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美國
證券交易委員會
華盛頓特區20549
表格 10-Q
☒   根據1934年證券交易法第13或15(d)條規定的季度報告
截至季度結束日期的財務報告2024年9月30日
☐    根據1934年證券交易法第13或15(d)條規定的過渡報告
過渡期從                    至                    
委員會文件號 001-40368001-13726
Expand_Energy_logo.jpg
拓展能源公司
(根據其章程規定的註冊人準確名稱)
俄克拉荷馬
73-1395733
（設立或組織的其他管轄區域）（納稅人識別號碼）
6100北Western大道，
俄克拉荷馬城，
俄克拉荷馬
73118
，（主要行政辦公地址）(郵政編碼)
(405)
 848-8000
(註冊人電話號碼，包括區號)
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易代碼在其上註冊的交易所的名稱
普通股，每股價值0.01美元EXE納斯達克證券交易所 LLC
購買普通股的A類認股權證EXEEW納斯達克證券交易所 LLC
購買普通股的b類認股權證EXEEZ納斯達克證券交易所 LLC
購買普通股的C類認股權證EXEEL納斯達克證券交易所 LLC
請勾選符號以指示登記人（1）是否在過去的12個月內根據1934年證券交易法第13或15(d)條要求提交了所有需要提交的報告（或對於登記人需要提交此類報告的較短期間），以及（2）過去90天內一直受到此類報告要求的要求。 是 ☒沒有☐ 
請勾選一個框，表示在過去的12個月內（或註冊者要求遞交此類文件的較短期間內），是否已經遞交了根據S-T規則405條和本章232.405條所要求遞交的每個交互式數據文件。是 ☒沒有☐ 
請通過複選標記指示註冊人是大型快速申報人、加速申報人、非加速申報人、較小型報告公司還是新興增長公司。請參閱交易所法規120億.2中"大型快速申報人"、"加速申報人"、"較小型報告公司"和"新興增長公司"的定義。
大型加速存取器 ☒加速報告人 ☐非加速報告人 ☐  
小型報告公司☐新興成長型公司 ☐ 
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐
請通過複選框表示註冊人是否是殼公司（如《交易所法》120億.2規定）。 是 ☐ 不☒ 
請用複選標記指示註冊人是否已根據證券交易法1934年的第12、13或15(d)條的要求提交了在法院確認的計劃下分配證券後需要提交的所有文件和報告。 是☒ 不 ☐
截至2024年10月24日，有 231,034,791 股我們每股面值爲$0.01的普通股已發行。

擴大能源公司和子公司
2024年9月30日止季度10-Q表索引
 


說明和定義
2024年10月1日，切薩皮克公司完成了此前宣佈的與西南公司的合併。西南併購後，切薩皮克更名爲擴展能源公司。除非另有規定，此處所述信息涉及截至2024年9月30日的季度和截至當年同期止的時間段，因此不包括該時段西南及其子公司的信息，相應的去年同期或截至2024年9月30日的財務狀況或截至2013年12月31日的情況。
2024年10月1日之前，「我們」，「我們」，「我們的」，「擴張能源」和「公司」指的是切薩皮克能源公司及其南西方合併之前的一體化子公司，並不包括南西方及其子公司，而2024年10月1日之後的提及指的是由於南西方合併而形成的合併公司，包括南西方及其子公司。除單位和每股金額以外，所有金融數值均以億美元爲單位，除非另有規定。此外，以下是本季度10-Q表格中使用的其他縮寫詞和特定術語的定義：
「ASU」代表會計準則更新。
「破產法典」指的是美國法典第11章，11 U.S.C. §§ 101–1532，經修訂。
「破產法庭」指美國德克薩斯州南區破產法院。
「Bbl」或「Bbls」表示桶或桶。
「Bcf」代表十億立方英尺。
「第11章案件」指的是涉及特定債務人的破產法第11章案件，在破產法法院中等待處理的案件，涉及所有債務人時，則指所有債務人在破產法法院中等待處理的程序上合併的第11章案件。
「切薩皮克」指南方併購前的切薩皮克能源公司。
「A類權證」指購買普通股10%的權證（在權益發行生效後，但受管理激勵計劃、B類權證和C類權證稀釋影響），每股初始行權價爲27.63美元。A類權證自生效日期起可行使，直至2026年2月9日。
「B級認股權證」指的是購買普通股的10%的認股權證（在權益發行後生效，但受管理層激勵計劃和C級認股權證的攤薄影響），每股初始行使價格爲32.13美元。B級認股權證可自生效日期起行使，直至2026年2月9日。
「C類權證」是指購買普通股10%的權證（在實施認購權發行後，但受管理激勵計劃的攤薄效應影響），每股的初始行使價格爲36.18美元。C類權證可在生效日期至2026年2月9日行使。
「確認訂單」指確認切薩皮克能源公司及其債務人附屬公司第五修訂聯合破產重整計劃的訂單，案卷號爲2915號，由破產法院於2021年1月16日進入。
「當前期間」指2024年9月30日結束的九個月。
「本季度」指的是截至2024年9月30日的三個月。
「DD&A」代表折舊、遞耗和攤銷。
「債務人」是指南方能源公司在併購之前，連同所有已提出第11章破產案件的直接和間接子公司。
「生效日期」指2021年2月9日。
「ESG」代表esg即環保母基、社會和公司治理。


「FASB」代表着財務會計準則委員會。
「G&A」代表一般和行政費用。
「GAAP」 表示美國通用會計準則。
「一般無抵押債權」指任何對任何債務人的債權，如果在破產法院的命令下未被充分支付，並且不是行政債權、優先稅務債權、其他優先債權、其他擔保債權、循環信貸設施債權、FLLO期限貸款設施債權、次級留置票據債權、無抵押票據債權、公司間債權或第510(b)條款債權。
「LNG」意爲液化天然氣。
「LTIP」代表切薩皮克能源公司2021年長期激勵計劃。
「MBbl」表示千桶。
「Mcf」表示千立方英尺。
「Mcfe」 是指天然氣當量的一千立方英尺，其中一桶石油或液化天然氣被轉換爲等量的天然氣，使用的比例是一桶石油或液化天然氣相當於六千立方英尺的天然氣。
「MMcf」表示百萬立方英尺。
「MMcfe」表示百萬立方英尺的天然氣當量。
「NGL」代表天然氣液體。
「nymex」 表示紐約商品交易所。
「OPEC+」代表石油輸出國組織加盟國。
「申請日」 指2020年6月28日，債務人啓動第11章破產案的日期。
「計劃」指的是切薩皮克能源公司及其債務人附屬公司的第五次修訂聯合第11章重整計劃，附表A爲確認訂單。
「上期」指2023年9月30日結束的九個月。
「上季度」 指截至2023年9月30日的三個月。
「權益發行」指破產債務人在生效日期完成的普通股權益發行金額的權益發行。
「Southwestern」指的是美國西南能源公司。
「西南合併」指的是切薩皮克與南西部的合併，該合併於2024年10月1日完成。
「SEC」指的是美國證券交易委員會。
「SOFR」指的是由SOFR管理機構紐約聯邦儲備銀行（或擔任擔保隔夜融資利率接任行政機構）管理，等於擔保隔夜融資利率的利率。
「認購權證」指的是A類認購權證、B類認購權證和C類認購權證的集合。
「/桶」表示每桶。
「/Mcf」表示每Mcf。
「/Mcfe」表示每Mcfe。

目錄
第一部分 財務信息
項目1。
基本報表彙編
擴大能源公司和子公司
基本報表資產負債表（未經審計）

(數額爲百萬美元，除每股數據外)2024年9月30日2023年12月31日
資產
流動資產：
現金及現金等價物$1,044 $1,079 
受限現金76 74 
2,687,823 261 593 
衍生工具資產199 637 
其他資產217 226 
總流動資產1,7972,609
固定資產和設備：
天然氣和石油資產，成功探明法
證明了的天然氣和石油資產12,373 11,468 
未探明財產1,806 1,806 
其他518 497 
總財產與設備14,697 13,771 
減：累計折舊、折耗和攤銷(4,743)(3,674)
淨房地產和設備總資產9,954 10,097 
開多期權資產15 74 
遞延所得稅資產1,038 933 
其他長期資產588 663 
資產總額$13,392 $14,376 
負債和股東權益
流動負債:
應付賬款$264 $425 
應計利息41 39 
衍生工具負債5 3 
其他流動負債589 847 
流動負債合計899 1,314 
長期負債淨額2,017 2,028 
長期衍生工具責任— 9 
資產退休義務淨額，減去當前部分271 265 
其他長期負債17 31 
負債合計3,204 3,647 
可能存在的情況和承諾（注5)
股東權益:
普通股，每股面值爲 $0.0001；0.01每股面值，450,000,000 授權股份數量： 135,107,576 看跌 130,789,936 股票已發行
1 1 
額外實收資本5,778 5,754 
保留盈餘4,409 4,974 
股東權益合計10,188 10,729 
負債和股東權益合計$13,392 $14,376 
隨附說明是這些簡明合併財務報表的一部分。
5
目錄
擴大能源公司和子公司
經簡化的合併利潤及損失表
(未經審計)
截至9月30日的三個月截至9月30日的九個月
(數額爲百萬美元，除每股數據外)2024202320242023
營業收入和其他:
天然氣、石油和液化石油氣$407 $682 $1,374 $2,784 
市場營銷193 724 641 1,987 
天然氣和石油衍生品46 106 207 1,195 
資產出售利得2 — 12 807 
總收入和其他648 1,512 2,234 6,773 
營業費用：
產量50 73 158 293 
採集、加工和運輸152 192 479 663 
遣散費和按比例計算的稅11 27 58 136 
勘探2 4 7 19 
市場營銷192 723 656 1,985 
一般行政39 29 133 95 
分離和其他終止成本— — 23 3 
Depreciation, depletion and amortization335 382 1,082 1,148 
其他經營支出，淨額22 3 55 15 
營業費用總計803 1,433 2,651 4,357 
營業收支（虧損）(155)79 (417)2,416 
其他收入（支出）：
利息支出(20)(23)(59)(82)
購買、交換或清償債務的損失— — (2)— 
其他收入17 15 58 48 
其他收入（支出）總額(3)(8)(3)(34)
稅前收益（虧損）(158)71 (420)2,382 
所得稅費用（收益）(44)1 (105)532 
$(114)$70 $(315)$1,850 
普通股每股收益：
Basic$(0.85)$0.53 $(2.39)$13.86 
Diluted$(0.85)$0.49 $(2.39)$12.90 
加權平均普通股持股數（以千爲單位）：
Basic133,794 132,153 131,958 133,460 
Diluted133,794142,348131,958143,463
隨附說明是這些簡明合併財務報表的一部分。
6
目錄
擴大能源公司和子公司
現金流量表簡明綜合報表
(未經審計)

截至9月30日的九個月
（單位：百萬美元）20242023
經營活動現金流量：
$(315)$1,850 
調整淨利潤(虧損)和經營活動提供的現金:
Depreciation, depletion and amortization1,082 1,148 
遞延所得稅支出（收益）(105)319 
Derivative gains, net(207)(1,195)
衍生工具結算的現金收入，淨額695 167 
基於股份的補償29 25 
資產出售利得(12)(807)
購買、交換或清償債務的損失2 — 
其他(16)35 
資產和負債的變動30 368 
經營活動產生的現金流量淨額1,1831,910
投資活動現金流量：
資本支出(1,021)(1,450)
遞延款項收入116 — 
對投資的貢獻(71)(149)
處置物業和設備的收益17 1,967 
投資活動產生的淨現金流量(959)368
籌集資金的現金流量：
信貸設施收益— 1,125 
信貸設施付款— (2,175)
用於過渡服務的資金— 91 
認股權行權所得款項1 — 
債務發行和其他融資成本(4)— 
用於回購和註銷普通股的現金支付— (313)
支付普通股股息的現金(254)(412)
籌集資金淨額(257)(1,684)
現金，現金等價物和受限現金淨增加（減少）(33)594 
期初現金、現金等價物及受限制的現金1,153192
期末現金、現金等價物及受限制的現金$1,120 $786 
現金及現金等價物$1,044 $713 
受限現金7673
現金、現金等價物和受限制的現金總額$1,120 $786 

