Amplify Energy Corp
For the period ended Dec 31, 2024. Filed Mar 5, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 5, 2025
AMPY$3.33+4.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-07.
0001558370-24-002637
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-05.
0001558370-25-002273
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 141 current paragraphs.
69 unchanged; 37 reworded; 31 added; 5 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 35 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Recent Developments
Current report
East Texas Haynesville Monetization
Current report
In December 2024, we sold certain rights, title and interest in assets located in East Texas to a third party. We recorded a gain of approximately $1.4 million.
Current report
In January 2025, we purchased and sold certain rights, title and interest in assets in East Texas from a third party, whereby we received net proceeds of $6.2 million.
Current report
On January 14, 2025, we entered into the Merger Agreement with the Merger Subs, the Acquired Companies, and, solely for the limited purposes set forth in the Merger Agreement, Juniper and the Specified Company Entities set forth on Annex A thereto, pursuant to which, at the Effective Time, (a) NPOG will merge with and into First Merger Sub, with NPOG surviving the merger as an indirect, wholly owned subsidiary of the Company and (b) COG will merge with and into Second Merger Sub, with COG surviving the merger as an indirect, wholly owned subsidiary of the Company, in each case, subject to the terms and conditions of the Merger Agreement.
Current report
Subject to the terms and conditions of the Merger Agreement, at the Effective Time, all of the issued and outstanding limited liability company interests of each of the Acquired Companies will automatically be converted into the right to receive the Aggregate Merger Consideration. Following the Effective Time, the Company's existing stockholders and the Acquired Companies' existing equityholders are expected to own approximately 61% and 39%, respectively, of the combined company's outstanding equity.
Current report
Mr. Christopher W. Hamm will serve as Chairman of the Board, and Mr. Martyn Willsher will continue to serve as the Chief Executive Officer of the Company after the Effective Time. The Merger Agreement provides that the Board will consist of the following seven members: Martyn Willsher, Christopher W. Hamm, Deborah G. Adams, James E. Craddock, Vidisha Prasad, Edward Geiser and Josh Schmidt. Further, Josh Schmidt will be appointed as Chairman of the Compensation Committee, and Edward Geiser will be appointed as a member of the Nominating and Governance Committee.
Current report
The Merger Agreement contains customary representations, warranties and covenants of the Company and the Acquired Companies, including covenants relating to the conduct of the business of both the Company and the Acquired Companies from the date of signing the Merger Agreement through the Closing, obtaining the requisite approval of the stockholders of the Company and maintaining the listing of the Common Stock on the NYSE. Under the terms of the Merger Agreement, the Company has also agreed not to solicit from any person an acquisition proposal for the Company.
Current report
In connection with the Mergers, the Company will seek the approval of the Company’s stockholders of the Stock Issuance Proposal. The Board has agreed to recommend the approval of the Stock Issuance Proposal to our stockholders and to solicit proxies in support of the approval of the Stock Issuance Proposal at a meeting of the stockholders (the “Stockholders Meeting”) to be held for that purpose.
Current report
The Closing is subject to various customary closing conditions, including, among other things, (a) the receipt of approval of the Stock Issuance Proposal by the affirmative vote of at least a majority of the votes cast in person or represented by proxy at the Stockholders Meeting by the holders of Common Stock entitled to vote thereon (the “Amplify Stockholder Approval”), (b) the receipt of certain specified consents, and (c) the approval for listing by the NYSE for the shares of Common Stock to be issued in connection with the Mergers.
Current report
The Merger Agreement also provides each of the Company and the Acquired Companies with certain termination rights including, among other things, termination: (a) by the Acquired Companies or Amplify Energy if Amplify Energy fails to obtain the Amplify Stockholder Approval; (b) by Amplify Energy or the Acquired Companies, if Amplify Energy or either of the Acquired Companies breaches or fails to perform any of its or their respective representations, warranties or covenants in the Merger Agreement and such breach cannot be or is not timely cured in accordance with the terms of the Merger Agreement and such breach or failure to perform would cause the applicable closing condition not to be satisfied; (c) by the Acquired Companies, in the event the Board effects a Parent Change in Recommendation (as defined in the Merger Agreement) prior to the Amplify Stockholder Approval being obtained or if Amplify Energy is in violation of the covenant to not solicit alternative business combination proposals from third parties in any material respect; or (d) by Amplify Energy, if the Acquired Companies are in violation of the covenant to not solicit alternative business combination proposals from third parties in any material respect.
Current report
In the event that a Parent Alternative Proposal (as defined in the Merger Agreement) is publicly submitted or proposed to the Board prior to, and not withdrawn at the time of the Stockholders Meeting, the Merger Agreement is terminated by the Acquired Companies in accordance with clause (b) above or by either Amplify Energy or the Acquired Companies in accordance with clause (a) above or as a result of the failure to close the Mergers on or before July 14, 2025 (the “Outside Date”), and Amplify Energy enters into a definitive agreement with respect to, or consummates, a Parent Alternative Proposal within 12 months following termination of the Merger Agreement, Amplify Energy will be required to pay the Acquired Companies a termination fee of $8,500,000 (the “Amplify Termination Fee”). Amplify Energy will also be required to pay the Acquired Companies the Amplify Termination Fee in the event the Merger Agreement is terminated by the Acquired Companies in accordance with clause (c) above. In the event that Amplify terminates the Merger Agreement in accordance with clause (d) above, the Acquired Companies will be required to (or will cause the Specified Company Entities to) pay Amplify a termination fee of $5,500,000 (the “Acquired Companies’ Termination Fee” and, together with the Amplify Termination Fee, the “Termination Fees”). If the Merger Agreement is terminated by any party in accordance with clause (a) or by the Acquired Companies in accordance with clause (b) above and the Amplify Termination Fee is not otherwise payable in accordance with the terms and conditions of the Merger Agreement, then Amplify Energy will be required to reimburse the Acquired Companies’ incurred expenses, up to a maximum aggregate amount of $800,000. If the Merger Agreement is terminated by Amplify Energy in accordance with clause (b) above and the Acquired Companies’ Termination Fee is not otherwise payable in accordance with the terms and conditions of the Merger Agreement, then the Acquired Companies will be required to (or will cause the Specified Company Entities to) reimburse Amplify Energy’s incurred expenses, up to a maximum aggregate amount of $1,250,000. In addition to the foregoing termination rights, the Merger Agreement may be terminated by either Amplify Energy or the Acquired Companies if the Mergers have not been consummated on or prior to the Outside Date or if a governmental entity issues a final, non-appealable order or decree permanently restraining, enjoining or prohibiting the Mergers. The parties may also mutually agree to terminate the Merger Agreement.
Current report
If the Board effects a Parent Change in Recommendation prior to the Stockholders Meeting, Amplify Energy will, unless the Acquired Companies terminate the Merger Agreement, be required to submit the approval of the Amplify Stock Issuance to a vote of Amplify Energy’s stockholders at the Stockholders Meeting notwithstanding the Parent Change in Recommendation. Neither Amplify Energy nor the Acquired Companies are able to terminate the Merger Agreement in order to accept an alternative business combination proposal.
Current report
The Merger Agreement provides that, during the period from the date of the Merger Agreement until the Effective Time, each of Amplify Energy and the Acquired Companies will be subject to certain restrictions on their ability to solicit or respond to alternative business combination proposals from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative business combination proposals, subject to customary exceptions.
Current report
The Merger Agreement contains customary representations, warranties and covenants for a transaction of this nature. The Merger Agreement also contains customary pre-closing covenants, including the obligations of Amplify Energy and the Acquired Companies to conduct their respective businesses in the ordinary course, consistent with past practice, and to refrain from taking certain specified actions without the consent of the other party.
Current report
*No Offer or Solicitation.*This section of the Annual Report relates to a proposed business combination transaction between the Company and the Acquired Companies. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the business combination transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Current report
Important Additional Information Regarding the Mergers Will Be Filed With the SEC. In connection with the proposed Mergers, the Company has filed a definitive proxy statement. The definitive proxy statement will be sent to the stockholders of the Company. The Company may also file other documents with the SEC regarding the Mergers. INVESTORS AND SECURITY HOLDERS OF AMPLIFY ENERGY ARE ADVISED TO CAREFULLY READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT MATERIALS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGERS, THE PARTIES TO THE MERGERS AND THE RISKS ASSOCIATED WITH THE MERGERS. Investors and security holders may obtain a free copy of the definitive proxy statement and other relevant documents filed by Amplify Energy with the SEC from the SEC’s website at www.sec.gov. Security holders and other interested parties will also be able to obtain, without charge, a copy of the definitive proxy statement and other relevant documents (when available) by (1) directing your written request to: 500 Dallas Street, Suite 1700, Houston, Texas or (2) contacting our Investor Relations department by telephone at (832) 219-9044 or (832) 219-9051. Copies of the documents filed by the Company with the SEC will be available free of charge on the Company’s website at http://www.amplifyenergy.com.
Current report
Participants in the Solicitation. Amplify Energy and certain of its respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the stockholders of Amplify Energy in connection with the transaction, including a description of their respective direct or indirect interests, by security holdings or otherwise, is included in the definitive proxy statement filed with the SEC. Additional information regarding the Company’s directors and executive officers is also included in Amplify’s Notice of Annual Meeting of Stockholders and 2024 Proxy Statement, which was filed with the SEC on April 5, 2024. These documents are available free of charge as described above.
Current report
Revenue Payables in Suspense
Current report
In the normal course of business, we undertake efforts to research and resolve the disputes, legal reasons or uncertainties causing revenues of owners of mineral interests in our leases to go into suspense. As resolutions occur, obligations related to revenue payables in suspense are released. For the year ended December 31, 2024, we released $8.4 million of net revenues in suspense as a result of these efforts. The following table presents the impact of releases of revenue payables in suspense to our statements of operations for the year ended December 31, 2024:
Current report
Other revenues were $11.7 million and $19.3 million for the year ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2024, other revenues consisted of iodine sales of $2.4 million, service revenues of $3.1 million with respect to our wholly owned subsidiary, Magnify Energy Services (“Magnify”), and interest income of $0.9 million earned on our sinking fund escrow accounts. Additionally, for the year ended December 31, 2024, we recorded a revenue suspense release of $4.8 million. For the year ended December 31, 2023, other revenues were primarily related to our receipt of LOPI insurance proceeds of $17.9 million, Magnify service revenue of $0.6 million and iodine sales of $0.2 million.
Current report
Non-GAAP Financial Measures
Current report
We define Adjusted Net Income (Loss) as net income (loss) adjusted for unrealized loss (gain) on commodity derivative instruments, acquisition & divestiture related expenses, unusual and infrequent items, and the income tax expense or benefit of these adjustments using our federal statutory tax rate. Adjusted Net Income (Loss) excludes the impact of unusual and infrequent items affecting earnings that can vary widely and unpredictably, including unrealized derivative gains and losses. This measure is not meant to disassociate these items from management's performance but rather is intended to provide helpful information to investors interested in comparing our performance between periods. Adjusted Net Income (Loss) is not considered to be an alternative to net income (loss) reported in accordance with GAAP.
Current report
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
Current report
(2) In 2023, we achieved three years of cumulative book income which resulted in the release of our valuation allowance of $284.9 million.
Current report
(3) The federal statutory rates were utilized for all periods presented.
Current report
(1) Adjusted EBITDA includes a revenue suspense release of $8.4 million for the year ended December 31, 2024. See “Revenue Payables in Suspense” discussion noted above for additional information.
Current report
(1) Adjusted EBITDA includes a revenue suspense release of $8.4 million for the year ended December 31, 2024. See “Revenue Payables in Suspense” discussion noted above for additional information.
Current report
There is no guarantee that we will be able to execute a refinancing in connection with the Mergers on favorable terms or at all. If we are unable to complete a sufficient refinancing at all, we may not be able to complete the Mergers. In certain circumstances (described in further detail above in “— Recent Developments — Merger with Juniper Capital”), upon termination of the Merger Agreement, we will be required to pay the Amplify Termination Fee, which could adversely affect our financial condition. For a discussion of risks associated with our liquidity and capital resources related to the Mergers, see “Item 1A. Risk Factors — Risks Related to the Mergers — We expect to refinance substantial indebtedness of the Acquired Companies in connection with the Mergers, which combined with our current debt may limit our financial flexibility and adversely affect our financial results” and “Item 1A. Risk Factors — Risks Related to the Mergers — The Merger Agreement limits our ability to pursue alternatives to the Mergers and may discourage a potential competing acquirer of Amplify Energy, including the payment by Amplify Energy of a Termination Fee.” If the Mergers are not completed, 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 2025 development activities. Further, if the Mergers are not completed, we believe that existing cash and cash equivalents, any positive cash flows from operations and available borrowings under our Revolving Credit Facility will be sufficient to support working capital, capital expenditures and other cash requirements for at least the next 12 months and, based on our current expectations, for the foreseeable future thereafter.
Current report
Capital Markets. On January 15, 2024, we entered into the Merger Agreement, pursuant to which we agreed to issue 26,729,315 shares of our Common Stock to Juniper as consideration for all of the outstanding equity of the Acquired Companies. However, such issuance remains subject to stockholder approval. For additional information, see “—Recent Developments.” In connection with the Mergers, we may also evaluate additional capital markets transactions in order to refinance all or a portion of the Acquired Companies’ outstanding indebtedness.
Current report
On October 25, 2024, we entered into the Credit Agreement Amendment, which among other things, (i) reduced the borrowing base under the Revolving Credit Facility from $150.0 million to $145.0 million, (ii) increased the aggregate elected commitments under the Revolving Credit Facility from $135.0 million to $145.0 million and (iii) amended certain interest rates applicable to loans under the Revolving Credit Facility.
Removed paragraphs (5)
Previous report
Other revenues were $19.3 million and $50.7 million for the year ended December 31, 2023 and 2022, respectively. The change in other revenues was primarily related to a decrease in the recognition of loss of production income insurance related to the Incident as the insurance policy terminated during 2023. During the year ended December 31, 2023, the loss of production income was $17.9 million compared to $50.2 million for the year ended December 31, 2022.
Previous report
Pipeline incident settlement. No expense was recorded for the year ended December 31, 2023 and $12.0 million was recorded for the year ended December 31, 2022, related to the resolution of the federal and state matters associated with the Incident discussed in Note 15 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Previous report
Adjusted EBITDA
Previous report
Impact of the Beta Pipeline Incident. There are remaining uncertainties 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 certain costs as a result of the Incident. However, in addition to the settlement amount disclosed elsewhere in this Annual Report that we received from the vessels that struck and damaged the Pipeline and their respective owners and operators, we carry customary insurance policies, which have covered a material portion of aggregate costs, including loss of production income insurance to offset loss of revenue resulting from suspended operations. The loss of production income insurance related to the Incident expired on March 31, 2023. We restarted operations of the Beta Field in April 2023. 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.
Previous report
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.
Reworded paragraphs (37)
Previous wording
Total production for the Company in 2023 was composed of approximately 37% oil, 45% natural gas and 18% NGLs compared to 31% oil, 51% natural gas and 18% NGLs in 2022. The change in our oil production was primarily related to Beta restarting operations in April 2023. We had a decrease of 29% in oil and natural gas sales primarily due to lower realized commodity prices. Average realized sales price per Boe was $38.54 for 2023 compared to $54.02 for 2022.
Current wording
Total production for the Company in 2024 was composed of approximately 43% oil, 39% natural gas and 18% NGLs compared to 37% oil, 45% natural gas and 18% NGLs in 2023. The change in our oil production was primarily related to Beta restarting operations in April 2023 and the development of wells at Beta. We had a decrease of 2% in oil and natural gas sales primarily due to lower volumes. Average realized sales price per Boe was $39.61 for 2024 compared to $38.54 for 2023.
Previous wording
Our total estimated proved reserves decreased to 98.1 MMBoe in 2023 compared to 124.0 MMBoe in 2022. The decrease is primarily due to lower commodity prices.
Current wording
Our total estimated proved reserves decreased to 93.0 MMBoe in 2024 compared to 98.1 MMBoe in 2023. The decrease was primarily due to changes in commodity prices and 2024 production roll off, partially offset by changes in development plans specifically related to Beta.
Previous wording
Oil. The NYMEX-WTI futures price is a widely used benchmark in the pricing of domestic and imported oil in the United States. The ICE Brent futures price is a widely used global price benchmark for oil. The actual prices realized from the sale of oil can differ from the quoted NYMEX-WTI price as a result of quality and location differentials. Quality differentials result from the fact that crude oils differ from one another in their molecular makeup, which plays an important part in their refining and subsequent sale as petroleum products. Among other things, there are two characteristics that commonly drive quality differentials: (1) the oil’s American Petroleum Institute (“API”) gravity and (2) the oil’s percentage of sulfur content by weight. In general, lighter oil (with higher API gravity) produces a larger number of lighter products, such as gasoline, which have higher resale value and, therefore, normally sells at a higher price than heavier oil. Oil with low sulfur content (“sweet” oil) is less expensive to refine and, as a result, normally sells at a higher price than high sulfur-content oil (“sour” oil).
Current wording
Oil. The NYMEX-WTI futures price is a widely used benchmark in the pricing of domestic and imported oil in the United States. The ICE Brent futures price is a widely used global price benchmark for oil. The actual prices realized from the sale of oil can differ from the quoted NYMEX-WTI price as a result of quality and location differentials. Quality differentials result from the fact that crude oils differ from one another in their molecular makeup, which plays an important part in their refining and subsequent sale as petroleum products. Among other things, there are two characteristics that commonly drive quality differentials: (1) the oil’s API gravity and (2) the oil’s percentage of sulfur content by weight. In general, lighter oil (with higher API gravity) produces a larger number of lighter products, such as gasoline, which have higher resale value and, therefore, normally sells at a higher price than heavier oil. Oil with low sulfur content (“sweet” oil) is less expensive to refine and, as a result, normally sells at a higher price than high sulfur-content oil (“sour” oil).
Previous wording
The oil produced from our onshore properties is a combination of sweet and sour oil, varying by location. This oil is typically sold at the NYMEX-WTI price, adjusted for quality and transportation differential, depending primarily on location and purchaser. The oil produced from our Beta properties is heavy and sour oil. Oil produced from our Beta properties is currently sold based on refiners’ posted prices for California Midway-Sunset deliveries in Southern California, adjusted primarily for quality and a negotiated market differential.
Current wording
The oil produced from our onshore properties is a combination of sweet and sour oil, which varies by location. This oil is typically sold at the NYMEX-WTI price, adjusted for quality and transportation differential, depending primarily on location and purchaser. The oil produced from our offshore properties is heavy and sour oil and was sold based on refiners’ posted prices for California Midway-Sunset for the year ended December 31, 2024. Effective January 1, 2025, offshore production will be sold based on posted prices for ICE Brent.
Previous wording
Commodity Derivative Contracts. Our hedging activities are intended to support oil, natural gas and NGL prices at targeted levels and to manage our exposure to commodity price fluctuations. We are required to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 50%−75% of our estimated production from 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 range. 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.
Current wording
Commodity Derivative Contracts. Our hedging activities are intended to support oil, natural gas and NGL prices at targeted levels and to manage our exposure to commodity price fluctuations. The covenants in our Revolving Credit Facility require us to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 50%−75% of our estimated production from 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 range. 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.
Previous wording
Based on our current plans, our capital expenditure program for the full year 2024 is expected to be approximately $50.0 million to $60.0 million. The charts below detail the allocation of capital across our asset base and by investment type based on the midpoint of our 2024 capital expenditure range.
Current wording
Based on our current plans, our capital expenditure program for the full year 2025 is expected to be approximately $70.0 million to $80.0 million. The charts below detail the allocation of capital across our asset base and by investment type based on the midpoint of our 2025 capital expenditure range.
Previous wording
In assessing the carrying value of our net deferred tax assets, we consider the realizability of our deferred tax assets each reporting period. The realization of any deferred tax asset is dependent upon the generation of future taxable income sufficient to demonstrate our ability to utilize the deferred tax asset in the period in which the temporary differences become deductible or in a future period prior to expiration. We considered all available evidence, including cumulative historical losses (defined as pre-tax earnings as adjusted for permanent tax adjustment), scheduled reversal of deferred tax liabilities, projected future taxable income and available tax planning strategies.
Current wording
In assessing the carrying value of our net deferred tax assets, we consider the realizability of our deferred tax assets each reporting period. The realization of any deferred tax asset is dependent upon the generation of future taxable income sufficient to demonstrate our ability to utilize the deferred tax asset in the period in which the temporary differences become deductible or in a future period prior to expiration. We considered all available evidence, including cumulative historical losses (defined as pre-tax earnings as adjusted for permanent tax adjustment), scheduled reversal of deferred tax liabilities, projected future taxable income and available tax planning strategies. Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our Consolidated Financial Statements. Any increase in the valuation allowance would increase our income tax expense in the Consolidated Statements of Operations.
Previous wording
We believe accounting for income taxes is a critical accounting estimate because the policies discussed above in assessing the carrying value of our net deferred tax assets require estimates and judgements about the impact of future events on our projected taxable income, the results of which can have a material impact on our Consolidated Financial Statements. For example, prior to 2023, our cumulative historical pre-tax losses for the three fiscal years end December 31, 2022, 2021 and 2020 were $434.1 million, which was primarily attributable to impairment expenses of $476.9 million that were incurred during the fiscal year ended December 31, 2020. However, primarily as a result of the litigation settlement of $84.9 million recorded during Q1 2023 and the roll-off of the impairment expense of $476.9 million incurred during the fiscal year ended December 31, 2020, we now have cumulative income of $169.7 million plus permanent adjustments, resulting in a total cumulative income of $172.1 million for the three fiscal years ended December 31, 2023, 2022 and 2021. We have reversed the entire valuation allowance on our net deferred tax assets during 2023, recording an income tax benefit of $249.0 million for the year ended December 31, 2023.
Current wording
We believe accounting for income taxes is a critical accounting estimate because the policies discussed above in assessing the carrying value of our net deferred tax assets require estimates and judgements about the impact of future events on our projected taxable income, the results of which can have a material impact on our Consolidated Financial Statements.
Previous wording
The results of operations for the years ended December 31, 2023 and 2022 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.
Current wording
The results of operations for the years ended December 31, 2024 and 2023 have been derived from our Consolidated Financial Statements. The comparability of the results of operations among the periods presented below is impacted by the suspension of operations at our Beta properties for the first half of 2023.
Previous wording
Net income of $392.8 million and $57.9 million was recorded for the year ended December 31, 2023 and 2022, respectively.
Current wording
Net income of $12.9 million and $392.8 million was recorded for the year ended December 31, 2024 and 2023, respectively.
Previous wording
Oil, natural gas and NGL revenues were $288.3 million and $407.8 million for the year ended December 31, 2023 and 2022, respectively. Average net production volumes were approximately 20.5 MBoe/d and 20.7 MBoe/d for the year ended December 31, 2023 and 2022, respectively. The average realized sales price was $38.54 per Boe and $54.02 per Boe for the year ended December 31, 2023 and 2022, respectively. The decrease in average realized sales price was due to lower commodity prices.
Current wording
Oil, natural gas and NGL revenues were $283.0 million and $288.3 million for the year ended December 31, 2024 and 2023, respectively. Average net production volumes were approximately 19.5 MBoe/d and 20.5 MBoe/d for the year ended December 31, 2024 and 2023, respectively. The average realized sales price was $39.61 per Boe and $38.54 per Boe for the year ended December 31, 2024 and 2023, respectively. The increase in the average realized sales price was driven by more oil sales in 2024 due to Beta being online for the full year in 2024 compared to nine months in 2023. Net sales for Beta were $84.8 million for the year ended December 31, 2024 compared to $51.1 million for the year ended December 31, 2023.
Previous wording
Lease operating expense was $139.6 million and $131.7 million for the year ended December 31, 2023 and 2022, respectively. The change in lease operating expense was primarily driven by higher base lease operating costs, with Beta restarting operations in April 2023, offset by a credit received for transportation costs. On a per Boe basis, lease operating expense was $18.66 and $17.45 for the year ended December 31, 2023 and 2022, respectively. The change in lease operating expense on a per Boe basis was mainly due to higher aggregate costs with Beta restarting operations and lower production.
Current wording
Lease operating expense was $143.0 million and $138.4 million for the year ended December 31, 2024 and 2023, respectively. The change in lease operating expense was primarily driven by higher base lease operating costs due to Beta being online for a full year in 2024 compared to nine months for 2023, offset by a credit received for transportation costs. On a per Boe basis, lease operating expense was $20.01 and $18.50 for the year ended December 31, 2024 and 2023, respectively. The change in lease operating expense on a per Boe basis was mainly due to an additional three months of costs associated with Beta being online for the full year in 2024 compared to nine months in 2023.
Previous wording
Gathering, processing and transportation expenses were $20.8 million and $29.1 million for the year ended December 31, 2023 and 2022, respectively. On a per Boe basis, gathering, processing and transportation expenses were$2.78 and $3.86 for the year ended December 31, 2023 and 2022, respectively. The decrease in gathering, processing and transportation expense was primarily driven by the expiration of the minimum volume commitment fee in East Texas/North Louisiana (November 2022) and Oklahoma (June 2023) and lower commodity prices.
Current wording
Gathering, processing and transportation expenses were $18.4 million and $20.8 million for the year ended December 31, 2024 and 2023, respectively. On a per Boe basis, gathering, processing and transportation expenses were$2.58 and $2.78 for the year ended December 31, 2024 and 2023, respectively. The decrease in gathering, processing and transportation expense was primarily driven by the expiration of the minimum volume commitment fee in Oklahoma (June 2023) and lower volumes.
Previous wording
Taxes other than income were $21.3 million and $33.3 million for the year ended December 31, 2023 and 2022, respectively. The change in taxes other than income is due to a decrease of $12.2 million in production taxes as a result of lower commodity prices offset by an increase of $0.2 million for ad valorem tax. On a per Boe basis, taxes other than income were $2.85 and $4.41 for the year ended December 31, 2023 and 2022, respectively. The change in taxes other than income on a per Boe basis was primarily due to lower commodity prices.
Current wording
Taxes other than income were $20.9 million and $22.6 million for the year ended December 31, 2024 and 2023, respectively. On a per Boe basis, taxes other than income were $2.92 and $3.02 for the year ended December 31, 2024 and 2023, respectively. The change in taxes other than income is due to a decrease of $1.6 million in production tax and a decrease in ad valorem tax of $1.3 million, partially offset by an increase in emission charges of $1.2 million.
Previous wording
DD&A expense was $28.0 million and $24.0 million for the year ended December 31, 2023 and 2022, respectively. The change in DD&A expense was primarily driven by the restart of production at Beta.
Current wording
DD&A expense was $32.6 million and $28.0 million for the year ended December 31, 2024 and 2023, respectively. The change in DD&A expense was primarily driven by the restart of production at Beta.
Previous wording
General and administrative expense was $33.0 million and $30.2 million for the year ended December 31, 2023 and 2022, respectively. The change in general and administrative expense is primarily related to (i) an increase of $2.1 million in salaries and other payroll benefits; (ii) an increase of $2.2 million in stock compensation expense; partially offset by (iii) a decrease in legal services of $0.9 million; and a decrease in professional services of $0.3 million.
Current wording
General and administrative expense was $35.9 million and $33.0 million for the year ended December 31, 2024 and 2023, respectively. The change in general and administrative expense is primarily related to (i) an increase of $1.5 million in stock compensation expense; (ii) an increase of $1.5 million in legal expense related to cost incurred with acquisitions and divestiture activities; and (iii) an increase of $0.4 million in office lease expense related to the early termination of our Oklahoma office lease partially offset by (i) a decrease of $0.3 million in salaries and other payroll benefits, and (ii) a decrease of $0.2 million in professional services.
Previous wording
Net gains on commodity derivative instruments of $40.3 million were recognized for the year ended December 31, 2023, consisting of a $47.9 million increase in the fair value of open positions, $0.7 million of cash settlements received on terminated derivative instruments partially offset by $8.3 million in cash settlements paid on expired positions. Net losses on commodity derivative instruments of $106.9 million were recognized for the year ended December 31, 2022, consisting of a $41.3 million increase in the fair value of open positions and a decrease of $148.2 million of cash settlements paid on expired positions.
Current wording
Net loss (gain) on commodity derivative instruments for the year ended December 31, 2024 was a loss of $2.0 million which consisted of a $20.5 million decrease in the fair value of open positions, partially offset by a $0.8 million of cash settlements received on terminated derivative instruments and $17.6 million in cash settlements received on expired positions. Net gains on commodity derivative instruments of $40.3 million were recognized for the year ended December 31, 2023, consisting of a $47.9 million increase in the fair value of open positions and $0.7 million of cash settlements received on terminated derivative instruments, partially offset by $8.3 million in cash settlements paid on expired positions.
Previous wording
Pipeline incident loss was $20.0 million and $11.3 million for the year ended December 31, 2023 and 2022. The $20.0 million reflects certain legal defense and regulatory costs associated with the Incident that are not expected to be recovered under an insurance policy. See Note 15 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Current wording
Pipeline incident loss was $3.9 million and $20.0 million for the year ended December 31, 2024 and 2023. The $3.9 million reflects certain legal defense, loss load and regulatory costs associated with the Incident that are not expected to be recovered under an insurance policy. See Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Previous wording
Interest expense, net was $17.7 million and $14.1 million for the year ended December 31, 2023 and 2022, respectively. The change resulted from an increase in interest expense due to higher interest rates on our Revolving Credit Facility and an increase in the amortization and write-off of deferred financing costs.
Current wording
Interest expense, net was $14.6 million and $17.7 million for the year ended December 31, 2024 and 2023, respectively. The change resulted from lower outstanding borrowings and amortization and write-off of deferred issuance costs.
Previous wording
Average outstanding borrowings under our Revolving Credit Facility were $138.9 million and $215.1 million for the year ended December 31, 2023 and 2022, respectively.
Current wording
Average outstanding borrowings under our Revolving Credit Facility were $120.9 million and $138.9 million for the year ended December 31, 2024 and 2023, respectively.
Previous wording
Litigation settlement was $84.9 million for the year ended December 31, 2023, related to the settlement with the shipping companies and the containerships whose anchors struck the Company’s pipeline. See additional information discussed in Note 15 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Current wording
Litigation settlement was not recorded for the year ended December 31, 2024 and litigation settlement of $84.9 million was recorded for the year ended December 31, 2023, related to the settlement with the shipping companies and the containerships whose anchors struck the Company’s pipeline. See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Previous wording
Current income tax (expense) benefit was ($4.8) million and ($0.1) million for the year ended December 31, 2023 and 2022, respectively. See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Current wording
Current income tax (expense) benefit was ($0.2) million and ($4.8) million for the year ended December 31, 2024 and 2023, respectively. See additional information discussed in Note 19 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Previous wording
Deferred income tax benefit (expense) was $253.8 million for the year ended December 31, 2023. Starting in the first quarter of 2023, we achieved three years of cumulative income, which allowed the release of the valuation allowance. No deferred income tax benefit (expense) was recorded for the year ended December 31, 2022. See additional information discussed in Note 17 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Current wording
Deferred income tax benefit (expense) was ($2.2) million and $253.8 million for the year ended December 31, 2024 and 2023, respectively. Starting in the first quarter of 2023, we achieved three years of cumulative book income, which allowed the release of the valuation allowance. See additional information discussed in Note 19 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report.
Previous wording
We include in this report the non-GAAP financial measure Adjusted EBITDA and provide our calculation of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net cash flow from operating activities, our most directly comparable financial measure calculated and presented in accordance with GAAP. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net income or cash flows as determined by GAAP. We define Adjusted EBITDA as net income (loss):
Current wording
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net income or cash flows as determined by GAAP. We define Adjusted EBITDA as net income (loss):
Previous wording
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, borrowings under our Revolving Credit Facility, and equity and debt capital markets. 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 2024 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. We anticipate funding our 2024 capital program from internally generated cash flow but retain the flexibility to utilize borrowings under our Revolving Credit Facility, and/or to access the debt and equity capital markets. We believe that existing cash and cash equivalents, any positive cash flows from operations and available borrowings under our Revolving Credit Facility will be sufficient to support working capital, capital expenditures and other cash requirements for at least the next 12 months and, based on our current expectations, for the foreseeable future thereafter.
Current wording
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, borrowings under our Revolving Credit Facility, and equity and debt capital markets. 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. We anticipate funding our 2025 capital program from internally generated cash flow but retain the flexibility to utilize borrowings under debt facilities available to us, and/or to access the debt and equity capital markets. 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.
Previous wording
Capital Expenditures. Our total capital expenditures were approximately $33.7 million for the year ended December 31, 2023, which were primarily related to capital workovers and capital facilities expenditures located in Beta, Oklahoma, Bairoil and non-operated drilling activity in Eagle Ford.
Current wording
Capital Expenditures. Our total capital expenditures were approximately $70.6 million for the year ended December 31, 2024, which were primarily related to the development program at Beta, capital workovers and facilities upgrades at Beta and in Oklahoma and non-operated drilling and completion activities in East Texas and the Eagle Ford.
Previous wording
As of December 31, 2023, we had a working capital deficit (excluding commodity derivatives) of $15.9 million primarily as the result of (i) an accrued liabilities balance of $50.9 million, (ii) an accounts payable balance of $23.6 million, and (iii) a revenue payable balance of $21.9 million, less (i) an accounts receivable balance of $39.1 million, (ii) prepaid expenses and other current assets balance of $20.7 million and (iii) cash on hand of $20.7 million.
Current wording
As of December 31, 2024, we had a working capital deficit (excluding commodity derivatives) of $2.7 million primarily as the result of (i) an accrued liabilities balance of $43.4 million, (ii) an accounts payable balance of $13.2 million, and (iii) a revenue payable balance of $11.5 million, less (i) an accounts receivable balance of $39.7 million and (ii) prepaid expenses and other current assets balance of $25.7 million.
Previous wording
Revolving Credit Facility. On July 31, 2023, OLLC, as borrower, entered into the Revolving Credit Facility. The Revolving Credit Facility is a replacement in full of the prior Revolving Credit Facility, by and among OLLC, Amplify Acquisitionco LLC, a Delaware limited liability company, the guarantors party thereto, the lenders party thereto and KeyBank National Association, as administrative agent (as amended, the “Prior Revolving Credit Facility”). At December 31, 2023, the aggregate principal amount of loans outstanding under the Revolving Credit Facility was $115.0 million.
Current wording
Revolving Credit Facility. On July 31, 2023, OLLC, as borrower, entered into the Revolving Credit Facility. The Revolving Credit Facility is a replacement in full of the prior revolving credit facility, by and among OLLC, Amplify Acquisitionco LLC, a Delaware limited liability company, the guarantors party thereto, the lenders party thereto and KeyBank National Association, as administrative agent (as amended, the “Prior Revolving Credit Facility”). At December 31, 2024, the aggregate principal amount of loans outstanding under the Revolving Credit Facility was $127.0 million.
Previous wording
As of December 31, 2023, we had approximately $20.0 million of available borrowings under our Revolving Credit Facility.
Current wording
As of December 31, 2024, we had approximately $18.0 million of available borrowings under our Revolving Credit Facility.
Previous wording
*Lease Obligations.*We have operating leases for office and warehouse spaces, office equipment, compressors and surface rentals related to our business obligations. As of December 31, 2023, our future commitments under these contracts were $2.2 million in 2024, $2.0 million in 2025, $1.3 million in 2026, $0.8 million in 2027 and $1.8 million thereafter. See Note 12 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information.
Current wording
*Lease Obligations.*We have operating leases for office and warehouse spaces, office equipment, compressors and surface rentals related to our business obligations. As of December 31, 2024, our future commitments under these contracts were $2.1 million in 2025, $1.4 million in 2026, $1.0 million in 2027, $0.7 million in 2028 and $1.1 million thereafter. See Note 13 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information.
Previous wording
Sinking fund payments. We have a funding requirement to fund a trust account to comply with supplemental regulatory bonding requirements related to our decommissioning obligations for our Beta production facilities. As of December 31, 2023, our future commitments under this agreement were $15.8 million per year for years 2024 through 2033. See Note 16 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information.
Current wording
Sinking fund payments. We have a funding requirement to fund a trust account to comply with supplemental regulatory bonding requirements related to our decommissioning obligations for our Beta production facilities. As of December 31, 2024, our future commitments under this agreement were $9.0 million per year for years 2025 through 2033. See Note 18 of the Notes to Consolidated Financial Statements included under “Item 8. Financial Statements and Supplementary Data” of this Annual Report for additional information.
Previous wording
Fines. We have a payment plan to pay our federal fines over a period of three years. We are scheduled to pay $2.0 million in 2024 and $1.1 million in 2025.
