Expand Energy Corporation (NASDAQ:EXE) Q4 2025 Earnings Call Transcript

Expand Energy Corporation (NASDAQ:EXE) Q4 2025 Earnings Call Transcript February 18, 2026

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Expand Energy Corporation Fourth Quarter 2025 Earnings Conference Call. After the speakers’ presentation, there will be a question and answer session. To ask a question, press 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from your queue, press 11 again. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Mr. Colby Arnold. Sir, please begin.

Colby Arnold: Thank you, Howard. Good morning, everyone, and thank you for joining our call today to discuss Expand Energy Corporation’s 2025 fourth quarter and full year financial and operating results. Hopefully, you have had a chance to review our press release and the updated investor presentation that we posted to our website yesterday. During this morning’s call, we will be making forward-looking statements which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections, and future performance and the assumptions underlying such statements. Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our press release yesterday and in other SEC filings.

Please recognize that, except as required by applicable law, we undertake no duty to update any forward-looking statements and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measure, we use a reconciliation to the nearest corresponding GAAP measure that can be found on our website. With me on the call today are Mike Wistrich, Joshua J. Viets, Daniel F. Turco, and Brittany Raiford. Mike will give a brief overview of our results, and then we will open up the teleconference to Q&A. So with that, thank you again. I will now turn the teleconference over to Mike. Thanks, Colby, and good morning. I would like to start out by talking about

Mike Wistrich: 2025. I think we had a really phenomenal execution year. I mean, we have a 15% reduction in our breakevens in the Haynesville. That is very difficult to do. The team should be congratulated on that. It is phenomenal. It does not just help our reinvestment rate. It also helps our inventory. You will notice in the deck, we have moved locations over to the left, getting closer to lower breakevens. I think that is really a tribute to the team. We did the Southwestern merger, we focused on reducing debt, fulfilling that promise this year. We have reduced debt, but we also returned a lot of money to our shareholders. And we continue to think that is a good way for the company to continue. Volatility. Look, we are seeing volatility in gas prices today.

You have seen it all quarter. We believe in hedging, and our hedging program has been effective. We have $200,000,000 in gains this year. But, I mean, just look at today’s prices, and we are glad we have them. You will see we are very active this quarter. What I like about the 15% breakevens in the Haynesville is you know they are real, and they know they are real because when we talk about 2026, we have reduced our maintenance capital. That absolutely is proof positive that the team is working, and it is working well. In 2026, we will continue to do our buy down of debt. We will also consider shareholder returns as we always have. Big news, of course, is the change that we made last week. That is really a reflection of the changing natural gas business.

We believe the world has fundamentally changed in natural gas. We are seeing tremendous growth in demand. We are seeing 35% to 40% in the next five years. This move is absolutely trying to address that reality. Today, our marketing business, while we think about it, is in three buckets. The first bucket that we consider is do we get our gas to premium markets? This has been a goal for the company from the very beginning last year. We started in Chesapeake in 2021, we had our goal of moving these numbers. It was at the time almost all in-basin sales. Today, we are close to 50%. We feel good progress has been made. The second leg of marketing is we need to take care of volatility. We live in a very volatile gas market. We know that. And so by hedging, by doing storage transactions, this helps us capture, helps us in the low-price environments, which we always are concerned about.

It is about discipline. Hedging is about that. Our third, which we have not made as much progress in and we are disappointed in, and we expect to do better, is we need to capture and facilitate new demand. We need to get our fair share of this market. Our team has done some good stuff. We saw the LCM deal this year, but we have not done enough. And we are taking that challenge, and that is really some of the fundamental reasons why we are moving to Houston. In order to participate in that market, you can see you have to compete on our trading side of our business, or our marketing side. We are not the only ones who are saying this. I mean, you see wellhead to water. You see wellhead to water. We have to think beyond the wellbore. We have to say, it is not good enough anymore to just drill great wells.

We have to compete on the marketing side of our business. What is the size of the prize? I have been asked many times about that. I think the size of the prize we are chasing is $0.20. We are looking for improved realizations across our business. We think that will make us competitive and a better energy company. These changes, as all changes, you have some things that are unfortunate. Obviously, our senior leadership has changed. That does not change our mission. This does not change our strategy, but what you are seeing is a change in tactics and focus. We have a new business. We have to spend time on that business. What is not changing? Our operations have been great. Look at the results. We are not changing our leadership. We are not changing even our location.

We plan to stay in Oklahoma City with our operations team. Joshua is still leading that group, and we do not expect to have changes there because, frankly, it works. And so we do not do things that do not work. So when you think about us, our mantra is our foundation is in place. Our strategy is clear. The opportunity set is huge. It is time for us to act and so we are talking about urgency. We are talking about competitiveness. And so all we need to do to be successful is execute. So with that, we would like to turn it over to questions.

Operator: Ladies and gentlemen, if you have a question or comment at this time, please press 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press 11 again. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Neil Singhvi Mehta from Goldman Sachs. Your line is open.

