Expand Energy Corporation (EXE) Q3 2026 Earnings Report, Transcript and Summary

Thank you for standing by, and welcome to Expand Energy's Third Quarter 26 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 1 on your telephone. To remove yourself from the queue, you may press 1 again. I would now like to hand the call over to Brittany Raiford. Vice president, treasurer, and investor relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our call. So last quarter, I discussed my optimism about the future of Expand. Today, that optimism continues to grow and is stronger than ever. You can feel momentum building across our organization. Over the past 9 months, we have transformed Expand from an upstream gas producer into an integrated gas company that is a leading producer and marketer of gas from coast to coast across North America. While our upstream business remains our foundation, this year, we are focused on strengthening our commercial capabilities by adding key leaders in both the c suite and across the organization. We have expanded our corporate and business development efforts to consider opportunities across the whole gas value chain to include upstream, marketing, and LNG. That decision proved to be a good 1 as last quarter, the team delivered Twin Eagle acquisition, bringing exceptional talent and valuable customer relationships to expand. With the transaction now closed, the Twin Eagle and Expand teams are working side by side in 1 office to deliver the synergies we promised. We see significant opportunities ahead and look forward to sharing our progress and successes over the coming quarters. Today, we are demonstrating exactly why an integrated gas company matters. Low commodity prices are pressuring free cash flow margins for many of our peers. However, at Expand, our marketing business is already making a difference. The combined Expand and Twin Eagle Marketing profits are expected to add 12¢/Mcfe to our fourth quarter margin. This is particularly impressive because the team is expecting to generate solid profits in an anticipated low-price, low-volatility period. As prices rise and volatility returns, we are well positioned to capture even more value. Through all this change, our team never took its eye off creating long term shareholder value. We continue to deliver strong operational results producing approximately 7.5 Bcfe per day this quarter and extended our drilling inventory through organic leasing, which remains 1 of the most accretive ways to add high quality locations. We have allocated more to share repurchases this year than any of our peers, including $35 million in the third quarter. Our hedging program, which we see as a critical risk management tool, improved our realized prices by $0.46 per Mcfe. And importantly, our balance sheet remains strong, with net debt of $4.7 billion and leverage of 0.8x. Finally, we said we would name a permanent CEO within 9 months, and we kept our promise. I am excited to be joined today by our new CEO, Dan Brown. The board was deliberate in its choice. Focused on finding the right leader to continue our momentum. First and foremost, we wanted a leader with a proven record of building a team oriented culture that focuses on creating long term shareholder value. Given our $3 billion annual capital plan, we wanted an upstream expert who has experience managing a large portfolio of assets and we wanted a former public CEO who understands our shareholders' perspective and is a great allocator of capital and can consistently deliver. We found all that in Dan, and we believe our patience was rewarded. We do not consider our mission accomplished but we have built the foundation. We now have a premier upstream business a coast to coast marketing platform, a strong balance sheet, and a team that plays to win. We have tacked opportunities to improve our business with urgency while maintaining our disciplined approach to value creation. And above all else, we keep our promises. I could not be more impressed with this team nor more optimistic about Expand's future. I am excited to watch Dan and the team build on this momentum. With that, I am pleased to turn the call over to Dan for a few brief remarks what is the start of his third day leading our company.

Thank you, Mike, and thank you as well for the confidence you and the board have placed in me to lead this organization. I would also like to take a moment to thank the Cord Energy team. I am proud of what we built and accomplished there together. I have full expectation that Cord will continue delivering for its stakeholders. As I turn my full attention to expand, I will say that I was drawn to this opportunity because I believe Expand has built something that is unique. And that is very well suited to deliver value for its shareholders in a differentiated fashion. First, we have meaningful scale. Which is tremendously important in any commodity business and particularly 1 that is as dynamic as natural gas. Second, we have inventory rich assets, which are diversified and adjacent to key demand centers. Third, we have resiliency. With an investment grade balance sheet, low breakevens, operational flexibility, and a disciplined hedging strategy. And now with Twin Eagle, we have a direct line to customers which should allow Expand to capture incremental margin along the value chain. And all of this set against the precipice of a structural increase in natural gas demand with rising needs for LNG, data centers, industrial projects, and broad scale electrification. The foundation is set Now, it is time to execute and leverage the platform that has been created to deliver differentiated value for our shareholders. And while I have only been here for a few short days, it is clear to me that this team shares the commitment to excellence in all aspects of our business which is critical to sustainable value creation in this industry. I am honored to be a member of this talented team and I am excited to be getting started. And as I do, I look forward to connecting with all of you. And now, operator, we are ready for questions.

And before we go into questions, I would like to turn the call over to Brittany Raiford, Vice President, Treasurer and Investor Relations, with forward-looking statements.

Madam?

