Amplify Energy Corp. 10-Q

ITEM 1. FINANCIAL STATEMENTS. AMPLIFY ENERGY CORP. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except outstanding shares) ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2024 ​ 2023 ASSETS ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 2,989 ​ $ 20,746 Accounts receivable, net (see Note 12) ​ 36,540 ​ 39,096 Short-term derivative instruments ​ 4,429 ​ 17,669 Prepaid expenses and other current assets ​ 18,366 ​ 20,672 Total current assets ​ 62,324 ​ 98,183 Property and equipment, at cost: ​ ​ Oil and natural gas properties, successful efforts method ​ 891,407 ​ 873,478 Support equipment and facilities ​ 150,211 ​ 149,069 Other ​ 11,038 ​ 10,359 Accumulated depreciation, depletion and amortization ​ ( 694,405 ) ​ ( 686,165 ) Property and equipment, net ​ 358,251 ​ 346,741 Long-term derivative instruments ​ 1,778 ​ 9,405 Restricted investments ​ 22,392 ​ 19,935 Operating lease - long term right-of-use asset ​ 5,407 ​ 5,756 Deferred tax asset ​ ​ 258,498 ​ ​ 253,796 Other long-term assets ​ 3,554 ​ 3,858 Total assets ​ $ 712,204 ​ $ 737,674 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND EQUITY ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 21,723 ​ $ 23,616 Revenues payable ​ 20,809 ​ 21,944 Accrued liabilities (see Note 12) ​ 36,776 ​ 50,871 Total current liabilities ​ 79,308 ​ 96,431 Long-term debt (see Note 7) ​ 115,000 ​ 115,000 Asset retirement obligations ​ 124,062 ​ 122,001 Operating lease liability ​ 4,704 ​ 5,090 Other long-term liabilities ​ 8,115 ​ 8,116 Total liabilities ​ 331,189 ​ 346,638 Commitments and contingencies (see Note 14) ​ ​ Stockholders' equity (deficit): ​ ​ Preferred stock, $ 0.01 par value: 50,000,000 shares authorized; no shares issued and outstanding at March 31, 2024 and December 31, 2023 ​ — ​ — Common stock, $ 0.01 par value: 250,000,000 shares authorized; 39,612,030 and 39,147,205 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively ​ 398 ​ 393 Additional paid-in capital ​ 434,465 ​ 435,095 Accumulated deficit ​ ( 53,848 ) ​ ( 44,452 ) Total stockholders' equity (deficit) ​ 381,015 ​ 391,036 Total liabilities and equity ​ $ 712,204 ​ $ 737,674 ​ See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements. ​ 8 Table of Contents AMPLIFY ENERGY CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2024 2023 Revenues: ​ ​ ​ Oil and natural gas sales ​ $ 75,322 ​ $ 66,284 Other revenues ​ 977 ​ 13,586 Total revenues ​ 76,299 ​ 79,870 ​ ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ Lease operating expense ​ 38,284 ​ 32,960 Gathering, processing and transportation ​ 4,774 ​ 5,602 Taxes other than income ​ 4,911 ​ 5,293 Depreciation, depletion and amortization ​ 8,239 ​ 5,808 General and administrative expense ​ 9,800 ​ 8,514 Accretion of asset retirement obligations ​ 2,061 ​ 1,942 Loss (gain) on commodity derivative instruments ​ 16,564 ​ ( 15,159 ) Pipeline incident loss ​ ​ 707 ​ ​ 8,279 Other, net ​ 41 ​ 26 Total costs and expenses ​ 85,381 ​ 53,265 Operating income (loss) ​ ( 9,082 ) ​ 26,605 Other income (expense): ​ ​ Interest expense, net ​ ( 3,527 ) ​ ( 5,737 ) Litigation settlement (See Note 16) ​ ​ — ​ ​ 84,875 Other income (expense) ​ ​ ( 95 ) ​ ​ 73 Total other income (expense) ​ ( 3,622 ) ​ 79,211 Income (loss) before income taxes ​ ( 12,704 ) ​ 105,816 Income tax (expense) benefit - current ​ ( 1,395 ) ​ ( 12,527 ) Income tax (expense) benefit - deferred ​ 4,703 ​ 259,470 Net income (loss) ​ $ ( 9,396 ) ​ $ 352,759 ​ ​ ​ ​ ​ ​ ​ Allocation of net income (loss) to: ​ ​ ​ ​ ​ ​ Net income (loss) available to common stockholders ​ $ ( 9,396 ) ​ $ 336,373 Net income (loss) allocated to participating securities ​ — ​ 16,386 Net income (loss) available to Amplify Energy Corp. ​ $ ( 9,396 ) ​ $ 352,759 ​ ​ ​ ​ ​ ​ ​ Earnings (loss) per share: (See Note 9) ​ ​ Basic and diluted earnings (loss) per share ​ $ ( 0.24 ) ​ $ 8.69 Weighted average common shares outstanding: ​ ​ Basic and diluted ​ 39,410 ​ 38,694 ​ See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements. ​ 9 Table of Contents AMPLIFY ENERGY CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ March 31, ​ 2024 2023 Cash flows from operating activities: ​ ​ Net income (loss) ​ $ ( 9,396 ) ​ $ 352,759 Adjustments to reconcile net income (loss) to net cash provided by operating activities: ​ ​ ​ ​ Depreciation, depletion and amortization ​ 8,239 ​ 5,808 Loss (gain) on derivative instruments ​ 16,564 ​ ( 15,159 ) Cash settlements (paid) received on expired derivative instruments ​ 4,303 ​ ( 2,709 ) Deferred income tax expense (benefit) ​ ​ ( 4,703 ) ​ ​ ( 259,470 ) Accretion of asset retirement obligations ​ 2,061 ​ 1,942 Share-based compensation (see Note 10) ​ 1,531 ​ 941 Amortization and write-off of deferred financing costs ​ 304 ​ 461 Bad debt expense ​ 26 ​ — Changes in operating assets and liabilities: ​ ​ Accounts receivable ​ 2,530 ​ 14,476 Prepaid expenses and other assets ​ 2,306 ​ 2,450 Payables and accrued liabilities ​ ( 16,053 ) ​ ( 10,940 ) Other ​ — ​ ( 246 ) Net cash provided by operating activities ​ 7,712 ​ 90,313 Cash flows from investing activities: ​ ​ Additions to oil and gas properties ​ ( 20,589 ) ​ ( 8,187 ) Additions to other property and equipment ​ ( 679 ) ​ ( 150 ) Additions to restricted investments ​ ( 2,456 ) ​ ( 2,080 ) Net cash used in investing activities ​ ( 23,724 ) ​ ( 10,417 ) Cash flows from financing activities: ​ ​ Advances on Revolving Credit Facility ​ 25,000 ​ 10,000 Payments on Revolving Credit Facility ​ ( 25,000 ) ​ ( 75,000 ) Shares withheld for taxes ​ ( 1,745 ) ​ ( 2,141 ) Net cash used in financing activities ​ ( 1,745 ) ​ ( 67,141 ) Net change in cash and cash equivalents ​ ( 17,757 ) ​ 12,755 Cash and cash equivalents, beginning of period ​ 20,746 ​ — Cash and cash equivalents, end of period ​ $ 2,989 ​ $ 12,755 ​ See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements. ​ 10 Table of Contents AMPLIFY ENERGY CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' Equity ​ ​ ​ ​ ​ Additional ​ Accumulated ​ ​ ​ ​ ​ Common ​ Paid-in ​ Earnings ​ ​ ​ ​ Stock Capital (Deficit) Total Balance at December 31, 2023 $ 393 ​ $ 435,095 ​ $ ( 44,452 ) ​ $ 391,036 Net income (loss) ​ — ​ — ​ ( 9,396 ) ​ ( 9,396 ) Share-based compensation expense ​ — ​ 1,120 ​ — ​ 1,120 Shares withheld for taxes ​ — ​ ( 1,745 ) ​ — ​ ( 1,745 ) Other ​ 5 ​ ( 5 ) ​ — ​ — Balance at March 31, 2024 ​ $ 398 ​ $ 434,465 ​ $ ( 53,848 ) ​ $ 381,015 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' Equity (Deficit) ​ ​ ​ ​ ​ Additional ​ Accumulated ​ ​ ​ ​ Common ​ Paid-in ​ Earnings ​ ​ ​ ​ Stock Capital (Deficit) Total Balance at December 31, 2022 $ 386 $ 432,251 $ ( 437,202 ) $ ( 4,565 ) Net income (loss) ​ — ​ — ​ 352,759 ​ 352,759 Share-based compensation expense ​ — ​ 941 ​ — ​ 941 Shares withheld for taxes ​ — ​ ( 2,141 ) ​ — ​ ( 2,141 ) Other ​ 5 ​ ( 5 ) ​ — ​ — Balance at March 31, 2023 ​ $ 391 ​ $ 431,046 ​ $ ( 84,443 ) ​ $ 346,994 ​ ​ See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements. ​ ​ 11 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization and Basis