California oil spill: Company managing facility sees shares crash

After the oil spill, Amplify Energy’s share value plunged to $3.23 per share on Monday on the New York Stock Exchange

The operator of a pipeline linked to one of the largest oil spills in California has lost almost half its value after its stock plummeted sharply this week after the “catastrophic” spill.

Texas-based oil and natural gas company Amplify Energy, the firm linked to the Huntington beach oil spill, saw a dip in its share price on the New York Stock Exchange (NYSE) on Monday, the company’s worst trading day.

Amplify Energy was valued at $5.74 per share on Friday. After the oil spill, however, its share value plunged to $3.23 per share on Monday. The stock saw a year-to-date gain of over 150 per cent prior to Monday’s decline.

The sell off was triggered after the catastrophic spill in Orange County, which led to the release of at least 126,000 gallons of oil impacting a six-mile range between Huntington Beach and Newport Beach.

The oil spill contaminated beaches and impacted wildlife, with dead birds and fish washing up ashore.

The leak is believed to be one of the largest spills in the state’s history and has triggered a potential “ecological disaster”, according to authorities.

The US Coast Guard began a cleanup of the area once the spill was found late on Saturday morning and is surveying the damage done and investigating the origin of the spill.

The pipeline, believed to be the source of the spill, was operated by Beta Offshore, a subsidiary company of Houston-based Amplify Energy, Huntington Beach Mayor Kim Carr said at a news conference.

The CEO of Amplify, Martyn Willsher, said at a press conference that the company shut down its pipeline and suctioned out remaining oil. He also said the company’s divers were inspecting the area and that a clearer picture may emerge on Tuesday.

Authorities, however, are looking into the possibility of bringing state charges for the spill, according to Orange County district attorney Todd Spitzer.

In response to the oil spill, Roth Capital suspended its price target on the stock in a Monday note, reported Reuters.

“Until we are able to have a discussion with management to confirm this is from an AMPY property, the extent of the spill, the estimated cost of cleanup and any insurance coverage that may apply, we are temporarily suspending our target price, our estimates and moving our rating to Neutral,” the note said.