Good morning, everyone, and thanks for joining our call this morning to discuss Expand Energy's 26 Third Quarter Financial and Operating Results. Hopefully, you have had a chance to review our press release and 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, forecast, 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 the factors identified and discussed in our press release yesterday and other SEC filings. Please recognize that except as required by 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 and 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 today on the call are Mike Wichterich and Dan Brown, from whom you have already heard prepared remarks, as well as Joshua J. Viets and Marcel Teunissen. Operator, with that, you can please turn the line over for questions.

Thank you. As a reminder, to ask a question, you will need to press 1 on your telephone. To remove yourself from the queue, you may press 1 again. We ask that you please limit yourself to 1 question and 1 follow-up to allow everyone the opportunity to participate. Please standby while we compile the Q and A roster. Our first question comes from the line of Neil Mehta of Goldman Sachs and Company. Your line is open, Neil.

Dan, congratulations on the role. And Mike, congratulations on completing the process. Dan, just maybe you can provide some perspective of what attracted you to the opportunity. What of your past experiences whether at Anadarko or Cord Energy, do you think is most transferable over to the Expand opportunity set? And how are you approaching the first 100 days on the job?

Well, thanks, Neil. it is. I am super excited to be here. You know, I would say as I as I as I indicated in my prepared remarks, I really see that Expand has built an amazing platform over here against the backdrop of something that could be really special. So I think it is set up with the right assets and the right places to just benefit from this structural increase in demand that we see coming. That was something that I think is very, very exciting. I am very to be a part of it. So really, that is why I am here. With respect to my background and the skills I have got, I would say, you know, over many years, I gained skills in capital allocation, allocating capital against different basins, allocating capital against projects with very different cash flow streams and risk profiles. And so that is something that I am comfortable with. And over at Cord, I would say we focused a lot on delivering value every day for our shareholders. Clearly, I learned a lot of skills around leadership writ large and leading larger public organizations. All of that, I think, combines well for the place that Expand is at right now and the opportunities we see in front of us. I just could not be more excited to be here, and I am very, very eager to dig in and work with the team to deliver on what we see as amazing potential within this organization.

Congratulations, Dan. And then the follow-up, this 1 might be for Marcel. Just on the commercial mandate that the team has set out here, whether it is the 20¢/Mcf, or trying to get more aggressive around marketing and commercial deals. Where do you think you are in the journey? And what areas or customers are you most focused on right now? Is it LNG? Is it data centers? Is it industrial customers like steel? Just help us get into your thought process around this.

Yeah. Thanks, Neil, for the question. So we closed the Twin Eagle acquisition September 16th. So we had 2 weeks of that under our belt by the end of the quarter. Of course, we are a couple of weeks further down and very much focused on integrating the plumbing of that business with ours. As Mike already mentioned, the team from Twin Eagle has moved into our offices, which is a great start. The organizations have been aligned, and we are doing some of the work in the back office, as you can imagine. The early opportunities there are really kind of pretty evident, from customer feedback whether they are on our side or on the original, the Twin Eagle side. We see lots of opportunities, and that kind of supports the thesis that we have had and synergies and the integration value. We have guided for Q4 to $80 million in a low-volatility environment for our combined marketing and commercial business, including Twin Eagle. That translates to about 12¢/Mcf. What we have also laid out is with the synergies, you know, we have a good line of sight to get the total number for marketing commercial up to $500 million by 2028. That translates to about $0.20/Mcf And as we continue to kind of look at the LNG opportunity, we are very active in that As we said before, we will be thoughtful about making sure that we get the right opportunities first in liquefaction, but also how we structure our sales portfolio. You know, that will come a little bit after 2028. And that ultimately gets us to $750 million of additional EBITDA for our marketing and commercial business, and that translates to about 30¢/Mcf on our current production. So we feel good about the progress we have made. The Twin Eagle integration is going well. We will provide more details once we have a real quarter under our belt after Q4. Thanks, Marcel.

And on that question about the logical end customers, LNG, data centers, or industrial? Is there 1 that you are leaning into?

Yeah. No. All of the above. Of course, LNG, and we have laid it out That is kind of really where the demand step up is coming from. And we are already supplying a lot of LNG, particularly out of our Haynesville assets, of course, today. That is going to continue to grow as we get to the back end of 2027 into 2028 and up to the 2030s. that is kind of providing that structural demand. Data centers, numerous conversations with data centers, and they are not just you know, in Appalachia. They are throughout the country. We see them in the Midwest. We see them in Texas. We see them in Louisiana, and we have conversations with all of those as we go. And there is this piece around where we talked about industrial demand, which is ongoing. The Twin Eagle team has given us great access to it. They already have a pretty big C and I book where they have those relationships. And it is really a characteristic of a premium market. Right? They pay some of these commercial and industrial customers. They just pay more because they often not on the beaten path. Off the beaten path. They are not on main pipeline. And to them, is just 1 factor in their overall production cost. it is a relationship business, and that is what we have acquired with Twin Eagle. They are good at it. Marcel.

