Company Information and Definitions This section provides essential registrant details and defines key terms and abbreviations used throughout the report [Registrant Information](index=1&type=section&id=Registrant%20Information) Expand Energy Corporation (formerly Chesapeake Energy Corporation) filed a 10-Q quarterly report for the quarter ended June 30, 2025, with its stock trading on Nasdaq, identified as a large accelerated filer - Company name changed from Chesapeake Energy Corporation to **Expand Energy Corporation**[8](index=8&type=chunk) Registrant Information Status | Indicator | Status | | :--- | :--- | | Report Type | Quarterly Report (10-Q) | | Quarter End Date | June 30, 2025 | | Securities Registered | Common Stock, Class A, B, C Warrants | | Registered Exchange | Nasdaq Stock Market LLC | | Filer Type | Large Accelerated Filer | | Common Stock Outstanding as of July 24, 2025 | 238,145,675 shares | [Explanatory Note and Definitions](index=3&type=section&id=Explanatory%20Note%20and%20Definitions) This section explains the company's name change and defines key abbreviations and terms for clear report understanding - Chesapeake Energy Corporation completed its merger with Southwestern Energy Company on October 1, 2024, and was renamed **Expand Energy Corporation**[8](index=8&type=chunk) - Monetary values used in the report, except for per unit and per share amounts, are stated in **millions of dollars**[9](index=9&type=chunk) - Provides definitions for numerous abbreviations and terms including ASU, Bbl, Bcf, Bcfe, Chapter 11 Cases, Chesapeake, Class A/B/C Warrants, Credit Facility, Current Period/Quarter, DD&A, Debtors, Effective Date, ESG, FASB, G&A, GAAP, General Unsecured Claim, LNG, LTIP, MBbls, MMBbls, Mcf, Mcfe, MMcf, MMcfe, NGL, NYMEX, OPEC+, Petition Date, Plan, Prior Period/Quarter, Rights Offering, SEC, SOFR, Southwestern, Southwestern Merger, Warrants, and WTI[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) PART I. FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's detailed analysis of its financial condition and operating results [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Expand Energy Corporation's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and stockholders' equity, with detailed notes for the financial position and operating results as of June 30, 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets slightly decreased, cash and cash equivalents significantly increased, total liabilities decreased, and stockholders' equity grew, reflecting post-merger financial structure changes and operational performance Condensed Consolidated Balance Sheets Key Data (Millions of Dollars) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $731 | $317 | +$414 | | Total Current Assets | $2,272 | $1,997 | +$275 | | Net Oil and Gas Properties | $24,172 | $24,282 | -$110 | | Total Assets | $27,768 | $27,894 | -$126 | | Total Current Liabilities | $2,924 | $3,123 | -$199 | | Total Liabilities | $9,831 | $10,329 | -$498 | | Stockholders' Equity | $17,937 | $17,565 | +$372 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved significant revenue and net income growth in Q2 and H1 2025, primarily due to increased volumes from the Southwestern Merger and higher commodity prices, reversing losses from the prior year Condensed Consolidated Statements of Operations Key Data (Millions of Dollars, except per share data) | Indicator | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues and Other | $3,690 | $505 | +$3,185 | $5,886 | $1,586 | +$4,300 | | Operating Expenses | $2,421 | $799 | +$1,622 | $4,885 | $1,848 | +$3,037 | | Operating Income (Loss) | $1,269 | $(294) | +$1,563 | $1,001 | $(262) | +$1,263 | | Net Income (Loss) | $968 | $(227) | +$1,195 | $719 | $(201) | +$920 | | Basic Earnings (Loss) Per Share | $4.07 | $(1.73) | +$5.80 | $3.04 | $(1.53) | +$4.57 | | Diluted Earnings (Loss) Per Share | $4.02 | $(1.73) | +$5.75 | $2.99 | $(1.53) | +$4.52 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) As of June 30, 2025, the company experienced a substantial increase in operating cash flow, increased cash outflows from investing activities, and significantly higher financing cash outflows, resulting in a net increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows Key Data (Millions of Dollars) | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $2,418 | $761 | +$1,657 | | Net Cash Used in Investing Activities | $(1,098) | $(640) | -$458 | | Net Cash Used in Financing Activities | $(909) | $(179) | -$730 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $411 | $(58) | +$469 | | End of Period Cash, Cash Equivalents, and Restricted Cash | $806 | $1,095 | -$289 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) As of June 30, 2025, total stockholders' equity increased to $17,937 million, primarily driven by net income contributions, despite stock repurchases and dividend payments Condensed Consolidated Statements of Stockholders' Equity Key Data (Millions of Dollars, except share count) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Common Stock (shares) | 237,437,223 | 231,769,886 | +5,667,337 | | Additional Paid-in Capital | $13,716 | $13,687 | +$29 | | Retained Earnings | $4,219 | $3,876 | +$343 | | Total Stockholders' Equity | $17,937 | $17,565 | +$372 | - In the first half of 2025, the company issued **6,032,153 common shares** due to warrant exercises and repurchased and retired **851,661 common shares**[92](index=92&type=chunk)[90](index=90&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to the condensed consolidated financial statements, covering accounting policies, significant transactions, debt, equity, derivatives, investments, and segment information, offering deeper context for understanding the company's financial position and operating results [Note 1. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Expand Energy Corporation is the largest natural gas producer in the U.S., focusing on natural gas, oil, and NGL development, with this note outlining the basis of financial statement presentation, consolidation scope, restricted cash, and potential impacts of recent accounting standard updates on disclosures - **Expand Energy Corporation** is the largest natural gas producer in the U.S., with operations across Louisiana, Pennsylvania, West Virginia, and Ohio[34](index=34&type=chunk) - As of June 30, 2025, the company held **$75 million in restricted cash**, primarily for certain outstanding royalty payments and general unsecured claims[37](index=37&type=chunk) - The company is evaluating the impact of ASU 2024-03 (expense disaggregation disclosures), ASU 2023-09 (income tax disclosure improvements), and ASU 2023-07 (reportable segment disclosure improvements) on future financial disclosures[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Note 2. Natural Gas and Oil Property Transactions](index=10&type=section&id=Note%202.%20Natural%20Gas%20and%20Oil%20Property%20Transactions) This note details the company's merger with Southwestern Energy Company, including merger terms, shares issued, total consideration, and preliminary purchase price allocation, also mentioning deferred consideration from Eagle Ford asset divestitures - The **Southwestern Merger** was completed on October 1, 2024, with the company issuing approximately **95.7 million common shares** to Southwestern shareholders, valued at approximately **$7.9 billion**[42](index=42&type=chunk) Southwestern Merger Preliminary Purchase Price Allocation (Millions of Dollars) | Item | Amount | | :--- | :--- | | **Consideration:** | | | Cash | $585 | | Fair Value of Expand Energy Common Stock | $7,871 | | Replacement Awards for Restricted Stock Units and Performance Stock Units | $17 | | **Total Consideration** | **$8,473** | | **Fair Value of Assets Acquired:** | | | Cash and Cash Equivalents and Restricted Cash | $126 | | Other Current Assets | $828 | | Proved Natural Gas and Oil Properties | $10,002 | | Unproved Properties | $4,270 | | Other Property and Equipment | $128 | | Other Long-Term Assets | $496 | | **Amounts Attributable to Assets Acquired** | **$15,850** | | **Fair Value of Liabilities Assumed:** | | | Current Liabilities | $1,955 | | Long-Term Debt | $3,305 | | Deferred Tax Liability | $479 | | Long-Term Contract Liabilities | $1,287 | | Other Long-Term Liabilities | $351 | | **Amounts Attributable to Liabilities Assumed** | **$7,377** | | **Total Identifiable Net Assets** | **$8,473** | - The company divested its Eagle Ford assets through three separate transactions in 2023, receiving deferred consideration, with the current portion approximately **$110 million** and the non-current portion approximately **$87 million** as of June 30, 2025[52](index=52&type=chunk) [Note 3. Earnings Per Share](index=13&type=section&id=Note%203.%20Earnings%20Per%20Share) This note provides the calculation methods and reconciliation for basic and diluted earnings per share, showing positive EPS in Q2 and H1 2025, contrasting with losses in the prior year Basic and Diluted Earnings Per Share Reconciliation | Indicator | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss), Basic and Diluted (Millions of Dollars) | $968 | $(227) | $719 | $(201) | | Weighted-Average Common Shares Outstanding, Basic (Thousands) | 237,973 | 131,168 | 236,213 | 131,030 | | Dilutive Securities Impact (Thousands): | | | | | | Warrants | 2,283 | — | 3,974 | — | | Restricted Stock Units | 304 | — | 364 | — | | Performance Stock Units | — | — | 77 | — | | Weighted-Average Common Shares Outstanding, Diluted (Thousands) | 240,560 | 131,168 | 240,628 | 131,030 | | Basic Earnings (Loss) Per Share | $4.07 | $(1.73) | $3.04 | $(1.53) | | Diluted Earnings (Loss) Per Share | $4.02 | $(1.73) | $2.99 | $(1.53) | - In Q2 and H1 2025, the diluted EPS calculation excluded the dilutive impact of **308,646 common shares** and **582,109 Class C warrants** related to Chapter 11 Cases, as their dilutive conditions were not met[56](index=56&type=chunk) [Note 4. Debt](index=14&type=section&id=Note%204.%20Debt) This note details the company's long-term debt composition, including senior notes and credit facilities, and describes the repayment of several senior notes in H1 2025, reflecting proactive debt management Long-Term Debt Composition (Millions of Dollars) | Debt Type | Book Value as of June 30, 2025 | Book Value as of December 31, 2024 | | :--- | :--- | :--- | | 4.95% Senior Notes (due 2025) | $— | $389 | | 5.50% Senior Notes (due 2026) | $— | $47 | | 5.375% Senior Notes (due 2029) | $700 | $700 | | 5.875% Senior Notes (due 2029) | $469 | $500 | | 6.75% Senior Notes (due 2029) | $866 | $950 | | 5.375% Senior Notes (due 2030) | $1,200 | $1,200 | | 4.75% Senior Notes (due 2032) | $1,150 | $1,150 | | 5.70% Senior Notes (due 2035) | $750 | $750 | | Total Debt, Net | $5,122 | $5,680 | | Less: Current Portion of Long-Term Debt, Net | $— | $(389) | | Total Long-Term Debt, Net | $5,122 | $5,291 | - The company's Credit Facility provides a total committed capacity of **$2.5 billion**, with approximately **$2.5 billion available for borrowing** and no outstanding borrowings as of June 30, 2025[59](index=59&type=chunk) - In January 2025, **$389 million** of 4.95% Senior Notes due 2025 were repaid and terminated; in March 2025, the remaining **$47 million** of 5.50% Senior Notes due 2026 were redeemed; and in Q2 2025, approximately **$84 million** of 6.750% Senior Notes due 2029 and approximately **$31 million** of 5.875% Senior Notes due 2029 were redeemed through open market repurchases[65](index=65&type=chunk)[66](index=66&type=chunk) [Note 5. Contingencies and Commitments](index=15&type=section&id=Note%205.%20Contingencies%20and%20Commitments) This note discloses various contingencies, including commercial operations, litigation, regulatory proceedings, and environmental risks, along with contractual commitments for future gathering, processing, and transportation agreements for natural gas, oil, and NGLs with midstream service providers and pipeline carriers - The company is involved in various litigation and regulatory proceedings, but management believes these matters, individually or in aggregate, are unlikely to have a **material adverse effect** on the company's future consolidated financial position, results of operations, or cash flows[67](index=67&type=chunk)[68](index=68&type=chunk) - The company has implemented policies and procedures to mitigate environmental risks and established environmental reserves for potential economic losses[70](index=70&type=chunk) Total Undiscounted Commitments for Gathering, Processing, and Transportation Agreements (Millions of Dollars) | Period | Amount | | :--- | :--- | | Remainder of 2025 | $730 | | 2026 | $1,412 | | 2027 | $1,302 | | 2028 | $1,204 | | 2029 | $1,028 | | Thereafter | $4,503 | | **Total** | **$10,179** | [Note 6. Other Current Liabilities](index=17&type=section&id=Note%206.%20Other%20Current%20Liabilities) This note details the composition of the company's other current liabilities as of June 30, 2025, and December 31, 2024, with revenue and royalty payables and accrued drilling and production costs being major components Other Current Liabilities Breakdown (Millions of Dollars) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Revenue and Royalty Payables | $814 | $734 | | Accrued Drilling and Production Costs | $401 | $296 | | Contract Liabilities | $272 | $284 | | Accrued Compensation and Benefits | $73 | $124 | | Taxes Payable | $163 | $142 | | Operating Leases | $67 | $71 | | Advances from Joint Interest Owners | $14 | $13 | | Other | $111 | $122 | | **Total Other Current Liabilities** | **$1,915** | **$1,786** | [Note 7. Revenue](index=17&type=section&id=Note%207.%20Revenue) This note disaggregates the company's revenue by operating area and product type and provides the composition of accounts receivable, showing significant changes and growth in the company's revenue structure post-Southwestern Merger Revenue by Operating Area and Product Type (Q2 2025, Millions of Dollars) | Operating Area | Natural Gas | Oil | NGL | Total | | :--- | :--- | :--- | :--- | :--- | | Haynesville | $845 | $— | $— | $845 | | Northeast Appalachia | $643 | $— | $— | $643 | | Southwest Appalachia | $271 | $86 | $176 | $533 | | **Natural Gas, Oil, and NGL Revenue** | **$1,759** | **$86** | **$176** | **$2,021** | | Marketing Revenue | $719 | $33 | $36 | $788 | Revenue by Operating Area and Product Type (H1 2025, Millions of Dollars) | Operating Area | Natural Gas | Oil | NGL | Total | | :--- | :--- | :--- | :--- | :--- | | Haynesville | $1,666 | $— | $— | $1,666 | | Northeast Appalachia | $1,543 | $— | $— | $1,543 | | Southwest Appalachia | $565 | $164 | $383 | $1,112 | | **Natural Gas, Oil, and NGL Revenue** | **$3,774** | **$164** | **$383** | **$4,321** | | Marketing Revenue | $1,556 | $67 | $75 | $1,698 | Accounts Receivable Breakdown (Millions of Dollars) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Natural Gas, Oil, and NGL Sales | $837 | $1,028 | | Joint Interest | $220 | $191 | | Other | $32 | $18 | | Allowance for Doubtful Accounts | $(15) | $(11) | | **Total Accounts Receivable, Net** | **$1,074** | **$1,226** | [Note 8. Income Taxes](index=19&type=section&id=Note%208.%20Income%20Taxes) This note provides a comparison of the company's income tax expense (benefit) and discusses the effective tax rate, Corporate Alternative Minimum Tax (CAMT), and the potential impact of the recently signed "One Big Beautiful Bill Act" on future taxation Income Tax Expense (Benefit) Comparison (Millions of Dollars) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Income (Loss) Before Income Taxes | $909 | $(262) | | Current Tax Expense | $56 (6.2%) | $— (—%) | | Deferred Tax Expense (Benefit) | $134 (14.7%) | $(61) (23.3%) | | **Total Income Tax Expense (Benefit)** | **$190 (20.9%)** | **$(61) (23.3%)** | - The company expects to pay **Corporate Alternative Minimum Tax (CAMT)** in 2025[87](index=87&type=chunk) - The **"One Big Beautiful Bill Act"**, signed on July 4, 2025, will restore **100% bonus depreciation** and provide parity for CAMT treatment of intangible drilling costs and depreciation, expected to significantly benefit the company's future financial position[88](index=88&type=chunk) [Note 9. Equity](index=20&type=section&id=Note%209.