Expand Energy Q3 net income falls to $519M
Twin Eagle contributed $196 million in revenue after its September 16, 2026 acquisition, while EXE reported $3.9 billion of liquidity at quarter-end.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
Expand Energy Corporation (EXE) reported third-quarter total revenues and other of $3.286 billion, versus $2.966 billion a year earlier, while net income was $519 million versus $547 million. For the first nine months, total revenues and other were $10.643 billion versus $8.852 billion, and net income was $2.2 billion versus $1.266 billion. Operating cash flow for the nine months was $4.675 billion, compared with $3.619 billion.
EXE completed its approximately $1.4 billion acquisition of Twin Eagle on September 16, 2026; the natural-gas marketing and logistics business contributed $196 million of revenue and $4 million of net earnings through September 30, 2026. During the nine months, EXE repurchased 9.8 million shares for $909 million. Liquidity as of September 30, 2026 was $3.9 billion, including $3.1 billion available under the Credit Facility. Lenders consented on October 6, 2026, to extend that facility’s maturity to September 30, 2031. Fitch upgraded the revolver credit rating and senior notes from BBB- to BBB on May 6, 2026. Estimated gross undiscounted gathering, processing, transportation and storage commitments were $8.94 billion.
3 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly and nine-month total revenues and other were $3.286 billion and $10.643 billion, versus $2.966 billion and $8.852 billion, respectively.
- Moderate pointNine-month net income was $2.2 billion, compared with $1.266 billion a year earlier.
- Minor pointFitch upgraded the revolver credit rating and senior notes from BBB- to BBB.
Negative
- Minor pointThird-quarter net income was $519 million, compared with $547 million a year earlier.
Filing Explained
The effective Delfin deal adds an estimated $2.9 billion in purchase commitments; actual payments may vary.
Expand Energy reports that its Delfin LNG purchase agreement is effective; commercial deliveries are expected to begin in
Based on fixed and determinable pricing components, the company estimates
Following the Twin Eagle acquisition, the company now reports two segments, Exploration and Production and Marketing, rather than one.
On
Key Figures
Total revenues and other: $3.286 billion
Net income: $519 million
Total revenues and other: $10.643 billion
+5 more
8 metrics
Total revenues and other
$3.286 billion
Three months ended September 30, 2026; $2.966 billion for the same period in 2025
Net income
$519 million
Three months ended September 30, 2026; $547 million for the same period in 2025
Total revenues and other
$10.643 billion
Nine months ended September 30, 2026; $8.852 billion for the same period in 2025
Net income
$2.2 billion
Nine months ended September 30, 2026; $1.266 billion for the same period in 2025
Net cash provided by operating activities
$4.675 billion
Nine months ended September 30, 2026; $3.619 billion for the same period in 2025
Twin Eagle aggregate purchase price
Approximately $1.4 billion
Acquisition completed September 16, 2026, including purchase price adjustments
Common shares repurchased
9.8 million shares for an aggregate price of $909 million
Nine months ended September 30, 2026; aggregate price includes the 1% excise tax
Liquidity
$3.9 billion
As of September 30, 2026
Key Terms
Preliminary Purchase Price Allocation, Debt to Capitalization Ratio, multi-period excess earnings method, estimated annual effective tax rate
4 terms
Preliminary Purchase Price Allocation financial
"Preliminary Purchase Price Allocation"
Debt to Capitalization Ratio financial
"Debt to Capitalization Ratio, not to exceed 65%, tested at the end of each quarter"
The debt to capitalization ratio measures what portion of a company’s total long-term funding comes from borrowed money versus owners’ money, calculated as long-term debt divided by the sum of long-term debt and equity. It matters to investors because a higher ratio signals the company relies more on loans—like a household heavy on mortgage—raising financial risk, potential interest costs, and sensitivity to economic downturns, while a lower ratio suggests more conservative funding.
multi-period excess earnings method financial
"using the multi-period excess earnings method for customer relationships"
estimated annual effective tax rate financial
"An estimated annual effective tax rate (“EAETR”) is used"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were EXE’s third-quarter revenue and net income in 2026?
EXE reported total revenues and other of $3.286 billion and net income of $519 million for the three months ended September 30, 2026. For the same period in 2025, total revenues and other were $2.966 billion and net income was $547 million.
How much did EXE pay for Twin Eagle, and what did it contribute?
EXE completed the acquisition on September 16, 2026, for an aggregate purchase price of approximately $1.4 billion, including purchase price adjustments. From September 16 through September 30, 2026, Twin Eagle contributed $196 million in revenues and $4 million in net earnings.
When does EXE’s Credit Facility mature?
On October 6, 2026, the lenders consented to extending the Credit Facility maturity by one year, to September 30, 2031. The facility also has two one-year extension options, each subject to lender consent.
What are the terms of EXE’s LNG agreement with Delfin?
On April 22, 2026, EXE executed a 20-year sales and purchase agreement with Delfin FLNG 1 LLC to purchase approximately 1.15 MTPA of LNG. Commercial deliveries are expected to commence in 2031; estimated commitments for fixed and determinable pricing components are approximately $2.9 billion.
What dividend did EXE declare after the third quarter of 2026?
On October 27, 2026, EXE declared a base quarterly dividend of $0.575 per share, payable December 3, 2026, to stockholders of record at the close of business on November 12, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
For the transition period from to
Commission File No. 001-13726
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
| | ||||||||||||||
| (Registrant’s telephone number, including area code) | ||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Smaller Reporting Company ☐ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 20, 2026, there were 230,957,348 shares of our $0.01 par value common stock outstanding.
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2026
PART I. FINANCIAL INFORMATION | |||||||||||
Item 1. | Condensed Consolidated Financial Statements (Unaudited) | ||||||||||
Condensed Consolidated Balance Sheets | 5 | ||||||||||
Condensed Consolidated Statements of Operations | 6 | ||||||||||
Condensed Consolidated Statements of Cash Flows | 7 | ||||||||||
Condensed Consolidated Statements of Stockholders’ Equity | 8 | ||||||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | |||||||||||
Note 1. Basis of Presentation and Summary of Significant Accounting Policies | 10 | ||||||||||
Note 2. Acquisitions and Divestitures | 11 | ||||||||||
Note 3. Earnings Per Share | 14 | ||||||||||
Note 4. Debt | 15 | ||||||||||
Note 5. Contingencies and Commitments | 17 | ||||||||||
Note 6. Other Balance Sheet Items | 19 | ||||||||||
Note 7. Revenue | 19 | ||||||||||
Note 8. Income Taxes | 21 | ||||||||||
Note 9. Equity | 22 | ||||||||||
Note 10. Share-Based Compensation | 22 | ||||||||||
Note 11. Derivative and Hedging Activities | 24 | ||||||||||
Note 12. Investments | 27 | ||||||||||
Note 13. Supplemental Cash Flow Information | 28 | ||||||||||
Note 14. Segment Information | 28 | ||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 | |||||||||
Liquidity and Capital Resources | 35 | ||||||||||
Results of Operations | 40 | ||||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 49 | |||||||||
Item 4. | Controls and Procedures | 51 | |||||||||
PART II. OTHER INFORMATION | |||||||||||
Item 1. | Legal Proceedings | 52 | |||||||||
Item 1A. | Risk Factors | 52 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 53 | |||||||||
Item 3. | Defaults Upon Senior Securities | 53 | |||||||||
Item 4. | Mine Safety Disclosures | 53 | |||||||||
Item 5. | Other Information | 53 | |||||||||
Item 6. | Exhibits | 54 | |||||||||
Signatures | 56 | ||||||||||
| Definitions | ||
Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Expand Energy,” the “Company” and “Registrant” refer to Expand Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in millions of U.S. dollars unless otherwise specified. The following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:
“ASU” means Accounting Standards Update.
“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended.
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas.
“Bbl” or “Bbls” means one stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.
“Bcf” means billion cubic feet.
“Bcfe” means billion cubic feet of natural gas equivalent.
“Chapter 11 Cases” refers to the voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code filed in the Bankruptcy Court by the Debtors.
“Chesapeake” means Chesapeake Energy Corporation, prior to the Southwestern Merger.
“Class A Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan, the Class B Warrants, and the Class C Warrants), at an initial exercise price per share of $27.63. The Class A Warrants were exercisable from the Effective Date until February 9, 2026.
“Class B Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan and the Class C Warrants), at an initial exercise price per share of $32.13. The Class B Warrants were exercisable from the Effective Date until February 9, 2026.
“Class C Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan), at an initial exercise price per share of $36.18. The Class C Warrants were exercisable from the Effective Date until February 9, 2026.
“Confirmation Order” means the order confirming the Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, Docket No. 2915, entered by the Bankruptcy Court on January 16, 2021.
“Credit Facility” means the amended and restated credit facility entered into on September 30, 2025.
“Current Period” means the nine months ended September 30, 2026.
“Current Quarter” means the three months ended September 30, 2026.
“DD&A” means depreciation, depletion and amortization.
“Debtors” means Chesapeake Energy Corporation prior to the Southwestern Merger, together with all of its direct and indirect subsidiaries that have filed the Chapter 11 Cases.
“Effective Date” means February 9, 2021.
“FASB” means the Financial Accounting Standards Board.
“G&A” means general and administrative expenses.
“GAAP” means U.S. generally accepted accounting principles.
“General Unsecured Claim” means any Claim against any Debtor that is not otherwise paid in full during the Chapter 11 Cases pursuant to an order of the Bankruptcy Court and is not an Administrative Claim, a Priority Tax Claim, an Other Priority Claim, an Other Secured Claim, a Revolving Credit Facility Claim, a FLLO Term Loan Facility Claim, a Second Lien Notes Claim, an Unsecured Notes Claim, an Intercompany Claim, or a Section 510(b) Claim.
“LNG” means liquefied natural gas.
“LTIP” means the Expand Energy Corporation 2021 Long Term Incentive Plan.
“MBbls” means one thousand barrels of oil or other liquid hydrocarbons.
“MMBbls” means one million barrels of oil or other liquid hydrocarbons.
“Mcf” means thousand cubic feet.
“Mcfe” means one thousand cubic feet of natural gas equivalent, with one barrel of oil or NGL converted to an equivalent volume of natural gas using the ratio of one barrel of oil or NGL to six Mcf of natural gas.
“MMcf” means million cubic feet.
“MMcfe” means million cubic feet of natural gas equivalent.
“MTPA” means million metric tons per annum.
“MWh” means megawatt hour (one MWh equals one thousand kilowatt hours).
“NGL” means natural gas liquids.
“NYMEX” means New York Mercantile Exchange.
“OPEC+” means the Organization of the Petroleum Exporting Countries Plus.
“Petition Date” means June 28, 2020, the date on which the Debtors commenced the Chapter 11 Cases.
“Plan” means the Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, attached as Exhibit A to the Confirmation Order.
“Prior Period” means the nine months ended September 30, 2025.
“Prior Quarter” means the three months ended September 30, 2025.
“Rights Offering” means the common stock rights offering for the Rights Offering Amount consummated by the Debtors on the Effective Date.
“SEC” means United States Securities and Exchange Commission.
“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator, the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Southwestern” means Southwestern Energy Company.
“Southwestern Merger” means Chesapeake’s merger with Southwestern, which closed on October 1, 2024.
“Twin Eagle” means Twin Eagle Holdings N.A., LLC.
“Twin Eagle Acquisition” means the acquisition of Twin Eagle, which closed on September 16, 2026.
“Warrants” means, collectively, the Class A Warrants, Class B Warrants and Class C Warrants.
"Winter Storm Fern" means the severe winter weather event that occurred in January 2026, which affected portions of the United States and resulted in, among other things, significant increases in natural gas and electricity demand and power supply disruptions.
“WTI” means West Texas Intermediate.
“/Bbl” means per barrel.
“/Mcf” means per Mcf.
“/Mcfe” means per Mcfe.
