Expand Energy Corporation

Good day and welcome to the Expand Energy 2025 First Quarter Earnings Teleconference. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. Please note that this event is being recorded. I would now like to turn the conference over to Chris Ayers, Vice President, Investor Relations and Special Projects. Please go ahead.

Thank you, Jonathan. Good morning, everyone, and thank you for joining our call today to discuss Expand Energy's 2025 First Quarter Financial and Operating Results. Hopefully, you've had a chance to review the press release and updated presentation we posted to our website yesterday. During this morning's call, we'll 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 also a number of factors that will cause actual results to differ materially from our forward-looking statements, including factors identified and discussed in our press release yesterday and in other SEC filings. Please recognize that except as required by law, we undertake no duty to update any forward-looking statements and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures which will help facilitate comparison across periods with peers. For any non-GAAP measures, there's a reconciliation that can be found on our website. With me on the call today are Nick Delosso, Mohit Singh, Josh Vietz, and Dan Turco. Nick will give a brief overview of our results, and then we'll open up the teleconference for Q&A. So with that, thank you again, and now I'll turn the conference over to Nick.

Good morning. Thank you all for joining our call today. Recent market volatility has reinforced the importance of our strategy. The steps we took over the last year to build scale and the best gas assets, lower our costs through merger synergies, strengthen our capital structure, and invest in our marketing business has successfully reduced the impact of market volatility in our company. Overcoming market volatility requires a resilient financial foundation, a deep market-connected portfolio, and low-cost efficient operations, all hallmarks of our company and strategy. In addition, we plan for an allocated capital around a mid-cycle gas price of $3.50 to $4. While markets have been volatile, this pricing is still consistent with the forward strip, and our view has not changed. While spot prices may be lower today, the macro fundamentals for natural gas remain very constructive, with growing LNG and data center demand setting up the market for a strong 2026 and steady rig count for lower 48 activity, implying a stable, not growing production. Against today's macro backdrop, we've continued to safely and efficiently execute our business. Our integration efforts remain on track, and we expect to achieve approximately $400 million in synergies in 2025 and $500 million by year end 2026. Since close we've eliminated approximately 1 billion in gross debt, including approximately 440 million in the first quarter. In March, we joined the S&P 500 index and we were recently upgraded to investment grade by Moody's, which means we have now achieved investment grade ratings by all of the agencies. These important milestones further demonstrate the strength of our company and the value of combining Chesapeake and Southwestern to create Xpand Energy. While both companies have achieved these results individually, I'm confident we greatly accelerated the timing through our combination. I am proud of the way our team has come together and embraced the role we play in answering the call to deliver affordable, reliable, lower carbon energy to markets in need. We also continue to benefit from the tailwind of our productive capacity strategy has provided our business. Building productive capacity allowed us to efficiently increase volumes as demand grew. To put our strategy in context, over the first 12 months, volumes from our productive capacity wells will generate approximately 225 million more in free cash flow compared to if we had elected to turn the wells in line last year. We expect to exit 2025 at approximately 7.2 BCFE per day, turning in line substantially all productive capacity built in 2024. As we look towards 2026, we are well positioned to deliver returns for our shareholders. We expect to see a significant inflection in our free cash flow next year on top of the very strong year we're having in 2025 while growing our production to seven and a half BCF a day. This will allow us to return a significant amount of capital to shareholders. Sound capital allocation and prudent hedging will reduce risks and underpin our free cash flow. We look forward to continuing to update you on our progress and operator will now turn the call over for questions.