Q3 2025 Expand Energy Corp Earnings Call

Bakers presentation, there will be a question and answer session to ask a question you will need to press star one on your telephone. If your question has been answered and you wish to remove yourself from the queue simply press Star. One again. Please note. This event is being recorded.

I would now like to turn the conference over to Koby Arnold manager Investor Relations. Please go ahead.

Thank you Jonathan Good morning, everyone and thank you for joining our call today to discuss expand Energy's 2025 third quarter financial and operating results hopefully you've had a chance to review our press release and the updated investor presentation that we posted to our website yesterday.

During this mornings call, we will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs goals expectations.

<unk> forecasts projections and future performance and the assumptions underlying such statements.

Note that there are a number of factors that will cause actual results to differ materially from our forward looking statements, including factors identified and discussed in our press release yesterday and in other SEC filings. Please recognize that except as required by applicable law. We undertake no duty to update any forward looking statements and you <unk>.

Should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across peers periods with peers for any non-GAAP measure we use a reconciliation to the nearest corresponding GAAP measure can be found on our website with me on the call today are Nick <unk>.

Josh feats, Dan Turco and Britney Raiford.

We will give a brief overview of our results and then we will open up the teleconference to Q&A. So with that thank you again and I will now turn the teleconference over to Nick.

Good morning, and thank you for joining our call.

The third quarter marked the first year of expand energy I'm extremely proud of the way our team has come together to collectively drive long term value through safely reducing costs and efficiently developing our advantaged geographically diverse portfolio.

As we demonstrated this quarter our business continues to deliver and outperformed every expectation pegged merger onset.

While there are many ways to measure synergies and their impact we are clearly spending less for more production, which is the ultimate definition of efficiency.

Colby Arnold: Good day and welcome to the Expand Energy Corporation 2025 third quarter earnings teleconference. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you'll need to press star 1 1 on your telephone. If your question has been answered and you wish to remove yourself from the queue, simply press star 1 1 again. Please note this event is being recorded. I would now like to turn the conference over to Colby Arnold, Manager, Investor Relations. Please go ahead.

Speaker #2: Good day and welcome to the EXPAND ENERGY Corp 2025 third quarter Earnings Teleconference . At this time , all participants are in listen only mode .

Nowhere is this more evident than in our Haynesville position, which has seen a meaningful step change in both efficiency and performance.

Speaker #2: After the presentation , there will be a question and answer session . To ask a question , you need to press star one on your telephone .

Enhancing the value of our 20 year plus years of inventory today.

Today, we can deliver with seven rigs the same production it took 13 rigs to deliver in 2023.

Since then we have reduced well costs by greater than 25% and.

And year to date, our costs are 30% lower than peers based on third party well proposals in.

Importantly, our optimized development and completion design continues to lead to improved productivity.

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

Since 2022, our average well productivity was approximately 40% greater than the base on average a trend we expect to continue.

These efficiency gains are sustainable and deliver significant improvement to our breakeven, which today average less than $2 75 across the basin.

We have also used our low cost advantage to attractively.

To add attractively priced acreage to our portfolio, giving us an option to develop volumes in east, Texas and reach additional markets.

Through the innovative efforts of our team we are seeing success stories like this across our business, resulting in us delivering 50% more synergies than our original target.

These meaningful efficiency gains and savings have greatly strengthened our underlying business and resulting cash flows.

Josh Viets: Please recognize that, except as required by applicable law, we undertake no duty to update any forward-looking statements, and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods with peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found on our website. With me on the call today are Nick Dell'Osso, Josh Viets, Dan Turco, and Brittany Rayford. Nick will give a brief overview of our results, and then we will open up the teleconference to Q&A. Thank you again, and I will now turn the teleconference over to Nick.

Since close we've eliminated $1 2 billion in gross debt and returned nearly $850 million to shareholders.

Now expect to spend $150 million less to deliver 50 million cubic feet per day more of production in 2025 compared to our beginning of the year guidance.

These efficiencies will carry forward to 2026.

Where should market conditions warrant we are prepared to deliver seven five bcf per day of production for approximately the same capex spent in 2025.

Looking ahead, we see significant opportunity to expand the value of natural gas by connecting our global scale to growing markets.

Nick Dell'Osso: Good morning and thank you for joining our call. The third quarter marked the first year of Expand Energy. I'm extremely proud of the way our team has come together to collectively drive long-term value through safely reducing costs and efficiently developing our advantaged, geographically diverse portfolio. As we demonstrated this quarter, our business continues to deliver and outperform every expectation pegged at merger onset. While there are many ways to measure synergies and their impact, we are clearly spending less for more production, which is the ultimate definition of efficiency. Nowhere is this more evident than in our Haynesville position, which has seen a meaningful step change in both efficiency and performance, enhancing the value of our 20+ years of inventory. Today we can deliver with 7 rigs the same production it took 13 rigs to deliver in 2023.

Consumers need for affordable reliable lower carbon energy and natural gas will play the largest and most crucial role in answering that call.

By the end of the decade natural gas demand is expected to grow 20% driven by LNG power and industrial growth.

<unk> sits in an advantaged position today, our diverse asset portfolio across two premier gas basins with 20 years of inventory.

Proven operational performance unique market connectivity and investment grade balance sheet are clear differentiators as we look to serve customers eager to secure reliable and flexible supply.

This is especially true along the Gulf Coast, where there is increasing competition for supply and lower carbon molecules with engie three now online we can track our production from the wellhead to the end user and offer are responsibly sourced differentiated lower carbon gas something our counterparties value greatly as was the case with <unk>.

Nick Dell'Osso: Since then, we have reduced well costs by greater than 25% and year to date our costs are 30% lower than peers based on third-party well proposals. Importantly, our optimized development and completion design continues to lead to improved productivity. Since 2022, our average well productivity was approximately 40% greater than the basin average, a trend we expect to continue. These efficiency gains are sustainable and deliver significant improvement to our breakevens, which today average less than $2.75 across the basin. We have also used our low-cost advantage to add attractively priced acreage to our portfolio, giving us an option to develop volumes in East Texas and reach additional markets through the innovative efforts of our team. We are seeing success stories like this across our business, resulting in us delivering 50% more synergies than our original target.

Charles Methanol supply agreement, we announced yesterday at a premium to Nymex.

Expand will serve as the sole supplier to this newbuild industrial facility, which is expected to commence operations in 2030 with global investment grade offtake already secured.

Importantly, we believe this agreement demonstrates our differentiated path to strategically connect our molecules to the highest growth markets at a premium price.

This announcement is also a great example of the evolution of our marketing strategy from value protection to value creation.

We are intentionally enhancing our marketing and commercial organization to capitalize on our unique position as north America's largest natural gas producer.

We see this organization has more than a few commercial transactions, but an opportunity to drive long term value from our integrated well connected portfolio.

As consumer demand grows we will be positioned to provide reliable and flexible supply to meet that demand.

We have the asset scale and capital structure to be patient our experienced team will continue to ensure we are achieving the best long term risk adjusted returns possible in any agreement we enter.

Nick Dell'Osso: These meaningful efficiency gains and savings have greatly strengthened our underlying business and resulting cash flows. Since close, we've eliminated $1.2 billion in gross debt and returned nearly $850 million to shareholders. We now expect to spend $150 million less to deliver 50 million cubic feet per day more of production in 2025 compared to our beginning of the year guidance. These efficiencies will carry forward to 2026, where, should market conditions warrant, we are prepared to deliver 7.5 BCF per day of production for approximately the same CapEx spent in 2025. Looking ahead, we see significant opportunity to expand the value of natural gas by connecting our global scale to growing markets. Consumers need affordable, reliable, lower-carbon energy and natural gas will play the largest and most crucial role in answering that call.

We are ready to answer the call of growing demand. We see ahead and we look forward to updating you on our progress.

I'll now turn the call over to Q&A.

Certainly and our first question for today comes from the line of Matt Portillo from <unk>. Your question. Please.

Good morning, Nick and team.

Good morning, Matt I wanted to I wanted to start out on a question that may be focused a bit more on the medium term with the outlook on page nine.

I was curious if you might be able to speak to the evolution of gas demand youre seeing regionally around Texas, Louisiana, and Arizona, and if Youre downstream counterparties are starting to realize the value producers like yourself might be bringing to the table for contracts that require 10 to 15 years of coverage I guess to us it seems like there.

Nick Dell'Osso: By the end of the decade, natural gas demand is expected to grow 20% driven by LNG, power, and industrial growth. Expand Energy Corporation sits in an advantaged position today. Our diverse asset portfolio across two premier gas basins with 20 years of inventory, proven operational performance, unique market connectivity, and investment grade balance sheet are clear differentiators as we look to serve customers eager to secure reliable and flexible supply. This is especially true along the Gulf Coast where there is increasing competition for supply and lower-carbon molecules. With NG3 now online, we can track our production from the wellhead to the end user and offer a responsibly sourced, differentiated, lower-carbon gas, something our counterparties value greatly.

Might be an interesting supply demand imbalance emerging on the Gulf coast with the lack of material long haul pipeline capacity from the northeast and dwindling.

Inventory from smaller privates in basins like the Haynesville, but curious on your thoughts around the regional dynamics.

Yes, Great question, Matt I'll start and I'm sure Dan will have more to add here.

Slide nine is a new slide our team created this quarter and we really like it. It shows the current demand and then the expected growth in demand in each of the interesting growing sub markets of the U S and so what we've created here is a way to think about where demand is growing along the Gulf.

Nick Dell'Osso: As was the case with the Lake Charles Methanol supply agreement we announced yesterday at a premium to NYMEX, Expand Energy Corporation will serve as the sole supplier to this new build industrial facility which is expected to commence operations in 2030 with global investment grade offtake already secured. Importantly, we believe this agreement demonstrates our differentiated path to strategically connect our molecules to the highest growth markets at a premium price. This announcement is also a great example of the evolution of our marketing strategy from value protection to value creation. We are intentionally enhancing our marketing and commercial organization to capitalize on our unique position as North America's largest natural gas producer. We see this organization as more than a few commercial transactions, but an opportunity to drive long-term value from our integrated, well-connected portfolio.

