Expand Energy Corporation Q3 FY2024 earnings call

• Integration of the two companies is off to a great start, ahead of schedule with various accomplishments. • Third quarter results showed significant momentum with the combined company producing 6.75 BCFE per day, legacy Chesapeake drilling operations had record feed per day in Haynesville and Northeast Appalachia, and Legacy Southwestern drilled a record lateral length well. • Preliminary 2025 capital and operational plans include ~$2.7 billion in total capital to deliver an average of 7 BCFE per day, with expected enhanced operational efficiencies and synergy realization. • Early integration wins have positioned the company to raise expected annual synergies target to $500 million, with ~$225 million expected in 2025. • Hedge-to-wedge strategy provides confidence in financial outlook, and the company has an investment-grade credit rating, enhancing its position and allowing for better capital access. • New capital return framework prioritizes base dividend, debt reduction, and includes a $1 billion share repurchase authorization.

No detailed financial performance by product segment with absolute revenue and contribution % provided in the transcript.

• Preliminary 2025 capital plan: ~$2.7 billion to deliver an average of 7 BCFE per day, representing a 120% increase in production vs. Chesapeake's standalone maintenance level with only an 80% increase in capital. • Synergy target raised to $500 million annually, with ~$225 million expected in 2025 and on track to achieve full $500 million by year-end 2027. • Expect to build ~80 deferred tills and up to 1 BCF per day of short cycle capacity by year-end 2024, and be prudent in turning production online based on market conditions. • Capital efficiency expected to hold as synergy realization builds and operating efficiencies continue, ensuring better financial performance in down cycles and more free cash flow in up cycles.

• Market volatility which could impact production online decisions and financial performance. • Ability to achieve expected synergies as it is a high bar and requires meeting specific criteria. • Potential challenges in maintaining capital efficiency and operating efficiencies over the long term, especially in varying market conditions.

Q: On capital costs and synergies, how does the $225 million in 2025 synergies compare to the original target and what about well costs?

A: $225 million is a combination of things, heavy on the capital side, with about $75 million attributed to CapEx. Well cost trends have been positive with record performance in drilling, and deflationary elements are being accounted for in the plan.

Q: Are you done with synergy delivery view?

A: Not done, the company is methodical in determining synergies, has a large portfolio with many opportunities, and believes scale offers significant opportunities, with a high bar for what is considered a synergy.

Q: Confidence in 2.7-2.8 billion sustaining capital and conditions for not bringing back production?

A: Confidence is high, and if market conditions like soft prices, storage congestion, etc., exist, volumes may not be brought back, with control over deferred activity.

Q: Midstream optimization opportunities?

A: Beginning to optimize flows to premium markets, with early wins in Northeast app and Haynesville, and plans to combine marketing books in January 2025.

Q: Capital returns framework and debt reduction?

A: Enhanced framework prioritizes base dividend, net debt reduction, and remaining free cash flow for buybacks or variable dividend based on market conditions. Aim to reduce net debt and achieve a sub one times leverage ratio.