CHK - Earnings call transcript Q3 2024 | Expand Energy Corporation

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Operator

Thank you for standing by, and welcome to the Expand Energy Corporation's Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your roots for today's program, Christopher Ayres, Vice President, Investor Relations. Please go ahead.

Chris Ayres

Thanks, Jonathan. thank Third joining Operating Quarter and discuss call Results. everyone, Energy's Expand XXXX morning, you our for to Good Financial and and yesterday. Hopefully, our that chance a posted the release we website you've presentation updated our to to investor had press review

also from call, such a factors information, be of making statements, underlying Please morning's SEC forecasts, our beliefs, including our are of statements. note statements which forward-looking results other by confirmed projections number will neither in in performance expectations, assumption the can filings. factors regarding that be there actual we and press and reference this statements, consist During statements cause to to including the and release identified discussed that our will and future existing differ yesterday materially goals, forward-looking

Please except also facilitate some you on periods no with refer may law, duty statements, we and comparisons not also update by such place undertake required and which any peers. help undue financial reliance measures, forward-looking We should recognize to across as statements. non-GAAP that to

non-GAAP measure corresponding be to website. the on use measure and For any can a GAAP found our we reconciliation nearest

call Viets. Dell'Osso, then brief are on Singh and up Mohit the Josh open we'll today me of our With Q&A. Nick the a give and will Nick overview results, teleconference to

time Nick. to turn over So that, the again you with and thank

Domenic Dell'Osso

exciting start. with is ahead is quarter preliminary Through briefly accomplishments thank companies our and our our seen and schedule for plans. to results great an This morning, are you company, the Good a time integration providing call. plenty outlook and Energy's The for we've and for Expand XXXX. of third to of X integration first of month, look earnings off our joining our highlighting forward I first

to success Expand producer. their a of a employees the testament leading Energy quality to Our commitment our making early is energy and

quarter heading solid results, which gains, significant and XXXX will stand-alone delivering the margins into enhance see third operational X companies, we future with momentum For impressive profitability.

produced the to build and include productive A Appalachia. per while few the delivered company notable Bcfe drilling achievements Haynesville and day turn-in per in Chesapeake completions day quarter quarterly feet combined the our record X.XX Northeast capacity deferred through lines. Legacy operations from continuing

the monthly quarterly hours pumped Northeast records, While for completion company set also and total in Appalachia.

legacy record Not a lateral a a lower be to onshore in Appalachia, outdone, well. Southwestern Southwest length lateral for drilled XX XX,XXX-foot

about shareholders consumers I'd for Now to we what talk deliver energy like are excited company and about XXXX. with starting our will why so this alike,

of operational the Energy and and combination capital for operational enhanced our illustrate plans Expand powerful outlook preliminary Our efficiencies.

We are price and in with together better all competitive will cycles. a that more resilient truly portfolio be

level, deliver outlook preliminary per $X.X Our production represents increase maintenance average XXXX of in capital to Bcfe this total Chesapeake's an Compared stand-alone approximately billion XX% XXX% of a only with for capital. an includes in to day. X increase

will by synergies the driven I our capturing recognize companies efficiencies. outlook strong significant capital Our be operating and and energies. many promise achievement of

more. capital all of In we deferred resulting less from the XXXX, XXXX. operating efficiencies, spending definition us, For producing is capital the in benefit It's while during about success should our efficiency clear. built and activity

and value ratio financial performance Importantly, builds periods flow better continue down during deliver as more dollar expect of realization and hold we cash capital for however, ensures operating deliver synergy to prices. free This this our to we efficiencies spent. higher during efficiency cycles every

XX% synergies our target have integration our by preliminary on plan in to expected annual us which our positioned confidence Our million. $XXX to based raise early is wins

drilled to Southwestern the legacy weeks structure produced talent of comprised telemetry redirected have per of drilling allowing successfully disposal Expand period center, ensure drilling ground is while rigs from new barrel streamed to all a owned telemetry The water org already Energy saving announcement optimization, all the deal extended water best work close and Expand to from organizations. ops the $X from we data capturing allowed successfully drilling and In data implemented assets, real-time best running. rigs, both us between to processes the hit Energy, our initial drilling

Given to approximately our well the which than our year $XXX synergies, synergy year-end target of is million full strong XXXX. to in by start, more annual and expect we achieving million are XX% next original $XXX our on achieve target way

We're short-cycle a strong up to capacity and strategy track deferred will Our per approximately day productive X year-end. capacity XXXX. of by on build to tailwind build provide TILs to also into XX Bcf

prudent to improves. be to market in ready condition We online turning rapidly pricing respond and production will when

per don't Energy collars was we as MMBtu volatility strategy great Expand hedge how cycles through will we continue. in respond, the while know market built our attractive and prices wedge to provides exactly the outlook our expect from into $X we Ultimately, deliver priced confidence range. that and well financial are benefit to do ceilings

from effectively program prolonged ensuring Simply value we XXXX significant still higher of a while have we prices. cycle our put, periods can protected upside capture down in

operations resilient capital powerful program. returns portfolio sheet success, to so balance and efficient our too and are sustainable While key our is our

access an credit transition rates. unsecured, capital at costs eliminate investment-grade us close, financing achieved RBL and rating We to upon more our allowing to ultimately attractive

the domestic counterparties our power We and to of hallmarks sheet position we LNG-ready markets rating need. returns, a continue of with since as execute legacy strengthens Chesapeake our strategy both investment-grade and strong Our importance understand peer-leading in balance supply shareholder restructuring. to our

return an pillar we our of to net attractive To return strength reduce shareholders. a capital enhancing ensure are while framework to remains Expand financial capital Energy, debt, maintaining

base the opportunity prioritizes market the variable future framework conditions warrant. $X and new for authorization a repurchase dividends dividend billion including share when while reduction and debt Our

short have said energy. world the is before, I

we updating on forward progress, our foundation call largest As so, market. in volatility are demand now are thrive we're portfolio, answer doing and geographically of increased address advantaged the domestic an with domestic natural and follow international this as questions. your built producer well assets, prime expand stakeholders. pleased look diverse to all naturally In we the for gas of to that you resilient to will to opportunity and evolving the as I financial rapidly

Operator

our first Kevin of And Energy from MacCurdy comes from Partners. Pickering the line question

Kevin MacCurdy

question capital first the is My costs. on

quarterly I in think of expected. expected lower looks in in million $X.X the compared did seeing came quarter. than cost to came your quarterly It are how XXXX -- on production synergies XXXX was the this target? lower again assets? what $XXX question My billion in than you like the in outlook for well else is, your CapEx legacy original And

Domenic Dell'Osso

of is capital It the Yes. I'll just I'll start Josh combination by a a is give though, you things. the $XXX let million on increase the specifics. few noting side, that heavy

Josh Viets

we on be $XXX that attributed Yes. the CapEx, is as comparison million about but Kevin, of $XX to million, where going a to started. to just

things X/X, be $XXX the Is talked delivered we of is X/X, million about One the at million, with about which that $XXX what we would that X/X, had transaction rollout. the described so cumulative X you're time deliver as as building standpoint. over increase far a from in able period? a a what almost talking synergy to year So about we're X-year $XXX million

just well XXX a day, the carrying the app. course, entire really under the have challenging including execution really with Your Northeast then, all just elements up drill our where for to across of seen expect that's the in more of seen for company, a record per into and the which, to pleased we one see company. and highlights referenced we've averaged a plan. of Haynesville on deflationary trends, couple market NFC quarter, feet again, We've well, into the the just Nick been the that's that to show we within in we month really And some fourth accounted heading quarter, softness record is places at bit pumping quarter more footage for first incredibly of day within cost question, and second record performance the as kind current a little seen. of the regards the

Kevin MacCurdy

synergies OpEx on OpEx. a Great. the year. know the And don't details starting identified you've guidance on if in for have point anything good else there is the curious follow-up just all I XQ XXXX. you term? that yet side Or my on OpEx the But next And near is is

Josh Viets

Yes.

the range pegged relatively think is we've as the where far number I good QX as there.

on synergy shown side that in we've number starting good QX then, the specifically we've the rolled a of offered we've business production plan -- the more out, is But modestly start year. course, water relatively growing We And course the the of the you. and that of is a guide up, through little to point disposal there will see Haynesville. the show the for

Operator

comes And Wolfe from line the Research. from Leggate question our Doug of next

Douglas George Blyth Leggate

you because deliver. obviously also number one, they the Nick, uptick. be want I to out put for happy I'll to with at outset, risked you guess, my tend forgive can't synergy we're never guess first to add all, that the targets this me synergy I But congratulations a never of

So are Obviously, debt, what to higher you There's is, although we done my characterize merger pretty you discussed the lot in risked to of going things. delivery of what a are terms that, some But got time How you chance do of off in think be looks how how this side to of a things target question last view take went of guess you've you the There the would when things my I of lot of attractive. medium-term Haynesville have of can are maturity this guess in you bunch outlook? is next question a you you looks? with the year deliver? potentially could the and I terms of you cost your terms a different Where the could debt differently. sitting the that year synergies? refinance

Domenic Dell'Osso

question, Yes. I that Frankly, Doug. love

certainly are to question, we the answer So hope not. I done? directly

across a that we're you methodical were and together huge across ensure the synergy, think how running, platform is going tons now number companies about of that are the as That determine with about quantitative And it maintaining exists of it it. we on both that the and entire and the of acres is that portfolios, number said, of come daily you opportunity what teams tangible together, talent will we're the think operating rigs about the that learnings manage. about operating going this think legacy you we the come a we're We basis, that and of to deliberate all from pretty a the in how in portfolio opportunity to project assets nature. portfolio consider

were in a then that, because for closing. of the do captured to really of potential can lot plan addition but for confidence significant stronger synergy to part a a consider were this organization, time we thought things And opportunities. And us in our increase scale implications here. able of absolutely we've to things those in lot We larger, balance period of to you we of our now many that And it as sheet projection, had good be to believe gain noted, we offer today been that good we plan. to long some a we able there's

us a something And to for synergy we I into to high going would something model able time. continue criteria to this. calling something and that have we good high bar can that We deliver a be love us we that million and it's put meet to can same deliver and like we reasonably call that add order great it's today for have you that to that reason. a do to $XXX a in a the confidence for that see we've in when number to want as synergy, to bar call But prove with over synergies. our

thing keep in is, mind, I legacy Chesapeake would X did say acquisitions. last The

couple Over last as of X years or the X Southwestern last the did over well. years, Legacy X

them we tracking operating what a teams, So and at creating not. lot synergies, together is bringing and have what's possible of practice understanding

think is providing. we're us And we're we in the the so we track to have here rely how record our of numbers front on something confidence knowing we learning history I about and going that can to is us think important and that and what's that on as deliver

Douglas George Blyth Leggate

laid kind kind don't of, is forget. you've a I'll macro XX be integration is you're it's Very of the ask should lot, track history My potentially Nick. out right. record, that I The back fair I on all cadence this I you question bringing experience question. guess I of a follow-up the of guess us think the We you've production. blunt. got but Slide and something guess of And answer,

wells, drilling some up I efficiency on think there's not from that online. capital them the benefits skepticism getting or them completing you're bringing

bring conditions back confidence importantly, under And so you not X.X, which sustaining to I the wonder you could to would this I if ask speak capital. in your are the XXXX? what And production X.X more in

Domenic Dell'Osso

great question. Another

another you for in in confidence is we in the high. X.X rolled addition completely So deferred to it's benefit XXXX. efficiency that gave capital first, looks in like what which show show the is has capital through from just system. the is when for XXXX activity in opportunity very all tailwind not you us And have to the XXXX the from happens it that, a deferred of you our our confidence we very, 'XX. what look, of where you, And efficiency deck activity slide an the

that from As associated from capital with that reductions winds cost the with efficiency synergies merger. is efficiency down that tailwind, our the replaced

you to And of going effectively we think see XXXX so forward. production CapEx that in sustainable that is the ratio

do not cause could us things. what to it, of lots Now

that on not XX. blue prices are need then represents the congestion whether -- deferred slide winter And we slide, and forward activity. same than online. strip in production We come have through completely or the online, in That's bring today, soft volumes weaker moderate have in can the don't storage as over indicate to from a that the accordingly. and There fundamentals wedge control is that slides complete and to the we a this volumes supply-demand a are reference of control we shows on light would our the color to if these we as -- Slide if come

hold And capital lot a efficiency confidence have our in ability in a the this over have to on lot deliver ability we confidence to future. control it. So into our of and this of we

Operator

TPH. And the from question line our comes from Matthew Portillo of next

Matthew Portillo

over thinking a around you on Do the contracts see opportunities maybe maybe marketing curious mentioned, the additional about to and as midstream also in Haynesville. Just you business? question side your years for few the specifically some dated. opportunity next guys but Northeast, longer midstream bit optimization, But any the a side, of the optimize the in

Mohit Singh

great Matt, this well. as is question a Mohit. That's

transaction the a reminder, we Just X. closed on October

forward XX fast days. So

So synergies now, still plans continue doing books X M&T to out that combine specific but marketing get early around integration. the operating come if flush XXXX, January state what we business, around you what days. X, of very bit expecting. are we Right To to have more do marketing at look we books, the a the little and we are are

integration. trade the -- we Endur updates in is I to beginning the optimize and The your contracts, consolidations, answer high-level books, flows. As to are question mentioned, name joining ASB ETRM back-office

are We to our are trying have beginning to get wins. more of to early production premium markets, and we some

we premium equity at we which looking we and In amount some some to move from start production utilized Chesapeake you idle. Haynesville, If more some it SWN equity pipes that have have of FT we Chesapeake move there's SWN -- the App, FT gas to markets a moved using access was into gas of to move had, that that to. able certain Northeast specific were had

using App Chesapeake to sales. fill Southwest pool legacy Southwest are App we in similarly, the capacity And firm

those all are early So wins.

at time. point details time, together, Over X together some the books that. of excited more businesses bring X the as super and this we around trade integrate we'll then are We share

Matthew Portillo

was cycle curious And follow-up design there. the at you landed Great. faster if drive the maybe bit fluid just drilling I then I specifically the on completion. on had highlighted in all but opportunity as cost a given and know Haynesville, to times loading down a drill you really

if of Chesapeake XXXX of it? incorporated I into cost loading beyond in that's how think your savings? at at in there a outlook was Southwestern historically in a looked how and terms all versus maybe been you bit difference looked fluid at And

Josh Viets

synergy to therefore, reasons attributed that to million that our entirely to know synergies, a completion at original the $XXX any designs we guess to was tied we really I completion absolutely synergies not productivity of we we And million described completion maybe are drilling include did. the drilling how what and the decided but economics. time, $XXX sensitive year, was to to as well go Yes, target, improvements. just back And as and

through the its we now productivity our assess impact take well therefore, and to which really design the companies' data of process various changes able sets, the to so planning integration economics. to time, implications And combine have be done and X wanted we to

we've see out $XXX now And incremental as we an we synergies associated included with with now come designs. have so that million, some completion

And side, proppant increasing expect some we'll of we little the on of fluid components flip Haynesville going dialing we the intensity, that, back the in will fluid a intensity, But you mentioned bit. be be forward. intensity

realize line such using limited In stage entry perforation think and design. our an increasing addition, the there well, savings changing are links complete we as can we as some extreme by

all sets optimize its look at combined the the teams that are how in going program about we really we entirety, start that data these new think things with So forward. these to can

Nick's earlier not together, we'll to work point, and synergies the done, as to to So be we're think push we higher. even able teams continue

Operator

And next from line question of our Akamine. Kalei the comes

please, from Bank question of America. Your

Kaleinoheaokealaula Akamine

capital budget in goes and The much capitalizing? Wondering can of a maybe was maybe some the in guess you that expense previous from also some if guys question This you reference here capital the guide then a optics done offer XXXX. soft to just And us how is bridge Southwestern for capital interest remind trying down are great And rub to job number. grinding I that point. have it.

Domenic Dell'Osso

with I'll start Yes. that. Kalei,

mid- of be to you it's give out our not CapEx. But capital able and in would start the number. next give what percentages It's say, of full We'll I we look year. huge as Let's low capitalized a program the comes they how like were on under details with the, that to capitalization. number things single-digit guidance full

point interest expense. the about on then So the next on

X.X% cost range. in is X.X% average going to the of interest weighted be to Our

stack a across debt take the so number there. you come can up And pretty and that good with

Kaleinoheaokealaula Akamine

Can you by it. the it have production and I'll leave is? And appreciate My any that as more curtailed remind Got industry how second I that. currently insight just is basin offer X much you housekeeping. where capacity there. think you to us maybe

Josh Viets

Yes.

-- by the So Haynesville have around we That's just the a pretty going day, local day a curtailed the across and by out something are and internally, cubic for in look moving to that at that's gas and we changes today, really evenly market day day and that's that's $XXX net demand. we million and be us just XXX the split understanding week million of feet how given Northeast. day in conditions

a that's been pretty so we'll be the responsive And conditions. And fluid in like we've number. just to past, market

asked That's, I on peg to You commenting individual companies to data. harder because bit number. directly little something down. about industry don't probably shied say, direct And have it's just we've would from access the a away we

Operator

next comes our Neil And from Goldman the question Sachs. from of line Mehta

Neil Mehta

And now about 'XX program? Slide we framework question some could the optimize this investors returning allocating that you first as returns get So returns you cadence should into different design? talking enhanced you all how little as evaluated thinking do capital is towards Maybe you about the XX. Why through more visibility of hedging and just be the spend capital have about time the capital. strategies a

Mohit Singh

Mohit. Yes. This Thanks for that is question, Neil.

shareholders. cash be number that start said, X to that back me things first our we address X with Let would this are returning as And reducing debt. framework. the trying you is, One by net to the acknowledging

to outlined flow that Slide are the reiterating or is referenced framework on we we the which base cash at of deem our you XX, free -- when tranche what the as doing we dividend, first commitment will sacrosanct. So look

free did be consistent that $XXX acknowledge next not bring annum. The there's is flow, any, do that annual tranche the place. So roughly of million deleveraging if framework into cash and not to per prior That efforts enough we will changing.

debt, have which use need debt for So the the the plan the to debt. we SWN inherited flow cash paying reduction, free X we merger, formal are so of trying that have to down a Tranche net paydown. formalizes debt we Post towards essentially

either the we What of towards that portion, Tranche go a be is opposed free before which And the remaining is will cash variable cash buybacks free on trying X of which market a flow. higher Tranche in of determine to finally, XX% X are to dividend, XX% equity flow, or in which returns we do will condition. remaining which any will provide based form additional to as

a we So as to enhanced in way that reassure are continuing summary, to we this net paydown, while committed deliver to framework see shareholders returns. debt strong shareholder

Neil Mehta

Nick, upside, There's of macro. through here. the -- about got 'XX, just on ramp spare and the as moving follow-up there's 'XX you've really LNG's And global 'XX, be but got, about capacity. go curious through obviously, over you go surprised mid-cycle but seeing on a a I'd other how the power the capacity your side. we we just to huge years. you've think as pieces we're lot demand talked you've And and of view the

like and at there and feels curious changed AI upside are the enthusiasm around it So views a this view moving lot on of to pieces, mid-cycle of your all. power how's your demand

Domenic Dell'Osso

Good Yes. Neil. question,

say thing us moving lot very I And means be a is will volatility. there that to pieces. So agree, what much would I first of there's

X models for X competing generation. touched faster rapidly. move to demand the gas key as and to you itself things on supply that lot are the capacity think call export manifests clearly continue which as I'll is think pieces, or ago form around. say, U.S. internationally X well growing of Demand of we're than demand Exactly domestically a those growing on power predicting, as internationally, that I LNG demand how moving growing LNG I of in years is will a the function

take to So develop. that's more of a encouraging AI gen lot is pretty around sign. to several years power the going A

end and last, flat down. you've most thing expect structural their October, XXXX, supply this through to actually tick have a be volumes moment, tick provide currently people supply as the to during on only on macro The in year but up volumes would pretty bring of going the term that to now, for picture so see of pretty over and is at trend And least up I and winter. seen believe, October, a few allocation be it's the long at more tailwind. to that just to capital Right that we're common current days, comment see we very other managed through, continuing important we

has I think with the something industry aligning done better demand of a weather. It's job production winter around

So it's that's to but see, think in count trend have the for down surprising XX, that a bit, the not a if quite lower to about you gas rig we and positioned grow. it's not

only has in filling Permian full in is not The being It the offset saw will come as Pipeline It We capacity transportation. grow Permian Matterhorn October. quite yet. online up. is

maybe until fill encourage the So change pipe over gas online immediate you the for rich that Permian down. count anywhere that in capital the see given see And several I really future you the growth see a that, around don't months. and we anything flat growth and And will the we next allocation in that rig areas a and weeks see $X. think to the forward be next limited after doesn't big breakeven around then capacity gas comes driving to production strip has dry

of kind right there. You're

a a is around is we're then and change, rig which time that probably seeing and flat to So the how you count cycles we I observing see to to it. the we supply shows lag that industry and learning some be remain believe quite capital down that way has allocate think you're from going until discipline trend

gas fundamentals supply-demand dynamics very for So are for strong. the

the shows are it strip, future. weather have supply demand of character definitely impact the about up. We we timing in together the change on terrible changing a that will the predictors and when huge but near come of see when Winter sometime relatively to

Operator

from comes question Nitin next the line of from Mizuho. our And Kumar

Nitin Kumar

Obviously, things of lot to long-term efficiencies the trying we're there's a with unpack here.

in think, ask XXXX, activity. the still long face us billion. to have $X.X should be you've term our help this, should under are probably some when math, XXXX billion. you your you DUCs And mentioned gap synergies it's in the I but also said in Nick, you $X.X about adding belt, Can sorry XXXX, So you but by all

So 'XX and 'XX how does between capital and 'XX 'XX. between -- 'XX and trend

Josh Viets

have question, good we're benefits it's Yes, as to from the DUCs heading a going indicated. Nitin. that. some Clearly, into you take XXXX I'll

to that we of we'll be down And so capacity end head the the course, drawing as year. of

are some that of capacity leveraging even productive you 'XX. So in

mentioned, in the fact, little activity, we'll which be activity for And As bit included XXXX back we adding back. is start billion. a of the adding some plan, you in rig in $X.X accounted

going you're at XX So exiting be around to 'XX rigs.

think as well are a assuming increases XXXX. you to So key other synergy activity. higher little that the remember But realization into bit I thing is the going

our capital that billion, expectation And the so just pace for given even slightly 'XX X.X line for the with maybe synergies? the would be we're realization in below

Nitin Kumar

Great.

you've the got to want part grade. investment is I and talk of you second company with The maybe When about had the about the talked expanded deal scale marketing. announced the Southwestern, you

data how market you is can supply of that on give is premium focused thoughts more to how up? going? generation. direct is centers if us points to color on And market the Any little maybe specifically, sort the So gas market power a AI and on shaping efforts price to

Mohit Singh

for here. first Mohit Nitin, I'll those first. the one take Yes, questions. Thanks

As I optimize said to premium earlier, flow to are and wins, the which side, beginning outlined on call. in the we we've earlier markets M&T I had early some

sensitivity, You commercial one details where is side truly we contractual till due the of to had into the could closed. should merger the remember not that business marketing get

the So innings. are in still we early

are and front. out that by the lies, early optimization And the all going October we but we figuring contracts. closed X, on wins the where So through very that encouraged merger have had

around AI your which of question, center other is power the data the On part demand.

of value power the interest whether and that whether chain, and we happening our was have doing the obviously, upstream consolidating stakeholders legacy Southwestern all developers, there's generation suppliers. it's end users the on in background, the say midstream It's in whether efforts on legacy those from process it's involved and been lots again, that So what conversations fair the to in was Chesapeake different and are its companies, doing it's end. the end

bring consortium to together. the trying So

We are all bit stakeholders. the stakeholders a very having of these and all but engaged remain conversations things little very of take time, encouraged tons right the and with we right with

Domenic Dell'Osso

like as Gulf both. one the both Haynesville, really portfolio having And demand LNG the responsive export Ohio respond is domestic which of industry, me to well as things Northeast significant both in Coast really growing just in and we geographic then of really areas our diversity let of the about capacity be us also to the add across and that duration that to with to these trends Pennsylvania Virginia, is and Appalachia allows the positioned growing power West gas uniquely proximity we're to

directly Haynesville south. that Our get East. then go gas West can can move South, its It can and outlets gas Appalachia some various that as has well. move Southeast Obviously, gas

really we customer a that and scale of company to periods that has this for the business we our setup time. of have from relationships production the and the like the financial ability to long strength meet markets create So multiple of very

Operator

from of And question our from next Silverstein line Josh UBS. the comes

Joshua Silverstein

on is, bigger seeing change pretty but outlook, the the change So in where stand-alone you a is it's Haynesville company. or step efficiency step curious were whether in capital big the forma pro we've the efficiency in a also I'm Marcellus?

Josh Viets

I question, good a say equitable X. it's mean Josh. between pretty the it's I would Yes,

our operating of areas tremendous both think this I job those have a in year. teams done

supply And so as capturing as efficiencies conjunction deflation. with well teams seeing chain operational in their both we're

see to expectation equitable through we think as And continue these it's well. step so changes I time my is and

Joshua Silverstein

Haynesville Do you about is Got a come produce -- the to profile stand-alone for before had production just companies were thinking that more the outlook guys to X at merger, level? get over then capacity looking see day. you're Bcfe. back The there? where the of X year you per there's next Bcfe that it. all longer as growth the from you the Does longer-term I'm curious scenario how term back company. And

Domenic Dell'Osso

obviously, capacity Yes. right will now have do We portfolio grow. well. the we love capacity question. Josh. across has from volumes, And that but as come primarily the It's there's the this a great if fact region Appalachia it curtailed to growth Haynesville, the

be to choice. growth the It's volume a XXXX So of from X and a back can come day at Bcf some true in that that. exactly come Choosing is can Haynesville. then

be also volumes market how expect conditions when have volatility. but be And and a that for to continued can the we to we expect informed gas that call to the macro there we bring directly we and going And back by happen, is the decide produce. seeing to

what to that did so liked having of capital necessarily to the capital we ramp better of tie the about to that efficient have severely. development we is our needs immediate that with a the sheet So which capital to associated strength strength the we that without continued what not allow program down our market for delivery can too balance the volumes to program is and time delivery did efficiency volumes of we've in and company, XXXX used up our

to have helps program. to decision-making able be balance company able to to do in kind hedging sheet you continue portfolio. expect it helps, be and We of combined we that scale to an expect and the better And have the strength new frankly, active because

our All of those size of with bringing that efficiencies better our together. synergies and the we're get things with

can and shown down beyond have needed, to that. ramp And choice. can do we've that needed. to we probably as shown. the we think else rank So when and what And it's I anybody do when a and flexibility willingness has complete a We as

Josh Viets

little just Yes. of Slide think the be we and reinforce be at kind does to low at that Bcf profile a activate plan trajectory I'll we'll I to in equivalent pretty XX. to our always we activate We've on conditions, view is DUCs we incredibly responsive the see want the steady Josh, to And we show that deferred said market want production markets the predicated out TILs, laid then of we've a all to bit. on that our we just to that begin a growth on of the And throughout today. X.X we as production this of do And around start point day QX. in add kind course, XXXX.

a the some out that demand showing it point XXXX, to trends see Bcf XX well around next really I hold going And not and exiting to anticipate but growth being We'll day. But want saying that fact we're to fairly we're months. on that think X.X. a we number X matches underlying we above it's is of up most importantly, we course the we just the have throughout that's flat, that occurring, do just be the

Operator

Johnson question the from Meade And comes our of next Charles from line Rice.

Charles Meade

-- Nick, as is and back you've because guide lot, sense 'XX it progression, to CapEx. for positive I talked want to a and you've questions on the go lot your of got makes a capital the as efficiency

and people for me, I X.X the the XXXX. I bigger to lot surprise number think of think is a to

the at goes ask angle, comment a but ask about capital. earlier you to at working this you DUC in looks it wanted XQ, at kind along net talked numbers, and working working a me you have I your count capital on if from kind X, gross for the made there Slide capital are look million you of 'XX I TIL to in investment different or look of these of capital So basis $XXX that, investing and look recognize question your I of And those to year like where about I at working maybe if year-end. you, lines, but back in a unproductive

'XX looks maybe get synergies is something even is in at million -- TILs off CapEx But still, 'XX earlier like still like in the of 'XX. X.X longer-term in to as that or in so X. you it this of the more actually in your you're benefit roll ways, the sustainable $XXX where this another framework, rolling about and you me And least though north you DUCs Josh X as think about, million of I talked and 'XX talked in $XXX

it And is, missing So if that what there? a am is I framework? fair

Josh Viets

I'll Well, that. take yes, Charles,

is in the more things be need synergies. synergy going synergies we G&A. though way. probably One throughout -- P&L, layered to today is up of we show the remind have way just to And as that just to start in XXXX I heavy specifically that folks that the important a more those work out it's towards And more geared

support a As we've efficiencies that X you start you capital the yesterday. those next XX capital really became the it's them number efficient years, work out over rolled help standpoint. more And to that out from

Charles Meade

Okay.

There you one guys you were share to involved or but paying how attention, are anything but I guys this the announced there? wondered thoughts transaction a on the attractive or you'd if any process to morning the me, on in price are sure your you whether could that just was where valuation pretty like on a then offer comment question. Northeast you seller, other And And Marcellus I'm an looks to Okay. operator.

Domenic Dell'Osso

in us No, Obviously, really we anything this synergies that. are merger is which focused on priority. top been on today, have closed working don't pretty to the our to that add front of and we've getting delivering

Operator

Leo question next ROTH. our comes Mariani from from And of line the

Leo Mariani

up follow sort maintenance to wanted of comments just CapEx the bit I around on little a here.

So billion see to kind $X.X the here. of day we saying I that. Bcfe kind Wanted to of around think are that sensitivity could you is if more guys any related the maybe X kind per get of

would For of a eventually CapEx have maintenance day, that? associated you to more something kind the a Bcfe production example, level grows if like X.X with

Domenic Dell'Osso

to you're but be more, off still the if on what a grow equal. production volumes going giving all profiles we bit you'd to spend billion-ish, it X.X Yes. anybody $X to a Obviously, We're else to of going to Bcf tie that day, would in should number look little up future neighborhood like. think hold

will point, Of else course, when all not be probably equal. you get to that

the And it you ability choose. for and an this profile, exact us efficiency to how hard grow know really sets when here, we're it's up. and the really how we have give production we pleased But we So to holds, number. with look,

Leo Mariani

to Okay. reduction Appreciate on debt target. guys that. ask I you wanted And just the

end So the you $X.X of think talking by guys debt a are I reduction about billion XXXX.

Southwestern at of million think you $XXX balance? the Just curious, the a does guys I that off roughly revolver around close number include, paid deal. had think I

I'm that's an trying million, $X.X included So get next imply maybe guess the which to year. a million would I $XXX in that just sense additional

trying Just gets understand to paid how here. down the debt

Mohit Singh

Yes. Mohit. Leo. Thanks This that is question, for

you -- $X we So side, Chesapeake a the let hand. give had cash billion of on me roughly walk $X from billion

retired $XXX was on credit facility and revolver, off. all has You been drawn that are the and that million at correct in closing had repaid that paid Southwestern and full

sheet. also inherited We that Southwestern million of on the $XXX cash had balance

quarter also When that transaction will about to $XXX is $XXX million or And when factor -- XQ come severance pay will into will pay the play employee what of dividend, in, the think XQ. out we paid that forecasting the play. end So year pay you of will the all with roughly in in happen that of costs, will the -- predict cost, employee cash end you which by the we'll million hand. XXXX into

XXXX. point, due coming have other we your To January X.X% note in the SWN

be the utilize at to it's of redeemable We'll million the cash keep it on some to good in $XXX par, So number at to course. of year. somewhere million mind $XXX the of par. along end hand redeem the would But cash

Operator

line Scialla And question Michael the of from comes our Stephens. from next

Michael Scialla

Would against off you Or 'XX see the that TILs had hold capital in do case, the holding DUCs? remained downside change winter how market spending to how back online? wanted you on the plan on the might mild oversupplied. if I off weigh on a a deferred we on bringing

Domenic Dell'Osso

either spending Yes, volumes way to one we'd on in is balance. on certainly less some the money to continue back add don't holding we look or in thereof. or to do activity our hold combination XXXX, probably by What from deferred deferred back want XXXX another, to activity

levels at are be So the pulling But increase completely to ready volumes these market. time. not if we to we see to flexibility wanting have now the and capital be same tons responsive back from will of

Josh Viets

just that. add Mike, I'll to on And Yes. maybe

add of and rigs adequate, around we reflecting plan that feel the built that on the that. the we the is to is to decision first the simply going in we've just that that really is we're again, to fact year. that want productive quarter is XX from thing And XX don't capacity other The

rigs add to as choose plan the of environment, those we back. had in billion we what rigs the not And DUC year. down a course half the of of back in the simply just we so to weaker assumed would in second year, And is course, the in and add work the included $X.X the starting throughout inventory

Michael Scialla

sense. makes That

right Okay. versus today. how the on enhanced just Mohit thinking as now, where things capital Slide walked to framework. And see, price buyback new through about the you then variable XX is I us wanted stand stock given returns you're dividend,

Mohit Singh

That's that constantly monitor. question, for Mike. that something we Thanks

You can now reevaluate. we behind as that's something us, I transaction imagine, closed, we were restricted that's constantly, that till the but said,

You some the of generating be is should introduces in cash in in we flow. we prices and to the in some down back when if expect price think the can cycle, like you upcycle, there is, element regular are lot a conversely, in to variable The is the business more where of of the maybe of more time on value you're the where versus And you dislocation the in -- to discipline distributions terms So higher. because right? be of dividend scenario it are which the buyback. valuation then in intrinsic shareholders. stock we And it are the cycle, part that terms where think proactive that's the the free

them, things the you're would buybacks less delivering think which an put but be how X more it the that and is a kind high But together roughly between investors. variable blended level. for detail it. something that's upcycle, that's you're volatile more a in doing down more -- I which even about we describe the at you X a would There's you're of maybe When doing and dividends. it, more In obviously how maybe quite cycle, is bit more -- around of

Operator

Geoff And from line our Partners. Daniel the of next question comes from Jay Energy

Geoff Jay

kind is level the you XX in What CapEx rig billion going threw first quarter. of to I words, sort know of terms $X.X In in count. activity question you're that My that on maintenance of out there. does the contemplate other

or like to of initial is. fourth what trying XX, take XX, to Just XX, get it kind contemplate you Does the of third the to understand the kind quarter. thought back billion you $X.X would in had back You that there quarter?

Josh Viets

Yes, that Geoff, we be number and that, $X.X expect would billion XX we'd around the that averaging rigs. in

Geoff Jay

back conditions questions, take X And would to strip Great. bring quicker. terms what of of in dropping to rigs of you to the the see some market have maybe other those or inverse Okay. then future or

Domenic Dell'Osso

to how screen, different much fundamentals, don't looking lag very want to that, completions destroy price we market not of the underlying to needs a to it's fact respond the benefit a the just all price at it's the know think sustainable activity the spike the more indicative think the and a that time at that really pointing in provide should we've volume. And when about incremental fundamentals a back want see to short-term market lines year needs incremental an in defer we do about turn process. have mean that see there's all of measures that decision defer about that Geoff. we it's I volume, in and economic of number talked to to just on us. back, looked we the really bringing about market. a try that believe are I We then What believe is bring volume we the and capital

when So to be need see for, looking and the we'll for that. we're activity really then supply for we bring back called structural

Operator

And our line Phillips today Capital from the final question from Johnston for One Securities. of comes

Phillips Johnston

Mohit. for a follow-up It's me. for one Just

those point think well. sub the not are once return year down the year $XXX you million kind to going annually, kind year, framework. the target continue net Should of of where shareholders to as reduction Tranche return the debt level a I debt X billion million $XXX And Just on capital the mix to really, That's per of ratchet the new just Or is you next of would also about would pay towards sort idea component noted with of down target? debt achieved. $X.X more ratio tilt Xx net the you forward think we payout? leverage debt and but

Mohit Singh

question, that Phillips. for Yes. Thanks

XXXX. just number we for intend to That's So $XXX every as a number the that that a we repeg year. have out, million laid reminder, that's

our the game absolute pointed plan we out. different the get is down gearing as just as that be to get the you least, view in turn. $X.X And But way could debt level at billion, trying it our X to to So is reminder, very XXXX. to a

mid-cycle at pricing. So

Mcf $X of EBITDA. billion -- generates business that think At so gas price. So per point, of $X.X around

of $X.X So where the billion debt we are of we that's it thinking that pegs have. target

to And that The back trying Chesapeake about prioritized base has but we have is debt between we did. extremely strike important the pro comfort higher -- right cash -- the shareholders. the comment trying you to the is get also legacy earlier give the than company I sacrosanct, forma the are to hence, paydown, would dividend balance is which given then deeming

in So to we debt address that's stack us. front need of the

and of we things this think we well would X drivers creditors priority both -- and with for are as the those addressing I And are framework, shareholders a new that reassure both like are our us. to

Operator

session the of to today's to Dell'Osso I'd hand program question-and-answer now back This does for remarks. any like conclude Nick program. further the

Domenic Dell'Osso

very and appreciate the lot be everybody on much. the answer is any up got we've thanks Expand many follow-ups, as taking anybody weeks has this the and I Obviously, for as questions be we'll morning. the to to XXXX. We Well, the Energy more way time a get to dial into meet setting market with we end the out in and talk coming about, we'll be over to 'XX could of of in road that you person. excited all about around

we're we believe, path to that, full very all these our achieving integration and ready synergies, to go. with is hands and of do the but We clear have

get through So much. progress on you and the next road. I year you on Thanks look our forward as to all giving very updates seeing guys we

Operator

This the and your conference. you, in conclude Thank does participation program. gentlemen, for today's ladies

You may now disconnect. Good day.

Expand Energy (EXE) 30 Oct 242024 Q3 Earnings call transcript