Executive Summary

Q4 2024 delivered strong operational execution with net production of 6.41 Bcfe/d (91% gas), Adjusted EBITDAX of $964M, and Adjusted EPS of $0.55, despite GAAP net loss driven by non‑cash derivative marks and merger‑related items .
2025 outlook was enhanced: synergy capture raised to ~$400M (from ~$225M in prior outlook), full $500M now targeted by YE 2026 (pulled in from 2027), plan to produce ~7.1 Bcfe/d on ~$2.7B capex and invest incremental $300M to build ~300 MMcfe/d productive capacity for 2026; quarterly base dividend maintained at $0.575 and $500M debt reduction prioritized .
Strategic narrative centered on “productive capacity” to flex volumes with market conditions; management highlighted advantaged LNG corridor positioning (2.5 Bcf/d Gillis delivery by year‑end), improved Haynesville drilling performance (~9 fewer days and ~$1.5M lower cost per well vs legacy), and net debt projected to be < $4.5B by YE 2025 at current strip .
Stock reaction drivers: synergy acceleration, clear capital return framework (base dividend + variable/buybacks after $500M deleveraging), and LNG/power demand tailwinds, offset by derivative losses in GAAP and ongoing macro/storage sensitivity discussed on the call .

What Went Well and What Went Wrong

What Went Well

Accelerated synergy realization: management now expects ~$400M in 2025 and full $500M by YE 2026; CEO emphasized capital and operating efficiencies, including >20% improvement in Haynesville drilling performance (“cut nearly nine days and $1.5M in cost per well”) .
Marketing and LNG positioning: integrated portfolio fully optimized by Jan 1; expected 75% of marketed volumes to reach strategic markets in 2026, including 2.5 Bcf/d directly to the LNG corridor; “We have the assets, balance sheet and capital‑efficient operations to help meet this new demand” .
Returns framework and balance sheet: debuted $750M IG issuance at record spread (+132 bps to 10‑yr UST), base dividend maintained, $500M targeted debt reduction in 2025; “we expect to end 2025 with less than $4.5B in net debt” .

What Went Wrong

GAAP net loss of $399M in Q4, driven largely by unrealized derivative losses and merger‑related costs (Adjusted net income $131M vs GAAP loss) .
Free cash flow headwind in Q4 (FCF -$154M; Adjusted FCF $73M) as capex ramped and integration costs flowed; sequentially higher capex also reflected Haynesville/SW Appalachia activity .
Transportation and gathering costs elevated with scale and marketing volumes (G&P&T expense $556M in Q4), while derivative mark‑to‑market volatility remained a modeling complication (derivatives -$245M revenue impact in Q4) .

Financial Results

Core P&L Metrics (USD Millions; EPS $/share)

Periods ordered oldest → newest

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues and Other ($MM)	$1,948	$648	$2,001
Natural Gas, Oil & NGL Revenues ($MM)	$763	$407	$1,595
Marketing Revenues ($MM)	$513	$193	$649
Derivative Gains (Losses) ($MM)	$533	$46	$(245)
GAAP Net Income (Loss) ($MM)	$569	$(114)	$(399)
GAAP Diluted EPS ($/sh)	$4.02	$(0.85)	$(1.72)
Adjusted Net Income ($MM)	$185	$22	$131
Adjusted Diluted EPS ($/sh)	$1.31	$0.16	$0.55
Adjusted EBITDAX ($MM)	$635	$365	$964
Adjusted EBITDAX Margin %	32.6% (635/1,948)	56.3% (365/648)	48.2% (964/2,001)

Quarter-over-Quarter and Year-over-Year Changes

Metric	QoQ (Q4’24 vs Q3’24)	YoY (Q4’24 vs Q4’23)
Total Revenues and Other ($MM)	+$1,353 (2,001–648)	+$53 (2,001–1,948)
GAAP Diluted EPS ($/sh)	-$0.87 (−1.72–−0.85)	-$5.74 (−1.72–4.02)
Adjusted Diluted EPS ($/sh)	+$0.39 (0.55–0.16)	-$0.76 (0.55–1.31)
Adjusted EBITDAX ($MM)	+$599 (964–365)	+$329 (964–635)