Table of Contents
PART I. FINANCIAL INFORMATION
| ITEM 1. | Condensed Consolidated Financial Statements | ||||
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
| ($ in millions, except per share data) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Accounts receivable, net | ||||||||||||||
| Derivative assets | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment: | ||||||||||||||
| Natural gas and oil properties, successful efforts method | ||||||||||||||
| Proved natural gas and oil properties | ||||||||||||||
| Unproved properties | ||||||||||||||
| Other property and equipment | ||||||||||||||
| Total property and equipment | ||||||||||||||
| Less: accumulated depreciation, depletion and amortization | ( | ( | ||||||||||||
| Property and equipment held for sale, net | ||||||||||||||
| Total property and equipment, net | ||||||||||||||
| Long-term derivative assets | ||||||||||||||
| Deferred income tax assets | ||||||||||||||
| Goodwill | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Other long-term assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and stockholders' equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued interest | ||||||||||||||
| Derivative liabilities | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, net | ||||||||||||||
| Long-term derivative liabilities | ||||||||||||||
| Asset retirement obligations, net of current portion | ||||||||||||||
| Long-term contract liabilities | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Contingencies and commitments (Note 5) | ||||||||||||||
| Stockholders' equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Total stockholders' equity | ||||||||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Table of Contents
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| ($ in millions, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenues and other: | ||||||||||||||||||||||||||
| Natural gas, oil and NGL | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing | ||||||||||||||||||||||||||
| Gains on derivatives | ||||||||||||||||||||||||||
| Gains (losses) on sales of assets | ( | |||||||||||||||||||||||||
| Total revenues and other | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Gathering, processing and transportation | ||||||||||||||||||||||||||
| Severance and ad valorem taxes | ||||||||||||||||||||||||||
| Exploration | ||||||||||||||||||||||||||
| Marketing | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Separation and other termination costs | ||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
| Other operating expense (income), net | ( | |||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Income from operations | ||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Gains on purchases, exchanges or extinguishments of debt | ||||||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||
| Total other income (expense) | ( | ( | ( | ( | ||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average common shares outstanding (in thousands): | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, | ||||||||||||||
| ($ in millions) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||
| Deferred income tax expense | ||||||||||||||
| Derivative gains, net | ( | ( | ||||||||||||
| Cash receipts on derivative settlements, net | ||||||||||||||
| Share-based compensation | ||||||||||||||
| Gains on sales of assets | ( | ( | ||||||||||||
| Contract amortization | ( | ( | ||||||||||||
| Gains on purchases, exchanges or extinguishments of debt | ( | ( | ||||||||||||
| Other | ||||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Business combination, net | ( | |||||||||||||
| Property acquisitions | ( | ( | ||||||||||||
| Receipts of deferred consideration | ||||||||||||||
| Contributions to investments | ( | ( | ||||||||||||
| Distributions from investments | ||||||||||||||
| Proceeds from divestitures of property and equipment | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from Credit Facility | ||||||||||||||
| Payments on Credit Facility | ( | ( | ||||||||||||
| Payments on Twin Eagle Credit Facility | ( | |||||||||||||
| Proceeds from issuance of senior notes, net | ||||||||||||||
| Proceeds from warrant exercise | ||||||||||||||
| Debt issuance and other financing costs | ( | ( | ||||||||||||
| Cash paid to repurchase and retire common stock | ( | ( | ||||||||||||
| Cash paid to purchase debt | ( | ( | ||||||||||||
| Cash paid for common stock dividends | ( | ( | ||||||||||||
| Proceeds from accounts receivable financing | ||||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
Table of Contents
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Common Stock | |||||||||||||||||||||||||||||
| ($ in millions) | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | ( | — | ( | |||||||||||||||||||||||||
| Issuance of common stock for warrant exercise | — | — | |||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | — | |||||||||||||||||||||||||||
| Issuance of common stock for warrant exercise | — | — | |||||||||||||||||||||||||||
| Repurchase and retirement of common stock | ( | — | — | ( | ( | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | — | |||||||||||||||||||||||||||
| Issuance of common stock for warrant exercise | — | — | — | ||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
Table of Contents
EXPAND ENERGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - (Continued)
(Unaudited)
| Common Stock | |||||||||||||||||||||||||||||
| ($ in millions) | Shares | Amount | Additional Paid-in Capital | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | ( | — | ( | |||||||||||||||||||||||||
| Issuance of common stock for warrant exercise | — | — | |||||||||||||||||||||||||||
| Issuance of reserved common stock and warrants | — | — | — | — | |||||||||||||||||||||||||
| Repurchase and retirement of common stock | ( | — | — | ( | ( | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | — | |||||||||||||||||||||||||||
| Repurchase and retirement of common stock | ( | — | — | ( | ( | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | — | — | |||||||||||||||||||||||||||
| Repurchase and retirement of common stock | ( | — | — | ( | ( | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Dividends on common stock | — | — | — | ( | ( | ||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | Basis of Presentation and Summary of Significant Accounting Policies | ||||
Description of Company
Expand Energy Corporation (“Expand Energy,” “we,” “our,” “us” or the “Company”) is a leading North American integrated natural gas company. As the largest natural gas producer in the U.S., based on net daily production, Expand Energy is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all. Our exploration and production (“E&P”) operations are located in Louisiana, Texas, Pennsylvania, West Virginia and Ohio, with all of our E&P operations located onshore in the United States. The recent acquisition of Twin Eagle, further described in Note 2, has expanded our marketing operations across the United States as well as Canada.
Basis of Presentation
This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to our financial position as of September 30, 2026 and December 31, 2025, and our results of operations for the three months ended September 30, 2026 (“Current Quarter”), the nine months ended September 30, 2026 (“Current Period”), the three months ended September 30, 2025 (“Prior Quarter”) and the nine months ended September 30, 2025 (“Prior Period”). This Form 10-Q should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). The accompanying unaudited condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been eliminated.
Restricted Cash
As of September 30, 2026, we had restricted cash of $103 million. Our restricted cash primarily represents funds restricted for payment of certain royalties pending the outcome of competing ownership claims for certain minerals.
Foreign Currency Translation
The U.S. dollar is the functional currency for our consolidated operations except for our Canadian operations assumed in the Twin Eagle Acquisition, which use the Canadian dollar as the functional currency. Assets and liabilities denominated in Canadian dollars are translated to U.S. dollars for financial reporting purposes using the exchange rate on the date of the condensed consolidated balance sheet, while revenues and expenses are translated at the average exchange rate during the applicable period. Any gains or losses on transactions in currencies other than the functional currency are included in net income in the current period. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income. For the time periods covered by this Form 10-Q, we did not have any material foreign currency translation adjustments or items impacting other comprehensive income.
Goodwill and Intangible Assets
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Inventory
Our inventory primarily consists of natural gas held in storage facilities and natural gas pipeline imbalances. Storage inventory is stated at the lower of cost and net realizable value, with cost determined using the weighted-average cost method. Pipeline imbalances represent differences between the volumes of natural gas delivered to and received from pipelines and are valued using applicable market prices as of the condensed consolidated balance sheet date.
Recently Issued Accounting Standards
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies interim disclosure requirements and the applicability of Topic 270. Additionally, ASU 2025-11 includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the impact this ASU will have on our disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 expands disclosures about specific costs and expenses presented on the face of the income statement. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the impact this ASU will have on our disclosures.
We consider the applicability and impact of all ASUs. ASUs not listed above were evaluated and determined to either be not applicable, already adopted and disclosed or not material upon adoption.
| 2. | Acquisitions and Divestitures | ||||
Twin Eagle Acquisition
On September 16, 2026, we completed the acquisition of Twin Eagle, a provider of natural gas marketing and logistics services, through a merger with one of our wholly owned subsidiaries. The aggregate purchase price was approximately $1.4 billion, including purchase price adjustments. This acquisition has expanded our marketing operations across the United States as well as Canada, extending our reach throughout North America within the natural gas value chain. We funded the transaction through a combination of cash on hand and borrowings under our Credit Facility. During the Current Quarter, we recognized approximately $22 million of costs related to the Twin Eagle Acquisition, which primarily related to transaction, consulting and legal fees. These acquisition-related costs are included within other operating expense (income), net within our condensed consolidated statements of operations.
Preliminary Purchase Price Allocation
We have accounted for the Twin Eagle Acquisition as a business combination, using the acquisition method. The following table represents the preliminary allocation of the total purchase price of Twin Eagle to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, final tax returns that provide the underlying tax basis of Twin Eagle’s assets and liabilities and final appraisals of assets acquired and liabilities assumed, including the acquired intangible assets and goodwill. We expect to complete the purchase price allocation during the 12-month period following the acquisition date, during which time the value of the assets and liabilities may be revised as appropriate.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Preliminary Purchase Price Allocation | |||||
| Consideration: | |||||
Cash | $ | ||||
Incentive awards(a) | |||||
| Working capital adjustments | |||||
Total consideration | $ | ||||
| Fair Value of Assets Acquired: | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
Other current assets | |||||
| Intangible assets | |||||
| Goodwill | |||||
Other long-term assets | |||||
| Amounts attributable to assets acquired, including goodwill | $ | ||||
| Fair Value of Liabilities Assumed: | |||||
| Accounts payable | $ | ||||
| Credit facility borrowings | |||||
| Other current liabilities | |||||
| Deferred tax liabilities | |||||
Other long-term liabilities | |||||
Amounts attributable to liabilities assumed | $ | ||||
Total identifiable net assets | $ | ||||
____________________________________________
Goodwill and Intangible Assets
In connection with the Twin Eagle Acquisition, we recognized the identifiable assets acquired and liabilities assumed at their acquisition-date fair values. We engaged a third-party valuation specialist to assist management in estimating the fair values of certain acquired assets, including the identifiable intangible assets.
The Twin Eagle Acquisition resulted in the recognition of approximately $349 million of goodwill. Prior to the Twin Eagle Acquisition, we had no goodwill. The goodwill recognized primarily represents the value attributable to expected operational and commercial synergies from combining Twin Eagle’s operations with ours and other benefits that do not qualify for separate recognition as identifiable intangible assets. We expect approximately $242 million of the goodwill recognized from the Twin Eagle Acquisition to be deductible for U.S. tax purposes.
The following table presents information regarding the identifiable intangible assets acquired in the Twin Eagle Acquisition:
| September 30, 2026 | ||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | |||||||||||||
| Customer relationships | $ | $ | ( | |||||||||||
| Transportation and storage contracts | ( | |||||||||||||
| Other | ||||||||||||||
| Intangible assets | $ | $ | ( | |||||||||||
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
The customer relationship intangible assets represent the estimated value of relationships with existing customers and are being amortized over their estimated useful lives of approximately 25 years using the straight-line method of amortization, with a weighted average amortization period of 25 years. Amortization expense associated with these intangible assets is recognized within depreciation, depletion and amortization within our condensed consolidated statements of operations. Amortization expense is estimated to be approximately $26
The transportation and storage contract intangible assets represent the estimated value attributable to acquired contractual arrangements and are being amortized over their estimated useful lives of up to 12 years using an accelerated method based on the pattern in which the related economic benefits are expected to be consumed, with a weighted average amortization period of 3.8 years. Amortization expense associated with these intangible assets is recognized within depreciation, depletion and amortization within our condensed consolidated statements of operations. Amortization expense associated with the transportation and storage contract intangible assets is estimated to be approximately $138 million in 2027, $57 million in 2028, $38 million in 2029, $31 million in 2030 and $20 million in 2031.
Management estimated the fair values of the acquired intangible assets using the multi-period excess earnings method for customer relationships and a discounted cash flow analysis for transportation and storage contracts. These fair value estimates required the use of significant assumptions and judgment, including forecasted revenue, customer attrition, operating margins, contract renewal assumptions and discount rates. For the period from the acquisition date through September 30, 2026, amortization expense associated with the acquired intangible assets was approximately $7 million. Additionally, the acquired intangibles have no significant residual values or contractual renewal or extension terms. The weighted average amortization period for the acquired intangible assets in total is approximately 16.4 years.
Revenues and Earnings Subsequent to Acquisition
We included in our condensed consolidated statements of operations revenues of $196 million and net earnings of $4 million, related to the Twin Eagle businesses for the period from September 16, 2026 through September 30, 2026.
Combined Pro Forma Financial Information
The following unaudited pro forma financial information is based on our historical consolidated financial statements adjusted to reflect as if the Twin Eagle Acquisition had occurred on January 1, 2025. The information below reflects pro forma adjustments based on available information and certain assumptions that we believe are reasonable, including the estimated tax impact of the pro forma adjustments.
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | |||||||||||||
| Revenues | $ | $ | ||||||||||||
| Net income available to common stockholders | $ | $ | ||||||||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | $ | ||||||||||||
| Diluted | $ | $ | ||||||||||||
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||
| Revenues | $ | $ | ||||||||||||
| Net income available to common stockholders | $ | $ | ||||||||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | $ | ||||||||||||
| Diluted | $ | $ | ||||||||||||
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Eagle Ford Divestitures
During 2023, we divested our Eagle Ford assets through three separate transactions (“the Eagle Ford divestiture transactions”). In each of these transactions, we received a portion of the purchase price upon closing, subject to customary post-closing adjustments, with the remainder of the purchase price recorded as deferred consideration and treated as a non-interest-bearing note to be paid in installments in up to the following four years following the close of the transaction. The deferred consideration is recorded at fair value with an imputed rate of interest as a Level 2 input, and approximately $54 million and $114 million of the deferred consideration is reflected within other current assets on the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025, respectively, and approximately $91 million of the deferred consideration is reflected within other long-term assets on the condensed consolidated balance sheets as of December 31, 2025. These installment payments are recorded as receipts of deferred consideration in our condensed consolidated statements of cash flows.
| 3. | Earnings Per Share | ||||
Basic earnings per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is calculated in the same manner but includes the impact of potentially dilutive securities utilizing the treasury stock method. Potentially dilutive securities consists of issuable shares related to warrants, unvested restricted stock units (“RSUs”), and unvested performance share units (“PSUs”).
The reconciliations between basic and diluted earnings per share are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||||
| Net income, basic and diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator (in thousands) | ||||||||||||||||||||||||||
| Weighted average common shares outstanding, basic | ||||||||||||||||||||||||||
| Effect of potentially dilutive securities | ||||||||||||||||||||||||||
| Warrants | ||||||||||||||||||||||||||
| Restricted stock units | ||||||||||||||||||||||||||
| Performance share units | ||||||||||||||||||||||||||
| Weighted average common shares outstanding, diluted | ||||||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
During the Current Quarter and Current Period, the diluted earnings per share calculation excludes the effect of 10,837
During the Prior Quarter and Prior Period, the diluted earnings per share calculation excludes the effect of 308,646 582,109
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| 4. | Debt | ||||
Our long-term debt consisted of the following as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value(a) | Carrying Amount | Fair Value(a) | ||||||||||||||||||||
| Credit Facility | $ | $ | $ | $ | |||||||||||||||||||
| Discounts on senior notes, net | ( | — | ( | — | |||||||||||||||||||
| Debt issuance costs | ( | — | ( | — | |||||||||||||||||||
| Total long-term debt, net | $ | $ | $ | $ | |||||||||||||||||||
____________________________________________
(a)The carrying value of borrowings under our Credit Facility approximates fair value as the interest rates are based on prevailing market rates and are a Level 1 fair value measurement. For all other debt, a market approach, based upon quotes from major financial institutions, which are Level 2 inputs, is used to measure the fair value.
