Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes ☐ No ☑

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☑ Yes ☐ No

As of ~~April~~July 30, 2021, the registrant had ~~37,976,522~~37,993,026 outstanding shares of common stock, $0.01 par value outstanding.

Analogous Reservoir: Analogous reservoirs, as used in resource assessments, have similar rock and fluid properties, reservoir conditions (depth, temperature and pressure) and drive mechanisms, but are typically at a more advanced stage of development than the reservoir of interest and thus may provide concepts to assist in the interpretation of more limited data and estimation of recovery. When used to support proved reserves, analogous reservoir refers to a reservoir that shares all of the following characteristics with the reservoir of interest: (i) the same geological formation (but not necessarily in pressure communication with the reservoir of interest); (ii) the same environment of deposition; (iii) similar geologic structure; and (iv) the same drive mechanism.

Bbl: One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

Boe: One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil.

Btu: One British thermal unit, the quantity of heat required to raise the temperature of a one-pound mass of water by one degree Fahrenheit.

Development Project: A development project is the means by which petroleum resources are brought to the status of economically producible. As examples, the development of a single reservoir or field, an incremental development in a producing field or the integrated development of a group of several fields and associated facilities with a common ownership may constitute a development project.

Dry Hole or Dry Well: A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production would exceed production expenses and taxes.

Economically Producible: The term economically producible, as it relates to a resource, means a resource which generates revenue that exceeds, or is reasonably expected to exceed, the costs of the operation. For this determination, the value of the products that generate revenue are determined at the terminal point of oil and natural gas producing activities.

Exploitation: A development or other project which may target proven or unproven reserves (such as probable or possible reserves), but which generally has a lower risk than that associated with exploration projects.

Field: An area consisting of a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

Gross Acres or Gross Wells: The total acres or wells, as the case may be, in which we have a working interest.

Net Production: Production that is owned by us less royalties and production due to others.

NGLs: The combination of ethane, propane, butane and natural gasolines that, when removed from natural gas, become liquid under various levels of higher pressure and lower temperature.

Operator: The individual or company responsible for the exploration and/or production of an oil or natural gas well or lease.

Plugging and Abandonment: Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another stratum or to the surface. Regulations of all states require plugging of abandoned wells.

Probabilistic Estimate: The method of estimation of reserves or resources is called probabilistic when the full range of values that could reasonably occur for each unknown parameter (from the geoscience and engineering data) is used to generate a full range of possible outcomes and their associated probabilities of occurrence.

Proved Developed Reserves: Proved reserves that can be expected to be recovered from existing wells with existing equipment and operating methods.

Proved Reserves: Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced, or the operator must be reasonably certain that it will commence the project, within a reasonable time. The area of the reservoir considered as proved includes (i) the area identified by drilling and limited by fluid contacts, if any, and (ii) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or natural gas on the basis of available geoscience and engineering data. In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons, as seen in a well penetration, unless geoscience, engineering or performance data and reliable technology establishes a lower contact with reasonable certainty. Where direct observation from well penetrations has defined a highest known oil elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. Reserves which can be produced economically through application of improved recovery techniques (including fluid injection) are included in the proved classification when (i) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir, or an analogous reservoir or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (ii) the project has been approved for development by all necessary parties and entities, including governmental entities. Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price used is the average price during the twelve-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

Realized Price: The cash market price less all expected quality, transportation and demand adjustments.

Reliable Technology: Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

Reserves: Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to market and all permits and financing required to implement the project. Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).

Reservoir: A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reserves.

Resources: Resources are quantities of oil and natural gas estimated to exist in naturally occurring accumulations. A portion of the resources may be estimated to be recoverable and another portion may be considered unrecoverable. Resources include both discovered and undiscovered accumulations.

Working Interest: An interest in an oil and natural gas lease that gives the owner of the interest the right to drill for and produce oil and natural gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:

All statements, other than statements of historical fact included in this report, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “would,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “outlook,” “continue,” the negative of such terms or other comparable terminology. These statements address activities, events or developments that we expect or anticipate will or may occur in the future, including things such as projections of results of operations, plans for growth, goals, future capital expenditures, competitive strengths, references to future intentions and other such references. These forward-looking statements involve risks and uncertainties. Important factors that could cause our actual results or financial condition to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following risks and uncertainties:

The forward-looking statements contained in this report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or that the events or circumstances described in any forward-looking statement will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in “Part I—Item 1A. Risk Factors” of Amplify’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2021 (“2020 Form 10-K”). All forward-looking statements speak only as of the date of this report. We do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

	March 31,			December 31,			June 30,			December 31,
	2021			2020			2021			2020
ASSETS
Current assets:
Cash	$	16,801		$	10,364		$	15,150		$	10,364
Accounts receivable, net		35,424			30,901			39,647			30,901
Prepaid expenses and other current assets		12,297			15,572			12,570			15,572
Total current assets		64,522			56,837			67,367			56,837
Property and equipment, at cost:
Oil and natural gas properties, successful efforts method		780,757			775,167			786,089			775,167
Support equipment and facilities		142,346			142,208			144,458			142,208
Other		9,431			9,102			9,553			9,102
Accumulated depreciation, depletion and impairment		(616,578	)		(609,231	)
Accumulated depreciation, depletion and amortization								(620,881	)		(609,231	)
Property and equipment, net		315,956			317,246			319,219			317,246
Long-term derivative instruments		1,522			873			0			873
Restricted investments		4,623			4,623			4,623			4,623
Operating lease - long term right-of-use asset		2,394			2,500			1,771			2,500
Other long-term assets		2,541			2,680			2,345			2,680
Total assets	$	391,558		$	384,759		$	395,325		$	384,759

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	6,364		$	798		$	14,382		$	798
Revenues payable		24,944			22,563			19,159			22,563
Accrued liabilities (see Note 13)		20,550			22,677
Accrued liabilities (see Note 12)								26,060			22,677
Short-term derivative instruments		30,391			10,824			63,071			10,824
Total current liabilities		82,249			56,862			122,672			56,862
Long-term debt (see Note 8)		255,516			260,516
Long-term debt (see Note 7)								235,000			260,516
Asset retirement obligations		98,201			96,725			99,412			96,725
Long-term derivative instruments		5,355			847			17,739			847
Operating lease liability		404			266			301			266
Other long-term liabilities		3,107			3,280			7,576			3,280
Total liabilities		444,832			418,496			482,700			418,496
Commitments and contingencies (see Note 15)
Commitments and contingencies (see Note 14)
Stockholders' equity (deficit):
Preferred stock, $0.01 par value: 50,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020		—			—
Warrants, 2,173,913 and 2,173,913 warrants issued and outstanding at March 31, 2021 and December 31, 2020, respectively		4,788			4,788
Common stock, $0.01 par value: 250,000,000 shares authorized; 37,969,324 and 37,663,509 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		381			378
Preferred stock, $0.01 par value: 50,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020								—			—
Warrants, 2,173,913 warrants issued and outstanding at June 30, 2021 and December 31, 2020								4,788			4,788
Common stock, $0.01 par value: 250,000,000 shares authorized; 37,987,145 and 37,663,509 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively								381			378
Additional paid-in capital		423,892			424,104			424,814			424,104
Accumulated earnings (deficit)		(482,335	)		(463,007	)
Total stockholders' equity (deficit)		(53,274	)		(33,737	)
Accumulated deficit								(517,358	)		(463,007	)
Total stockholders' deficit								(87,375	)		(33,737	)
Total liabilities and equity	$	391,558		$	384,759		$	395,325		$	384,759

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

	For the Three Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,						June 30,
	2021			2020			2021			2020			2021			2020
Revenues:
Oil and natural gas sales	$	72,331		$	57,787		$	80,338		$	34,888		$	152,669		$	92,675
Other revenues		138			349			55			283			193			632
Total revenues		72,469			58,136			80,393			35,171			152,862			93,307

Costs and expenses:
Lease operating expense		28,906			35,723			28,653			27,828			57,559			63,551
Gathering, processing and transportation		4,579			5,053			5,050			4,689			9,629			9,742
Exploration		16			16
Taxes other than income		4,613			3,986			5,071			2,195			9,684			6,181
Depreciation, depletion and amortization		7,347			15,556			7,389			7,623			14,736			23,179
Impairment expense		0			455,031			0			0			0			455,031
General and administrative expense		6,921			8,353			6,030			6,755			12,951			15,108
Accretion of asset retirement obligations		1,615			1,513			1,638			1,539			3,253			3,052
(Gain) loss on commodity derivative instruments		34,588			(107,713	)		63,898			19,165			98,486			(88,548	)
Other, net		68			0			12			3			96			19
Total costs and expenses		88,653			417,518			117,741			69,797			206,394			487,315
Operating income (loss)		(16,184	)		(359,382	)		(37,348	)		(34,626	)		(53,532	)		(394,008	)
Other income (expense):
Interest expense, net		(3,112	)		(7,647	)		(3,137	)		(6,209	)		(6,249	)		(13,856	)
Other income (expense)		(26	)		16
Other expense								(54	)		(250	)		(80	)		(234	)
Gain on extinguishment of debt								5,516			0			5,516			0
Total other income (expense)		(3,138	)		(7,631	)		2,325			(6,459	)		(813	)		(14,090	)
Income (loss) before reorganization items, net and income taxes		(19,322	)		(367,013	)
Loss before reorganization items, net and income taxes								(35,023	)		(41,085	)		(54,345	)		(408,098	)
Reorganization items, net		(6	)		(186	)		0			(166	)		(6	)		(352	)
Net income (loss)		(19,328	)		(367,199	)
Net (income) loss allocated to participating restricted stockholders		0			0
Net income (loss) attributable to common stockholders	$	(19,328	)	$	(367,199	)
Income tax expense								0			(85	)		0			(85	)
Net loss							$	(35,023	)	$	(41,336	)	$	(54,351	)	$	(408,535	)

Earnings (loss) per share: (See Note 10)
Basic and diluted earnings (loss) per share	$	(0.51	)	$	(9.77	)
Earnings (loss) per share: (See Note 9)
Basic and diluted loss per share							$	(0.92	)	$	(1.10	)	$	(1.43	)	$	(10.87	)
Weighted average common shares outstanding:
Basic and diluted		37,829			37,568			37,983			37,595			37,907			37,582