隨附說明是這些簡明合併財務報表的一部分。
7
目錄
擴大能源公司和子公司
現金流量表彙編-（續）
(未經審計)

以下是附加披露的簡明綜合現金流量表：
截至9月30日的九個月
（單位：百萬美元）20242023
補充現金流量信息：
利息支付淨額，扣除資本化利息。$64 $90 
已收到所得稅退款，淨額$(2)$(18)
重大補充披露
非現金投融資活動：
應計的鑽井和完井成本變動$(72)$(39)
已確認的經營租賃義務$— $65 
隨附說明是這些簡明合併財務報表的一部分。
8
目錄
擴大能源公司和子公司
股東權益的簡明合併報表
(未經審計)

普通股
（單位：百萬美元）股份金額股本外溢價未分配利潤股東權益總計
2022年12月31日餘額134,715,094 $1 $5,724 $3,399 $9,124 
基於股份的補償92,048 — 5 — 5 
發行普通股以行權4,654 — — — — 
普通股的回購和養老(792,543)— — (60)(60)
淨利潤— — — 1,389 1,389 
普通股股息— — — (175)(175)
截至2023年3月31日的餘額134,019,253 $1 $5,729 $4,553 $10,283 
基於股份的補償109,012 — 7 — 7 
發行普通股以行權878 — — — — 
普通股的回購和養老(1,444,402)— (10)(115)(125)
淨利潤— — — 391 391 
普通股股息— — — (160)(160)
截至2023年6月30日的餘額132,684,741 $1 $5,726 $4,669 $10,396 
基於股份的補償5,859 — 10 — 10 
發行普通股以行權1,809 — — — — 
普通股的回購和養老(1,509,491)— (1)(130)(131)
淨利潤— — — 70 70 
普通股股息— — — (77)(77)
截至2023年9月30日的餘額131,182,918 $1 $5,735 $4,532 $10,268 
隨附說明是這些簡明合併財務報表的一部分。
9
目錄
擴大能源公司和子公司
壓縮的股東權益綜合報表 - （續）
(未經審計)
普通股
（單位：百萬美元）股份金額股本外溢價未分配利潤股東權益總計
2023年12月31日的餘額130,789,936 $1 $5,754 $4,974 $10,729 
基於股份的補償168,538 — 4 — 4 
發行普通股以行權201 — — — — 
淨利潤— — — 26 26 
普通股股息— — — (77)(77)
2024年3月31日的餘額130,958,675 $1 $5,758 $4,923 $10,682 
基於股份的補償264,072 — 9 — 9 
發行普通股以行權29,360 — 1 — 1 
淨損失— — — (227)(227)
普通股股息— — — (95)(95)
2024年6月30日的餘額131,252,107 $1 $5,768 $4,601 $10,370 
基於股份的補償27,618 — 10 — 10 
發行普通股以換股權行使3,827,851 — — — — 
淨損失— — — (114)(114)
普通股股息— — — (78)(78)
2024年9月30日餘額135,107,576 $1 $5,778 $4,409 $10,188 
隨附說明是這些簡明合併財務報表的一部分。
10
目錄
擴大能源公司和子公司
簡明合併財務報表附註
(未經審計)

1.報告的編制基於美國公認會計原則（US GAAP）和證券交易委員會（SEC）的適用規則和法規，關於中期財務報告的規定。根據這些規定的規定，某些按照美國公認會計原則通常要求的註腳或其他財務信息已被精簡或省略，因此2024年1月31日的資產負債表及相關披露信息已來源於那個日期的經審計合併財務報表，但不包含美國公認會計原則要求的所有信息。這些未經審計的簡明合併財務報表與公司的年度合併財務報表基於相同的基礎而編制，經管理層的意見，反映了必要的調整（僅包括正常循環調整），以公平呈現公司的簡明合併財務信息。2024年4月30日的營業結果不一定是預期的2025年1月31日或任何其他中期或未來年度的結果。
公司描述
2024年10月1日，切薩皮克能源公司（「切薩皮克」）在與西南合併（有關詳情請參見）的過程中將其名稱更改爲擴展能源公司（「擴展能源」，「我們」，「我們的」，「我們」或「公司」）。 注2在西南合併之後，擴展能源是美國最大的天然氣生產商，基於淨日產量，並致力於負責地開發豐富的天然氣、石油和液化石油氣供應，以擴大所有板塊的能源獲取。我們在路易斯安那州、賓夕法尼亞州、西弗吉尼亞州和俄亥俄州進行業務，所有業務均位於美國內陸。
報告範圍
對擴展能源的隨附未經審計的簡明綜合財務報表是根據GAAP和SEC的法規編制的。根據這些法規，某些披露已被簡化或省略。
本季度報告的表格10-Q（以下簡稱「表格10-Q」）涉及截至2024年9月30日和2023年12月31日的財務狀況，以及截至2024年9月30日的三個月（「當前季度」），截至2024年9月30日的九個月（「當前期間」），截至2023年9月30日的三個月（「上季度」）和截至2023年9月30日的九個月（「上期間」）的經營結果。我們的 年度報告表格10-K 截至2023年12月31日的年度報告（「2023年表格10-K」）應與本表格10-Q一起閱讀。附表的未經審計的簡明合併財務報表反映出所有正常的經常性調整，根據管理層的意見，這些調整是必要的，以便公允陳述我們的簡明合併財務報表和附註，幷包括我們的直接和間接全資子公司的帳戶以及我們在控制金融利益的實體。公司間賬目和餘額已予以消除。在本表格10-Q覆蓋的時間段內，我們沒有任何影響其他綜合收益的變化或項目。
板塊
營運部門被定義爲企業的元件，參與可以賺取收入併發生費用的活動，從中可以獲得單獨的運營財務信息，並且由首席經營決策者（「CODM」）定期評估，以分配企業資源並評估其運營績效。 截至2024年9月30日，我們得出結論，我們僅有一個 之一 報告的經營部門，由於Expand能源及其合併子公司的勘探和生產業務性質相似，以及我們的市場活動是輔助我們業務的事實。
限制性現金
截至2024年9月30日，我們有$的受限現金。76 我們的受限現金代表着未來支付某些版稅款項的法律限制資金，以及在破產後我們恢復後用於支付某些無抵押債權的方便分類款項。
尚未採用最近發佈的會計標準
2023年12月，FASB發佈了ASU 2023-09，所得稅（主題740）：改進所得稅披露。該標準要求上市的業務實體在每年披露稅率調節表的特定類別，併爲滿足數量門限的調節項目提供其他信息（如果這些調節項目的影響相當於或大於將稅前收入（或損失）與適用的法定所得稅率相乘所得金額的5%）。它還要求所有實體每年披露按聯邦、州和外國稅種分解的所支付的所得稅（扣除退款），以及按所支付的所得稅（扣除退款）在個別司法管轄區分解的金額，當所支付的所得稅（扣除退款）相當於或大於所支付的總所得稅（扣除退款）的5%時。最後，該標準取消了要求所有實體披露未識別稅務負債餘額在未來12個月內合理可能變動範圍的性質和估計，或聲明無法估算範圍的要求。該標準對公司自2026年1月1日開始的年度適用。可以提前採納該標準。該標準應以前瞻性基礎應用。允許追溯適用。公司目前正在評估該標準可能對其財務報表產生的影響。ASU 2023-09 旨在通過要求披露諸如有效稅率和有關所支付所得稅等事項的細分，爲投資者提供有關實體所得稅的額外信息。本ASU適用於2024年12月15日後開始的年度報告期，允許對尚未發佈或可供發佈的年度基本報表提前採用。我們正在評估這一ASU對我們的披露可能產生的影響，預計不會對我們的綜合財務報表產生重大影響。
2023年11月，FASB發佈了ASU 2023-07，分部報告（話題280）：改進報告分部披露根據美國註冊會計師協會（ASU）2023-07的規定，分部披露的範圍和頻率增加，以向投資者提供有關實體CODm使用的信息的額外細節，包括有關重要分部費用的信息。本ASU自2024年起生效，開始適用於我們的2024年度報告和
11
目錄
擴大能源公司和子公司
附註-續
(未經審計)
2025年起開始的中期時段，允許提前採納。我們正在評估這項ASU將對我們的披露產生的影響，並不預計會對我們的綜合基本報表產生重大影響。

2.天然氣和石油財產交易

西南合併
2024年1月10日，切薩皮克和西南公司簽署了一份全股票協議和合並計劃（「合併協議」）。西南公司是一家獨立的能源公司，從事於其在阿巴拉契亞和海因斯維爾頁岩區域的開發、勘探和生產活動，包括相關的營銷活動。我們的董事會和西南公司的董事會均批准了該合併協議。在2024年6月18日舉行的單獨特別會議上，切薩皮克的股東批准了向西南公司股東發行切薩皮克普通股以完成西南公司合併，並且西南公司的股東也批准了該合併協議。

2024年10月1日，西南併購完成，我們根據併購協議向西南的股東發行了大約 95.7 百萬股我們的普通股與西南的股東。根據併購協議的規定，在某些例外情況下，每股西南普通股轉換爲收到 0.0867 公司的普通股權。根據我們普通股的收盤價，發行給西南股東的我方普通股的總價值約爲$7.9十億美元。

我們正在使用收購會計方法來覈算這筆交易，將Expand Energy（原Chesapeake）視爲會計收購方。根據收購會計方法，Southwestern及其子公司的資產和負債將按照它們在Southwestern合併完成之日的各自公允價值記錄。截至本報告日，初步的購買價格分配尚未完成，但預計將在Southwestern合併結束後一年內完成。 確定Southwestern的資產和負債的公允價值需要進行判斷和做出某些假設，包括與Southwestern的石油和天然氣資產估值相關的假設。Southwestern合併爲美國聯邦所得稅目的而構建爲一項免稅重組。

