Expand Energy Corporation Reports Third Quarter 2024 Results, Provides Preliminary 2025 Capital and Operating Plan and Announces Enhanced Capital Return Framework
Expand Energy (NASDAQ: EXE) reported its Q3 2024 results, featuring net cash from operations of $422 million and a net loss of $114 million ($0.85 per share). The company achieved adjusted net income of $22 million ($0.16 per share) and adjusted EBITDAX of $365 million. Following its merger with Southwestern Energy, Expand Energy increased its annual synergy target by $100 million to $500 million, expecting to reach $225 million in 2025. The company announced a quarterly dividend of $0.575 per share and a new $1 billion share repurchase program. For 2025, capital expenditures are projected at $2.7 billion, targeting production of approximately 7 bcf/day.
Expand Energy (NASDAQ: EXE) ha riportato i risultati del terzo trimestre 2024, mostrando un flusso di cassa netto dalle operazioni di $422 milioni e una perdita netta di $114 milioni ($0,85 per azione). L'azienda ha registrato un reddito netto rettificato di $22 milioni ($0,16 per azione) e un EBITDAX rettificato di $365 milioni. Dopo la fusione con Southwestern Energy, Expand Energy ha aumentato l'obiettivo annuale di sinergia di $100 milioni a $500 milioni, con l'aspettativa di raggiungere $225 milioni nel 2025. L'azienda ha annunciato un dividendo trimestrale di $0,575 per azione e un nuovo programma di riacquisto di azioni da $1 miliardo. Per il 2025, le spese in conto capitale sono previste a $2,7 miliardi, puntando a una produzione di circa 7 bcf/giorno.
Expand Energy (NASDAQ: EXE) reportó sus resultados del tercer trimestre de 2024, presentando un flujo de efectivo neto de $422 millones y una pérdida neta de $114 millones ($0.85 por acción). La empresa alcanzó un ingreso neto ajustado de $22 millones ($0.16 por acción) y un EBITDAX ajustado de $365 millones. Tras su fusión con Southwestern Energy, Expand Energy aumentó su objetivo anual de sinergias en $100 millones a $500 millones, esperando alcanzar $225 millones en 2025. La empresa anunció un dividendo trimestral de $0.575 por acción y un nuevo programa de recompra de acciones de $1 mil millones. Para 2025, se proyectan gastos de capital de $2.7 mil millones, con un objetivo de producción de aproximadamente 7 bcf/día.
Expand Energy (NASDAQ: EXE)는 2024년 3분기 결과를 발표하면서 운영에서 순현금이 $422백만, 순손실이 $114백만($0.85 주당)이라고 보고했습니다. 회사는 조정된 순이익으로 $22백만($0.16 주당)과 조정된 EBITDAX로 $365백만을 달성했습니다. Southwestern Energy와의 합병 이후, Expand Energy는 연간 시너지 목표를 $100백만 증가시켜 $500백만으로 설정했으며 2025년까지 $225백만에 도달할 것으로 예상하고 있습니다. 또한 회사는 주당 $0.575의 분기 배당금을 발표하고, 새로운 $10억 규모의 자사주 매입 프로그램을 도입했습니다. 2025년에는 자본 지출이 $27억으로 예상되며, 하루 약 7 bcf의 생산 목표를 가지고 있습니다.
Expand Energy (NASDAQ: EXE) a publié ses résultats du troisième trimestre 2024, avec un flux de trésorerie net provenant des opérations de 422 millions de dollars et une perte nette de 114 millions de dollars (0,85 $ par action). L'entreprise a atteint un revenu net ajusté de 22 millions de dollars (0,16 $ par action) et un EBITDAX ajusté de 365 millions de dollars. À la suite de sa fusion avec Southwestern Energy, Expand Energy a augmenté son objectif annuel de synergies de 100 millions de dollars à 500 millions de dollars, s'attendant à atteindre 225 millions de dollars en 2025. L'entreprise a annoncé un dividende trimestriel de 0,575 $ par action et un nouveau programme de rachat d'actions d'un milliard de dollars. Pour 2025, les dépenses en capital sont projetées à 2,7 milliards de dollars, visant une production d'environ 7 bcf/jour.