Coast, including onshore, Louisiana as well as LNG in Appalachia, and then in other key markets like the southeast and Florida.

And I think youre right to point out that as demand for gas is growing and growing in a really tangible way.

We have more insight into how gas demand is growing right now than we've had in a very long time.

These projects are multiyear projects that require billions of dollars of capital and you can see it coming and so we can plan for this and we can be ready to help work with our customers to deliver the solutions that they need I think this is a great.

The Lake Charles Methanol transaction, we announced here there is a great case study for how this works and is evidence of exactly what you. Just described this is a project that.

Nick Dell'Osso: As consumer demand grows, we will be positioned to provide reliable and flexible supply to meet that demand. We have the asset scale and capital structure to be patient. Our experienced team will continue to ensure we are achieving the best long-term risk-adjusted returns possible in any agreement we enter. We are ready to answer the call of growing demand we see ahead and we look forward to updating you on our progress. We'll now turn the call over to Q&A.

Lake Charles methanol is going to be a new demand facility built.

Along with the offtake customers supporting the facility so requesting the methanol product it's in need around the world.

That uptake has been fully subscribed.

I need to.

Locked down the economics of the project to go out and get the project Tidied. The supply of gas is a really important element of that.

Colby Arnold: Certainly. Our first question for today comes from the line of Matthew Portillo from TPH. Question please. Good morning Nick and team.

They look to us with our depth of supply and inventory to drill our ability to bring large volumes to south Louisiana.

Nick Dell'Osso: Morning Matt.

Colby Arnold: I wanted to start out on a question that maybe focused a bit more on the medium term with the outlook on page nine. Was curious if you might be able to speak to the evolution of gas demand you're seeing regionally around Texas, Louisiana, and Arizona, and if your downstream counterparties are starting to realize the value producers like yourself might be bringing to the table for contracts that require 10 to 15 years of coverage. I guess to us it seems like there might be an interesting supply-demand imbalance emerging on the Gulf Coast with the lack of material long-haul pipeline capacity from the Northeast and dwindling inventory from smaller privates and basins like the Haynesville. Curious on your thoughts around the regional dynamics.

And then for those volumes to have a low carbon intensity and a.

Wanted to lock that up for 15 years, and so we were in a position to accommodate that.

This idea that.

Gas demand, especially new gas demand growth needs to have clarity as to where the supply will come from the.

The depth of that supply.

The characteristics of it.

The credit quality of the counterparty, providing at all of those things need to come together in a bundled solution that we're uniquely positioned to do in this transaction and we believe we'll be in a unique position to do across many transactions in the future.

It is a good example of what we think is.

Plenty to come.

Hey, Matt you hit on an interesting dynamic at the start of your question that ill just add too is that demand.

Nick Dell'Osso: Yeah, great question, Matt. I'll start and I'm sure Dan will have more to add here. Slide 9 is a new slide our team created this quarter and we really like it. It shows the current demand and then the expected growth in demand in each of the interesting growing submarkets of the U.S. What we've created here is a way to think about where demand is growing along the Gulf Coast, including onshore Louisiana as well as LNG in Appalachia and then in other key markets like the Southeast and Florida. I think you're right to point out that as demand for gas is growing and growing in a really tangible way, we have more insight into how gas demand is growing right now than we've had in a very long time. These projects are multi-year projects.

Demand is growing in south, Louisiana, and our portfolio sets up well, especially where our asset basis as Nick talked about in our capacity to get there and we said where is the supply coming from and that the challenge from associated basins, and we agree that theres going be a lot of supply that comes out of associated basins, especially the Permian, but as you see pipelines being developed determinants of those pipelines ended up in Texas.

And so getting across that border from Texas, Louisiana is a bit of a challenge it will happened, but it takes a longer time, obviously with interstate pipelines, it's a longer build to get across that border and so we set up quite nicely to where our demand ends at the end of our <unk> III <unk> pipeline into Dallas and customers.

Customers are looking for that security of supply is Nick touched about so it is an interesting dynamic about where demand is growing and how it is actually going to get supplied from the different regions across the basins.

Nick Dell'Osso: They require billions of dollars of capital and you can see it coming. We can plan for this and we can be ready to help work with our customers to deliver the solutions that they need. I think this is great. The Lake Charles Methanol transaction we announced here is a great case study for how this works and is evidence of exactly what you just described. This is a project that Lake Charles Methanol is going to be a new demand facility built along with the offtake customers supporting the facility, so requesting the methanol product. It's in need around the world. That offtake has been fully subscribed. They need to lock down the economics of the project to go out and get the project FID. The supply of gas is a really important element of that.

Great and then just as a quick follow up Nick I'm curious, if you might be willing to.

Comment on your views around the evolution of a mid cycle gas prices I guess, specifically as we kind of look at the Haynesville.

Ah regionally and Louisiana, you're projecting about 11 Bcf a day of demand growth regionally and I think most forecast even with really robust gas prices expect maybe the haynesville can grow 6% to eight bcf before starting to face some pretty significant inventory challenges. So you all are.

Kind of any unique position given the depth of your inventory.

Bringing this back to slide seven you highlight kind of maximizing free cash flow at a kind of eight five Bcf a day production level would require kind of a.

Nick Dell'Osso: They look to us with our depth of supply and inventory to drill, our ability to bring large volumes to South Louisiana, and then for those volumes to have a low carbon intensity. They were wanting to lock that up for 15 years. We were in a position to accommodate that. I think this idea that gas demand, especially new gas demand growth, needs to have clarity as to where the supply will come from, the depth of that supply, the characteristics of it, the credit quality of the counterparty providing it, all of those things need to come together in a bundled solution that we're uniquely positioned to do in this transaction and we believe we'll be in a unique position to do across many transactions in the future. It's a good example of what we think is plenty to come.

A $4 50 gas price over the medium term, but I think if you go all keep pace with the Haynesville growth moving forward.

Corporate production will be in excess of that so Nick maybe just specifically curious as you get more comfort around this regional demand growth trend in the Haynesville being part of the production engine that meets that demand. How do you. How do you think about the mid cycle gas price and is that right hand side of the chart kind of closer to that $4.

Ft level, a good place to be thinking about or are there other factors that are involved.

Yes, that's a great question Matt.

At this point, we're still focused actually on the columns of the chart that we've highlighted there 350 to four centering on 475, there's so many unknowns to how this will all evolve and we've been taking a measured approach to how we set up our supply in the context of the broader U S market that is now increasingly connected to.

Dan Turco: Hey Matt, you hit on an interesting dynamic at the start of your question that I'll just add to is that demand is growing in south Louisiana and our portfolio sets up well, especially where our asset base is as Nick talked about and our capacity to get there. He said where's the supply coming from and the challenge from associated basins. We agree that there's going to be a lot of supply that comes out of associated basin, especially the Permian. As you see pipelines being developed, determinants of those pipelines end up in Texas. Getting across that border from Texas to Louisiana is a bit of a challenge. It will happen, but it takes a longer time. Obviously with interstate pipelines it's a longer build to get across that border.

The global market is the right answer.

I do believe that over time that our view of mid cycle prices can go higher I don't think we're quite there yet I think there is a lot to still happen with.

With the timing of how this demand will grow you'll.

Youll see some of the numbers that are on this slide nine.

We put out today are a bit more conservative than many other forecasters in the market we're pretty.

I would say I guess conservative is the right word around how we think about the pace at which this demand will grow I think it's important to note, though that when we talk about all of this stuff. This slide is framing between now and 2000 32030 being the end of the decade is a point in time that the market has become focused on we don't bill.

Dan Turco: We set up quite nice to where our demand ends at the end of our NG3 and LEAP pipeline into Gillis and where customers are looking for that security supply as Nick talked about. It is an interesting dynamic about where demand is growing and how it's actually going to get supplied from the different regions across the basins.

Demand growth stops in 2030 by any stretch and so our view relative to some of the other more aggressive use of demand growth is really a difference in timing more than it is anything there is a lot of bottlenecks to create all of this demand growth.

Colby Arnold: Great. Just as a quick follow up, Nick, curious if you might be willing to comment on your views around the evolution of mid cycle gas prices. I guess specifically as we kind of look at the Haynesville or regionally in Louisiana, you're projecting about 11 Bcf a day of demand growth regionally. I think most forecasts, even with really robust gas prices, expect maybe the Haynesville can grow 6 to 8 Bcf before starting to face some pretty significant inventory challenges. You all are kind of in a unique position given the depth of your inventory. Bringing this back to Slide 7, you highlight maximizing free cash flow at a kind of 8.25 Bcf a day production level would require a $4.50 gas price over the medium term.

So we think.

While it is big it is very meaningful and there will be.

Supply constraints.

<unk> deliver to certain of these markets at certain times theres going be a lot of volatility around it.

<unk>.

We're ready for that volatility I think our business is uniquely positioned with the geographic diversity, we have with our approach to being willing and proven to me.

Modulate supply up and down.

We're again.

Really ready to take on the challenge of this volatility and help our customers.

Have the surety of supply that they need with the characteristics of supply they expect.

Colby Arnold: I think if you all keep pace with the Haynesville growth moving forward, your corporate production would be in excess of that. Nick, maybe just specifically curious, as you get more comfort around this regional demand growth trend and the Haynesville being part of the production engine that meets that demand, how do you think about the mid cycle gas price and is that right hand side of the chart kind of closer to that $4.50 level a good place to be thinking about or are there other factors that are involved?

Thank you.

Yes.

Thank you Dr <unk>.

Next question comes from the line of Doug Leggate from Wolfe Research Your question. Please.

Hi, Thanks.

Guys I appreciate you having you on.

Nick I Wonder if I could hit two things first of all there's been a lot of moving parts, obviously in the cash flow capacity of the portfolio. So.

I'm really focused on where you think your breakeven is trending well.