Credit Facility. On September 30, 2025, the Company entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) that, as amended, had a maturity date of September 30, 2030 (the “Credit Facility”), with the lenders and issuing banks party thereto from time to time (the “Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent. On October 6, 2026, we obtained consent from the Lenders to an amendment to extend the maturity date of the Credit Facility by one year to September 30, 2031. The maturity date for the Credit Facility has two one-year extension options available, each subject to the Lenders’ consent. The Credit Facility provides for aggregate commitments of $3.5 billion, with incremental capacity for additional commitments in an amount up to $1.0 billion, subject to the receipt of commitments thereto and certain customary conditions. Under the Credit Facility, the sublimit available for the issuance of letters of credit is $1.0 billion and the sublimit available for swingline loans is $100 million. As of September 30, 2026, there were no outstanding letters of credit under the Credit Facility, and there was approximately $450 million of outstanding borrowings and approximately $3.1 billion available for borrowings under the Credit Facility.
The Credit Agreement contains restrictive covenants that, subject to exceptions customary to investment-grade credit facilities, limit Expand Energy and its subsidiaries’ ability to, among other things: (i) incur priority indebtedness, (ii) enter into mergers; (iii) make or declare dividends; (iv) incur liens; (v) sell all or substantially all of their assets; and (vi) engage in certain transactions with affiliates. The Credit Agreement requires our compliance with an indebtedness to capitalization ratio, which is the ratio of the Company’s total indebtedness to the sum of total indebtedness plus stockholders’ equity (the “Debt to Capitalization Ratio”), not to exceed 65 %, tested at the end of each quarter. As of September 30, 2026, we were in compliance with the Debt to Capitalization Ratio.
Borrowings under the Credit Agreement may be alternate base rate loans or term SOFR loans, at our election. Interest is payable quarterly for alternate base rate loans and at the end of the applicable interest period for term SOFR loans. Term SOFR loans bear interest at term SOFR plus an applicable rate ranging from 112.5 to 200 basis points per annum, depending on the Company’s unsecured debt ratings. Alternate base rate loans bear interest at a rate per annum equal to the greatest of: (i) the prime rate; (ii) the federal funds effective rate plus 50 basis points; and (iii) the term SOFR rate for a one-month interest period plus 100 basis points, plus an applicable margin ranging from 12.5 to 100 basis points per annum, depending on the Company’s unsecured debt ratings. Expand
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Energy also pays a commitment fee on unused commitment amounts under the Credit Facility ranging from 12.5 to 32.5 basis points per annum, depending on the Company’s unsecured debt ratings.
The Credit Facility is subject to customary events of default, remedies, and cure periods for investment-grade credit facilities of this nature.
Issuance of 5.65 % Senior Notes
On September 17, 2026, we completed our underwritten public offering of $500 million aggregate principal amount of our 5.65 % Senior Notes due 2031 (the “2031 Notes”). The 2031 Notes were issued pursuant to the Indenture (the “Base Indenture”), dated as of December 2, 2024, between the Company and Regions Bank (the “Trustee”), as trustee, as supplemented by the Second Supplemental Indenture, dated as of September 17, 2026, between the Company and the Trustee, setting forth specific terms applicable to the 2031 Notes.
The 2031 Notes are the Company’s senior unsecured obligations and rank equally in right to payment of the holders of the Company’s other current and future unsecured senior debt, including debt under the Company’s revolving credit facility and the Company’s existing senior notes, and senior in right of payment to any future subordinated debt that the Company may incur. The 2031 Notes are not guaranteed by any of the Company’s subsidiaries and are therefore structurally subordinated to any indebtedness incurred by any of the Company’s subsidiaries.
The 2031 Notes mature on September 15, 2031 and interest on the 2031 Notes is payable semi-annually, on March 15 and September 15 of each year, beginning on March 15, 2027.
Senior Notes Repayment
During the Prior Period, the $389 million aggregate principal of 4.95 % Senior Notes due 2025 (the “2025 Notes”) was repaid and terminated with cash on hand and borrowings on the Company’s reserve-based credit facility entered into on December 9, 2022, which was subsequently terminated in connection with the entry into the Credit Facility. The borrowings on the prior credit facility were subsequently repaid during the Prior Period. Additionally, we redeemed the remaining $47 million aggregate principal of the 5.50 % Senior Notes due 2026 (the “2026 Notes”), approximately $103 million of our 6.75 % Senior Notes due 2029, approximately $60 million of our 5.875 % Senior Notes due 2029 and approximately $62 million of our 5.375 % Senior Notes due 2029 with cash on hand.
During the Current Period, we redeemed the $847 million aggregate principal of 6.75 % Senior Notes due 2029 for approximately $875 million, which included accrued interest of $28 million. Additionally, we redeemed the $440 million aggregate principal of 5.875 % Senior Notes due 2029 for approximately $446 million, which included accrued interest of $6 million. Upon redemption of the 6.75 % Senior Notes due 2029 and the 5.875 % Senior Notes due 2029, we recognized a gain of $37 million during the Current Period primarily related to the derecognition of the unamortized premiums for these notes. We utilized cash on hand for the redemption of the 6.75 % Senior Notes due 2029 and the 5.875 % Senior Notes due 2029.
Assumption of Twin Eagle’s Credit Facility
On September 16, 2026, we closed the Twin Eagle Acquisition. As part of this acquisition, we assumed Twin Eagle’s Fifth Amended and Restated Credit Agreement, dated as of May 16, 2025 (the “Twin Eagle Credit Agreement”), with the lenders and issuing banks party thereto from time to time (the “Twin Eagle Lenders”), and MUFG Bank, Ltd., as administrative agent and collateral agent. The Twin Eagle Credit Agreement was amended on September 10, 2026 related to the Twin Eagle Acquisition. The Twin Eagle Credit Agreement provides for a revolving credit facility (the “Twin Eagle Credit Facility”) with a maturity date of May 16, 2027 and aggregate commitments of up to $1.4 billion. As of September 30, 2026, there were $1.0 billion of elected commitments under the Twin Eagle Credit Facility. The Twin Eagle Credit Facility can be used for borrowings or for the issuance of letters of credit, with incremental capacity for additional commitments in an amount up to $0.6 billion, subject to the receipt of commitments thereto and certain customary conditions. Under the Twin Eagle Credit Facility, the sublimit available for swingline loans is $200 million. As of September 30, 2026, there were no outstanding borrowings and there was approximately $266 million outstanding letters of credit under the Twin Eagle Credit Facility and approximately $734 million available for borrowings or for the issuance of letters of credit under the elected commitments.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
We expect the Twin Eagle Credit Facility to remain outstanding for a limited period of time, after which we intend to terminate this facility once all outstanding letters of credit are canceled. Neither Expand Energy nor its subsidiaries (other than certain Twin Eagle Resource Management, LLC subsidiaries) provide guarantees for this facility.
Substantially all of Twin Eagle’s and the guarantors’ thereunder assets were pledged as security for the Twin Eagle Credit Facility. The availability of capacity for borrowings and letters of credit were subject to a borrowing base calculation and other covenants. As of September 30, 2026, Twin Eagle was in compliance with the covenants associated with the Twin Eagle Credit Facility.
The Twin Eagle Credit Agreement contains restrictive covenants that limit Twin Eagle and its subsidiaries’ ability to, among other things: (i) incur indebtedness, (ii) enter into mergers; (iii) make restricted payments, including distributions; (iv) incur liens; (v) sell all or substantially all of their assets; and (vi) engage in certain transactions with affiliates. The Twin Eagle Credit Agreement requires Twin Eagle’s compliance with the following financial covenants, each tested as of the last day of each calendar month: (i) a consolidated net working capital of not less than 18 % of a maximum amount then in effect; (ii) a consolidated tangible net worth of not less than the greater of 20.0 % of a maximum amount then in effect and $200 million; (iii) a consolidated leverage ratio, which is the ratio of consolidated total liabilities (minus any subordinated indebtedness up to 50.00 % of the consolidated total liabilities) to consolidated tangible net worth, not to exceed 8.5 to 1.0; and (iv) a consolidated tangible net worth minus an aggregate marked-to-market value of, and reserves for, forward contracts with delivery periods more than one year out of not less than the greater of 14.5 % of a maximum amount then in effect and $145 million. As of September 30, 2026, Twin Eagle was in compliance with each of these financial condition covenants.
Borrowings under the Twin Eagle Credit Agreement may be base rate loans, term SOFR loans or cost of funds loans, at our election. Interest is payable monthly for base rate loans and at the end of the applicable interest period for term SOFR loans and cost of funds loans. Term SOFR loans bear interest at adjusted term SOFR plus an applicable margin of 175 basis points per annum. Base rate loans bear interest at a rate per annum equal to the greatest of: (i) the prime rate; (ii) the federal funds rate plus 50 basis points; and (iii) adjusted term SOFR for a one-month tenor plus 150 basis points, plus an applicable margin of 75 basis points per annum.
Assumption of Twin Eagle’s Trade Receivables Purchase Agreement
As part of the Twin Eagle Acquisition, we also assumed Twin Eagle’s Uncommitted Trade Receivables Purchase Agreement (the “Twin Eagle Trade Receivables Purchase Agreement”), made as of February 17, 2022, by and between Twin Eagle Resources Management, LLC, as seller, and MUFG Bank, Ltd., as purchaser. The Twin Eagle Trade Receivables Purchase Agreement matures on February 17, 2027 and renews automatically on an annual basis. The Twin Eagle Trade Receivables Purchase Agreement provides for Twin Eagle Resources Management, LLC to offer to sell, and MUFG Bank, Ltd. to purchase, on an uncommitted and discretionary basis, certain of Twin Eagle Resources Management, LLC’s trade receivables accounts. As of September 30, 2026, $86 million of trade receivables accounts had been sold under the Twin Eagle Trade Receivables Purchase Agreement and are reflected within other current liabilities within our condensed consolidated balance sheets.
Aside from the Twin Eagle Credit Facility and the Twin Eagle Trade Receivables Purchase Agreement, the Company had no secured debt as of September 30, 2026.
| 5. | Contingencies and Commitments | ||||
Contingencies
Business Operations and Litigation and Regulatory Proceedings
We are involved in, and expect to continue to be involved in, various lawsuits and disputes incidental to our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. We are also party to the consolidated Chapter 11 Cases pending for the Debtors in the Bankruptcy Court.
Our total accrued liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates. While it is not possible at this time to estimate the amount of any additional loss, or range of loss that is reasonably possible, based on the nature of the claims, management believes that current litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on our financial position, results of operations or cash flows. Many of these matters are in early stages and are all subject to inherent uncertainties. Therefore, management’s view may change in the future. If an unfavorable final outcome were to occur, there exists the possibility of our final liabilities being materially different.
The majority of Chesapeake’s pre-petition legal proceedings were settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court, together with actions seeking to collect pre-petition indebtedness or to exercise control over the property of Chesapeake’s bankruptcy estates. Any allowed claim related to such litigation will be treated in accordance with the Plan. The Plan in the Chapter 11 Cases, which became effective on February 9, 2021, provided for the treatment of claims against Chesapeake’s bankruptcy estates, including pre-petition liabilities that had not been satisfied or addressed during the Chapter 11 Cases. Many of these proceedings were in early stages as of the Petition Date, and many of them sought damages and penalties, the amount of which is indeterminate. Any legal proceeding pending against Southwestern and assumed by us in connection with the Southwestern Merger is not subject to discharge or resolution as part of the Chapter 11 Cases.
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.
Commitments
Gathering, Processing, Transportation and Storage Agreements
We have contractual commitments with midstream service companies and pipeline carriers for future gathering, processing and transportation of natural gas, oil and NGL to move certain of our production to market, as well as separate commitments with other counterparties for storage services. Certain of these arrangements include reservation and other capacity-related fees. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Generally, commitments related to gathering, processing, transportation and storage agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets, however, as part of the Southwestern Merger, we assumed gathering, processing, transportation and storage contracts, certain of which were deemed to be above or below current market rates. We recognized assets and liabilities for the difference in the contractual and market rates of these contracts, as of the date of the Southwestern Merger.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
The aggregate undiscounted commitments under our gathering, processing, transportation and storage agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below:
| September 30, 2026 | ||||||||
| Remainder of 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
In addition, we have long-term agreements for certain natural gas gathering and related services within specified acreage dedication areas in exchange for cost-of-service based fees redetermined annually, or tiered fees based on volumes delivered relative to scheduled volumes. Future gathering fees may vary with the applicable agreement.
Sales and Purchase Agreements
In April 2026, the Company entered into a 20-year LNG sales and purchase agreement with Delfin FLNG 1 LLC (“Delfin”) to purchase approximately 1.15 MTPA of LNG. As of June 30, 2026, all conditions precedent under the agreement had been satisfied and the agreement is effective. Commercial deliveries are expected to commence in 2031. Based on the fixed and determinable components of the contractual pricing provisions, the Company estimates future commitments associated with such components to be approximately $2.9 billion over the term of the agreement. Actual amounts paid under the agreement may vary based on commodity prices, inflation adjustments and other contractual terms.