Expand Energy (NASDAQ: EXE) hat seine Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem Netto-cashflow aus den Betrieben von $422 Millionen und einem Nettoverlust von $114 Millionen ($0,85 pro Aktie). Das Unternehmen erzielte einen bereinigten Nettogewinn von $22 Millionen ($0,16 pro Aktie) und ein bereinigtes EBITDAX von $365 Millionen. Nach der Fusion mit Southwestern Energy erhöhte Expand Energy sein jährliches Synergieziel um $100 Millionen auf $500 Millionen und erwartet, 2025 $225 Millionen zu erreichen. Das Unternehmen kündigte eine vierteljährliche Dividende von $0,575 pro Aktie und ein neues Rückkaufprogramm für Aktien im Wert von $1 Milliarden an. Für 2025 werden Investitionen in Höhe von $2,7 Milliarden prognostiziert, mit einem Produktionsziel von rund 7 bcf/Tag.
- Upgraded to Investment Grade credit rating (BBB-) by S&P and Fitch
- Increased annual synergy target by $100 million to $500 million
- Strong operating cash flow of $422 million in Q3
- New $1 billion share repurchase authorization
- Maintained quarterly dividend of $0.575 per share for 15th straight quarter
- Q3 net loss of $114 million ($0.85 per share)
- Planned reduction of two rigs in Q1 2025
- High capital expenditure forecast of $2.7 billion for 2025
Insights
The merger between Chesapeake and Southwestern, creating Expand Energy, marks a significant industry consolidation. The company's Q3 results show mixed performance with
The enhanced capital return framework prioritizes a
The formation of the largest U.S. natural gas producer through this merger creates significant operational leverage. The company's strategic decision to defer completions with 58 DUCs and 58 deferred TILs shows market-responsive management. The planned rig reduction in Q1 2025 reflects prudent capacity management amid current market conditions.
The production profile of
OKLAHOMA CITY, Oct. 29, 2024 (GLOBE NEWSWIRE) -- 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 return framework. On October 1, 2024, Expand Energy announced the completion of the previously disclosed merger between Chesapeake Energy Corporation (“Chesapeake”) and Southwestern Energy Company (“Southwestern”).
Legacy Chesapeake Third Quarter Highlights
- Net cash provided by operating activities of
$422 million - Net loss of
$114 million , or$0.85 per fully diluted share; adjusted net income(1) of$22 million , or$0.16 per share - Adjusted EBITDAX(1) of
$365 million - Produced approximately 2.65 bcf/d net (
100% natural gas)
Expand Energy Highlights
- Raised annual synergy target by
$100 million ; expected to achieve approximately$225 million in 2025 and approximately$500 million in annual synergies by year end 2027 - Upgraded at the start of fourth quarter to Investment Grade credit rating from S&P (BBB-) and Fitch (BBB-)
- Quarterly base dividend of
$0.57 5 per common share to be paid in December 2024, 15th straight quarter paying a dividend - 2025 capital expenditures expected to be approximately
$2.7 billion , yielding net production of approximately 7 bcf/day (~91% natural gas) - Enhanced capital return framework to more effectively return cash to shareholders and reduce net debt; announced new
$1 billion share repurchase authorization
(1) Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are included at the end of this news release.
“Our strong third quarter results, recent Investment Grade rating and preliminary 2025 outlook demonstrate the power of our advantaged portfolio and resilient financial foundation,” said Nick Dell’Osso, Expand Energy’s President and Chief Executive Officer. “Our integration efforts are already delivering, allowing us to raise our annual synergy expectations by
Operations Update
In the third quarter, legacy Chesapeake operated an average of seven rigs to drill 30 wells and turned seven wells in line, resulting in net production of approximately 2.65 bcfe per day (
Expand Energy continues to execute its previously disclosed plan to defer completions and new TILs. As of October 1, 2024, the combined company had 58 DUCs, excluding working inventory, and 58 deferred TILs. The company intends to prudently activate production as market conditions warrant.