Thank you.

Our next question comes from the line of Doug Leggate of Wolfe Research. Your line is open, Doug.

Thank you. Good morning, everyone. Dan, it is great to get you back. So congratulations. On joining Expand. I am going to answer this question as delicately as I can. And it is probably to Mike. But Mike, you have talked about you have emphasized the need to be in the flow for trading, for AI, for LNG, for all the things that can be more of a commercial endeavor How did-- why is Dan the right fit to lead that? And then whoever wants to offer their perspective, I would appreciate that. My follow-up is related, if I may. And it really relates to the Twin Eagle organization and the contribution to Neil's question. To the breakeven. Where is it now? Where do you think it can get to with Twin Eagle as part of the portfolio? I will leave it there. Thank you.

Sure. This is Mike, and I will start. So, why Dan? I think you have to think about the journey at Expand. We started in February. Looking to expand our commercial capabilities. We always said from the very beginning we were thinking about it in a team perspective and not an individual perspective. So we went at it. We ended up adding Marcel, of course, integrated gas experience with Shell. Then we ended up with the Twin Eagle team who has tremendous commercial capabilities. So once you have the commercial side set and the organization built to get deal flow, then it is starting to think about our base business. Our base business is a $3 billion capital business. We wanted an expert to. Who understood that business. Dan filled that role. We wanted someone who is a team builder. Dan had already built teams successfully and has a great following. And then we wanted the CEO to continue our momentum, and the person who can do that is a person who is already a CEO. Dan is not learning the job of CEO. he is learning the job executing and creating shareholder value. So when you put those together, it seemed like a great fit for us, and we are super pleased. Marcel, you want to take the second? Yeah.

Let me follow up on your question on breakeven.

So including dividends, right, our cash breakeven is about $280 million or so per Mcf. The $0.20 up to $0.30 as we kind of develop our marketing and commercial business will bring that number down. I think maybe the other way to also talk about the resiliency of that marketing and commercial cash flow. So if you look back over the last 4 quarters, our free cash flow, adjusted free cash flow per Mcf was about $1 So think of that $0.20 to $0.30 as an addition to that, ratable addition to that and that makes that cash flow that we generate as a business a lot more resilient. So, 1, it is reducing the breakeven, and the other is it is making our free cash flow and our delivery just more resilient as well. So where. Sorry, Marcel. So where do you see the breakeven when you have fully integrated Twin Eagle in terms of the synergies? Yeah. So we go to $2.50 to $2.60. So the $2.50 is out when we deliver the $750 million run rate, and then and then the intermediate stop in 2028 will be around $2.60 and that includes dividend.

Thank you so much, guys. Appreciate you taking my questions. Thank you.

Our next question comes from the line of Arun Jayaram of JPMorgan Securities. Your line is open, Arun.

Yeah. Good morning, Dan. Congratulations on your new role. I wanted to. Maybe with my first question, is follow-up on expand strategy. Kind of managing your upstream volumes and capital allocation in an environment where 2027 could have some headwinds from Super El Nino. you know, some of the Permian supply trends. As well as the fact that some of the LNG start-ups are a little bit more levered to the back end of the year. Versus what looks to be a much more robust demand picture between 2028 and, 2030?

Yeah. Good morning, Arun This is Joshua, Yeah. We would definitely, you know, agree with the sentiment around the supply demand fundamentals in the market. Is pretty well supplied right now despite seeing record levels of demand. LNG flows are at all time highs. Power burn through the summer was at record levels despite record levels of renewable generation. So, you know, demand is showing up. it is just that, you know, there is additional supply that came on to the market late year. And then of course you had new Permian egress coming up through the summer and that is expected to continue to grow. And so that obviously combined with the outlook on winter is suppressing the 2027 curve. And so we have definitely been mindful of that. In fact, as we have come into the fourth quarter, we have ended up reducing some of our activity. That activity reduction moving from around 12 rigs down to 10 is in direct acknowledgment that the market is weakening. In addition to that, we have proven in the past to be highly flexible with how we manage our production volumes. that is shown up in the third quarter. it is showing up again here in the fourth quarter with how we manage curtailments. We pushed out about 9 turn-in-lines out of Q3. We are waiting on those still to think about the optimal time to bring them online. And as we get into 2027, we will also maintain that same level of flexibility through the year. there is around 13 Bcf a day of new incremental demand that will show up by year end 2028. And so the demand is coming, and there is gonna need to be a supply push in order to match that, and that should lead to higher prices. And so we will continue to be flexible. We really pride ourselves on better aligning production with price. And we are going to be well positioned to take advantage of that opportunity again.