Q&A Session

Neil Singhvi Mehta: Yes. Good morning, Mike. Good morning, team. Thanks for taking the time and Mike, appreciate some of the color that you provided around management change. Maybe you could talk about the characteristics you and the board are looking for in that next CEO and any thoughts on timing, how long you think the search could take?

Mike Wistrich: Sure. Thank you for the question. We are looking for a leader who has a bigger view of energy. He will be an energy person, but someone who is going to continue our mission to look beyond the wellhead. That is someone who thinks about the whole value chain and including we need to get closer to customers, not just here in the U.S. We need to get customers, closer customers in Europe. So it is someone who has a bigger view of the energy industry as a whole. How long does it take? Well, we have done the search before for a CEO. It took about six months. This is a bigger, more complicated company. I would not be surprised if it went to nine months. But call it six is the goal. I will tell you, I am committed to find the right person. I will be here until that occurs.

Neil Singhvi Mehta: Okay. That is really helpful. And then as you talk about marketing, can you talk about the quantification of the uplift in cash flow or realizations that you think could happen if you optimize the commercial side of the business, and one case study could be FERN. Did you capture all the upside that you think you could have in that event? And if you had a more robust marketing effort, do you feel like you would have done even better?

Mike Wistrich: Well, I think all energy companies and gas companies are moving towards more marketing because we can no longer give away margin to the guys in between us, the marketers. So number one, our first goal is premium markets. We are starting to see a little bit of results this year on that. I expect that to be the near-term catalyst for us to increase our realizations across our portfolio. That will move into 2027. I think volatility. I mean, especially when prices are low, storage is phenomenal. Volatility is high. Storage will be very helpful. Moving our gas to premium markets, whether it be Gillis or to Perryville, has been very helpful. Those are the near-term ways to help our margins right away. To go get that $0.20 a little bit longer.

Let us call it three to five years. We have to do more LCM deals. I mean, to facilitate demand, generally, that has to do with building something, building a plant, building a facility of some sort. So they take a little bit longer, but that is really the future. We are really fighting for years three to five. Again, the goal is $0.20. A $0.20 improved realization is obviously very material to our margin. And we think we can make it there.

Neil Singhvi Mehta: It is about $500,000,000 in EBITDA, right?

Mike Wistrich: That is what we are talking about.

Neil Singhvi Mehta: Yeah. Yeah. And then, Neil, hey. Just on you asked about

Joshua J. Viets: Winter Storm FERN. I mean, I think your question around, what are you going to be able to do with the integration of the operations that we have with the marketing commercial business. And all those things have to work in tandem. But I think just talk about that entire value chain and starting with the operations. Those operations have to hold up when you have these types of weather events. And, of course, it really is going to depend on the type of weather that we incur. In the Northeast, really across our entire Appalachian region, the operations held up incredibly well and performed incredibly strong through the weather events. In fact, the other thing I would just point out in Northeast Pennsylvania, we were actually peaking out on our production levels as we headed into January.

So, again, just thinking about the flexibility of our business there. In the Haynesville, that was a little bit different of a challenge. We had over an inch of ice accumulate on roads and that simply was detrimental to the power infrastructure as well as our ability to manage water across the asset. So definitely a little bit of a different situation there that had some impact on our volumes across that time period, but we absolutely know that in order for us to realize these aspirations, the entire value chain has to work, and that includes our operations. That has to include our marketing commercial business. And then it also implies that we have to gain additional access to infrastructure, further down the value chain.

Neil Singhvi Mehta: Thank you.

Operator: Our next question or comment comes from the line of Matthew Portillo from TPH. Mr. Portillo, your line is open.

Matthew Portillo: Good morning, all. Maybe just to follow up on the marketing front. It feels like, and I know you laid out in the slide deck, but it feels like there has been a pretty significant shift in a constructive way in the supply-demand balances for natural gas on the Gulf Coast. I was curious if you might be able to discuss at a high level how you think the demand dynamics have been changing and if there is any shift in your conversations for contract tenor, but also pricing dynamics for offtake agreements, whether it be LNG players, utilities, or industrial consumers around Louisiana and Texas?

Mike Wistrich: Yeah. I will start and let Daniel finish. Really high level, we are definitely seeing the Gulf Coast be very active. It is a unique area. Of course, it is with 50% of our production where it is. We are seeing gas-on-gas demand. We are seeing that end-use customers want to be closer to the wellhead. And so we think that is going to go into our favor. And you could see others talking about this as well. We are not the only ones. In the Northeast, of course, that is a power market. And it is a little different. It is actually having, of course, with Virginia and the data centers built, it is a little bit different market. Generally think that there is more diversity in the Gulf Coast. But, Daniel, you should add additional color.

Daniel F. Turco: Thanks, Matt. I think you have nailed it. The Gulf Coast is a place where we are seeing growing demand. If you look at the entire United States, we are seeing about 25,000,000,000 cubic feet a day of gas demand coming online. A lot of that, half of that is coming from LNG, and that sits right in our backyard and right where our Haynesville asset is and right where our pipeline capacity gets down to Gillis. And somebody asked me the other day, how do you feel about this market? And I said, I have been around this for, like, 25 years. And the first time, we are getting tons of inbounds, people looking for that security of supply that you referenced. So the team is out there working all these deals, trying to do something better.

