Merger and Acquisitions - The Southwestern Merger was completed on October 1, 2024, resulting in the issuance of approximately 95.7 million shares valued at approximately $7.9 billion to Southwestern's shareholders [117]. - The company was added to the S&P 500 Index in March 2025 following the completion of the Southwestern Merger and receipt of investment grade ratings [119]. - The company recognized approximately $27 million in costs related to the Southwestern Merger during Q1 2025 [148]. Financial Performance - Cash provided by operating activities increased to $1,096 million in the current quarter from $552 million in the prior quarter, driven by increased sales volumes and higher prices for natural gas, oil, and NGL [135]. - Total natural gas, oil, and NGL sales reached $2,300 million in Q1 2025, a $1,711 million increase compared to Q1 2024, driven by the Southwestern Merger and higher average prices [141]. - The effective income tax rate was 21.9% in the current quarter, compared to 21.2% in the prior quarter, with a recorded income tax benefit of $70 million [150]. - An income tax benefit of $70 million was recorded for Q1 2025, compared to an income tax expense of $7 million in Q1 2024 [150]. Capital Expenditures and Investments - The company expects to invest between $2.9 billion and $3.1 billion in capital expenditures for the year ending December 31, 2025, with plans to complete 240 to 270 gross wells [133]. - The company plans to fund its 2025 capital program through cash on hand, expected cash flow from operations, and borrowings under the Credit Facility [133]. - The company authorized a stock repurchase program of up to $1.0 billion and aims for a targeted $500 million annual net debt reduction in 2025 [121]. Liquidity and Debt - As of March 31, 2025, the company had $2.8 billion of liquidity available, including $0.3 billion in cash and $2.5 billion in unused borrowing capacity under the Credit Facility [125]. - The company had approximately $2.5 billion available for borrowings under its Credit Facility as of March 31, 2025 [131]. - Total interest expense increased to $59 million in the current quarter from $19 million in the prior quarter, primarily due to the assumption of Southwestern's Senior Notes [149]. Production and Expenses - Total production expenses rose by $88 million compared to the prior quarter, primarily due to the Southwestern Merger and increased volumes [142]. - Gathering, processing, and transportation expenses increased by $390 million compared to the prior quarter, attributed to higher volumes and rates following the Southwestern Merger [143]. - Severance and ad valorem taxes increased by $19 million compared to the prior quarter, with $30 million of this increase related to the Southwestern Merger [144]. - Depreciation, depletion, and amortization increased to $711 million in the current quarter from $399 million in the prior quarter, mainly due to the Southwestern Merger [147]. - General and administrative expenses remained stable at $47 million, with a decrease in per Mcfe costs due to increased production volumes from the Southwestern Merger [146]. Market Conditions and Risks - The company cautions that forward-looking statements are subject to numerous risks and uncertainties, including commodity price volatility and operational risks [152]. - The company anticipates potential impacts on operations due to global economic conditions and OPEC+ actions, which may affect financial performance [152]. - Forward-looking statements indicate that the company faces numerous risks, including commodity price volatility and competition in the natural gas and oil industry [152].
Expand Energy Corporation(EXE) - 2025 Q1 - Quarterly Report