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Thursday, May 26, 2022

Amplify Energy Corp. (AMPY) Stock Plummets Ahead of Potential Oil Spill

Amplify Energy Corp. (AMPY) stock prices were up by 8.08% as of the market closing on October 1st, 2021. This brought the price per share up to USD$5.75 at the end of the trading day. Subsequent premarket fluctuations saw the stock plummet by 26.43%, bringing it down to USD$4.23.

AMPY Stock Explores Potential Spill

October 4th, 2021 saw AMPY stock announce that its Beta Offshore subsidiary’s observation of an oil sheen. The U.S Coast Guard was notified of the sheen that spanned roughly 4 miles off the coast of Southern California. The company then initiated its Oil Spill Prevention and Response Plan. The first step of the plan is to send a remotely operated vehicle (ROV) to investigate and attempt to determine the source of the release. As an addition precaution, the company has had the entirety of its production and pipeline operations at the Beta Field shut down.

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Adjusted EBITDA Report

The second quarter of fiscal 2021 saw AMPY stock generate USD$23.8 million in Adjusted EBITDA. This represents a USD$1 million year-over-year increase. Adjusted EBITDA for the second quarter of fiscal 2021 surpassed internal projections, with the improvement being largely driven by production outperformance and cost efficiencies. These, in turn, were strengthened by continued commodity price improvement.

Building on Success

The second quarter of fiscal 2021 saw average daily production in the amount of roughly 25.3 MBoepd. This represents a 2% increase from the 24.7 MBoepd reported in the prior quarter. This production outperformance during the second quarter of 2021 was primarily driven by the recovery in East Texas and Oklahoma. These areas were affected by Winter Storm Uri in February 2021, with new wells being switch online in the Eagle Ford.

AMPY Stock’s Liquidity Position

Cash capital spending for the second quarter of fiscal 2021 came out to roughly USD$10.9 million. This represented roughly a USD$5.1 million increase from the USD$5.8 million reported in the prior quarter. the year over year increase was largely driven by the annual facility maintenance project at Bairoil. The yearly increase was also facilitated by the acceleration of rod-lift conversions in Oklahoma, as well as the purchase of long lead-time materials. This purchase is in line with AMPY stock’s previously announced phased development program at Beta.

Future Outlook for AMPY Stock

The company reported a strong quarter, as evidenced by the strength of its financial reports for the second quarter of fiscal 2021. AMPY stock is poised to capitalize on the quick resolution of the potential oil spill as it seeks to continue on its trajectory of recent success. Current and potential investors are hopeful that management will be able to effectively leverage the resources at their disposal. This is hoped to usher in significant and organic growth in shareholder value over the long term.

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