Welcome to Amplify Energy’s First Quarter 2022 Investor Conference Call. Amplify’s operating and financial results were released yesterday after market close on May 4, 2022 and are available on Amplify’s website at www.amplifyenergy.com. [Operator Instructions] Today’s call is being recorded. A replay of the call will be accessible until Thursday, May 19 by dialing 855-859-2056 and then entering conference ID number 6891368 or by visiting Amplify’s website at www.amplifyenergy.com. I would now like to turn the conference call over to Jason McGlynn, Senior Vice President and Chief Financial Officer of Amplify Energy Corp. Please go ahead, sir.

Good morning and welcome to the Amplify Energy conference call to discuss operating and financial results for the first 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 this 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 maybe 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 first provide an update regarding our Southern California assets, followed by our first quarter highlights and revised full year guidance. I will then discuss the first quarter results in detail and provide updates to our hedging program, balance sheet and additional items regarding guidance for the remainder of the year. Martyn will then deliver final comments regarding performance during the quarter, current projections and strategic goals. Following our prepared remarks, we will have a question-and-answer session.

Before we get into the quarterly results, I would like to provide an update regarding the progress we have made towards returning our Southern California assets to production. During our most recent earnings call, I discussed the approvals required from PHMSA and the Army Corps of Engineers to proceed with the permanent repair claims of the pipeline. In mid-April, where we received approval from PHMSA for departmental airplane, we are now working cooperatively with the Army Corps of Engineers to obtain the remaining permit to commence repair operations. Although we cannot predict when we receive approval from the court, we expect that within 3 to 4 months from an approval date, we can complete the PHMSA approved repairs, satisfy the regulatory requirements to safely restart the pipeline and return to platform’s production. Now on to the quarter. Production for the first quarter averaged approximately 20,400 barrels of oil equivalent per day, down slightly from 20,800 barrels of oil equivalent per day in the fourth quarter of 2021. First quarter adjusted EBITDA of approximately $24.9 million exceeded internal projections and was an increase of approximately $14 million from the previous quarter. This increase was primarily attributable to stronger price realizations and additional loss of production income insurance payments that were recognized in the quarter. As a result of production outperformance and improved pricing realizations, we have increased our full year 2022 production and adjusted EBITDA guidance, which Jason will detail later in the call. Capital spending for the first quarter was approximately $6.9 million, focused primarily on accelerated workover projects in Oklahoma to capitalize on current commodity prices and non-operated Eagle Ford and East Texas development programs. Free cash flow, defined as adjusted EBITDA, CapEx and cash interest expense, was approximately $14.9 million in the first quarter of 2022 and provides…

Thank you, Martyn. I’ll first provide details regarding first quarter results and then give an update on our hedge book, concluding with comments regarding our balance sheet and details on our updated guidance. Production for the first quarter averaged approximately 20,400 BOE per day with a commodity mix of 32% oil, 18% NGLs and 50% gas. Total oil, natural gas and NGL revenues for the first quarter of 2022 were approximately $93.1 million before the impact of derivatives compared to $86.3 million in the fourth quarter of 2021. Other revenues were $17.6 million for the quarter compared to $6.8 million in the fourth quarter and primarily related to $17.5 million of LOPI payments that were booked during the period. As discussed during our prior earnings call loss of production income proceeds are available for approximately 18 months following the internet. Lease operating expenses for the quarter were approximately $32.9 million or $17.92 per BOE, an increase of approximately $3.5 million compared to $29.4 million or $15.34 per BOE in the fourth quarter. The increase was primarily attributable to incremental expense workover projects in Oklahoma, Bairoil and the Eagle Ford and higher costs resulting from inflation across our asset base. GP&T this quarter was $8 million or $4.36 per BOE compared to $6.1 million or $3.20 per BOE in the fourth quarter. The increase is primarily due to an accounting reclassification of plant processing charges from revenue deductions to GP&T expenses resulting from taking our gas in kind in Oklahoma during the fourth quarter of 2021. By taking our gas in kind in Oklahoma, the company has greatly improved our natural gas pricing differential, irrespective of the increase in GP&T as a result of the accounting reclass. This reclassification is reflected in our updated guidance. Production and Ad Valorem taxes this…

