10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-35512

Amplify Energy Corp.

(Exact name of registrant as specified in its charter)

Delaware	82-1326219
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
500 Dallas Street, Suite 1700, Houston, TX	77002
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 490-8900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  þ    No  ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  þ    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer þ
Non-accelerated filer ☐	Smaller reporting company ☑
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).   Yes  ☐    No  þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    þ  Yes      ☐     No

Securities Registered Pursuant to Section 12(b):

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AMPY	NYSE

As of April 29, 2022, the registrant had 38,327,143 outstanding shares of common stock, $0.01 par value outstanding.

AMPLIFY ENERGY CORP.

TABLE OF CONTENTS

		Page
	Glossary of Oil and Natural Gas Terms	1
	Names of Entities	4
	Cautionary Note Regarding Forward-Looking Statements	5
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	8
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	8
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021	9
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	10
	Unaudited Condensed Consolidated Statements of Equity (Deficit) for the Three Months Ended March 31, 2022 and 2021	11
	Notes to Unaudited Condensed Consolidated Financial Statements	12
	Note 1 – Organization and Basis of Presentation	12
	Note 2 – Summary of Significant Accounting Policies	13
	Note 3 – Revenue	13
	Note 4 – Fair Value Measurements of Financial Instruments	14
	Note 5 – Risk Management and Derivative Instruments	15
	Note 6 – Asset Retirement Obligations	18
	Note 7 – Long-term Debt	19
	Note 8 – Equity (Deficit)	20
	Note 9 – Earnings per Share	21
	Note 10 – Long-Term Incentive Plans	21
	Note 11 – Leases	24
	Note 12 – Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows	26
	Note 13 – Related Party Transactions	27
	Note 14 – Commitments and Contingencies	27
	Note 15 – Income Taxes	28
	Note 16 – Southern California Pipeline Incident	28
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44

i

GLOSSARY OF OIL AND NATURAL GAS TERMS

Analogous Reservoir: Analogous reservoirs, as used in resource assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, analogous reservoir refers to a reservoir that shares all of the following characteristics with the reservoir of interest: (i) the same geological formation (but not necessarily in pressure communication with the reservoir of interest); (ii) the same environment of deposition; (iii) similar geologic structure; and (iv) the same drive mechanism.

Bbl: One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

Bbl/d: One Bbl per day.

Bcfe: One billion cubic feet of natural gas equivalent.

Boe: One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil.

BOEM: U.S. Bureau of Ocean Energy Management.

Btu: One British thermal unit, the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.

CO₂: Carbon dioxide.

Development Project: A development project is the means by which petroleum resources are brought to the status of economically producible. As examples, the development of a single reservoir or field, an incremental development in a producing field or the integrated development of a group of several fields and associated facilities with a common ownership may constitute a development project.

Dry Hole or Dry Well: A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production would exceed production expenses and taxes.

Economically Producible: The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. For this determination, the value of the products that generate revenue are determined at the terminal point of oil and natural gas producing activities.

Exploitation: A development or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects.

Field: An area consisting of a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

Gross Acres or Gross Wells: The total acres or wells, as the case may be, in which we have a working interest.

ICE: Inter-Continental Exchange.

MBbl: One thousand Bbls.

MBbls/d: One thousand Bbls per day.

MBoe: One thousand barrels of oil equivalent.

1

MBoe/d: One thousand barrels of oil equivalent per day.

MMBoe: One million barrels of oil equivalent.

Mcf: One thousand cubic feet of natural gas.

Mcf/d: One Mcf per day.

MMBtu: One million Btu.

MMcf: One million cubic feet of natural gas.

MMcfe: One million cubic feet of natural gas equivalent.

MMcfe/d: One MMcfe per day.

Net Production: Production that is owned by us less royalties and production due to others.

NGLs: The combination of ethane, propane, butane and natural gasolines that, when removed from natural gas, become liquid under various levels of higher pressure and lower temperature.

NYMEX: New York Mercantile Exchange.

NYSE: New York Stock Exchange.

Oil: Oil and condensate.

Operator: The individual or company responsible for the exploration and/or production of an oil or natural gas well or lease.

OPIS: Oil Price Information Service.

Plugging and Abandonment: Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another stratum or to the surface. Regulations of all states require plugging of abandoned wells.

Probabilistic Estimate: The method of estimation of reserves or resources is called probabilistic when the full range of values that could reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible outcomes and their associated probabilities of occurrence.

Proved Developed Reserves: Proved reserves that can be expected to be recovered from existing wells with existing equipment and operating methods.

Proved Reserves: Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time. The area of the reservoir considered as proved includes (i) the area identified by drilling and limited by fluid contacts, if any, and (ii) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or natural gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons, as seen in a well penetration, unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty. Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves

2

which can be produced economically through application of improved recovery techniques (including fluid injection) are included in the proved classification when (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir, or an analogous reservoir or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price used is the average price during the twelve-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Realized Price: The cash market price less all expected quality, transportation and demand adjustments.

Reliable Technology: Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

Reserves: Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

Reservoir: A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reserves.

Resources: Resources are quantities of oil and natural gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable and another portion may be considered unrecoverable. Resources include both discovered and undiscovered accumulations.

SEC: The U.S. Securities and Exchange Commission

Working Interest: An interest in an oil and natural gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

Workover: Operations on a producing well to restore or increase production.

WTI: West Texas Intermediate.

3

NAMES OF ENTITIES

As used in this Form 10-Q, unless indicated otherwise:

● “Amplify Energy,” “Company,” “we,” “our,” “us,” or like terms refers to Amplify Energy Corp. individually and collectively with its subsidiaries, as the context requires;

● “Legacy Amplify” refers to Amplify Energy Holdings LLC (f/k/a Amplify Energy Corp.), the successor reporting company of Memorial Production Partners LP; and

● “OLLC” refers to Amplify Energy Operating LLC, our wholly owned subsidiary through which we operate our properties.

4

CAUTIONARY NOTE REGARDING FORWARD–LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:

● business strategies;

● ongoing impact of the oil incident that occurred off the coast of Southern California resulting from our pipeline operations (the “Pipeline”) at the Beta Field (the “Incident”);

● acquisition and disposition strategy;

● cash flows and liquidity;

● financial strategy;

● ability to replace the reserves we produce through drilling;

● drilling locations;

● oil and natural gas reserves;

● technology;

● realized oil, natural gas and NGL prices;

● production volumes;

● lease operating expense;

● gathering, processing and transportation;

● general and administrative expense;

● future operating results;

● ability to procure drilling and production equipment;

● ability to procure oil field labor;

● planned capital expenditures and the availability of capital resources to fund capital expenditures;

● ability to access capital markets;

● marketing of oil, natural gas and NGLs;

● acts of God, fires, earthquakes, storms, floods, other adverse weather conditions, war, acts of terrorism, military operations or national emergency;

● the occurrence or threat of epidemic or pandemic diseases, including the coronavirus (“COVID-19”) pandemic, or any government response to such occurrence or threat;

5

● expectations regarding general economic conditions;

● competition in the oil and natural gas industry;

● effectiveness of risk management activities;

● environmental liabilities;

● counterparty credit risk;

● expectations regarding governmental regulation and taxation;

● expectations regarding developments in oil-producing and natural-gas producing countries; and

● plans, objectives, expectations and intentions.

All statements, other than statements of historical fact included in this report, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “would,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “outlook,” “continue,” the negative of such terms or other comparable terminology. These statements address activities, events or developments that we expect or anticipate will or may occur in the future, including things such as projections of results of operations, plans for growth, goals, future capital expenditures, competitive strengths, references to future intentions and other such references. These forward-looking statements involve risks and uncertainties. Important factors that could cause our actual results or financial condition to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following risks and uncertainties:

● risks related to the Incident and the ongoing impact to the Incident;

● risks related to a redetermination of the borrowing base under our senior secured reserve-based revolving credit facility;

● our ability to access funds on acceptable terms, if at all, because of the terms and conditions governing our indebtedness, including financial covenants;

● our ability to satisfy debt obligations;

● volatility in the prices for oil, natural gas and NGLs, including further or sustained declines in commodity prices;

● the potential for additional impairments due to continuing or future declines in oil, natural gas and NGL prices;

● the uncertainty inherent in estimating quantities of oil, natural gas and NGLs reserves;

● our substantial future capital requirements, which may be subject to limited availability of financing;

● the uncertainty inherent in the development and production of oil and natural gas;

● our need to make accretive acquisitions or substantial capital expenditures to maintain our declining asset base;

● the existence of unanticipated liabilities or problems relating to acquired or divested businesses or properties;

● potential acquisitions, including our ability to make acquisitions on favorable terms or to integrate acquired properties;

● the consequences of changes we have made, or may make from time to time in the future, to our capital expenditure budget, including the impact of those changes on our production levels, reserves, results of operations and liquidity;

6

● potential shortages of, or increased costs for, drilling and production equipment and supply materials for production, such as CO₂;

● potential difficulties in the marketing of oil and natural gas;

● changes to the financial condition of counterparties;

● uncertainties surrounding the success of our secondary and tertiary recovery efforts;

● competition in the oil and natural gas industry;

● our results of evaluation and implementation of strategic alternatives;

● general political and economic conditions, globally and in the jurisdictions in which we operate, including escalating tensions between Russia and Ukraine and the political destabilizing effect such conflict may pose for the European continent or the global oil and natural gas markets;

● the impact of climate change and natural disasters, such as earthquakes, tidal waves, mudslides, fires and floods;

● the impact of local, state and federal governmental regulations, including those related to climate change and hydraulic fracturing;

● the risk that our hedging strategy may be ineffective or may reduce our income;

● the cost and availability of insurance as well as operating risks that may not be covered by an effective indemnity or insurance;

● actions of third-party co-owners of interests in properties in which we also own an interest; and

● other risks and uncertainties described in “Item 1A. Risk Factors.”

The forward-looking statements contained in this report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or that the events or circumstances described in any forward-looking statement will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in “Part I—Item 1A. Risk Factors” of Amplify’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2022 (“2021 Form 10-K”). All forward-looking statements speak only as of the date of this report. The Company does not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to the Company or persons acting on its behalf.

7

PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except outstanding shares)

	March 31,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	15,605	$	18,799
Accounts receivable, net (see Note 12)		91,932		91,967
Short-term derivative instruments		234		—
Prepaid expenses and other current assets		14,266		15,018
Total current assets		122,037		125,784
Property and equipment, at cost:
Oil and natural gas properties, successful efforts method		806,959		799,532
Support equipment and facilities		145,325		145,324
Other		9,641		9,641
Accumulated depreciation, depletion and amortization		(639,847)		(634,212)
Property and equipment, net		322,078		320,285
Restricted investments		7,297		4,622
Operating lease - long term right-of-use asset		3,158		2,716
Other long-term assets		1,560		1,693
Total assets	$	456,130	$	455,100
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	26,578	$	33,819
Revenues payable		21,862		20,374
Accrued liabilities (see Note 12)		53,896		57,826
Short-term derivative instruments		103,887		53,144
Total current liabilities		206,223		165,163
Long-term debt (see Note 7)		225,000		230,000
Asset retirement obligations		104,118		102,398
Long-term derivative instruments		20,846		9,664
Operating lease liability		2,549		2,017
Other long-term liabilities		10,397		10,699
Total liabilities		569,133		519,941
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, 2022 and December 31, 2021		—		—
Warrants, 2,173,913 warrants issued and outstanding at March 31, 2022 and December 31, 2021		4,788		4,788
Common stock, $0.01 par value: 250,000,000 shares authorized; 38,260,182 and 38,024,142 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		384		382
Additional paid-in capital		425,516		425,066
Accumulated deficit		(543,691)		(495,077)
Total stockholders' deficit		(113,003)		(64,841)
Total liabilities and equity	$	456,130	$	455,100

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

8

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	For the Three Months Ended
	March 31,
	2022		2021
Revenues:
Oil and natural gas sales	$	93,872	$	72,331
Other revenues		17,561		138
Total revenues		111,433		72,469
Costs and expenses:
Lease operating expense		32,920		28,906
Gathering, processing and transportation		8,010		4,579
Taxes other than income		7,553		4,613
Depreciation, depletion and amortization		5,635		7,347
General and administrative expense		7,771		6,921
Accretion of asset retirement obligations		1,720		1,615
Loss on commodity derivative instruments		93,404		34,588
Pipeline incident loss		580		—
Other, net		35		84
Total costs and expenses		157,628		88,653
Operating loss		(46,195)		(16,184)
Other (expense) income:
Interest expense, net		(2,441)		(3,112)
Other expense		22		(26)
Total other expense		(2,419)		(3,138)
Loss before reorganization items, net and income taxes		(48,614)		(19,322)
Reorganization items, net		—		(6)
Income tax expense		—		—
Net loss	$	(48,614)	$	(19,328)
Loss per share: (See Note 9)
Basic and diluted loss per share	$	(1.27)	$	(0.51)
Weighted average common shares outstanding:
Basic and diluted		38,181		37,829

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

9

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Three Months Ended
	March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(48,614)	$	(19,328)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization		5,635		7,347
Loss on derivative instruments		92,847		34,526
Cash settlements paid on expired derivative instruments		(31,157)		(11,100)
Bad debt expense		10		3
Amortization and write-off of deferred financing costs		133		139
Accretion of asset retirement obligations		1,720		1,615
Share-based compensation (see Note 10)		518		(204)
Settlement of asset retirement obligations		—		(162)
Changes in operating assets and liabilities:
Accounts receivable		(6,661)		(4,525)
Prepaid expenses and other assets		(804)		2,574
Payables and accrued liabilities		(3,436)		4,849
Other		(472)		(176)
Net cash provided by operating activities		9,719		15,558
Cash flows from investing activities:
Additions to oil and gas properties		(5,172)		(3,788)
Additions to other property and equipment		—		(328)
Additions to restricted investments		(2,675)		—
Net cash used in investing activities		(7,847)		(4,116)
Cash flows from financing activities:
Payments on revolving credit facility		(5,000)		(5,000)
Shares withheld for taxes		(66)		(5)
Net cash used in financing activities		(5,066)		(5,005)
Net change in cash and cash equivalents		(3,194)		6,437
Cash and cash equivalents, beginning of period		18,799		10,364
Cash and cash equivalents, end of period	$	15,605	$	16,801

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

10

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(In thousands)

	Stockholders' Equity (Deficit)
					Additional
	Common				Paid-in		Accumulated
	Stock		Warrants		Capital		Deficit		Total
Balance at December 31, 2021	$	382	$	4,788	$	425,066	$	(495,077)	$	(64,841)
Net loss		—		—		—		(48,614)		(48,614)
Share-based compensation expense		—		—		518		—		518
Shares withheld for taxes		—		—		(66)		—		(66)
Other		2		—		(2)		—		—
Balance at March 31, 2022	$	384	$	4,788	$	425,516	$	(543,691)	$	(113,003)

	Stockholders' Equity (Deficit)
					Additional		Accumulated
	Common				Paid-in		Earnings
	Stock		Warrants		Capital		(Deficit)		Total
Balance at December 31, 2020	$	378	$	4,788	$	424,104	$	(463,007)	$	(33,737)
Net loss		—		—		—		(19,328)		(19,328)
Share-based compensation expense		—		—		(204)		—		(204)
Shares withheld for taxes		—		—		(5)		—		(5)
Other		3		—		(3)		—		—
Balance at March 31, 2021		381		4,788		423,892		(482,335)		(53,274)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

11

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Basis of Presentation

General

Amplify Energy Corp. (“Amplify Energy,” “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 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 the economic environments are not different within the operation of its oil and natural gas properties. The Company’s assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. 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 Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the SEC. The results reported in these Unaudited Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. In the Company’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Although the Company believes the disclosures in these financial statements are adequate, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC.

Material intercompany transactions and balances have been eliminated in preparation of the Company’s consolidated financial statements.

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; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

Market Conditions and COVID-19

Since the start of the COVID-19 pandemic, governments have tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in activity in the global economy and the demand for oil and to a lesser extent natural gas and NGLs. As vaccines have become widely available, social distancing guidelines, travel restrictions and stay-at-home orders have eased, activity in the global economy has increased and demand for oil, natural gas and NGLs and related commodity pricing, has improved.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally, oil, natural gas and NGLs prices increased in the first quarter of 2022 when compared to the same period of 2021 and, as a result, we experienced a significant increase in revenues. As we continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations, the Russia-Ukraine conflict, global inventories of oil and gas and the uncertainty associated with recovering oil demand, future monetary policy and governmental policies aimed at transitioning towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile. Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions or other medical advances to combat the virus may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

Note 2. Summary of Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies and estimates as described in the Company’s annual financial statements included in its 2021 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.

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,
	2022		2021
Revenues
Oil	$	52,374	$	49,695
NGLs		13,481		7,670
Natural gas		28,017		14,966
Oil and natural gas sales	$	93,872	$	72,331

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 was $39.9 million at March 31, 2022 and $32.4 million at December 31, 2021.

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.

