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Long-Term Debt

9 Months Ended

Sep. 30, 2020

Note 8. Long-Term Debt

The following table presents our consolidated debt obligations at the dates indicated:

	September 30,		December 31,
	2020		2019
	(In thousands)
Revolving Credit Facility (1)	$	265,000	$	285,000
Paycheck Protection Program loan (2)		5,516		—
Total debt		270,516		285,000
Current portion of long-term debt (3)		5,000		—
Long-term debt	$	265,516	$	285,000

(1)	The carrying amount of our Revolving Credit Facility approximates fair value because the interest rates are variable and reflective of market rates.

(2)	See below for additional information regarding the receipt of the paycheck protection program loan.

(3)	Reflects the current portion of the monthly reductions for the Revolving Credit Facility as described below regarding the Third Amendment (as defined below).

Revolving Credit Facility

Amplify Energy Operating LLC, our wholly owned subsidiary (“OLLC”), is a party to a reserve-based revolving credit facility (the “Revolving Credit Facility”), subject to a borrowing base of $270.0 million as of September 30, 2020, which is guaranteed by us and all of our current subsidiaries. The Revolving Credit Facility matures on November 2, 2023.

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 with respect to our estimated natural gas, oil and NGL reserves, which takes into account the prevailing natural gas, oil and NGL prices at such time, as adjusted for the impact of our commodity derivative contracts.

As of September 30, 2020, we were in compliance with all the financial (current ratio and total leverage ratio) and other covenants associated with our Revolving Credit Facility.

Borrowing Base Redetermination

On June 12, 2020, the Company entered into the Borrowing Base Redetermination Agreement and Third Amendment to Credit Agreement, among the Borrower, Amplify Acquisitionco LLC, a Delaware limited liability company, the guarantors party thereto, the lenders party thereto and Bank of Montreal, as administrative agent (the “Third Amendment”). The Third Amendment amended the parties’ existing Credit Agreement, dated November 2, 2018, to among other things:

•

reduce the borrowing base under the Credit Agreement from $450.0 million to $285.0 million, with monthly reductions of $5.0 million thereafter until the borrowing base is reduced to $260.0 million, effective November 1, 2020;

•

increase the amount of first priority liens on all assets from at least 85% to 90%;

•

suspend certain financial covenants for the quarter ended June 30, 2020;

•

amend the definition of “Consolidated EBITDAX” in the Credit Agreement to decrease the limit of cash and cash equivalents permitted from $30.0 million to $25.0 million and increase the limit of transaction-related expense add-backs from $5.0 million to $20.0 million;

•

increase the minimum hedging requirements to at least 30% - 60% of our estimated production from total proved developed producing reserves;

•

incorporate a mandatory prepayment at times when cash and cash equivalents (as defined in the Credit Agreement) on hand exceed $25.0 million for five consecutive business days; and

•

amend certain other covenants and provisions.

Weighted-Average Interest Rates

The following table presents the weighted-average interest rates paid, excluding commitment fees, on our consolidated variable-rate debt obligations for the periods presented:

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2020	2019	2020	2019
Revolving Credit Facility	3.72%	4.89%	3.61%	4.99%

Letters of Credit

At September 30, 2020, we had no letters of credit outstanding.

Unamortized Deferred Financing Costs

Unamortized deferred financing costs associated with our Revolving Credit Facility was $1.7 million at September 30, 2020. At September 30, 2020, the unamortized deferred financing costs are amortized over the remaining life of our Revolving Credit Facility. For the nine months ended September 30, 2020, we wrote-off $2.4 million of deferred financing costs in connection with the decrease in our borrowing base.

Paycheck Protection Program

On April 24, 2020, the Company received a $5.5 million loan under the Paycheck Protection Program (the “PPP Loan”). The Paycheck Protection Program was established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide loans to qualifying businesses. The loans and accrued interest are potentially forgivable provided that the borrower uses the loan proceeds for eligible purposes. At this time, the Company anticipates that a substantial majority of the loan proceeds will be forgiven under the program. The term of the Company’s PPP Loan is 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.