Amplify Energy Corp (Form: 10-Q, Received: 08/08/2018 16:40:33)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10–Q

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

For the quarterly period ended June 30, 2018

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

For the transition period from to .

Commission File Number: 001-35364

AMPLIFY ENERGY CORP.

(Exact name of registrant as specified in its charter)

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

500 Dallas Street, Suite 1600, Houston, TX		77002
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (713) 490-8900

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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.

Large accelerated filer ☐	Accelerated filer ☑
Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☐
Emerging growth company ☐

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 August 3, 2018, the registrant had 25,072,856 outstanding shares of common stock, $0.0001 par value outstanding.

AMPLIFY ENERGY CORP.

Table of Contents

		Page


	Glossary of Oil and Natural Gas Terms	1
	Names of Entities	3
	Cautionary Note Regarding Forward-Looking Statements	4

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2018 (Successor Period) and December 31, 2017 (Successor Period)	7
	Unaudited Condensed Statements of Consolidated Operations for the Three and Six Months Ended June 30, 2018 (Successor Period), the period from May 5, 2017 through June 30, 2017 (Successor Period) and the period from January 1, 2017 through May 4, 2017 (Predecessor Period)	8
	Unaudited Condensed Statements of Consolidated Cash Flows for the Six Months Ended June 30, 2018 (Successor Period), the period from May 5, 2017 through June 30, 2017 (Successor Period) and the period from January 1, 2017 through May 4, 2017 (Predecessor Period)	10
	Unaudited Condensed Statements of Consolidated Equity for the Six Months Ended June 30, 2018 (Successor Period)	11
	Notes to Unaudited Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	12
	Note 2 – Summary of Significant Accounting Policies	14
	Note 3 – Revenue	15
	Note 4 – Acquisitions and Divestitures	16
	Note 5 – Fair Value Measurements of Financial Instruments	17
	Note 6 – Risk Management and Derivative Instruments	18
	Note 7 – Asset Retirement Obligations	20
	Note 8 – Long-term Debt	20
	Note 9 – Equity (Deficit)	21
	Note 10 – Earnings per Share/Unit	22
	Note 11 – Long-Term Incentive Plans	22
	Note 12 -Supplemental Disclosures to the Condensed Consolidated Balance Sheets and Condensed Statements of Consolidated Cash Flows	25
	Note 13 – Related Party Transactions	26
	Note 14 – Commitments and Contingencies	26
	Note 15 – Income Taxes	27
	Note 16 – Subsequent Events	27

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41

Signatures		43

G LOSSARY OF OIL AND NATURAL GAS TERMS

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.

Bcfe : One billion cubic feet of natural gas equivalent.

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.

ICE : Inter-Continental Exchange.

MBbl : One thousand Bbls.

Mcf : One thousand cubic feet of natural gas.

Mcf/d : One Mcf per day.

MMBtu : One million Btu.

MMcf : One million cubic feet of natural gas.

MMcfe : One million cubic feet of natural gas equivalent.

MMcfe/d : One MMcfe per day.

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.

NYMEX : New York Mercantile Exchange.

Oil : Oil and condensate.

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

OPIS: Oil Price Information Service.

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 engine ering 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 contrac ts 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, o r 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 undr illed 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 con tacts, 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 dir ect 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, engine ering, 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 prove d 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 evide nce 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 e ntities. 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 re port, 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.

Workover : Operations on a producing well to restore or increase production.

WTI : West Texas Intermediate.

N AMES OF ENTITIES

As used in this Form 10-Q, unless we indicate otherwise:

•	“Amplify Energy” and “Successor” refer to Amplify Energy Corp., the successor reporting company of Memorial Production Partners LP, individually and collectively with its subsidiaries, as the context requires;

•	“Memorial Production Partners,” “MEMP” and “Predecessor” refer to Memorial Production Partners LP, individually and collectively with its subsidiaries, as the context requires;

•	“Company,” “we,” “our,” “us” or like terms refer to Memorial Production Partners for the period prior to emergence from bankruptcy and to Amplify Energy for the period after emergence from bankruptcy; and

•	“OLLC” refers to Amplify Energy Operating LLC, our wholly owned subsidiary through which we operate our properties.

C AUTIONARY NOTE REGARDING FORWARD–LOOKING STATEMENTS

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, that are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about our:

•

business strategies;

•

acquisition and disposition strategy;

•

cash flows and liquidity;

•

financial strategy;

•

ability to replace the reserves we produce through drilling;

•

drilling locations;

•

oil and natural gas reserves;

•

technology;

•

realized oil, natural gas and NGL prices;

•

production volumes;

•

lease operating expense;

•

gathering, processing, and transportation;

•

general and administrative expense;

•

future operating results;

•

ability to procure drilling and production equipment;

•

ability to procure oil field labor;

•

planned capital expenditures and the availability of capital resources to fund capital expenditures;

•

ability to access capital markets;

•

marketing of oil, natural gas and NGLs;

•

acts of God, fires, earthquakes, storms, floods, other adverse weather conditions, war, acts of terrorism, military operations, or national emergency;

•

expectations regarding general economic conditions;

•

impact of the Tax Cuts and Jobs Act of 2017;

•

competition in the oil and natural gas industry;

•

effectiveness of risk management activities;

•

environmental liabilities;

•

counterparty credit risk;

•

expectations regarding governmental regulation and taxation;

•

expectations regarding developments in oil-producing and natural-gas producing countries; and

•

plans, objectives, expectations and intentions.

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,” “w ill,” “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 act ivities, 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 i ntentions 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 stat ements include, but are not limited to, the following risks and uncertainties:

•

our results of evaluation and implementation of strategic alternatives;

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our inability to maintain relationships with suppliers, customers, employees and other third parties as a result of our Chapter 11 filing, or otherwise;

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our indebtedness and our ability to satisfy our debt obligations and a potential inability to effect deleveraging transactions or otherwise reduce those risks;

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risks related to a redetermination of the borrowing base under our secured reserve-based revolving credit facility;

•

the effect of changes in our senior management;

•

our ability to access funds on acceptable terms, if at all, because of the terms and conditions governing our indebtedness;

•

volatility in the prices for oil, natural gas, and NGLs, including further or sustained declines in commodity prices;

•

the potential for additional impairments due to continuing or future declines in oil, natural gas and NGL prices;

•

the uncertainty inherent in estimating quantities of oil, natural gas and NGLs reserves;

•

our substantial future capital requirements, which may be subject to limited availability of financing;

•

the uncertainty inherent in the development and production of oil and natural gas;

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our need to make accretive acquisitions or substantial capital expenditures to maintain our declining asset base;

•

the existence of unanticipated liabilities or problems relating to acquired or divested businesses or properties;

•

potential acquisitions, including our ability to make acquisitions on favorable terms or to integrate acquired properties;

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the consequences of changes we have made, or may make from time to time in the future, to our capital expenditure budget, including the impact of those changes on our production levels, reserves, results of operations and liquidity;

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potential shortages of, or increased costs for, drilling and production equipment and supply materials for production, such as CO ₂ ;

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potential difficulties in the marketing of oil and natural gas;

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changes to the financial condition of counterparties;

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uncertainties surrounding the success of our secondary and tertiary recovery efforts;

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competition in the oil and natural gas industry;

•

general political and economic conditions, globally and in the jurisdictions in which we operate;

•

the impact of legislation and governmental regulations, including those related to climate change and hydraulic fracturing;

•

the risk that our hedging strategy may be ineffective or may reduce our income;

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the cost and availability of insurance as well as operating risks that may not be covered by an effective indemnity or insurance; and

•

actions of third-party co-owners of interests in properties in which we also own an interest.

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 e stimates 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 caut ioned 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 statemen t 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 our Annual Report on Form 10-K for the year ended December 31, 2017 filed w ith the SEC on March 12, 2018 (“2017 Form 10-K”) and “Part II—Item 1A. Risk Factors” appearing within this report and elsewhere in this report. All forward-looking statements speak only as of the date of this report. We do not intend to update or revise an y 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.

P ART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except outstanding shares/units)

	Successor			Successor
	June 30,			December 31,
	2018			2017
ASSETS
Current assets:
Cash and cash equivalents	$	7,586		$	6,392
Restricted cash		325			—
Accounts receivable		33,456			36,391
Short-term derivative instruments		2,536			28,546
Prepaid expenses and other current assets		5,251			7,220
Total current assets		49,154			78,549
Property and equipment, at cost:
Oil and natural gas properties, successful efforts method		587,718			603,053
Support equipment and facilities		101,634			100,225
Other		6,320			6,133
Accumulated depreciation, depletion and impairment		(59,805	)		(35,979	)
Property and equipment, net		635,867			673,432
Long-term derivative instruments		73			—
Restricted investments		156,716			156,938
Other long-term assets		6,462			8,545
Total assets	$	848,272		$	917,464

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	5,928		$	1,941
Revenues payable		23,770			22,427
Accrued liabilities (see Note 12)		25,493			18,233
Short-term derivative instruments		20,767			—
Total current liabilities		75,958			42,601
Long-term debt (see Note 8)		314,000			376,000
Asset retirement obligations		73,640			99,460
Long-term derivative instruments		11,778			5,470
Total liabilities		475,376			523,531
Commitments and contingencies (see Note 14)
Stockholders'/ partners' equity:
Preferred stock, $0.0001 par value: 45,000,000 shares authorized; no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		—			—
Warrants, 2,173,913 warrants issued and outstanding at June 30, 2018 and December 31, 2017		4,788			4,788
Common stock, $0.0001 par value: 300,000,000 shares authorized; 25,072,856 and 25,000,000 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		3			3
Additional paid-in capital		388,859			387,856
Accumulated earnings (deficit)		(20,754	)		1,286
Total stockholders'/partners' equity		372,896			393,933
Total liabilities and equity	$	848,272		$	917,464

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS

(In thousands, except per shares/unit amounts)

	Successor						Predecessor
				Period from			Period from
	For the Three			May 5, 2017			April 1, 2017
	Months Ended			through			through
	June 30, 2018			June 30, 2017			May 4, 2017
Revenues:
Oil and natural gas sales	$	90,894		$	42,228		$	27,686
Other revenues		94			167			135
Total revenues		90,988			42,395			27,821

Costs and expenses:
Lease operating expense		27,500			18,842			9,582
Gathering, processing and transportation		5,975			4,114			2,737
Exploration		2,988			7			5
Taxes other than income		5,535			1,933			921
Depreciation, depletion and amortization		13,619			8,351			9,835
General and administrative expense		16,863			7,382			8,236
Accretion of asset retirement obligations		1,429			1,027			912
(Gain) loss on commodity derivative instruments		35,652			(1,915	)		(12,835	)
(Gain) loss on sale of properties		(227	)		—			—
Other, net		(120	)		—			44
Total costs and expenses		109,214			39,741			19,437
Operating income (loss)		(18,226	)		2,654			8,384
Other income (expense):
Interest expense, net		(6,287	)		(3,797	)		(1,843	)
Other income (expense)		2			(6	)		2
Total other income (expense)		(6,285	)		(3,803	)		(1,841	)
Income (loss) before reorganization items, net and income taxes		(24,511	)		(1,149	)		6,543
Reorganization items, net		(768	)		(349	)		(81,121	)
Income tax benefit (expense)		—			592			—
Net income (loss)		(25,279	)		(906	)		(74,578	)
Net income (loss) attributable to common stockholders/limited partners	$	(25,279	)	$	(906	)	$	(74,578	)

Successor/Predecessor interest in net income (loss):
Net income (loss) attributable to Successor/Predecessor	$	(25,279	)	$	(906	)	$	(74,578	)
Net (income) loss allocated to participating restricted stockholders		—			—			—
Net income (loss) available to common stockholders/limited partners	$	(25,279	)	$	(906	)	$	(74,578	)

Earnings per share/unit: (See Note 10)
Basic and diluted earnings per share/unit	$	(1.01	)	$	(0.04	)	$	(0.89	)
Weighted average common shares/units outstanding:
Basic and diluted		25,038			25,000			83,800

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS

(In thousands, except per shares/unit amounts)

	Successor						Predecessor
				Period from			Period from
	For the Six			May 5, 2017			January 1,
	Months Ended			through			2017 through
	June 30, 2018			June 30, 2017			May 4, 2017
Revenues:
Oil and natural gas sales	$	178,741		$	42,228		$	108,970
Other revenues		179			167			231
Total revenues		178,920			42,395			109,201

Costs and expenses:
Lease operating expense		57,070			18,842			35,568
Gathering, processing, and transportation		11,575			4,114			10,772
Exploration		3,022			7			21
Taxes other than income		10,572			1,933			5,187
Depreciation, depletion, and amortization		26,577			8,351			37,717
General and administrative expense		27,520			7,382			31,606
Accretion of asset retirement obligations		3,147			1,027			3,407
(Gain) loss on commodity derivative instruments		46,108			(1,915	)		(23,076	)
(Gain) loss on sale of properties		2,146			—			—
Other, net		(120	)		—			36
Total costs and expenses		187,617			39,741			101,238
Operating income (loss)		(8,697	)		2,654			7,963
Other income (expense):
Interest expense, net		(12,059	)		(3,797	)		(10,243	)
Other income (expense)		2			(6	)		8
Total other income (expense)		(12,057	)		(3,803	)		(10,235	)
Income (loss) before reorganization items, net and income taxes		(20,754	)		(1,149	)		(2,272	)
Reorganization items, net		(1,286	)		(349	)		(88,774	)
Income tax benefit (expense)		—			592			91
Net income (loss)		(22,040	)		(906	)		(90,955	)
Net income (loss) attributable to Successor/Predecessor	$	(22,040	)	$	(906	)	$	(90,955	)

Successor/Predecessor interest in net income (loss):
Net income (loss) attributable to Successor/Predecessor	$	(22,040	)	$	(906	)	$	(90,955	)
Net (income) loss allocated to participating restricted stockholders		—			—			—
Net income (loss) available to common stockholders/limited partners	$	(22,040	)	$	(906	)	$	(90,955	)

Earnings per share/unit: (See Note 10)
Basic and diluted earnings per share/unit	$	(0.88	)	$	(0.04	)	$	(1.09	)
Weighted average common shares/units outstanding:
Basic and diluted		25,019			25,000			83,807

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS

(In thousands)

	Successor						Predecessor
				Period from			Period from
	For the Six			May 5, 2017			January 1, 2017
	Months Ended			through			through
	June 30, 2018			June 30, 2017*			May 4, 2017
Cash flows from operating activities:
Net income (loss)	$	(22,040	)	$	(906	)	$	(90,955	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		26,577			8,351			37,717
(Gain) loss on derivative instruments		46,108			(1,915	)		(23,076	)
Cash settlements (paid) received on expired derivative instruments		6,903			8,285			15,895
Cash settlements (paid) on terminated derivatives		—			—			94,146
Deferred income tax expense (benefit)		—			(592	)		(74	)
Amortization and write-off of deferred financing costs		1,752			346			—
Accretion of asset retirement obligations		3,147			1,027			3,407
(Gain) loss on sale of properties		2,146			—			—
Share/unit-based compensation (see Note 11)		1,512			526			3,667
Settlement of asset retirement obligations		(380	)		—			(164	)
Reorganization items, net		—			—			68,356
Other		—			—			56
Changes in operating assets and liabilities:
Accounts receivable		2,165			3,666			1,024
Prepaid expenses and other assets		3,120			1,378			735
Payables and accrued liabilities		13,265			458			15,030
Other		—			(80	)		(266	)
Net cash provided by operating activities		84,275			20,544			125,498
Cash flows from investing activities:
Additions to oil and gas properties		(38,847	)		(9,516	)		(6,211	)
Additions to other property and equipment		(187	)		—			(76	)
Additions to restricted investments		(281	)		(123	)		(209	)
Proceeds from the sale of oil and natural gas properties, net of cash and cash equivalents sold		18,565			—			—
Other		503			—			—
Net cash (used in) investing activities		(20,247	)		(9,639	)		(6,496	)
Cash flows from financing activities:
Advances on revolving credit facilities		10,000			—			16,600
Payments on revolving credit facilities		(72,000	)		(12,000	)		(98,252	)
Deferred financing costs		—			(142	)		(8,575	)
Payment to holders of the Notes		—			(8,193	)		(16,446	)
Payment to Predecessor common unitholders		—			(1,250	)		—
Contribution from management		—			1,500			—
Restricted units returned to plan		(509	)		—			(10	)
Other		—			(9	)		9
Net cash (used in) provided by financing activities		(62,509	)		(20,094	)		(106,674	)
Net change in cash, cash equivalents and restricted cash		1,519			(9,189	)		12,328
Cash, cash equivalents and restricted cash, beginning of period		6,392			20,140			15,373
Cash, cash equivalents and restricted cash, end of period	$	7,911		$	10,951		$	27,701

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

*See Note 1 for information regarding recast amounts and basis of financial statement presentation.

AMPLIFY ENERGY CORP.

UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY (SUCCESSOR)

(In thousands)

	Stockholders' Equity
	Common Stock		Warrants		Additional Paid-in Capital			Accumulated Earnings (Deficit)			Total
Balance at December 31, 2017 (Successor)	$	3	$	4,788	$	387,856		$	1,286		$	393,933
Net income (loss)		—		—		—			(22,040	)		(22,040	)
Share-based compensation expense		—		—		1,512			—			1,512
Restricted shares repurchased		—		—		(509	)		—			(509	)
Balance at June 30, 2018 (Successor)	$	3	$	4,788	$	388,859		$	(20,754	)	$	372,896

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

N ote 1. Organization and Basis of Presentation

General

When referring to Amplify Energy Corp. (formerly known as Memorial Production Partners LP and also referred to as “Successor,” “Amplify Energy,” or the “Company”), the intent is to refer to Amplify Energy, a newly formed Delaware corporation, and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made. Amplify Energy is the successor reporting company of Memorial Production Partners LP (“MEMP”) pursuant to Rule 15d-5 of the Securities Exchange Act of 1934, as amended. When referring to the “Predecessor” or the “Company” in reference to the period prior to the emergence from bankruptcy, the intent is to refer to MEMP, the predecessor that was dissolved following the effective date of the Plan (as defined below) and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made.

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 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 Texas, Louisiana, Wyoming and offshore California. 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.

Emergence from Voluntary Reorganization under Chapter 11

On January 16, 2017 (the “Petition Date”), MEMP and certain of its subsidiaries (collectively with MEMP, the “Debtors”) filed voluntary petitions (the cases commenced thereby, the “Chapter 11 proceedings”) under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code” or “Chapter 11”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). The Debtors’ Chapter 11 proceedings were jointly administered under the caption In re: Memorial Production Partners LP, et al. (Case No. 17-30262). On April 14, 2017, the Bankruptcy Court entered an order approving the Second Amended Joint Plan of Reorganization of Memorial Production Partners LP and its affiliated Debtors, dated April 13, 2017 (as amended and supplemented, the “Plan”). On May 4, 2017 (the “Effective Date”), the Debtors satisfied the conditions to effectiveness of the Plan, the Plan became effective in accordance with its terms and the Company emerged from bankruptcy.

Management and Board Changes

On April 27, 2018, the board of directors appointed Martyn Willsher to serve as Senior Vice President and Chief Financial Officer of the Company, effective April 27, 2018.

On May 1, 2018, the Company announced the retirement of William J. Scarff, the Company’s President and Chief Executive Officer and member of the board of directors, which retirement became effective May 14, 2018. Also on May 1, 2018, the Company announced the departure of Christopher S. Cooper, Senior Vice President and Chief Operating Officer, and Robert L. Stillwell, Jr., Senior Vice President and Chief Financial Officer, from their respective positions with the Company, effective April 27, 2018. There were no disagreements between the Company and any of Messrs. Scarff, Cooper or Stillwell (collectively, the “Departing Executives”) which led to their retirement or separation (as applicable) from the Company.

On May 4, 2018, the board of directors appointed Kenneth Mariani to serve as President and Chief Executive Officer of the Company, effective May 14, 2018,

On May 17, 2018, Mr. Scarff resigned from the board of directors of the Company. There were no disagreements between Mr. Scarff and the Company which led to Mr. Scarff’s resignation from the board of directors. Also on May 17, 2018, the board of directors appointed Mr. Mariani to serve as a director of the Company to fill the vacancy caused by Mr. Scarff’s resignation.

Subsequent Event. On July 25, 2018, Matthew J. Hoss tendered his resignation from his position as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018. There were no disagreements between Mr. Hoss and the Company which led to his separation from the Company.

On July 25, 2018, the board of directors appointed Denise DuBard to serve as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation

Our Unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and guidelines of the Securities and Exchange Commission (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 and make the information presented not misleading, 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 and reflect the application of Accounting Standards Codification 852 “Reorganizations” (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred in the bankruptcy proceedings are recorded in “reorganization items, net” on the Company’s Unaudited Condensed Statements of Consolidated Operations.

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

The Company adopted the new accounting pronouncement related to the presentation of statement of cash flows – restricted cash in the first quarter of 2018. See Note 2 for additional information. A retrospective change for the period from January 1, 2017 through May 4, 2017 on the Unaudited Condensed Statement of Consolidated Cash Flows as previously presented was required due to adoption. The table below sets forth the retrospective adjustment to the period from January 1, 2017 through May 4, 2017:

	Previously Reported Period from January 1, 2017 through May 4, 2017			Adjustment Effect		As Adjusted Period from January 1, 2017 through May 4, 2017
	(In thousands)
Changes in operating assets and liabilities:
Restricted cash	$	(7,561	)	$	7,561	$	—
Net cash provided by operating activities		117,937			7,561		125,498
Net change in cash and cash equivalents		4,767			7,561		12,328
Cash and cash equivalents, end of period		20,140			7,561		27,701

Comparability of Financial Statements to Prior Periods

We adopted and applied the relevant guidance provided in GAAP with respect to the accounting and financial statement disclosures for entities that have emerged from bankruptcy proceedings (“Fresh Start Accounting”), on May 4, 2017. Accordingly, our Unaudited Condensed Consolidated Financial Statements and Notes after May 4, 2017, are not comparable to the Unaudited Condensed Consolidated Financial Statements and Notes prior to that date. To facilitate our financial statement presentations, we refer to the reorganized company in these Unaudited Condensed Consolidated Financial Statements and Notes as the “Successor” for periods subsequent to May 4, 2017 and “Predecessor” for periods prior to May 5, 2017. Furthermore, our Unaudited Condensed Consolidated Financial Statements and Notes have been presented with a “black line” division to delineate the lack of comparability between the Predecessor and Successor.

Use of Estimates

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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

N ote 2. Summary of Significant Accounting Policies

A discussion of our significant accounting policies and estimates is included in our 2017 Form 10-K.

Reorganization Items, Net

The Company has incurred significant costs associated with the reorganization. Reorganization items, net, which are expensed as incurred, represent costs and income directly associated with the Chapter 11 proceedings since the Petition Date.