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

	For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,
	2021			2020			2021			2020
Cash flows from operating activities:
Net income (loss)	$	(19,328	)	$	(367,199	)
Net loss							$	(54,351	)	$	(408,535	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		7,347			15,556			14,736			23,179
Impairment expense		0			455,031			0			455,031
(Gain) loss on derivative instruments		34,526			(104,096	)		98,443			(84,494	)
Cash settlements (paid) received on expired derivative instruments		(11,100	)		12,522			(28,432	)		39,471
Cash settlements (paid) received on terminated derivative instruments								0			17,977
Bad debt expense		3			110			94			252
Amortization of deferred financing costs		139			309
Amortization and write-off of deferred financing costs								360			2,999
Gain on extinguishment of debt								(5,516	)		0
Accretion of asset retirement obligations		1,615			1,513			3,253			3,052
Share-based compensation (see Note 11)		(204	)		(1,112	)
Share-based compensation (see Note 10)								730			(632	)
Settlement of asset retirement obligations		(162	)		0			(162	)		0
Changes in operating assets and liabilities:
Accounts receivable		(4,525	)		8,381			(8,851	)		5,762
Prepaid expenses and other assets		2,574			(349	)		3,002			659
Payables and accrued liabilities		4,849			(7,399	)		13,505			(11,345	)
Other		(176	)		(178	)		(408	)		(387	)
Net cash provided by operating activities		15,558			13,089			36,403			42,989
Cash flows from investing activities:
Additions to oil and gas properties		(3,788	)		(12,416	)		(11,528	)		(26,123	)
Additions to other property and equipment		(328	)		(304	)		(451	)		(719	)
Net cash provided by (used in) investing activities		(4,116	)		(12,720	)
Other								404			0
Net cash used in investing activities								(11,575	)		(26,842	)
Cash flows from financing activities:
Advances on revolving credit facilities		0			25,000
Payments on revolving credit facilities		(5,000	)		(20,000	)
Advances on revolving credit facility								0			25,000
Payments on revolving credit facility								(20,000	)		(30,000	)
Proceeds from the paycheck protection program								0			5,516
Deferred financing costs								(25	)		0
Dividends to stockholders		0			(3,786	)		0			(3,786	)
Restricted shares returned to plan and retired		(5	)		(14	)
Net cash provided by (used in) financing activities		(5,005	)		1,200
Shares withheld for taxes								(17	)		(35	)
Other								0			35
Net cash used in financing activities								(20,042	)		(3,270	)
Net change in cash, cash equivalents and restricted cash		6,437			1,569			4,786			12,877
Cash, cash equivalents and restricted cash, beginning of period		10,364			325			10,364			325
Cash, cash equivalents and restricted cash, end of period	$	16,801		$	1,894		$	15,150		$	13,202

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF ~~CONSOLIDATED~~ EQUITY (DEFICIT)

	Stockholders' Equity (Deficit)													Stockholders' Equity (Deficit)
	Common Stock		Warrants		Additional Paid-in Capital			Accumulated Earnings (Deficit)			Total			Common Stock		Warrants		Additional Paid-in Capital			Accumulated Deficit			Total
Balance at December 31, 2020	$	378	$	4,788	$	424,104		$	(463,007	)	$	(33,737	)	$	378	$	4,788	$	424,104		$	(463,007	)	$	(33,737	)
Net income (loss)		0		0		0			(19,328	)		(19,328	)
Net loss															0		0		0			(19,328	)		(19,328	)
Share-based compensation expense		0		0		(204	)		0			(204	)		0		0		(204	)		0			(204	)
Restricted shares repurchased		0		0		(5	)		0			(5	)
Shares withheld for taxes															0		0		(5	)		0			(5	)
Other		3		0		(3	)		0			0			3		0		(3	)		0			0
Balance at March 31, 2021	$	381	$	4,788	$	423,892		$	(482,335	)	$	(53,274	)		381		4,788		423,892			(482,335	)		(53,274	)
Net loss															0		0		0			(35,023	)		(35,023	)
Share-based compensation expense															0		0		934			0			934
Shares withheld for taxes															0		0		(12	)		0			(12	)
Balance at June 30, 2021														$	381	$	4,788	$	424,814		$	(517,358	)	$	(87,375	)

	Stockholders' Equity (Deficit)													Stockholders' Equity (Deficit)
	Common Stock		Warrants		Additional Paid-in Capital			Accumulated Earnings (Deficit)			Total			Common Stock		Warrants			Additional Paid-in Capital			Accumulated Earnings (Deficit)			Total
Balance at December 31, 2019	$	209	$	4,790	$	424,399		$	4,809		$	434,207		$	209	$	4,790		$	424,399		$	4,809		$	434,207
Net income (loss)		0		0		0			(367,199	)		(367,199	)
Net loss															0		0			0			(367,199	)		(367,199	)
Share-based compensation expense		0		0		(1,112	)		0			(1,112	)		0		0			(1,112	)		0			(1,112	)
Restricted shares repurchased		0		0		(14	)		0			(14	)
Shares withheld for taxes															0		0			(14	)		0			(14	)
Dividends		0		0		0			(3,786	)		(3,786	)		0		0			0			(3,786	)		(3,786	)
Balance at March 31, 2020	$	209	$	4,790	$	423,273		$	(366,176	)	$	62,096			209		4,790			423,273			(366,176	)		62,096
Net loss															0		0			0			(41,336	)		(41,336	)
Share-based compensation expense															0		0			480			0			480
Expiration of warrants															0		(2	)		2			0			0
Shares withheld for taxes															0		0			(20	)		0			(20	)
Other															0		0			35			0			35
Balance at June 30, 2020														$	209	$	4,788		$	423,770		$	(407,512	)	$	21,255

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

Amplify Energy Corp. (“Amplify Energy,” or the “Company”), is a publicly traded Delaware corporation, in which our common stock is listed on the NYSE under the symbol “AMPY.”

We operate in 1 reportable segment engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Our management evaluates performance based on one reportable business segment as the economic environments are not different within the operation of our oil and natural gas properties. Our assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. The Company’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.

Our Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the SEC. The results reported in these Unaudited Condensed Consolidated Financial Statements should not necessarily be taken as indicative of results that may be expected for the entire year. In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for fair presentation. Although we believe the disclosures in these financial statements are adequate, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC.

~~The Unaudited Condensed Consolidated Financial Statements have been prepared as if the Company is a going concern.~~

Material intercompany transactions and balances have been eliminated in preparation of our consolidated financial statements.

The preparation of the accompanying Unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations.

~~During 2020 as~~similar restrictions. As a result, of the ~~pandemic, there was sharp reduction~~global economy has been marked by significant slowdown and uncertainty, which in ~~the demand for oil and natural gas and~~turn has led to a precipitous decline in commodity prices ~~which were~~in response to decreased demand, further ~~impacted~~exacerbated by ~~disputes over production levels~~global energy storage shortages and by the price war among ~~oil-producing countries,~~members of the ~~significant increase in production levels by such countries~~Organization of Petroleum Exporting Countries (“OPEC”) and ~~limited storage capacity for natural gas, oil and refined products. The reductions in commodity prices impacted the Company’s cash flow from operating activities, contributed to a decrease~~other non-OPEC producer nations (collectively with OPEC members, “OPEC+”) beginning in the ~~Company’s borrowing base under its Revolving Credit Facility, and led to an impairment~~first quarter of ~~our oil and natural gas properties.~~

~~Despite the gradual recovery in commodity prices in the second half~~2020. As of ~~2020 and~~ the first quarter of 2021, commodity prices have recovered to pre-pandemic levels, due in part to the ~~expectation~~accessibility of ~~a successful phased rollout~~vaccines, reopening of aeconomies after the lockdown, and optimism about the economic recovery. The continued spread of COVID-19, including vaccine resistant strains, or repeated deterioration in ~~2021,~~oil and the successful realization and execution of our disciplined operational strategy and hedging program, there remains significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impactnatural gas prices could result in additional adverse impacts on the ~~U.S.~~Company's results of operations, cash flows and ~~international economies and, as such, the Company is unable to determine the extent of the impact caused by the~~ financial position, including further asset impairments.

On June 22, 2021, KeyBank National Association (“KeyBank”) notified the Company that the loan under the Paycheck Protection Program (the “PPP Loan”) had been approved for full and complete forgiveness by the Small Business Association. For the three and six months ended June 30, 2021, the Company reported a gain on extinguishment of debt for $5.5 million for the PPP Loan forgiveness in the Unaudited Condensed Consolidated Statements of Operations. See Note 7 for additional information.

Credit.The Consolidated Appropriations Act extended and expanded the availability of the Coronavirus Aid, Relief, and Economic Security Act ~~(“CARES~~(the “CARES Act”) employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ~~("ARP Act"~~(the “ARP Act”), enacted on March 11, 2021, extended and expanded the availability of the employee retention credit through December 31, 2021, however, certain provisions ~~apply~~applied only after December 31, 2020. This new legislation expanded the group of qualifying ~~business~~businesses to include businesses with fewer than 500 employees and those who previously qualified for the ~~Paycheck Protection Program (the “PPP Loan”).~~PPP Loan. The employee retention credit is calculated to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company has determined that the qualifications for the credit were met in the first ~~quarter~~and second quarters of 2021. The Company recognized a $2.8 million employee retention credit during the three and six months ended June 30, 2021, which included an approximate $0.8 million credit to general and administrative expense and an ~~application has been filed accordingly.~~approximate $2.0 million to lease operating expense in the Unaudited Condensed Consolidated Statements of Operations.

There have been no changes to the Company’s significant accounting policies and estimates as described in the Company’s annual financial statements included in our 2020 Form 10-K.

The Company adopted ASU 2019-10 Measurement of Credit Losses on Financial Instruments as of January 1, 2020. The provisions of the standard were interpreted to relate only to the Company’s accounts receivable, net. Trade receivables relate to one common pool, revenue earned on the sale of oil, natural gas and natural gas liquids. The performance obligation is satisfied at a point in time and revenue is recognized and a trade receivable is recorded from the sale when production is delivered to, and title has transferred to, the purchaser. The majority of the Company’s purchasers have been large, major companies in the industry with the wherewithal to pay.

The Company, as operator on most of our wells, also records receivables on billings to our joint interest owners who participate in the operating costs of the wells they have an interest in. Historically, an allowance for doubtful accounts has been set up to recognize credit losses on joint interest billing (“JIB”) receivables based upon an aging analysis which is an appropriate method to estimate credit losses under the guidance. The Company will continue to assess the expected credit loss in the future as economic conditions change. We believe the majority of our revenue purchasers have the size and financial condition to currently meet their obligations. There could be added risk on the JIB accounts receivable as some wells could become uneconomic, with the revenue not enough to cover the operating expenses billed, which could result in additional write-offs. Accordingly, the Company will continue to closely monitor trade receivables.

Reference Rate Reform.In March 2020, the Financial Accounting Standard Board (the “FASB”) issued an accounting standard update which provides optional expedients and expectations for applying GAAP to contracts, hedging relationships and other transactions to ease financial reporting burdens to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this accounting standards update became effective on March 12, 2020, and an entity may elect to apply the amendments prospectively through December 31, 2022. The Company ~~is currently evaluating the~~notes no material impact with applying this ~~guidance may have on the Company’s consolidated financial statements.~~guidance.

Income Taxes – Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued an accounting standard update which ~~simplifies~~simplified the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. This accounting standards update ~~removes~~removed the following exceptions: (i) exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; (ii) exception to the requirements to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (iii) exception to the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (iv) exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in the accounting standards update also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. The guidance became effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted the guidance effective January 1, 2021, with all of the anticipated and applicable effects to be required on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations and cash flows.

The Company has determined that its contracts for the sale of crude oil, unprocessed natural gas, residue gas and NGLs contain monthly performance obligations to deliver product at locations specified in the contract. Control is transferred at the delivery location, at which point the performance obligation has been satisfied and revenue is recognized. Fees included in the contract that are incurred prior to control transfer are classified as gathering, processing and transportation, and fees incurred after control transfers are included as a reduction to the transaction price. The transaction price at which revenue is recognized consists entirely of variable consideration based on quoted market prices less various fees and the quantity of volumes delivered.

Oil and natural gas revenues are recorded using the sales method. Under this method, revenues are recognized based on actual volumes of oil and natural gas sold to purchasers, regardless of whether the sales are proportionate to our ownership in the property. An asset or a liability is recognized to the extent there is an imbalance in excess of the proportionate share of the remaining recoverable reserves on the underlying properties. No significant imbalances existed at ~~March 31,~~June 30, 2021.