Nick Dell'Osso: Yeah, it's a great question, Matt. At this point we're still focused actually on the columns of the chart that we've highlighted there. $3.50 to $4.00 centering on $3.75. There are so many unknowns to how this will all evolve. We think taking a measured approach to how we set up our supply in the context of the broader U.S. market that is now increasingly connected to the global market is the right answer. I do believe that over time our view of mid-cycle prices can go higher. I don't think we're quite there yet. I think there's a lot to still happen with the timing of how this demand will grow. You'll see some of the numbers that are on this slide 9 that we put out today are a bit more conservative than many other forecasters in the market.

With the continued synergy delivery and more importantly, you have dropped your sustaining capital by it looks like a $150 million switch.

<unk> is pretty meaningful in your stock so where do you see your breakeven today, but do you see a trending.

And I guess my follow up forgive me for this I kind of ask it fairly regularly but you've given a lot of insight into the role of the implied that Don and his team are having where would you see the what kind of earnings are you in if you like in terms of the marketing uplift and if you can quantify how do you see your realization has been impacted by that.

Great. So those are my two please.

Okay great.

Love talking about this obviously, Doug so the capital efficiency that our business is showcasing right now is tremendous and we're beating our own expectations, beating the.

Nick Dell'Osso: We're pretty, I would say, I guess conservative is the right word around how we think about the pace at which this demand will grow. I think it's important to note though that when we talk about all of this stuff, this slide is framing between now and 2030, 2030 being the end of the decade, is a point in time that the market has become focused on. We don't believe demand growth stops in 2030 by any stretch. Our view relative to some of the other more aggressive views of demand growth is really a difference in timing more than it is anything. There are a lot of bottlenecks to create all of this demand growth.

Synergy goals, we laid out at the onset of the merger and then.

Again, making faster progress towards reducing costs and increasing productivity across our entire portfolio, that's driving our breakeven is lower.

Importantly, we're talking about this morning.

The fact that our 2026 setup looks even better.

<unk> said at the beginning of this year that we wanted to set up our productive capacity for 2026 to be seven five Bcf a day that is what we are positioned to deliver.

Can hold that level of production.

Through 2026, and going forward with a very similar capex profile to what we have this year.

Nick Dell'Osso: We think while it is big, it is very meaningful and there will be supply constraints to deliver to certain of these markets at certain times. There is going to be a lot of volatility around it, and we're ready for that volatility. I think our business is uniquely positioned with the geographic diversity we have, with our approach to being willing and proven to modulate supply up and down. We're again really ready to take on the challenge of this volatility and help our customers have the surety of supply that they need with the characteristics of supply they expect.

Two eight to $2 nine and Capex is the right way to think about what we're setting up for in 2026 now lots of things could change between now and when we actually go through 'twenty six so what we determine is the right level of activity and the right level of production based on market conditions will undoubtedly change and that's the flexibility that we have been excited to build.

Into our business and embrace.

But that capital efficiency is what we want to highlight by.

Showing that we can deliver that level of production with about the same amount of capex that we had this year. So what that means is that these improvements in our cost structure alongside the productivity, our sustaining and we're going to hold those going forward.

We're pretty excited about all of that.

Colby Arnold: Thank you. Thank you. Our next question comes from the line of Douglas Leggate from Wolfe Research. Your question please.

As to your question about what inning, we're in with.

How were seeing the uplift of marketing.

[Analyst]: Thanks guys. I appreciate you having me on. Nick, I wonder if I could hit two things. First of all, there's been a lot of moving parts obviously in the cash flow capacity of the portfolio. I'm really focused on where you think your breakeven is trending with the continued synergy delivery. More importantly, you've dropped your sustaining capital by what looks like $150 million, which, that alone is pretty meaningful in your stock. Where do you see your breakeven today? Where do you see it trending? I guess my follow up, forgive me for this, I kind of ask it fairly regularly, but you've given a lot of insight into the role or the impact that Dan and his team are having.

I guess I would say, we're still in pregame warm ups.

Keep the analogy going with baseball here.

This is this is a very.

Newly emerging part of our business that we are putting resources behind in giving a mandate to this team that is highly effective team that we can.

Go out and create more value than historically, they've been positioned to do inside of a company that was of lower scale and non investment grade so with the tools that this company has now around what is a talented organization.

We can go out and do so much more and this lake Charles Methanol transaction is the first example.

[Analyst]: Where would you see, what kind of innings are you in, if you like, in terms of the marketing uplift and if you can quantify how you see your realizations being impacted by that, that would be great. Those are my two, please.

Okay can I pin you down just one specific are you under $3 not only to breakeven.

Yeah, Hey, Doug we are we've made a ton of progress on our breakeven and of course, the merger was really a key catalysts for that but we think if we were to go back kind of pre merger in 2024 to where we are.

Nick Dell'Osso: Okay, great. Love talking about this, obviously, Doug. The capital efficiency that our business is showcasing right now is tremendous. We're beating our own expectations, beating the synergy goals we laid out at the onset of the merger, and then again making faster progress towards reducing costs and increasing productivity across our entire portfolio that's driving our breakevens lower. Importantly, we're talking about this morning the fact that our 2026 setup looks even better. We had said at the beginning of this year that we wanted to set up our productive capacity for 2026 to be 7.5 Bcf a day, that is what we are positioned to deliver. We can hold that level of production through 2026 and going forward with a very similar CapEx profile to what we have this year.

We see the setup for 2026 or over 15 improvement and a breakeven and sitting well below $3.

Great. Thanks, so much guys I appreciate it.

Thank you and our next question comes from the line of Betty Jiang from Barclays. Your question. Please.

Good morning, Thank you for taking my question.

Really appreciate all that color that youre laying out slide nine and 10.

Just growing the gas marketing opportunity.

I can.

Just asked about.

Typically means for your gas realizations over time.

The methanol deal is obviously, helping in the 2000 <unk> and beyond but the opportunities that you see do you see your gas realization and desk just barely over time as you start capturing all of these opportunities.

Nick Dell'Osso: You know, $2.8 to $2.9 billion in CapEx is the right way to think about what we're setting up for in 2026. Lots of things could change between now and when we actually go through 2026. What we determine is the right level of activity and the right level of production based on market conditions will undoubtedly change. That's the flexibility that we've been excited to build into our business and embrace. That capital efficiency is what we want to highlight by showing that we can deliver that level of production with about the same amount of CapEx that we had this year. What that means is that these improvements in our cost structure alongside the productivity are sustaining, and we're going to hold those going forward. We're pretty excited about all of that.

Yeah.

Yes, Matt it's a great question, we do expect to add a lot of margin through our marketing business.

There is so many elements of this and Dan will add to my answer here, but we will optimize the delivery of every molecule that we sell today across our.

Extensive firm transportation portfolio in all the markets we reach.

We will aggregate supply and create value off that aggregation and will continue to connect to customers that need surety of supply and work with them around.

The reliability and flexibility that they require I think you get paid for the combination of all of those things that we bring to the table.

Nick Dell'Osso: As to your question about what inning we're in with how we're seeing the uplift of marketing, I guess I would say we're still in pregame warmups to keep the analogy going with baseball here. This is a very newly emerging part of our business that we are putting resources behind and giving a mandate to this team that is a highly effective team that we can let go out and create more value than historically they've been positioned to do inside of a company that was of lower scale and not investment grade. With the tools that this company has now around what is a talented organization, we can go out and do so much more. This Lake Charles Methanol transaction is the first example.

Yes, Hi, Betty Thanks for that question I'd, just add to the two elements. We're really focused on right now is that optimization that Nick talked about the team has already done a great job this year of being able to optimize our portfolio. We start from a great position with our asset base and our transportation portfolio and our team is be able to optimize across different markets across geography and across different.

With storage and deferred assets, we have to be able to create realizations that are meaningful we've already taken tens of millions of dollars low tens of million dollars and added that to our realizations and just expect to do more over time and then that LCM example is a great example of how we can be differentiated offer customer solutions you pointed to slide 10.

That gives some of our guiding principles of how we think about these deals and what we're looking to accomplish and different elements of these value chain creation and LCM. For example, we hit the majority of these elements and we have tons of inbounds right now and plenty of conversations going on where we can do a lot more of these deals and create a lot more value for for the corporation.

[Analyst]: Nick, can I pin you down just on one specific. Are you under $3 now in your breakeven?

Josh Viets: Yeah. Hey, Doug. We are. We've made a ton of progress on our breakeven. Of course, the merger was really a key catalyst for that. We think if we were to go back kind of pre-merger in 2024 to where we are, you know, as we see the setup for 2026, we're over $0.15 improvement in a breakeven and sitting well below $3.

That's great very exciting developments there.

And then my follow up is just on the M&A side. The resource expansion that you highlighted both the Appalachia and the Westar Haynesville, maybe bigger picture.

[Analyst]: Thanks so much, guys. Appreciate it.

Colby Arnold: Thank you. Our next question comes from the line of Betty Jiang from Barclays. Your question, please.

What do you what are you looking to achieve with these type of.

Bolt ons slash small.

Operator: Good morning. Thank you for taking my question. I really appreciate all the color that you're laying out. Slide 9 and 10 on just growing the gas marketing opportunity. If I can just ask about what it specifically means for your gas realization over time. The methanol deal is obviously helping in the 2030s and beyond, but the opportunities that you see, do you see your gas realization and diffs just narrowing over time as you start capturing all these opportunities?

Alright.

Do you see more resource opportunities and.

And similar type of deal to acquire.

Locations at a low cost.

Yes, good morning, Betty this is Josh.

I would maybe characterize the two acquisitions of organic leasehold in two different ways. The acquisition in the southwest App was purely opportunistic.

Clearly highly synergistic with our existing acreage position allows us to extend lateral lengths.

More than double the lateral links which gives us an opportunity to pull forward inventory.

Nick Dell'Osso: Yeah, Betty, it's a great question. We do expect to add a lot of margin through our marketing business. There are so many elements of this, and Dan will add to my answer here. We'll optimize the delivery of every molecule that we sell today across our extensive firm transportation portfolio and all the markets we reach. We'll aggregate supply and create value off that aggregation, and we'll continue to connect to customers that need surety of supply and work with them around the reliability and flexibility that they require. I think you get paid for the combination of all of those things that we bring to the table.

And simply improve the overall return profile there.

And the Western Haynesville Thats, we think about that a little bit differently. That's something we've been studying for a number of years now and have been very thoughtful about what an entry might look like.

