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What changed in EXPAND ENERGY Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EXPAND ENERGY Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+502 added−518 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-21)

Top changes in EXPAND ENERGY Corp's 2024 10-K

502 paragraphs added · 518 removed · 300 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

82 edited+58 added−37 removed35 unchanged
Biggest changeIn the table, "gross" refers to the total wells in which we had a working interest and "net" refers to gross wells multiplied by our working interest: 2023 2022 2021 Gross % Net % Gross % Net % Gross % Net % Development: Productive 194 100 109 100 237 100 151 100 137 100 74 100 Dry — — — — — — — — — — — — Total 194 100 109 100 237 100 151 100 137 100 74 100 Exploratory: Productive — — — — — — — — 2 100 1 100 Dry — — — — 1 100 1 100 — — — — Total — — — — 1 100 1 100 2 100 1 100 The following table shows the wells we completed or participated in by operating area: 2023 2022 2021 Gross Wells Net Wells Gross Wells Net Wells Gross Wells Net Wells Marcellus 78 37 103 59 83 34 Haynesville 84 51 83 61 40 31 Eagle Ford 32 21 52 32 12 7 Powder River Basin — — — — 4 3 Total 194 109 238 152 139 75 As of December 31, 2023, we had 92 gross (58 net) wells in the process of being drilled or completed. 14 TABLE OF CONTENTS Production Volumes, Sales Prices, Production Expenses and Gathering, Processing and Transportation Expenses The following tables present information regarding our net production volumes, average sales price received for our production, and production and gathering, processing and transportation expenses per Mcfe for the periods indicated for our significant fields: Production Natural Gas (Bcf) Oil (MMBbl) NGL (MMBbl) Total (Bcfe) 2023 Successor Period Marcellus 669 — — 669 Haynesville 566 — — 566 Eagle Ford 31 7.7 3.8 100 Total Production 1,266 7.7 3.8 1,335 2022 Successor Period Marcellus 670 — — 670 Haynesville 588 — — 588 Eagle Ford 46 18.7 5.8 193 Total Production 1,308 19.4 6.0 1,461 2021 Successor Period Marcellus 421 — — 421 Haynesville 243 — — 243 Eagle Ford 44 19.5 6.0 198 Total Production 727 22.5 7.1 905 2021 Predecessor Period Marcellus 50 — — 50 Haynesville 22 — — 22 Eagle Ford 7 3.0 0.7 29 Total Production 80 3.4 0.9 105 15 TABLE OF CONTENTS Average Sales Price of Production (a) Expenses ($/Mcfe) Natural Gas ($/Mcf) Oil ($/Bbl) NGL ($/Bbl) Total ($/Mcfe) Production GP&T 2023 Successor Period Marcellus $ 2.22 $ — $ — $ 2.22 $ 0.12 $ 0.65 Haynesville $ 2.30 $ — $ — $ 2.30 $ 0.33 $ 0.46 Eagle Ford $ 2.25 $ 77.80 $ 25.62 $ 7.64 $ 0.91 $ 1.57 Total $ 2.25 $ 77.80 $ 25.62 $ 2.66 $ 0.27 $ 0.64 2022 Successor Period Marcellus $ 6.03 $ — $ — $ 6.03 $ 0.11 $ 0.57 Haynesville $ 5.92 $ — $ — $ 5.92 $ 0.26 $ 0.53 Eagle Ford $ 5.64 $ 96.10 $ 36.76 $ 11.76 $ 1.22 $ 1.78 Total $ 5.96 $ 96.07 $ 37.48 $ 6.77 $ 0.33 $ 0.73 2021 Successor Period Marcellus $ 3.25 $ — $ — $ 3.25 $ 0.08 $ 0.68 Haynesville $ 4.10 $ — $ — $ 4.10 $ 0.24 $ 0.49 Eagle Ford $ 4.02 $ 69.25 $ 29.76 $ 8.65 $ 0.88 $ 1.46 Total $ 3.61 $ 69.07 $ 31.37 $ 4.87 $ 0.33 $ 0.86 2021 Predecessor Period Marcellus $ 2.42 $ — $ — $ 2.42 $ 0.08 $ 0.70 Haynesville $ 2.44 $ — $ — $ 2.44 $ 0.19 $ 0.49 Eagle Ford $ 2.57 $ 53.37 $ 23.94 $ 6.71 $ 0.71 $ 1.55 Total $ 2.45 $ 53.21 $ 25.92 $ 3.77 $ 0.30 $ 0.96 ___________________________________________ (a) Excludes the effect of hedging. 16 TABLE OF CONTENTS Natural Gas, Oil and NGL Reserves The tables below set forth information as of December 31, 2023, with respect to our estimated proved reserves, the associated estimated future net revenue, the present value of estimated future net revenue and the standardized measure of discounted future net cash flows.