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, 2022 and December 31, 2021. 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, 2022 and December 31, 2021 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, 2022 and December 31, 2021 for each of the fair value hierarchy levels:

	Fair Value Measurements at March 31, 2022
					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	$	—	$	11,819	$	—	$	11,819
Interest rate derivatives		—		234		—		234
Total assets	$	—	$	12,053	$	—	$	12,053
Liabilities:
Commodity derivatives	$	—	$	136,465	$	—	$	136,465
Interest rate derivatives		—		87		—		87
Total liabilities	$	—	$	136,552	$	—	$	136,552

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Fair Value Measurements at December 31, 2021
					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	$	—	$	7,967	$	—	$	7,967
Interest rate derivatives		—		—		—		—
Total assets	$	—	$	7,967	$	—	$	7,967
Liabilities:
Commodity derivatives	$	—	$	70,152	$	—	$	70,152
Interest rate derivatives		—		623		—		623
Total liabilities	$	—	$	70,775	$	—	$	70,775

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

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 recorded on proved oil and natural gas properties during the three months ended March 31, 2022 and 2021.

Note 5. Risk Management and Derivative Instruments

Derivative instruments are utilized to manage exposure to commodity price fluctuations and achieve a more predictable cash flow in connection with natural gas and oil sales from production and borrowing related activities. These instruments limit exposure to declines in prices but also limit the benefits that would be realized if prices increase.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 generally are 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. 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.

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. The Company’s NGL derivative contracts are primarily indexed to OPIS Mont Belvieu.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At March 31, 2022, the Company had the following open commodity positions:

	2022		2023
Natural Gas Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (MMBtu)		695,000		—
Weighted-average fixed price	$	2.56	$	—
Collar contracts:
Two-way collars
Average monthly volume (MMBtu)		775,000		690,000
Weighted-average floor price	$	2.56	$	2.92
Weighted-average ceiling price	$	3.44	$	3.84
Crude Oil Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		61,667		55,000
Weighted-average fixed price	$	49.17	$	57.30
Collar contracts:
Two-way collars
Average monthly volume (Bbls)		20,000		—
Weighted-average floor price	$	58.75	$	—
Weighted-average ceiling price	$	68.31	$	—
Three-way collars
Average monthly volume (Bbls)		89,000		30,000
Weighted-average ceiling price	$	55.55	$	67.15
Weighted-average floor price	$	42.92	$	55.00
Weighted-average sub-floor price	$	32.58	$	40.00

Interest Rate Swaps

Periodically, the Company enters into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates such as those in its Credit Agreement to fixed interest rates. At March 31, 2022, the Company had the following interest rate swap open positions:

	Remaining
	2022
Average Monthly Notional (in thousands)	$	75,000
Weighted-average fixed rate		1.281	%
Floating rate		1 Month LIBOR

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, 2022 and December 31, 2021. 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.

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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	2022		2022		2021		2021
		(In thousands)
Commodity contracts	Short-term derivative instruments	$	9,470	$	113,270	$	4,804	$	57,325
Interest rate swaps	Short-term derivative instruments		234		87		—		623
Gross fair value			9,704		113,357		4,804		57,948
Netting arrangements			(9,470)		(9,470)		(4,804)		(4,804)
Net recorded fair value	Short-term derivative instruments	$	234	$	103,887	$	—	$	53,144
Commodity contracts	Long-term derivative instruments	$	2,349	$	23,195	$	3,163	$	12,827
Interest rate swaps	Long-term derivative instruments		—		—		—		—
Gross fair value			2,349		23,195		3,163		12,827
Netting arrangements			(2,349)		(2,349)		(3,163)		(3,163)
Net recorded fair value	Long-term derivative instruments	$	—	$	20,846	$	—	$	9,664

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	March 31,
	Operations Location	2022		2021
Commodity derivative contracts	Loss on commodity derivatives	$	93,404	$	34,588
Gain on interest rate derivatives	Interest expense, net		(557)		(62)

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, 2022 (in thousands):

Asset retirement obligations at beginning of period	$	103,414
Liabilities added from acquisition or drilling		—
Liabilities settled		—
Liabilities removed upon sale of wells		—
Accretion expense		1,720
Revision of estimates		—
Asset retirement obligation at end of period		105,134
Less: Current portion		1,016
Asset retirement obligations - long-term portion	$	104,118

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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,
	2022		2021
	(In thousands)
Revolving Credit Facility (1)	$	225,000	$	230,000
Total long-term debt	$	225,000	$	230,000

(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.

Revolving Credit Facility

Amplify Energy Operating LLC, the Company’s wholly owned subsidiary (“OLLC”), is a party to a reserve-based revolving credit facility (the “Revolving Credit Facility”), subject to a borrowing base of $235.0 million as of March 31, 2022, which is guaranteed by the Company and all of its current subsidiaries. The Revolving Credit Facility matures on November 2, 2023. The Company’s borrowing base under its Revolving Credit Facility is subject to redetermination on at least a semi-annual basis, primarily based on a reserve engineering report.

As of March 31, 2022, the Company was in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with its Revolving Credit Facility.

The Fall 2021 semi-annual borrowing base redetermination in November 2021, resulted in (1) the reaffirmation of the $245.0 million borrowing base and (2) subsequent reductions to the borrowing base of $5.0 million per month beginning February 28, 2022 and continuing until the completion of the next regularly scheduled redetermination. The Company expects to complete the next regularly scheduled redetermination during the second quarter 2022. As of April 30, 2022, the Company’s borrowing base was $230.0 million, which reflects the previously agreed-upon borrowing base reductions of $5.0 million in February, March and April 2022.

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,
	2022		2021
Revolving Credit Facility	3.79	%	3.67	%

Letters of Credit

At March 31, 2022, the Company had no letters of credit outstanding.

Unamortized Deferred Financing Costs

Unamortized deferred financing costs associated with the Company’s Revolving Credit Facility was $0.8 million at March 31, 2022.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Paycheck Protection Program

On April 24, 2020, the Company received a $5.5 million PPP Loan. The PPP Loan was established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide loans to qualifying businesses. The PPP Loan was not part of the Revolving Credit Facility as described above. The loan and accrued interest were potentially forgivable provided that the borrower uses the loan proceeds for eligible purposes. The term of the Company’s PPP Loan was two years with an annual interest rate of 1% and no payments of principal or interest due during the six-month period beginning on the date of the PPP Loan. The Company applied for forgiveness of the amount due on the PPP Loan based on spending the loan proceeds on eligible expenses as defined by the statute. On June 22, 2021, KeyBank notified the Company that the PPP Loan had been approved for full and complete forgiveness by the Small Business Association.

Note 8. Equity (Deficit)

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, 2022:

	Common Stock
Balance, December 31, 2021	38,024,142
Issuance of common stock	—
Restricted stock units vested	326,440
Shares withheld for taxes (1)	(90,400)
Balance, March 31, 2022	38,260,182

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

Warrants

On May 4, 2017, Legacy Amplify entered into a warrant agreement with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which Legacy Amplify issued warrants to purchase up to 2,173,913 shares of Legacy Amplify’s common stock, exercisable for a five-year period commencing on May 4, 2017 at an exercise price of $42.60 per share. The warrants expired on May 4, 2022.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 9. Earnings 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,
	2022		2021
Net loss	$	(48,614)	$	(19,328)
Less: Net income allocated to participating restricted stockholders		—		—
Basic and diluted earnings available to common stockholders	$	(48,614)	$	(19,328)
Common shares:
Common shares outstanding — basic		38,181		37,829
Dilutive effect of potential common shares		—		—
Common shares outstanding — diluted		38,181		37,829
Net loss per share:
Basic	$	(1.27)	$	(0.51)
Diluted	$	(1.27)	$	(0.51)
Antidilutive warrants (1)		2,174		2,174

(1) Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect.

Note 10. Long-Term Incentive Plans

In May 2021, the shareholders approved a new Equity Incentive Plan (“EIP”) in which the Legacy Amplify Management Incentive Plan (the “Legacy Amplify MIP”) and the Legacy Amplify 2017 Non-Employee Directors Compensation Plan (the “Legacy Amplify Non-Employee Directors Compensation Plan”) were replaced by the EIP and no further awards will be allowed to be granted under the Legacy Amplify MIP or the Legacy Amplify Non-Employee Directors Compensation Plan. As of March 31, 2022, an aggregate of 1,564,669 shares were available for future grants under the EIP.

Restricted Stock Units

Restricted Stock Units with Service Vesting Condition

The restricted stock units with service vesting conditions (“TSUs”) are accounted for as equity-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 are recorded as general and administrative expense. The unrecognized cost associated with the TSUs was $4.9 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.4 years.

21

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information regarding the TSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
TSUs outstanding at December 31, 2021	1,074,420	$	3.66
Granted (2)	834,374	$	3.64
Forfeited	(18,523)	$	3.52
Vested	(277,345)	$	3.60
TSUs outstanding at March 31, 2022	1,612,926	$	3.66

(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, 2022 was $3.0 million based on a grant date market price at $3.64 per share.

Restricted Stock Units with Market and Service Vesting Conditions

The restricted stock units with market and service vesting conditions (“PSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost related to the PSUs was less than $0.1 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 1.0 years.

The PSUs will vest based on the satisfaction of service and market vesting conditions, with market vesting based on the Company’s achievement of certain share price targets. The PSUs are subject to service-based vesting such that 50% of the PSUs service vest on the applicable market vesting date and an additional 25% of the PSUs service vest on each of the first and second anniversaries of the applicable market vesting date.

In the event of a qualifying termination, subject to certain conditions, (i) all PSUs that have satisfied the market vesting conditions will fully service vest, upon such termination, and (ii) if the termination occurs between the second and third anniversaries of the grant date, then PSUs that have not market vested as of the termination will market vest to the extent that the share targets (in each case, reduced by $0.25) are achieved as of such termination. Subject to the foregoing, any unvested PSUs will be forfeited upon termination of employment.

A Monte Carlo simulation was used in order to determine the fair value of these awards at the grant date.

The following table summarizes information regarding the PSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PSUs outstanding at December 31, 2021	65,940	$	2.87
Granted	—	$	—
Forfeited	(5,365)	$	2.11
Vested	—	$	—
PSUs & outstanding at March 31, 2022	60,575	$	2.94

(1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units with Market Vesting Conditions

The restricted stock units with performance-based vesting conditions (“PRSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense.

The 2022 PRSUs were issued with a three year vesting period beginning on the grant date and ending on the third anniversary of the grant date. Vesting of PRSUs can range from zero to 200% of the target units 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 performance period. The fair value of each PRSU award was estimated on their grant dates using a Monte Carlo simulation. The unrecognized cost associated with the PRSUs was $1.3 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.7 years.

The 2021 PRSUs awards were issued collectively in separate tranches with individual performances periods beginning in January 2021, 2022, and 2023 respectively. For each of the 2021 PRSUs awards the performance period, will vest based on the percentage of the target PRSUs subject to the performance vesting condition, with 25% able to vest during the period January 1, 2021 through December 31, 2021; 25% able to vest during the period January 1, 2022 through December 31, 2022 and 50% able to vest during the period of January 1, 2023 through December 31, 2023.

The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2022 are presented as follows:

	2022
Expected volatility	120.8	%
Dividend yield	0.00	%
Risk-free interest rate	1.38	%

The following table summarizes information regarding the PRSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PRSUs outstanding at December 31, 2021	196,377	$	1.94
Granted (2)	189,904	$	6.20
Forfeited	—	$	—
Vested	(49,095)	$	1.24
PRSUs outstanding at March 31, 2022	337,186	$	4.44

(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 PRSUs issued for the three months ended March 31, 2022 was $1.2 million based on a calculated fair value price at $6.20 per share.

2017 Non-Employee Directors Compensation Plan

In June 2017, Legacy Amplify implemented the Legacy Amplify Non-Employee Directors Compensation Plan to attract and retain the services of experienced non-employee directors of Legacy Amplify or its subsidiaries. In connection with the closing of the merger, on August 6, 2019, the Company assumed the Legacy Amplify Non-Employee Directors Compensation Plan. As noted above, the Legacy Amplify Non-Employee Directors Compensation Plan was replaced by the EIP in May 2021.

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AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The restricted stock units with a service vesting condition (“Board RSUs”) are accounted for as equity-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 are recorded as general and administrative expense. The unrecognized cost associated with restricted stock unit awards was less than $0.1 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 0.1 years. The remaining Board RSUs outstanding was 3,333 at March 31, 2022 with a weighted average grant date fair value per unit of $5.12. No awards granted, forfeited or vested during the three months ended March 31, 2022.

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,
	2022		2021
Equity classified awards
TSUs		591		75
PSUs and PRSUs		53		23
Board RSUs		4		4
	$	648	$	102

Note 11. Leases

For the quarter ended March 31, 2022, the Company’s leases qualify as operating leases and it did not have any existing or new leases qualifying as financing leases or variable leases. The Company has leases for office space and equipment in its corporate office and operating regions as well as warehouse space, vehicles, compressors and surface rentals related to its business operations. In addition, the Company has offshore Southern California pipeline right-of-way use agreements. 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 under ASC 842 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.

The Company’s corporate office lease does not provide an implicit rate. To determine the present value of the lease payments, the Company uses its 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, 2022 and 2021, the Company recognized approximately $0.4 million and $0.6 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 Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Non-cash amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	442	$	106

24

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:

	March 31,		December 31,
	2022		2021
	(In thousands)
Right-of-use asset	$	3,158	$	2,716
Lease liabilities:
Current lease liability		756		777
Long-term lease liability		2,549		2,017
Total lease liability	$	3,305	$	2,794

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
Remaining 2022	$	508	$	187	$	695
2023		678		240		918
2024		678		32		710
2025		678		—		678
2026 and thereafter		571		—		571
Total lease payments		3,113		459		3,572
Less: interest		252		15		267
Present value of lease liabilities	$	2,861	$	444	$	3,305

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

	March 31,
	2022		2021
Weighted average remaining lease term (years):
Office and warehouse space	4.01		0.47
Vehicles	0.26		0.77
Office equipment	—		0.03
Weighted average discount rate:
Office leases	3.05	%	2.75	%
Vehicles	0.44	%	1.45	%
Office equipment	—	%	0.14	%

25

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,
	2022		2021
Accrued liability - pipeline incident	$	27,731	$	34,417
Accrued lease operating expense		9,327		9,271
Accrued general and administrative expense		3,047		4,555
Accrued production and ad valorem tax		5,315		3,277
Accrued commitment fee and other expense		4,157		2,882
Accrued capital expenditures		2,329		1,631
Asset retirement obligations		1,016		1,016
Operating lease liability		756		777
Other		218		—
Accrued liabilities	$	53,896	$	57,826

Accounts Receivable

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

	March 31,		December 31,
	2022		2021
Oil and natural gas receivables	$	39,949	$	32,428
Insurance receivable - pipeline incident		47,778		55,765
Joint interest owners and other		5,850		5,409
Total accounts receivable		93,577		93,602
Less: allowance for doubtful accounts		(1,645)		(1,635)
Total accounts receivable, net		91,932		91,967

Supplemental Cash Flows

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

	For the Three Months Ended
	March 31,
	2022		2021
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$	2,100	$	2,265
Cash paid for reorganization items, net		—		6
Noncash investing and financing activities:
Increase in capital expenditures in payables and accrued liabilities		1,997		1,916

26

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, 2022 and 2021.

Note 14. Commitments and Contingencies

Litigation and Environmental

As of March 31, 2022, the Company had no material contingent liabilities recorded in its Unaudited Condensed Consolidated Financial Statements associated with any litigation, pending or threatened.

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.

At March 31, 2022 and December 31, 2021, the Company had no environmental reserves recorded in its Unaudited Condensed Consolidated Balance Sheet.

Southern California Pipeline Incident

The Company and certain of its subsidiaries are named defendants in a putative class action pending in the United States District Court for the Central District of California. The plaintiffs seek unspecified monetary damages and certain forms of injunctive relief. The Company is also participating in a related claims process organized under the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. (“OPA 90”). Under OPA 90, a party alleged to be responsible for a discharge of oil is required to establish a claims process to pay for interim costs and damages as a result of the discharge. The OPA 90 claims process remains ongoing.

Future litigation may be necessary, among other things, to defend the Company by determining the scope, enforceability, and validity of claims. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

Minimum Volume Commitment

The Company is party to a gas purchase, gathering and processing contract in Oklahoma, which includes certain minimum NGL commitments. To the extent the Company does not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, it would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee. The Company is not meeting the minimum volume required under this contractual provision. The commitment fee expense was approximately $0.4 million for each of the three months ended March 31, 2022 and 2021. The minimum volume commitment for Oklahoma ends on June 30, 2023.

The Company is party to a gas purchase, gathering and processing contract in East Texas, which includes certain minimum gas commitments. The Company is not meeting the minimum volume required under this contractual provision. The commitment fee expense for the three months ended March 31, 2022 and 2021, was approximately $0.5 million and $0.7 million, respectively. The minimum volume commitment for East Texas ends on November 30, 2022.

Sinking Fund Trust Agreement

Beta Operating Company, LLC, a wholly owned subsidiary, assumed an obligation with a third party to make payments into a sinking fund in connection with its 2009 acquisition of the Company properties in federal waters offshore Southern California, the

27

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. Under the terms of the agreement, the operator of the properties is obligated to make monthly deposits into the sinking fund account in an amount equal to $0.25 per barrel of oil and other liquid hydrocarbon produced from the acquired working interest. 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, 2022, the account balance included in restricted investments was approximately $4.3 million.

Supplemental Bond for Decommissioning Liabilities Trust Agreement

Beta Operating Company, LLC (“Beta”), a wholly owned subsidiary of the Company, has an obligation with the BOEM in connection with its 2009 acquisition of the Company’s properties in federal waters offshore Southern California. The Company supports this obligation with $161.3 million of A-rated surety bonds and $0.3 million of cash as of March 31, 2022.

