Welcome to Amplify Energy Third Quarter 2022 Investor Conference Call. Amplify's operating and financial results were released yesterday, after market closed on November 01, 2022 and are available on Amplify's website at www.amplifyenergy.com. During this conference call, all participants will be in a listen-only mode. Today's call is being recorded. A replay of the call will be accessible until Wednesday, November 16th by dialing 800-654-1463 and then entering access code 10110635. I would now like to turn the conference call over to Jason McGlynn, Senior Vice President and Chief Financial Officer of Amplify Energy Corp.

Good morning, and welcome to the Amplify Energy conference call to discuss operating and financial results for the third quarter of 2022. Joining me on the call today is Martyn Willsher, Amplify's President and Chief Executive Officer. Before we get started, we would like to remind you that some of our remarks may contain forward-looking statements, which reflect management's current views of future events and are subject to various risks, uncertainties, expectations, and assumptions. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call. Please refer to our press release and SEC filings for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during the call. In addition, the unaudited financial information that will be highlighted here is derived from our internal financial books, records, and reports. For additional detailed disclosure, we encourage you to read our Form 10-Q that was filed yesterday afternoon. Also, non-GAAP financial measures may be disclosed during this call. Reconciliations of those measures to comparable GAAP measures may be found in our earnings release or on our website at www.amplifyenergy.com. During the call, Martyn will provide an update regarding our assets in Southern California, followed by our third quarter highlights and an operational update. I will then discuss the second quarter results in greater detail and provide an update on our hedging program, balance sheet, and 2022 guidance. Martyn will conclude our prepared remarks with comments regarding performance during the quarter, current projections, and strategic goals. We will then have a question-and-answer session before concluding this call.

I will begin with an update regarding our Southern California assets. Since our last quarterly update, Amplify has made significant progress toward the final resolution of all criminal and civil proceedings and continues to advance the permanent repair procedures needed to replace the damaged sections of the pipeline and return the Beta field to production. As we previously announced, we reached an agreement in principle with the plaintiffs in the class action to settle all civil claims against Amplify and its subsidiaries. On October 17th, plaintiffs' counsel filed a motion for preliminary approval of the final settlement agreement and that motion is currently noticed for a hearing with the court on November 16th. The settlement amount of $50 million will be funded under the company's insurance policies. During the third quarter of 2022, we also announced that Amplify had reached agreements with federal and state authorities to resolve all criminal matters involving the company and subsidiaries stemming from the incident. The resolution of these matters contemplates an aggregate fine of approximately $12 million, payable in installments to federal and state authorities over the next few years, probationary periods, and reimbursement of certain government agency response costs. The company also agreed to implement certain compliance measures, including the installation of a new leak detection system and increased remote-operated vehicle inspections of the pipeline. With the resolution of these matters substantially complete, we are concentrating on safely repairing the damaged sections of the pipeline and bringing the Beta field back online. On October 1st, we announced that Amplify had received the Nationwide Permit 12 from the U.S. Army Corps of Engineers to proceed with the permit repair plans, which were reviewed and approved by PHMSA earlier this year. Repair operations are currently underway to remove and replace the sections of the pipeline damaged by anchor strikes from two shipping vessels in 2021. As repair procedures are complete, the pipeline will undergo a series of safety integrity tests as required by both federal pipeline safety regulations and the October 5th, 2021 PHMSA corrective action order. We anticipate that PHMSA will review the pipeline restart plan, and once finalized, the company will begin the process of bringing the Beta fields back online. Repair operations have progressed as expected and subject to the various reviews and approvals previously discussed. We currently estimate bringing the Beta field back online by the end of the first quarter of 2023. Amplify’s actions during the course of the last 12 months reflect the commitments we made immediately following the incident to the communities and environment impacted by the release. We work diligently to support the successful cleanup and remediation efforts and continue to work cooperatively with the various state and federal agencies involved with these matters. Furthermore, we continue to aggressively pursue our substantial claims of damages against the vessels that struck and damaged our pipeline, as well as their respective owners and operators and the Marine Exchange of Southern California that failed to notify us of the anchor strikes. Now, onto the quarter. Production for the third quarter averaged approximately 21,000 Boe per day, an increase of 3% from 20,400 Boe per day in the second quarter. The quarter-over-quarter increase was driven by recent development activity at Eagle Ford, accelerated workovers in Oklahoma, and the return to normal operations in Bairoil after the annual maintenance turnaround in the second quarter. Third quarter adjusted EBITDA was approximately $30.8 million compared to $16.3 million in the prior quarter. The increase was attributable to higher production, lower operating expenses, timing variances regarding the recognition of LOPI insurance proceeds, and lower commodity hedge settlement payments. Capital spending during the third quarter was approximately $9.9 million, primarily related to workover activity in Oklahoma, non-operated development in Eagle Ford, and facilities maintenance at Bairoil and Beta. Free cash flow defined as the adjusted EBITDA less CapEx and cash interest expense was $17 million in the third quarter of 2022, which compares to $14.3 million in the first half of the year. With Beta expected to restart early next year, we anticipate free cash flow generation to accelerate and we are now projecting cumulative free cash flow of $235 million through year-end 2024 at current commodity prices. Now, for an update on our operations. In Oklahoma, we continued our workover program running 3 rigs focused on returning offline wells to production and artificial lift optimization. As a result of this program, Oklahoma production increased approximately 5% in the third quarter from 6,500 to 6,800 Boe per day, and the field achieved its highest quarterly production rate since the first quarter of 2021. For the remainder of 2022, we expect to continue an active workover program to manage our cost profile and drive incremental free cash flow. At Bairoil, processing facilities returned to normal operating levels after completion of the annual maintenance turnaround last quarter, resulting in production of 3,600 Boe per day and lower operating expenses. We will continue to utilize targeted workover activity and well stimulations to drive further operational improvements and efficiencies and improve production performance. In East Texas and North Louisiana, we remain committed to efficiently managing production and costs while pursuing high-return workover and joint development projects. Results from the non-operated completions participated in during the second quarter have continued to exceed expectations and we intend to participate in similar high-return projects into 2023. In the Eagle Ford, third quarter production increased 25% from the previous quarter, primarily resulting from successful development activity earlier in the year. We're currently participating in 11 gross, 1.0 net additional development projects, including two re-fracs, which are projected to be online in the first quarter of 2023. I will now turn the call over to Jason to provide a detailed review of our financial and operational results.

Thank you, Martyn. Production for the third quarter averaged approximately 21,000 Boe per day with a commodity mix of 31% oil, 19% NGLs, and 50% gas. Once Beta returns to production next year, the company expects the product mix to return to approximately 40% oil with the low decline in the increasingly oil-weighted nature of our diverse assets further driving long-term profitability. Total oil, natural gas, and NGL revenues for the third quarter were approximately $112.8 million before the impact of derivatives compared to $112.9 million in the second quarter. Other revenues were $13.5 million for the quarter compared to $8.9 million in the second quarter. For the third quarter, the company recognized $13.3 million of LOPI proceeds, which represents three months of LOPI payments compared to $8.8 million or two months of LOPI payments for the prior quarter. As discussed during our prior earnings call, Amplify’s LOPI insurance policy is effective for 18 months following the date of the incident and the company will continue to receive payments until the earlier of the expiration of the policy or until Beta is returned to full production. Lease operating expenses for the third quarter were approximately $32 million or $16.56 per Boe, a decrease from $33.3 million or $17.91 per Boe for the second quarter, primarily attributable to lower workover costs at Bairoil. GP&T this quarter was $7.5 million or $3.87 per Boe compared to $7.3 million or $3.92 per Boe in the second quarter. I would like to note that we expect GP&T to decline in future quarters as the East Texas Gas NBC expires this year and the Oklahoma NGL NBC expires in June of 2023. Production and ad valorem taxes this quarter were $9.2 million or $4.73 per Boe compared to $8.6 million or $4.64 per Boe in the prior quarter. Third quarter cash G&A totaled $6.1 million or $3.16 per Boe compared to $7.7 million or $4.16 per Boe in the second quarter, primarily due to a decrease in certain professional and advisor fees. Adjusted EBITDA in the third quarter totaled $30.8 million, an increase of approximately $14.5 million from $16.3 million in the prior quarter. As previously discussed, the increase was primarily attributable to higher production, timing variance regarding the recognition of low fee insurance proceeds, and lower operating expenses and hedge settlement payments. Cash capital spending for the third quarter was approximately $9.9 million, a decrease of $3.6 million from the second quarter, primarily related to reduced capital in East Texas and Bairoil. Free cash flow for the third quarter was $17 million compared to negative $0.6 million in the prior quarter. The quarter-over-quarter increase was primarily related to the scheduled roll-off of out-of-the-money commodity hedges, in addition to the previously noted reductions in capital spending and LOPI payment recognition during the second and third quarters. Onto the hedge book. As evidenced by free cash flow generation this quarter, we are now starting to realize the benefits from the scheduled roll-off of our hedge book and the company will continue to capture additional upside in the current commodity price environment as we roll off additional out-of-the-money hedges in the coming quarters. Currently, we're approximately 70% hedged for the balance of 2022 and 50% hedged in 2023 across all commodities. Our crude oil production is approximately 85% to 95% hedged for the remainder of the year and 50% to 60% hedged for 2023. On the gas side, we are approximately 85% to 95% hedged for the balance of 2022 and 70% to 80% hedged for 2023. As a reminder, when we return Beta to field production, those crude oil volumes will be completely unhedged which may provide additional upside depending on prevailing prices. Moving on to our balance sheet. As of October 28th, Amplify had net debt of approximately $179 million consisting of $205 million outstanding under our revolving credit facility and $26 million of cash on hand. For the remainder of 2022 and into 2023, we'll continue to allocate the majority of our free cash flow to improving our balance sheet and reducing our total debt outstanding. The company's fall borrowing base redetermination process is currently underway and we will provide further updates as they become available. On to guidance, as detailed in the earnings release last night, we have tightened our full year 2022 guidance ranges for production, adjusted EBITDA, and free cash flow. Additional guidance details were provided in our earnings release and can be found in the latest investor presentation currently available on our website. I'll now turn the call back to Martyn.