Other Commitments
As part of our normal course of business, we enter into various agreements providing, or otherwise arranging for, financial or performance assurances to third parties on behalf of our wholly owned guarantor subsidiaries. These agreements may include future payment obligations or commitments regarding operational performance that effectively guarantee our subsidiaries’ future performance.
In connection with acquisitions and divestitures, our purchase and sale agreements generally provide indemnification to the counterparty for liabilities incurred as a result of a breach of a representation or warranty by the indemnifying party and/or other specified matters. These indemnifications generally have a discrete term and are intended to protect the parties against risks that are difficult to predict or cannot be quantified at the time of entering into or consummating a particular transaction. For divestitures of natural gas and oil properties, our purchase and sale agreements may require the return of a portion of the proceeds we receive as a result of uncured title or environmental defects.
While executing our strategic priorities, we have incurred certain cash charges, including contract termination charges, financing extinguishment costs and charges for unused natural gas transportation and gathering capacity.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| 6. | Other Balance Sheet Items | ||||
Other current assets as of September 30, 2026 and December 31, 2025 are detailed below:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Contract assets | $ | $ | ||||||||||||
| Notes receivable | ||||||||||||||
| Inventory | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Margin deposits | ||||||||||||||
| Other | ||||||||||||||
| Total other current assets | $ | $ | ||||||||||||
Other current liabilities as of September 30, 2026 and December 31, 2025 are detailed below:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Revenues and royalties due to others | $ | $ | ||||||||||||
| Accrued drilling and production costs | ||||||||||||||
| Contract liabilities | ||||||||||||||
| Accrued compensation and benefits | ||||||||||||||
| Taxes payable | ||||||||||||||
| Operating leases | ||||||||||||||
| Joint interest prepayments received | ||||||||||||||
| Other | ||||||||||||||
| Total other current liabilities | $ | $ | ||||||||||||
| 7. | Revenue | ||||
The following tables show revenue disaggregated by operating area and product type:
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | $ | $ | $ | ||||||||||||||||||||||
| Northeast Appalachia | ||||||||||||||||||||||||||
| Southwest Appalachia | ||||||||||||||||||||||||||
| Natural gas, oil and NGL revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Intersegment revenues | ( | ( | ( | ( | ||||||||||||||||||||||
| Marketing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | $ | $ | $ | ||||||||||||||||||||||
| Northeast Appalachia | ||||||||||||||||||||||||||
| Southwest Appalachia | ||||||||||||||||||||||||||
| Natural gas, oil and NGL revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Intersegment revenues | ( | ( | ( | ( | ||||||||||||||||||||||
| Marketing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | $ | $ | $ | ||||||||||||||||||||||
| Northeast Appalachia | ||||||||||||||||||||||||||
| Southwest Appalachia | ||||||||||||||||||||||||||
| Natural gas, oil and NGL revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Intersegment revenues | ( | ( | ( | ( | ||||||||||||||||||||||
| Marketing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | $ | $ | $ | ||||||||||||||||||||||
| Northeast Appalachia | ||||||||||||||||||||||||||
| Southwest Appalachia | ||||||||||||||||||||||||||
| Natural gas, oil and NGL revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Intersegment revenues | ( | ( | ( | ( | ||||||||||||||||||||||
| Marketing revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Transaction Price Allocated to Remaining Performance Obligation
As of September 30, 2026, we had approximately $536 million of unsatisfied performance obligations related to natural gas sales that have a fixed price component and a contract term of greater than one year . These obligations were assumed in connection with the Twin Eagle Acquisition and are expected to be recognized over the next 5 years.
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.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Accounts receivable as of September 30, 2026 and December 31, 2025 are detailed below:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Natural gas, oil and NGL sales | $ | $ | ||||||||||||
| Joint interest | ||||||||||||||
| Other | ||||||||||||||
| Allowance for doubtful accounts | ( | ( | ||||||||||||
| Total accounts receivable, net | $ | $ | ||||||||||||
| 8. | Income Taxes | ||||
The table below presents a comparison of the Current Period and Prior Period’s income tax expense and actual year-to-date effective tax rates.
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Income before income taxes | $ | $ | ||||||||||||||||||||||||
| Current tax expense | % | % | ||||||||||||||||||||||||
| Deferred tax expense | % | % | ||||||||||||||||||||||||
| Income tax expense | $ | % | $ | % | ||||||||||||||||||||||
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 21.9 %, compared to 21.3 % 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. Remeasurement of our state deferred tax assets and liabilities due to the Twin Eagle Acquisition resulted in a discrete deferred tax benefit recorded in the Current Period.
The Twin Eagle Acquisition was treated as a taxable asset acquisition and therefore provides for acquired tax basis to be stepped up to fair market value. For U.S. tax purposes, the intangible assets and the tax deductible portion of goodwill will amortize over a 15-year period. We expect approximately $242 million of the goodwill recognized from the Twin Eagle Acquisition to be deductible for U.S. tax purposes.
As a result of projecting federal and state income taxes, a portion of our EAETR represents the estimated provision for current taxes. Due to the book income in the Current Period and Prior Period, a current tax expense of $19 million and $9 million, respectively, was recorded.
As of December 31, 2025, we were in a net deferred tax asset position and we anticipate being in a net deferred tax liability position as of December 31, 2026. 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 for federal and state purposes as of September 30, 2026 and December 31, 2025. As of September 30, 2026, we were in a net deferred tax liability position for all jurisdictions.
On July 4, 2025, the current Presidential Administration signed into law the One Big Beautiful Bill Act (the “OBBBA”). This bill restores 100% bonus depreciation for property acquired and placed into service after January 19, 2025, restores the immediate expensing of research expenditures, and provides for parity between the treatment of intangible drilling costs and depreciation for purposes of the CAMT. The enactment of the OBBBA and its provisions contributed to a reduction in the Company’s expected current tax expense with an offsetting increase to the Company’s expected deferred tax expense.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| 9. | Equity | ||||
Dividends
The table below presents dividends during the Current Period and Prior Period.
| Base | Variable | Rate Per Share | Total | |||||||||||||||||||||||
| 2026: | ||||||||||||||||||||||||||
| First Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
| Second Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
| Third Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
| 2025: | ||||||||||||||||||||||||||
| First Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
| Second Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
| Third Quarter | $ | $ | $ | $ | ||||||||||||||||||||||
On October 27, 2026, we declared a base quarterly dividend payable of $0.575 per share, which will be paid on December 3, 2026 to stockholders of record at the close of business on November 12, 2026.
Share Repurchases
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. On July 24, 2026, our Board of Directors authorized an expansion of the share repurchase program by $1.0 billion, bringing the total authorized share repurchase amount to $2.0 billion for our common stock. During the Current Period, we repurchased 9.8 million shares for an aggregate price of $909 million, which includes the impact of the 1% excise tax on share repurchases. During the Prior Period, we repurchased 0.9 million shares for an aggregate price of $100 million. The shares of common stock repurchased during the Current Period and Prior Period were retired and recorded as a reduction to common stock and retained earnings.
Warrants
As of December 31, 2025, there were 15,705 Class A Warrants, 48,801 Class B Warrants and 1,244,008 Class C Warrants outstanding. On February 9, 2026, all of the outstanding Warrants that had not been previously exercised expired. As a result of these Warrant exercises, we issued 1,122,179 common shares and no longer have any outstanding Warrants.
| 10. | Share-Based Compensation | ||||
Our long-term incentive plan, as amended and adopted by our Board of Directors (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 and has a share reserve equal to 6,800,000 shares of common stock.
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:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Unvested Restricted Stock Units | Weighted Average Grant Date Fair Value Per Share | |||||||||||||
| (in thousands) | ||||||||||||||
| Unvested as of December 31, 2025 | $ | |||||||||||||
Granted(a) | $ | |||||||||||||
| Vested | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
| Unvested as of September 30, 2026 | $ | |||||||||||||
___________________________________________
(a)Includes approximately 479 thousand awards granted to certain employees in connection with the Twin Eagle Acquisition. These awards will vest in full on the third anniversary of the grant date, subject to continued employment through the vesting date.
The aggregate intrinsic value of RSUs that vested during the Current Period was approximately $44 million based on the stock price at the time of vesting.
As of September 30, 2026, there was approximately $114 million of total unrecognized compensation expense related to unvested RSUs. The expense is expected to be recognized over a weighted average period of approximately 2.37 years.
Performance Share Units. During the Current Period, we granted PSUs to senior management and certain employees 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 during the Current Period.
| Assumption | TSR, rTSR | |||||||
| Risk-free interest rate | % | |||||||
| Volatility | % | |||||||
A summary of the changes in unvested PSUs is presented below:
| Unvested Performance Share Units | Weighted Average Grant Date Fair Value Per Share | |||||||||||||
| (in thousands) | ||||||||||||||
| Unvested as of December 31, 2025 | $ | |||||||||||||
| Granted | $ | |||||||||||||
| Vested | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
| Unvested as of September 30, 2026 | $ | |||||||||||||
The aggregate intrinsic value of PSUs that vested during the Current Period was approximately $11 million based on the stock price at the time of vesting.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
As of September 30, 2026, 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 1.83 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, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| General and administrative expenses | $ | $ | $ | $ | ||||||||||||||||||||||
| Natural gas and oil properties | ||||||||||||||||||||||||||
| Production expense | ||||||||||||||||||||||||||
| Separation and other termination costs | ||||||||||||||||||||||||||
| Marketing expense | ||||||||||||||||||||||||||
| Other operating expense, net | ||||||||||||||||||||||||||
| Total RSU and PSU compensation | $ | $ | $ | $ | ||||||||||||||||||||||
| Related income tax benefit | $ | $ | $ | $ | ||||||||||||||||||||||
| 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 primarily include futures, swaps, and options, that manage index price risk, and basis risk. 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. These instruments may be transacted through an exchange or bilaterally with a counterparty. Our derivative instruments, other than those that meet the normal purchase and normal sale scope exception, are recorded at fair value in accordance with GAAP within our condensed consolidated balance sheets. We have elected not to designate any of our derivative instruments, including those acquired as part of the Twin Eagle Acquisition, for hedge accounting treatment.
As part of the Twin Eagle Acquisition, we acquired certain foreign currency, interest rate, and power derivative positions that Twin Eagle used as economic hedges. The foreign currency derivatives were used to manage exchange rate exposure associated with activity denominated in Canadian dollars, the interest rate derivatives were used to manage interest rate risk, and the power derivatives were used to manage exposure to fluctuations in power prices. The power derivative positions are included within our commodity derivatives below. Additional information on the Twin Eagle Acquisition is found in Note 2.
All gains and losses associated with our derivative instruments, including those acquired in the Twin Eagle Acquisition, are reflected within our condensed consolidated statements of operations within gains on derivatives and are presented within the table below.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Commodity derivatives | $ | $ | $ | $ | |||||||||||||||||||||||||
| Foreign exchange derivatives | |||||||||||||||||||||||||||||
| Interest rate derivatives | |||||||||||||||||||||||||||||
| Total gains on derivatives | $ | $ | $ | $ | |||||||||||||||||||||||||
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
The following table presents the notional volumes from our outstanding natural gas, oil and NGL derivative instruments as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Natural gas (Bcf): | ||||||||||||||
| Central hub exposure - Henry Hub | ||||||||||||||
| Basis exposure | ||||||||||||||
| Total natural gas | ||||||||||||||
| Oil (MMBbls): | ||||||||||||||
| Central hub exposure - WTI | ||||||||||||||
| NGLs (MMBbls): | ||||||||||||||
| Central hub exposure - Mont Belvieu | ||||||||||||||
Power Derivatives
As of September 30, 2026, the aggregate notional amount of our outstanding power derivatives was 1.5 million MWh.
Foreign Currency Derivatives
As of September 30, 2026, the aggregate notional amount of our outstanding foreign currency derivatives was approximately $260 million.
Interest Rate Derivatives
As of September 30, 2026, the aggregate notional amount of our outstanding interest rate derivatives was approximately $5.5 billion.
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, 2026 and December 31, 2025 on a gross basis and after same-counterparty netting:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Gross Fair Value(a) | Amounts Netted in the Condensed Consolidated Balance Sheets | Net Fair Value Presented in the Condensed Consolidated Balance Sheets | ||||||||||||||||||
| As of September 30, 2026 | ||||||||||||||||||||
| Commodity Contracts: | ||||||||||||||||||||
| Short-term derivative asset | $ | $ | ( | $ | ||||||||||||||||
| Long-term derivative asset | ( | |||||||||||||||||||
| Short-term derivative liability | ( | ( | ||||||||||||||||||
| Long-term derivative liability | ( | ( | ||||||||||||||||||
| Foreign Exchange Contracts: | ||||||||||||||||||||
| Short-term derivative asset | ( | |||||||||||||||||||
| Long-term derivative asset | ( | |||||||||||||||||||
| Short-term derivative liability | ( | |||||||||||||||||||
| Long-term derivative liability | ( | |||||||||||||||||||
| Interest Rate Contracts: | ||||||||||||||||||||
| Long-term derivative asset | ( | |||||||||||||||||||
| Long-term derivative liability | ( | |||||||||||||||||||
| Total derivatives | $ | $ | $ | |||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Commodity Contracts: | ||||||||||||||||||||
| Short-term derivative asset | $ | $ | ( | $ | ||||||||||||||||
| Long-term derivative asset | ( | |||||||||||||||||||
| Short-term derivative liability | ( | ( | ||||||||||||||||||
| Long-term derivative liability | ( | ( | ||||||||||||||||||
| Total derivatives | $ | $ | $ | |||||||||||||||||
___________________________________________
Fair Value
The fair value of our derivative instruments is based on third-party pricing models that utilize inputs that are either readily available in public markets or can be corroborated from active markets or broker quotes and, as such, are classified as Level 2. The fair value of our commodity derivatives is determined using observable inputs, including natural gas, oil, NGL and power forward-price curves, volatility curves and discount factors. The fair value of our foreign currency derivatives is determined using observable foreign currency exchange rates and forward curves, and the fair value of our interest-rate derivatives is determined using observable interest rates and yield curves. These values are compared to counterparty valuations 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.