Note 15. Income Taxes

The Company had no income tax expense for the three months ended March 31, 2022 and 2021, respectively. The Company’s effective tax rate was 0% for the three months ended March 31, 2022 and 2021, respectively. The effective tax rates for the three months ended March 31, 2022 and 2021 are different from the statutory U.S. federal income tax rate primarily due to the Company’s recorded valuation allowances.

Note 16. Southern California Pipeline Incident

On October 2, 2021, contractors operating under the direction of Beta, a subsidiary of Amplify, observed an oil sheen on the water approximately four miles off the coast of Newport Beach, California (the “Incident”). Beta platform personnel were notified and promptly initiated the Company’s Oil Spill Response Plan, which was reviewed and approved by the Bureau of Safety and Environmental Enforcement’s Oil Spill Preparedness Division within the United States Department of the Interior, and which included the required notifications of specified regulatory agencies. 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.

On October 5, 2021, the Unified Command announced that reports from its contracted commercial divers and Remotely Operated Vehicle footage indicated that a 4,000-foot section of the Company’s pipeline had been displaced with a maximum lateral movement of approximately 105 feet and that the pipeline had a 13-inch split, running parallel to the pipe. On October 14, 2021, the U.S. Coast Guard announced that it had a high degree of confidence the size of the release was approximately 588 barrels of oil, which is below the previously reported maximum estimate of 3,134 barrels. On October 16, 2021, the U.S. Coast Guard announced that it had identified the Mediterranean Shipping Company (DANIT) as a “vessel of interest” and its owner Dordellas Finance Corporation and operator Mediterranean Shipping Company, S.A. as parties in interest in connection with an anchor-dragging incident, in January 2021 (the “Anchor Dragging Incident”), which occurred in close proximity to our pipeline, and that additional vessels of interest continued to be investigated. On November 19, 2021, the U.S. Coast Guard announced that it had identified the COSCO (Beijing) as another vessel involved in the Anchor Dragging Incident and named its owner Capetanissa Maritime Corporation of Liberia and its operator V.Ships Greece Ltd. as parties in interest. The cause, timing and details regarding the Incident remain under investigation.

At the height of the Incident response, the Company deployed over 1,800 personnel working under the guidance and at the direction of the Unified Command to aid in cleanup operations. As of October 14, 2021, all beaches that had been closed following the Incident have reopened. On February 2, 2022, the Unified Command announced that response and monitoring efforts have officially concluded for the Incident, and Unified Command would stand down as of such date. Amplify is grateful to its Unified Command partners for their collaboration and professionalism over the course of the response.

28

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In response to the Incident, all operations have been suspended and the pipeline has been shut-in until the Company receives the required regulatory approvals to begin operations. On October 4, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) issued a Corrective Action Order (CAO) pursuant to 49 U.S.C. § 60112, which makes clear that no restart of the affected pipeline may occur until PHMSA has approved a written restart plan. Additionally, the California Coastal Commission requested approval from the Office of Coastal Management for the National Oceanic and Atmospheric Association (NOAA) to conduct a Coastal Zone Management Act consistency review of the U.S. Army Corps of Engineers Nationwide Permit (NWP) 12 application for the proposed permanent repair permit; on April 7, 2022, NOAA denied that request. The Company is working expeditiously and cooperatively to comply with the requirements of the relevant agencies in order to gain such approvals and any other regulatory approvals that are necessary to permanently repair the pipeline and restart operations. As a result of the uncertainties related to the permitting and regulatory approval process, the Company can provide no assurances as to whether and when, if at all, operation will restart at the Beta field. At present, no operations are underway in the Beta field.

On December 15, 2021, a federal grand jury in the Central District of California returned a federal criminal indictment against Amplify Energy Corp., Beta Operating Company, LLC, and San Pedro Bay Pipeline Company in connection with the Incident. The indictment alleges that the Company committed a misdemeanor violation of the federal Clean Water Act for negligently discharging oil into the contiguous zone of the United States. A trial is set for November 1, 2022. The United States Attorney’s Office for the Central District of California has stated that its investigation of the Incident and related matters is ongoing. State authorities are conducting parallel criminal investigations as well. We are continuing to cooperate with these federal and state investigations. The outcome of these investigations is uncertain, including whether they will result in additional criminal charges.

The Company is currently subject to a number of ongoing investigations related to the Incident by certain federal and state agencies. To date, the U.S. Coast Guard, the U.S. Bureau of Ocean Energy Management, the U.S. Department of Justice, PHMSA, the U.S. Department of the Interior Bureau of Safety and Environmental Enforcement, the California Department of Justice, the Orange County District Attorney, the Los Angeles County District Attorney, and the California Department of Fish & Wildlife are conducting investigations or examinations of the Incident. On April 8, 2022, in light of the allegations raised in the December 15, 2021 federal indictment, the Company received a Show Cause Notice from the U.S. Environmental Protection Agency (“EPA") asking the Company to provide information as to why it should not be suspended from participating in future Federal contracting and assisting activities pursuant to 2 C.F.R. § 180.700(a), (c) and 2 C.F.R. § 180.800(a)(4). On April 22, 2022, the Company responded to the Show Cause Notice and is working cooperatively with the EPA in connection with this matter. Other federal agencies may or have commenced investigations and proceedings, and may initiate enforcement actions seeking penalties and other relief under the Clean Water Act and other statutes. 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 and criminal liability.

The Company and certain of its subsidiaries have been named as defendants in approximately 14 putative class action lawsuits, which have been consolidated into a single consolidated action in the United States District Court for the Central District of California. In the consolidated action, Plaintiffs filed a consolidated class action complaint on January 28, 2022. The consolidated complaint asserted claims against the Company and MSC Mediterranean Shipping Company, Dordellas Finance Corp., Costamare Shipping Co. S.A., and Capetanissa Maritime Corporation of Liberia. In a third-party complaint filed on February 28, 2022, the Company also asserted claims against those entities, as well as against the Marine Exchange of Los Angeles-Long Beach Harbor, V Ships Greece Ltd, the MSC Danit (proceeding in rem), and the COSO Beijing (proceeding in rem). The Company moved to dismiss the Plaintiffs’ consolidated complaint on February 28, 2022. Certain of the shipping-related defendants have moved to dismiss the Company’s complaint against them. MSC Mediterranean Shipping Company and Dordellas Finance Corp. have filed a Petition for Limitation of Liability under maritime law in the United States District Court for the Central District of California. The Court is considering whether to consolidate the Limitation of Liability action with the consolidated class action. Resolution of the civil litigation may take considerable time, and it is not possible at this time to estimate our potential liability resulting from these actions.

29

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Under the 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.

The Company currently estimates that the total costs it has incurred or will incur with respect to the Incident related to (i) actual and projected response and remediation expenses incurred under the direction of the Unified Command and (ii) estimates for certain legal fees, to be approximately $100.0 million to $120.0 million. These estimates consider currently available facts and presently enacted laws and regulations. The Company has made assumptions regarding (i) the probable and estimable amounts expected to be settled with certain vendors for response and remediation expenses and (ii) the resolution of certain third-party claims, excluding claims with respect to losses, which are not probable and reasonably estimable, and (iii) future claims and lawsuits. 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 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 the Beta operations. The Company believes it has accrued adequate amounts for all probable and reasonably estimable costs; however, this estimate is subject to uncertainties associated with the assumptions that it has made. For example, settlements with vendors for response and remediation expenses could turn out to be significantly higher or lower than the Company has estimated. Accordingly, as the Company’s assumptions and estimates may change in future periods based on future events and total costs may materially increase; therefore, the Company can provide no assurance that it will not have to accrue significant additional costs in future periods with respect to the Incident.

In accordance with customary insurance practice, the Company maintains insurance policies, including loss of production income insurance, against many potential losses or liabilities arising from its operations and at costs that the Company believes to be economic. The Company regularly reviews its risk of loss and the cost and availability of insurance and revises its insurance accordingly. The Company’s insurance does not cover every potential risk associated with its operations and is subject to certain exclusions and deductibles. While the Company expects its insurance policies will cover a material portion of the total aggregate costs associated with the Incident, including but not limited to response and remediation expenses, defense costs and loss of revenue resulting from suspended operations, it can provide no assurance that its coverage will 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.

As of March 31, 2022, and inclusive of cost associated with the temporary repair of the pipeline, the Company has incurred total aggregate gross costs of $111.2 million, of which the Company has received or expects that it is probable that it will receive $109.0 million in insurance recoveries. The Company’s net charge of $0.6 million, which is classified as “Pipeline Incident Loss” in the Company’s Unaudited Condensed Consolidated Statements of Operations, reflects legal costs incurred during the three months ended March 31, 2022, that are not currently expected to be recovered under an insurance policy. The Company incurred the balance of the difference, or $1.6 million, in expense for the year ended December 31, 2021.

Through March 31, 2022, the Company had collected $70.4 million out of the approximately $109.0 million of costs that the Company expects are probable of recovery from insurance carriers, net of deductibles. Therefore as of March 31, 2022, the Company had a receivable of approximately $38.6 million for the portion of costs that the Company expects is probable of recovery from insurance, net of deductibles and amounts collected during 2022.

Additionally, during the three months ended March 31, 2022, the Company recognized $17.5 million related to approved LOPI insurance proceeds, which is classified as “Other Revenues” in the Company’s Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022, the Company has recorded a receivable of $8.9 million related to approved but unpaid LOPI claims.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and accompanying notes in “Item 1. Financial Statements” contained herein and in “Item 1A. Risk Factors” of our Annual Report on the Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”). The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” in the front of this report.

Overview

We operate in one reportable segment engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Our management evaluates performance based on the reportable business segment as the economic environments are not different within the operation of our oil and natural gas properties. Our business activities are conducted through OLLC, our wholly owned subsidiary, and its wholly owned subsidiaries. Our assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. Our properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.

Industry Trends

Since the start of the COVID-19 pandemic, governments have tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in activity in the global economy and the demand for oil and to a lesser extent natural gas and NGLs. As vaccines have become widely available, social distancing guidelines, travel restrictions and stay-at-home orders have eased, activity in the global economy has increased and demand for oil, natural gas and NGLs and related commodity pricing, has improved.

Additionally, oil, natural gas and NGLs prices increased in the first quarter of 2022 when compared to the same period of 2021 and, as a result, we experienced a significant increase in revenues. As we continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations, the Russia-Ukraine conflict, global inventories of oil and gas and the uncertainty associated with recovering oil demand, future monetary policy and governmental policies aimed at transitioning towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile. Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions or other medical advances to combat the virus may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

Recent Developments

Appointment of Certain Directors

On April 7, 2022, the board of directors of the Company appointed Deborah G. Adams and Eric T. Greager to the board of directors, effective April 7, 2022. Ms. Adams has also been appointed to the nominating and governance committee of the board of directors, and Mr. Greager has also been appointed to the compensation committee of the board of directors.

Business Environment and Operational Focus

We use a variety of financial and operational metrics to assess the performance of our oil and natural gas operations, including: (i) production volumes; (ii) realized prices on the sale of our production; (iii) cash settlements on our commodity derivatives; (iv) lease operating expense; (v) gathering, processing and transportation; (vi) general and administrative expense; and (vii) Adjusted EBITDA (as defined below).

31

Sources of Revenues

Our revenues are derived from the sale of natural gas and oil production, as well as the sale of NGLs that are extracted from natural gas during processing. Production revenues are derived entirely from the continental United States. Natural gas, NGL and oil prices are inherently volatile and are influenced by many factors outside our control. In order to reduce the impact of fluctuations in natural gas and oil prices on revenues, we intend to periodically enter into derivative contracts that fix the future prices received. At the end of each period, the fair value of these commodity derivative instruments is estimated and because hedge accounting is not elected, the changes in the fair value of unsettled commodity derivative instruments are recognized in earnings at the end of each accounting period.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates, including a discussion regarding the estimation uncertainty and the impact that our critical accounting estimates have had, or are reasonably likely to have, on our financial condition or results of operations, are described in Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Form 10 K. Significant estimates include, but are not limited to, oil and natural gas reserves; fair value estimates; revenue recognition; and contingencies and insurance accounting. These estimates, in our opinion, are subjective in nature, require the use of professional judgment and involve complex analysis.

When used in the preparation of our consolidated financial statements, such estimates are based on our current knowledge and understanding of the underlying facts and circumstances and may be revised as a result of actions we take in the future. Changes in these estimates will occur as a result of the passage of time and the occurrence of future events. Subsequent changes in these estimates may have a significant impact on our consolidated financial position, results of operations and cash flows.

32

Results of Operations

The results of operations for the three months ended March 31, 2022 and 2021 have been derived from our consolidated financial statements. The comparability of the results of operations among the periods presented below is impacted by the Incident and suspension of operations at our Beta properties. The following table summarizes certain of the results of operations for the periods indicated.

	For the Three Months Ended
	March 31,
	2022		2021
Oil and natural gas sales	$	93,872	$	72,331
Other revenues		17,561		138
Lease operating expense		32,920		28,906
Gathering, processing and transportation		8,010		4,579
Taxes other than income		7,553		4,613
Depreciation, depletion and amortization		5,635		7,347
General and administrative expense		7,771		6,921
Accretion of asset retirement obligations		1,720		1,615
Loss on commodity derivative instruments		93,404		34,588
Interest expense, net		2,441		3,112
Net loss		(48,614)		(19,328)
Oil and natural gas revenues:
Oil sales	$	52,374	$	49,695
NGL sales		13,481		7,670
Natural gas sales		28,017		14,966
Total oil and natural gas revenues	$	93,872	$	72,331
Production volumes:
Oil (MBbls)		581		920
NGLs (MBbls)		338		342
Natural gas (MMcf)		5,511		5,761
Total (MBoe)		1,837		2,222
Average net production (MBoe/d)		20.4		24.7
Average realized sales price (excluding commodity derivatives):
Oil (per Bbl)	$	90.22	$	54.03
NGL (per Bbl)		39.86		22.45
Natural gas (per Mcf)		5.08		2.60
Total (per Boe)	$	51.10	$	32.56
Average unit costs per Boe:
Lease operating expense	$	17.92	$	13.01
Gathering, processing and transportation		4.36		2.06
Taxes other than income		4.11		2.08
General and administrative expense		4.23		3.11
Depletion, depreciation and amortization		3.07		3.31

For the Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Net losses of $48.6 million and $19.3 million were recorded for the three months ended March 31, 2022 and 2021, respectively.

33

Oil, natural gas and NGL revenues were $93.9 million and $72.3 million for the three months ended March 31, 2022 and 2021, respectively. Average net production volumes were approximately 20.4 MBoe/d and 24.7 MBoe/d for the three months ended March 31, 2022 and 2021, respectively. The change in production volumes was primarily due to the suspension of operations at our Beta properties and natural declines. During the first quarter of 2021, production from our Beta properties was 3.6 MBoe/d. The average realized sales price was $51.10 per Boe and $32.56 per Boe for the three months ended March 31, 2022 and 2021, respectively. The increase in average realized sales price was primarily due to the increase in commodity prices.

Other revenues were $17.6 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. During the first quarter of 2022, we recognized $17.5 million in loss of production insurance income (“LOPI”) proceeds related to the suspension of operations at our Beta properties resulting from the Incident which includes four months of LOPI.

Lease operating expense was $32.9 million and $28.9 million for the three months ended March 31, 2022 and 2021, respectively. The change in lease operating expense was primarily related to a $1.7 million increase in workover expense offset by the natural decline in production. The increase was primarily attributable to increase expense workover projects in Oklahoma and the Rockies. On a per Boe basis, lease operating expense was $17.92 and $13.01 for the three months ended March 31, 2022 and 2021, respectively. The change in lease operating expense on a per Boe basis was due mainly to higher cost and lower production.

Gathering, processing and transportation was $8.0 million and $4.6 million for the three months ended March 31, 2022 and 2021, respectively. The increase was primarily attributable to us marketing our own natural gas in Oklahoma, resulting in a reclassification of certain revenue deductions to gathering, processing and transportation expenses. On a per Boe basis, gathering, processing and transportation was $4.36 and $2.06 for the three months ended March 31, 2022 and 2021, respectively. The change on a per BOE basis primarily related to higher commodity prices and the accounting reclassification discussed above.

Taxes other than income were $7.6 million and $4.6 million for the three months ended March 31, 2022 and 2021, respectively. The increase in taxes other than income is due to an increase in production taxes as a result of the increase in commodity prices. On a per Boe basis, taxes other than income were $4.11 and $2.08 for the three months ended March 31, 2022 and 2021, respectively. The change in taxes other than income on a per Boe basis was primarily due to the increase in commodity prices.

DD&A expense was $5.6 million and $7.3 million for the three months ended March 31, 2022 and 2021, respectively. The change in DD&A expense was primarily due to a decrease in production of 4.3 MBoe/d, which equates to a decrease of approximately $1.2 million.

General and administrative expense was $7.8 million and $6.9 million for the three months ended March 31, 2022 and 2021, respectively. The change in general and administrative expense was primarily related to (1) an increase of $0.5 million in stock compensation expense, (2) an increase of $0.4 million in salaries and other payroll benefits, and (3) an increase of $0.1 million in legal expenses. The increases in general and administrative expense were offset by a decrease of $0.3 million in professional services.