As Mike pointed out, this opportunity set is huge, and we are accelerating what we are trying to do here. And grow and further expand down the value chain. Where we are set up, our Haynesville asset, Gillis, and that demand is quite unique for us. Not only the Louisiana side of the border, the Texas side of the border is growing as well. There is a unique aspect going on between Texas and Louisiana. With the amount of demand growth, people talk about the Permian a lot. The Permian will grow into these markets. Of course, Texas is growing substantially as well as Louisiana, and the ability to get from interstate pipelines across the border to meet that demand is also a little bit challenged. So we are set here to go and capture all this demand.

Matthew Portillo: Great. And then maybe a question for Joshua. One thing we have noticed on the macro side is the industry has continued to accelerate the rig count in the Haynesville, but more of those rigs are making their way to East Texas. And then in the core of the basin, some of your peers are starting to face degradation in their well results. I guess, Joshua, as we look at your well data and then also the slide you laid out on Page 12, curious how you think about Expand’s productivity trends in the Haynesville over the next few years and how that might contrast to the industry as a whole?

Joshua J. Viets: Yeah. Thanks for the question, Matt. I mean, the reality is the inventory that we carry in the Haynesville is just simply unmatched. It is both in terms of depth and quality. You see that show up in a number of different spots. And then you combine that with what is a 15-plus-year history of operating the basin, and so that simply leads to operational excellence. And then at the end of the day, that is going to show up in the breakeven of our inventory. We are just in the one year alone. We have been able to add five years of inventory below $3.50. And so, yes, though we have seen roughly 10 rigs added to the Haynesville, those 10 rigs that are being added by no means can make any comparison to a rig that we might choose to add.

In fact, if you reference slide 30, you will see we have characterized there what over a two-year time period of production our rig is able to generate relative to an average rig in the industry. So the things that we are continuing to be on, of course, is operational excellence and continuing to manage the way at which we drill our wells. So that is primarily around how we manage temperature. And then the other differentiator for us is, of course, how we source sand. And not only that is lowering the input cost, but it is simply allowing us to optimize a better economic outcome by increasing proppant intensity and driving our well productivity higher. That is not about IPs. I will just note, that is really about changing the decline parameters of the well, which again translates to value at the end of the day.

Operator: Thank you. Just a sec. Our next question or comment comes from the line of Douglas Leggate from Wolfe Research. Mr. Leggate, your line is open.

Douglas Leggate: You had me on pause there for a minute. Thanks so much. Good morning, guys. Mike, I wonder if I could ask two quick things to the extent you are able to answer them. There is a lot of focus obviously on your breakeven. When you and I have chatted, it has been almost like you have kind of laser-focused on how you get this breakeven down. Some of your peers have obviously taken different routes on this, whether it be greater liquids mix, introducing midstream, deleveraging. I am wondering to the extent you can share your vision for how Expand gets that breakeven down given the proportion of dry gas you have as my first one. My second one is you have called the 2029 bonds a big nut, obviously. I am wondering if this is defining a different priority for the use of cash in terms of balance sheet over buybacks. I will leave it there. Thank you.

Mike Wistrich: Great. Thanks, Doug. A couple things. I do think we focus a lot on breakevens, but we also need to focus on our total financial picture, including earnings per share. Obviously, we are making a big dent in our debt. We think that actually helps. That is one way to do it. But we are also thinking about marketing. It is the top line. We have to have the margin get better. And so I think we are trying to squeeze this number anyway. We are fighting for pennies. We know we are fighting for pennies as an industry. And so you have to use the whole tool chest to get that done. And so between debt reductions, between I think you have noticed this last couple years, we have made pretty good synergy adjustments in G&A and not just our business.

And so we hope marketing will be the next leg of that. As far as paying down debt versus buyback shares, of course, we like to do both. We have done both this year. We continue to do both. But we are in a very volatile commodity business. And with that, having a nonnegotiable of a fantastic balance sheet comes first. And so that is why you are seeing our priority to pay down debt. I think we will lean into that. We would like to be a little bit less prescriptive on our buybacks. I think it is a terrible policy to tell the market exactly when we are buying back shares and when not. We want to be smart about it. But first deal is balance sheet first. And so that is why you will see us focus on that. And I think that is also, again, great for EPS, which is important.

Mike, if I could just add a quick follow-up there? I wonder, does M&A come in

Douglas Leggate: the picture here in terms of resetting that breakeven, again midstream and liquids is kind of what I am driving at here. What would you say to that?

Mike Wistrich: Well, I would say we are very actively looking at every potential party in the basins that we operate, and some of those have liquids. But the more important part of that question is you have to have discipline. This year, we looked at a lot of transactions, we passed on a lot because it starts with our nonnegotiables. Our nonnegotiables are balance sheet and accretion. And sometimes, this year, gas price was pretty high, and so those deals were not that attractive. But if you are asking about liquids and helping margin, is that a possible answer? It is.