鷹福特資產出售
2023年1月，我們簽署協議，將部分Eagle Ford資產賣給WildFire Energy I LLC，售價約爲$1.425十億美元，根據習慣的交割後調整。購買價格中的約225百萬美元記錄爲遞延支付，並作爲一份非息息票據，將在交易關閉後的頭三年每年支付60百萬美元，第四年支付45百萬美元。在當期，我們收到了與此交易相關的第一筆分期付款。遞延支付按公允價值記錄，按照假設利率作爲二級輸入，並約581百萬美元和58百萬美元的遞延支付反映在其他流動資產中，約871百萬美元和135破產清點表中，分別反映了2024年9月30日和2023年12月31日的其他長期資產內的數百萬美元。該出售交易於2023年3月20日結束（生效日期爲2022年10月1日），導致獲利約$337磋商後調整後，基於資產賬面價值與收到考慮款項之間的差額，獲利約$百萬。
2023年2月，我們達成協議，以約美元的價格將鷹福特剩餘資產的一部分出售給英力士上游控股有限公司（「英力士能源」）1.4十億，視按慣例收盤後調整而定。大約 $225100萬美元的收購價格被記作遞延對價，並被視爲無息票據，分期支付，金額約爲美元56每年一百萬 四年 在交易截止日期之後。在本期間，我們收到了與該交易相關的第一筆分期付款。遞延對價按公允價值入賬，估算利率作爲二級投入，約爲 $54百萬和美元55百萬美元的遞延對價反映在其他流動資產中，大約爲 $97百萬和美元144截至2024年9月30日和2023年12月31日，百萬美元分別反映在簡明合併資產負債表上的其他長期資產中。資產剝離於2023年4月28日結束（生效日期爲2022年10月1日），收益約爲美元470百萬，基於資產的賬面價值與收到的對價之間的差額。
12
目錄
擴大能源公司和子公司
附註-續
(未經審計)
2023年8月，我們達成協議，以約美元的價格將鷹福特資產的最後一部分出售給SilverBow Resources, Inc.（「SilverBow」）700百萬，視按慣例收盤後調整而定。大約 $50100萬美元的收購價格被記作遞延對價，並被視爲無息票據，自截止日期起一年內支付。遞延對價按公允價值入賬，估算利率作爲二級投入，約爲 $49百萬和美元46截至2024年9月30日和2023年12月31日，數百萬美元的遞延對價分別反映在簡明合併資產負債表上的其他流動資產中。此外，SilverBow 同意向我們額外支付一筆或有付款 $25WTI NYMEX 的平均價格應介於 $ 之間75 和 $80 每桶或 $50WTI 紐約商品交易所的平均價格應高於美元，應爲百萬美元80 交易結束後一年的每桶。2024 年 7 月 30 日，新月能源公司（「新月」）收購了 SilverBow。我們預計將在2024年第四季度收到Crescent的額外或有付款（如果有）。截至2024年9月30日的或有對價的公允價值爲美元18百萬美元反映在我們簡明合併資產負債表中的衍生資產中。參見 注意事項 11 以獲取更多信息。此次剝離於 2023 年 11 月 30 日結束（生效日期爲 2023 年 2 月 1 日），收益約爲 $140百萬，基於資產的賬面價值與收到的對價之間的差額。

3.每股收益
每股基本盈利（虧損）是通過將淨利潤（虧損）除以期間內流通的普通股加權平均數量來計算的。每股攤薄盈利（虧損）的計算方式相同，但包括利用庫藏股權方法的潛在攤薄證券的影響。潛在攤薄證券包括與認股權證、未獲授予的限制性股票單位（「RSUs」）以及未獲授予的績效分享單位（「PSUs」）相關的可發行股份。
基本和稀釋每股收益（虧損）的調節如下：
截至9月30日的三個月截至9月30日的九個月
2024202320242023
分子
淨利潤（損失），基本和攤薄$(114)$70 $(315)$1,850 
分母（以千計）
基礎加權平均普通股數133,794 132,153 131,958 133,460 
潛在普通股的影響
權證— 9,841 — 9,639 
限制性股票單位— 306 — 316 
業績股份單位— 48 — 48 
攤薄加權平均普通股數133,794 142,348 131,958 143,463 
普通股每股收益：
Basic$(0.85)$0.53 $(2.39)$13.86 
Diluted$(0.85)$0.49 $(2.39)$12.90 

在本季度和本期間，每股攤薄損失的計算不包括 777,369 普通股預留股份和 1,466,502 與第11章案件相關的普通C認股權所預留的普通股份未滿足被視爲攤薄股份的所有必要條件。此外，在本季度和本期間，每股攤薄損失的計算不包括 7,667,037 看跌 9,580,029 權證， 164,253 看跌 270,095公司授予PSUs的有PSUs，並頒發了2015年外部董事計劃的RSUs。0 看跌 97,528 PSUs 分別。

13
目錄
擴大能源公司和子公司
附註-續
(未經審計)
在上一季度和上一期間，每股攤薄收益的計算不包括 789,458 普通股預留股票和 1,489,337 A類權證儲備與第11章破產案件一般無抵押債權結算有關，因爲未達成所有必要條件使這些股份被視爲攤薄股份。

4.債務
2024年9月30日和2023年12月31日，我們的長期債務包括以下內容：
2024年9月30日2023年12月31日
開多餘額
公正價值(a)
開多餘額
公正價值(a)
信貸設施$— $— $— $— 
5.502026年到期的高級票據
500 500 500 496 
5.8752029年到期的優先票據
500 502 500 489 
6.752029年到期的優先票據
950 967 950 958 
高級債券上的追加費用71 — 83 — 
債務發行費用(4)— (5)— 
全部長期債務，淨額$2,017 $1,969 $2,028 $1,943 
____________________________________________
(a)我們信貸設施下借款的賬面價值接近公允價值，因爲利率是基於市場利率的，因此，它們是一種一級公允價值衡量。對於所有其他債務，使用基於主要金融機構報價的市場方法來衡量公允價值，這些報價是二級輸入。

信貸額度。2022年12月，我們與貸款人和髮卡銀行（「貸款人」）以及北美摩根大通銀行簽訂了基於優先擔保儲備的信貸協議，該協議根據2024年4月29日的第1號修正案和借款基礎協議（「初始信貸協議修正案」）進行了修訂，並於2024年10月28日由投資級信貸協議修正案（定義見下文）自動修訂。作爲行政代理人和抵押代理人（以此身份稱爲 「行政代理人」）（此類信貸協議）經《初始信貸協議修正案》、「IG之前的信貸協議」 以及《投資級信貸協議修正案》進一步修訂的 「信貸協議」）規定了循環信貸額度（例如根據初始信貸協議修正案修訂的 「預IG信貸額度」，以及根據投資級別信貸協議修正案進一步修訂的 「信貸額度」），將於2027年12月到期。除其他外，《初始信貸協議修正案》將Pre-IG信貸額度下的承諾總額從美元提高了2.0十億到美元2.5十億美元，並將可用於簽發信用證的次級限額從美元提高了200百萬到美元500百萬。信貸額度繼續提供美元50百萬個子限額可用於擺動貸款。截至2024年9月30日，IG前信貸額度下的借款基礎爲美元3.5十億。截至 2024 年 9 月 30 日，我們有大約 $2.5在IG之前的信貸額度下，有數十億美元可用於借款。

負責之前IG信貸額度的義務由Expand Energy的某些子公司（即「擔保方」）擔保，IG信貸額度由公司和擔保方擁有的絕大部分資產（受習慣例外條款約束）擔保，包括不少於公司債權人基礎報告評估的總PV-9的抵押（其中PV-9是按每年％折現的淨現值，估計未來淨收入）。由於投資級信貸協議修訂的生效，信貸額度不再受到擔保或擔保，也不再受到借款基礎約束。 85借款基礎財產最近的儲量報告評估中，借款基礎財產總PV-9的不少於％按年折現的預計未來淨收入的淨現值（其中PV-9是淨現值，按每年％折現的估計未來淨收入）。 9自投資級信貸協議修正案生效以來，信貸額度不再受擔保或擔保，也不再受借款基礎約束。

Pre-IG信貸協議包含苛刻的契約限制條款，針對基於儲量的信貸設施的慣例性例外進行限制，限制了Expand能源及其子公司在諸如：(i)增加額外負債，(ii)進行投資，(iii)參與併購；(iv)進行或宣佈分紅派息；(v)回購或贖回特定負債；(vi)進行特定套期保值；(vii)負債；(viii)賣出資產；以及(ix)與關聯方進行特定交易的能力。自投資級信用協議生效以來
14
目錄
擴大能源公司和子公司
附註-續
(未經審計)
2024年10月28日的修正案中，信貸協議包含限制性契約，這些契約限制了Expand Energy及其子公司的能力，除其他外：（i）承擔優先債務，（ii）進行合併；（iii）發放或申報股息；（iv）產生留置權；（v）出售其全部或幾乎所有資產；以及（vi）與某些交易進行某些交易附屬公司。IG之前的信貸協議要求Expand Energy保持對以下財務比率的合規性：（A）流動比率，即Expand Energy及其限制性子公司的合併流動資產（包括前IG信貸額度下的未用承付款，但不包括某些非現金資產）與其合併流動負債（不包括長期債務的流動部分和某些非現金負債）的比率，不低於 1.00 至1.00；（B）淨槓桿比率，即前四個財季的總負債（減去指定門檻內的非限制性現金）與合併息稅折舊攤銷前利潤（定義見IG信貸協議）的比率，不大於 3.50 至 1.00 和 (C) 淨現值的 PV-9 覆蓋率，折現率爲 9每年佔Expanding Energy及其限制性子公司總負債不少於探明儲量的預期未來淨收入的百分比 1.50 到 1.00。《投資級信貸協議修正案》除其他外，（i）取消了先前在IG信貸協議中包含的流動比率、淨槓桿率和PV-9覆蓋率，（ii）規定我們遵守負債與資本化比率，即公司總負債與總負債加上股東權益總和的比率（「債務資本比率」），不得超過 65%.

根據我們的選擇，信貸協議下的借款可以是替代基準利率貸款或定期SOFR貸款。替代基準利率貸款的利息應按季度支付，在定期SOFR貸款的適用利息期結束時支付ns。定期SOFR貸款的利息按定期SOFR加上適用的利率計算 125 到 187.5 每年的點子，取決於公司的無抵押債務評級（根據之前的IG信貸協議，該評級的利率範圍爲 175 到 275 每年點子，視所用承諾的百分比而定），外加額外的 10 每年點子的信用利差調整。替代基準利率貸款的年利率等於以下中最大值：（i）最優惠利率；（ii）聯邦基金有效利率+ 50 點子；以及（iii）一個月利息期的調整後定期SOFR利率+ 100 點子，加上適用的利潤，範圍從 25 到 87.5 每年點子，取決於公司的無抵押債務評級（先前IG信貸協議下的適用利潤率範圍爲 75 到 175 每年點子，視所用承諾的百分比而定）。Expand Energy還爲信貸額度下未使用的承諾金額支付承諾費，範圍包括 15 到 27.5 每年點子，取決於公司的無抵押債務評級（先前IG信貸協議下的承諾費率介於 37.5 到 50 每年點子，視所用承諾的百分比而定）。

信貸額度受到這類自然常規違約事件、救濟措施和治癒權利的約束。公司截至2024年9月30日， no 額外的擔保債務。
後續事項-南西公司的Senior Notes承擔和南西信貸授信設施滅絕。
2024年10月1日，完成了西南合併，我們承擔了約$的西南高級票據。3.72024年10月1日，西南現有的信貸額度已終止，所有貸款金額和其他應付款項已全額償還，所有承諾已清償，約$。585萬美元，其中包括所有未償還的借款和交易費用。
後續事項 - 投資級評級。
2024年10月1日，我們收到了標準普爾全球評級（「S&P」）的投資級評級。S&P爲我們的無擔保債務分配了『BBb-』的發行人級評級，並將我們的發行人信用評級提升至『BBb-』，展望穩定。此外，2024年10月2日，我們還收到了惠譽評級（「Fitch」）的投資級評級。Fitch確認了我們的循環信貸評級爲『BBb-』，並將我們的優先票據評級提升至『BBb-』，展望穩定。由於這些投資級評級以及滿足特定其他條件，（i）《投資級信用協議》已自動整體修正，如《投資級信用協議》附件所述（此類自動修正稱爲「投資級信用協議修正」，而經過此類修正的《投資級信用協議》稱爲「信用協議」），（ii）公司及其子公司在與《投資級信用協議》有關的任何擔保及擔保在先的全部留置權已被解除，以及（iii）爲公司的優先票據提供的所有以前的擔保已被解除。此類投資級信用協議修正，除其他事項外，取消了《投資級信用協議》中規定的借款基礎的適用，並修改了上述定價和契約。