Net loss on commodity derivative instruments of $93.4 million were recognized for the three months ended March 31, 2022, consisting of a $62.5 million decrease in the fair value of open positions and $30.9 million of cash settlements paid on expired positions. Net loss on commodity derivative instruments of $34.6 million was recognized for the three months ended March 31, 2021, consisting of a $24.0 million decrease in the fair value of open positions and $10.6 million of cash settlements paid on expired positions.

Interest expense, net was $2.4 million and $3.1 million for the three months ended March 31, 2022 and 2021, respectively. Interest expense included a gain position on our interest rate swaps of $0.5 million for the three months ended March 31, 2022, compared to a gain position on interest rate swaps of less than $0.1 million for the three months ended March 31, 2021. In addition, we had a decrease of $0.2 million in interest expense due to lower borrowings on our Revolving Credit Facility.

Average outstanding borrowings under our Revolving Credit Facility were $228.1 million and $253.3 million for the three months ended March 31, 2022 and 2021, respectively.

34

Adjusted EBITDA

We include in this report the non-GAAP financial measure of Adjusted EBITDA and provide our reconciliation of Adjusted EBITDA to net loss and net cash flows from operating activities, our most directly comparable financial measures calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss):

Plus:

● Interest expense;

● Income tax expense;

● DD&A;

● Impairment of goodwill and long-lived assets (including oil and natural gas properties);

● Accretion of AROs;

● Loss on commodity derivative instruments;

● Cash settlements received on expired commodity derivative instruments;

● Amortization of gain associated with terminated commodity derivatives;

● Losses on sale of assets;

● Share-based compensation expenses;

● Exploration costs;

● Acquisition and divestiture related expenses;

● Reorganization items, net;

● Severance payments; and

● Other non-routine items that we deem appropriate.

Less:

● Interest income;

● Income tax benefit;

● Gain on commodity derivative instruments;

● Cash settlements paid on expired commodity derivative instruments;

● Gains on sale of assets and other, net; and

● Other non-routine items that we deem appropriate.

35

We believe that Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure.

Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

In addition, we use Adjusted EBITDA to evaluate actual cash flow available to develop existing reserves or acquire additional oil and natural gas properties.

The following tables present our reconciliation of the Company’s net loss and cash flows from operating activities to Adjusted EBITDA, our most directly comparable GAAP financial measures, for each of the periods indicated.

Reconciliation of Net Loss to Adjusted EBITDA

	For the Three Months Ended
	March 31,
	2022		2021
Net loss	$	(48,614)	$	(19,328)
Interest expense, net		2,441		3,112
DD&A		5,635		7,347
Accretion of AROs		1,720		1,615
Losses on commodity derivative instruments		93,404		34,588
Cash settlements paid on expired commodity derivative instruments		(30,943)		(10,636)
Amortization of gain associated with terminated commodity derivatives		—		5,785
Acquisition and divestiture related expenses		5		12
Share-based compensation expense		640		331
Pipeline incident loss		580		—
Exploration costs		16		16
Loss on settlement of AROs		19		68
Bad debt expense		10		3
Reorganization items, net		—		6
Other		—		16
Adjusted EBITDA	$	24,913	$	22,935

36

Reconciliation of Net Cash from Operating Activities to Adjusted EBITDA

	For the Three Months Ended
	March 31,
	2022		2021
Net cash provided by operating activities	$	9,719	$	15,558
Changes in working capital		11,373		(2,722)
Interest expense, net		2,441		3,112
Gain on interest rate swaps		557		62
Cash settlements paid on interest rate swaps		214		464
Amortization of gain associated with terminated commodity derivatives		—		5,785
Pipeline incident loss		580		—
Amortization and write-off of deferred financing fees		(133)		(139)
Acquisition and divestiture related expenses		5		12
Exploration costs		16		16
Plugging and abandonment cost		19		230
Reorganization items, net		—		6
Other		122		551
Adjusted EBITDA	$	24,913	$	22,935

Liquidity and Capital Resources

Overview. Our ability to finance our operations, including funding capital expenditures and acquisitions, to meet our indebtedness obligations, to refinance our indebtedness or to meet our collateral requirements will depend on our ability to generate cash in the future. Our primary sources of liquidity and capital resources have historically been cash flows generated by operating activities and borrowings under our Revolving Credit Facility. As we pursue reserve and production growth, we plan to monitor which capital resources, including equity and debt financings, are available to us to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. Based on our current oil and natural gas price expectations, we believe our cash flows provided by operating activities and availability under our Revolving Credit Facility will provide us with the financial flexibility necessary to meet our cash requirements, including normal operating needs, and to pursue our currently planned 2022 development activities. However, future cash flows are subject to a number of variables, including the level of our oil and natural gas production and the prices we receive for our oil and natural gas production, and significant additional capital expenditures will be required to more fully develop our properties. We cannot assure you that operations and other needed capital will be available on acceptable terms, or at all. For the remainder of 2022, we expect our primary funding sources to be from internally generated cash flow, borrowings under our Revolving Credit Facility, and equity and debt capital markets.

Impact of the Southern California Pipeline Incident. There is substantial uncertainty surrounding the full impact that the Incident will have on our financial condition and cash flow generation going forward. We have incurred and will continue to incur costs as a result of the Incident, and we anticipate that the suspension of production from Beta will lead to a material reduction in revenue from these assets. Although we carry customary insurance policies, including loss of production income insurance, which we expect will cover a material portion of the total aggregate costs associated with the Incident, including loss of revenue resulting from suspended operations, we can provide no assurance that our coverage will adequately protect us against liability from all potential consequences, damages and losses related to the Incident.

Capital Markets. We do not currently anticipate any near-term capital markets activity, but we will continue to evaluate the availability of public debt and equity for funding potential future growth projects and acquisition activity.

37

Hedging. Commodity hedging has been and remains an important part of our strategy to reduce cash flow volatility. Our hedging activities are intended to support oil, NGL and natural gas prices at targeted levels and to manage our exposure to commodity price fluctuations. We intend to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 30%-60% of our estimated production from total proved developed producing reserves over a one-to-three-year period at any given point of time. We may, however, from time to time, hedge more or less than this approximate amount. Additionally, we may take advantage of opportunities to modify our commodity derivative portfolio to change the percentage of our hedged production volumes when circumstances suggest that it is prudent to do so. The current market conditions may also impact our ability to enter into future commodity derivative contracts.

We evaluate counterparty risks related to our commodity derivative contracts and trade credit. Should any of these financial counterparties not perform, we may not realize the benefit of some of our hedges under lower commodity prices. We sell our oil and natural gas to a variety of purchasers. Non-performance by a customer could also result in losses.

Capital Expenditures. Our total capital expenditures were approximately $6.9 million for the three months ended March 31, 2022, which were primarily related to capital workovers, maintenance and facilities located in Oklahoma and East Texas and non-operated completion activities in the Eagle Ford.

Working Capital. Working capital is the amount by which current assets exceed current liabilities. Our working capital requirements are primarily driven by changes in accounts receivable and accounts payable, as well as the classification of our debt outstanding. These changes are impacted by changes in the prices of commodities that we buy and sell. In general, our working capital requirements increase in periods of rising commodity prices and decrease in periods of declining commodity prices. However, our working capital needs do not necessarily change at the same rate as commodity prices because both accounts receivable and accounts payable are impacted by the same commodity prices. In addition, the timing of payments received by our customers or paid to our suppliers can also cause fluctuations in working capital because we settle with most of our larger customers on a monthly basis and often near the end of the month. We expect that our future working capital requirements will be impacted by these same factors.

As of March 31, 2022, we had a working capital deficit of $84.2 million primarily due to short-term derivatives of $103.9 million, accrued liabilities of $53.9 million, revenues payable of $21.9 million, and accounts payable of $26.6 million offset by accounts receivable of $91.9 million, cash on hand of $15.6 million and prepaid expenses of $14.3 million.

Debt Agreement

Revolving Credit Facility. On November 2, 2018, OLLC as borrower, we entered into our Revolving Credit Facility (as amended and supplemented to date). KeyBank serves as the administrative agent. Our borrowing base under our Revolving Credit Facility is subject to redetermination on at least a semi-annual basis primarily based on a reserve engineering report.

As of March 31, 2022, we had approximately $10.0 million of available borrowings under our Revolving Credit Facility.

As of March 31, 2022, we were in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with our Revolving Credit Facility.

For additional information regarding our Revolving Credit Facility, see Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report.

Material Cash Requirements

Contractual commitments. We have contractual commitments under our debt agreements, including interest payments and principal payments. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

Lease Obligations. We have operating leases for office and warehouse spaces, office equipment, compressors and surface rentals related to our business obligations. See Note 11 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

38

Cash Flows from Operating, Investing and Financing Activities

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated. The cash flows for the three months ended March 31, 2022 and 2021 have been derived from our Unaudited Condensed Consolidated Financial Statements. For information regarding the individual components of our cash flow amounts, see our Unaudited Condensed Consolidated Statements of Cash Flows included under “Item 1. Financial Statements” of this quarterly report.

	For the Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Net cash provided by operating activities	$	9,719	$	15,558
Net cash used in investing activities		(7,847)		(4,116)
Net cash used in financing activities		(5,066)		(5,005)

Operating Activities. Key drivers of net operating cash flows are commodity prices, production volumes and operating costs. Net cash provided by operating activities was $9.7 million and $15.6 million for the three months ended March 31, 2022 and 2021, respectively. Production volumes were approximately 20.4 MBoe/d and 24.7 MBoe/d for the three months ended March 31, 2022 and 2021, respectively. The average realized sales price was $51.10 per Boe and $32.56 per Boe for the three months ended March 31, 2022 and 2021, respectively. The change in average realized sales price was primarily due to the increase in commodity prices.

Net cash provided by operating activities for the three months ended March 31, 2022 included $30.9 million of cash paid on expired commodity derivative instruments compared to $10.6 million of cash paid on expired commodity derivatives for the three months ended March 31, 2021. For the three months ended March 31, 2022, we had net losses on commodity derivative instruments of $93.4 million compared to net losses of $34.6 million for the three months ended March 31, 2021.

Investing Activities. Net cash used in investing activities for the three months ended March 31, 2022 was $7.8 million, of which $5.2 million was used for additions to oil and natural gas properties. Net cash provided by investing activities for the three months ended March 31, 2021 was $4.1 million, of which $3.8 million was used for additions to oil and natural gas properties.

Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with our offshore Southern California properties. Additions to restricted investments were $2.7 million during the three months ended March 31, 2022.

Financing Activities. We had net repayments of $5.0 million for the three months ended March 31, 2022 and 2021, respectively, related to our Revolving Credit Facility.

Off–Balance Sheet Arrangements

As of March 31, 2022, we had no off–balance sheet arrangements.

Recently Issued Accounting Pronouncements

For a discussion of recent accounting pronouncements that will affect us, see Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

39

ITEM 4.CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) and under the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, the principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2022.

The full impact of COVID-19 on our business is still uncertain. In order to protect the health and safety of our employees, we took proactive steps to allow employees to work remotely and to reduce the number of employees on site at any one time in our field areas to comply with social distancing guidelines. We believe that our internal controls and procedures are still functioning as designed and were effective for the most recent quarter.

Change in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2, respectively, to this quarterly report.

40

PART II—OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS.

The Company and certain of its subsidiaries are named defendants in a putative class action pending in the United States District Court for the Central District of California. The plaintiffs seek unspecified monetary damages and certain forms of injunctive relief. We are also participating in a related claims process organized under OPA 90. Under OPA 90, a party alleged to be responsible for a discharge of oil is required to establish a claims process to pay for interim costs and damages as a result of the discharge. The OPA 90 claims process remains ongoing. For additional discussion of the legal proceedings associated with the Incident, see Note 16 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report.

Future litigation may be necessary, among other things, to defend ourselves by determining the scope, enforceability, and validity of claims. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

ITEM 1A.RISK FACTORS.

Our business faces many risks. Any of the risks discussed elsewhere in this quarterly report and our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. There have been no material changes to the risk factors since those disclosed in our 2021 Form 10-K.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table summarizes our repurchase activity during the three months ended March 31, 2022:

				Total Number of	Approximate Dollar
				Shares Purchased as	Value of Shares That
				Part of Publicly	May Yet Be
	Total Number of	Average Price		Announced Plans	Purchased Under the
Period	Shares Purchased	Paid per Share		or Programs	Plans or Programs (1)
					(In thousands)
Common Shares Repurchased (1)
January 1, 2022 - January 31, 2022	2,336	$	3.11	—	n/a
February 1, 2022 - February 28, 2022	14,559	$	3.95	—	n/a
March 1, 2022 - March 31, 2022	73,505	$	5.46	—	n/a

(1) Common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting. We repurchased the remaining vesting shares on the vesting date at current market price. See Note 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.MINE SAFETY DISCLOSURES.

Not applicable.

41

ITEM 5.OTHER INFORMATION.

None.

42

ITEM 6.EXHIBITS.

Exhibit Number		Description
3.1	—	Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 8-A filed on October 21, 2016, and incorporated herein by reference).
3.2	—	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc., dated August 6, 2019 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-35512) filed on August 6, 2019).
3.3	—	Third Amended and Restated Bylaws of Amplify Energy Corp. (incorporated by reference to Exhibit 3.3 of the Company’s Quarterly Report on Form 10-Q (File No. 001-35512) filed on November 15, 2021).
31.1*	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2*	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1**	—	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	—	Inline XBRL Instance Document
101.SCH*	—	Inline XBRL Schema Document
101.CAL*	—	Inline XBRL Calculation Linkbase Document
101.DEF*	—	Inline XBRL Definition Linkbase Document
101.LAB*	—	Inline XBRL Labels Linkbase Document
101.PRE*	—	Inline XBRL Presentation Linkbase Document
104*	—	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed as an exhibit to this Quarterly Report on Form 10-Q.

** Furnished as an exhibit to this Quarterly Report on Form 10-Q.

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Amplify Energy Corp.
		(Registrant)
Date:	May 4, 2022	By:	/s/ Jason McGlynn
		Name:	Jason McGlynn
		Title:	Senior Vice President and Chief Financial Officer
Date:	May 4, 2022	By:	/s/ Eric Dulany
		Name:	Eric Dulany
		Title:	Vice President and Chief Accounting Officer

44

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Martyn Willsher, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2022	/s/ Martyn Willsher
	Martyn Willsher
	President and Chief Executive Officer
	Amplify Energy Corp.

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Jason McGlynn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2022	/s/ Jason McGlynn
	Jason McGlynn
	Senior Vice President and Chief Financial Officer
	Amplify Energy Corp.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Martyn Willsher, President and Chief Executive Officer, and Jason McGlynn, Senior Vice President and Chief Financial Officer, of Amplify Energy Corp., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2022	/s/ Martyn Willsher
	Martyn Willsher
	President and Chief Executive Officer
	Amplify Energy Corp.
Date: May 4, 2022	/s/ Jason McGlynn
	Jason McGlynn
	Senior Vice President and Chief Financial Officer
	Amplify Energy Corp.