Biggest changeIn the table, "gross" refers to the total wells in which we had a working interest and "net" refers to gross wells multiplied by our working interest: 2024 2023 2022 Gross % Net % Gross % Net % Gross % Net % Development: Productive 87 100 62 100 194 100 109 100 237 100 151 100 Dry — — — — — — — — — — — — Total 87 100 62 100 194 100 109 100 237 100 151 100 Exploratory: Productive — — — — — — — — — — — — Dry — — — — — — — — 1 100 1 100 Total — — — — — — — — 1 100 1 100 The following table shows the wells we completed or participated in by operating area: 2024 2023 2022 Gross Wells Net Wells Gross Wells Net Wells Gross Wells Net Wells Haynesville 48 41 84 51 83 61 Northeast Appalachia 38 20 78 37 103 59 Southwest Appalachia 1 1 — — — — Eagle Ford — — 32 21 52 32 Total 87 62 194 109 238 152 As of December 31, 2024, we had 162 gross (128 net) wells in the process of being drilled or completed. 11 TABLE OF CONTENTS Production Volumes, Sales Prices, Production Expenses and Gathering, Processing and Transportation Expenses The following tables present information regarding our net production volumes, average sales price received for our production, and production and gathering, processing and transportation expenses per Mcfe for the periods indicated for our significant fields: Production Natural Gas (Bcf) Oil (MMBbl) NGL (MMBbl) Total (Bcfe) 2024 Haynesville 561 — — 561 Northeast Appalachia 662 — — 662 Southwest Appalachia 98 1.2 7.8 152 Total Production 1,321 1.2 7.8 1,375 2023 Haynesville 566 — — 566 Northeast Appalachia 669 — — 669 Eagle Ford 31 7.7 3.8 100 Total Production 1,266 7.7 3.8 1,335 2022 Haynesville 588 — — 588 Northeast Appalachia 670 — — 670 Eagle Ford 46 18.7 5.8 193 Total Production 1,308 19.4 6.0 1,461 12 TABLE OF CONTENTS Average Sales Price of Production (a) Expenses ($/Mcfe) Natural Gas ($/Mcf) Oil ($/Bbl) NGL ($/Bbl) Total ($/Mcfe) Production GP&T 2024 Haynesville $ 2.14 $ — $ — $ 2.14 $ 0.30 $ 0.58 Northeast Appalachia $ 1.88 $ — $ — $ 1.88 $ 0.15 $ 0.77 Southwest Appalachia $ 2.42 $ 60.41 $ 27.44 $ 3.42 $ 0.32 $ 1.33 Total $ 2.03 $ 60.41 $ 27.44 $ 2.16 $ 0.23 $ 0.75 2023 Haynesville $ 2.30 $ — $ — $ 2.30 $ 0.33 $ 0.46 Northeast Appalachia $ 2.22 $ — $ — $ 2.22 $ 0.12 $ 0.65 Eagle Ford $ 2.25 $ 77.80 $ 25.62 $ 7.64 $ 0.91 $ 1.57 Total $ 2.25 $ 77.80 $ 25.62 $ 2.66 $ 0.27 $ 0.64 2022 Haynesville $ 5.92 $ — $ — $ 5.92 $ 0.26 $ 0.53 Northeast Appalachia $ 6.03 $ — $ — $ 6.03 $ 0.11 $ 0.57 Eagle Ford $ 5.64 $ 96.10 $ 36.76 $ 11.76 $ 1.22 $ 1.78 Total $ 5.96 $ 96.07 $ 37.48 $ 6.77 $ 0.33 $ 0.73 ___________________________________________ (a) Excludes the effect of hedging. 13 TABLE OF CONTENTS Natural Gas, Oil and NGL Reserves The tables below set forth information as of December 31, 2024, with respect to our estimated proved reserves, the associated estimated future net revenue, the present value of estimated future net revenue and the standardized measure of discounted future net cash flows.