%20Equity) This note discloses the company's dividend payments, execution of the stock repurchase program, and warrant conversion activities in H1 2025, reflecting strategies for returning value to shareholders and managing capital structure Dividend Payments (Dollars per share, Millions of Dollars total) | Period | Base Dividend | Variable Dividend | Total per Share | Total Amount | | :--- | :--- | :--- | :--- | :--- | | Q1 2025 | $0.575 | $— | $0.575 | $138 | | Q2 2025 | $0.575 | $— | $0.575 | $138 | | Q1 2024 | $0.575 | $— | $0.575 | $77 | | Q2 2024 | $0.575 | $0.14 | $0.715 | $95 | - On July 29, 2025, the company declared a quarterly dividend of **$1.465 per share**, comprising a **$0.575 base dividend** and a **$0.89 variable dividend**[89](index=89&type=chunk) - The Board of Directors authorized a **$1 billion common stock and/or warrant repurchase program** on October 22, 2024; in Q2 2025, the company repurchased **900,000 shares** for **$100 million**[90](index=90&type=chunk) Warrant Conversions (Thousands) | Warrant Type | Outstanding as of Dec 31, 2024 | Converted to Common Stock | Outstanding as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Class A Warrants | 1,254 | (1,186) | 68 | | Class B Warrants | 3,073 | (2,959) | 114 | | Class C Warrants | 4,384 | (2,247) | 2,137 | [Note 10. Share-Based Compensation](index=21&type=section&id=Note%2010.%20Share-Based%20Compensation) This note details the company's Long-Term Incentive Plan (LTIP), including the grant, vesting, and associated compensation expense for Restricted Stock Units (RSUs) and Performance Stock Units (PSUs), as well as the balance of unrecognized compensation expense - The company's Long-Term Incentive Plan (LTIP) provides a stock reserve of **6.8 million common shares** for grants of RSUs, restricted stock, stock options, and stock appreciation rights[94](index=94&type=chunk) Summary of Unvested Restricted Stock Units (RSUs) Activity (Thousands) | Item | Unvested Restricted Stock Units | Grant Date Fair Value (per share) | | :--- | :--- | :--- | | Unvested as of December 31, 2024 | 957 | $81.99 | | Granted | 548 | $103.47 | | Vested | (446) | $78.21 | | Forfeited | (14) | $97.39 | | **Unvested as of June 30, 2025** | **1,045** | **$94.67** | - As of June 30, 2025, total unrecognized compensation expense related to unvested RSUs was approximately **$80 million**, expected to be recognized over a weighted-average period of approximately **2.3 years**[96](index=96&type=chunk) RSU and PSU Compensation Costs (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | General and Administrative Expenses | $10 | $9 | $18 | $17 | | Natural Gas and Oil Properties | $3 | $2 | $4 | $4 | | Production Expenses | $1 | $1 | $2 | $2 | | Marketing Expenses | $1 | $— | $2 | $— | | Other Operating Expense, Net | $1 | $— | $3 | $— | | **Total RSU and PSU Compensation** | **$16** | **$21** | **$29** | **$32** | | Related Income Tax Benefit | $4 | $7 | $8 | $9 | [Note 11. Derivative and Hedging Activities](index=22&type=section&id=Note%2011.%20Derivative%20and%20Hedging%20Activities) This note describes the company's strategy of using derivative instruments to manage commodity price volatility risk and provides the fair values of natural gas, oil, and NGL derivatives as of June 30, 2025, and December 31, 2024, and their presentation in the consolidated balance sheets - The company uses derivative instruments such as financial price swaps, call options, put options, and basis protection swaps to mitigate future commodity price volatility risk, without designating any derivatives for hedge accounting[103](index=103&type=chunk) Estimated Fair Value of Natural Gas, Oil, and NGL Derivatives (Millions of Dollars) | Derivative Type | Notional Volume as of June 30, 2025 | Fair Value as of June 30, 2025 | Notional Volume as of Dec 31, 2024 | Fair Value as of Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Natural Gas (Bcf):** | | | | | | Fixed Price Swaps | 296 | $(37) | 369 | $(28) | | Collars | 1,437 | $(176) | 1,098 | $(27) | | Three-Way Collars | 81 | $23 | 161 | $60 | | Call Options (Purchased) | 37 | $1 | 73 | $1 | | Call Options (Sold) | 147 | $(19) | 219 | $(16) | | Basis Protection Swaps | 320 | $22 | 279 | $(39) | | **Total Natural Gas** | **2,318** | **$(186)** | **2,199** | **$(49)** | | **Oil (MMBbls):** | | | | | | Three-Way Collars | 1 | $5 | 2 | $4 | | **Total Oil** | **1** | **$5** | **2** | **$4** | | **NGLs (MMBbls):** | | | | | | Fixed Price Swaps | 4 | $— | 7 | $(9) | | **Total NGL** | **4** | **$—** | **7** | **$(9)** | | **Total Estimated Fair Value** | | **$(181)** | | **$(54)** | - The company incorporates non-performance risk into derivative valuations and diversifies credit risk by transacting commodity contracts with **20 counterparties**[107](index=107&type=chunk)[108](index=108&type=chunk) [Note 12. Investments](index=24&type=section&id=Note%2012.%20Investments) This note discloses the company's equity investment in Momentum Sustainable Ventures LLC, a joint venture aimed at constructing natural gas gathering pipelines and carbon capture projects to support Haynesville Shale gas production and carbon emission reduction - The company holds a **35% equity interest** in Momentum Sustainable Ventures LLC, a joint venture to construct a natural gas gathering pipeline and carbon capture project, expected to be operational in Q4 2025[110](index=110&type=chunk) - The project is expected to have an initial natural gas transportation capacity of **1.7 Bcf/d**, expandable to **2.2 Bcf/d**, and plans to capture approximately **1 million metric tons of CO2 annually**[110](index=110&type=chunk) - As of June 30, 2025, the book value of the company's equity investment was **$314 million**, including approximately **$25 million in capitalized interest**[110](index=110&type=chunk) [Note 13. Supplemental Cash Flow Information](index=25&type=section&id=Note%2013.%20Supplemental%20Cash%20Flow%20Information) This note provides supplemental disclosures for the condensed consolidated statements of cash flows, including the impact of changes in assets and liabilities on cash flow, net interest and income taxes paid, and significant non-cash investing and financing activities Supplemental Cash Flow Information (Millions of Dollars) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Changes in Assets and Liabilities:** | | | | Accounts Receivable | $165 | $239 | | Accounts Payable | $(87) | $(129) | | Other Current Assets | $(30) | $6 | | Other Current Liabilities | $22 | $(171) | | **Total** | **$70** | **$(55)** | | **Supplemental Cash Flow Information:** | | | | Interest Paid, Net of Capitalized Interest | $110 | $45 | | Income Taxes Paid (Refunds Received), Net | $82 | $(2) | | **Significant Non-Cash Investing and Financing Activities:** | | | | Change in Accrued Drilling and Completion Costs | $160 | $(62) | | Operating Lease Obligations Recognized | $26 | $— | [Note 14. Segment Information](index=25&type=section&id=Note%2014.%20Segment%20Information) This note explains the company's operating segment information, aggregating all operating areas into one reportable segment, and discloses key financial metrics used by the Chief Operating Decision Maker (CEO) for resource allocation and performance evaluation - The company aggregates all operating areas into **one reportable segment** due to the similar nature of exploration and production activities and the ancillary nature of marketing activities[113](index=113&type=chunk) - The Chief Operating Decision Maker (CEO) uses **consolidated net income (loss)** to allocate resources and evaluate operating performance, regularly reviewing key segment expenses such as production, gathering, processing and transportation, severance and ad valorem taxes, and general and administrative expenses[114](index=114&type=chunk) Capital Expenditures and Investments (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Capital Expenditures | $727 | $293 | $1,389 | $647 | | Contributions to Equity Method Investments | $— | $21 | $— | $37 | | Interest Income | $5 | $14 | $7 | $28 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's in-depth analysis of Expand Energy Corporation's financial condition, liquidity, and results of operations, focusing on the integration impacts of the Southwestern Merger, recent developments, market environment, and changes in various revenues and expenses [Introduction](index=27&type=section&id=Introduction) Expand Energy Corporation, post-merger with Southwestern Energy Company, is the largest independent natural gas producer in the U.S., committed to creating sustainable value for stakeholders through responsible development, operational efficiency, and financial discipline, with ambitious ESG goals - The company completed the **Southwestern Merger** on October 1, 2024, becoming the **largest independent natural gas producer in the U.S.** with a leading natural gas asset portfolio and an investment-grade balance sheet[118](index=118&type=chunk)[119](index=119&type=chunk) - The company's strategy is to create shareholder value through responsible resource development, operational efficiency, and financial discipline, with a focus on improving ESG performance[120](index=120&type=chunk) - The company has set ESG targets, including achieving **net-zero (Scope 1 and 2) greenhouse gas emissions by 2035** and maintaining **100% Responsibly Sourced Gas (RSG) certification**[121](index=121&type=chunk) [Recent Developments](index=28&type=section&id=Recent%20Developments) Following the Southwestern Merger, the company achieved significant milestones, including investment-grade credit ratings, S&P 500 inclusion, repayment of senior notes, and a stock repurchase program, substantially enhancing its financial strength and market position - The company completed the **Southwestern Merger** on October 1, 2024, issuing approximately **95.7 million common shares** to Southwestern shareholders, valued at approximately **$7.9 billion**[122](index=122&type=chunk) - The company achieved **investment-grade ratings** from S&P and Fitch in October 2024, and from Moody's in April 2025, upgrading its unsecured debt ratings[123](index=123&type=chunk) - In March 2025, the company's common stock was included in the **S&P 500 Index**[124](index=124&type=chunk) - In January and March 2025, the company repaid **$389 million** of 2025 Senior Notes and **$47 million** of 2026 Senior Notes, respectively; in Q2 2025, it redeemed approximately **$84 million** of 6.750% Senior Notes due 2029 and approximately **$31 million** of 5.875% Senior Notes due 2029 through open market repurchases[125](index=125&type=chunk) - In October 2024, the Board authorized a **$1 billion common stock and/or warrant repurchase program**; in Q2 2025, the company repurchased **900,000 shares** for **$100 million**[126](index=126&type=chunk) [Economic and Market Conditions](index=28&type=section&id=Economic%20and%20Market%20Conditions) Geopolitical risks and policy uncertainties continue to drive volatility in natural gas, oil, and NGL prices, while the domestic natural gas market balance is easing; the company partially hedges commodity price risks through derivatives and leverages vertical integration from the Southwestern Merger to control costs - Geopolitical risks and policy uncertainties continue to drive **volatility in natural gas, oil, and NGL prices**[127](index=127&type=chunk) - In Q2 2025, the domestic natural gas market balance was moderately loose, with production elasticity, reduced demand, and mild spring weather offsetting rapid LNG demand growth, creating **downward pressure on near-term prices**[127](index=127&type=chunk) - The company's hedging strategy provides **price floor protection for over half of its projected natural gas volumes** for the remainder of 2025, while retaining significant upside participation[128](index=128&type=chunk) - The **Southwestern Merger** provided the company with oilfield services operations, facilitating vertical integration of exploration and production activities to control costs and ensure inputs[129](index=129&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company primarily funds capital through internal operating cash flow and credit facilities for oil and gas asset development, debt repayment, and shareholder returns, maintaining ample liquidity as of June 30, 2025, and planning to fund 2025 capital expenditures with cash flow and credit facilities - The company's primary sources of capital resources and liquidity are **internal operating cash flow** and borrowings under its **Credit Facility**[130](index=130&type=chunk) - As of June 30, 2025, the company had **$3.2 billion in available liquidity**, including **$700 million in cash** and **$2.5 billion in unused borrowing capacity** under its Credit Facility[130](index=130&type=chunk) - On July 29, 2025, the company declared a quarterly dividend of **$1.465 per share**, comprising a **$0.575 base dividend** and a **$0.89 variable dividend**[132](index=132&type=chunk) - As of June 30, 2025, the company's material contractual obligations included senior note repayments, derivative obligations, asset retirement obligations, lease obligations, and gathering, processing, and transportation agreements, with total undiscounted future commitments estimated at approximately **$10.2 billion**[135](index=135&type=chunk) - The company expects to complete **250 to 280 gross wells** in 2025, with capital expenditures estimated at approximately **$2.85 billion to $3.0 billion**, planned to be funded by cash on hand, operating cash flow, and the Credit Facility[138](index=138&type=chunk) [Sources and (Uses) of Cash and Cash Equivalents](index=31&type=section&id=Sources%20and%20(Uses)%20of%20Cash%20and%20Cash%20Equivalents) This section outlines the company's sources and uses of cash and cash equivalents in H1 2025, showing operating activities as the primary cash inflow, while capital expenditures, debt purchases, and dividend payments were major outflows Sources and (Uses) of Cash and Cash Equivalents (Millions of Dollars) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $2,418 | $761 | | Proceeds from Asset Divestitures | $15 | $12 | | Receipts of Deferred Consideration | $116 | $116 | | Proceeds from Warrant Exercises | $22 | $1 | | Capital Expenditures | $(1,220) | $(723) | | Contributions to Investments | $(9) | $(45) | | Cash Paid to Purchase Debt | $(553) | $— | | Cash Paid to Repurchase and Retire Common Stock | $(99) | $— | | Cash Paid for Common Stock Dividends | $(279) | $(176) | | Debt Issuance and Other Financing Costs | $— | $(4) | | **Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash** | **$411** | **$(58)** | [Cash Flow from Operating Activities](index=32&type=section&id=Cash%20Flow%20from%20Operating%20Activities) The company's operating cash flow significantly increased in H1 2025, primarily due to higher sales volumes from the Southwestern Merger and increased natural gas, oil, and NGL sales prices - Operating cash flow for H1 2025 was **$2.418 billion**, a significant increase from **$761 million** in H1 2024[140](index=140&type=chunk) - The increase in cash flow was primarily attributable to **higher sales volumes** from the Southwestern Merger and **increased sales prices** for natural gas, oil, and NGLs[140](index=140&type=chunk) [Receipts of Deferred Consideration](index=32&type=section&id=Receipts%20of%20Deferred%20Consideration) The company received $116 million in deferred consideration related to the Eagle Ford asset divestiture in both H1 2025 and H1 2024 - In both H1 2025 and H1 2024, the company received **$116 million** in deferred consideration related to the Eagle Ford asset divestiture transactions[141](index=141&type=chunk) [Capital Expenditures](index=32&type=section&id=Capital%20Expenditures) The company's capital expenditures increased in H1 2025, mainly due to increased drilling and completion activities across operating areas following the Southwestern Merger - Capital expenditures in H1 2025 increased compared to H1 2024, primarily due to **increased drilling and completion activities** across operating areas following the Southwestern Merger[142](index=142&type=chunk) [Contributions to Investments](index=32&type=section&id=Contributions%20to%20Investments) In H1 2025, the company's contributions to investments primarily related to capitalized interest for the Momentum Sustainable Ventures LLC project, aimed at constructing natural gas gathering pipelines and carbon capture facilities - In H1 2025, contributions to investments primarily related to **capitalized interest** for the Momentum Sustainable Ventures LLC project[143](index=143&type=chunk) - In