Expand Energy Corporation(EXE) - 2025 Q2 - Quarterly Results

Financial and Operational Highlights Expand Energy reported strong Q2 2025 results, achieving $968 million net income, reducing capital guidance, and increasing synergy outlook Q2 2025 Key Financial & Operating Metrics | Metric | Value | | :--- | :--- | | Net Cash from Operating Activities | $1,322 million | | Net Income | $968 million ($4.02/share) | | Adjusted Net Income (Non-GAAP) | $265 million ($1.10/share) | | Adjusted EBITDAX (Non-GAAP) | $1,176 million | | Net Production | 7.20 Bcfe/d (92% natural gas) | - The company highlighted significant outperformance compared to initial merger expectations, resulting in an approximate 50% increase to run-rate synergies and generating substantially more free cash flow than anticipated for 2025 and 2026[4] - Key strategic achievements for the quarter include reduced full-year 2025 drilling and completion capital expenditures guidance by **$100 million**, increased annual synergy outlook to $600 million by year-end 2026, announced ~$425 million of incremental free cash flow in 2025 driven by business performance, and increased the 2025 net debt paydown target to $1.0 billion[5] Operations and Outlook The company reduced 2025 capital spending while maintaining production guidance and increasing its annual synergy target for 2026 Operations Update In Q2, Expand Energy operated 11 rigs, drilled 49 wells, and brought 59 wells online, achieving 7.20 Bcfe/d net production, 92% natural gas Q2 2025 Operational Activity | Metric | Value | | :--- | :--- | | Average Rigs Operated | 11 | | Wells Drilled | 49 | | Wells Turned in Line | 59 | | Net Production | 7.20 Bcfe/d | 2025 Annual Synergy, Capital and Operating Outlook The company upgraded its synergy forecast to $600 million by year-end 2026 and reduced 2025 capital expenditure to $2.6 billion, maintaining production guidance - On track for **$500 million** in annual synergies in 2025, with an increased target of $600 million by year-end 2026[7] Updated 2025 Full-Year Outlook | Metric | Updated 2025 Guidance | | :--- | :--- | | Capital Spending | ~$2.6 billion (down $100M) | | Average Rigs | ~11 | | Daily Production | ~7.1 Bcfe/d | - The company plans an incremental $275 million capital investment to exit 2025 with ~12 rigs, enabling a potential production increase to an average of 7.5 Bcfe/d in 2026, market conditions permitting[8] Shareholder Returns Update Expand Energy doubled its 2025 net debt paydown target to $1 billion and announced $448 million in Q2 shareholder returns, including a $1.465 total dividend per share - The company is increasing its net debt paydown target for 2025 from $500 million to $1 billion[10] Q2 2025 Shareholder Returns | Return Component | Amount | | :--- | :--- | | Quarterly Base Dividend | $137 million | | Variable Dividend | $211 million | | Share Repurchases | $100 million | | Total Q2 Return | $448 million | Dividend Per Share (Payable Sept 2025) | Dividend Component | Amount per Share | | :--- | :--- | | Base Dividend | $0.575 | | Variable Dividend | $0.89 | | Total Dividend | $1.465 | Financial Statements The company's financial statements show significant revenue growth, a shift to net income, and strong cash flow from operations for the period ended June 30, 2025 Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $27.77 billion, total liabilities $9.83 billion, and stockholders' equity $17.94 billion, reflecting debt reduction and equity growth Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $27,768 | $27,894 | | Cash and cash equivalents | $731 | $317 | | Total property and equipment, net | $24,172 | $24,282 | | Total Liabilities | $9,831 | $10,329 | | Long-term debt, net | $5,122 | $5,291 | | Total Stockholders' Equity | $17,937 | $17,565 | Condensed Consolidated Statements of Operations For Q2 2025, the company reported $968 million net income, a significant turnaround from a prior-year loss, driven by $3.69 billion in total revenues and $4.02 diluted EPS Statement of Operations Summary - Three Months Ended June 30 (in millions) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues and other | $3,690 | $505 | | Income (loss) from operations | $1,269 | $(294) | | Net Income (Loss) | $968 | $(227) | | Diluted EPS | $4.02 | $(1.73) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash from operating activities significantly increased to $2.42 billion, with $1.1 billion used in investing and $909 million in financing activities Cash Flow Summary - Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,418 | $761 | | Net Cash Used in Investing Activities | $(1,098) | $(640) | | Net Cash Used in Financing Activities | $(909) | $(179) | | Net Increase (Decrease) in Cash | $411 | $(58) | Key Operating Metrics In Q2 2025, total production significantly increased to 7,202 MMcfe/day, with an average realized price of $3.14/Mcfe, and capital expenditures totaling $727 million Production and Average Sales Prices Q2 2025 total production reached 7,202 MMcfe/day, primarily from Haynesville and Northeast Appalachia, with an average realized price of $3.14/Mcfe including derivatives Q2 2025 Production by Basin (MMcfe/day) | Basin | Production | | :--- | :--- | | Haynesville | 2,978 | | Northeast Appalachia | 2,662 | | Southwest Appalachia | 1,562 | | Total | 7,202 | Q2 Average Realized Prices (including derivatives) | Period | Price per Mcfe | | :--- | :--- | | Q2 2025 | $3.14 | | Q2 2024 | $2.51 | Capital Expenditures Accrued capital expenditures for Q2 2025 totaled $727 million, more than double Q2 2024, with $603 million allocated to drilling and completion, primarily in Haynesville Capital Expenditures - Three Months Ended June 30 (in millions) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Drilling and completion | $603 | $224 | | Non-drilling and completion | $124 | $69 | | Total Capital Expenditures | $727 | $293 | Non-GAAP Financial Measures and Reconciliations The company utilizes non-GAAP measures, including Adjusted Net Income, Adjusted EBITDAX, and Free Cash Flow, to provide a clearer view of core operating performance - Management uses non-GAAP measures like Adjusted Net Income, Adjusted EBITDAX, and Free Cash Flow to evaluate performance by excluding one-time items or items whose timing is unpredictable, such as unrealized derivative gains/losses[27] Q2 2025 GAAP to Non-GAAP Reconciliation Summary (in millions) | Metric | GAAP Value | Adjustments | Non-GAAP Value | | :--- | :--- | :--- | :--- | | Net Income | $968 | $(703) | $265 (Adjusted Net Income) | | Net Income | $968 | $208 | $1,176 (Adjusted EBITDAX) | Q2 2025 Free Cash Flow Reconciliation (in millions) | Metric | Value | | :--- | :--- | | Net cash provided by operating activities (GAAP) | $1,322 | | Cash capital expenditures | $(657) | | Free cash flow (Non-GAAP) | $665 |