15
目錄
擴大能源公司和子公司
附註-續
(未經審計)
5.事項和承諾
備用金
業務操作以及訴訟和監管程序
我們涉及並預計將繼續涉及各種訴訟和糾紛，這些糾紛與我們的業務運營相關，包括商業糾紛、人身傷害索賠、版稅索賠、財產損失索賠和合同訴訟。
我們在訴訟和監管程序方面的累計賠償責任是根據每個案例確定的，並代表在考慮其他因素後的潛在損失估計，其中包括每個案例或程序的進展，我們的經驗以及其他類似案例或程序的經驗，以及法律顧問的意見和觀點。在進行這些估計時需要做出重大判斷，我們最終的責任可能會有實質性的不同。
切薩皮克公司多數在第11章破產案件中解決了其申請前訴訟事務，或將在破產法院進行清算程序中解決，包括追索申請前債務或對切薩皮克破產財產實施控制的訴訟。任何與此類訴訟相關的已認可債權將按照計劃進行處理。第11章破產案中的計劃於2021年2月9日生效，規定了對切薩皮克破產財產提出的債權進行處理，包括在第11章破產案中未解決或未處理的申請前債務。其中許多程序尚處於初期階段，其中許多要求賠償金和處罰金，數額不確定。
環保母基控件
天然氣和石油業務的性質對我們及我們的子公司存在一定的環保母基風險。我們已實施各種政策、項目、程序、培訓和審計以減少和緩解這些環保母基風險。我們進行定期審核，全公司範圍內評估我們的環保母基風險概況的變化。爲可能發生經濟損失且能夠合理估計的環保母基負債設立環保母基儲備。在收購中，我們通過評估過程來管理我們對環保母基負債的風險承擔，該評估旨在識別已有的污染或合規問題，並解決潛在的責任。根據確定的環保母基問題的程度，我們可以採取包括在該交易中排除物業、要求賣方對我們滿意的物業進行整治或同意承擔物業整治責任等措施。

該公司的任何回購活動，無論是與債券定價同時進行，還是根據其股份回購計劃的要求或其他情形，都可能增加或減少ADSs和普通股市場價格和票據價格的下跌幅度。
關於西南合併，據稱公司或西南公司的股東已對公司和/或公司董事會成員提起了兩起訴訟： 傑拉德·約瑟夫·洛沃伊訴切薩皮克能源公司等人，案件編號1:24-cv-01896 (美國紐約南區地方法院，2024年3月13日); 傑弗裏·施安茨訴加斯等人，案件編號155009/2024 (紐約州最高法院，2024年5月30日)。其中一起或兩起訴訟中包含的指控是被告違反了《交易所法》第14(a)和第20(a)條規定，並在代表佛羅里達州普通法下誤導性陳述或遺漏重要事實方面存在疏忽，因爲與西南合併有關的註冊聲明據稱遺漏或失實陳述重要信息。2024年6月10日，紐約州最高法院駁回了訴訟。2024年6月24日，紐約南區聯邦地方法院駁回了訴訟。
根據管理層目前的評估，我們認爲與我們業務運營相關的任何未決或威脅訴訟或糾紛不太可能對我們未來的合併財務狀況、經營業績或現金流產生重大不利影響。然而，此類事項的最終解決可能超過已計提的金額，實際結果可能與管理層的估計有重大差異。
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目錄
擴大能源公司和子公司
附註-續
(未經審計)
承諾
收集、加工和運輸協議
我們與中游服務公司和管道運營商有合同承諾，用於未來天然氣、石油和NGL 的集氣、加工和運輸，以將部分生產送往市場。作業權擁有人和採礦權擁有人，在適當情況下，將負責相應的費用份額。與集氣、加工和運輸協議相關的承諾未在隨附的簡明合併資產負債表中記錄爲義務。
我們的聚集、加工和運輸協議中未打折的承諾總額，不包括來自工作權益和王權益持有人的任何補償、第三方產量的貸方或成本服務協議下的未來成本，如下所示：
2024年9月30日
2024年餘下的時間$71 
2025278 
2026245 
2027214 
2028198 
2029-2036945 
總計$1,951 
此外，我們與特定天然氣彙集和相關服務的長期協議上有一定的範圍承諾，以交換每年重新確定的基於成本服務費用，或者基於按交付量與計劃量相對的分層費用。未來的彙集費用可能會根據適用協議而變化。

其他承諾
作爲我們正常業務的一部分，我們與各種協議進行交易，爲我們全資擔保子公司提供或安排財務或履約擔保。這些協議可能包括未來的付款義務或關於運營績效的承諾，有效地保證我們子公司未來的表現。
在收購和出售方面，我們的購買和銷售協議通常爲交易對手提供賠償，以補償因履約方和/或其他指定事項的違約而產生的責任。這些賠償通常有明確的條款，旨在保護各方免受在進入或完成特定交易時難以預測或無法量化的風險。對於天然氣和石油資產的脫售，我們的購買和銷售協議可能要求將我們收到的部分收入退還，因爲存在未糾正的所有權或環境缺陷。
在執行我們的戰略重點過程中，我們已經承擔了一定的現金支出，包括終止合同費用、融資清償成本以及未使用的天然氣運輸和採集能力費用。

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目錄
擴大能源公司和子公司
附註-續
(未經審計)
6.其他流動負債
2024年9月30日和2023年12月31日的其他流動負債如下所示:
2024年9月30日2023年12月31日
應支付給其他方的收入和版稅$258 $360 
應計的鑽井和生產成本132 211 
應計的套期成本— 2 
應計的薪酬和福利55 64 
應付稅款60 84 
經營租賃30 84 
收到聯合利益預付款5 8 
其他49 34 
其他流動負債總額$589 $847 

7.營業收入
以下表格顯示按經營區域和產品類型細分的營業收入:
2024年9月30日止三個月
天然氣石油天然氣液總計
Marcellus$213 $— $— $213 
Haynesville194 — — 194 
天然氣、石油和液化天然氣營業收入$407 $— $— $407 
營業收入$193 $— $— $193 

2023年9月30日止三個月
天然氣石油天然氣液總計
Marcellus$259 $— $— $259 
Haynesville310 — — 310 
Eagle Ford18 71 24 113 
天然氣、石油和NGL營業收入$587 $71 $24 $682 
營銷收入$219 $448 $57 $724 
2024年9月30日止九個月
天然氣石油天然氣液總計
Marcellus$722 $— $— $722 
Haynesville652 — — 652 
天然氣、石油和液化天然氣營業收入$1,374 $— $— $1,374 
營業收入$526 $82 $33 $641 
18
目錄
擴大能源公司和子公司
附註-續
(未經審計)
截至2023年9月30日的九個月
天然氣石油NGL總計
馬塞勒斯$1,126 $— $— $1,126 
海恩斯維爾968 — — 968 
鷹福特59 548 83 690 
天然氣、石油和液化天然氣收入$2,153 $548 $83 $2,784 
營銷收入$735 $1,117 $135 $1,987 
Accounts Receivable
Our accounts receivable are primarily from purchasers of natural gas, oil and NGL and from exploration and production companies that own interests in properties we operate. This industry concentration could affect our overall exposure to credit risk, either positively or negatively, because our purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We monitor the creditworthiness of all our counterparties, and we generally require letters of credit or parent guarantees for receivables from parties deemed to have sub-standard credit, unless the credit risk can otherwise be mitigated. We utilize an allowance method in accounting for bad debt based on historical trends in addition to specifically identifying receivables that we believe may be uncollectible.
Accounts receivable as of September 30, 2024 and December 31, 2023 are detailed below:
September 30, 2024December 31, 2023
Natural gas, oil and NGL sales$155 $406 
Joint interest106 180 
Other6 8 
Allowance for doubtful accounts(6)(1)
Total accounts receivable, net$261 $593 

8.Income Taxes

The table below presents a comparison of the Current Period and Prior Period’s income tax expense (benefit) and actual year-to-date effective tax rates.
Nine Months Ended September 30,
20242023
Income (loss) before income taxes$(420)$2,382 
Current tax expense— — %2138.9 %
Deferred tax expense (benefit)(105)25.0 %31913.4 %
Income tax expense (benefit)$(105)25.0 %$532 22.3 %

An estimated annual effective tax rate (“EAETR”) is used in recording our interim year-to-date income tax provision. The EAETR is determined based on analysis of year-to-date and projected financial results of our operations. Our EAETR during the Current Period was 24.3%, compared to 22.4% in the Prior Period. The actual year-to-date effective tax rate and EAETR can differ as a result of certain discrete items, which are recorded in the period. Common examples of such items include, but are not limited to, certain equity-based compensation, true-ups resulting from differences between tax returns filed and estimated accruals, and tax effects of enacted laws.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
There was no current tax expense recorded in the Current Period. The Prior Period recorded $213 million of current tax expense, primarily as a result of tax gains on the Eagle Ford divestitures which closed in the Prior Period.

In the Current Period, we made $12 million in income tax payments, which were offset by $14 million in income tax refunds.

As of December 31, 2023, we were in a net deferred tax asset position and anticipate being in a net deferred tax asset position as of December 31, 2024. Based on all available positive and negative evidence, including projections of future taxable income, we believe it is more likely than not that some of our deferred tax assets will not be realized. As such, a partial valuation allowance was recorded against our net deferred tax asset position for federal and state purposes as of September 30, 2024 and December 31, 2023.
On August 16, 2022, the President of the United States signed into law the Inflation Reduction Act of 2022, which includes provisions for a 15% corporate alternative minimum tax (“CAMT”) on book income for companies whose average book income exceeds $1 billion for any three consecutive years preceding the tax year. Based upon our book income in the past three years, we believe we are subject to the CAMT beginning in the current year. The CAMT will result in incremental taxes to the extent that 15% of our adjusted book earnings exceeds our regular federal tax liability. During the Current Quarter, proposed regulations for the CAMT were released. Although we are not early adopting these, we are still analyzing their potential impact should they become finalized. We do not currently project any material impact due to the CAMT in 2024.


9.Equity
Dividends
The table below presents the dividends paid during the Current Period and Prior Period:
BaseVariableRate Per ShareTotal
2024:
First Quarter$0.575 $— $0.575 $77 
Second Quarter$0.575 $0.14 $0.715 $95 
Third Quarter$0.575 $— $0.575 $78 
2023:
First Quarter$0.55 $0.74 $1.29 $175 
Second Quarter$0.55 $0.63 $1.18 $160 
Third Quarter$0.575 $— $0.575 $77 
On October 29, 2024, we declared a base quarterly dividend payable of $0.575 per share, which will be paid on December 4, 2024 to stockholders of record at the close of business on November 14, 2024.
Share Repurchases
We did not repurchase any shares during the Current Period, and during the Prior Period, we repurchased 3.7 million shares of common stock for an aggregate price of $305 million. The repurchased shares of common stock were retired and recorded as a reduction to common stock and retained earnings and were made pursuant to the share repurchase program that expired on December 31, 2023. All share repurchases made after January 1, 2023 are subject to a 1% excise tax on share repurchases, as enacted under the Inflation Reduction Act of 2022. We are able to net this 1% excise tax on share repurchases against the issuance of shares of our common stock. The impact of this 1% excise tax was immaterial during the Prior Period.


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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Warrants
Class A WarrantsClass B Warrants
Class C Warrants(a)
Outstanding as of December 31, 20234,247,615 4,403,064 4,023,483 
Converted into common stock(b)
— — (168)
Outstanding as of March 31, 20244,247,615 4,403,064 4,023,315 
Converted into common stock(b)
— (13,122)(13,325)
Outstanding as of June 30, 20244,247,615 4,389,942 4,009,990 
Converted into common stock(b)
(2,986,928)(1,264,248)(328,726)
Outstanding as of September 30, 20241,260,687 3,125,694 3,681,264 
_________________________________________
(a)As of September 30, 2024, we had 1,466,502 of reserved Class C Warrants.
(b)During the Current Period, we issued 3,857,412 shares of common stock as a result of Warrant exercises.
Subsequent Event - Shares Issued as a Result of the Southwestern Merger
On October 1, 2024, we issued approximately 95.7 million shares of our common stock to Southwestern’s shareholders in connection with the closing of the Southwestern Merger.
Subsequent Event - Share Repurchase Program
On October 22, 2024, our Board of Directors authorized repurchases of up to $1.0 billion, in aggregate, of the Company’s common stock and/or warrants under a share repurchase program.

