AMPY

AMPY (Amplify Energy Corp.) Analyst Note Date: 2026-06-13 Event Date: 2026-06-13

1. Structural Readiness

Conservative Entry: $6.59 Current Price: $5.01 Extension: -24.0% vs. conservative entry Breakout Level: $6.59 (Conservative Entry) ATR Context: ATR at breakout was 5.9% (High); Current ATR is 5.6% (High).

2. Thesis Layer

Thesis Classification: Tactical / Setup-Led Macro Thesis: None. Assessment: As of 2026-06-13, there is no named secular thesis driving this name. The investment case is strictly tactical, relying on the quality of the technical setup (the Coil structure) and the immediate fundamentals of the business. There is no macro overlay to weight the conviction; the trade is judged solely on whether the company can execute its operational plan to justify a re-rating that triggers the breakout.

3. Business Overview

Company Profile: Amplify Energy Corp. is an independent oil and natural gas company engaged in the acquisition, development, exploitation, and production of hydrocarbon properties. Primary Assets: As of March 31, 2026, the company operates two primary producing properties:

Operational Focus: The company divested its assets in Oklahoma, East Texas/North Louisiana, and the Eagle Ford (non-op) during the year ended December 31, 2025, to focus capital on these core California assets.

• Beta Field: Located in federal waters approximately 11 miles offshore from the Port of Long Beach, California.
• Bairoil: Located in California.

Key Operational Metrics (Source: Q1 2026 10-K / Earnings):

• Reserves: As of December 31, 2025, estimated proved reserves were 38.1 MMBoe. The Beta field contained 24.3 MMBbls of net proved oil reserves, while Bairoil contained 13.7 MMBbls.
• Production: Average net production for the three months ended December 31, 2025, was 6.6 MBoe/d. The Beta field generated 3.7 MBoe/d, and Bairoil generated 2.9 MBoe/d.
• Well Performance: Management reported that the C54 well in the D-Sand (Beta) was the strongest in the program with an IP20 of approximately 800 barrels of oil per day. Management stated that "all of our D-Sand completions to date have significantly outperformed the type curve."
• Capital Allocation: For 2025, management elected to defer three development projects at Beta, resulting in capital savings of approximately $50 million. The 2025 capital program was adjusted to a range of $55 million to $70 million. Management intends to complete three wells in 2025 at Beta, with the option to add back wells if commodity prices improve.
• Reserve Mix: Estimated proved reserves consisted of approximately 93% oil and 7% NGLs, with 65% classified as proved developed reserves.

4. Archetype and Conviction

Archetype: Cyclical Recovery Rationale: The name fits the "Cyclical Recovery" archetype due to its recent strategic pivot (divestiture of non-core assets) and the successful execution of a high-performing D-Sand drilling program that has outperformed type curves. The company is shifting from a broader, less efficient portfolio to a concentrated, high-yield core in California.

Valuation & Financial Context:

• Financial Spine: Forward consensus EPS for FY1 is projected at -$0.6684, with a turnaround to $0.92 in FY2. This indicates the market expects a near-term earnings dip followed by a recovery, aligning with the cyclical nature of the setup.
• Balance Sheet: As of March 31, 2026, the borrowing base under the Revolving Credit Facility was $25.0 million with elected commitments of $15.0 million. The facility matures on December 31, 2028. Minimum hedging requirements range from 25% to 75% of projected production.
• Conviction Stack:
• *Thesis Strength:* Low (Tactical only).
• *Evidence Quality:* High (Strong operational data from 2025 earnings and 2026 filings).
• *Structural Quality:* High (ATR at breakout was 5.9%, indicating a robust volatility environment suitable for a setup).
• *Setup Readiness:* Partial (Forming state; price is 24% below entry).
• *Rerating Potential:* Dependent on the successful execution of the 2026 capital plan and sustained commodity prices to unlock the "option to add back wells."

5. Invalidations, Strengtheners, and Gaps

Invalidation Triggers:

• A significant deterioration in the Beta field production rates or a failure to meet the 2026 capital execution plan.
• A breach of the borrowing base covenant or a forced reduction in the credit facility.

Strengtheners:

• A close above the conservative entry of $6.59, confirming the breakout.
• Confirmation of additional well additions at Beta beyond the planned three wells in 2025.
• Upward revisions to the 2026 production guidance range (currently 19,000 to 20,500 bpd).

Evidence Gaps:

• 2026 Production Data: While 2025 data is robust, specific production results for the first quarter of 2026 (post-divestiture) are not detailed in the provided evidence beyond the March 31, 2026 reserve snapshot.
• Commodity Price Sensitivity: The evidence notes the option to add back wells "should commodity prices improve," but does not quantify the specific price thresholds required for this decision.
• FY1 Loss Drivers: The consensus EPS of -$0.6684 for FY1 is noted, but the specific drivers (e.g., one-time costs, tax impacts, or operational inefficiencies) are not detailed in the provided snippets.

PRIVATE ANALYST CALL

Judgment: Speculative Confidence: medium Key evidence: D-Sand completions significantly outperforming type curves with IP20 of 800 bbls; strategic divestiture of non-core assets to focus on high-yield Beta and Bairoil fields; capital program reduced to $55-70M with $50M in savings. Key risks: Current price is 24% below breakout entry; FY1 consensus EPS remains negative; borrowing base is tight at $25M with mandatory hedging requirements; commodity price dependency for capital expansion. Sizing hint: Position size should reflect the "Forming" state and the 24% extension; treat as a partial position until breakout confirmation. Expected path: Management expects to complete three wells at Beta in 2026 with potential for expansion if prices improve; production guidance is set for 19,000-20,500 bpd. Expected horizon: 3 to 6 months for the setup to resolve (breakout or invalidation). Failure mode to watch: A daily close below $4.57, which would invalidate the structural setup.