These laws and regulations relate to matters that include, but are not limited to, the following: • reporting of workplace injuries and illnesses; • industrial hygiene monitoring; • worker protection and workplace safety; • approval or permits to drill and to conduct operations; • provision of financial assurances (such as bonds) covering drilling and well operations; • calculation and disbursement of royalty payments and production taxes; • seismic operations/data; 21 TABLE OF CONTENTS • location, drilling, cementing and casing of wells; • well design and construction of pad and equipment; • construction and operations activities in sensitive areas, such as wetlands, coastal regions or areas that contain endangered or threatened species, their habitats, or sites of cultural significance; • method of well completion and hydraulic fracturing; • water withdrawal; • well production and operations, including processing and gathering systems; • emergency response, contingency plans and spill prevention plans; • emissions and discharges permitting; • climate change; • use, transportation, storage and disposal of fluids and materials incidental to natural gas and oil operations; • surface usage, maintenance, monitoring and the restoration of properties associated with well pads, pipelines, impoundments and access roads; • plugging and abandoning of wells; and • transportation of production.
These laws and regulations relate to matters that include, but are not limited to, the following: • reporting of workplace injuries and illnesses; • industrial hygiene monitoring; • worker protection and workplace safety; • approval or permits to drill and to conduct operations; • provision of financial assurances (such as bonds) covering drilling and well operations; 18 TABLE OF CONTENTS • calculation and disbursement of royalty payments and production taxes; • seismic operations/data; • location, drilling, cementing and casing of wells; • well design and construction of pad and equipment; • construction and operations activities in sensitive areas, such as wetlands, coastal regions or areas that contain endangered or threatened species, their habitats, or sites of cultural significance; • method of well completion and hydraulic fracturing; • water withdrawal; • well production and operations, including processing and gathering systems; • emergency response, contingency plans and spill prevention plans; • emissions and discharges permitting; • climate change; • use, transportation, storage and disposal of fluids and materials incidental to natural gas and oil operations; • surface usage, maintenance, monitoring and the restoration of properties associated with well pads, pipelines, impoundments and access roads; • plugging and abandoning of wells; and • transportation of production.
In addition, several states and geographic regions in the United States have also adopted legislation and regulations regarding climate change-related matters, and additional legislation or regulation by these states and regions, U.S. federal agencies, including the EPA, and/or international agreements to which the United States may become a party could result in increased compliance costs for us and our customers.
In addition, several states and geographic regions in the United States have adopted legislation and regulations regarding climate change-related matters, and additional legislation or regulation by these states and regions, U.S. federal agencies, including the EPA, and/or international agreements to which the United States may become a party could result in increased compliance costs for us and our customers.
Our Manager – SEC Reserves Engineering, who is in charge of our Corporate Reserves Department, is the technical person primarily responsible for overseeing the preparation of our reserve estimates and for coordinating any reserves work conducted by a third-party engineering firm.
Our Manager – Corporate Reserves, who is in charge of our Corporate Reserves Department, is the technical person primarily responsible for overseeing the preparation of our reserve estimates and for coordinating any reserves work conducted by a third-party engineering firm.
Our estimated proved reserves and the standardized measure of discounted future net cash flows of the proved reserves as of December 31, 2023, 2022 and 2021, along with the changes in quantities and standardized measure of the reserves for each of the three years then ended, are shown in Supplemental Disclosures About Natural Gas, Oil and NGL Producing Activities included in Item 8 of Part II of this report.
Our estimated proved reserves and the standardized measure of discounted future net cash flows of the proved reserves as of December 31, 2024, 2023 and 2022, along with the changes in quantities and standardized measure of the reserves for each of the three years then ended, are shown in Supplemental Disclosures About Natural Gas, Oil and NGL Producing Activities included in Item 8 of Part II of this report.
