Oklahoma City’s Expand Energy, considered the largest natural gas producer in the country, announced improved earnings in the second quarter and outperformance of expectations from its merger last fall with Southwestern Energy.
Its net income was $968 million or $4.02 per fully diluted share while net cash from operating activities jumped to $1.3 billion and adjusted net income was $265 million or $1.10 per share.
It compared with first quarter earnings results of $1 billion in net cash, a net loss of $249 million or $1.06 a share and adjusted net income of $487 million or $2.02 per share.
Formerly known as Chesapeake Energy, Expand Energy produced 7.20 Bcfe/d net, delivered the highest average drilled footage a day in all three business units and reduced full year 2025 drilling and completion capital expenditures guidance by $100 million to achieve $2.9 billion in total capital expenditures.
It also increased its 2025 net debt paydown to $1 billion and returned $585 million to shareholders in the form of quarterly base dividend, variable dividend and share repurchases in the first half of the year.
“Expand Energy was created to make a more durable and efficient business,” said Nick Dell’Osso, Expand Energy’s President and Chief Executive Officer.
“We are delivering more for less, outperforming every expectation set when we announced our merger, including an approximate 50% increase to run-rate synergies. Importantly, our outperformance is repeatable, achieving approximately 30% more free cash flow in 2025 and approximately 20% more in 2026 compared to our expectations at the beginning of the year. This significant improvement further demonstrates how our culture of continuous improvement creates value for our shareholders.”
Operations Update
Expand Energy operated an average of 11 rigs during the second quarter, drilling 49 wells and turning 59 wells in line, resulting in net production of approximately 7.20 Bcfe per day (92% natural gas). A detailed breakdown of second quarter production, capital expenditures and activity can be found in supplemental slides which have been posted at https://investors.expandenergy.com/events-presentations.
2025 Annual Synergy, Capital and Operating Outlook
Given the significant operational efficiency gains recognized through our integration efforts, Expand Energy is on track to capture approximately $500 million in annual synergies in 2025. The Company anticipates ultimately achieving $600 million in annual synergies by year end 2026.
Expand Energy now expects to spend $100 million less capital in 2025, running approximately 11 rigs and investing approximately $2.6 billion yielding an estimated daily production of approximately 7.1 Bcfe/d. The Company intends to build incremental productive capacity for an additional $275 million by exiting 2025 with approximately 12 rigs. Should market conditions warrant, this incremental capital investment positions the Company to efficiently grow production from a year-end 2025 exit rate of approximately 7.2 Bcfe/d to average approximately 7.5 Bcfe/d in 2026.
A detailed breakdown of 2025 annual synergy, capital, and operating outlook can be found in supplemental slides which have been posted at https://investors.expandenergy.com/events-presentations.
Shareholder Returns Update
Expand Energy is increasing its net debt paydown from $500 million to $1 billion to further strengthen its balance sheet and to create more balance sheet capacity at cycle lows. For the second quarter, the Company will return $448 million to shareholders in the form of a quarterly base dividend ($137 million), variable dividend ($211 million), and share repurchases ($100 million). The Company plans to pay its base and variable dividend on September 4, 2025 to shareholders of record at the close of business on August 14, 2025.