Expand Energy Corporation · NASDAQ:EXE
Expand Energy — Q2 2023 Earnings Presentation
23 slides from Expand Energy's earnings presentation, Aug 1, 2023
Slide 1: 2Q 2023 Earnings
2023 2Q EARNINGS AUGUST 1, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements include our current expectations or forecasts of
Slide 3: 2Q 2023 Highlights
2Q 2023 Highlights (1) Adjusted EBITDAX Capital Cash balance Production $524mm $505mm ~$900mm ~3.7 bcfe/d lower end of quarter guide as of 6/30/23 high end of quarter guide Increased base dividend Drilled fastest well in ~4.5% to Cash returned to shareholders CHK Marcellus history Stock buybacks ~$1
Slide 4: Our Strategic Pillars Remain Unchanged
Our Strategic Pillars Remain Unchanged Superior Capital Returns Most efficient operator, returning more cash to shareholders than domestic gas peers Deep, Attractive Inventory Premium rock, returns, runway with best-in-class execution Premier Balance Sheet Investment grade-quality balance sheet prov
Slide 5: Advantaged Combination of Gas Scale and Quality
Advantaged Combination of Gas Scale and Quality Marcellus Reduces company volatility Superior Portfolio Characteristics Underpins return profile Low capital intensity Quality: Premium rock that delivers lowest cost of supply Longevity: Deep inventory supporting returns for decades >15 years Executio
Slide 6: Actively Managing Production Through Cycles
Actively Managing Production Through Cycles Purposefully Managing Marcellus Quarterly Production Haynesville Quarterly Production Continues to be Strong (mmcf/d) (mmcf/d) 1,590 Guidance Mid-point Proactively deferring volumes 2Q – 4Q 2023 1,549 1,974 Actuals 1,830 1,520 1,520 1,980 1,830 1,475 1,440
Slide 7: Service Cost Deflation Expected in 2024
Service Cost Deflation Expected in 2024 Illustrative AFE Components and Cost Trends (1Q23 compared to 1Q24 expectations) ▪ Service cost moderating as industry PHASE SUB-CATEGORY % OF AFE TREND activity slows OCTG 10 – 15% ▪ Pricing for OCTG, pressure pumping, sand Rigs 8 – 12% Drilling and rigs expe
Slide 8: Enhancing Basin-Leading Operational Performance
Enhancing Basin-Leading Operational Performance ▪ Drilling results benefiting from rig fleet high grading, improved drilling practices and equipment reliability ▪ Data analytics and machine learning modules enable rapid optimization of drilling performance ▪ Achieved three of the five fastest Marcel
Slide 9: Marcellus Development Strategies Unlock Superior Returns
Marcellus Development Strategies Unlock Superior Returns ▪ Extended laterals in Upper yields similar per well >$3mm incremental NPV(1) per well production to Lower and decreased cost per foot from Hybrid design Future Hybrid Existing Lower ▪ Co-development of Lower and Upper drives Future Upper oper
Slide 10: Increasing Haynesville Value Through Acreage Optimization
Increasing Haynesville Value Through Acreage Optimization ▪ Maximizing return on investment through acreage trades and growth leasing ▪ Executed trades and obtained leases in key sections turning 5K into 10K opportunities ▪ Increased WI by ~4% on near-term projects through leasing and third-party de
Slide 11: Being LNG Ready Will Create Meaningful Value and Enhance Returns
Being LNG Ready Will Create Meaningful Value and Enhance Returns ▪ What CHK has done to Growing Exports Will be Significant to U.S. Gas Demand (U.S. LNG capacity, bcf/d)(1) Be LNG Ready: Online LNG • Gunvor offtake HOA for up to Under Construction LNG Lake Charles(2) 2 mtpa with JKM linked price FER
Slide 12: Meeting Our Commitment to Shareholder Returns
Meeting Our Commitment to Shareholder Returns ▪ >14mm shares retired and Clear Capital Return Track Record ~$725mm remaining under ($mm) current authorization as of $830 7/31/23 >$2.9B returned $813 • ~$20mm of buybacks completed to shareholders since 2021 in July 2023 $406 Buybacks $515 ▪ Annual ba
Slide 13: Continuing Our Path to Investment Grade
Continuing Our Path to Investment Grade Debt Maturity Profile Cash held on behalf of ($ in millions, % interest rate) third-parties related to ~6.75%(2) Cash ▪ De-risked balance sheet divested asset Current Balances with ~10% net debt(1)-to-cap(1) transition services – $2.8B RBL Capacity will be unw
Slide 14: Continuing to Support Returns with Through-Cycle Hedging
Continuing to Support Returns with Through-Cycle Hedging Ceiling ($/mmbtu) $5.02 $5.06 $4.45 $4.59 $4.64 $4.70 $4.74 $4.30 Floor ($/mmbtu) $3.45 $3.55 $3.60 $3.71 $3.72 $3.71 $3.55 $3.38 ~65% of Production Hedged 0 12 Added Since 2 Q1 Earnings (bcf) 13 19 22 Last Public 20 188 200 Disclosure (bcf)(1
Slide 15: Maintaining Our Drive for Sustainability Leadership
Maintaining Our Drive for Sustainability Leadership Sustainability Fundamentals Deliver energy to Minimize emissions Invest in low-carbon Transparent disclosures sustain economic from operations solutions with adjacent with measurable progress progress and welfare technologies ▪ Achieved recertifica
Slide 16: Appendix
Appendix 2Q 2023 EARNINGS CHESAPEAKE ENERGY
Slide 17: Management's Guidance as of August 1, 2023
Management’s Guidance as of August 1, 2023(1) Bold/Italicized = updated guidance range Production 2Q23A 3Q23E 2023E Operating Costs (per mcfe of Projected Production) 2Q23A 2023E Total Natural Gas Production (mmcf/d) 3,505 3,300 – 3,400 3,400 – 3,500 Production Expense $0.27 $0.25 – $0.35 Marcellus
Slide 18: 2Q 2023 Business Unit Results
2Q 2023 Business Unit Results Eagle Ford MARCELLUS HAYNESVILLE Black Oil(1) Rich Gas Production (mmcfe/d, mboe/d) 1,830 1,590 10 29 Production Expense ($/mcf) / ($/boe) $0.12 $0.36 $9.47 $3.29 Differential to NYMEX ($/mcf) / ($/bbl) ($0.35) ($0.35) +$2.70 ($2.12) GP&T ($/mcf) / ($/boe) $0.65 $0.45 $
Slide 19: Hedging Program Reduces Risk, Protects Returns
Hedging Program Reduces Risk, Protects Returns NATURAL GAS ESTIMATED NYMEX GAS SETTLEMENT ($mm)(1) SWAPS COLLARS THREE-WAY COLLARS $2.00 $2.50 $3.50 Date Volume Price Volume Bought Put Sold Call Volume Sold Put Bought Put Sold Call Date NYMEX NYMEX NYMEX bcf $/mcf bcf $/mcf $/mcf bcf $/mcf $/mcf $/m
Slide 20: Hedged Financial Basis
Hedged Financial Basis ▪ ~30% of Marcellus and ~55% of Haynesville basis financially (as of 7/26/23) MARCELLUS HAYNESVILLE TRANSPORT SPREAD(1) hedged for 2H23 TETCO M3 TGP Z4 300L LEIDY CGT MAINLINE TGT Z1 TETCO M3 Volume Avg. Price Volume Avg. Price Volume Avg. Price Volume Avg. Price Volume Avg. P
Slide 21: Marcellus and Haynesville Sale Points
Marcellus and Haynesville Sale Points Marcellus Sales Points Haynesville Sales Points DEDUCT FROM NYMEX ($)(1) MARCELLUS TOTAL PRODUCTION DEDUCT FROM NYMEX ($)(1) HAYNESVILLE TOTAL PRODUCTION HISTORICAL CURRENT In Basin 50% Out of Basin 50% HISTORICAL CURRENT CGML 60% TGP Z4 ($1.08) TGP Z4 ($0.99) T
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures As a supplement to the financial results prepared in accordance with U.S. GAAP, Chesapeake’s quarterly earnings presentations contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adju
Slide 23: Reconciliation of Net Income to Adjusted EBITDAX
Reconciliation of Net Income to Adjusted EBITDAX Reconciliation of Net Cash Provided by Operating (Unaudited) Activities to Adjusted EBITDAX (Unaudited) Three Months Three Months Three Months Three Months Ended June 30, 2023 Ended June 30, 2022 Ended June 30, 2023 Ended June 30, 2022 ($ in millions)