We wanted to get in at a low cost.

To ensure there is limited near term obligations.

We are also looking for a part of the play that we would see as being lower from a geologic complexity standpoint, and we think we've done that with the 75000 acre position that we've created and as we think about that going forward, we simply see that as a great option for the company.

Josh Viets: Yeah.

Dan Turco: Hi Betty, thanks for that question. I just add to the two elements we're really focused on right now is that optimization that Nick talked about. The team has already done a great job this year being able to optimize our portfolio. We start from a great position with our asset base and our transportation portfolio and our team is able to optimize across different markets, across geography and across different time with storage and different assets. We have to be able to create realizations that are meaningful. We've already taken tens of millions of dollars, low tens of millions of dollars and added that to our realizations and just expect to do more over time. That LCM example is a great example of how we can be differentiated, offer customer solutions. You pointed to slide 10.

Able to develop a resource with tremendous upside in an area, where we see growing demand.

And so we'll continue to be mindful that these opportunities as they appear but of course, we're always going to be sticking to our M&A non negotiable with any transaction that we evaluate.

Thank you very much.

Thank you.

Next question comes from the line of Kevin Mccarthy from Pickering Energy Partners. Your question. Please.

Hey, good morning kind of sticking with the western Haynesville.

Sounds like you've already drilled a vertical well there and you did some leasing.

Dan Turco: That gives some of our guiding principles of how we think about these deals and what we're looking to accomplish and different elements of these value chain creation. In LCM, for example, we hit majority of these elements and we have tons of pin bounds right now and plenty of conversations going on where we can do a lot more of these deals and create a lot more value for the corporation.

Before this last acquisition.

Can you kind of expand on what you saw on that vertical well in what was attractive about this particular area of the western Haynesville.

Yes, Thanks, Kevin happy to address that we have been again studying this for some time and so we have a pretty extensive dataset across the entire region, just given our decade and a half of experience here and so we've been very thoughtful about integrating new production data as it came available from.

Operator: That's great. Very exciting developments there. My follow up is just on the M&A side, the resource expansion that you highlighted, both the Appalachia and the Western Haynesville. Maybe bigger picture, what are you looking to achieve with these type of bolt-on small deals? Do you see more resource opportunities and similar type of deal to acquire locations at a low cost?

Some of the developments further to the west.

Corporate and that in and calibrating our models and then with the vertical well that was of course pretty important for us to serve as a bit.

Final.

Validation of the resource potential that we saw and what we found is a thick very dense.

Vince.

Shale reservoir that we think presents tremendous upside it has a lot of characteristics that were accustomed to developing in areas like the NFC.

Josh Viets: Yeah. Good morning Betty, this is Josh. I would maybe characterize the two acquisitions of organic leasehold in two different ways. The acquisition in the Southwest Appalachia was purely opportunistic, that's clearly highly synergistic with our existing acreage position, allows us to extend lateral lengths, almost more than double lateral lengths, which gives us an opportunity to pull forward inventory and simply improve the overall return profile there. In the Western Haynesville, we think about that a little bit differently. That's something we've been studying for a number of years now and have been very thoughtful about what an entry might look like. We wanted to get in at a low cost. We wanted to ensure there was limited near-term obligations. We were also looking for a part of the play that we would see as being lower from a geologic complexity standpoint.

In our southern portion of the Louisiana play and.

Really kind of met all the requirements that we would think about to support future development.

I would just note though.

For for the company specifically this is something that we still see is carrying some level of uncertainty with it and I think that really goes to the entire western Haynesville area.

Long term decline is something that we definitely need to monitor and I think the advantage that we have in the play is that with 20 years of inventory in Louisiana, We can definitely be measured in our approach, we'll drill our first horizontal production well here.

Here later in the fourth quarter.

And that really will need time, as we head into 2026th to further assess that but again the resource potential is quite high we like the option that it creates.

Josh Viets: We think we've done that with the 75,000 acre position that we've created. As we think about that going forward, we simply see that as a great option for the company to be able to develop a resource with tremendous upside in an area where we see growing demand. We will continue to be mindful of these opportunities as they appear. Of course, we're always going to be sticking to our M&A non-negotiables with any transaction that we evaluate.

And again, given the depth of the inventory, we're going to be very measured in our approach to how we develop it going forward.

Great. Thank you for the I appreciate the detail on that.

And as a follow up kind of moving back to the core haynesville.

It looks like a lot of the Capex savings and even the outperformance on the production side has come from the Haynesville.

Hi.

Operator: Thank you very much.

What are the most notable differences between your expectations coming into the year on the drilling and completing of the wells and you kind of mentioned in your earlier remarks that you think youre doing wells significantly cheaper than peers without without giving away your secrets.

Colby Arnold: Thank you. Our next question comes from the line of Kevin McCurdy from Pickering Energy Partners. Your question please. Hey, good morning. Kind of sticking with the Western Haynesville. It sounds like you've already drilled a vertical well there and you did some leasing maybe before this last acquisition. Can you kind of expand on what you saw on that vertical well and what was attractive about this particular area of the Western Haynesville?

Do you know what you're doing different that is causing that well cost savings.

Well one of the things that has helped US of course is just putting two teams together, where we've been able to leverage the experience of two companies and I think the drilling improvements that we've experienced over the last year I think of just exceeded all of our expectations and really a credit.

Josh Viets: Yeah, thanks, Kevin. Happy to address that. We've been again studying this for some time, and we have a pretty extensive data set across the entire region, just given our decade and a half of experience here. We've been very thoughtful about integrating new production data as it came available from some of the developments further to the west, incorporating that in and calibrating our models. With the vertical well, that was, of course, pretty important for us to serve as a good final validation of the resource potential that we saw. What we found is a thick, very dense shale reservoir that we think presents tremendous upside. It has a lot of characteristics that we're accustomed to developing in areas like the NFZ and our southern portion of Louisiana plate. It really kind of met all the requirements that we would think about to support future development.

To our employees and to our contractors that help support that and so we continue to make strides in I would say the most material cost improvements that we've made and where we see differentiated performance.

Is on the drilling side.

But also I think I would like to talk about completions just for a little bit there because theres really two components to it of.

Of course, we made an investment in our own sand mine, which I think is a unique opportunity for us because of the scale of program that we run where we're going to be pretty consistent and running anywhere from two to four frac crews.

And so we can go make that investment pays out in just over a year's time and has a material impact on our.

Our well cost and then when you combined out lower source of sand or lower completion cost that also now presents an opportunity to where we can be a little bit more thoughtful about our proppant intensity on the wells that we're completing and so through the merger integration we knew that in the two companies had different approaches to completion design.

Josh Viets: I would just note though, for the company specifically, this is something that we still see as carrying some level of uncertainty with it. I think that really goes for the entire Western Haynesville area. Long term decline is something that we definitely need to monitor. I think the advantage that we have in the play is that with 20 years of inventory in Louisiana, we can definitely be measured in our approach. We'll drill our first horizontal production well here later in the fourth quarter. We will need time as we head into 2026 to further assess that. Again, the resource potential is quite high. We like the option that it creates. Given the depth of the inventory, we're going to be very measured in our approach to how we develop it going forward.

And in terms of both fluid and proppant intensity and so through the integration we landed on what we would consider kind of our gen. One as expand.

<unk> design, and we quickly put that into place at merger close and I would say even through that Gen. One design, we've seen improvements in productivity and some of our fourth quarter and first quarter of 2025 pills.

That's helped contribute we've quickly continued to progress that to a gen. Two design that we implemented in the earlier parts of the year with those wells coming online in the second and third quarter. Those two have been outperforming our expert expectations and we're already now moving onto the Gen. Three.

Colby Arnold: Great, thank you for that. Appreciate the detail on that. As a follow-up, kind of moving back to the core Haynesville, it looks like a lot of the CapEx savings and even the outperformance on the production side has come from the Haynesville. What are the most notable differences between your expectations coming into the year on the drilling and the cleaning of the wells? You mentioned in your earlier remarks that you think you're doing wells significantly cheaper than peers. Without giving away your secrets, do you know what you're doing different that is causing that well cost saving?

We continue to see kind of outsized performance from these wells so you've seen the productivity trends and we think there's still more upside to be had within that and we're very excited to be able to talk more about that in the coming quarters.

I appreciate the answer thank you.

Thank you and our next question comes from the line of Neil Mehta from Goldman Sachs. Your question. Please.

Yes. Thank you so much.

Great to see the capital efficiency improvement and that kind of sets up my question for as you think about 'twenty six is it fair to say that.

Josh Viets: One of the things that has helped us of course is just putting two teams together where we've been able to leverage the experience of two companies. I think the drilling improvements that we've experienced over the last year have just exceeded all of our expectations and really are a credit to our employees and to our contractors that help support that. We continue to make strides. I would say the most material cost improvements that we've made and where we see differentiated performance is on the drilling side. I would also like to talk about completions just for a little bit there because there's really two components to it.

Capex all else equal should be relatively flat.

<unk> 26 versus 25% and what are some moving pieces as you think about the soft guide for next year.

Yes, I think that's exactly the right message Neil is that you should think about it the same capex profile for next year same dollar amount the moving pieces of course theres going to be the market conditions. So again, one of the things were.

Pleased within our businesses, our willingness and ability to be flexible in how we allocate capital and how we view production.

Within a given year. So we're ready for anything the year throws at us and obviously gas markets have been pretty volatile.

Josh Viets: Of course, we made an investment in our own sand mine which I think is a unique opportunity for us because of the scale of program that we run where we're going to be pretty consistent and running anywhere from two to four frac crews. We can go make that investment. It pays out in just over a year's time and has a material impact on our well cost. When you combine that lower source of sand or lower completion cost, that also now presents an opportunity to where we can be a little bit more thoughtful about our proppant intensity on the wells that we're completing. Through the merger integration, we knew that the two companies had different approaches to completion design in terms of both fluid and proppant intensity. Through the integration, we landed on what we would consider kind of our Gen1 as Expand Energy completion design.

Through the summer.

Being pretty soft even through the third quarter production has been pretty high 26 setup is different.