10.Share-Based Compensation
As of the Effective Date, the Board of Directors adopted the LTIP with a share reserve equal to 6,800,000 shares of common stock. The LTIP provides for the grant of RSUs, restricted stock awards, stock options, stock appreciation rights, performance awards and other stock awards to the Company’s employees and non-employee directors.
Restricted Stock Units. During the Current Period, we granted RSUs to employees and non-employee directors under the LTIP, which will vest over a three-year period and one-year period, respectively. The fair value of RSUs is based on the closing sales price of our common stock on the date of grant, and compensation expense is recognized ratably over the requisite service period. A summary of the changes in unvested RSUs is presented below:
Unvested Restricted Stock UnitsWeighted Average Grant Date Fair Value Per Share
(in thousands)
Unvested as of December 31, 2023940 $73.08 
Granted430 $83.61 
Vested(a)
(509)$67.49 
Forfeited(18)$77.52 
Unvested as of September 30, 2024843 $81.74 
_______________
(a) Approximately 105 thousand RSUs were accelerated related to one-time termination benefits for certain employees.
The aggregate intrinsic value of RSUs that vested during the Current Period was approximately $43 million based on the stock price at the time of vesting.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
As of September 30, 2024, there was approximately $48 million of total unrecognized compensation expense related to unvested RSUs. The expense is expected to be recognized over a weighted average period of approximately 2.13 years.
Performance Share Units. During the Current Period, we granted PSUs to senior management under the LTIP, which will generally vest over a three-year period and will be settled in shares. The performance criteria include total shareholder return (“TSR”) and relative TSR (“rTSR”) and could result in a total payout between 0% - 200% of the target units. The fair value of the PSUs was measured on the grant date using a Monte Carlo simulation, and compensation expense is recognized ratably over the requisite service period because these awards depend on a combination of service and market criteria.

The following table presents the assumptions used in the valuation of the PSUs granted in 2024.
AssumptionTSR, rTSR
Risk-free interest rate4.55 %
Volatility39.36 %


A summary of the changes in unvested PSUs is presented below:
Unvested Performance Share UnitsWeighted Average Grant Date Fair Value Per Share
(in thousands)
Unvested as of December 31, 2023394 $85.78 
Granted134 $95.33 
Vested(130)$69.26 
Forfeited— $— 
Unvested as of September 30, 2024398 $94.37 
The aggregate intrinsic value of PSUs that vested during the Current Period was approximately $17 million based on the stock price at the time of vesting.
As of September 30, 2024, there was approximately $17 million of total unrecognized compensation expense related to unvested PSUs. The expense is expected to be recognized over a weighted average period of approximately 1.97 years.

RSU and PSU Compensation.
We recognized the following compensation costs, net of actual forfeitures, related to RSUs and PSUs for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
General and administrative expenses$8 $7 $25 $21 
Natural gas and oil properties2 2 6 5 
Production expense1 1 3 3 
Separation and other termination costs— — 9 — 
Total RSU and PSU compensation$11 $10 $43 $29 
Related income tax benefit$1 $2 10 6 
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)


11.Derivative and Hedging Activities
We use derivative instruments to reduce our exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. These commodity contract derivative financial instruments include financial price swaps, collars and basis protection swaps. All of our commodity contract derivative instruments are net settled based on the difference between the fixed-price payment and the floating-price payment, resulting in a net amount due to or from the counterparty. We do not intend to hold or issue derivative financial instruments for speculative trading purposes and have elected not to designate any of our derivative instruments for hedge accounting treatment.
Contingent Consideration Arrangement
In November 2023, we sold the final portion of our Eagle Ford assets to SilverBow. As part of the divestiture agreement, SilverBow agreed to pay the Company an additional contingent payment of $25 million should WTI NYMEX prices average between $75 and $80 per barrel or $50 million should WTI NYMEX prices average above $80 per barrel during the year following the close of the transaction. On July 30, 2024, Crescent acquired SilverBow. We anticipate receiving the additional contingent payment from Crescent, if any, during the fourth quarter of 2024. All changes in fair value are recognized as a gain or loss in earnings in the period they occur within natural gas and oil derivatives in our condensed consolidated statements of operations. During the Current Period, we recorded $6 million of unrealized gains related to the contingent consideration arrangement.


The estimated fair values of our natural gas and oil derivative instrument assets (liabilities) as of September 30, 2024 and December 31, 2023 are provided below: 
September 30, 2024December 31, 2023
Notional VolumeFair ValueNotional VolumeFair Value
Natural gas (Bcf):
Fixed-price swaps221 $27 343 $188 
Collars537 182 558 497 
Basis protection swaps376 (18)578 2 
Total natural gas1,134 191 1,479 687 
Contingent Consideration:
Eagle Ford divestiture18 12 
Total estimated fair value$209 $699 
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 on a gross basis and after same-counterparty netting:
Gross Fair Value(a)
Amounts Netted in the Condensed Consolidated Balance SheetsNet Fair Value Presented in the Condensed Consolidated Balance Sheets
As of September 30, 2024
Commodity Contracts:
Short-term derivative asset$238 $(57)$181 
Long-term derivative asset33 (18)15 
Short-term derivative liability(62)57 (5)
Long-term derivative liability(18)18 — 
Contingent Consideration:
Short-term derivative asset18 — 18 
Total derivatives$209 $— $209 
As of December 31, 2023
Commodity Contracts:
Short-term derivative asset$661 $(36)$625 
Long-term derivative asset101 (27)74 
Short-term derivative liability(39)36 (3)
Long-term derivative liability(36)27 (9)
Contingent Consideration:
Short-term derivative asset12 — 12 
Total derivatives$699 $— $699 
___________________________________________
(a)These financial assets (liabilities) are measured at fair value on a recurring basis utilizing significant other observable inputs; see further discussion on fair value measurements below.
Fair Value
The fair value of our commodity derivatives is based on third-party pricing models, which utilize inputs that are either readily available in the public market, such as natural gas, oil and NGL forward curves and discount rates, or can be corroborated from active markets or broker quotes, and, as such, are classified as Level 2. These values are compared to the values given by our counterparties for reasonableness. Derivatives are also subject to the risk that either party to a contract will be unable to meet its obligations. We factor non-performance risk into the valuation of our derivatives using current published credit default swap rates. To date, this has not had a material impact on the values of our derivatives. The valuation of the contingent consideration is based on an option pricing model using significant Level 2 inputs that include quoted future commodity prices based on active markets.
Credit Risk Considerations
Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we only enter into commodity contracts derivatives with counterparties that are highly rated or deemed by us to have acceptable credit strength and deemed by management to be competent and competitive market-makers, and we attempt to limit our exposure to non-performance by any single counterparty. As of September 30, 2024, our commodity contract derivative instruments were spread among 17 counterparties.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Hedging Arrangements
Certain of our hedging arrangements are with counterparties that were also Lenders (or affiliates of Lenders) under our Credit Facility. The contracts entered into with these counterparties were previously secured by the same collateral that secured the Pre-IG Credit Facility, but such collateral was released on October 28, 2024 in connection with the Investment Grade Credit Agreement Amendment. We do not expect to post cash or letters of credit to secure our obligations under such contracts while we have the investment grade ratings described in Note 4. The obligations under these contracts must be secured by cash or letters of credit to the extent that any mark-to-market amounts exceed defined thresholds. As of September 30, 2024, we did not have any cash or letters of credit posted as collateral for our commodity derivatives.

12.Investments
Momentum Sustainable Ventures LLC. During the fourth quarter of 2022, the Company entered into an agreement with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture and sequestration project (“CCUS”), which will gather natural gas produced in the Haynesville Shale for re-delivery to Gulf Coast markets, including LNG export. The pipeline is expected to have an initial capacity of 1.7 Bcf/d expandable to 2.2 Bcf/d. The carbon capture portion of the project anticipates capturing and permanently sequestering up to 2.0 million tons per annum of CO2. The natural gas gathering pipeline is projected for a potential in-service date in the fourth quarter of 2025, and the carbon sequestration portion of the project is subject to regulatory approvals. We have a 35% interest in the joint venture entity. We have accounted for this investment as an equity method investment, and its carrying value, which is reflected within other long-term assets on the condensed consolidated balance sheets, was $302 million and $238 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, the carrying value of our investment in Momentum Sustainable Ventures LLC included approximately $12 million of capitalized interest related to the project.
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Table of Contents
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with management’s perspective on our financial condition, liquidity, results of operations and certain other factors that may affect our future results. The following discussion should be read together with the condensed consolidated financial statements included in Item 1 of Part I of this report and the consolidated financial statements included in Item 8 of our 2023 Form 10-K.
On October 1, 2024, we completed the Southwestern Merger, creating a premier energy company that we believe is underpinned by a leading natural gas portfolio adjacent to the highest demand markets, premium inventory, a resilient financial foundation and an investment grade balance sheet. We believe that this new company is uniquely positioned to deliver affordable, lower carbon energy to meet growing domestic and international demand while creating sustainable value for stakeholders. In conjunction with the closing of the Southwestern Merger, Chesapeake Energy Corporation changed its name to Expand Energy Corporation.
Expand Energy is the largest independent natural gas producer in the U.S., based on net daily production, and is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all. Our operations are located in Louisiana in the Haynesville/Bossier Shales (“Haynesville”), in Pennsylvania in the Marcellus Shale (“Northeast Appalachia”) and in West Virginia and Ohio in the Marcellus and Utica Shales (“Southwest Appalachia”).
Our strategy is to create shareholder value through the responsible development of our significant resource plays while continuing to be a leading provider of natural gas to markets in need. We continue to focus on improving margins through operating efficiencies and financial discipline and improving our ESG performance. To accomplish these goals, we intend to allocate our human resources and capital expenditures to projects we believe offer the highest cash return on capital invested, to deploy leading drilling and completion technology throughout our portfolio, and to take advantage of acquisition and divestiture opportunities to strengthen our portfolio. We also intend to continue to dedicate capital to projects that reduce the environmental impact of our production activities.
We are focused on expanding America’s energy reach to fuel a more affordable, reliable, lower-carbon future. In our efforts to achieve this ambition, we strive to be a safe operator and dedicated community partner. We have adopted five fundamentals that drive our decision-making, and which we believe will guide our success and increase our ability to sustainably deliver stakeholder value:
•Minimize emissions intensity in support of delivering lower-carbon energy to sustain economic progress.
•Take steps to implement environmentally sound operations that mitigate impact and protect ecosystems.
•Promote a safe and inclusive workplace, promoting collaboration and innovation.
•Take meaningful action to support community well-being.
•Provide transparent and measurable information encouraging accountability.
Additionally, we aim to be conscientious in our efforts and how they will shape our approach to sustainability for the future and have established the following goals:
•Net zero (Scope 1 and 2) greenhouse gas emissions by 2035.
•Maintain 100% responsibly sourced gas (RSG) certification across our portfolio.
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Recent Developments
Southwestern Merger
On January 10, 2024, Chesapeake and Southwestern entered into an all-stock agreement and plan of merger (the “Merger Agreement”). Southwestern was an independent energy company engaged in development, exploration and production activities, including related marketing activities, within its operating areas in the Appalachia and Haynesville shale plays. Our Board of Directors and the Board of Directors of Southwestern both approved the Merger Agreement. At separate special meetings each held on June 18, 2024, Chesapeake’s stockholders approved the issuance of Chesapeake’s common stock to the stockholders of Southwestern in connection with the Southwestern Merger, and Southwestern’s stockholders approved the Merger Agreement.
On October 1, 2024, the Southwestern Merger was completed, and we issued approximately 95.7 million shares of our common stock to Southwestern’s shareholders in connection with the Merger Agreement. Under the terms of the Merger Agreement, subject to certain exceptions, each share of Southwestern common stock was converted into the right to receive 0.0867 of a share of the Company’s common stock. Based on the closing price our common stock, the total value of such shares of our common stock issued to Southwestern’s shareholders was approximately $7.9 billion.
Investment Grade Rating
On October 1, 2024, we received an investment grade rating from S&P Global Ratings (“S&P”). S&P assigned an issuer-level rating of ‘BBB-’ on our unsecured debt and raised our issuer credit rating to ‘BBB-’, with a stable outlook. Additionally, on October 2, 2024, we received an investment grade rating from Fitch Ratings (“Fitch”). Fitch affirmed our revolver credit rating at ‘BBB-’ and upgraded the rating on our senior notes to ‘BBB-’, with a stable outlook. As a result of these investment grade ratings, certain restrictive covenants on our credit facility fall away and become more permissive. The leverage ratio and current ratio financial covenants and PV-9 Coverage Ratio are no longer effective, and the Company will be required to maintain compliance with a total indebtedness to capitalization ratio, which is the ratio of the Company’s total indebtedness to the sum of total indebtedness plus stockholders’ equity, not to exceed 65%.
Divestitures
On January 17, 2023, we entered into an agreement to sell a portion of our Eagle Ford assets to WildFire Energy I LLC for approximately $1.425 billion, subject to post-closing adjustments. This transaction closed on March 20, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $337 million.
On February 17, 2023, we entered into an agreement to sell a portion of our remaining Eagle Ford assets to INEOS Energy for approximately $1.4 billion, subject to post-closing adjustments. This transaction closed on April 28, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $470 million.
On August 11, 2023, we entered into an agreement to sell the final portion of our remaining Eagle Ford assets to SilverBow Resources, Inc. (“SilverBow”) for approximately $700 million, subject to post-closing adjustments. Subject to the satisfaction of certain commodity price triggers, we may receive up to an additional $50 million cash consideration shortly following the first anniversary of the transaction close date. This transaction closed on November 30, 2023 (with an effective date of February 1, 2023) and resulted in the recognition of a gain of approximately $140 million.
LNG Agreement
On February 13, 2024, we announced our entrance into an LNG export deal that includes executed Sales and Purchase Agreements (“SPA”) for long-term liquefaction offtake. Under the SPAs, we will purchase approximately 0.5 million tonnes of LNG per annum from Delfin LNG LLC at a Henry Hub price with a contract targeted start date in 2028, then deliver to Gunvor Group Ltd., on a free on board basis with the sales price linked to the Japan Korea Market for a period of 20 years.
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Investments - Momentum Sustainable Ventures LLC
During the fourth quarter of 2022, we entered into an agreement with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture and sequestration project, which will gather natural gas produced in the Haynesville Shale for re-delivery to Gulf Coast markets, including LNG export. The pipeline is expected to have an initial capacity of 1.7 Bcf/d expandable to 2.2 Bcf/d. The carbon capture portion of the project anticipates capturing and permanently sequestering up to 2.0 million tons per annum of CO2. The natural gas gathering pipeline is projected for a potential in-service date in the fourth quarter of 2025, and the carbon sequestration portion of the project is subject to regulatory approvals. Through the end of the Current Period, we have made total capital contributions of $296 million to the project.