Credit Risk Considerations
Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we evaluate the creditworthiness of our derivative counterparties and seek to transact with counterparties that have acceptable credit strength, and we attempt to limit our exposure to non-performance by any single counterparty. As of September 30, 2026, our commodity contracts derivative instruments were spread among 33 counterparties.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Hedging Arrangements
Certain of our hedging arrangements are with counterparties that are also Lenders (or affiliates of Lenders) under our Credit Facility. We do not expect to post cash or letters of credit to secure our obligations under these hedging arrangements while we have our investment grade ratings. 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, 2026, we had $42 million of letters of credit posted as collateral related to certain Twin Eagle commodity derivatives. We maintain accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and associated margin requirements, we may be required to deposit cash into these accounts. As of September 30, 2026, the cash held within these broker margin accounts was $35 million, and is included within other current assets within our condensed consolidated balance sheets.
| 12. | Investments | ||||
Momentum Sustainable Ventures LLC. During the fourth quarter of 2022, the Company entered into an agreement with Momentum Sustainable Ventures LLC (“Momentum”) to build a new natural gas gathering pipeline and carbon capture project, which gathers and treats natural gas produced in the Haynesville Shale for delivery to Gulf Coast markets, including LNG export, the New Generation Gas Gathering LLC (“NG3”) operated pipeline (the “NG3 pipeline”). The NG3 pipeline was placed in service and began gathering operations on October 1, 2025. Under a CO2 services agreement with ExxonMobil Low Carbon Solutions Onshore Storage, LLC (“Exxon”), NG3 began delivering CO2 to Exxon for capture and sequestration in February 2026. During the Current Quarter, Momentum was acquired by Williams (NYSE: WMB), but we continue to have a 35 % interest in the joint venture entity and classify our investment with Momentum in the NG3 pipeline as a related party.
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 $304 million and $313 million as of September 30, 2026 and December 31, 2025, respectively. We recognize our proportionate share of income (loss) related to our investment with Momentum in other income, net within our condensed consolidated statements of operations. Our proportionate share of income (loss) related to our investment with Momentum is recognized on a three-month lag. During the Current Quarter and Prior Quarter, as well as the Current Period and Prior Period, our proportionate share of income (loss) related to our investment in the NG3 pipeline did not have a material impact to our financial statements. We periodically review our investment with Momentum to determine if a loss in value, which is other than a temporary decline, has occurred. If an other than temporary decline has occurred, we recognize an impairment on our investment. Through September 30, 2026, we have no t recognized any impairments related to our investment with Momentum.
The NG3 pipeline provides to us certain gathering, processing and transportation services. We have a gathering agreement in which approximately 900 MMcf per day, on average, of natural gas are to be gathered and processed by the NG3 pipeline over the course of the next 11 years. During the Current Quarter and Current Period, approximately $23 million and $62 million of our gathering, processing and transportation expenses were related to services provided by the NG3 pipeline, respectively, and is reflected within our condensed consolidated statements of operations. Additionally, approximately $18 million and $12 million of our accounts payable balance as of September 30, 2026 and December 31, 2025, respectively, was related to gathering, processing and transportation services rendered to us by the NG3 pipeline.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| 13. | Supplemental Cash Flow Information | ||||
Supplemental disclosures to the condensed consolidated statements of cash flows are presented below.
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Changes in assets and liabilities | ||||||||||||||
| Accounts receivable | $ | $ | ||||||||||||
| Accounts payable | ( | ( | ||||||||||||
| Other current assets | ( | ( | ||||||||||||
| Other current liabilities | ( | ( | ||||||||||||
| Total | $ | $ | ||||||||||||
| Supplemental cash flow information: | ||||||||||||||
| Interest paid, net of capitalized interest | $ | $ | ||||||||||||
| Income taxes paid (refunds received), net | $ | ( | $ | |||||||||||
| Supplemental disclosure of significant non-cash investing and financing activities: | ||||||||||||||
| Change in accrued drilling and completion costs | $ | $ | ||||||||||||
| Operating lease obligations recognized | $ | $ | ||||||||||||
| 14. | Segment Information | ||||
Operating segments are components of an enterprise that engage in business activities from which they may earn revenues and incur expenses, have discrete financial information available, and are regularly evaluated by the chief operating decision maker (“CODM”) to allocate resources and assess performance. Our Chief Executive Officer serves as our CODM. Our revenues are derived from the production, marketing and sale of natural gas, oil and NGL. Substantially all of the production generated by our Exploration and Production segment is marketed and sold by our Marketing segment. Additional information on our revenues, including the disaggregation of our revenues, is found in Note 7.
As of September 30, 2026, our operating segments consisted of our individual exploration and production operating areas and our marketing business. Following the Twin Eagle Acquisition, we changed our reportable segment structure from one reportable segment to two : Exploration and Production (“E&P”) and Marketing. We aggregate our E&P operating segments into one reportable segment based on their similar economic characteristics and the similar nature of their operations and revenue-generating activities. Our E&P segment engages in the exploration and production of gas, oil and NGL. Our Marketing segment sells the production volumes generated by the E&P segment as well as third-party produced volumes while seeking to optimize the prices received for our production. Subsequent to the Twin Eagle Acquisition, Marketing was identified as a separate operating and reportable segment because the CODM now separately evaluates its operating performance and allocates resources based on discrete financial information provided for those operations. The CODM uses income (loss) from operations to assess the performance of each reportable segment, allocate resources and compare actual results with forecasted information. Our CODM previously used consolidated net income (loss) for purposes of allocating resources and in assessing Expand Energy’s operating performance as Expand Energy was a single reportable segment. In conjunction with the change to two reportable segments, our CODM now uses income (loss) from operations as certain items are not allocated at the segment level, such as taxes and other nonoperating items. Intersegment transactions are recorded using market-based pricing and are eliminated in consolidation. Segment results are presented within the tables below. Prior-period segment information has been recast to conform to the current-period presentation.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
The CODM does not review or receive asset information by segment. As substantially all capital expenditures relate to or support our E&P segment, the CODM reviews capital expenditures on a consolidated basis when assessing the Company’s performance. During the Current Quarter and Prior Quarter, our capital expenditures were $794 million and $735 million, respectively. During the Current Period and Prior Period, our capital expenditures were $2,361 million and $2,124 million, respectively. During the Current Quarter, Current Period, Prior Quarter and Prior Period we did no
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| E&P | Marketing | Eliminations | Total | |||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Natural gas, oil and NGL sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| Gains on derivatives | ||||||||||||||||||||||||||
| Gains on sales of assets | ||||||||||||||||||||||||||
| Total revenues and other | ( | |||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Gathering, processing and transportation | ( | |||||||||||||||||||||||||
| Severance and ad valorem taxes | ||||||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total significant expenses | ( | |||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
Other expenses(a) | ||||||||||||||||||||||||||
| Other segment items | ||||||||||||||||||||||||||
| Total expenses and other segment items | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Other expenses primarily consist of exploration, other operating expense (income), net, separation and other termination costs and impairments.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| E&P | Marketing | Eliminations | Total | |||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Natural gas, oil and NGL sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| Gains on derivatives | ||||||||||||||||||||||||||
| Losses on sales of assets | ( | ( | ||||||||||||||||||||||||
| Total revenues and other | ( | |||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Gathering, processing and transportation | ( | |||||||||||||||||||||||||
| Severance and ad valorem taxes | ||||||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total significant expenses | ( | |||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
Other expenses(a) | ( | ( | ||||||||||||||||||||||||
| Other segment items | ||||||||||||||||||||||||||
| Total expenses and other segment items | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Other expenses primarily consist of exploration, other operating expense (income), net, separation and other termination costs and impairments.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| E&P | Marketing | Eliminations | Total | |||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Natural gas, oil and NGL sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| Gains on derivatives | ||||||||||||||||||||||||||
| Gains on sales of assets | ||||||||||||||||||||||||||
| Total revenues and other | ( | |||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Gathering, processing and transportation | ( | |||||||||||||||||||||||||
| Severance and ad valorem taxes | ||||||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total significant expenses | ( | |||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
Other expenses(a) | ||||||||||||||||||||||||||
| Other segment items | ||||||||||||||||||||||||||
| Total expenses and other segment items | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Other expenses primarily consist of exploration, other operating expense (income), net, separation and other termination costs and impairments.
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EXPAND ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| E&P | Marketing | Eliminations | Total | |||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Natural gas, oil and NGL sales | $ | $ | $ | $ | ||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| Gains on derivatives | ||||||||||||||||||||||||||
| Gains on sales of assets | ||||||||||||||||||||||||||
| Total revenues and other | ( | |||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Production | ||||||||||||||||||||||||||
| Gathering, processing and transportation | ( | |||||||||||||||||||||||||
| Severance and ad valorem taxes | ||||||||||||||||||||||||||
| Marketing | ( | |||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total significant expenses | ( | |||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||
Other expenses(a) | ||||||||||||||||||||||||||
| Other segment items | ||||||||||||||||||||||||||
| Total expenses and other segment items | ( | |||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Other expenses primarily consist of exploration, other operating expense (income), net, separation and other termination costs and impairments.
The table below reconciles income (loss) from operations to net income.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||
| Income from operations | $ | $ | $ | $ | ||||||||||||||||||||||
| Unallocated items: | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Gains on purchases, exchanges or extinguishments of debt | ||||||||||||||||||||||||||
Other income, net(a) | ||||||||||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||||||||
| Income tax (expense) benefit | ( | ( | ( | ( | ||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
(a)Included within other income, net is approximately $4 million, $6 million, $20 million and $13 million, respectively, of interest revenue during the Current Quarter, Prior Quarter, Current Period and Prior Period.
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| 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 2025 Form 10-K.
Expand Energy is a leading North American integrated natural gas company, reaching customers from coast to coast across the United States and Canada. As the largest natural gas producer in the U.S., based on net daily production, Expand Energy is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all. Our E&P operations are located in Louisiana and Texas in the Haynesville and 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”). The recent Twin Eagle Acquisition has expanded our marketing operations across the United States as well as Canada, extending our reach throughout North America within the natural gas value chain.
Our strategy is to create sustainable long-term shareholder value by leveraging our advantaged natural gas supply, premium market access and portfolio optionality across an integrated value chain. We continue to focus on improving margins through operating efficiencies, marketing and commercial efforts and financial discipline, while improving our safety and sustainability performance. To accomplish these goals, we plan to allocate our human resources and capital expenditures to projects we believe offer the highest cash return on capital invested; deploy leading drilling and completion technology throughout our portfolio; optimize market access and customer relationships; and pursue acquisition and divestiture opportunities which strengthen our portfolio. We also intend to continue to invest in projects designed to reduce the environmental impact of our operations.
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 | ||
Twin Eagle Acquisition
On September 16, 2026, we completed the acquisition of Twin Eagle, a provider of natural gas marketing and logistics services, through a merger with one of our wholly owned subsidiaries. The aggregate purchase price was approximately $1.4 billion, including purchase price adjustments. 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.
Issuance of Senior Notes and Senior Notes Repayment
In September 2026, we completed our underwritten public offering of $500 million aggregate principal amount of our 5.65% Senior Notes due 2031 (the “2031 Notes”). During the Current Period, the 6.75% Senior Notes due 2029 were repaid and terminated for approximately $875 million, including accrued interest. Additionally, the 5.875% Senior Notes due 2029 were repaid and terminated for approximately $446 million, including accrued interest. These series of senior notes were repaid using cash on hand. 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.
Credit Facility Maturity Extension
On October 6, 2026, we obtained consent from the lenders to an amendment to extend the maturity date of the Credit Facility by one year to September 30, 2031. 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.
Shareholder Returns
In October 2024, our Board of Directors authorized the Company to repurchase up to $1.0 billion, in aggregate, of the Company’s common stock and/or warrants. On July 24, 2026, our Board of Directors authorized an expansion of the share repurchase program by $1.0 billion, bringing the total authorized share repurchase amount to $2.0 billion for our common stock. In 2025, we prioritized paying the base dividend of $2.30 per share and $1.0 billion of annual net debt reduction, with 75% of the remaining free cash flow distributed, as market conditions warranted, through share repurchases and additional dividend payments. In 2026, the Company plans to continue to effectively return cash to shareholders and preserve balance sheet strength. During the Current Period, we repurchased 9.8 million shares for an aggregate price of $909 million, which includes the impact of the 1% excise tax on share repurchases.
LNG Agreement
On April 22, 2026, we executed a Sales and Purchase Agreement (“SPA”) for long-term liquefaction offtake with Delfin FLNG 1 LLC. Under the SPA, we will purchase approximately 1.15 MTPA of LNG from Delfin FLNG 1 LLC at a Henry Hub price with a contract targeted start date in 2031. The previously announced SPAs with Delfin and Gunvor Group Ltd have been terminated.