Yep. And my follow-up is just starting to think about 2027 Your updated guidance outlines, call it, a baseline for capital in calendar 2026 at $3 billion or $750 million per quarter I was wondering if you could comment on some of the inflationary pressures you are seeing in the Haynesville, obviously, where you compete maybe for OFS service capacity relative to the Permian. The Appalachia Basin? And do you have any maybe soft commentary that you could provide on 2027 as we start to dial in some of these inflationary pressures such as diesel, and OCTG.

Yeah. Sure. I mean, you know, clearly, for 2026, the majority of inflation has been centered around diesel for us. We run a pretty large program. We have averaged around 12 rigs for the year, running 5 to 6 frac crews. You know, a lot of that activity, of course, gets centered in the Haynesville. You know, just as a, you know, point of reference, you know, we end up burning about 25 million gallons of diesel each year. So that definitely has added to some of the capital pressures this year. As we think about 2027, we do start to see a little bit of shift in where we see inflationary pressures We will actually see about a 50% reduction in our diesel usage heading into 2027 as we have more e-fleets coming into the program. But the inflation does start to move a little bit. Haynesville recounts are up about 35% year over year. With the movement in oil prices, see U. S. Oil rig counts up around 10% to 12%. And so we do see with that activity some tightening in the pressure pumping market. As well as OCTG. And so we think those are probably 2 of the factors that we are paying the most attention to. And based upon some of our early outlooks for 2027, we could anticipate kind of a low to mid single digit inflationary factor from heading from 2020 into 2027. that is super helpful.

Thanks.

Thank you. Our next question comes from the line of Matthew Portillo of TPH Research. Your line is open, Matthew.

Good morning. I just wanted to kick it off on the marketing side of the portfolio. Saw an interesting project announcement from KMI. Where it will be taking Northeast and Haynesville gas into the Southeast. At the same time that we are seeing a ramp in LNG demand and potentially upside to LNG forecast on the Gulf Coast over the next few years. I was just curious if you might be able to comment on how the market has continued to evolve over the past year as it relates to long term gas supply agreements on the Gulf Coast?

Yeah. Hey, Matthew. I mean, I think, you know, what you are starting to see is the market is responding to the large LNG pool that is occurring in The US Gulf Coast. So people, as especially getting to the Southeastern markets, are starting to think about supply security. And I think that is what you are seeing with the most recent announcement from Kinder to move gas into the Georgia and Florida markets. And so this is just, I think, a good sign of the strength and demand signals that we are seeing. And I think our presence in The US Gulf Coast really positions us to take advantage of the demand pull that we see coming in front of us.

Perfect. And then for my follow-up question, just wanted to get your latest thoughts on the Western Haynesville as we look at some of the state data. It appears that the industry is trending to around a 2 Bcf per 1 thousand lateral foot EUR for some of the more recent vintages of wells? But I am curious how you all are seeing early time productivity trends in the basin how you are thinking about breakevens for the asset, and then maybe any thoughts on your capital program as you head into 2027? And the long term resource potential here, obviously, you are in at very low entry price. So just wanted to wrap all those things together for the Western Haynesville.

Yeah. Matthew, thanks for the question. You know, so if I just kind of recap what we have done this year, we have 1 horizontal production well online. We drilled a second appraisal well about 50 miles to the north You know, what we have is a resource dense you know, reservoir. It has a lot of the characteristics you would look for in a shale reservoir. In terms of it being significantly over pressured at a really thick interval but it is deep. And when it is deep it means it is going to be more complex to develop. So I still think there is a lot to be learned I think we have proven through the years with our experience in the Haynesville, the ability to go unlock value from these highly complex reservoirs. You know, it is a high cost reservoir today. It does not compete within our portfolio in the near term, just given the strength of our inventory in Louisiana and really across the entire portfolio for that matter. You know, in terms of, you know, how you might kind of peg a breakeven I think we think about it as this place is going to need >$4 gas right now in order to compete. And so, you know, we are happy to be very methodical about how we appraise it. We like the call option that it creates for us. Especially in light of the growing demand that we see across The US Gulf Coast. East Texas, whether that is LNG, its data centers, industrial demand, I think there is going to be a call on gas for it. And so we will be methodical. We expect you know, to drill probably 2 wells in 2027 there. to appraise it and be smart with how we allocate out. You know, the fact that we have the depth inventory that we do, you know, really forces us to be flexible in how we allocate capital in the business over the next couple of years.

Thank you.

Our next question comes from the line of Joshua Silverstein of UBS. Your line is open, Joshua.

Yeah. Thanks. Good morning, guys, and welcome on board, Dan. Marcel, you had mentioned you were talking to customers kind of across the value chain. I was curious how those conversations may differ in the Gulf Coast versus Appalachia and how, you know, with you guys having access to both basins, how those conversations may be evolving. Is it across them, or are they separate? Was curious what your early discussions have been Thanks.