We have identified three material revenue streams in our business: oil, natural gas and NGLs. The following table presents our revenues disaggregated by revenue stream.

	For the Three Months Ended				For the Three Months Ended				For the Six Months Ended
	March 31,				June 30,				June 30,
	2021		2020		2021		2020		2021		2020
	(in thousands)				(in thousands)
Revenues
Oil	$	49,695	$	41,851	$	56,510	$	22,963	$	106,205	$	64,814
NGLs		7,670		5,122		8,876		3,343		16,547		8,465
Natural gas		14,966		10,814		14,952		8,582		29,917		19,396
Oil and natural gas sales	$	72,331	$	57,787	$	80,338	$	34,888	$	152,669	$	92,675

Under our sales contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities. Accounts receivable attributable to our revenue contracts with customers was ~~$33.1~~$34.9 million at ~~March 31,~~June 30, 2021 and $25.6 million at December 31, 2020.

~~There were 0 material acquisitions or divestitures during the three months ended March 31, 2021 and 2020.~~

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. A three-tier hierarchy has been established that classifies fair value amounts recognized or disclosed in the financial statements. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). All the derivative instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets were considered Level 2.

The carrying values of accounts receivables, accounts payables (including accrued liabilities), restricted investments and amounts outstanding under long-term debt agreements with variable rates included in the accompanying Unaudited Condensed Consolidated Balance Sheets approximated fair value at ~~March 31,~~June 30, 2021 and December 31, 2020. The fair value estimates are based upon observable market data and are classified within Level 2 of the fair value hierarchy. These assets and liabilities are not presented in the following tables.

The fair market values of the derivative financial instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2021 and December 31, 2020 were based on estimated forward commodity prices. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement in its entirety. The significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The following tables present the gross derivative assets and liabilities that are measured at fair value on a recurring basis at ~~March 31,~~June 30, 2021 and December 31, 2020 for each of the fair value hierarchy levels:

	Fair Value Measurements at March 31, 2021 Using								Fair Value Measurements at June 30, 2021 Using
	Quoted Prices in		Significant Other		Significant				Quoted Prices in		Significant Other		Significant
	Active Market		Observable Inputs		Unobservable Inputs				Active Market		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value		(Level 1)		(Level 2)		(Level 3)		Fair Value
	(In thousands)								(In thousands)
Assets:
Commodity derivatives	$	0	$	7,896	$	0	$	7,896	$	0	$	5,295	$	0	$	5,295
Interest rate derivatives		0		0		0		0		0		0		0		0
Total assets	$	0	$	7,896	$	0	$	7,896	$	0	$	5,295	$	0	$	5,295

Liabilities:
Commodity derivatives	$	0	$	39,894	$	0	$	39,894	$	0	$	84,336	$	0	$	84,336
Interest rate derivatives		0		2,226		0		2,226		0		1,769		0		1,769
Total liabilities	$	0	$	42,120	$	0	$	42,120	$	0	$	86,105	$	0	$	86,105

	Fair Value Measurements at December 31, 2020 Using
	Quoted Prices in		Significant Other		Significant
	Active Market		Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Fair Value
	(In thousands)
Assets:
Commodity derivatives	$	0	$	15,449	$	0	$	15,449
Interest rate derivatives		0		0		0		0
Total assets	$	0	$	15,449	$	0	$	15,449

Liabilities:
Commodity derivatives	$	0	$	23,495	$	0	$	23,495
Interest rate derivatives		0		2,752		0		2,752
Total liabilities	$	0	$	26,247	$	0	$	26,247

Certain assets and liabilities are reported at fair value on a nonrecurring basis as reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets. The following methods and assumptions are used to estimate the fair values:

Derivative instruments are utilized to manage exposure to commodity price fluctuations and achieve a more predictable cash flow in connection with natural gas and oil sales from production and borrowing related activities. These instruments limit exposure to declines in prices, but also limit the benefits that would be realized if prices increase.

Certain inherent business risks are associated with commodity derivative contracts, including market risk and credit risk. Market risk is the risk that the price of natural gas or oil will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the counterparty to a contract. It is our policy to enter into derivative contracts only with creditworthy counterparties, which generally are financial institutions, deemed by management as competent and competitive market makers. Some of the lenders, or certain of their affiliates, under our current credit agreements are counterparties to our derivative contracts. While collateral is generally not required to be posted by counterparties, credit risk associated with derivative instruments is minimized by limiting exposure to any single counterparty and entering into derivative instruments only with creditworthy counterparties that are generally large financial institutions. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative instruments. We have also entered into International Swaps and Derivatives Association Master Agreements (“ISDA Agreements”) with each of our counterparties. The terms of the ISDA Agreements provide us and each of our counterparties with rights of set-off upon the occurrence of defined acts of default by either us or our counterparty to a derivative, whereby the party not in default may set-off all liabilities owed to the defaulting party against all net derivative asset receivables from the defaulting party. Had all counterparties failed completely to perform according to the terms of the existing contracts, we would have had the right to offset $0.4 million against amounts outstanding under our Revolving Credit Facility at March 31, 2021. See Note 87 for additional information regarding our Revolving Credit Facility.

We may use a combination of commodity derivatives (e.g., floating-for-fixed swaps, put options, costless collars and three-way collars) to manage exposure to commodity price volatility. We recognize all derivative instruments at fair value.

~~In April 2020, the Company monetized a portion of its 2021 crude oil hedges for total cash proceeds of approximately $18.0 million.~~

We enter into natural gas derivative contracts that are indexed to NYMEX-Henry Hub. We also enter into oil derivative contracts indexed to NYMEX-WTI. Our NGL derivative contracts are primarily indexed to OPIS Mont Belvieu.

In April 2020, the Company monetized a portion of its 2021 crude oil hedges for total cash proceeds of approximately $18.0 million.

	Remaining
	2021			2022		2023
Natural Gas Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (MMBtu)		970,000			695,000		0
Weighted-average fixed price	$	2.49		$	2.56	$	0

Collar contracts:
Two-way collars
Average monthly volume (MMBtu)		830,000			595,000		140,000
Weighted-average floor price	$	2.06		$	2.37	$	2.40
Weighted-average ceiling price	$	3.28		$	3.09	$	2.91

Natural Gas Basis Swaps:
PEPL basis swaps:
Average monthly volume (MMBtu)		500,000			0		0
Weighted-average spread	$	(0.40	)	$	0	$	0

Crude Oil Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		172,500			99,000		55,000
Weighted-average fixed price	$	49.37		$	55.68	$	57.30

Collar contracts:
Two-way collars
Average monthly volume (Bbls)		0			7,500		0
Weighted-average floor price	$	0		$	55.00	$	0
Weighted-average ceiling price	$	0		$	60.25	$	0

Three-way collars
Average monthly volume (Bbls)		72,500			89,000		30,000
Weighted-average ceiling price	$	50.36		$	55.55	$	67.15
Weighted-average floor price	$	40.00		$	42.92	$	55.00
Weighted-average sub-floor price	$	30.00		$	32.58	$	40.00

NGL Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		20,300			0		0
Weighted-average fixed price	$	23.74		$	0	$	0

Remaining

2021

2022

Natural Gas Derivative Contracts:

Fixed price swap contracts:

Average monthly volume (MMBtu)

981,667

590,000

Weighted-average fixed price
$
2.49

$
2.48

Collar contracts:

Two-way collars

Average monthly volume (MMBtu)

851,667

595,000

Weighted-average floor price
$
2.06

$
2.37

Weighted-average ceiling price
$
3.29

$
3.09

Natural Gas Basis Swaps:

PEPL basis swaps:

Average monthly volume (MMBtu)

500,000

0

Weighted-average spread
$
(0.40
)

$
0

Crude Oil Derivative Contracts:

Fixed price swap contracts:

Average monthly volume (Bbls)

197,500

85,000

Weighted-average fixed price
$
48.12

$
54.81

Collar contracts:

Two-way collars

Average monthly volume (Bbls)

0

7,500

Weighted-average floor price
$
0

$
55.00

Weighted-average ceiling price
$
0

$
60.25

Three-way collars

Average monthly volume (Bbls)

52,500

76,000

Weighted-average ceiling price
$
50.50

$
53.18

Weighted-average floor price
$
40.00

$
40.00

Weighted-average sub-floor price
$
30.00

$
31.32

NGL Derivative Contracts:

Fixed price swap contracts:

Average monthly volume (Bbls)

20,300

0

Weighted-average fixed price
$
23.74

$
0

Periodically, we enter into interest rate swaps to mitigate exposure to market rate fluctuations by converting variable interest rates such as those in our Credit Agreement to fixed interest rates. At ~~March 31,~~June 30, 2021, we had the following interest rate swap open positions:

The following table summarizes both: (i) the gross fair value of derivative instruments by the appropriate balance sheet classification even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the balance sheet and (ii) the net recorded fair value as reflected on the balance sheet at ~~March 31,~~June 30, 2021 and December 31, 2020. There was no cash collateral received or pledged associated with our derivative instruments since most of the counterparties, or certain of their affiliates, to our derivative contracts are lenders under our Revolving Credit Facility.

		Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives				Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
		March 31,			March 31,			December 31,			December 31,				June 30,			June 30,			December 31,			December 31,
Type	Balance Sheet Location	2021			2021			2020			2020			Balance Sheet Location	2021			2021			2020			2020
		(In thousands)													(In thousands)
Commodity contracts	Short-term derivative instruments	$	2,547		$	31,310		$	6,088		$	15,007		Short-term derivative instruments	$	1,172		$	62,901		$	6,088		$	15,007
Interest rate swaps	Short-term derivative instruments		0			1,628			0			1,905		Short-term derivative instruments		0			1,342			0			1,905
Gross fair value			2,547			32,938			6,088			16,912				1,172			64,243			6,088			16,912
Netting arrangements			(2,547	)		(2,547	)		(6,088	)		(6,088	)			(1,172	)		(1,172	)		(6,088	)		(6,088	)
Net recorded fair value	Short-term derivative instruments	$	0		$	30,391		$	0		$	10,824		Short-term derivative instruments	$	0		$	63,071		$	0		$	10,824

Commodity contracts	Long-term derivative instruments	$	5,349		$	8,584		$	9,361		$	8,488		Long-term derivative instruments	$	4,124		$	21,436		$	9,361		$	8,488
Interest rate swaps	Long-term derivative instruments		0			598			0			847		Long-term derivative instruments		0			427			0			847
Gross fair value			5,349			9,182			9,361			9,335				4,124			21,863			9,361			9,335
Netting arrangements			(3,827	)		(3,827	)		(8,488	)		(8,488	)			(4,124	)		(4,124	)		(8,488	)		(8,488	)
Net recorded fair value	Long-term derivative instruments	$	1,522		$	5,355		$	873		$	847		Long-term derivative instruments	$	0		$	17,739		$	873		$	847

We do not designate derivative instruments as hedging instruments for accounting and financial reporting purposes. Accordingly, all gains and losses, including changes in the derivative instruments’ fair values, have been recorded in the accompanying Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Operations. The following table details the gains and losses related to derivative instruments for the periods indicated (in thousands):

