Amplify Energy Corp. · NYSE:AMPY
Amplify Energy — Merger or Acquisition (May 2019)
24 slides from Amplify Energy's merger presentation, May 6, 2019
Slide 1: Amplify Energy and Midstates Petroleum Announce a Merger-of-Equals
Exhibit 99.2 Amplify Energy and Midstates Petroleum Announce a Merger-of-Equals May 6, 2019Exhibit 99.2 Amplify Energy and Midstates Petroleum Announce a Merger-of-Equals May 6, 2019
Slide 2: Transaction Highlights
Transaction Highlights Strategic All Stock Merger-of-Equals Unlocks Substantial Value Through Cost Synergies Establishes a Peer-Leading Free Cash Flow Profile Additional Capacity to Accelerate Capital Return Programs Potential for Opportunistic Consolidation of PDP-Weighted Assets Enhanced Scale Dri
Slide 3: Transaction Details
Transaction Details 100% stock combination of Amplify Energy Corp. ( Amplify or AMPY ) and Midstates Petroleum Company Inc. ( Midstates or MPO ) Amplify stockholders will receive 0.933 shares of common stock of newly-issued Midstates 1 shares for each share they currently own Combined company will t
Slide 4: Asset Overview
Asset Overview Robust platform of long-life, shallow decline assets – ~50/50 liquids and gas production mix 4 – Gas production receives attractive pricing in the Gulf Coast Combined company enterprise value of $729 MM is a significant discount to substantial proved developed (PD) 1 1 reserve value o
Slide 5: Transaction Rationale
Transaction Rationale G&A rationalization; preliminary estimates of at least $20 MM annual G&A reduction Realize G&A Synergies Opportunity to move down the cost curve by spreading fixed costs over more production 3 Achieves benefits of scale by combining two PDP-weighted independent producers 1 ‒ Pr
Slide 6: Combination Unlocks Value for All Stockholders
Combination Unlocks Value for All Stockholders Pro Forma Free Cash Flow 33 3 Asset Diversification 373 LOE and G&A Synergies 773 Float 773 Leverage & Liquidity 33 3 5Combination Unlocks Value for All Stockholders Pro Forma Free Cash Flow 33 3 Asset Diversification 373 LOE and G&A Synergies 773 Float
Slide 7: Top-Tier Free Cash Flow Generation
Top-Tier Free Cash Flow Generation Substantial low decline asset base yields sustainable sector-leading FCF generation U.S. publicly listed E&Ps 40 with market cap between Pro Forma $0.3 – $5 BN 7 Companies with FCF Pro Forma 1,2 yield > 10% Pro Forma 2 Companies with 1,2 FCF yield > 10% & leverage
Slide 8: Path to Value Creation and Upside
Path to Value Creation and Upside ~$230 MM Value Gap ‒ Enterprise Value is ~24% less than PD PV-10 ‒ Equity has ~54% upside based on PD PV-10 only Synergy Realization A 3 Further Value Enhancement $960 MM Improved Market Visibility and Trading B $729 MM 3 Liquidity Reinvestment Projects C 3 Further
Slide 9: Merger Creates a Peer Group Leader
Merger Creates a Peer Group Leader 1 4Q18 Production (Mboe/d) 4Q18A Levered Free Cash Flow ($ MM) $165 40 Peer Average: 38 Peer Average: ($17) $94 24 $71 16 4Q18 4Q18A Pro Forma Pro Forma 2018 Cash G&A Expense ($/Boe) Net Debt / 4Q18A Adjusted EBITDA 1.8x Peer Average: $3.48 Peer Average: 1.6x $3.21
Slide 10: Top-Tier Free Cash Flow Generation
Top-Tier Free Cash Flow Generation 1 2019E Levered Free Cash Flow Yield Pro Forma Amplify, 2019E Levered Free Cash Flow Yield: 15%-25% 27.1% 25.0% 16.7% 15.0% 8.4% 6.8% 5.1% Peer Average: (0.2%) (4.9%) (11.3%) (15.1%) (34.7%) Source: Company filings, FactSet as of 5/3/19 Note: Peers include: BCEI, B
Slide 11: Scale and Synergies Enable Top-Tier G&A Efficiency
Scale and Synergies Enable Top-Tier G&A Efficiency 2018 Cash G&A Expense ($/Boe) $5.81 $5.47 $4.80 $4.25 Peer Average: $3.48 ($/Boe) $3.21 $2.90 $2.70 $2.70 $2.32 $1.64 $1.47 $1.20 Source: Company filings 10 Note: Peers include: BCEI, BRY, CRK, DNR, ESTE, MGY (includes successor period only), PVAC,
Slide 12: Substantial Synergy Realization