It looks like we have some pretty significant structural demand growth that should outpace supply for most of the year, but by the end of the year you have got some Permian pipes coming on.

In size and that will again change the dynamics so.

We're ready for that volatility and we're ready we're ready to be flexible.

And then the follow up is just the update on hedge the wedge.

The curve looks really good here for 2026, and even into 2007 and so how are you thinking about continuing to execute that program and it backward its pretty decently as he gets it from 2008 to 2030 and I know theres less liquidity I'm guessing eight eight quarters Rolling forward is still the right framework, but just.

Josh Viets: We quickly put that into place at merger close. Even through that Gen1 design, we've seen improvements in productivity in some of our fourth quarter and first quarter of 2025 tills. That's helped contribute. We've quickly continued to progress that to a Gen2 design that we implemented in the earlier parts of the year. With those wells coming online in the second and third quarter, those too have been outperforming our expectations and we're already now moving on to a Gen3 where we continue to see kind of outperformance from these wells. You've seen the productivity trends. We think there's still more upside to be had within that and we're very excited to be able to talk more about that in the coming quarters.

Your latest thoughts there.

Yes, Neal this is Britney and Youre right were going to maintain that discipline approach to commodity risk management.

That includes layering on those hedge positions over a rolling eight quarter period, and really that strategy is focused on adding that downside protection. While also affording significant upside participation and I think this year is a really great example of the effectiveness of that strategy. If you think about the second and third quarters, we had around $165 million of cash.

Inflows from our hedges.

That's really great to see that downside protection and action as we look to 2006 were about 47% hedged colors are about 75% of that book.

Colby Arnold: Appreciate the answer. Thank you. Thank you. Our next question comes from the line of Neil Mehta from Goldman Sachs. Your question please. Yeah, thank you so much. It's great to see the capital efficiency improvement. That kind of sets up my question for as you think about 2026, is it fair to say that the CapEx, all else equal, should be relatively flat, 2026 versus 2025? What are some moving pieces as you think about the soft guide for next year?

And in 2007, we've already initiated our position just under 15% hedge so even with the bullish outlook. We believe that it's prudent to continue to layer on downside protection and the benefit that we have is with our fundamentals team we have great market insight to proactively manage that book once those positions are layered on so we're going to lean in when we see.

<unk> is in the market and consistently add to that position.

Thanks Brittany.

Thank you and our next question comes from the line of Zach program from Jpmorgan. Your question. Please.

Nick Dell'Osso: Yeah, I think that's exactly the right message, Neil, is that you should think about the same CapEx profile for next year, same dollar amount. The moving pieces, of course, are just going to be the market conditions. One of the things we're really pleased with in our business is our willingness and ability to be flexible in how we allocate capital and how we view production within a given year. We're ready for anything the year throws at us. Obviously, gas markets have been pretty volatile through the summer, being pretty soft. Even through the third quarter, production's been pretty high. The 2026 setup is different. It looks like we have some pretty significant structural demand growth that should outpace supply for most of the year. By the end of the year, you've got some Permian pipes coming on in size and that will again change the dynamic.

Hey, Thanks for taking my question first just wanted to follow up on Kevin's question. You took your D&C costs down in the Haynesville would expect those to move even lower in 2026 can you just talk about the factors pushing those costs lower is that mostly efficiency gains that you factored in in 2026 or is there some level of OSA.

Deflation built into those numbers.

Yes, good morning Zach.

Really this is going to be driven by efficiency improvements as we assess the RFS market and just think about where activity trends or potentially heading into 2026.

We would expect <unk> markets to be relatively stable.

Year over year from 25 to 26, and so we're really just thinking about how do we continue to strengthen our business improve our operational performance and continue to build upon all the success that we had in 2025.

Nick Dell'Osso: We're ready for that volatility and we're ready to be flexible.

Colby Arnold: Thanks, Nick. The follow up is just the update on Hedge the Wedge. The curve looks really good here for 2026 and even into 2027. How are you thinking about continuing to execute that program? It backward dates pretty decently as you get from 2028 to 2030. I know there's less liquidity, so I'm guessing eight-quarter rolling forward is still the right framework. Just your latest thoughts there.

Thanks, Josh.

And then my follow up just on your macro views in general you've mentioned flexibility you've got this productive capacity sitting here.

As we sit here today would you expect to be back at seven five Bcf a day in January and maybe just talk about the flexibility you have on when you bring those those volumes to market and kind of how you think about that.

Yes, so right now as we look at the setup as we exit the year.

Brittany Rayford: Yeah, Neil, this is Brittany. You're right. We're going to maintain that disciplined approach to commodity risk management that includes layering on those hedge positions over a rolling eight-quarter period. That strategy is focused on adding that downside protection while also affording significant upside participation. I think this year is a really great example of the effectiveness of that strategy. If you think about the second and third quarters, we had around $165 million of cash inflows from our hedges. That's really great to see that downside protection in action. As we look to 2026, we're about 47% hedged. Collars are about 75% of that book. In 2027, we've already initiated our position just under 15% hedged. Even with a bullish outlook, we believe it's prudent to continue to layer on downside protection.

We do have the ability to be at seven five Bcf a day pretty early in 2026.

But like we demonstrated in the past, we're always going to be responsive to market conditions.

Our goal is to always be thoughtful about how we shape our production.

That should be in alignment with how we see demand rolling out as well and so we expect to average seven five Bcf a day across 2026.

That doesn't necessarily mean that we're going to simply just be flat as demand.

Pushes higher or if we happen to see market weakness, we're always going to be in a position to exercise flexibility and push volumes higher but lower but again the target for next year across the year will be seven five Bcf a day.

Yes.

Brittany Rayford: The benefit that we have is with our fundamentals team, we have great market insight to proactively manage that book once those positions are layered on. We're going to lean in when we see opportunities in the market and consistently add to that position.

Thanks.

Thank you and our next question comes from the line of Charles Meade from Johnson Rice. Your question. Please.

Good morning, Nick to you and your whole team there.

I wanted to ask a question on <unk>.

Colby Arnold: Thanks, Brittany. Thank you. Our next question comes from the line of Zach Parham from JPMorgan, your question please.

Break evens and go back to some of the I think your prepared comments I believe I heard you say in your prepared comments that.

Europe I think it was your companywide breakeven is about $2 75, and I am wondering if you could tell me if I heard that correctly and also maybe remind us.

Nick Dell'Osso: Hey, thanks for taking my question first. Just wanted to follow up on Kevin's question. You took your DNC cost down in the Haynesville and expect those to move even lower in 2026. Can you just talk about the factors pushing those costs lower? Is that mostly efficiency gains that you factored in in 2026 or is there some level of OFS deflation built into those numbers?

The other important assumptions in that number or and I'm thinking just to off the top of my head whether that includes location costs and if there is some minimum threshold return thats baked in that number also.

Yeah, Hey, Charles this is Josh so the 275 that you referenced is shows up on slide 12 connected referenced this in his prepared comments, but the 275 refers specifically to Haynesville and so think about that is just simply an annual free cash flow breakeven for specifically for that asset. So obviously it would include any corporate items such as the.

Josh Viets: Yeah. Good morning, Zach. Really, this is going to be driven by efficiency improvements as we assess the OFS market and just think about where activity trends are potentially heading in 2026. We would expect the OFS markets to be relatively stable year over year from 2025 to 2026. We are really just thinking about how do we continue to strengthen our business, improve our operational performance, and continue to build upon all the success that we had in 2025.

Corporate dividend.

But what I'd like to maybe just comment there I mean, obviously with improved productivity reducing costs. That's a great combination that's going to pull down breakeven.

Just as a point of reference if we were to go back to where we initially guided.

On the company and specifically Haynesville back in February we would have been sitting in probably closer to $3. So we've seen that much improvement in the business to kind of be able to back out almost a quarter out of our breakeven just across the calendar year of 2025.

Nick Dell'Osso: Thanks, Josh. My follow up just on your macro views in general. You've mentioned flexibility and you've got this productive capacity sitting here as we sit here today. Would you expect to be back at 7.5 BCFE a day in January, and maybe just talk about the flexibility you have on when you bring those volumes to market and kind of how you think about that?

Got it that's great context, Thanks, Josh and then maybe this is a follow up for you perhaps.

The the western Haynesville horizontal that youre going to drill in <unk> can you can.

Josh Viets: Yeah. Right now, as we look at the setup as we exit the year, we do have the ability to be at 7.5 Bcf a day pretty early in 2026. Like we demonstrated in the past, we're always going to be responsive to market conditions. Our goal is to always be thoughtful about how we shape our production. That should be in alignment with how we see demand rolling out as well. We expect to average 7.5 Bcf a day across 2026. That doesn't necessarily mean that we're going to simply just be flat. If demand pushes higher or if we happen to see market weakness, we're always going to be in a position to exercise flexibility and push volumes higher or lower. Again, the target for next year across the year will be 7.5 Bcf a day. Thanks.

Can you give us some framework for what success would look like there what would what would.

What would get.

Get you more enthusiastic about the play and perhaps as a follow onto a bracket what we should be thinking about for your activity there in 2006.

Yes, I mean first of all we need to get this first well on the ground and assess the results before we start thinking about what what might else occur in 2026, but to your first question.

We've confirmed the geologic model we have a good understanding of what the subsurface looks like and so what the well it's really first about kind of fine tuning our operations of drilling in this part of the state.

And then of course, primarily this is really centered around productivity.

And getting some early time data to kind of SaaS.

Colby Arnold: Thank you. Our next question comes from the line of Charles Meade from Johnson Rice. Your question please.

Overall reservoir performance, but obviously, we'll be monitoring this very closely to help better understand longer term flow characteristics from the from the reservoir.

Nick Dell'Osso: Good morning, Nick, to you and your whole team there. I want to ask a question on breakevens and go back to some of the, I think, your prepared comments. I believe I heard you say in your prepared comments that your, I think it was your company-wide breakeven is now $2.75. I wonder if you could tell me if I heard that correctly and also maybe remind us what the other important assumptions in that number are. I'm thinking just too off the top of my head whether that includes location costs and if there's some minimum threshold return that's baked in that number also.

