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Aug 10, 2026, 4:20 PM ETEnergy

Amplify Energy — Second Quarter 2026 Earnings Summary

AMPYAMPLIFY ENERGY CORP
Source

Financial Performance

  • Reported net income of $17.3 million for Q2 2026, a significant improvement from a net loss of $38.1 million in Q1 2026, primarily driven by a $22.6 million non-cash unrealized gain on commodity derivatives.
  • Generated Adjusted EBITDA of $8.6 million, an increase of $4.8 million compared to $3.8 million in Q1 2026.
  • Reported Adjusted Net Loss of $1.7 million, a decrease of $2.1 million from the $3.9 million Adjusted Net Loss in Q1 2026.
  • Net cash provided by operating activities was $2.8 million in Q2 2026, down from $4.5 million in Q1 2026.
  • Free Cash Flow was negative $12.9 million in Q2 2026, an improvement from negative $18.1 million in Q1 2026.
  • Total revenues excluding hedges were $52.7 million in Q2 2026, compared to $37.5 million in Q1 2026.
  • Lease operating expenses were approximately $22.7 million in Q2 2026.
  • Cash General and Administrative (G&A) expenses were $5.1 million in Q2 2026, down from $6.3 million in Q1 2026.
  • Depreciation, depletion, and amortization (DD&A) expense totaled $4.9 million in Q2 2026.
  • Net interest expense was $0.9 million in Q2 2026.
  • Recorded a $5.9 million deferred income tax expense in Q2 2026.
  • Total capital invested was $20.7 million in Q2 2026, down slightly from $21.0 million in Q1 2026.

Guidance and Future Outlook

  • Updated full-year 2026 lease operating expense guidance to $80.0 to $95.0 million, reduced from the previous range of $80.0 to $100.0 million.
  • Maintained full-year 2026 Adjusted EBITDA guidance range of $30.0 to $40.0 million, consistent with previous guidance.
  • Updated full-year 2026 capital investment guidance to $45.0 to $55.0 million, down from the previous range of $45.0 to $65.0 million.
  • Updated full-year 2026 cash G&A guidance to $17.0 to $22.0 million, consistent with previous guidance.
  • Updated full-year 2026 average daily oil production guidance to 7.0 to 7.5 MBbls/d, down from the previous range of 6.7 to 7.9 MBbls/d.
  • Updated full-year 2026 oil differential guidance to $(9.00) to $(11.00) per Bbl, down from the previous range of $(6.00) to $(9.00) per Bbl.
  • Guidance assumes flat commodity prices for crude oil of $75/Bbl (WTI).
  • Management expects future quarters to benefit from a meaningful increase in net production, revenue, and cash flow as royalty relief and recent development activity are reflected over full reporting periods.
  • Management may reduce or defer portions of remaining 2026 drilling activity at Beta to generate the highest risk-adjusted returns, given the share repurchase program and stock trading below intrinsic value.

Business Segments and Product Lines

  • Beta Field:
    • Average daily production increased by approximately 11% in Q2 2026 compared to the prior quarter.
    • Completed the C29 well in June with a peak IP30 of approximately 525 Bopd.
    • Completed the C16 well in July with a peak IP30 of approximately 550 Bopd.
    • Both wells are expected to achieve payout in approximately 15 months at current commodity prices and generate an internal rate of return (IRR) of approximately 100%.
    • Obtained royalty relief effective May 1, 2026, lowering the royalty burden from 25.0% to 12.5%, which increased average net production by over 600 bbls/d and improved revenue and cash flow by approximately $3.0 million.
    • Plans to focus on waterflood and pressure maintenance optimization and targeted workover projects in the second half of 2026.
  • Bairoil Field:
    • Average daily production increased by 1% in Q2 2026 compared to the prior quarter.
    • Amended CO₂ purchase agreement effective June 1, 2026, to increase CO₂ delivery and realize additional Section 45Q tax credits.
    • The amended agreement is expected to lower lease operating expenses by approximately $5.0 million per year and generate approximately $10 million in annual cost savings compared to the prior agreement.
    • Increased CO₂ circulation rates by operating additional compressors to enhance oil production and free cash flow.
    • Continuing strategic evaluation of Bairoil's role in carbon storage and low-carbon initiatives.
  • Overall Production:
    • Averaged total production of 6.8 MBopd (100% oil) in Q2 2026, an increase of approximately 6% compared to the prior quarter.

Market and Competitive Landscape

  • Navigating declining refining capacity in California, which has reduced available outlets for locally produced crude oil and increased marketing deducts.
  • Pursuing multiple paths to increase available markets and improve pricing, including offshore buoys, new pipeline connections, and trucking.
  • Updated guidance reflects larger deducts in realized commodity price assumptions for the balance of the year.
  • Recent increases in oil prices have improved the economics of operating additional compression capacity at Bairoil.

Risks and Challenges

  • Volatility in oil, natural gas, and NGL prices.
  • Declining refining capacity in California affecting realized oil prices.
  • Potential changes in local, state, and federal governmental regulations, including those related to climate change.
  • Risks associated with the redetermination of the borrowing base under the revolving credit facility.
  • Risks related to the implementation of the share repurchase program.
  • General political and economic conditions, including global conflicts and trade wars.
  • Potential unanticipated liabilities or problems relating to acquired or divested business or properties.

Management Commentary and Tone

  • CEO Dan Furbee stated the company continues to focus on activities expected to meaningfully enhance shareholder returns.
  • Management expressed confidence in the quality, predictability, and repeatability of the D Sand development program at Beta.
  • Management views the amended CO₂ agreement at Bairoil as an important first step in monetizing strategic assets that have historically been undervalued.
  • The Board believes the Company's stock is trading at a meaningful discount to its net asset value and that repurchasing up to $15.0 million will be accretive to shareholders.
  • Management emphasized a commitment to allocating capital to opportunities demonstrating the highest risk-adjusted return.

Other Key Points

  • The Board of Directors approved a share repurchase program authorizing the repurchase of up to $15.0 million of Amplify's common stock, representing approximately 10% of currently outstanding shares.
  • Repurchases under the program may begin after market open on August 11, 2026, and continue through December 31, 2026.
  • As of June 30, 2026, the Company had no outstanding debt under its revolving credit facility.
  • Total liquidity as of June 30, 2026, was $36.2 million, consisting of $21.2 million in cash on hand and approximately $15.0 million in available borrowing capacity.
  • The semi-annual borrowing base redetermination completed on June 10, 2026, was reaffirmed at $25.0 million with elected commitments of $15.0 million.
  • The Company entered into Brent crude oil swaps covering portions of 2027 with a weighted average price of $75.00/Bbl.
  • As of June 30, 2026, the Company was hedged approximately 70–75% of its expected PDP oil production for the remainder of 2026 and 55–65% for 2027.
  • Amplify expects to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, with the SEC on August 10, 2026.