Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


($ in millions, except per share data)	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	731	$	317
Restricted cash	75		78
Accounts receivable, net	1,074		1,226
Derivative assets	46		84

Other current assets	346		292
Total current assets	2,272		1,997
Property and equipment:
Natural gas and oil properties, successful efforts method
Proved natural gas and oil properties	24,755		23,093
Unproved properties	5,563		5,897
Other property and equipment	679		654
Total property and equipment	30,997		29,644
Less: accumulated depreciation, depletion and amortization	(6,825)		(5,362)

Total property and equipment, net	24,172		24,282
Long-term derivative assets	13		1
Deferred income tax assets	457		589
Other long-term assets	854		1,025
Total assets	$	27,768	$	27,894

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	747	$	777
Current maturities of long-term debt, net	—		389
Accrued interest	107		100
Derivative liabilities	155		71
Other current liabilities	1,915		1,786
Total current liabilities	2,924		3,123
Long-term debt, net	5,122		5,291
Long-term derivative liabilities	85		68
Asset retirement obligations, net of current portion	513		499
Long-term contract liabilities	1,083		1,227
Other long-term liabilities	104		121
Total liabilities	9,831		10,329
Contingencies and commitments (Note 5)
Stockholders' equity:
Common stock, $0.01 par value, 450,000,000 shares authorized: 237,437,223 and 231,769,886 shares issued	2		2
Additional paid-in capital	13,716		13,687
Retained earnings	4,219		3,876
Total stockholders' equity	17,937		17,565
Total liabilities and stockholders' equity	$	27,768	$	27,894

The accompanying notes are an integral part of these condensed consolidated financial statements.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
($ in millions, except per share data)	2025		2024		2025		2024
Revenues and other:
Natural gas, oil and NGL	$	2,021	$	378	$	4,321	$	967
Marketing	788		136		1,698		448
Natural gas, oil and NGL derivatives	877		(11)		(137)		161
Gains on sales of assets	4		2		4		10
Total revenues and other	3,690		505		5,886		1,586
Operating expenses:
Production	151		49		298		108
Gathering, processing and transportation	563		154		1,126		327
Severance and ad valorem taxes	49		18		97		47
Exploration	20		3		27		5
Marketing	791		141		1,710		464
General and administrative	40		47		87		94
Separation and other termination costs	—		23		—		23
Depreciation, depletion and amortization	769		348		1,480		747

Other operating expense, net	38		16		60		33
Total operating expenses	2,421		799		4,885		1,848
Income (loss) from operations	1,269		(294)		1,001		(262)
Other income (expense):
Interest expense	(60)		(20)		(119)		(39)
Gains (losses) on purchases, exchanges or extinguishments of debt	3		(2)		3		(2)
Other income, net	16		21		24		41
Total other income (expense)	(41)		(1)		(92)		—
Income (loss) before income taxes	1,228		(295)		909		(262)
Income tax expense (benefit)	260		(68)		190		(61)
Net income (loss)	$	968	$	(227)	$	719	$	(201)


Earnings (loss) per common share:
Basic	$	4.07	$	(1.73)	$	3.04	$	(1.53)
Diluted	$	4.02	$	(1.73)	$	2.99	$	(1.53)
Weighted average common shares outstanding (in thousands):
Basic	237,973		131,168		236,213		131,030
Diluted	240,560		131,168		240,628		131,030

The accompanying notes are an integral part of these condensed consolidated financial statements.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
($ in millions)	2025		2024
Cash flows from operating activities:
Net income (loss)	$	719	$	(201)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	1,480		747
Deferred income tax expense (benefit)	134		(61)
Derivative (gains) losses, net	137		(161)
Cash receipts (payments) on derivative settlements, net	(29)		488
Share-based compensation	22		19
Gains on sales of assets	(4)		(10)
Contract amortization	(124)		—

(Gains) losses on purchases, exchanges or extinguishments of debt	(3)		2
Other	16		(7)
Changes in assets and liabilities	70		(55)
Net cash provided by operating activities	2,418		761
Cash flows from investing activities:
Capital expenditures	(1,220)		(723)

Receipts of deferred consideration	116		116
Contributions to investments	(9)		(45)
Proceeds from divestitures of property and equipment	15		12
Net cash used in investing activities	(1,098)		(640)
Cash flows from financing activities:
Proceeds from Credit Facility	825		—
Payments on Credit Facility	(825)		—