H1 2024, contributions to investments primarily included the investment in Momentum Sustainable Ventures LLC for the construction of new natural gas gathering pipelines and carbon capture projects[143](index=143&type=chunk) [Cash Paid to Purchase Debt](index=32&type=section&id=Cash%20Paid%20to%20Purchase%20Debt) In H1 2025, the company repaid multiple senior notes, including those due in 2025 and 2026, and redeemed portions of 2029 senior notes through open market repurchases, using cash and credit facilities - In H1 2025, the company repaid **$389 million** of 2025 Senior Notes and **$47 million** of 2026 Senior Notes[144](index=144&type=chunk) - The company also redeemed approximately **$84 million** of 6.750% Senior Notes due 2029 and approximately **$31 million** of 5.875% Senior Notes due 2029 through open market repurchases[144](index=144&type=chunk) [Cash Paid to Repurchase and Retire Common Stock](index=32&type=section&id=Cash%20Paid%20to%20Repurchase%20and%20Retire%20Common%20Stock) Under the board-authorized stock repurchase program, the company repurchased and retired 900,000 shares of common stock for $100 million in H1 2025 - In H1 2025, the company repurchased and retired **900,000 common shares** for **$100 million**, as part of the Board-authorized **$1 billion stock repurchase program**[145](index=145&type=chunk) [Cash Paid for Common Stock Dividends](index=32&type=section&id=Cash%20Paid%20for%20Common%20Stock%20Dividends) The company paid $279 million in common stock dividends in H1 2025, an increase from $176 million in H1 2024 - In H1 2025, the company paid **$279 million** in common stock dividends, compared to **$176 million** in H1 2024[146](index=146&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's operating results post-Southwestern Merger, including natural gas, oil, and NGL production volumes, average sales prices, sales revenue, and changes in various operating expenses, demonstrating the merger's significant impact on financial performance [Natural Gas, Oil and NGL Production and Average Sales Prices](index=33&type=section&id=Natural%20Gas,%20Oil%20and%20NGL%20Production%20and%20Average%20Sales%20Prices) The company experienced significant growth in natural gas, oil, and NGL production and average sales prices in Q2 and H1 2025, primarily due to expanded operating areas from the Southwestern Merger and rising market prices Natural Gas, Oil and NGL Production and Average Sales Prices (Q2 2025) | Operating Area | Natural Gas (MMcf/day) | Natural Gas ($/Mcf) | Oil (MBbl/day) | Oil ($/Bbl) | NGL (MBbl/day) | NGL ($/Bbl) | Total (MMcfe/day) | Total ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Haynesville | 2,978 | 3.12 | — | — | — | — | 2,978 | 3.12 | | Northeast Appalachia | 2,662 | 2.65 | — | — | — | — | 2,662 | 2.65 | | Southwest Appalachia | 956 | 3.11 | 18 | 54.47 | 83 | 23.19 | 1,562 | 3.75 | | **Total** | **6,596** | **2.93** | **18** | **54.47** | **83** | **23.19** | **7,202** | **3.08** | | Average NYMEX Price | | 3.44 | | 63.74 | | | | | | Average Realized Price (with Derivatives) | | 2.98 | | 55.89 | | 23.08 | | 3.14 | Natural Gas, Oil and NGL Production and Average Sales Prices (H1 2025) | Operating Area | Natural Gas (MMcf/day) | Natural Gas ($/Mcf) | Oil (MBbl/day) | Oil ($/Bbl) | NGL (MBbl/day) | NGL ($/Bbl) | Total (MMcfe/day) | Total ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Haynesville | 2,798 | 3.29 | — | — | — | — | 2,798 | 3.29 | | Northeast Appalachia | 2,665 | 3.20 | — | — | — | — | 2,665 | 3.20 | | Southwest Appalachia | 963 | 3.24 | 16 | 58.34 | 79 | 26.66 | 1,533 | 4.01 | | **Total** | **6,426** | **3.24** | **16** | **58.34** | **79** | **26.66** | **6,996** | **3.41** | | Average NYMEX Price | | 3.55 | | 67.58 | | | | | | Average Realized Price (with Derivatives) | | 3.24 | | 59.30 | | 26.04 | | 3.40 | [Natural Gas, Oil and NGL Sales](index=34&type=section&id=Natural%20Gas,%20Oil%20and%20NGL%20Sales) The company's natural gas, oil, and NGL sales significantly increased in Q2 and H1 2025, driven by higher volumes from the Southwestern Merger and rising index prices across all products Natural Gas, Oil and NGL Sales (Q2 2025, Millions of Dollars) | Operating Area | Natural Gas | Oil | NGL | Total | | :--- | :--- | :--- | :--- | :--- | | Haynesville | $845 | $— | $— | $845 | | Northeast Appalachia | $643 | $— | $— | $643 | | Southwest Appalachia | $271 | $86 | $176 | $533 | | **Total Natural Gas, Oil, and NGL Sales** | **$1,759** | **$86** | **$176** | **$2,021** | Natural Gas, Oil and NGL Sales (H1 2025, Millions of Dollars) | Operating Area | Natural Gas | Oil | NGL | Total | | :--- | :--- | :--- | :--- | :--- | | Haynesville | $1,666 | $— | $— | $1,666 | | Northeast Appalachia | $1,543 | $— | $— | $1,543 | | Southwest Appalachia | $565 | $164 | $383 | $1,112 | | **Natural Gas, Oil, and NGL Revenue** | **$3,774** | **$164** | **$383** | **$4,321** | - Q2 2025 natural gas, oil, and NGL sales increased by **$1.643 billion** compared to the prior year, with the Southwestern Merger contributing **$1.153 billion** in volume growth and higher commodity prices contributing **$402 million**[148](index=148&type=chunk) [Production Expenses](index=35&type=section&id=Production%20Expenses) The company's production expenses significantly increased in Q2 and H1 2025, primarily due to the Southwestern Merger and higher production volumes across all operating areas Production Expenses (Millions of Dollars, except Dollars per Mcfe) | Operating Area | Q2 2025 | Q2 2025 ($/Mcfe) | Q2 2024 | Q2 2024 ($/Mcfe) | H1 2025 | H1 2025 ($/Mcfe) | H1 2024 | H1 2024 ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Haynesville | $67 | 0.25 | $30 | 0.28 | $137 | 0.27 | $68 | 0.28 | | Northeast Appalachia | $37 | 0.15 | $19 | 0.14 | $75 | 0.15 | $40 | 0.14 | | Southwest Appalachia | $47 | 0.33 | $— | — | $86 | 0.31 | $— | — | | **Total Production Expenses** | **$151** | **0.23** | **$49** | **0.20** | **$298** | **0.24** | **$108** | **0.20** | - Production expenses in Q2 and H1 2025 increased by **$102 million** and **$190 million**, respectively, primarily attributable to the **Southwestern Merger** and increased production volumes across all operating areas[150](index=150&type=chunk) [Gathering, Processing and Transportation Expenses](index=35&type=section&id=Gathering,%20Processing%20and%20Transportation%20Expenses) The company's gathering, processing, and transportation expenses substantially increased in Q2 and H1 2025, mainly due to higher production volumes and rates across all operating areas post-Southwestern Merger Gathering, Processing and Transportation Expenses (Millions of Dollars, except Dollars per Mcfe) | Operating Area | Q2 2025 | Q2 2025 ($/Mcfe) | Q2 2024 | Q2 2024 ($/Mcfe) | H1 2025 | H1 2025 ($/Mcfe) | H1 2024 | H1 2024 ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Haynesville | $180 | 0.66 | $52 | 0.48 | $357 | 0.70 | $116 | 0.48 | | Northeast Appalachia | $203 | 0.84 | $102 | 0.72 | $429 | 0.89 | $211 | 0.71 | | Southwest Appalachia | $180 | 1.27 | $— | — | $340 | 1.23 | $— | — | | **Total** | **$563** | **0.86** | **$154** | **0.62** | **$1,126** | **0.89** | **$327** | **0.60** | - Gathering, processing, and transportation expenses in Q2 and H1 2025 increased by **$409 million** and **$799 million**, respectively, primarily due to **higher production volumes and rates** across all operating areas following the Southwestern Merger[151](index=151&type=chunk) [Severance and Ad Valorem Taxes](index=35&type=section&id=Severance%20and%20Ad%20Valorem%20Taxes) The company's severance and ad valorem taxes increased in Q2 and H1 2025, primarily influenced by the Southwestern Merger, despite a decrease in the statutory severance tax rate in the Haynesville region Severance and Ad Valorem Taxes (Millions of Dollars, except Dollars per Mcfe) | Operating Area | Q2 2025 | Q2 2025 ($/Mcfe) | Q2 2024 | Q2 2024 ($/Mcfe) | H1 2025 | H1 2025 ($/Mcfe) | H1 2024 | H1 2024 ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Haynesville | $17 | 0.06 | $15 | 0.14 | $31 | 0.06 | $40 | 0.17 | | Northeast Appalachia | $8 | 0.03 | $3 | 0.02 | $16 | 0.03 | $7 | 0.02 | | Southwest Appalachia | $24 | 0.17 | $— | — | $50 | 0.18 | $— | — | | **Total** | **$49** | **0.08** | **$18** | **0.07** | **$97** | **0.08** | **$47** | **0.09** | - Q2 2025 severance and ad valorem taxes increased by **$31 million**, primarily due to a **$35 million increase from the Southwestern Merger**, partially offset by a decrease in the Haynesville statutory severance tax rate[152](index=152&type=chunk) [Natural Gas, Oil and NGL Derivatives](index=36&type=section&id=Natural%20Gas,%20Oil%20and%20NGL%20Derivatives) The company realized significant unrealized gains from natural gas derivatives in Q2 2025, reversing prior-year losses, while oil and NGL derivatives also contributed positive gains Natural Gas, Oil and NGL Derivatives Gains (Losses) (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Natural Gas Derivatives - Realized Gains (Losses) | $34 | $251 | $(3) | $490 | | Natural Gas Derivatives - Unrealized Gains (Losses) | $825 | $(262) | $(137) | $(350) | | **Total Natural Gas Derivatives Gains (Losses)** | **$859** | **$(11)** | **$(140)** | **$140** | | Oil Derivatives - Realized Gains | $2 | $— | $2 | $— | | Oil Derivatives - Unrealized Gains | $1 | $— | $1 | $— | | **Total Oil Derivatives Gains** | **$3** | **$—** | **$3** | **$—** | | NGL Derivatives - Realized Losses | $(1) | $— | $(9) | $— | | NGL Derivatives - Unrealized Gains | $16 | $— | $9 | $— | | **Total NGL Derivatives Gains** | **$15** | **$—** | **$—** | **$—** | | Contingent Consideration Unrealized Gains | $— | $— | $— | $21 | | **Total Natural Gas, Oil, and NGL Derivatives Gains (Losses)** | **$877** | **$(11)** | **$(137)** | **$161** | [General and Administrative Expenses](index=36&type=section&id=General%20and%20Administrative%20Expenses) The company's net general and administrative expenses decreased in Q2 and H1 2025; although the Southwestern Merger led to increased employee compensation and benefits, this was offset by higher allocations and reimbursements, with unit expenses declining due to increased production Net General and Administrative Expenses (Millions of Dollars, except Dollars per Mcfe) | Item | Q2 2025 | Q2 2025 ($/Mcfe) | Q2 2024 | Q2 2024 ($/Mcfe) | H1 2025 | H1 2025 ($/Mcfe) | H1 2024 | H1 2024 ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total G&A, Net** | **$40** | **0.06** | **$47** | **0.19** | **$87** | **0.07** | **$94** | **0.17** | - Net general and administrative expenses decreased in Q2 and H1 2025, primarily because increased employee compensation and benefits from the **Southwestern Merger** were offset by corresponding increases in allocations and reimbursements[155](index=155&type=chunk) - The decrease in unit general and administrative expenses was due to **increased production volumes** following the Southwestern Merger[155](index=155&type=chunk) [Separation and Other Termination Costs](index=36&type=section&id=Separation%20and%20Other%20Termination%20Costs) In H1 2024, the company recognized $23 million in separation and other termination costs, primarily related to one-time termination benefits for certain employees - In H1 2024, the company recognized **$23 million** in separation and other termination costs, primarily related to one-time termination benefits for certain employees[156](index=156&type=chunk) [Depreciation, Depletion and Amortization](index=36&type=section&id=Depreciation,%20Depletion%20and%20Amortization) The company's absolute depreciation, depletion, and amortization (DD&A) increased in Q2 and H1 2025, primarily due to the Southwestern Merger, but DD&A per Mcfe decreased due to lower depletion rates for acquired wells Depreciation, Depletion and Amortization (Millions of Dollars, except Dollars per Mcfe) | Item | Q2 2025 | Q2 2025 ($/Mcfe) | Q2 2024 | Q2 2024 ($/Mcfe) | H1 2025 | H1 2025 ($/Mcfe) | H1 2024 | H1 2024 ($/Mcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **DD&A** | **$769** | **1.17** | **$348** | **1.39** | **$1,480** | **1.17** | **$747** | **1.38** | - Absolute DD&A increased in Q2 and H1 2025, primarily related to the **Southwestern Merger**[157](index=157&type=chunk) - DD&A per Mcfe decreased due to **lower depletion rates** for wells acquired in the Southwestern Merger[157](index=157&type=chunk) [Other Operating Expense, Net](index=37&type=section&id=Other%20Operating%20Expense,%20Net) The company recognized other operating expenses, net, in Q2 and H1 2025 related to the Southwestern Merger, primarily including employee, legal, consulting, and financial advisory fees Other Operating Expense, Net (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Other Operating Expense, Net** | **$38** | **$16** | **$60** | **$33** | - In Q2 and H1 2025, the company recognized approximately **$25 million** and **$52 million**, respectively, in costs related to the **Southwestern Merger**, including employee, legal, consulting, and financial advisory fees[158](index=158&type=chunk)[159](index=159&type=chunk) [Interest Expense](index=37&type=section&id=Interest%20Expense) The company's interest expense increased in Q2 and H1 2025, mainly due to higher debt interest from assuming Southwestern's senior notes post-merger, with capitalized interest also rising due to increased capital activities Interest Expense (Millions of Dollars) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Debt Interest Expense | $74 | $32 | $151 | $64 | | Amortization of Premiums, Discounts, Issuance Costs, and Other | $2 | $(3) | $2 | $(5) | | Capitalized Interest | $(16) | $(9) | $(34) | $(20) | | **Total Interest Expense** | **$60** | **$20** | **$119** | **$39** | - Interest expense increased in Q2 and H1 2025, primarily due to **higher debt interest expense** from assuming Southwestern's senior notes following the Southwestern Merger[160](index=160&type=chunk) - Capitalized interest increased due to **higher capital activities** after the Southwestern Merger[160](index=160&type=chunk) [Income Taxes](index=37&type=section&id=Income%20Taxes) The company recognized $190 million in income tax expense in H1 2025, comprising $56 million in current tax and $134 million in deferred tax, contrasting with an income tax benefit in the prior year, with effective tax rates fluctuating across periods - In H1 2025, the company recognized **$190 million in income tax expense**, including **$56 million in current tax** and **$134 million in deferred tax**[162](index=162&type=chunk) - In H1 2024, the company recognized an **income tax benefit of $61 million**, entirely related to deferred federal and state income tax projections[162](index=162&type=chunk) - The company's effective income tax rates were **20.9%** for H1 2025 and **23.3%** for H1 2024[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, primarily commodity price risk and interest rate risk, detailing how the company hedges commodity price volatility with derivatives and assesses the potential financial impact of these risks - The company uses various derivative instruments to hedge against **natural gas, oil, and NGL price volatility risk**, enhancing the certainty of revenue forecasts[170](index=170&type=chunk) - As of June 30, 2025, natural gas derivatives had a **net liability fair value of $186 million**, oil derivatives had a **net asset fair value of $5 million**, and NGL derivatives had a nominal net asset fair value[172](index=172&type=chunk) - A **10% fluctuation in natural gas forward prices** would impact natural gas derivative valuations by approximately **$500 million**, a **10% fluctuation in oil forward prices** would impact oil derivative valuations by approximately **$2 million**, and a **10% fluctuation in NGL forward prices** would impact NGL derivative valuations by approximately **$9 million**[172](index=172&type=chunk) - The company's interest rate risk primarily relates to floating-rate borrowings under its Credit Facility, with **no outstanding borrowings** under the facility as of June 30, 2025[173](index=173&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Company management assessed the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective, with no significant changes in internal control over financial reporting during the reporting period - As of June 30, 2025, the company's Chief Executive Officer and Chief Financial Officer assessed and concluded that disclosure controls and procedures were **effective**[175](index=175&type=chunk) - There were **no significant changes** in internal control over financial reporting during the current quarterly reporting period[176](index=176&type=chunk) PART II. OTHER INFORMATION This part provides additional disclosures on legal proceedings, risk factors, equity security sales, defaults, mine safety, and other information, along with a comprehensive list of exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and regulatory proceedings, including commercial disputes, personal injury claims, and royalty claims, which management believes are unlikely to have a material adverse effect on the company's financial condition, results of operations, or cash flows - The company is involved in various legal and regulatory proceedings, including **commercial disputes, personal injury claims, royalty claims, property damage claims, and contract litigation**[179](index=179&type=chunk) - Management believes that existing litigation, claims, and proceedings, individually or in aggregate, are unlikely to have a **material adverse effect** on the company's future consolidated financial position, results of operations, or cash flows[180](index=180&type=chunk) - The company has implemented policies, procedures, training, and audits to reduce and mitigate environmental risks, and has established environmental reserves for potential economic losses[181](index=181&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the company's 2024 10-K annual report, advising investors to carefully review these factors that could materially adversely affect the company's business, financial condition, results of operations, or liquidity - Risk factors facing the company's business are detailed in the "Risk Factors" section of the **2024 10-K annual report**[182](index=182&type=chunk) - Risk factors include, but are not limited to: reduced demand for natural gas, oil, and NGLs; negative public perception of the industry; commodity price volatility; capital expenditure requirements; ability to replace reserves; drilling and operating risks; commodity price risk management activities; geopolitical conflicts and economic environment impacts; inability to access capital markets; debt levels and restrictive covenants; employee retention challenges; acquisition or disposition risks; cybersecurity threats; ability to achieve ESG goals; legislative, regulatory, and ESG initiatives; federal and state tax proposals; and annual limitations on the utilization of tax attributes[163](index=163&type=chunk)[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section discloses the company's stock repurchase program executed in Q2 2025, including the number of shares repurchased, average price, and remaining amount available for repurchase - The Board of Directors authorized a **$1 billion common stock and/or warrant repurchase program** on October 22, 2024[184](index=184&type=chunk) Equity Security Repurchases in Q2 2025 | Period | Total Number of Shares Repurchased | Average Price Paid per Share | Total Number of Shares Repurchased as Part of Publicly Announced Plans | Approximate Dollar Value of Shares that May Yet Be Repurchased Under the Plans (Millions of Dollars) | | :--- | :--- | :--- | :--- | :--- | | April 1 - April 30 | — | $— | — | $1,000 | | May 1 - May 31 | 144,583 | $116.17 | 144,583 | $983 | | June 1 - June 30 | 707,078 | $117.65 | 707,078 | $900 | | **Total** | **851,661** | **$117.40** | **851,661** | | [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during this reporting period - No defaults upon senior securities[186](index=186&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations and other regulatory matters is included in Exhibit 95.1 - Information regarding mine safety violations and other regulatory matters is contained in **Exhibit 95.1**[187](index=187&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no directors or officers adopted or terminated "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" - During the three months ended June 30, 2025, no directors or officers adopted or terminated "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements"[188](index=188&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed, furnished, or incorporated by reference as required by Item 601 of Regulation S-K Exhibit Index | Exhibit Number | Exhibit Description | SEC Filing Form | File Number | Exhibit | Filing Date | Filed/Furnished Herewith | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 2.1 | Fifth Amended Joint Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates under Chapter 11 of the Bankruptcy Code (Exhibit A to Confirmation Order) | 8-K | 001-13726 | 2.1 | January 19, 2021 | | | 2.2* | Agreement and Plan of Merger, dated as of January 10, 2024, by and among Chesapeake Energy Corporation, Hulk Merger Sub, Inc., Hulk LLC Sub, LLC and Southwestern Energy Company | 8-K | 001-13726 | 2.1 | January 11, 2024 | | | 3.1 | Third Amended and Restated Certificate of Incorporation of Expand Energy Corporation | 8-K | 001-13726 | 3.1 | October 1, 2024 | | | 3.2 | Third Amended and Restated Bylaws of Expand Energy Corporation | 8-K | 001-13726 | 3.2 | October 1, 2024 | | | 31.1 | Certification of Domenic J. Dell'Osso, Jr., President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | X | | 31.2 | Certification of Mohit Singh, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | | | X | | 32.1** | Certification of Domenic J. Dell'Osso Jr., President and Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | | | X | | 32.2** | Certification of Mohit Singh, Executive Vice President and Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | | | X | | 95.1 | Mine Safety Disclosures | | | | | X | | 101 INS | Inline XBRL Instance Document | | | | | X | | 101 SCH | Inline XBRL Taxonomy Extension Schema Document | | | | | X | | 101 CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | | | X | | 101 DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | | | | | X | | 101 LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | | | | | X | | 101 PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | | | X | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | | | | | X | [Signatures](index=46&type=section&id=Signatures) This report was formally signed by Domenic J. Dell'Osso, Jr., President and Chief Executive Officer, and Mohit Singh, Executive Vice President and Chief Financial Officer of Expand Energy Corporation, on July 29, 2025 - This report was signed by **Domenic J. Dell'Osso, Jr., President and Chief Executive Officer**, and **Mohit Singh, Executive Vice President and Chief Financial Officer**, on July 29, 2025[197](index=197&type=chunk)

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Expand Energy Corporation's unaudited condensed consolidated financial statements and related accounting notes - The financial statements are prepared in accordance with GAAP and SEC rules, reflecting all normal recurring adjustments[34](index=34&type=chunk)[35](index=35&type=chunk) - The Southwestern Merger, completed on October 1, 2024, significantly impacted financial results and position, leading to increased volumes and changes in debt structure[41](index=41&type=chunk)[141](index=141&type=chunk) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Expand Energy Corporation's unaudited condensed consolidated financial statements and explanatory notes Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Total Assets | 27,934 | 27,894 | | Total Liabilities | 10,743 | 10,329 | | Total Stockholders' Equity | 17,191 | 17,565 | | Current Assets | 2,113 | 1,997 | | Current Liabilities | 3,589 | 3,123 | Condensed Consolidated Statements of Operations This section details the company's financial performance, including revenues, expenses, and net income or loss over a period Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Natural gas, oil and NGL revenues | 2,300 | 589 | | Marketing revenues | 910 | 312 | | Natural gas, oil and NGL derivatives | (1,014) | 172 | | Total revenues and other | 2,196 | 1,081 | | Total operating expenses | 2,464 | 1,049 | | Income (loss) from operations | (268) | 32 | | Net income (loss) | (249) | 26 | | Basic EPS | (1.06) | 0.20 | | Diluted EPS | (1.06) | 0.18 | Condensed Consolidated Statements of Cash Flows This section outlines cash flows from operating, investing, and financing activities for the period Condensed Consolidated Statements of Cash Flows Highlights | Metric | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | 1,096 | 552 | | Net cash used in investing activities | (507) | (374) | | Net cash used in financing activities | (557) | (77) | | Net increase in cash, cash equivalents and restricted cash | 32 | 101 | | Cash, cash equivalents and restricted cash, end of period | 427 | 1,254 | Condensed Consolidated Statements of Stockholders' Equity This section presents changes in the company's equity, including net income, dividends, and share transactions Condensed Consolidated Statements of Stockholders' Equity Highlights | Metric | March 31, 2025 ($ millions) | March 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Total Stockholders' Equity | 17,191 | 10,682 | | Net income (loss) | (249) | 26 | | Dividends on common stock | (138) | (77) | | Shares outstanding (March 31) | 237,476,127 | 130,958,675 | Note 1. Basis of Presentation and Summary of Significant Accounting Policies This note explains the financial statement presentation basis, significant accounting policies, and recent accounting pronouncements - Expand Energy Corporation is the largest natural gas producer in the U.S., with operations in Louisiana, Pennsylvania, West Virginia, and Ohio[33](index=33&type=chunk) - Restricted cash of **$78 million** as of March 31, 2025, is legally restricted for future royalty payments and certain convenience class unsecured claims[36](index=36&type=chunk) - The company is evaluating the impact of recently issued ASUs on expense disaggregation and income tax disclosures, while ASU 2023-07 on segment reporting is effective for this quarterly report[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) Note 2. Natural Gas and Oil Property Transactions This note details significant natural gas and oil property transactions, including the Southwestern Merger and divestitures - The Southwestern Merger was completed on October 1, 2024, with Expand Energy issuing approximately **95.7 million shares** of common stock valued at **$7.9 billion** to Southwestern's shareholders[41](index=41&type=chunk) Preliminary Southwestern Merger Purchase Price Allocation | Category | Amount ($ millions) | | :-------------------------------- | :------------------ | | Total Consideration | 8,473 | | Fair Value of Assets Acquired | 15,850 | | Fair Value of Liabilities Assumed | 7,377 | | Total Identifiable Net Assets | 8,473 | - Acquisition-related costs of approximately **$27 million** were recognized during the Current Quarter, primarily consisting of employee expenses[41](index=41&type=chunk) - The company received **$60 million** in deferred consideration from Eagle Ford divestitures in both Q1 2025 and Q1 2024[51](index=51&type=chunk)[136](index=136&type=chunk) Note 3. Earnings Per Share This note provides the calculation of basic and diluted earnings per share, including factors affecting dilution Earnings Per Common Share | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss), basic and diluted | $(249) million | $26 million | | Weighted average common shares outstanding, basic | 234,434 thousand | 130,893 thousand | | Weighted average common shares outstanding, diluted | 234,434 thousand | 141,752 thousand | | Basic EPS | $(1.06) | $0.20 | | Diluted EPS | $(1.06) | $0.18 | - The diluted loss per share calculation for Q1 2025 excludes the antidilutive effect of **5,634,917 Warrants**, **413,816 RSUs**, and **154,868 PSUs**[54](index=54&type=chunk) Note 4. Debt This note details the company's debt structure, including long-term debt, credit facilities, and covenant compliance Long-Term Debt, Net | Metric | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Total debt, net | 5,243 | 5,680 | | Less current maturities of long-term debt, net | — | (389) | | Total long-term debt, net | 5,243 | 5,291 | - The Credit Facility provides **$2.5 billion** in aggregate commitments, with approximately **$2.5 billion** available for borrowings as of March 31, 2025, and no outstanding borrowings[57](index=57&type=chunk)[125](index=125&type=chunk) - In January 2025, **$389 million** of 4.95% Senior Notes due 2025 were repaid, and in March 2025, the remaining **$47 million** of 5.50% Senior Notes due 2026 were redeemed[63](index=63&type=chunk)[64](index=64&type=chunk) - The company was in compliance with its Debt to Capitalization Ratio (not to exceed **65%**) as of March 31, 2025[58](index=58&type=chunk) Note 5. Contingencies and Commitments This note outlines potential liabilities from litigation, environmental matters, and contractual commitments - Management believes current litigation, claims, and proceedings are not likely to have a material adverse impact on the company's financial position, results of operations, or cash flows[66](index=66&type=chunk)[70](index=70&type=chunk) - Environmental reserves are established for probable and reasonably estimable environmental liabilities[68](index=68&type=chunk) Aggregate Undiscounted Commitments Under Gathering, Processing and Transportation Agreements | Period | Amount ($ millions) | | :---------------- | :------------------ | | Remainder of 2025 | 1,071 | | 2026 | 1,372 | | 2027 | 1,260 | | 2028 | 1,192 | | 2029 | 1,011 | | Thereafter | 4,609 | | Total | 10,515 | Note 6. Other Current Liabilities This note breaks down various current liabilities, including revenues due to others, accrued costs, and taxes Other Current Liabilities | Category | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Revenues and royalties due to others | 892 | 734 | | Accrued drilling and production costs | 466 | 296 | | Contract liabilities | 274 | 284 | | Accrued compensation and benefits | 48 | 124 | | Taxes payable | 104 | 142 | | Operating leases | 71 | 71 | | Joint interest prepayments received | 14 | 13 | | Other | 102 | 122 | | Total other current liabilities | 1,971 | 1,786 | Note 7. Revenue This note disaggregates revenue by operating area and product type, and details accounts receivable Revenue Disaggregated by Operating Area and Product Type (Q1 2025) | Operating Area | Natural Gas ($ millions) | Oil ($ millions) | NGL ($ millions) | Total ($ millions) | | :------------------- | :----------------------- | :--------------- | :--------------- | :--------------- | | Haynesville | 821 | — | — | 821 | | Northeast Appalachia | 900 | — | — | 900 | | Southwest Appalachia | 294 | 78 | 207 | 579 | | **Total Natural gas, oil and NGL revenue** | **2,015** | **78** | **207** | **2,300** | | Marketing revenue | 837 | 34 | 39 | 910 | Revenue Disaggregated by Operating Area and Product Type (Q1 2024) | Operating Area | Natural Gas ($ millions) | Oil ($ millions) | NGL ($ millions) | Total ($ millions) | | :------------------- | :----------------------- | :--------------- | :--------------- | :--------------- | | Haynesville | 272 | — | — | 272 | | Northeast Appalachia | 317 | — | — | 317 | | **Total Natural gas, oil and NGL revenue** | **589** | **—** | **—** | **589** | | Marketing revenue | 197 | 82 | 33 | 312 | Accounts Receivable, Net | Category | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Natural gas, oil and NGL sales | 1,137 | 1,028 | | Joint interest | 228 | 191 | | Other | 12 | 18 | | Allowance for doubtful accounts | (16) | (11) | | Total accounts receivable, net | 1,361 | 1,226 | Note 8. Income Taxes This note presents income tax expense or benefit, effective tax rates, and the impact of tax regulations Income Tax Expense (Benefit) and Effective Tax Rates | Metric | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Income (loss) before income taxes | (319) | 33 | | Current tax benefit | (33) | — | | Deferred tax expense (benefit) | (37) | 7 | | Income tax expense (benefit) | (70) | 7 | | Effective tax rate | 21.9% | 21.2% | - A current tax benefit of **$33 million** was recorded in Q1 2025 due to a book loss[83](index=83&type=chunk) - The company anticipates being subject to and paying the **15% corporate alternative minimum tax (CAMT)** in 2025[85](index=85&type=chunk) Note 9. Equity This note details changes in equity, including dividend payments, share repurchases, and warrant