Expand Energy is currently running 12 rigs (8 in Haynesville, 2 in Northeast Appalachia, and 2 in Southwest Appalachia) and 6 completion crews (3 in Haynesville, 2 in Northeast Appalachia, and 1 in Southwest Appalachia). At current market conditions, the company expects to drop two rigs in the first quarter of 2025.
Annual Synergy Outlook and Preliminary 2025 Capital & Operating Program
Expand Energy increased its expected annual synergy outlook by
In 2025, at current market conditions, the company expects to run 10 to 12 rigs and invest approximately
Shareholder Returns Update
Expand Energy plans to pay its quarterly base dividend of
The company announced today its enhanced capital return framework which is designed to more effectively return cash to shareholders and reduce net debt. The plan is expected to go into effect January 1, 2025, and prioritizes the base dividend of
In conjunction with the enhanced framework, Expand Energy’s Board of Directors approved a
Conference Call Information
A conference call to discuss the results and preliminary 2025 plan has been scheduled for 9 a.m. EDT on October 30, 2024. Participants can view the live webcast here. Participants who would like to ask a question, can register here, and will receive the dial-in info and a unique PIN to join the call. Links to the conference call will be provided on Expand Energy’s website. A replay will be available on the website following the call.
Financial Statements, Non-GAAP Financial Measures and 2024 Guidance and Outlook Projections
Reconciliations of each non-GAAP financial measure used in this news release to the most directly comparable GAAP financial measure are provided below. Additional detail on the company’s 2024 third quarter financial and operational results, along with non-GAAP measures that adjust for items typically excluded by certain securities analysts, are available on the company’s website. Non-GAAP measures should not be considered as an alternative to GAAP measures. Management’s updated guidance for 2024 and preliminary plan for 2025 can be found on the company’s website at www.expandenergy.com.
Expand Energy Corporation (NASDAQ: EXE) is the largest independent natural gas producer in the United States, powered by dedicated and innovative employees 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. Expand Energy’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. Expand Energy is committed to expanding America’s energy reach to fuel a more affordable, reliable, lower carbon future.
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the combined company after the merger with Southwestern Energy Company (“Southwestern”), armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, and the impact of each on our business, financial condition, results of operations and cash flows, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, the amount and timing of any cash dividends and our ESG initiatives. Forward-looking and other statements in this release regarding our environmental, social and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as “expect,” “could,” “may,” “anticipate,” “intend,” “plan,” “ability,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “guidance,” “outlook,” “opportunity” or “strategy.” The absence of such words or expressions does not necessarily mean the statements are not forward-looking.
Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:
- conservation measures and technological advances could reduce demand for natural gas and oil;
- negative public perceptions of our industry;
- competition in the natural gas and oil exploration and production industry;
- the volatility of natural gas, oil and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles;
- risks from regional epidemics or pandemics and related economic turmoil, including supply chain constraints;
- write-downs of our natural gas and oil asset carrying values due to low commodity prices;
- significant capital expenditures are required to replace our reserves and conduct our business;
- our ability to replace reserves and sustain production;
- uncertainties inherent in estimating quantities of natural gas, oil and NGL reserves and projecting future rates of production and the amount and timing of development expenditures;
- drilling and operating risks and resulting liabilities;
- our ability to generate profits or achieve targeted results in drilling and well operations;
- leasehold terms expiring before production can be established;
- risks from our commodity price risk management activities;
- uncertainties, risks and costs associated with natural gas and oil operations;
- our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used;
- pipeline and gathering system capacity constraints and transportation interruptions;
- our plans to participate in the LNG export industry;
- terrorist activities and/or cyber-attacks adversely impacting our operations;
- risks from failure to protect personal information and data and compliance with data privacy and security laws and regulations;
- disruption of our business by natural or human causes beyond our control;
- a deterioration in general economic, business or industry conditions;
- the impact of inflation and commodity price volatility, including as a result of armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, on our business, financial condition, employees, contractors, vendors and the global demand for natural gas and oil and on U.S. and global financial markets;
- our inability to access the capital markets on favorable terms;
- the limitations on our financial flexibility due to our level of indebtedness and restrictive covenants from our indebtedness;
- our actual financial results after emergence from bankruptcy may not be comparable to our historical financial information;
- risks related to acquisitions or dispositions, or potential acquisitions or dispositions, including risks related to the merger with Southwestern, such as risks related to loss of management personnel, other key employees, customers, suppliers, vendors, landlords, joint venture partners and other business partners following the merger; risks related to disruption of management time from ongoing business operations due to integration; the risk of any litigation relating to the transaction; the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; and the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the transaction or it may take longer than expected to achieve those synergies or benefits;
- our ability to achieve and maintain ESG certifications, goals and commitments;
- legislative, regulatory and ESG initiatives, addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal;
- federal and state tax proposals affecting our industry;
- risks related to an annual limitation on the utilization of our tax attributes, as well as trading in our common stock, additional issuance of common stock, and certain other stock transactions, which could lead to an additional, potentially more restrictive, annual limitation; and
- other factors that are described under Risk Factors in Item 1A of Part I of our Annual Report on Form 10-K.
We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the filing date, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||