		For the Three Months Ended							For the Three Months Ended				For the Six Months Ended
	Statements of	March 31,						Statements of	June 30,				June 30,
	Operations Location	2021			2020			Operations Location	2021		2020		2021			2020
Commodity derivative contracts	(Gain) loss on commodity derivatives	$	34,588		$	(107,713	)	(Gain) loss on commodity derivatives	$	63,898	$	19,165	$	98,486		$	(88,548	)
(Gain) loss on interest rate derivatives	Interest expense, net		(62	)		3,616		Interest expense, net		18		438		(44	)		4,054

The Company’s asset retirement obligations primarily relate to the Company’s portion of future plugging and abandonment costs for wells and related facilities. The following table presents the changes in the asset retirement obligations for the ~~three~~six months ended ~~March 31,~~June 30, 2021 (in thousands):

Asset retirement obligations at beginning of period	$	97,149		$	97,149
Liabilities added from acquisition or drilling		20			29
Liabilities settled		(162	)		(162	)
Liabilities removed upon sale of wells		0			(113	)
Accretion expense		1,615			3,253
Revision of estimates		3			3
Asset retirement obligation at end of period		98,625			100,159
Less: Current portion		(424	)		(747	)
Asset retirement obligations - long-term portion	$	98,201		$	99,412

The following table presents our consolidated debt obligations at the dates indicated:

	March 31,		December 31,		June 30,		December 31,
	2021		2020		2021		2020
	(In thousands)				(In thousands)
Revolving Credit Facility (1)	$	250,000	$	255,000	$	235,000	$	255,000
Paycheck Protection Program loan (2)		5,516		5,516		0		5,516
Long-term debt	$	255,516	$	260,516
Total long-term debt					$	235,000	$	260,516

Amplify Energy Operating LLC, our wholly owned subsidiary (“OLLC”), is a party to a reserve-based revolving credit facility (the “Revolving Credit Facility”), subject to a borrowing base of ~~$260.0~~$245.0 million as of ~~March 31,~~June 30, 2021, which is guaranteed by us and all of our current subsidiaries. The Revolving Credit Facility matures on November 2, 2023.

Our borrowing base under our Revolving Credit Facility is subject to redetermination on at least a semi-annual basis primarily based on a reserve engineering ~~report with respect~~report.

On June 16, 2021, the Company completed its scheduled semi-annual borrowing base redetermination process, pursuant to ~~our estimated natural gas, oil and NGL reserves,~~ which ~~takes into account~~ the ~~prevailing natural gas, oil and NGL prices at such time, as adjusted for~~borrowing base under the ~~impact~~Revolving Credit Facility was decreased from $260.0 million to $245.0 million. In addition to the redetermination, the administrative agent under the Revolving Credit Facility agreement was changed from Bank of ~~our commodity derivative contracts.~~Montreal to KeyBank.

As of ~~March 31,~~June 30, 2021, we were in compliance with all the financial (current ratio and total leverage ratio) and other covenants associated with our Revolving Credit Facility.

The following table presents the weighted-average interest rates paid, excluding commitment fees, on our consolidated variable-rate debt obligations for the periods presented:

Unamortized deferred financing costs associated with our Revolving Credit Facility was ~~$1.4~~$1.2 million at ~~March 31,~~June 30, 2021.

On April 24, 2020, the Company received a $5.5 million ~~loan under the~~ PPP Loan. The PPP Loan was established as part of the CARES Act to provide loans to qualifying businesses. The ~~loans~~PPP Loan was not part of the Revolving Credit Facility as described above. The loan and accrued interest ~~are~~were potentially forgivable provided that the borrower uses the loan proceeds for eligible purposes. ~~At this time, the Company anticipates that a substantial majority of the loan proceeds will be forgiven under the program.~~ The term of the Company’s PPP Loan iswas two years with an annual interest rate of 1% and 0 payments of principal or interest due during the six-month period beginning on the date of the PPP Loan.

The Company applied for forgiveness of the amount due on the PPP Loan based on spending the loan proceeds on eligible expenses as defined by the statute. On June 22, 2021, KeyBank notified the Company that the PPP Loan had been approved for full and complete forgiveness by the Small Business Association. For the three and six months ended June 30, 2021, the company reported a gain on extinguishment of debt of $5.5 million for the PPP Loan forgiveness in the Unaudited Condensed Consolidated Statements of Operations.

The Company’s authorized capital stock includes 250,000,000 shares of common stock, $0.01 par value per share. The following is a summary of the changes in our common stock issued for the ~~three~~six months ended ~~March 31,~~June 30, 2021:

On May 4, 2017, Legacy Amplify entered into a warrant agreement with American Stock Transfer & Trust Company, LLC, as warrant agent, pursuant to which Legacy Amplify issued warrants to purchase up to 2,173,913 shares of Legacy Amplify’s common stock, (representing 8% of Legacy Amplify’s outstanding common stock as of May 4, 2017), including shares of Legacy Amplify’s common stock issuable upon full exercise of the warrants, but excluding any common stock issuable under Legacy Amplify’s Management Incentive Plan (the “Legacy Amplify MIP”), exercisable for a five-year period commencing on May 4, 2017 at an exercise price of $42.60 per share.

On March 3, 2020, our board of directors approved a dividend of $0.10 per share of outstanding common stock or $3.8 million in aggregate, which was paid on March 30, 2020, to stockholders of record at the close of business on March 16, 2020. The board of directors subsequently suspended quarterly dividends. Future dividends, if any, are subject to debt covenants under our Revolving Credit Facility and discretionary approval by the board of directors.

The following sets forth the calculation of earnings (loss) per share, or EPS, for the periods indicated (in thousands, except per share amounts):

	For the Three Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,						June 30,
	2021			2020			2021			2020			2021			2020
Net income (loss)	$	(19,328	)	$	(367,199	)
Net loss							$	(35,023	)	$	(41,336	)	$	(54,351	)	$	(408,535	)
Less: Net income allocated to participating restricted stockholders		0			0			0			0			0			0
Basic and diluted earnings available to common stockholders	$	(19,328	)	$	(367,199	)	$	(35,023	)	$	(41,336	)	$	(54,351	)	$	(408,535	)

Common shares/units:
Common shares outstanding — basic		37,829			37,568			37,983			37,595			37,907			37,582
Dilutive effect of potential common shares		0			0			0			0			0			0
Common shares outstanding — diluted		37,829			37,568			37,983			37,595			37,907			37,582

Net earnings (loss) per share:
Basic	$	(0.51	)	$	(9.77	)	$	(0.92	)	$	(1.10	)	$	(1.43	)	$	(10.87	)
Diluted	$	(0.51	)	$	(9.77	)	$	(0.92	)	$	(1.10	)	$	(1.43	)	$	(10.87	)
Antidilutive warrants (1)		2,174			9,154			2,174			2,174			2,174			2,174

In May ~~2017, Legacy Amplify implemented~~2021, the shareholders approved a new Equity Incentive Plan (“EIP”) in which the Legacy Amplify ~~MIP. In connection with the closing of the merger, on August 6, 2019, the Company assumed~~Management Incentive Plan (the “Legacy Amplify MIP”) and the Legacy Amplify ~~MIP.~~2017 Non-Employee Directors Compensation Plan (the “Legacy Amplify Non-Employee Directors Compensation Plan”) replaced by the EIP and no further awards will be allowed to be granted under the Legacy Amplify MIP or the Legacy Amplify Non-Employee Directors Compensation Plan. As of June 30, 2021, an aggregate of 2,802,856 shares were available for future grants under the EIP.

The restricted stock units with service vesting conditions (“TSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a straight-line basis over the requisite service period and forfeitures are accounted for as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost associated with the TSUs was ~~$0.2~~$2.7 million at ~~March 31,~~June 30, 2021. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately ~~1.2~~1.7 years.

The following table summarizes information regarding the TSUs granted under the Legacy Amplify MIP for the period presented:

				Weighted-					Weighted-
				Average Grant					Average Grant
	Number of			Date Fair Value		Number of			-Date Fair Value
	Units			per Unit (1)		Units			per Unit (1)
TSUs outstanding at December 31, 2020		115,797		$	4.47		115,797		$	4.47
Granted(2)		0		$	0		872,588		$	3.52
Forfeited		(622	)	$	5.12		(1,244	)	$	5.12
Vested		(7,870	)	$	6.27		(24,056	)	$	3.91
TSUs outstanding at March 31, 2021		107,305		$	4.33
TSUs outstanding at June 30, 2021							963,085		$	3.62

The restricted stock units with market and service vesting conditions (“PSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost related to the PSUs was less than $0.1 million at ~~March 31,~~June 30, 2021. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 1.4 years.

The PSUs will vest based on the satisfaction of service and market vesting conditions with market vesting based on the Company’s achievement of certain share price targets. The PSUs are subject to service-based vesting such that 50% of the PSUs service vest on the applicable market vesting date and an additional 25% of the PSUs service vest on each of the first and second anniversaries of the applicable market vesting date.

In the event of a qualifying termination, subject to certain conditions, (i) all PSUs that have satisfied the market vesting conditions will fully service vest, upon such termination, and (ii) if the termination occurs between the second and third anniversaries of the grant date, then PSUs that have not market vested as of the termination will market vest to the extent that the share targets (in each case, reduced by $0.25) are achieved as of such termination. Subject to the foregoing, any unvested PSUs will be forfeited upon termination of employment.

A Monte Carlo simulation was used in order to determine the fair value of these awards at the grant date.

The following table summarizes information regarding the PSUs granted under the Legacy Amplify MIP for the period presented:

				Weighted-					Weighted-
				Average Grant					Average Grant
	Number of			Date Fair Value		Number of			-Date Fair Value
	Units			per Unit (1)		Units			per Unit (1)
PSUs outstanding at December 31, 2020		214,554		$	2.36		214,554		$	2.36
Granted		0		$	0		0		$	0
Forfeited		(1,866	)	$	2.11		(3,732	)	$	2.11
Vested		0		$	0		0		$	0
PSUs outstanding at March 31, 2021		212,688		$	2.36
PSUs outstanding at June 30, 2021							210,822		$	2.36

The restricted stock units with performance-based vesting conditions (“PRSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. As such, the Company recognizes compensation cost over the requisite service period for each separately vesting tranche of the award as though the award were, in substance, multiple awards. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense.

The PRSUs are issued collectively in separate tranches with individual performances periods beginning in January 2021, 2022, and 2023 respectively. For each of the performance periods the awards will vest based on the percentage of the target PRSUs subject to the performance vesting condition with 25% able to vest during the period January 1, 2021 through December 31, 2021; 25% able to vest during the period January 1, 2022 through December 31, 2022 and 50% able to vest during the period of January 1, 2023 through December 31, 2023. Vesting of PRSUs can range from 0 to 200% of the target units granted based on the Company’s relative total shareholder return as compared to the total shareholder return of the Company’s performance peer group over the performance period. The fair value of each PRSU award was estimated on their grant dates using a Monte Carlo simulation. The unrecognized cost associated with the PRSUs was $0.3 million at June 30, 2021. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.1 years.

The ranges for the assumptions used in the Monte Carlo model for the PRSUs granted during 2021 are presented as follows:

The following table summarizes information regarding the PRSUs granted under the Legacy Amplify MIP for the period presented:

In June 2017, Legacy Amplify implemented the ~~2017 Non-Employee Directors Compensation Plan (“~~Legacy Amplify Non-Employee Directors Compensation ~~Plan”)~~Plan to attract and retain the services of experienced non-employee directors of Legacy Amplify or its subsidiaries. In connection with the closing of the merger, on August 6, 2019, the Company assumed the Legacy Amplify Non-Employee Directors Compensation Plan. As noted above, the Legacy Amplify Non-Employee Directors Compensation Plan was replaced by the EIP in May 2021.