The foregoing certifications are being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, are not being filed as part of the Report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2022	Apr. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-35512
Entity Registrant Name	Amplify Energy Corp.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-1326219
Entity Address, Address Line One	500 Dallas Street
Entity Address, Address Line Two	Suite 1700
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77002
City Area Code	713
Local Phone Number	490-8900
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	AMPY
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		38,327,143
Entity Central Index Key	0001533924
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 15,605	$ 18,799
Accounts receivable, net (see Note 12)	91,932	91,967
Short-term derivative instruments	234
Prepaid expenses and other current assets	14,266	15,018
Total current assets	122,037	125,784
Property and equipment, at cost:
Oil and natural gas properties, successful efforts method	806,959	799,532
Support equipment and facilities	145,325	145,324
Other	9,641	9,641
Accumulated depreciation, depletion and amortization	(639,847)	(634,212)
Property and equipment, net	322,078	320,285
Restricted investments	7,297	4,622
Operating lease - long term right-of-use asset	3,158	2,716
Other long-term assets	1,560	1,693
Total assets	456,130	455,100
Current liabilities:
Accounts payable	26,578	33,819
Revenues payable	21,862	20,374
Accrued liabilities (see Note 12)	53,896	57,826
Short-term derivative instruments	103,887	53,144
Total current liabilities	206,223	165,163
Long-term debt (see Note 7)	225,000	230,000
Asset retirement obligations	104,118	102,398
Long-term derivative instruments	20,846	9,664
Operating lease liability	2,549	2,017
Other long-term liabilities	10,397	10,699
Total liabilities	569,133	519,941
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, 2022 and December 31, 2021	0	0
Warrants, 2,173,913 warrants issued and outstanding at March 31, 2022 and December 31, 2021	4,788	4,788
Common stock, $0.01 par value: 250,000,000 shares authorized; 38,260,182 and 38,024,142 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	384	382
Additional paid-in capital	425,516	425,066
Accumulated deficit	(543,691)	(495,077)
Total stockholders' deficit	(113,003)	(64,841)
Total liabilities and equity	$ 456,130	$ 455,100

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Warrants issued	2,173,913	2,173,913
Warrants outstanding	2,173,913	2,173,913
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	38,260,182	38,024,142
Common stock, shares outstanding	38,260,182	38,024,142

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Total revenues	$ 111,433	$ 72,469
Costs and expenses:
Lease operating expense	32,920	28,906
Gathering, processing and transportation	8,010	4,579
Taxes other than income	7,553	4,613
Depreciation, depletion and amortization	5,635	7,347
General and administrative expense	7,771	6,921
Accretion of asset retirement obligations	1,720	1,615
Loss on commodity derivative instruments	93,404	34,588
Pipeline incident loss	580	0
Other, net	35	84
Total costs and expenses	157,628	88,653
Operating loss	(46,195)	(16,184)
Other (expense) income:
Interest expense, net	(2,441)	(3,112)
Other expense	22	(26)
Total other expense	(2,419)	(3,138)
Loss before reorganization items, net and income taxes	(48,614)	(19,322)
Reorganization items, net	0	(6)
Income tax expense	0	0
Net loss	$ (48,614)	$ (19,328)
Loss per share: (See Note 9)
Basic loss per share	$ (1.27)	$ (0.51)
Diluted loss per share	$ (1.27)	$ (0.51)
Weighted average common shares outstanding:
Basic	38,181	37,829
Diluted	38,181	37,829
Oil and Natural Gas Sales [Member]
Revenues:
Total revenues	$ 93,872	$ 72,331
Other Revenues [Member]
Revenues:
Total revenues	$ 17,561	$ 138

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net loss	$ (48,614)	$ (19,328)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	5,635	7,347
Loss on derivative instruments	92,847	34,526
Cash settlements paid on expired derivative instruments	(31,157)	(11,100)
Bad debt expense	10	3
Amortization and write-off of deferred financing costs	133	139
Accretion of asset retirement obligations	1,720	1,615
Share-based compensation (see Note 10)	518	(204)
Settlement of asset retirement obligations	0	(162)
Changes in operating assets and liabilities:
Accounts receivable	(6,661)	(4,525)
Prepaid expenses and other assets	(804)	2,574
Payables and accrued liabilities	(3,436)	4,849
Other	(472)	(176)
Net cash provided by operating activities	9,719	15,558
Cash flows from investing activities:
Additions to oil and gas properties	(5,172)	(3,788)
Additions to other property and equipment		(328)
Additions to restricted investments	(2,675)	0
Net cash used in investing activities	(7,847)	(4,116)
Cash flows from financing activities:
Payments on revolving credit facility	(5,000)	(5,000)
Shares withheld for taxes	(66)	(5)
Net cash used in financing activities	(5,066)	(5,005)
Net change in cash and cash equivalents	(3,194)	6,437
Cash and cash equivalents, beginning of period	18,799	10,364
Cash and cash equivalents, end of period	$ 15,605	$ 16,801

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock [Member]	Warrant [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2020	$ 378	$ 4,788	$ 424,104	$ (463,007)	$ (33,737)
Net loss	0	0	0	(19,328)	(19,328)
Share-based compensation expense	0	0	(204)	0	(204)
Shares withheld for taxes	0	0	(5)	0	(5)
Other	3	0	(3)	0	0
Balance at Mar. 31, 2021	381	4,788	423,892	(482,335)	(53,274)
Balance at Dec. 31, 2021	382	4,788	425,066	(495,077)	(64,841)
Net loss	0	0	0	(48,614)	(48,614)
Share-based compensation expense	0	0	518	0	518
Shares withheld for taxes	0	0	(66)	0	(66)
Other	2	0	(2)	0	0
Balance at Mar. 31, 2022	$ 384	$ 4,788	$ 425,516	$ (543,691)	$ (113,003)

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Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2022

Organization and Basis of Presentation

Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

General

Amplify Energy Corp. (“Amplify Energy,” “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 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 the economic environments are not different within the operation of its oil and natural gas properties. The Company’s assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. 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 Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the SEC. The results reported in these Unaudited Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. In the Company’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Although the Company believes the disclosures in these financial statements are adequate, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC.

Material intercompany transactions and balances have been eliminated in preparation of the Company’s consolidated financial statements.

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; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

Market Conditions and COVID-19

Since the start of the COVID-19 pandemic, governments have tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in activity in the global economy and the demand for oil and to a lesser extent natural gas and NGLs. As vaccines have become widely available, social distancing guidelines, travel restrictions and stay-at-home orders have eased, activity in the global economy has increased and demand for oil, natural gas and NGLs and related commodity pricing, has improved.

Additionally, oil, natural gas and NGLs prices increased in the first quarter of 2022 when compared to the same period of 2021 and, as a result, we experienced a significant increase in revenues. As we continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations, the Russia-Ukraine conflict, global inventories of oil and gas and the uncertainty associated with recovering oil demand, future monetary policy and governmental policies aimed at transitioning towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile. Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions or other medical advances to combat the virus may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies and estimates as described in the Company’s annual financial statements included in its 2021 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.

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Revenue

3 Months Ended

Mar. 31, 2022

Revenue

Revenue

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,
	2022		2021
Revenues
Oil	$	52,374	$	49,695
NGLs		13,481		7,670
Natural gas		28,017		14,966
Oil and natural gas sales	$	93,872	$	72,331

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 was $39.9 million at March 31, 2022 and $32.4 million at December 31, 2021.

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Fair Value Measurements of Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value Measurements of Financial Instruments

Fair Value Measurements of Financial Instruments

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.

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, 2022 and December 31, 2021. 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, 2022 and December 31, 2021 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, 2022 and December 31, 2021 for each of the fair value hierarchy levels:

	Fair Value Measurements at March 31, 2022
					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	$	—	$	11,819	$	—	$	11,819
Interest rate derivatives		—		234		—		234
Total assets	$	—	$	12,053	$	—	$	12,053
Liabilities:
Commodity derivatives	$	—	$	136,465	$	—	$	136,465
Interest rate derivatives		—		87		—		87
Total liabilities	$	—	$	136,552	$	—	$	136,552

	Fair Value Measurements at December 31, 2021
					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	$	—	$	7,967	$	—	$	7,967
Interest rate derivatives		—		—		—		—
Total assets	$	—	$	7,967	$	—	$	7,967
Liabilities:
Commodity derivatives	$	—	$	70,152	$	—	$	70,152
Interest rate derivatives		—		623		—		623
Total liabilities	$	—	$	70,775	$	—	$	70,775

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

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 recorded on proved oil and natural gas properties during the three months ended March 31, 2022 and 2021.

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Risk Management and Derivative Instruments

3 Months Ended

Mar. 31, 2022

Risk Management and Derivative Instruments

Risk Management and Derivative Instruments

Note 5. Risk Management and Derivative Instruments

Derivative instruments are utilized to manage exposure to commodity price fluctuations and achieve a more predictable cash flow in connection with natural gas and oil sales from production 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 generally are 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. 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.

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. The Company’s NGL derivative contracts are primarily indexed to OPIS Mont Belvieu.

At March 31, 2022, the Company had the following open commodity positions:

	2022		2023
Natural Gas Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (MMBtu)		695,000		—
Weighted-average fixed price	$	2.56	$	—
Collar contracts:
Two-way collars
Average monthly volume (MMBtu)		775,000		690,000
Weighted-average floor price	$	2.56	$	2.92
Weighted-average ceiling price	$	3.44	$	3.84
Crude Oil Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		61,667		55,000
Weighted-average fixed price	$	49.17	$	57.30
Collar contracts:
Two-way collars
Average monthly volume (Bbls)		20,000		—
Weighted-average floor price	$	58.75	$	—
Weighted-average ceiling price	$	68.31	$	—
Three-way collars
Average monthly volume (Bbls)		89,000		30,000
Weighted-average ceiling price	$	55.55	$	67.15
Weighted-average floor price	$	42.92	$	55.00
Weighted-average sub-floor price	$	32.58	$	40.00

Interest Rate Swaps

Periodically, the Company enters into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates such as those in its Credit Agreement to fixed interest rates. At March 31, 2022, the Company had the following interest rate swap open positions:

	Remaining
	2022
Average Monthly Notional (in thousands)	$	75,000
Weighted-average fixed rate		1.281	%
Floating rate		1 Month LIBOR

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, 2022 and December 31, 2021. 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.

		Asset		Liability		Asset		Liability
		Derivatives		Derivatives		Derivatives		Derivatives
		March 31,		March 31,		December 31,		December 31,
Type	Balance Sheet Location	2022		2022		2021		2021
		(In thousands)
Commodity contracts	Short-term derivative instruments	$	9,470	$	113,270	$	4,804	$	57,325
Interest rate swaps	Short-term derivative instruments		234		87		—		623
Gross fair value			9,704		113,357		4,804		57,948
Netting arrangements			(9,470)		(9,470)		(4,804)		(4,804)
Net recorded fair value	Short-term derivative instruments	$	234	$	103,887	$	—	$	53,144
Commodity contracts	Long-term derivative instruments	$	2,349	$	23,195	$	3,163	$	12,827
Interest rate swaps	Long-term derivative instruments		—		—		—		—
Gross fair value			2,349		23,195		3,163		12,827
Netting arrangements			(2,349)		(2,349)		(3,163)		(3,163)
Net recorded fair value	Long-term derivative instruments	$	—	$	20,846	$	—	$	9,664

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	March 31,
	Operations Location	2022		2021
Commodity derivative contracts	Loss on commodity derivatives	$	93,404	$	34,588
Gain on interest rate derivatives	Interest expense, net		(557)		(62)

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Asset Retirement Obligations

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligations

Asset Retirement Obligations

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, 2022 (in thousands):

Asset retirement obligations at beginning of period	$	103,414
Liabilities added from acquisition or drilling		—
Liabilities settled		—
Liabilities removed upon sale of wells		—
Accretion expense		1,720
Revision of estimates		—
Asset retirement obligation at end of period		105,134
Less: Current portion		1,016
Asset retirement obligations - long-term portion	$	104,118

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Long-Term Debt

3 Months Ended

Mar. 31, 2022

Long-Term Debt

Long-Term Debt

Note 7. Long-Term Debt

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

	March 31,		December 31,
	2022		2021
	(In thousands)
Revolving Credit Facility (1)	$	225,000	$	230,000
Total long-term debt	$	225,000	$	230,000

(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.

Revolving Credit Facility

Amplify Energy Operating LLC, the Company’s wholly owned subsidiary (“OLLC”), is a party to a reserve-based revolving credit facility (the “Revolving Credit Facility”), subject to a borrowing base of $235.0 million as of March 31, 2022, which is guaranteed by the Company and all of its current subsidiaries. The Revolving Credit Facility matures on November 2, 2023. The Company’s borrowing base under its Revolving Credit Facility is subject to redetermination on at least a semi-annual basis, primarily based on a reserve engineering report.

As of March 31, 2022, the Company was in compliance with all the financial (current ratio and total leverage ratio) and non-financial covenants associated with its Revolving Credit Facility.

The Fall 2021 semi-annual borrowing base redetermination in November 2021, resulted in (1) the reaffirmation of the $245.0 million borrowing base and (2) subsequent reductions to the borrowing base of $5.0 million per month beginning February 28, 2022 and continuing until the completion of the next regularly scheduled redetermination. The Company expects to complete the next regularly scheduled redetermination during the second quarter 2022. As of April 30, 2022, the Company’s borrowing base was $230.0 million, which reflects the previously agreed-upon borrowing base reductions of $5.0 million in February, March and April 2022.

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,
	2022		2021
Revolving Credit Facility	3.79	%	3.67	%

Letters of Credit

At March 31, 2022, the Company had no letters of credit outstanding.

Unamortized Deferred Financing Costs

Unamortized deferred financing costs associated with the Company’s Revolving Credit Facility was $0.8 million at March 31, 2022.

Paycheck Protection Program

On April 24, 2020, the Company received a $5.5 million PPP Loan. The PPP Loan was established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide loans to qualifying businesses. The PPP Loan was not part of the Revolving Credit Facility as described above. The loan and accrued interest were potentially forgivable provided that the borrower uses the loan proceeds for eligible purposes. The term of the Company’s PPP Loan was two years with an annual interest rate of 1% and no payments of principal or interest due during the six-month period beginning on the date of the PPP Loan. The Company applied for forgiveness of the amount due on the PPP Loan based on spending the loan proceeds on eligible expenses as defined by the statute. On June 22, 2021, KeyBank notified the Company that the PPP Loan had been approved for full and complete forgiveness by the Small Business Association.

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Equity (Deficit)

3 Months Ended

Mar. 31, 2022

Equity (Deficit)

Equity (Deficit)

Note 8. Equity (Deficit)

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, 2022:

	Common Stock
Balance, December 31, 2021	38,024,142
Issuance of common stock	—
Restricted stock units vested	326,440
Shares withheld for taxes (1)	(90,400)
Balance, March 31, 2022	38,260,182

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

Warrants

On May 4, 2017, Legacy Amplify entered into a warrant agreement with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which Legacy Amplify issued warrants to purchase up to 2,173,913 shares of Legacy Amplify’s common stock, exercisable for a five-year period commencing on May 4, 2017 at an exercise price of $42.60 per share. The warrants expired on May 4, 2022.

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Earnings per Share

3 Months Ended

Mar. 31, 2022

Earnings per Share

Earnings per Share

Note 9. Earnings 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,
	2022		2021
Net loss	$	(48,614)	$	(19,328)
Less: Net income allocated to participating restricted stockholders		—		—
Basic and diluted earnings available to common stockholders	$	(48,614)	$	(19,328)
Common shares:
Common shares outstanding — basic		38,181		37,829
Dilutive effect of potential common shares		—		—
Common shares outstanding — diluted		38,181		37,829
Net loss per share:
Basic	$	(1.27)	$	(0.51)
Diluted	$	(1.27)	$	(0.51)
Antidilutive warrants (1)		2,174		2,174

(1) Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect.

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Long-Term Incentive Plans

3 Months Ended

Mar. 31, 2022

Long-Term Incentive Plans

Long-Term Incentive Plans

Note 10. Long-Term Incentive Plans

In May 2021, the shareholders approved a new Equity Incentive Plan (“EIP”) in which the Legacy Amplify Management Incentive Plan (the “Legacy Amplify MIP”) and the Legacy Amplify 2017 Non-Employee Directors Compensation Plan (the “Legacy Amplify Non-Employee Directors Compensation Plan”) were replaced by the EIP and no further awards will be allowed to be granted under the Legacy Amplify MIP or the Legacy Amplify Non-Employee Directors Compensation Plan. As of March 31, 2022, an aggregate of 1,564,669 shares were available for future grants under the EIP.

Restricted Stock Units

Restricted Stock Units with Service Vesting Condition

The restricted stock units with service vesting conditions (“TSUs”) are accounted for as equity-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 are recorded as general and administrative expense. The unrecognized cost associated with the TSUs was $4.9 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.4 years.

The following table summarizes information regarding the TSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
TSUs outstanding at December 31, 2021	1,074,420	$	3.66
Granted (2)	834,374	$	3.64
Forfeited	(18,523)	$	3.52
Vested	(277,345)	$	3.60
TSUs outstanding at March 31, 2022	1,612,926	$	3.66

(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, 2022 was $3.0 million based on a grant date market price at $3.64 per share.

Restricted Stock Units with Market and Service Vesting Conditions

The restricted stock units with market and service vesting conditions (“PSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost related to the PSUs was less than $0.1 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 1.0 years.

The PSUs will vest based on the satisfaction of service and market vesting conditions, with market vesting based on the Company’s achievement of certain share price targets. The PSUs are subject to service-based vesting such that 50% of the PSUs service vest on the applicable market vesting date and an additional 25% of the PSUs service vest on each of the first and second anniversaries of the applicable market vesting date.

In the event of a qualifying termination, subject to certain conditions, (i) all PSUs that have satisfied the market vesting conditions will fully service vest, upon such termination, and (ii) if the termination occurs between the second and third anniversaries of the grant date, then PSUs that have not market vested as of the termination will market vest to the extent that the share targets (in each case, reduced by $0.25) are achieved as of such termination. Subject to the foregoing, any unvested PSUs will be forfeited upon termination of employment.

A Monte Carlo simulation was used in order to determine the fair value of these awards at the grant date.

The following table summarizes information regarding the PSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PSUs outstanding at December 31, 2021	65,940	$	2.87
Granted	—	$	—
Forfeited	(5,365)	$	2.11
Vested	—	$	—
PSUs & outstanding at March 31, 2022	60,575	$	2.94

(1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

Restricted Stock Units with Market Vesting Conditions

The restricted stock units with performance-based vesting conditions (“PRSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense.

The 2022 PRSUs were issued with a three year vesting period beginning on the grant date and ending on the third anniversary of the grant date. Vesting of PRSUs can range from zero to 200% of the target units 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 performance period. The fair value of each PRSU award was estimated on their grant dates using a Monte Carlo simulation. The unrecognized cost associated with the PRSUs was $1.3 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.7 years.

The 2021 PRSUs awards were issued collectively in separate tranches with individual performances periods beginning in January 2021, 2022, and 2023 respectively. For each of the 2021 PRSUs awards the performance period, will vest based on the percentage of the target PRSUs subject to the performance vesting condition, with 25% able to vest during the period January 1, 2021 through December 31, 2021; 25% able to vest during the period January 1, 2022 through December 31, 2022 and 50% able to vest during the period of January 1, 2023 through December 31, 2023.