Yeah. Joshua, this is Joshua. The great thing about the Twin Eagle platform is, you know, we have access to transportation supply customers across the entire North America. That really is a differentiator. And so, you know, it is all about creating an advantage position and accessing premium markets. And so what I would say is we are really following where the demand is as opposed to, you know, focused on 1 basin or another. Twin Eagle has built a great origination team They have long standing relationships with over 1 thousand customers. And so we are continuing to leverage those relationships. You know, we have definitely seen a dynamic shift how those conversations are going. I think existing customers you know, it is really about you know, longer dated contracts with more volumes. I think that is what expand has brought. it is about, you know, credit and credibility. You know, as they are engaging these newer conversations. And then in addition, we are having you know, new customers show up. And these are, you know, larger name customers that you know, see the strength of our combined platform that we built. And so just to, you know, respond to your question, you know, we are. This is about, you know, accessing new supply and demand across all of North America as opposed to being focused on 1 particular basin.

Got it. Thanks for that. And then we are just curious on capital allocation for fourth quarter and into next year. Post the 20 Eagle acquisition, obviously, debt went up. And it seems like you want to go and start working that down. But the stock is also, you know, has been weak this year and closer towards 52-week low. How do you balance buybacks, shareholder returns and debt reduction into this year?

Yeah. Thanks, Joshua, So our capital, you know, allocation priorities are number 1, our D&C capital; number 2, our dividend number 3, our balance sheet; and number 4, what we have left goes to growth opportunities, which could include share buybacks if we see value in that. What we said on the second quarter call that after the Twin Eagle acquisition, which put some additional debt on the balance sheet, we will take a more balanced approach. We want to get our leverage down from where it is now, but at the same time, we keep the option open to be opportunistic in share buybacks if we see good value there. So you should expect us to continue doing that as we go to Q4 and into the early parts of next year.

Thank you.

Our next question comes from the line of Kevin McDermott of Morgan Stanley. Your line is open, Kevin.

Hey. Good morning. Thanks for taking my question and echo the congrats to Dan. So there were as I am sure you are aware, a sizable transaction announced between 2 of your peers earlier this week. And now that you have the management team set at Expand, I was loving. Would love to hear just your perspectives. Mike, you can take this or Dan, Marcel, feel free to chime in as well. Perspectives on the M&A landscape, both in terms of upstream consolidation or how you would evaluate further opportunities beyond the wellhead, like 20 Eagle? Just contextualize with how you are thinking about the expand portfolio today and anything else you think you might need to strengthen the integrated platform.

So thanks for the question, Kevin. This is Dan. And first, I will say, you know, con. Congrats to EQT and Range on their deal. As I look at Expand, I think we have got a great portfolio of assets and opportunities in front of us and really a reach across all of North America And so I do not think the transaction announced yesterday really impacts our plans internally, so we are gonna stay focused on what we are doing over here to deliver value for our shareholders. More broadly, I would say that while we are happy with the existing with the existing portfolio of assets and opportunities we have got, and we will be working hard to realize value from that. I am a big believer in continuous improvement. And that includes improving all aspects of the business, including the portfolio. And so I am sure, along those lines, we will be open to inorganic opportunities to do that, but we will be very disciplined in our focus on that. And when you think about when you think about that, anything we do has to make the company better and deliver strong risk adjusted, full cycle value. And in order for us to do those things and to hit a market clearing price, it is clearly going to have to be something that has a lot of synergies that we are very, very confident that we can capture. So I think that is how we will think about that great portfolio. We got a lot of things to do internally, but we will stay open to opportunities to improve the business.

Got it. Makes a lot of sense. And maybe sticking with the theme on continuous improvement, for my follow-up, you all have a track record in driving efficiency gains pushing down the breakeven of the business. In the context of a bit of inflationary pressure into 2027, and maybe this 1's for Joshua, could you talk about some of the items you are exploring to potentially offset some of those pressures, outlook further efficiency gains, and maybe comment on some of the, outperformance and well productivity in Southwest, PA or Appalachia as well.

Yeah. Sure. You know, the way we would like to talk about it inside of organization is, you know, round 1 of integration between Chesapeake and Southwest was really centered around the Haynesville, and we made a ton of progress. If you think about our results from 2024 and into 2025, we have really doubled down on our continuous improvement efforts across our Appalachian business. In fact, when you look at our Southwest Appalachia drilling performance from 2025 to 2026, we have seen a 20% improvement in our footage per day. it is about a 10% improvement in our cost per foot and our drilling performance. it is really just about leveraging the learnings across the entire portfolio and sticking it into that asset. And so, I think you will continue to see those you know, continuous improvement efforts on the more traditional methods, drilling wells faster, completing wells more efficiently, We continue to dial in our completion designs in the Haynesville as well. You know, we expect to see about a 2% to 3% improvement in well productivity year over year that is really taken advantage of the investment that we made in our own sand supply, which again comes with a cost of about 1/3 of what you pay for a commercial ton of sand. And so we think that is continued to up opportunities and improve returns on our overall wells We continue to find opportunities to exploit artificial intelligence within the business as well and we see that unlocking additional value in the years to come. So we will be excited to talk about that more in the future.

