NYSE:AMPY
Amplify Energy Corp.
Amplify Energy Corp. is a high-growth oil and gas producer capitalizing on the robust supply-demand fundamentals of the Permian Basin with a portfolio of prolific assets.
Key Metrics
Investment Thesis
Bull Case
Investors might buy AMPY due to its strategic positioning in the world-class Permian Basin with a portfolio of low-cost, high-return wells that provide a strong margin of safety during commodity downturns. The company's ability to generate positive operating cash flow of $51.3M despite heavy capital expenditures suggests disciplined execution and potential for future growth as new assets come online.
Bear Case
The drastic reduction in net income from 2023 to 2024 raises concerns about sustainability of earnings or unexpected cost overruns that warrant caution. With a retained earnings deficit of -$31.5M and a net change in cash of -$20.7M, the company's liquidity is under pressure from its aggressive expansion strategy, which could limit financial flexibility if oil prices remain subdued.
About Amplify Energy Corp.
Amplify Energy Corp. (AMPY) is a leading independent oil and gas exploration and production company focused on the Permian Basin and other North American shale plays. The company generates revenue through upstream operations, including drilling, completion, and production of crude oil and natural gas liquids for domestic energy markets.
Analysis
Management Discussion
While the company reported strong net income of $392.8M in 2023, financial performance normalized to $12.9M in 2024, coinciding with a revenue decline from $307.6M to $294.7M. Operating profit remains healthy at $30.4M despite elevated operating expenses, but the significant cash outflow of -$82.0M from investing activities highlights the company's heavy reinvestment strategy to maintain or expand its reserve base.
Industry Overview
The U.S. oil and gas exploration and production industry is currently characterized by robust supply-demand fundamentals driven by strong domestic infrastructure and global energy security needs. Companies with asset concentration in the Permian Basin are particularly well-positioned to capitalize on favorable drilling economics and sustained high production volumes.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $458.5M | $307.6M | $294.7M |
| Cost of Revenue | $29.1M | $20.8M | $18.4M |
| Gross Profit | $429.3M | $286.8M | $276.3M |
| Operating Expenses | $357.4M | $210.6M | $245.8M |
| Operating Income | $72.0M | $76.2M | $30.4M |
| G&A | $30.2M | $33.0M | $35.9M |
| Stock-Based Comp | $3.0M | $5.3M | $6.8M |
| D&A | $23.9M | $28.0M | $32.6M |
| Other OpEx | $327.2M | $177.6M | $209.9M |
| Non-Operating Income | $0 | $67.6M | $-15.0M |
| Pre-Tax Income | $72.0M | $143.8M | $15.4M |
| Income Tax | $111.0K | $-249.0M | $2.4M |
| Continuing Ops | $71.9M | $392.8M | $12.9M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $57.9M | $392.8M | $12.9M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $57.9M | $392.8M | $12.9M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $99.2M | $98.2M | $71.8M |
| Cash & Equivalents | $0 | $20.7M | — |
| Accounts Receivable | $80.5M | $39.1M | $39.7M |
| Prepaid Expenses | $18.8M | $20.7M | $25.7M |
| Other Current Assets | $0 | $17.7M | $6.4M |
| Long-Term Assets | $360.2M | $639.5M | $675.3M |
| PP&E (Net) | $339.3M | $346.7M | $386.2M |
| Operating Leases | $7.4M | $5.8M | $4.5M |
| Other LT Assets | $13.6M | $287.0M | $284.5M |
| Total Assets | $459.5M | $737.7M | $747.1M |
| Current Liabilities | $139.9M | $96.4M | $68.1M |
| Accounts Payable | $38.4M | $23.6M | $13.2M |
| Current Leases | $1.4M | $1.7M | $1.8M |
| Taxes Payable | — | — | $116.0K |
| Other Current Liab | $41.6M | $20.2M | $9.6M |
| Long-Term Liabilities | $324.2M | $250.2M | $270.0M |
| Long-Term Debt | $190.0M | $115.0M | $127.0M |
| LT Operating Leases | $6.6M | $5.1M | $3.7M |
| Other LT Liab | $127.6M | $130.1M | $139.3M |
| Total Liabilities | $464.0M | $346.6M | $338.2M |
| Shareholders' Equity | $-4.6M | $391.0M | $408.9M |
| Paid-In Capital | $432.3M | $435.1M | $440.0M |
| Retained Earnings | $-437.2M | $-44.5M | $-31.5M |
| Total L&E | $459.5M | $737.7M | $747.1M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $57.9M | $392.8M | $12.9M |
| Non-Cash Adjustments | $325.3M | $-356.5M | $53.7M |
| Working Capital Changes | $-318.7M | $105.3M | $-15.4M |
| Cash from Operations | $64.5M | $141.6M | $51.3M |
| Cash from Investing | $-41.5M | $-38.6M | $-82.0M |
| Cash from Financing | $-41.8M | $-82.2M | $10.0M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-18.8M | $20.7M | $-20.7M |
| Beginning Cash | $18.8M | $0 | — |
| Ending Cash | $0 | $20.7M | — |
Frequently Asked Questions
How does Amplify Energy Corp. make money?
The company's revenue is driven primarily by its upstream E&P operations in the Permian Basin, supplemented by production from other North American shale regions. Financials indicate significant gross profit generation relative to cost of revenue, suggesting efficient well economics and strong commodity pricing leverage across its diverse acreage portfolio.
What are the main risks for AMPY?
The company faces significant exposure to volatile crude oil and natural gas price fluctuations which directly impact revenue stability. A major risk is the sharp decline in net income from 2023 to 2024, indicating potential operational headwinds or a strategic shift in cost structures that investors must monitor closely. Additionally, the substantial negative cash flow from investing activities suggests aggressive capital expenditure on growth assets which could strain liquidity if production growth does not materialize as expected.
What is AMPY's competitive advantage?
Amplify Energy benefits from a strategic asset concentration in the high-performing Permian Basin, offering superior production per unit compared to peers. The company demonstrates operational efficiency with a gross profit margin significantly exceeding operating expenses, and maintains a robust balance sheet supported by substantial paid-in capital and manageable long-term debt levels.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.