Economic and Market Conditions
Domestically, mild weather and strong production weighed on natural gas prices during the first nine months of 2026. Over the longer term, we expect structural demand growth, led by new LNG export capacity, industrial demand, and power demand from data center expansion, to tighten the market and increase the need for incremental supply. We also expect these factors to contribute to greater price volatility. Our hedge positions partially protect our estimated future cash flows from commodity price movements, providing downside protection on more than half of our projected natural gas volumes through the end of 2027, while our collar and three-way collar structures allow us to participate in price increases up to their ceiling prices. We believe our operational flexibility, cost structure, and liquidity position will allow us to manage through periods of price volatility.
Elevated geopolitical tensions and episodic supply disruptions have continued to contribute to price fluctuations across energy commodity markets, with attendant risks to the broader global economy. During 2026, for example, renewed military conflict and instability in the Middle East raised concerns about potential disruptions to
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oil, natural gas and LNG production and to regional shipping routes. These concerns may continue to affect prices for an indeterminate period, particularly as growing LNG trade increasingly links previously regional natural gas markets. We continue to monitor factors impacting commodity supply and demand, as well as our costs, including the price of oil-linked inputs such as diesel fuel and tariffs on steel and other materials, to assess their effect on our business, business partners, and customers. For additional discussion of risks associated with price volatility and economic uncertainty, see Part I, Item 1A “Risk Factors” in our 2025 Form 10-K.
Management Changes
On February 6, 2026, the Board of Directors of the Company appointed Michael Wichterich, Chairman of the Board, as Interim President and Chief Executive Officer, replacing Domenic J. Dell’Osso, Jr., effective immediately. In connection with his separation, Mr. Dell’Osso also resigned from the Board of Directors, effective immediately.
On April 6, 2026, the Board of Directors of the Company appointed Marcel Teunissen, as Executive Vice President and Chief Financial Officer, effective immediately.
On October 16, 2026, the Board of Directors of the Company appointed Daniel E. Brown, as President and Chief Executive Officer, effective October 26, 2026. In connection with the appointment, Mr. Brown was also elected to serve on our Board of Directors, effective October 26, 2026. Upon the effectiveness of Mr. Brown’s appointment, Mr. Wichterich ceased serving as Interim President and Chief Executive Officer and will continue serving as Chairman of the Board.
| 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, repayments of debt and return of value to stockholders through dividends and equity repurchases. If needed, we also have the ability to issue equity or debt securities through public offerings or private placements. We believe our cash flow from operations, 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, 2026, we had $3.9 billion of liquidity available, including $0.1 billion of cash on hand and $3.1 billion and $0.7 billion of aggregate unused borrowing capacity available under the Credit Facility and Twin Eagle Credit Facility, respectively. As of September 30, 2026, we had $450 million outstanding borrowings under our Credit Facility and no borrowings outstanding under the Twin Eagle Credit Facility.
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 principal and carrying amounts of our senior notes.
Investment Grade Ratings
We have investment grade ratings with S&P Global Ratings (“S&P”), Fitch Ratings (“Fitch”) and Moody’s Ratings (“Moody’s”). S&P has an issuer-level rating of ‘BBB-’ on our unsecured debt and an issuer credit rating of ‘BBB-’, with a stable outlook. Moody’s has a rating of Baa3 on our senior unsecured notes, with a stable outlook. On May 6, 2026, Fitch upgraded the credit rating on our revolver credit rating as well as our senior notes from ‘BBB-’, to ‘BBB’ and maintains a stable outlook.
Dividends
On October 27, 2026, we declared a base quarterly dividend payable of $0.575 per share, which will be paid on December 3, 2026 to stockholders of record at the close of business on November 12, 2026.
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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 of Directors 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 and (iv) the terms and provisions of the various indentures governing our senior notes. 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.
Derivative and Hedging Activities
Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. 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. Additionally, as part of the Twin Eagle Acquisition, we acquired certain foreign currency derivative positions that Twin Eagle would use as economic hedges to lock in the exchange rate associated with activity denominated in Canadian dollars in order to minimize fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates. We also acquired certain interest rate derivatives that Twin Eagle would use as economic hedges to hedge its exposure to interest rate risk. See Item 3. Quantitative and Qualitative Disclosures About Market Risk included in Part I of this report for further discussion on the impact of these risks on our financial position.
Shelf Registration
We have a universal shelf registration statement on file with the SEC, as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), under which we have the ability to issue and sell an indeterminate amount of various types of debt and equity securities. The specific terms of any securities to be sold will be described in supplemental filings with the SEC. As discussed in Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report, during the Current Period, we completed our underwritten public offering of $500 million aggregate principal amount of our 2031 Notes. There were no sales of such securities during the Prior Period. Our current shelf registration statement will expire in November 2027.
Contractual Obligations and Off-Balance Sheet Arrangements
As of September 30, 2026, our material contractual obligations include repayment of senior notes, derivative obligations, asset retirement obligations, lease obligations, sales and purchase agreements, 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 as well as separate commitments related to storage services. The estimated gross undiscounted future commitments under these gathering, processing, transportation and storage agreements were approximately $8.9 billion as of September 30, 2026. 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.
Credit Facility
On September 30, 2025, we entered into the Credit Agreement, which, giving effect to Amendment No. 1 thereto dated October 6, 2026, matures in September 2031. The Credit Facility provides for aggregate commitments of $3.5 billion, with a $1.0 billion sublimit available for the issuance of letters of credit and a $100 million sublimit available for swingline loans. Borrowings under the Credit Agreement may be alternate base rate loans or term SOFR loans, at the Company’s election. As of September 30, 2026, we had approximately $450 million of outstanding borrowings and approximately $3.1 billion available for borrowings under the Credit Facility. 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.
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Twin Eagle’s Credit Facility
On September 16, 2026, we closed the Twin Eagle Acquisition. As part of this acquisition, we assumed the Twin Eagle Credit Agreement. The Twin Eagle Credit Agreement provides for a revolving credit facility with a maturity date of May 16, 2027 (the “Twin Eagle Credit Facility”), aggregate commitments of up to $1.4 billion, with incremental capacity for additional commitments in an amount up to $0.6 billion, subject to the receipt of commitments thereto and certain customary conditions. As of September 30, 2026, there were $1.0 billion of elected commitments under the Twin Eagle Credit Facility. The Twin Eagle Credit Facility can be used for borrowings or for the issuance of letters of credit. As of September 30, 2026, there were approximately $266 million outstanding letters of credit under the Twin Eagle Credit Facility and approximately $734 million available for borrowings. As of September 30, 2026, there were no outstanding borrowings under the Twin Eagle Credit Facility. We expect the Twin Eagle Credit Facility to remain outstanding for a limited period of time, after which we intend to terminate this facility once all outstanding letters of credit thereunder are canceled. 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.
Capital Expenditures
For the year ending December 31, 2026, we currently expect to complete and turn in line 205 to 235 gross wells utilizing approximately 11 to 12 rigs and plan to invest approximately $3.0 billion in capital expenditures. We currently plan to fund our 2026 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.
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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, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash provided by operating activities | $ | 4,675 | $ | 3,619 | ||||||||||
| Proceeds from divestitures of property and equipment | 76 | 19 | ||||||||||||
| Receipts of deferred consideration | 161 | 116 | ||||||||||||
| Proceeds from Credit Facility, net | 450 | — | ||||||||||||
| Proceeds from issuance of senior notes, net | 499 | — | ||||||||||||
| Proceeds from accounts receivable financing | 86 | — | ||||||||||||
| Proceeds from warrant exercise | 15 | 22 | ||||||||||||
| Distributions from investments | 10 | — | ||||||||||||
| Capital expenditures | (2,298) | (1,995) | ||||||||||||
| Business combination, net | (1,395) | — | ||||||||||||
| Property acquisitions | (9) | (69) | ||||||||||||
| Contributions to investments | (2) | (14) | ||||||||||||
| Payments on Twin Eagle Credit Facility | (141) | — | ||||||||||||
| Cash paid to purchase debt | (1,287) | (663) | ||||||||||||
| Cash paid to repurchase and retire common stock | (900) | (100) | ||||||||||||
| Cash paid for common stock dividends | (411) | (628) | ||||||||||||
| Debt issuance and other financing costs | (4) | (11) | ||||||||||||
| Net increase in cash, cash equivalents and restricted cash | $ | (475) | $ | 296 | ||||||||||
Cash Flow from Operating Activities
Cash provided by operating activities was $4,675 million and $3,619 million during the Current Period and Prior Period, respectively. The increase during the Current Period is primarily due to higher prices for the natural gas we sold as well as increased sales volumes. 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 Current Period, we sold a portion of our Oklahoma City campus as well as certain minor leasehold positions.
Receipts of Deferred Consideration
During both the Current Period and Prior Period, we received 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.
Proceeds from Credit Facility, net
During the Current Period, we borrowed a net $450 million under the Credit Facility. We utilized a portion of these borrowings to fund the Twin Eagle Acquisition, along with cash on hand.
Proceeds from Accounts Receivable Financing
During the Current Period, we received $86 million under the Twin Eagle Trade Receivables Purchase Agreement. 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.
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Proceeds from Issuance of Senior Notes, net
During the Current Period, we completed our underwritten public offering of $500 million aggregate principal amount of our 5.65% Senior Notes due 2031. 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.
Capital Expenditures
Our capital expenditures increased during the Current Period compared to the Prior Period, as a result of increased drilling and completion activity within our Northeast Appalachia and Southwest Appalachia operating areas as well as increased leasehold capital expenditure activity.
Business Combination, net
During the Current Period, we completed our acquisition of Twin Eagle for approximately $1,395 million which is inclusive of purchase price adjustments, less the cash assumed from Twin Eagle. 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.
Property Acquisitions
Property acquisitions during the Prior Period primarily relate to undeveloped leasehold acquired in Southwest Appalachia.
Payments on Twin Eagle Credit Facility
Subsequent to the close of the Twin Eagle Acquisition, we made payments of $141 million on the Twin Eagle Credit Facility. As of September 30, 2026, there were no borrowings under the Twin Eagle Credit Facility.
Cash Paid to Purchase Debt
During the Current Period, we redeemed the $440 million aggregate principal of the 5.875% Senior Notes due 2029 as well as the $847 million aggregate principal of the 6.75% Senior Notes due 2029. These series of senior notes were repaid using cash on hand.
During the Prior Period, the $389 million aggregate principal of the 2025 Notes was repaid and terminated upon maturity with cash on hand and borrowings under the prior credit facility, of which the prior credit facility borrowings were subsequently repaid. Additionally, we redeemed the remaining $47 million aggregate principal of the 2026 Notes using cash on hand. During the Prior Period, we also redeemed approximately $103 million of our 6.75% Senior Notes due 2029, approximately $60 million of our 5.875% Senior Notes due 2029 and approximately $62 million of our 5.375% Senior Notes due 2029 through open market repurchases using cash on hand. 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.
Cash Paid to Repurchase and Retire Common Stock
During the Current Period, we repurchased 9.8 million shares for an aggregate price of $909 million. During the Prior Period, we repurchased 0.9 million shares for an aggregate price of $100 million. The shares of common stock repurchased were retired and recorded as a reduction to common stock and retained earnings. 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.
Cash Paid for Common Stock Dividends
As part of our dividend program, we paid common stock dividends of $411 million and $628 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 | ||
Following the Twin Eagle Acquisition we completed during the Current Quarter, we changed our reportable segment structure from one reportable segment to two reportable segments: Exploration and Production (“E&P”) and Marketing. Prior-period information has been recast to conform to the current-period presentation. See Note 14 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion on our reportable segments.