Thank you, Jason. Our near-term strategy remains focused on continuously enhancing our free cash flow profile and rapidly deleveraging our balance sheet. As we progress into 2023, we expect to not only continue generating the current level of quarterly free cash flow, but we anticipate materially increasing our free cash flow profile as our hedge book continues to roll off and the Beta field is returned to production. Currently, our forecasted 2022 to 2024 cumulative free cash flow is estimated to be approximately $235 million at current strip pricing and we are projecting to improve our leverage to under one times by the third quarter of 2023. As Jason mentioned earlier, we are currently working with our lending group on the fall borrowing base redetermination and are exploring various solutions to extend or replace the current facility, which matures in the fall of 2023. Lastly, I'd like to express my appreciation to the company's employees for their outstanding efforts and dedication particularly over the last 12 months. We have made significant progress towards the final resolution of the legal matters related to the incident and are actively pursuing our claims against the ships that caused damage to our pipeline in 2021. Finally, we remain focused on progressing repair operations with the anticipation of bringing the Beta field back online early in 2023. With that, operator, we are now open for questions.

Our first question comes from John White with ROTH Capital. Your line is open.

Good morning, and congratulations on all the progress you have made on the legal matters over the past number of months. I'm sure that's very distracting. But I think it looks like a lot of progress has been made. At Beta, what exactly is going on? Are there damaged sections of the line being replaced by new sections of pipe or is there a lot of welding going on? Can you give us some more detail on the actual operations?

The primary repair involves a 250-foot section where the crack occurred. That section of the line has been removed and brought to the port. We will replace it with new pipe. Additionally, there is an 80-foot section and some clamps that also need to be replaced, which will be quicker and easier to handle. The main section is already removed, and the process is ongoing, expected to take a few more weeks. Once this work is completed, we will conduct a series of tests, including hydrostatic testing and in-line inspections, which will be reviewed by PHMSA and the state as part of the restart plan. Once we receive approval, we can resume oil flow through the pipeline. We are allowing some extra time for the review, but we anticipate completing this before the end of the first quarter, and hopefully even sooner.

Thanks very much for that. That's good detail and good luck on that. On your lawsuit against the shipping companies and I understand if you don't want to comment, but as I understand it, the preponderance of the evidence that the Coast Guard has revealed is pretty strong. Are you anticipating a settlement prior to the trial date or do you think you're going to go to trial?

There are various ways this situation could unfold. While I won't delve into our strategy or my personal beliefs about the case, you have pointed out that we indicated there have been anchor strikes, and we believe there is significant evidence supporting this. Regardless, the damages are ongoing. Until the Beta field resumes production, we are experiencing ongoing revenue losses due to the damages incurred. This issue is not directly related to the spill event but rather stems from the timing of the damages caused by these ships. There is a distinction between what we are claiming individually and what we are pursuing on behalf of the insurance companies, which relates more to the costs associated with the spill event itself. As I mentioned, this will be a continuous process. Considering these are two of the largest shipping companies globally, it may take some time, or it could be resolved quickly. It ultimately depends on the commercial dynamics at play.

Well again, very good detail and I appreciate that update. I'll pass it back.

And our next question comes from Jeff Robertson with Water Tower Research.

Martyn, at Beta, 2 questions. One, will the work you all have done to restore production have much of an impact on operating costs for those assets as you restart them? And secondly, you all had talked previously before the spill about some redevelopment or recompletion opportunities, can you just provide an update on where that might stand in your capital allocation process either for 2023 or maybe even 2024?

