Amplify Energy Simplifies Portfolio, Goes Debt-Free to Fuel Beta and Bairoil Growth

Key Points

• Amplify Energy has simplified its portfolio and eliminated debt by selling its East Texas, Oklahoma and Eagle Ford assets for approximately $250 million, leaving Beta and Bairoil as its core producing assets and providing cash for growth investments.
• Beta is the primary development opportunity: nine horizontal wells have lifted net production to roughly 4,500 barrels per day, with 26 additional drilling locations identified and lower federal royalties improving project economics.
• Bairoil’s revised CO2 agreement significantly improves cash flow by shifting the asset from roughly $5 million in annual CO2 costs to an estimated $5 million–$6 million in annual benefits, while increased CO2 supply could enable development of the Sector One area.

Amplify Energy NYSE: AMPY outlined a simplified strategy centered on two remaining producing assets—its offshore Beta field in federal waters off Southern California and the Bairoil CO2 flood in Wyoming—after divesting several noncore positions and eliminating debt, CEO Dan Furbee said during an EnerCom presentation.

Furbee said the company sold its East Texas, Oklahoma and Eagle Ford assets for approximately $250 million in net proceeds. The transactions were part of a plan introduced a year earlier to streamline a portfolio that had been spread across multiple U.S. regions with limited scale in any one area.

“We found it prudent to simplify the portfolio,” Furbee said. “By doing that, we sold our East Texas, Oklahoma, and Eagle Ford positions,” using the proceeds to pay down all debt. He said Amplify now has cash on hand to pursue development programs at Beta and Bairoil.

Valuation and Share Repurchase Program

Using an assumed $75 per-barrel WTI oil price, Furbee said Amplify’s proved developed reserves had a PV-10 value of $414 million. He cited an additional $106 million PV-20 value for Beta proved undeveloped reserves, bringing 1P reserve value to approximately $520 million.

Furbee also pointed to the company’s hedges, cash balance and restricted cash account associated with Beta’s eventual decommissioning obligations. He said these factors, along with a deduction for corporate general and administrative costs, implied an equity value of about $510 million, or more than $12 per share. He characterized that figure as more than a 200% premium to the company’s recent trading value.

The company announced a share repurchase program several weeks before the presentation. Furbee said the perceived discount between Amplify’s market value and its intrinsic value was a primary reason for establishing the program.

Beta Development Focuses on Horizontal Wells

The Beta field consists of three federal lease blocks about 10 miles offshore Southern California. Amplify operates two producing platforms, Eureka and Ellen, as well as the Elly processing platform, which handles oil, water and gas before sales oil is transported by pipeline to Long Beach and connected to the Los Angeles Basin refinery complex.

Shell discovered the field in the late 1970s, and it has produced more than 100 million barrels of oil to date, according to Furbee. He estimated original oil in place at roughly 1 billion barrels and said comparable Los Angeles Basin fields have typically achieved recovery factors of 30% to 40%, while Beta has recovered about 10% thus far.

Amplify has been pursuing horizontal development using drilling technology that was not available during the field’s earlier development in the 1980s and early 1990s. Furbee said legacy wells were generally drilled at 30- to 40-degree inclinations, while current rigs and rotary steerable, measurement-while-drilling and logging-while-drilling tools enable the company to access individual reservoir zones horizontally.

• Amplify has drilled nine Beta wells since beginning its current drilling program in mid-2024.
• Eight of those wells targeted the D sand, while one targeted the C sand.
• Net production has increased from approximately 2,800 barrels per day to the midpoint of the company’s 2026 guidance of about 4,500 barrels per day, Furbee said.
• The company has identified 19 additional D-sand locations in the Joulters fault block and seven in the main fault block.

In the Joulters area, Furbee said Amplify’s type curve assumes a gross initial production rate of 500 barrels per day and estimated ultimate recovery of about 670,000 barrels of oil per well. The company estimates average capital costs of approximately $6.5 million per well.

Amplify also received federal royalty relief earlier in the year, reducing the royalty burden on most production from 25% to 12.5%, according to Furbee. He said the company believes additional federal royalty programs could further improve Beta economics.

Bairoil Contract Creates CO2 and CCUS Opportunities

The Bairoil field in Wyoming produces just under 3,000 net barrels of oil per day and has operated as a tertiary CO2 recovery project since the 1980s. Furbee described it as a long-life, low-decline asset that has produced more than 340 million barrels of oil since its discovery before 1920.

The field is connected to a major CO2 transmission line in central Wyoming. Furbee said Bairoil was certified under an ISO enhanced-oil-recovery operations management plan last year, allowing qualified anthropogenic CO2 injected into the certified reservoir to be eligible for Section 45Q tax credits.

Under a revised CO2 supply agreement, the supplier receives the tax credit and Amplify receives a share of the economics through a rebate. Furbee said Amplify had previously paid about $5 million annually for CO2 but now receives roughly $5 million to $6 million annually related to CO2, representing an approximate $10 million swing for the asset.

CO2 volumes available to Bairoil increased from about 10,000 Mcf per day to approximately 32,000 Mcf per day, Furbee said. The added supply could support expansion into a northern area known as Sector One, which has received substantially less CO2 injection than other portions of the Wertz field.

Furbee said Sector One contains an estimated 18 million barrels of oil in place. A 10% recovery factor would equate to 1.8 million barrels of cumulative production, though he noted that potential is not included in the company’s reserves or the valuation figures presented.

Beyond the CO2 contract, Furbee said Amplify has reduced headcount by more than 50% and expects its general and administrative cost run rate in 2027 to be significantly lower than 2025 and 2026 levels. He said the company is pursuing cost reductions across both Beta and Bairoil, where lower fixed costs can materially improve asset-level economics.

About Amplify Energy (NYSE:AMPY)

Amplify Energy Corp NYSE: AMPY is an independent upstream energy company focused on the exploration, development and production of crude oil and natural gas resources in the United States. The company's operations emphasize both conventional and unconventional plays, combining onshore and offshore activities. Amplify Energy applies advanced reservoir management techniques and disciplined capital allocation to identify and develop reserves with attractive economics while managing commodity price exposure through targeted risk strategies.

The company's asset portfolio is concentrated along the U.S.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source