Douglas Leggate: It is. Great. Appreciate the comments. Thanks so much.

Operator: Our next question or comment comes from the line of Kevin Moreland MacCurdy from Pickering Energy Partners. Mr. MacCurdy, your line is now open.

Kevin Moreland MacCurdy: Sorry about that. Good morning, and thank you for taking my question. I wanted to ask about your maintenance CapEx and specifically slide six. It looks like there were some improvements to your maintenance capital compared to last quarter, although the guidance did not change, if I am reading that correctly. And I also noticed that there are three production levels bolded on the left-hand side there, 7.25 Bcf to 7.75 Bcf, a range a little bit wider than your 2026 guidance. Is there anything to read into that as well?

Joshua J. Viets: Yes, Kevin. I mean, I think the first thing is to reemphasize the improvement that we have seen in our maintenance CapEx. I mean, if you were to go back to a year ago and look at this slide, it would have been $225,000,000 higher to deliver the 7.5 Bcf a day. So first, I think just acknowledging that the business has gotten stronger, and that is reflected here. So you will see that our program does have the ability to still be incredibly efficient from a free cash flow generation standpoint up to 7.75 Bcf a day. But one of the things that I just think is incredibly important to recall and really what is underwriting this slide is a view on mid-cycle price. And that view on mid-cycle price remains unchanged from $3.50 to $4.

$0.50 for us is a pretty big range. And so one of the things we really want to continue to be focused on is maintaining a level of flexibility in the business and, therefore, how much we produce in any given month or across a given year based upon how we see those prices trend. And so in certain instances, that might cause us to push volumes a little bit higher. But if we see the market maybe turn a little bit bearish, whether that is shorter term or even longer term, we want to have the ability to flex those volumes.

Kevin Moreland MacCurdy: And for my second question, your budget outlines $75,000,000 for the Western Haynesville this year. Can you talk a little bit about how that program progressed, when you will be drilling, and what you are looking for in results?

Joshua J. Viets: Yeah. Kevin, this is Joshua again. On that, we have roughly two and a half wells scheduled. There is a little bit of carry-in and carry-out capital that will take place across the year. We have just finished drilling the first well. That was a horizontal well. Those operations went incredibly well. In fact, when we benchmark our performance both in terms of days and cost, we are at the very low end of what we have seen from some of the bigger competitors in the Western Haynesville, so we feel really good about that. That well is being completed as we speak, and we expect first production sometime in late Q1, early Q2. Really there, we are going to be interested in longer-term decline parameters. We know the reservoir is there.

We know it is highly saturated with overpressure gas. But understanding those decline characteristics will be really important. For the rest of the year, we have, again, roughly two additional wells that we plan to drill, and those are really going to be centered around helping us appraise the full extent to the acreage position that we put together there.

Operator: Thanks, Joshua.

Brittany Raiford: Thank you.

Operator: Our next question or comment comes from the line of Scott Michael Hanold from RBC Capital Markets. Mr. Hanold, your line is open.

Scott Michael Hanold: Yes, thanks. I would like to maybe key off something, Mike, you had said in your overview. And one of the things you mentioned is that you want to look to, you know, just cannot give away margin to the middleman. And as you step back and think about that, would that also contemplate looking at more of an integrated operation, such as going out and actually owning midstream to be more integrated? Does that help the effort? Is that a possible avenue you would be willing to look at?

Mike Wistrich: Yeah. I think, generally speaking, we are focused more on partnerships with midstream companies. We are looking at stuff like Momentum that we have done in the past. We are looking, and we actually, an LCM deal has a Momentum component on it. So I imagine this is more partnerships. We have to get our gas to premium markets. It is unrealistic to think we are not going to have to deal with some sort of midstream to get there. We would like to be part of that equation. So I think it is that more than just going out and buying gathering systems. I am not sure that would be really helpful for us. We have to get to end-use customers. So yes, integrated, but maybe think about that in a partnership way.

Scott Michael Hanold: Okay. Understood. Appreciate the context. And then if I could ask on cash taxes, surprised at the minimal cash tax that you are looking at this year. Can you give us a sense of what drove that? Is that part of the OBDD from last year? And do you have any visibility over the next couple of years where that cash tax rate might go?

Brittany Raiford: Yes, Scott. This is Brittany. So you are absolutely right. It is the benefit of the OBDD, and we saw that last year and are seeing the benefit of it this year. So we do expect to be a full cash taxpayer probably in the back part of the decade, and so I would expect us to stair-step our cash tax increases throughout the next couple of years to be a full cash taxpayer probably later, closer to 2030. Thank you.

Operator: Thank you. Our next question or comment comes from the line of Benjamin Zachary Parham from JPMorgan. Mr. Parham, your line is open.

Benjamin Zachary Parham: I wanted to follow up on Matt’s question earlier. In the slide deck, you highlighted an increase in your first-year cumes that you expect from the Haynesville in 2026. Can you talk about that a little bit? What drove that expected increase? And if you see that as sustainable going forward?