Great. Thanks so much. Thank you.

Our next question comes from the line of Scott Hanold of RBC. Your line is open, Scott.

Yes, thanks. If I could, maybe play a little bit off the M&A theme and talk about just sort of your or we will call it ground game organic land acquisition activity. it is been a little bit more robust this year, and you talk about the opportunities with that you know, you see next year and especially as it relates to how you think about, like, the budget overall and where you wanna be given the macro backdrop?

Yeah. Sure, Scott. This is Joshua, You know, this past year in 2026, you will spend about $250 million on organic lease acquisitions. We have had a lot of success and what I love about it is we are seeing success across all of our operating units. Haynesville, Appalachia alike. We have added some incredibly valuable locations this year, you know, highlighting roughly 3 thousand acres that we were able to acquire in the state of Pennsylvania up in Bradford County. Those are some of our most competitive locations that we will add. We spent around $15 million acquiring those leases. We had a rig sitting on the lease. It within a couple months of taking it, and those wells will come online. Likely early next year and we will end up delivering about 1 million cubic feet per foot of lateral productivity, some of the most productive wells in the region that we will probably see over the next several years. So highly, highly valuable and accretive locations that we brought in. That ground game is ingrained in us. it is something that we expect to carry on into next year. And what we love about our financial position and the strength of the balance sheet that we have is we can be opportunistic when others are, you know, struggling to find capital to support their development programs. And so we see that as a competitive advantage. The cross basin reach that we have is the other, you know, advantage that we see, and so we will be opportunistic as we head into 2027 with our leasing program.

Okay. So it sounds like a very similar run rate. Maybe next year is a good starting point for us.

Yeah, but, you know, again, those can come and go. You know, as an example, in the fourth quarter of this year, we do not expect to close any material transactions And so, you know, again, that is a goal right now, and something we will like to update the market on when we come back in February.

Okay. Thanks. My second follow-up question or my follow-up question is just, you know, going to Twin Eagle and just thinking about, like, some of the larger, we will we will say, you know, more you know, headline type of commercial type of announcements, whether it is LNG or industrial or whatnot, like, if you can give us a sense of, like, with Twin Eagle, you know, and your new platform, you know, when should we expect to see, you know, some larger, more impactful announcements that you guys could put in place for, you know, maybe the longer term demand growth, you know, in gas?

Yeah. So as I kind of said, Scott, we were. We are 2 weeks in at the end of the quarter with the integration rights, but we already see some early signs. So we can give you a more holistic update after we have completed the fourth quarter, right? The Twin Eagle business, of course, is a lot of blocking and tackling and small wins there, so we will not announce every single deal as we go in there, but there is a portfolio with power customers there is a portfolio with C&I customers, as I already talked about it. You add that to the portfolio that we already had us expand with LNG power and other portfolios. So all of that will continue to work that, but the integration value is already pretty obvious to us. We said for the fourth quarter, $80 million of EBITDA of the combined Marketing and Commercial business, which was our business with the Twin Eagle business. And then in 2027 and 2028, that synergy that we have talked about is primarily on the top line kind of growing the business, both getting more money for our molecules out of the expense system, extending customer relationships on the Twin Eagle side, you know, and with the footprint that we have both in storage and transportation just to capture more value from our occurs. And so that is what is driving that number ultimately and you should see you should see that kind of rolling in, you know, as the. As we are progressing.

Understood. Thank you. Thank you.

Our next question comes from the line of Kevin McCurdy of Pickering Energy Partners. Your line is open, Kevin.

Hey. Good morning. Maybe we can start with an update on the hedge strategy, which has been very successful this year. With the potential for demand to pick up in late 2027 and 2020, how do you guys kind of think about adding on hedges for that part, for those out quarters? And are you done hedging for the early part of 2027?

it is a great question. So I think just on the purpose of our hedge strategy, right, we are really trying to protect against the downside while we leave ourselves open to participate in the upside, and that is been our consistent hedging strategy. The way that we have looked at the market earlier in 2026, where we saw the fundamentals kind of being misaligned with the forward strip, we decided to hedge more aggressively both in 2026 as well as into 2027. And you kind of see the result of that in Q3 you know, where prices on strip have been weak. And our hedge program paid over $300 million relative to that, and that is kind of the sign of that protection. Then you look into 2027, we are already 55% hedged. For all of 2027 with a $3.65 kind of price on average. So, you know, that gives us a downside protection, and it gives us the option to choose what we do with production during that year. The way that we roll in the hedges, that is a bit more tactical. We take a mix of swaps and collars and 3 ways to kind of roll that in. And we roll those in progressively so that we do not pick a price point at any particular point in time and kind of bet that the market will not move. So we continue to kind roll that in and align our view of hedging to our view on the fundamentals, but always kind of with an eye on protecting against the downside and leaving the upside open.

