AMPY

Amplify Energy Corp. (AMPY) - Q2 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026. Amplify Energy Corp. operates as a single reportable segment focused on the acquisition, development, and production of oil and natural gas properties. Following significant divestitures in 2025, the Company's portfolio as of June 30, 2026, consists solely of its Bairoil (Rockies) and Beta (offshore Southern California) assets. The Company is classified as a smaller reporting company.

Key Financial Metrics

Note: YTD 2026 Net Loss was driven primarily by a $36.8 million unrealized loss on commodity derivative instruments.

Material Changes vs. Prior Period

• Revenue Decline: Revenues decreased significantly year-over-year due to the divestiture of East Texas, Oklahoma, and non-operated Eagle Ford assets completed in 2025. Production volumes dropped from 19.1 MBoe/d in Q2 2025 to 6.8 MBoe/d in Q2 2026.
• Realized Price Increase: Despite lower volumes, the average realized sales price increased to $85.14 per Boe in Q2 2026 from $38.38 per Boe in Q2 2025, driven by higher commodity prices and the Beta Royalty Relief program.
• Derivative Impact: The Company recognized a $9.0 million gain on derivatives in Q2 2026 (improving net income) but a $36.8 million loss on derivatives YTD 2026 (driving the net loss), compared to gains in the prior year periods.
• Cost Reduction: Lease operating expenses and G&A expenses decreased materially due to the reduced asset base and lower acquisition/divestiture transaction costs.

Guidance, Outlook, and Risks

• Share Repurchase Program: On August 6, 2026, the Board approved a $15.0 million share repurchase program, effective August 11, 2026, through December 31, 2026. This represents approximately 10% of outstanding shares.
• Beta Royalty Relief: The Company received End-of-Life Royalty Relief for Beta leases effective May 1, 2026, reducing royalty rates from ~25% to 12.5% on primary leases, contingent on commodity prices remaining below $79.65/BOE.
• Liquidity: The Company has no outstanding debt and $21.2 million in cash. It maintains a $25.0 million borrowing base with $15.0 million in elected commitments under its Revolving Credit Facility.
• Internal Controls: Management identified a material weakness in internal controls over financial reporting related to personnel changes and technical accounting knowledge. Remediation efforts are ongoing but not yet complete as of June 30, 2026.
• Operational Risks: Risks include concentration of production in mature reservoirs, dependence on a small number of customers, and potential volatility in oil prices affecting the royalty relief suspension threshold.

Investor Verification Checklist

• Derivative Exposure: Verify the impact of the $36.8 million YTD unrealized derivative loss on future cash flows and the specific terms of open WTI and Brent hedges.
• Internal Control Remediation: Monitor progress on remediation of the material weakness in internal controls to ensure future financial reporting reliability.
• Share Repurchase Execution: Track the execution of the new $15.0 million buyback program and its impact on share count and liquidity.
• Beta Royalty Relief Status: Confirm that commodity prices remain below the $79.65/BOE threshold to maintain the reduced royalty rate at the Beta field.
• Capital Allocation: Assess the sustainability of the $42.2 million YTD capital expenditure program against current cash flow generation from the reduced asset base.