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EXPAND ENERGY Corp

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Business Summary

Expand Energy Corporation operates as the largest independent natural gas producer in the U.S., focusing on the responsible development of natural gas, oil, and natural gas liquids (NGLs) to enhance energy access. The company's operations are primarily located in the Haynesville and Bossier Shales in Louisiana and Texas, the Marcellus Shale in Pennsylvania (Northeast Appalachia), and the Marcellus and Utica Shales in West Virginia and Ohio (Southwest Appalachia) . The company's business model revolves around the exploration, development, production, and marketing of natural gas, oil, and NGLs. Revenue is generated through the direct sale of these commodities and through marketing services, including commodity price structuring, securing gathering, hauling, storage, processing, and transportation services, and contract administration for both its own production and that of other interest owners in Expand Energy-operated wells . The company also operates drilling rigs and provides certain oilfield products and services, primarily serving its own exploration and production (E&P) operations through vertical integration .

Expand Energy's core business model is centered on creating resilient shareholder value by responsibly developing its significant resource plays and being a leading natural gas provider to growing markets. This involves improving margins through operating efficiencies, marketing and commercial efforts, and financial discipline, alongside enhancing safety and sustainability performance . The company allocates human resources and capital expenditures to projects with high cash returns on invested capital, deploys advanced drilling and completion technology, and pursues acquisition and divestiture opportunities to strengthen its portfolio . Additionally, Expand Energy invests in projects aimed at reducing the environmental impact of its production activities .

For the fiscal year ended December 31, 2025, Expand Energy reported total revenues of $12.124 billion . Natural gas, oil, and NGL sales contributed $8.476 billion , while marketing revenues were $3.163 billion . The company recognized a gain on derivatives of $550 million and a loss on sales of assets of $65 million . Total operating expenses amounted to $9.653 billion , leading to income from operations of $2.471 billion . Net income for the year was $1.819 billion , resulting in basic earnings per common share of $7.67 and diluted earnings per common share of $7.57 . Cash provided by operating activities was $4.575 billion . As of December 31, 2025, the company held cash and cash equivalents of $616 million and total long-term debt, net, of $5.009 billion .

Comparing 2025 to 2024, natural gas, oil, and NGL sales increased by $5.507 billion , primarily driven by increased volumes across all operating areas due to the Southwestern Merger, which contributed $3.476 billion , and higher average natural gas prices, which added $2.031 billion . Total production expenses increased by $319 million , and gathering, processing, and transportation (GP&T) expenses rose by $1.341 billion , both largely attributable to the Southwestern Merger and increased volumes and rates. Severance and ad valorem taxes increased by $96 million , with the Southwestern Merger contributing $103 million to this increase, partially offset by a decrease in the Haynesville statutory severance tax rate . Marketing revenues and expenses also increased in 2025 due to higher production volumes from the Southwestern Merger and increased natural gas prices . Depreciation, depletion, and amortization (DD&A) increased by $1.251 billion to $2.980 billion in 2025, primarily due to the Southwestern Merger, though DD&A per Mcfe decreased from $1.26 in 2024 to $1.13 in 2025 due to lower depletion rates on acquired wells .

During the reported period, Expand Energy completed the Southwestern Merger on October 1, 2024, issuing approximately 95.7 million shares of common stock to Southwestern's shareholders, valued at approximately $7.9 billion . Following the merger, the company received investment grade ratings from S&P Global Ratings, Fitch Ratings, and Moody's Ratings . In March 2025, Expand Energy's common stock was added to the S&P 500 index . The company also entered into an Amended and Restated Credit Agreement on September 30, 2025, extending its maturity to September 2030 and increasing aggregate commitments from $2.5 billion to $3.5 billion . Debt management activities included issuing $750 million of 5.70% Senior Notes due 2035 in December 2024 , repaying $389 million of SWN 2025 Notes in January 2025 , and redeeming $47 million of 2026 Notes in March 2025 . Additionally, the company repurchased approximately $103 million of 6.750% Senior Notes due 2029, $60 million of 5.875% Senior Notes due 2029, and $62 million of 5.375% Senior Notes due 2029 through open market repurchases in 2025 . In 2025, the company returned approximately $865 million to shareholders, comprising $765 million in dividend payments and $100 million for repurchasing 0.9 million shares . The NG3 pipeline, a joint venture for natural gas gathering and carbon capture in the Haynesville Shale, was placed in service and began gathering operations on October 1, 2025 .