Great. I appreciate that. That was a good answer. And as a follow-up, I know we have hit the marketing questions quite a few times here, but maybe I will just try another 1 on what line of sight do you have on the $150 million of incremental EBITDA by year end 2028? And any thoughts on exactly how that progresses between now and the end of 2028?

Yeah. No. Let me start with it, and I will let Joshua to maybe add. Like. So we have a good line of sight, and that just comes from kind of obviously the work that we did during due diligence as we kind of you know, were framing the acquisition itself as well as the first couple of weeks It gives us a lot of confidence just from customer feedback from the teams on the ground that are kind of hearing that and as well as what we see. So we feel we feel confident about that number. Maybe, Joshua, it is good to get some additional color from your side.

Yeah. I mean, I would just reiterate. I mean, think there is a high level of confidence in our ability to deliver that. And, you know, the time. Exact timing of it, I think, is a little bit uncertain. But it will roll through over the next 2 years without a doubt. The conversation in deal flow is high. And so, you know, to Marcel's point, our origination teams are incredibly busy to try to identify new customers and add duration and volume to existing contracts. And so, again, we expect the team to be successful and, you know, exceed this target is the ultimate goal.

I appreciate that answer. Thank you. Thank you.

Our next question comes from the line of Charles Meade of Johnson Rice. Your question, please, Charles.

Yes. Good morning, Dan and Mike. And to the rest of the Expand team there. Dan, I want to kind of go back to, I think, the first question you fielded. And I recognize that this is, you know, day 3 on the job. But, I am thinking about you. You have had a window, a non op window in you know, to look in on Marcel operations for at least the last 2 years at your at your former seat. So when I think about your. The assets and your former seat and expand assets, obviously, they are both US onshore unconventional, but within that framework, they seem to me like they are at opposite ends of the spectrum on kind of maturity runway, macro dynamics, that sort of thing. So I am curious. Are there any or can you identify any kind of practices or philosophies that you developed or found useful at, in the Bakken? That would be you know, new or different for the Expand team.

Well, it is good to hear from you, Charles, and thanks for the question. You know, I would say as I think about my experience over at Cord, might be from there and my time at that organization over here, I would say there is lots of things. Maybe the most significant of which is just foundationally challenging assumptions on how you do business and looking to improve. And so I think about what we did over my time at Chord challenging our development assumptions, challenging our assumptions on where inventory was and where it could be, and then certainly leveraging the advantage of the platform that we created for the benefit of our organization and shareholders. And so all of that, I think, is really a bit irrespective of what basin you are in. Foundationally, both organizations are producing a commodity. Now there is different macro associated with that commodity, but in a commodity business, I think there is lots of similarities. And so I think I will bring those similarities to bear over at Expand and look forward to working with the team to leverage our platform here.

Got it. That is helpful, Dan. Thank you. And then a follow-up perhaps for Joshua, Joshua, I think you addressed some of this in response to the earlier question. But regarding the curtailments and TILs in Q4, I mean, the are there any things you are looking at beyond, I would say, the 2 big ones, which are, you know, weather and pipeline maintenance to, you know, that could affect how that, know, how your curtailments and TILs progress over, over Q4, and what do you have contemplated right now in your guide in those 2 dimensions?

Yeah. Maybe I will kind of answer this in reverse. You know, included in our guide, and you will notice there is a relatively wide range of production expectations from 7.4 Bcf to 7.6 Bcf a day for Q4. And really what that is implying is that, you know, we are gonna retain a significant amount of flexibility in the program. We do have curtailments coming into the fourth quarter and North Appalachia. We are actively having discussions around the timing of new turn in lines. And so, you know, we are going to be disciplined with how we, you know, introduce volumes. And, you know, again, the goal is to always align our production with the most constructive price environment. Clearly, weather is an overhang on the markets right now. Production, we typically see a little bit of a pop heading into the winter months. We see that regularly in Appalachia. I think there is an expectation we could expect to see a seasonal pop in Haynesville with some of the private producers as well. I think I think that is also a overhang on the market today. I think the other thing, if you think about the longer term, I think really the market is going to be watching for where storage ends up, and this is by region. Across The US. If we end up, you know, at an elevated level of storage into coming into next spring and summer, you know, that is really going to create another overhang on the market. I just need to remind you, we are. What we are focused on is long term value creation. And what we see again is roughly 13 Bcf a day of new demand coming by 2028. So we really see, you know, year of 2027 to be 1 of transition. We are gonna be flexible with our business. And put ourselves in a position to respond when the demand shows up.

That is helpful detail. Thank you, Joshua, Thank you.

Our next question comes from the line of Betty Jiang of Barclays. Your line is open, Betty.