Operational KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Net Production (MMcfe/d)	3,427	2,647	6,412
Gas Mix (%)	n/a	100% gas (legacy)	91% gas
Avg Realized Price ($/Mcfe, incl. derivatives)	3.01	2.51	3.11
Cash from Ops ($MM)	$470	$422	$382
Cash Capex ($MM)	$379	$298	$536
Free Cash Flow ($MM, Non‑GAAP)	$91	$124	$(154)
Adjusted Free Cash Flow ($MM, Non‑GAAP)	$(39)	$98	$73

Segment Production (Q4 2024)

Segment	Natural Gas (MMcf/d)	Oil (MBbl/d)	NGL (MBbl/d)	Total (MMcfe/d)	Realized Price
Haynesville	2,338	—	—	2,338	$2.57/Mcf
Northeast Appalachia	2,425	—	—	2,425	$2.34/Mcf
Southwest Appalachia	1,067	12	85	1,649	$3.42/Mcfe
Total	5,830	12	85	6,412	$2.70/Mcfe; realized $3.11/Mcfe incl. derivatives

Note: Q3 2024 reflected legacy production footprint (Marcellus 1,531 MMcf/d; Haynesville 1,116 MMcf/d) pre full merger integration .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Annual Synergy Capture	FY 2025	~$225M (achieve $500M by YE 2027)	~$400M (achieve $500M by YE 2026)	Raised; timeline pulled forward
Production	FY 2025	~7.0 Bcfe/d	~7.1 Bcfe/d	Raised
Capital Expenditures	FY 2025	~$2.7B	~$2.7B (plus $300M incremental 2H rigs)	Maintained base; added $300M productive capacity build
Productive Capacity Build	FY 2025 (2H) → 2026 delivery	Not specified	$300M incremental to add ~300 MMcfe/d capacity into 2026	New
Exit Rate	YE 2025	Not specified	~7.2 Bcfe/d exit	New
Base Dividend	2025	$0.575/quarter	$0.575/quarter (paid Mar 27, 2025)	Maintained
Net Debt Reduction	FY 2025	Enhanced framework announced; specifics later	$500M targeted reduction; expect < $4.5B net debt YE 2025 at strip	Formalized and quantified

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
Synergies & Integration	Q3 2024: target lifted to $500M; ~$225M in 2025	~$400M in 2025; full $500M by 2026; Haynesville drilling >20% improvement	Acceleration; operational upside
LNG & Marketing Strategy	Q3 2024: plan, IG rating, framework	2.5 Bcf/d to Gillis by YE; 75% volumes to strategic markets by 2026; building optimization capabilities; potential domestic power/industrial/LNG deals	Strengthening positioning and capabilities
Productive Capacity Philosophy	Q3 2024: defer TILs, build DUC inventory	Target ~7.5 Bcf/d in 2026 contingent on mid‑cycle $3.5–$4/MMBtu; optionality to curtail or hold back if needed	Clear framework; counter‑cyclical stance
Balance Sheet & Capital Returns	Q3 2024: IG upgrades; $1B buyback authorization	Record‑spread IG issuance; base dividend; 75% of excess FCF to buybacks/variable dividends after $500M deleveraging	Execution; consistent
Hedging Strategy	Prior: hedge‑to‑wedge concept	50–60% first‑year hedged; collars/swaps mix; opportunistically lock higher prices as strip strengthened	Disciplined; adaptive
Appalachia Capacity	Prior: rig cadence and takeaway stability	Appalachia capital supports existing capacity; growth focus in Haynesville; monitoring new infrastructure and in‑basin demand	Stable; opportunistic
Macro/Storage & Demand	Prior: general outlook	Multi‑year view anchored to mid‑cycle pricing; storage draws accelerated timing; LNG utilization and power demand key variables	Constructive but cautious

(“Q-2” unavailable via our document retrieval; trends reflect Q3 2024 and Q4 2024 documents .)

