valuebet Posted March 5, 2020 Share Posted March 5, 2020 Looks like the only reason for the negative earnings is 27 mln in "Unrealized (gain) loss on commodity derivatives" line. Cashflow is still positive - 11 mln. Am i missing something? Link to comment Share on other sites More sharing options...
given2invest Posted March 5, 2020 Share Posted March 5, 2020 um yah....missed production/cash flow for Q4 by decent margin cut div in half provided no FCF guidance for 2020 i still own and added a little but it was a terrible quarter Link to comment Share on other sites More sharing options...
valuedontlie Posted March 5, 2020 Share Posted March 5, 2020 was actually pretty impressed with the guide... i'm not smart enough with these O&G names to figure out what their avg realized price will be in 2020 but for production, they guided 26-29Mboe/d or ~9.5-10.6m bbls for the year? in 2H19 they produced 5.4m bbls in total so implies relatively stable production, no? just looked at SD and those guys are cliff diving at something like a 30% drop in production from 2019 to 2020... Link to comment Share on other sites More sharing options...
given2invest Posted March 5, 2020 Share Posted March 5, 2020 was actually pretty impressed with the guide... i'm not smart enough with these O&G names to figure out what their avg realized price will be in 2020 but for production, they guided 26-29Mboe/d or ~9.5-10.6m bbls for the year? in 2H19 they produced 5.4m bbls in total so implies relatively stable production, no? just looked at SD and those guys are cliff diving at something like a 30% drop in production from 2019 to 2020... yes, if they hit those production #s it's good. but they missed in Q4. always an excuse. it's a much better name than 99% of E&P...generates real FCF and can at 45 oil. like i said i own it. Link to comment Share on other sites More sharing options...
misterkrusty Posted March 6, 2020 Share Posted March 6, 2020 I own it too. If you take away the exploration and dumb acquisition risk, E&Ps like this become far less risky. This mgmt team is on the tightest leash I've ever seen. Seems like the market doesn't want to pay much for reserves that won't be produced in the out-years, even though these reservoirs are pretty well understood (correct me if I'm wrong!). I wonder if sale to a larger E&P is the only way we're likely to get fair value ... thankfully, it seems the larger holders wouldn't let mgmt say no to a decent offer. M Link to comment Share on other sites More sharing options...
given2invest Posted March 6, 2020 Share Posted March 6, 2020 If there was a bid, they'd take it. Both Fir Tree and Brigade sold stock back to company at low 5's as part of the buyback. They both want out. There is simply no buyers for anything. But yes, the management team is not in control, it's the large holders. Which is good. Link to comment Share on other sites More sharing options...
aws Posted March 6, 2020 Author Share Posted March 6, 2020 Ouch, that escalated quickly. Already back to the same dividend yield a day after announcing a 50% cut. Hard to imagine they or any similar company survives in this price environment. They say their next redetermination won't reduce borrowing by enough to make liquidity an issue, but things will get uncomfortably tight. Link to comment Share on other sites More sharing options...
aws Posted March 11, 2020 Author Share Posted March 11, 2020 And cut in half again in a couple more days. The equity is a call option now, and one that looks a little low probability to payout, but I am nibbling down here. At 1.17 with a .10 dividend coming Friday you're basically paying about 1/10th book value, but a book value that can only be realized if oil goes back above 50. The hedge book alone has to be worth about 1/3rd - 1/2 the debt at this point so even if they get cut hard they can monetize those to not go insolvent. I don't know if it's the best way to play an oil price recovery, but I'm taking a chance on a shareholder friendly management who are already working with a firm to see if another deal can be made. Maybe they'll just sell themselves or go private. Link to comment Share on other sites More sharing options...
valuedontlie Posted March 13, 2020 Share Posted March 13, 2020 market thinks this co is dead... wonder if they'll sell the crown jewel (offshore) to pare back debt and keep the trash (onshore)... dividend is probably gone though the 2020 hedge book should protect some level of cash flow Link to comment Share on other sites More sharing options...
given2invest Posted March 13, 2020 Share Posted March 13, 2020 agree. i bought a little more each day. 50% chance 0, 50% chance 5-10 bagger. ok maybe there is a middle outcome. but it's ridiculous how much it's been punished. Link to comment Share on other sites More sharing options...
valuedontlie Posted March 14, 2020 Share Posted March 14, 2020 took a small position but you'd be kidding yourself if you didn't consider this a call option at best right now! the CA offshore assets seem like a valuable gem, no? https://www.amplifyenergy.com/operations/default.aspx#california 20m bbls in them wells and ~1.1m bbls annual production -- likely much much better decline curve relative to onshore... Link to comment Share on other sites More sharing options...
