Expand says efficiency lets executives trim capex by $100 million

The leaders of Expand Energy Corp., Oklahoma City, have trimmed the 2025 capital spending forecast by $100 million after posting record drilling performance during the second quarter. The company, formed last October via the merger of Chesapeake Energy and Southwestern Energy, is continuing with plans to build about 300 million cu ft equivalent/day (MMcfed) of potential capacity for 2026.

Expand produced an average of just over 7.2 bcfed from its operations in the Haynesville basin as well southwest and northeast Appalachia, up from nearly 6.8 bcfed in the first three months of this year. President and chief executive officer Nick Dell’Osso and his team expect third-quarter production to also be around 7.2 bcfed, with Haynesville output growing about 2% and that from Appalachia ticking down.

That production will use 11 rigs, down from the 12 executives had planned 3 months ago. Expand teams are expected to turn in line the same number of wells for the year as before—they added 59 to the company’s count during the second quarter, down from 89 in the year's first quarter—but they’re doing so more efficiently: All three of the company’s regions drilled at least 20% more ft/day in the second quarter than early this year and set records.

That rising efficiency is translating into the $100 million capex cut, which includes plans to set up Expand’s growth in 2026. Three months ago, executives expected they’d spend $300 million and end 2025 with 15 rigs to set up an additional 300 MMcfed of production next year. Those figures are now $275 million and 12 rigs—and Dell’Osso said recent gyrations in the price of natural gas won’t lead to major changes.

“We’re just not bothered by the volatility that we’re seeing here this summer,” Dell’Osso said. “If you think about where we are in the broader scheme of the year of the macro, demand is still growing pretty attractively and forward price is at a level that is still well above our mid-cycle.”

Expand executives also have raised estimates for 2026 savings from the Chesapeake-Southwestern combination to $600 million from $500 million—which was itself $100 million larger than the target they set when announcing the deal (OGJ Online, Feb. 13, 2024).

Expand produced a net profit of $968 million in the 3 months that ended June 30, reversing a $227 million loss Chesapeake posted in the same period of last year. Total revenues jumped to nearly $3.7 billion from $505 million, helped by the average price of 1,000 cu ft of natural gas climbing to $3.44 during the quarter from $1.89 in the prior year.

Shares of Expand (Ticker: EXE) rose more than 4% midday to about $103.90 after executives’ earnings release and conference call on a generally down day for energy stocks. Over the past 6 months, they are now up slightly, which has grown the company’s market capitalization to about $25 billion.