, this is Dan. The five to six million dollar estimate, so we made that obviously before we started drilling wells out here. The team did a great job.

Dan Furbee: a fifty were very efficient cut well done on time and we'll see as we get we will get a few more wells under belt for we lower or overall expectations but with certainly possible to drill these wells less than five million dollars

Martyn Willsher: Okay, great. And then, if I could sneak one more in, the new non-op wells that you guys elected to participate in that popped up in East Texas, obviously, gas prices are not tremendously high right now, but I assume they kind of met your hurdle rate. But just kind of wondering, you know, what your assessment is, is this kind of setting up a potential longer-term capital allocation potential in East Texas, or is this just a couple maybe one-offs where you guys just kind of wanted to participate and kind of get a look at what these well economics could be down the road?

Jeff Grant: Okay, great. And then, if I can sneak one more in, the new non-op wells that you guys elected to participate in that popped up in East Texas, obviously, gas prices are not tremendously high right now, but I assume they kind of met your hurdle rate. But just kind of wondering, you know, what your assessment is, is this kind of setting up a potential longer-term capital allocation potential in East Texas, or is this just a couple maybe one-offs where you guys just kind of wanted to participate and kind of get a look at what these well economics could be down the road?

Jeff Grant: Okay, great. And then if I can sneak one more in, the new non-op wells that you guys elected to participate in that popped up in East Texas, obviously, you know, gas prices are not tremendously high right now, but I assume they kind of met your hurdle rate. But just kind of wondering, you know, what your assessment is, is this kind of setting up a potential longer-term capital allocation potential in East Texas, or is this just a couple maybe one-offs where you guys just kind of wanted to participate and kind of get a look for what these well economics could be down the road?

Speaker Change: okay great and then i sneak one more in the new nonup wells you ys elected to participate in that popped up in these texas

Martyn Willsher: Obviously, gas prices are not tremendously high right now, but I assume they kind of met your hurdle rate.

Martyn Willsher: kind of wondering know what what your assessment is is this kind of setting up a potential longer term capital allocation potential any these texas or is it just a couple maybe one -offs where you ys justkind wanted to participate and kind of get a look for what these economics could be down the road

Martyn Willsher: So I think it's a combination of both. But, you know, I'll say that, you know, Hainesville's been, you know, obviously, a perspective in our area, but the activity keeps getting closer and closer now is obviously on our acreage. And we have a meaningful amount of Hainesville acreage that is now in perspective. And obviously, we want to, you know, learn firsthand, especially as we look to decide what to do with it. We have some contiguous acres where you could have an entirely different drilling program.

Martyn Willsher: So I think it's a combination of both, but, you know, I'll say that, you know, the Hainesville has been, you know, obviously, perspective in our area, but the activity keeps getting closer and closer now is obviously on our acreage. We have a meaningful amount of Hainesville acreage that is now perspective, and obviously we want to, you know, learn firsthand, especially as we look to decide what to do with, we have some contiguous acres where you could have an entirely different drilling program and, you know, whether we want to partner up or do something different with some of those acres.

Martyn Willsher: So I think it's a combination of both. But, you know, I'll say that, you know, Hainesville's been, you know, obviously a perspective in our area, but the activity keeps getting closer and closer now is obviously on our acreage. And we have a meaningful amount of Hainesville acreage that is now prospective. And obviously, we want to, you know, learn firsthand, especially as we look to decide what to do with it. We have some contiguous acres where you could have an entirely different drilling program.

Martyn Willsher: so i think into a combination of both but you know i'll say that you know the hainstill been you know obviously perspective in our area but the activity keeps getting closerandcloser now is obviously allin our acreage and we have

Martyn Willsher: meaningful amount of Haynesville acreage that is now

Martyn Willsher: perspective.

Martyn Willsher: And, obviously, we want to, you know, learn firsthand, especially as we look to decide what to do with, we have some contiguous acres where you could have an entirely different drilling program, and, you know, whether we want to partner up or do something different with some of those acres. And so this is an opportunity to learn more while participating in a kind of a lower risk kind of 25% working interest level. But we do have some interesting opportunities now in Haynesville, and obviously, yes, gas prices are low. They're, you know, forecasted to be better next year. But even with where they're currently projected, we feel comfortable with the returns.