exercises Dividend Payments | Period | Amount ($ millions) | Per Share Amount | | :-------------------------------- | :------------------ | :--------------- | | Three Months Ended March 31, 2025 | 142 | $0.575 | | Three Months Ended March 31, 2024 | 77 | $0.575 | - The Board authorized repurchases of up to **$1.0 billion** of common stock and/or warrants in October 2024, but no repurchases were made in Q1 2025[87](index=87&type=chunk) - **5,320,216 shares** of common stock were issued during Q1 2025 as a result of Warrant exercises[89](index=89&type=chunk) Note 10. Share-Based Compensation This note describes share-based compensation plans, including RSUs and PSUs, and related expenses - The Long-Term Incentive Plan (LTIP) has a share reserve of **6,800,000 shares** of common stock[90](index=90&type=chunk) Unrecognized Compensation Expense for RSUs and PSUs (as of March 31, 2025) | Award Type | Unrecognized Compensation Expense ($ millions) | Weighted Average Recognition Period (years) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------ | | Restricted Stock Units (RSUs) | 89 | 2.53 | | Performance Share Units (PSUs) | 42 | 2.66 | Total RSU and PSU Compensation Costs | Period | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total RSU and PSU compensation | 13 | 11 | | Related income tax benefit | 4 | 2 | Note 11. Derivative and Hedging Activities This note explains the use of derivative instruments to manage commodity price risk and their fair values - The company uses derivative instruments (financial price swaps, collars, call options, basis protection swaps) to reduce exposure to commodity price fluctuations, not for speculative trading[99](index=99&type=chunk) Estimated Fair Values of Derivative Instruments | Derivative Type | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Natural gas | (1,011) | (49) | | Oil | 4 | 4 | | NGLs | (16) | (9) | | **Total estimated fair value** | **(1,023)** | **(54)** | - As of March 31, 2025, the company had no cash or letters of credit posted as collateral for its commodity derivatives[105](index=105&type=chunk) Note 12. Investments This note details the company's equity method investment in Momentum Sustainable Ventures LLC and its project - The company holds a **35% equity method interest** in Momentum Sustainable Ventures LLC, a joint venture to build a natural gas gathering pipeline and carbon capture project[106](index=106&type=chunk) - The project includes a natural gas gathering pipeline with an initial capacity of **1.7 Bcf/d** (expandable to **2.2 Bcf/d**) and anticipates capturing approximately **1.0 million tons per annum of CO2**[106](index=106&type=chunk) Carrying Value of Investment in Momentum Sustainable Ventures LLC | Date | Carrying Value ($ millions) | | :---------------- | :-------------------------- | | March 31, 2025 | 311 | | December 31, 2024 | 307 | Note 13. Supplemental Cash Flow Information This note provides additional details on non-cash investing, financing activities, and other cash flow adjustments Changes in Assets and Liabilities Affecting Cash Flows | Category | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Accounts receivable | (135) | 286 | | Accounts payable | (96) | (93) | | Other current assets | (25) | 1 | | Other current liabilities | 5 | (118) | | Total | (251) | 76 | Supplemental Cash Flow Information | Metric | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Interest paid, net of capitalized interest | 91 | 20 | | Income taxes paid (refunds received), net | — | — | | Change in accrued drilling and completion costs | 126 | (59) | | Operating lease obligations recognized | 19 | — | Note 14. Segment Information This note explains the company's operating segments, their aggregation, and capital expenditure allocation - The company's operating areas (Haynesville, Northeast Appalachia, Southwest Appalachia) are aggregated into one reportable segment due to the similar nature of the exploration and production business[109](index=109&type=chunk) - The Chief Executive Officer (CODM) uses consolidated net income (loss) and reviews significant segment expenses and capital expenditures for resource allocation and performance assessment[110](index=110&type=chunk)[111](index=111&type=chunk) Capital Expenditures | Period | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Capital expenditures | 662 | 354 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Expand Energy's financial condition, liquidity, and operational results, highlighting the Southwestern Merger, investment ratings, and ESG goals - The Southwestern Merger, completed on October 1, 2024, established Expand Energy as a premier energy company and the largest independent natural gas producer in the U.S[113](index=113&type=chunk)[114](index=114&type=chunk) - The company's strategy focuses on responsible development of resource plays, improving margins through operating efficiencies, financial discipline, and enhancing ESG performance[115](index=115&type=chunk) - Key ESG goals include achieving net zero (Scope 1 and 2) greenhouse gas emissions by **2035** and maintaining **100% responsibly sourced gas (RSG)** certification[116](index=116&type=chunk) - Expand Energy received investment grade ratings from S&P, Fitch, and Moody's in late 2024 and early 2025, leading to more permissive covenants on its Credit Facility[118](index=118&type=chunk) Liquidity and Capital Resources This section discusses the company's liquidity, capital allocation framework, and planned capital expenditures - As of March 31, 2025, Expand Energy had **$2.8 billion** of liquidity available, comprising **$0.3 billion** cash on hand and **$2.5 billion** in unused borrowing capacity under its Credit Facility[125](index=125&type=chunk) - The company's enhanced capital returns framework, effective January 1, 2025, prioritizes a base dividend of **$2.30 per share** and a targeted **$500 million annual net debt reduction**, with **75%** of remaining free cash flow allocated to share repurchases or additional dividends[121](index=121&type=chunk) - Expected capital expenditures for 2025 are between **$2.9 billion** and **$3.1 billion**, to be funded by cash on hand, operating cash flow, and Credit Facility borrowings[133](index=133&type=chunk) Sources and (Uses) of Cash and Cash Equivalents | Category | Three Months Ended March 31, 2025 ($ millions) | Three Months Ended March 31, 2024 ($ millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Cash provided by operating activities | 1,096 | 552 | | Capital expenditures | (563) | (421) | | Cash paid to purchase debt | (436) | — | | Cash paid for common stock dividends | (142) | (77) | | Net increase in cash, cash equivalents and restricted cash | 32 | 101 | Results of Operations This section analyzes the company's financial performance, focusing on revenue drivers, expenses, and derivative impacts - Natural gas, oil, and NGL sales increased by **$1,711 million** in Q1 2025 compared to Q1 2024, primarily driven by a **$1.3 billion** increase in volumes due to the Southwestern Merger and a **$462 million** increase from higher average prices[141](index=141&type=chunk) Production and Average Realized Prices | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Production (MMcfe per day) | 6,788 | 3,198 | | Average Realized Price (including realized derivatives) per Mcfe | $3.69 | $2.85 | - Production expenses increased by **$88 million** and gathering, processing, and transportation expenses increased by **$390 million** in Q1 2025, both primarily due to the Southwestern Merger and increased volumes[142](index=142&type=chunk)[143](index=143&type=chunk) - Natural gas, oil, and NGL derivatives resulted in a **$(1,014) million loss** in Q1 2025, compared to a **$172 million gain** in Q1 2024, mainly due to unrealized losses on natural gas derivatives[145](index=145&type=chunk) - Depreciation, depletion, and amortization (DD&A) increased to **$711 million** in Q1 2025 from **$399 million** in Q1 2024 due to the Southwestern Merger, though DD&A per Mcfe decreased due to lower depletion rates on acquired wells[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Expand Energy's exposure to market risks, including commodity price volatility and interest rate fluctuations, and details derivative use - The company's primary market risks are changes in natural gas, oil, and NGL prices and interest rates[158](index=158&type=chunk) - Derivative instruments are used to mitigate exposure to commodity price declines and manage price volatility, not for speculative trading[159](index=159&type=chunk) - A **10% increase** in forward natural gas prices would decrease the valuation of natural gas derivatives by approximately **$753 million**, while a **10% decrease** would increase it by approximately **$734 million**[161](index=161&type=chunk) - Interest rate risk primarily relates to floating-rate borrowings under the Credit Facility; as of March 31, 2025, there were no outstanding borrowings[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures and reported no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[164](index=164&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended March 31, 2025[165](index=165&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section details Expand Energy's legal and regulatory proceedings, including those from Chapter 11 and the Southwestern Merger, with no material adverse impact expected - The company is involved in various regulatory proceedings, lawsuits, and disputes incidental to its business operations[168](index=168&type=chunk) - Pre-petition legal proceedings from the Chapter 11 Cases will be resolved through the claims reconciliation process, while those assumed from the Southwestern Merger are not subject to Chapter 11 discharge[168](index=168&type=chunk) - Management believes no pending or threatened lawsuit is likely to have a material adverse effect on future consolidated financial position, results of operations, or cash flows[169](index=169&type=chunk) - Environmental risks are managed through policies, programs, and the establishment of reserves for probable and reasonably estimable liabilities[170](index=170&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the 2024 Form 10-K for comprehensive risk factors that could materially affect Expand Energy's business and financial condition - Factors that could materially adversely affect the business are described under 'Risk Factors' in Item 1A of the 2024 Form 10-K[171](index=171&type=chunk) - Forward-looking statements are subject to numerous risks and uncertainties, including reduced demand for natural gas, oil, and NGLs, price volatility, and regulatory changes[152](index=152&type=chunk)[157](index=157&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that Expand Energy Corporation did not repurchase any common stock shares during the quarter ended March 31, 2025 - No repurchases of common stock were made during the quarter ended March 31, 2025[172](index=172&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults upon senior securities for Expand Energy Corporation during the reporting period - There were no defaults upon senior securities[173](index=173&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety violations and other regulatory matters are detailed in Exhibit 95.1 to this Form 10-Q - Information concerning mine safety violations and other regulatory matters is included in Exhibit 95.1 to this Form 10-Q[174](index=174&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended March 31, 2025[175](index=175&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, furnished, or incorporated by reference, including key corporate documents, merger agreements, and certifications - The exhibits include the Fifth Amended Joint Plan of Reorganization, the Agreement and Plan of Merger with Southwestern Energy Company, and the Third Amended and Restated Certificate of Incorporation and Bylaws[178](index=178&type=chunk) - Also included are forms of Executive/Employee Restricted Stock Unit Award Agreement, Performance Share Unit Award agreements, and certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[178](index=178&type=chunk) - The exhibits also contain Inline XBRL Instance Document and Taxonomy Extension Documents for interactive data filing[180](index=180&type=chunk) [Signatures](index=42&type=section&id=Signatures) This section contains the official signatures of Expand Energy Corporation's CEO and CFO, certifying the report's accuracy and completeness - The report is duly signed by Domenic J. Dell'Osso, Jr., President and Chief Executive Officer, and Mohit Singh, Executive Vice President and Chief Financial Officer, on April 29, 2025[186](index=186&type=chunk)

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Expand Energy's key financial and operational achievements for Q1 2025, along with strategic milestones and CEO commentary [First Quarter 2025 Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) Expand Energy reported key financial and operational achievements for Q1 2025, including significant net cash from operations, adjusted net income, and production, alongside strategic milestones like S&P 500 inclusion and an investment-grade credit rating Q1 2025 Key Financial & Operational Highlights | Metric | Value | | :----------------------------------- | :-------------------- | | Net cash provided by operating activities | $1,096 million | | Net loss | $249 million | | Net loss per fully diluted share | $1.06 | | Adjusted net income | $487 million | | Adjusted net income per share | $2.02 | | Adjusted EBITDAX | $1,395 million | | Net production | Approximately **6.79 Bcfe/d** (92% natural gas) | | Quarterly base dividend | **$0.575 per common share** (to be paid in June 2025) | | 2025 Synergy Target | Approximately **$400 million** | | Total Synergy Target (by year-end 2026) | **$500 million** | - Added to the S&P 500, effective March 24, 2025[5](index=5&type=chunk) - Upgraded to Investment Grade credit rating by Moody's (Baa3); achieved uniform Investment Grade rating from all rating agencies[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Nick Dell'Osso emphasized Expand Energy's resilient financial foundation, market-connected portfolio, and efficient operations as key to navigating market volatility and preparing for future market changes - Strategy focuses on a resilient financial foundation, a deep market-connected portfolio, and low-cost, efficient operations to overcome market volatility[4](index=4&type=chunk) - Company continues to execute its business, utilizing productive capacity to navigate the dynamic macro environment and efficiently respond as market conditions change[4](index=4&type=chunk) [Business Overview](index=2&type=section&id=Business%20Overview) This section provides an overview of Expand Energy's corporate profile, highlighting its position as the largest natural gas producer in the United States and its strategic focus [Company Profile](index=2&type=section&id=Company%20Profile) Expand Energy Corporation is the largest natural gas producer in the United States, committed to a returns-driven strategy that leverages its scale, financial strength, and operational execution to create sustainable value and expand America's energy reach for a more affordable, reliable, lower-carbon future - Expand Energy Corporation (NASDAQ: EXE) is the **largest natural gas producer in the United States**[12](index=12&type=chunk) - Strategy is returns-driven, focused on disrupting the industry's traditional cost and market delivery model to responsibly develop assets in the nation's most prolific natural gas basins[12](index=12&type=chunk) - Committed to expanding America's energy reach to fuel a more affordable, reliable, lower carbon future[13](index=13&type=chunk) [Operational Performance & Outlook](index=2&type=section&id=Operational%20Performance%20%26%20Outlook) This section details Expand Energy's Q1 2025 operational results and outlines its annual synergy, capital, and operating projections for 2025 and beyond [First Quarter 2025 Operations Update](index=2&type=section&id=First%20Quarter%202025%20Operations%20Update) In Q1 2025, Expand Energy operated an average of 11 rigs, drilled 46 wells, and turned 89 wells in line, achieving a net production of approximately 6.79 Bcfe per day, predominantly natural gas - Operated an average of **11 rigs** during the first quarter[6](index=6&type=chunk) - Drilled **46 wells** and turned **89 wells** in