The following table summarizes the components of reorganization items, net included in the accompanying Unaudited Condensed Statements of Consolidated Operations (in thousands):

	Successor									Predecessor
							Period from			Period from			Period from
	For the Three			For the Six			May 5, 2017			April 1, 2017			January 1,
	Months Ended			Months Ended			through			through			2017 through
	June 30, 2018			June 30, 2018			June 30, 2017			May 4, 2017			May 4, 2017
Gain on settlement of liabilities subject to compromise	$	—		$	—		$	—		$	758,764		$	758,764
Fresh start valuation adjustments		—			—			—			(827,120	)		(827,120	)
Professional fees		(210	)		(625	)		(349	)		(12,239	)		(19,824	)
Other		(558	)		(661	)		—			(526	)		(594	)
Reorganization items, net	$	(768	)	$	(1,286	)	$	(349	)	$	(81,121	)	$	(88,774	)

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance regarding the accounting for revenue from contracts with customers. This standard includes a five-step revenue recognition model to depict the transfer of goods or services to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Among other things, the standard also eliminates industry-specific revenue guidance and requires enhanced disclosures related to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard was effective for the Company starting January 1, 2018, and the Company adopted the standard using a modified retrospective approach. See Note 3 for additional information.

New Accounting Pronouncements

Compensation—Stock Compensation. In May 2017, the FASB issued an accounting standards update to clarify and reduce both (i) diversity in practice and (ii) cost and complexity when applying its guidance in the terms and conditions of a share-based payment award. The new guidance is effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company adopted this guidance as of January 1, 2018, noting the impact of adopting this guidance was not material to the Company’s financial statements and related disclosures.

Statement of Cash Flows—Restricted Cash a consensus of the FASB Emerging Issues Task Force . In November 2016, the FASB issued an accounting standards update to clarify the guidance on the classification and presentation of restricted cash in the statement of cash flows. The changes in restricted cash and restricted cash equivalents that result from the transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the statement of cash flows. The new guidance is effective for reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. The new guidance requires transition under a retrospective approach for each period presented. We adopted this guidance and applied the disclosure requirements retrospectively to the Unaudited Condensed Statement of Consolidated Cash Flows.

Leases. In February 2016, the FASB issued a revision to lease accounting guidance. The FASB retained a dual model, requiring leases to be classified as either direct financing or operating leases. The classification will be based on criteria that are similar to the current lease accounting treatment. The revised guidance requires lessees to recognize a right-of-use asset and lease liability for all leasing transactions regardless of classification. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities as of the beginning of an interim or annual reporting period.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company is the lessee under various agreements for office space, com pressors, equipment, and surface rentals that are currently accounted for as operating leases. As a result, these new rules will increase reported assets and liabilities. The Company will not early adopt this standard. The Company will apply the revised le ase rules for our interim and annual reporting periods starting January 1, 2019 using a modified retrospective approach, including several optional practical expedients related to leases commenced before the effective date. The Company is currently evaluat ing the impact of these rules on its financial statements and has started the assessment process by evaluating the population of leases under the revised definition. The quantitative impacts of the new standard are dependent on the leases in place at the t ime of adoption. As a result, the evaluation of the effect of the new standards will extend over future periods.

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.

Note 3. Revenue

Revenue from contracts with customers

As discussed in Note 2, the Company adopted Accounting Standard Update (ASU) No. 2014-09, revenue from contracts with customers (ASC 606), on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity and did not materially change the Company's amount and timing of revenues. The Company applied the ASU only to contracts that were not completed as of January 1, 2018.

Although the adoption of ASC 606 did not have an impact on the Company’s net income or cash flows, it did result in the reclassification of fees incurred under certain gathering and gas processing agreements. Such reclassification led to an overall decrease in oil and natural gas sales with a corresponding decrease in gathering, processing and transportation as follows (in thousands):

	For the Three Months Ended
	June 30, 2018
	As Reported			Previous Revenue Recognition Method			Increase/ (Decrease)
	(in thousands)
Revenues:
Oil and natural gas sales	$	90,894		$	91,628		$	(734	)
Cost and expenses:
Gathering, processing and transportation		5,975			6,709		$	(734	)

Net income (loss)	$	(25,279	)	$	(25,279	)	$	—

	For the Six Months Ended
	June 30, 2018
	As Reported			Previous Revenue Recognition Method			Increase/ (Decrease)
	(in thousands)
Revenues:
Oil and natural gas sales	$	178,741		$	180,326		$	(1,585	)
Cost and expenses:
Gathering, processing and transportation		11,575			13,160		$	(1,585	)

Net income (loss)	$	(22,040	)	$	(22,040	)	$	—

The reclassification of certain fees between oil and natural gas sales and gathering, processing and transportation is the result of the Company’s assessment of the point in time at which its performance obligations under its commodity sales contracts are satisfied and control of the commodity is transferred to the customer. 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.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, 2018.

Disaggregation of Revenue

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

	For the Three Months Ended		For the Six Months Ended
	June 30, 2018		June 30, 2018
	(in thousands)
Revenues
Oil	$	58,540	$	113,267
NGLs		10,931		21,877
Natural gas		21,423		43,597
Oil and natural gas sales	$	90,894	$	178,741

Contract Balances

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 $32.8 million at June 30, 2018 and $30.1 million at December 31, 2017.

Transaction Price Allocated to Remaining Performance Obligations

For our contracts that have a contract term greater than one year, we have utilized the practical expedient in ASC 606, which states that a company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under our contracts, each unit of product delivered to the customer represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. For our contracts that have a contract term of one year or less, we have utilized the practical expedient in ASC 606, which states that a company is not required to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

N ote 4. Acquisitions and Divestitures

Acquisition and Divestiture Related Expenses

Acquisition and divestiture related expenses for both related party and third party transactions are included in general and administrative expense in the accompanying Unaudited Condensed Statements of Consolidated Operations for the periods indicated below (in thousands):

Successor

Predecessor

Period from

For the Three

For the Six

May 5, 2017

April 1, 2017

January 1, 2017

Months Ended

through

June 30, 2018

June 30, 2017

May 4, 2017

679

887

—

Acquisitions and Divestitures

There were no material acquisitions during the three or six months ended June 30, 2018.

On May 30, 2018, we closed a transaction to divest certain of our non-core assets located in South Texas (the “South Texas Divestiture”) for total proceeds of approximately $18.4 million, including estimated post-closing adjustments, which includes $18.6 million in cash and $0.2 million in accounts payable. We recorded a (gain) loss on sale of properties of approximately ($0.2) million and $2.1 million during the three and six months ended June 30, 2018, respectively, in “(gain) loss on sale of properties” in the accompanying Unaudited Condensed Statements of Consolidated Operations. The net proceeds from the sale were used to reduce outstanding borrowings under our Credit Facility (as defined below). This disposition did not qualify as a discontinued operation.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There were no materi al acquisitions or divestitures for the period from January 1, 2017 through May 4, 2017 or for the period from May 5, 2017 through June 30, 2017.

Note 5. Fair Value Measurements of Financial Instruments

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 of 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 June 30, 2018 and December 31, 2017. 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair market values of the derivative financial instruments reflected on the accompanying Unaudited Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 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 table presents the gross derivative assets and liabilities that are measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017 for each of the fair value hierarchy levels:

	Successor
	Fair Value Measurements at June 30, 2018 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	$	—	$	13,440	$	—	$	13,440

Liabilities:
Commodity derivatives	$	—	$	43,376	$	—	$	43,376

	Successor
	Fair Value Measurements at December 31, 2017 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	$	—	$	38,188	$	—	$	38,188

Liabilities:
Commodity derivatives	$	—	$	15,112	$	—	$	15,112

See Note 6 for additional information regarding our derivative instruments.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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:

•

The fair value of asset retirement obligations (“AROs”) is based on discounted cash flow projections using numerous estimates, assumptions and judgments regarding factors such as the existence of a legal obligation for an ARO; amounts and timing of settlements; the credit-adjusted risk-free rate; and inflation rates. See Note 7 for a summary of changes in AROs.

•

If sufficient market data is not available, the determination of the fair values of proved and unproved properties acquired in transactions accounted for as business combinations are prepared by utilizing estimates of discounted cash flow projections. The factors to determine fair value include, but are not limited to, estimates of: (i) economic reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital.

•

Proved oil and natural gas properties are reviewed for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying value of such properties. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, estimates of probable reserves, future commodity prices, the timing of future production and capital expenditures and a discount rate commensurate with the risk reflective of the lives remaining for the respective oil and natural gas properties.

•

Unproved oil and natural gas properties are reviewed for impairment based on time or geologic factors. Information such as drilling results, reservoir performance, seismic interpretation or future plans to develop acreage is also considered.

•

No impairments were recognized during the three or six months ended June 30, 2018, for the period from January 1, 2017 through May 4, 2017 or the period from May 5, 2017 through June 30, 2017.

Note 6. Risk Management and Derivative Instruments

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 the Credit Agreement 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. At June 30, 2018, after taking into effect netting arrangements, we had no counterparty exposure related to our derivative instruments. As a result, had all counterparties failed completely to perform according to the terms of the existing contracts, we would have had the right to offset $2.6 million against amounts outstanding under our Credit Facility (as defined below) at June 30, 2018. See Note 7 for additional information regarding our Credit Facility.

Commodity Derivatives

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

In January 2017, in connection with our restructuring efforts, we monetized $94.1 million in commodity hedges and used a portion of the proceeds to reduce the amounts outstanding under our Predecessor’s revolving credit facility and kept the remaining portion as cash on hand for general partnership purposes.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We enter into natural gas derivative contracts that are indexed to NYMEX-Henry Hub. We also enter into oil derivative contracts indexed to either NYMEX-WTI or ICE Brent. Our NGL derivative contracts are primarily indexed to OPIS Mont Belv ieu. At June 30, 2018, we had the following open commodity positions:

	Remaining
	2018		2019
Natural Gas Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (MMBtu)		1,802,000		1,250,000
Weighted-average fixed price	$	3.54	$	2.82

Crude Oil Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		205,000		186,000
Weighted-average fixed price	$	69.14	$	54.08

NGL Derivative Contracts:
Fixed price swap contracts:
Average monthly volume (Bbls)		86,800		72,000
Weighted-average fixed price	$	25.85	$	29.96

Balance Sheet Presentation

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 June 30, 2018 and December 31, 2017. 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 the Credit Agreement.

		Successor						Successor
		Asset Derivatives			Liability Derivatives			Asset Derivatives			Liability Derivatives
		June 30,			June 30,			December 31,			December 31,
Type	Balance Sheet Location	2018			2018			2017			2017
		(In thousands)
Commodity contracts		$	12,776		$	31,007		$	37,729		$	9,183
Gross fair value			12,776			31,007			37,729			9,183
Netting arrangements			(10,240	)		(10,240	)		(9,183	)		(9,183	)
Net recorded fair value	Short-term derivative instruments	$	2,536		$	20,767		$	28,546		$	—

Commodity contracts		$	664		$	12,369		$	459		$	5,929
Gross fair value			664			12,369			459			5,929
Netting arrangements			(591	)		(591	)		(459	)		(459	)
Net recorded fair value	Long-term derivative instruments	$	73		$	11,778		$	—		$	5,470

(Gains) Losses on Derivatives

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 Statements of Consolidated Operations. The following table details the gains and losses related to derivative instruments for the periods indicated (in thousands):

Successor

Predecessor

Period from

For the Three

For the Six

May 5, 2017

April 1, 2017

January 1, 2017

Months Ended

through

June 30, 2018

June 30, 2017

May 4, 2017

(Gain) loss on commodity derivatives

35,652

46,108

(1,915

)

(12,835

)

(23,076

)

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

N ote 7. Asset Retirement Obligations

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 six months ended June 30, 2018 (in thousands):

Asset retirement obligations at beginning of period (Successor)	$	100,173
Liabilities added from acquisition or drilling		89
Liabilities settled		(380	)
Liabilities removed upon sale of wells		(15,665	)
Accretion expense		3,147
Revision of estimates (1)		(13,286	)
Asset retirement obligation at end of period		74,078
Less: Current portion		(438	)
Asset retirement obligations - long-term portion (Successor)	$	73,640

(1)

The decrease in revision of estimates during the six months ended June 30, 2018 is primarily due to receiving new cost estimates from third parties regarding the estimated plugging and abandonment costs.

Note 8. Long-Term Debt

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

	Successor		Successor
	June 30,		December 31,
	2018		2017
	(In thousands)
$1.0 billion Credit Facility, variable-rate, due March 2021 (1)	$	314,000	$	376,000
Long-term debt	$	314,000	$	376,000

(1)	The carrying amount of our Credit Facility approximates fair value because the interest rates are variable and reflective of market rates.

OLLC Revolving Credit Facility

Amplify Energy Operating LLC, our wholly owned subsidiary, is a party to a $1.0 billion revolving credit facility (our “Credit Facility”) which is guaranteed by us and all of our current subsidiaries.

Our borrowing base is subject to redetermination on at least a semi-annual basis primarily based on a reserve engineering report with respect 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 the impact of our commodity derivative contracts.

On May 15, 2018, we entered into the Second Amendment to the Amended and Restated Credit Agreement, dated as of May 4, 2017 (the “Credit Agreement”), to among other things, (i) reflect the reduction of the borrowing base under the Credit Agreement from $435.0 million to $430.0 million, effective as of May 15, 2018, with the borrowing base to be further reduced by $15.0 million upon the consummation of the South Texas Divestiture and by $5.0 million each month until the next scheduled redetermination of the borrowing base to occur on or about October 1, 2018; and (ii) amend the minimum hedging requirement to disregard the reasonably anticipated production of hydrocarbons from the assets to be sold in the South Texas Divestiture.

The borrowing base as of June 30, 2018 was $410.0 million.

Predecessor’s Revolving Credit Facility

Our Predecessor was a party to a $2.0 billion revolving credit facility, which was guaranteed by us and all of our current and future subsidiaries (other than certain immaterial subsidiaries).

On the Effective Date of the Plan, the holders of claims under the Predecessor’s revolving credit facility received a full recovery, which included a $24.8 million pay down and their pro rata share of our Credit Facility.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Weighted-Average Interest Rates

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

Successor

Predecessor

Period from

For the Three

For the Six

May 5, 2017

April 1, 2017

January 1, 2017

Months Ended

through

June 30, 2018

June 30, 2017

May 4, 2017

Credit Facility

5.80%

5.64%

4.91%

n/a

Predecessor's revolving credit facility

n/a

3.80%

4.18%

Letters of Credit

At June 30, 2018, we had $2.4 million of letters of credit outstanding, primarily related to operations at our Wyoming properties.

Unamortized Deferred Financing Costs

Unamortized deferred financing costs associated with our Credit Facility was $5.4 million at June 30, 2018. The unamortized deferred financing costs are amortized over the remaining life of our Credit Facility.

Note 9. Equity (Deficit)

Common Stock

The Company’s authorized capital stock includes 300,000,000 shares of common stock, $0.0001 par value per share. The following is a summary of the changes in our common stock issued for the six months ended June 30, 2018:

	Common
	Shares
Balance, December 31, 2017 (Successor)		25,000,000
Issuance of common stock		—
Restricted stock units vested		124,137
Repurchase of common shares		(51,281	)
Balance, June 30, 2018 (Successor)		25,072,856

Warrants

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

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

N ote 10. Earnings per Share/Unit

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

	Successor									Predecessor
							Period from			Period from			Period from
	For the Three			For the Six			May 5, 2017			April 1, 2017			January 1,
	Months Ended			Months Ended			through			through			2017 through
	June 30, 2018			June 30, 2018			June 30, 2017			May 4, 2017			May 4, 2017
Net income (loss) attributable to Successor/Predecessor	$	(25,279	)	$	(22,040	)	$	(906	)	$	(74,578	)	$	(90,955	)
Less: Net income allocated to participating restricted stockholders		—			—			—			—			—
Basic and diluted earnings available to common stockholders/limited partners	$	(25,279	)	$	(22,040	)	$	(906	)	$	(74,578	)	$	(90,955	)

Common shares/units:
Common shares/units outstanding — basic		25,038			25,019			25,000			83,800			83,807
Dilutive effect of potential common shares/units		—			—			—			—			—
Common shares/units outstanding — diluted		25,038			25,019			25,000			83,800			83,807

Net earnings per share/unit:
Basic	$	(1.01	)	$	(0.88	)	$	(0.04	)	$	(0.89	)	$	(1.09	)
Diluted	$	(1.01	)	$	(0.88	)	$	(0.04	)	$	(0.89	)	$	(1.09	)
Antidilutive stock options (1)		135			135			516			—			—
Antidilutive warrants (2)		2,174			2,174			2,174			—			—

(1)

Amount represents options to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect.

(2)

Amount represents warrants to purchase common stock that are excluded from the diluted net earnings per share calculations because of their antidilutive effect.

Note 11. Long-Term Incentive Plans

On the Effective Date in connection with the Plan, the Company implemented the MIP for selected employees of the Company or its subsidiaries. An aggregate of 2,322,404 shares of the Company’s common stock were reserved for issuance under the MIP. MIP awards are granted in the form of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards, stock awards and other incentive awards. To the extent that an award under the MIP is expired, forfeited or cancelled for any reason without having been exercised in full, the unexercised award would then be available again for grant under the MIP. The MIP is administered by the board of directors of the Company.

Restricted Stock Units

Restricted Stock Units with Service Vesting Condition

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 $4.4 million at June 30, 2018. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.3 years.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

				Weighted-
				Average Grant
	Number of			Date Fair Value
	Units			per Unit (1)
TSUs outstanding at December 31, 2017 (Successor)		682,792		$	13.54
Granted (2)		156,500		$	10.86
Forfeited (3)		(327,473	)	$	13.70
Vested		(118,692	)	$	13.77
TSUs outstanding at June 30, 2018 (Successor)		393,127		$	12.27

(1)

Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)

The aggregate grant date fair value of TSUs issued for the six months ended June 30, 2018 was $1.7 million based on a grant date market price ranging from $10.30 to $11.00 per share.

(3)

In connection with the separation and retirement agreements of certain executives as discussed in Note 1, the Departing Executives forfeited 298,354 TSUs during the three months ended June 30, 2018.

Restricted Stock Units with Market and Service Vesting Conditions

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 $0.8 million at June 30, 2018. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 1.4 years.

On June 1, 2018, the board of directors granted PSUs to certain executives of the Company. 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 assumptions used to estimate the fair value of the PSUs are as follows:

	Awards Issued on May 14, 2018
Share price targets	$	12.50		$	15.00		$	17.50
Risk-free interest rate		2.68	%		2.68	%		2.68	%
Dividend yield		—			—			—
Expected volatility		50.0	%		50.0	%		50.0	%
Calculated fair value per PSU	$	9.71		$	8.52		$	7.48

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

			Weighted-
			Average Grant
	Number of		Date Fair Value
	Units		per Unit (1)
PSUs outstanding at December 31, 2017 (Successor)		—	$	—
Granted (2)		125,000	$	8.57
Forfeited		—	$	—
Vested		—	$	—
PSUs outstanding at June 30, 2018 (Successor)		125,000	$	8.57

(1)

Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)

The aggregate grant date fair value of PSUs issued for the six months ended June 30, 2018 was $1.1 million based on a calculated fair value price ranging from $7.48 to $9.71 per share.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Options

The restricted stock options granted 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 option awards was $0.6 million at June 30, 2018. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 1.9 years.

No restricted stock options were granted during the three or six months ended June 30, 2018.

The following table summarizes information regarding the restricted stock option awards granted under the MIP for the period presented:

				Weighted-
				Average Grant
	Number of			Date Fair Value
	Options			per Option (1)
Restricted stock options outstanding at December 31, 2017 (Successor)		517,398		$	5.01
Granted		—		$	—
Forfeited		(17,126	)	$	5.01
Vested		(365,654	)	$	5.01
Restricted stock options outstanding at June 30, 2018 (Successor)		134,618		$	5.01

(1)

Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

Stock Option Modification

On April 27, 2018, in connection with the separation and retirement of certain executives as discussed in Note 1, the board of directors of the Company approved the acceleration of the vesting schedule for 298,354 unvested restricted stock option awards with an exercisable period of two years that otherwise would have been forfeited upon an involuntary termination.

The acceleration of the restricted stock options vesting schedule represents an improbable to probable modification. The grant-date fair value compensation cost of approximately $0.5 million was reversed and the modified-date grant fair value compensation cost of $0.3 million was recognized.

The modified-date grant fair value was estimated using the Black-Scholes option pricing model using the following assumptions:

	Awards Issued in
	Successor Period
Risk-free interest rate		2.49	%
Dividend yield		—
Expected life (in years)		2.0
Expected volatility		50.0	%
Strike Price	$	21.58
Calculated fair value per stock option	$	0.85

2017 Non-Employee Directors Compensation Plan

In June 2017, in connection with the Plan, the Company implemented the 2017 Non-Employee Directors Compensation Plan (“Directors Compensation Plan”) to attract and retain services of experienced non-employee directors of the Company or its subsidiaries. An aggregate of 200,000 shares of the Company’s common stock are reserved for issuance under the Directors Compensation Plan.

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 $0.4 million at June 30, 2018. We expect to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.5 years.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes informati on regarding the Board RSUs granted under the Directors Compensation Plan for the period presented:

				Weighted-
				Average Grant
	Number of			Date Fair Value
	Units			per Unit (1)
Board RSUs outstanding at December 31, 2017 (Successor)		16,341		$	13.77
Granted		28,708		$	10.45
Forfeited		—		$	—
Vested		(5,445	)	$	13.77
Board RSUs outstanding at June 30, 2018 (Successor)		39,604		$	11.36

(1)

Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.

(2)

The aggregate grant date fair value of Board RSUs issued for the six months ended June 30, 2018 was $0.3 million based on a grant date market price of $10.45.

Compensation Expense

The following table summarizes the amount of recognized compensation expense associated with the MIP, Directors Compensation Plan and Memorial Production Partners GP LLC Long Term Incentive Plan awards, which are reflected in the accompanying Unaudited Condensed Statements of Consolidated Operations for the periods presented (in thousands):

	Successor							Predecessor
						Period from		Period from			Period from
	For the Three			For the Six		May 5, 2017		April 1, 2017			January 1, 2017
	Months Ended			Months Ended		through		through			through
	June 30, 2018			June 30, 2018		June 30, 2017		May 4, 2017			May 4, 2017
Equity classified awards
TSUs (Successor)	$	(837	)	$	111	$	422	$	—		$	—
PSUs (Successor)		251			251		—		—			—
Board RSUs (Successor)		35			54		4		—			—
Restricted stock options (Successor)		(134	)		75		101		—			—
Restricted common units (Predecessor)		—			—		—		2,644			3,713
Liability classified awards
Phantom units (Predecessor)		—			—		—		(102	)		(46	)
	$	(685	)	$	491	$	527	$	2,542		$	3,667

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

Accrued Liabilities

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

	Successor		Successor
	June 30,		December 31,
	2018		2017
Accrued general and administrative expense	$	8,477	$	4,412
Accrued lease operating expense		7,923		6,439
Accrued capital expenditures		4,226		3,854
Accrued exploration expense		2,888		—
Accrued ad valorem tax		1,436		398
Asset retirement obligations		438		713
Accrued interest payable		105		1,309
Other		—		1,108
Accrued liabilities	$	25,493	$	18,233

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash and Cash Equivalents Reconciliation

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):

	Successor		Successor
	June 30,		December 31,
	2018		2017
Cash and cash equivalents	$	7,586	$	6,392
Restricted cash		325		—
Total cash, cash equivalents and restricted cash	$	7,911	$	6,392

Supplemental Cash Flows

Supplemental cash flows for the periods presented (in thousands):

	Successor					Predecessor
	For The			Period from		Period from
	Six Months			May 5, 2017		January 1, 2017
	Ended			through		through
	June 30, 2018			June 30, 2017		May 4, 2017
Supplemental cash flows:
Cash paid for interest, net of amounts capitalized	$	10,815		$	1,752	$	6,598
Cash paid for reorganization items, net		1,522			412		11,999
Noncash investing and financing activities:
Increase (decrease) in capital expenditures in payables and accrued liabilities		(446	)		5,288		3,173
(Increase) decrease in accounts receivable/payable related to divestiture		(206	)		—		—

Note 13. Related Party Transactions

Related Party Agreements

There have been no transactions in excess of $120,000 between us and a related person in which the related person had a direct or indirect material interest for the three or six months ended June 30, 2018, for the period from January 1, 2017 through May 4, 2017, or the period from May 5, 2017 through June 30, 2017.