The following table presents income from operations for each of our reportable segments and the related discussion for items impacting each segment. For items that are not allocated to reportable segments, but are meaningful to the discussion of our consolidated results of operations, those have been labeled “Other Condensed Consolidated Statements of Operations Items” within the below discussion.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income from operations by segment | ||||||||||||||||||||||||||
| Exploration & Production | $ | 546 | $ | 663 | $ | 2,461 | $ | 1,542 | ||||||||||||||||||
| Marketing | 94 | 62 | 371 | 184 | ||||||||||||||||||||||
| Consolidated income from operations | $ | 640 | $ | 725 | $ | 2,832 | $ | 1,726 | ||||||||||||||||||
Exploration and Production
Natural Gas, Oil and NGL Production and Average Sales Prices
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||
| Haynesville | 3,178 | 2.68 | — | — | — | — | 3,178 | 2.68 | ||||||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 2,593 | 2.15 | — | — | — | — | 2,593 | 2.15 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 1,145 | 2.44 | 17 | 77.05 | 87 | 25.95 | 1,767 | 3.59 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 6,916 | 2.44 | 17 | 77.05 | 87 | 25.95 | 7,538 | 2.71 | ||||||||||||||||||||||||||||||||||||||||||
| Average NYMEX Price | 2.95 | 85.79 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average Realized Price (including realized derivatives) | 2.94 | 75.97 | 25.87 | 3.17 | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||
| Haynesville | 3,206 | 2.80 | — | — | — | — | 3,206 | 2.80 | ||||||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 2,556 | 2.29 | — | — | — | — | 2,556 | 2.29 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 959 | 2.64 | 17 | 53.50 | 85 | 21.40 | 1,571 | 3.36 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 6,721 | 2.58 | 17 | 53.50 | 85 | 21.40 | 7,333 | 2.74 | ||||||||||||||||||||||||||||||||||||||||||
| Average NYMEX Price | 3.07 | 64.93 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average Realized Price (including realized derivatives) | 2.81 | 54.66 | 21.62 | 2.95 | ||||||||||||||||||||||||||||||||||||||||||||||
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| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||
| Haynesville | 3,171 | 3.22 | — | — | — | — | 3,171 | 3.22 | ||||||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 2,667 | 3.37 | — | — | — | — | 2,667 | 3.37 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 1,070 | 3.05 | 15 | 75.42 | 81 | 25.92 | 1,648 | 3.95 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 6,908 | 3.25 | 15 | 75.42 | 81 | 25.92 | 7,486 | 3.44 | ||||||||||||||||||||||||||||||||||||||||||
| Average NYMEX Price | 3.63 | 83.50 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average Realized Price (including realized derivatives) | 3.37 | 74.10 | 25.74 | 3.54 | ||||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| MMcf per day | $/Mcf | MBbl per day | $/Bbl | MBbl per day | $/Bbl | MMcfe per day | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||
| Haynesville | 2,935 | 3.11 | — | — | — | — | 2,935 | 3.11 | ||||||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 2,628 | 2.90 | — | — | — | — | 2,628 | 2.90 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 961 | 3.04 | 16 | 56.59 | 81 | 24.81 | 1,546 | 3.79 | ||||||||||||||||||||||||||||||||||||||||||
| Total | 6,524 | 3.01 | 16 | 56.59 | 81 | 24.81 | 7,109 | 3.18 | ||||||||||||||||||||||||||||||||||||||||||
| Average NYMEX Price | 3.39 | 66.70 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average Realized Price (including realized derivatives) | 3.09 | 57.63 | 24.48 | 3.25 | ||||||||||||||||||||||||||||||||||||||||||||||
Natural Gas, Oil and NGL Sales
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | 783 | $ | — | $ | — | $ | 783 | ||||||||||||||||||
| Northeast Appalachia | 513 | — | — | 513 | ||||||||||||||||||||||
| Southwest Appalachia | 257 | 120 | 208 | 585 | ||||||||||||||||||||||
| Total natural gas, oil and NGL sales | $ | 1,553 | $ | 120 | $ | 208 | $ | 1,881 | ||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | 826 | $ | — | $ | — | $ | 826 | ||||||||||||||||||
| Northeast Appalachia | 538 | — | — | 538 | ||||||||||||||||||||||
| Southwest Appalachia | 233 | 86 | 167 | 486 | ||||||||||||||||||||||
| Total natural gas, oil and NGL sales | $ | 1,597 | $ | 86 | $ | 167 | $ | 1,850 | ||||||||||||||||||
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| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | 2,790 | $ | — | $ | — | $ | 2,790 | ||||||||||||||||||
| Northeast Appalachia | 2,454 | — | — | 2,454 | ||||||||||||||||||||||
| Southwest Appalachia | 890 | 319 | 573 | 1,782 | ||||||||||||||||||||||
| Total natural gas, oil and NGL sales | $ | 6,134 | $ | 319 | $ | 573 | $ | 7,026 | ||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Natural Gas | Oil | NGL | Total | |||||||||||||||||||||||
| Haynesville | $ | 2,492 | $ | — | $ | — | $ | 2,492 | ||||||||||||||||||
| Northeast Appalachia | 2,081 | — | — | 2,081 | ||||||||||||||||||||||
| Southwest Appalachia | 798 | 250 | 550 | 1,598 | ||||||||||||||||||||||
| Total natural gas, oil and NGL sales | $ | 5,371 | $ | 250 | $ | 550 | $ | 6,171 | ||||||||||||||||||
Natural gas, oil and NGL sales during the Current Quarter increased $31 million compared to the Prior Quarter. Higher sales volumes, primarily driven by new well production, resulted in a $48 million increase. This increase was partially offset by a $17 million decrease resulting from lower average natural gas prices, partially offset by higher oil and NGL prices.
Natural gas, oil and NGL sales during the Current Period increased $855 million compared to the Prior Period. Higher average natural gas prices, primarily driven by Winter Storm Fern, increased revenues by $547 million. Additionally, increased volumes across all of our operating areas, driven by new well production, resulted in a $308 million increase.
Production Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| $/Mcfe | $/Mcfe | $/Mcfe | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||||||
| Haynesville | $ | 89 | 0.30 | $ | 79 | 0.27 | $ | 268 | 0.31 | $ | 216 | 0.27 | ||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 40 | 0.17 | 43 | 0.18 | 128 | 0.18 | 118 | 0.16 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 39 | 0.24 | 47 | 0.32 | 125 | 0.28 | 133 | 0.31 | ||||||||||||||||||||||||||||||||||||||||||
| Total production expenses | $ | 168 | 0.24 | $ | 169 | 0.25 | $ | 521 | 0.25 | $ | 467 | 0.24 | ||||||||||||||||||||||||||||||||||||||
Production expenses during the Current Period increased $54 million compared to the Prior Period. This increase was primarily driven by increased salt water disposal expenses and workover expenses in Haynesville as a result of increased production activity.
Gathering, Processing and Transportation Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| $/Mcfe | $/Mcfe | $/Mcfe | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||||||
| Haynesville | $ | 230 | 0.79 | $ | 211 | 0.72 | $ | 693 | 0.80 | $ | 568 | 0.71 | ||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 207 | 0.87 | 201 | 0.85 | 674 | 0.93 | 630 | 0.88 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 241 | 1.48 | 196 | 1.36 | 635 | 1.41 | 536 | 1.27 | ||||||||||||||||||||||||||||||||||||||||||
| Total GP&T | $ | 678 | 0.98 | $ | 608 | 0.90 | $ | 2,002 | 0.98 | $ | 1,734 | 0.89 | ||||||||||||||||||||||||||||||||||||||
Gathering, processing and transportation expenses during the Current Quarter and Current Period increased $70 million and $268 million compared to the Prior Quarter and Prior Period, respectively. These increases were primarily related to increased rates across all of our operating areas as well as increased volumes due to new well production, annual fee escalations and the NG3 pipeline going into service.
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Severance and Ad Valorem Taxes
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| $/Mcfe | $/Mcfe | $/Mcfe | $/Mcfe | |||||||||||||||||||||||||||||||||||||||||||||||
| Haynesville | $ | 34 | 0.12 | $ | 18 | 0.06 | $ | 90 | 0.10 | $ | 49 | 0.06 | ||||||||||||||||||||||||||||||||||||||
| Northeast Appalachia | 7 | 0.03 | 8 | 0.03 | 22 | 0.03 | 24 | 0.03 | ||||||||||||||||||||||||||||||||||||||||||
| Southwest Appalachia | 20 | 0.12 | 22 | 0.15 | 69 | 0.15 | 72 | 0.17 | ||||||||||||||||||||||||||||||||||||||||||
| Total severance and ad valorem taxes | $ | 61 | 0.09 | $ | 48 | 0.07 | $ | 181 | 0.09 | $ | 145 | 0.07 | ||||||||||||||||||||||||||||||||||||||
Severance and ad valorem taxes during the Current Quarter and Current Period increased $13 million and $36 million compared to the Prior Quarter and Prior Period, respectively. These increases were primarily related to higher effective severance tax rates in Haynesville.
Gains (Losses) on E&P Derivatives
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Natural gas derivatives - realized gains | $ | 318 | $ | 138 | $ | 221 | $ | 135 | ||||||||||||||||||
| Natural gas derivatives - unrealized gains | 159 | 312 | 582 | 175 | ||||||||||||||||||||||
| Total gains on natural gas derivatives | $ | 477 | $ | 450 | $ | 803 | $ | 310 | ||||||||||||||||||
| Oil derivatives - realized gains (losses) | $ | (2) | $ | 2 | $ | (6) | $ | 4 | ||||||||||||||||||
| Oil derivatives - unrealized gains (losses) | (12) | (2) | (5) | (1) | ||||||||||||||||||||||
| Total gains (losses) on oil derivatives | $ | (14) | $ | — | $ | (11) | $ | 3 | ||||||||||||||||||
| NGL derivatives - realized gains (losses) | $ | (1) | $ | 2 | $ | (4) | $ | (7) | ||||||||||||||||||
| NGL derivatives - unrealized gains (losses) | (8) | (1) | (6) | 8 | ||||||||||||||||||||||
| Total gains (losses) on NGL derivatives | $ | (9) | $ | 1 | $ | (10) | $ | 1 | ||||||||||||||||||
| Total gains on E&P derivatives | $ | 454 | $ | 451 | $ | 782 | $ | 314 | ||||||||||||||||||
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, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Total G&A, net | $ | 50 | $ | 45 | $ | 163 | $ | 132 | ||||||||||||||||||
| G&A, net per Mcfe | $ | 0.07 | $ | 0.07 | $ | 0.08 | $ | 0.07 | ||||||||||||||||||
Total general and administrative expenses, net during the Current Quarter and Current Period increased $5 million and $31 million compared to the Prior Quarter and Prior Period, respectively, due to an increase in employee compensation and benefits as well as other corporate expenses.
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Separation and Other Termination Costs
During the Current Period and Prior Period, we recognized $12 million and $5 million, respectively, 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, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| DD&A | $ | 743 | $ | 741 | $ | 2,176 | $ | 2,221 | ||||||||||||||||||
| DD&A per Mcfe | $ | 1.07 | $ | 1.10 | $ | 1.06 | $ | 1.14 | ||||||||||||||||||
The absolute and per unit decrease in depreciation, depletion and amortization for the Current Period compared to the Prior Period is related to lower depletion rates in the Current Period due to an increase in prices used in the evaluation of our reserves.
Other Operating Expense (Income), Net
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Other operating expense (income), net | $ | 29 | $ | (37) | $ | 42 | $ | 23 | ||||||||||||||||||
During the Current Quarter and Current Period, we recognized approximately $22 million of costs related to the Twin Eagle Acquisition, which included transaction fees, consulting and legal fees and other fees related to the transaction. During the Prior Quarter and Prior Period, other operating expense (income), net included favorable legal settlements of approximately $40 million. Additionally, during the Prior Period, we recognized approximately $53 million of costs related to the Southwestern Merger, which included employee expenses, legal fees, consulting fees and financial advisory fees.
Marketing
Marketing Revenues and Expenses
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Marketing segment revenues | $ | 2,748 | $ | 2,498 | $ | 9,797 | $ | 8,413 | ||||||||||||||||||
| Intersegment revenue eliminations | (1,821) | (1,832) | (6,977) | (6,049) | ||||||||||||||||||||||
| Consolidated marketing revenues | $ | 927 | $ | 666 | $ | 2,820 | $ | 2,364 | ||||||||||||||||||
| Marketing segment expenses | $ | 2,657 | $ | 2,436 | $ | 9,421 | $ | 8,229 | ||||||||||||||||||
| Intersegment expense eliminations | (1,769) | (1,777) | (6,763) | (5,860) | ||||||||||||||||||||||
| Consolidated marketing expenses | $ | 888 | $ | 659 | $ | 2,658 | $ | 2,369 | ||||||||||||||||||
Marketing revenues and expenses increased in the Current Quarter compared to the Prior Quarter primarily as a result of increased activity following the close of the Twin Eagle Acquisition. Optimization efforts and increases in marketed volumes also contributed to an increase in marketing revenues and expenses.
Marketing revenues and expenses increased in the Current Period compared to the Prior Period primarily as a result of increased marketed volumes, higher prices amid natural gas price volatility as well as increased activity following the close of the Twin Eagle Acquisition, and optimization efforts.
The table below presents the total marketing derivative gains and losses included within our Marketing segment results. See Note 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for additional discussion.
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Marketing derivatives - realized losses | $ | (4) | $ | — | $ | (12) | $ | — | |||||||||||||||||||||
| Marketing derivatives - unrealized gains | 14 | — | 14 | — | |||||||||||||||||||||||||
| Total gains on marketing derivatives | $ | 10 | $ | — | $ | 2 | $ | — | |||||||||||||||||||||
Other Condensed Consolidated Statements of Operations Items
Interest Expense
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Interest expense on debt | $ | 54 | $ | 72 | $ | 180 | $ | 223 | ||||||||||||||||||
| Amortization of premium, discount, issuance costs and other | 4 | 2 | 7 | 4 | ||||||||||||||||||||||
| Capitalized interest | (14) | (17) | (41) | (51) | ||||||||||||||||||||||
| Total interest expense | $ | 44 | $ | 57 | $ | 146 | $ | 176 | ||||||||||||||||||
The decrease in interest expense on debt during the Current Quarter and Current Period compared to the Prior Quarter and Prior Period was primarily due to lower average debt outstanding during the Current Quarter and Current Period. Capitalized interest decreased during the Current Quarter and Current Period compared to the Prior Quarter and Prior Period, as we ceased capitalizing interest on our investment in the NG3 pipeline once operations commenced on October 1, 2025.
See Note 4 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for additional discussion.