line[6](index=6&type=chunk) - Resulted in net production of approximately **6.79 Bcfe per day** (92% natural gas)[6](index=6&type=chunk) [2025 Annual Synergy, Capital and Operating Outlook](index=2&type=section&id=2025%20Annual%20Synergy%2C%20Capital%20and%20Operating%20Outlook) Expand Energy projects running approximately 12 rigs and investing $2.7 billion in 2025, targeting an estimated daily production of 7.1 Bcfe/d. The company also plans an additional $300 million investment to exit 2025 with 15 rigs, positioning for potential production growth to 7.5 Bcfe/d in 2026. The company remains on track to achieve $400 million in 2025 synergies, with a full target of $500 million by year-end 2026 2025 Annual Outlook | Metric | Value | | :-------------------------------- | :-------------------- | | Rigs Expected to Run | Approximately **12** | | Capital Investment | Approximately **$2.7 billion** | | Estimated Daily Production | Approximately **7.1 Bcfe/d** | - Intends to build incremental productive capacity for an additional **$300 million** by exiting 2025 with approximately **15 rigs**[7](index=7&type=chunk) - This incremental capital investment positions the Company to efficiently grow production from a year-end 2025 exit rate of approximately **7.2 Bcfe/d** to average approximately **7.5 Bcfe/d** in 2026 should market conditions warrant[7](index=7&type=chunk) - On track to capture its 2025 expected annual synergy target of approximately **$400 million**, with the full **$500 million** in annual synergies expected to be achieved by year end 2026[8](index=8&type=chunk) [Shareholder Returns & Financial Strategy](index=2&type=section&id=Shareholder%20Returns%20%26%20Financial%20Strategy) This section outlines Expand Energy's updated capital return framework, including its base dividend plan and strategy for net debt reduction and free cash flow allocation [Shareholder Returns Update](index=2&type=section&id=Shareholder%20Returns%20Update) Expand Energy enhanced its capital return framework in 2024, planning a quarterly base dividend of $0.575 per share for June 2025. The company expects to allocate $500 million to Net Debt reduction in 2025 and anticipates additional free cash flow for variable dividends, share repurchases, and balance sheet management - Enhanced its capital return framework in 2024 to more efficiently return cash to shareholders and reduce Net Debt[9](index=9&type=chunk) - Plans to pay its quarterly base dividend of **$0.575 per share** on June 4, 2025[9](index=9&type=chunk) - Expects to allocate **$500 million** to Net Debt reduction in 2025, and at current market conditions, to have additional free cash flow available to allocate to the combination of variable dividends, share repurchases, and the balance sheet[9](index=9&type=chunk) [Financial Results](index=5&type=section&id=Financial%20Results) This section presents Expand Energy's condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows for Q1 2025 compared to prior periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Expand Energy reported total assets of $27,934 million, a slight increase from December 31, 2024. Key changes include an increase in cash and cash equivalents, accounts receivable, and proved natural gas and oil properties, while current maturities of long-term debt decreased significantly. Total liabilities also increased, primarily due to derivative liabilities and other current liabilities Condensed Consolidated Balance Sheets (March 31, 2025 vs. Dec 31, 2024) | Metric | March 31, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | | :----------------------------------- | :-------------------------- | :--------------------------- | :------------------ | | Total Assets | **27,934** | 27,894 | +40 | | Cash and cash equivalents | **349** | 317 | +32 | | Accounts receivable, net | **1,361** | 1,226 | +135 | | Proved natural gas and oil properties | **23,874** | 23,093 | +781 | | Total current liabilities | **3,589** | 3,123 | +466 | | Current maturities of long-term debt, net | — | 389 | -389 | | Derivative liabilities (current) | **896** | 71 | +825 | | Total liabilities | **10,743** | 10,329 | +414 | | Total stockholders' equity | **17,191** | 17,565 | -374 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, Expand Energy reported a net loss of $249 million, a significant decline from a net income of $26 million in the prior year period. This was primarily driven by a substantial negative impact from natural gas, oil and NGL derivatives, despite a large increase in natural gas, oil and NGL revenues. Total revenues and other increased significantly, but operating expenses also rose sharply Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2025 vs. 2024) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Natural gas, oil and NGL revenues | **2,300** | 589 | +1,711 | +290.5% | | Natural gas, oil and NGL derivatives | **(1,014)** | 172 | -1,186 | -689.5% | | Total revenues and other | **2,196** | 1,081 | +1,115 | +103.1% | | Total operating expenses | **2,464** | 1,049 | +1,415 | +134.9% | | Income (loss) from operations | **(268)** | 32 | -300 | -937.5% | | Net income (loss) | **(249)** | 26 | -275 | -1057.7% | | Basic EPS | **(1.06)** | 0.20 | -1.26 | -630.0% | | Diluted EPS | **(1.06)** | 0.18 | -1.24 | -688.9% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Expand Energy's net cash provided by operating activities significantly increased to $1,096 million in Q1 2025 from $552 million in Q1 2024, primarily due to derivative losses and changes in assets and liabilities. Cash used in investing activities also increased, while cash used in financing activities saw a substantial rise due to debt purchases and higher dividend payments Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2025 vs. 2024) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net cash provided by operating activities | **1,096** | 552 | +544 | +98.6% | | Net cash used in investing activities | **(507)** | (374) | -133 | +35.6% | | Net cash used in financing activities | **(557)** | (77) | -480 | +623.4% | | Net increase in cash, cash equivalents and restricted cash | **32** | 101 | -69 | -68.3% | | Cash, cash equivalents and restricted cash, end of period | **427** | 1,254 | -827 | -65.9% | - Key drivers for operating cash flow include derivative (gains) losses, net of **$1,014 million** in 2025 (vs. $(172) million in 2024) and changes in assets and liabilities of **$(251) million** in 2025 (vs. $76 million in 2024)[20](index=20&type=chunk) - Key drivers for financing cash flow include cash paid to purchase debt of **$(436) million** in 2025 and cash paid for common stock dividends of **$(142) million** in 2025 (vs. $(77) million in 2024)[20](index=20&type=chunk) [Production and Capital Expenditures](index=8&type=section&id=Production%20and%20Capital%20Expenditures) This section details Expand Energy's natural gas, oil, and NGL production volumes, average sales prices, and capital expenditures for Q1 2025, with comparisons to the prior year [Natural Gas, Oil and NGL Production and Average Sales Prices](index=8&type=section&id=Natural%20Gas%2C%20Oil%20and%20NGL%20Production%20and%20Average%20Sales%20Prices) In Q1 2025, Expand Energy significantly increased total production to 6,788 MMcfe per day, up from 3,198 MMcfe per day in Q1 2024, primarily driven by growth in Haynesville and Northeast Appalachia, and new production from Southwest Appalachia. The average realized price (including derivatives) also increased to $3.69 per Mcfe from $2.85 per Mcfe year-over-year Production and Average Sales Prices (Three Months Ended March 31, 2025 vs. 2024) | Metric | 2025 | 2024 | Change | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :---------------- | :--------- | | Total Production (MMcfe per day) | **6,788** | 3,198 | +3,590 | +112.2% | | Average Realized Price (including realized derivatives) ($/Mcfe) | **3.69** | 2.85 | +0.84 | +29.5% | Production Breakdown (MMcfe per day, Q1 2025) | Region | MMcfe per day | | :-------------------- | :-------------- | | Haynesville | **2,617** | | Northeast Appalachia | **2,668** | | Southwest Appalachia | **1,503** | Average NYMEX Price (Q1 2025 vs. Q1 2024) | Commodity | 2025 | 2024 | | :---------- | :--- | :--- | | Natural Gas ($/Mcf) | **3.65** | 2.24 | | Oil ($/Bbl) | **71.42** | — | [Capital Expenditures Accrued](index=8&type=section&id=Capital%20Expenditures%20Accrued) Total capital expenditures accrued for Q1 2025 significantly increased to $662 million, up from $354 million in Q1 2024. This rise was primarily driven by increased drilling and completion capital in Haynesville and the introduction of significant capital in Southwest Appalachia Capital Expenditures Accrued (Three Months Ended March 31, 2025 vs. 2024) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Total drilling and completion capital expenditures | **554** | 300 | +254 | +84.7% | | Total capital expenditures | **662** | 354 | +308 | +87.0% | Drilling and Completion Capital by Region (Q1 2025 vs. Q1 2024) | Region | 2025 ($ millions) | 2024 ($ millions) | | :-------------------- | :---------------- | :---------------- | | Haynesville | **286** | 195 | | Northeast Appalachia | **103** | 105 | | Southwest Appalachia | **165** | — | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles Expand Energy's non-GAAP financial measures, providing clarity on how management evaluates performance and presents financial results [Non-GAAP Definitions](index=9&type=section&id=Non-GAAP%20Definitions) This section provides definitions for several non-GAAP financial measures used by Expand Energy, including Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow, and Net Debt. These measures are used by management to evaluate performance and are considered comparable to analyst estimates, excluding one-time or hard-to-estimate items - Adjusted Net Income: Net income (loss) adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect[25](index=25&type=chunk) - Adjusted Diluted Earnings Per Common Share: Diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items, less a tax effect[26](index=26&type=chunk) - Adjusted EBITDAX: Net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results[27](index=27&type=chunk) - Free Cash Flow: Net cash provided by operating activities less cash capital expenditures[28](index=28&type=chunk) - Adjusted Free Cash Flow: Net cash provided by operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results[29](index=29&type=chunk) - Net Debt: GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents[30](index=30&type=chunk) [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of various non-GAAP financial measures to their most directly comparable GAAP financial measures for the three months ended March 31, 2025, and 2024 [Adjusted Net Income Reconciliation](index=10&type=section&id=Adjusted%20Net%20Income%20Reconciliation) Adjusted Net Income for Q1 2025 was $487 million, a significant increase from $80 million in Q1 2024, primarily due to the exclusion of $969 million in unrealized losses on natural gas and oil derivatives in 2025 Reconciliation of Net Income (Loss) to Adjusted Net Income (Three Months Ended March 31) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net income (loss) (GAAP) | **(249)** | 26 | -275 | -1057.7% | | Unrealized losses on natural gas and oil derivatives | **969** | 67 | +902 | +1346.3% | | Adjusted net income (Non-GAAP) | **487** | 80 | +407 | +508.8% | [Adjusted Diluted Earnings Per Common Share Reconciliation](index=10&type=section&id=Adjusted%20Diluted%20Earnings%20Per%20Common%20Share%20Reconciliation) Adjusted Diluted Earnings Per Common Share for Q1 2025 was $2.02, a substantial increase from $0.56 in Q1 2024, mainly driven by the adjustment for unrealized losses on natural gas and oil derivatives Reconciliation of Earnings (Loss) Per Common Share to Adjusted Diluted EPS (Three Months Ended March 31) | Metric | 2025 ($/share) | 2024 ($/share) | Change ($/share) | Change (%) | | :-------------------------------- | :------------- | :------------- | :--------------- | :--------- | | Diluted earnings (loss) per common share (GAAP) | **(1.06)** | 0.18 | -1.24 | -688.9% | | Unrealized losses on natural gas and oil derivatives | **4.14** | 0.47 | +3.67 | +780.9% | | Adjusted diluted earnings per common share (Non-GAAP) | **2.02** | 0.56 | +1.46 | +260.7% | [Adjusted EBITDAX Reconciliation](index=11&type=section&id=Adjusted%20EBITDAX%20Reconciliation) Adjusted EBITDAX for Q1 2025 was $1,395 million, a significant increase from $508 million in Q1 2024, primarily due to higher depreciation, depletion and amortization, and the exclusion of unrealized losses on natural gas and oil derivatives Reconciliation of Net Income (Loss) to Adjusted EBITDAX (Three Months Ended March 31) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :-------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net income (loss) (GAAP) | **(249)** | 26 | -275 | -1057.7% | | Depreciation, depletion and amortization | **711** | 399 | +312 | +78.2% | | Unrealized losses on natural gas and oil derivatives | **969** | 67 | +902 | +1346.3% | | Adjusted EBITDAX (Non-GAAP) | **1,395** | 508 | +887 | +174.6% | [Adjusted Free Cash Flow Reconciliation](index=11&type=section&id=Adjusted%20Free%20Cash%20Flow%20Reconciliation) Adjusted Free Cash Flow for Q1 2025 was $577 million, a substantial increase from $112 million in Q1 2024, driven by higher net cash provided by operating activities despite increased cash capital expenditures Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow (Three Months Ended March 31) | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | | :----------------------------------- | :---------------- | :---------------- | :------------------ | :--------- | | Net cash provided by operating activities (GAAP) | **1,096** | 552 | +544 | +98.6% | | Cash capital expenditures | **(563)** | (421) | -142 | +33.7% | | Free cash flow (Non-GAAP) | **533** | 131 | +402 | +306.9% | | Adjusted free cash flow (Non-GAAP) | **577** | 112 | +465 | +415.2% | [Net Debt Reconciliation](index=11&type=section&id=Net%20Debt%20Reconciliation) As of March 31, 2025, Expand Energy reported Net Debt of $4,901 million, calculated by adjusting total GAAP debt for premiums, discounts, and issuance costs, and subtracting cash and cash equivalents Reconciliation of Total Debt to Net Debt (March 31, 2025) | Metric | Amount ($ millions) | | :-------------------------------- | :------------------ | | Total debt (GAAP) | **5,243** | | Premiums, discounts and issuance costs on debt | **7** | | Principal amount of debt | **5,250** | | Cash and cash equivalents | **(349)** | | Net debt (Non-GAAP) | **4,901** | [Legal & Disclosures](index=3&type=section&id=Legal%20%26%20Disclosures) This section addresses important legal considerations and disclosures, particularly regarding forward-looking statements and the inherent risks and uncertainties associated with them [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements regarding future events, financial performance, market factors, and ESG initiatives, emphasizing that these are subject to numerous risks and uncertainties, including demand fluctuations, commodity price volatility, regulatory changes, and economic conditions. Investors are cautioned not to place undue reliance on these statements - Includes current expectations or forecasts of future events, business, financial performance, and financial condition[13](index=13&type=chunk) - Inherently subject to numerous risks and uncertainties, including reduced demand for natural gas, oil, and NGLs; negative public perceptions; commodity price volatility; significant capital expenditures; ability to replace reserves; drilling and operating risks; pipeline capacity constraints; terrorist activities and/or cyber-attacks; and legislative, regulatory, and ESG initiatives[14](index=14&type=chunk) - Caution against undue reliance on forward-looking statements, which speak only as of the filing date, with no obligation to update except as required by law[15](index=15&type=chunk)

