HOUSTON, Oct. 10, 2018 (GLOBE NEWSWIRE) — Amplify Energy Corp. (“Amplify” or the “Company”) (OTCQX: AMPY) announced today the receipt of approximately $61.5 million from the Beta Decommissioning Trust account. This cash release to Amplify’s balance sheet was made pursuant to an order of the U.S. Bankruptcy Court dated February 9, 2018, which allowed for the release of Beta cash subject to certain conditions that have since been satisfied. Following the cash release, Beta’s decommissioning obligations are still fully supported by A-rated surety bonds and $90 million of cash. This milestone represents a significant first step in better aligning the funding structure of the long-term Beta decommissioning liability with its ultimate duration.
Separately, the Company is pleased to announce that Amplify’s board of directors has approved a $37 million capital project to increase oil production at the Company’s Bairoil CO2 flood field in the Rockies by approximately 900 Boe/d (100% oil). This investment will expand CO2 recycling capacity at the facility by approximately 60 MMcf/d, and, importantly, will allow the Company to bring currently shut-in wells back online. The Company anticipates that the expanded facility will be completed and operational by the fourth quarter 2019, and the estimated return on invested capital (“ROIC”) will exceed 100% for the project. The expansion will also allow the Company to drill 4 additional wells in 2019 with projected IRR’s of 30% (91% oil) at a $60 flat WTI price. Further development opportunities exist with 59 additional drilling locations identified and a recent 3D seismic survey.
“We are very pleased to be able to announce the partial release of the funds held in trust and a significant investment in our Bairoil properties,” said Ken Mariani, Amplify’s President and Chief Executive Officer. “With this additional liquidity and our strong performance year-to-date, Amplify is well positioned to make further strategic investments and drive shareholder value and returns.”
Amplify’s current net debt of $221 million as of October 9, 2018 is a reduction of $195 million, or 47%, from the $416 million of net debt outstanding at the Company’s emergence from bankruptcy on May 4, 2017. As of October 9, 2018, Amplify had total debt of $294 million under its revolving credit facility, with a current borrowing base of $390 million. As such, Amplify’s liquidity is currently $167 million, consisting of $73 million of cash on hand and available borrowing capacity of $94 million (including the impact of $2.4 million in outstanding letters of credit).
With Amplify’s significant cash position and additional free cash flow generation, the Company’s Board is working with management to determine the best use of these funds, which could include some combination of increased capital spending on the Company’s oil-focused assets (offshore California and the Rockies), further reduction of debt and/or return of capital to shareholders.
About Amplify Energy
Amplify Energy Corp. is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties. The Company’s operations are focused in the Rockies, offshore California, East Texas / North Louisiana and South Texas. For more information, visit www.amplifyenergy.com.