Note 14. Commitments and Contingencies

Litigation and Environmental

As part of our normal business activities, we may be named as defendants in litigation and legal proceedings, including those arising from regulatory and environmental matters. On January 13, 2017, the Company received a letter from the Environmental Protection Agency (“EPA”) concerning potential violations of the Clean Air Act (“CAA”) section 112(r) associated with our Bairoil complex in Wyoming. The Company met with the EPA on February 16, 2017 to present relevant information related to the allegations. On September 12, 2017, the EPA filed an Administrative Compliance Order on Consent for which the Company must bring all outstanding issues to closure no later than June 30, 2018. On June 14, 2018, we sent the EPA a letter informing the EPA that we had completed all remedial action items related to the Administrative Compliance Order on Consent. We currently cannot estimate the potential penalties, fines or other expenditures, if any, that may result from any EPA actions relating to the alleged violations and, therefore, we cannot determine if the ultimate outcome of this matter will have a material impact on the Company’s financial position, results of operations or cash flows. Other than the Chapter 11 proceedings and the alleged CAA violations discussed herein, based on facts currently available, 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 June 30, 2018 and December 31, 2017, we had no environmental reserves recorded on our Unaudited Condensed Consolidated Balance Sheet.

AMPLIFY ENERGY CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Application for Final Decree

On April 30, 2018, the Debtors filed with the Bankruptcy Court a motion for a final decree and entry of an order closing the chapter 11 cases with respect to each of the Debtors other than (i) San Pedro Bay Pipeline Company, Ch. 11 Case No. 17-30249, (ii) Rise Energy Beta, LLC, Ch. 11 Case No. 17-30250, and (iii) Beta Operating Company, LLC, Ch. 11 Case No. 17-30253, (collectively, the “Closing Debtors”). On May 30, 2018, the court entered the final decree closing the chapter 11 cases of the Closing Debtors.

Supplemental Bond for Decommissioning Liabilities Trust Agreement

Beta Operating Company, LLC, has an obligation with the BOEM in connection with its 2009 acquisition of our properties in offshore California. The trust account had the required minimum balance of $152.0 million at June 30, 2018 and December 31, 2017 and is fully cash funded. The held-to-maturity investments held in the trust account at June 30, 2018 for the U.S. Bank money market cash equivalent was $152.4 million.

In 2015, the Bureau of Safety and Environmental Enforcement issued a preliminary report that indicated the estimated costs of decommissioning may further increase. The implementation of this increase is currently on hold and we do not expect resolution of a negotiated decommissioning estimate until the second half of 2018.

Note 15. Income Taxes

Effective May 5, 2017, pursuant to the Plan, the Successor became a corporation subject to federal and state income taxes. Prior to the Plan being effective, the Predecessor was a limited partnership and organized as a pass-through entity for federal and most state income tax purposes. As a result, our Predecessor limited partners were responsible for federal and state income taxes on their share of our taxable income. Certain of our consolidated subsidiaries were taxed as corporations for federal and state income tax purposes, which resulted in deferred taxes. We were also subject to the Texas margin tax for partnership activity in the state of Texas.

The Company had no income tax benefit/(expense) for the three and six months ended June 30, 2018, and an income tax benefit of $0.6 million for the period from May 5, 2017 through June 30, 2017 and $0.1 million for the period from January 1, 2017 through May 4, 2017. The Company’s effective tax rate was 0.0% for the three and six months ended June 30, 2018, 39.5% for the period from May 5, 2017 through June 30, 2017 and 0.1% for the period from January 1, 2017 through May 4, 2017. The effective tax rates for the three and six months ended June 30, 2018 are different from the statutory U.S. federal income tax rate primarily due to our existing valuation allowances. The effective tax rate for the period from May 5, 2017 through June 30, 2017 is different from the statutory U.S. federal income tax rate due to the impact of state taxes, disallowed expenses, and changes in the rate applied to historic deferred balances.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The provisions of the Tax Act that impact us include, but are not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) temporary bonus depreciation that will allow for full expensing of qualified property, (3) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80 percent of taxable income, and (4) elimination of certain business deductions and credits, including the deduction for entertainment expenditures. In conjunction with the Tax Act, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We have reported provisional amounts for the income tax effects of the Tax Act for which the accounting is incomplete but a reasonable estimate could be determined. As of June 30, 2018, we have not changed the provisional amounts recorded in 2017. Based on a continued analysis of the estimates, revisions may occur during the allowable measurement period.

Note 16. Subsequent Events

Management Changes

On July 25, 2018, Matthew J. Hoss tendered his resignation from his position as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018. There were no disagreements between Mr. Hoss and the Company which led to his separation from the Company.

On July 25, 2018, the board of directors appointed Denise DuBard to serve as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018.

ITEM 2. M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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 our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 12, 2018 (“2017 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.

References

When referring to Amplify Energy Corp. (also referred to as “Successor,” “Amplify Energy,” or the “Company”), the intent is to refer to Amplify Energy, a Delaware corporation, and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made. Amplify Energy is the successor reporting company of Memorial Production Partners LP (“MEMP”) pursuant to Rule 15d-5 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When referring to the “Predecessor” or the “Company” in reference to the period prior to the emergence from bankruptcy, the intent is to refer to MEMP, the predecessor that was dissolved following the effective date of the Second Amended Joint Plan of Reorganization of Memorial Production Partners LP and its affiliated Debtors, dated April 13, 2017, and MEMP’s consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made.

Overview

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 Amplify Energy Operating LLC (“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 Texas, Louisiana, Wyoming and offshore California. 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, 2017:

•

Our total estimated proved reserves were approximately 989.7 Bcfe, of which approximately 44% were oil and 71% were classified as proved developed reserves;

•

We produced from 2,547 gross (1,498 net) producing wells across our properties, with an average working interest of 59% and the Company is the operator of record of the properties containing 93% of our total estimated proved reserves; and

•

Our average net production for the three months ended December 31, 2017 was 184.3 MMcfe/d, implying a reserve-to-production ratio of approximately 15 years.

Recent Developments

South Texas Divestiture

In May 2018, we closed a transaction to divest certain of our non-core assets located in South Texas (“South Texas Divestiture”) for total proceeds of approximately $18.4 million, including estimated post-closing adjustments, which include $18.6 million in cash and $0.2 million in accounts payable. The proceeds from the sale were used to reduce outstanding borrowings under our Credit Facility. See Note 4 of the Notes to Unaudited Condensed Consolidated Financial Statements included under Part I, “Item 1. Financial Statements” for additional information.

Management and Board Changes

On April 27, 2018, the board of directors appointed Martyn Willsher to serve as our Senior Vice President and Chief Financial Officer of the Company, effective April 27, 2018.

On May 1, 2018, we announced the retirement of William J. Scarff, the Company’s President and Chief Executive Officer, which retirement became effective May 14, 2018. Also on May 1, 2018, we announced the departure of Christopher S. Cooper, our Senior Vice President and Chief Operating Officer, and Robert L. Stillwell, Jr., our Senior Vice President and Chief Financial Officer, from their respective positions with the Company, effective April 27, 2018. There were no disagreements between us and any of Messrs. Scarff, Cooper or Stillwell (collectively, the “Departing Executives”) which led to their retirement or separation (as applicable) from the Company.

On May 4, 2018, the board of directors appointed Kenneth Mariani to serve as our President and Chief Executive Officer of the Company, effective May 14, 2018.

On May 17, 2018, Mr. Scarff resigned from the board of directors of the Company. There were no d isagreements between us and Mr. Scarff which led to Mr. Scarff’s resignation from the board of directors. Also on May 17, 2018, the board of directors appointed Mr. Mariani to serve as a director of the Company to fill the vacancy caused by Mr. Scarff’s re signation.

On July 25, 2018, Matthew J. Hoss tendered his resignation from his position as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018. There were no disagreements between us and Mr. Hoss which led to his separation from the Company.

On July 25, 2018, the board of directors appointed Denise DuBard to serve as Vice President and Chief Accounting Officer of the Company, effective August 9, 2018.

Predecessor and Successor Reporting

As a result of the application of fresh start accounting, the Company’s Unaudited Condensed Consolidated Financial Statements and certain note presentations are separated into two distinct periods, the period before and through May 4, 2017 (the “Effective Date”) (labeled Predecessor) and the period after that date (labeled Successor), to indicate the application of different basis of accounting between the periods presented. Despite this separate presentation, there was continuity of the Company’s operations.

Business Environment and Operational Focus

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 (defined below).

Sources of Revenues

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.

Principal Components of Cost Structure

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Lease operating expense. These are the day-to-day costs incurred to maintain production of our natural gas, NGLs and oil. Such costs include utilities, direct labor, water injection and disposal, the cost of CO ₂ injection, chemicals, materials and supplies, compression, repairs and workover expenses. Cost levels for these expenses can vary based on supply and demand for oilfield services and activities performed during a specific period.

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Gathering, processing and transportation. These are costs incurred to deliver production of our natural gas, NGLs and oil to the market. Cost levels of these expenses can vary based on the volume of natural gas, NGLs and oil production.

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Exploration expense . These are geological and geophysical costs and include seismic costs, costs of unsuccessful exploratory dry holes and unsuccessful leasing efforts. Exploration expense also includes rig contract termination fees.

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Taxes other than income . These consist of production, ad valorem and franchise taxes. Production taxes are paid on produced natural gas, NGLs and oil based on a percentage of market prices and at fixed per unit rates established by state or local taxing authorities. We take advantage of credits and exemptions in the various taxing jurisdictions where we operate. Ad valorem taxes are generally tied to the valuation of the oil and natural gas properties. Franchise taxes are privilege taxes levied by states that are imposed on companies, including limited liability companies and partnerships, which give the businesses the right to be chartered or operate within that state.

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Depreciation, depletion and amortization . Depreciation, depletion and amortization, or DD&A, includes the systematic expensing of the capitalized costs incurred to acquire, exploit and develop oil and natural gas properties. As a “successful efforts” company, all costs associated with acquisition and development efforts and all successful exploration efforts are capitalized, and these costs are depleted using the units of production method.

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Impairment of proved properties . Proved properties are impaired whenever the carrying value of the properties exceeds their estimated undiscounted future cash flows.

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General and administrative expense . These costs include overhead, including payroll and benefits for employees, costs of maintaining headquarters, costs of managing production and development operations, compensation expense associated with certain long-term incentive-based plans, audit and other professional fees and legal compli ance expenses.

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Accretion expense. Accretion expense is recognized over time as the discounted liabilities are accreted to their expected settlement value.

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Interest expense . We finance a portion of our working capital requirements, capital development and acquisitions with borrowings under our Credit Facility and our Predecessor’s revolving credit facility. As a result, we incur substantial interest expense that is affected by both fluctuations in interest rates and financing decisions. We expect to continue to incur significant interest expense.

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Income tax expense . We are a corporation subject to federal and certain state income taxes. Our Predecessor was organized as a pass-through entity for federal and most state income tax purposes. During the period from January 1, 2017 through May 4, 2017, certain of our consolidated subsidiaries were taxed as corporations for federal and state income tax purposes. We are also subject to the Texas margin tax for activity in the State of Texas.

Critical Accounting Policies and Estimates

A discussion of our critical accounting policies and estimates is included in our 2017 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.

Results of Operations

The results of operations for the three and six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017, the period from April 1, 2017 through May 4, 2017 and the period from January 1, 2017 through May 4, 2017 have been derived from our consolidated financial statements.

The following table summarizes cert ain of the results of operations for the periods indicated.

	Successor						Predecessor
				Period from			Period from
	For the Three			May 5, 2017			April 1, 2017
	Months Ended			through			through
	June 30, 2018			June 30, 2017			May 4, 2017
	($ In thousands)						($ In thousands)
Oil and natural gas sales	$	90,894		$	42,228		$	27,686
Lease operating expense		27,500			18,842			9,582
Gathering, processing and transportation		5,975			4,114			2,737
Exploration expense		2,988			7			5
Taxes other than income		5,535			1,933			921
Depreciation, depletion and amortization		13,619			8,351			9,835
General and administrative expense		16,863			7,382			8,236
Accretion of asset retirement obligations		1,429			1,027			912
(Gain) loss on commodity derivative instruments		35,652			(1,915	)		(12,835	)
(Gain) loss on sale of properties		(227	)		—			—
Interest expense, net		(6,287	)		(3,797	)		(1,843	)
Reorganization items, net		(768	)		(349	)		(81,121	)
Income tax benefit (expense)		—			592			—
Net income (loss)		(25,279	)		(906	)		(74,578	)

Oil and natural gas revenue:
Oil sales	$	58,540		$	22,070		$	14,466
NGL sales		10,931			4,112			3,495
Natural gas sales		21,423			16,046			9,725
Total oil and natural gas revenue	$	90,894		$	42,228		$	27,686

Production volumes:
Oil (MBbls)		892			525			315
NGLs (MBbls)		391			219			160
Natural gas (MMcf)		7,665			5,092			3,173
Total (MMcfe)		15,369			9,576			6,025
Average net production (MMcfe/d)		168.9			168.0			177.2

Average sales price:
Oil (per Bbl)	$	65.57		$	41.93		$	45.81
NGL (per Bbl)		27.95			18.60			21.90
Natural gas (per Mcf)		2.79			3.15			3.06
Total (per Mcfe)	$	5.91		$	4.41		$	4.59

Average unit costs per Mcfe:
Lease operating expense	$	1.79		$	1.97		$	1.59
Gathering, processing and transportation		0.39			0.43			0.45
Taxes other than income		0.36			0.20			0.15
General and administrative expense		1.10			0.77			1.37
Depletion, depreciation and amortization		0.89			0.87			1.63

	Successor						Predecessor
				Period from			Period from
	For the Six			May 5, 2017			January 1, 2017
	Months Ended			through			through
	June 30, 2018			June 30, 2017			May 4, 2017
	($ In thousands)						($ In thousands)
Oil and natural gas sales	$	178,741		$	42,228		$	108,970
Lease operating expense		57,070			18,842			35,568
Gathering, processing and transportation		11,575			4,114			10,772
Exploration expense		3,022			7			21
Taxes other than income		10,572			1,933			5,187
Depreciation, depletion and amortization		26,577			8,351			37,717
General and administrative expense		27,520			7,382			31,606
Accretion of asset retirement obligations		3,147			1,027			3,407
(Gain) loss on commodity derivative instruments		46,108			(1,915	)		(23,076	)
(Gain) loss on sale of properties		2,146			—			—
Interest expense, net		(12,059	)		(3,797	)		(10,243	)
Reorganization items, net		(1,286	)		(349	)		(88,774	)
Income tax benefit (expense)		—			592			91
Net income (loss)		(22,040	)		(906	)		(90,955	)

Oil and natural gas revenue:
Oil sales	$	113,267		$	22,070		$	55,767
NGL sales		21,877			4,112			14,103
Natural gas sales		43,597			16,046			39,100
Total oil and natural gas revenue	$	178,741		$	42,228		$	108,970

Production volumes:
Oil (MBbls)		1,795			525			1,204
NGLs (MBbls)		803			219			616
Natural gas (MMcf)		15,441			5,092			12,411
Total (MMcfe)		31,029			9,576			23,336
Average net production (MMcfe/d)		171.4			168.0			188.2

Average sales price:
Oil (per Bbl)	$	63.10		$	41.93		$	46.28
NGL (per Bbl)		27.24			18.60			22.90
Natural gas (per Mcf)		2.82			3.15			3.15
Total (per Mcfe)	$	5.76		$	4.41		$	4.67

Average unit costs per Mcfe:
Lease operating expense	$	1.84		$	1.97		$	1.52
Gathering, processing and transportation		0.37			0.43			0.46
Taxes other than income		0.34			0.20			0.22
General and administrative expense		0.89			0.77			1.35
Depletion, depreciation and amortization		0.86			0.87			1.62

For the Three Months Ended June 30, 2018, for the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017

Net losses of $25.3 million, $0.9 million and $74.6 million were recorded for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017, and the period from April 1, 2017 through May 4, 2017, respectively.

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Oil, natural gas and NGL revenues were $90.9 million, $42.2 million and $27.7 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. Average net production volumes were approximately 168.9 MMcfe/d, 168.0 MMcfe/d and 177.2 MMcfe/d for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The change in production volumes was primarily due to the natural decline of wells, decreased drilling activity and the South Texas Divestiture. The average realized sales price was $5.91 per Mcfe, $4.41 per Mcfe and $4.59 per Mcfe for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The increase was primarily due to increases in realized prices for oil and NGLs.

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Lease operating expense was $27.5 million, $18.8 million and $9.6 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017 , respectively. On a per Mcfe basis, lease operating expense was $1.79, $1.97 and $1.59 for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively.

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Gathering, processing and transportation was $6.0 million, $4.1 million and $2.7 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The change in gathering, processing and transportation was primarily the result of lower production and the impact of the new accounting standard related to revenue from contracts with customers adopted on January 1, 2018. On a per Mcfe basis, gathering, processing and transportation were $0.39, $0.43 and $0.45 for each of the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively.

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Exploration expense was $3.0 million for the three months ended June 30, 2018 and less than $0.1 million for the periods from May 5, 2017 through June 30, 2017 and from January 1, 2017 through May 4, 2017. The change in exploration expense was primarily due to a $2.9 million expense associated with the early termination of a rig contract in East Texas.

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Taxes other than income were $5.5 million, $1.9 million and $0.9 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. On a per Mcfe basis, taxes other than income were $0.36, $0.20 and $0.15 for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The change in taxes other than income on a per Mcfe basis was primarily due to an increase in commodity price.

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DD&A expense was $13.6 million, $8.4 million and $9.8 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The change in DD&A expense was primarily due to lower rates as a result of the application of fresh start accounting, a decrease in production volumes and the South Texas Divestiture, which closed on May 30, 2018 and which assets were accounted for as assets held for sale for the period from March 31, 2018 through the closing date.

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General and administrative expense was $16.9 million, $7.4 million and $8.2 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. General and administrative expense includes $7.7 million in severance payments to the Departing Executives during the three months ended June 30, 2018. Non-cash share/unit-based compensation expense was $0.3 million, $0.5 million and $2.5 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The three-month period ended June 30, 2018, includes a $1.7 million reduction in non-cash share/unit-based compensation related to the impact of management separation and retirement agreements for the Departing Executives, TSUs and restricted stock options. The period from April 1, 2017 through May 4, 2017 includes $2.3 million of non-cash share/unit-based compensation related to the cancellation of the Predecessor’s restricted common units.

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Net losses on commodity derivative instruments of $35.7 million were recognized for the three months ended June 30, 2018, consisting of $2.0 million of cash settlement receipts on expired positions offset by a $37.7 million decrease in the fair value of open positions. Net gains on commodity derivative instruments of $1.9 million were recognized for the period from May 5, 2017 through June 30, 2017, consisting of $8.3 million of cash settlement receipts on expired positions and partially offset by a $6.4 million decrease in the fair value of open positions. Net gains on commodity derivative instruments of $12.8 million were recognized for the period from April 1, 2017 through May 4, 2017, consisting of $5.1 million of cash settlement receipts on expired positions and a $7.8 million increase in the fair value of open positions.

Given the volatility of commodity prices, it is not possible to predict future reported mark-to-market net gains or losses and the actual net gains or losses that will ultimately be realized upon settlement of the hedge positions in future years. If commodity prices at settlement are lower than the prices of the hedge positions, the hedges are expected to partially mitigate the otherwise negative effect on earnings of lower oil, natural gas and NGL prices. However, if commodity prices at settlement are higher than the prices of the hedge positions, the hedges are expected to dampen the otherwise positive effect on earnings of higher oil, natural gas and NGL prices and will, in this context, be viewed as having resulted in an opportunity cost.

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Interest expense, net was $6.3 million, $3.8 million and $1.8 million for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. The Company recognized $1.2 million and $0.3 million in amortization and write-off of deferred financing costs for the three months ended June 30, 2018 and for the period from May 5, 2017 through June 30, 2017, respectively. No amortization of deferred financing costs was recorded for the period from April 1, 2017 through May 4, 2017, as the unamortized amount of deferred financing costs was written off in the fourth quarter of 2016.

Average outstanding borrowings under our Credit Facility were $334.2 million for the three months ended June 30, 2018. Average outstanding borrowings under our Credit Faci lity were $424.7 million for the period from May 5, 2017 through June 30, 2017. Average outstanding borrowings under our Predecessor’s revolving credit facility were $454.1 million for the period from April 1, 2017 through May 4, 2017. We had an average of $1.1 billion aggregate principal amount of the Notes issued and outstanding for the period from April 1, 2017 through May 4, 2017. The Notes were cancelled on the Effective Date.

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The Company has incurred significant costs associated with the reorganization. Reorganization items, net represents costs and income directly associated with the Company’s Chapter 11 proceedings since January 16, 2017, the petition date, such as the gain on settlement of liabilities subject to compromise, fresh start valuation adjustments, and advisor and professional fees. The Company incurred $0.8 million, $0.3 million and $81.1 million of reorganization items, net for the three months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from April 1, 2017 through May 4, 2017, respectively. See Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements under “Item.1 Financial Statements” of this quarterly report for additional information.

For the six months ended June 30, 2018, for the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017

Net losses of $22.0 million, $0.9 million and $91.0 million were recorded for the six months ended June 30, 2018, for the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively.

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Oil, natural gas and NGL revenues were $178.7 million, $42.2 million and $109.0 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. Average net production volumes were approximately 171.4 MMcfe/d, 168.0 MMcfe/d and 188.2 MMcfe/d for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in production volumes was due to natural decline of wells, decreased drilling activities and the South Texas Divestiture. The average realized sales price was $5.76 per Mcfe, $4.41 per Mcfe and $4.67 per Mcfe for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in the average realized sales price was primarily due to increases in realized prices for oil and NGLs.

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Lease operating expense was $57.1 million, $18.8 million and $35.6 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. On a per Mcfe basis, lease operating expense was $1.84, $1.97 and $1.52 for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in lease operating expense on a per Mcfe basis was primarily related to lower production.

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Gathering, processing and transportation expenses were $11.6 million, $4.1 million and $10.8 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in gathering, processing and transportation was primarily the result of lower production and the impact of the new accounting standard related to revenue from contracts with customers adopted on January 1, 2018. On a per Mcfe basis, gathering, processing and transportation expenses were $0.37, $0.43 and $0.46 for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively.