Proceeds from warrant exercise	22		1
Debt issuance and other financing costs	—		(4)
Cash paid to repurchase and retire common stock	(99)		—
Cash paid to purchase debt	(553)		—
Cash paid for common stock dividends	(279)		(176)
Net cash used in financing activities	(909)		(179)
Net increase (decrease) in cash, cash equivalents and restricted cash	411		(58)
Cash, cash equivalents and restricted cash, beginning of period	395		1,153
Cash, cash equivalents and restricted cash, end of period	$	806	$	1,095

Cash and cash equivalents	$	731	$	1,019
Restricted cash	75		76
Total cash, cash equivalents and restricted cash	$	806	$	1,095

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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, 2023	130,789,936	$	1	$	5,754	$	4,974	$	10,729
Share-based compensation	168,538	—		4		—		4
Issuance of common stock for warrant exercise	201	—		—		—		—
Net income	—	—		—		26		26
Dividends on common stock	—	—		—		(77)		(77)
Balance as of March 31, 2024	130,958,675	$	1	$	5,758	$	4,923	$	10,682
Share-based compensation	264,072	—		9		—		9
Issuance of common stock for warrant exercise	29,360	—		1		—		1
Net loss	—	—		—		(227)		(227)
Dividends on common stock	—	—		—		(95)		(95)
Balance as of June 30, 2024	131,252,107	$	1	$	5,768	$	4,601	$	10,370

Balance as of December 31, 2024	231,769,886	$	2	$	13,687	$	3,876	$	17,565
Share-based compensation	386,025	—		(8)		—		(8)
Issuance of common stock for warrant exercise	5,320,216	—		21		—		21
Net loss	—	—		—		(249)		(249)
Dividends on common stock	—	—		—		(138)		(138)
Balance as of March 31, 2025	237,476,127	$	2	$	13,700	$	3,489	$	17,191
Share-based compensation	100,820	—		15		—		15
Issuance of common stock for warrant exercise	711,937	—		1		—		1
Repurchase and retirement of common stock	(851,661)	—		—		(100)		(100)
Net income	—	—		—		968		968
Dividends on common stock	—	—		—		(138)		(138)
Balance as of June 30, 2025	237,437,223	$	2	$	13,716	$	4,219	$	17,937

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 the largest natural gas producer in the U.S., based on net daily production, and is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all. We have operations in Louisiana, Pennsylvania, West Virginia and Ohio, with all of our operations located onshore in the United States.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Expand Energy were prepared in accordance with GAAP and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to our financial position as of June 30, 2025 and December 31, 2024, and our results of operations for the three months ended June 30, 2025 (“Current Quarter”), the six months ended June 30, 2025 (“Current Period”), the three months ended June 30, 2024 (“Prior Quarter”) and the six months ended June 30, 2024 (“Prior Period”). Our annual report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) should be read in conjunction with this Form 10-Q. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring 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. For the time periods covered by this Form 10-Q, we did not have any changes or items impacting other comprehensive income.

Restricted Cash

As of June 30, 2025, we had restricted cash of $75 million. Our restricted cash represents funds restricted for payment of certain royalties pending the outcome of competing ownership claims for certain minerals, as well as for payment of certain convenience class unsecured claims.

Recently Issued Accounting Standards

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.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with additional information about an entity’s income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. We are evaluating the impact this ASU will have on our disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segments Disclosures. Under ASU 2023-07, the scope and frequency of segment disclosures is increased to provide investors with additional detail about information utilized by an entity’s chief operating decision maker (“CODM”), including information about significant segment expenses. This ASU became effective beginning with our 2024 Form 10-K and also became effective for interim periods beginning with our quarterly report on Form 10-Q for the first quarter of 2025. See Note 14 for further discussion on our segment reporting.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


2.			Natural Gas and Oil Property Transactions

Southwestern Merger

On January 10, 2024, Chesapeake and Southwestern entered into an all-stock agreement and plan of merger (the “Merger Agreement”). Southwestern was an independent energy company engaged in development, exploration and production activities, including related marketing activities, within its operating areas in the Appalachia and Haynesville shale plays. Our Board of Directors and the Board of Directors of Southwestern both approved the Merger Agreement. At separate special meetings each held on June 18, 2024, Chesapeake’s stockholders approved the issuance of Chesapeake’s common stock to the stockholders of Southwestern in connection with the Southwestern Merger, and Southwestern’s stockholders approved the Merger Agreement.

On October 1, 2024, the Southwestern Merger was completed, and we issued approximately 95.7 million shares of our common stock to Southwestern’s shareholders in connection with the Merger Agreement. Under the terms of the Merger Agreement, subject to certain exceptions, each share of Southwestern common stock was converted into the right to receive 0.0867 of a share of the Company’s common stock. Based on the closing price of our common stock, the total value of the shares of our common stock issued to Southwestern’s shareholders was approximately $7.9 billion. During the Current Quarter and Current Period, we recognized approximately $25 million and $52 million, respectively, of costs related to the Southwestern Merger, which primarily consisted of employee expenses. These acquisition-related costs are included within other operating expense, net within our condensed consolidated statements of operations. The Southwestern Merger was structured as a tax-free reorganization for United States federal income tax purposes.

Preliminary Southwestern Merger Purchase Price Allocation

We have accounted for the Southwestern Merger as a business combination, using the acquisition method, with Expand Energy (formerly Chesapeake) treated as the accounting acquirer. The following table represents the preliminary allocation of the total purchase price of Southwestern 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 Southwestern’s assets and liabilities and final appraisals of assets acquired and liabilities assumed. 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(a)	$	585
Fair value of Expand Energy common stock issued(b)	7,871
Restricted stock unit and performance stock unit replacement awards	17
Total consideration	$	8,473

Fair Value of Assets Acquired:
Cash and cash equivalents and restricted cash	$	126
Other current assets	828
Proved natural gas and oil properties	10,002
Unproved properties	4,270
Other property and equipment	128
Other long-term assets	496
Amounts attributable to assets acquired	$	15,850

Fair Value of Liabilities Assumed:
Current liabilities	$	1,955
Long-term debt	3,305
Deferred tax liabilities	479
Long-term contract liabilities	1,287
Other long-term liabilities	351
Amounts attributable to liabilities assumed	$	7,377

Total identifiable net assets	$	8,473

(a)Reflects the repayment of $585 million outstanding on Southwestern's 2022 revolving credit facility including $2 million of accrued interest and fees, as the facility was repaid and retired upon close of the Southwestern Merger.

(b)The fair value of our common stock is a Level 1 input, as our stock price is a quoted price in an active market as of the acquisition date.

Natural Gas and Oil Properties

For the Southwestern Merger, we applied the business combination guidance, under which an acquirer should recognize the identifiable assets acquired and the liabilities assumed on the acquisition date at fair value. The fair value estimate of proved and unproved natural gas and oil properties as of the acquisition date was based on estimated natural gas and oil reserves and related future net cash flows discounted using a weighted average cost of capital, including estimates of future production rates and future development costs. We utilized NYMEX strip pricing adjusted for inflation to value the reserves. We then applied various discount rates depending on the classification of reserves and other risk characteristics. Management utilized the assistance of a third-party valuation expert to estimate the value of the natural gas and oil properties acquired. Additionally, the fair value estimate of proved and unproved natural gas and oil properties was corroborated by utilizing a market approach, which considers recent comparable transactions for similar assets.

The inputs used to value natural gas and oil properties require significant judgment and estimates made by management and represent Level 3 inputs.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

As part of the Southwestern Merger, we assumed gathering, processing and transportation 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. The terms of the contracts extend through 2035.

Pro Forma Financial Information

As the Southwestern Merger closed on October 1, 2024, all activity in 2025 is included in our condensed consolidated statements of operations for the Current Quarter and Current Period. The following unaudited pro forma financial information is based on our historical consolidated financial statements adjusted to reflect as if the Southwestern Merger had occurred on January 1, 2023. 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 June 30, 2024		Six Months Ended June 30, 2024
Revenues	$	1,684	$	4,434
Net loss available to common stockholders	$	(424)	$	(341)
Loss per common share:
Basic	$	(1.87)	$	(1.51)
Diluted	$	(1.87)	$	(1.51)

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 $110 million and $114 million of the deferred consideration is reflected within other current assets and approximately $87 million and $188 million of the deferred consideration is reflected within other long-term assets on the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively. These installment payments are recorded as receipts of deferred consideration in our condensed consolidated statements of cash flows.

During the Current Quarter and Prior Quarter, we amortized approximately $4 million and $7 million, respectively, related to the deferred consideration from the Eagle Ford divestiture transactions. During the Current Period and Prior Period, we amortized approximately $10 million and $16 million, respectively, related to the deferred consideration from the Eagle Ford divestiture transactions. The deferred consideration amortization is recorded within other income, net, in our condensed consolidated statements of operations.

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


3.			Earnings Per Share

Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) 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 (loss) per share are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Numerator
Net income (loss), basic and diluted	$	968	$	(227)	$	719	$	(201)

Denominator (in thousands)
Weighted average common shares outstanding, basic	237,973		131,168		236,213		131,030
Effect of potentially dilutive securities
Warrants	2,283		—		3,974		—
Restricted stock units	304		—		364		—
Performance share units	—		—		77		—
Weighted average common shares outstanding, diluted	240,560		131,168		240,628		131,030

Earnings (loss) per common share:
Basic	$	4.07	$	(1.73)	$	3.04	$	(1.53)
Diluted	$	4.02	$	(1.73)	$	2.99	$	(1.53)

During the Current Quarter and Current Period, the diluted earnings per share calculation excludes the effect of 308,646 reserved shares of common stock and 582,109 reserved Class C Warrants related to the settlement of General Unsecured Claims associated with the Chapter 11 Cases, as all necessary conditions had not been met for such shares to be considered dilutive shares.

During the Prior Quarter and Prior Period, the diluted loss per share calculation excludes the effect of 777,369 reserved shares of common stock and 1,466,502 reserved Class C Warrants related to the settlement of General Unsecured Claims associated with the Chapter 11 Cases, as all necessary conditions had not been met for such shares to be considered dilutive shares. Additionally, the diluted loss per share calculation during the Prior Quarter and Prior Period excludes the antidilutive effect of 10,803,037 and 10,570,473 Warrants, 220,935 and 306,195 RSUs and 120,171 and 146,570 PSUs, respectively.

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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 June 30, 2025 and December 31, 2024:


	June 30, 2025				December 31, 2024
	Carrying Amount		Fair Value(a)		Carrying Amount		Fair Value(a)
Credit Facility	$	—	$	—	$	—	$	—
4.95% senior notes due 2025	—		—		389		389
5.50% senior notes due 2026	—		—		47		47
5.375% senior notes due 2029	700		700		700		684
5.875% senior notes due 2029	469		471		500		494
6.75% senior notes due 2029	866		878		950		959
5.375% senior notes due 2030	1,200		1,204		1,200		1,174
4.75% senior notes due 2032	1,150		1,118		1,150		1,067
5.70% senior notes due 2035	750		734		750		734
Premiums (discounts) on senior notes, net	(4)		—		4		—
Debt issuance costs	(9)		—		(10)		—
Total debt, net	$	5,122	$	5,105	$	5,680	$	5,548
Less current maturities of long-term debt, net	—		—		(389)		(389)
Total long-term debt, net	$	5,122	$	5,105	$	5,291	$	5,159

(a)The carrying value of borrowings under our Credit Facility approximates fair value as the interest rates are based on prevailing market rates; therefore, they 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. In December 2022, we entered into a senior secured reserve-based credit agreement, as amended pursuant to the Amendment No. 1 and Borrowing Base Agreement, dated April 29, 2024 (the “Initial Credit Agreement Amendment”) and as automatically amended on October 28, 2024 by the Investment Grade Credit Agreement Amendment (as defined below), with the lenders and issuing banks party thereto from time to time (the “Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (in such capacity, the “Administrative Agent”) (such credit agreement as amended by the Initial Credit Agreement Amendment and the Investment Grade Credit Agreement Amendment, the “Credit Agreement”), providing for a revolving credit facility (such facility as amended pursuant to the Initial Credit Agreement Amendment and the Investment Grade Credit Agreement Amendment, the “Credit Facility”) maturing in December 2027. The Credit Facility provides for aggregate commitments of $2.5 billion, including a $500 million sublimit available for the issuance of letters of credit and a $50 million sublimit available for swingline loans. As of June 30, 2025, we had approximately $2.5 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 provides for 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%. As of June 30, 2025, 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

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EXPAND ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

SOFR loans. Term SOFR loans bear interest at term SOFR plus an applicable rate ranging from 125 to 187.5 basis points per annum, depending on the Company’s unsecured debt ratings, plus an additional 10 basis points per annum credit spread adjustment. 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 adjusted term SOFR rate for a one-month interest period plus 100 basis points, plus an applicable margin ranging from 25 to 87.5 basis points per annum, depending on the Company’s unsecured debt ratings. Expand Energy also pays a commitment fee on unused commitment amounts under the Credit Facility ranging from 15 to 27.5 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 rights for investment grade credit facilities of this nature.

The Company had no secured debt as of June 30, 2025.

Senior Notes Repayment

In January 2025, 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 Credit Facility. The borrowings on the Credit Facility were subsequently repaid during the Current Period.

In March 2025, we redeemed the remaining $47 million aggregate principal of the 5.50% Senior Notes due 2026 (the “2026 Notes”) with cash on hand.

During the Current Quarter, we redeemed approximately $84 million of our 6.750% Senior Notes due 2029 and approximately $31 million of our 5.875% Senior Notes due 2029 through open market repurchases using cash on hand.


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 and Transportation 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. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to gathering, processing and transportation agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets.

The aggregate undiscounted commitments under our gathering, processing and transportation 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:


	June 30, 2025
Remainder of 2025	$	730
2026	1,412
2027	1,302
2028	1,204
2029	1,028
Thereafter	4,503
Total	$	10,179

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.

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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.


6.			Other Current Liabilities

Other current liabilities as of June 30, 2025 and December 31, 2024 are detailed below:


	June 30, 2025		December 31, 2024
Revenues and royalties due to others	$	814	$	734
Accrued drilling and production costs	401		296
Contract liabilities	272		284
Accrued compensation and benefits	73		124
Taxes payable	163		142
Operating leases	67		71
Joint interest prepayments received	14		13

Other	111		122
Total other current liabilities	$	1,915	$	1,786


7.			Revenue

The following tables show revenue disaggregated by operating area and product type:


	Three Months Ended June 30, 2025
	Natural Gas		Oil		NGL		Total
Haynesville	$	845	$	—	$	—	$	845
Northeast Appalachia	643		—		—		643
Southwest Appalachia	271		86		176		533
Natural gas, oil and NGL revenue	$	1,759	$	86	$	176	$	2,021

Marketing revenue	$	719	$	33	$	36	$	788

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	Three Months Ended June 30, 2024
	Natural Gas		Oil		NGL		Total
Haynesville	$	186	$	—	$	—	$	186
Northeast Appalachia	192		—		—		192

Natural gas, oil and NGL revenue	$	378	$	—	$	—	$	378

Marketing revenue	$	136	$	—	$	—	$	136


	Six Months Ended June 30, 2025
	Natural Gas		Oil		NGL		Total
Haynesville	$	1,666	$	—	$	—	$	1,666
Northeast Appalachia	1,543		—		—		1,543
Southwest Appalachia	565		164		383		1,112

Natural gas, oil and NGL revenue	$	3,774	$	164	$	383	$	4,321

Marketing revenue	$	1,556	$	67	$	75	$	1,698


	Six Months Ended June 30, 2024
	Natural Gas		Oil		NGL		Total
Haynesville	$	458	$	—	$	—	$	458
Northeast Appalachia	509		—		—		509


Natural gas, oil and NGL revenue	$	967	$	—	$	—	$	967

Marketing revenue	$	333	$	82	$	33	$	448

Accounts Receivable

Our accounts receivable are primarily from purchasers of natural gas, oil and NGL and from exploration and production companies that own interests in properties we operate. This industry concentration could affect our overall exposure to credit risk, either positively or negatively, because our purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We monitor the creditworthiness of all our counterparties, and we generally require letters of credit or parent guarantees for receivables from parties deemed to have sub-standard credit, unless the credit risk can otherwise be mitigated. We utilize an allowance method in accounting for bad debt based on historical trends in addition to specifically identifying receivables that we believe may be uncollectible.

Accounts receivable as of June 30, 2025 and December 31, 2024 are detailed below:


	June 30, 2025		December 31, 2024
Natural gas, oil and NGL sales	$	837	$	1,028
Joint interest	220		191
Other	32		18
Allowance for doubtful accounts	(15)		(11)
Total accounts receivable, net	$	1,074	$	1,226

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8.			Income Taxes

The table below presents a comparison of the Current Period and Prior Period’s income tax expense (benefit) and actual year-to-date effective tax rates.


	Six Months Ended June 30,
		2025	2024
Income (loss) before income taxes			$	909			$	(262)

Current tax expense			56		6.2	%	—		—	%
Deferred tax expense (benefit)			134		14.7	%	(61)		23.3	%
Income tax expense (benefit)			$	190	20.9	%	$	(61)	23.3	%

An estimated annual effective tax rate (“EAETR”) is used in recording our interim year-to-date income tax provision. The EAETR is determined based on analysis of year-to-date and projected financial results of our operations. Our EAETR during the Current Period was 21.2%, compared to 22.4% in the Prior Period. The actual year-to-date effective tax rate and EAETR can differ as a result of certain discrete items, which are recorded in the period. Common examples of such items include, but are not limited to, certain equity-based compensation, true-ups resulting from differences between tax returns filed and estimated accruals, and tax effects of enacted laws.

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, a current tax expense of $56 million was recorded. There was no current tax expense recorded in the Prior Period.

As of December 31, 2024, we were in a net deferred tax asset position and anticipate being in a net deferred tax asset position as of December 31, 2025. Based on all available positive and negative evidence, including projections of future taxable income, we believe it is more likely than not that some of our deferred tax assets will not be realized. As such, a partial valuation allowance was recorded against our net deferred tax asset position for federal and state purposes as of June 30, 2025 and December 31, 2024.

On August 16, 2022, the previous Presidential Administration signed into law the Inflation Reduction Act of 2022, which includes provisions for a 15% corporate alternative minimum tax (“CAMT”) on book income for companies whose average book income exceeds $1 billion for any three consecutive years preceding the tax year. Based upon our book income in the past three years, we believe we are subject to the CAMT. The CAMT will result in incremental taxes to the extent that 15% of our adjusted book earnings exceeds our regular federal tax liability. We currently project that we will pay the CAMT in 2025.

Subsequent to June 30, 2025, on July 4, 2025, the current Presidential Administration signed into law the One Big Beautiful Bill Act. 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. As this legislation was enacted after June 30, 2025, its effects are not reflected in the Company’s provision for income taxes as of that date. The Company is currently evaluating the impact of the new legislation, which is expected to have a significant benefit on its financial position, results of operations and cash flows in future reporting periods.

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9.			Equity

Dividends

The table below presents dividends during the Current Period and Prior Period:


	Base		Variable		Rate Per Share		Total
2025:
First Quarter	$	0.575	$	—	$	0.575	$	138
Second Quarter	$	0.575	$	—	$	0.575	$	138



2024:
First Quarter	$	0.575	$	—	$	0.575	$	77
Second Quarter	$	0.575	$	0.14	$	0.715	$	95

On July 29, 2025, we declared a quarterly dividend payable of $1.465 per share, which will be paid on September 4, 2025 to stockholders of record at the close of business on August 14, 2025. The dividend consists of a base quarterly dividend in the amount of $0.575 per share and a variable quarterly dividend in the amount of $0.89 per share.

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. During the Current Quarter, we repurchased 0.9 million shares for an aggregate price of $100 million. The shares of common stock repurchased during the Current Quarter were retired and recorded as a reduction to common stock and retained earnings.

Warrants


	Class A Warrants	Class B Warrants	Class C Warrants(a)
Outstanding as of December 31, 2024	1,254,479	3,073,194	4,383,634
Converted into common stock(b)	(1,186,019)	(2,823,724)	(1,600,930)


Outstanding as of March 31, 2025	68,460	249,470	2,782,704
Converted into common stock(b)	(154)	(136,285)	(645,600)

Outstanding as of June 30, 2025	68,306	113,185	2,137,104

(a)As of June 30, 2025, we had 582,109 of reserved Class C Warrants.

(b)During the Current Period, we issued 6,032,153 shares of common stock as a result of Warrant exercises.

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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:


	Unvested Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share
	(in thousands)
Unvested as of December 31, 2024	957	$	81.99
Granted	548	$	103.47
Vested	(446)	$	78.21
Forfeited	(14)	$	97.39
Unvested as of June 30, 2025	1,045	$	94.67

The aggregate intrinsic value of RSUs that vested during the Current Period was approximately $51 million based on the stock price at the time of vesting.

As of June 30, 2025, there was approximately $80 million of total unrecognized compensation expense related to unvested RSUs. The expense is expected to be recognized over a weighted average period of approximately 2.3 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	4.00	%
Volatility	33.40	%

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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, 2024	376	$	94.67
Granted	250	$	125.64
Vested	(124)	$	109.71
Forfeited	(4)	$	125.64
Unvested as of June 30, 2025	498	$	106.22

The aggregate intrinsic value of PSUs that vested during the Current Period was approximately $20 million based on the stock price at the time of vesting.

As of June 30, 2025, there was approximately $37 million of total unrecognized compensation expense related to unvested PSUs. The expense is expected to be recognized over a weighted average period of approximately 2.44 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 June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
General and administrative expenses	$	10	$	9	$	18	$	17
Natural gas and oil properties	3		2		4		4
Production expense	1		1		2		2
Separation and other termination costs	—		9		—		9
Marketing expense	1		—		2		—
Other operating expense, net	1		—		3		—
Total RSU and PSU compensation	$	16	$	21	$	29	$	32
Related income tax benefit	$	4	$	7	$	8	$	9


11.			Derivative and Hedging Activities

We use derivative instruments to reduce our exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. These commodity contract derivative financial instruments include financial price swaps, collars, call options and basis protection swaps. All of our commodity contract derivative instruments are net settled based on the difference between the fixed-price payment and the floating-price payment, resulting in a net amount due to or from the counterparty. We do not intend to hold or issue derivative financial instruments for speculative trading purposes and have elected not to designate any of our derivative instruments for hedge accounting treatment.

The estimated fair values of our natural gas, oil and NGL derivative instrument assets (liabilities) as of June 30, 2025 and December 31, 2024 are provided below:

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	June 30, 2025			December 31, 2024
	Notional Volume	Fair Value		Notional Volume	Fair Value
Natural gas (Bcf):
Fixed-price swaps	296	$	(37)	369	$	(28)
Collars	1,437	(176)		1,098	(27)
Three-way collars	81	23		161	60
Call options (purchased)	37	1		73	1
Call options (sold)	147	(19)		219	(16)
Basis protection swaps	320	22		279	(39)
Total natural gas	2,318	(186)		2,199	(49)
Oil (MMBbls):
Three-way collars	1	$	5	2	$	4
Total oil	1	5		2	4
NGLs (MMBbls):
Fixed-price swaps	4	$	—	7	$	(9)
Total NGL	4	—		7	(9)


Total estimated fair value		$	(181)		$	(54)

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024 on a gross basis and after same-counterparty netting:


	Gross Fair Value(a)		Amounts Netted in the Condensed Consolidated Balance Sheets		Net Fair Value Presented in the Condensed Consolidated Balance Sheets

As of June 30, 2025
Commodity Contracts:
Short-term derivative asset	$	138	$	(92)	$	46
Long-term derivative asset	39		(26)		13
Short-term derivative liability	(247)		92		(155)
Long-term derivative liability	(111)		26		(85)


Total derivatives	$	(181)	$	—	$	(181)

As of December 31, 2024
Commodity Contracts:
Short-term derivative asset	$	191	$	(107)	$	84
Long-term derivative asset	6		(5)		1
Short-term derivative liability	(178)		107		(71)
Long-term derivative liability	(73)		5		(68)


Total derivatives	$	(54)	$	—	$	(54)

(a)These financial assets (liabilities) are measured at fair value on a recurring basis utilizing significant other observable inputs; see further discussion on fair value measurements below.

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Fair Value

The fair value of our commodity derivatives is based on third-party pricing models, which utilize inputs that are either readily available in the public market, such as natural gas, oil and NGL forward curves and discount rates, or can be corroborated from active markets or broker quotes, and, as such, are classified as Level 2. These values are compared to the values given by our counterparties for reasonableness. Derivatives are also subject to the risk that either party to a contract will be unable to meet its obligations. We factor non-performance risk into the valuation of our derivatives using current published credit default swap rates. To date, this has not had a material impact on the values of our derivatives.

Credit Risk Considerations

Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we only enter into commodity contracts derivatives with counterparties that are highly rated or deemed by us to have acceptable credit strength and deemed by management to be competent and competitive market-makers, and we attempt to limit our exposure to non-performance by any single counterparty. As of June 30, 2025, our commodity contracts derivative instruments were spread among 20 counterparties.

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 June 30, 2025, we did not have any cash or letters of credit posted as collateral for our commodity derivatives.


12.			Investments

Momentum Sustainable Ventures LLC. During the fourth quarter of 2022, the Company entered into an agreement with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture project, which will gather and treat natural gas produced in the Haynesville Shale for re-delivery to Gulf Coast markets, including LNG export. The pipeline is expected to have an initial capacity of 1.7 Bcf/d expandable to 2.2 Bcf/d. The carbon capture portion of the project anticipates capturing approximately 1.0 million tons per annum of CO2 and delivering the CO2 to ExxonMobil Low Carbon Solutions Onshore Storage, LLC for additional transportation and storage. The natural gas gathering pipeline is projected for a potential in-service date in the fourth quarter of 2025. We have a 35% interest in the joint venture entity. We have accounted for this investment as an equity method investment, and its carrying value, which is reflected within other long-term assets on the condensed consolidated balance sheets, was $314 million and $307 million as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, the carrying value of our investment included approximately $25 million of capitalized interest related to the project.

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13.			Supplemental Cash Flow Information

Supplemental disclosures to the condensed consolidated statements of cash flows are presented below.


	Six Months Ended June 30,
	2025		2024
Changes in assets and liabilities
Accounts receivable	$	165	$	239
Accounts payable	(87)		(129)
Other current assets	(30)		6
Other current liabilities	22		(171)
Total	$	70	$	(55)


Supplemental cash flow information:
Interest paid, net of capitalized interest	$	110	$	45
Income taxes paid (refunds received), net	$	82	$	(2)

Supplemental disclosure of significant non-cash investing and financing activities:
Change in accrued drilling and completion costs	$	160	$	(62)

Operating lease obligations recognized	$	26	$	—


14.			Segment Information

Operating segments are defined as components of an enterprise that engage in activities from which it may earn revenues and incur expenses for which separate operational financial information is available and is regularly evaluated by the CODM, who is our Chief Executive Officer (“CEO”), for the purpose of allocating an enterprise’s resources and assessing its operating performance. Our revenues are derived from the production, marketing and sale of natural gas, oil and NGL. Additional information on our revenues, including the disaggregation of our revenues, is found in Note 7. As of June 30, 2025, we considered each of our operating areas as operating segments, however, we have aggregated those operating segments into one reportable segment due to the similar nature of the exploration and production business across Expand Energy and its consolidated subsidiaries and the fact that our marketing activities are ancillary to our operations.

Our CEO uses consolidated net income (loss), for purposes of allocating resources and in assessing Expand Energy’s operating performance. Additionally, our CEO is regularly provided information on production expense, gathering, processing and transportation expense, severance and ad valorem taxes and general and administrative expense, which are our significant segment expenses. Other segment items primarily consist of depreciation, depletion and amortization, marketing expense, interest expense and income tax expense (benefit). Our significant segment expenses and other segment items are derived from, and can be found within the condensed consolidated statements of operations.

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The measure of segment assets is total assets as reported on our condensed consolidated balance sheets, and as of June 30, 2025 and as of December 31, 2024 our total assets were $27,768 million and $27,894 million, respectively. Additionally, in analyzing company performance, our CEO reviews capital expenditures. During the Current Quarter and Prior Quarter, our capital expenditures were $727 million and $293 million, respectively. During the Current Period and Prior Period, our capital expenditures were $1,389 million and $647 million, respectively. During the Current Quarter and Current Period we did not make any contributions to equity method investments and during the Prior Quarter and Prior Period, we contributed $21 million and $37 million to equity method investments, respectively, which primarily consisted of our investment with Momentum Sustainable Ventures LLC. Additional discussion around our investment with Momentum Sustainable Ventures LLC is in Note 12. Our interest revenue during the Current Quarter and Prior Quarter was $5 million and $14 million, respectively. Our interest revenue during the Current Period and Prior Period was $7 million and $28 million, respectively.

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