($ in millions, except per share data) | September 30, 2024 | December 31, 2023 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,044 | $ | 1,079 | |||
Restricted cash | 76 | 74 | |||||
Accounts receivable, net | 261 | 593 | |||||
Derivative assets | 199 | 637 | |||||
Other current assets | 217 | 226 | |||||
Total current assets | 1,797 | 2,609 | |||||
Property and equipment: | |||||||
Natural gas and oil properties, successful efforts method | |||||||
Proved natural gas and oil properties | 12,373 | 11,468 | |||||
Unproved properties | 1,806 | 1,806 | |||||
Other property and equipment | 518 | 497 | |||||
Total property and equipment | 14,697 | 13,771 | |||||
Less: accumulated depreciation, depletion and amortization | (4,743 | ) | (3,674 | ) | |||
Total property and equipment, net | 9,954 | 10,097 | |||||
Long-term derivative assets | 15 | 74 | |||||
Deferred income tax assets | 1,038 | 933 | |||||
Other long-term assets | 588 | 663 | |||||
Total assets | $ | 13,392 | $ | 14,376 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 264 | $ | 425 | |||
Accrued interest | 41 | 39 | |||||
Derivative liabilities | 5 | 3 | |||||
Other current liabilities | 589 | 847 | |||||
Total current liabilities | 899 | 1,314 | |||||
Long-term debt, net | 2,017 | 2,028 | |||||
Long-term derivative liabilities | — | 9 | |||||
Asset retirement obligations, net of current portion | 271 | 265 | |||||
Other long-term liabilities | 17 | 31 | |||||
Total liabilities | 3,204 | 3,647 | |||||
Contingencies and commitments | |||||||
Stockholders’ equity: | |||||||
Common stock, | 1 | 1 | |||||
Additional paid-in capital | 5,778 | 5,754 | |||||
Retained earnings | 4,409 | 4,974 | |||||
Total stockholders’ equity | 10,188 | 10,729 | |||||
Total liabilities and stockholders’ equity | $ | 13,392 | $ | 14,376 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
($ in millions, except per share data) | |||||||||||||||
Revenues and other: | |||||||||||||||
Natural gas, oil and NGL | $ | 407 | $ | 682 | $ | 1,374 | $ | 2,784 | |||||||
Marketing | 193 | 724 | 641 | 1,987 | |||||||||||
Natural gas and oil derivatives | 46 | 106 | 207 | 1,195 | |||||||||||
Gains on sales of assets | 2 | — | 12 | 807 | |||||||||||
Total revenues and other | 648 | 1,512 | 2,234 | 6,773 | |||||||||||
Operating expenses: | |||||||||||||||
Production | 50 | 73 | 158 | 293 | |||||||||||
Gathering, processing and transportation | 152 | 192 | 479 | 663 | |||||||||||
Severance and ad valorem taxes | 11 | 27 | 58 | 136 | |||||||||||
Exploration | 2 | 4 | 7 | 19 | |||||||||||
Marketing | 192 | 723 | 656 | 1,985 | |||||||||||
General and administrative | 39 | 29 | 133 | 95 | |||||||||||
Separation and other termination costs | — | — | 23 | 3 | |||||||||||
Depreciation, depletion and amortization | 335 | 382 | 1,082 | 1,148 | |||||||||||
Other operating expense, net | 22 | 3 | 55 | 15 | |||||||||||
Total operating expenses | 803 | 1,433 | 2,651 | 4,357 | |||||||||||
Income (loss) from operations | (155 | ) | 79 | (417 | ) | 2,416 | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (20 | ) | (23 | ) | (59 | ) | (82 | ) | |||||||
Losses on purchases, exchanges or extinguishments of debt | — | — | (2 | ) | — | ||||||||||
Other income | 17 | 15 | 58 | 48 | |||||||||||
Total other income (expense) | (3 | ) | (8 | ) | (3 | ) | (34 | ) | |||||||
Income (loss) before income taxes | (158 | ) | 71 | (420 | ) | 2,382 | |||||||||
Income tax expense (benefit) | (44 | ) | 1 | (105 | ) | 532 | |||||||||
Net income (loss) | $ | (114 | ) | $ | 70 | $ | (315 | ) | $ | 1,850 | |||||
Earnings (loss) per common share: | |||||||||||||||
Basic | $ | (0.85 | ) | $ | 0.53 | $ | (2.39 | ) | $ | 13.86 | |||||
Diluted | $ | (0.85 | ) | $ | 0.49 | $ | (2.39 | ) | $ | 12.90 | |||||
Weighted average common shares outstanding (in thousands): | |||||||||||||||
Basic | 133,794 | 132,153 | 131,958 | 133,460 | |||||||||||
Diluted | 133,794 | 142,348 | 131,958 | 143,463 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