PART I [Business](index=10&type=section&id=Item%201.%20Business) Expand Energy is the largest independent natural gas producer in the U.S., operating primarily in the Haynesville, Northeast Appalachia, and Southwest Appalachia shale plays - On October 1, 2024, Chesapeake Energy Corporation completed its merger with Southwestern Energy Company and changed its name to Expand Energy Corporation, becoming the **largest independent natural gas producer in the U.S.** based on net daily production[12](index=12&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - The company's core operating areas are Haynesville (Louisiana), Northeast Appalachia (Pennsylvania), and Southwest Appalachia (West Virginia and Ohio), with interests in approximately **8,000 gross wells**[52](index=52&type=chunk)[59](index=59&type=chunk) - The business strategy is centered on creating shareholder value by developing significant resource plays, improving margins through efficiencies, maintaining financial discipline, and enhancing ESG performance[58](index=58&type=chunk) Annual Production Volumes (Bcfe) | Year | Haynesville | Northeast Appalachia | Southwest Appalachia | Eagle Ford | Total Production (Bcfe) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2024 | 561 | 662 | 152 | — | 1,375 | | 2023 | 566 | 669 | — | 100 | 1,335 | | 2022 | 588 | 670 | — | 193 | 1,461 | Average Sales Price and Per-Unit Expenses (2024 vs 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Avg. Sales Price ($/Mcfe) | $2.16 | $2.66 | | Production Expense ($/Mcfe) | $0.23 | $0.27 | | GP&T Expense ($/Mcfe) | $0.75 | $0.64 | Proved Reserves as of December 31, 2024 | Reserve Category | Natural Gas (Bcf) | Oil (MMBbl) | NGL (MMBbl) | Total (Bcfe) | | :--- | :--- | :--- | :--- | :--- | | Proved Developed | 14,418 | 40.3 | 383.0 | 16,958 | | Proved Undeveloped | 2,506 | 27.6 | 195.1 | 3,842 | | **Total Proved** | **16,924** | **67.9** | **578.1** | **20,800** | - As of December 31, 2024, the company had approximately **1,700 employees**[115](index=115&type=chunk)[116](index=116&type=chunk) - The company culture is built on core values of Stewardship, Character, Collaboration, Learning, and Disruption, with a strong commitment to safety, diversity, equity, and inclusion (DEI)[120](index=120&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks primarily related to commodity price volatility, which impacts revenues, profitability, and capital expenditures - Natural gas, oil, and NGL prices fluctuate widely due to factors beyond the company's control, such as supply/demand, weather, and geopolitical events, with a prolonged period of low prices potentially harming the business[129](index=129&type=chunk)[130](index=130&type=chunk) - The Southwestern Merger involves complex integration challenges, and failure to successfully integrate businesses or realize anticipated synergies could adversely affect future results and financial condition[198](index=198&type=chunk)[202](index=202&type=chunk) - The company is subject to extensive governmental regulations that can change and adversely impact the business, including rules on hydraulic fracturing, methane emissions, and climate change policies, which could increase compliance costs and reduce demand for fossil fuels[207](index=207&type=chunk)[208](index=208&type=chunk)[214](index=214&type=chunk) - Cyber-attacks targeting IT and operational technology systems pose a significant risk, potentially leading to operational disruptions, data corruption, and financial or legal liability, despite the company's cybersecurity risk management program[168](index=168&type=chunk)[170](index=170&type=chunk) - The completion of the Southwestern Merger triggered an annual limitation on the utilization of the company's tax attributes under Section 382 of the Internal Revenue Code, which could reduce the ability to offset future taxable income and increase tax liabilities[229](index=229&type=chunk) [Unresolved Staff Comments](index=53&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - Not applicable[234](index=234&type=chunk) [Cybersecurity](index=53&type=section&id=Item%201C.%20Cybersecurity) The company has implemented a cybersecurity risk management program guided by the NIST Cybersecurity Framework, which is integrated into its overall enterprise risk management - The cybersecurity program is designed based on the NIST Cybersecurity Framework to identify, assess, and manage risks[235](index=235&type=chunk) - Oversight is provided by the Board of Directors' Audit Committee, which receives bi-annual updates from management on cybersecurity risks[238](index=238&type=chunk)[239](index=239&type=chunk) - The program is led by a Cybersecurity Manager with over **20 years of experience**, supervising an internal team with over **50 years of combined experience**[242](index=242&type=chunk) - No known cybersecurity threats or prior incidents have materially affected the company to date, but the company acknowledges that future threats are reasonably likely to have a material impact[237](index=237&type=chunk) [Properties](index=55&type=section&id=Item%202.%20Properties) Information regarding the company's properties is detailed in other sections of the report, specifically under Item 1 (Business) and Item 8 (Financial Statements and Supplementary Data) - Details on the company's properties are located in Item 1 and Item 8 of this report[244](index=244&type=chunk) [Legal Proceedings](index=56&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings arising from the ordinary course of business - The company is involved in various lawsuits and disputes arising in the ordinary course of business[246](index=246&type=chunk) - Legal proceedings existing before the Chapter 11 petition date will be resolved through the Bankruptcy Court's claims reconciliation process[246](index=246&type=chunk) - Management does not currently expect any pending litigation to have a material adverse effect on the company's financial condition or results of operations[247](index=247&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[249](index=249&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=57&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Following the Southwestern Merger, the company's name changed to Expand Energy Corporation and its NASDAQ ticker changed from 'CHK' to 'EXE' - Effective October 1, 2024, the company's name changed to Expand Energy Corporation and its NASDAQ trading symbol changed to '**EXE**'[252](index=252&type=chunk) - A new enhanced returns framework, effective January 1, 2025, prioritizes a base dividend and annual net debt reduction before additional shareholder returns[253](index=253&type=chunk) - On October 22, 2024, the Board of Directors authorized a new share repurchase program for up to **$1.0 billion** of common stock and/or warrants[254](index=254&type=chunk) - No shares of common stock were repurchased during the quarter ended December 31, 2024, leaving the full **$1.0 billion** available under the new program[255](index=255&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's financial condition and operational results, heavily influenced by the Southwestern Merger, which created the largest U.S. independent natural gas producer [Recent Developments](index=59&type=section&id=Recent%20Developments) Recent developments include the Southwestern Energy merger, achieving investment grade ratings, and establishing a new capital returns framework - Completed the all-stock merger with Southwestern Energy on October 1, 2024, issuing approximately **95.7 million shares** of common stock valued at about **$7.9 billion**[263](index=263&type=chunk)[264](index=264&type=chunk) - Achieved an investment grade rating of '**BBB-**' from both S&P and Fitch in October 2024, leading to more permissive covenants on its credit facility[265](index=265&type=chunk) - In December 2024, issued **$750 million** of 5.70% Senior Notes due 2035 and tendered for **$453 million** of its 2026 Notes[266](index=266&type=chunk) - Announced an enhanced capital returns framework effective January 1, 2025, prioritizing a base dividend and a target of **$500 million** in annual net debt reduction for 2025[268](index=268&type=chunk) - Entered into a long-term LNG export deal to purchase approximately **0.5 million tonnes per annum** from Delfin LNG starting in 2028, for delivery to Gunvor Group[272](index=272&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of $2.8 billion, though 2024 operating cash flow decreased due to lower commodity prices - As of December 31, 2024, the company had **$2.8 billion** of available liquidity, comprising **$317 million** in cash and **$2.5 billion** of unused capacity under its Credit Facility[276](index=276&type=chunk) Sources and (Uses) of Cash (in millions) | Category | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Cash from operating activities | $1,565 | $2,380 | $4,125 | | Capital expenditures | $(1,557) | $(1,829) | $(1,823) | | Proceeds from divestitures | $21 | $2,533 | $407 | | Business combination, net | $(459) | — | $(1,967) | | Cash paid for dividends | $(388) | $(487) | $(1,212) | | **Net change in cash** | **$(758)** | **$961** | **$(722)** | - Cash from operating activities decreased to **$1.57 billion** in 2024 from **$2.38 billion** in 2023, primarily due to lower commodity prices[288](index=288&type=chunk) - The company plans to invest between **$2.9 billion** and **$3.1 billion** in capital expenditures for 2025, expecting to complete **240 to 270 gross wells**[286](index=286&type=chunk) [Results of Operations](index=66&type=section&id=Results%20of%20Operations) 2024 revenues decreased to $2.97 billion due to lower prices and divestitures, while operating expenses increased post-merger Production and Sales Price Comparison (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Production (MMcfe per day) | 3,758 | 3,659 | | Avg. Realized Price ($/Mcfe, before derivatives) | $2.16 | $2.66 | | Avg. Realized Price ($/Mcfe, with derivatives) | $2.84 | $2.99 | - Natural gas, oil, and NGL sales decreased by **$578 million** in 2024 compared to 2023, driven by a **$426 million** decrease from lower average prices and a **$764 million** decrease from the Eagle Ford divestitures, partially offset by a **$1.0 billion** increase from the Southwestern Merger[305](index=305&type=chunk) - Total production expenses decreased by **$40 million** in 2024, mainly due to a **$90 million** reduction from the Eagle Ford divestitures, partially offset by a **$49 million** increase from the Southwestern Merger[306](index=306&type=chunk) - Gathering, processing, and transportation (GP&T) expenses increased by **$182 million** in 2024, primarily due to a **$404 million** increase related to the Southwestern Merger, partially offset by a **$157 million** decrease from the Eagle Ford divestitures[308](index=308&type=chunk) - General and administrative (G&A) expenses increased by **$59 million** in 2024, mainly due to reduced G&A allocations after the Eagle Ford divestitures and increased corporate expenses following the Southwestern Merger[314](index=314&type=chunk) - Other operating expenses in 2024 included approximately **$312 million** in costs related to the Southwestern Merger[317](index=317&type=chunk) [Critical Accounting Estimates](index=72&type=section&id=Critical%20Accounting%20Estimates) Key accounting estimates involve natural gas and oil reserves, business combinations, and long-lived asset impairment assessments - Estimates of natural gas and oil reserves are the most significant estimates, affecting depreciation, depletion, and amortization (DD&A) and impairment calculations, and are subject to revision based on production data, prices, and other factors[323](index=323&type=chunk) - Accounting for business combinations, such as the Southwestern Merger, requires significant judgment in allocating the purchase price to the fair value of assets acquired and liabilities assumed, particularly for natural gas and oil properties[324](index=324&type=chunk)[325](index=325&type=chunk) - The company assesses long-lived assets for impairment when circumstances indicate that their carrying value may not be recoverable, involving comparing undiscounted future cash flows to the asset's carrying value[330](index=330&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are to commodity price volatility and interest rate changes - The company's main market risk is from volatile natural gas, oil, and NGL prices, with derivative instruments used to mitigate a portion of this exposure[333](index=333&type=chunk) - Based on 2024 production, a **10% change in commodity prices** would have impacted revenues as follows: Natural Gas by ~**$269 million**, Oil by ~**$7 million**, and NGL by ~**$21 million** (excluding hedges)[335](index=335&type=chunk) - As of December 31, 2024, a **10% increase in forward gas prices** would decrease the fair value of natural gas derivatives by approximately **$493 million**, while a **10% decrease** would increase the value by **$482 million**[335](index=335&type=chunk) - Interest rate risk is tied to the Credit Facility, which has floating rates, but as of December 31, 2024, there were no outstanding borrowings, minimizing current exposure[336](index=336&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for the fiscal years ended December 31, 2024, 2023, and 2022, including the balance sheets, statements of operations, cash flows, and stockholders' equity Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $27,894 | $14,376 | | Total Liabilities | $10,329 | $3,647 | | Total Stockholders' Equity | $17,565 | $10,729 | Consolidated Statement of Operations Highlights (in millions) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total Revenues and Other | $4,235 | $8,721 | $11,743 | | Total Operating Expenses | $5,038 | $5,579 | $7,963 | | Net Income (Loss) | $(714) | $2,419 | $4,936 | Consolidated Statement of Cash Flows Highlights (in millions) | Account | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,565 | $2,380 | $4,125 | | Net Cash from Investing Activities | $(1,904) | $473 | $(3,401) | | Net Cash from Financing Activities | $(419) | $(1,892) | $(1,446) | [Changes In and Disagreements with Accountants on Accounting and Financial Disclosure](index=127&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[590](index=590&type=chunk) [Controls and Procedures](index=127&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2024 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[592](index=592&type=chunk) - Management's assessment of internal control over financial reporting as of December 31, 2024, excluded the recently acquired Southwestern Energy[596](index=596&type=chunk) - Southwestern Energy represented approximately **56% of consolidated total assets** and **35% of consolidated revenues** for the year ended December 31, 2024[346](index=346&type=chunk)[596](index=596&type=chunk) [Other Information](index=127&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q4 2024[599](index=599&type=chunk) - On February 21, 2025, the company approved a supplement to certain employee equity awards providing for pro rata vesting upon termination without cause after one year of employment[600](index=600&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Compensation, and Principal Accountant Fees](index=128&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, certain relationships, related transactions, director independence, and principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for the 2025 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the forthcoming 2025 Proxy Statement[602](index=602&type=chunk)[604](index=604&type=chunk)[605](index=605&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk) - The company has adopted a Code of Business Conduct applicable to all officers, directors, and employees, which is available on its website[603](index=603&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=129&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K - This section contains an index of all exhibits filed with or incorporated by reference into the Form 10-K[611](index=611&type=chunk) - Key exhibits filed include consents from the independent registered public accounting firm and the independent petroleum engineers, as well as certifications from the CEO and CFO[614](index=614&type=chunk) [Form 10-K Summary](index=134&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[618](index=618&type=chunk)

Exhibit 99.1 N E W S R E L E A S E Expand Energy Corporation Reports Fourth Quarter and Full-Year 2024 Results, Issues 2025 Outlook OKLAHOMA CITY, February 26, 2025 – Expand Energy Corporation (NASDAQ:EXE) ("Expand Energy" or the "Company") today reported fourth quarter and full-year 2024 financial and operating results and issued its 2025 outlook. Fourth Quarter Highlights 2025 Outlook (1) Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly ...