Economic and Market Conditions
Instability and conflict in Europe and the Middle East has caused, and could intensify, volatility in natural gas, oil and NGL prices, and may further impact on global growth prospects, which could in turn affect supply and demand for natural gas and oil. In addition, a mild winter in 2023 and historically higher inventory levels have resulted in an observed decline in natural gas pricing in 2023 and 2024. Our future estimated cash flow is partially protected from commodity price volatility due to our current hedge positions that cover approximately 45% of our projected natural gas volumes through the end of 2025. Through the remainder of 2024 and for the foreseeable future, we believe our cost structure and liquidity position will enable us to successfully navigate continued price volatility.

During early 2023, our industry experienced inflationary pressures, including increased demand for oilfield service equipment, rising fuel costs, and labor shortages, which resulted in observed increases to our operating and capital costs that were not fixed. Reductions in rig activity in the lower 48 states of the United States allowed service costs to stabilize and then decline in the second half of 2023, which has continued into 2024. We continue to monitor these situations and assess their impact on our business, including business partners and customers. As a result of the Southwestern Merger, we assumed Southwestern’s oilfield service businesses that will allow for some vertical integration of our exploration and production operations, which may help lower costs and secure inputs for our operations. For additional discussion regarding risks associated with price volatility and economic deterioration, see Part I, Item 1A “Risk Factors” in our 2023 Form 10-K.

Liquidity and Capital Resources
Liquidity Overview
Our primary sources of capital resources and liquidity are internally generated cash flows from operations and borrowings under our Credit Facility, and our primary uses of cash are for the development of our natural gas and oil properties, acquisitions of additional natural gas and oil properties and return of value to stockholders through dividends and equity repurchases. We believe our cash flow from operations, including from the acquired Southwestern business, cash on hand and unused borrowing capacity under the Credit Facility, as discussed below, will provide sufficient liquidity during the next 12 months and the foreseeable future. As of September 30, 2024, we had $3.5 billion of liquidity available, including $1.0 billion of cash on hand and $2.5 billion of aggregate unused borrowing capacity available under the Pre-IG Credit Facility. As of September 30, 2024, we had no outstanding borrowings under our Pre-IG Credit Facility. In April 2024, the aggregate commitments under the Pre-IG Credit Facility were increased by $500 million to $2.5 billion, bringing our aggregate unused borrowing capacity under the Pre-IG Credit Facility to $2.5 billion.
Further, we may from time to time seek to retire, refinance or amend some or all of our outstanding debt or debt agreements through exchanges, open market purchases, privately negotiated transactions, tender offers or otherwise. Such transactions, if any, and the terms thereof, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in such financing transactions may be material. See Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion of our debt obligations, including the carrying and fair value of our senior notes.
Dividends
On October 29, 2024, we declared a base quarterly dividend payable of $0.575 per share, which will be paid on December 4, 2024 to stockholders of record at the close of business on November 14, 2024.
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The declaration and payment of any future dividend, whether fixed or variable, will remain at the full discretion of the Board and will depend on the Company’s financial results, cash requirements, future prospects and other relevant factors. The Company’s ability to pay dividends to its stockholders is restricted by (i) Oklahoma corporate law, (ii) its Certificate of Incorporation, (iii) the terms and provisions of the Credit Agreement governing the Credit Facility and (iv) the terms and provisions of the indentures governing its 5.500% Senior Notes due 2026, 5.875% Senior Notes due 2029, and 6.750% Senior Notes due 2029, as well as the senior notes assumed from Southwestern, including the 4.950% Senior Notes due 2025, 8.375% Senior Notes due 2028, 5.375% Senior Notes due 2029, 5.375% Senior Notes due 2030 and 4.750% Senior Notes due 2032.

Derivative and Hedging Activities
Our results of operations and cash flows are impacted by changes in market prices for the commodities we produce. We enter into various derivative instruments to mitigate a portion of our exposure to commodity price declines, but these transactions may also limit our cash flows in periods of rising commodity prices. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to better predict the total revenue we expect to receive. See Item 3. Quantitative and Qualitative Disclosures About Market Risk included in Part I of this report for further discussion on the impact of commodity price risk on our financial position.

Contractual Obligations and Off-Balance Sheet Arrangements
As of September 30, 2024, our material contractual obligations include repayment of senior notes, derivative obligations, asset retirement obligations, lease obligations, undrawn letters of credit and various other commitments we enter into in the ordinary course of business that could result in future cash obligations. In addition, we have contractual commitments with midstream companies and pipeline carriers for future gathering, processing and transportation of natural gas to move certain of our production to market. The estimated gross undiscounted future commitments under these agreements were approximately $2.0 billion as of September 30, 2024. As discussed above, we believe our existing sources of liquidity will be sufficient to fund our near and long-term contractual obligations. See Notes 4, 5 and 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.
As a result of the Southwestern Merger, we will be assuming material contractual obligations related to demand and similar charges under firm transportation and gathering agreements to guarantee access capacity on natural gas and liquids pipelines and gathering systems.

Credit Facility
On December 9, 2022, we entered into the Credit Agreement, as amended by the Initial Credit Agreement Amendment and the Investment Grade Credit Agreement Amendment, maturing in December 2027. The Pre-IG Credit Facility provided for a borrowing base of $3.5 billion. The Credit Facility continues to provide for aggregate commitments of $2.5 billion, with a $500 million sublimit available for the issuance of letters of credit and a $50 million sublimit available for swingline loans. As of September 30, 2024, we had approximately $2.5 billion available for borrowings under the Pre-IG Credit Facility.

Borrowings under the Credit Agreement may be alternate base rate loans or term SOFR loans, at the Company’s election. On October 1, 2024, we received an investment grade rating from S&P Global Ratings (“S&P”). S&P assigned an issuer-level rating of ‘BBB-’ on our unsecured debt and raised our issuer credit rating to ‘BBB-’, with a stable outlook. Additionally, on October 2, 2024, we received an investment grade rating from Fitch Ratings (“Fitch”). Fitch affirmed our revolver credit rating at ‘BBB-’ and upgraded the rating on our senior notes to ‘BBB-’, with a stable outlook. As a result of these investment grade ratings and the satisfaction of certain other conditions, (i) the Pre-IG Credit Agreement was automatically amended by the Investment Grade Credit Agreement Amendment, (ii) all liens and guarantees previously provided by the Company and its subsidiaries in connection with the Pre-IG Credit Agreement were released and (iii) all guarantees previously provided in connection with the Company’s senior notes were released. Such Investment Grade Credit Agreement Amendment, among other things, removed the application of the borrowing base provided for in the Pre-IG Credit Agreement and modified the pricing and covenants as discussed in Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report.
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See Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.
Assumption of Southwestern’s Senior Notes and Southwestern Credit Facility Extinguishment
On October 1, 2024, the Southwestern Merger was completed, and we assumed approximately $3.7 billion of Southwestern’s senior notes. On October 1, 2024, Southwestern’s existing credit facility was terminated, with all loan amounts and other obligations outstanding thereunder repaid in full and all commitments thereunder extinguished, for approximately $585 million, which included all outstanding borrowings and transaction fees.

Capital Expenditures
For the quarter ending December 31, 2024, we currently expect to complete and turn in line 30 to 35 gross wells utilizing approximately 12 rigs and plan to invest between approximately $620 – $690 million in capital expenditures. We currently plan to fund our 2024 capital program through cash on hand, expected cash flow from our operations and borrowings under our Credit Facility. We may alter or change our plans with respect to our capital program and expected capital expenditures based on developments in our business, our financial position, our industry or any of the markets in which we operate.