Joshua J. Viets: Yeah. Good morning, Zach. Yeah. Is it sustainable? Absolutely. Again, to tie back to my earlier comments. We have really been able to reset the economics of the Haynesville with improvements in drilling efficiency, self-sourcing our own sand. And we have been able to drive in this higher productivity largely through enhancing the completion designs. On the call during the third quarter, I talked about, at the merger onset, we came together. We put together what we have referred to as our Gen 1 completion design. We are already now progressing to what is considered our Gen 3 design and seeing really improved results from that. And so we expect that this type of trend that you are seeing continues forward. And, again, I will just bring it back to we have an unmatched inventory quality and depth in the Haynesville, and that combined with our history in the basin, there is a good reason why we are delivering these outsized results relative to peers.

Benjamin Zachary Parham: Then my follow-up, just on D&C costs in the Haynesville. You have done a lot to bring down costs over the last several years. You have got a slight reduction in your numbers for 2026. But can you talk about your ability to potentially drive that number even lower going forward?

Joshua J. Viets: Yeah. You know, my expectation is pretty high for the organization and our ability to do that. We continue to find opportunities to improve tool reliability. The bigger issues you fight in the Haynesville is temperature. And so we continue to partner with some of our service providers to increase tool reliability. In addition, we are seeing some pretty significant advancements with artificial intelligence to help us refine in a more optimal way our well designs, but more importantly, a faster real-time optimization of drilling parameters. And we think those two items there are really going to allow us to unlock further savings from a D&C standpoint.

Operator: Our next question or comment comes from the line of Joshua Ian Silverstein from UBS. Mr. Silverstein, your line is now open.

Joshua Ian Silverstein: Yep. Hey, good morning, guys. Mike, it felt it was a challenge to get Expand volumes to the demand growth areas. Just talk about what the biggest challenges are in doing so. Is it getting the customer to actually just agree to supply? Is it price? Concerns over inventory duration? I am just curious.

Mike Wistrich: Yep. Well, there are two challenges for our team. And one is on us, and one is just the facts of the world. The first is our team needs to be more aggressive to review more transactions or potential transactions. We will build more generators. We will add to the team to be in the room more often. A big part of moving to Houston is to be in that room, and so we have to get out of our own way. The other side is just real, which is you need to get your gas to them physically. And so you always are thinking about transportation, how to get it there, how to service those clients, and that gives advantages to companies, frankly, like Williams who have been connected to them for a generation. We have to compete by having assured production that they do not have. And so that is our competitive advantage, but we definitely have to partner. That is why we want to partner with midstream companies because that is the biggest thing to overcome.

Joshua Ian Silverstein: Got it. And then you talked about trying to get an incremental $0.20 of realizations or margins there. What is the cost to get it there? Because you are going to have to start to build out a bit more. Is this going to cost you more upfront to then have benefits later? Some sort of sense of that would be great, sir.

Mike Wistrich: Yeah. I think that is a great question. And the first thing is we talk about our culture of discipline. We talk about rate of return. We think of ourselves as how do you grow long-term shareholder value, and that means you have to talk about the cost as well. So, generally speaking, the lowest dollar change will be on just trading to premium markets. Those will turn into commitments at feet. Those are not debt necessarily, but call it commitments. Everything else, if we have to put more capital to work or risk our balance sheet, has to have a higher rate of return, has to have a bigger payout because we are returns-focused. And so do I think we will probably spend some money over the next three to five years? Undoubtedly. Undoubtedly, we have to, but we will put it in the context of our rate of return framework. We have to have a decent ROCE in our program, and so these things will have to have discipline around that.

Operator: Our next question or comment comes from the line of John Christopher Freeman from Raymond James. Mr. Freeman, your line is now open.

John Christopher Freeman: Good morning. It was nice to see the Haynesville productivity improvement continue, but it does look like the upside on production in the quarter was actually from the Appalachia region. Maybe it looks like, I do not know if it is quicker turning lines, but just any color you could provide on that relative to the guide for the quarter?

Joshua J. Viets: Yeah. So, John, this is Joshua. I mean, just to address that. Really, that is about our returning our production from curtailments in the fourth quarter. That was a big piece of it, coming to the end of the year. And, of course, most of those curtailments would have been taking place across Northeast Appalachia. And then, of course, in Q1, we would have had a little bit more weather-related downtime in the Haynesville, as a result of Winter Storm FERN where we saw roughly an inch of ice show up at the end of January. So that had some modest amount of impacts. But across the full course of the year, we do anticipate to be averaging in and around 7.5 Bcf a day.

John Christopher Freeman: Got it. Thanks, Joshua. And then Mike, sorry to belabor the marketing topic, but it seems like, and I do not want to put words in your mouth, but you are a lot more focused, it appears, on the LCM type agreements as opposed to maybe long-term LNG supply agreements. Is that a fair characterization?