The qualifications of the technical persons at the firm primarily responsible for overseeing the audit of our reserve estimates are set forth below. • Over 43 combined years of practical experience in the estimation and evaluation of reserves; • Licensed Professional Engineer in the State of Texas and Bachelor of Science degree in Chemical Engineering/Engineering and Public Policy; • Licensed Professional Geoscientist in the State of Texas and Bachelor of Science and Master of Science degrees in Geology.
The qualifications of the technical persons at the firm primarily responsible for overseeing the audit of our reserve estimates are set forth below. • Over 43 combined years of practical experience in the estimation and evaluation of reserves; • Licensed Professional Engineer in the State of Texas and Bachelor of Science degree in Chemical Engineering; • Licensed Professional Geoscientist in the State of Texas and Bachelor of Science and Master of Science degrees in Geology.
Future prices and costs may be materially higher or lower than the prices and costs as of the date of any estimate. See Supplemental Disclosures About Natural Gas, 18 TABLE OF CONTENTS Oil and NGL Producing Activities included in Item 8 of Part II of this report for further discussion of our reserve quantities.
Future prices and costs may be materially higher or 15 TABLE OF CONTENTS lower than the prices and costs as of the date of any estimate. See Supplemental Disclosures About Natural Gas, Oil and NGL Producing Activities included in Item 8 of Part II of this report for further discussion of our reserve quantities.
Our industry is subject to a wide range of regulations, laws, rules, taxes, fees and other policy implementation actions that have been pervasive and are under constant review for amendment or expansion. Numerous government agencies have issued extensive regulations that are binding on our industry, some of which carry substantial penalties for failure to comply.
Our industry is subject to a wide range of regulations, laws, rules, taxes, fees and other policy implementation actions that are under constant review for amendment or expansion. Numerous government agencies have issued extensive regulations that are binding on our industry, some of which carry substantial penalties for failure to comply.
Certain of our U.S. natural gas and oil leases are granted or approved by the federal government and administered by the U.S. Department of the Interior.
Certain of our U.S. natural gas and oil leases are granted or approved by the federal government and administered by the U.S. Department of the Interior (“DOI”).
Our Corporate Reserves Department prepared our estimated proved reserves as of December 31, 2023 disclosed in this report. Those estimates were established utilizing standard geological and engineering technologies, which are generally accepted by the petroleum industry and were based upon the best available production, engineering and geologic data.
Our Corporate Reserves Department prepared our estimated proved reserves as of December 31, 2024 disclosed in this report. Those estimates were established utilizing standard geological and engineering technologies, which are generally accepted by the petroleum industry and were based upon the best available production, engineering and geologic data.
This insurance may not be adequate to cover all losses or exposure to liability. We also carry a $300 million comprehensive general liability umbrella insurance policy. In addition, we maintain a $50 million pollution liability insurance policy providing coverage for gradual pollution related risks and in excess of the general liability policy for sudden and accidental pollution risks.
This insurance may not be adequate to cover all losses or exposure to liability. We also carry a $305 million comprehensive general liability umbrella insurance policy. In addition, we maintain a $50 million pollution liability insurance policy providing coverage for gradual pollution related risks and in excess of the general liability policy for sudden and accidental pollution risks.
Reserves Estimation We engaged Netherland, Sewell & Associates, Inc., a third-party engineering firm, to audit our total proved reserves as of December 31, 2023. A copy of the audit letter issued by the engineering firm is filed with this report as Exhibit 99.1.
Reserves Estimation We engaged Netherland, Sewell & Associates, Inc., a third-party engineering firm, to audit our total proved reserves as of December 31, 2024. A copy of the audit letter issued by the engineering firm is filed with this report as Exhibit 99.1.
(b) Estimated future net revenue represents the estimated future revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using pricing differentials and costs under existing economic conditions as of December 31, 2023, and assuming commodity prices as set forth below.
(b) Estimated future net revenue represents the estimated future revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using pricing differentials and costs under existing economic conditions as of December 31, 2024, and assuming commodity prices as set forth below.
Further restrictions of hydraulic fracturing could make it difficult or impossible to conduct our drilling and completion operations, and thereby reduce the amount of natural gas, oil and NGL that we are ultimately able to produce from our properties.