Business Outlook

For the fiscal year ending December 31, 2026, Expand Energy anticipates completing and turning in line 205 to 235 gross wells, utilizing approximately 11 to 12 rigs . The company plans to invest between approximately $2.75 billion and $2.95 billion in capital expenditures for 2026 . These capital expenditures are expected to be funded through cash on hand, anticipated cash flow from operations, and borrowings under the 2025 Credit Facility . Management continuously reviews operational plans, which may lead to adjustments in projected capital expenditures and revenues from natural gas, oil, and NGL sales .

A key growth area for Expand Energy is its participation in the global LNG value chain, which is supported by the growing U.S. LNG export market . The company aims to leverage its position as the largest independent natural gas producer in the U.S. to meet increasing domestic and international demand for affordable, lower-carbon energy . The NG3 pipeline, a joint venture for natural gas gathering and carbon capture in the Haynesville Shale, was placed in service on October 1, 2025, and is expected to gather and treat approximately 900 MMcf per day of natural gas over the next 12 years for delivery to Gulf Coast markets, including LNG export . This investment aligns with the company's strategy to enhance its role in the LNG value chain and potentially engage in direct marketing arrangements with LNG export facilities and end-users .

The company's operational outlook includes a continued focus on improving margins through operating efficiencies, marketing and commercial efforts, and financial discipline . Expand Energy also intends to continue investing in projects designed to reduce the environmental impact of its production activities . The company has established goals to achieve net zero (Scope 1 and 2) greenhouse gas emissions by 2035 and to maintain 100% responsibly sourced gas (RSG) certification across its portfolio .

Regarding capital allocation, Expand Energy will prioritize debt reduction in 2026 while continuing to return cash to shareholders . In 2025, the company prioritized paying a base dividend of $2.30 per share and achieving $1.0 billion of annual net debt reduction , with 75% of the remaining free cash flow distributed through share repurchases and additional dividend payments as market conditions allowed . The Board of Directors declared a base quarterly dividend of $0.575 per share payable on March 26, 2026 . The company has a share repurchase program authorized up to $1.0 billion , under which $100 million was used to repurchase 0.9 million shares in 2025 .

Management has explicitly flagged several structural headwinds and execution risks to its growth plan. Geopolitical risk and policy uncertainty are expected to continue driving volatility in natural gas, oil, and NGL prices . Macroeconomic headwinds in key consuming countries could impact global growth prospects, affecting energy commodity supply and demand . Domestically, while the natural gas market balance has tightened through 2027 due to robust demand from LNG, power generation, and industrials, this has also led to upward pressure and additional volatility on near-term pricing . The company's future estimated cash flow is partially protected by current hedge positions, providing a floor price on over 60% of projected gas volumes through the end of 2026, with upside participation via costless and three-way collars .

Risk Factors

Expand Energy faces material risks including the wide fluctuation of natural gas, oil, and NGL prices, which directly impacts revenues, profitability, liquidity, and capital expenditure capacity . Conservation measures and technological advances could reduce demand for natural gas and oil, adversely affecting earnings and cash flows . Negative public perception regarding the industry, particularly concerning hydraulic fracturing, waste disposal, and climate change, may lead to new regulations, operational delays, increased costs, and restricted access to capital . The industry is highly competitive, with some competitors possessing greater financial resources, and there is intense competition for attracting and retaining skilled talent and access to equipment . Risks associated with acquisitions and dispositions, such as integration challenges, unforeseen liabilities, and inaccurate assumptions about reserves or costs, could negatively impact financial performance . The company may be required to record write-downs of natural gas and oil property carrying values if commodity prices fall or drilling efforts are unsuccessful . Significant capital expenditures are required to replace reserves and conduct business, and an inability to fund these could lead to curtailed exploration and development, property loss, and declining reserves . Estimates of proved reserves and future net revenues are inherently uncertain and subject to revisions based on actual production, drilling results, and commodity prices, with approximately 28% of current proved reserves being undeveloped and requiring an estimated $4.2 billion in development costs over the next five years . Drilling and well operations may not be profitable or achieve targeted returns due to unexpected conditions, equipment failures, or commodity price declines . Lease expirations on undeveloped properties pose a risk if production is not established or leases are not renewed . Commodity price risk management activities, while mitigating downside risk, may limit benefits from price increases and expose the company to counterparty non-performance risk . Natural gas and oil operations involve substantial costs and risks, including accidents, environmental hazards, and regulatory changes, which may not be fully covered by insurance . Inability to acquire adequate water supplies or dispose of/recycle water economically could impair operations . Pipeline and gathering system capacity constraints and interruptions, including those affecting the NG3 pipeline, could adversely affect cash flow . Joint ventures, such as the NG3 pipeline, may restrict operational flexibility and expose the company to partner non-performance . Participation in the global LNG value chain is dependent on the highly regulated and capital-intensive U.S. LNG export market, and deterioration in this market or unfavorable price differentials could materially impact the business . The departure of key management personnel or failure to attract and retain talent could adversely affect operations . Cyber-attacks and related regulations pose significant and evolving risks to critical systems and data, potentially leading to disruptions, financial liabilities, and reputational damage . Failure to protect personal information and comply with data privacy laws could harm reputation and business results . Catastrophes, natural disasters, severe weather, and human causes beyond control could disrupt operations and impact financial condition . A deterioration in general economic, political, business, or industry conditions, including inflationary pressures and geopolitical conflicts, could adversely affect demand and increase costs . The company may be unable to dispose of assets on attractive terms and may retain significant liabilities from divestitures . Military conflicts and geopolitical instability could cause volatility in energy markets and disrupt operations . Regional epidemics or pandemics could adversely affect business, financial condition, and cash flows . Significant capital needs and limited access to capital markets on favorable terms, particularly for the energy sector, could impact funding for operations and debt repayment . Restrictive covenants in debt instruments, such as the 65% total indebtedness to capitalization ratio , limit financial flexibility and ability to pursue business opportunities . A significant amount of indebtedness, approximately $5.0 billion as of December 31, 2025, limits liquidity and financial flexibility . Changes to customer ability to receive products or meet obligations could adversely impact financial condition . Future equity issuances could dilute common stockholders . The ability to declare and pay dividends and repurchase common stock is discretionary and subject to limitations, potentially affecting stock price . The trading price and volume of common stock may be volatile due to various market and company-specific factors . Extensive governmental regulation, including environmental, health, and safety laws, pipeline safety rules, hydraulic fracturing regulations, and climate change policies, can change and increase compliance costs, delay projects, or limit operations . The Inflation Reduction Act (IRA) and other tax law changes could increase the cost of doing business . The Southwestern Merger triggered an annual limitation on the utilization of tax attributes, potentially increasing income tax liabilities, and future stock transactions could lead to more restrictive limitations . Judicial decisions on property rights and contractual provisions could increase liabilities or restrict operations .

Management Priorities

Management's message to shareholders emphasizes a strategic focus on creating resilient shareholder value through the responsible development of significant resource plays and maintaining its position as a leading provider of natural gas to growing markets . The company aims to achieve this by improving margins through operating efficiencies, marketing and commercial efforts, and financial discipline, while also enhancing safety and sustainability performance . Key strategic priorities include allocating human resources and capital expenditures to projects offering the highest cash return on capital invested, deploying leading drilling and completion technology, and leveraging acquisition and divestiture opportunities to strengthen the portfolio . Management also highlights continued investment in projects designed to reduce the environmental impact of production activities . For 2026, the company expects to complete and turn in line 205 to 235 gross wells with capital expenditures projected between $2.75 billion and $2.95 billion . Management explicitly stated that the company will continue to prioritize debt reduction in 2026 while effectively returning cash to shareholders . The Board of Directors has declared a base quarterly dividend of $0.575 per share payable on March 26, 2026 .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Our Business
  2. [2] Item 1, Business — Marketing
  3. [3] Item 1, Business — Oilfield Services Vertical Integration
  4. [4] Item 1, Business — Business Strategy
  5. [5] Item 1, Business — Business Strategy
  6. [6] Item 1, Business — Business Strategy
  7. [7] Item 8, Consolidated Statements of Operations — Total revenues and other
  8. [8] Item 8, Consolidated Statements of Operations — Natural gas, oil and NGL
  9. [9] Item 8, Consolidated Statements of Operations — Marketing
  10. [10] Item 8, Consolidated Statements of Operations — Gain (loss) on derivatives
  11. [11] Item 8, Consolidated Statements of Operations — Gains (losses) on sales of assets
  12. [12] Item 8, Consolidated Statements of Operations — Total operating expenses
  13. [13] Item 8, Consolidated Statements of Operations — Income (loss) from operations
  14. [14] Item 8, Consolidated Statements of Operations — Net income (loss)
  15. [15] Item 8, Consolidated Statements of Operations — Basic earnings (loss) per common share
  16. [16] Item 8, Consolidated Statements of Operations — Diluted earnings (loss) per common share
  17. [17] Item 8, Consolidated Statements of Cash Flows — Cash flows from operating activities
  18. [18] Item 8, Consolidated Balance Sheets — Cash and cash equivalents
  19. [19] Item 8, Consolidated Balance Sheets — Long-term debt, net
  20. [20] Item 7, MD&A — Natural Gas, Oil and NGL Sales
  21. [21] Item 7, MD&A — Natural Gas, Oil and NGL Sales
  22. [22] Item 7, MD&A — Natural Gas, Oil and NGL Sales
  23. [23] Item 7, MD&A — Production Expenses
  24. [24] Item 7, MD&A — Gathering, Processing and Transportation Expenses ("GP&T")
  25. [25] Item 7, MD&A — Severance and Ad Valorem Taxes
  26. [26] Item 7, MD&A — Severance and Ad Valorem Taxes
  27. [27] Item 7, MD&A — Severance and Ad Valorem Taxes
  28. [28] Item 7, MD&A — Marketing Revenues and Expenses
  29. [29] Item 7, MD&A — Depreciation, Depletion and Amortization
  30. [30] Item 7, MD&A — Depreciation, Depletion and Amortization
  31. [31] Item 7, MD&A — Depreciation, Depletion and Amortization
  32. [32] Item 7, MD&A — Depreciation, Depletion and Amortization
  33. [33] Item 7, MD&A — Depreciation, Depletion and Amortization
  34. [34] Item 7, MD&A — Southwestern Merger
  35. [35] Item 7, MD&A — Investment Grade Rating
  36. [36] Item 7, MD&A — Addition to the S&P 500 Index
  37. [37] Item 7, MD&A — Credit Facility
  38. [38] Item 7, MD&A — Issuance of Senior Notes and Senior Notes Repayment
  39. [39] Item 7, MD&A — Issuance of Senior Notes and Senior Notes Repayment
  40. [40] Item 7, MD&A — Issuance of Senior Notes and Senior Notes Repayment
  41. [41] Item 7, MD&A — Issuance of Senior Notes and Senior Notes Repayment
  42. [42] Item 7, MD&A — Shareholder Returns
  43. [43] Item 7, MD&A — Shareholder Returns
  44. [44] Item 7, MD&A — Economic and Market Conditions
  45. [45] Item 7, MD&A — Capital Expenditures
  46. [46] Item 7, MD&A — Capital Expenditures
  47. [47] Item 7, MD&A — Capital Expenditures
  48. [48] Item 7, MD&A — Capital Expenditures
  49. [49] Item 1, Business — Business Strategy
  50. [50] Item 7, MD&A — Introduction
  51. [51] Item 15, Note 15 — Momentum Sustainable Ventures LLC.
  52. [52] Item 1A, Risk Factors — Our business strategy includes participating in the global LNG value chain
  53. [53] Item 7, MD&A — Introduction
  54. [54] Item 7, MD&A — Introduction
  55. [55] Item 7, MD&A — Introduction
  56. [56] Item 7, MD&A — Shareholder Returns
  57. [57] Item 7, MD&A — Shareholder Returns
  58. [58] Item 7, MD&A — Shareholder Returns
  59. [59] Item 7, MD&A — Shareholder Returns
  60. [60] Item 7, MD&A — Liquidity and Capital Resources
  61. [61] Item 7, MD&A — Shareholder Returns
  62. [62] Item 7, MD&A — Cash Paid to Repurchase and Retire Common Stock
  63. [63] Item 7, MD&A — Economic and Market Conditions
  64. [64] Item 7, MD&A — Economic and Market Conditions
  65. [65] Item 7, MD&A — Economic and Market Conditions
  66. [66] Item 7, MD&A — Economic and Market Conditions
  67. [67] Item 1A, Risk Factors — Natural gas, oil and NGL prices fluctuate widely
  68. [68] Item 1A, Risk Factors — Conservation measures and technological advances could reduce demand for natural gas and oil.
  69. [69] Item 1A, Risk Factors — Negative public perception regarding us or our industry could have an adverse effect on our operations.
  70. [70] Item 1A, Risk Factors — The gas and oil exploration and production industry is very competitive
  71. [71] Item 1A, Risk Factors — Risks related to potential acquisitions or dispositions may adversely affect our business.