Sources and (Uses) of Cash and Cash Equivalents
The following table presents the sources and uses of our cash and cash equivalents for the periods presented:
Nine Months Ended September 30,
20242023
Cash provided by operating activities$1,183 $1,910 
Proceeds from divestitures of property and equipment17 1,967 
Receipts of deferred consideration116 — 
Funds held for transition services— 91 
Proceeds from warrant exercise1 — 
Capital expenditures(1,021)(1,450)
Contributions to investments(71)(149)
Payments on Credit Facility, net— (1,050)
Cash paid to repurchase and retire common stock— (313)
Cash paid for common stock dividends(254)(412)
Debt issuance and other financing costs(4)— 
Net increase (decrease) in cash, cash equivalents and restricted cash$(33)$594 
Cash Flow from Operating Activities
Cash provided by operating activities was $1,183 million and $1,910 million during the Current Period and Prior Period, respectively. The decrease during the Current Period is primarily due to lower prices for the natural gas we sold, as well as decreased sales volumes, including those related to our Eagle Ford divestitures, and planned production curtailments and activity deferrals. Cash flows from operations are largely affected by the same factors that affect our net income (loss), excluding various non-cash items, such as depreciation, depletion and amortization, certain impairments, gains or losses on sales of assets, deferred income taxes and mark-to-market changes in our open derivative instruments. See further discussion below under Results of Operations.
Proceeds from Divestitures of Property and Equipment
During the Prior Period, we sold a portion of our Eagle Ford assets to WildFire Energy I LLC and also sold a portion of our remaining Eagle Ford assets to INEOS Energy (each transaction with an effective date of October 1, 2022). See Note 2 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.
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Receipts of Deferred Consideration
During the Current Period, we received $116 million in deferred consideration associated with our Eagle Ford divestiture transactions. See Note 2 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.
Funds Held for Transition Services
During the Prior Period, we held $91 million of funds relating to transition services associated with our Eagle Ford divestitures.
Capital Expenditures
Our capital expenditures decreased during the Current Period compared to the Prior Period, primarily as a result of decreased drilling and completion activity within our Marcellus and Haynesville operating areas, as well as reduced activity in Eagle Ford due to our Eagle Ford divestitures. See Note 2 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.

Contributions to Investments
During the Current Period and Prior Period, contributions to investments primarily consisted of contributions to our investment with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture project. See Note 12 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.
Payments on Credit Facility, net

During the Prior Period, we made net repayments of $1,050 million on the Pre-IG Credit Facility, utilizing a portion of the divestiture proceeds from the Eagle Ford divestitures and also from internally generated cash provided by operating activities.
Cash Paid to Repurchase and Retire Common Stock
We did not repurchase any shares during the Current Period, and during the Prior Period, we repurchased 3.7 million shares of common stock for an aggregate price of $313 million. The repurchased shares of common stock were retired and recorded as a reduction to common stock and retained earnings.
Cash Paid for Common Stock Dividends
As part of our dividend program, we paid common stock dividends of $254 million and $412 million during the Current Period and Prior Period, respectively. See Note 9 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion.


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Results of Operations
The results of operations discussed below for the Current Quarter and Current Period compared to the Prior Quarter and Prior Period, respectively, represent Expand Energy’s results prior to the Southwestern Merger and do not include the results of operations of Southwestern and its subsidiaries for those periods. The results of operations discussed below reference legacy Chesapeake operating areas such as the Marcellus Shale in the northern Appalachian Basin in Pennsylvania (“Marcellus”), the Haynesville/Bossier Shales in northwestern Louisiana (“Haynesville”) and the Eagle Ford Shale in South Texas (“Eagle Ford”). During 2023, we completed our exit from Eagle Ford through three separate divestiture transactions, with aggregate proceeds from these three transactions exceeding $3.5 billion, subject to customary post-closing adjustments. We anticipate, beginning in the fourth quarter of 2024, that our results of operations will reflect increased natural gas, oil and NGL production, operating revenues and related operating expenses due to the Southwestern Merger. Additionally, we anticipate increased interest expense related to the assumption of Southwestern’s senior notes.
Natural Gas, Oil and NGL Production and Average Sales Prices
Three Months Ended September 30, 2024
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,531 1.51 — — — — 1,531 1.51 
Haynesville1,116 1.88 — — — — 1,116 1.88 
Total2,647 1.67 — — — — 2,647 1.67 
Average NYMEX Price2.16 — 
Average Realized Price (including realized derivatives)2.51 — — 2.51 
Three Months Ended September 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,734 1.63 — — — — 1,734 1.63 
Haynesville1,568 2.15 — — — — 1,568 2.15 
Eagle Ford76 2.52 9 82.33 10 25.76 193 6.36 
Total3,378 1.89 9 82.33 10 25.76 3,495 2.12 
Average NYMEX Price2.55 82.26 
Average Realized Price (including realized derivatives)2.58 82.33 25.76 2.79 
Nine Months Ended September 30, 2024
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,601 1.65 — — — — 1,601 1.65 
Haynesville1,261 1.88 — — — — 1,261 1.88 
Total2,862 1.75 — — — — 2,862 1.75 
Average NYMEX Price2.10 — 
Average Realized Price (including realized derivatives)2.64 — — 2.64 
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Nine Months Ended September 30, 2023
Natural GasOilNGLTotal
MMcf per day$/McfMBbl per day$/BblMBbl per day$/BblMMcfe per day$/Mcfe
Marcellus1,845 2.24 — — — — 1,845 2.24 
Haynesville1,569 2.26 — — — — 1,569 2.26 
Eagle Ford96 2.22 26 77.41 12 25.61 323 7.82 
Total3,510 2.25 26 77.41 12 25.61 3,737 2.73 
Average NYMEX Price2.69 77.39 
Average Realized Price (including realized derivatives)2.56 72.10 25.61 2.99 
Natural Gas, Oil and NGL Sales
Three Months Ended September 30, 2024
Natural GasOilNGLTotal
Marcellus$213 $— $— $213 
Haynesville194 — — 194 
Total natural gas, oil and NGL sales$407 $— $— $407 
Three Months Ended September 30, 2023
Natural GasOilNGLTotal
Marcellus$259 $— $— $259 
Haynesville310 — — 310 
Eagle Ford18 71 24 113 
Total natural gas, oil and NGL sales$587 $71 $24 $682 
Nine Months Ended September 30, 2024
Natural GasOilNGLTotal
Marcellus$722 $— $— $722 
Haynesville652 — — 652 
Total natural gas, oil and NGL sales$1,374 $— $— $1,374 
Nine Months Ended September 30, 2023
Natural GasOilNGLTotal
Marcellus$1,126 $— $— $1,126 
Haynesville968 — — 968 
Eagle Ford59 548 83 690 
Total natural gas, oil and NGL sales$2,153 $548 $83 $2,784 
Natural gas, oil and NGL sales during the Current Quarter decreased $275 million compared to the Prior Quarter. Lower average prices, which were consistent with the downward trend in index prices for all products, drove a $56 million decrease during the Current Quarter. The Eagle Ford divestitures resulted in a $113 million decrease. Additionally, planned curtailments and activity deferrals during the Current Quarter led to lower sales volumes in Marcellus and Haynesville, resulting in an aggregate decrease of $106 million.
Natural gas, oil and NGL sales during the Current Period decreased $1,410 million compared to the Prior Period. Lower average prices, which were consistent with the downward trend in index prices for all products, drove a $459 million decrease during the Current Period. The Eagle Ford divestitures resulted in a $690 million decrease. Additionally, planned curtailments and activity deferrals led to lower sales volumes in Marcellus and Haynesville,
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resulting in an aggregate decrease of $261 million.
Production Expenses
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
$/Mcfe$/Mcfe$/Mcfe$/Mcfe
Marcellus$18 0.13 $21 0.13 $58 0.13 $64 0.13 
Haynesville32 0.32 44 0.31 100 0.29 143 0.33 
Eagle Ford— — 8 0.45 — — 86 0.98 
Total production expenses$50 0.21 $73 0.23 $158 0.20 $293 0.29 
Production expenses during the Current Quarter decreased $23 million compared to the Prior Quarter. The decrease was primarily due to a $12 million decrease in Haynesville, primarily related to lower saltwater disposal and treating expenses, as well as an $8 million decrease due to the Eagle Ford divestitures.
Production expenses during the Current Period decreased $135 million compared to the Prior Period. The decrease was primarily due to an $86 million decrease due to the Eagle Ford divestitures, as well as a $43 million decrease in Haynesville as a result of decreased workover activity and lower saltwater disposal expenses.
Gathering, Processing and Transportation Expenses
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
$/Mcfe$/Mcfe$/Mcfe$/Mcfe
Marcellus$103 0.73 $106 0.66 $314 0.72 $325 0.64 
Haynesville49 0.48 65 0.45 165 0.48 198 0.46 
Eagle Ford— — 21 1.23 — — 140 1.59 
Total GP&T$152 0.62 $192 0.60 $479 0.61 $663 0.65 
Gathering, processing and transportation expenses during the Current Quarter decreased $40 million compared to the Prior Quarter. The decrease was primarily related to a $21 million decrease due to the Eagle Ford divestitures. Additionally, decreased volumes resulted in a $14 million and $20 million decrease in Marcellus and Haynesville, respectively. These decreases were partially offset by rate increases of $11 million and $4 million in Marcellus and Haynesville, respectively.
Gathering, processing and transportation expenses during the Current Period decreased $184 million compared to the Prior Period. The decrease was primarily related to a $140 million decrease due to the Eagle Ford divestitures. Additionally, decreased volumes resulted in a $47 million and $40 million decrease in Marcellus and Haynesville, respectively. These decreases were partially offset by rate increases of $36 million and $7 million in Marcellus and Haynesville, respectively.

Severance and Ad Valorem Taxes
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
$/Mcfe$/Mcfe$/Mcfe$/Mcfe
Marcellus$3 0.02 $4 0.03 $10 0.02 $11 0.02 
Haynesville8 0.07 17 0.11 48 0.14 80 0.19 
Eagle Ford— — 6 0.38 — — 45 0.52 
Total severance and ad valorem taxes$11 0.04 $27 0.08 $58 0.07 $136 0.13 
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Severance and ad valorem taxes during the Current Quarter decreased $16 million compared to the Prior Quarter. The decrease was primarily related to a $9 million decrease in Haynesville, which was driven by a decrease in the statutory severance tax rates as well as reduced volumes. Additionally, the Eagle Ford divestitures resulted in a $6 million decrease.
Severance and ad valorem taxes during the Current Period decreased $78 million compared to the Prior Period. The decrease was primarily related to a $45 million decrease due to the Eagle Ford divestitures and a $32 million decrease in Haynesville, which was driven by a decrease in the statutory severance tax rates as well as reduced volumes.

Natural Gas and Oil Derivatives
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Natural gas derivatives - realized gains$206 $216 $696 $302 
Natural gas derivatives - unrealized gains (losses)(145)(110)(495)843 
Total gains on natural gas derivatives$61 $106 $201 $1,145 
Oil derivatives - realized losses$— $— $— $(38)
Oil derivatives - unrealized gains— — — 88 
Total gains on oil derivatives$— $— $— $50 
Contingent consideration unrealized gains (losses)$(15)$— $6 $— 
Total gains on natural gas and oil derivatives$46 $106 $207 $1,195 
See Note 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for a discussion of our derivative activity.

General and Administrative Expenses
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Total G&A, net$39 $29 $133 $95 
G&A, net per Mcfe$0.16 $0.09 $0.17 $0.09 
The absolute and per unit increase in total general and administrative expenses, net during the Current Quarter and Current Period is primarily due to a decrease in our producing well count following the Eagle Ford divestitures, which reduced our allocations and reimbursements of G&A.

Separation and Other Termination Costs
During the Current Period, we recognized $23 million of separation and other termination costs related to one-time termination benefits for certain employees.
Depreciation, Depletion and Amortization
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
DD&A$335 $382 $1,082 $1,148 
DD&A per Mcfe$1.38 $1.19 $1.38 $1.13 
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The per unit increase in depreciation, depletion and amortization for the Current Quarter and Current Period compared to the Prior Quarter and Prior Period, respectively, is primarily the result of a higher depletion rate. The increase in our depletion rate is due to a decrease in prices used in the evaluation of our reserves. The decrease in absolute depreciation, depletion and amortization for the Current Quarter and Current Period compared to the Prior Quarter and Prior Period, respectively, is due to decreased volumes.