The restricted stock units with a service vesting condition (“Board RSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a straight-line basis over the requisite service period and forfeitures are accounted for as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost associated with restricted stock unit awards was less than $0.1 million at ~~March 31,~~June 30, 2021. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately ~~1.1~~0.8 years.

The following table summarizes information regarding the Board RSUs granted under the Legacy Amplify Non-Employee Directors Compensation Plan for the period presented:

			Weighted-					Weighted-
			Average Grant					Average Grant
	Number of		Date Fair Value		Number of			-Date Fair Value
	Units		per Unit (1)		Units			per Unit (1)
Board RSUs outstanding at December 31, 2020		8,898	$	5.12		8,898		$	5.12
Granted		0	$	0		0		$	0
Forfeited		0	$	0		0		$	0
Vested		0	$	0		(5,565	)	$	5.12
Board RSUs outstanding at March 31, 2021		8,898	$	5.12
Board RSUs outstanding at June 30, 2021						3,333		$	5.12

The following table summarizes the amount of recognized compensation expense associated with the Legacy Amplify MIP and Legacy Amplify Non-Employee Directors Compensation Plan, which are reflected in the accompanying Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Operations for the periods presented (in thousands):

	For the Three Months Ended				For the Three Months Ended					For the Six Months Ended
	March 31,				June 30,					June 30,
	2021		2020		2021		2020			2021		2020
Equity classified awards
TSUs	$	75	$	131		582		(6	)		657		125
PSUs		23		37		16		5			39		10
Board RSUs		4		5		4		2			8		40
PRSUs					$	89	$	0		$	89	$	0
	$	102	$	173	$	691	$	1		$	793	$	175

For the quarter ended ~~March 31,~~June 30, 2021, our leases qualify as operating leases and we did not have any existing or new leases qualifying as financing leases or variable leases. We have leases for office space and equipment in our corporate office and operating regions as well as vehicles, compressors and surface rentals related to our business operations. In addition, we have offshore Southern California pipeline right-of-way use agreements. Most of our leases, other than our corporate office lease, have an initial term and may be extended on a month-to-month basis after expiration of the initial term. Most of our leases can be terminated with 30-day prior written notice. The majority of our month-to-month leases are not included as a lease liability in our balance sheet under ASC 842 because continuation of the lease is not reasonably certain. Additionally, the Company elected the short-term practical expedient to exclude leases with a term of twelve months or less.

Our corporate office lease does not provide an implicit rate. To determine the present value of the lease payments, we use our incremental borrowing rate based on the information available at the inception date. To determine the incremental borrowing rate, we apply a portfolio approach based on the applicable lease terms and the current economic environment. We use a reasonable market interest rate for our office equipment and vehicle leases.

For the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, we recognized approximately ~~$0.6~~$1.2 million and ~~$0.6~~$1.2 million, respectively, of costs relating to the operating leases in the Unaudited Condensed ~~Statement~~Consolidated Statements of Operations.

Supplemental cash flow information related to the Company’s lease liabilities are included in the table below:

	For the Three Months Ended				For the Six Months Ended
	March 31,				June 30,
	2021		2020		2021		2020
	(In thousands)				(In thousands)
Non-cash amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	106	$	330	$	729	$	877

The following table presents the Company’s right-of-use assets and lease liabilities for the period presented:

	March 31,		December 31,		June 30,		December 31,
	2021		2020		2021		2020
	(In thousands)				(In thousands)
Right-of-use asset	$	2,394	$	2,500	$	1,771	$	2,500

Lease liabilities:
Current lease liability		2,009		2,258		1,480		2,258
Long-term lease liability		404		266		301		266
Total lease liability	$	2,413	$	2,524	$	1,781	$	2,524

The following table reflects the Company’s maturity analysis of the minimum lease payment obligations under non-cancelable operating leases with a remaining term in excess of one year (in thousands):

	Office leases		Leased vehicles and office equipment		Total		Office leases		Leased vehicles and office equipment		Total
Remaining 2021	$	1,365	$	701	$	2,066	$	816	$	370	$	1,186
2022		0		266		266		140		290		430
2023		0		150		150		0		195		195
2024 and thereafter		0		0		0		0		14		14
Total lease payments		1,365		1,117		2,482		956		869		1,825
Less: interest		31		38		69		16		28		44
Present value of lease liabilities	$	1,334	$	1,079	$	2,413	$	940	$	841	$	1,781

The weighted average remaining lease terms and discount rate for all of our operating leases for the period presented:

	March 31,						June 30,
	2021			2020			2021			2020
Weighted average remaining lease term (years):
Office leases		0.47			1.27			0.30			1.10
Vehicles		0.77			0.55			0.77			0.53
Office equipment		0.03			0.07			0.02			0.06
Weighted average discount rate:
Office leases		2.75	%		3.50	%		2.57	%		3.49	%
Vehicles		1.45	%		1.00	%		1.57	%		0.94	%
Office equipment		0.14	%		0.20	%		0.14	%		0.17	%

Note ~~13.~~12. Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of Cash Flows

Current accrued liabilities consisted of the following at the dates indicated (in thousands):

The following table provides a reconciliation of cash and cash equivalents on the Unaudited Condensed Consolidated Balance Sheet to cash, cash equivalents and restricted cash on the Unaudited Condensed Statements of Consolidated Cash Flows (in thousands):

	For the Three Months Ended				For the Six Months Ended
	March 31,				June 30,
	2021		2020		2021		2020
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$	2,265	$	3,017	$	4,429	$	5,380
Cash paid for reorganization items, net		6		186		6		351
Cash paid for taxes						0		85

Noncash investing and financing activities:
Increase in capital expenditures in payables and accrued liabilities		1,916		3,206
Increase (decrease) in capital expenditures in payables and accrued liabilities						5,203		(3,618	)

There have been 0 transactions between us and any related person in which the related person had a direct or indirect material interest for the three or six months ended ~~March 31,~~June 30, 2021 and ~~2020, respectively.~~2020.

We are not aware of any litigation, pending or threatened, that we believe will have a material adverse effect on our financial position, results of operations or cash flows; however, cash flow could be significantly impacted in the reporting periods in which such matters are resolved.

Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to indemnify us against liabilities arising from future legal proceedings.

At ~~March 31,~~June 30, 2021 and December 31, 2020, we had 0 environmental reserves recorded on our Unaudited Condensed Consolidated Balance Sheet.

The Company is party to a gas purchase, gathering and processing contract in Oklahoma, which includes certain minimum NGL commitments. To the extent the Company does not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, it would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee. The Company is not meeting the minimum volume required under ~~these~~this contractual ~~provisions.~~provision. The commitment fee expense for the three and six months ended ~~March 31,~~June 30, 2021, was approximately ~~$0.4 million.~~$0.5 million and $0.8 million, respectively. The minimum volume commitment for Oklahoma ends on June 30, 2023.

The Company is party to a gas purchase, gathering and processing contract in East Texas, which includes certain minimum gas commitments. The Company is not meeting the minimum volume required under this contractual ~~provision and has established an accrual for the~~provision. The commitment fee expense ~~of $0.7 million~~ for the three and six months ended ~~March 31, 2021.~~June 30, 2021, was approximately $0.5 million and $0.9 million, respectively. The minimum volume commitment for East Texas ends on November 30, 2022.

Beta Operating Company, LLC, has an obligation with the BOEM in connection with its 2009 acquisition of our properties in federal waters offshore Southern California. The Company supports this obligation with $161.3 million of A-rated surety bonds and $0.3 million of cash as of ~~March 31,~~June 30, 2021.

The Company had 0 income tax ~~benefit/(expense)~~expense for the three and six months ended ~~March 31,~~June 30, 2021, respectively, and less than $0.1 million in income tax expense for the three and six months ended June 30, 2020, respectively. The Company’s effective tax rate was 0.0% for the three and six months ended ~~March 31,~~June 30, 2021, respectively, and 0.2% and 0.0% for the three and six months ended June 30, 2020, respectively. The effective tax rates for the three and six months ended ~~March 31,~~June 30, 2021 and 2020 are different from the statutory U.S. federal income tax rate primarily due to our recorded valuation allowances.

In March 2021, the President of the United States signed the ARP Act, to respond to the COVID-19 emergency and address its economic effects. The ARP Act did not have a material impact on the Company’s current year tax provision.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and accompanying notes in “Item 1. Financial Statements” contained herein and in “Item 1A. Risk Factors” of our Annual Report on the ~~Amplify~~ Form ~~10-K.~~10-K for the year ended December 31, 2020 (“2020 Form 10-K”). The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” in the front of this report.

We operate in one reportable segment engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Our management evaluates performance based on the reportable business segment as the economic environments are not different within the operation of our oil and natural gas properties. Our business activities are conducted through OLLC, our wholly owned subsidiary, and its wholly owned subsidiaries. Our assets consist primarily of producing oil and natural gas properties and are located in Oklahoma, the Rockies, in federal waters offshore Southern California, East Texas / North Louisiana and the Eagle Ford. Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. The Company’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells. ~~As of December 31, 2020:~~

In March 2020, the World Health Organization ~~declared a global pandemic related to~~classified the ~~proliferation of COVID-19. The impact~~outbreak of COVID-19 as a pandemic. The nature of COVID-19 led to worldwide shutdowns, reductions in commercial and ~~efforts~~interpersonal activity and changes in consumer behavior. In attempting to mitigate its spread caused significant volatility in U.S. and international markets and a substantial reduction in global and domestic demand for oil and natural gas. Actions by governmental authorities to mitigatecontrol the spread of COVID-19, governments around the world imposed laws and regulations such as ~~imposing mandatory closures of all non-essential business facilities, seeking voluntary closures of business facilities,~~shelter-in-place orders, quarantines, executive orders and ~~imposing restrictions on, or advisories with respect~~similar restrictions. As a result, the global economy has been marked by significant slowdown and uncertainty, which in turn has led to ~~travel, business operations and public gatherings or interactions, have further exacerbated the economic impact of the pandemic. Despite the gradual recovery~~a precipitous decline in commodity prices in response to decreased demand, further exacerbated by certain actions taken by members of the ~~second half~~Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”) beginning in the first quarter of 2020 ~~and~~that maintained high levels of global oil production. As of the first quarter of 2021, commodity prices have recovered to pre-pandemic levels, due in part to the ~~expectation~~accessibility of ~~a successful phased rollout~~vaccines, reopening of aeconomies after the lockdown, and optimism about the economic recovery. The continued spread of COVID-19, including vaccine resistant strains, or repeated deterioration in ~~2021,~~oil and the successful realization and execution of our disciplined operational strategy and hedging program, there remains significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impactnatural gas prices could result in additional adverse impacts on the ~~U.S.~~Company's results of operations, cash flows and ~~international economies. As such,~~financial position, including further asset impairments.

On July 8, 2021, the Company ~~is unable to determine~~received noticed from the ~~extent~~NYSE that it had regained compliance with the continued listing standards set forth in Item 802.01B of the ~~impact caused~~NYSE Listed Company Manual.