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Exploration expense was $3.0 million for the six months ended June 30, 2018 and less than $0.1 million for the periods from May 5, 2017 through June 30, 2017 and from January 1, 2017 through May 4, 2017. The change in exploration expense was primarily due to a $2.9 million expense associated with the early termination of a rig contract in East Texas.

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Taxes other than income was $10.6 million, $1.9 million and $5.2 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. On a per Mcfe basis, taxes other than income were $0.34, $0.20 and $0.22 for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in taxes other than income on a per Mcfe basis was primarily due to an increase in commodity prices.

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DD&A expense was $26.6 million, $8.4 million and $37.7 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in DD&A expense was primarily due to lower rates as a result of the application of fresh start accounting, a decrease in production volumes and the South Texas Divestiture, which closed on May 30, 2018 and which assets were accounted for as held for sale for the period from March 31, 2018 through the closing date.

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General and administrative expense was $27.5 million, $7.4 million and $31.6 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. General and administrative expense includes $7.7 million in severance payments to the Departing Ex ecutives during the six months ended June 30, 2018. Non-cash share/unit-based compensation expense was $1.5 million, $0.5 million and $3.7 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The six-month period ended June 30, 2018, includes a $1.7 million reduction in non-cash share/unit-based compensation expense related to the impact of management separation and retirement agreements for t he Departing Executives, TSUs and restricted stock options. The period from January 1, 2017 through May 4, 2017 includes $2.3 million of non-cash share/unit-based compensation expense related to the cancellation of the Predecessor’s restricted common units . Additionally, the Company recorded $7.5 million in prepetition restructuring-related costs primarily for advisory and professional fees for the period from January 1, 2017 through May 4, 2017.

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Net losses on commodity derivative instruments of $46.1 million were recognized for the six months ended June 30, 2018, consisting of $6.9 million of cash settlements received on expired positions offset by a $53.0 million decrease in the fair value of open positions. Net gains on commodity derivative instruments of $1.9 million were recognized for the period from May 5, 2017 through June 30, 2017, consisting of $8.3 million of cash settlements received on expired positions and offset by a $6.4 million decrease in the fair value of open positions. Net gains on commodity derivative instruments of $23.1 million were recognized for January 1, 2017 through May 4, 2017, consisting of $15.9 million of cash settlements received on expired positions and $94.1 million in cash settlements received on terminated derivatives. These receipts were partially offset by an $86.9 million decrease in the fair value of open positions.

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Interest expense, net was $12.1 million, $3.8 million and $10.2 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The change in interest expense was primarily due to the Company not recording interest expense on the Predecessor’s 7.625% senior notes due May 2021 and 6.875% senior notes due August 2022 (collectively, the “Notes’) for the period from the Petition Date through the Effective Date. The Company recorded $3.5 million in interest expense for the Notes for the period from January 1, 2017 through May 4, 2017. No interest expense was recorded on the Notes for the period from May 5, 2017 through June 30, 2017, as the Notes were cancelled on the Effective Date. The Company recognized $1.8 million and $0.3 million in amortization and write-off of deferred financing cost for the six months ended June 30, 2018 and the period from May 5, 2017 through June 30, 2017, respectively. No amortization of deferred financing cost was recorded for the period from January 1, 2017 through May 4, 2017, as the unamortized amount of deferred financing cost was written off in the fourth quarter of 2016.

Average outstanding borrowings under our Credit Facility were $349.1 million for the six months ended June 30, 2018. Average outstanding borrowings under our Credit Facility were $424.7 million for the period from May 5, 2017 through June 30, 2017. Average outstanding borrowings under the Predecessor’s revolving credit facility were $460.2 million for the period from January 1, 2017 through May 4, 2017. We had an average of $1.1 billion aggregate principal amount of the Notes issued and outstanding for the period from January 1, 2017 through May 4, 2017. The Notes were cancelled on the Effective Date.

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The Company incurred significant costs associated with the reorganization. Reorganization items, net represents costs and income directly associated with the Chapter 11 proceedings since January 16, 2017, the petition date, such as the gain on settlement of liabilities subject to compromise, fresh start valuation adjustments, advisors and professional fees. The Company incurred $1.3 million, $0.3 million and $88.8 million of reorganization items, net for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. See Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements under “Item.1 Financial Statements” of this quarterly report for additional information.

Adjusted EBITDA

We include in this report the non-GAAP financial measure Adjusted EBITDA and provide our reconciliation of Adjusted EBITDA to net income 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):

Plus:

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Interest expense;

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Income tax expense;

•

Depreciation, depletion and amortization (“DD&A”);

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Impairment of goodwill and long-lived assets (including oil and natural gas properties);

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Accretion of asset retirement obligations (“AROs”);

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Loss on commodity derivative instruments;

•

Cash settlements received on expired commodity derivative instruments;

•

Losses on sale of assets;

•

Share/unit-based compensation expenses;

•

Exploration costs;

•

Acquisition and divestiture related expenses;

•

Restructuring related costs;

•

Reorganization items, net;

•

Severance payments; and

•

Other non-routine items that we deem appropriate.

Less:

•

Interest income;

•

Income tax benefit;

•

Gain on commodity derivative instruments;

•

Cash settlements paid on expired commodity derivative instruments;

•

Gains on sale of assets and other, net; and

•

Other non-routine items that we deem appropriate.

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 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 Adjusted EBITDA to net income and net cash flows from operating activities, our most directly comparable GAAP financial measures, for each of the periods indicated.

Reconciliation of Adjusted EBITDA to Net Income (Loss)

	Successor									Predecessor
							Period from			Period from			Period from
	For the Three			For the Six			May 5, 2017			April 1, 2017			January 1,
	Months Ended			Months Ended			through			through			2017 through
	June 30, 2018			June 30, 2018			June 30, 2017			May 4, 2017			May 4, 2017
	(In thousands)									(In thousands)
Net income (loss)	$	(25,279	)	$	(22,040	)	$	(906	)	$	(74,578	)	$	(90,955	)
Interest expense, net		6,287			12,059			3,797			1,843			10,243
Income tax expense (benefit)		—			—			(592	)		—			(91	)
DD&A		13,619			26,577			8,351			9,835			37,717
Accretion of AROs		1,429			3,147			1,027			912			3,407
(Gains) losses on commodity derivative instruments		35,652			46,108			(1,915	)		(12,835	)		(23,076	)
Cash settlements received (paid) on expired commodity derivative instruments		2,027			6,903			8,284			5,069			15,895
(Gain) loss on sale of properties		(227	)		2,146			—			—			—
Acquisition and divestiture related expenses		679			887			—			—			—
Share/Unit-based compensation expense		336			1,512			526			2,542			3,667
Exploration costs		2,988			3,022			—			—			16
(Gain) loss on settlement of AROs		(110	)		(110	)		—			44			36
Restructuring related costs		—			—			—			—			7,548
Reorganization items, net		768			1,286			349			81,121			88,774
Severance payments		7,709			7,709			—			—			—
Other		(105	)		(105	)		—			15			57
Adjusted EBITDA	$	45,773		$	89,101		$	18,921		$	13,968		$	53,238

Reconciliation of Adjusted EBITDA to Net Cash from Operating Activities

	Successor									Predecessor
							Period from			Period from			Period from
	For the Three			For the Six			May 5, 2017			April 1, 2017			January 1,
	Months Ended			Months Ended			through			through			2017 through
	June 30, 2018			June 30, 2018			June 30, 2017			May 4, 2017			May 4, 2017
	(In thousands)									(In thousands)
Net cash provided by (used in) operating activities	$	42,128		$	84,275		$	20,544		$	(7,828	)	$	125,498
Changes in working capital		(13,740	)		(18,550	)		(5,424	)		3,325			(16,524	)
Interest expense, net		6,287			12,059			3,797			1,843			10,243
Cash settlements received on terminated derivatives		—			—			—			—			(94,146	)
Amortization of deferred financing fees		(1,211	)		(1,752	)		(346	)		—			—
Acquisition and divestiture related expenses		679			887			—			—			—
Income tax expense (benefit) - current portion		—			—			—			—			(17	)
Exploration costs		2,988			3,022			—			—			16
Plugging and abandonment cost		270			270			—			95			200
Restructuring related costs		—			—			—			—			7,548
Reorganization items, net		768			1,286			350			16,533			20,420
Severance payments		7,709			7,709			—			—			—
Other		(105	)		(105	)		—			—			—
Adjusted EBITDA	$	45,773		$	89,101		$	18,921		$	13,968		$	53,238

Liquidity and Capital Resources

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 flows generated by operating activities, borrowings under our Predecessor’s revolving credit facility and equity and debt capital markets. For the remainder of 2018, we expect our primary funding sources to be cash flows generated by operating activities and available borrowing capacity under our 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 75% 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 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. For additional information regarding the volumes of our production covered by commodity derivative contracts and the average prices at which production is hedged as of June 30, 2018, see “Item 3. Quantitative and Qualitative Disclosures About Market Risk — Counterparty and Customer Credit Risk.”

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 $38.3 million for the six months ended June 30, 2018, which were primarily related to drilling, capital workovers and facilities located in East Texas and California.

Government Trust Account. In 2015, the Bureau of Safety and Environmental Enforcement issued a preliminary report that indicated the estimated cost of decommissioning the offshore production facilities associated with our properties in offshore California may further increase. The implementation of this increase is currently on hold and we do not expect resolution of a negotiated decommissioning estimate until the second half of 2018. At June 30, 2018, there was approximately $152.4 million in the trust account and $62.0 million in surety bonds.

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 our expected capital expenditures. Our debt service requirements are expected to be funded by operating cash flows. See Note 8 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 June 30, 2018, we had a working capital deficit of $26.8 million primarily due to accrued liabilities of $25.5 million, revenues payable of $23.8 million and a current derivative liability of $20.8 million, partially offset by an accounts receivable balance of $33.5 million and a cash balance of $7.6 million.

Debt Agreements

Credit Facility. On May 4, 2017, OLLC, as borrower, entered into the Credit Agreement with Wells Fargo Bank, National Association, as administrative agent. Pursuant to the Credit Agreement the lenders party thereto agreed to provide OLLC with a $1 billion senior secured reserve-based Credit Facility. Our borrowing base is subject to redetermination on at least a semi-annual basis primarily based on a reserve engineering report with respect 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 the impact of our commodity derivative contracts.

On May 15, 2018, we entered into the Second Amendment to the Amended and Restated Credit Agreement, dated as of May 4, 2017, to among other things, (i) reflect the reduction of the borrowing base under the Credit Agreement from $435.0 million to $430.0 million, effective as of May 15, 2018, with the borrowing base to be further reduced by $15.0 million upon the consummation of the South Texas Divestiture and by $5.0 million each month until the next scheduled redetermination of the borrowing base to occur on or about October 1, 2018; and (ii) amend the minimum hedging requirement to disregard the reasonably anticipated production of hydrocarbons from the assets to be sold in the South Texas Divestiture. The borrowing base as of June 30, 2018, was $410.0 million.

As of June 30, 2018, we were in compliance with all the financial (interest coverage ratio, current ratio and total leverage ratio) and other covenants associated with our Credit Facility.

As of June 30, 2018, we had approximately $93.6 million of available borrowings under our Credit Facility, net of $2.4 million in letters of credit. See Note 8 of the Notes to Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information regarding the Credit Facility.

Cash Flows from Operating, Investing and Financing Activities

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated. The cash flows for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017 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 Statements of Consolidated Cash Flows included under “Item 1. Financial Statements” of this quarterly report.

	Successor						Predecessor
				Period from			Period from
	For the Six			May 5, 2017			January 1, 2017
	Months Ended			through			through
	June 30, 2018			June 30, 2017			May 4, 2017
	(In thousands)						(In thousands)
Net cash provided by operating activities	$	84,275		$	20,544		$	125,498
Net cash (used in) investing activities		(20,247	)		(9,639	)		(6,496	)
Net cash provided by (used in) financing activities		(62,509	)		(20,094	)		(106,674	)

Operating Activities. Key drivers of net operating cash flows are commodity prices, production volumes and operating costs. Net cash provided by operating activities was $84.3 million, $20.5 and $125.5 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. Production volumes were approximately 171.4 MMcfe/d, 168.0 MMcfe/d and 188.2 MMcfe/d for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. The average realized sales price was $5.76 per Mcfe, $4.41 per Mcfe and $4.67 per Mcfe for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. Lease operating expenses were $57.1 million, $18.8 million and $35.6 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. Gathering, processing and transportation was $11.6 million, $4.1 million and $10.8 million for the six months ended June 30, 2018, the period from May 5, 2017 through June 30, 2017 and the period from January 1, 2017 through May 4, 2017, respectively. Cash settlements received on terminated derivatives were $94.1 million for the period from January 1, 2017 through May 4, 2017.

Investing Activities. Net cash used in investing activities for the six months ended June 30, 2018 was $20.2 million, of which $38.8 million was used for additions to oil and natural gas properties and partially offset by $18.6 million in proceeds from the sale of oil and natural gas properties primarily related to the South Texas Divestiture. Net cash used in investing activities for the period from May 5, 2017 through June 30, 2017 was $9.6 million, of which $9.5 million was used for additions to oil and natural gas properties. Net cash used in investing activities for the period from January 1, 2017 through May 4, 2017 was $6.5 million, of which $6.2 million was used for additions to oil and natural gas properties.

Financing Activities . The Company had net repayments of $62.0 million and $12.0 million under the Credit Facility for the six months ended June 30, 2018 and for the period from May 5, 2017 through June 30, 2017, respectively. The Company made $8.2 million in payments to the holders of the Notes and $1.3 million in payments to the Predecessor common unitholders, and the Company received a $1.5 million contribution from management in accordance with the Plan for the period from May 5, 2017 through June 30, 2017. The Company had net repayments of $81.7 million under the Predecessor’s revolving credit facility for the period from January 1, 2017 through May 4, 2017. In addition, the Company had made $16.4 million in payments to the holders of the Notes in accordance with the Plan and paid $8.6 million in deferred financing costs for the period from January 1, 2017 through May 4, 2017.

Contractual Obligations

During the six months ended June 30, 2018, there were no significant changes in our consolidated contractual obligations from those reported in our 2017 Form 10-K except for the Credit Facility borrowings and repayments.

Off–Balance Sheet Arrangements

As of June 30, 2018, we had no off–balance sheet arrangements.

Recently Issued Accounting Pronouncements

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.

ITEM 3.

Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

In the normal course of our business operations, we are exposed to certain risks, including commodity prices. We may enter into derivative instruments to manage or reduce market risk, but do not enter into derivative agreements for speculative purposes. We do not designate these or plan to designate future derivative instruments as hedges for accounting purposes. Accordingly, the changes in the fair value of these instruments are recognized currently in earnings. We believe that our exposures to market risk have not changed materially since those reported under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in our 2017 Form 10-K.

Commodity Price Risk

Our major market risk exposure is in the prices that we receive for our oil, natural gas and NGL production. To reduce the impact of fluctuations in commodity prices on our revenues, we periodically enter into derivative contracts with respect to a portion of our projected production through various transactions that fix the future prices we receive. It has been our practice to enter into fixed price swaps and costless collars only with lenders and their affiliates under our Predecessor’s revolving credit facility and our Credit Facility.

For additional information regarding the volumes of our production covered by commodity derivative contracts and the average prices at which production is hedged as of June 30, 2018, see Note 6 of the Notes to Unaudited Condensed Consolidated Financial Statements included “Item 1. Financial Statements” of this quarterly report.

Counterparty and Customer Credit Risk

We are also subject to credit risk due to the concentration of our oil and natural gas receivables with several significant customers. In addition, our derivative contracts may expose us to credit risk in the event of nonperformance by counterparties. Some of the lenders, or certain of their affiliates, under our Credit Agreement 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 counterparties that are large financial institutions. Additionally, master netting agreements are used to mitigate risk of loss due to default with counterparties on derivative instruments. These agreements allow us to offset our asset position with our liability position in the event of default by the counterparty. 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. At June 30, 2018, after taking into effect netting arrangements, we had no counterparty exposure related to our derivative instruments. As a result, had all counterparties failed completely to perform according to the terms of the existing contracts, we would have had the right to offset $2.6 million against amounts outstanding under our Credit Facility at June 30, 2018.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

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 June 30, 2018.

Change in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the quarter ended June 30, 2018 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.

P ART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

For information regarding legal proceedings, see Part I, “Item 1. Financial Statements,” Note 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.

ITEM 1A.

RISK FACTORS.

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 with respect to the risk factors since those disclosed in our 2017 Form 10-K.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table summarizes our repurchase activity during the three months ended June 30, 2018:

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

(In thousands)

Common Shares Repurchased (1)

April 1, 2018 - April 30, 2018 (Successor)

—

n/a

May 1, 2018 - May 31, 2018 (Successor)

21,620

10.61

n/a

June 1, 2018 - June 30, 2018 (Successor)

6,461

11.00

n/a

(1)

Common shares are generally net-settled by shareholders to cover the required withholding tax upon vesting. The Company repurchased the remaining vesting shares on the vesting date at current market price. See Note 9 of the Notes to the Unaudited Condensed Consolidated Financial Statements included under “Item 1. Financial Statements” of this quarterly report for additional information.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

Exhibit Number		Description
2.1	—	Second Amended Joint Plan of Reorganization of Memorial Production Partners LP and its affiliated Debtors, dated April 13, 2017 (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K (File No. 001-35364) filed on April 17, 2017).

3.1	—	Amended and Restated Certificate of Incorporation of Amplify Energy Corp. (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-8 (File No. 333-217674) filed on May 4, 2017).

3.2	—	Amended and Restated Bylaws of Amplify Energy Corp. (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-8 (File No. 333-217674) filed on May 4, 2017).

Exhibit Number		Description
10.1	—	Second Amendment to Amended and Restated Credit Agreement, dated as of May 15, 2018, among Amplify Energy Operating LLC, the guarantors party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 001-35364) filed on May 17, 2018).

10.2*	—	Employment Agreement, dated May 5, 2018, by and between Amplify Energy Corp. and Kenneth Mariani.

10.3*	—	Letter Agreement, dated April 27, 2018, by and between Amplify Energy Corp. and William J. Scarff.

10.4*	—	Letter Agreement, dated April 27, 2018, by and between Amplify Energy Corp. and Robert L. Stillwell, Jr.

10.5*	—	Letter Agreement, dated April 27, 2018, by and between Amplify Energy Corp. and Christopher S. Cooper.

10.6*	—	Form of RSU Award Agreement.

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

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.CAL*	—	XBRL Calculation Linkbase Document

101.DEF*	—	XBRL Definition Linkbase Document

101.INS*	—	XBRL Instance Document

101.LAB*	—	XBRL Labels Linkbase Document

101.PRE*	—	XBRL Presentation Linkbase Document

101.SCH*	—	XBRL Schema Document

*	Filed as an exhibit to this Quarterly Report on Form 10-Q.

**	Furnished as an exhibit to this Quarterly Report on Form 10-Q.

S IGNATURES

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.

	Amplify Energy Corp.
	(Registrant)


Date: August 8, 2018	By:	/s/ Martyn Willsher
	Name:	Martyn Willsher
	Title:	Senior Vice President and Chief Financial Officer

Exhibit 10.2

Amplify Energy Corp.

500 Dallas Street, Suite 1600

Houston, TX 77002

(713) 490-8900

EMPLOYMENT AGREEMENT

May 5, 2018

This Employment Agreement (“ Agreement ”) is entered into by and between AMPLIFY ENERGY CORP. , a Delaware corporation (the “ Company ”), and KENNETH MARIANI (the “ Employee ”), effective as of May 14, 2018 (the “ Effective Date ”), on the terms set forth herein. The Company and Employee may sometimes hereafter be referred to singularly as a “ Party ” or collectively as the “ Parties .”

Accordingly, the Parties, intending to be legally bound, agree as follows:

1.	Position and Duties .

1.1 Employment; Titles; Reporting. The Company agrees to employ the Em ployee and the Employee agrees to commence employment with the Company, upon the terms and subject to the conditions provided under this Agreement. During the Employment Term (as defined in Section 2), the Employee will serve the Company as its Chief Executive Officer. In such capacity, the Employee will report to the Board of Directors of the Company (including any committee thereof, the “Board”) and otherwise will be subject to the direction and control of the Board, and the Employee will have such duties, responsibilities and authorities as may be assigned to the Employee by the Board from time to time to the extent consistent with his position as the chief executive officer in a publicly traded company comparable to the Company.

1.2 Duties. During the Employment Term, the Employee will devote substantially all of the Employee’s full working time to the business and affairs of the Company, will use the Employee’s best efforts to promote the Company’s interests and will perform the Employee’s duties and responsibilities faithfully, diligently and to the best of the Employee’s ability, consistent with sound business practices. The Employee may be required by the Board to provide services to, or otherwise serve as an officer or director of, any direct or indirect subsidiary of the Company. The Employee will comply with the Company’s policies, codes and procedures, as they may be in effect from time to time, applicable to executive officers of the Company. Subject to the preceding sentence, the Employee may, with the prior written approval of the Board in each instance, engage in other business and charitable activities, provided that such charitable and/or other business activities do not violate Section 7, create a conflict of interest or the appearance of a conflict of interest with the Company, or interfere, individually or in the aggregate, with the performance of the Employee’s obligations to the Company under this Agreement.

1.3 Place of Employment. The Employee will perform the Employee’s duties under this Agreement at the Company’s offices in Houston, Texas. The Employee understands and agrees that he will be required to travel from time to time for purposes of the Company’s business.

2.	Term of Employment .

The term of the Employee’s employment by the Company under this Agreement (the “ Employment Term ”) will commence on the Effective Date and will continue until the Employee’s employment is terminated by either Party under Section 5 . The date on which the Employee’s employment ends is referred to in this Agreement as the “ Termination Date .” For the purpose of Sections 5 and 6 of this Agreement, the Termination Date shall be the date upon which the Employee incurs a “separation from service” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and regulations issued thereunder (collectively, “ Code Section 409A ”).

3.	Compensation .

3.1 Base Salary . During the Employment Term, the Employee will be entitled to receive a base salary (“ Base Salary ” ) at an annual rate of not less than $600,000 for services rendered to the Company and any of its direct or indirect subsidiaries, payable in accordance with the Company’s regular payroll practices. The Employee’s Base Salary shall be reviewed annually by the Board and may be adjusted upward in the Board’s sole discretion, but not downward.