Martyn Willsher: And, you know, whether we want to partner up or do something different with some of those acres. And so this is an opportunity to learn more while participating in a kind of a lower risk, kind of a 25 percent working interest level. But we do have some interesting opportunities now in Hainesville. And, obviously, yes, gas prices are low. They're forecasted to be better next year, but even with where they're currently projected, we feel comfortable with the returns.

Martyn Willsher: And like I said, we like understanding what our optionality is going to be down the road in this area, which is, like I said, an area which could increase in importance to us for 25 and beyond.

Martyn Willsher: And like I said, we like understanding what our optionality is going to be down the road and in this area, which is, like I said, an area which could increase in importance to us for 25 and beyond.

Martyn Willsher: And, like I said, we like understanding what our optionality is going to be down the road in this area, which is, like I said, an area which could increase in importance to us for 25 and beyond.

Jeff Grant: Okay, sounds good. Thank you guys for the time.

Jeff Grampp: Okay, sounds good. Thank you guys for the time.

John White: Thank you. And our next question comes from John White with Roth Capital.

Operator: Thank you. And our next question comes from John White with Roth Capital.

Jeff Grampp: Thank you, Jeff.

John White: Thank you. And our next question comes from John White with Roth Capital.

John White: Good morning and congratulations on a strong quarter and getting your bids in on the bear oil property. You mentioned several times maximizing shareholder value, assuming a closed, excuse me, assuming a closing and a robust amount of sale proceeds from barrel. Do you have a preference at this time? for capital returns would it be? Ah! instituting a stock buyback or initiating a stock dividend program.

John White: Good morning and congratulations on a strong quarter and getting your bids in on the bare oil property. You mentioned several times maximizing shareholder value. Assuming a closed transaction and a robust amount of sale proceeds per barrel, Do you have a preference at this time for capital returns? Ah! instituting a stock buyback or initiating a stock dividend program.

John White: Good morning and congratulations on a strong quarter and getting your bids in on the bare oil property. You mentioned several times maximizing shareholder value. Assuming a closed transaction and a robust amount of sale proceeds from each barrel, Do you have a preference at this time? For capital returns, would it be?

John White: You mentioned several times maximizing shareholder value. Assuming a closing and a robust amount of sale proceeds from barrel

Speaker Change: Do you have a preference at this time?

Speaker Change: for capital returns, would it be?

John White: instituting a stock buyback or initiating a stock dividend program.

Martyn Willsher: Yeah, so let me kind of take both parts of that. So obviously, when you're in an active discussion, you know, we have to be very careful about what information we disclose. And so I'm sure, well, we'd love to kind of say more that we, you know, we have, you know, the option to sell it outright, the option to potentially monetize it partially, or the option to just hold it if we think that's what's best for the company a longer term.

Martyn Willsher: Yeah, so let me kind of take both parts of that. Obviously, when you're in an active discussion, you know, we have to be very careful about what information we disclose. And so I'm sure, well, we'd love to kind of say more than we can, you know, we have the option to sell it outright, the option to potentially monetize it partially, or the option to just hold it, if we think that's what's best for the company longer term.

Speaker Change: Yeah, so let me kind of take both parts of that. So, obviously, when you're in an active discussion, you know, we have to be very careful about what information we disclose. And so I'm sure, well, we'd love to kind of say more that we, you know, we have

Speaker Change: the option to sell it out right of the option to potentially monetize it partially or the auction to just hold it if we think that's what's best for the company longer term so

Martyn Willsher: So that's all in, like I said, that's a process that's currently still very active. And, you know, we can only provide the updates once they're more definitive. At the same time, in terms of capital returns, you know, I always say that this is going to be kind of dependent on what we see at the time. In the past, we've done both dividends and stock buybacks. So both of those are certainly on the table.

Speaker Change: That's all in, like I said, that's a process that's currently...

Speaker Change: still very active and you know we can only provide the updates you know once they're more definitive at the same time in terms of capital returns you know i always say that this is going to be kind of

Speaker Change: dependent on what we see at the time. In the past we've done, you know, both dividends and stock buybacks.

Speaker Change: So both of those are certainly on the table. It could be one or the other, it could be a combination of both.

Martyn Willsher: It could be one or the other; it could be a combination of both. So, you know, whether we accelerate that by monetizing the barrel in some way, or whether we do it through, you know, cash flow generation, which will pick up considerably in Q4 and beyond, where we'll evaluate both of those options at the appropriate time. But at this point, it'd be inappropriate for me to basically speculate on what the board will decide to do at that time. All right.