On June 22, 2021, KeyBank notified the Company that the PPP Loan had been approved for full and complete forgiveness by the ~~COVID-19 pandemic~~Small Business Association. For the three and six months ended June 30, 2021, the company reported a gain on extinguishment of debt of $5.5 million for the PPP Loan forgiveness in the Unaudited Condensed Consolidated Statements of Operations.

On June 16, 2021, the Company completed its scheduled semi-annual borrowing base redetermination process, pursuant to which the ~~Company’s operations.~~borrowing base under the Revolving Credit Facility was decreased from $260.0 million to $245.0 million. Additionally, the administrative agent under the Revolving Credit Facility agreement was changed from Bank of Montreal to KeyBank.

~~Recent Developments~~Appointment of Vice President and Chief Accounting Officer

On May 17, 2021, the board of directors appointed Eric Dulany, to serve as Vice President and Chief Accounting Officer of the Company, effective May 17, 2021.

On April 9, 2021, Ms. Denise DuBard notified the Company of her decision to retire from serving as the Company’s Vice President and Chief Accounting Officer. Ms. DuBard ~~intends to remain~~remained in her role at the Company to assist with an orderly transition ~~of her responsibilities. Ms. DuBard’ s decision~~ to ~~retire stems solely from personal reasons and did not result from any disagreement with the Company, the Company’s management or the board of directors.~~Mr. Dulany.

We use a variety of financial and operational metrics to assess the performance of our oil and natural gas operations, including: (i) production volumes; (ii) realized prices on the sale of our production; (iii) cash settlements on our commodity derivatives; (iv) lease operating expense; (v) gathering, processing and transportation; (vi) general and administrative expense; and (vii) Adjusted EBITDA (as defined below).

Our revenues are derived from the sale of natural gas and oil production, as well as the sale of NGLs that are extracted from natural gas during processing. Production revenues are derived entirely from the continental United States. Natural gas, NGL and oil prices are inherently volatile and are influenced by many factors outside our control. In order to reduce the impact of fluctuations in natural gas and oil prices on revenues, we intend to periodically enter into derivative contracts that fix the future prices received. At the end of each period the fair value of these commodity derivative instruments are estimated and because hedge accounting is not elected, the changes in the fair value of unsettled commodity derivative instruments are recognized in earnings at the end of each accounting period.

A discussion of our critical accounting policies and estimates is included in our 2020 Form 10-K. Significant estimates include, but are not limited to, oil and natural gas reserves; depreciation, depletion and amortization of proved oil and natural gas properties; future cash flows from oil and natural gas properties; impairment of long-lived assets; fair value of derivatives; fair value of equity compensation; fair values of assets acquired and liabilities assumed in business combinations and asset retirement obligations. These estimates, in our opinion, are subjective in nature, require the use of professional judgment and involve complex analysis.

When used in the preparation of our consolidated financial statements, such estimates are based on our current knowledge and understanding of the underlying facts and circumstances and may be revised as a result of actions we take in the future. Changes in these estimates will occur as a result of the passage of time and the occurrence of future events. Subsequent changes in these estimates may have a significant impact on our consolidated financial position, results of operations and cash flows.

The results of operations for the three and six months ended ~~March 31,~~June 30, 2021 and 2020 have been derived from our consolidated financial statements. The following table summarizes certain of the results of operations for the periods indicated.

	For the Three Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,						June 30,
	2021			2020			2021			2020			2021			2020
	($ In thousands)						($ In thousands except per unit amounts)
Oil and natural gas sales	$	72,331		$	57,787		$	80,338		$	34,888		$	152,669		$	92,675
Lease operating expense		28,906			35,723			28,653			27,828			57,559			63,551
Gathering, processing and transportation		4,579			5,053			5,050			4,689			9,629			9,742
Taxes other than income		4,613			3,986			5,071			2,195			9,684			6,181
Depreciation, depletion and amortization		7,347			15,556			7,389			7,623			14,736			23,179
Impairment expense		—			455,031			—			—			—			455,031
General and administrative expense		6,921			8,353			6,030			6,755			12,951			15,108
Accretion of asset retirement obligations		1,615			1,513			1,638			1,539			3,253			3,052
(Gain) loss on commodity derivative instruments		34,588			(107,713	)
Loss (gain) on commodity derivative instruments								63,898			19,165			98,486			(88,548	)
Interest expense, net		(3,112	)		(7,647	)		(3,137	)		(6,209	)		(6,249	)		(13,856	)
Net income (loss)		(19,328	)		(367,199	)
Gain on extinguishment of debt								5,516			—			5,516			—
Income tax expense								—			(85	)		—			(85	)
Net loss								(35,023	)		(41,336	)		(54,351	)		(408,535	)

Oil and natural gas revenue:
Oil and natural gas revenues:
Oil sales	$	49,695		$	41,851		$	56,510		$	22,963		$	106,205		$	64,814
NGL sales		7,670			5,122			8,876			3,343			16,547			8,465
Natural gas sales		14,966			10,814			14,952			8,582			29,917			19,396
Total oil and natural gas revenue	$	72,331		$	57,787
Total oil and natural gas revenues							$	80,338		$	34,888		$	152,669		$	92,675

Production volumes:
Oil (MBbls)		920			982			905			945			1,824			1,927
NGLs (MBbls)		342			454			368			435			710			889
Natural gas (MMcf)		5,761			7,586			6,161			6,857			11,922			14,443
Total (MBoe)		2,222			2,700			2,300			2,523			4,521			5,223
Average net production (MBoe/d)		24.7			29.7			25.3			27.7			25.0			28.7

Average sales price (excluding commodity derivatives):
Oil (per Bbl)	$	54.03		$	42.64		$	62.47		$	24.30		$	58.21		$	33.64
NGL (per Bbl)		22.45			11.29			24.09			7.68			23.30			9.52
Natural gas (per Mcf)		2.60			1.43			2.43			1.25			2.51			1.34
Total (per Boe)	$	32.56		$	21.41		$	34.93		$	13.83		$	33.76		$	17.74

Average unit costs per Boe:
Lease operating expense	$	13.01		$	13.23		$	12.46		$	11.03		$	12.73		$	12.17
Gathering, processing and transportation		2.06			1.87			2.20			1.86			2.13			1.87
Taxes other than income		2.08			1.48			2.20			0.87			2.14			1.18
General and administrative expense		3.11			3.09			2.62			2.68			2.86			2.89
Depletion, depreciation and amortization		3.31			5.76			3.21			3.02			3.26			4.44

For the ~~three months ended March 31,~~Three Months Ended June 30, 2021 ~~compared~~Compared to the ~~three months ended March 31,~~Three Months Ended June 30, 2020

Net losses of ~~$19.3~~$35.0 million and ~~$367.2~~$41.3 million were recorded for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively.

Oil, natural gas and NGL revenues were ~~$72.3~~$80.3 million and ~~$57.8~~$34.9 million for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively. Average net production volumes were approximately ~~24.7~~25.3 MBoe/d and ~~29.7~~27.7 MBoe/d for the three months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in production volumes was primarily due to natural decline. The average realized sales price was $34.93 per Boe and $13.83 per Boe for the three months ended June 30, 2021 and 2020, respectively. The increase in average realized sales price was primarily due to the increase in commodity prices. Commodity prices were depressed in the second quarter of 2020 due to the impact of the pandemic and the effects of OPEC production related to supply and demand decisions.

Lease operating expense was $28.7 million and $27.8 million for the three months ended June 30, 2021 and 2020, respectively. The change in lease operating expense is primarily due to an 8% increase in workover expense for 2021 projects compared to 2020, partially offset by the employee retention credit received for the first and second quarters of 2021. On a per Boe basis, lease operating expense was $12.46 and $11.03 for the three months ended June 30, 2021 and 2020, respectively. The increase in lease operating expense on a per Boe basis is primarily driven by the increase in workover expense and lower production.

Gathering, processing and transportation was $5.1 million and $4.7 million for the three months ended June 30, 2021 and 2020, respectively. The increase in gathering, processing and transportation was primarily driven by additional fees from our non-operated wells, fee increases from our processing plants and minimum volume commitments. On a per Boe basis, gathering, processing and transportation was $2.20 and $1.86 for the three months ended June 30, 2021 and 2020, respectively. The change in gathering, processing and transportation on a per Boe basis is due to higher costs and lower production.

Taxes other than income were $5.1 million and $2.2 million for the three months ended June 30, 2021 and 2020, respectively. On a per Boe basis, taxes other than income were $2.20 and $0.87 for the three months ended June 30, 2021 and 2020, respectively. The change in taxes other than income on a per Boe basis was primarily due to the increase in commodity prices.

DD&A expense was $7.4 million and $7.6 million for the three months ended June 30, 2021 and 2020, respectively. The change in DD&A expense was primarily due to a decrease in production from natural decline.

Impairment expense. No impairment expense recorded for the three months ended June 30, 2021 and 2020, respectively.

General and administrative expense was $6.0 million and $6.8 million for the three months ended June 30, 2021 and 2020, respectively. The change in general and administrative expense was primarily related to the employee retention credit received of $0.8 million for the first and second quarters of 2021, a decrease of $0.2 million in professional services and a decrease of $0.1 million in legal expenses partially offset by an increase of $0.7 million in stock compensation expense.

Net losses (gains) on commodity derivative instruments of $63.9 million were recognized for the three months ended June 30, 2021, consisting of $47.0 million decrease in the fair value of open positions and $16.9 million of cash settlements paid on expired positions. Net losses on commodity derivative instruments of $19.2 million were recognized for the three months ended June 30, 2020, consisting of a $64.5 million decrease in the fair value of open positions offset by $27.3 million of cash settlement received on expired positions and $18.0 million of cash settlements received on terminated positions.

Interest expense, net was $3.1 million and $6.2 million for the three months ended June 30, 2021 and 2020, respectively. Interest expense included less than $0.1 million and $2.4 million for the write-off of deferred financing costs for the three months ended June 30, 2021 and 2020, respectively. Furthermore, we had a loss position on our interest rate swaps of less than $0.1 million and $0.4 million for the three months ended June 30, 2021 and 2020, respectively.

Average outstanding borrowings under our Revolving Credit Facility were $242.8 million and $287.5 million for the three months ended June 30, 2021 and 2020, respectively.

Gain on extinguishment of debt was $5.5 million for the three months ended June 30, 2021, which is related to the forgiveness of the PPP Loan. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information regarding the PPP Loan.

For the Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Net losses of $54.4 million and $408.5 million were recorded for the six months ended June 30, 2021 and 2020, respectively.

Oil, natural gas and NGL revenues were $152.7 million and $92.7 million for the six months ended June 30, 2021 and 2020, respectively. Average net production volumes were approximately 25.0 MBoe/d and 28.7 MBoe/d for the six months ended June 30, 2021 and 2020, respectively. The change in production volumes was primarily due to natural decline and the impact of Winter Storm Uri that caused a severe freeze in areas where we operate, including Texas, Oklahoma and Louisiana, resulting in shut-ins for wells, pipelines and plants for approximately two weeks in February 2021. The average realized sales price was ~~$32.56~~$33.76 per Boe and ~~$21.41~~$17.74 per Boe for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The increase in average realized sales price was primarily due to the increase in commodity prices. Commodity prices were depressed in Q1the first half of 2020 due to the impact of the pandemic and the effects of ~~Organization of the Petroleum Exporting Countries~~OPEC production related to supply and demand decisions.