Other Operating Expense, Net
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Other operating expense, net$22 $3 $55 $15 
During the Current Quarter and Current Period, we recognized approximately $17 million and $43 million, respectively, of costs related to the Southwestern Merger, which included legal fees, consulting fees and financial advisory fees. As a result of the closing of the Southwestern Merger, we anticipate recognizing additional material expenses during the fourth quarter of 2024 related to costs associated with the closing of the Southwestern Merger.
Interest Expense
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Interest expense on debt$34 $33 $98 $111 
Amortization of premium, issuance costs and other(3)(2)(8)(7)
Capitalized interest(11)(8)(31)(22)
Total interest expense$20 $23 $59 $82 
The decrease in total interest expense during the Current Period compared to the Prior Period was due to lower average debt outstanding between periods as well as increased capitalized interest, primarily related to our investment in Momentum Sustainable Ventures LLC.
Other Income
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Other income$17 $15 $58 $48 
Other income during the time periods presented above primarily consists of interest income and deferred consideration amortization. The increase during the Current Period was primarily due to increased interest income related to our higher average cash balance compared to the Prior Period.

Income Taxes
An income tax benefit of $105 million was recorded for the Current Period. This amount was entirely related to projections of deferred federal and state income taxes. Income tax expense was $532 million for the Prior Period. Of this amount, $213 million was the result of projecting current federal and state income taxes, predominately as a result of taxable gains on closed divestitures, and the remainder was related to projections of deferred federal and state income taxes. Our effective income tax rate was 25.0% and 22.3% during the Current Period and the Prior Period, respectively. Our effective tax rate can fluctuate due to the impact of discrete items, state income taxes and permanent differences. See Note 8 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for a discussion of income taxes.
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Forward-Looking Statements
This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the combined company after the Southwestern Merger, 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, the potential effects of the Plan on our operations, management, and employees, 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 Form 10-Q 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.”

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;
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•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 Southwestern Merger, 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 Southwestern Merger; risks related to disruption of management time from ongoing business operations due to integration; the risk of any unexpected costs or expenses resulting from the Southwestern Merger; the risk of any litigation relating to the Southwestern Merger; 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 Southwestern Merger 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 our 2023 Form 10-K.
We caution you not to place undue reliance on the forward-looking statements contained in this report, 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 report and our other filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.
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Information About Us
Investors should note that we make available, free of charge on our website at expandenergy.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also post announcements, updates, events, investor information and presentations on our website in addition to copies of all recent news releases. We may use the Investors section of our website to communicate with investors. It is possible that the financial and other information posted on the Investors section of our website could be deemed to be material information. Documents and information on our website are not incorporated by reference herein.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Expand Energy, that file electronically with the SEC.
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ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our exposure to market risk. The term market risk relates to our risk of loss arising from adverse changes in natural gas, oil and NGL prices and interest rates. These disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. The forward-looking information provides indicators of how we view and manage our ongoing market risk exposures.
Commodity Price Risk
Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL, which have historically been volatile. To mitigate a portion of our exposure to adverse price changes, we enter into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the revenue we will receive. We believe our derivative instruments continue to be highly effective in achieving our risk management objectives.
We determine the fair value of our derivative instruments utilizing established index prices, volatility curves and discount factors. These estimates are compared to counterparty valuations for reasonableness. Derivative transactions are also subject to the risk that counterparties will be unable to meet their obligations. This non-performance risk is considered in the valuation of our derivative instruments, but to date has not had a material impact on the values of our derivatives. Future risk related to counterparties not being able to meet their obligations has been partially mitigated under our commodity hedging arrangements that require counterparties to post collateral if their obligations to us are in excess of defined thresholds. The values we report in our financial statements are as of a point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. See Note 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion of the fair value measurements associated with our derivatives.
Our natural gas revenues during the Current Period, excluding any effect of our derivative instruments, were $1,374 million. We did not have any oil or NGL revenues during the Current Period. Based on production, natural gas revenues for the Current Period would have increased or decreased by approximately $137 million, for a 10% increase or decrease in prices. As of September 30, 2024, the fair value of our natural gas derivatives was a net asset of $191 million. As of September 30, 2024, we did not have any open oil or NGL derivative positions. A 10% increase in forward natural gas prices would decrease the valuation of natural gas derivatives by approximately $176 million, while a 10% decrease would increase the valuation by approximately $180 million. This fair value change assumes volatility based on prevailing market parameters at September 30, 2024. Additionally, should oil prices not meet the average target prices specified within the contingent payment from Crescent, we may not receive any payment from the up to $50 million contingent consideration arrangement. See Note 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further information on our open derivative positions, including information about the contingent consideration arrangement.
As a result of the Southwestern Merger, our results of operations and cash flows will continue to be impacted by changes in market prices for natural gas, oil and NGL, which have historically been volatile. We plan to mitigate a portion of our exposure to adverse price changes and have entered into various derivative instruments, which includes hedge positions that cover approximately 45% of our projected natural gas volumes through the end of 2025.
Interest Rate Risk
Our exposure to interest rate changes relates primarily to borrowings under our Credit Facility. Interest is payable on borrowings under the Credit Facility based on floating rates. See Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part 1 of this report for additional information. As of September 30, 2024, we did not have any outstanding borrowings under our Pre-IG Credit Facility.
As a result of the Southwestern Merger, we assumed approximately $3.7 billion of Southwestern’s senior notes, all of which had fixed interest rates. On October 1, 2024, Southwestern’s existing credit facility, which was based on floating interest rates, was terminated, with all loan amounts and other outstanding obligations thereunder repaid in full and all commitments thereunder extinguished, for approximately $585 million, which included all outstanding borrowings and transaction fees.
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ITEM 4.
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of September 30, 2024 that our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1.Legal Proceedings
Litigation and Regulatory Proceedings
We are involved in various regulatory proceedings, lawsuits and disputes arising in the ordinary course of our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. The majority of the legal proceedings that were in existence prior to the Petition Date were settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court. Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan.
In connection with the Southwestern Merger, two lawsuits have been filed by purported stockholders of the Company or Southwestern against the Company and/or the members of the Company’s board of directors: Gerald Joseph Lovoi v. Chesapeake Energy Corp., et al., No. 1:24-cv-01896 (S.D.N.Y. Mar. 13, 2024); Jeffrey Schantz v. Gass et al., No. 155009/2024 (N.Y. Sup. Ct. May 30, 2024). Included in one or both of the complaints were allegations that the defendants violated Sections 14(a) and 20(a) of the Exchange Act and were negligent in misrepresenting or omitting material facts under Florida common law, because the registration statement filed in connection with the Southwestern Merger allegedly omitted or misstated material information. On June 10, 2024, the complaint in the Supreme Court of the State of New York was dismissed. On June 24, 2024, the complaint in the United States District Court for the Southern District of New York was dismissed.
See Note 5 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for information regarding our estimation and provision for potential losses related to litigation and regulatory proceedings. Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.
Environmental Contingencies
The nature of the natural gas and oil business carries with it certain environmental risks for us and our subsidiaries. We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks. We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property.

ITEM 1A.
Risk Factors

Our business has many risks. Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our common stock are described under “Risk Factors” in Item 1A of our 2023 Form 10-K and the additional risk factor provided below, which supplements the risk factors included in our 2023 Form 10-K. This information should be considered carefully, together with other information in this report and other reports and materials we file with the SEC.

The completion of the Southwestern Merger may have triggered an annual limitation on the utilization of our tax attributes, reducing their ability to offset future taxable income, which may result in an increase to income tax liabilities. In addition, trading in our common stock, additional issuances of common stock, and certain other stock transactions could lead to an additional, potentially more restrictive annual limitation on the utilization of our tax attributes.
Upon emergence from bankruptcy on February 9, 2021, the Company experienced an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code” and such change, a “Section
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382 Ownership Change”), as all of the common stock and preferred stock of our predecessor, or the old loss corporation, was canceled and replaced with common stock of the successor, or the new loss corporation (the “First Ownership Change”). As such, an annual limitation was computed for the First Ownership Change based on the fair market value of the new equity immediately after emergence multiplied by the long-term tax-exempt rate in effect for the month of February 2021. This annual limitation restricts the future utilization of our net operating loss (“NOL”) carryforwards, disallowed business interest carryforwards and tax credits that existed at the time of emergence.
The Southwestern Merger, on October 1, 2024, resulted in an ownership change for Southwestern and is being analyzed to determine if a Section 382 Ownership Change also occurred for the Company (the “Potential Second Ownership Change"). In addition, trading in our stock, additional issuances, and other stock transactions occurring subsequent to the First Ownership Change (or, if the Potential Second Ownership Change occurred, subsequent to the Southwestern Merger) could lead to a further Section 382 Ownership Change. In the event of any additional Section 382 Ownership Change, including the Potential Second Ownership Change, a new annual limitation would be determined at such time that could be more restrictive than the limitation of the First Ownership Change. Depending on the market conditions and the Company’s tax basis, an additional Section 382 Ownership Change may result in a net unrealized built-in loss. The annual limitation in such a case would additionally be applied to certain of the Company’s tax items other than just NOL carryforwards, disallowed business interest carryforwards and tax credits. For example, a portion of tax depreciation, depletion and amortization would also be subject to the annual limitation for a five-year period following the Section 382 Ownership Change, but only to the extent of the net unrealized built-in loss existing at the time of the additional Section 382 Ownership Change. Whether the new annual limitation would be more restrictive would depend on the value of our stock and the long-term tax-exempt rate in effect at the time of such Section 382 Ownership Change. If the Southwestern Merger resulted in a Section 382 Ownership Change for the Company, given the higher long-term tax exempt rates in effect in October 2024 as compared to prior years, we believe that the annual limitation on the utilization of the Company’s tax attributes will be less restrictive than the First Ownership Change. As a result, the new limitation would generally only apply to those tax attributes generated subsequent to the First Ownership Change. However, if the value of our common stock or long-term tax-exempt rates have decreased at the time any additional Section 382 Ownership Change occurs, such ownership change may be more restrictive than the First Ownership Change or the Potential Second Ownership Change, if applicable, and would apply to certain of the tax attributes existing at the time of the additional Section 382 Ownership Change, including those remaining from the time of the First Ownership Change and Potential Second Ownership Change, if applicable.
Some states impose similar limitations on tax attribute utilization upon experiencing an ownership change.

ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Repurchases of Equity Securities
We did not repurchase any shares of our common stock during the quarter ended September 30, 2024.

ITEM 3.Defaults Upon Senior Securities
None.
ITEM 4.Mine Safety Disclosures
Not applicable.
ITEM 5.
Other Information

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
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ITEM 6.
Exhibits
The exhibits listed below in the Index of Exhibits are filed, furnished or incorporated by reference pursuant to the requirements of Item 601 of Regulation S-K.
INDEX OF EXHIBITS
  Incorporated by Reference 
Exhibit
Number
Exhibit DescriptionForm
SEC File
Number
ExhibitFiling Date
Filed or
Furnished
Herewith
2.18-K001-137262.11/19/2021
2.2*8-K001-137262.11/11/2024
3.18-K001-137263.110/1/2024
3.28-K001-137263.210/1/2024
31.1X
31.2X
32.1X
32.2X
101 INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101 SCHInline XBRL Taxonomy Extension Schema Document.X
101 CALInline XBRL Taxonomy Extension Calculation Linkbase Document.X
101 DEFInline XBRL Taxonomy Extension Definition Linkbase Document.X
101 LABInline XBRL Taxonomy Extension Labels Linkbase Document.X
101 PREInline XBRL Taxonomy Extension Presentation Linkbase Document.X
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).X
*Annexes, schedules and certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted annexes, schedules and exhibits upon request by the SEC.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EXPAND ENERGY CORPORATION
Date: October 29, 2024By: /s/ DOMENIC J. DELL’OSSO, JR.
  Domenic J. Dell’Osso, Jr.
President and Chief Executive Officer
Date: October 29, 2024By:/s/ MOHIT SINGH
Mohit Singh
Executive Vice President and Chief Financial Officer


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