John White: So...

Speaker Change: you know, whether we accelerate that by...

Speaker Change: monetizing in some way barrel or whether we do it through you know cash flow generation which will pick up

Speaker Change: considerably in Q4 and beyond, where we'll evaluate both of those options at the appropriate time. But at this point, it would be inappropriate for me to basically speculate on what the board will decide to do at that time.

John White: I understand your constraints in your communication, and thanks for addressing it. I'll turn the call back.

Speaker Change: I understand your constraints in your communication, and thanks for addressing it. I'll turn the call back.

Operator: Thank you. And we will take our next question from Subhas Chandra on Benchmark.

Operator: Thank you, and we will take our next question from Subhash Chandra with Spinch Mart.

John White: job

John White: Thank you. And we will take our next question from Subhas Chandra with Benchmark.

Subhash Chandra: Yes, thanks. Yes, congrats to our family, you know, showing the value of beta. With the cycle times pretty much what you expected on the A50 or what was it faster?

Subhasish Chandra: Yeah, thanks. Yeah, congrats, too, on finally showing the value of beta. Were the cycle times pretty much what you expected on the A50, or was it faster?

Speaker Change: Yeah, thanks. Yeah, congrats, too, on finally, you know, showing the value of beta. Were the cycle times pretty much what you expected on the A50, or was it faster?

Martyn Willsher: It's about what's expected. Drilling complete time is less than a month. Every well out here is a little different. Some will take a little longer than this one did, some will take a little shorter. But every well we currently are looking at in our inventory should be less than a month if the drilling...

Dan Furbee: It's about what's expected. Drilling complete time, we expect less than a month. Every well out here is a little different. Some will take a little longer than this one did. Some will take a little shorter. But every well we currently are looking at in our inventory should be less than a month if the drilling goes as we expect it to.

Martyn Willsher: It's about what's expected. Drilling complete time, we expect less than a month. Every well out here is a little different. Some will take a little longer than this one did. Some will take a little shorter. But every well we currently are looking at in our inventory should be less than a month if the drilling is completed.

Subhash Chandra: Got it. Okay. So, you know, I think back to maybe a question that Jeff had asked, you know, so I guess with the Haynesville play, you want to take a look, and maybe this is a cost-effective way of taking a look at what the value of the acreage is. Or it could have been, you know, arguably two more, you know, California wells, right? So how did that sort of, you know, value proposition, how do you sort of walk through that?

Martyn Willsher: I got it. Okay. So, you know, I think back to maybe a question that Jeff had asked, you know, so I guess with the Haynesville play, you want to take a look, and maybe this is a cost-effective way of taking a look at what the value of the acreage is, or it could have been, you know, arguably two more California wells, right? So how did that sort of, you know, value proposition, how do you sort of walk through that?

Subhasish Chandra: Got it. Okay.

Martyn Willsher: places we expect it to.

Martyn Willsher: Got it. Okay. So, you know, I think back to maybe a question that Jeff had asked, you know, so I guess with the Haynesville play, you want to take a look, and maybe this is a cost-effective way of taking a look at what the value of the acreage is.

Martyn Willsher: So, you know, I think back to maybe a question that Jeff had asked. You know, so I guess with the Haynesville play, you want to take a look, and maybe this is a cost-effective way of taking a look at what the value of the acreage is. Or it could have been, you know, arguably two more California wells, right? So how did that sort of, you know, value proposition, how do you sort of walk through that?

Martyn Willsher: or it could have been, you know, arguably two more, you know, California wells, right? So, how did that sort of, you know, value proposition, how do you sort of walk through that?

Martyn Willsher: Yeah, I don't think our ultimate constraint on California is going to be capital. I think, obviously, with the quick payback of these wells, we have the ability to ramp up if it makes sense to do so. And so that's something that, like I said, will obviously be cognizant of capital allocation. But with the free cash flow we're generating, like I said, more so starting in the fourth quarter, I think we'll have optionality there to both participate in Haynesville, if that makes sense.

Martyn Willsher: Yeah, I don't think our ultimate constraint on California is going to be the capital. I think obviously with the quick payback of these wells, we have the ability to ramp up if it makes sense to do so. And so that's something that, like I said, will obviously be cognizant of capital allocation. But with the free cash flow we're generating, like I said, more so starting in the fourth quarter, I think we'll have optionality there to both participate in the Haynesville, if that makes sense.