Income Taxes
The projected full year current and deferred taxes are allocated to the Current Period based on the proportion of year-to-date pre-tax book income to the projected full year pre-tax book income. As a result, an income tax expense of $569 million was recorded for the Current Period. Of this amount, $19 million was related to current taxes and $550 million was related to deferred taxes. An income tax expense of $329 million was recorded for the Prior Period. Of this amount, $9 million was related to current taxes and $320 million was related to deferred taxes. Our effective income tax rate was 20.6% and 20.6% 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. The OBBBA and its provisions contributed to a reduction in the Company’s expected current tax expense with an offsetting increase to the Company’s deferred tax expense. 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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Critical Accounting Estimates | ||
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions. The accounting estimates and assumptions that involve a significant level of estimation uncertainty and have or are reasonably likely to have a material impact on our financial condition or results of operations are discussed below. Our management has discussed each critical accounting estimate with the Audit Committee of our Board of Directors.
Accounting for Business Combinations. We account for business combinations using the acquisition method of accounting, which requires us to recognize the assets acquired and liabilities assumed at their acquisition-date fair values. Any excess of the consideration transferred over the fair value of the identifiable net assets acquired is recognized as goodwill. Determining the acquisition-date fair values of the assets acquired and liabilities assumed requires significant judgment and the use of estimates and assumptions.
During the Current Quarter, we completed the Twin Eagle Acquisition. The preliminary purchase price allocation includes significant identifiable intangible assets, principally customer relationships and transportation and storage contracts, as well as goodwill. We engaged a third-party valuation specialist to assist management in estimating the fair values of the acquired intangible assets. The valuation of the customer relationship intangible assets was based on the multi-period excess earnings method, while the valuation of the transportation and storage contract intangible assets was based on a discounted cash flow analysis. Significant assumptions used in these valuations included forecasted revenue, customer attrition, operating margins, contract renewal assumptions and discount rates. These assumptions reflect management’s estimates of the future economic performance of the acquired businesses and are subject to uncertainty.
Changes in the underlying estimates and assumptions could materially affect the estimated fair values assigned to the assets acquired and liabilities assumed, the amount of goodwill recognized and future amortization expense. The purchase price allocation is preliminary and may be revised during the measurement period as additional information about facts and circumstances existing as of the acquisition date becomes available. See Note 2 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for additional information regarding the Twin Eagle Acquisition and the preliminary purchase price allocation.
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 armed conflict between Russia and Ukraine, instability in the Middle East and Venezuela and changes in China-Taiwan relations, along with the effects of the current global economic environment, and the impact of each on our business, financial condition, results of operations and cash flows, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, the amount and timing of any cash dividends and our sustainability 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 “aim,” “predict,” “should,” "expect," “could,” “may,” "anticipate," "intend," "plan," “ability,” "believe," "seek," "see," "will," "would," “estimate,” “forecast,” "target," “guidance,” “outlook,” “opportunity” or “strategy.”
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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:
•reduced demand for natural gas, oil and natural gas liquids;
•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;
•risks related to our plans to participate in the global LNG value chain;
•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 decisions made by OPEC+ and armed conflict between Russia and Ukraine, instability in the Middle East due to the potential broadening of the military conflict between the U.S. and Iran beyond the Strait of Hormuz, instability in Venezuela, changes in China-Taiwan relations, 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;
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•the limitations on our financial flexibility due to our level of indebtedness and restrictive covenants from our indebtedness;
•challenges with employee recruitment and retention and an increasingly competitive labor market;
•risks related to acquisitions or dispositions, or potential acquisitions or dispositions;
•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business;
•our ability to achieve and maintain sustainability certifications, goals and commitments;
•environmental and sustainability legislation and regulatory initiatives, including those addressing the impact of climate change or further regulating hydraulic fracturing, greenhouse gas 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, which was triggered upon the completion of the Southwestern Merger, 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;
•the results, effects and benefits of the Twin Eagle Acquisition, future opportunities for the Company, other plans with respect to the Twin Eagle Acquisition, and the anticipated impact of the Twin Eagle Acquisition on the Company’s results of operations, financial position, growth opportunities and competitive position;
•the integration of acquisitions, including the Twin Eagle Acquisition; and
•other factors that are described under Risk Factors in Item 1A of our 2025 Form 10-K, as updated by our Form 10-Qs and other filings with the SEC.
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 and have no intention to update this information, except as required by law. 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.
All forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.
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, interest rates and foreign currency exchange 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 effective as economic hedges 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, oil and NGL revenues during the Current Period, excluding any effect of our derivative instruments, were $6,134 million, $319 million and $573 million, respectively. Based on production, natural gas, oil and NGL revenue for the Current Period would have increased or decreased by approximately $613 million, $32 million and $57 million, respectively, for each 10% increase or decrease in prices. As of September 30, 2026, the fair value of our commodity derivatives were net assets of $911 million, which primarily consisted of natural gas derivative positions. A 10% fluctuation in forward commodity prices would impact the valuation of the commodity derivatives by approximately $574 million. This fair value change assumes volatility based on prevailing market parameters at September 30, 2026. 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.
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Interest Rate Risk
Our exposure to interest rate changes relates primarily to borrowings under our Credit Facility and Twin Eagle Credit Facility. Interest is payable on borrowings under each 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, 2026, we had $450 million outstanding borrowings under our Credit Facility and no borrowings under the Twin Eagle Credit Facility. A 1.0% increase in interest rates based on the variable borrowings as of September 30, 2026 would result in an increase in our interest expense of approximately $5 million per year.
Additionally, we are exposed to interest rate risk associated with the valuation of certain commodity contracts. Although these contracts are not recorded at fair value under GAAP, we monitor their economic value for internal risk management purposes by discounting the expected future contractual cash flows using market-based interest rates. Changes in those interest rates affect the internally calculated present value of the contracts but do not directly result in changes to their carrying amounts or earnings under GAAP. We use interest rate derivatives to reduce a portion of this economic exposure. A 1% fluctuation in interest rates would impact the valuation of the interest rate derivatives by approximately $15 million.
Foreign Currency Exchange Risk
We have international operations that expose us to foreign currency exchange rate risk and portion of our revenues and operating expenses are denominated in the Canadian dollar; however, our exposure is not material to our condensed consolidated financial statements.
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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, 2026 that our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
During the Current Quarter, we completed the Twin Eagle Acquisition and began integrating the acquired assets into our internal control over financial reporting. We will continue to evaluate and monitor our internal control over financial reporting and will continue to evaluate the operating effectiveness of related key controls.
Except as noted above, 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. We are also party to the consolidated Chapter 11 Cases pending for the Debtors in the Bankruptcy Court. Legal proceedings that were in existence prior to the Petition Date and have not yet been settled as part of the Chapter 11 Cases 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. Any legal proceeding pending against Southwestern and assumed by us in connection with the Southwestern Merger is not subject to discharge or resolution as part of the Chapter 11 Cases.
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. Pursuant to this item, we use a threshold of $1 million for purposes of determining whether any legal proceedings in regards to federal, state or local environmental laws with a governmental authority require disclosure. This $1 million disclosure threshold does not imply that this amount is necessarily material to our business or financial condition, and as of September 30, 2026, there were no environmental proceedings to disclose. 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 below and under “Risk Factors” in Item 1A of our 2025 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 benefits attributable to the Twin Eagle Acquisition may vary from expectations.
We may fail to realize the anticipated benefits expected from the Twin Eagle Acquisition. The success of the Twin Eagle Acquisition will depend, in significant part, on our ability to successfully integrate Twin Eagle, grow the Company’s revenue and realize the anticipated strategic benefits from the Twin Eagle Acquisition. We believe that the addition of Twin Eagle complements our strategy by providing us with direct access to customers and structural demand growth. This growth and the anticipated benefits of the Twin Eagle Acquisition may not be realized fully or at all or may take longer to realize than expected. Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than expected or may take longer to achieve than anticipated. Additionally, the integration process may result in the disruption of ongoing business and there could be potential unknown liabilities and unforeseen expenses associated with the Twin Eagle Acquisition that were not discovered in the course of performing due diligence. The integration may also require significant time and focus from management following the Twin Eagle Acquisition which may disrupt our business and results of operations. If
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we are not able to realize the anticipated benefits expected from the Twin Eagle Acquisition within the anticipated timing or at all, our business and operating results may be adversely affected.
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Repurchases of Equity Securities
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. On July 24, 2026, our Board of Directors authorized an expansion of the share repurchase program by $1.0 billion, bringing the total authorized share repurchase amount to $2.0 billion for our common stock. The repurchase authorization permits repurchases on a discretionary basis subject to market conditions, obtaining required internal approvals, applicable legal requirements, available liquidity, compliance with the Company’s debt agreements and other appropriate factors. The following table provides information regarding purchases of our common stock made by us during the Current Quarter.
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | ||||||||||||||||||||||
| July 1 - July 31 | 3,407,639 | $ | 89.49 | 3,407,639 | $ | 1,000 | ||||||||||||||||||||
| August 1 - August 31 | — | — | — | $ | 1,000 | |||||||||||||||||||||
| September 1 - September 30 | — | — | — | $ | 1,000 | |||||||||||||||||||||
| Total | 3,407,639 | $ | 89.49 | 3,407,639 | ||||||||||||||||||||||
| ITEM 3. | Defaults Upon Senior Securities | ||||
None.
| ITEM 4. | Mine Safety Disclosures | ||||
The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Form 10-Q.
| ITEM 5. | Other Information | ||||
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
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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 Description | Form | SEC File Number | Exhibit | Filing Date | Filed or Furnished Herewith | ||||||||||||||||||||||||||||||||
| 2.1 | Fifth Amended Joint Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (Exhibit A of the Confirmation Order). | 8-K | 001-13726 | 2.1 | 1/19/2021 | |||||||||||||||||||||||||||||||||
| 2.2* | Agreement and Plan of Merger, dated as of January 10, 2024, among Chesapeake Energy Corporation, Hulk Merger Sub, Inc., Hulk LLC Sub, LLC, and Southwestern Energy Company. | 8-K | 001-13726 | 2.1 | 1/11/2024 | |||||||||||||||||||||||||||||||||
| 3.1 | Third Amended and Restated Certificate of Incorporation of Expand Energy Corporation. | 8-K | 001-13726 | 3.1 | 10/1/2024 | |||||||||||||||||||||||||||||||||
| 3.2 | Third Amended and Restated Bylaws of Expand Energy Corporation. | 8-K | 001-13726 | 3.2 | 10/1/2024 | |||||||||||||||||||||||||||||||||
| 10.1* | Agreement and Plan of Merger, dated as of July 24, 2026, by and among Expand Energy Corporation, Twin Eagle N.A., LLC, Eikon AW Holdings, LLC and TERM Holdings, LLC (as Seller Representative). | 8-K | 001-13726 | 10.1 | 7/30/2026 | |||||||||||||||||||||||||||||||||
| 10.2 | Second Supplemental Indenture, dated as of September 17, 2026, by and between Expand Energy Corporation and Regions Bank, as Trustee (including the form of the Notes). | 8-K | 001-13726 | 4.2 | 9/17/2026 | |||||||||||||||||||||||||||||||||
| 10.3*+ | Fifth Amended and Restated Credit Agreement, dated as of May 16, 2025, by and among Twin Eagle Resource Management, LLC, Twin Eagle Resource Management Canada, LLC, MUFG Bank, Ltd., as administrative agent and collateral agent, and each other bank or financial institution party from time to time thereto in the capacity as a lender. | X | ||||||||||||||||||||||||||||||||||||
| 10.4 | Amendment No. 1 to the Fifth Amended and Restated Credit Agreement, dated as of September 10, 2026, by and among Twin Eagle Resource Management, LLC, Twin Eagle Resource Management Canada, LLC, MUFG Bank, Ltd., as administrative agent and collateral agent, and each other bank or financial institution party from time to time thereto in the capacity as a lender. | X | ||||||||||||||||||||||||||||||||||||
| 10.5+ | Uncommitted Trade Receivables Purchase Agreement made as of February 17, 2022, by and between Twin Eagle Resource Management, LLC and MUFG Bank, Ltd. | X | ||||||||||||||||||||||||||||||||||||
| 31.1 | Daniel E. Brown, President and Chief Executive Officer, Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||||||||||||||||||||||||||
| 31.2 | Marcel Teunissen, Executive Vice President and Chief Financial Officer, Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||||||||||||||||||||||||||
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| Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | SEC File Number | Exhibit | Filing Date | Filed or Furnished Herewith | ||||||||||||||||||||||||||||||||
| 32.1** | Daniel E. Brown, President and Chief Executive Officer, Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||||||||||||||||||||||||||
| 32.2** | Marcel Teunissen, Executive Vice President and Chief Financial Officer, Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | X | ||||||||||||||||||||||||||||||||||||
| 95.1 | Mine Safety Disclosure. | X | ||||||||||||||||||||||||||||||||||||
| 101 INS | Inline 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 SCH | Inline XBRL Taxonomy Extension Schema Document. | X | ||||||||||||||||||||||||||||||||||||
| 101 CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101 DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101 LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101 PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | X | ||||||||||||||||||||||||||||||||||||
| * | Certain annexes, schedules and 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. | |||||||||||||||||||||||||||||||||||||
| ** | Furnished herewith. | |||||||||||||||||||||||||||||||||||||
| + | Certain personally identifiable information has been omitted from this Exhibit pursuant to Item 601(a)(6) of Regulation S-K. | |||||||||||||||||||||||||||||||||||||
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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 27, 2026 | By: | /s/ DANIEL E. BROWN | |||||||||
| Daniel E. Brown President and Chief Executive Officer | |||||||||||
| Date: October 27, 2026 | By: | /s/ MARCEL TEUNISSEN | |||||||||
| Marcel Teunissen Executive Vice President and Chief Financial Officer | |||||||||||
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