Amplify Energy Moves to Eliminate Debt with Major Asset Sales

Amplify Energy has finalized the divestiture of its East Texas and Louisiana oil fields for $122 million, with the transaction closing today. The buyer is EQV Alpha LLC. This sale, combined with a previously announced $92.5 million deal for its Oklahoma assets in November, is set to bring in over $214 million in total proceeds by the end of the month. A key question for investors is whether this capital influx will be sufficient to fully clear the company's revolving credit facility.

Management has confirmed its intention to direct the proceeds from both December transactions toward repaying its revolving credit line, aiming to eliminate this current debt obligation. As of September 30, 2025, the outstanding balance under this facility was $123.0 million. The combined asset sale revenues are expected to exceed this liability. Furthermore, the company's borrowing base was recently reset to $145 million at the start of the year, a move designed to bolster liquidity as Amplify Energy transitions into fiscal 2026.

Operational Performance and Focus

Despite previous divestments in the Eagle Ford region, Amplify's production has demonstrated stability with a slight upward trend. Operational highlights from the third quarter of 2025 include:
* Average Production: 19.7 thousand barrels of oil equivalent per day (MBoepd), a sequential increase from 19.1 MBoepd in Q2.
* Production Mix: 41% crude oil, 16% natural gas liquids (NGLs), and 43% natural gas.
* Adjusted EBITDA: $20.3 million, marking a 7% quarter-over-quarter improvement.
* Lease Operating Expenses: Declined by $3.0 million to approximately $35.6 million.

The company is now sharpening its operational focus on margin-rich assets, particularly development in the Beta field and its Bairoil operations. Approximately 85% of the 2025 capital budget had already been deployed through the first three quarters.

Should investors sell immediately? Or is it worth buying Amplify Energy?

Market Response and Risk Management

The equity market responded favorably to the news. On December 19, Amplify Energy shares closed at $4.75, a gain of 3.49%, with trading volume reaching 602,000 shares. Analyst firm Alliance Global maintains a price target of $7.25 for the stock.

For Q3 2025, the company reported a GAAP net loss of $21.0 million. This figure was heavily influenced by a non-cash impairment charge of $34.0 million. Excluding this and other one-time items, the adjusted net loss was $6.0 million. Looking ahead, Amplify has secured a degree of revenue protection through oil swaps for 2026 and 2027 at a weighted average price of $62.29 per barrel, establishing a cash flow floor.

With the $122 million transaction now complete and the Oklahoma sale finalized, management anticipates receiving the combined $214 million before month-end. These funds are prioritized for debt repayment, while the newly established $145 million borrowing base provides a liquidity cushion for the upcoming year.