Thank you, Jason. Amplify’s strong performance this quarter is a testament to our ability to generate substantial free cash flow from a mature diversified asset base and has allowed us to improve the full year guidance provided on our last call. We are especially optimistic about the prospect of safely returning of beta assets reduction, which will have a significant positive impact to our free cash flow profile. As we look ahead to the remainder of 2022, the elevated commodity price environment has allowed us to optimistically accelerate workable programs and explore additional non-operated development opportunities within our East Texas and Eagle Ford assets. Furthermore, the previously announced marketing process of our Eagle Ford asset is expected to accelerate our commitment to delevering, while we continue to evaluate additional accretive transactions that could further drive shareholder value. Additionally, with improved commodity pricing, our 2021 year end total proved reserves now over a PV-10 value of approximately $1.2 billion at share pricing as of April 18, 2022. And as detailed in our investor presentation, our improved internal 3-year projections currently forecast approximately $215 million to $340 million in cumulative free cash flow. With our significant reserve value and strong free cash flow outlook, we believe that Amplify remains substantially undervalued in the current market. Before concluding, I would like to reiterate that safety remains our highest priority, and we are continuously committed to operating safely and an amount of insurers to well-being of our employees, business partners and stakeholders and the protection of the environment and our surrounding communities. Our dedication to safety, environmental stewardship, operational excellence, disciplined capital allocation and delevering efforts has demonstrated our ability to generate significant free cash flow and to drive substantial long-term value for all of our stakeholders. With that, operator, we are now open for questions.

[Operator Instructions] Your first question comes from the line of John White with ROTH Capital.

Good morning, guys.

Good morning, John.

You have made it clear you are not assuming Beta returns to production in 2022. Is that – for a little more detail, is that because you have to wait on the Corp of Engineers or is it due to the amount of time needed for the repairs or is it a combination of those two?

So I will take that, John. So while it’s still to be determined, we are obviously hoping for a return in 2022. As we’ve stated, we expect to take approximately 3 to 4 months and we are waiting on that final permit as we speak. So we are certainly hopeful of getting it online by end 2022. But from a guidance perspective, we felt like it was more appropriate to issue guidance without Beta coming online until we had more clarity on exactly what date that would be. So if we come back online in October, we would obviously update the guidance to reflect that at that time.

That’s certainly understandable. In the 3 to 4 months, that encompasses a decision by the Corp of Engineers and estimated repair time?

So, that’s basically once we get the permit in hand, that’s a 3 to 4-month process from there.

Okay. Thank you. And strong activity during the quarter at the Eagle Ford and I know you are considering that for divestiture. But do you see continued strong activity at the Eagle Ford for the rest of the year?

Yes, I will start that and Jason can add if he wants to, but yes, we have certainly seen an uptick in activity across the Eagle Ford. Obviously, we are still planning to – we are still looking at the potential for divesting that asset. But obviously, we always have the opportunity to keep it as well and continue to take advantage of the extremely strong economics from the projects that are coming online with a lot more assumingly planned for the remainder of the year that may stretch into 2023 as well.

Yes. John, the only thing I’ll add there is the activity that we are seeing right now is completing the DUCs that were drilled later last year, which is the 7 gross wells, 4 net that we anticipate coming online in the second quarter. And we’re continually having conversations with the operators on our positions about future projects, what could be coming down the pipeline from both a recompletion refrac standpoint and from new drills. So we would anticipate additional activity as we continue through the year.

Yes. And I’d just like to once again reiterate that the divestiture process is still very much ongoing. So we are – we can kind of pivot depending on what provides the best outcome for the company.

I appreciate that. Are you marketing the property with internal resources or have you hired an adviser?

We have an adviser marketing it for us.

Okay. Well, good luck with that and congratulations on the nice results. The free cash flow and most of all, your regulatory progress on Beta, congratulations on that.

Thank you, John.

That’s all I have.

And there are no further questions in queue at this time. I’ll turn the call back over to management for closing remarks.

I’d just like to say thank you everyone for joining us today. I’d like to conclude by expressing my appreciation to the company’s employees for their outstanding efforts and dedication as always. I also like to thank all of our stakeholders for their continued support and patience as we move through this process. As always, please don’t hesitate to reach out to us if you have any additional questions. Thank you.

And this concludes today’s conference call. Thank you for participating. You may now disconnect.