Management Commentary

“We now expect to achieve approximately $400,000,000 of our annual synergy target in 2025 and to capture the entire $500,000,000 target by year end 2026.”
“We expect to produce approximately 7.1 Bcf per day for a capital investment of approximately $2,700,000,000… invest an incremental $300,000,000 to build approximately 300,000,000 cubic feet per day of additional productive capacity” .
“At today’s prices, we expect to end 2025 with less than $4,500,000,000 in net debt.”
“Once the NG3 pipe is online, approximately 75% of our marketed volumes are expected to reach strategic markets, including 2.5 Bcf per day directly to the growing LNG corridor.”
“In the fourth quarter alone, we cut nearly nine days and $1,500,000 in cost per well from Southwestern’s legacy drilling performance.”

Q&A Highlights

Productive capacity and mid‑cycle optimization: Targeting ~7.5 Bcf/d in 2026 at $3.5–$4 Henry Hub; will flex capital and turn‑in‑line cadence based on market conditions; optionality to delay TILs or curtail if winter/macro disappoints .
LNG and marketing: Building optimization processes and risk framework; expect meaningful netback uplift from domestic optimization and potential longer‑term power/industrial/LNG agreements; 2.5 Bcf/d capacity to Gillis by YE .
Activity cadence and wells: Brought ~40 wells online in Q4 (≈25 deferred TILs); plan ~90 wells in Q1; exit March ~7.0 Bcf/d; deferred TILs extinguished by 1H 2025; DUC activation ratable with flexibility .
Capex and infrastructure: No material step‑change needed to support moving from 7.5 to 8+ Bcf/d; existing gathering/transport sufficient; rigs added cadence in 2H across Haynesville and Appalachia .
Hedging: 50–60% of near‑term year hedged; collars earlier, willing to use swaps as prices rise; increase hedge levels when prices above marginal breakevens .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS/Revenue/EBITDA was unavailable due to data access limits at time of request; therefore, estimate comparisons are not included. Values would be retrieved from S&P Global when accessible.
Implication: Sell‑side models should reassess for (a) higher 2025 synergy capture (~$400M vs ~$225M prior), (b) production trajectory to ~7.1 Bcfe/d in 2025 with exit ~7.2, (c) incremental $300M productive capacity investment, and (d) stronger LNG/power demand linkage .

Key Takeaways for Investors

Near‑term: The synergy acceleration and clear productive‑capacity plan are positive catalysts; watch LNG corridor ramp (LEAP/NG3) and Q1/Q2 well TIL cadence for production trajectory toward ~7.1 Bcfe/d .
Medium‑term: Optionality to deliver ~7.5 Bcf/d in 2026 at mid‑cycle prices while maintaining balance‑sheet discipline (<$4.5B net debt) and returns framework (base dividend + variable/buybacks) .
Profitability quality: Adjusted EBITDAX expanded to $964M; derivative volatility and integration costs impacted GAAP—focus on non‑GAAP reconciliations and underlying cash metrics .
Operational execution: Haynesville efficiency gains (>20% improvement) and longer laterals/hybrid designs in Appalachia support lower breakevens and normalized returns across zones .
Marketing uplift: Expect incremental netback improvements from domestic optimization and potential long‑term commercial arrangements (LNG/power/industrial); execution risk mitigated by new leadership and process build‑out .
Macro sensitivity: Strategy anchored to counter‑cyclical discipline; if LNG utilization and power growth exceed expectations, upside to productive capacity could be underwritten at >$4 pricing; if not, company will flex capital/TILs .
Monitoring items: Storage trajectory, LNG utilization, rig/DUC trends in the gas complex, Appalachia takeaway developments, hedge posture (swaps vs collars) .

Notes on non‑GAAP

Adjusted EPS, Adjusted Net Income, Adjusted EBITDAX, FCF and Adjusted FCF are non‑GAAP measures; reconciliations are provided in the press release exhibits . Merger‑related costs and derivative MTM are key adjustments in Q4.

EXPAND ENERGY Corp (EXE)·Q4 2024 Earnings Summary