  72. [72] Item 1A, Risk Factors — If commodity prices fall or drilling efforts are unsuccessful, we may be required to record write-downs of the carrying value of our natural gas and oil properties.
  73. [73] Item 1A, Risk Factors — Significant capital expenditures are required to replace our reserves and conduct our business.
  74. [74] Item 1A, Risk Factors — The actual quantities of and future net revenues from our proved reserves may be less than our estimates.
  75. [75] Item 1A, Risk Factors — The actual quantities of and future net revenues from our proved reserves may be less than our estimates.
  76. [76] Item 1A, Risk Factors — Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.
  77. [77] Item 1A, Risk Factors — Certain of our undeveloped properties are subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are renewed.
  78. [78] Item 1A, Risk Factors — Our commodity price risk management activities may limit the benefit we would receive from increases in commodity prices
  79. [79] Item 1A, Risk Factors — Natural gas and oil operations are uncertain and involve substantial costs and risks.
  80. [80] Item 1A, Risk Factors — Our ability to produce natural gas, oil and NGL economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our operations or are unable to dispose of or recycle the water we use economically and in compliance with environmental laws.
  81. [81] Item 1A, Risk Factors — Our operations may be adversely affected by pipeline, trucking and gathering system capacity constraints and may be subject to interruptions that could adversely affect our cash flow.
  82. [82] Item 1A, Risk Factors — We entered into a joint venture, and may in the future enter into additional or modify existing joint ventures, that might restrict our operational and corporate flexibility.
  83. [83] Item 1A, Risk Factors — Our business strategy includes participating in the global LNG value chain
  84. [84] Item 1A, Risk Factors — The departure of key management personnel and the failure to attract and retain talent could adversely affect our operations.
  85. [85] Item 1A, Risk Factors — Cyber-attacks targeting systems and infrastructure used by the gas and oil industry and related regulations may adversely impact our operations
  86. [86] Item 1A, Risk Factors — We collect, process, store and use personal information and other data, and our actual or perceived failure to protect such information and data or comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results.
  87. [87] Item 1A, Risk Factors — Our business is subject to risks related to catastrophes, natural disasters, severe weather and human causes beyond our control, which may have a negative impact on our results of operations and financial condition.
  88. [88] Item 1A, Risk Factors — A deterioration in general economic, political, business or industry conditions would have a material adverse effect on our results of operations, liquidity and financial condition.
  89. [89] Item 1A, Risk Factors — We may be unable to dispose of assets on attractive terms, and may be required to retain liabilities for certain matters.
  90. [90] Item 1A, Risk Factors — Military and other armed conflicts, including terrorist activities, and related price volatility and geopolitical instability could materially and adversely affect our business and results of operations.
  91. [91] Item 1A, Risk Factors — Regional epidemics or pandemics and related economic turmoil, including supply chain constraints, have affected, and could in the future adversely affect our business, financial condition, results of operations and cash flows.
  92. [92] Item 1A, Risk Factors — We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by industry conditions.
  93. [93] Item 4, Note 4 — Credit Facility
  94. [94] Item 4, Note 4 — Credit Facility
  95. [95] Item 1A, Risk Factors — Restrictive covenants in certain of our existing and future debt instruments may limit our ability to finance our operations
  96. [96] Item 1A, Risk Factors — We have a significant amount of indebtedness, which will limit our liquidity and financial flexibility.
  97. [97] Item 1A, Risk Factors — We have a significant amount of indebtedness, which will limit our liquidity and financial flexibility.
  98. [98] Item 1A, Risk Factors — Changes to the ability of our customers to receive our products or meet their financial, performance and other obligations to us could adversely impact our business and financial condition.
  99. [99] Item 1A, Risk Factors — Our common stockholders will be diluted if additional shares are issued.
  100. [100] Item 1A, Risk Factors — Our ability to declare and pay dividends, and to repurchase common stock, is subject to limitations.
  101. [101] Item 1A, Risk Factors — The trading price and volume of our common stock may be volatile, and you could lose a significant portion of your investment.
  102. [102] Item 1A, Risk Factors — We are subject to extensive governmental regulation, which can change and could adversely impact our business.
  103. [103] Item 1A, Risk Factors — The taxation of independent producers is subject to change, and changes in tax law could increase our cost of doing business.
  104. [104] Item 1A, Risk Factors — The completion of the Southwestern Merger in 2024 triggered an annual limitation on the utilization of our tax attributes
  105. [105] Item 1A, Risk Factors — Judicial decisions can affect our rights and obligations.
  106. [106] Item 7, MD&A — Introduction
  107. [107] Item 7, MD&A — Introduction
  108. [108] Item 7, MD&A — Introduction
  109. [109] Item 7, MD&A — Introduction
  110. [110] Item 7, MD&A — Capital Expenditures
  111. [111] Item 7, MD&A — Capital Expenditures
  112. [112] Item 7, MD&A — Shareholder Returns
  113. [113] Item 7, MD&A — Liquidity and Capital Resources
  114. [114] Item 7, MD&A — Liquidity and Capital Resources

Analysis on 5/21/2026