Mike Wistrich: I do not think that is fair. I think we are looking at both. We are looking at both. We are chasing margin. We have to participate in the value chain downstream of us. That is definitely LNG. That is definitely manufacturing. It is power. I think it is all. And so all of the above. I just want to be more aggressive because to get in the room, we have to hustle. It is a competitive space. I mean, it is a super competitive space. We will have to focus.

Operator: Thank you. Our next question or comment comes from the line of Neil Dingmann from William Blair. Mr. Dingmann, your line is now open.

Neil Dingmann: Morning, Mike. Nice quarter. Mike, my question, you guys talked about a little bit this last night, was on your upstream position. Just looking at your share price, it certainly does not seem to me that you all are getting credit for the massive, what, the 2,000,000-plus acres position on top of your material production. So I am just wondering, is there something you all would consider doing with, I do not know, either monetizing a bit of the inventory or drilling carry to something somebody or something to unlock some of this value given it just seems like, given that size of position, your investors are just not recognizing this.

Mike Wistrich: Well, first of all, thank you for saying that we are not getting full credit. We would love to get full credit. We hope you all are paying attention. We think we have a good business. Generally speaking, we are not actively looking to do what you are talking about, but I would say it is always on the table. It has to be. And just to say no for the sake of no is the wrong answer. If we see something that is attractive and part of our portfolio that someone wants to overpay, we are a public company. That could happen any day, and so nothing is off the table. But I do not think we are actively doing that right now.

Neil Dingmann: Makes sense. And then just secondly, it looked like on the guide, you are going to run about the same rig count. Do you assume, I am just wondering if you are running, if you continue to have the efficiencies that you have recently seen, would you see yourself potentially, let us say you are running ahead of schedule by, I do not know, second, third quarter. Would you pull back on the rig count and just sort of continue to bank that free cash flow, or would you continue to potentially boost the production a little more than suggested?

Joshua J. Viets: Well, I mean, I think, Neil, we would have to take a look at fundamentals and understanding where supply-demand balances sit. We really take great pride in maintaining a high level of flexibility within our business. We have noted today that we see this business being efficient up to that 7.75 Bcf a day number. But at this point in time, we feel really good about the program that we have laid out to deliver the 7.5 Bcf a day at the $2,850,000,000 of CapEx. And, until the market fundamentals start to shore up, that is the plan that we expect to execute this year.

Operator: Thank you. Our next question or comment comes from the line of Charles Meade from Johnson Rice. Mr. Meade, your line is now open.

Charles Meade: Yes. Good morning, Mike, to you and the whole Expand team there. I would like to ask a question about maybe drilling down on one piece of your marketing push, and that is on storage. You guys, in your presentation, say you have 5 Bcf of storage that you own now. Can you talk about the nature of those assets and what the trajectory has been for building that position? And is storage an area that you expect to be, I guess, competitive in acquiring more?

Daniel F. Turco: Yeah. Hey, Charles. This is Daniel. I will take that question. This year, we added about 3.5 Bcf of storage in the last quarter here to our 1.5 we already had, so we like this storage, and we like it for many reasons. Right? You go back to our M&C strategy. One of the key components is managing volatility. The market is highly volatile as we have seen over the last few months, not only from time movements, but geography movements. So we are actively using that storage. We like that storage, and we have made money on it already. And we plan on turning that storage a lot more. We would like to grow that storage position, but it is a very competitive market. The total demand of this market has grown substantially, and storage has not caught up.

That is why you are seeing a lot of volatility. So it is highly competitive to actually get more capacity. We continue to actively look at it and, back to our disciplined approach here, we are only going to take that capacity we feel is going to make us value and help us manage that volatility and create more margin ultimately.

Charles Meade: Got it. Thank you. And then, if I could ask a question about the West Virginia Utica. You guys, also in your presentation, talking about bringing the potential of bringing some Ohio Utica development concepts towards West Virginia and a lot of upside there. Can you elaborate on what that is and how big the upside might be?

Joshua J. Viets: Yeah, Charles. I mean, we are pretty excited about our sup-location program. I mean, the reality is there has not been a lot of Utica development as you move across the Ohio River, and I can assure you the geology does not stop at the river. And so we think there is quite a bit of upside with that. It is something that the teams have been working for some time. It is just really about getting into the right environment in which that inventory development makes sense. There will be some infrastructure requirements to be able to process it, but it is something that we think we can take the learnings that we have built up of drilling deeper gas wells in the Haynesville and leverage those learnings in the Utica and expect it to be a highly profitable part of the business going forward.

Operator: Next question or comment comes from the line of Mr. Phillip Jungwirth from BMO. Sir, your line is open.

Phillip Jungwirth: Yeah. Thanks. Good morning. With the NG3 pipeline now flowing volumes, can you talk through how this will benefit Expand this year also as Golden Pass starts up? And is there a benefit to maintaining ownership in the project long term or at least through a potential expansion?

Daniel F. Turco: Yeah. Hi, Phillip. This is Daniel. I will talk about the market dynamics. So, yeah, NG3 came on in October, and that is providing us just, again, more market optionality, and that is bringing our gas to Gillis, which over time is going to be a pretty premium market. At the moment, we are getting about even on where we are, and the capacity payments we get and the uplift we are getting. But over time, back to the structural demand of this market, LNG is growing significantly, and we see Gillis becoming even more premium. So it is providing us two things. It is getting us to a premium wholesale market, it is providing us market optionality where we can move between Gillis and Perryville on any given day.

Phillip Jungwirth: Okay. Great. And then besides the capacity going to Gillis, you also have 2 Bcf a day going to Perryville. So it is further away from the LNG corridor. So can you just talk about the advantages of selling gas to this hub? And how would the go-forward marketing strategy be tailored here versus volumes going to Gillis?

Daniel F. Turco: Yeah. Perryville is also a great market. There is a strong pull from the utilities down in the Southeast. A lot of that is coming from the dynamics of Gillis, more gas is being redirected to Gillis for the LNG demand. And the historic gas that would come across over to Perryville has been less. There is more demand that is going to be taken away from Perryville. There is, I think, 3 Bcf/d of new pipeline capacity coming online pulling further down to the Southeast. So this market is also a premium. A lot of utilities are looking for that longer-term reliable supply. So our advantage here is actually the ability to go to both markets, not only structurally selling to these markets, but any given day being able to move molecules between the two markets.

If we sell down in Gillis and the Perryville market changes, we can buy back that position at Gillis or buy gas into that position and move gas to Perryville. We have been doing this quite a lot, proud of the team and how they are capturing that optionality value, and we are just going to continue doing more of that.

Operator: Our next question or comment comes from the line of Betty Jiang from Barclays. Ms. Jiang, your line is open.

Betty Jiang: Hello. Good morning. Mike, I am with you on the scale of the marketing opportunity and the need to think bolder. I am just curious on your $0.20 uplift that we talked about. Just how you came up with that target, and do you see that as a reasonably achievable number, or is it more of a stretch goal for the organization?

Mike Wistrich: I do not think it is a stretch. Let us just start with that. I think it is something that we will have to be aggressive to do. It is something that we will have to invest time and energy into. I do not think it is a stretch. We will definitely have to pull all three of our levers. Lever one is premium markets. Two, we need to work on our storage. And three, we are going to have to participate in the value chain beyond the wellbore, and that means LNG or industrial. And so I do not think that. I think this will be a big part of our business going forward. And I also think that will help our breakeven. That will help our downside protection. Because those tend to be a bit more fixed, closer to a fixed-fee concept if you think about it. So, I do not think it is a stretch. I sure hope that we make it really quick so that you all can be comfortable, and then I hope to expand that over time.

Betty Jiang: Great. No. That makes sense. And definitely a lot of opportunity to fill in the hopper. My follow-up is on M&A. A lot of talk already on the Gulf Coast, but we have also seen rising dealmaking in Appalachia. What is your appetite for M&A in the Northeast? Is there value to having more in-basin exposure in order to capture that growing power opportunity up north?

Mike Wistrich: Yeah. I think M&A has been something that we have done a lot of over the past five years. You can see, I think we have done over $15,000,000,000 of transactions. So it is in our DNA to continue to look at everything. And Appalachia, of course, and the liquids concept that you all mentioned earlier, of course. The question is, can you do it disciplined? Can you do it to protect the balance sheet? Can you do it with the nonnegotiables? This year, we were not able to. I mean, some of these deals went for premium prices that we did not think were fair value. So, the answer is we will look at everything in our basins, of course, that is our job. But M&A is a tricky market. You just have to think about your base business first. And we will do that.

Operator: Thank you. Our next question or comment comes from the line of Kalei Akamine from Bank of America. Your line is open.

Kalei Akamine: Mike, going back to your comments about marketing, you expressed this desire to be more commercial around your volumes. You look at your portfolio, I am curious how much gas you have to commit to long-term sales agreements. Trying to get a sense of how much flexibility you have in the portfolio to ship gas to higher value markets. And is it fair to think that more flexible molecules in that portfolio is in the Haynesville?

Mike Wistrich: I think it is two things. You are right to point out, of course, that we make commitments every day, and some of those commitments would have to be rolled off. I do not think we have a set number in my mind as exact, and Daniel may be able to answer that question. But I do think the Gulf Coast is where we can build. It is where we can grow. We could add volumes there. And so to the extent we get more demand, we can increase production to fulfill that demand. And so I think that is always a great answer. In Appalachia, you have less ability to do that. And we are talking about growing there, but the Gulf Coast is where it is. And we feel it is our competitive advantage. I mean, we have three basins. Everyone else has one. We have a bigger market area. We have to take advantage of it, but the ability to grow and, frankly, shrink the Haynesville gives us a lot of marketing opportunities.

Daniel F. Turco: I would just add that we do stage those commitments. And on page 19, we laid out a couple of commitments we just made. And over a five-year time, we have commitments that go up 15 years, but over a five-year time frame is really where we are looking at doing a lot of our sales. We just added a couple sales to premium markets here. So these are not the big deals that we are going to announce, but these are singles and doubles that we are doing every day, adding more sales to end users. And just getting that premium uplift. A sale becomes an asset as well. As I pointed out in the last point here, you make a sale and markets move, you can still fulfill that sale with other gas and move your molecule to higher-priced markets. So there is a double combination here: premium market and capturing the volatility.

Kalei Akamine: I appreciate that. This next question is on the LNG exposure. Pre-filed, the desire was for exposure to be somewhere between 15% to 20%. Post-merger, that commentary shifted a bit. What does desired exposure look like today? Is it a quarter of gas? Is it a third? And do you think it is necessary to physically match the molecules at the wellhead to takeaway on the water, or is there some synthetic way that you could go about it?

Brittany Raiford: Yeah. Kalei, great question. And I will start, and Daniel can jump in here as well. That commitment that Chesapeake had made prior to close, 15% to 20% on LNG, if you think about it, really the gas markets have changed quite a bit since then. Back then, we probably were not talking near as much about power and industrial demand growth. And so, really, when you think about it, and we have mentioned this several times, we are interested in reaching premium markets. We are agnostic really to exactly what those premium markets are. We think the opportunity set is broad. And so we are going to look for the highest-return way for us to diversify our sales exposure. So we are not going to be overly prescriptive on exactly how much we want to go to LNG.

Mike Wistrich: Got it. Okay.

Brittany Raiford: Appreciate that, Brittany. Thank you.

Operator: Our next question comes from the line of Leo Mariani from Roth. Mr. Mariani, your line is open.

Leo Mariani: You guys talk about this a lot, but just on the goal of the $0.20 uplift on gas, is there a rough timeframe for that? And you mentioned trying to get some deals over three to five years, just trying to get a sense if that is a five-year goal. Any other color on that?

Mike Wistrich: I would say, yes. It is three to five, and giving five to give us some room. I certainly hope to make that in three, three and a half. And so we want to be aggressive here.

Leo Mariani: Okay. And then just following up on the buyback, you guys spoke about this. I do not want to put words in your mouth, but it sounds as if there are really going to be times of dislocation in the stock, and the priority is really going to be just to make this balance sheet even more rock solid here.

Mike Wistrich: Agreed. We totally agree with your statement right there.

Operator: Thank you. Our next question or comment comes from the line of John Annis from Texas Capital. Mr. Annis, your line is open.

John Annis: Good morning, all, and thanks for taking my questions. For my first one, you noted around 20% of the 2025 TILs exceeded 1 Bcf per 1,000 feet, and you expect that to rise above 30% in 2026. I wanted to get a sense of what is different about those top-performing wells. Is it geology, lateral placement, completion intensity, or some combination? And then is there a ceiling on how high that percentage can go given your acreage mix?

Joshua J. Viets: Yeah. I mean, it is definitely a mix, John. Completion design is really going to be the biggest driver for us moving forward. But, clearly, where you drill is going to matter as well. So typically, we see the best-performing wells in the southern part of our acreage position within the NFE. And so you are going to be limited in the number of wells you can drill in any one gathering system. You will just simply hit capacity constraints. So, yes, to answer your question, there would be some constraints. But we just see continued upside across the entire acreage position. We have had a lot of success this year drilling three-mile laterals. We are going to continue to get better and see a bigger portion of that showing up going forward.

And as I mentioned earlier in the call, I do not think we have reached what we really deem to be optimal from a completion design standpoint. And, again, we continue to reset those economics as a result of having access to a cheaper sand source.

John Annis: Makes sense. For my follow-up, you mentioned supplying microgrid solutions in Appalachia with flexible volume contracts. How large is this opportunity today? And how would you compare the attractiveness of these smaller volume deals with some of the larger supply commitments announced in the basin?

Daniel F. Turco: Hey, John. Thanks for the question. Yeah. We went live with this microgrid solution. It is relatively small, to be fair, but we are excited about these because a bunch of these small deals adds up, and this actually commands quite a premium by having a reservation fee behind our gathering system where this micro solution can pull volume from us and capture at a higher price. So we are getting a dual effect here of a reservation fee and a higher price. It is small, but these singles are going to add up over time. We are going to do a lot more of these types of deals.

Mike Wistrich: Great. Thank everyone for their questions today. We want you to ask tough questions. We want to be responsive, so thank you for them. I would like to close with just a few big picture comments. Number one, our execution has been amazingly solid. That is our foundation. We are not changing it. We expect it to continue, and we continue to expect our teams to perform better in the future. Two, we are definitely thinking beyond the wellbore. Obviously, we have talked a lot about marketing today. That is actually not a strategy change. We have had that strategy. What we are talking about changing today is urgency, attention, discipline. We want to be more aggressive, but always know that we are ready to return and build shareholder value.

You have to have that. Third, the opportunity is huge. We see it. We finally feel like gas has got its moment. We want to take advantage of it. The demand is amazing. And now it is just time for us to not talk and execute. And so that is our focus here at the company, and we will continue. So with that, I think that is the end of our call. And I hope you have a good day.

Operator: Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, standby.