Substantial Synergy Realization Cash G&A Bridge ($ MM) 2 $47 ($20) $15 1 $31 ~43% $27 reduction AMPY 2018 MPO 2018 Pro Forma Synergies AMPY PF 2018 G&A Overview AMPY to be headquartered in Houston, Texas, and will utilize AMPY's existing platform to eliminate redundancies and reduce overhead costs O
Slide 13: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Attractive PF 4Q18A leverage expected to be 1.2x; Pro Forma Capitalization ($ in MM, as of 3/31/19) below peer group average of 1.6x Cash and Cash Equivalents $32 Simple capital structure with 100% of debt from revolving credit facility Revolving Credit Facility 32
Slide 14: Capital Return Programs
Capital Return Programs Both Amplify and Midstates have been actively returning capital to stockholders and the pro forma combined company will be positioned to accelerate allocation of capital to this strategy Recent Capital Return Initiatives ($ in MM) Future Return of Capital Share Buyback - Rema
Slide 15: Expected Combination Highlights
Expected Combination Highlights Highly-efficient operator with best-in-class free cash flow profile 1 Substantial value creation through immediate synergies resulting in top-tier G&A metrics 2 Attractive leverage profile and liquidity 3 Unlocks optionality for accelerated capital returns 4 14Expecte
Slide 16: Appendix
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Slide 17: Miss Lime Asset Overview
Miss Lime Asset Overview 4Q18 Production PD PV-10 (Mboe/d) ($ MM) Other PF Amplify Assets Miss Lime Key Stats Net Acres (ML): ~100,000 acres ‒ Operatorship: ~83% ‒ Average WI: ~76% ‒ HBP: ~92% 1 Net Production: 16.4 MBoe/d 1 Liquids Mix: ~53% 2 PD PV-10: $350 MM 2 PD Reserves: 48 MMBoe 3 PD R/P: ~8
Slide 18: East Texas / North Louisiana Asset Overview
East Texas / North Louisiana Asset Overview 4Q18 Production PD PV-10 (Mboe/d) ($ MM) Other PF Amplify Assets ETX / NLA Key Stats Net Acres (CV): ~93,300 acres ‒ Average WI: ~87% ‒ HBP 100% Net Acres (HSVL): ~21,200 acres ‒ Average WI: ~69% ‒ HBP 100% 1 Net Production: 15.5 MBoe/d 2 PD PV-10: $230 MM
Slide 19: California Beta Field Asset Overview
California Beta Field Asset Overview 4Q18 Production PD PV-10 (Mboe/d) ($ MM) Other PF Amplify Assets California Beta Key Stats Net Acres: 17,000 acres ‒ WI %: 100% ‒ HBP %: 100% 1 Net Production: 3.1 MBoe/d 2 PD PV-10: $187 MM 2 PD Reserves: 16 MMBoe Amplify Leasehold Crude Oil: 100% 3 Beta Field P
Slide 20: Rockies CO Asset Overview
Rockies CO Asset Overview 2 4Q18 Production PD PV-10 (Mboe/d) ($ MM) Amplify Leasehold Fremont Carbon Other PF Amplify Assets Rockies CO 2 Sweetwater Key Stats Net Acres: 7,000 acres ‒ WI%: 100% ‒ HBP%: 100% 1 Net Production: 4.1 MBoe/d 2 PD PV-10: $151 MM N. Dakota 2 PD Reserves: 33 MMBoe Montana L
Slide 21: Eagle Ford Asset Overview
Eagle Ford Asset Overview 4Q18 Production PD PV-10 (Mboe/d) ($ MM) DeWitt Other PF Amplify Assets Eagle Ford Karnes Key Stats Net Acres: ~750 acres ‒ WI %: ~5% ‒ HBP %: ~100% 1 Net Production: 1.1 MBoe/d 2 PD PV-10: $42 MM 2 PD Reserves: 2 MMBoe Liquids: ~89% 3 PD R/P: ~6 years Key Highlights 100% N
Slide 22: Experienced Management Team
Experienced Management Team Amplify’s senior management team will operate the combined business The Amplify team, on average, has >23 years of experience successfully operating companies with diverse asset bases Name Position Prior Experience Years in Industry Ken Mariani CEO and President 36+ Marty
Slide 23: Forward Looking Statements
Forward Looking Statements This presentation and the oral statements made in connection therewith contain forward-looking statements. All statements, other than statements of historical facts, included in this presentation or made in connection therewith that address activities, events or developmen
Slide 24: Important Additional Information (Cont'd)
Important Additional Information (Cont'd) Important Additional Information (Continued). In connection with the proposed transaction between Amplify and Midstates, it is expected that Midstates will file with the SEC a registration statement on Form S-4 that will constitute a Proxy Statement and Pros