Further restrictions of hydraulic fracturing could make it difficult or impossible to conduct our drilling and completion operations, and thereby reduce the amount of natural gas, oil and NGLs that we are ultimately able to produce from our properties.
We do not anticipate any material lease expirations within the next three years. Marketing The principal function of our marketing operations is to provide natural gas, oil and NGL marketing services, including commodity price structuring, securing and negotiating of gathering, hauling, processing and transportation services, contract administration and nomination services for us and other interest owners in Chesapeake-operated wells.
We do not anticipate any material lease expirations within the next three years. Marketing The principal function of our marketing operations is to provide natural gas, oil and NGL marketing services, including commodity price structuring, securing and negotiating of gathering, hauling, processing and transportation services, contract administration and nomination services for us and other interest owners in Expand Energy-operated wells.
For further discussion, see Item 1A. Risk Factors - We are subject to extensive governmental regulation, which can change and could adversely impact our business. Regulatory proposals in some states and local communities have been initiated to require or make more stringent the permitting and compliance requirements for hydraulic fracturing operations.
For further discussion, see Item 1A. Risk Factors - “We are subject to extensive governmental regulation, which can change and could adversely impact our business.” Regulatory proposals in some states and local communities have been initiated to require or make more stringent the permitting and compliance requirements for hydraulic fracturing operations.
Our training program includes a mix of in-person and virtual training, with greater emphasis on in-person instruction and includes all employees. Job-specific learning paths aim to exceed regulatory requirements and ensure employees are holistically prepared to execute their job functions safely and responsibly. Chesapeake’s training philosophy values contractor training in the same manner as employees.
Our training program includes a mix of in-person and virtual training, with greater emphasis on in-person instruction and includes all employees. Job-specific learning paths aim to exceed regulatory requirements and ensure employees are holistically prepared to execute their job functions safely and responsibly. Expand Energy’s training philosophy values contractor training in the same manner as employees.
Each year all employees must sign a Code certification confirming they have reviewed the Code and related policies, understand the high standards expected of them and will report actual or potential ethics concerns or Code violations. Employee Wellness and Benefits Supporting the individual well-being of our employees is foundational to our safety culture and success as a company.
Each year all employees must sign a Code certification acknowledging that they have reviewed the Code and related policies, the high standards expected of them and that they will report actual or potential ethics concerns or Code violations. Employee Wellness and Benefits Supporting the individual well-being of our employees is foundational to our safety culture and success as a company.
The federal government has increased its review in recent years in evaluating and, in some cases, promulgating new rules and regulations regarding competitive lease bidding, venting and flaring, gas and oil measurement and royalty 23 TABLE OF CONTENTS payment obligations for production from federal lands.
The federal government has increased its review in recent years in evaluating and, in some cases, promulgating new rules and regulations regarding competitive lease bidding, venting and flaring, gas and oil measurement and royalty payment obligations for production from federal lands.
Strong governance practices begin at the top providing our organization with clear guidelines to define standards for ethical behavior at every level. Each Chesapeake director or employee, regardless of position, must abide by Chesapeake’s Code of Business Conduct (the "Code"), which is structured around our core values.
Strong governance practices begin at the top, providing our organization with clear guidelines to define standards for ethical behavior at every level. Each Expand Energy director or employee, regardless of position, must abide by Expand Energy’s Code of Business Conduct (the "Code"), which is structured around our core values.
All material changes are reviewed and approved by the Manager – SEC Reserves Engineering. • The Corporate Reserves Department reviews our proved reserves at the close of each quarter. • Each quarter, Reservoir Managers, the Manager – SEC Reserves Engineering, the Senior Resource Manager, the Vice Presidents of each operating area and the Vice President of Corporate and Strategic Planning review all significant reserves changes and all new proved undeveloped reserves additions. • The Corporate Reserves Department reports independently of our operations. • The five-year PUD development plan is reviewed and approved annually by the Manager – SEC Reserves Engineering, the Senior Resource Manager, and the Vice President of Corporate and Strategic Planning. 19 TABLE OF CONTENTS Acreage The following table sets forth our gross and net developed and undeveloped natural gas and oil leasehold and fee mineral acreage as of December 31, 2023.