Thank you for that.

Thank you.

And our next question comes from the line of David <unk> from TD Cowen Your question. Please.

Thanks for taking my questions.

I wanted to just follow up a bit on some of the color and planning around 2006, and just curious if you could.

Talk to the appraisal program for the Western Haynesville in 'twenty, six and really I guess, how impactful you could see this asset would be coming to your overall program and what timeframe.

Josh Viets: Yeah. Hey Charles, this is Josh. The $2.75 that you reference shows up on slide 12. Nick did reference this in his prepared comments, but the $2.75 refers specifically to Haynesville. Think about that as just simply an annual free cash flow breakeven specifically for that asset. It would include any corporate items such as the corporate dividend. What I'd like to maybe just comment there, I mean, obviously, with improved productivity, reducing costs, that's a great combination that's going to pull down breakevens. Just as a point of reference, if we were to go back to where we initially guided on the company and specifically Haynesville back in February, we would have been sitting probably closer to $3. We've seen that much improvement in the business to kind of be able to back out almost a quarter out of our breakeven just across the calendar year of 2025.

Yeah, David So for next year with the soft guide that we've provided of $2 $85 billion to deliver the seven five Bcf a day is inclusive of the appraisal capex that we have planned. So we're not at this point getting into the specific details of what all is included in that but I think it's just important to reiterate that all of the appraisal.

Capex that we think we need is included in that $2 5 billion and that really just speaks to the overall improvements that we've seen in capital efficiency through the course of the year and I think at this point in time, it's just way too early to be speculating on what might this due to capital going forward.

We're really just in the first inning there.

I appreciate that.

And then maybe we could revisit the LCM deal.

Nick Dell'Osso: Got it. That's great context. Thanks, Josh. Maybe this is a follow-up for you, perhaps the Western Haynesville horizontal that you're going to drill in Q4. Can you give us some framework for what success would look like there? What would get you more enthusiastic about the play and perhaps as a follow into the bracket, what we should be thinking about for your activity there in 2026?

I know without going into pricing terms I'm curious just what merits of this deal.

Propels you are motivated you to sign this one why why this agreement sort of makes sense versus perhaps some others like LNG or.

Our power related contracts I surmise, you're trying to achieve a premium relative to what your forecast might be on 2030, but.

But what was what was the general thought process or guidelines that you are using right now to sort of.

Engaged in some of these these offtake agreements.

Josh Viets: Yeah, I mean, first of all, we need to get this first well in the ground and assess the results before we start thinking about what might else occur in 2026. To your first question, we've confirmed the geologic model. We have a good understanding of what the subsurface looks like. With the well, it's really first about fine tuning our operations of drilling in this part of the state. Of course, primarily this is really centered around productivity and getting some early time data to kind of assess the overall reservoir performance. Obviously, we'll be monitoring this very closely to help better understand longer term flow characteristics from the reservoir.

Yes, Thanks, David I think slide 10 is a great slide to how we're thinking about these deals.

Deals and for Lake Charles Methanol, specifically hit.

A majority of the elements you see on our guiding principles laid across this page.

Deal that facilitated new demand and it has committed offtake so huge win for US. It provides the customer their needs. It provides them reliability and flexibility the genesis of this.

Our relationship is.

It goes back to the heritage company's paired as Chesapeake inherent yourselves with southwestern but they have a long standing relationship with the principles of this project extra near you guys and so they understand the reliability and the reputation that we bring and so they were looking for long term security of supply that they were looking for a differentiated project product, we can deliver the lower carbon intensity score product.

Nick Dell'Osso: Thank you for that.

And give them that flexibility, we have a base load sale into them, but we also give you a bit of operational flexibility. So we can really manage their supply.

Colby Arnold: Thank you. Our next question comes from the line of David Deckelbaum from TD Cowen. Your question please. Thanks for taking my questions all. I wanted to just follow up a bit on some of the color and planning around 2026 and just curious if you could talk to the appraisal program for the Western Haynesville in 2026 and really, I guess how impactful you could see this asset becoming to your overall program in what time frame?

It leaves us to achieving that premium price on that deal.

This deal closed to other deals we're taking a huge portfolio approach to this were looking at LNG deals. We're looking at power deals. We're looking at more industrial deals who are really taking it back to these guiding principles and how do they meet and create value for for us as a corporation. So at the moment, we have because of our position because of our portfolio. We have a lot of conversations going on right now.

Josh Viets: Yeah, David, for next year, the soft guide that we've provided of $2.85 billion to deliver the 7.5 Bcf a day is inclusive of the appraisal CapEx that we have planned. We're not at this point getting into the specific details of what all is included in that. I think it's just important to reiterate that all the appraisal CapEx that we think we need is included in that $2.85 billion. That really just speaks to the overall improvements that we've seen in capital efficiency through the course of the year. I think at this point in time it's just way too early to be speculating on what this might do to capital going forward. We're really just in the first innings there.

If something like 20% 25 different conversations going on across the LNG spectrum across the power spectrum across industry and again it comes back to that value creation, and then risk reward any deal we're looking at.

As color.

Thank you and our next question comes from the line of John Ennis from Texas Capital. Your question. Please.

Hey, good morning, guys and thanks for taking my questions.

My first one with <unk>.

Over two Bcf of power and industrial demand growth expected along the Gulf Coast that you highlight on slide 11, how should we think about the pace of leaning further into supply agreements like the one with LCM and the inbound interest you noted.

Colby Arnold: I appreciate that. Maybe we could revisit just the LCM deal. I know without going into pricing terms, I'm curious just what merits of this deal sort of propelled you or motivated you to sign this one. Why this agreement sort of makes sense versus perhaps some others like LNG or power related contracts. I surmise you're trying to achieve a premium relative to what your forecast might be on 2030, but what was the general thought process or guidelines that you're using right now to sort of engage in some of these offtake agreements?

Just given you're one of the few with meaningful inventory depth in the Haynesville and with egress from Texas to Louisiana potentially constrained are you contemplating potentially being more patient with entering into the future deals to let the gas on gas demand further materialize and accrue to your benefit.

Well, we're happy to be patient and I think we're going to go back to the principals Dan just described and how we think about which deals we want to pursue which customers we want to align with.

To provide long term supply agreements.

Dan Turco: Yeah, thanks, David. I think slide 10 is a great slide to lay out how we're thinking about these deals. For Lake Charles Methanol specifically, it hit the majority of the elements you see on our guiding principles laid across this page. It was a deal that facilitated new demand and it has committed offtake, so huge win for us. It provides the customer their needs, it provides them reliability and flexibility. The genesis of this relationship goes back to the Heritage companies, Heritage Chesapeake and Heritage Southwestern, where they have a long-standing relationship with the principals of this project, Exiner guys. They understand the reliability and the reputation that we bring. They were looking for long-term security of supply, they were looking for a differentiated product. We can deliver the lower carbon intensity score product and give them that flexibility.

Looking for those characteristics again that helped to deliver a better business for our bottom line higher revenue.

We want lower volatility for our business, we're trying to set up.

Customer relationships, where we can help provide a service in addition to the commodity that we're providing in that it's.

Uniquely reliable flexible and we can get paid a premium for that.

When we think about.

The overall scope here of long term agreements.

This one is attractive to us because it doesn't require any balance sheet commitments.

And the price is floating.

So if youre thinking about doing transactions, where there are balance sheet commitments associated with.

Dan Turco: We have a base load sale into them, but we also give them a bit of operational flexibility so we can really manage their supply. That is what leads us to achieving that premium price on that deal. As this deal goes to other deals, we're taking a huge portfolio approach to this. We're looking at LNG deals, we're looking at power deals, we're looking at more industrial deals. We're really taking it back to these guiding principles and how do they meet and create value for us as a corporation. At the moment, because of our position, because of our portfolio, we have a lot of conversations going on right now. We have something like 20, 25 different conversations going on across the LNG spectrum, across the power spectrum, across industry. Again, it comes back to that value creation and then risk reward of any deal we're looking.

The transaction or you are changing your price characteristics, whether it would be.

Fixed price or a collar price you would think about the impacts those have on your portfolio those could be very attractive to you as well.

This deal closed to other deals we're taking a huge portfolio approach to this.

Looking at LNG deals, we're looking at power deals. We're looking at more industrial deals who are really taking it back to these guiding principles and how do they meet and create value for for us as a corporation. So at the moment, we have because of our position because of our portfolio. We have a lot of conversations going on right now, it's something like 20% 25 different conversations going on across the LNG spectrum.

And again it will be a portfolio approach as to how we think about the balances here, but to put in place a structure like this where you're getting a premium to Nymex, which of course Nymex being the most liquid natural gas market in the world, we can hedge around that and manage that exposure proactively.

The power spectrum across industry and again it comes back to value creation, and then risk reward any deal we're looking at.

Thought it was a really good opportunity here. So we can do more of these and again, we'll continue to look for.

Good color.

Transactions that have all the right characteristics, but they won't all look the same in fact intentionally we will have a portfolio approach to this.

Colby Arnold: Thank you. Our next question comes from the line of John Ennis from Texas Capital. Your question please. Hey, good morning guys and thanks for taking my questions. For my first one, with over 2 pcf of power and industrial demand growth expected along the Gulf Coast that you highlight on slide 11, how should we think about the pace of leaning further into supply agreements like the one with LCM and the inbound interest you've noted just given you're one of the few with meaningful inventory depth in the Haynesville and with egress from Texas to Louisiana potentially constrained, are you contemplating potentially being more patient with entering into future deals to let the gas on gas demand further materialize and accrue to your benefit?

Thank you and our next question comes from the line of John Ennis from Texas Capital. Your question. Please.

Terrific I appreciate that color for my follow up what's your position in the <unk> fault zone I wanted to get a sense of how similar your position in the Western Haynesville is TBD NFC just in terms of.

Hey, good morning, guys and thanks for taking my questions.

My first one with <unk>.

Over two Bcf of power and industrial demand growth expected along the Gulf Coast that you highlight on slide 11, how should we think about the pace of leaning further into supply agreements like the one with LCM and the inbound interest you noted.