3.2 Bonus Compensation . During the Employment Term, the Employee shall be eligible for discretionary bonus compensation with a target of 100% of the Employee’s Base Salary (the “ Target Bonus ”) for each complete calendar year that the Employee is employed by the Company hereunder (any bonus compensation payable, the “ Annual Bonus ”). The performance targets that must be achieved in order to be eligible for certain bonus levels shall be established by the Board (or a committee thereof) annually, after consultation with the Employee. Notwithstanding the foregoing, the Employee shall be eligible to receive a pro rata bonus for the portion of the 2018 calendar year that the Employee is employed by the Company hereunder (the “ 2018 Bonus ”), based on performance targets set by the Board after consultation with the Employee and communicated to the Employee by May 31, 2018. Each Annual Bonus (including the 2018 Bonus), if any, shall be paid as soon as administratively feasible after the Board (or a committee thereof) certifies whether the applicable performance targets for the applicable calendar year have been achieved, but in no event later than March 15 following the end of such calendar year. Notwithstanding anything in this Section 3.2 to the contrary, but subject to Section 6 below, no Annual Bonus (including the 2018 Bonus), if any, nor any portion thereof, shall be payable for any calendar year unless the Employee remains continuously employed by the Company from the Effective Date through the date on which such Annual Bonus or 2018 Bonus is paid. Any Annual Bonus will be paid in the form of (a) cash, with respect to 25% of the amount of the Annual Bonus, and (b) fully-vested shares of the Company’s common stock having an aggregate fair market value on the grant date (as determined by the Board) equal to 75% of the amount of the Annual Bonus.

3.3 Long-Term Incentive Compensation . Within 30 days of the Effective Date, the Employee shall receive a grant of 250,000 restricted stock units (“ RSUs ”) under the Company’s Management Incentive Plan (as it may be amended from time to time), which RSUs will be subject to vesting in accordance with, and the other terms and conditions set forth in, the form of award agreement attached hereto as Exhibit A . Thereafter, long-term incentive compensation awards may be made to the Employee from time to time during the Employment Term by the Board in its sole discretion, whose decision will be based upon performance and aw ard guidelines for executive officers of the Company established periodically by the Board in its sole discretion.

4.	Expenses and Other Benefits .

4.1 Reimbursement of Business Expenses . The Employee will be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Employee during the Employment Term (in accordance with the policies and practices presently followed by the Company or as may be established by the Board from time to time for the Company’s senior executive officers) in performing services under this Agreement, provided that the Employee properly accounts for such expenses in accordance with the Company’s policies as in effect from time to time. Each reimbursement shall be paid within 30 days after it has been properly submitted to the Company by the Employee in accordance with all applicable policies, but in no event later than the end of the calendar year following the calendar year in which any such reimbursable expense was incurred.

The Company shall not be obligated to pay any such reimbursement amount for which the Employee fails to submit an invoice or other documented reimbursement request at least ten business days before the end of the calendar year next following the calendar year in which the expense was incurred. Business related expenses shall be reimbursable only to the extent they were incurred during the Employment Term, but in no event shall the time period extend beyond the later of the lifetime of the Employee or, if longer, 20 years. The amount of such reimbursements that the Company is obligated to pay in any given calendar year shall not affect the amount the Company is obligated to pay in any other calendar year. In addition, the Employee may not liquidate or exchange the right to reimbursement of such expenses for any other benefits.

Notwithstanding the foregoing provisions of this Section 4.1 , and provided the Effective Date occurs, the Company agrees to reimburse the Employee for the legal fees and expenses that he incurred before the commencement of the Employment Term with respect to the negotiation of this Agreement and any restricted stock unit or other equity incentive award agreement with the Company, provided that such legal fees and expenses do not exceed $15,000.00 in the aggregate. Reimbursement shall be made by the Company to the Employee after the Effective Date and within 30 days after receipt by the Company of invoices or other supporting documentation for such legal fees and expenses.

4.2 Paid Time Off . The Employee shall be entitled to paid time off in accordance with the Company’s policy as then in effect (prorated for any calendar year during which the Employee is employed with the Company for less than the entire year, based on the number of days that the Employee is employed with the Company during such calendar year); the

Company’s policy in effect as of the Effective Date would provide the Employee with 200 hours of paid time off per calendar year.

4.3 Other Employee Benefits . In addition to the foregoing, during the Employment Term, the Employee will be entitled to participate in and to receive benefits as a senior executive under all of the Company’s employee benefit plans, programs and arrangements available to senior executives, subject to the eligibility criteria and other terms and conditions thereof, as such plans, programs and arrangements may be duly amended, terminated, approved or adopted by the Company from time to time.

5.	Termination of Employment .

5.1 Death . The Employee’s employment under this Agreement will terminate upon the Employee’s death.

5.2 Termination by the Company.

(a) Terminable at Will. The Company may terminate the Employee’s employment under this Agreement at any time with or without Cause (as defined below).

(b) Definition of Cause. For purposes of this Agreement, “ Cause ” means any of the Employee’s: (1) conviction of a felony, or plea of guilty or nolo contendere to, any felony or any crime of moral turpitude; (2) repeated intoxication by alcohol or drugs during the performance of the Employee’s duties; (3) embezzlement or other willful and intentional misuse of any of the funds of the Company or its direct or indirect subsidiaries, (4) commission of a demonstrable act of fraud; (5) willful and material misrepresentation or concealment on any written reports submitted to the Company or its direct or indirect subsidiaries; (6) material breach of this Agreement; (7) failure to follow or comply with the reasonable, material and lawful written directives of the Board; or (8) conduct constituting a material breach of the Company’s then-current code of conduct or other similar written policy which has been provided to the Employee.

(c) Notice and Cure Opportunity in Certain Circumstances. The Employee may be afforded a reasonable opportunity to cure any act or omission that would otherwise constitute Cause hereunder according to the following terms: The Board shall give the Employee written notice stating with reasonable specificity the nature of the circumstances determined by the Board in its reasonable and good faith judgment to constitute Cause. If, in the reasonable and good faith judgment of the Board, the alleged breach is reasonably susceptible to cure, the Employee will have 15 days from the Employee’s receipt of such notice to effect the cure of such circumstances or such breach to the reasonable and good faith satisfaction of the Board. The Board will state whether the Employee will have such an opportunity to cure in the initial notice of Cause referred to above. Prior to a termination for Cause, in those instances where the initial notice of Cause states that the Employee will have an opportunity to cure, the Company shall provide an opportunity for the Employee to be heard by the Board or a Board committee designated by the Board to hear the Employee. The decision as to whether the Employee has satisfactorily cured the alleged breach shall be made at such meeting. If, in the reasonable and good faith judgment of the Board, the alleged breach is not reasonably susceptible to cure, or

such circumstances or breach have not been satisfactorily cured within such 15 day cure period, such breach will thereupon constitute Cause hereunder.

5.3 Termination by the Employee.

(a) Terminable at Will. The Employee may terminate the Employee’s employment under this Agreement at any time with or without Good Reason (as defined below).

(b) Notice and Cure Opportunity. If such termination is for Good Reason, the Employee will give the Company written notice, which will identify with reasonable specificity the grounds for the Employee’s resignation and provide the Company with 30 days from the day such notice is given to cure the alleged grounds for resignation contained in the notice. A termination will not be for Good Reason if such notice is given by the Employee to the Company more than 45 days after the first occurrence of the event that the Employee alleges is Good Reason for the Employee’s termination hereunder. The Employee must actually terminate his employment within 30 days following the expiration of the Company’s 30-day cure period. Otherwise, any claim of such circumstances constituting “Good Reason” shall be deemed irrevocably waived by the Employee.

(c) Definition of Good Reason. For purposes of this Agreement, “ Good Reason ” will mean any of the following to which the Employee will not consent in writing: (i) a relocation of the Employee’s principal work location to a location in excess of 40 miles from its then current location; (ii) a reduction in the Employee’s then current Base Salary or Target Bonus, or both; (iii) a material breach of any provision of this Agreement by the Company; or (iv) any material reduction in the Employee’s title, authority, duties, responsibilities or reporting relationship from those in effect as of the Effective Date, except to the extent such reduction occurs in connection with the Employee’s termination of employment for Cause or due to the Employee’s death or Disability.

5.4 Notice of Termination . Any termination of the Employee’s employment by the Company or by the Employee during the Employment Term (other than termination pursuant to Section 5.1 ) will be communicated by written Notice of Termination to the other Party hereto in accordance with Section 8.7 . For purposes of this Agreement, a “ Notice of Termination ” means a written notice that (a) indicates the specific termination provision in this Agreement relied upon, (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated, and (c) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which Termination Date will be not more than 30 days after the giving of such notice).

5.5 Disability . If the Company determines in good faith that the Disability (as defined herein) of the Employee has occurred during the Employment Term, it may, without breaching this Agreement, give to the Employee written notice in accordance with Section 5.4 of its intention to terminate the Employee’s employment. In such event, the Employee’s employment with the Company will terminate effective on the 30th day after receipt of such notice by the Employee, provided that, within 30 days after such receipt, the Employee has not returned to full-time performance of the Employee’s duties hereunder.

“ Disability ” means the earlier of (a) written determination by a physician selected by the Company and reasonably agreed to by the Employee that the Employee has been unable to perform substantially the Employee’s usual and customary duties under t his Agreement for a period of at least 120 consecutive days or a non-consecutive period of 180 days during any 12- month period as a result of incapacity due to mental or physical illness or disease; and (b) “disability” as such term is defined in the Comp any’s applicable long-term disability insurance plan. At any time and from time to time, upon reasonable request therefor by the Company, the Employee will submit to reasonable medical examination for the purpose of determining the existence, nature and ex tent of any such disability. Any physician selected by Company shall be Board Certified in the appropriate field and shall have no actual or potential conflict of interest.

6. Compensation of the Employee Upon Termination . Subject to the provisions of Section 6.9 , the Employee shall be entitled to receive the amount specified upon the termination events designated below:

6.1 Death . If the Employee’s employment under this Agreement is terminated by reason of the Employee’s death, the Company shall pay to the person or persons designated by the Employee for that purpose in a notice filed with the Company, or, if no such person has been so designated, to the Employee’s estate, the following:

(a) an amount equal to the Employee’s accrued but unpaid then current Base Salary through the Termination Date, payable in a lump sum within 30 days following the Termination Date;

plus

(b) if the Termination Date occurs after the end of the calendar year but prior to the date on which annual bonuses are paid, an amount equal to the Annual Bonus that the Employee would have received (if any) had he been employed on the payment date (the “ Actual Full Year Bonus Amount ”), payable at the same time annual bonuses for such year are paid to actively-employed senior executives of the Company;

plus

(c) a pro-rata portion of the Employee’s Annual Bonus for the calendar year in which the Employee’s Termination Date occurs, based on actual results for such year (determined by multiplying the amount of such Annual Bonus which would be due for the full calendar year by a fraction, (i) the numerator of which is the number of days during the calendar year that the Employee is employed by the Company and (ii) the denominator of which is three hundred sixty-five (365)) (the “ Actual Pro Rata Bonus Amount ”), if any, payable at the same time annual bonuses for such year are paid to actively-employed senior executives of the Company;

plus

(d) any other amounts that may be reimbursable by the Company to the Employee as expressly provided under this Agreement, payable in a lump sum within 30 days following the Termination Date.

The Employee’s entitlement to the amounts set forth in Section 6.1(b) and Section 6.1(c) is subject to the provisions of Section 6.5 .

Thereafter, the Company will have no further obligation to the Employee under this Agreement, other than for payment of any amounts accrued and vested under any employee benefit plans or programs of the Company and any payments or benefits required to be made or provided under applicable law.

6.2 Disability . In the event of the Employee’s termination by reason of Disability pursuant to Section 5.5 , the Employee will continue to receive the Employee’s Base Salary in effect immediately prior to the Termination Date and participate in applicable employee benefit plans or programs of the Company through the Termination Date, subject to offset dollar-for-dollar by the amount of any disability income payments provided to the Employee under any Company disability policy or program that is maintained by the Company. The Company also shall pay to the Employee the amounts set forth in Section 6.1(a) through Section 6.1(d) , at the times and subject to the conditions set forth in Section 6.1 . Thereafter, the Company will have no further obligation to the Employee under this Agreement, other than for payment of any amounts accrued and vested under any employee benefit plans or programs of the Company and any payments or benefits required to be made or provided under applicable law.

6.3 By the Company for Cause or by the Employee Without Good Reason.

(a) Termination by Company For Cause. If the Employee’s employment is terminated by the Company for Cause, the Employee will receive (i) the Employee’s accrued but unpaid then current Base Salary through the Termination Date and (ii) any other amounts that may be reimbursable by the Company to the Employee as expressly provided under this Agreement, in each case, payable in a lump sum within 30 days following the Termination Date. Thereafter, the Company will have no further obligation to the Employee under this Agreement, other than for payment of any amounts accrued and vested under any employee benefit plans or programs of the Company, and any payments or benefits required to be made or provided under applicable law. No bonus will be paid to the Employee for a termination of the Employee’s employment for Cause.

(b) Termination by Employee Without Good Reason . If the Employee’s employment is terminated by the Employee without Good Reason, the Employee will receive (i) the Employee’s accrued but unpaid then current Base Salary through the Termination Date and (ii) any other amounts that may be reimbursable by the Company to the Employee as expressly provided under this Agreement, in each case, payable in a lump sum within 30 days following the Termination Date. Thereafter, the Company will have no further obligation to the Employee under this Agreement, other than for payment of any amounts accrued and vested under any employee benefit plans or programs of the Company, and any payments or benefits required to be made or provided under applicable law. No bonus will be paid to the Employee for a termination of the Employee’s employment without Good Reason.

6.4 By the Employee for Good Reason or by the Company Without Cause . Subject to the provisions of Section 6.5 , if the Company terminates the Employee’s employment without Cause, or the Employee terminates his employment for Good Reason, then the Employee will be entitled to the following (with the amounts payable under clauses (b), (c), (e) and (f) below,

collectively, the “ Severance Benefits ”):

(a) an amount equal to the Employee’s accrued but unpaid then current Base Salary through the Termination Date, payable in a lump sum within 30 days following the Termination Date;

plus

(b) if the Termination Date occurs after the end of the calendar year but prior to the date on which annual bonuses are paid, the Actual Full Year Bonus Amount, payable at the same time annual bonuses for such year are paid to actively-employed senior executives of the Company;

plus

(c) the Actual Pro Rata Bonus Amount, if any, payable at the same time annual bonuses for such year are paid to actively-employed senior executives of the Company;

plus

(d) any other amounts that may be reimbursable by the Company to the Employee as expressly provided under this Agreement;

plus

(e) (i) if the Employee’s termination occurs on or prior to the 18-month anniversary of the Effective Date, an amount equal to the Employee’s monthly Base Salary rate as in effect on the day before the Termination Date (but not as an employee), and (ii) if the Employee’s termination occurs after the 18-month anniversary of the Effective Date, an amount equal to 200% of the Employee’s monthly Base Salary rate as in effect on the day before the Termination Date, in each case, payable in accordance with the Company’s regularly scheduled payroll practices for a period of 12 months following the Termination Date; provided that to the extent the payment of any amount constitutes “nonqualified deferred compensation” for purposes of Code Section 409A, any such payment scheduled to occur during the first 60 days following the Termination Date shall not be paid until the first regularly scheduled pay period following the 60 th day after the Termination Date and shall include payment of any amount that was otherwise scheduled to be paid prior thereto;

plus

(f) subject to the Employee’s (i) timely election of continuation coverage under the Consoli dated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and (B) continued copayment of premiums at the same level and cost to the Employee as if the Employee were a senior executive of the Company (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), continued participation in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) which covers the Employee (and his spouse and eligible dependents, if applicable) for a

period of 12 months, provided that the Employee is eligible and remains eligible for COBRA coverage; provided, further, that the Company may modify the continuation coverage contemplated by this Section 6.4(f) to the extent reas onably necessary to avoid the imposition of any excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and/or the Health Care and Education Reconcilia tion Act of 2010, as amended (to the extent applicable); and provided, further, that in the event that the Employee obtains other employment that offers group health plan coverage, such continuation of coverage by the Company under this Section 6.4(f) shal l cease as of the end of the month in which the Employee obtains such other employer-provided, group health plan coverage.

6.5 Conditions to Receipt of Certain Post-Termination Payments and Benefits.

(a) Release. As a condition to receiving the Actual Full Year Bonus Amount, the Actual Pro Rata Bonus Amount and/or any Severance Benefits to which the Employee may otherwise be entitled under Section 6.1 , Section 6.2 or Section 6.4 , the Employee must execute and not revoke a general release of claims, which will include an affirmation of the restrictive covenants set forth in Section 7 , in form and substance satisfactory to the Company (the “ Release ”). The Company will provide the Release to the Employee for signature within ten days after the Termination Date. If the Company has provided the Release to the Employee for signature within ten days after the Termination Date, and if the Release is not executed and non-revocable within 60 days after the Termination Date and prior to the date on which such payment and/or benefits are to be first paid or provided to the Employee, the Employee will not be entitled to the Actual Full Year Bonus Amount, the Actual Pro Rata Bonus Amount and/or any Severance Benefits, as the case may be, and the Company will have no further obligations with respect to the provision of those payments and/or benefits except as may be required by law. If the Release consideration period spans two calendar years, no payments and/or benefits subject to the Release will be paid or provided until the later of (i) the date on which the Release becomes effective and non-revocable and (ii) January 2 nd of the second calendar year.

(b) Limitation on Benefits. If, following a termination of employment that gives the Employee a right to the payment of the Actual Full Year Bonus Amount, the Actual Pro Rata Bonus Amount and/or any Severance Benefits to which the Employee may otherwise be entitled under Section 6.1 , Section 6.2 or Section 6.4 , the Employee violates any of the covenants in Section 7 or as otherwise set forth in the Release, the Employee will have no further right or claim to the Actual Full Year Bonus Amount, the Target Pro Rata Bonus Amount and/or any Severance Benefits to which the Employee may otherwise be entitled under Section 6.1 , Section 6.2 or Section 6.4 from and after the date on which the Employee engages in such activities, and the Company will have no further obligations with respect to such payments or benefits, and the covenants in Section 7 will nevertheless continue in full force and effect.

6.6 Certain Amounts Not Includable for Employee Benefits Purposes . Except to the extent the terms of any applicable benefit plan, policy or program provide otherwise, any benefit programs of the Company that take into account the Employee’s income will exclude the Actual Full Year Bonus Amount, the Actual Pro Rata Bonus Amount and/or any Severance Benefits to which the Employee may otherwise be entitled under Section 6.1 , Section 6.2 or Section 6.4 .

6.7 Exclusive Severance Benefits . The Actual Full Year Bonus Amount, the Actual Pro Rata Bonus Amount and/or any Severance Benefits to which the Employee may otherwise be entitled under Section 6.1 , Section 6.2 or Section 6.4 , if they become payable under the terms of this Agreement, will be in lieu of any other severance or similar benefits that would otherwise be payable under any other agreement, plan, program or policy of the Company, excluding, for this purpose, any post-termination treatment of equity incentive awards provided under the terms of the governing award agreements.

6.8 Code Section 280G; Code Section 409A . Notwithstanding anything in this Agreement to the contrary:

(a) If any of the payments or benefits received or to be received by the Employee (including, without limitation, any payment or benefits received in connection with a “change of control” or the Employee’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the (“ 280G Payments ”) constitute “parachute payments” within the meaning of Section 280G of the Code and would, but for this Section 6.8(a) , be subject to the excise tax imposed under Section 4999 of the Code (the “ Excise Tax ”), then prior to making the 280G Payments, a calculation shall be made comparing (i) the Net Benefit (as defined below) to the Employee of the 280G Payments after payment of the Excise Tax to (ii) the Net Benefit to the Employee if the 280G Payments are limited to the extent necessary to avoid being subject to the Excise Tax. Only if the amount calculated under clause (i) above is less than the amount under clause (ii) above will the 280G Payments be reduced to the minimum extent necessary to ensure that no portion of the 280G Payments is subject to the Excise Tax. “Net Benefit” shall mean the present value of the 280G Payments net of all federal, state, local, foreign income, employment and excise taxes. Any reduction made pursuant to this Section 6.8(a) shall be made in a manner determined by the Company that is consistent with the requirements of Code Section 409A and that maximizes the Employee’s economic position and after-tax income; for the avoidance of doubt, the Employee shall not have any discretion in determining the manner in which the payments and benefits are reduced.

(b) In the event that any benefits payable or otherwise provided under this Agreement would be deemed to constitute non-qualified deferred compensation subject to Code Section 409A, the Company will have the discretion to adjust the terms of such payment or benefit (but not the amount or value thereof) to the minimum extent reasonably necessary to comply with the requirements of Code Section 409A to avoid the imposition of any excise tax or other penalty with respect to such payment or benefit under Code Section 409A.

6.9 Timing of Payments by the Company . Notwithstanding anything in this Agreement to the contrary, in the event that the Employee is a “specified employee” (as determined under Code Section 409A) at the time of the separation from service triggering the payment or provision of benefits, any payment or benefit under this Agreement which is determined to provide for a deferral of compensation pursuant to Code Section 409A shall not commence being paid or made available to the Employee until after six months from the Termination Date that constitutes a “separation from service” within the meaning of Code Section 409A or such earlier date as may be permitted under Code Section 409A.

7.	Restrictive Covenants .

7.1 Confidential Information . During the Employment Term and thereafter, the Employee shall keep secret and retain in strictest confidence, and shall not use for the benefit of himself or others, any confidential matters or trade secrets of, or confidential and competitively valuable information concerning, the Company and its direct or indirect subsidiaries (collectively, the “ Company Group ”), including, without limitation, information concerning their organization and operations, business and affairs, formulae, manufacturing processes, proprietary information, technical data, “know-how”, customer lists, details of client or consultant contracts, vendor and purchasing arrangements, terms and discounts, pricing methods and policies, financial information, operational methods, marketing plans or strategies, business acquisition plans, new personnel acquisition plans, technical processes, projects, financing/financial projections, budget information and procedures, marketing plans or strategies, and research products. The confidentiality obligations set forth in this Section 7.1 shall not apply to any information that becomes part of the public domain other than through the Employee’s disclosure in violation of the terms hereof. Nothing herein shall be construed as prohibiting the Employee from using or disclosing such confidential information as is necessary and has been authorized in his proper performance of services for the Company Group.

(a) SEC Provisions . The Employee understands that nothing contained in this Agreement limits the Employee’s ability to file a charge or complaint with the Securities and Exchange Commission (“ SEC ”). The Employee further understands that this Agreement does not limit the Employee’s ability to communicate with the SEC or otherwise participate in any investigation or proceeding that may be conducted by the SEC, including providing documents or other information, without notice to the Company. This Agreement does not limit the Employee’s right to receive an award for information provided to the SEC. This Section 7.1(a) applies only for the period of time that the Company is subject to the Dodd-Frank Act.

(b) Trade Secrets . The parties specifically acknowledge that 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, notwithstanding anything to the contrary in the foregoing, the Parties have the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. If the Employee files a lawsuit for retaliation against the Company for reporting a suspected violation of law, the Employee may disclose the Company’s trade secrets to the Employee’s attorney and use the trade secret information in the court proceeding, if the Employee first files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

7.2 No Interference . Notwithstanding any other provision of this Agreement, (a) the Employee may dis close confidential information (as described in Section 7.1 above) when required to do so by a court of competent jurisdiction, by any governmental agency having authority over the Employee or the business of the Company or by any administrative b ody or legislative body (including a committee thereof) with jurisdiction to order the Employee to divulge, disclose or make accessible such information, in each case, subject to the Employee’s obligations to notify the Company and first obtain a protectiv e order, to the extent permitted by applicable law; and (b) nothing in this Agreement is intended to interfere with the Employee’s right to (i) report possible violations of state or federal law or regulation to any governmental or law enforcement agency o r entity; (ii) make other disclosures that are protected under the whistleblower provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies); (iii) file a claim or char ge any governmental agency or entity; or (iv) testify, assist or participate in an investigation, hearing, or proceeding conducted by any governmental or law enforcement agency or entity, or any court. For purposes of clarity, in making or initiating any s uch reports or disclosures or engaging in any of the conduct outlined in subsection (b) above, the Employee may disclose confidential information to the extent necessary to such governmental or law enforcement agency or entity or such court, need not seek prior authorization from the Company and is not required to notify the Company of any such reports, disclosures or conduct.