($ in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (114 | ) | $ | 70 | $ | (315 | ) | $ | 1,850 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 335 | 382 | 1,082 | 1,148 | |||||||||||
Deferred income tax expense (benefit) | (44 | ) | (80 | ) | (105 | ) | 319 | ||||||||
Derivative gains, net | (46 | ) | (106 | ) | (207 | ) | (1,195 | ) | |||||||
Cash receipts on derivative settlements, net | 207 | 216 | 695 | 167 | |||||||||||
Share-based compensation | 10 | 9 | 29 | 25 | |||||||||||
Gains on sales of assets | (2 | ) | — | (12 | ) | (807 | ) | ||||||||
Losses on purchases, exchanges or extinguishments of debt | — | — | 2 | — | |||||||||||
Other | (9 | ) | 6 | (16 | ) | 35 | |||||||||
Changes in assets and liabilities | 85 | 9 | 30 | 368 | |||||||||||
Net cash provided by operating activities | 422 | 506 | 1,183 | 1,910 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (298 | ) | (423 | ) | (1,021 | ) | (1,450 | ) | |||||||
Receipts of deferred consideration | — | — | 116 | — | |||||||||||
Contributions to investments | (26 | ) | (61 | ) | (71 | ) | (149 | ) | |||||||
Proceeds from divestitures of property and equipment | 5 | 4 | 17 | 1,967 | |||||||||||
Net cash provided by (used in) investing activities | (319 | ) | (480 | ) | (959 | ) | 368 | ||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from Credit Facility | — | — | — | 1,125 | |||||||||||
Payments on Credit Facility | — | — | — | (2,175 | ) | ||||||||||
Funds held for transition services | — | (6 | ) | — | 91 | ||||||||||
Proceeds from warrant exercise | — | — | 1 | — | |||||||||||
Debt issuance and other financing costs | — | — | (4 | ) | — | ||||||||||
Cash paid to repurchase and retire common stock | — | (132 | ) | — | (313 | ) | |||||||||
Cash paid for common stock dividends | (78 | ) | (77 | ) | (254 | ) | (412 | ) | |||||||
Net cash used in financing activities | (78 | ) | (215 | ) | (257 | ) | (1,684 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 25 | (189 | ) | (33 | ) | 594 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 1,095 | 975 | 1,153 | 192 | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 1,120 | $ | 786 | $ | 1,120 | $ | 786 | |||||||
Cash and cash equivalents | $ | 1,044 | $ | 713 | $ | 1,044 | $ | 713 | |||||||
Restricted cash | 76 | 73 | 76 | 73 | |||||||||||
Total cash, cash equivalents and restricted cash | $ | 1,120 | $ | 786 | $ | 1,120 | $ | 786 |
NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited) | |||||||||||||||
Three Months Ended September 30, 2024 | |||||||||||||||
Natural Gas | Oil | NGL | Total | ||||||||||||
MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | ||||||||
Marcellus | 1,531 | 1.51 | — | — | — | — | 1,531 | 1.51 | |||||||
Haynesville | 1,116 | 1.88 | — | — | — | — | 1,116 | 1.88 | |||||||
Total | 2,647 | 1.67 | — | — | — | — | 2,647 | 1.67 | |||||||
Average NYMEX Price | 2.16 | — | |||||||||||||
Average Realized Price (including realized derivatives) | 2.51 | — | — | 2.51 |
Three Months Ended September 30, 2023 | |||||||||||||||
Natural Gas | Oil | NGL | Total | ||||||||||||
MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | ||||||||
Marcellus | 1,734 | 1.63 | — | — | — | — | 1,734 | 1.63 | |||||||
Haynesville | 1,568 | 2.15 | — | — | — | — | 1,568 | 2.15 | |||||||
Eagle Ford | 76 | 2.52 | 9 | 82.33 | 10 | 25.76 | 193 | 6.36 | |||||||
Total | 3,378 | 1.89 | 9 | 82.33 | 10 | 25.76 | 3,495 | 2.12 | |||||||
Average NYMEX Price | 2.55 | 82.26 | |||||||||||||
Average Realized Price (including realized derivatives) | 2.58 | 82.33 | 25.76 | 2.79 |
Nine Months Ended September 30, 2024 | |||||||||||||||
Natural Gas | Oil | NGL | Total | ||||||||||||
MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | ||||||||
Marcellus | 1,601 | 1.65 | — | — | — | — | 1,601 | 1.65 | |||||||
Haynesville | 1,261 | 1.88 | — | — | — | — | 1,261 | 1.88 | |||||||
Total | 2,862 | 1.75 | — | — | — | — | 2,862 | 1.75 | |||||||
Average NYMEX Price | 2.10 | — | |||||||||||||
Average Realized Price (including realized derivatives) | 2.64 | — | — | 2.64 |