Temperature and do you believe your experience operating in the highest geo pressured area of the legacy Haynesville position you to potentially come down the learning curve more quickly.

Just given you're one of the few with meaningful inventory depth in the Haynesville and with egress from Texas to Louisiana potentially constrained are you contemplating potentially being more patient with entering into future deals to let the gas on gas demand further materialize and accrue to your benefit.

Yes, John So there is definitely some similarities of course as we get into the western Haynesville, the depths will be a little bit deeper from a total vertical depth standpoint.

But but as far as will it be learnings absolutely.

Nick Dell'Osso: We are happy to be patient and I think we are going to go back to the principles Dan just described in how we think about which deals we want to pursue, which customers we want to align with to provide long term supply agreements. We are looking for those characteristics again that help to deliver a better business for our bottom line, higher revenue, we want lower volatility for our business. We are trying to set up customer relationships where we can help provide a service in addition to the commodity that we are providing in that it is uniquely reliable, flexible and we can get paid a premium for that. When we think about the overall scope here of long term agreements, this one is attractive to us because it does not require any balance sheet commitments and the price is floating.

Currently when we think about how we're developing the NFC area of our play just as a point of example, we're drilling completing wells there 500 to $600 per foot and today. If you are thinking about wells in the western haynesville that around 3000.

Well, we're happy to be patient and I think we're going to go back to the principals Dan just described and how we think about which deals we want to pursue which customers we want to align with.

To provide long term supply agreements.

Looking for those characteristics again that helped to deliver a better business for our bottom line higher revenue.

Every bit of expectation that it doesn't take us two times, the well cost to develop that part of the asset. So we will absolutely carry forward those operational learnings I think theres a lot of things that we can carry forward into this part of the play which again is why we simply believe that we're the right type of operator to be operating in a very.

We want lower volatility for our business, we're trying to set up.

Customer relationships, where we can help provide a service in addition to the commodity that we're providing in that it's.

Uniquely reliable flexible and we can get paid a premium for that.

<unk> part of the basin.

Yes.

Thanks, guys.

When we think about.

Thank you and our next question comes from the line of Scott Hanold from RBC capital markets. Your question. Please.

The overall scope here of long term agreements.

This one is attractive to us because it doesn't require any balance sheet commitments.

Yes, Thanks, just touching base again on the Western Haynesville just a couple of questions just a clarification number one.

Nick Dell'Osso: If you are thinking about doing transactions where there are balance sheet commitments associated with the transaction or you are changing your price characteristics, whether it be a fixed price or a collar price, you would think about the impacts those have on your portfolio. Those could be very attractive to you as well. It will be a portfolio approach as to how we think about the balances here. To put in place a structure like this where you are getting a premium to Nymex, which of course Nymex being the most liquid natural gas market in the world, we can hedge around that and manage that exposure proactively, we thought was a really good opportunity here. We could do more of these. We will continue to look for transactions that have all the right characteristics, but they will not all look the same.

And the price is floating.

So if youre thinking about doing transactions, where there are balance sheet commitments associated with.

First on you spoke about like geological complexities and stuff out there do you.

The transaction or you are changing your price characteristics, whether it would be.

What other kind of assets are important for us to focus on in trying to figure out like is there a greater position for you to build out there or do you think you've got a pocket that.

Fixed price or a collar price you would think about the impacts those have on your portfolio those could be very attractive to you as well.

That you like right now.

And again it will be a portfolio approach as to how we think about the balances here, but to put in place a structure like this where you're getting a premium to Nymex, which of course Nymex being the most liquid natural gas market in the world, we can hedge around that and manage that exposure proactively.

Yes, Scott we feel really good about the position that we've built I mean with 75000 net acres of course, the gross acre position is going to be a little bit larger than that and so we think there's some opportunities to maybe kind of true kind of buildup in and around that position, but nothing material.

Again, given our overall inventory depth in the basin. We think this is about the right size.

Thought it was a really good opportunity here. So we can do more of these and again, we'll continue to look for.

For us going forward and then to your comments on the geologic complexity one of the things that we've observed two our datasets as you know there is quite a bit of structural complexity as you move across the play, especially as you move further west you'll get some very steep cieply deepening beds, there that create some complexities in terms of.

Transactions that have all the right characteristics, but they won't all look the same in fact intentionally we will have a portfolio approach to this.

Nick Dell'Osso: In fact, intentionally we will have a portfolio approach to this.

Colby Arnold: Terrific, I appreciate that. For my follow up with your position in the Nacogdoches fault zone, I wanted to get a sense of how similar your position in the Western Haynesville is to the NFC just in terms of depth and temperature. Do you believe your experience operating in the highest geopressured area of the Legacy Haynesville positions you to potentially come down the learning curve more quickly?

Terrific I appreciate that color for my follow up what's your position in the <unk> fault zone I wanted to get a sense of how similar your position in the Western Haynesville is TBD NFC just in terms of.

How you drill wells, especially in the lateral section and so we were very thoughtful about where we want it to be we like the area that we've got.

Temperature and do you believe your experience operating in the highest geo pressured area of the legacy Haynesville position you to potentially come down the learning curve more quickly.

Much less structural complexity within it which puts us in a position to simply.

Executing at lower cost, while delivering outsized production results.

Josh Viets: Yeah, John. There's definitely some similarities. Of course, as we get into the Western Haynesville, the depths will be a little bit deeper from a total vertical depth standpoint. As far as will there be learnings, absolutely. Currently, when we think about how we're developing the NFZ area of our play, just as a point of example, we're drilling, completing wells there, $1,500 to $1,600 per foot. Today, if you're thinking about wells in the Western Haynesville, that around 3,000, I have every bit of expectation that it doesn't take us two times the well cost to go develop that part of the asset. We will absolutely carry forward those operational learnings.

Yes, John So there is definitely some similarities of course as we get into the western Haynesville, the depths will be a little bit deeper from a total vertical depth standpoint.

Thanks, and then my follow up question is on the Haynesville productivity improvements in the view of seeing it improve yet into 26 it sounds like.

But but as far as will it be learnings absolutely.

Some of that is your gen. One through potentially Gen. III design could you give us a little bit of color on exactly what you're tweaking within that and also is there any facet of the expectation of productivity improvements related to where you are targeting within the haynesville or is it more.

Currently when we think about how we're developing the NFC area of our play just as a point of example, where drilling completing wells there.

Hunter to $600 per foot and today, if you are thinking about wells in the western Haynesville that around 3000.

Based on these new generations of completions.

Every bit of expectation that it doesn't take us two times, the well cost sito develop that part of the asset. So we will absolutely carry forward those operational learnings I think theres a lot of things that we can carry forward into this part of the play which again is why we simply believe that we're the right type of operator to be operating in a very <unk>.

Yes, I mean first of all both the Bossier and the Haynesville are very perspective.

Josh Viets: I think there's a lot of things that we can carry forward into this part of the play, which again is why we simply believe that we're the right type of operator to be operating in a very complex part of the basin.

Within our acreage position in Louisiana. So we continue to develop both in especially in the southern portion.

In and around the NFC both zones are highly prolific and so yes, we continue to optimize exactly where we land the wells within those zones, but but really what we find to be one of the biggest drivers is just simply how we complete the wells and so exactly that recipe, obviously, we're not going to get into that but.

<unk> part of the basin.

Colby Arnold: Thank you. Thank you. Our next question comes to the line of Scott Hanold from RBC Capital Markets. Your question please.

Thanks, guys.

Thank you and our next question comes from the line of Scott Hanold from RBC capital markets. Your question. Please.

Josh Viets: Yeah, thanks.

Nick Dell'Osso: Just touching base again on the Western Haynesville. Just a couple questions, just a clarification. Number one, first on, you spoke about geological complexities and stuff out there. What other kind of facets are important for us to focus on in trying to figure out, is there a greater position for you to build out there or do you think you've got a pocket that you like right now?

Yes, Thanks, just touching base again on the Western Haynesville just a couple of questions just a clarification number one.

I think the biggest factor is we have a very low cost sand source that we're able to.

First on you spoke about like geological complexities and stuff out there do you.

Rely on going forward that also allows us to control the deliverability of it in terms of ensuring that we have the right sand at the right time historically in the basin.

What other kind of assets are important for us to focus on in trying to figure out like is there a greater position for you to build out there or do you think you've got a pocket that.

Especially as we've gotten more and more efficient with our completions.

Third parties their ability to keep up with our needs has definitely been lagging. So we can now control our own destiny, we have a lower supply supply sand source, we can increase our proppant loading and do so more economically than what others can do in the basin.

That you like right now.

Josh Viets: Yes, Guy, we feel really good about the position that we've built. With 75,000 net acres, of course the gross acre position is going to be a little bit larger than that. We think there's some opportunities to maybe kind of build up in and around that position, but nothing material. Given our overall inventory depth in the basin, we think this is about the right size for us going forward. To your comments on the geologic complexity, one of the things that we've observed through our data sets is there is quite a bit of structural complexity as you move across the play, especially as you move further west. You'll get some very steeply deepened beds there that create some complexities in terms of how you drill wells, especially in the lateral section. We were very thoughtful about where we want it to be.

Yes, Scott we feel really good about the position that we've built I mean with 75000 net acres of course, the gross acre position is going to be a little bit larger than that and so we think there's some opportunities to maybe kind of true kind of buildup in and around that position, but nothing material.

Thank you.

Thank you and our final question for today comes from the line of John Freeman from Raymond James Your question. Please.

Again, given our overall inventory depth in the basin. We think this is about the right size.

For us going forward and then to your comments on the geologic complexity one of the things that we've observed two our datasets as you know there is quite a bit of structural complexity as you move across the play, especially as you move further west you'll get some very steep cieply deepening beds, there that create some complexities in terms of.

Good morning. Thanks.

What I was looking at.

Full year Capex reduction by another $75 million the two biggest drivers of that.

The $25 million allocated to the productive capacity.

<unk> been pretty clear kind of highlighting.

The efficiency gains.

That drove that but the other amount.

How you drill wells, especially in the lateral section and so we were very thoughtful about where we want it to be we like the area that we've got.

