It's a business gamble that unfortunately has more than just financial consequences if the second-hand hardware fails to continue performing as "reasonably" expected.
>Amplify Energy Corp. is an independent oil and natural gas company engaged in the acquisition, development, exploitation and production of oil and natural gas properties.
All the actual work is expected to be performed by contractors, so the company can co-exist in the same space as cowboy oilmen who don't have to have great engineers on their staff as long as the contractors have the credentials.
Looking at the Amplify portfolio at this early stage in their business, it can be seen that a good number of their properties consist of oilfields where many or most of the wells are not actually producing any more, even though the remaining subsurface reserves are significant.
These could be expected to be value acquisitions requiring the lowest possible up-front investment. A rise in the oil price might be what is anticipated before the additional cash could be raised that could be used for refurbishment and to bring non-producing wells back into production.
The offshore California play however does have all wells listed as currently producing, plus they ended up with the associated pipeline that goes with it in that case.
They may not have as much experience at operating a subsea pipline compared to their efforts getting into the oilwells themselves.
Either way, once an asset sale is in the works, expensive maintenance would be deferred from that point so the acquiring operator can bear the costs. This would be figured into the negotiated price.
To some extent you get what you pay for, even on the industrial scale.