The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2022 are presented as follows:

	2022
Expected volatility	120.8	%
Dividend yield	0.00	%
Risk-free interest rate	1.38	%

The following table summarizes information regarding the PRSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PRSUs outstanding at December 31, 2021	196,377	$	1.94
Granted (2)	189,904	$	6.20
Forfeited	—	$	—
Vested	(49,095)	$	1.24
PRSUs outstanding at March 31, 2022	337,186	$	4.44

(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 PRSUs issued for the three months ended March 31, 2022 was $1.2 million based on a calculated fair value price at $6.20 per share.

2017 Non-Employee Directors Compensation Plan

In June 2017, Legacy Amplify implemented the Legacy Amplify Non-Employee Directors Compensation Plan to attract and retain the services of experienced non-employee directors of Legacy Amplify or its subsidiaries. In connection with the closing of the merger, on August 6, 2019, the Company assumed the Legacy Amplify Non-Employee Directors Compensation Plan. As noted above, the Legacy Amplify Non-Employee Directors Compensation Plan was replaced by the EIP in May 2021.

The restricted stock units with a service vesting condition (“Board RSUs”) are accounted for as equity-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 are recorded as general and administrative expense. The unrecognized cost associated with restricted stock unit awards was less than $0.1 million at March 31, 2022. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 0.1 years. The remaining Board RSUs outstanding was 3,333 at March 31, 2022 with a weighted average grant date fair value per unit of $5.12. No awards granted, forfeited or vested during the three months ended March 31, 2022.

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,
	2022		2021
Equity classified awards
TSUs		591		75
PSUs and PRSUs		53		23
Board RSUs		4		4
	$	648	$	102

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Leases

3 Months Ended

Mar. 31, 2022

Leases

Leases

Note 11. Leases

For the quarter ended March 31, 2022, the Company’s leases qualify as operating leases and it did not have any existing or new leases qualifying as financing leases or variable leases. The Company has leases for office space and equipment in its corporate office and operating regions as well as warehouse space, vehicles, compressors and surface rentals related to its business operations. In addition, the Company has offshore Southern California pipeline right-of-way use agreements. 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 under ASC 842 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.

The Company’s corporate office lease does not provide an implicit rate. To determine the present value of the lease payments, the Company uses its 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, 2022 and 2021, the Company recognized approximately $0.4 million and $0.6 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 Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Non-cash amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	442	$	106

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

	March 31,		December 31,
	2022		2021
	(In thousands)
Right-of-use asset	$	3,158	$	2,716
Lease liabilities:
Current lease liability		756		777
Long-term lease liability		2,549		2,017
Total lease liability	$	3,305	$	2,794

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
Remaining 2022	$	508	$	187	$	695
2023		678		240		918
2024		678		32		710
2025		678		—		678
2026 and thereafter		571		—		571
Total lease payments		3,113		459		3,572
Less: interest		252		15		267
Present value of lease liabilities	$	2,861	$	444	$	3,305

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

	March 31,
	2022		2021
Weighted average remaining lease term (years):
Office and warehouse space	4.01		0.47
Vehicles	0.26		0.77
Office equipment	—		0.03
Weighted average discount rate:
Office leases	3.05	%	2.75	%
Vehicles	0.44	%	1.45	%
Office equipment	—	%	0.14	%

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Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows

3 Months Ended

Mar. 31, 2022

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows

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,
	2022		2021
Accrued liability - pipeline incident	$	27,731	$	34,417
Accrued lease operating expense		9,327		9,271
Accrued general and administrative expense		3,047		4,555
Accrued production and ad valorem tax		5,315		3,277
Accrued commitment fee and other expense		4,157		2,882
Accrued capital expenditures		2,329		1,631
Asset retirement obligations		1,016		1,016
Operating lease liability		756		777
Other		218		—
Accrued liabilities	$	53,896	$	57,826

Accounts Receivable

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

	March 31,		December 31,
	2022		2021
Oil and natural gas receivables	$	39,949	$	32,428
Insurance receivable - pipeline incident		47,778		55,765
Joint interest owners and other		5,850		5,409
Total accounts receivable		93,577		93,602
Less: allowance for doubtful accounts		(1,645)		(1,635)
Total accounts receivable, net		91,932		91,967

Supplemental Cash Flows

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

	For the Three Months Ended
	March 31,
	2022		2021
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$	2,100	$	2,265
Cash paid for reorganization items, net		—		6
Noncash investing and financing activities:
Increase in capital expenditures in payables and accrued liabilities		1,997		1,916

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Related Party Transactions

3 Months Ended

Mar. 31, 2022

Related Party Transactions

Related Party Transactions

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, 2022 and 2021.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments And Contingencies.

Commitments and Contingencies

Note 14. Commitments and Contingencies

Litigation and Environmental

As of March 31, 2022, the Company had no material contingent liabilities recorded in its Unaudited Condensed Consolidated Financial Statements associated with any litigation, pending or threatened.

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.

At March 31, 2022 and December 31, 2021, the Company had no environmental reserves recorded in its Unaudited Condensed Consolidated Balance Sheet.

Southern California Pipeline Incident

The Company and certain of its subsidiaries are named defendants in a putative class action pending in the United States District Court for the Central District of California. The plaintiffs seek unspecified monetary damages and certain forms of injunctive relief. The Company is also participating in a related claims process organized under the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. (“OPA 90”). Under OPA 90, a party alleged to be responsible for a discharge of oil is required to establish a claims process to pay for interim costs and damages as a result of the discharge. The OPA 90 claims process remains ongoing.

Future litigation may be necessary, among other things, to defend the Company by determining the scope, enforceability, and validity of claims. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

Minimum Volume Commitment

The Company is party to a gas purchase, gathering and processing contract in Oklahoma, which includes certain minimum NGL commitments. To the extent the Company does not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, it would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee. The Company is not meeting the minimum volume required under this contractual provision. The commitment fee expense was approximately $0.4 million for each of the three months ended March 31, 2022 and 2021. The minimum volume commitment for Oklahoma ends on June 30, 2023.

The Company is party to a gas purchase, gathering and processing contract in East Texas, which includes certain minimum gas commitments. The Company is not meeting the minimum volume required under this contractual provision. The commitment fee expense for the three months ended March 31, 2022 and 2021, was approximately $0.5 million and $0.7 million, respectively. The minimum volume commitment for East Texas ends on November 30, 2022.

Sinking Fund Trust Agreement

Beta Operating Company, LLC, a wholly owned subsidiary, assumed an obligation with a third party to make payments into a sinking fund in connection with its 2009 acquisition of the Company 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. Under the terms of the agreement, the operator of the properties is obligated to make monthly deposits into the sinking fund account in an amount equal to $0.25 per barrel of oil and other liquid hydrocarbon produced from the acquired working interest. 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, 2022, the account balance included in restricted investments was approximately $4.3 million.

Supplemental Bond for Decommissioning Liabilities Trust Agreement

Beta Operating Company, LLC (“Beta”), a wholly owned subsidiary of the Company, has an obligation with the BOEM in connection with its 2009 acquisition of the Company’s properties in federal waters offshore Southern California. The Company supports this obligation with $161.3 million of A-rated surety bonds and $0.3 million of cash as of March 31, 2022.

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes

Income Taxes

Note 15. Income Taxes

The Company had no income tax expense for the three months ended March 31, 2022 and 2021, respectively. The Company’s effective tax rate was 0% for the three months ended March 31, 2022 and 2021, respectively. The effective tax rates for the three months ended March 31, 2022 and 2021 are different from the statutory U.S. federal income tax rate primarily due to the Company’s recorded valuation allowances.

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Southern California Pipeline Incident

3 Months Ended

Mar. 31, 2022

Southern California Pipeline Incident

Southern California Pipeline Incident

Note 16. Southern California Pipeline Incident

On October 2, 2021, contractors operating under the direction of Beta, a subsidiary of Amplify, observed an oil sheen on the water approximately four miles off the coast of Newport Beach, California (the “Incident”). Beta platform personnel were notified and promptly initiated the Company’s Oil Spill Response Plan, which was reviewed and approved by the Bureau of Safety and Environmental Enforcement’s Oil Spill Preparedness Division within the United States Department of the Interior, and which included the required notifications of specified regulatory agencies. 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.

On October 5, 2021, the Unified Command announced that reports from its contracted commercial divers and Remotely Operated Vehicle footage indicated that a 4,000-foot section of the Company’s pipeline had been displaced with a maximum lateral movement of approximately 105 feet and that the pipeline had a 13-inch split, running parallel to the pipe. On October 14, 2021, the U.S. Coast Guard announced that it had a high degree of confidence the size of the release was approximately 588 barrels of oil, which is below the previously reported maximum estimate of 3,134 barrels. On October 16, 2021, the U.S. Coast Guard announced that it had identified the Mediterranean Shipping Company (DANIT) as a “vessel of interest” and its owner Dordellas Finance Corporation and operator Mediterranean Shipping Company, S.A. as parties in interest in connection with an anchor-dragging incident, in January 2021 (the “Anchor Dragging Incident”), which occurred in close proximity to our pipeline, and that additional vessels of interest continued to be investigated. On November 19, 2021, the U.S. Coast Guard announced that it had identified the COSCO (Beijing) as another vessel involved in the Anchor Dragging Incident and named its owner Capetanissa Maritime Corporation of Liberia and its operator V.Ships Greece Ltd. as parties in interest. The cause, timing and details regarding the Incident remain under investigation.

At the height of the Incident response, the Company deployed over 1,800 personnel working under the guidance and at the direction of the Unified Command to aid in cleanup operations. As of October 14, 2021, all beaches that had been closed following the Incident have reopened. On February 2, 2022, the Unified Command announced that response and monitoring efforts have officially concluded for the Incident, and Unified Command would stand down as of such date. Amplify is grateful to its Unified Command partners for their collaboration and professionalism over the course of the response.

In response to the Incident, all operations have been suspended and the pipeline has been shut-in until the Company receives the required regulatory approvals to begin operations. On October 4, 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA), Office of Pipeline Safety (OPS) issued a Corrective Action Order (CAO) pursuant to 49 U.S.C. § 60112, which makes clear that no restart of the affected pipeline may occur until PHMSA has approved a written restart plan. Additionally, the California Coastal Commission requested approval from the Office of Coastal Management for the National Oceanic and Atmospheric Association (NOAA) to conduct a Coastal Zone Management Act consistency review of the U.S. Army Corps of Engineers Nationwide Permit (NWP) 12 application for the proposed permanent repair permit; on April 7, 2022, NOAA denied that request. The Company is working expeditiously and cooperatively to comply with the requirements of the relevant agencies in order to gain such approvals and any other regulatory approvals that are necessary to permanently repair the pipeline and restart operations. As a result of the uncertainties related to the permitting and regulatory approval process, the Company can provide no assurances as to whether and when, if at all, operation will restart at the Beta field. At present, no operations are underway in the Beta field.

On December 15, 2021, a federal grand jury in the Central District of California returned a federal criminal indictment against Amplify Energy Corp., Beta Operating Company, LLC, and San Pedro Bay Pipeline Company in connection with the Incident. The indictment alleges that the Company committed a misdemeanor violation of the federal Clean Water Act for negligently discharging oil into the contiguous zone of the United States. A trial is set for November 1, 2022. The United States Attorney’s Office for the Central District of California has stated that its investigation of the Incident and related matters is ongoing. State authorities are conducting parallel criminal investigations as well. We are continuing to cooperate with these federal and state investigations. The outcome of these investigations is uncertain, including whether they will result in additional criminal charges.

The Company is currently subject to a number of ongoing investigations related to the Incident by certain federal and state agencies. To date, the U.S. Coast Guard, the U.S. Bureau of Ocean Energy Management, the U.S. Department of Justice, PHMSA, the U.S. Department of the Interior Bureau of Safety and Environmental Enforcement, the California Department of Justice, the Orange County District Attorney, the Los Angeles County District Attorney, and the California Department of Fish & Wildlife are conducting investigations or examinations of the Incident. On April 8, 2022, in light of the allegations raised in the December 15, 2021 federal indictment, the Company received a Show Cause Notice from the U.S. Environmental Protection Agency (“EPA") asking the Company to provide information as to why it should not be suspended from participating in future Federal contracting and assisting activities pursuant to 2 C.F.R. § 180.700(a), (c) and 2 C.F.R. § 180.800(a)(4). On April 22, 2022, the Company responded to the Show Cause Notice and is working cooperatively with the EPA in connection with this matter. Other federal agencies may or have commenced investigations and proceedings, and may initiate enforcement actions seeking penalties and other relief under the Clean Water Act and other statutes. 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 and criminal liability.

The Company and certain of its subsidiaries have been named as defendants in approximately 14 putative class action lawsuits, which have been consolidated into a single consolidated action in the United States District Court for the Central District of California. In the consolidated action, Plaintiffs filed a consolidated class action complaint on January 28, 2022. The consolidated complaint asserted claims against the Company and MSC Mediterranean Shipping Company, Dordellas Finance Corp., Costamare Shipping Co. S.A., and Capetanissa Maritime Corporation of Liberia. In a third-party complaint filed on February 28, 2022, the Company also asserted claims against those entities, as well as against the Marine Exchange of Los Angeles-Long Beach Harbor, V Ships Greece Ltd, the MSC Danit (proceeding in rem), and the COSO Beijing (proceeding in rem). The Company moved to dismiss the Plaintiffs’ consolidated complaint on February 28, 2022. Certain of the shipping-related defendants have moved to dismiss the Company’s complaint against them. MSC Mediterranean Shipping Company and Dordellas Finance Corp. have filed a Petition for Limitation of Liability under maritime law in the United States District Court for the Central District of California. The Court is considering whether to consolidate the Limitation of Liability action with the consolidated class action. Resolution of the civil litigation may take considerable time, and it is not possible at this time to estimate our potential liability resulting from these actions.

Under the 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.

The Company currently estimates that the total costs it has incurred or will incur with respect to the Incident related to (i) actual and projected response and remediation expenses incurred under the direction of the Unified Command and (ii) estimates for certain legal fees, to be approximately $100.0 million to $120.0 million. These estimates consider currently available facts and presently enacted laws and regulations. The Company has made assumptions regarding (i) the probable and estimable amounts expected to be settled with certain vendors for response and remediation expenses and (ii) the resolution of certain third-party claims, excluding claims with respect to losses, which are not probable and reasonably estimable, and (iii) future claims and lawsuits. 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 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 the Beta operations. The Company believes it has accrued adequate amounts for all probable and reasonably estimable costs; however, this estimate is subject to uncertainties associated with the assumptions that it has made. For example, settlements with vendors for response and remediation expenses could turn out to be significantly higher or lower than the Company has estimated. Accordingly, as the Company’s assumptions and estimates may change in future periods based on future events and total costs may materially increase; therefore, the Company can provide no assurance that it will not have to accrue significant additional costs in future periods with respect to the Incident.

In accordance with customary insurance practice, the Company maintains insurance policies, including loss of production income insurance, against many potential losses or liabilities arising from its operations and at costs that the Company believes to be economic. The Company regularly reviews its risk of loss and the cost and availability of insurance and revises its insurance accordingly. The Company’s insurance does not cover every potential risk associated with its operations and is subject to certain exclusions and deductibles. While the Company expects its insurance policies will cover a material portion of the total aggregate costs associated with the Incident, including but not limited to response and remediation expenses, defense costs and loss of revenue resulting from suspended operations, it can provide no assurance that its coverage will 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.

As of March 31, 2022, and inclusive of cost associated with the temporary repair of the pipeline, the Company has incurred total aggregate gross costs of $111.2 million, of which the Company has received or expects that it is probable that it will receive $109.0 million in insurance recoveries. The Company’s net charge of $0.6 million, which is classified as “Pipeline Incident Loss” in the Company’s Unaudited Condensed Consolidated Statements of Operations, reflects legal costs incurred during the three months ended March 31, 2022, that are not currently expected to be recovered under an insurance policy. The Company incurred the balance of the difference, or $1.6 million, in expense for the year ended December 31, 2021.

Through March 31, 2022, the Company had collected $70.4 million out of the approximately $109.0 million of costs that the Company expects are probable of recovery from insurance carriers, net of deductibles. Therefore as of March 31, 2022, the Company had a receivable of approximately $38.6 million for the portion of costs that the Company expects is probable of recovery from insurance, net of deductibles and amounts collected during 2022.

Additionally, during the three months ended March 31, 2022, the Company recognized $17.5 million related to approved LOPI insurance proceeds, which is classified as “Other Revenues” in the Company’s Unaudited Condensed Consolidated Statements of Operations. As of March 31, 2022, the Company has recorded a receivable of $8.9 million related to approved but unpaid LOPI claims.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies

General

General

Amplify Energy Corp. (“Amplify Energy,” “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 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 the economic environments are not different within the operation of its oil and natural gas properties. The Company’s assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. 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

Basis of Presentation

The Company’s Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the SEC. The results reported in these Unaudited Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. In the Company’s opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Although the Company believes the disclosures in these financial statements are adequate, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC.

Material intercompany transactions and balances have been eliminated in preparation of the Company’s consolidated financial statements.

Use of Estimates

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; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

Market Conditions and COVID-19

Market Conditions and COVID-19

Since the start of the COVID-19 pandemic, governments have tried to slow the spread of the virus by imposing social distancing guidelines, travel restrictions and stay-at-home orders, among other actions, which caused a significant decrease in activity in the global economy and the demand for oil and to a lesser extent natural gas and NGLs. As vaccines have become widely available, social distancing guidelines, travel restrictions and stay-at-home orders have eased, activity in the global economy has increased and demand for oil, natural gas and NGLs and related commodity pricing, has improved.

