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    Amplify Energy (AMPY)

    AMPY Q3 2024: Capital Return in 2025 as Haynesville Sale Nears

    Reported on Jun 19, 2025 (After Market Close)
    Pre-Earnings Price$6.87Last close (Nov 7, 2024)
    Post-Earnings Price$6.87Open (Nov 8, 2024)
    Price Change
    $0.00(0.00%)
    • Beta Field Development Upside: The Q&A highlights that Amplify has 4 PUDs booked this year with significant potential to add derisked locations into reserves, supporting a robust long-term development program extending into 2025–2029.
    • Improving Drilling Economics: Executives emphasized that drilling costs are expected to remain within the $5–$6 million range with opportunities to drive cost efficiency further by avoiding tool failures and optimizing operations, which could enhance overall margins.
    • Monetization of East Texas Assets: The discussion pointed to upcoming monetization of the Haynesville acreage, with expected transactions potentially generating several million dollars while retaining non-operated interest—a move that could strengthen cash flow and balance sheet flexibility.
    • Drilling risks and cost overruns: The call highlighted that wells such as C-59 have experienced extra drilling days and tool issues, jeopardizing the cost targets and potentially hurting margins.
    • Limited near-term reserve additions: With only 4 PUDs booked for the current year and uncertainty over the exact number of derisked locations, the development pipeline may not support substantial near-term production growth.
    • Uncertain capital return timing: The ambiguity around the trigger for capital return—in particular, the reliance on lowering bank utilization below a moving target—introduces uncertainty regarding when shareholders might see distributions.
    1. Capital Return
      Q: When will capital be returned?
      A: Management anticipates a return of capital in 2025 once bank utilization drops below about $100 million and development pace is balanced, signaling sustainable free cash flow generation.

    2. Haynesville Monetization
      Q: Timing and value of Haynesville monetization?
      A: Opportunities on Haynesville acreage are expected to materialize soon – likely by mid‐Q1 – with potential proceeds in the range of several million dollars.

    3. Well Costs
      Q: What drove the second well’s cost increase?
      A: Extra drilling days and technical challenges pushed costs to about $5.9 million, yet management remains comfortable with a $5–$6 million range if operations run smoothly.

    4. PUD Derisking
      Q: How many derisked PUD locations exist?
      A: Although specific numbers aren’t called out, management noted they only have 4 PUDs booked this year, with expectation of additional derisked locations coming online for a broader development program.

    5. Permits at Beta
      Q: How many permits are at Beta?
      A: There are currently between 7 and 10 permits already in place, with more expected to be added as development plans progress.

    6. Non-Op AFEs
      Q: What is the near-term outlook for AFEs?
      A: Non-operated proposals are expected to be submitted in the next 6–9 months, although precise activity levels for 2025 remain uncertain.

    7. Exit Rate
      Q: What exit rate is expected at year-end?
      A: Management foresees a modest decline from initial production – a pattern supported by historical performance and waterflood injection – yielding a relatively stable exit rate.

    8. Bottom Hole Pressure
      Q: Why was the second well produced with high bottom hole pressure?
      A: The pump was set high deliberately to avoid casing issues in unconsolidated sands, a precaution that will be adjusted after initial production to boost flow.

    Research analysts covering Amplify Energy.