of Presentation General Amplify Energy Corp. (“Amplify Energy,” “Amplify,” “it” or the “Company”) is a publicly traded Delaware corporation whose common stock is listed on the NYSE under the symbol “AMPY.” The Company operates in one reportable segment that is engaged in the acquisition, development, exploitation and production of oil and natural gas properties. The Company’s management evaluates performance based on one reportable business segment as there are not different economic environments within the operation of the Company’s oil and natural gas properties. The Company’s assets consist primarily of producing oil and natural gas properties located in Oklahoma, the Rockies (“Bairoil”), federal waters offshore Southern California (“Beta”), East Texas/North Louisiana and the Eagle Ford (non-op). Most of the Company’s oil and natural gas properties are located in large, mature oil and natural gas reservoirs. The Company’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells. Basis of Presentation The Company’s accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the Company’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Material intercompany transactions and balances have been eliminated. The results reported in these Unaudited Condensed Consolidated Financial Statements are not necessarily indicative of results that may be expected for the entire year. Furthermore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. Accordingly, the accompanying Unaudited Condensed Consolidated Financial Statements and Notes should be read in conjunction with the Company’s annual financial statements included in its 2023 Form 10-K. Use of Estimates The preparation of the accompanying Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, oil and natural gas reserves; fair value estimates; revenue recognition; and contingencies and insurance accounting. Note 2. Summary of Significant Accounting Policies There have been no changes to the Company’s significant accounting policies as described in the Company’s annual financial statements included in its 2023 Form 10-K. New Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. 12 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 3. Revenue Revenue from Contracts with Customers Revenue is recognized when the following five steps are completed: (1) identify the contract with the customer, (2) identify the performance obligation (promise) in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, (5) recognize revenue when the reporting organization satisfies a performance obligation. The Company has determined that its contracts for the sale of crude oil, unprocessed natural gas, residue gas and NGLs contain monthly performance obligations to deliver product at locations specified in the contract. Control is transferred at the delivery location, at which point the performance obligation has been satisfied and revenue is recognized. Fees included in the contract that are incurred prior to control transfer are classified as gathering, processing and transportation, and fees incurred after control transfers are included as a reduction to the transaction price. The transaction price at which revenue is recognized consists entirely of variable consideration based on quoted market prices less various fees and the quantity of volumes delivered. Disaggregation of Revenue The Company has identified three material revenue streams in its business: oil, natural gas and NGLs. The following table presents the Company’s revenues disaggregated by revenue stream. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ 2024 2023 ​ ​ (In thousands) Revenues ​ ​ ​ Oil ​ $ 57,422 ​ $ 38,816 NGLs ​ ​ 7,525 ​ ​ 7,785 Natural gas ​ ​ 10,375 ​ ​ 19,683 Oil and natural gas sales ​ $ 75,322 ​ $ 66,284 ​ Contract Balances Under the Company’s sales contracts, the Company invoices customers once its performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s contracts do not give rise to contract assets or liabilities. Accounts receivable attributable to the Company’s revenue contracts with customers were $ 31.6 million at March 31, 2024 and $ 31.1 million at December 31, 2023. Note 4. Fair Value Measurements of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. A three-tier hierarchy has been established that classifies fair value amounts recognized or disclosed in the financial statements. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). All the derivative instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets were considered Level 2. 13 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The carrying values of accounts receivables, accounts payables (including accrued liabilities), restricted investments and amounts outstanding under long-term debt agreements with variable rates included in the accompanying Unaudited Condensed Consolidated Balance Sheets approximated fair value at March 31, 2024 and December 31, 2023. The fair value estimates are based upon observable market data and are classified within Level 2 of the fair value hierarchy. These assets and liabilities are not presented in the following tables. Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair market values of the derivative financial instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 were based on estimated forward commodity prices. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement in its entirety. The significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following tables present the gross derivative assets and liabilities that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023 for each of the fair value hierarchy levels: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at March 31, 2024 ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Unobservable ​ ​ ​ ​ ​ Active Market ​ Observable Inputs ​ Inputs ​ ​ ​ ​ (Level 1) (Level 2) (Level 3) Fair Value ​ ​ (In thousands) Assets: ​ ​ ​ ​ Commodity derivatives ​ $ — ​ $ 25,306 ​ $ — ​ $ 25,306 Interest rate derivatives ​ — ​ — ​ — ​ — Total assets ​ $ — ​ $ 25,306 ​ $ — ​ $ 25,306 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Commodity derivatives ​ $ — ​ $ 19,099 ​ $ — ​ $ 19,099 Interest rate derivatives ​ — ​ — ​ — ​ — Total liabilities ​ $ — ​ $ 19,099 ​ $ — ​ $ 19,099 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2023 ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Unobservable ​ ​ ​ ​ ​ Active Market ​ Observable Inputs ​ Inputs ​ ​ ​ ​ (Level 1) (Level 2) (Level 3) Fair Value ​ ​ (In thousands) Assets: ​ ​ ​ ​ ​ ​ ​ ​ Commodity derivatives ​ $ — ​ $ 39,439 ​ $ — ​ $ 39,439 Interest rate derivatives ​ — ​ — ​ — ​ — Total assets ​ $ — ​ $ 39,439 ​ $ — ​ $ 39,439 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ Commodity derivatives ​ $ — ​ $ 12,365 ​ $ — ​ $ 12,365 Interest rate derivatives ​ — ​ — ​ — ​ — Total liabilities ​ $ — ​ $ 12,365 ​ $ — ​ $ 12,365 ​ See Note 5 for additional information regarding the Company’s derivative instruments. 