Lease operating expense was ~~$28.9~~$57.6 million and ~~$35.7~~$63.6 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in lease operating expense was primarily related to the employee retention credit received of $2.0 million for the first and second quarters of 2021, reduced workover expense based on the implementation of cost savings initiatives implemented during the second quarter of 2020 and continuing in ~~2021.~~2021 and natural decline in production. On a per Boe basis, lease operating expense was ~~$13.01~~$12.73 and ~~$13.23~~$12.17 for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in lease operating expense on a per Boe basis was due to lower production.

Gathering, processing and transportation was ~~$4.6~~$9.6 million and ~~$5.1~~$9.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The decrease in gathering, processing and transportation was primarily driven by the decrease in production ~~decline,~~in first quarter 2021 from Winter Storm Uri partially offset by ~~an increase in the~~additional fees from our non-operated wells, fee increases from our processing plants and minimum volume ~~commitment on certain properties in Oklahoma and East Texas.~~commitments. On a per Boe basis, gathering, processing and transportation was ~~$2.06~~$2.13 and $1.87 for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in gathering, processing and transportation on a per Boe basis was due to higher costs and lower production.

Taxes other than income were ~~$4.6~~$9.7 million and ~~$4.0~~$6.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. On a per Boe basis, taxes other than income were ~~$2.08~~$2.14 and ~~$1.48~~$1.18 for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in taxes other than income on a per Boe basis was primarily due to the increase in commodity prices.

DD&A expense was ~~$7.3~~$14.7 million and ~~$15.6~~$23.2 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in DD&A expense was primarily due to ~~the 2020 impairments which reduced depletable oil~~a decrease in production and ~~gas property.~~a decrease in our DD&A rate.

Impairment expense was $455.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. We recognized $405.7 million of impairment expense on proved properties for the ~~three~~six months ended ~~March 31,~~June 30, 2020. The estimated future cash flows expected from these properties were compared to their carrying values and determined to be unrecoverable primarily as a result of declining commodity prices in 2020. We recognized $49.3 million of impairment expense on unproved properties for the ~~three~~six months ended ~~March 31,~~June 30, 2020, which was related to expiring leases and the evaluation of qualitative and quantitative factors related to the decline in commodity prices in 2020. No impairment expense was recorded for the ~~three~~six months ended ~~March 31,~~June 30, 2021.

General and administrative expense was ~~$6.9~~$13.0 million and ~~$8.4~~$15.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in general and administrative expense was primarily related to (1) the employee retention credit received of $0.8 million for the first and second quarters of 2021, (2) a decrease of ~~$0.7~~$0.9 million in salaries and other payroll benefits, (3) a ~~$0.4~~decrease of $0.5 million ~~decrease~~ in professional services, and (4) a ~~$0.2~~decrease of $0.3 million ~~decrease~~ in legal expenses. The decreases in general and administrative expense were offset with an increase of $0.6 million in stock compensation expense.

Net losses (gains) on commodity derivative instruments of ~~$34.6~~$98.5 million were recognized for the ~~three~~six months ended ~~March 31,~~June 30, 2021, consisting of ~~$24.0~~$71.0 million decrease in the fair value of open positions and ~~$10.6~~$27.5 million of cash settlements paid on expired positions. Net gains on commodity derivative instruments of ~~$107.7~~$88.5 million were recognized for the ~~three~~six months ended ~~March 31,~~June 30, 2020, consisting of ~~$95.2~~$30.7 million increase in the fair value of open positions and ~~$12.5~~$39.8 million of cash settlement received on expired positions and $18.0 million of cash settlements received on terminated positions.

Interest expense, net was ~~$3.1~~$6.2 million and ~~$7.6~~$13.9 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. ~~The decrease in interest~~Interest expense ~~was primarily related to~~included less than $0.1 million and $2.4 million for the write-off of deferred financing costs for the six months ended June 30, 2021 and 2020, respectively. Furthermore, we had a gain position on our interest rate swaps of ~~$0.06~~less than $0.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021, compared to a loss position on interest rate swaps of ~~$3.6~~$4.1 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. In addition, we had a decrease of ~~$0.6~~$0.7 million in interest expense due to lower borrowings ~~and a decrease of $0.2 million in the amortization of deferred financing costs.~~on our Revolving Credit Facility.

Average outstanding borrowings under our Revolving Credit Facility were ~~$253.3~~$248.0 million and ~~$295.1~~$291.3 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively.

Gain on extinguishment of debt was $5.5 million for the six months ended June 30, 2021 which is related to the forgiveness of the PPP Loan. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information regarding the PPP Loan.

We include in this report the non-GAAP financial measure of Adjusted EBITDA and provide our reconciliation of Adjusted EBITDA to net income (loss) and net cash flows from operating activities, our most directly comparable financial measures calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss):

We believe that Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure.

Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) or cash flows from operating activities as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that Adjusted EBITDA is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.

In addition, management uses Adjusted EBITDA to evaluate actual cash flow available to develop existing reserves or acquire additional oil and natural gas properties.

The following tables present our reconciliation of the Company’s net income (loss) and cash flows from operating activities to Adjusted EBITDA, our most directly comparable GAAP financial measures, for each of the periods indicated.

	For the Three Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,						June 30,
	2021			2020			2021			2020			2021			2020
	(In thousands)						(In thousands)
Net income (loss)	$	(19,328	)	$	(367,199	)
Net loss							$	(35,023	)	$	(41,336	)	$	(54,351	)	$	(408,535	)
Interest expense, net		3,112			7,647			3,137			6,209			6,249			13,856
Income tax expense								—			85			—			85
DD&A		7,347			15,556			7,389			7,623			14,736			23,179
Impairment expense		—			455,031			—			—			—			455,031
Accretion of AROs		1,615			1,513			1,638			1,539			3,253			3,052
(Gains) losses on commodity derivative instruments		34,588			(107,713	)
Losses (gains) on commodity derivative instruments								63,898			19,165			98,486			(88,548	)
Cash settlements received (paid) on expired commodity derivative instruments		(10,636	)		12,500			(16,855	)		27,295			(27,491	)		39,795
Amortization of gain associated with terminated commodity derivatives		5,785			—			4,166			—			9,951			—
Acquisition and divestiture related expenses		12			481			7			44			19			525
Share-based compensation expense		331			(911	)		903			371			1,234			(540	)
Exploration costs		16			16			7			3			23			19
(Gain) loss on settlement of AROs		68			—
Loss on settlement of AROs								5			—			73			—
Bad debt expense		3			110			91			141			94			251
Gain on extinguishment of debt								(5,516	)		—			(5,516	)		—
Reorganization items, net		6			186			—			166			6			352
Severance payments		—			19			—			10			—			29
Other		16			—			—			—			16			—
Adjusted EBITDA	$	22,935		$	17,236		$	23,847		$	21,315		$	46,782		$	38,551

	For the Three Months Ended						For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,						June 30,
	2021			2020			2021			2020			2021			2020
	(In thousands)						(In thousands)
Net cash provided by (used in) operating activities	$	15,558		$	13,089
Net cash provided by operating activities							$	20,845		$	29,900		$	36,403		$	42,989
Changes in working capital		(2,722	)		(455	)		(4,526	)		5,766			(7,248	)		5,311
Interest expense, net		3,112			7,647			3,137			6,209			6,249			13,856
Gain (loss) on interest rate swaps		62			(3,617	)		(18	)		(438	)		44			(4,055	)
Cash settlements paid (received) on interest rate swaps		464			(22	)		476			346			940			324
Cash settlements paid (received) on terminated derivatives								—			(17,977	)		—			(17,977	)
Amortization of gain associated with terminated commodity derivatives		5,785			—			4,166			—			9,951			—
Amortization of deferred financing fees		(139	)		(309	)
Amortization and write-off of deferred financing fees								(221	)		(2,690	)		(360	)		(2,999	)
Acquisition and divestiture related expenses		12			481			7			44			19			525
Income tax expense - current portion								—			85			—			85
Exploration costs		16			16			7			3			23			19
Plugging and abandonment cost		230			—			5			—			235			—
Reorganization items, net		6			186			—			166			6			352
Severance payments		—			19			—			10			—			29
Other		551			201			(31	)		(109	)		520			92
Adjusted EBITDA	$	22,935		$	17,236		$	23,847		$	21,315		$	46,782		$	38,551

Overview. Our ability to finance our operations, including funding capital expenditures and acquisitions, meet our indebtedness obligations, refinance our indebtedness or 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 on hand, cash flows ~~generated~~provided by operating activities and borrowings under our Revolving Credit Facility. For the remainder of 2021, we expect our primary funding sources to be cash flows ~~generated~~provided by operating activities, cash on hand and available borrowing capacity under our Revolving Credit Facility.

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.

Hedging. Commodity hedging has been and remains an important part of our strategy to reduce cash flow volatility. Our hedging activities are intended to support oil, NGL and natural gas prices at targeted levels and to manage our exposure to commodity price fluctuations. We intend to enter into commodity derivative contracts at times and on terms desired to maintain a portfolio of commodity derivative contracts covering at least 30% ~~- 65%~~-65% of our estimated production from total proved developed producing reserves over a one-to-three year period at any given point of time to satisfy the hedging covenants in our Revolving Credit Facility and pursuant to our internal policies. We may, however, from time to time, hedge more or less than this approximate amount. 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.

We evaluate counterparty risks related to our commodity derivative contracts and trade credit. Should any of these financial counterparties not perform, we may not realize the benefit of some of our hedges under lower commodity prices. We sell our oil and natural gas to a variety of purchasers. Non-performance by a customer could also result in losses.

Capital Expenditures. Our total capital expenditures were approximately ~~$5.8~~$16.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021, which were primarily related to capital workovers, maintenance and facilities located in Oklahoma, the Rockies and California and non-operated completion activities in the Eagle Ford.

Working Capital. We expect to fund our working capital needs primarily with operating cash flows. ~~We also plan to reinvest a sufficient amount of our operating cash flow to fund~~Furthermore, our expected capital ~~expenditures. Our~~expenditures and debt service requirements are expected to be funded by operating cash flows. See Note 87 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” and “—Overview” of this quarterly report for additional information.

As of ~~March 31,~~June 30, 2021, we had a working capital deficit of ~~$17.7~~$55.3 million primarily due to short-term derivatives of ~~$30.4~~$63.1 million, accrued liabilities of $26.1 million, revenues payable of ~~$24.9 million, accrued liabilities of $20.6~~$19.2 million, and accounts payable of ~~$6.4~~$14.4 million offset by accounts receivable of ~~$35.4~~$39.6 million, cash on hand of ~~$16.8~~$15.2 million and prepaid expenses of ~~$12.3~~$12.6 million.

Revolving Credit Facility.On November 2, 2018, OLLC as borrower, entered into the Revolving Credit Facility (as amended and supplemented to date) with Bank of Montreal, as administrative agent. Our borrowing base under our Revolving Credit Facility is subject to redetermination on at least a semi-annual basis primarily based on a reserve engineering ~~report with respect~~report.

On June 16, 2021, the Company completed its scheduled semi-annual borrowing base redetermination process, pursuant to ~~our estimated natural gas, oil and NGL reserves,~~ which ~~takes into account~~ the ~~prevailing natural gas, oil and NGL prices at such time, as adjusted for~~borrowing base under the ~~impact~~Revolving Credit Facility was decreased from $260.0 million to $245.0 million. Additionally, the administrative agent under the Revolving Credit Facility agreement was changed from Bank of ~~our commodity derivative contracts.~~Montreal to KeyBank.

