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Sunday, November 28, 2021

Amplify Energy Pulls Full-year Outlook after California Offshore Oil Spill

Maritime Activity Reports, Inc.

November 15, 2021

Crude oil is shown in the Pacific Ocean offshore of Orange County, Oct. 3, 2021. U.S. Coast Guard photo (Cropped)

Crude oil is shown in the Pacific Ocean offshore of Orange County, Oct. 3, 2021. U.S. Coast Guard photo (Cropped)

Amplify Energy Corp withdrew its full-year forecast on Monday, saying that a large oil spill from one of its subsea pipelines in southern California last month forced it to shut its operations in the region.

In mid-October, the U.S. Coast Guard said about 588 barrels (25,000 gallons) of crude oil was spilt, about a fifth as much as it initially estimated, from a pipeline connected to an offshore facility owned by Amplify's unit.

The oil and gas producer said on Monday that it was under multiple investigations by state and federal authorities over the incident, adding that it had spent about $17.3 million so far to clean up the spill.

Amplify has not estimated how much it would totally spend on the clean-up, but said it expects industry insurance to cover a "material portion" of the costs, including loss of revenue resulting from suspended operations.

The company said it may seek contribution from third parties, including any vessels that may have played a role in the spill, as officials investigate if a ship anchor striking the pipeline could have triggered the leaks.

The company had in August raised the lower end of its full-year production forecast by 1,000 barrels of oil equivalent per day (boepd) to 24,000-25,000 boepd. It had also raised its adjusted core earnings and free cash flow estimates for the year.

For the third quarter, Amplify said average daily production fell 9.4% to 25,100 boepd.

Net loss narrowed to $13.5 million from $17.7 million a year earlier, while revenue of $97 million beat Refinitiv-IBES estimates of $66.07 million. 

(Reporting by Ruhi Soni in Bengaluru; Editing by Ramakrishnan M.)

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