7.3 Return of Property . The Employee agrees to deliver promptly to the Company, upon termination of the Employee’s employment hereunder, or at any other time when the Company so requests, all documents relating to the business of the Company Group; provided, however, that the Employee will be permitted to retain copies of any documents or materials of a personal nature or otherwise related to the Employee’s rights under this Agreement, copies of this Agreement and any attendant or ancillary documents specifically including any documents referenced in this Agreement and copies of any documents related to the Employee’s long-term incentive awards and other compensation.

7.4 Non-Competition . The Employee acknowledges that the Employee (a) will perform services of a unique nature for the Company Group that are irreplaceable, and that the Employee’s performance of such services to a competing business will result in irreparable harm to the Company Group, (b) will have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company Group, (c) would inevitably use or disclose such Confidential Information in the course of the Employee’s employment by a competitor, (d) will have access to the customers of the Company Group, (e) will receive specialized training from the Company Group, and (f) will generate goodwill for the Company Group in the course of the Employee’s employment. Accordingly, during the Employment Term and for a period of 12 months immediately thereafter, the Employee agrees that the Employee will not, directly or indirectly, other than through the Company, engage or participate (or prepare to engage or participate), in any manner, whether directly or indirectly through an employee, employer, consultant, agent, principal, partner, more than 1% shareholder, officer, director, licensor, lender, lessor or in any other individual or representative capacity, in any business or activity which is in competition with the business of the Company Group in the leasing, acquiring, exploring or producing hydrocarbons and related products within the boundaries of, or within a ten-mile radius of the boundaries of, any mineral property interest of any member of the Company Group (including, without limitation, a mineral lease, overriding

royalty interest, production payment, net profits interest, mineral fee interest or option or right to acquire any of the foregoing, or an area of mutual interest as designated pursuant to contractual agreements between any member of the Company Group and any third party), or any other property on which any of the Company Group has an option, right , license or authority to conduct or direct exploratory activities, such as three-dimensional seismic acquisition or other seismic, geophysical and geochemical activities (but not including any preliminary geological mapping), provided that the foregoing w ill not restrict the Employee from obtaining post-termination employment with an entity that only has de minimis operations in the restricted territory (as determined by the Board in good faith); provided that, this Section 7.4 will not preclude the Employ ee from making passive investments in securities of oil and gas companies which are registered on a national stock exchange, if (i) the aggregate amount owned by the Employee and his spouse and children, if any, does not exceed 1% of such company’s outstan ding securities, and (ii) the aggregate amount invested in such investments by the Employee and his spouse and children does not exceed $1,000,000.

7.5 Non-Solicitation; Non-Interference.

(a) During the Employment Term and for a period of 12 months immediately thereafter, the Employee agrees that he shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, induce or attempt to induce any customer, supplier, agent, intermediary or other business relation of the Company Group to reduce or cease doing business with the Company Group, or interfere with the relationship between any such customer, supplier, agent, intermediary or business relation and the Company Group (including making any negative statements or communications concerning the Company Group); provided that nothing contained in this Section 7.5(a) will prohibit public advertising or general solicitations that are not specifically directed to customers, suppliers, licensees or other business relations of the Company Group.

(b) During the Employment Term and for a period of 12 months immediately thereafter, the Employee agrees that he shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any employee, representative or agent of the Company Group to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company Group or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent. An employee, representative or agent shall be deemed covered by this Section 7.5(b) while so employed or retained and for a period of six months thereafter.

7.6 Non-Disparagement . The Employee agrees not to make any negative, disparaging, detrimental or derogatory remarks or public statements (written, oral, telephonic, electronic, or by any other method) about the Company or any other member of the Company Group or their respective successors and assigns or any of their respective officers, directors, employees, shareholders, agents or products. The Company agrees not to make any negative, disparaging, detrimental or derogatory remarks or public statements (written, oral, telephonic,

electronic or by any other method) about the Employee. The foregoing shall not be violated by truthful statements in response to legal p rocess, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

7.7 Assignment of Developments.

(a) The Employee acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products, developments, software, know-how, processes, techniques, works of authorship and other work product, whether patentable or unpatentable, (i) that are reduced to practice, created, invented, designed, developed, contributed to, or improved with the use of any Company Group resources and/or within the scope of the Employee’s work with the Company Group or that relate to the business, operations or actual or demonstrably anticipated research or development of the Company Group, and that are made or conceived by the Employee, solely or jointly with others, during the Employment Term, or (ii) suggested by any work that the Employee performs in connection with the Company Group, either while performing the Employee’s duties with the Company Group or on the Employee’s own time, but only insofar as the Inventions are related to the Employee’s work as an employee or other service provider to the Company Group, shall belong exclusively to the Company (or its designee), whether or not patent or other applications for intellectual property protection are filed thereon (the “ Inventions ”). The Employee will keep full and complete written records (the “ Records ”), in the manner prescribed by the Company, of all Inventions, and will promptly disclose all Inventions completely and in writing to the Company. The Records shall be the sole and exclusive property of the Company, and the Employee will surrender them upon the termination of the Employment Term, or upon the Company’s earlier request. The Employee irrevocably conveys, transfers and assigns to the Company the Inventions and all patents or other intellectual property rights that may issue thereon in any and all countries, whether during or subsequent to the Employment Term, together with the right to file, in the Employee’s name or in the name of the Company (or its designee), applications for patents and equivalent rights (the “ Applications ”). The Employee will, at any time during and subsequent to the Employment Term, make such applications, sign such papers, take all rightful oaths, and perform all other acts as may be requested from time to time by the Company to perfect, record, enforce, protect, patent or register the Company’s rights in the Inventions, all without additional compensation to the Employee from the Company. The Employee will also execute assignments to the Company (or its designee) of the Applications, and give the Company and its attorneys all reasonable assistance (including the giving of testimony) to obtain the Inventions for the Company’s benefit, all without additional compensation to the Employee from the Company, but entirely at the Company’s expense.

(b) In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright laws of the United States, on behalf of the Company, and the Employee agrees that the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity without any further obligations to the Employee. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, or the rights in such Inventions do not otherwise automatically vest in the Company, the Employee hereby irrevocably conveys, transfers and

assigns to the Company, all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the Inventions, including, without limitation, all of the Employee’s ri ght, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricte d right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement, or other unauthorized use or conduct in derogation of the Inve ntions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Employee hereby waives any so-called “moral rights” with respect to the Inventions. To the extent t hat the Employee has any rights in the results and proceeds of the Employee’s service to the Company that cannot be assigned in the manner described herein, the Employee agrees to unconditionally waive the enforcement of such rights. The Employee hereby w aives any and all currently existing and future monetary rights in and to the Inventions and all patents and other registrations for intellectual property that may issue thereon, including, without limitation, any rights that would otherwise accrue to the Employee’s benefit by virtue of the Employee being an employee of or other service provider to the Company.

7.9 Injunctive Relief . The Employee acknowledges that a breach of any of the covenants contained in this Section 7 may result in material, irreparable injury to the Company Group for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely, and that, in the event of such a breach or threat of breach, the Company or any other member of the Company Group will be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Employee from engaging in activities prohibited by this Section 7 or such other relief as may be required to specifically enforce any of the covenants in this Section 7 .

7.10 Adjustment of Covenants . The Parties consider the covenants and restrictions contained in this Section 7 to be reasonable. However, if and when any such covenant or restriction is found to be void or unenforceable and would have been valid had some part of it been deleted or had its scope of application been modified, such covenant or restriction will be deemed to have been applied with such modification as would be necessary and consistent with the intent of the Parties to have made it valid, enforceable and effective.

7.11 Forfeiture Provision.

(a) Detrimental Activities. If the Employee engages in any activity that violates any covenant or restriction contained in this Section 7 , in addition to any other remedy the Company may have at law or in equity, (i) the Employee will be entitled to no further payments or benefits from the Company under this Agreement or otherwise, except for any payments or benefits required to be made or provided under applicable law; (ii) all forms of equity compensation held by or credited to the Employee will terminate effective as of the date on which the Employee engages in that activity, unless terminated sooner by operation of another term or condition of this Agreement or other applicable plans and agreements; and (iii) any exercise, payment or delivery pursuant to any equity compensation award that occurred within one year prior to the date on which the Employee engages in that activity may be rescinded within one year after the first date that any member of the Board first became aware

that the Employee engaged in that activity. In the event of any such rescission, the Employee will pay to the Company the amount of any gain realized or payment received as a result o f the rescinded exercise, payment or delivery (after deducting the Employee’s actual income tax liability incurred with respect to such gain or payment), in such manner and on such terms and condition as may be required. Notwithstanding any provi sion of this Agreement to the contrary, if the Employee disputes whether he has violated any covenant or restriction contained in Section 7 , and such dispute has been adjudicated to a final decision pursuant to Section 8.5 in the Employee’s favor, the Comp any will pay to the Employee all amounts withheld or clawed back pursuant to this Section 7.11 to the extent ordered by a court of competent jurisdiction; provided that legal action in this respect is filed by the Employee within 60 days after being notifi ed of the Company’s decision affecting the Employee under this Section 7.11 .

(b) Right of Setoff. The Employee consents to a deduction from any amounts the Company owes the Employee from time to time (including amounts owed as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Employee by the Company), to the extent of the amounts the Employee owes the Company under Section 7.11(a) (above). Whether or not the Company elects to make any setoff in whole or in part, if the Company does not recover by means of setoff the full amount the Employee owes, calculated as set forth above, the Employee agrees to pay immediately the unpaid balance to the Company.

8.	Miscellaneous .

8.1 Assignment; Successors; Binding Agreement . This Agreement may not be assigned by either Party, whether by operation of law or otherwise, without the prior written consent of the other Party, except that any right, title or interest of the Company arising out of this Agreement may be assigned to any corporation or entity controlling, controlled by, or under common control with the Company, or succeeding to the business and substantially all of the assets of the Company or any affiliates for which the Employee performs substantial services. Subject to the foregoing, this Agreement will be binding upon and will inure to the benefit of the Parties and their respective heirs, legatees, devisees, personal representatives, successors and assigns. The Company shall obtain from any successor or other person or entity acquiring a majority of the Company’s assets or equity securities a written agreement to perform all terms of this Agreement, and any failure by the Company to obtain such written agreement shall be a material breach of this Agreement.

8.2 Modification and Waiver . Except as otherwise provided below, no provision of this Agreement may be modified, waived, or discharged unless such waiver, modification or discharge is duly approved by the Board and is agreed to in writing by the Employee and such officer(s) as may be specifically authorized by the Board to effect it. No waiver by any Party of any breach by any other Party of, or of compliance with, any term or condition of this Agreement to be performed by any other Party, at any time, will constitute a waiver of similar or dissimilar terms or conditions at that time or at any prior or subsequent time.

8.3 Entire Agreement . This Agreement, together with any documents specifically referenced in this Agreement, embodies the entire understanding of the Parties hereto, and, upon the Effective Date, will supersede all other oral or written agreements or understandings between them regarding the subject matter hereof; provided, however, that if there is a conflict between any of the terms in this Agreement and the terms in any award agreement between the Company and the Employee pursuant to any long-term incentive plan or otherwise, the terms of the award agreement shall govern. No agreement or representation, oral or otherwise, express or implied, with respect to the subject matter of this Agreement, has been made by either Party which is not set forth expressly in this Agreement or the other documents referenced in this Section 8.3 .

8.4 Governing Law . The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Texas other than the conflict of laws provision thereof.

8.5 Consent to Jurisdiction; Service of Process; Waiver of Right to Jury Trial.

(a) Disputes . In the event of any dispute, controversy or claim between the Company and the Employee arising out of or relating to the interpretation, application or enforcement of the provisions of this Agreement, the Company and the Employee agree and consent to the personal jurisdiction of the state and local courts of Harris County, Texas and/or the United States District Court for the Southern District of Texas, Houston Division for resolution of the dispute, controversy or claim, and that those courts, and only those courts, shall have any jurisdiction to determine any dispute, controversy or claim related to, arising under or in connection with this Agreement. The Company and the Employee also agree that those courts are convenient forums for the parties to any such dispute, controversy or claim and for any potential witnesses and that process issued out of any such court or in accordance with the rules of practice of that court may be served by mail or other forms of substituted service to the Company at the address of its principal executive offices and to the Employee at the Employee’s last known address as reflected in the Company’s records.

(b) Waiver of Right to Jury Trial . THE COMPANY AND THE EMPLOYEE HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY TO ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, AS WELL AS TO ALL CLAIMS ARISING OUT OF THE EMPLOYEE’S EMPLOYMENT WITH THE COMPANY OR TERMINATION THEREFROM.

8.6 Withholding of Taxes . The Company will withhold from any amounts payable under the Agreement all federal, state, local or other taxes as legally will be required to be withheld.

8.7 Notices . All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a Party may designate by notice to the other parties).

To the Company :

AMPLIFY ENERGY CORP.

Attn: General Counsel 500 Dallas Street

Suite 1600

Houston, TX 77002

Facsimile: (713) 456-2940 To the Employee :

At the address reflected in the Company’s written records.

Addresses may be changed by written notice sent to the other Party at the last recorded address of that Party.

8.8 Severability . The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

8.9 Counterparts . This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

8.10 Headings . The headings used in this Agreement are for convenience only, do not constitute a part of the Agreement, and will not be deemed to limit, characterize, or affect in any way the provisions of the Agreement, and all provisions of the Agreement will be construed as if no headings had been used in the Agreement.

8.11 Construction . As used in this Agreement, unless the context otherwise requires:

(a) the terms defined herein will have the meanings set forth herein for all purposes; (b) references to “Section” are to a section hereof; (c) “include,” “includes” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of like import; (d) “writing,” “written” and comparable terms refer to printing, typing, lithography and other means of reproducing words in a visible form; (e) “hereof,” “herein,” “hereunder” and comparable terms refer to the entirety of this Agreement and not to any particular section or other subdivision hereof or attachment hereto; (f) references to any gender include references to all genders; and (g) references to any agreement or other instrument or statute or regulation are referred to as amended or supplemented from time to time (and, in the case of a statute or regulation, to any successor provision).

8.12 Capacity; No Conflicts . The Employee represents and warrants to the Company that: (a) the Employee has full power, authority and capacity to execute and deliver this Agreement, and to perform the Employee’s obligations hereunder, (b) such execution, delivery and performance will not (and with the giving of notice or lapse of time, or both, would not) result in the breach of any agreement or other obligation to which the Employee is a party or is otherwise bound, and (c) this Agreement is the Employee’s valid and binding obligation, enforceable in accordance with its terms.

[Signature page follows.]

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above.

	AMPLIFY ENERGY CORP.

	By:	/s/ ERIC M. WILLIS
	Name:	ERIC M. WILLIS
	Title:	Vice President and General Counsel

	EMPLOYEE

	/s/ Kenneth Mariani
	Kenneth Mariani

[Signature Page to Employment Agreement]

Exhibit 10.3

Amplify Energy Corp.

500 Dallas Street, Suite 1600

Houston, TX 77002

(713) 490-8900

April 27, 2018

William J. Scarff

500 Dallas Street, Suite 1600

Houston, Texas 77002

Dear Mr. Scarff:

This letter agreement (together with Appendixes A and B hereto, the “ Agreement ”) sets forth our mutual understanding concerning your retirement from Amplify Energy Corp., a Delaware corporation (the “ Company ”). To accept the Agreement, you must sign and return a copy of the Agreement to the Company at the address indicated in Section 9(f)(iv)(C) below, by no later than May 1, 2018 (the date on which you actually execute the Agreement, the “ Effective Date ”).

1. Chief Executive Officer Transition and Retirement .

(a) With great thanks for your valuable contributions to the Company to date, we hereby acknowledge your intent to retire from your position as the Company’s Chief Executive Officer effective as of the earlier of (i) May 17, 2018 (or a later mutually agreed date) and (ii) the date on which a successor is appointed as Chief Executive Officer (such earlier date, the “ Retirement Date ”). Your employment and all positions you held with the Company and its subsidiaries and affiliates (collectively, the “ Company Group ”) will terminate in all capacities as of the Retirement Date; provided that you will continue to serve as a member of the Company’s Board of Directors until May 17, 2018. You agree to execute such additional documents as reasonably requested by the Company to evidence the foregoing.

(b) During the period beginning on the Effective Date and ending on the Retirement Date, you will (i) continue to receive your base salary at the rate currently in effect, paid in accordance with the Company’s regular payroll practices, and (ii) remain eligible to participate in the Company’s retirement and health and welfare plans in accordance with the terms and conditions of such plans.

2. Consideration . You acknowledge that: (a) the Retirement Payments (as defined in Section 3) constitute full settlement of all of your rights under the Agreement and in connection with your separation from the Company, (b) except as otherwise provided specifically in the Agreement, you have no entitlement under any other severance, change in control, equity incentive or similar agreement with, or arrangement maintained by, any member of the Company Group, and

(c) except as otherwise provided specifically in the Agreement, the Compa ny does not and will not have any other liability or obligation to you by reason of the termination of your employment with the Company Group. You further acknowledge that, in the absence of the Effective Date and the Re-Execution Effective Date (as define d in Appendix A), the Retirement Payments would not otherwise be due to you.

3. Retirement Payments . In consideration of the covenants set forth herein and the Effective Date and the Re-Execution Effective Date, the Company will provide you with the following payments and benefits (collectively, the “ Retirement Payments ”):

(a) an aggregate amount of $3,000,000 (the “ Severance ”), less all applicable withholdings and authorized or required deductions, which will be paid to you in installments, with the first installment of $1,500,000 paid on the sixtieth (60 ^th ) calendar day following the Retirement Date (provided that the Re-Execution Effective Date occurs), and the remaining

$1,500,000 paid in installments of $375,000 on each of the three, four, five and six month anniversaries of the Retirement Date;

(b) to the extent you timely elect COBRA continuation coverage under the Company’s group insurance plans, the Company will reimburse you for the amount of COBRA continuation premiums (less required co-pay) until the earlier of (i) 12 months following the Retirement Date and (ii) such time as you are no longer eligible for COBRA continuation coverage (with you being required to notify the Company within one week after becoming eligible for group medical coverage from another employer);

(c) the Company will reimburse you for (i) financial counseling services for 12 months following the Retirement Date, subject to a maximum benefit of $30,000, and (ii) outplacement counseling services for 12 months following the Retirement Date, subject to a maximum benefit of $30,000. You will be responsible for selecting any financial counseling advisors and any outplacement services providers;

(d) the option to purchase 125,854 shares of the Company’s Common Stock that was granted to you under the Company’s Management Incentive Plan and the Stock Option Award Agreement thereunder, dated as of May 4, 2017 (the “ Option Agreement ”), will fully vest on the Retirement Date and will remain exercisable until it expires on the second anniversary of the Retirement Date;

(e) at your election as indicated on the signature page hereto (provided that the Re-Execution Effective Date occurs), either (i) a cash payment of $296,594, less all applicable withholdings and authorized or required deductions, or (ii) 41,951 shares of the Company’s Common Stock, paid or delivered, as applicable, on the sixtieth (60th) calendar day following the Retirement Date; provided that such shares, if applicable, may not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than by will or the laws of descent or distribution, prior to the third anniversary of the Retirement Date; and

(f) in the event that a Change of Control (as defined in the Company’s Managemen t Incentive Plan) occurs on or prior to October 27, 2018, the 83,903 shares of the Company’s Common Stock covered by the award of restricted stock units granted to you under the Company’s Management Incentive Plan and the Restricted Stock Unit Award Agreem ent thereunder, dated as of May 4, 2017 (the “ RSU Agreement ”), that were scheduled to vest in installments of 41,951 shares on May 4, 2019 and 41,952 shares on May 4, 2020 will immediately be 100% vested. This arrangement supersedes Section 2(c) of the RSU Agreement, which would provide for immediate forfeiture of the unvested restricted stock units upon the Retirement Date.

For clarity, you will not be eligible to vest in the 41,951 shares covered by the RSU Agreement that were scheduled to vest on May 4, 2018, and the 83,903 shares covered by the RSU Agreement that were scheduled to vest in installments on May 4 of 2019 and 2020 will only become vested in the event that a Change of Control occurs on or prior to October 27, 2018.

Notwithstanding the foregoing, if the Re-Execution Effective Date does not occur, you will automatically and without further action forfeit your right to the Severance (but you will retain your right to the Retirement Payments other than the Severance, subject to the terms set forth in the Agreement, and the release of non-ADEA Claims set forth in Section 9(a) will remain in full force and effect).

4. No Other Compensation or Benefits . Except for compensation and benefits you earned through the Retirement Date (to be paid to you in accordance with the Company’s policies), as otherwise specifically provided herein, or as required for COBRA coverage under Section 4980B(f) of the Internal Revenue Code of 1986, as amended, you will not be entitled to any compensation or benefits or to participate in any benefit programs or arrangements of the Company Group after the Retirement Date. Additional information regarding COBRA coverage will be provided to you separately.

5. Return of Property . You confirm that, on or prior to the Retirement Date, you will have returned to the Company all property of the Company Group in your possession and all property made available to you in connection with your employment with the Company Group, including, without limitation, any and all Company Group credit cards, keys, security access codes, work-related passwords, records, manuals, customer lists, notebooks, computers, computer programs and files, papers, electronically stored information and documents kept or made by you in connection with your employment with the Company Group.

6. Non-Disparagement . You agree to refrain from making or causing to be made, any intentional statement, oral or written, for the purpose of causing, or that reasonably may be expected to cause, any material harm to the Company Group’s business, business relationships, operations, goodwill or reputation.

will testify truthfully in connection with any such Proceeding. Except as provided in Sec tion 11 , you agree that you will cooperate with the Company in connection with every such Proceeding, and that your duty of cooperation will include an obligation to meet with the Company representatives and/or counsel concerning all such Proceedings for such purposes, and at such times and places, as the Company reasonably requests on reasonable prior notice and during normal business hours, and to appear for deposition and/or testimony upon the Company’s request and without a subpoena. The Company will reimburse you f or reasonable out-of-pocket expenses that you incur in honoring your obligation of cooperation under this Sec tion 7 .

8. Breach of Agreement . If you violate any provisions of the Agreement or the Restrictive Covenant Agreement (as defined in Section 9(h)), no further Retirement Payments will be due to you, and you will be required to promptly repay to the Company any of the Retirement Payments previously paid to you.