All material changes are reviewed and approved by the Manager – Corporate Reserves. • The Corporate Reserves Department reviews our proved reserves at the close of each quarter. • Each quarter, Reservoir Managers, the Manager – Corporate Reserves, the Vice Presidents of each operating area and the Vice President of Corporate and Strategic Planning review all significant reserves changes and all new proved undeveloped reserves additions. • The Corporate Reserves Department reports independently of our operations. • The five-year PUD development plan is reviewed and approved annually by the Manager – Corporate Reserves and the Vice President of Corporate and Strategic Planning. 16 TABLE OF CONTENTS Acreage The following table sets forth our gross and net developed and undeveloped natural gas and oil leasehold and fee mineral acreage as of December 31, 2024.
ITEM 1. Business Unless the context otherwise requires, references to “Chesapeake,” the “Company,” “us,” “we” and “our” in this report are to Chesapeake Energy Corporation together with its subsidiaries. Our principal executive offices are located at 6100 North Western Avenue, Oklahoma City, Oklahoma 73118, and our main telephone number at that location is (405) 848-8000.
ITEM 1. Business Unless the context otherwise requires, references to “Expand Energy,” the “Company,” “us,” “we,” “our” and “ours” in this report are to Expand Energy Corporation together with its subsidiaries. Our principal executive offices are located at 6100 North Western Avenue, Oklahoma City, Oklahoma 73118, and our main telephone number at that location is (405) 848-8000.
The present value of estimated future net revenue typically differs from the standardized measure because the former does not include the effects of estimated future income tax expense of $94 million as of December 31, 2023.
The present value of estimated future net revenue typically differs from the standardized measure because the former does not include the effects of estimated future income tax expense of $36 million as of December 31, 2024.
His qualifications include the following: • Over 16 years of practical experience in the oil and gas industry, with over 14 years in reservoir engineering; • Licensed Professional Engineer (Petroleum) in the State of Oklahoma; • Member in good standing of the Society of Petroleum Evaluation Engineers; • Bachelor of Science in Mechanical Engineering; and • Master’s of Business Administration.
His qualifications include the following: • Over 17 years of practical experience in the oil and gas industry, with over 15 years in reservoir engineering; • Licensed Professional Engineer (Petroleum) in the State of Oklahoma; • Member in good standing of the Society of Petroleum Evaluation Engineers; • Bachelor of Science in Mechanical Engineering; and • Masters of Business Administration.
Neither PV-10 nor the standardized measure of discounted future net cash flows purport to represent the fair value of our proved natural gas and oil reserves. 17 TABLE OF CONTENTS As of December 31, 2023, our proved reserve estimates included 3,325 Bcfe of reserves classified as proved undeveloped, compared to 4,321 Bcfe as of December 31, 2022.
Neither PV-10 nor the standardized measure of discounted future net cash flows purport to represent the fair value of our proved natural gas and oil reserves. 14 TABLE OF CONTENTS As of December 31, 2024, our proved reserve estimates included 3,842 Bcfe of reserves classified as proved undeveloped, compared to 3,325 Bcfe as of December 31, 2023.
We design contractor training to align as much as possible with employee training, encouraging synchronized knowledge sharing and understanding, critical to decreasing our cumulative incidents. Ethical Business Conduct Chesapeake works hard to maintain the confidence of our stakeholders.
We design contractor training to align as much as possible with employee training, encouraging synchronized knowledge sharing and understanding, critical to decreasing our cumulative incidents. 25 TABLE OF CONTENTS Ethical Business Conduct Expand Energy works hard to maintain the confidence of our stakeholders.
However, based on regulatory trends and increasingly stringent laws, as well as the increasing number of climate-related commitments by capital providers, our capital expenditures and operating expenses related to the protection of the environment and safety and health compliance have increased over the years and may continue to increase.
However, based on regulatory trends and increasingly stringent laws, as well as the increasing number of climate-related commitments by capital providers, our capital expenditures and operating expenses related to compliance with environmental and safety and health regulations have increased over time and may continue to increase.
