If Wall Street’s opinion is anything to go by in the short term, Amplify Energy Corp. is in trouble.
Traders dumped shares of the Houston-based owner of the offshore pipeline that leaked from Huntington Beach, plunging the small company’s market value by $96 million on Monday — thrashing a 44%. The drop — from $3.23 to $2.52 per share — came after Amplify’s stock hit a 19-month high of $5.75 on Friday, just before the leak.
Investors apparently didn’t like the prospect of losing about one-seventh of their business if California facilities shut down for an extended period — not to mention the damage to the spill and potentially huge financial liabilities associated with the cleanup. For.
Amplify’s history is mired in setbacks, including the 2017 bankruptcy and multiple regulatory run-ins. Its subsidiary, Beta Operating Company, which operates drilling operations off the California coast, went out of bankruptcy in 2020.
Amplify has not reported a net profit since 2018. It lost $464 million in 2020, mainly due to a huge writedown of the value of its energy properties, after losing $35 million in 2019. The pandemic wallop didn’t help either, with sinking energy cutting prices in 2020 by 27% of the company’s revenue to $201 million.
The rise in oil prices – at a seven-year high on Monday – helped amplify the first six months of 2021. Its revenue was $153 million but still lost $54 million. And as of June 30, it had $235 million in debt and $21 million in cash.
Jonathan Lancer is a business columnist for the Southern California Newsgroup. He can be contacted at [email protected]