Martyn Willsher: Yeah I don't think our ultimate constraint on California is going to be you know the capital. I think obviously with the quick payback of these wells you're

Martyn Willsher: You know, we have the ability to ramp up if it makes sense to do so.

Martyn Willsher: and so that's something that i said we willll obviously be cog with in our capital allocation but with the free cash low we're generating likeike said

Martyn Willsher: more so starting in the fourth quarter, I think we'll have optionality there too.

Martyn Willsher: But also if we decide to go a little faster and increase activity in California, we can do that as well. So I don't think one precludes the other. You've got to kind of take advantage of opportunities as they come up. And so we're going to We're also full speed ahead right now and obviously on beta with the next two wells coming up right after, you know, in this quarter and should be online before our next call.

Martyn Willsher: both participate in the Haynesville, if that makes sense, but also if we decide to go a little faster and increase activity in California, we can do that as well.

Martyn Willsher: But also, if we decide to go a little faster and increase activity in California, we can do that as well. So I don't think one precludes the other. It's, you know, you've got to kind of take advantage of opportunities as they come up. And so we're going to...

Speaker Change: Thank you.

Martyn Willsher: I don't think one precludes the other. It's, you know, you've got to kind of take advantage of opportunities as they come up.

Martyn Willsher: So I don't think one precludes the other. It's, you know, you've got to kind of take advantage of opportunities as they come up. And so we're going to We're also full speed ahead right now and obviously on beta with the next two wells coming up right after this quarter and should be online before our next call.

Martyn Willsher: We're also full speed ahead right now and obviously on beta with the next two wells coming up right after, you know, in this quarter and should be online before our next call.

Martyn Willsher: Okay, yeah, no, that makes sense. I mean, you know, I guess the acceleration. Let's say a significant acceleration. Would that be because you have a lot of free cash flow coming for sure, but then you have these monetization events that are, you know, potential. Do we need both to sort of see a material acceleration in California and understand that you're walking through the results of the wells, but let's say they all come out looking like 850. Do you need both to occur, or do you think you can materially accelerate just through organic free cash?

Subhash Chandra: Okay, yeah. No, that makes sense.

Speaker Change: Okay, yeah. No, that makes sense. I mean, you know, I guess the acceleration...

Martyn Willsher: I mean, you know, I guess, the acceleration, um... Let's say a significant acceleration. Would that be, because you have a lot of free cash flow coming for sure, but then you have these monetization events that are, you know, potential. Do we need both to sort of see a material acceleration in California and understanding that you're walking through the, you know, the results of the wells, but let's say they all come out looking like 850. Do you need both to occur or do you think you can materially accelerate just through organic free cash?

Speaker Change: Let's say a significant acceleration, would that be, because you have a lot of free cash flow coming for sure, but then you have these monetization events that are, you know, potential.

Speaker Change: Do we need both to sort of see a material acceleration in California and understanding that you're walking through the you know the results of the wells but let's say they all come out looking like 850. Do you need both to occur or do you think you can materially accelerate just through organic free cash flows?

Martyn Willsher: I think we can clearly see that even if you doubled activity levels in 2025, just as an example, I think we have more than sufficient organic free cash flow to do that. You know, the infrastructure project at Beta has obviously doubled a lot of that free cash through and will continue to through the third quarter, which is why we've talked about, you know, how the fourth quarter is really where we'll start to generate more of a go forward free cash flow.

Martyn Willsher: I think we can clearly, you know, even if you doubled activity levels in 2025, just as an example, I think we have more than sufficient organic free cash flow to do that. You know, the infrastructure project at Beta has obviously doubled a lot of that free cash through and will continue to through the third quarter, which is why we've talked about, you know, how the fourth quarter is really where we'll start to generate more of a go forward free cash flow look.

Martyn Willsher: I think we can clearly or you know even if you doubled activity levels in 2025 just as an example I think

Martyn Willsher: We have more than sufficient organic free cash flow to do that. You know, the infrastructure project at Beta has obviously...

