Shares of Amplify Energy Corp. were nearly halved (-44%) on Monday after what investigators believe an anchor from a vessel may have punctured the company's undersea pipeline off the coast of Orange County, California, creating one of the state's worst oil spills in three decades, according to WSJ. On Tuesday morning, shares bounced 10% after being deeply oversold.
Amplify's CEO Martyn Willsher released a statement that the company believes the "source and a cause" of the oil spill may have come from a ship's anchor. He said the company has surveyed 1.5 miles of pipe using remote-controlled underwater cameras and suspects an anchor collision is a "distinct possibility."
"There's more information to come but I think we're moving very closely to a source and a cause of this incident," Willsher said
With more than 60 container ships at anchor or drifting off the ports of Los Angeles and Long Beach due to record-high port congestion, the likelihood of an anchor dragging across the seabed and puncturing a pipeline seems plausible.
Coast Guard Lt. Cmdr. Jeannie Shaye also said, "We're looking into if it could have been an anchor from a ship, but that's in the assessment phase right now."
The oil spill has been absolutely devastating for Huntington Beach to about 6 miles down the coast to Laguna Beach, where oil has come ashore. Estimates so far show 126,000 gallons of oil leaked into the ocean.
The spill comes when regulatory uncertainty in the state about the fossil fuel industry is growing. Last week, the Santa Barbara County Planning Commission blocked Exxon Mobil Corp. from restarting three platforms in the area.
Orange County District Attorney Todd Spitzer was quoted in a press release that Amplify shouldn't lead the investigation into what may have caused the undersea pipeline to leak.
"The company should not be responsible for leading its own investigation with respect to the hundreds of millions of dollars of devastation that it did to our environment and our economy," Spitzer said.