Nine Months Ended September 30, 2023 | |||||||||||||||
Natural Gas | Oil | NGL | Total | ||||||||||||
MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | ||||||||
Marcellus | 1,845 | 2.24 | — | — | — | — | 1,845 | 2.24 | |||||||
Haynesville | 1,569 | 2.26 | — | — | — | — | 1,569 | 2.26 | |||||||
Eagle Ford | 96 | 2.22 | 26 | 77.41 | 12 | 25.61 | 323 | 7.82 | |||||||
Total | 3,510 | 2.25 | 26 | 77.41 | 12 | 25.61 | 3,737 | 2.73 | |||||||
Average NYMEX Price | 2.69 | 77.39 | |||||||||||||
Average Realized Price (including realized derivatives) | 2.56 | 72.10 | 25.61 | 2.99 |
CAPITAL EXPENDITURES ACCRUED (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
($ in millions) | |||||||||||||||
Drilling and completion capital expenditures: | |||||||||||||||
Marcellus | $ | 82 | $ | 91 | $ | 280 | $ | 324 | |||||||
Haynesville | 151 | 191 | 477 | 704 | |||||||||||
Eagle Ford | — | 9 | — | 222 | |||||||||||
Total drilling and completion capital expenditures | 233 | 291 | 757 | 1,250 | |||||||||||
Non-drilling and completion - field | 32 | 48 | 106 | 100 | |||||||||||
Non-drilling and completion - corporate | 24 | 18 | 73 | 56 | |||||||||||
Total capital expenditures | $ | 289 | $ | 357 | $ | 936 | $ | 1,406 |
NON-GAAP FINANCIAL MEASURES |
As a supplement to the financial results prepared in accordance with U.S. GAAP, Expand Energy’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by certain securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.
Expand Energy's definitions of each non-GAAP measure presented herein are provided below. Because not all companies or securities analysts use identical calculations, Expand Energy’s non-GAAP measures may not be comparable to similarly titled measures of other companies or securities analysts.
Adjusted Net Income: Adjusted Net Income is defined as 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 using applicable rates. Expand Energy believes that Adjusted Net Income facilitates comparisons of the company's period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.
Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as 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 management believes affect the comparability of operating results, less a tax effect using applicable rates. Expand Energy believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company’s period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.
Adjusted EBITDAX: Adjusted EBITDAX is defined as 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. Adjusted EBITDAX is presented as it provides investors an indication of the company's ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.
Free Cash Flow: Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.
Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company's ability to service or incur debt and return cash to shareholders and is used to determine Expand Energy's returns framework payout. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.
Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
($ in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Net income (loss) (GAAP) | $ | (114 | ) | $ | 70 | $ | (315 | ) | $ | 1,850 | |||||
Adjustments: | |||||||||||||||
Unrealized (gains) losses on natural gas and oil derivatives | 160 | 110 | 489 | (931 | ) | ||||||||||
Separation and other termination costs | — | — | 23 | 3 | |||||||||||
Gains on sales of assets | (2 | ) | — | (12 | ) | (807 | ) | ||||||||
Other operating expense, net | 23 | 3 | 58 | 18 | |||||||||||
Losses on purchases, exchanges or extinguishments of debt | — | — | 2 | — | |||||||||||
Other | (4 | ) | (4 | ) | (17 | ) | (19 | ) | |||||||
Tax effect of adjustments(a) | (41 | ) | (24 | ) | (125 | ) | 403 | ||||||||
Adjusted net income (Non-GAAP) | $ | 22 | $ | 155 | $ | 103 | $ | 517 |
(a) | The three- and nine-month periods ended September 30, 2024 and September 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of |
RECONCILIATION OF EARNINGS (LOSS) PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
($/share) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Earnings (loss) per common share (GAAP) | $ | (0.85 | ) | $ | 0.53 | $ | (2.39 | ) | $ | 13.86 | |||||
Effect of dilutive securities | — | (0.04 | ) | — | (0.96 | ) | |||||||||
Diluted earnings (loss) per common share (GAAP) | $ | (0.85 | ) | $ | 0.49 | $ | (2.39 | ) | $ | 12.90 | |||||
Adjustments: | |||||||||||||||
Unrealized (gains) losses on natural gas and oil derivatives | 1.20 | 0.78 | 3.70 | (6.49 | ) | ||||||||||
Separation and other termination costs | — | — | 0.17 | 0.02 | |||||||||||
Gains on sales of assets | (0.02 | ) | — | (0.09 | ) | (5.63 | ) | ||||||||
Other operating expense, net | 0.17 | 0.02 | 0.44 | 0.13 | |||||||||||
Losses on purchases, exchanges or extinguishments of debt | — | — | 0.01 | — | |||||||||||
Other | (0.03 | ) | (0.03 | ) | (0.13 | ) | (0.13 | ) | |||||||
Tax effect of adjustments(a) | (0.31 | ) | (0.17 | ) | (0.95 | ) | 2.81 | ||||||||
Effect of dilutive securities | — | — | (0.03 | ) | — | ||||||||||
Adjusted diluted earnings per common share (Non-GAAP) | $ | 0.16 | $ | 1.09 | $ | 0.73 | $ | 3.61 |
(a) | The three- and nine-month periods ended September 30, 2024 and September 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of |
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
($ in millions) | |||||||||||||||
Net income (loss) (GAAP) | $ | (114 | ) | $ | 70 | $ | (315 | ) | $ | 1,850 | |||||
Adjustments: | |||||||||||||||
Interest expense | 20 | 23 | 59 | 82 | |||||||||||
Income tax expense (benefit) | (44 | ) | 1 | (105 | ) | 532 | |||||||||
Depreciation, depletion and amortization | 335 | 382 | 1,082 | 1,148 | |||||||||||
Exploration | 2 | 4 | 7 | 19 | |||||||||||
Unrealized (gains) losses on natural gas and oil derivatives | 160 | 110 | 489 | (931 | ) | ||||||||||
Separation and other termination costs | — | — | 23 | 3 | |||||||||||
Gains on sales of assets | (2 | ) | — | (12 | ) | (807 | ) | ||||||||
Other operating expense, net | 23 | 3 | 58 | 18 | |||||||||||
Losses on purchases, exchanges or extinguishments of debt | — | — | 2 | — | |||||||||||
Other | (15 | ) | (13 | ) | (57 | ) | (36 | ) | |||||||
Adjusted EBITDAX (Non-GAAP) | $ | 365 | $ | 580 | $ | 1,231 | $ | 1,878 |
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
($ in millions) | |||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 422 | $ | 506 | $ | 1,183 | $ | 1,910 | |||||||
Cash capital expenditures | (298 | ) | (423 | ) | (1,021 | ) | (1,450 | ) | |||||||
Free cash flow (Non-GAAP) | 124 | 83 | 162 | 460 | |||||||||||
Cash contributions to investments | (26 | ) | (61 | ) | (71 | ) | (149 | ) | |||||||
Free cash flow associated with divested assets(a) | — | (57 | ) | — | (195 | ) | |||||||||
Adjusted free cash flow (Non-GAAP) | $ | 98 | $ | (35 | ) | $ | 91 | $ | 116 |
(a) | In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction. Additionally, in August 2023, we entered into an agreement to sell the final portion of our Eagle Ford assets, with an economic effective date of February 1, 2023. Included within the adjustment above reflects the cash flows from the three months ended September 30, 2023, associated with the final portion of our Eagle Ford assets as the cash generated by those assets were delivered to the buyer through a reduction in the proceeds we received once the transaction closed during the fourth quarter of 2023. |
RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited) | |||
($ in millions) | September 30, 2024 | ||
Total debt (GAAP) | $ | 2,017 | |
Premiums and issuance costs on debt | (67 | ) | |
Principal amount of debt | 1,950 | ||
Cash and cash equivalents | (1,044 | ) | |
Net debt (Non-GAAP) | $ | 906 |
INVESTOR CONTACT: | MEDIA CONTACT: | EXPAND ENERGY CORPORATION |
Chris Ayres | Brooke Coe | 6100 North Western Avenue |
(405) 935-8870 | (405) 935-8878 | P.O. Box 18496 |
ir@expandenergy.com | media@expandenergy.com | Oklahoma City, OK 73154 |
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