9. Release .

(a) General Release . In consideration of the Retirement Payments provided to you under the Agreement, you, and each of your heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “ Releasors ”) hereby irrevocably and unconditionally release and forever discharge the Company Group and its parent, and each of their subsidiaries, affiliates and joint venture partners, and all of their past and present directors, officers, employees, consultants, founders, owners, shareholders, representatives, members, attorneys, partners, insurers, benefit plans and agents, and all of their predecessors, successors and assigns (collectively, the “ Releasees ”) from any and all claims, actions, causes of action, suits, controversies, cross-claims, counter-claims, rights, judgments, obligations, compensatory damages, liquidated damages, punitive or exemplary damages, any other damages, demands, accountings, debts, claims for costs and attorneys’ fees, losses or liabilities of whatever kind or character in law and in equity and any other liabilities, known or unknown, suspected or unsuspected of any nature whatsoever (collectively, “ Claims ”), including, without limitation, any Claims under Title VII of the Civil Rights Act, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, the Equal Pay Act, as amended, the Employee Retirement Income Security Act, as amended, the Civil Rights Act of 1991, as amended, the Worker Adjustment and Retraining Notification Act, as amended, and any other Claims under any federal, state, local or foreign law, act, statute, code, order, judgment, injunction, ruling, decree, writ, ordinance or regulation arising from or in any way related to (i) your employment with the Company Group or the termination of such employment, at any time prior to the Effective Date and/or the Reaffirmation Date (as applicable), (ii) any agreement entered into as part of your employment with the Company Group with any of the Releasees, and/or (iii) any awards, policies, plans, programs or practices of any of the Releasees that may apply to you or in which you may participate; provided, however, that the release set forth in this Section 9(a) will not apply to the obligations of the Company under the Agreement. The Releasors further agree that the Retirement Payments will be in full satisfaction of any and all Claims for payments or benefits, whether express or implied, that the Releasors may have against the Releasees arising out of your employment with the Company Group and the termination thereof. This Section 9(a) does not apply to any Claims that the Releasors may have as of the Effective Date arising under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, as amended, and the applicable rules and regulations promulgated thereunder (“ ADEA ”). Claims arising under ADEA are addressed in Section 9(f) of the Agreement.

(b) You understand that you may later discover claims or facts that may be differen t than, or in addition to, those which you now know or believe to exist with regards to the subject matter of the Agreement and the releases in this Section 9 , and which, if known at the time of executing the Agreement, may have materially affected the Agreement or your decision to enter into it. You hereby waive any right or claim that might arise as a result of such different or additional claims or facts.

(c) The Agreement is not intended to bar or affect (i) any Claims that may not be waived by private agreement under applicable law, such as claims for workers’ compensation or unemployment insurance benefits, or (ii) vested rights under the Company’s 401(k) or pension plan.

(d) Nothing in the Agreement is intended to prohibit or restrict your right to file a charge with, or participate in a charge by, the Equal Employment Opportunity Commission or any other local, state, or federal administrative body or government agency; provided , however , that you hereby waive the right to recover any monetary damages or other relief against any Releasee to the fullest extent permitted by law, excepting any benefit or remedy to which you are or become entitled to pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

(e) You represent that you have made no assignment or transfer of any right or Claim covered by this Section 9 and that you further agree that you are not aware of any such right or Claim covered by this Section 9.

(f) Specific Release of ADEA Claims . As of the Re-Execution Effective Date (as defined in Appendix A), you acknowledge and agree that you are hereby waiving and releasing any age Claims or rights you may have under ADEA through the Reaffirmation Date. In connection with this ADEA release, you agree that (i) you are hereby entering into this waiver and release knowingly and voluntarily, (ii) this ADEA release does not apply to any rights or Claims that may arise under ADEA after the Reaffirmation Date, (iii) the consideration given for this release of ADEA Claims is in addition to anything of value to which you were already entitled, and (iv) you have been advised by this writing that:

(A) you should consult with an attorney prior to executing the Agreement;

(B) you have until June 12, 2018, which is at least forty-five (45) days

after receipt of the Agreement, to consider whether to re-execute it, by signing the Reaffirmation Page set forth on Appendix A, and release any age Claim under ADEA following the Retirement Date; provided , however , that the Agreement may not be reaffirmed by you prior to the Retirement Date. If you choose to re-execute the Agreement before June 12, 2018, you do so knowingly and voluntarily;

(C) you have seven (7) days following your re-execution of the Agreement to revoke the portion of the release applicable to ADEA Claims set forth in Section 9(f) by notifying the Company of this fact, in writing, within such seven (7) day period, at 500 Dallas Street, Suite 1600, Houston, Texas 77002, attention: Kim Evans, Vice President, Human Resources & Administration; and

(D) in accordance with the requirements of ADEA, you were provided with information, appended hereto as Appendix B, regarding (i) the job title and age of each employee in an affected job classification or organizational unit whose employment is being terminated on the date hereof or in proximity thereto and (ii) the job title and age of each employee in such affected job classification or organizational unit who is not being terminated on the date hereof or in proximity hereto.

(g) Representation . You hereby represent that you have not instituted, assisted or otherwise participated in connection with, any action, complaint, claim, charge, grievance, arbitration, lawsuit, or administrative agency proceeding, or action at law or otherwise against any of the Releasees. You understand that the release of Claims contained in the Agreement extends to all of the aforementioned Claims and potential Claims which arose on or before the Effective Date and the Reaffirmation Date (as applicable), whether now known or unknown, suspected or unsuspected, and that this constitutes an essential term of the Agreement. You further understand and acknowledge the significance and consequences of the Agreement and of each specific release and waiver, and expressly consent that the Agreement shall be given full force and effect to each and all of its express terms and provisions, including those relating to unknown and uncompensated Claims, if any, as well as those relating to any other Claims specified herein. You hereby waive any right or Claim that you may have to employment, reinstatement or re-employment with the Company Group.

(h) Indemnification; D&O Insurance . The Agreement does not impair or terminate any rights you have to indemnification under the Company Group’s organizational documents, applicable law or the Company Group’s Directors’ and Officers’ liability insurance policy as in effect from time to time. For six (6) years after the Effective Date, the Company will provide you with coverage under a Directors’ and Officers’ liability insurance policy on the same basis, if any, as the Company provides coverage to its then current directors and officers.

10. Restrictive Covenants . You acknowledge that you have entered into a Restrictive Covenant Agreement with the Company, dated as of May 4, 2017 (the “ Restrictive Covenant Agreement ”), and that the obligations applicable to you under the Restrictive Covenant Agreement, including without limitation the non-competition, non-solicitation and confidentiality covenants contained therein, will remain in full force and effect following the Retirement Date in accordance with their terms and will not be superseded by the terms of the Agreement.

11. Employee Protections. (a) You have the right under federal law to certain protections for cooperating with or reporting legal violations to the Securities and Exchange Commission (the “ SEC ”) and/or its Office of the Whistleblower, as well as certain other governmental entities and self-regulatory organizations. As such, nothing in the Agreement or otherwise prohibits or limits you from disclosing the Agreement to, or from cooperating with or reporting violations to or initiating communications with, the SEC or any other such governmental entity or self-regulatory organization, and you may do so without notifying the Company. No member of the Company Group may retaliate against you for any of these activities, and nothing in the Agreement or otherwise requires you to waive any monetary award or other payment that you might become entitled to from the SEC or any other governmental entity or self-regulatory organization. Moreover, nothing in the Agreement or otherwise prohibits you from notifying the Company that you are going to make a report or disclosure to law enforcement.

(b) Notwithstanding anything to the contrary in the Agreement or otherwise, as provided for in the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), you will not be held criminally or civilly liable under any federal o r state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigati ng a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Without limiting the foregoing, if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law,

you may disclose the trade secret to your attorney and use the trade secret information in the court proceeding, if you (x) file any document containing the trade secret under seal, and (y) do not disclose the trade secret, except pursuant to court order.

12. Miscellaneous .

(a) Entire Agreement . Except for the Restrictive Covenant Agreement, the Option Agreement (as modified by Section 3(d)) and the RSU Agreement (as modified by Section 3(f)), the Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and supersedes and replaces any express or implied, written or oral, prior agreement, plan or arrangement with respect to the terms of your employment with the Company Group and the termination thereof which you may have had with the Company Group, including without limitation the following agreements entered into between you and the Company: the Severance Agreement, dated as of May 4, 2017, and the Change of Control Agreement, dated as of May 4, 2016, as amended as of May 4, 2017 (the “ CoC Agreement ”), each of which shall hereafter be null and void in their entirety. For clarity, if a Change of Control (as defined in the CoC Agreement) occurs within six months following the Retirement Date, you will not be entitled to any payments under the CoC Agreement or otherwise, except to the extent set forth in Section 3(f). The Agreement may be amended only by a written document signed by an authorized representative of the Company and you.

(b) Withholding Taxes . The Retirement Payments will be reduced by any applicable withholding taxes.

(c) Waiver . The failure of either party to the Agreement to enforce any of its terms, provisions or covenants will not be construed as a waiver of the same or of the right of such party to enforce the same. Waiver by either party hereto of any breach or default by the other party of any term or provision of the Agreement will not operate as a waiver of any other breach or default.

(d) Severability . In the event that any provision of the Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remainder of the Agreement will not in any way be affected or impaired thereby. If any provision of the Agreement is held to be excessively broad as to duration, activity or subject, such provision will be construed by limiting and reducing it so as to be enforceable to the maximum extent allowed by applicable law.

(e) Counterparts . The Agreement may be executed in one or more counterparts, which together will constitute one and the same agreement. A faxed or PDF signature shall operate the same as an orig inal signature and shall be considered to have the same binding legal effect as if it were the original signed version of the Agreement delivered in person.

(f) Successors and Assigns . You shall not assign any rights, or delegate or subcontract any obligations, under the Agreement. The Company may freely assign all rights and obligations of the Agreement to any affiliate or successor (including a purchaser of any assets of the Company).

(g) Governing Law; Jury Trial . The Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the conflicts of laws principles thereof. YOU EXPRESSLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THE AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

(h) No Admission of Wrongdoing . Neither the Agreement, nor the furnishing of the consideration for the Agreement, shall be deemed or construed at any time to be an admission by the parties of any improper or unlawful conduct, and all of the parties expressly deny any improper or unlawful conduct.

(i) Third-Party Beneficiaries . You acknowledge and agree that all Releasees are third-party beneficiaries of the Agreement and have the right to enforce the Agreement.

[Signature page follows]

	AMPLIFY ENERGY CORP.


	By:	/s/ ERIC M. WILLIS
	Name:	ERIC M. WILLIS
	Title:	Vice President and General Counsel

YOU HEREBY ACKNOWLEDGE THAT YOU HAVE READ THE AGREEMENT, THAT YOU FULLY KNOW, UNDERSTAND AND APPRECIATE ITS CONTENTS, AND THAT YOU HEREBY ENTER INTO THE AGREEMENT VOLUNTARILY AND OF YOUR OWN FREE WILL .

ACCEPTED AND AGREED:

/s/ William J Scarff

William J Scarff

Date: April 27, 2018

Pursuant to Section 3(e) of the Agreement, indicate, whether you elect to receive payment in cash or shares of the Company’s Common Stock:

☒ Cash payment of $296,594.

☐ 41,951 shares of the Company’s Common Stock.

[Signature page to Retirement Agreement]

Exhibit 10.4

Amplify Energy Corp.

500 Dallas Street, Suite 1600

Houston, TX 77002

(713) 490-8900

April 27, 2018

Robert L. Stillwell, Jr.

500 Dallas Street, Suite 1600

Houston, Texas 77002

Dear Mr. Stillwell:

This letter agreement (together with Appendixes A and B hereto, the “ Agreement ”) sets forth our mutual understanding concerning your separation of employment from Amplify Energy Corp., a Delaware corporation (the “ Company ”). To accept the Agreement, you must sign and return a copy of the Agreement to the Company at the address indicated in Section 9(f)(iv)(C) below, by no later than May 1, 2018. The date on which you actually execute the Agreement is referred to herein as the “ Effective Date ”.

1. Termination in All Capacities. Your employment and all positions you held with the Company and its subsidiaries and affiliates (collectively, the “ Company Group ”) shall terminate without cause in all capacities as of April 27, 2018 (the “ Separation Date ”). You agree to execute such additional documents as reasonably requested by the Company to evidence the foregoing.

2. Consideration . You acknowledge that: (a) the Separation Payments (as defined in Section 3) constitute full settlement of all of your rights under the Agreement and in connection with your separation from the Company, (b) except as otherwise provided specifically in the Agreement, you have no entitlement under any other severance, change in control, equity incentive or similar agreement with, or arrangement maintained by, any member of the Company Group, and (c) except as otherwise provided specifically in the Agreement, the Company does not and will not have any other liability or obligation to you by reason of the termination of your employment with the Company Group. You further acknowledge that, in the absence of the Effective Date and the Re-Execution Effective Date (as defined in Appendix A), the Separation Payments would not otherwise be due to you.

3. Separation Payments . In consideration of the covenants set forth herein and the Effective Date and the Re-Execution Effective Date, the Company will provide you with the following payments and benefits (collectively, the “ Separation Payments ”):

(a) an aggregate amount of $1,577,000 (the “ Severance ”), less all applicable withholdings and authorized or required deductions, which will be paid to you in installments, with the first installment of $788,500 paid on the sixtieth (60 th ) calendar day following the Separation Date (provided that the Re-Execution Effective Date occurs), and the remaining $788,500 paid in installments of $197,125 on each of the three, four, five and six month anniversaries of the Separation Date;

(b) to the extent you timely elect COBRA continuation coverage under the Company’s group insurance plans, the Company will reimburse you for the amount of COBRA continuation premiums (less required co-pay) until the earlier of (i) 12 months following the Separation Date and (ii) such time as you are no longer eligible for COBRA continuation coverage (with you being required to notify the Company within one week after becoming eligible for group medical coverage from another employer);

(c) the Company will reimburse you for (i) financial counseling services for 12 months following the Separation Date, subject to a maximum benefit of $30,000, and (ii) outplacement counseling services for 12 months following the Separation Date, subject to a maximum benefit of $30,000. You will be responsible for selecting any financial counseling advisors and any outplacement services providers;

(d) the option to purchase 66,000 shares of the Company’s Common Stock that was granted to you under the Company’s Management Incentive Plan and the Stock Option Award Agreement thereunder, dated as of May 4, 2017 (the “ Option Agreement ”), will fully vest on the Separation Date and will remain exercisable until it expires on the second anniversary of the Separation Date;

(e) at your election as indicated on the signature page hereto (provided that the Re-Execution Effective Date occurs), either (i) a cash payment of $155,540, less all applicable withholdings and authorized or required deductions, or (ii) 22,000 shares of the Company’s Common Stock, paid or delivered, as applicable, on the sixtieth (60th) calendar day following the Separation Date; provided that such shares, if applicable, may not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than by will or the laws of descent or distribution, prior to the third anniversary of the Separation Date; and

(f) in the event that a Change of Control (as defined in the Company’s Management Incentive Plan) occurs on or prior to October 27, 2018, the 44,000 shares of the Company’s Common Stock covered by the award of restricted stock units granted to you under the Company’s Management Incentive Plan and the Restricted Stock Unit Award Agreement thereunder, dated as of May 4, 2017 (the “ RSU Agreement ”), that were scheduled to vest in installments of 22,000 shares on May 4, 2019 and 22,000 shares on May 4, 2020 will immediately be 100% vested. This arrangement supersedes Section 2(c) of the RSU Agreement, which would provide for immediate forfeiture of the unvested restricted stock units upon the Separation Date.

For clarity, you will not be eligible to vest in the 22,000 shares covered by the RSU Agreement that were scheduled to vest on May 4, 2018, and the 44,000 shares covered by the RSU Agreement that were scheduled to vest in installments on May 4 of 2019 and 2020 will only become vested in the event that a Change of Control occurs on or prior to October 27, 2018.

Notwithstanding the foregoing, if the Re-Execution Effective Date does not occur, you will automatically and without further action forfeit your right to the Severance (but you will retain your right to the Separation Payments other than the Severance, subject to the terms set forth in the Agreement, and the release of non-ADEA Claims set forth in Section 9(a) will remain in full force and effect).

4. No Other Compensation or Benefits . Except for compensation and benefits you earned through the Separation Date (to be paid to you in accordance with the Company’s policies), as otherwise specifically provided herein, or as required for COBRA coverage under Section 4980B(f) of the Internal Revenue Code of 1986, as amended, you will not be entitled to any compensation or benefits or to participate in any benefit programs or arrangements of the Company Group after the Separation Date. Additional information regarding COBRA coverage will be provided to you separately.

5. Return of Property . You confirm that, on or prior to the Effective Date, you will have returned to the Company all property of the Company Group in your possession and all property made available to you in connection with your employment with the Company Group, including, without limitation, any and all Company Group credit cards, keys, security access codes, work-related passwords, records, manuals, customer lists, notebooks, computers, computer programs and files, papers, electronically stored information and documents kept or made by you in connection with your employment with the Company Group.

7. Cooperation . You acknowledge that because of your position with the Company, you may possess information that may be relevant to or discoverable in connection with claims, litigation or judicial, arbitral or investigative proceedings initiated by a private party or by a regulator, governmental entity, or self-regulatory organization, that relates to or arises from matters with which you were involved during your employment with the Company, or that concern matters of which you have information or knowledge (collectively, a “ Proceeding ”). You agree that you will testify truthfully in connection with any such Proceeding. Except as provided in Section 11, you agree that you will cooperate with the Company in connection with every such Proceeding, and that your duty of cooperation will include an obligation to meet with the Company representatives and/or counsel concerning all such Proceedings for such purposes, and at such times and places, as the Company reasonably requests on reasonable prior notice and during normal business hours, and to appear for deposition and/or testimony upon the Company’s request and without a subpoena. The Company will reimburse you for reasonable out-of-pocket expenses that you incur in honoring your obligation of cooperation under this Section 7.

8. Breach of Agreement . If you violate any provisions of the Agreement or the

Restrictive Covenant Agreement (as defined in Section 9(h)), no further Separation Payments will be due to you, and you will be required to promptly repay to the Company any of the Separation Payments previously paid to you.

9. Release .

(a) General Release . In consideration of the Separation Payments provided to you under the Agreement, you, and each of your heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “ Releasors ”) hereby irrevocably and unconditionally release and forever discharge the Company Group and its parent, and each of their subsidiaries, affiliates and joint venture partners, and all of their past and present directors, officers, employees, consultants, founders, owners, shareholders, representatives, members, attorneys, partners, insurers, benefit plans and agents, and all of their predecessors, successors and assigns (collectively, the “ Releasees ”) from any and all claims, actions, causes of action, suits, controversies, cross-claims, counter-claims, rights, judgments, obligations, compensatory damages, liquidated damages, punitive or exemplary damages, any other damages, demands, accountings, debts, claims for costs and attorneys’ fees, losses or liabilities of whatever kind or character in law and in equity and any other liabilities, known or unknown, suspected or unsuspected of any nature whatsoever (collectively, “ Claims ”), including, without limitation, any Claims under Title VII of the Civil Rights Act, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, the Equal Pay Act, as amended, the Employee Retirement Income Security Act, as amended, the Civil Rights Act of 1991, as amended, the Worker Adjustment and Retraining Notification Act, as amended, and any other Claims under any federal, state, local or foreign law, act, statute, code, order, judgment, injunction, ruling, decree, writ, ordinance or regulation arising from or in any way related to (i) your employment with the Company Group or the termination of such employment, at any time prior to the Effective Date and/or the Reaffirmation Date (as applicable), (ii) any agreement entered into as part of your employment with the Company Group with any of the Releasees, and/or (iii) any awards, policies, plans, programs or practices of any of the Releasees that may apply to you or in which you may participate; provided, however, that the release set forth in this Section 9(a) will not apply to the obligations of the Company under the Agreement. The Releasors further agree that the Separation Payments will be in full satisfaction of any and all Claims for payments or benefits, whether express or implied, that the Releasors may have against the Releasees arising out of your employment with the Company Group and the termination thereof. This Section 9(a) does not apply to any Claims that the Releasors may have as of the Effective Date arising under the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, as amended, and the applicable rules and regulations promulgated thereunder (“ ADEA ”). Claims arising under ADEA are addressed in Section 9(f) of the Agreement.

(b) You understand that you may later discover claims or facts that may be different than, or in addition to, those which you now know or believe to exist with regards to the subject matter of the Agreement and the releases in this Section 9, and which, if known at the time of executing the Agreement, may have materially affected the Agreement or your decision to enter into it. You hereby waive any right or claim that might arise as a result of such different or additional claims or facts.

(c) The Agreement is not intended to bar or affect (i) any Claims that may not be waived by private agreement under applicable law, such as claims for workers’ compensation

or unemployment insurance benefits or (ii) vested rights under the Company’s 401(k) or pension plan.

(A) you should consult with an attorney prior to executing the

Agreement;

(B) you have until June 12, 2018, which is at least forty-five (45) days

after receipt of the Agreement, to consider whether to re-execute it, by signing the Reaffirmation Page set forth on Appendix A, and release any age Claim under ADEA following the Separation Date. If you choose to re-execute the Agreement before June 12, 2018, you do so knowingly and voluntarily;

Vice President, Human Resources & Administration; and

any of the Releasees. You understand that the release of Claims contained in the Agreement extends to all of the aforementioned Claims and potential Claims which arose on or before the Effective Date and the Reaffirmation Date (as applicable), whether now known or unknown, suspected or unsuspected, and that this constitutes an essential term of the Agreement. You further understand and acknowledge the significance and consequences of the Agreement and of each specific release and waiver, and expressly consent that the Agreement shall be given full force and effect to each and all of its express terms and provisions, including those relating to unknown and uncompensated Claims, if any, as well as those relating to any other Claims specified herein. You hereby waive any right or Claim that you may have to employment, reinstatement or re-employment with the Company Group.

10. Restrictive Covenants . You acknowledge that you have entered into a Restrictive Covenant Agreement with the Company, dated as of May 4, 2017 (the “ Restrictive Covenant Agreement ”), and that the obligations applicable to you under the Restrictive Covenant Agreement, including without limitation the non-competition, non-solicitation and confidentiality covenants contained therein, will remain in full force and effect following the Separation Date in accordance with their terms and will not be superseded by the terms of the Agreement.

in a lawsuit or other proceeding, if such filing is made under seal. Without limiting the foregoing, if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law,you may disclose the trade secret to your attorney and use the trade secret information in the court proceeding, if you (x) file any document containing the trade secret under seal, and (y) do not

disclose the trade secret, except pursuant to court order.

12. Miscellaneous .

(a) Entire Agreement . Except for the Restrictive Covenant Agreement, the Option Agreement (as modified by Section 3(d)) and the RSU Agreement (as modified by Section 3(f)), the Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and supersedes and replaces any express or implied, written or oral, prior agreement, plan or arrangement with respect to the terms of your employment with the Company Group and the termination thereof which you may have had with the Company Group, including without limitation the following agreements entered into between you and the Company: the Severance Agreement, dated as of May 4, 2017, and the Change of Control Agreement, dated as of May 4, 2016, as amended as of May 4, 2017 (the “ CoC Agreement ”), each of which shall hereafter be null and void in their entirety. For clarity, if a Change of Control (as defined in the CoC Agreement) occurs within six months following the Separation Date, you will not be entitled to any payments under the CoC Agreement or otherwise, except to the extent set forth in Section 3(f). The Agreement may be amended only by a written document signed by an authorized representative of the Company and you.