Speaker Change: up a lot of that that free cash through and will continue to through the third quarter Which is why we've talked about you know How the fourth quarter is really where we'll start to generate more of a go forward free cash flow look

Martyn Willsher: But that is also impactful from a full fixed cost perspective on that platform. So it will also, once again, kind of increase the cash flow off the Beta assets, not just from the development side but also from the cost side going forward. And so it's much more meaningful in the fourth quarter and beyond, like I said, so I don't think it's impeding us. It's not going to be the constraint to a faster program if that's what we choose to do. Got it. Yeah, so it's

Martyn Willsher: You know, the data is also impactful from a full fixed cost perspective on that platform. So it will also, once again, kind of increase the cash flow off the Beta assets, not just from the development side, but also reducing the cost side going forward. And so it's much more meaningful in the fourth quarter and beyond, like I said, so I don't think it's impeding us. It's not going to be the constraint to a faster program if that's what we choose to do. Got it. Yeah, so it's

Speaker Change: you knowthat' but that a is also impactful from a full fixed cost perspective

Martyn Willsher: on that platform so it will also

Martyn Willsher: once again, kind of increase the cash flow off the beta the assets, not just from the development side, but also reducing the cost side going forward. And so there are

Martyn Willsher: It's much more meaningful in the fourth quarter and beyond, like I said, so I don't think it's impeding us. It's not going to be the constraint to a faster program if that's what we choose to do.

Martyn Willsher: Got it. Yeah, so it's that operating leverage that we really should begin to see in the fourth quarter with the four well zones.

Subhasish Chandra: Got it. Yeah, so it's that operating leverage that we should really begin to see in the fourth quarter with the four well zone.

Martyn Willsher: Got it. Yeah, so it's that operating leverage that we really should begin to see in the fourth quarter with the four wells on.

Subhasish Chandra: Yeah, I guess that wasn't a question. All right. Thanks, guys. Thank you.

Subhash Chandra: Yeah, I guess that wasn't a question. All right. Thanks, guys. Thank you.

Martyn Willsher: that

Speaker Change: Yeah, I guess that wasn't a question. All right, thanks guys. Thank you.

Operator: Thank you. And we will take our next question from Jeff Robertson with Water Tower Research. Thank you.

Operator: And we will take our next question from Jeff Robertson with Water Tower Research. Thank you.

Martyn Willsher: Thank you. And we will take our next question from Jeff Robertson with Water Tower Research.

Operator: Thank you.

Jeff Robertson: Thank you. Martin, following up on where you ended that, can you talk at all, or can you provide some color on where you think L.O.E. in beta will go with the electrification and the additional volume?

Jeff Robertson: Thank you. Martyn, following up on where you ended that, can you talk at all or can you provide some color on where you think LOE in beta will go with the electrification and the additional volumes?

Operator: Thank you. Martyn, following up on where you ended that, can you talk at all or can you provide some color on where you think LOE in beta will go with the electrification and the additional volumes?

Dan Furbee: Hi, this is Dan. LOE and Beta, yeah, as we finish this project, and this project is about several things, redundancy, it will lower LOE, and it's required by the air quality standards by the South Coast Air Quality District in Southern California. But, you know, what this will do for us, it will reduce essentially all of our diesel usage in California from an operating standpoint, and it should reduce overall power costs.

Dan Furbee: Yeah, hi, this is Dan. LOE and Beta, yeah, as we finish this project, and this project is on several things, it's redundancy, it will lower LOE, and it's required by the air quality standards by the South Coast Air Quality District in Southern California. But what this will do for us, it will reduce essentially all of our diesel usage in California from an operating standpoint, and it should reduce overall power costs. And a big part of our LOE right now is, in addition to diesel with beta, we have to buy NOx credits, emission credits, to offset our NOx emissions. After this project, NOx emissions will be almost non-existent, so we'll save those costs as well. So we expect next year to see a sizable reduction in total beta LOE once this project is fully

Operator: Hi, this is Dan. LOE and Beta, yeah, as we finish this project, and this project is on several things, it's redundancy, it will lower LOE, and it's required by the air quality standards by the South Coast Air Quality District in Southern California.

Operator: But, you know, what this will do for us, it will reduce essentially all of our diesel usage in California from an operating standpoint.

Dan Furbee: And a big part of our LOE right now is, in addition to diesel with beta, we have to buy NOx credits, emission credits, to offset our NOx emissions. After this project, NOx emissions will be almost non-existent, so we'll save those costs as well. So we expect next year to see, you know, a sizable reduction in total beta LOE once this project is fully implemented.

Operator: and it should reduce overall power costs and a big part of allo we right now is in addition the diesel of beta we have to buy knockx credit mission credits to offset are not submissions

Speaker Change: After this project, NOx emissions will be almost non-existent, so we'll save those costs as well. So we expect next year to see, you know, a sizable reduction in total beta LOE once this project is fully completed.