As of ~~March 31, 2021, we were in compliance with all the financial (current ratio and total leverage ratio) and other covenants associated with our Revolving Credit Facility.~~

~~As of March 31,~~June 30, 2021, we had approximately $10.0 million of available borrowings under our Revolving Credit Facility. See Note 87 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information regarding our Revolving Credit Facility.

As of June 30, 2021, we were in compliance with all the financial (current ratio and total leverage ratio) and other covenants associated with our Revolving Credit Facility.

COVID-19 Relief Funding.On June 22, 2021, the Company was notified by the bank that the PPP Loan was approved for full and complete forgiveness by the Small Business Association. For the three and six months ended June 30, 2021, the Company recorded a gain on extinguishment of debt for $5.5 million in the Unaudited Condensed Consolidated Statements of Operations.

Under the Consolidated Appropriations Act 2021 passed by the U.S. Congress and signed by the President on December 27, 2020, provisions of the CARES Act were extended and modified making the Company eligible for the employee retention credit subject to meeting certain criteria. The Company met the criteria for the first and second quarters of 2021 and recognized a $2.8 million employee retention credit during the three and six months ended June 30, 2021, which is included as a credit to general and administrative expense and to lease operating expense in the Unaudited Condensed Consolidated Statements of Operations.

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated. The cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020 have been derived from our Unaudited Condensed Consolidated Financial Statements. For information regarding the individual components of our cash flow amounts, see the Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Cash Flows included under “Item 1. Financial Statements” of this quarterly report.

	For the Three Months Ended						For the Six Months Ended
	March 31,						June 30,
	2021			2020			2021			2020
	(In thousands)						(In thousands)
Net cash provided by operating activities	$	15,558		$	13,089		$	36,403		$	42,989
Net cash used in investing activities		(4,116	)		(12,720	)		(11,575	)		(26,842	)
Net cash provided by (used in) financing activities		(5,005	)		1,200
Net cash used in financing activities								(20,042	)		(3,270	)

Operating Activities. Key drivers of net operating cash flows are commodity prices, production volumes and operating costs. Net cash provided by operating activities was ~~$15.6~~$36.4 million and ~~$13.1~~$43.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. Production volumes ~~were approximately 24.7 MBoe/d~~decreased by 13% primarily related to natural decline and ~~29.7~~ M~~Boe/d~~the impact of Winter Storm Uri that caused a severe freeze in areas that we operate which resulted in shut-ins for wells, pipelines and plants for two weeks in February 2021. The average realized sales price was $33.76 per Boe and $17.74 per Boe for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and 2020, respectively. The change in average realized sales ~~prices were $32.56 per Boe and $21.41 per Boe for~~price was primarily due to the ~~three months ended March 31, 2021 and 2020, respectively. Lease~~increase in commodity prices.

Other items affecting operating ~~expenses were $28.9 million and $35.7 million for the three months ended March 31, 2021 and 2020, respectively. Gathering, processing and transportation~~cash flow was ~~$4.6 million and $5.1 million for the three months ended March 31, 2021 and 2020, respectively.~~

~~Net cash provided by operating activities for the three months ended March 31, 2021 included $11.1 million of~~ cash paid on expired derivative instruments of $28.4 million for the six months ended June 30, 2021 compared to ~~$12.5 million of~~ cash receipts on expired derivatives of $39.8 million and cash receipts on terminated derivative instruments of $18.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2020. ~~For~~Derivative instruments also changed from a net gain position of $88.5 million for the ~~three~~six months ended ~~March 31, 2021, we had~~June 30, 2020 to a net ~~losses~~loss position on derivative instruments of ~~$34.5 million compared to a net gain of $104.1~~$98.5 million for the ~~three~~six months ended ~~March 31, 2020.~~June 30, 2021.

In addition, the Company recorded a $5.5 million gain on extinguishment of debt related to the forgiveness of the PPP Loan. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information regarding the PPP Loan.

Investing Activities.Net cash used in investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2021 was ~~$4.1~~$11.6 million, of which ~~$3.8~~$11.5 million was used for additions to oil and natural gas properties. Net cash provided by investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2020 was ~~$12.7~~$26.8 million, of which ~~$12.4~~$26.1 million was used for additions to oil and natural gas properties.

Financing Activities. The Company had net repayments of $20.0 million and $5.0 million for the ~~three~~six months ended ~~March 31,~~June 30, 2021 and ~~net borrowings of $5.0 million for the three months ended March 31,~~ 2020, respectively, related to our Revolving Credit Facility.

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, the Company paid out $3.8 million in dividends on March 30, 2020 to stockholders of record at the close of business on March 16, 2020. The board of directors subsequently suspended quarterly dividends. Future dividends, if any, are subject to debt covenants under our Revolving Credit Facility and discretionary approval by the board of directors.

As noted above, the Company received forgiveness for the $5.5 million PPP Loan received in April 2020.

For a discussion of recent accounting pronouncements that will affect us, see Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) and under the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, the principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~March 31,~~June 30, 2021.

The full impact of COVID-19 on our business is still uncertain. In order to protect the health and safety of our employees, we took proactive steps to allow employees to work remotely and to reduce the number of employees on site at any one time in our field areas to comply with social distancing guidelines. We believe that our internal controls and procedures are still functioning as designed and were effective for the most recent quarter.

No changes in our internal control over financial reporting occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2, respectively, to this quarterly report.

For information regarding legal proceedings, see Part I, “Item 1. Financial Statements,” Note ~~15,~~14, “Commitments and Contingencies — Litigation and Environmental” of the Notes to Unaudited Condensed Consolidated Financial Statements included in this quarterly report, which is incorporated herein by reference.

Our business faces many risks. Any of the risks discussed elsewhere in this quarterly report and our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also impair our business operations. There have been no material changes to the risk factors since those disclosed in our 2020 Form 10-K.

The following table summarizes our repurchase activity during the three months ended ~~March 31,~~June 30, 2021:

Period

Total Number of
Shares Purchased

Average Price
Paid per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs

Approximate Dollar
Value of Shares That
May Yet Be
Purchased Under the
Plans or Programs (1)

(In thousands)
Common Shares Repurchased (1)

January 1, 2021 - January 31, 2021

2,336

$
1.31

—

n/a
February 1, 2021 - February 28, 2021

155,692

$
2.48

—

n/a
March 1, 2021 - March 31, 2021

—

$
—

—

n/a

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
							(In thousands)
Common Shares Repurchased (1)
April 1, 2021 - April 30, 2021		2,301	$	2.94		—	n/a
May 1, 2021 - May 31, 2021		1,629	$	2.67		—	n/a
June 1, 2021 - June 30, 2021		—	$	—		—	n/a

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Delaware		82-1326219
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Dallas Street, Suite 1700, Houston, TX		77002
(Address of principal executive offices)		(Zip Code)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☑	Smaller reporting company ☑
Emerging growth company ☐

		Page


	Glossary of Oil and Natural Gas Terms	1
	Names of Entities	4
	Cautionary Note Regarding Forward-Looking Statements	5

PART I—FINANCIAL INFORMATION
Item 1.	FinancialStatements
	Unaudited Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2021 and December 31, 2020	8
	Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2021 and 2020	9
	Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2021 and 2020	10
	Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Equity (Deficit) for the Three and Six Months Ended ~~March 31,~~June 30, 2021 and 2020	11
	Notes to Unaudited Condensed Consolidated Financial Statements	12
	Note 1 – Organization and Basis of Presentation	12
	Note 2 – Summary of Significant Accounting Policies	13
	Note 3 – Revenue	1413
	Note 4 ~~– Acquisitions and Divestitures~~	14
	~~Note 5~~ – Fair Value Measurements of Financial Instruments	14
	Note 65 – Risk Management and Derivative Instruments	1615
	Note 76 – Asset Retirement Obligations	18
	Note 87 – Long-term Debt	18
	Note 8 – Equity (Deficit)	19
	Note 9 ~~– Equity (Deficit)~~	20
	~~Note 10~~ – Earnings per Share	20
	Note 1110 – Long-Term Incentive Plans	20
	Note 1211 – Leases	2223
	Note ~~13 -Supplemental~~12 – Supplemental Disclosures to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statements of ~~Consolidated~~ Cash Flows	24
	Note 1413 – Related Party Transactions	24
	Note 1514 – Commitments and Contingencies	2425
	Note 1615 – Income Taxes	25

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3234
Item 4.	Controls and Procedures	3334

PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	3435
Item 1A.	Risk Factors	3435
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3435
Item 3.	Defaults Upon Senior Securities	3435
Item 4.	Mine Safety Disclosures	3435
Item 5.	Other Information	3435
Item 6.	Exhibits	3436

Signatures		3637

	Remaining
	2021			2022
Average Monthly Notional (in thousands)	$	125,000		$	75,000
Weighted-average fixed rate		1.612	%		1.281	%
Floating rate	1 Month LIBOR			1 Month LIBOR

	Common Stock
Balance, December 31, 2020		37,663,509
Restricted stock units vested		~~7,870~~29,621
Bonus stock awards (1)		455,973
~~Repurchase of common shares~~Shares withheld for taxes (2)		(~~158,028~~161,958	)
Balance, ~~March 31,~~June 30, 2021		~~37,969,324~~37,987,145


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AMPY	NYSE

	2021
Expected volatility		119.6	%
Dividend yield		0.00	%
Risk-free interest rate		0.31	%

	Number of Units		Weighted-Average Grant-Date Fair Value per Unit (1)
PRSUs outstanding at December 31, 2020		0	$	0
Granted (2)		196,377	$	1.94
Forfeited		0	$	0
Vested		0	$	0
PRSUs outstanding at June 30, 2021		196,377	$	1.94

Exhibit Number		Description
3.1	—	Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc. (filed as Exhibit 3.1 to the Company’s Registration Statement on Form 8-A filed on October 21, 2016, and incorporated herein by reference).

3.2	—	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Midstates Petroleum Company, Inc., dated August 6, 2019 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-35512) filed on August 6, 2019).

3.3	—	Second Amended and Restated Bylaws of Midstates Petroleum Company Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 001-35512) filed on August 6, 2019).

10.1*#†	—	~~Form of~~Employment Agreement, dated May 17, 2021, ~~TRSU Award Agreement.~~

~~10.2*#~~†	—	~~Form of 2021 PRSU Award Agreement.~~by and between Amplify Energy Corp. and Eric Dulany.

31.1*	—	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

Exhibit Number		~~Description~~
31.2*	—	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

32.1**	—	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*	—	Inline XBRL Instance Document

101.SCH*	—	Inline XBRL Schema Document

101.CAL*	—	Inline XBRL Calculation Linkbase Document

101.DEF*	—	Inline XBRL Definition Linkbase Document

101.LAB*	—	Inline XBRL Labels Linkbase Document

101.PRE*	—	Inline XBRL Presentation Linkbase Document

104*	—	Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Amplify Energy Corp.
	(Registrant)


Date: ~~May 5,~~August 4, 2021	By:	/s/ Jason McGlynn
	Name:	Jason McGlynn
	Title:	Senior Vice President and Chief Financial Officer


Date: ~~May 5,~~August 4, 2021	By:	/s/ ~~Denise DuBard~~Eric Dulany
	Name:	~~Denise DuBard~~Eric Dulany
	Title:	Vice President and Chief Accounting Officer