given2invest Posted March 14, 2020 Share Posted March 14, 2020 took a small position but you'd be kidding yourself if you didn't consider this a call option at best right now! the CA offshore assets seem like a valuable gem, no? https://www.amplifyenergy.com/operations/default.aspx#california 20m bbls in them wells and ~1.1m bbls annual production -- likely much much better decline curve relative to onshore... yah "50% chance it's a 0, 50% chance it's a 10 bagger" is precisely a call option. and yes california offshore is very valuable between that and the hedge book they should be able to survive till 2021. Link to comment Share on other sites More sharing options...
valuebet Posted April 25, 2020 Share Posted April 25, 2020 Excuse me for an entry level question, but what happens if AMPY will be delisted from NYSE? Link to comment Share on other sites More sharing options...
given2invest Posted April 25, 2020 Share Posted April 25, 2020 Excuse me for entry level question, but what happens if AMPY will be delisted from NYSE? won't be, they will just do a reverse split if need be. Link to comment Share on other sites More sharing options...
valuebet Posted August 21, 2020 Share Posted August 21, 2020 Market cap around 40 mln. It would be a great step for the company to buyback right now... Link to comment Share on other sites More sharing options...
misterkrusty Posted August 21, 2020 Share Posted August 21, 2020 unfortunately, I think debt reduction is the priority right now. I can't really object. All they need to do is get through this and once oil gets back to ~$50 the upside should take care of itself. Link to comment Share on other sites More sharing options...
aws Posted August 21, 2020 Author Share Posted August 21, 2020 As of 7/31 they only had $259 million of net debt and a bank line that will be reduced to $260 million in November. There's really no room for buybacks here. They need to at least get through that next redetermination, and I'm sure anything like a suicidal looking share repurchase is not going to win any friends at the bank for when that happens. They will generate free cash flow for the rest of the year with the hedges still in place, which hopefully could bring net debt under $240 million by November and give them a little breathing room. Then hopefully they'll have enough time to get to the other side of this and catch the benefits of an oil price recovery in 2021. They should be really well positioned if you can see oil prices in the 50s. The royalty relief is big news, worth $7 million cash annually at $40/BBL and $9 million annually at $50/BBL. Link to comment Share on other sites More sharing options...
aws Posted September 25, 2020 Author Share Posted September 25, 2020 I talked to the CEO today and I wanted to add a couple of small updates: 1. I confirmed that my understanding of the Beta royalty relief was correct. They have a 100% working interest for three leases in federal waters offshore California. Previously they had a 75% revenue interest in two leases and a 83.33% revenue interest in the third. The royalty relief cut the fed's royalty by 50%, so now the company gets 87.5% and 91.67% of the revenue for the leases. This is in effect for current and incremental production and at oil prices up to near the $70 level. So this relief, valued at about $7 million annually at $40 oil, drops straight to the bottom line. Obtaining the relief does require them to spend some capital to maintain production, but with the reduced royalty being in effect it is likely the most attractive place for them to spend any maintenance capex. 2. When they monetized the $18 million of hedges in Q2 2020, the cash proceeds were not included in the 2020 EBITDA calculations because they were related to unwinding 2021 hedges. Instead they will be accounted for in 2021 EBITDA calculations. While this doesn't really affect anything from a cashflow perspective, it does improve the EBITDA ratios the banks will use in the next credit facility redetermination. That combined with the substantial increase in energy prices since the last redetermination should hopefully forestall another cut in the credit line. In all fairness it probably should warrant an increase in the credit line, but he is not optimistic that would happen in the next redetermination because any of the banks can veto an increase and there obviously isn't much of an appetite for banks increasing lending to oil companies at the moment. So take that for what you will. They are probably safe from a restructuring before the end of 2021 if energy prices maintain close to these levels, so it would boil down to whether you think the total value of the assets is worth more than the current enterprise value. With the share price this low, 90% of the EV is the debt, so relatively small changes to asset valuations could swing you from equity values of zero to multiple times the current price. Link to comment Share on other sites More sharing options...
misterkrusty Posted September 25, 2020 Share Posted September 25, 2020 thanks AWS. as I understand it, the biggest drag on oil prices now is the continued slump in demand for jet fuel. maybe we could take your Gulfstream on a tour of AMPY properties? Link to comment Share on other sites More sharing options...
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