(b) Withholding Taxes . The Separation Payments will be reduced by any applicable withholding taxes.

(e) Counterparts . The Agreement may be executed in one or more counterparts, which together will constitute one and the same agreement. A faxed or PDF signature shall operate the same as an original signature and shall be considered to have the same binding legal effect as if it were the original signed version of the Agreement delivered in person.

FROM THE AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

(i) Third-Party Beneficiaries . You acknowledge and agree that all Releasees are third-party beneficiaries of the Agreement and have the right to enforce the Agreement.

[Signature page follows]

	AMPLIFY ENERGY CORP.


	By:	/s/ ERIC M. WILLIS
	Name:	ERIC M. WILLIS
	Title:	Vice President and General Counsel

ACCEPTED AND AGREED:

/s/ Robert L. Stillwell, Jr.

Robert L. Stillwell, Jr.

Date: April 27, 2018

Pursuant to Section 3(e) of the Agreement, indicate, whether you elect to receive payment in cash or shares of the Company’s Common Stock:

☑ Cash payment of $155,540.

☐ 22,000 shares of the Company’s Common Stock.

[Signature page to Separation Agreement]

Exhibit 10.5

Amplify Energy Corp.

500 Dallas Street, Suite 1600

Houston, TX 77002

(713) 490-8900

April 27, 2018

Christopher S. Cooper

500 Dallas Street, Suite 1600

Houston, Texas 77002

Dear Mr. Cooper:

(a) an aggregate amount of $1,691,000 (the “ Severance ”), less all applicable withholdings and authorized or required deductions, which will be paid to you in installments, with the first installment of $845,500 paid on the sixtieth (60 th ) calendar day following the Separation Date (provided that the Re-Execution Effective Date occurs), and the remaining $845,500 paid in installments of $211,375 on each of the three, four, five and six month anniversaries of the Separation Date;

(b) to the extent you timely elect COBRA continuation coverage under the Company’s group insurance plans, the Company will reimburse you for the amount of COBRA continuation premiums (less required co-pay) until the earlier of (i) 12 months following the Separation Date and (ii) such time as you are no longer eligible for COBRA continuation coverage (with you being required to notify the Company within one week after becoming eligible for group medical coverage from another employer);

(d) the option to purchase 88,000 shares of the Company’s Common Stock that was granted to you under the Company’s Management Incentive Plan and the Stock Option Award Agreement thereunder, dated as of May 4, 2017 (the “ Option Agreement ”), will fully vest on the Separation Date and will remain exercisable until it expires on the second anniversary of the Separation Date;

(e) at your election as indicated on the signature page hereto (provided that the Re-Execution Effective Date occurs), either (i) a cash payment of $207,384, less all applicable withholdings and authorized or required deductions, or (ii) 29,333 shares of the Company’s Common Stock, paid or delivered, as applicable, on the sixtieth (60th) calendar day following the Separation Date; provided that such shares, if applicable, may not be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner, other than by will or the laws of descent or distribution, prior to the third anniversary of the Separation Date; and

(f) in the event that a Change of Control (as defined in the Company’s Management Incentive Plan) occurs on or prior to October 27, 2018, the 58,667 shares of the Company’s Common Stock covered by the award of restricted stock units granted to you under the Company’s Management Incentive Plan and the Restricted Stock Unit Award Agreement thereunder, dated as of May 4, 2017 (the “ RSU Agreement ”), that were scheduled to vest in installments of 29,333 shares on May 4, 2019 and 29,334 shares on May 4, 2020 will immediately be 100% vested. This arrangement supersedes Section 2(c) of the RSU Agreement, which would provide for immediate forfeiture of the unvested restricted stock units upon the Separation Date.

For clarity, you will not be eligible to vest in the 29,333 shares covered by the RSU Agreement that were scheduled to vest on May 4, 2018, and the 58,667 shares covered by the RSU Agreement that were scheduled to vest in installments on May 4 of 2019 and 2020 will only become vested in the event that a Change of Control occurs on or prior to October 27, 2018.

Notwithstanding the foregoing, if the Re-Execution Effective Date does not occur, you will automatically and without further action forfeit your right to the Severance (but you will retain your right to the Separation Payments other than the Severance, subject to the terms set forth in the Agreement, and the release of non-ADEA Claims set forth in Section 9(a) will remain in full force and effect).

8. Breach of Agreement . If you violate any provisions of the Agreement or the Restrictive Covenant Agreement (as defined in Section 9(h)), no further Separation Payments will be due to you, and you will be required to promptly repay to the Company any of the Separation Payments previously paid to you.

9. Release .

(b) You understand that you may later discover claims or facts that may be different than, or in addition to, those which you now know or believe to exist with regards to the subject matter of the Agreement and the releases in this Section 9, and which, if known at the time of executing the Agreement, may have materially affected the Agreement or your decision to enter into it. You hereby waive any right or claim that might arise as a result of such different or additional claims or facts.

(c) The Agreement is not intended to bar or affect (i) any Claims that may not be waived by private agreement under applicable law, such as claims for workers’ compensation or unemployment insurance benefits or (ii) vested rights under the Company’s 401(k) or pension plan.

(A) you should consult with an attorney prior to executing the Agreement;

(B) you have until June 12, 2018, which is at least forty-five (45) days after receipt of the Agreement, to consider whether to re-execute it, by signing the Reaffirmation Page set forth on Appendix A, and release any age Claim under ADEA following the Separation Date. If you choose to re-execute the Agreement before June 12, 2018, you do so knowingly and voluntarily;

10. Restrictive Covenants . You acknowledge that you have entered into a Restrictive Covenant Agreement with the Company, dated as of May 4, 2017 (the “ Restrictive Covenant Agreement ”), and that the obligations applicable to you under the Restrictive Covenant Agreement, including without limitation the non-competition, non-solicitation and confidentiality covenants contained therein, will remain in full force and effect following the Separation Date in accordance with their terms and will not be superseded by the terms of the Agreement.

(b) Notwithstanding anything to the contrary in the Agreement or otherwise, as provided for in the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Without limiting the foregoing, if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the trade secret to your attorney and use the trade secret information in the court proceeding, if you (x) file any document containing the trade secret under seal, and (y) do not disclose the trade secret, except pursuant to court order.

12. Miscellaneous .

(a) Entire Agreement . Except for the Restrictive Covenant Agreement, the Option Agreement (as modified by Section 3(d)) and the RSU Agreement (as modified by Section 3(f)), the Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the matters covered hereby and supersedes and replaces any express or implied, written or oral, prior agreement, plan or arrangement with respect to the terms of your employment with the Company Group and the termination thereof which you may have had with the Company Group, including without limitation the following agreements entered into between you and the Company: the Severance Agreement, dated as of May 4, 2017, and the Change of Control Agreement, dated as of May 4, 2016, as amended as of May 4, 2017 (the “ CoC Agreement ”), each of which shall hereafter be null and void in their entirety. For clarity, if a Change of Control (as defined in the CoC Agreement) occurs within six months following the Separation Date, you will not be entitled to any payments under the CoC Agreement or otherwise, except to the extent set forth in Section 3(f). The Agreement may be amended only by a written document signed by an authorized representative of the Company and you.

(b) Withholding Taxes . The Separation Payments will be reduced by any applicable withholding taxes.

(e) Counterparts . The Agreement may be executed in one or more counterparts, which together will constitute one and the same agreement. A faxed or PDF signature shall operate the same as an original signature and shall be considered to have the same binding legal effect as if it were the original signed version of the Agreement delivered in person.

(i) Third-Party Beneficiaries . You acknowledge and agree that all Releasees are third-party beneficiaries of the Agreement and have the right to enforce the Agreement.

[Signature page follows]

	AMPLIFY ENERGY CORP.


	By:	/s/ ERIC M. WILLIS
	Name:	ERIC M. WILLIS
	Title:	Vice President and General Counsel

ACCEPTED AND AGREED:

/s/ Christopher S. Cooper

Christopher S. Cooper

Date: 4/28/18

Pursuant to Section 3(e) of the Agreement, indicate, whether you elect to receive payment in cash or shares of the Company’s Common Stock:

☑ Cash payment of $207.384.

☐ 29,333 shares of the Company’s Common Stock.

[Signature page to Separation Agreement]

Exhibit 10.6

Form of

Amplify Energy Corp.

Management Incentive Plan

Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “ Agreement ”) is made by and between Amplify Energy Corp., a Delaware corporation (the “ Company ”), and [ ] (the “ Participant ”), effective as of [ ] (the “ Date of Grant ”), pursuant to the Amplify Energy Corp. Management Incentive Plan (as the same may be amended from time to time, the “ Plan ”), and the Employment Agreement, by and between the Company and the Participant, dated [ ] (the “ Employment Agreement ”).

RECITALS

WHEREAS , the Company has adopted the Plan, which is incorporated herein by reference and made a part of this Agreement, and capitalized terms not otherwise defined in this Agreement shall have the meanings ascribed to those terms in the Plan; and

WHEREAS , the Committee has authorized and approved the grant of an Award to the Participant that will provide the Participant the opportunity to receive shares of Common Stock upon the settlement of stock units on the terms and conditions set forth in the Plan and this Agreement (“ Restricted Stock Units ”).

NOW THEREFORE , in consideration of the premises and mutual covenants set forth in this Agreement, the parties hereto agree as follows:

1. Grant of Restricted Stock Unit Award . The Company hereby grants to the Participant [ ] Restricted Stock Units, on the terms and conditions set forth in the Plan and this Agreement, subject to adjustment as set forth in the Plan. Each Restricted Stock Unit represents the promise of the Company to deliver shares of Common Stock (initially one share of Common Stock per Restricted Stock Unit) to the Participant pursuant to the terms and conditions of the Plan and this Agreement.

2. Vesting of Restricted Stock Units . Subject to the terms and conditions set forth in the Plan and this Agreement, the Restricted Stock Units shall vest as follows:

a. TSUs . Fifty percent (50%) of the Restricted Stock Units shall be subject to time-vesting conditions (“ TSUs ”) and shall vest in accordance with the following schedule, subject to the Participant’s continued Service through each applicable vesting date, except as otherwise provided in this Section 2 :

Vesting Date Cumulative Vested Percentage

First Anniversary of the Date of Grant 33⅓%

Second Anniversary of the Date of Grant 66⅔%

Third Anniversary of the Date of Grant 100%

b. PSUs . Fifty percent (50%) of the Restricted Stock Units shall be subject to both time-vesting and performance-vesting conditions (“ PSUs ”). The PSUs shall

performance vest based on the Company’s achievement of the 15-Day VWAP targets set forth below on or befor e the third anniversary of the Date of Grant (such period, the “ Performance Period ”), subject to the Participant’s continued Service through each applicable vesting date . For purposes of this Agreement, “ 15-Day VWAP ” means the volume-weighted average price per share of Common Stock over fifteen (15) consecutive trading days. In the event the Company makes a significant return of capital to its shareholders during the Performance Period, the Company and the Participant will work together in good faith to effectuate any necessary adjustments to the 15-Day VWAP Targets.

15-Day VWAP Target Cumulative Performance-Vested Percentage

At or above $12.50 33⅓%

At or above $15.00 66⅔%

At or above $17.50 100%

Any PSU that does not performance vest prior to the conclusion of the Performance Period shall be forfeited immediately and without consideration at the conclusion of the Performance Period.

Any PSUs that performance vest during the Performance Period (the “ Performance-Vested PSUs ”) will be subject to time-based vesting, such that 50% of the Performance-Vested PSUs will time vest on the applicable performance-vesting date, and an additional 25% of the Performance-Vested PSUs will time vest on each of the first and second anniversaries of the date on which such Performance-Vested PSUs performance-vested, subject to the Participant’s continued Service through each applicable vesting date.

c. Involuntary Termination without Cause or Voluntary Termination for Good Reason . If the Participant’s Service is terminated by the Company without Cause or by the Participant for Good Reason (not due to [his][her] death or Disability), (i) all TSUs shall fully vest, and all PSUs shall fully time vest, upon such termination, and (ii) if such termination occurs after the second anniversary of the Effective Date (as defined in the Employment Agreement) and prior to the end of the Performance Period, then with respect to any PSUs that have not performance-vested as of such termination, such PSUs shall performance vest to the extent that the price per share of Common Stock as of such termination equals or exceeds the 15-Day VWAP targets set forth above (in each case, reduced by $0.25), in each case, subject to the Participant’s execution and non-revocation of the Release (as defined in the Employment Agreement) no later than the 60th day following the Participant’s termination of Service. Any PSUs that have not performance-vested in accordance with Section 2.b hereof as of such termination of Service will be forfeited immediately and without consideration. For all purposes of this Agreement, the terms “ Cause ” and “ Good Reason ” shall have the definitions given to them in the Employment Agreement as of the termination date.

d. Change of Control . If a Change of Control is consummated during the Participant’s Service, all TSUs shall fully vest, and all PSUs shall fully time vest, upon the consummation of such Change of Control. Further, if a Change of Control occurs during the Performance Period, then with respect to any PSUs that have not performance vested

as of the Change of Control, such PSUs shall performance vest to the extent that the price per share of Common Stock achieved in the Change of Control equals or exceeds the 15-Day VWAP targets set forth above. Any PSUs that have not performance-vested in accordance with Section 2.b and this Section 2.d as of such Change of Control will be forfeited immediately and without consideration.

e. Forfeiture . Any Restricted Stock Units that are not fully vested will be forfeited immediately and without consideration upon a termination of the Participant’s Service for any or no reason, except as set forth in Section 2.c .

3. Dividend Equivalent Rights . Each Restricted Stock Unit is granted together with dividend equivalent rights, which dividend equivalent rights will be (a) accumulated and deemed reinvested in additional Restricted Stock Units and (b) subject to the same vesting and forfeiture provisions as the Restricted Stock Units granted pursuant to Section 2 . Any payments made pursuant to dividend equivalent rights will be paid in either cash or in shares of Common Stock, or any combination thereof, as elected by the Participant (to the extent permissible under applicable law), effective as of the date of settlement under Section 4 below.

4. Payment .

a. Settlement . Promptly following the vesting date of the Restricted Stock Units (but no later than 60 days following each such vesting date), the Company shall deliver to the Participant (or the Participant’s legal representatives of the estate of the Participant) a number of shares of Common Stock equal to the aggregate number of Restricted Stock Units that vested as of such date. No fractional shares of Common Stock shall be delivered; the Company shall pay cash in respect of any fractional shares of Common Stock. The Company may deliver such shares either through book entry accounts held by, or in the name of, the Participant or cause to be issued a certificate or certificates representing the number of shares of Common Stock to be issued in respect of the Restricted Stock Units, registered in the name of the Participant. If the 60-day period following the vesting date of the Restricted Stock Units extends across two calendar years, settlement shall always occur in the second calendar year.

b. Withholding Requirements . The Company shall have the power and the right to deduct or withhold automatically from any shares of Common Stock or cash deliverable under this Agreement, or to require the Participant or the Participant’s representative to remit to the Company, the amount necessary to satisfy federal, state and local taxes required by law or regulation to be withheld with respect to any taxable event arising as a result of this Agreement (collectively, “ Withheld Taxes ”). If the Restricted Stock Units are settled in shares of Common Stock, all or a portion of the applicable Withheld Taxes may, except as otherwise determined by the Committee at such time, be paid by reducing the number of shares of Common Stock otherwise deliverable upon such settlement by the number of shares of Common Stock having an aggregate Fair Market Value equal to the applicable Withheld Taxes (or a portion thereof).

5. Adjustment of Shares of Common Stock . In the event of any change with respect to the outstanding shares of Common Stock contemplated by Section 4.4 of the Plan, the number

of Restricted Stock Units and the performance vesting conditions set forth in Section 2.b may be adjusted in accordance with Section 4.4 of the Plan.

6. Restrictive Covenants . In consideration of the Restricted Stock Units granted pursuant to this Agreement, the Participant shall comply with the restrictions relating to confidentiality, non-solicitation of employees, consultants and customers, and non-competition set out in the Employment Agreement.

7. Miscellaneous Provisions .

a. Securities Laws Requirements . No shares of Common Stock will be issued or transferred pursuant to this Agreement unless and until all then applicable requirements imposed by federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance of shares of Common Stock pursuant to this Agreement, the Company may require the Participant to take any reasonable action to meet those requirements. The Committee may impose such conditions on any shares of Common Stock issuable pursuant to this Agreement as it may deem advisable, including, without limitation, restrictions under the Securities Act, under the requirements of any exchange upon which shares of the same class are then listed and under any blue sky or other securities laws applicable to those shares of Common Stock.

b. Rights of a Shareholder of the Company . Prior to settlement of the Restricted Stock Units in shares of Common Stock, neither the Participant nor the Participant’s representative will have any rights as a shareholder of the Company with respect to any shares of Common Stock underlying the Restricted Stock Units.

c. Transfer Restrictions . The shares of Common Stock delivered hereunder will be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares are listed, any applicable federal or state laws and any agreement with, or policy of, the Company or the Committee to which the Participant is a party or subject, and the Committee may cause orders or designations to be placed upon the books and records of the Company’s transfer agent to make appropriate reference to such restrictions.

d. No Right to Continued Service . Nothing in this Agreement or the Plan confers upon the Participant any right to continue in Service for any period of specific duration or interferes with or otherwise restricts in any way the rights of the Company (or any Subsidiary employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate [his][her] Service at any time and for any reason, with or without Cause or Good Reason.

e. No Transfer of Restricted Stock Units . The Participant shall not sell, assign, transfer, exchange, pledge, encumber, gift, devise, hypothecate or otherwise dispose of (collectively, “ Transfer ”) any Restricted Stock Units granted hereunder. Any purported

Transfer of Restricted Stock Units in breach of this Agreement shall be void and ineffective and shall not operate to Transfer any interest or title in the purported transferee.

f. Notification . Any notification required by the terms of this Agreement will be given by the Participant (i) in writing addressed to the Company at its principal executive office and will be deemed effective upon actual receipt when delivered by personal delivery or by registered or certified mail, with postage and fees prepaid, or (ii) by electronic transmission to the Company’s e-mail address of the Company’s General Counsel and will be deemed effective upon actual receipt. Any notification required by the terms of this Agreement will be given by the Company (x) in writing addressed to the address that the Participant most recently provided to the Company and will be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, or (y) by facsimile or electronic transmission to the Participant’s primary work fax number or e-mail address (as applicable), and will be deemed effective upon confirmation of receipt by the sender of such transmission.

g. Entire Agreement . This Agreement and the Plan constitute the entire agreement between the parties hereto with regard to the subject matter of this Agreement. This Agreement and the Plan supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter of this Agreement.

h. Waiver . No waiver of any breach or condition of this Agreement will be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.

i. Survival of Certain Provisions . Wherever appropriate to the intention of the parties hereto, the respective rights and obligations of the parties hereunder shall survive any termination or expiration of this Agreement or the Participant’s termination of Service.

j. Successors and Assigns . The provisions of this Agreement will inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s executor, personal representative(s), distributees, administrator, permitted transferees, permitted assignees, beneficiaries, and legatee(s), as applicable, whether or not any such person has become a party to this Agreement or agreed in writing to be joined herein and be bound by the terms hereof.

k. Severability . The provisions of this Agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, then such provision shall be reformed to create a valid and enforceable provision to the maximum extent permitted by law; provided, however, if such provision cannot be reformed, it shall be deemed ineffective and deleted herefrom, and the remaining provisions will nevertheless be binding and enforceable. This Agreement should be construed by limiting and reducing it only to the minimum extent necessary to be enforceable under then applicable law.

l. Amendment . Except as otherwise provided in the Plan, this Agreement will not be amended unless the amendment is agreed to in writing by both the Participant and the Company.

m. Code Section 409A Compliance . It is the intention of the parties that this Agreement is written and administered, and will be interpreted and construed, in a manner such that no amount under this Agreement becomes subject to (a) gross income inclusion under Code Section 409A or (b) interest and additional tax under Code Section 409A (collectively, “ Section 409A Penalties ”), including, where appropriate, the construction of defined terms to have meanings that would not cause imposition of the Section 409A Penalties. Accordingly, the Participant consents to any amendment of this Agreement which the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, the Participant a copy of such amendment. Further, to the extent that any terms of the Agreement are ambiguous, such terms shall be interpreted as necessary to comply with, or an exemption under, Code Section 409A when applicable. Under no circumstances will the Company have any liability for any violation of Code Section 409A.

n. Choice of Law; Jurisdiction . This Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Agreement will be governed by the internal laws of the State of Delaware, excluding any conflicts or choice-of-law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. Jurisdiction and venue of any action or proceeding relating to this Agreement shall be exclusively in the federal and state courts of competent jurisdiction located in Houston, Harris County, Texas, and the parties hereby waive any objection to such venue and jurisdiction including, without limitation, that it is inconvenient.

o. Signature in Counterparts . This Agreement may be signed in counterparts, manually or electronically, each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.

p. Electronic Delivery . The Company may, in its sole discretion, decide to deliver any documents related to any Awards granted under the Plan by electronic means or to request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, if applicable. Such on-line or electronic system shall satisfy notification requirements discussed in Section 7.f .

q. Acceptance . The Participant hereby acknowledges receipt of a copy of the Plan, this Agreement and the Restrictive Covenant Agreement. The Participant has read and understands the terms and provisions of the Plan, this Agreement and the Restrictive Covenant Agreement, and accepts the Restricted Stock Units subject to all of the terms and conditions of the Plan and this Agreement. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable term and provision of the Plan will govern and prevail.

r. I nterpretive Matters . In the interpretation of this Agreement, except where the context otherwise requires:

(i) The headings used in this Agreement headings are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

(ii) The terms “including” and “include” do not denote or imply any limitation;

(iii) The conjunction “or” has the inclusive meaning “and/or”;

(iv) The singular includes the plural, and vice versa, and each gender includes each of the others;

(v) Reference to any statute, rule, or regulation includes any amendment thereto or any statute, rule, or regulation enacted or promulgated in replacement thereof; and

(vi) The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement and not to any particular provision.

[ Signature page follows. ]

IN WITNESS WHEREOF, the Company and the Participant have executed this Restricted Stock Unit Award Agreement as of the dates set forth below.


PARTICIPANT			AMPLIFY ENERGY CORP.


Name:			By:
Date:			Title:
			Date:

Signature Page to Restricted Stock Unit Award Agreement

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Kenneth Mariani, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2018	/s/ Kenneth Mariani
	Kenneth Mariani
	President and Chief Executive Officer
	Amplify Energy Corp.

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Martyn Willsher, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2018	/s/ Martyn Willsher
	Martyn Willsher
	Senior Vice President and Chief Financial Officer
	Amplify Energy Corp.

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Amplify Energy Corp. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Kenneth Mariani, President and Chief Executive Officer of Amplify Energy Corp., and Martyn Willsher, Senior Vice President and Chief Financial Officer of Amplify Energy Corp., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge:

	(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2018			/s/ Kenneth Mariani
			Kenneth Mariani
			President and Chief Executive Officer
			Amplify Energy Corp.


Date: August 8, 2018			/s/ Martyn Willsher
			Martyn Willsher
			Senior Vice President and Chief Financial Officer
			Amplify Energy Corp.

The foregoing certifications are being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, are not being filed as part of the Report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.