Those are great questions. Let me start with the operating cost first. One of the things we've done this year is we've continued to electrify the platforms. So they're going to be running on more shore power versus diesel power. This obviously helps with air quality standards and other things as well. So we have been making changes even while we've been down in order to further reduce the fixed cost going forward. When we first come back online, one of the things that we'll note is that we're projecting kind of a reduced rate for some time because obviously being offline for what could be 17 or 18 months by the time we come back online, we want to make sure that we're being conservative and not over-projecting crude volumes coming straight out of the gate. And so we ramp up from about 50% of the production rate prior to the event, and that is not including the impact of royalty relief anymore. So we ramp up from about 50% up to 100% over time. We have the crews already on the platform. We have the rigs ready to go for whenever we get back online. So obviously, our primary responsibility is to get all the existing wells back online as quickly as we can, so that's where we'll start our focus. We do still have all the permits in hand for what we were doing prior to the event, which included, as you may recall, a couple of smaller projects that we were planning to do in late 2021 and then two large projects in early '22, which had some real potential to increase production of the field. Those projects are still very valuable and even more so at current pricing. So I would expect we will revisit that once we kind of get the Beta field back and most of the existing wells back online. I can't give you an exact timing of that yet; it really depends on how quickly we get the existing production back online and fully restored.

So those development opportunities are still very attractive, especially in today's commodity price environment.

Yes, they are much more valuable now. We did lose royalty relief, but that was due to the significant increase in pricing, and these projects are worth more now even without that relief compared to when we first planned them.

Just a question on the hedge book structure. Jason, for 2023, are the hedges spread pretty evenly through the year or will they roll off as the quarters progress?

They'll roll off a little bit. It's fairly even. I mean, we're not projecting a sizable decrease in production volumes throughout the year. We have some of the joint development that's going on in the Eagle Ford and in East Texas that'll help offset that plus the benefits of the workover program in Oklahoma keeps it fairly flat notwithstanding kind of the nature of the assets with Beta and Bairoil. So it'll roll off a little bit, but not substantially. As you look at them, the structures are a lot more advantageous than what we had this year. So we'll have a lot more benefit as we roll forward. And just speaking specifically to the gas side, I mean, we only have callers for ‘23 at this point, and the floor's about $3.50 and they call out just under $6. So kind of right in that sweet spot with some potential upside as we roll forward.

So I think at this point we're going to take some questions that we received as well from various investors as well. Jason?

Perfect. Yeah, and just consistent with what we did last time, we received a number of questions from some investors and have consolidated that and we'll ask a few of those here and just continue to encourage people to send those along our way and we'll roll this forward as we continue with this in future quarters. The first one that hasn't been touched here is in relation to the inflationary CapEx environment and kind of our plans that roll forward through our three-year free cash flow forecast. So specific question is did we raise the CapEx in our free cash flow slide and what are we seeing from an inflationary aspect and what are we doing that's different from other people to try to mitigate that?

Thank you for your question. We have indeed increased our capital for the 2023 and 2024 cycles, largely due to finalizing our planning for the East Texas and Eagle Ford developments. We are experiencing inflation on the drilling side, even as a non-operating partner, and this has been factored into our projections for 2023 and 2024. Despite the impact of inflation, our returns remain very strong. While we are not completely unaffected by inflation, we did observe its effects on our base lease operating expenses earlier in the year, although those effects have eased somewhat recently. This inflation has been evident across various areas, including chemicals and saltwater disposal. We've accounted for these factors in our capital forecasts. On the other hand, our forecast related to facilities and workover projects hasn't encountered the same level of inflation, making those projects easier to manage from an inflation standpoint. We have integrated these considerations into our future projections, and as we gain more clarity on our future plans, we will continue to update our cash flow forecast, with the next update expected after Q4 covering the full-year outlook for 2023.

And the last question that hasn't been touched on that we received from a number of people is can we provide any additional color on the pending RBL maturity and the plans to adjust that through an extension or refinance?

Certainly. So as we mentioned, we are currently talking to our RBL lenders primarily about an extension in the near-term. All of this financing becomes a lot easier once Beta comes back online. So we are trying to extend that fairway for a certain amount of time in order to give us a little bit more flexibility. We will look at any and all options to refinance. That could mean kind of an RBL with fewer banks. It could mean a new financing structure completely. So there's a lot of alternatives out there and quite frankly, we could do it in the near-term, but it becomes a lot more attractive and easier once Beta is back online. So we are trying to give ourselves a little bit more time to get that done. So we will have something on that hopefully in the coming months, and we will update the market when we have that.

Great. I think that concludes the Q&A portion of the call, so I'll turn it to Martyn for some closing comments.

Thank you, Jason. I'd just like to thank everyone for participating in the call today. We are continuing to work diligently to finish the year strong on the production side and really focus on getting Beta back online as early in the first quarter as we can. We will continue to update all of our stakeholders on our progress. And as always, if there are any questions, please don't hesitate to reach out. Thank you everyone.

Thank you, ladies and gentlemen. This concludes today's teleconference. You may now disconnect.