14 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are reported at fair value on a nonrecurring basis, as reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets. The following methods and assumptions are used to estimate the fair values: ● The fair value of asset retirement obligations (“AROs”) is based on discounted cash flow projections using numerous estimates, assumptions and judgments regarding factors such as the existence of a legal obligation for an ARO; amounts and timing of settlements; the credit-adjusted risk-free rate; and inflation rates. The initial fair value estimates are based on unobservable market data and are classified within Level 3 of the fair value hierarchy. See Note 6 for a summary of changes in AROs. ● Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The Company uses an income approach based on the discounted cash flow method, whereby the present value of expected future net cash flows is discounted by applying an appropriate discount rate, for purposes of placing a fair value on the assets. The future cash flows are based on management’s estimates for the future. The unobservable inputs used to determine fair value include, but are not limited to, estimates of proved reserves, estimates of probable reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties (some of which are Level 3 inputs within the fair value hierarchy). ● No impairment expense was recorded on proved oil and natural gas properties during the three months ended March 31, 2024 and 2023. Note 5. Risk Management and Derivative Instruments Derivative instruments are utilized to manage exposure to commodity price and interest rate fluctuations and to achieve a more predictable cash flow in connection with natural gas and oil sales and borrowing related activities. These instruments limit exposure to declines in prices but also limit the benefits that would be realized if prices increase. Certain inherent business risks are associated with commodity derivative contracts, including market risk and credit risk. Market risk is the risk that the price of natural gas or oil will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the counterparty to a contract. It is the Company’s policy to enter into derivative contracts only with creditworthy counterparties, which are generally financial institutions, deemed by management as competent and competitive market makers. Some of the lenders, or certain of their affiliates, under the Company’s current credit agreements are counterparties to its derivative contracts. While collateral is generally not required to be posted by counterparties, credit risk associated with derivative instruments is minimized by limiting exposure to any single counterparty and entering into derivative instruments only with creditworthy counterparties that are generally large financial institutions. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative instruments. The Company has also entered into International Swaps and Derivatives Association Master Agreements (“ISDA Agreements”) with each of its counterparties. The terms of the ISDA Agreements provide the Company and each of its counterparties with rights of set-off upon the occurrence of defined acts of default by either the Company or its counterparty to a derivative, whereby the party not in default may set-off all liabilities owed to the defaulting party against all net derivative asset receivables from the defaulting party. As a result, had certain counterparties failed completely to perform according to the terms of the existing contracts, the Company would have the right to offset $ 7.6 million against amounts outstanding under our Revolving Credit Facility at March 31, 2024. See Note 7 for additional information regarding the Company’s Revolving Credit Facility. Commodity Derivatives The Company may use a combination of commodity derivatives (e.g., floating-for-fixed swaps, put options, costless collars and three-way collars) to manage exposure to commodity price volatility. The Company recognizes all derivative instruments at fair value. 15 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Company enters into natural gas derivative contracts that are indexed to NYMEX-Henry Hub. The Company also enters into oil derivative contracts indexed to NYMEX-WTI. At March 31, 2024, the Company had the following open commodity positions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2025 ​ 2026 Natural Gas Derivative Contracts: ​ ​ ​ ​ ​ ​ ​ ​ Fixed price swap contracts: ​ ​ ​ ​ ​ ​ ​ ​ Average monthly volume (MMBtu) ​ ​ 716,667 ​ ​ 675,000 ​ ​ 291,667 Weighted-average fixed price ​ $ 3.72 ​ $ 3.74 ​ $ 3.72 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collar contracts: ​ ​ ​ ​ ​ ​ Two-way collars ​ ​ ​ ​ ​ ​ Average monthly volume (MMBtu) ​ 544,444 ​ 500,000 ​ 291,667 Weighted-average floor price ​ $ 3.46 ​ $ 3.50 ​ $ 3.50 Weighted-average ceiling price ​ $ 4.15 ​ $ 4.10 ​ $ 4.10 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Crude Oil Derivative Contracts: ​ ​ ​ ​ ​ ​ Fixed price swap contracts: ​ ​ ​ ​ ​ ​ Average monthly volume (Bbls) ​ 85,889 ​ 53,000 ​ 30,917 Weighted-average fixed price ​ $ 74.04 ​ $ 70.68 ​ $ 70.68 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collar contracts: ​ ​ ​ Two-way collars ​ ​ ​ ​ ​ ​ ​ ​ ​ Average monthly volume (Bbls) ​ ​ 102,000 ​ ​ 59,500 ​ ​ — Weighted-average floor price ​ $ 70.00 ​ $ 70.00 ​ $ — Weighted-average ceiling price ​ $ 80.20 ​ $ 80.20 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Presentation The following table summarizes both: (i) the gross fair value of derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the balance sheet and (ii) the net recorded fair value as reflected on the balance sheet at March 31, 2024 and December 31, 2023. There was no cash collateral received or pledged associated with the Company’s derivative instruments since most of its counterparties, or certain of its affiliates, to its derivative contracts are lenders under its Revolving Credit Facility. 16 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Liability Asset Liability ​ ​ ​ ​ Derivatives ​ Derivatives ​ Derivatives ​ Derivatives ​ ​ ​ ​ March 31, ​ March 31, ​ December 31, ​ December 31, Type Balance Sheet Location 2024 2024 2023 2023 ​ ​ ​ ​ (In thousands) Commodity contracts Short-term derivative instruments ​ $ 16,069 ​ $ 11,640 ​ $ 21,657 ​ $ 3,988 Interest rate swaps Short-term derivative instruments ​ — ​ — ​ — ​ — Gross fair value ​ ​ 16,069 ​ 11,640 ​ 21,657 ​ 3,988 Netting arrangements ​ ​ ( 11,640 ) ​ ( 11,640 ) ​ ( 3,988 ) ​ ( 3,988 ) Net recorded fair value Short-term derivative instruments ​ $ 4,429 ​ $ — ​ $ 17,669 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commodity contracts Long-term derivative instruments ​ $ 9,237 ​ $ 7,459 ​ $ 17,782 ​ $ 8,377 Interest rate swaps Long-term derivative instruments ​ — ​ — ​ — ​ — Gross fair value ​ ​ 9,237 ​ 7,459 ​ 17,782 ​ 8,377 Netting arrangements ​ ​ ( 7,459 ) ​ ( 7,459 ) ​ ( 8,377 ) ​ ( 8,377 ) Net recorded fair value Long-term derivative instruments ​ $ 1,778 ​ $ — ​ $ 9,405 ​ $ — ​ Loss (Gain) on Derivative Instruments The Company does not designate derivative instruments as hedging instruments for accounting and financial reporting purposes. Accordingly, all gains and losses, including changes in the derivative instruments’ fair values, have been recorded in the accompanying Unaudited Condensed Consolidated Statements of Operations. The following table details the gains and losses related to derivative instruments for the periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ Statements of December 31, ​ Operations Location 2024 2023 Commodity derivative contracts Loss (gain) on commodity derivatives $ 16,564 ​ $ ( 15,159 ) ​ ​ Note 6. Asset Retirement Obligations The Company’s asset retirement obligations primarily relate to the Company’s portion of future plugging and abandonment costs for wells and related facilities. The following table presents the changes in the asset retirement obligations for the three months ended March 31, 2024 (in thousands): ​ ​ ​ ​ ​ Asset retirement obligations at beginning of period ​ $ 123,494 Liabilities added from acquisition or drilling ​ — Liabilities settled ​ — Liabilities removed upon sale of wells ​ — Accretion expense ​ 2,061 Revision of estimates ​ — Asset retirement obligation at end of period ​ 125,555 Less: Current portion ​ 1,493 Asset retirement obligations - long-term portion ​ $ 124,062 ​ ​ 17 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 7. Long-Term Debt The following table presents the Company’s consolidated debt obligations at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ (In thousands) Revolving Credit Facility (1) ​ $ 115,000 ​ $ 115,000 Total long-term debt ​ $ 115,000 ​ $ 115,000 (1) The carrying amount of the Company’s Revolving Credit Facility approximates fair value because the interest rates are variable and reflective of market rates. Amended and Restated Credit Agreement On July 31, 2023, OLLC and Amplify Acquisitionco LLC (“Acquisitionco”), as the direct parent of OLLC and wholly owned subsidiary of the Company, entered into the Amended and Restated Credit Agreement, providing for a senior secured reserve-based revolving credit facility. The Revolving Credit Facility is guaranteed by the Company and all of its material subsidiaries and secured by substantially all of its assets. The Revolving Credit Facility matures on July 31, 2027, and is a replacement in full of the prior Revolving Credit Facility by and among OLLC, Acquisitionco, the guarantors party thereto, the lenders party thereto and KeyBank National Association, as the administrative agent (as amended, the “Prior Revolving Credit Facility”). The aggregate principal amount of loans outstanding under the Revolving Credit Facility as of March 31, 2024, was $ 115.0 million. The borrowing base under the facility is $ 150.0 million with elected commitments of $ 135.0 million, and, consistent with the Prior Revolving Credit Facility, the Revolving Credit Facility borrowing base will be subject to redetermination on at least a semi-annual basis, primarily based on a reserve engineering report. Certain key terms and conditions under the Revolving Credit Facility include (but are not limited to): ● A maturity date of July 31, 2027; ● The loans shall bear interest at a rate per annum equal to (i) adjusted SOFR or (ii) an adjusted base rate, plus an applicable margin based on a utilization ratio of the lesser of the borrowing base and the aggregate commitments. The applicable margin ranges from 2.00 % to 3.00 % for adjusted base rate borrowings, and 3.00 % to 4.00 % for adjusted SOFR borrowings; ● The unused commitments under the Revolving Credit Facility will accrue a commitment fee of 0.50 % , payable quarterly in arrears; ● Certain financial covenants, including the maintenance of (i) a net debt leverage ratio not to exceed 3.00 to 1.00, determined as of the last day of each fiscal quarter for the four fiscal-quarter period then ending and (ii) a current ratio of not less than 1.00 to 1.00 , determined as of the last day of each fiscal quarter, in each case commencing with the fiscal quarter ending December 31, 2023; ● Certain events of default, including, without limitation: non-payment; breaches of representations and warranties; non-compliance with covenants or other agreements; cross-default to material indebtedness; judgments; change of control; and voluntary and involuntary bankruptcy; and ● Initial minimum hedging requirements covering 75 % of the reasonably projected monthly production of hydrocarbons from proved developed producing reserves for the 24-month period following the effective date of the Revolving Credit Facility (the “First Period”) and (ii) 50 % for the 12-month period immediately following the First Period. 18 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As noted above, the Company is required to maintain a minimum current ratio of 1.00 to 1.00 , which is measured on the last day of each quarter. On March 31, 2024, the Company’s current ratio was 0.98 to 1.00 . On May 2, 2024, the Company received a letter agreement from its lenders waiving any default or event of default as a result of such noncompliance related to the minimum current ratio requirement for the quarter ended March 31, 2024. As a result, the Company was in compliance with all financial covenants as of March 31, 2024. Subsequent event. On May 2, 2024, OLLC completed its spring 2024 borrowing base redetermination, which reaffirmed the borrowing base of $ 150.0 million with elected commitments of $ 135.0 million. The next redetermination is expected in the fourth quarter of 2024. Weighted-Average Interest Rates The following table presents the weighted-average interest rates paid, excluding commitment fees, on the Company’s consolidated variable-rate debt obligations for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2024 ​ 2023 ​ Revolving Credit Facility ​ 9.37 % 9.73 % ​ Letters of Credit At March 31, 2024, the Company had no letters of credit outstanding. Unamortized Deferred Financing Costs Unamortized deferred financing costs associated with the Company’s Revolving Credit Facility were $ 4.1 million at March 31, 2024. Note 8. Equity Common Stock The Company’s authorized capital stock includes 250,000,000 shares of common stock, $ 0.01 par value per share. The following is a summary of the changes in the Company’s common stock issued for the three months ended March 31, 2024: ​ ​ ​ ​ ​ Common Stock Balance, December 31, 2023 39,147,205 Issuance of common stock — Restricted stock units vested 711,728 Shares withheld for taxes (1) ​ ( 246,903 ) Balance, March 31, 2024 39,612,030 (1) Represents the net settlement on vesting of restricted stock to satisfy tax withholding requirements. ​ 19 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 9. Earnings (Loss) per Share The following sets forth the calculation of earnings (loss) per share, or EPS, for the periods indicated (in thousands, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2024 ​ 2023 Net income (loss) ​ $ ( 9,396 ) ​ $ 352,759 Less: Net income allocated to participating securities ​ — ​ 16,386 Basic and diluted earnings available to common stockholders ​ $ ( 9,396 ) ​ $ 336,373 ​ ​ ​ ​ ​ ​ ​ Common shares: ​ ​ Common shares outstanding — basic ​ 39,410 ​ 38,694 Dilutive effect of potential common shares ​ — ​ — Common shares outstanding — diluted ​ 39,410 ​ 38,694 ​ ​ ​ ​ ​ ​ ​ Net earnings (loss) per share: ​ ​ Basic ​ $ ( 0.24 ) ​ $ 8.69 Diluted ​ $ ( 0.24 ) ​ $ 8.69 ​ ​ ​ Note 10. Long-Term Incentive Plans In May 2021, the shareholders approved a new Equity Incentive Plan (“EIP”) which replaced the Legacy Amplify Management Incentive Plan (the “Legacy Amplify MIP”). As such, no further awards have been granted under the Legacy Amplify MIP. In April 2024, the board of directors of the Company (the “Board”) approved and adopted the Amplify Energy Corp. 2024 Equity Incentive Plan (the “2024 Plan”), subject to stockholder approval at the Company’s Annual Meeting of Stockholders to be held on May 15, 2024. EIP awards are, and, under the Legacy Amplify MIP, were, granted in the form of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards, stock awards and other incentive awards. To the extent that an award under the EIP or Legacy Amplify MIP is expired, forfeited or canceled for any reason without having been exercised in full, the unexercised award would then be available again for future grants under the EIP. The EIP is administered by the Board. Restricted Stock Units Restricted Stock Units with Service Vesting Condition Restricted stock units with service vesting conditions (“TSUs”) are accounted for as either equity-classified awards or liability-classified awards. The grant-date fair value is recognized as compensation cost on a straight-line basis over the requisite service period and forfeitures are accounted for as they occur. Compensation costs for equity-classified awards are recorded as general and administrative expense. The fair value of liability-classified awards is determined on a quarterly basis beginning at the grant date until final vesting. Changes in the fair value of liability-classified awards are recorded to general administrative expense and are remeasured at fair value each reporting period. 20 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Company granted contingent cash-settlement awards in the form of TSUs (the “Contingent TSUs”) under the EIP in February 2024 that will be settled in shares of stock, subject to stockholder approval of the 2024 Plan. In the event the Company’s stockholders do not approve the 2024 Plan, the Contingent TSUs will be settled in cash pursuant to the terms of the applicable award agreement. The Contingent TSUs are accounted for as liability-classified awards and vest in substantially equal installments over a three-year period. The unrecognized cost associated with the TSUs was $ 7.8 million at March 31, 2024. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted average period of approximately 2.3 years. Of the unrecognized share-based compensation expense for TSUs, $ 4.1 million relates to liability-classified awards and will be subsequently remeasured at each reporting period. The Company recognized $ 0.3 million in liability-classified share-based compensation expense at March 31, 2024 for the Contingent TSUs. The following table summarizes information regarding the TSUs activity for the period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average Grant- ​ ​ Number of ​ Date Fair Value ​ ​ Units ​ per Unit (1) TSUs outstanding at December 31, 2023 1,331,456 ​ $ 5.77 Granted (2) 709,402 ​ $ 6.09 Forfeited ( 5,922 ) ​ $ 5.04 Vested ( 604,684 ) ​ $ 4.95 TSUs outstanding at March 31, 2024 (3) 1,430,252 ​ $ 6.28 (1) Determined by dividing the aggregate grant-date fair value of awards by the number of awards issued. (2) The aggregate grant-date fair value of TSUs issued for the three months ended March 31, 2024 was $ 4.3 million based on a grant-date market price of $ 6.09 per share. (3) As of March 31, 2024, 709,402 of the unvested TSUs were accounted for as liability awards in “accrued liabilities” in the Unaudited Condensed Consolidated Balance sheet. Restricted Stock Units with Market and Service Vesting Conditions Restricted stock units with market and service vesting conditions (“PSUs”) are accounted for as either equity-classified or liability-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. The fair value of the awards is estimated on their grant dates using a Monte Carlo simulation . The Company recognizes compensation cost over the requisite service or performance period. The Company accounts for forfeitures as they occur. Vesting of PSUs can range from zero to 200 % of the target awards granted based on the Company’s relative total shareholder return as compared to the total shareholder return of the Company’s performance peer group over the applicable performance period. The 2022 and 2023 PSU awards are accounted for as equity-classified awards and were issued with a three-year vesting period beginning on the grant date and ending on the third anniversary of the grant date. The three-year performance period for the 2022 awards is January 1, 2022 through December 31, 2024. The three-year performance period for the 2023 awards is January 1, 2023 through December 31, 2025. The Company granted contingent cash-settlement awards in the form of PSUs (the “Contingent PSUs”) in February 2024 that will be settled in shares of stock, subject to stockholder approval of the 2024 Plan. In the event the Company’s stockholders do not approve the 2024 Plan, the Contingent PSUs will be settled in cash pursuant to the terms of the applicable award agreement. The Contingent PSUs are accounted for as liability-classified awards and were issued with a three-year vesting period beginning on the grant date and ending on the third anniversary of the grant date. The three-year performance period for the Contingent PSUs is January 1, 2024 through December 31, 2026. 21 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Compensation costs related to the awards are recorded as general and administrative expense. The unrecognized cost associated with these awards was $ 4.3 million at March 31, 2024. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.3 years. Of the unrecognized share-based compensation expense, $ 2.3 million relates to liability-classified awards and will be subsequently remeasured at each reporting period. The Company recognized $ 0.2 million in liability-classified share-based compensation expense at March 31, 2024 for the Contingent PSUs. The below table reflects the ranges for the assumptions used in the Monte Carlo model for the Contingent PSU awards: ​ ​ ​ ​ ​ ​ ​ February 2024 ​ Expected volatility ​ 75.8 % Dividend yield ​ 0.00 % Risk-free interest rate ​ 4.19 % ​ The following table summarizes information regarding the PSUs activity for the period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average Grant- ​ ​ Number of ​ Date Fair Value ​ ​ Units ​ per Unit (1) PSUs outstanding at December 31, 2023 402,701 ​ $ 9.31 Granted (2) 312,843 ​ $ 8.28 Forfeited — ​ $ — Vested ( 107,044 ) ​ $ 2.63 PSUs outstanding at March 31, 2024 (3) 608,500 ​ $ 9.95 (1) Determined by dividing the aggregate grant-date fair value of awards by the number of awards issued. (2) The aggregate grant-date fair value of PSUs issued for the three months ended March 31, 2024 was $ 2.6 million based on a calculated fair value price ranging from $ 2.63 to $ 9.18 per share. (3) As of March 31, 2024, 269,897 of the unvested PSUs were accounted for as liability awards in “accrued liabilities” in the Unaudited Condensed Consolidated Balance sheet. Compensation Expense The following table summarizes the amount of recognized compensation expense associated with the EIP, which are reflected in the accompanying Unaudited Condensed Consolidated Statements of Operations for the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2024 ​ 2023 Share-based compensation costs ​ ​ ​ ​ Share-based compensation - equity awards ​ $ 1,120 ​ $ 941 Share-based compensation - liability awards ​ 411 ​ — ​ ​ $ 1,531 ​ $ 941 ​ ​ 22 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 11. Leases The Company has leases for office space, warehouse space and equipment in its corporate office and operating regions as well as vehicles, compressors and surface rentals related to its business operations. In addition, the Company has right-of-way leases to operate the San Pedro Bay Pipeline. Most of the Company’s leases, other than its corporate office lease, have an initial term and may be extended on a month-to-month basis after expiration of the initial term. Most of the Company’s leases can be terminated with 30-day prior written notice. The majority of its month-to-month leases are not included as a lease liability in its balance sheet because continuation of the lease is not reasonably certain. Additionally, the Company elected the short-term practical expedient to exclude leases with a term of twelve months or less. For the quarter ended March 31, 2024, all of the Company’s leases qualified as operating leases, and it did not have any existing or new leases qualifying as financing leases or variable leases. The Company’s corporate office lease does not provide an implicit rate. To determine the present value of the lease payments, the Company uses an incremental borrowing rate based on the information available at the inception date. To determine the incremental borrowing rate, the Company applies a portfolio approach based on the applicable lease terms and the current economic environment. The Company uses a reasonable market interest rate for its office equipment and vehicle leases. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $ 0.5 million and $ 0.5 million, respectively, of costs relating to the operating leases in the Unaudited Condensed Consolidated Statements of Operations. Supplemental cash flow information related to the Company’s lease liabilities is included in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2024 ​ 2023 ​ ​ (In thousands) Non-cash amounts included in the measurement of lease liabilities: ​ ​ ​ ​ Operating cash flows from operating leases $ 349 ​ $ 288 ​ The following table presents the Company’s right-of-use assets and lease liabilities for the period presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ (In thousands) Right-of-use asset ​ $ 5,407 ​ $ 5,756 ​ ​ ​ ​ ​ ​ ​ Lease liabilities: ​ ​ Current lease liability ​ 1,740 ​ 1,737 Long-term lease liability ​ 4,704 ​ 5,090 Total lease liability ​ $ 6,444 ​ $ 6,827 ​ 23 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table reflects the Company’s maturity analysis of the minimum lease payment obligations under non-cancelable operating leases with a remaining term in excess of one year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Office and ​ Leased vehicles ​ ​ ​ ​ ​ ​ warehouse ​ and office ​ ​ ​ ​ leases equipment Total 2024 ​ $ 1,066 ​ $ 568 ​ $ 1,634 2025 ​ ​ 1,421 ​ ​ 573 ​ ​ 1,994 2026 ​ ​ 1,200 ​ ​ 87 ​ ​ 1,287 2027 ​ ​ 832 ​ ​ 4 ​ ​ 836 2028 and thereafter ​ 1,790 ​ — ​ 1,790 Total lease payments ​ 6,309 ​ 1,232 ​ 7,541 Less: interest ​ 1,014 ​ 83 ​ 1,097 Present value of lease liabilities ​ $ 5,295 ​ $ 1,149 ​ $ 6,444 ​ The weighted average remaining lease terms and discount rate for all of the Company’s operating leases for the period presented: ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ 2024 ​ 2023 Weighted average remaining lease term (years): ​ ​ Office and warehouse space 4.17 4.60 ​ Vehicles 0.36 0.37 ​ Office equipment 0.01 0.03 ​ Weighted average discount rate: ​ ​ ​ Office and warehouse space 5.30 % 4.90 % Vehicles 1.19 % 1.33 % Office equipment 0.06 % 0.10 % ​ ​ ​ 24 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 12. Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows Accrued Liabilities Current accrued liabilities consisted of the following at the dates indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 ​ 2023 Accrued lease operating expense ​ $ 11,440 ​ $ 14,239 Accrued liability - pipeline incident ​ ​ 2,670 ​ ​ 9,331 Accrued liability - current portion of pipeline incident settlement ​ ​ 2,000 ​ ​ 2,000 Accrued capital expenditures ​ ​ 6,500 ​ ​ 8,019 Accrued general and administrative expense ​ 2,159 ​ 5,335 Accrued production and ad valorem tax ​ 3,659 ​ 3,502 Accrued commitment fee and other expense ​ 2,478 ​ 2,626 Operating lease liability ​ ​ 1,740 ​ ​ 1,737 Asset retirement obligations ​ 1,493 ​ 1,493 Accrued current income tax payable ​ ​ 1,395 ​ ​ — Accrued interest payable ​ ​ 284 ​ ​ 1,792 Other ​ 958 ​ 797 Accrued liabilities ​ $ 36,776 ​ $ 50,871 ​ Accounts Receivable Accounts receivable consisted of the following at the dates indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2024 ​ 2023 Oil and natural gas receivables ​ $ 31,570 ​ $ 31,131 Insurance receivable - pipeline incident ​ ​ 1,437 ​ ​ 3,571 Joint interest owners and other ​ ​ 5,207 ​ ​ 6,042 Total accounts receivable ​ 38,214 ​ 40,744 Less: allowance for doubtful accounts ​ ( 1,674 ) ​ ( 1,648 ) Total accounts receivable, net ​ $ 36,540 ​ $ 39,096 ​ Supplemental Cash Flows Supplemental cash flows for the periods presented (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ March 31, ​ ​ 2024 ​ 2023 Supplemental cash flows: ​ ​ ​ ​ Cash paid for interest, net of amounts capitalized ​ $ 3,920 ​ $ 4,502 ​ ​ ​ ​ ​ ​ ​ Noncash investing and financing activities: ​ ​ ​ Increase (decrease) in capital expenditures in payables and accrued liabilities ( 1,520 ) ​ 1,966 ​ ​ 25 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 13. Related Party Transactions Related Party Agreements There have been no transactions between the Company and any related person in which the related person had a direct or indirect material interest for the three months ended March 31, 2024 and 2023. Note 14. Commitments and Contingencies Litigation and Environmental As part of our normal business activities, we may be named as defendants in litigation and legal proceedings, including those arising from regulatory and environmental matters. Although the Company is insured against various risks to the extent it believes it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to indemnify it against liabilities arising from future legal proceedings. Environmental costs for remediation are accrued based on estimates of known remediation requirements. Such accruals are based on management’s best estimate of the ultimate cost to remediate a site and are adjusted as further information and circumstances develop. Those estimates may change substantially depending on information about the nature and extent of contamination, appropriate remediation technologies and regulatory approvals. Expenditures to mitigate or prevent future environmental contamination are capitalized. Ongoing environmental compliance costs are charged to expense as incurred. In accruing for environmental remediation liabilities, costs of future expenditures for environmental remediation are not discounted to their present value, unless the amount and timing of the expenditures are fixed or reliably determinable. At March 31, 2024 and December 31, 2023, the Company had no environmental reserves recorded in its Unaudited Condensed Consolidated Balance Sheet. Beta Pipeline Incident Please refer to “Note 16. Beta Pipeline Incident” for details. Sinking Fund Trust Agreement Beta Operating Company, LLC (“Beta LLC”), a wholly owned subsidiary, assumed an obligation with a third party to make payments into a sinking fund in connection with the Company’s properties in federal waters offshore Southern California, the purpose of which is to provide funds adequate to decommission the portion of the San Pedro Bay Pipeline that lies within state waters and the surface facilities. Interest earned in the account stays in the account. The obligation to fund ceases when the aggregate value of the account reaches $ 4.3 million. As of March 31, 2024, the account balance included in restricted investments was approximately $ 4.5 million. Supplemental Bond for Decommissioning Liabilities Trust Agreement Beta LLC has a decommissioning obligation with BOEM in connection with the Company’s properties in federal waters offshore Southern California. The Company supports its decommissioning obligation with $ 161.3 million of A-rated surety bonds. In December 2021, the Company entered into two escrow funding agreements with its surety providers to fund interest-bearing escrow accounts on a quarterly basis to reimburse and indemnify the surety providers for any claims arising under the surety bonds related to the decommissioning of our Beta LLC properties. In March 2024, the Company amended one of the escrow funding agreements to decrease the amount funded from $ 14.8 million per year to $ 8.0 million per year. There were no changes made to the second escrow agreement. The obligation for these agreements ceases when the total aggregate value of the escrow accounts reaches $ 172.6 million. 26 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The below table outlines the updated funding commitment for these agreements at March 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period Funding commitment ​ Total Remaining 2024 2025 2026 2027 2028 Thereafter Federal escrow fund payments ​ $ 145,550 ​ $ 6,000 ​ $ 8,000 ​ $ 8,000 ​ $ 8,000 ​ $ 8,000 ​ $ 107,550 State escrow fund payments ​ ​ 10,079 ​ ​ 775 ​ ​ 1,034 ​ ​ 1,034 ​ ​ 1,034 ​ ​ 1,034 ​ ​ 5,168 Total sinking fund payments ​ $ 155,629 ​ $ 6,775 ​ $ 9,034 ​ $ 9,034 ​ $ 9,034 ​ $ 9,034 ​ $ 112,718 ​ As of March 31, 2024, the Company has funded $ 17.6 million into the escrow accounts which is reflected in “Restricted investments” on the Unaudited Condensed Consolidated Balance Sheet. Note 15. Income Taxes The Company’s current income tax expense was $ 1.4 million and $ 12.5 million for the three months ended March 31, 2024 and 2023, respectively. The Company’s deferred income tax benefit was $ 4.7 million and $ 259.5 million for the three months ended March 31, 2024 and 2023, respectively. The effective tax rates for the three months ended March 31, 2024 and 2023 were 26.0 % and ( 233.4 %), respectively. The item that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21 % and the effective tax rate for the three months ended March 31, 2024 was the weighted state accrual rate. The items that had the most significant impact on the difference between the statutory U.S. federal income tax rate of 21 % and the effective tax rate for the three months ended March 31, 2023 was the release of the valuation allowances. Net deferred tax assets relate to net operating loss carryforwards, interest expense carryforwards, tax credits, and other temporary differences expected to produce tax deductions in future periods. The realization of these assets depends on recognition of sufficient future taxable income in specific federal and state tax jurisdictions in which those temporary differences are deductible. In assessing the need for a valuation allowance on its deferred tax assets, the Company considers whether it is more likely than not that all of its deferred tax assets will be realized. On December 31, 2023, the Company release all of its valuation allowance of $ 284.9 million, which increased net deferred tax assets as of such date . Note 16. Beta Pipeline Incident On October 2, 2021, contractors operating under the direction of Beta LLC observed an oil sheen on the water approximately four miles off the coast of Newport Beach, California. Beta LLC platform personnel were notified and promptly initiated the Company’s Oil Spill Response Plan. On October 3, 2021, a Unified Command, consisting of the Company, the U.S. Coast Guard and California Department of Fish and Wildlife’s Office of Spill Prevention and Response, was established to respond to the Incident. Reports from the Unified Command’s contracted commercial divers and Remotely Operated Vehicle footage indicated that a 4,000 -foot section of the Company’s pipeline had been displaced and that the pipeline had a 13 -inch split, running parallel to the pipe, releasing approximately 588 barrels of oil. All operations were suspended and the pipeline was shut-in pending the Company’s receipt of the required regulatory approvals to restart operations, including but not limited to, approval of a written restart plan from the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), Office of Pipeline Safety. On April 10, 2023, the Company announced that it received the required approvals from federal regulatory agencies to restart operations at the Beta Field. Since such date, the pipeline has been operated in accordance with the restart procedures that were reviewed and approved by PHMSA. 27 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On December 15, 2021, a federal grand jury in the Central District of California returned a federal criminal indictment against the Company, Beta LLC, and San Pedro Bay Pipeline Company in connection with the Incident. As previously disclosed, state authorities were conducting parallel criminal investigations. The Company reached court-approved agreements to resolve all criminal matters stemming from the Incident. As part of the resolution with the United States, the Company agreed to plead guilty to one count of misdemeanor negligent discharge of oil in violation of the Clean Water Act, and, agreed to pay a fine of approximately $ 7.1 million in installments over a period of three years , serve a term of four years ’ probation and reimburse governmental agencies approximately $ 5.8 million for their response to this event. Additionally, as part of the resolution with the state of California, the Company agreed to enter a plea of No Contest to six misdemeanor charges, and, as a result, paid a fine in the amount of $ 4.9 million to be distributed among the state of California, including the State’s Fish and Game Preservation Fund, and Orange County, agreed to serve a one-year term of probation and agreed to certain compliance enhancements to its operations. The Company is currently subject to a number of ongoing investigations related to the Incident by certain federal and state agencies and may be subject to new investigations and proceedings in the future, the results of which may have a material impact on the Company’s business and results of operations and could put pressure on its liquidity position going forward. With respect to PHMSA’s investigation, on April 6, 2023, PHMSA provided the Company notice of PHMSA’s positions regarding “probable violations of the Pipeline Safety Regulations” in connection with the Incident. The Company has responded to the notice and is conferring with PHMSA regarding a resolution. Amplify continues to comply with all regulatory requirements and investigations. The outcomes of these investigations and the nature of any remedies pursued will depend on the discretion of the relevant authorities and may result in regulatory or other enforcement actions, as well as civil liability. The Company, Beta LLC, and San Pedro Bay Pipeline Company were named as defendants in a consolidated putative class action in the United States District Court for the Central District of California, asserting claims against the Company, Beta LLC, San Pedro Bay Pipeline Company, among others. On August 25, 2022, the Company reached an agreement in principle with plaintiffs in the class action to resolve all civil claims against it and its subsidiaries. The settlement of $ 50.0 million, which also includes certain injunctive relief, has been and will continue to be funded under the Company’s insurance policies. The Court granted final approval of the settlement on April 24, 2023. Separately, on March 1, 2023, the Company announced that the vessels that struck and damaged the pipeline and their respective owners and operators agreed to pay the Company $ 96.5 million in a settlement. This settlement resolved Amplify’s affirmative claims related to the Incident, and as such, Amplify dismissed its legal claims against those parties. Under the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. (“OPA 90”), the Company’s pipeline was designated by the U.S. Coast Guard as the source of the oil discharge and therefore the Company is financially responsible for remediation and for certain costs and economic damages as provided for in OPA 90, as well as certain natural resource damages associated with the spill and certain costs determined by federal and state trustees engaged in a joint assessment of such natural resource damages. The Company is currently processing covered claims under OPA 90 as expeditiously as possible. In addition, the Natural Resource Damage Assessment remains ongoing and therefore the extent, timing and cost related to such assessment are difficult to project. While the Company anticipates insurance will reimburse it for expenses related to the Natural Resource Damage Assessment, any potentially uncovered expenses may be material and could impact the Company’s business and results of operations and could put pressure on its liquidity position going forward. Based on presently enacted laws and regulations and currently available facts, the Company estimates that the total costs it has incurred or will incur with respect to the Incident to be approximately $ 190.0 million to $ 210.0 million. The range of total costs is based on the Company’s assumptions regarding (i) settlement of costs associated with certain vendors for response and remediation expenses, (ii) resolution of certain third-party claims, excluding claims with respect to losses, which are not probable or reasonably estimable, and (iii) future claims and lawsuits. While the Company believes it has accurately reflected all probable and reasonably estimable costs incurred in the Company’s Unaudited Consolidated Statements of Operations, these estimates are subject to uncertainties associated with the underlying assumptions. Accordingly, as the Company’s assumptions and estimates may change in future periods based on future events, the Company can provide no assurance that total costs will not materially change in future periods. 28 Table of Contents AMPLIFY ENERGY CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Company’s estimates do not include (i) the nature, extent and cost of future legal services that will be required in connection with all lawsuits, claims and other matters requiring legal or expert advice associated with the Incident, (ii) any lost revenue associated with the suspension of operations at Beta, (iii) any liabilities or costs, including regulatory costs, that are not reasonably estimable at this time or that relate to contingencies where the Company currently regards the likelihood of loss as being only reasonably possible or remote and (iv) the costs associated with the permanent repair of the pipeline and the restart of operations at Beta. In accordance with customary insurance practice, the Company maintains insurance policies, including loss of production insurance, against many potential losses or liabilities arising from its operations, which, in addition to the settlement amount disclosed, have covered a material portion of aggregate costs associated with the Incident. However, the Company can provide no assurance that its coverage will continue to adequately protect it against liability from all potential consequences, damages and losses related to the Incident and such view and understanding is preliminary and subject to change. On March 31, 2024, and December 31, 2023, the Company’s insurance receivables were $ 1.4 million and $ 3.6 million, respectively. Excluding the costs associated with the resolution of the federal and state matters discussed above, for the three months ended March 31, 2024, the Company incurred response and remediation expenses and legal fees of $ 0.7 million, which primarily relates to certain legal costs that are not expected to be recovered under an insurance policy and are classified as “Pipeline Incident Loss” on the Company’s Unaudited Condensed Consolidated Statements of Operations. For more information, please see our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024. Note 17. Subsequent Events Borrowing Base Redetermination See Note 7 for additional information relating to the Company’s borrowing base redetermination. ​ ​ ​ ​ 29 Table of Contents