Additionally, oil, natural gas and NGLs prices increased in the first quarter of 2022 when compared to the same period of 2021 and, as a result, we experienced a significant increase in revenues. As we continue to monitor the impact of the actions of the Organization of the Petroleum Exporting Countries and other large producing nations, the Russia-Ukraine conflict, global inventories of oil and gas and the uncertainty associated with recovering oil demand, future monetary policy and governmental policies aimed at transitioning towards lower carbon energy, we expect prices for some or all of the commodities we produce to remain volatile. Other factors such as the duration of the COVID-19 pandemic and the speed and effectiveness of vaccine distributions or other medical advances to combat the virus may impact the recovery of world economic growth and the demand for oil, natural gas and NGLs.

New Accounting Pronouncements

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.

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Revenue (Tables)

3 Months Ended

Mar. 31, 2022

Revenue

Summary of Revenues Disaggregated

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,
	2022		2021
Revenues
Oil	$	52,374	$	49,695
NGLs		13,481		7,670
Natural gas		28,017		14,966
Oil and natural gas sales	$	93,872	$	72,331

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Fair Value Measurements of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Measurements of Financial Instruments

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present the gross derivative assets and liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021 for each of the fair value hierarchy levels:

	Fair Value Measurements at March 31, 2022
					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	$	—	$	11,819	$	—	$	11,819
Interest rate derivatives		—		234		—		234
Total assets	$	—	$	12,053	$	—	$	12,053
Liabilities:
Commodity derivatives	$	—	$	136,465	$	—	$	136,465
Interest rate derivatives		—		87		—		87
Total liabilities	$	—	$	136,552	$	—	$	136,552

	Fair Value Measurements at December 31, 2021
					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	$	—	$	7,967	$	—	$	7,967
Interest rate derivatives		—		—		—		—
Total assets	$	—	$	7,967	$	—	$	7,967
Liabilities:
Commodity derivatives	$	—	$	70,152	$	—	$	70,152
Interest rate derivatives		—		623		—		623
Total liabilities	$	—	$	70,775	$	—	$	70,775

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Risk Management and Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Risk Management and Derivative Instruments

Open Commodity Positions

At March 31, 2022, the Company had the following open commodity positions:

	2022		2023
Natural Gas Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (MMBtu)		695,000		—
Weighted-average fixed price	$	2.56	$	—
Collar contracts:
Two-way collars
Average monthly volume (MMBtu)		775,000		690,000
Weighted-average floor price	$	2.56	$	2.92
Weighted-average ceiling price	$	3.44	$	3.84
Crude Oil Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		61,667		55,000
Weighted-average fixed price	$	49.17	$	57.30
Collar contracts:
Two-way collars
Average monthly volume (Bbls)		20,000		—
Weighted-average floor price	$	58.75	$	—
Weighted-average ceiling price	$	68.31	$	—
Three-way collars
Average monthly volume (Bbls)		89,000		30,000
Weighted-average ceiling price	$	55.55	$	67.15
Weighted-average floor price	$	42.92	$	55.00
Weighted-average sub-floor price	$	32.58	$	40.00

Interest Rate Swap Open Positions

At March 31, 2022, the Company had the following interest rate swap open positions:

	Remaining
	2022
Average Monthly Notional (in thousands)	$	75,000
Weighted-average fixed rate		1.281	%
Floating rate		1 Month LIBOR

Gross Fair Value of Derivative Instruments by Appropriate Balance Sheet

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, 2022 and December 31, 2021. 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.

		Asset		Liability		Asset		Liability
		Derivatives		Derivatives		Derivatives		Derivatives
		March 31,		March 31,		December 31,		December 31,
Type	Balance Sheet Location	2022		2022		2021		2021
		(In thousands)
Commodity contracts	Short-term derivative instruments	$	9,470	$	113,270	$	4,804	$	57,325
Interest rate swaps	Short-term derivative instruments		234		87		—		623
Gross fair value			9,704		113,357		4,804		57,948
Netting arrangements			(9,470)		(9,470)		(4,804)		(4,804)
Net recorded fair value	Short-term derivative instruments	$	234	$	103,887	$	—	$	53,144
Commodity contracts	Long-term derivative instruments	$	2,349	$	23,195	$	3,163	$	12,827
Interest rate swaps	Long-term derivative instruments		—		—		—		—
Gross fair value			2,349		23,195		3,163		12,827
Netting arrangements			(2,349)		(2,349)		(3,163)		(3,163)
Net recorded fair value	Long-term derivative instruments	$	—	$	20,846	$	—	$	9,664

Unrealized and Realized Gains and Losses Related to Derivative Instruments

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	March 31,
	Operations Location	2022		2021
Commodity derivative contracts	Loss on commodity derivatives	$	93,404	$	34,588
Gain on interest rate derivatives	Interest expense, net		(557)		(62)

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Asset Retirement Obligations (Tables)

3 Months Ended

Mar. 31, 2022

Asset Retirement Obligations

Summary of Changes in 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, 2022 (in thousands):

Asset retirement obligations at beginning of period	$	103,414
Liabilities added from acquisition or drilling		—
Liabilities settled		—
Liabilities removed upon sale of wells		—
Accretion expense		1,720
Revision of estimates		—
Asset retirement obligation at end of period		105,134
Less: Current portion		1,016
Asset retirement obligations - long-term portion	$	104,118

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2022

Long-Term Debt

Consolidated Debt Obligations

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

	March 31,		December 31,
	2022		2021
	(In thousands)
Revolving Credit Facility (1)	$	225,000	$	230,000
Total long-term debt	$	225,000	$	230,000

(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.

Summary of Weighted-Average Interest Rates Paid on Variable-Rate Debt Obligations

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,
	2022		2021
Revolving Credit Facility	3.79	%	3.67	%

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Equity (Deficit) (Tables)

3 Months Ended

Mar. 31, 2022

Equity (Deficit)

Summary of Changes in Common Stock Issued

The following is a summary of the changes in the Company’s common stock issued for the three months ended March 31, 2022:

	Common Stock
Balance, December 31, 2021	38,024,142
Issuance of common stock	—
Restricted stock units vested	326,440
Shares withheld for taxes (1)	(90,400)
Balance, March 31, 2022	38,260,182

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

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Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings per Share

Calculation of 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,
	2022		2021
Net loss	$	(48,614)	$	(19,328)
Less: Net income allocated to participating restricted stockholders		—		—
Basic and diluted earnings available to common stockholders	$	(48,614)	$	(19,328)
Common shares:
Common shares outstanding — basic		38,181		37,829
Dilutive effect of potential common shares		—		—
Common shares outstanding — diluted		38,181		37,829
Net loss per share:
Basic	$	(1.27)	$	(0.51)
Diluted	$	(1.27)	$	(0.51)
Antidilutive warrants (1)		2,174		2,174

(1) Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect.

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Long-Term Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2022

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Amount of Compensation Expense Recognized

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,
	2022		2021
Equity classified awards
TSUs		591		75
PSUs and PRSUs		53		23
Board RSUs		4		4
	$	648	$	102

TSUs [Member]

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Information Regarding Restricted Stock Unit Awards

The following table summarizes information regarding the TSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
TSUs outstanding at December 31, 2021	1,074,420	$	3.66
Granted (2)	834,374	$	3.64
Forfeited	(18,523)	$	3.52
Vested	(277,345)	$	3.60
TSUs outstanding at March 31, 2022	1,612,926	$	3.66

(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, 2022 was $3.0 million based on a grant date market price at $3.64 per share.

PSUs [Member]

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Information Regarding Restricted Stock Unit Awards

The following table summarizes information regarding the PSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PSUs outstanding at December 31, 2021	65,940	$	2.87
Granted	—	$	—
Forfeited	(5,365)	$	2.11
Vested	—	$	—
PSUs & outstanding at March 31, 2022	60,575	$	2.94

(1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

PRSU [Member]

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Information Regarding Restricted Stock Unit Awards

The following table summarizes information regarding the PRSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PRSUs outstanding at December 31, 2021	196,377	$	1.94
Granted (2)	189,904	$	6.20
Forfeited	—	$	—
Vested	(49,095)	$	1.24
PRSUs outstanding at March 31, 2022	337,186	$	4.44

(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 PRSUs issued for the three months ended March 31, 2022 was $1.2 million based on a calculated fair value price at $6.20 per share.

Ranges for the Assumptions Used in Monte Carlo Model for PRSUs Granted

The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2022 are presented as follows:

	2022
Expected volatility	120.8	%
Dividend yield	0.00	%
Risk-free interest rate	1.38	%

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Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases

Schedule of Supplemental Cash Flow Information Related to Lease Liabilities

Supplemental cash flow information related to the Company’s lease liabilities is included in the table below:

	For the Three Months Ended
	March 31,
	2022		2021
	(In thousands)
Non-cash amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	442	$	106

Schedule of Right-of-Use Assets and Lease Liabilities

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

	March 31,		December 31,
	2022		2021
	(In thousands)
Right-of-use asset	$	3,158	$	2,716
Lease liabilities:
Current lease liability		756		777
Long-term lease liability		2,549		2,017
Total lease liability	$	3,305	$	2,794

Schedule of Maturity Analysis of Minimum Lease Payment Obligation Under Non-cancellable Operating Leases

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
Remaining 2022	$	508	$	187	$	695
2023		678		240		918
2024		678		32		710
2025		678		—		678
2026 and thereafter		571		—		571
Total lease payments		3,113		459		3,572
Less: interest		252		15		267
Present value of lease liabilities	$	2,861	$	444	$	3,305

Schedule of Weighted Average Remaining Lease Terms and Discount Rate of Operating Leases

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

	March 31,
	2022		2021
Weighted average remaining lease term (years):
Office and warehouse space	4.01		0.47
Vehicles	0.26		0.77
Office equipment	—		0.03
Weighted average discount rate:
Office leases	3.05	%	2.75	%
Vehicles	0.44	%	1.45	%
Office equipment	—	%	0.14	%

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Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows (Tables)

3 Months Ended

Mar. 31, 2022

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows

Summary of Current Accrued Liabilities

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

	March 31,		December 31,
	2022		2021
Accrued liability - pipeline incident	$	27,731	$	34,417
Accrued lease operating expense		9,327		9,271
Accrued general and administrative expense		3,047		4,555
Accrued production and ad valorem tax		5,315		3,277
Accrued commitment fee and other expense		4,157		2,882
Accrued capital expenditures		2,329		1,631
Asset retirement obligations		1,016		1,016
Operating lease liability		756		777
Other		218		—
Accrued liabilities	$	53,896	$	57,826

Summary of accounts receivable

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

	March 31,		December 31,
	2022		2021
Oil and natural gas receivables	$	39,949	$	32,428
Insurance receivable - pipeline incident		47,778		55,765
Joint interest owners and other		5,850		5,409
Total accounts receivable		93,577		93,602
Less: allowance for doubtful accounts		(1,645)		(1,635)
Total accounts receivable, net		91,932		91,967

Summary of Supplemental Cash Flows

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

	For the Three Months Ended
	March 31,
	2022		2021
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$	2,100	$	2,265
Cash paid for reorganization items, net		—		6
Noncash investing and financing activities:
Increase in capital expenditures in payables and accrued liabilities		1,997		1,916

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Organization and Basis of Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2022 segment
Summary of Significant Accounting Policies
Number of reportable business segments	1

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Revenue - Summary of Revenues Disaggregated (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Total revenues	$ 111,433	$ 72,469
Oil and Natural Gas Sales [Member]
Revenues:
Total revenues	93,872	72,331
Oil [Member]
Revenues:
Total revenues	52,374	49,695
NGLs [Member]
Revenues:
Total revenues	13,481	7,670
Natural Gas [Member]
Revenues:
Total revenues	$ 28,017	$ 14,966

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Revenue - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Revenue
Number of revenue streams | item	3
Accounts receivable attributable to revenue from contracts with customers | $	$ 39.9	$ 32.4

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Fair Value Measurements of Financial Instruments - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value [Member] - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	$ 12,053	$ 7,967
Total liabilities	136,552	70,775
Quoted Prices in Active Market (Level 1) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	0	0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	12,053	7,967
Total liabilities	136,552	70,775
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	0	0
Commodity derivatives [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	11,819	7,967
Total liabilities	136,465	70,152
Commodity derivatives [Member] | Quoted Prices in Active Market (Level 1) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	0	0
Commodity derivatives [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	11,819	7,967
Total liabilities	136,465	70,152
Commodity derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	0	0
Interest rate derivatives [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	234	0
Total liabilities	87	623
Interest rate derivatives [Member] | Quoted Prices in Active Market (Level 1) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	0	0
Interest rate derivatives [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	234	0
Total liabilities	87	623
Interest rate derivatives [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Total assets	0	0
Total liabilities	$ 0	$ 0

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Fair Value Measurements of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Proved Developed and Producing Oil and Gas Properties [Member]
Assets And Liabilities Carrying Value And Fair Value [Line Items]
Impairment expense	$ 0	$ 0

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Risk Management and Derivative Instruments - Open Commodity Positions (Detail)	3 Months Ended
	Mar. 31, 2022 MMBTU $ / bbl $ / MMBTU bbl
Natural Gas Derivative Contracts Fixed Price Swap 2022 [Member]
Derivative [Line Items]
Average monthly volume (MMBtu) | MMBTU	695,000
Weighted-average fixed price | $ / MMBTU	2.56
Natural Gas Derivative Two Way Collars Contracts 2022 [Member]
Derivative [Line Items]
Average monthly volume (MMBtu) | MMBTU	775,000
Weighted-average floor price	2.56
Weighted-average ceiling price	3.44
Crude Oil Derivative Contracts Fixed Price Swap 2022 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	61,667
Weighted-average fixed price	49.17
Crude Oil Derivative Two Way Collars Contracts 2022 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	20,000
Weighted-average floor price	58.75
Weighted-average ceiling price	68.31
Crude Oil Derivative Three Way Collars Contracts 2022 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	89,000
Weighted-average floor price	42.92
Weighted-average ceiling price	55.55
Weighted-average sub-floor price	32.58
Natural Gas Derivative Contracts Fixed Price Swap 2023 [Member]
Derivative [Line Items]
Average monthly volume (MMBtu) | MMBTU	0
Weighted-average fixed price | $ / MMBTU	0
Natural Gas Derivative Two Way Collars Contracts 2023 [Member]
Derivative [Line Items]
Average monthly volume (MMBtu) | MMBTU	690,000
Weighted-average floor price	2.92
Weighted-average ceiling price	3.84
Crude Oil Derivative Contracts Fixed Price Swap 2023 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	55,000
Weighted-average fixed price	57.30
Crude Oil Derivative Two Way Collars Contracts 2023 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	0
Weighted-average floor price	0
Weighted-average ceiling price	0
Crude Oil Derivative Three Way Collars Contracts 2023 [Member]
Derivative [Line Items]
Average monthly volume (Bbls) | bbl	30,000
Weighted-average floor price	55.00
Weighted-average ceiling price	67.15
Weighted-average sub-floor price	40.00

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Risk Management and Derivative Instruments - Interest Rate Swap Open Positions (Detail) - Interest Rate Swap Open Position Remaining 2021 [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Derivative [Line Items]
Average Monthly Notional (in thousands)	$ 75,000
Weighted-average fixed rate	1.281%
Floating rate	1 Month LIBOR

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Risk Management and Derivative Instruments - Gross Fair Value of Derivative Instruments by Appropriate Balance Sheet (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Derivative Instruments and Hedges, Assets [Abstract]
Asset Derivatives, Net recorded fair value	$ 234
Liability Derivatives, Net recorded fair value	103,887	$ 53,144
Liability Derivatives, Net recorded fair value	20,846	9,664
Short-Term Derivative Instruments [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	9,704	4,804
Asset Derivatives, Netting arrangements	(9,470)	(4,804)
Asset Derivatives, Net recorded fair value	234	0
Liability Derivatives, Gross fair value	113,357	57,948
Liability Derivatives, Netting arrangements	(9,470)	(4,804)
Liability Derivatives, Net recorded fair value	103,887	53,144
Short-Term Derivative Instruments [Member] | Commodity derivatives [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	9,470	4,804
Liability Derivatives, Gross fair value	113,270	57,325
Short-Term Derivative Instruments [Member] | Interest Rate Swaps [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	234	0
Liability Derivatives, Gross fair value	87	623
Long-Term Derivative Instruments [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	2,349	3,163
Asset Derivatives, Netting arrangements	(2,349)	(3,163)
Asset Derivatives, Net recorded fair value	0	0
Liability Derivatives, Gross fair value	23,195	12,827
Liability Derivatives, Netting arrangements	(2,349)	(3,163)
Liability Derivatives, Net recorded fair value	20,846	9,664
Long-Term Derivative Instruments [Member] | Commodity derivatives [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	2,349	3,163
Liability Derivatives, Gross fair value	23,195	12,827
Long-Term Derivative Instruments [Member] | Interest Rate Swaps [Member]
Derivative Instruments and Hedges, Assets [Abstract]
Total assets	0	0
Liability Derivatives, Gross fair value	$ 0	$ 0

XML

Risk Management and Derivative Instruments - Unrealized and Realized Gains and Losses Related to Derivative Instruments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments Gain Loss [Line Items]
Loss on commodity derivative instruments	$ 93,404	$ 34,588
Interest expense, net	(2,441)	(3,112)
Commodity derivatives [Member]
Derivative Instruments Gain Loss [Line Items]
Loss on commodity derivative instruments	93,404	34,588
Interest Rate Swaps [Member]
Derivative Instruments Gain Loss [Line Items]
Interest expense, net	$ (557)	$ (62)

XML

Asset Retirement Obligations - Summary of Changes in Asset Retirement Obligations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Asset Retirement Obligations
Asset retirement obligations at beginning of period	$ 103,414
Accretion expense	1,720	$ 1,615
Asset retirement obligation at end of period	105,134
Less: Current Portion	1,016		$ 1,016
Asset retirement obligations - long-term portion	$ 104,118		$ 102,398

XML

Long-Term Debt - Consolidated Debt Obligations (Detail) - USD ($) $ in Thousands		Apr. 24, 2020	Mar. 31, 2022	Mar. 31, 2021
Line Of Credit Facility [Line Items]
Paycheck Protection Program loan		$ 5,500
Total long-term debt			$ 225,000	$ 230,000
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Aggregate principal outstanding	[1]		$ 225,000	$ 230,000

[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.