I analyze oil and gas companies like Expand Energy and related companies in my service, Oil & Gas Value Research, where I look for undervalued names in the oil and gas space. I break down everything you need to know about these companies -- the balance sheet, competitive position and development prospects. This article is an example of what I do. But for Oil & Gas Value Research members, they get it first and they get analysis on some companies that is not published on the free site. Interested? Sign up her ...

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These unaudited statements reflect **Expand Energy's** financial position, operations, and cash flows as of **September 30, 2024**, showing a **net loss** primarily due to **lower commodity prices** and **reduced production**, excluding the impact of the **Southwestern Energy merger** completed **October 1, 2024** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of **September 30, 2024**, **total assets** decreased to **$13.39 billion** from **$14.38 billion** at year-end **2023**, with liabilities and equity also declining due to **net losses** and dividends Condensed Consolidated Balance Sheet Highlights ($ in millions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $1,797 | $2,609 | | **Total Property and Equipment, net** | $9,954 | $10,097 | | **Total Assets** | **$13,392** | **$14,376** | | **Total Current Liabilities** | $899 | $1,314 | | **Long-term Debt, net** | $2,017 | $2,028 | | **Total Liabilities** | **$3,204** | **$3,647** | | **Total Stockholders' Equity** | $10,188 | $10,729 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a **net loss of $114 million** for **Q3 2024** and **$315 million** for the nine months, a significant reversal from prior-year **net income**, driven by **substantially lower revenues** from natural gas, oil, and NGL sales Key Operating Results ($ in millions, except per share data) | Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $648 | $1,512 | $2,234 | $6,773 | | **Income (Loss) from Operations** | $(155) | $79 | $(417) | $2,416 | | **Net Income (Loss)** | **$(114)** | **$70** | **$(315)** | **$1,850** | | **Diluted EPS** | **$(0.85)** | **$0.49** | **$(2.39)** | **$12.90** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Net cash from operating activities** for the first nine months of **2024** decreased to **$1.18 billion** from **$1.91 billion**, while investing activities shifted to a **$959 million** net use, and **financing activities** used **$257 million** for dividends Cash Flow Summary for Nine Months Ended Sep 30 ($ in millions) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,183 | $1,910 | | **Net Cash from (used in) Investing Activities** | $(959) | $368 | | **Net Cash used in Financing Activities** | $(257) | $(1,684) | | **Net (Decrease) Increase in Cash** | $(33) | $594 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes detail significant events including the **Southwestern Merger** on **October 1, 2024**, transforming the company into the **largest U.S. natural gas producer**, alongside **2023 Eagle Ford divestitures**, debt structure, **investment grade rating**, and equity changes - On **October 1, 2024**, **Chesapeake** completed its merger with **Southwestern Energy**, changed its name to **Expand Energy Corporation**, and became the **largest natural gas producer** in the U.S. The financial statements for the period ending **September 30, 2024**, do not include **Southwestern's** information[5](index=5&type=chunk)[26](index=26&type=chunk) - The merger with **Southwestern** was an **all-stock transaction** valued at **approximately $7.9 billion**, with **Expand Energy** (formerly **Chesapeake**) as the **accounting acquirer**. The transaction closed on **October 1, 2024**[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - In **2023**, the company completed the **divestiture** of all its **Eagle Ford assets** in three separate transactions, generating **total proceeds exceeding $3.5 billion**[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - Upon receiving **investment grade ratings** from S&P and Fitch in **October 2024**, the company's **credit facility** covenants were amended, releasing all collateral and guarantees and replacing certain financial ratios with a new **Debt to Capitalization Ratio limit of 65%**[48](index=48&type=chunk)[52](index=52&type=chunk) Dividends Paid Per Share | Quarter | 2024 Total Dividend | 2023 Total Dividend | | :--- | :--- | :--- | | Q1 | $0.575 | $1.29 | | Q2 | $0.715 | $1.18 | | Q3 | $0.575 | $0.575 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation into the **largest U.S. natural gas producer** with an **investment-grade balance sheet** post-Southwestern Merger, highlighting **$3.5 billion** liquidity, **$620-$690 million** Q4 capital expenditures, and a shift to **net loss** due to **lower prices** and divestitures [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a **strong liquidity position** of **$3.5 billion** as of **September 30, 2024**, with primary cash uses for **property development and shareholder returns**, and projects **$620-$690 million** in **Q4 2024** capital expenditures after assuming **$3.7 billion** in **Southwestern's senior notes** Liquidity Position as of Sep 30, 2024 ($ in billions) | Component | Amount | | :--- | :--- | | **Cash on Hand** | $1.0 | | **Unused Credit Facility Capacity** | $2.5 | | **Total Liquidity** | **$3.5** | - For **Q4 2024**, the company plans to invest **approximately $620 – $690 million** in **capital expenditures** and operate around **12 rigs**[130](index=130&type=chunk) - On **October 1, 2024**, the company assumed **approximately $3.7 billion** of **Southwestern's senior notes** and terminated **Southwestern's existing credit facility**[129](index=129&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) **Operating results** for **Q3** and the first nine months of **2024** show **significantly lower performance** due to a **sharp drop in natural gas prices**, absence of **Eagle Ford production**, and **planned curtailments**, with **Natural gas, oil, and NGL sales revenue** falling by **$1.41 billion** - **Natural gas, oil, and NGL sales** for the nine months ended **Sep 30, 2024**, decreased by **$1.41 billion** compared to the prior period. This was driven by a **$459 million** decrease from **lower prices**, a **$690 million** decrease from the **Eagle Ford divestitures**, and a **$261 million** decrease from **planned curtailments** and activity deferrals[149](index=149&type=chunk)[150](index=150&type=chunk) Production and Realized Prices (Nine Months Ended Sep 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Total Production (MMcfe/day)** | 2,862 | 3,737 | | **Avg. Realized Price ($/Mcfe)** | $1.75 | $2.73 | | **Avg. Realized Price incl. Hedges ($/Mcfe)** | $2.64 | $2.99 | - **General and administrative (G&A) expenses** increased on both an absolute and per-unit basis, primarily due to a **lower producing well count** after the **Eagle Ford divestitures**, which **reduced G&A allocations and reimbursements**[156](index=156&type=chunk) - The company recognized **$43 million** in costs related to the **Southwestern Merger** during the first nine months of **2024**, recorded under '**Other operating expense, net**'[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces **commodity price risk** and **interest rate risk**, mitigating the former by **hedging approximately 45%** of natural gas volumes through **2025**, while interest rate exposure is limited as the **Credit Facility** had **no outstanding borrowings** and assumed debt is **fixed-rate** - The company has **hedged approximately 45%** of its projected natural gas volumes through the end of **2025** to mitigate price volatility[118](index=118&type=chunk)[176](index=176&type=chunk) - A hypothetical **10% increase** in forward natural gas prices would decrease the fair value of the company's natural gas derivatives by **approximately $176 million**, while a **10% decrease** would increase the value by **$180 million** as of **September 30, 2024**[175](index=175&type=chunk) - As of **September 30, 2024**, the company had **no outstanding borrowings** under its **floating-rate Credit Facility**. The **approximately $3.7 billion** in **senior notes** assumed from **Southwestern** are all **fixed-rate**, limiting exposure to **interest rate fluctuations** on that debt[177](index=177&type=chunk)[178](index=178&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the **CEO and CFO**, concluded the company's **disclosure controls and procedures** were **effective** as of **September 30, 2024**, with **no material changes** to **internal control over financial reporting** during the quarter - The **Chief Executive Officer and Chief Financial Officer** concluded that the company's **disclosure controls and procedures** were **effective** as of **September 30, 2024**[180](index=180&type=chunk) - **No changes were made** during the quarter that **materially affected**, or are reasonably likely to **materially affect**, the company's **internal control over financial reporting**[181](index=181&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in **routine legal proceedings**, including **Southwestern Merger** lawsuits alleging **Exchange Act violations** that were **dismissed in June 2024**, with management not expecting a **material adverse effect** on financial position - Two lawsuits filed by purported stockholders in connection with the **Southwestern Merger**, alleging misstatements in the **registration statement**, were **dismissed in June 2024**[58](index=58&type=chunk)[184](index=184&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor indicates the **Southwestern Merger** may have triggered a **Section 382 Ownership Change**, potentially limiting the company's use of **NOLs** and **tax attributes** to offset future taxable income, which could increase **future tax liabilities** - The **Southwestern Merger** on **October 1, 2024**, may have resulted in a **Section 382 Ownership Change**, which could **limit the future use of the company's tax attributes** like **NOLs** and **tax credits**[188](index=188&type=chunk)[191](index=191&type=chunk) - If an **ownership change** occurred, a new **annual limitation** on utilizing **tax attributes** would be established. While the company believes a new limitation from the merger would be **less restrictive** than the one from its **2021 bankruptcy emergence** due to **higher interest rates**, a **future ownership change** under **different market conditions** could be **more restrictive**[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares of its **common stock** during the quarter ended **September 30, 2024** - **No common stock was repurchased** during the **third quarter of 2024**[192](index=192&type=chunk)

Exhibit 99.1 N E W S R E L E A S E Expand Energy Corporation Reports Third Quarter 2024 Results, Provides Preliminary 2025 Capital and Operating Plan and Announces Enhanced Capital Return Framework OKLAHOMA CITY, October 29, 2024 – Expand Energy Corporation (NASDAQ:EXE) ("Expand Energy" or the "company") today reported third quarter 2024 financial and operating results. In addition, the company provided its preliminary 2025 capital and operating plan and announced details regarding its enhanced capital retu ...

Laura Starks is the founder and CEO of Starks Energy Economics, LLC (since 2007). She has a degree in chemical engineering and an MBA with a concentration in finance which she has used for many years to invest personally and to share her ideas about energy companies. Her coverage includes utilities, independent power producers, energy service companies and contractors, a few petrochemical companies, and all sectors of oil and natural gas: upstream, midstream, and downstream Analyst's Disclosure: I/we have a ...

OKLAHOMA CITY, Oct. 01, 2024 (GLOBE NEWSWIRE) -- Chesapeake Energy Corporation (NASDAQ: CHK) and Southwestern Energy Company (NYSE: SWN) today closed on their previously announced combination. The combined company has been rebranded as Expand Energy Corporation. Expand Energy's common stock will commence public trading on the NASDAQ under the ticker "EXE" at the open of trading on October 2, 2024, and will continue to trade today under the symbol "CHK". "As America's largest natural gas producer and a top p ...