Jeff Robertson: I think, Dan, in the second quarter, LOE and beta was just short of $43, excuse me, per BOE. Do you know where that could go? I think you were at $34 a BLE in the 4th quarter of 24. I'm sorry 23.

Dan Furbee: I think, Dan, in the second quarter, LOE and beta were just short of $43, excuse me, per BOE. Do you know where that could go? I think you were at $34 a BOE in the fourth quarter of 24, sorry, 23.

Operator: I think, Dan, in the second quarter, LOE and beta was just short of $43, excuse me, per BOE.

Speaker Change: Do you know where that could go? I think you were at $34 a BOE in the fourth quarter of 24, I'm sorry, 23.

Dan Furbee: Yeah, and quarter by quarter it's going to jump around some as, you know, part of our LOE as well is work over expenses. So, in addition to drilling wells, our rig crews out there, we have to pull ESPs different times and they fail throughout the year. So, depending if we're doing expense work overs or drilling wells within a certain quarter, that will move that LOE number up and down. But we'll have more information as we get further in the year as to what our LOE is going to look like on a total absolute basis of beta and on a unit basis like you're talking about here for next year. But we expect to be

Dan Furbee: Yeah, and quarter by quarter, it's going to jump around some as, you know, part of our LOE as well is work over expenses. So, in addition to drilling wells, our rig crews out there, we have to pull ESPs at different times, and they fail throughout the year. So, depending on whether we're doing expense workovers or drilling wells within a certain quarter, that will move that LOE number up and down. But we'll have more information as we get further in the year as to what our LOE is going to look like on a total absolute basis of beta and on a unit basis like you're talking about here for next year. What we expect to be trending.

Dan Furbee: gic

Dan Furbee: Yeah, and quarter by quarter it's going to jump around some as, you know, part of our LOE as well is work over expenses. So in addition to drilling wells, our rig crews out there, we have to pull ESPs different times and they fail throughout the year. So depending if we're doing expense work overs or drilling wells within a certain quarter, that will move that LOE number up and down.

Dan Furbee: But we'll have more information as we get further in the year as to what our LOE is going to look like on a total absolute basis of beta and on a unit basis like you're talking about here for next year.

Jim Frew: Jeff, the other thing i would add to that you know as we ramp up bonds, you're talking per B.O.E. So as we ramp volumes with the drilling program our costs are generally fixed out here So our per B.O.E. costs are going to come down increase our volumes. So again, we'll have more on this coming forward, but I think that the story is generally a positive.

Jim Frew: Jeff, the other thing I would add to that, this is Jim, is as we ramp up volumes, you're talking per BOE, right? So as we ramp up volumes with the drilling program, our costs are generally fixed out here, so our per BOE costs are going to come down as we increase our volumes. So again, we'll have more on this coming forward, but I think that the story is generally a positive one.

Dan Furbee: will we expect to be trending down? Jeff, the other thing I would add to that, this is Jim, is as we ramp up volumes, you're talking per BOE, right? So as we ramp volumes with the drilling program, our costs are generally fixed out here, so our per BOE costs are going to come down as we...

Martyn Willsher: be trending now, and increase our volumes. So again, we'll have more on this coming forward, but I think that the story is generally a positive one.

Martyn Willsher: increase our volumes. So again, we'll have more on this coming forward, but I think that the story is generally a positive one.

Martyn Willsher: Right, costs come down, and margins go up.

Jeff Robertson: Right, costs come down, and margins go up. Jim, on the RBL's redetermination in the fall, I think before EDA went offline, the borrowing base was $225 to $240 million. With the bear oil sale and having beta on in the development, can you give any color on where you think an RBL might be after the redetermination and what that will do just for the liquidity on paper?

Jeff Robertson: Right, costs come down and margins go up. Jim, on the RBL's redetermination in the fall, I think before EDA went offline, the borrowing base was $225 to $240 million, with the bear oil sale and having beta on in the development. Can you give any color on where you think an RBL might be after the re-determination and what that will do just for the liquidity on paper?

Martyn Willsher: Right, costs come down and margins go up.

Martyn Willsher: Thread.

Speaker Change: Jim, on the RBL redetermination in the fall, I think before ADEL went offline, the borrowing base was $225 to $240 million.

