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Amplify Energy Corp (NYSE: AMPY) is an independent oil and natural gas company headquartered in Houston, Texas. Founded in 2017, the company focuses on the acquisition, development, exploitation, and production of oil and natural gas properties across Oklahoma, the Rockies (Bairoil, Wyoming), federal waters offshore Southern California (Beta), East Texas/North Louisiana, and a non-operated interest in the Eagle Ford.
Corporate Structure and Workforce
Amplify Energy employs approximately 230 people and operates several subsidiaries, including Beta Operating Company LLC and San Pedro Bay Pipeline Company. Its asset base comprises about 1,000 oil wells and 1,500 natural gas wells. The company uses hydraulic fracturing and COâ/water injection in onshore wells, while fracking is prohibited or restricted in its Beta offshore unit as per a court order.
Oil Production by Patrick Hendry
Recent Developments and News
- September 26, 2023: AMPY shares closed at $6.8115, reflecting a 16.64% increase on a trading volume of 197,753 shares, attributed to investor interest amid fluctuations in energy prices and regulatory updates.
- October 1â2, 2021: An offshore pipeline leak resulted in the discharge of approximately 25,000 gallons of crude oil into San Pedro Bay. Federal investigators cited delayed notifications and a negligent response to leak alarms.
- December 15, 2021: Amplify Energy Corp, Beta Operating Company LLC, and San Pedro Bay Pipeline Company were indicted for negligent discharge of oil under the Clean Water Act.
- August 26, 2022: Proposed plea agreements were filed, indicating a collective $7.1 million federal criminal fine and $5.8 million in compensations for environmental programs, along with four years of probation subject to compliance measures.
- Probation Period: Subject to court approval, the companies are under probation until late 2026, implementing pipeline integrity audits and environmental safeguards.
Financial and Strategic Analysis
Amplify Energyâs strategic focus emphasizes diversified basins and a combination of onshore and offshore operations. In 2019, the company merged with a wholly owned subsidiary, Midstates Petroleum, and terminated its Section 12(b) registration, streamlining its corporate structure under Amplify Energy Holdings LLC. Key considerations include:
- Commodity Exposure: Revenue and cash flow are sensitive to fluctuations in oil and natural gas prices, which can be influenced by market cycles.
- Capital Allocation: Current capital expenditures are directed toward well optimization, water injection projects, and pipeline maintenance to manage environmental risks.
- Regulatory Compliance: Limited wastewater reinjection permits in Oklahoma and ongoing litigation related to the 2021 spill have increased compliance costs and operational oversight.
Market Position and Industry Context
Within the Energy sectorâs Oil & Gas Equipment & Services industry, Amplify Energy is categorized as a small-to-mid-cap operator. It competes with larger exploration and production companies by utilizing niche offshore assets and non-operated onshore positions. Industry dynamicsâincluding environmental regulations, supply chain factors for drilling services, and changes in global demandâimpact Amplifyâs capital discipline and production strategies.
tl;dr
On September 26, 2023, AMPY shares increased by 16.64% to $6.8115 amid elevated trading volume. The company is under a four-year probation period until late 2026 following the 2021 pipeline leak and associated penalties totaling $13 million. Investors are monitoring commodity prices and compliance milestones as significant factors influencing the stock's performance.
