Expand Energy Corporation Common Stock 2026 Q3 Earnings Call

Good morning, everyone. Thanks, Brittany.

Good morning, and thanks for joining our call. Last quarter, I discussed my optimism about the future of Expand. Today, that optimism continues to grow and is stronger than ever. You can feel momentum building across our organization. Over the past nine months, we have transformed Expand from an upstream gas producer into an integrated gas company that is a leading producer and marketer of gas coast to coast across North America. While our upstream business remains our foundation, this year we're focused on strengthening our commercial capabilities by adding key leaders in both the C-suite and across the organization. We've expanded our corporate and business development efforts to consider opportunities across the whole gas value chain to include upstream marketing and LNG.

That decision proved to be a good one, as last quarter the team delivered Twin Eagle acquisition, bringing exceptional talent and valuable customer relationships to Expand. With the transaction now closed, the Twin Eagle and Expand teams are working side by side in one office to deliver the synergies we promised. We see significant opportunities ahead and look forward to sharing our progress and successes over the coming quarters. Today, we are demonstrating exactly why an integrated gas company matters. Low commodity prices are pressuring free cash flow margins for many of our peers. However, at Expand, our marketing business is already making a difference. The combined Expand and Twin Eagle marketing profits are expected to add $0.12 per Mcfe to our fourth quarter margin. This is particularly impressive because the team is expecting to generate solid profits in an anticipated low-price, low-volatility period.

As prices rise and volatility returns, we are well-positioned to capture even more value. Through all this change, our team never took its eye off creating long-term shareholder value. We continue to deliver strong operational results, producing approximately 7.5 Bcfe per day this quarter, and extended our drilling inventory through organic leasing, which remains one of the most accretive ways to add high-quality locations. We have allocated more to share repurchases this year than any of our peers, including $305 million in the third quarter. Our hedging program, which we see as a critical risk management tool, improved our realized prices by $0.46 per Mcfe. Importantly, our balance sheet remains strong, with net debt of $4.7 billion and leverage of 0.8 times. Finally, we said we would name a permanent CEO within nine months, and we kept our promise.

I am excited to be joined today with our new CEO, Danny Brown. The board was deliberate in its choice, focused on finding the right leader to continue our momentum. First and foremost, we wanted a leader with a proven record of building a team-oriented culture that focuses on creating long-term shareholder value. Given our $3 billion annual capital plan, we wanted an upstream expert who has experience managing a large portfolio of assets, and we wanted a former public CEO who understands our shareholders' perspective and is a great allocator of capital and can consistently deliver. We found all that in Danny, and we believe our patience was rewarded. We do not consider our mission accomplished, but we have built the foundation. We now have a premier upstream business, a coast-to-coast marketing platform, a strong balance sheet, and a team that plays to win.

We attack opportunities to improve our business with urgency while maintaining our disciplined approach to value creation, and above all else, we keep our promises. I could not be more impressed with this team, nor more optimistic about Expand's future. I am excited to watch Danny and the team build on this momentum. With that, I am pleased to turn the call over to Danny for a few brief remarks on what is the start of his third day leading our company.

Thank you, Mike. Thank you as well for the confidence you and the board have placed in me to lead this organization. I would also like to take a moment and thank the Chord Energy team. I am proud of what we built and accomplished there together, and have full expectation that Chord will continue delivering for its stakeholders. As I turn my full attention to Expand, I will say that I was drawn to this opportunity because I believe Expand has built something that is unique and that is very well-suited to deliver value for its shareholders in a differentiated fashion. First, we have meaningful scale, which is tremendously important in any commodity business, and particularly one that is as dynamic as natural gas. Second, we have inventory-rich assets, which are diversified and adjacent to key demand centers.

Third, we have resiliency with an investment-grade balance sheet, low breakevens, operational flexibility, and a disciplined hedging strategy. Now, with Twin Eagle, we have a direct line to customers, which should allow Expand to capture incremental margin along the value chain. All of this set against the precipice of a structural increase in natural gas demand with rising needs for LNG, data centers, industrial projects, and broad-scale electrification. The foundation is set. Now it is time to execute and leverage the platform that has been created to deliver differentiated value for our shareholders. While I have only been here for a few short days, it is clear to me that this team shares the commitment to excellence in all aspects of our business, which is critical to sustainable value creation in this industry. I am honored to be a member of this talented team, and I am excited to be getting started.

As I do, I look forward to connecting with all of you. Now, operator, we are ready for questions.

Madam? Good morning, everyone, and thanks for joining our call this morning to discuss Expand Energy's 2026 third quarter financial and operating results.

Hopefully, you have had a chance to review our press release and updated investor presentation that we posted to our website yesterday. During this morning's call, we will be making forward-looking statements which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections, and future performance, and the assumptions underlying such statements. Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our press release yesterday and other SEC filings. Please recognize that except as required by law, we undertake no duty to update any forward-looking statements, and you should not place undue reliance on such statements.

We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure that can be found on our website. With me today on the call are Mike Wichterich and Danny Brown, who you've already heard prepared remarks from, as well as Josh Viets and Marcel Teunissen. Operator, with that, you can please turn the line over for questions.