Current wording
Fines. We currently have a payment plan to pay our federal fines over a period of three years with one year remaining in such plan. We are scheduled to pay $1.1 million in September 2025.
Previous wording
*Operating Activities.*Key drivers of net operating cash flows are commodity prices, production volumes, operating costs and the settlement received related to the Incident. Net cash provided by operating activities was $141.6 million and $64.5 million for the year ended December 31, 2023 and 2022, respectively. Production volumes decreased to 20.5 MBoe/d in 2023 from 20.7 MBoe/d in 2022, and the average realized sales price decreased to $38.54 per Boe in 2023 from $54.02 per Boe in 2022. The changes in production and average realized sales price were primarily related to decreased realized commodity prices. For the year ended December 31, 2023, we received $84.9 million in connection with the settlement between the Company and the vessels that struck and damaged the pipeline and their respective owners and operators.
Current wording
*Operating Activities.*Key drivers of net operating cash flows are commodity prices, production volumes, operating costs and the settlement received related to the Incident. Net cash provided by operating activities was $51.3 million and $141.6 million for the year ended December 31, 2024 and 2023, respectively. Production volumes decreased to 19.5 MBoe/d in 2024 from 20.5 MBoe/d in 2023, and the average realized sales price increased to $39.61 per Boe in 2024 from $38.54 per Boe in 2023. The increase in average realized sales price was driven by more oil sales in 2024 due to Beta being online for a full year in 2024 compared to nine months in 2023. For the year ended December 31, 2023, we received $84.9 million in connection with the settlement between the Company and the vessels that struck and damaged the pipeline and their respective owners and operators.
Previous wording
Net cash provided by operating activities for the year ended December 31, 2023 included $8.3 million of cash paid on expired derivative instruments and $0.7 million of cash received on terminated derivative instruments compared to $147.9 million of cash paid on expired derivative instruments for the year ended December 31, 2022. For the year ended December 31, 2023, we had net gains on commodity derivative instruments of $40.3 million compared to net losses of $106.9 million for the year ended December 31, 2022.
Current wording
Net cash provided by operating activities for the year ended December 31, 2024 included $17.6 million of cash received on expired derivative instruments and $0.8 million of cash received on terminated derivative instruments compared to $8.3 million of cash paid on expired derivative instruments and $0.7 million of cash received on terminated derivatives instruments for the year ended December 31, 2023. For the year ended December 31, 2024, we had a net loss on commodity derivative instruments of $2.0 million compared to net gains of $40.3 million for the year ended December 31, 2023.
Previous wording
*Investing Activities.*Net cash used in investing activities for the year ended December 31, 2023 was $38.6 million, of which $30.7 million was used for additions to oil and natural gas properties. Net cash used in investing activities for the year ended December 31, 2022, was $41.5 million, of which $34.8 million was used for additions to oil and natural gas properties. For the year ended December 31, 2023, in East Texas, we sold a small working interest in certain acreage for $1.2 million and an override royalty interest.
Current wording
*Investing Activities.*Net cash used in investing activities for the year ended December 31, 2024 was $82.0 million, of which $72.2 million was used for additions to oil and natural gas properties and $1.1 million used for additions to other property and equipment. Net cash used in investing activities for the year ended December 31, 2023, was $38.6 million, of which $30.7 million was used for additions to oil and natural gas properties.
Previous wording
Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with our offshore Beta properties. Additions to restricted investments were $8.6 million for the year ended December 31, 2023 compared to $6.7 million for the year ended December 31, 2022.
Current wording
Various restricted investment accounts fund certain long-term contractual and regulatory asset retirement obligations and collateralize certain regulatory bonds associated with our offshore Beta properties. Additions to restricted investments were $10.1 million for the year ended December 31, 2024 compared to $8.6 million for the year ended December 31, 2023.
Previous wording
Financing Activities. We had net repayments of $75.0 million and $40.0 million under our Revolving Credit Facility and Prior Revolving Credit Facility for the year ended December 31, 2023 and 2022, respectively.
Current wording
Financing Activities. We had net borrowings of $12.0 million for the year ended December 31, 2024, compared to net repayments of $75.0 million for the year ended December 31, 2023, under our Revolving Credit Facility.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
We include in this report the non-GAAP financial measures for Adjusted Net Income (Loss) and Adjusted EBITDA and provide our reconciliation of net income (loss) to Adjusted Net Income (Loss) and a reconciliation of net cash flow from operating activities to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with GAAP.
Current report — wording carried from elsewhere
(1) In 2023, non-recurring costs included a litigation settlement with the shipping companies and the containerships whose anchors struck the Company’s pipeline.
Current report — wording carried from elsewhere
Prior to the closing of the Mergers, 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 2025 development activities. In connection with the Mergers, we expect to refinance a substantial portion of our outstanding debt and approximately $133 million in principal amount of the Acquired Companies’ outstanding debt. We believe that existing cash and cash equivalents, any positive cash flows from operations and available borrowings under our Revolving Credit Facility following such refinancings made in connection with the Mergers will be sufficient to support working capital, capital expenditures and other cash requirements for at least the next 12 months and, based on our current expectations, for the foreseeable future thereafter.
Current report — wording carried from elsewhere
For the year ended December 31, 2024, in East Texas we sold some undeveloped acreage recognizing a gain of $1.4 million. For the year ended December 31, 2023, in East Texas, we sold a small working interest in certain acreage for $1.2 million and an override royalty interest.