With northeast App dropped about 25 million and I know theres. Some curtailments I'm just trying to get an understanding if that's sort of timing curtailment related or there are efficiency gains just I didn't see anything on the back on kind of what drove the meaningful northeast App tropical budget.

Josh Viets: We like the area that we've got, that it has much less structural complexity within it, which puts us in a position to simply execute at lower cost while delivering outsized production results.

Much less structural complexity within it which puts us in a position to simply.

Executing at lower cost, while delivering outsized production results.

Yeah.

Nick Dell'Osso: Thanks. My follow up question is on the Haynesville productivity improvements. In the view of seeing it improve yet into 2026, it sounds like some of that is your Gen 1 through potentially Gen 3 design. Could you give us a little bit of color on exactly what you're tweaking within that? Also, is there any facet of that expectation or productivity improvements related to where you're targeting within the Haynesville, or is it more based on these new generations of completion?

Yeah. So I mean, if you just think about kind of seasonality across the United States. The majority of the seasonal demand weakness will show up in the Appalachia region and so when we think about curtailments.

Thanks, and then my follow up question is on the Haynesville productivity improvements in the view of seeing it improve yet into 26 it sounds like.

That is your Gen. One through extensive gen. III design could you give us a little bit of color on exactly what you're tweaking within that and also is there any facet of that expectation or productivity improvements related to.

We will tend to prioritize curtailments in the northeast first and so thats really whats impacted the Q3 number to kind of project forward into the fourth quarter. We're obviously carrying forward curtailments into the fourth quarter with those being predominantly in the northeast So that's by and large what's driving that John.

Where you are targeting within the Haynesville or is it more based on these new generations of completions.

Josh Viets: First of all, both the Bossier and the Haynesville are very prospective within our acreage position in Louisiana. We continue to develop both, and especially in the southern portion in and around the NFC. Both zones are highly prolific. We continue to optimize exactly where we land the wells within those zones. What we find to be one of the biggest drivers is simply how we complete the wells. Exactly that recipe, obviously we're not going to get into that, but I think the biggest factor is we have a very low cost sand source that we're able to rely on going forward. That also allows us to control the deliverability of it in terms of ensuring that we have the right sand at the right time.

Okay. Thanks, and then on the.

Yes, I mean first of all both the Bossier and the Haynesville are very perspective.

Follow up question, you've obviously made significant progress on debt reduction this year.

Within our acreage position in Louisiana. So we continue to develop both in especially in the southern portion.

When I'm looking at next year relative to your capital returns framework.

Long.

On slide 14, how should we think about kind of further debt reduction relative to other returns such as buybacks I guess said differently in other words would you anticipate a similar amount.

In and around the NFC both zones are highly prolific and so yes, we continue to optimize exactly where we land the wells within those zones, but but really what we find to be one of the biggest drivers is just simply how we complete the wells and so exactly that recipe, obviously, we're not going to get into that but.

Allocated to debt reduction.

And next year and that sort of a capital return framework.

Yeah, Hey, John it's Nick.

Last quarter, we said, we were going to prioritize debt pay down for a period of time as we recognize that post merger our balance sheet is very strong, but we would like to have less debt for the long term. So we're going to continue to do that going into next year. We think we have a lot of momentum to to pay down some debt next year.

I think the biggest factor is we have a very low cost sand source that we're able to.

Rely on going forward that also allows us to control the deliverability of it in terms of ensuring that we have the right sand at the right time historically in the basin.

Josh Viets: Historically, in the base of, and especially as we've gotten more and more efficient with our completions, third parties, their ability to keep up with our needs has definitely been lagging. We can now control our own destiny. We have a lower supply sand source. We can increase our proppant loading and do so more economically than what others can do in the basin.

Especially as we've gotten more and more efficient with our completions.

And looking forward to delivering on that I would just note that this year we did.

Third parties their ability to keep up with our needs has definitely been lagging. So we can now control our own destiny, we have a lower supply supply sand source, we can increase our proppant loading and do so more economically than what others can do in the basin.

Retire $1 2 billion of debt and returned $850 million to shareholders. So we are willing and able to do both we have the financial flexibility to.

Nick Dell'Osso: Thank you.

Thank you.

Allocate capital towards shareholder returns in size.

Colby Arnold: Thank you. Our final question for today comes from the line of John Freeman from Raymond James, your question please.

Thank you and our final question for today comes from the line of John Freeman from Raymond James Your question. Please.

When we choose to do it in.

We'll be we'll be ready to do that when the right time hits, So I would say stay tuned.

John Freeman: Good morning. Thanks. When I was looking at the full year CapEx reduction by another $75 million, the two biggest drivers of that are the $25 million less allocated to the productive capacity build, which y'all have been pretty clear highlighting the efficiency gains in the Haynesville that drove that. The other amount was Northeast Appalachia that dropped about $25 million. I know there's some curtailments. I'm just trying to get an understanding if that's sort of timing curtailment related. Are there efficiency gains? I didn't see anything in the deck on what drove the meaningful Northeast Appalachia drop in the budget.

Good morning. Thanks.

We will be.

What I was looking at the full year Capex reduction by another $75 million. The two biggest drivers of that.

Giving more specific answers as we get into next year and see market conditions set up but.

The 25 million less allocated to the productive capacity.

We're totally flexible capable and willing on all fronts.

<unk> been pretty clear kind of highlighting.

Thanks, Nick appreciate it.

The efficiency gains in the home.

That drove that but the other amount was.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Nick <unk> for any further remarks.

With northeast App dropped about 25 million and I know there were some curtailments I'm just trying to get an understanding if that's sort of timing curtailment related or there are efficiency gains just I didn't see anything on the back on kind of what drove the meaningful northeast App tropical budget.

Yes.

Thank you guys for joining the call. This morning, we're obviously really pleased with our third quarter results. This puts a great end to the first 12 months of expand energy and we think is such a great setup for where we had next as an organization the momentum we have around capital efficiency as well.

Josh Viets: Yeah. If you just think about kind of seasonality across the United States, the majority of the seasonal demand weakness will show up in the Appalachian region. When we think about curtailments, we will tend to prioritize curtailments in the Northeast first. That's really what's impacted the Q3 number. If you kind of project forward into the fourth quarter, we're obviously carrying forward curtailments into the fourth quarter with those being predominantly in the Northeast. That's by and large what's driving that, John.

Okay.

Yeah. So I mean, if you just think about kind of seasonality across the United States. The majority of the seasonal demand weakness will show up in the Appalachia region and so when we think about curtailments.

So as building on our marketing business is very exciting to us and we think theres an opportunity to create a tremendous amount of value for shareholders going forward and look forward to speaking with you all at each step along the way. Thank you for your time.

We will tend to prioritize curtailments in the northeast first and so that's really what's impacted the Q3 number to kind of project forward into the fourth quarter. We're obviously carrying forward curtailments into the fourth quarter with those being predominantly in the northeast So that's by and large what's driving that John.

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

John Freeman: Okay, thanks. On the follow up question, you've obviously made significant progress on debt reduction this year. When I'm looking at next year relative to your capital returns framework that you all have on slide 14, how should we think about kind of further debt reduction relative to other returns such as buybacks? I guess that differently. In other words, would you anticipate a similar amount gets allocated to debt reduction next year in that sort of capital returns framework?

Okay. Thanks, and then on.

The follow up question, you've obviously made significant progress on debt reduction this year.

When I'm looking at next year relative to your capital returns framework.

On slide 14, how should we think about kind of further debt reduction relative to other returns such as buybacks I guess said differently in other words would you anticipate a similar amount.

Allocated to debt reduction.

Next year in that sort of a capital return framework.

Dan Turco: Yeah.

Nick Dell'Osso: Hey John, it's Nick. Last quarter we said we were going to prioritize debt pay down for a period of time as we recognize that post merger our balance sheet is very strong. We would like to have less debt for the long term. We're going to continue to do that going into next year. We think we have a lot of momentum to pay down some debt next year and looking forward to delivering on that. I would just note that this year we did both retire $1.2 billion of debt and returned $850 million to shareholders. We are willing and able to do both. We have the financial flexibility to allocate capital towards shareholder returns in size when we choose to do it. We'll be ready to do that when the right time hits. I would say stay tuned.

Yeah, Hey, John it's Nick So last quarter, we said, we were going to prioritize debt pay down for a period of time as we recognize that post merger our balance sheet is very strong, but we would like to have less debt for the long term. So we're going to continue to do that going into next year. We think we have a lot of momentum to to pay down.

Some of that next year.

And looking forward to delivering on that I would just note that this year we did.

Retire $1 2 billion of debt and returned $850 million to shareholders. So we are willing and able to do both we have the financial flexibility to.

Allocate capital towards shareholder returns in size.

When we choose to do it in.

We'll be we'll be ready to do that when the right time hits, So I would say stay tuned.

Nick Dell'Osso: We'll be giving more specific answers as we get into next year and see market conditions set up. We're totally flexible, capable and willing on all fronts.

We will be.

Giving more specific answers as we get into next year.

We see market conditions set up but.

We're totally flexible capable and willing on all fronts.

John Freeman: Thanks, Nick. Appreciate it.

Thanks, Nick appreciate it.

Colby Arnold: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Nick Dell'Osso for any further remarks.

Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Nick <unk> for any further remarks.

Nick Dell'Osso: Thank you guys for joining the call this morning. We're obviously really pleased with our third quarter results. This puts a great end to the first 12 months of Expand Energy Corporation and we think is such a great setup for where we head next as an organization. The momentum we have around capital efficiency as well as building on our marketing business is very exciting to us and we think there's an opportunity to create a tremendous amount of value for shareholders going forward and look forward to speaking with you all at each step along the way. Thank you for your time.

Thank you guys for joining the call. This morning, we're obviously really pleased with our third quarter results. This puts a great end to the first 12 months of expand energy and we think is such a great setup for where we had next as an organization the momentum we have around capital efficiency.

C as well as building on our marketing business is very exciting to us and we think theres an opportunity to create a tremendous amount of value for shareholders going forward and look forward to speaking with you all at each step along the way. Thank you for your time.

Colby Arnold: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Sam.

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

Okay.