Amplfy Energy's AMPY stock price has given double-digit returns since the beginning of 2024. Shares have gained 12.3% this year, outrperforming the sector and the subindustry. The company is also faring better than its peers like W&T Offshore WTI and Ring Energy REI.

AMPY, WTI and REI Stock Performance Comparison

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Robust Beta Well Performance

The energy explorer’s A50 Beta well has significantly exceeded expectations, both in terms of production output and costs. Completed for $4.2 million — well below the original budget of $5-$6 million — the well came online in early June 2024. Its production performance is impressive, with a payback period projected to be just over four months. This strong result supports Amplify’s outlook and acted as a key driver of stock performance, overcoming declining oil prices on the back of slower economic growth in China.

Non-Operated Investments to Boost Future Cash Flow

Amplify’s strategic decision to participate in high-return non-operated wells in East Texas and the Eagle Ford is poised to enhance cash flow in early 2025. With 14 new development wells and additional recompletions in the Eagle Ford, alongside the expansion into the Haynesville Shale, the company is set to increase its production volumes.

Strategic Asset Sale Potential

Amplify Energy's imminent plan for the potential sale or partial monetization of its Bairoil assets could significantly de-risk its balance sheet and unlock shareholder value. While a deal hasn't been finalized, getting rid of Bairoil could provide a liquidity boost without significantly impacting the company’s credit facility borrowing base.

The encouraging outlook for the short term has pushed the AMPY stock higher.

AMPY Stock Marred by Its Weak Earnings History

Even though the Beta field success and clever strategic decisions caused a share bump, there are, however, concerns. Amplify Energy has surpassed earnings estimates just once in the last four quarters, missing the other three. Back in August, the company reported second-quarter earnings of 17 cents per share, a -45.2% surprise over the 31 cents per share consensus estimate. AMPY has delivered a trailing four-quarter average earnings surprise of -27.5%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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AMPY Stock’s Vulnerability to Oil Price Volatility

AMPY faces significant risk from fluctuating oil prices, which directly impact its cash flow and profitability. With crude recently dipping below $70, earnings are at risk if prices remain suppressed. Additionally, China’s ongoing economic struggles could further weaken global oil demand, putting downward pressure on prices. Sustained volatility, combined with potential OPEC+ production increases, threatens to strain Amplify Energy's revenues and margins in the coming quarters, creating a challenging outlook for the company.