Hi. Good morning. I have a question on the long term marketing margin expansion. In the slide, you guys talked about the $250 million that is tied to new demand growth, particularly LNG. So can you just talk about your strategy to capture that opportunity? Is it more about adding LNG offtake and building capacities to. On the global spread? Or and then how does Twin Eagle fit into that strategy?

Good. Hey. Thanks for the question, Betty. So when we think of the LNG market, we really see that as an international gas market. And so our strategy around LNG is to tie our domestic kind of production to international pricing, which provides diversification. And obviously, when you look at LNG prices at the moment, a significant premium over Henry Hub. So what our strategy is around LNG is to build you know, a reasonable portfolio around LNG, liquefied and offtake and then a portfolio of customers that take that LNG as we go in. We have signed the Delfin agreement earlier this year, which is for 1.15 million tonnes of LNG offtake starting in 2031 toward the end of 2032. You should expect us to add more to that LNG portfolio than it is ultimately quite a sizable portfolio and provides us with access to those international markets and diversification away from Henry Hub.

Got it. That makes sense. And then maybe just a follow-up on how you guys think about the production management into next year. To what extent could 2024 be a playbook? Would you consider again the DUCs and the deferreds to maintain a higher productive capacity into a stronger long term. Demand outlook?

Yeah, Betty. I think the answer to that is just yes. You know, I think we. We have proven an ability to go, you know, create value to our productive capacity strategy. that is inclusive of base curtailments, building DUCs, building up an inventory, deferred turn in lines. And so we are going to be very mindful of where the markets are and broader supply demand fundamentals and look for opportunities to create more value from the production that we produce.

Got it. Thank you. Thank you.

Our final question comes from the line of Phillip Jungwirth of BMO. Your line is open, Phillip.

Thanks. And also wanted to extend my congrats to Dan. When you think through the gas supply or data center opportunity and how Twin Eagle increases your scope across much of North America, Is there a good way to think about the ultimate benefit to expand for any supply deals that are outside areas where your core upstream positions are located versus if you were to announce a project within the Gulf Coast or Appalachia footprint. And then just separately, we have seen fewer projects in Northeast PA, but you do have a large acreage footprint here. So just wondering if you see much potential in this area.

Yeah. No. I think you go right to the heart of the benefit of being integrated, you know, with Twin Eagle and our own capability, right, so that comes then in 2 forms. 1 is where we have equity gas, obviously, you know, there is a lot of value there. But in some of those areas, and you mentioned Pennsylvania, you know, data centers go slow in the development of data centers. But data centers are gonna be everywhere in the country, and so when you start looking west, into Ohio, of course, we see more data centers coming in, and we can get gas there. But even further west, you know, there is gonna be data centers all over The US. And having the, you know, the capability that came with Twin Eagle to connect really coast to coast allows us to kind of go after those projects. Gas in some of those areas needs to come from far. Some of it needs to come from the North. Some of it needs to come from the East. But, you know, with our capability with Twin Eagle, we can connect all of that and be competitive on all the data centers throughout it is very much an integral part of how we think of reaching those customers that are further away from the production basins.

Okay. Great. And then Permian gas debottlenecking has obviously been a headwind for price, but a lot of this gas does get stuck in around Houston. We do have 3 pipes, though, Blackband, Trident, Mustang, all starting up here in the next call it, like, 12 to 18 months. Move gas into the LNG corridor. So just as you look out, 12 to 18 months, you see higher how do you see these higher flows kinda impacting realized price for Expand, if at all, in the Haynesville? Or do you think there is enough LNG demand pull between now and then to largely offset incremental supply?

Yeah. Phillip, I think the view is that this is expected. We expected pipes to get built and, you know, get over and around the city of Houston. Which is where a large part of the gas has been bottlenecked for the last several years. So, you know, this is really no surprise to us But when we look out longer term and look at the broader supply demand fundamentals, what we see is that Permian gas, though there is a significant amount, will not be able to meet the upcoming demand. It will periodically, and that is what you see in a year like, you know, we are entering into in 2027. But if we look out over the next, you know, call it 4 to 6 years or so, you know, we expect that Haynesville is going to need to grow by somewhere around 5 Bcf a day to match the demand. And as the marginal molecule, we expect that to be the mechanism by which price gets set. And so that is why we remain highly constructive on our broader portfolio, the gas markets in general, and the option that we have created in a place like the West Haynesville for ourselves.

Thank you.

Thank you. I would now like to turn the conference back to Dan Brown for closing remarks. Sir?

Thanks, Latif. And for those that joined our call this morning, thank you for your time. Your interest in our organization. To the Expand team, I look forward to working with you to deliver the full potential of Expand for our shareholders and to our investors. I look forward to listening to and engaging with you along the way. Thanks again.

This concludes today's conference call. Thank you for participating. You may now disconnect.