What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-07 · 144 added, 91 removed, 542 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except outstanding shares)

September 30,

Current assets:

22 unchanged sentences

Asset retirement obligations

Long-term derivative instruments

Operating lease liability

5 unchanged sentences

50,000,000 shares authorized;

no shares issued and outstanding at June 30, 2024 and December 31, 2023

no shares issued and outstanding at September 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value:

250,000,000 shares authorized;

39,637,947 and 39,147,205 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

39,789,500 and 39,147,205 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

7 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Oil and natural gas sales

33 unchanged sentences

(In thousands)

For the Six Months Ended

For the Nine Months Ended

September 30,

Cash flows from operating activities:

4 unchanged sentences

Cash settlements (paid) received on expired derivative instruments

Cash settlements received (paid) on terminated derivative instruments

Deferred income tax expense (benefit)

37 unchanged sentences

Balance at June 30, 2024

Net income (loss)

Share-based compensation expense

Shares withheld for taxes

Balance at September 30, 2024

Stockholders' Equity (Deficit)

8 unchanged sentences

Balance at June 30, 2023

Net income (loss)

Share-based compensation expense

Shares withheld for taxes

Balance at September 30, 2023

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

16 unchanged sentences

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.

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation.

These reclassifications had an immaterial effect on the previously reported results of operations.

Use of Estimates

5 unchanged sentences

and contingencies and insurance accounting.

Operating segments are defined as components of an enterprise that engage in activities from which it may earn revenues and incur expenses for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker (“CODM”).

The Company’s Chief Executive Officer has been determined to be the Company’s CODM and as such, he allocates resources and assesses performance based upon consolidated financial information.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

1 unchanged sentence

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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Improvements to Reportable Segment Disclosure.

In November 2023, the Federal Accounting Standards Board (“FASB”) issued an accounting standard update which provides for enhanced disclosure requirements with respect to reportable segments, primarily concerning significant segment expenses and the information used to assess segment performance.

The new guidance became effective for annual periods beginning after December 15, 2023, and will become effective for interim reporting periods beginning after December 15, 2024, and must be applied retrospectively for periods included in the Company’s financial statements unless it is impracticable to do so.

The Company is currently evaluating the impact of this guidance on the Company's financial disclosures.

Improvements to Income Tax Disclosure.

In December 2023, the FASB issued an accounting standard update which requires that companies disclose the nature and magnitude of factors contributing to the difference between their effective tax rate and the statutory tax rate.

The update will require companies to disclose specific categories in the rate reconciliation and provide additional information about items that meet a certain quantitative threshold.

The new guidance will become effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the impact of this guidance on the Company's financial disclosures.

Adoption of the update will not impact the Company’s financial position, results of operations or liquidity.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Revenue from Contracts with Customers

5 unchanged sentences

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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Disaggregation of Revenue

3 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

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 $ 30.2 million at June 30, 2024 and $ 31.1 million at December 31, 2023.

Accounts receivable attributable to the Company’s revenue contracts with customers were $ 25.6 million at September 30, 2024 and $ 31.1 million at December 31, 2023.

Fair Value Measurements of Financial Instruments

4 unchanged sentences

All the derivative instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets were considered Level 2.

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 June 30, 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.

1 unchanged sentence

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 June 30, 2024 and December 31, 2023 were based on estimated forward commodity prices.

The fair market values of the derivative financial instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets as of September 30, 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 June 30, 2024 and December 31, 2023 for each of the fair value hierarchy levels:

Fair Value Measurements at June 30, 2024

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the gross derivative assets and liabilities that are measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023 for each of the fair value hierarchy levels:

Fair Value Measurements at September 30, 2024

Quoted Prices in

20 unchanged sentences

See Note 5 for additional information regarding the Company’s derivative instruments.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

7 unchanged sentences

See Note 6 for a summary of changes in AROs.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

● 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.

2 unchanged sentences

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 and six months ended June 30, 2024 and 2023.

● No impairment expense was recorded on proved oil and natural gas properties during the three and nine months ended September 30, 2024 and 2023.

Risk Management and Derivative Instruments

10 unchanged sentences

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 $ 3.2 million against amounts outstanding under our Revolving Credit Facility at June 30, 2024.

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 $ 17.5 million against amounts outstanding under our Revolving Credit Facility at September 30, 2024.

See Note 7 for additional information regarding the Company’s Revolving Credit Facility.

2 unchanged sentences

The Company recognizes all derivative instruments at fair value.

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 June 30, 2024, the Company had the following open commodity positions:

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At September 30, 2024, the Company had the following open commodity positions:

Natural Gas Derivative Contracts:

18 unchanged sentences

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 June 30, 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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30,

Balance Sheet Location

16 unchanged sentences

Long-term derivative instruments

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Loss (Gain) on Derivative Instruments

3 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

Statements of

September 30,

Operations Location

3 unchanged sentences

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 six months ended June 30, 2024 (in thousands):

The following table presents the changes in the asset retirement obligations for the nine months ended September 30, 2024 (in thousands):

Asset retirement obligations at beginning of period

Liabilities added from acquisition or drilling

Liabilities settled

Liabilities removed upon sale of wells

Accretion expense

3 unchanged sentences

Asset retirement obligations - long-term portion

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Debt

The following table presents the Company’s consolidated debt obligations at the dates indicated:

September 30,

(In thousands)

6 unchanged sentences

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 June 30, 2024, was $ 118.0 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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The aggregate principal amount of loans outstanding under the Revolving Credit Facility as of September 30, 2024, was $ 120.0 million.

As of September 30, 2024, the borrowing base under the facility was $ 150.0 million with elected commitments of $ 135.0 million, and, consistent with the Prior Revolving Credit Facility, the Revolving Credit Facility borrowing base is 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):

7 unchanged sentences

● 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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

As of June 30, 2024, the Company was in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with the Revolving Credit Facility.

Subsequent event .

On October 25, 2024, OLLC entered into an amendment to the Revolving Credit Facility (the “Credit Agreement Amendment”), which, among other things, (i) reduced the borrowing base under the Revolving Credit Facility from $ 150.0 million to $ 145.0 million, (ii) increased the aggregate elected commitments under the Revolving Credit Facility from $ 135.0 million to $ 145.0 million and (iii) amended certain interest rates applicable to loans under the Revolving Credit Facility.

The next redetermination is expected in the spring of 2025.

As of September 30, 2024, the Company was in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with the Revolving Credit Facility.

Weighted-Average Interest Rates

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Revolving Credit Facility

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Letters of Credit

At June 30, 2024, the Company had no letters of credit outstanding.

At September 30, 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 $ 3.8 million at June 30, 2024.

Unamortized deferred financing costs associated with the Company’s Revolving Credit Facility were $ 3.5 million at September 30, 2024.

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 six months ended June 30, 2024:

The following is a summary of the changes in the Company’s common stock issued for the nine months ended September 30, 2024:

Balance, December 31, 2023

2 unchanged sentences

Shares withheld for taxes (1)

Balance, June 30, 2024

Balance, September 30, 2024

(1) Represents the net settlement on vesting of restricted stock to satisfy tax withholding requirements.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Earnings (Loss) per Share

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Net income (loss)

6 unchanged sentences

Net earnings (loss) per share:

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Incentive Plans

18 unchanged sentences

The 2024 TSUs will vest in substantially equal installments over a three-year period.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unrecognized cost associated with the TSUs was $ 7.0 million at June 30, 2024.

The unrecognized cost associated with the TSUs was $ 6.6 million at September 30, 2024.

The Company expects to recognize the unrecognized compensation cost for these awards over a weighted average period of approximately 2.0 years.

3 unchanged sentences

TSUs outstanding at December 31, 2023

TSUs outstanding at June 30, 2024

TSUs outstanding at September 30, 2024

(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 six months ended June 30, 2024 was $ 4.5 million based on a grant-date market price ranging from $ 6.26 per share to $ 6.30 per share.

(2) The aggregate grant-date fair value of TSUs issued for the nine months ended September 30, 2024 was $ 5.4 million based on a grant-date market price ranging from $ 6.26 per share to $ 6.72 per share.

Restricted Stock Units with Market and Service Vesting Conditions

1 unchanged sentence

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 fair value of the

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

awards is estimated on their grant dates using a Monte Carlo simulation.

The Company recognizes compensation cost over the requisite service or performance period.

6 unchanged sentences

In May 2024, the Company received shareholder approval of the 2024 EIP, which removed the contingent consideration around the 2024 PSUs.

As of June 30, 2024, the 2024 PSUs are reclassified as equity awards with a three-year vesting period.

As of June 30, 2024, the 2024 PSUs were reclassified as equity awards with a three-year vesting period.

The compensation cost related to these awards is determined by the fair value of the award on the modification date.

1 unchanged sentence

Compensation costs related to PSU awards are recorded as general and administrative expense.

The unrecognized cost associated with PSU awards was $ 4.2 million at June 30, 2024.

The unrecognized cost associated with PSU awards was $ 3.3 million at September 30, 2024.

The Company expects to recognize the unrecognized compensation cost for PSU awards over a weighted-average period of approximately 1.9 years.

6 unchanged sentences

Risk-free interest rate

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information regarding the PSU activity for the period presented:

2 unchanged sentences

PSUs outstanding at December 31, 2023

PSUs outstanding at June 30, 2024

PSUs outstanding at September 30, 2024

(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 six months ended June 30, 2024 was $ 2.4 million based on a calculated fair value price ranging from $ 2.63 to $ 8.33 per share.

(2) The aggregate grant-date fair value of PSUs issued for the nine months ended September 30, 2024 was $ 2.4 million based on a calculated fair value price ranging from $ 2.63 to $ 8.33 per share.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Compensation Expense

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Share-based compensation costs

5 unchanged sentences

Additionally, the Company elected the short-term practical expedient to exclude leases with a term of twelve months or less.

For the quarter ended June 30, 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.

For the quarter ended September 30, 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.

2 unchanged sentences

The Company uses a reasonable market interest rate for its office equipment and vehicle leases.

For the six months ended June 30, 2024 and 2023, the Company recognized approximately $ 1.0 million and $ 1.1 million, respectively, of costs relating to the operating leases in the Unaudited Condensed Consolidated Statements of Operations.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2024 and 2023, the Company recognized approximately $ 1.5 million and $ 1.6 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 Six Months Ended

For the Nine Months Ended

September 30,

(In thousands)

1 unchanged sentence

Operating cash flows from operating leases

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s right-of-use assets and lease liabilities for the period presented:

September 30,

(In thousands)

10 unchanged sentences

The weighted average remaining lease terms and discount rate for all of the Company’s operating leases for the period presented:

September 30,

Weighted average remaining lease term (years):

9 unchanged sentences

Current accrued liabilities consisted of the following at the dates indicated (in thousands):

September 30,

Accrued lease operating expense

12 unchanged sentences

Accounts receivable consisted of the following at the dates indicated (in thousands):

September 30,

Oil and natural gas receivables

4 unchanged sentences

Total accounts receivable, net

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Cash Flows

Supplemental cash flows for the periods presented (in thousands):

For the Six Months Ended

For the Nine Months Ended

September 30,

Supplemental cash flows:

3 unchanged sentences

Increase (decrease) in capital expenditures in payables and accrued liabilities

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 and six months ended June 30, 2024 and 2023.

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 and nine months ended September 30, 2024 and 2023.

Commitments and Contingencies

8 unchanged sentences

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 June 30, 2024 and December 31, 2023, the Company had no environmental reserves recorded in its Unaudited Condensed Consolidated Balance Sheet.

At September 30, 2024 and December 31, 2023, the Company had no environmental reserves recorded in its Unaudited Condensed Consolidated Balance Sheet.

Revenue Payables in Suspense

2 unchanged sentences

Management considered qualitative and quantitative factors and concluded the out-of-period adjustment is immaterial to 2024 and each of the applicable periods.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Beta Pipeline Incident

5 unchanged sentences

The obligation to fund ceases when the aggregate value of the account reaches $ 4.3 million.

As of June 30, 2024, the account balance included in restricted investments was approximately $ 4.5 million.

As of September 30, 2024, the account balance included in restricted investments was approximately $ 4.5 million.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Bond for Decommissioning Liabilities Trust Agreement

5 unchanged sentences

The obligation for these agreements ceases when the total aggregate value of the escrow accounts reaches $ 172.6 million.

The below table outlines the updated funding commitment for these agreements at June 30, 2024 (in thousands):

The below table outlines the updated funding commitment for these agreements at September 30, 2024 (in thousands):

Payment Due by Period

4 unchanged sentences

Total sinking fund payments

As of June 30, 2024, the Company has funded $ 20.4 million into the escrow accounts which is reflected in “Restricted investments” on the Unaudited Condensed Consolidated Balance Sheet.

The Company’s current income tax benefit (expense) was ($ 0.6 ) million and ($ 2.0 ) million for the three and six months ended June 30, 2024, respectively.

The Company’s current income tax benefit (expense) was $ 6.9 million and ($ 5.7 ) million for the three and six months ended June 30, 2023, respectively.

The Company’s deferred income tax benefit (expense) was ($ 2.1 ) million and $ 2.6 million for the three and six months ended June 30, 2024, respectively.

The Company’s deferred income tax benefit (expense) was less than ($ 0.1 ) million and $ 259.4 million for the three and six months ended June 30, 2023, respectively.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The effective tax rates for the three and six months ended June 30, 2024 were 27.4 % and 21.3 %, respectively.

The effective tax rates for the three and six months ended June 30, 2023 were ( 226.0 %) and ( 233.2 %), 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 June 30, 2024 was higher income earned in the current quarter.

As of September 30, 2024, the Company has funded $ 22.9 million into the escrow accounts which is reflected in “Restricted investments” on the Unaudited Condensed Consolidated Balance Sheet.

The Company’s current income tax benefit (expense) was ($ 0.4 ) million and ($ 2.4 ) million for the three and nine months ended September 30, 2024, respectively.

The Company’s current income tax benefit (expense) was ($ 1.4 ) million and ($ 7.1 ) million for the three and nine months ended September 30, 2023, respectively.

The Company’s deferred income tax benefit (expense) was ($ 5.7 ) million and ($ 3.1 ) million for the three and nine months ended September 30, 2024, respectively.

The Company’s deferred income tax benefit (expense) was $ 4.7 million and $ 264.1 million for the three and nine months ended September 30, 2023, respectively.

The effective tax rates for the three and nine months ended September 30, 2024 were both 21.1 %.

The difference between the statutory U.S.

federal income tax rate of 21 % and the effective tax rate for the three and nine months ended September 30, 2024, was caused by higher state taxes, partially offset by marginal well tax credits pursuant to Section 45I of the Internal Revenue Code and a windfall tax benefit from stock compensation.

The effective tax rates for the three and nine months ended September 30, 2023 were 19.6 % and ( 278.9 %), 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 and six months ended June 30, 2023, was the release of the valuation allowance.

federal income tax rate of 21 % and the effective tax rate for the three and nine months ended September 30, 2023, was the release of the valuation allowance.

Beta Pipeline Incident

4 unchanged sentences

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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

12 unchanged sentences

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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

7 unchanged sentences

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.

As of September 30, 2024, the Company has completed processing all outstanding covered claims under OPA 90.

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.

On or about October 10, 2024, the Company reached settlements with the City of Huntington Beach and Pacific Airshow LLC.

The Company has resolved all known claims arising from the Incident and believes there are no more claims outstanding, except through the ongoing Natural Resource Damage Assessment process.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 between approximately $ 190.0 million to $ 210.0 million.

5 unchanged sentences

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 June 30, 2024, and December 31, 2023, the Company’s insurance receivables were $ 1.6 million and $ 3.6 million, respectively.

Excluding the costs associated with the resolution of the federal and state matters discussed above, for the six months ended June 30, 2024, the Company incurred response and remediation expenses and legal fees of $ 1.2 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.

On September 30, 2024, and December 31, 2023, the Company’s insurance receivables were $ 1.7 million and $ 3.6 million, respectively.

Excluding the costs associated with the resolution of the federal and state matters discussed above, for the nine months ended September 30, 2024, the Company incurred response and remediation expenses and legal fees of $ 1.5 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.

Subsequent Events

Borrowing Base Redetermination

See Note 7 for additional information relating to the Company’s borrowing base redetermination.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements