FALSE2024Q30000895126--12-31xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesexe:segmentxbrli:pureiso4217:USDutr:bblutr:Bcfexe:counterpartyexe:billionOfCubicFeetPerDayutr:MT00008951262024-01-012024-09-300000895126us-gaap:CommonStockMember2024-01-012024-09-300000895126exe:ClassAWarrantsMember2024-01-012024-09-300000895126exe:ClassBWarrantsMember2024-01-012024-09-300000895126exe:ClassCWarrantsMember2024-01-012024-09-3000008951262024-10-2400008951262024-09-3000008951262023-12-310000895126us-gaap:OilAndGasMember2024-07-012024-09-300000895126us-gaap:OilAndGasMember2023-07-012023-09-300000895126us-gaap:OilAndGasMember2024-01-012024-09-300000895126us-gaap:OilAndGasMember2023-01-012023-09-300000895126us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2024-07-012024-09-300000895126us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2023-07-012023-09-300000895126us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2024-01-012024-09-300000895126us-gaap:NaturalGasGatheringTransportationMarketingAndProcessingMember2023-01-012023-09-3000008951262024-07-012024-09-3000008951262023-07-012023-09-3000008951262023-01-012023-09-3000008951262022-12-3100008951262023-09-300000895126exe:ChangeInAccruedDrillingAndCompletionCostsMember2024-01-012024-09-300000895126exe:ChangeInAccruedDrillingAndCompletionCostsMember2023-01-012023-09-300000895126us-gaap:CommonStockMember2022-12-310000895126us-gaap:AdditionalPaidInCapitalMember2022-12-310000895126us-gaap:RetainedEarningsMember2022-12-310000895126us-gaap:CommonStockMember2023-01-012023-03-310000895126us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100008951262023-01-012023-03-310000895126us-gaap:RetainedEarningsMember2023-01-012023-03-310000895126us-gaap:CommonStockMember2023-03-310000895126us-gaap:AdditionalPaidInCapitalMember2023-03-310000895126us-gaap:RetainedEarningsMember2023-03-3100008951262023-03-310000895126us-gaap:CommonStockMember2023-04-012023-06-300000895126us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000008951262023-04-012023-06-300000895126us-gaap:RetainedEarningsMember2023-04-012023-06-300000895126us-gaap:CommonStockMember2023-06-300000895126us-gaap:AdditionalPaidInCapitalMember2023-06-300000895126us-gaap:RetainedEarningsMember2023-06-3000008951262023-06-300000895126us-gaap:CommonStockMember2023-07-012023-09-300000895126us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300000895126us-gaap:RetainedEarningsMember2023-07-012023-09-300000895126us-gaap:CommonStockMember2023-09-300000895126us-gaap:AdditionalPaidInCapitalMember2023-09-300000895126us-gaap:RetainedEarningsMember2023-09-300000895126us-gaap:CommonStockMember2023-12-310000895126us-gaap:AdditionalPaidInCapitalMember2023-12-310000895126us-gaap:RetainedEarningsMember2023-12-310000895126us-gaap:CommonStockMember2024-01-012024-03-310000895126us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-3100008951262024-01-012024-03-310000895126us-gaap:RetainedEarningsMember2024-01-012024-03-310000895126us-gaap:CommonStockMember2024-03-310000895126us-gaap:AdditionalPaidInCapitalMember2024-03-310000895126us-gaap:RetainedEarningsMember2024-03-3100008951262024-03-310000895126us-gaap:CommonStockMember2024-04-012024-06-300000895126us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-3000008951262024-04-012024-06-300000895126us-gaap:RetainedEarningsMember2024-04-012024-06-300000895126us-gaap:CommonStockMember2024-06-300000895126us-gaap:AdditionalPaidInCapitalMember2024-06-300000895126us-gaap:RetainedEarningsMember2024-06-3000008951262024-06-300000895126us-gaap:CommonStockMember2024-07-012024-09-300000895126us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300000895126us-gaap:RetainedEarningsMember2024-07-012024-09-300000895126us-gaap:CommonStockMember2024-09-300000895126us-gaap:AdditionalPaidInCapitalMember2024-09-300000895126us-gaap:RetainedEarningsMember2024-09-300000895126exe:SouthwesternMemberus-gaap:SubsequentEventMember2024-10-012024-10-010000895126exe:SouthwesternMemberus-gaap:SubsequentEventMember2024-10-010000895126exe:PortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-01-310000895126exe:PortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-03-200000895126exe:PortionOfEagleFordAssetsMemberexe:FirstThreeYearsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-03-200000895126exe:PortionOfEagleFordAssetsMemberexe:FourthYearMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-03-200000895126exe:PortionOfEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2024-09-300000895126exe:PortionOfEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-12-310000895126exe:PortionOfEagleFordAssetsMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2024-09-300000895126exe:PortionOfEagleFordAssetsMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-12-310000895126exe:PortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-03-202023-03-200000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-02-280000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-04-280000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-04-282023-04-280000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2024-09-300000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-12-310000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2024-09-300000895126exe:PortionOfRemainingEagleFordAssetsMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-12-310000895126exe:FinalPortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-08-310000895126exe:FinalPortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-11-300000895126exe:FinalPortionOfEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2024-09-300000895126exe:FinalPortionOfEagleFordAssetsMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-12-310000895126exe:FinalPortionOfEagleFordAssetsMemberexe:WTINYMEXPriceAverage75To80PerBarrelMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-11-300000895126exe:WTINYMEXPriceAverage75To80PerBarrelMembersrt:MinimumMember2023-11-012023-11-300000895126exe:WTINYMEXPriceAverage75To80PerBarrelMembersrt:MaximumMember2023-11-012023-11-300000895126exe:FinalPortionOfEagleFordAssetsMemberexe:WTINYMEXPriceAverageAbove80PerBarrelMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-11-300000895126exe:WTINYMEXPriceAverageAbove80PerBarrelMember2023-11-012023-11-300000895126exe:ContingentConsiderationMember2024-09-300000895126exe:FinalPortionOfEagleFordAssetsMemberus-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember2023-11-302023-11-300000895126us-gaap:CommonStockMember2024-01-012024-09-300000895126us-gaap:CommonStockMember2024-07-012024-09-300000895126exe:ClassCWarrantsMemberus-gaap:WarrantMember2024-07-012024-09-300000895126exe:ClassCWarrantsMemberus-gaap:WarrantMember2024-01-012024-09-300000895126us-gaap:WarrantMember2024-07-012024-09-300000895126us-gaap:WarrantMember2024-01-012024-09-300000895126us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300000895126us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMember2024-07-012024-09-300000895126us-gaap:PerformanceSharesMember2024-01-012024-09-300000895126us-gaap:CommonStockMember2023-01-012023-09-300000895126us-gaap:CommonStockMember2023-07-012023-09-300000895126exe:ClassCWarrantsMemberus-gaap:WarrantMember2023-07-012023-09-300000895126exe:ClassCWarrantsMemberus-gaap:WarrantMember2023-01-012023-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2023-12-310000895126exe:FivePointFiveZeroPercentSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2024-09-300000895126exe:FivePointFiveZeroPercentSeniorNotesDue2026Memberus-gaap:SeniorNotesMember2023-12-310000895126exe:FivePointEightSevenFivePercentSeniorNotesDue2029Memberus-gaap:SeniorNotesMember2024-09-300000895126exe:FivePointEightSevenFivePercentSeniorNotesDue2029Memberus-gaap:SeniorNotesMember2023-12-310000895126exe:SixPointSevenFivePercentSeniorNotesDue2029Memberus-gaap:SeniorNotesMember2024-09-300000895126exe:SixPointSevenFivePercentSeniorNotesDue2029Memberus-gaap:SeniorNotesMember2023-12-310000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-12-310000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2022-12-310000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LetterOfCreditMemberus-gaap:LineOfCreditMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberexe:SwinglineLoansMemberMemberus-gaap:LineOfCreditMember2024-09-300000895126us-gaap:LineOfCreditMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MinimumMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMember2024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMembersrt:MaximumMember2024-10-280000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMembersrt:MinimumMember2024-10-282024-10-280000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SubsequentEventMembersrt:MaximumMember2024-10-282024-10-280000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MinimumMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberexe:FederalFundsEffectiveRateMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:SecuredOvernightFinancingRateSofrMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberexe:SOFROneMonthPeriodAdditionalApplicableMarginMemberus-gaap:SubsequentEventMembersrt:MinimumMember2024-10-282024-10-280000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberexe:SOFROneMonthPeriodAdditionalApplicableMarginMemberus-gaap:SubsequentEventMembersrt:MaximumMember2024-10-282024-10-280000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberexe:SOFROneMonthPeriodAdditionalApplicableMarginMembersrt:MinimumMember2024-01-012024-09-300000895126us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberexe:SOFROneMonthPeriodAdditionalApplicableMarginMembersrt:MaximumMember2024-01-012024-09-300000895126exe:SecuredDebtOtherMember2024-09-300000895126us-gaap:SubsequentEventMemberus-gaap:SeniorNotesMember2024-10-012024-10-010000895126us-gaap:SubsequentEventMemberus-gaap:LineOfCreditMember2024-10-012024-10-010000895126exe:GatheringProcessingandTransportationAgreementMember2024-09-300000895126exe:MarcellusMemberexe:NaturalGasSalesMember2024-07-012024-09-300000895126exe:MarcellusMemberexe:OilSalesMember2024-07-012024-09-300000895126exe:MarcellusMemberexe:NaturalGasLiquidsSalesMember2024-07-012024-09-300000895126exe:MarcellusMemberus-gaap:OilAndGasMember2024-07-012024-09-300000895126exe:HaynesvilleMemberexe:NaturalGasSalesMember2024-07-012024-09-300000895126exe:HaynesvilleMemberexe:OilSalesMember2024-07-012024-09-300000895126exe:HaynesvilleMemberexe:NaturalGasLiquidsSalesMember2024-07-012024-09-300000895126exe:HaynesvilleMemberus-gaap:OilAndGasMember2024-07-012024-09-300000895126exe:NaturalGasSalesMember2024-07-012024-09-300000895126exe:OilSalesMember2024-07-012024-09-300000895126exe:NaturalGasLiquidsSalesMember2024-07-012024-09-300000895126exe:NaturalGasMarketingSalesMember2024-07-012024-09-300000895126exe:OilMarketingSalesMember2024-07-012024-09-300000895126exe:NaturalGasLiquidsMarketingSalesMember2024-07-012024-09-300000895126exe:MarcellusMemberexe:NaturalGasSalesMember2023-07-012023-09-300000895126exe:MarcellusMemberexe:OilSalesMember2023-07-012023-09-300000895126exe:MarcellusMemberexe:NaturalGasLiquidsSalesMember2023-07-012023-09-300000895126exe:MarcellusMemberus-gaap:OilAndGasMember2023-07-012023-09-300000895126exe:HaynesvilleMemberexe:NaturalGasSalesMember2023-07-012023-09-300000895126exe:HaynesvilleMemberexe:OilSalesMember2023-07-012023-09-300000895126exe:HaynesvilleMemberexe:NaturalGasLiquidsSalesMember2023-07-012023-09-300000895126exe:HaynesvilleMemberus-gaap:OilAndGasMember2023-07-012023-09-300000895126exe:EagleFordMemberexe:NaturalGasSalesMember2023-07-012023-09-300000895126exe:EagleFordMemberexe:OilSalesMember2023-07-012023-09-300000895126exe:EagleFordMemberexe:NaturalGasLiquidsSalesMember2023-07-012023-09-300000895126exe:EagleFordMemberus-gaap:OilAndGasMember2023-07-012023-09-300000895126exe:NaturalGasSalesMember2023-07-012023-09-300000895126exe:OilSalesMember2023-07-012023-09-300000895126exe:NaturalGasLiquidsSalesMember2023-07-012023-09-300000895126exe:NaturalGasMarketingSalesMember2023-07-012023-09-300000895126exe:OilMarketingSalesMember2023-07-012023-09-300000895126exe:NaturalGasLiquidsMarketingSalesMember2023-07-012023-09-300000895126exe:MarcellusMemberexe:NaturalGasSalesMember2024-01-012024-09-300000895126exe:MarcellusMemberexe:OilSalesMember2024-01-012024-09-300000895126exe:MarcellusMemberexe:NaturalGasLiquidsSalesMember2024-01-012024-09-300000895126exe:MarcellusMemberus-gaap:OilAndGasMember2024-01-012024-09-300000895126exe:HaynesvilleMemberexe:NaturalGasSalesMember2024-01-012024-09-300000895126exe:HaynesvilleMemberexe:OilSalesMember2024-01-012024-09-300000895126exe:HaynesvilleMemberexe:NaturalGasLiquidsSalesMember2024-01-012024-09-300000895126exe:HaynesvilleMemberus-gaap:OilAndGasMember2024-01-012024-09-300000895126exe:NaturalGasSalesMember2024-01-012024-09-300000895126exe:OilSalesMember2024-01-012024-09-300000895126exe:NaturalGasLiquidsSalesMember2024-01-012024-09-300000895126exe:NaturalGasMarketingSalesMember2024-01-012024-09-300000895126exe:OilMarketingSalesMember2024-01-012024-09-300000895126exe:NaturalGasLiquidsMarketingSalesMember2024-01-012024-09-300000895126exe:MarcellusMemberexe:NaturalGasSalesMember2023-01-012023-09-300000895126exe:MarcellusMemberexe:OilSalesMember2023-01-012023-09-300000895126exe:MarcellusMemberexe:NaturalGasLiquidsSalesMember2023-01-012023-09-300000895126exe:MarcellusMemberus-gaap:OilAndGasMember2023-01-012023-09-300000895126exe:HaynesvilleMemberexe:NaturalGasSalesMember2023-01-012023-09-300000895126exe:HaynesvilleMemberexe:OilSalesMember2023-01-012023-09-300000895126exe:HaynesvilleMemberexe:NaturalGasLiquidsSalesMember2023-01-012023-09-300000895126exe:HaynesvilleMemberus-gaap:OilAndGasMember2023-01-012023-09-300000895126exe:EagleFordMemberexe:NaturalGasSalesMember2023-01-012023-09-300000895126exe:EagleFordMemberexe:OilSalesMember2023-01-012023-09-300000895126exe:EagleFordMemberexe:NaturalGasLiquidsSalesMember2023-01-012023-09-300000895126exe:EagleFordMemberus-gaap:OilAndGasMember2023-01-012023-09-300000895126exe:NaturalGasSalesMember2023-01-012023-09-300000895126exe:OilSalesMember2023-01-012023-09-300000895126exe:NaturalGasLiquidsSalesMember2023-01-012023-09-300000895126exe:NaturalGasMarketingSalesMember2023-01-012023-09-300000895126exe:OilMarketingSalesMember2023-01-012023-09-300000895126exe:NaturalGasLiquidsMarketingSalesMember2023-01-012023-09-300000895126exe:NaturalGasOilAndNGLSalesMember2024-09-300000895126exe:NaturalGasOilAndNGLSalesMember2023-12-310000895126exe:JointInterestMember2024-09-300000895126exe:JointInterestMember2023-12-310000895126exe:OtherRevenueMember2024-09-300000895126exe:OtherRevenueMember2023-12-310000895126us-gaap:SubsequentEventMember2024-10-290000895126us-gaap:CommonStockMember2023-01-012023-09-300000895126exe:ClassAWarrantsMember2023-12-310000895126exe:ClassBWarrantsMember2023-12-310000895126exe:ClassCWarrantsMember2023-12-310000895126exe:ClassAWarrantsMember2024-01-012024-03-310000895126exe:ClassBWarrantsMember2024-01-012024-03-310000895126exe:ClassCWarrantsMember2024-01-012024-03-310000895126exe:ClassAWarrantsMember2024-03-310000895126exe:ClassBWarrantsMember2024-03-310000895126exe:ClassCWarrantsMember2024-03-310000895126exe:ClassAWarrantsMember2024-04-012024-06-300000895126exe:ClassBWarrantsMember2024-04-012024-06-300000895126exe:ClassCWarrantsMember2024-04-012024-06-300000895126exe:ClassAWarrantsMember2024-06-300000895126exe:ClassBWarrantsMember2024-06-300000895126exe:ClassCWarrantsMember2024-06-300000895126exe:ClassAWarrantsMember2024-07-012024-09-300000895126exe:ClassBWarrantsMember2024-07-012024-09-300000895126exe:ClassCWarrantsMember2024-07-012024-09-300000895126exe:ClassAWarrantsMember2024-09-300000895126exe:ClassBWarrantsMember2024-09-300000895126exe:ClassCWarrantsMember2024-09-300000895126exe:ClassCWarrantsMember2024-01-012024-09-300000895126us-gaap:WarrantMember2024-01-012024-09-300000895126us-gaap:SubsequentEventMember2024-10-220000895126exe:A2021LongTermIncentivePlanMember2021-02-090000895126us-gaap:RestrictedStockUnitsRSUMemberexe:EmployeeMember2024-01-012024-09-300000895126us-gaap:RestrictedStockUnitsRSUMembersrt:DirectorMember2024-01-012024-09-300000895126us-gaap:RestrictedStockUnitsRSUMember2023-12-310000895126us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300000895126us-gaap:RestrictedStockUnitsRSUMember2024-09-300000895126us-gaap:PerformanceSharesMembersrt:ManagementMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMembersrt:MinimumMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMembersrt:MaximumMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMemberexe:TotalShareholderReturnTSRAndRelativeTSRRTSRMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMember2023-12-310000895126us-gaap:PerformanceSharesMember2024-01-012024-09-300000895126us-gaap:PerformanceSharesMember2024-09-300000895126us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300000895126us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300000895126us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300000895126us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300000895126us-gaap:OilAndGasPropertiesMember2024-07-012024-09-300000895126us-gaap:OilAndGasPropertiesMember2023-07-012023-09-300000895126us-gaap:OilAndGasPropertiesMember2024-01-012024-09-300000895126us-gaap:OilAndGasPropertiesMember2023-01-012023-09-300000895126exe:NaturalGasOilAndNGLProductionMember2024-07-012024-09-300000895126exe:NaturalGasOilAndNGLProductionMember2023-07-012023-09-300000895126exe:NaturalGasOilAndNGLProductionMember2024-01-012024-09-300000895126exe:NaturalGasOilAndNGLProductionMember2023-01-012023-09-300000895126us-gaap:RestructuringChargesMember2024-07-012024-09-300000895126us-gaap:RestructuringChargesMember2023-07-012023-09-300000895126us-gaap:RestructuringChargesMember2024-01-012024-09-300000895126us-gaap:RestructuringChargesMember2023-01-012023-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:SwapMember2024-01-012024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:SwapMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:SwapMember2023-01-012023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:SwapMember2023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberexe:CollarMember2024-01-012024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberexe:CollarMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberexe:CollarMember2023-01-012023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberexe:CollarMember2023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:BasisSwapMember2024-01-012024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:BasisSwapMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:BasisSwapMember2023-01-012023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMemberus-gaap:BasisSwapMember2023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMember2024-01-012024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMember2023-01-012023-12-310000895126us-gaap:EnergyRelatedDerivativeMembersrt:NaturalGasReservesMember2023-12-310000895126us-gaap:EnergyRelatedDerivativeMemberexe:EagleFordDivestitureMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMemberexe:EagleFordDivestitureMember2023-12-310000895126us-gaap:EnergyRelatedDerivativeMember2024-09-300000895126us-gaap:EnergyRelatedDerivativeMember2023-12-310000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2024-09-300000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2024-09-300000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherNoncurrentAssetsMember2024-09-300000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentLiabilitiesMember2024-09-300000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherNoncurrentLiabilitiesMember2024-09-300000895126us-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2024-09-300000895126us-gaap:NondesignatedMember2024-09-300000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2023-12-310000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMember2023-12-310000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherNoncurrentAssetsMember2023-12-310000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherCurrentLiabilitiesMember2023-12-310000895126us-gaap:CommodityContractMemberus-gaap:NondesignatedMemberus-gaap:OtherNoncurrentLiabilitiesMember2023-12-310000895126us-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2023-12-310000895126us-gaap:NondesignatedMember2023-12-310000895126us-gaap:CommodityContractMember2024-09-300000895126exe:MomentumSustainableVenturesLLCMemberMemberus-gaap:ScenarioPlanMember2024-09-300000895126exe:MomentumSustainableVenturesLLCMemberMember2024-09-300000895126exe:MomentumSustainableVenturesLLCMemberMember2023-12-310000895126exe:MomentumSustainableVenturesLLCMemberMember2024-01-012024-09-30

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒      No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒  Accelerated Filer ☐  Non-accelerated Filer ☐  

Smaller Reporting Company ☐  Emerging Growth Company ☐ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐      No ☒ 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  ☒ No ☐

As of October 24, 2024, there were 231,034,791 shares of our $0.01 par value common stock outstanding.

On October 1, 2024, Chesapeake completed its previously announced merger with Southwestern. After the Southwestern Merger, Chesapeake changed its name to Expand Energy Corporation. Unless otherwise specified, information set forth herein relates to the period as of and for the quarter and year-to-date periods ended September 30, 2024 and therefore does not include the information of Southwestern and its subsidiaries for those periods, the corresponding prior year periods or financial position as of September 30, 2024 or December 31, 2023.

References to “us,” “we,” “our,” “ours,” “Expand Energy” and the “Company” prior to October 1, 2024 refer to Chesapeake Energy Corporation and its consolidated subsidiaries prior to the Southwestern Merger and do not include Southwestern and its subsidiaries, while such references on or after October 1, 2024 refer to the combined company as a result of the Southwestern Merger, including Southwestern and its subsidiaries. All monetary values, other than per unit and per share amounts, are stated in millions of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:

“ASU” means Accounting Standards Update.

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended.

“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas.

“Bbl” or “Bbls” means barrel or barrels.

“Bcf” means billion cubic feet.

“Chapter 11 Cases” means, when used with reference to a particular Debtor, the case pending for that Debtor under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court, and when used with reference to all the Debtors, the procedurally consolidated Chapter 11 cases pending for the Debtors in the Bankruptcy Court.

“Chesapeake” means Chesapeake Energy Corporation, prior to the Southwestern Merger.

“Class A Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan, the Class B Warrants, and the Class C Warrants), at an initial exercise price per share of $27.63. The Class A Warrants are exercisable from the Effective Date until February 9, 2026.

“Class B Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan and the Class C Warrants), at an initial exercise price per share of $32.13. The Class B Warrants are exercisable from the Effective Date until February 9, 2026.

“Class C Warrants” means warrants to purchase 10 percent of the common stock (after giving effect to the Rights Offering, but subject to dilution by the Management Incentive Plan), at an initial exercise price per share of $36.18. The Class C Warrants are exercisable from the Effective Date until February 9, 2026.

“Confirmation Order” means the order confirming the Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, Docket No. 2915, entered by the Bankruptcy Court on January 16, 2021.

“Current Period” means the nine months ended September 30, 2024.

“Current Quarter” means the three months ended September 30, 2024.

“DD&A” means depreciation, depletion and amortization.

“Debtors” means Chesapeake Energy Corporation prior to the Southwestern Merger, together with all of its direct and indirect subsidiaries that have filed the Chapter 11 Cases.

“Effective Date” means February 9, 2021.

“ESG” means environmental, social and governance.

“FASB” means Financial Accounting Standards Board.

“G&A” means general and administrative expenses.

“GAAP” means U.S. generally accepted accounting principles.

“General Unsecured Claim” means any Claim against any Debtor that is not otherwise paid in full during the Chapter 11 Cases pursuant to an order of the Bankruptcy Court and is not an Administrative Claim, a Priority Tax Claim, an Other Priority Claim, an Other Secured Claim, a Revolving Credit Facility Claim, a FLLO Term Loan Facility Claim, a Second Lien Notes Claim, an Unsecured Notes Claim, an Intercompany Claim, or a Section 510(b) Claim.

“LNG” means liquefied natural gas.

“LTIP” means the Chesapeake Energy Corporation 2021 Long-Term Incentive Plan.

“MBbl” means thousand barrels.

“Mcf” means thousand cubic feet.

“Mcfe” means one thousand cubic feet of natural gas equivalent, with one barrel of oil or NGL converted to an equivalent volume of natural gas using the ratio of one barrel of oil or NGL to six Mcf of natural gas.

“MMcf” means million cubic feet.

“MMcfe” means million cubic feet of natural gas equivalent.

“NGL” means natural gas liquids.

“NYMEX” means New York Mercantile Exchange.

“OPEC+” means Organization of the Petroleum Exporting Countries Plus.

“Petition Date” means June 28, 2020, the date on which the Debtors commenced the Chapter 11 Cases.

“Plan” means the Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, attached as Exhibit A to the Confirmation Order.

“Prior Period” means the nine months ended September 30, 2023.

“Prior Quarter” means the three months ended September 30, 2023.

“Rights Offering” means the common stock rights offering for the Rights Offering Amount consummated by the Debtors on the Effective Date.

“Southwestern” means Southwestern Energy Company.

“Southwestern Merger” means Chesapeake’s merger with Southwestern, which closed on October 1, 2024.

“SEC” means United States Securities and Exchange Commission.

“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator, the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“Warrants” means collectively, the Class A Warrants, Class B Warrants and Class C Warrants.

“/Bbl” means per barrel.

“/Mcf” means per Mcf.

“/Mcfe” means per Mcfe.

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

On October 1, 2024, Chesapeake Energy Corporation (“Chesapeake”) changed its name to Expand Energy Corporation (“Expand Energy,” “we,” “our,” “us” or the “Company”) in connection with the Southwestern Merger, further discussed in Note 2. Following the Southwestern Merger, Expand Energy 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.

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 September 30, 2024 and December 31, 2023, and our results of operations for the three months ended September 30, 2024 (“Current Quarter”), the nine months ended September 30, 2024 (“Current Period”), the three months ended September 30, 2023 (“Prior Quarter”) and the nine months ended September 30, 2023 (“Prior Period”). Our annual report on Form 10-K for the year ended December 31, 2023 (“2023 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.

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 chief operating decision maker (“CODM”), for the purpose of allocating an enterprise’s resources and assessing its operating performance. As of September 30, 2024, we have concluded that we have only one reportable operating 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.

As of September 30, 2024, we had restricted cash of $76 million. Our restricted cash represents funds legally restricted for future payment of certain royalties, as well as for payment of certain convenience class unsecured claims following our emergence from bankruptcy.

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 and do not expect it to have a material impact on our consolidated financial statements.

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 CODM, including information about significant segment expenses. This ASU is effective beginning with our 2024 annual reporting and interim periods beginning in 2025, with early adoption permitted.

We are evaluating the impact this ASU will have on our disclosures and do not expect it to have a material impact on our consolidated financial statements.

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.

We are accounting for this transaction using the acquisition method of accounting, with Expand Energy (formerly Chesapeake) treated as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities of Southwestern and its subsidiaries will be recorded at their respective fair values as of the date of the completion of the Southwestern Merger. As of the date of this report, the preliminary purchase price allocation is not complete but is expected to be completed within one year subsequent to the closing date of the Southwestern Merger. Determining the fair value of the assets and liabilities of Southwestern requires judgment and certain assumptions to be made, including relating to the valuation of Southwestern's oil and gas properties. The Southwestern Merger was structured as a tax-free reorganization for United States federal income tax purposes.

In January 2023, we entered into an agreement to sell a portion of our Eagle Ford assets to WildFire Energy I LLC for approximately $1.425 billion, subject to customary post-closing adjustments. Approximately $225 million of the purchase price was recorded as deferred consideration and treated as a non-interest-bearing note to be paid in installments of $60 million per year for the first three years following the transaction close date and $45 million to be paid in the fourth year following the transaction close date. During the Current Period, we received the first installment payment related to this transaction. The deferred consideration is recorded at fair value with an imputed rate of interest as a Level 2 input, and approximately $58 million and $58 million of the deferred consideration is reflected within other current assets and approximately $87 million and $135 million is reflected within other long-term assets on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. The divestiture, which closed on March 20, 2023 (with an effective date of October 1, 2022), resulted in a gain of approximately $337 million, inclusive of post-closing adjustments, based on the difference between the carrying value of the assets and consideration received.

In February 2023, we entered into an agreement to sell a portion of our remaining Eagle Ford assets to INEOS Upstream Holdings Limited (“INEOS Energy”) for approximately $1.4 billion, subject to customary post-closing adjustments. Approximately $225 million of the purchase price was recorded as deferred consideration and treated as a non-interest-bearing note to be paid in installments of approximately $56 million per year for four years following the transaction close date. During the Current Period, we received the first installment payment related to this transaction. The deferred consideration is recorded at fair value with an imputed rate of interest as a Level 2 input, and approximately $54 million and $55 million of the deferred consideration is reflected within other current assets and approximately $97 million and $144 million is reflected within other long-term assets on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. The divestiture, which closed on April 28, 2023 (with an effective date of October 1, 2022), resulted in a gain of approximately $470 million, based on the difference between the carrying value of the assets and consideration received.

In August 2023, we entered into an agreement to sell the final portion of our Eagle Ford assets to SilverBow Resources, Inc. (“SilverBow”) for approximately $700 million, subject to customary post-closing adjustments. Approximately $50 million of the purchase price was recorded as deferred consideration and treated as a non-interest-bearing note to be paid one year from the closing date. The deferred consideration is recorded at fair value with an imputed rate of interest as a Level 2 input, and approximately $49 million and $46 million of the deferred consideration is reflected within other current assets on the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively. Additionally, SilverBow agreed to pay us an additional contingent payment of $25 million should WTI NYMEX prices average between $75 and $80 per barrel or $50 million should WTI NYMEX prices average above $80 per barrel during the year following the close of the transaction. On July 30, 2024, Crescent Energy Company (“Crescent”) acquired SilverBow. We anticipate receiving the additional contingent payment from Crescent, if any, during the fourth quarter of 2024. The fair value of the contingent consideration as of September 30, 2024 of $18 million is reflected within derivative assets within our condensed consolidated balance sheets. See Note 11 for additional information. The divestiture, which closed on November 30, 2023 (with an effective date of February 1, 2023), resulted in a gain of approximately $140 million, based on the difference between the carrying value of the assets and consideration received.

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:

During the Current Quarter and Current 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 calculations during the Current Quarter and Current Period exclude the antidilutive effect of 7,667,037 and 9,580,029 Warrants, 164,253 and 270,095 RSUs and 0 and 97,528 PSUs, respectively.

During the Prior Quarter and Prior Period, the diluted earnings per share calculations exclude the effect of 789,458 reserved shares of common stock and 1,489,337 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.

4.			Debt

Our long-term debt consisted of the following as of September 30, 2024 and December 31, 2023:

____________________________________________

(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, the “Pre-IG Credit Agreement”, and as further amended by 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, the “Pre-IG Credit Facility”, and as further amended pursuant to the Investment Grade Credit Agreement Amendment, the “Credit Facility”) maturing in December 2027. The Initial Credit Agreement Amendment, among other things, increased the aggregate commitments under the Pre-IG Credit Facility from $2.0 billion to $2.5 billion and increased the sublimit available for the issuance of letters of credit from $200 million to $500 million. The Credit Facility continues to provide for a $50 million sublimit available for swingline loans. As of September 30, 2024, the borrowing base under the Pre-IG Credit Facility was $3.5 billion. As of September 30, 2024, we had approximately $2.5 billion available for borrowings under the Pre-IG Credit Facility.

The obligations under the Pre-IG Credit Facility were guaranteed by certain of Expand Energy’s subsidiaries (the “Guarantors”), and the Pre-IG Credit Facility was secured by substantially all of the assets owned by the Company and the Guarantors (subject to customary exceptions), including mortgages on not less than 85% of the total PV-9 of the borrowing base properties evaluated in the most recent reserve report (where PV-9 is the net present value, discounted at 9% per annum, of the estimated future net revenues). Since the effectiveness of the Investment Grade Credit Agreement Amendment, the Credit Facility is no longer guaranteed or secured, or subject to a borrowing base.

The Pre-IG Credit Agreement contained restrictive covenants, subject to customary exceptions for reserve-based credit facilities, that limited Expand Energy and its subsidiaries’ ability to, among other things: (i) incur additional indebtedness, (ii) make investments, (iii) enter into mergers; (iv) make or declare dividends; (v) repurchase or redeem certain indebtedness; (vi) enter into certain hedges; (vii) incur liens; (viii) sell assets; and (ix) engage in certain transactions with affiliates.

Since the effectiveness of the Investment Grade Credit Agreement Amendment on October 28, 2024, 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 Pre-IG Credit Agreement required Expand Energy to maintain compliance with the following financial ratios: (A) a current ratio, which was the ratio of Expand Energy’s and its restricted subsidiaries’ consolidated current assets (including unused commitments under the Pre-IG Credit Facility but excluding certain non-cash assets) to their consolidated current liabilities (excluding the current portion of long-term debt and certain non-cash liabilities), of not less than 1.00 to 1.00; (B) a net leverage ratio, which was the ratio of total indebtedness (less unrestricted cash up to a specified threshold) to Consolidated EBITDAX (as defined in the Pre-IG Credit Agreement) for the prior four fiscal quarters, of not greater than 3.50 to 1.00 and (C) a PV-9 coverage ratio of the net present value, discounted at 9% per annum, of the estimated future net revenues expected in the proved reserves to Expand Energy’s and its restricted subsidiaries’ total indebtedness of not less than 1.50 to 1.00. The Investment Grade Credit Agreement Amendment, among other things, (i) removed the current ratio, net leverage ratio and PV-9 coverage ratio previously contained in the Pre-IG Credit Agreement and (ii) 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%.

Borrowings under the Credit Agreement may be alternate base rate loans or term SOFR loans, at our election. Interest is payable quarterly for alternate base rate loans and at the end of the applicable interest period for term SOFR loans. Term SOFR loans bear interest at term SOFR plus an applicable rate ranging from 125 to 187.5 basis points per annum, depending on the Company’s unsecured debt ratings (which rate under the Pre-IG Credit Agreement previously ranged from 175 to 275 basis points per annum, depending on the percentage of the commitments utilized), 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 (which applicable margin under the Pre-IG Credit Agreement previously ranged from 75 to 175 basis points per annum, depending on the percentage of the commitments utilized). 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 (which commitment fee rate under the Pre-IG Credit Agreement previously ranged from 37.5 to 50 basis points per annum, depending on the percentage of the commitments utilized).

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 additional secured debt as of September 30, 2024.

On October 1, 2024, we received an investment grade rating from S&P Global Ratings (“S&P”). S&P assigned an issuer-level rating of ‘BBB-’ on our unsecured debt and raised our issuer credit rating to ‘BBB-’, with a stable outlook. Additionally, on October 2, 2024, we received an investment grade rating from Fitch Ratings (“Fitch”). Fitch affirmed our revolver credit rating at ‘BBB-’ and upgraded the rating on our senior notes to ‘BBB-’, with a stable outlook. As a result of these investment grade ratings and the satisfaction of certain other conditions, (i) the Pre-IG Credit Agreement was automatically amended in its entirety as set forth in an exhibit to the Pre-IG Credit Agreement (such automatic amendment, the “Investment Grade Credit Agreement Amendment”, and the Pre-IG Credit Agreement as amended by such amendment, the “Credit Agreement”), (ii) all liens and guarantees previously provided by the Company and its subsidiaries in connection with the Pre-IG Credit Agreement were released and (iii) all guarantees previously provided in connection with the Company’s senior notes were released. Such Investment Grade Credit Agreement Amendment, among other things, removed the application of the borrowing base provided for in the Pre-IG Credit Agreement and modified the pricing and covenants as described above.

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.

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, and our final liabilities may ultimately be 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, and many of them sought damages and penalties, the amount of which is indeterminate.

Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.

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:

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.

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.

Other current liabilities as of September 30, 2024 and December 31, 2023 are detailed below:

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

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 September 30, 2024 and December 31, 2023 are detailed below:

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.

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 24.3%, 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.

There was no current tax expense recorded in the Current Period. The Prior Period recorded $213 million of current tax expense, primarily as a result of tax gains on the Eagle Ford divestitures which closed in the Prior Period.

In the Current Period, we made $12 million in income tax payments, which were offset by $14 million in income tax refunds.

As of December 31, 2023, we were in a net deferred tax asset position and anticipate being in a net deferred tax asset position as of December 31, 2024. 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 September 30, 2024 and December 31, 2023.

On August 16, 2022, the President of the United States 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 beginning in the current year. The CAMT will result in incremental taxes to the extent that 15% of our adjusted book earnings exceeds our regular federal tax liability. During the Current Quarter, proposed regulations for the CAMT were released. Although we are not early adopting these, we are still analyzing their potential impact should they become finalized. We do not currently project any material impact due to the CAMT in 2024.

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

We did not repurchase any shares during the Current Period, and during the Prior Period, we repurchased 3.7 million shares of common stock for an aggregate price of $305 million. The repurchased shares of common stock were retired and recorded as a reduction to common stock and retained earnings and were made pursuant to the share repurchase program that expired on December 31, 2023. All share repurchases made after January 1, 2023 are subject to a 1% excise tax on share repurchases, as enacted under the Inflation Reduction Act of 2022. We are able to net this 1% excise tax on share repurchases against the issuance of shares of our common stock. The impact of this 1% excise tax was immaterial during the Prior Period.

			Class A Warrants						Class B Warrants						Class C Warrants(a)
Outstanding as of December 31, 2023			4,247,615						4,403,064						4,023,483
Converted into common stock(b)			—						—						(168)
Outstanding as of March 31, 2024			4,247,615						4,403,064						4,023,315
Converted into common stock(b)			—						(13,122)						(13,325)
Outstanding as of June 30, 2024			4,247,615						4,389,942						4,009,990
Converted into common stock(b)			(2,986,928)						(1,264,248)						(328,726)
Outstanding as of September 30, 2024			1,260,687						3,125,694						3,681,264

_________________________________________

(a)As of September 30, 2024, we had 1,466,502 of reserved Class C Warrants.

(b)During the Current Period, we issued 3,857,412 shares of common stock as a result of Warrant exercises.

On October 1, 2024, we issued approximately 95.7 million shares of our common stock to Southwestern’s shareholders in connection with the closing of the Southwestern Merger.

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.

As of the Effective Date, the Board of Directors adopted the LTIP with a share reserve equal to 6,800,000 shares of common stock. 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.

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:

_______________

(a) Approximately 105 thousand RSUs were accelerated related to one-time termination benefits for certain employees.

The aggregate intrinsic value of RSUs that vested during the Current Period was approximately $43 million based on the stock price at the time of vesting.

As of September 30, 2024, there was approximately $48 million of total unrecognized compensation expense related to unvested RSUs. The expense is expected to be recognized over a weighted average period of approximately 2.13 years.

Performance Share Units. During the Current Period, we granted PSUs to senior management 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 in 2024.

A summary of the changes in unvested PSUs is presented below:

The aggregate intrinsic value of PSUs that vested during the Current Period was approximately $17 million based on the stock price at the time of vesting.

As of September 30, 2024, there was approximately $17 million of total unrecognized compensation expense related to unvested PSUs. The expense is expected to be recognized over a weighted average period of approximately 1.97 years.

We recognized the following compensation costs, net of actual forfeitures, related to RSUs and PSUs for the periods presented:

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 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.

In November 2023, we sold the final portion of our Eagle Ford assets to SilverBow. As part of the divestiture agreement, SilverBow agreed to pay the Company an additional contingent payment of $25 million should WTI NYMEX prices average between $75 and $80 per barrel or $50 million should WTI NYMEX prices average above $80 per barrel during the year following the close of the transaction. On July 30, 2024, Crescent acquired SilverBow. We anticipate receiving the additional contingent payment from Crescent, if any, during the fourth quarter of 2024. All changes in fair value are recognized as a gain or loss in earnings in the period they occur within natural gas and oil derivatives in our condensed consolidated statements of operations. During the Current Period, we recorded $6 million of unrealized gains related to the contingent consideration arrangement.

The estimated fair values of our natural gas and oil derivative instrument assets (liabilities) as of September 30, 2024 and December 31, 2023 are provided below: 

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 on a gross basis and after same-counterparty netting: