Amplify Energy Corp., an independent hydrocarbon producer based in the United States, has confirmed the divestiture of all its assets located in East Texas. The operation, consisting of two separate transactions, represents a combined consideration of $127.5mn. It forms part of a broader strategy to streamline the group’s operations and significantly reduce its debt.
Full exit from the Haynesville and Cotton Valley basins
The first transaction, completed on October 24, involved the sale of Amplify’s remaining rights in certain units within the Haynesville basin, located in Harrison County. This deal generated net proceeds of $5.5mn. The second transaction, announced under a definitive agreement, concerns all remaining interests in the Haynesville and Cotton Valley basins for a contract price of $122mn, subject to customary post-closing adjustments. It is expected to close by the end of the fourth quarter.
Debt reduction and strategic refocus
Proceeds from these divestments will be used to pay down debt, in line with the strategic plan outlined by Amplify earlier this year. The company also anticipates a significant reduction in general and administrative (G&A) expenses following the completion of the transaction. Resources will now be directed towards its most promising assets, particularly the Beta and Bairoil sites.
Financial advisory and executive statement
TenOaks Energy Advisors is acting as Amplify’s financial advisor in this operation. Chief Executive Officer Dan Furbee stated that the sale marks an important step in executing the strategy of portfolio simplification and asset performance optimisation. He also acknowledged the internal teams’ commitment to executing the transactions.