XML

Long-Term Debt- Revolving Credit Facility - Additional Information (Detail) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
	Apr. 30, 2022	Nov. 30, 2021	Mar. 31, 2022
Line Of Credit Facility [Line Items]
Letters of credit outstanding			$ 0.0
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Borrowing base	$ 230.0	$ 245.0	$ 235.0
Maturity date			Nov. 02, 2023
Amount of monthly reduction in borrowing base	$ 5.0	$ 5.0

XML

Long-Term Debt - Summary of Weighted-Average Interest Rates Paid on Variable-Rate Debt Obligations (Detail)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Revolving credit facility, weighted-average interest rates	3.79%	3.67%

XML

Long-Term Debt - Unamortized Deferred Financing Costs - Additional Information (Detail) $ in Millions	Mar. 31, 2022 USD ($)
Revolving Credit Facility [Member]
Line Of Credit Facility [Line Items]
Unamortized deferred financing costs	$ 0.8

XML

Long-Term Debt - Paycheck Protection Program - Additional Information (Detail)	Apr. 24, 2020 USD ($)
Long-Term Debt
Loan amount received under paycheck protection plan	$ 5,500,000
Paycheck protection program loan of 2020, term	2 years
Paycheck protection program Loan of 2020, interest rate	1.00%
Paycheck protection program loan, principal or interest due next six months	$ 0

XML

Equity (Deficit)- Additional Information (Detail) - $ / shares	May 04, 2017	Mar. 31, 2022	Dec. 31, 2021
Equity And Distributions [Line Items]
Common stock, shares authorized		250,000,000	250,000,000
Common stock, par value		$ 0.01	$ 0.01
Warrant [Member]
Equity And Distributions [Line Items]
Warrant issued during period	2,173,913
Warrant life period	5 years
Warrant exercise price	$ 42.60

XML

Equity (Deficit) - Summary of Changes in Number of Outstanding Common Stock (Detail)	3 Months Ended
	Mar. 31, 2022 shares
Summary Of Changes In Number Of Outstanding Units Or Shares [Line Items]
Beginning balance	38,024,142
Ending balance	38,260,182
Common Stock [Member]
Summary Of Changes In Number Of Outstanding Units Or Shares [Line Items]
Beginning balance	38,024,142
Restricted stock units vested	326,440
Shares withheld for taxes	(90,400)	[1]
Ending balance	38,260,182

[1] Represents the net settlement on vesting of restricted stock necessary to satisfy the minimum statutory tax withholding requirements.

XML

Earnings per Share - Calculation of Earnings (Loss) per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share [Line Items]
Net loss		$ (48,614)	$ (19,328)
Less: Net income allocated to participating restricted stockholders		0	0
Basic and diluted earnings available to common stockholders		$ (48,614)	$ (19,328)
Common shares:
Common shares outstanding - basic		38,181	37,829
Dilutive effect of potential common shares		0	0
Common shares outstanding - diluted		38,181	37,829
Basic		$ (1.27)	$ (0.51)
Diluted		$ (1.27)	$ (0.51)
Warrants [Member]
Common shares:
Antidilutive stock options or warrants	[1]	2,174	2,174

[1] Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect

XML

Long-Term Incentive Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
		Mar. 31, 2022	Dec. 31, 2021
EIP [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares Available for Future Grants Issuance		1,564,669
TSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost		$ 4.9
Weighted-average period of unrecognized compensation cost		2 years 4 months 24 days
TSUs [Member] | Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
RSUs outstanding		1,612,926	1,074,420
Weighted average grant date fair value per unit	[1]	$ 3.66	$ 3.66
Granted, Number of Units	[2]	834,374
Forfeited, Number of Units		18,523
Shares vested		277,345
PSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average period of unrecognized compensation cost		1 year
Decrease in share targets		$ 0.25
RSUs outstanding		60,575	65,940
Weighted average grant date fair value per unit	[1]	$ 2.94	$ 2.87
Granted, Number of Units		0
Forfeited, Number of Units		5,365
Shares vested		0
PSUs [Member] | Share Based Compensation Award Tranche Three [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		50.00%
PSUs [Member] | First Anniversary Vesting [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		25.00%
PSUs [Member] | Second Anniversary Vesting [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		25.00%
PSUs [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost		$ 0.1
2017 Non-Employee Directors Compensation Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average period of unrecognized compensation cost		1 month 6 days
RSUs outstanding		3,333
Weighted average grant date fair value per unit		$ 5.12
Granted, Number of Units		0
Forfeited, Number of Units		0
Shares vested		0
2017 Non-Employee Directors Compensation Plan [Member] | Maximum [Member] | Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost		$ 0.1
PRSU [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost		$ 1.3
Weighted-average period of unrecognized compensation cost		2 years 8 months 12 days
Fair value estimation method		The fair value of each PRSU award was estimated on their grant dates using a Monte Carlo simulation.
RSUs outstanding		337,186	196,377
Weighted average grant date fair value per unit	[1]	$ 4.44	$ 1.94
Granted, Number of Units	[3]	189,904
Forfeited, Number of Units		0
Shares vested		49,095
PRSU [Member] | Share Based Compensation Award Tranche Three [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		50.00%
PRSU [Member] | First Anniversary Vesting [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		25.00%
PRSU [Member] | Second Anniversary Vesting [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock units vesting percentage		25.00%
PRSU [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of Potential Payout		200.00%
PRSU [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of Potential Payout		0.00%

[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, 2022 was $3.0 million based on a grant date market price at $3.64 per share.

[3] The aggregate grant-date fair value of PRSUs issued for the three months ended March 31, 2022 was $1.2 million based on a calculated fair value price at $6.20 per share.

XML

Long-Term Incentive Plans - Summary of Information Regarding Restricted Stock Unit Awards (Detail)	3 Months Ended
	Mar. 31, 2022 $ / shares shares
PSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding, Number of Units, Beginning Balance	65,940
Granted, Number of Units	0
Forfeited, Number of Units	(5,365)
Vested, Number of Units	0
Outstanding, Number of Units, Ending Balance	60,575
Outstanding, Weighted-Average Grant Date Fair Value per unit, Beginning balance | $ / shares	$ 2.87	[1]
Granted, Weighted-Average Grant Date Fair Value per Unit | $ / shares	0	[1]
Forfeited, Weighted-Average Grant Date Fair Value per Unit | $ / shares	2.11	[1]
Vested, Weighted-Average Grant Date Fair Value per Unit | $ / shares	0	[1]
Outstanding, Weighted-Average Grant Date Fair Value per unit, Ending balance | $ / shares	$ 2.94	[1]
PRSU [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding, Number of Units, Beginning Balance	196,377
Granted, Number of Units	189,904	[2]
Forfeited, Number of Units	0
Vested, Number of Units	(49,095)
Outstanding, Number of Units, Ending Balance	337,186
Outstanding, Weighted-Average Grant Date Fair Value per unit, Beginning balance | $ / shares	$ 1.94	[1]
Granted, Weighted-Average Grant Date Fair Value per Unit | $ / shares	6.20	[1],[2]
Forfeited, Weighted-Average Grant Date Fair Value per Unit | $ / shares	0	[1]
Vested, Weighted-Average Grant Date Fair Value per Unit | $ / shares	1.24	[1]
Outstanding, Weighted-Average Grant Date Fair Value per unit, Ending balance | $ / shares	$ 4.44	[1]
Restricted Stock Units (RSUs) [Member] | TSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding, Number of Units, Beginning Balance	1,074,420
Granted, Number of Units	834,374	[3]
Forfeited, Number of Units	(18,523)
Vested, Number of Units	(277,345)
Outstanding, Number of Units, Ending Balance	1,612,926
Outstanding, Weighted-Average Grant Date Fair Value per unit, Beginning balance | $ / shares	$ 3.66	[1]
Granted, Weighted-Average Grant Date Fair Value per Unit | $ / shares	3.64	[1],[3]
Forfeited, Weighted-Average Grant Date Fair Value per Unit | $ / shares	3.52	[1]
Vested, Weighted-Average Grant Date Fair Value per Unit | $ / shares	3.60	[1]
Outstanding, Weighted-Average Grant Date Fair Value per unit, Ending balance | $ / shares	$ 3.66	[1]
Restricted Stock Units (RSUs) [Member] | 2017 Non-Employee Directors Compensation Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted, Number of Units	0
Forfeited, Number of Units	0
Vested, Number of Units	0
Outstanding, Number of Units, Ending Balance	3,333
Outstanding, Weighted-Average Grant Date Fair Value per unit, Ending balance | $ / shares	$ 5.12

[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 PRSUs issued for the three months ended March 31, 2022 was $1.2 million based on a calculated fair value price at $6.20 per share.

[3] The aggregate grant-date fair value of TSUs issued for the three months ended March 31, 2022 was $3.0 million based on a grant date market price at $3.64 per share.

XML

Long-Term Incentive Plans - Summary of Information Regarding Restricted Stock Unit Awards (Parenthetical) (Detail) $ / shares in Units, $ in Millions	Mar. 31, 2022 USD ($) $ / shares
TSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value of restricted stock units issued | $	$ 3.0
TSUs [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant Date Market Price | $ / shares	$ 3.64
PRSU [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Aggregate grant date fair value of restricted stock units issued | $	$ 1.2
PRSU [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant Date Market Price | $ / shares	$ 6.20

XML

Long-Term Incentive Plans - Assumptions Used in Monte Carlo Model (Detail) - PRSU [Member]	3 Months Ended
	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility	120.80%
Dividend yield	0.00%
Risk-free interest rate	1.38%

XML

Long-Term Incentive Plans - Summary of Amount of Compensation Expense Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity based compensation expense (benefit)	$ 648	$ 102
TSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity based compensation expense (benefit)	591	75
PSUs and PRSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity based compensation expense (benefit)	53	23
Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Equity based compensation expense (benefit)	$ 4	$ 4

XML

Leases - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases
Lease, option to terminate	leases can be terminated with 30-day prior written notice.
Lease termination period with prior written notice	30 days
Operating lease costs	$ 0.4	$ 0.6

XML

Leases - Schedule of Supplemental Cash Flow Information Related to Lease Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Supplemental Cash Flow Information [Abstract]
Non-cash amounts included in the measurement of lease liabilities, operating cash flows from operating leases	$ 442	$ 106

XML

Leases - Schedule of Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Leases
Right-of-use asset	$ 3,158	$ 2,716
Current lease liability	756	777
Long-term lease liability	2,549	2,017
Total lease liability	$ 3,305	$ 2,794

XML

Leases - Schedule of Maturity Analysis of Minimum Lease Payment Obligation Under Non-cancellable Operating Leases (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Lessee Lease Description [Line Items]
Remaining 2022	$ 695
2023	918
2024	710
2025	678
2026 and thereafter	571
Total lease payments	3,572
Less: interest	267
Present value of lease liabilities	3,305	$ 2,794
Office and Warehouse Space [Member]
Lessee Lease Description [Line Items]
Remaining 2022	508
2023	678
2024	678
2025	678
2026 and thereafter	571
Total lease payments	3,113
Less: interest	252
Present value of lease liabilities	2,861
Leased Vehicles and Office Equipment [Member]
Lessee Lease Description [Line Items]
Remaining 2022	187
2023	240
2024	32
2025	0
2026 and thereafter	0
Total lease payments	459
Less: interest	15
Present value of lease liabilities	$ 444

XML

Leases - Schedule of Weighted Average Remaining Lease Terms and Discount Rate of Operating Leases (Detail)	Mar. 31, 2022	Mar. 31, 2021
Office and Warehouse Space [Member]
Lessee Lease Description [Line Items]
Weighted average remaining lease term	4 years 3 days	5 months 19 days
Office Leases [Member]
Lessee Lease Description [Line Items]
Weighted average discount rate	3.05%	2.75%
Vehicles [Member]
Lessee Lease Description [Line Items]
Weighted average remaining lease term	3 months 3 days	9 months 7 days
Weighted average discount rate	0.44%	1.45%
Office Equipment [Member]
Lessee Lease Description [Line Items]
Weighted average remaining lease term	0 years	10 days
Weighted average discount rate		0.14%

XML

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows - Summary of Current Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows
Accrued liability - pipeline incident	$ 27,731	$ 34,417
Accrued lease operating expense	9,327	9,271
Accrued general and administrative expense	3,047	4,555
Accrued production and ad valorem tax	5,315	3,277
Accrued commitment fee and other expense	4,157	2,882
Accrued capital expenditures	2,329	1,631
Asset retirement obligations	1,016	1,016
Operating lease liability	$ 756	$ 777
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities	Accrued liabilities
Other	$ 218
Accrued liabilities	$ 53,896	$ 57,826

XML

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows
Oil and natural gas receivables	$ 39,949	$ 32,428
Insurance receivable - pipeline incident	47,778	55,765
Joint interest owners and other	5,850	5,409
Total accounts receivable	93,577	93,602
Less: allowance for doubtful accounts	(1,645)	(1,635)
Total accounts receivable, net	$ 91,932	$ 91,967

XML

Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows - Summary of Supplemental Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$ 2,100	$ 2,265
Cash paid for reorganization items, net	0	6
Noncash investing and financing activities:
Increase in capital expenditures in payables and accrued liabilities	$ 1,997	$ 1,916

XML

Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Related Party Transactions
Significant transaction with related party	$ 0	$ 0

XML

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2022 USD ($) $ / bbl	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Commitments and Contingencies Additional Textual [Abstract]
Remaining environmental accrued liability recorded	$ 0		$ 0
Beta's decommissioning obligations, full supported by surety bonds	161,300,000
Beta's decommissioning obligations, cash	$ 300,000
Obligatory monthly deposit into sinking fund account per barrel of oil | $ / bbl	0.25
Sinking fund account maximum value upon which obligation ceases	$ 4,300,000
Oklahoma [Member]
Commitments and Contingencies Additional Textual [Abstract]
Commitment fee expense	400,000	$ 400,000
East Texas [Member]
Commitments and Contingencies Additional Textual [Abstract]
Commitment fee expense	500,000	$ 700,000
Southern California Pipeline Incident and Oil Release
Commitments and Contingencies Additional Textual [Abstract]
Restricted Investment - decommissioning of offshore production facilities	$ 4,300,000

XML

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Taxes
Income tax expense	$ 0	$ 0
Effective tax rate	0.00%	0.00%

XML

Southern California Pipeline Incident (Details) $ in Thousands		3 Months Ended		12 Months Ended
	Oct. 02, 2021 item	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 15, 2021 item	Oct. 14, 2021 bbl	Oct. 05, 2021 ft² item
Unusual or Infrequent Item, or Both [Line Items]
Pipeline incident loss		$ 580	$ 0
Amount receivable		47,778		$ 55,765
Receivable		91,932		91,967
Southern California Pipeline Incident and Oil Release
Unusual or Infrequent Item, or Both [Line Items]
Number of foot section of pipeline displaced with lateral movement | item							4,000
Maximum lateral movement of pipeline identified | ft²							105
Number of inch split running parallel to pipe | item							13
Volume of oil expected to be released | bbl						588
Maximum volume of oil previously estimated | bbl						3,134
Number of deployed contractors working in cleanup operations | item	1,800
Estimated aggregate costs		111,200
Amount received as reimbursement by insurance carriers		70,400
Costs probable of recovery		109,000
Pipeline incident loss		600
Amount of loss contingency expenses				$ 1,600
Southern California Pipeline Incident and Oil Release | Accounts Receivable
Unusual or Infrequent Item, or Both [Line Items]
Amount receivable		38,600
LOPI insurance payments recognized		17,500
Receivable		8,900
Southern California Pipeline Incident and Oil Release | Minimum
Unusual or Infrequent Item, or Both [Line Items]
Estimated aggregate costs		100,000
Southern California Pipeline Incident and Oil Release | Maximum
Unusual or Infrequent Item, or Both [Line Items]
Estimated aggregate costs		$ 120,000
Southern California Pipeline Incident and Oil Release | Pending Litigation
Unusual or Infrequent Item, or Both [Line Items]
Number of putative class action suit filed | item					14
Southern California Pipeline Incident and Oil Release | CALIFORNIA
Unusual or Infrequent Item, or Both [Line Items]
Number of miles off the coast of beach | item	4