Speaker Change: with the bar oil sale and having betatta on in the development can you give any color on where you think an rbl might be after the redetermination and what that will do just for the liquidity on paper

Martyn Willsher: So like Martyn said, right, I think it's a little bit early to speculate in terms of the barrel of monetization and what that may do, so it makes it a little difficult to answer your question. That being said, right, we are generating free cash flow, so there's not a huge need for us to increase the size of the facility today. I think, but again, as we add reserves and as we add value, we will have the option to do that, assuming our lenders are supportive. So from our perspective, it's not a major concern right now and, kind of similar to what I just said, there is more upside than not.

Jim Frew: So, like Martyn said, right, I think it's a little bit early to speculate in terms of the barrel of monetization and what that may do, so it makes it a little difficult to answer your question. That being said, right, we are generating free cash flow, so there's not a huge need for us to increase the size of the facility today. I think, but again, as we add reserves and as we add value, we will have the option to do that, assuming our lenders are supportive.

Jim Frew: So like Martyn said, right, I think it's a little bit early to speculate in terms of the barrel of monetization and what that may do, so it makes it a little difficult to answer your question. That being said, right, we are generating free cash flow, so there's not a huge need for us to increase the size of the facility today. I think, but again, as we add reserves and as we add value, we will have the option to do that, assuming our lenders are supportive.

Martyn Willsher: So like Martyn said, right, I think it's a little bit early to speculate in terms of the barrel of monetization and what that may do. So it makes it a little difficult to answer your question.

Martyn Willsher: that being said right we are generating free cash flow so 's there's not a huge need for us to increase the size of the facility

Martyn Willsher: today. I think but again as we add reserves and as we add value we will have the option to do that assuming our lenders are supportive. So from our perspective it's not a major concern right now and again kind of similar to what I just said more more upside than not.

Jim Frew: So from our perspective, it's not a major concern right now, and again, kind of similar to what I just said, more upside than not as we continue to do things at Beta. Yeah, I'll just add that, you know, the barrel.

Jim Frew: So from our perspective, it's not a major concern right now, and again, kind of similar to what I just said, more upside than not, as we continue to do things at beta. Yeah, I'll just add that, you know, the barrel.

Martyn Willsher: Yeah, I'll just add that, you know, the barrel facility does not meaningfully impact the credit facility. So, and our barring base is higher than our committed capital, so, you know, there's, Selling it wouldn't have a huge impact on the availability of the credit facility, and obviously, whatever you sold it for or monetized it for would obviously be incremental liquidity. Once again, given the nature and status of our discussions, we're not alluding to whether or not we're going to transact on it or not at this point. We just want to make sure that we're, like I said, open to all opportunities.

Martyn Willsher: Yeah, I'll just add that, you know, the barrel. The credit facility does not meaningfully impact the credit facility, so, and our barring base is higher than our committed capital, so, you know, there's, Selling it wouldn't have a huge impact on the availability of the credit facility and obviously so whatever you sold it for, monetized it for, would obviously be incremental liquidity. Once again, given the nature and status of our discussion, we're not alluding to whether or not we're going to transact on it or not at this point. We just want to make sure that we're, like I said, open to all opportunities.

Speaker Change: as we continue to do things at Beta. Yeah, I'll just add that, you know, the Beryl

Martyn Willsher: facility does not meaningfully impact the credit facility so and our barring base is higher than our committed capital and so you know there's

Speaker Change: Selling it wouldn't have a huge impact on the availability of...

Martyn Willsher: of

Speaker Change: the, you know, the credit facility and obviously, so whatever you...

Speaker Change: Sold it for, monetized it for, would obviously be incremental liquidity once again, you know, where

Martyn Willsher: Given the nature and status of our discussions, we're not alluding to whether or not we're going to transact on it or not at this point. We just want to make sure that we're, like I said, open to all opportunities.

Operator: Thank you. It appears that we have no further questions at this time. I will now turn the program back to our presenters for closing remarks.

Speaker Change: Thank you. It appears that we have no further questions at this time. I will now turn the program back to our presenters for closing remarks.

Martyn Willsher: With that, I'd just like to say thank you to all of our employees for their outstanding efforts and dedication this year. And I'd also like to express my appreciation to all of our stakeholders for their continuing support. We appreciate you all participating in our call today. And, as always, if you have any other follow-up questions, please don't hesitate to reach out directly to us. Thank you, everyone. Thank you. This does conclude today's Amplify Energy second quarter 2024 investor conference call. Thank you for your participation. You may disconnect at any time.

Operator: ...

Martyn Willsher: Thank you. With that, I'd just like to say thank you to all of our employees for their outstanding efforts and dedication this year, and also like to express my appreciation to all of our stakeholders for their continuing support. We appreciate you all participating in our call today, and as always, if you have any other follow-up questions, please don't hesitate to reach out directly to us. Thank you, everyone.

Speaker Change: Thank you. With that, I'd just like to say thank you to all of our employees for their outstanding efforts and dedication this year, and I'd also like to express my appreciation to all of our stakeholders for their continuing support. We appreciate you all participating in our call today, and as always, if you have any other follow-up questions, please don't hesitate to reach out directly to us. Thank you, everyone.

Operator: Thank you. This does conclude today's Amplify Energy second quarter 2024 investor conference call. Thank you for your participation. You may disconnect at any time.

Speaker Change: Thank you. This does conclude today's Amplify Energy's second quarter 2024 investor conference call. Thank you for your participation. You may disconnect at any time.

Operator: Thank you. This does conclude today's Amplify Energy second quarter 2024 investor conference call. Thank you for your participation. You may disconnect at any time.

Operator: This is a Telegraph Program program. We're happy to answer any questions you may have. Thank you. This is a Telegraph Program program. We're happy to answer any questions you may have.

Martyn Willsher: The cumulative reduction received to date from this well continues to exceed the upper band of our expectations, which were based on a limited subset of analogous wells previously drilled up to beta platforms. With the results of the A50 and comparable results from future development wells, we would anticipate increasing our expectations for undeveloped well productivity. In addition, it is important to note that our current SEC proof reserves of beta only include the four wells we plan to drill in 2024.

Daniel Furbee: We are on schedule to complete this multi-year project in the fourth quarter of this year, which will lower operating expenses by reducing diesel usage and emission credit purchases, increase redundancy across our operations, and bring us in line with regional fair quality standards. We continue the third and final phase of the electrification and emission reduction project.

Martyn Willsher: So that's all in, like I said, that's a process that's currently still very active. And, you know, we can only provide the updates, you know, once they're more definitive. At the same time, in terms of capital returns, you know, I always say that this is going to be kind of dependent on what we see at the time. In the past, we've done, you know, both dividends and stock buybacks.

Martyn Willsher: As strategic initiatives highlighted on our previous calls, we received multiple bids for both an outright sale and partial monetization of our barrel assets following a comprehensive marketing process. The company, working with its advisors, continues to actively evaluate these proposals and will provide updates as they become available. The company is committed to assuming the path of the latest will maximize shareholder value. At beta, we continue to rate progress in our 2024 development program. Dan will provide more details in a moment, but will your police renounce that we successfully threw and brought online the A50 well in early June with very strong results?

Martyn Willsher: And so this is an opportunity to learn more while participating in a kind of a lower risk, kind of 25% working interest level, but we do have some interesting opportunities now in Hainesville. Obviously, yes, gas prices are low. They're, you know, forecasted to be better next year, but even with where they're currently projected, we feel comfortable with the returns. And like I said, we like understanding what our optionality is going to be in down the road in this area, which is, like I said, an area which could increase the importance to us for 25 and beyond. Okay.

Martyn Willsher: So both of those are certainly on the table. It could be one or the other. It could be a combination of both. So, you know, whether we accelerate that by monetizing in some way barrel, or whether we do it through, you know, cash load generation, which will pick up considerably and keep foreign beyond, where we'll evaluate both of those options at the appropriate time. But at this point, be inappropriate for me to basically speculate on what the board will decide to do at that time. All right.

Operator: [inaudible] James Frew, James Frew, James Frew.

Martyn Willsher: With continued success, we have a substantial number of additional development locations that we may add to our proof reserve inventory. The combination of increased productivity forecasts and additional locations has the potential to materially impact the value of our beta reserves and demonstrate the strategic value of this prolific asset. In summary, we continue to focus on optimizing future cash flow generation by pursuing our strategic initiatives at Beryl and Beta and capitalizing on incremental, non-operated investment opportunities in East Texas and Eagleford. We believe this strategy will unlock the full potential of Amplify's diverse portfolio of assets and deliver substantial benefits and long-term value to our shareholders. With that, I will hand it over to Dan. Thank you.

Q2 2024 Amplify Energy Corp Earnings Call

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