By Chris Isidore, CNN Business
The shares of the owner of the pipeline, who is responsible for the oil spill off the coast of Southern California, collapsed on Monday as the money-losing company could face heavy fines.
Amplify Energy, a small, independent oil company engaged in oil production and drilling in the area, said its pipeline is the obvious source of the massive oil spill about four miles offshore near Huntington, California. Authorities say the spill was an estimated 3,000 barrels, or about 126,000 gallons of crude oil.
Amplify’s shares tumbled roughly 44% in early Monday trading as news of the spill broke. Houston-based Amplify emerged from the bankruptcy of another small oil company, Memorial Production Partners, in 2017.
Thanks to a surge in oil prices, this year’s company’s stock was on the up, up 339% year-to-date by Friday’s close of trading. Despite those huge gains, Amplify’s stock price was roughly where it was on Friday before the collapse in energy prices in the early days of the pandemic, when oil prices briefly turned negative. Institutional investors own around a third of the company’s shares.
Amplify is a very small company with only 222 employees as of the end of 2018, when it last reported the size of its employees in a company filing.
The latest financial report shows sales of $ 153 million, with an annual loss of $ 54.4 million to the end of June. Adjusted operating income was $ 47 million. One factor that contributed to the results was the full waiver of a $ 5.5 million loan from the United States Small Business Administration.
The limited impact of the spill on other businesses
The impact of the oil spill on other oil and drilling companies has so far been limited. The shares of Exxon Mobil, Chevron and ConocoPhillips, the three largest US oil companies, rose slightly on Monday morning, as did those of the offshore drilling company Transocean.
The facilities that operate the pipeline were built in the late 1970s and early 1980s and are inspected every two years, Amplify CEO Martyn Willsher said at a news conference on Sunday. He said the company’s staff noticed the oil spill and notified the Coast Guard on Saturday.
Offshore state oil production has been a focus for Amplify to grow its business. The company announced in August that it had spent $ 1.7 million in capital to expand operations on states off the southern California coast and expects to begin production in September. The company did not respond when asked if this happened as planned and if the oil from that project was involved in this exit.
The CNN Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia company. All rights reserved.