Additionally, Chesapeake provides employees and their families access to a confidential Employee Assistance Program, which connects employees with trained counselors and other support professionals. 27 TABLE OF CONTENTS
Additionally, Expand Energy provides employees and their families access to a confidential Employee Assistance Program, which connects employees with trained counselors and other support professionals. 26 TABLE OF CONTENTS
Further, in May 2023, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (the “PHMSA”) issued a proposed rule that would require pipelines, underground natural gas storage facilities, and liquefied natural gas facilities to update leak detection and repair programs to require companies to use commercially available technologies to find and fix methane leaks from pipelines and other facilities.
Additionally, in January 2025, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (the “PHMSA”) finalized a rule that requires pipelines, underground natural gas storage facilities, and liquefied natural gas facilities to update leak detection and repair programs to require companies to use commercially available technologies to find and fix methane leaks from pipelines and other facilities.
Presented below is a summary of changes in our proved undeveloped reserves for 2023: Total (Bcfe) Proved undeveloped reserves, beginning of period 4,321 Extensions and discoveries 301 Revisions of previous estimates 236 Conversion to proved developed reserves (1,125) Purchase of reserves-in-place 40 Sales of reserves-in-place (448) Proved undeveloped reserves, end of period 3,325 As of December 31, 2023, all PUDs were planned to be developed within five years of original recording.
Presented below is a summary of changes in our proved undeveloped reserves for 2024: Total (Bcfe) Proved undeveloped reserves, beginning of period 3,325 Extensions and discoveries 55 Revisions of previous estimates (1,625) Conversion to proved developed reserves (1,050) Purchase of reserves-in-place 3,137 Sales of reserves-in-place — Proved undeveloped reserves, end of period 3,842 As of December 31, 2024, all PUDs were planned to be developed within five years of original recording.
President Biden has recommitted the United States to the Paris Agreement and, in April 2021, announced a goal of reducing the United States’ emissions by 50-52% below 2005 levels by 2030.
In 2021, the previous Presidential Administration recommitted the United States to the Paris Agreement and announced a goal of reducing the United States’ GHG emissions by 50-52% below 2005 levels by 2030.
Title to Properties Our title to properties is subject to royalty, overriding royalty, carried, net profits, working and other similar interests and contractual arrangements customary in the natural gas and oil industry, to liens for current taxes not yet due and to other encumbrances.
Risk Factors - “Natural gas and oil operations are uncertain and involve substantial costs and risks.” Title to Properties Our title to properties is subject to royalty, overriding royalty, carried, net profits, working and other similar interests and contractual arrangements customary in the natural gas and oil industry, to liens for current taxes not yet due and to other encumbrances.
Singh earned a PhD in Chemical Engineering from the University of Houston, an MBA from the University of Texas and a BTech in Chemical Engineering from the Indian Institute of Technology. Joshua J. Viets, Executive Vice President and Chief Operating Officer Joshua J. (“Josh”) Viets, 45, has served as Executive Vice President and Chief Operating Officer since February 2022.
Singh earned a PhD in Chemical Engineering from the University of Houston, an MBA from the University of Texas at Austin and a BTech in Chemical Engineering from the Indian Institute of Technology. Joshua J. Viets, Executive Vice President and Chief Operating Officer Joshua J.
Federal and state agencies have continued to assess the potential impacts of hydraulic fracturing, which could spur further action toward federal, state and/or local legislation and regulation.
Federal and state agencies have continued to assess the potential impacts of hydraulic fracturing, which could result in additional federal, state and/or local legislation and regulation.
Our operations also are subject to conservation regulations, including the regulation of the size of drilling and spacing units or proration units, the number of wells that may be drilled in a unit, the rate of production allowable from gas and oil wells, and the unitization or pooling of gas and oil properties.
Risk Factors - “We are subject to extensive governmental regulation, which can change and could adversely impact our business.” Our operations also are subject to conservation regulations, including the regulation of the size of drilling and spacing units or proration units, the number of wells that may be drilled in a unit, the rate of production allowable from gas and oil wells, and the unitization or pooling of gas and oil properties.
In November 2021, the Environmental Protection Agency (the “EPA”) proposed new regulations to establish comprehensive standards of performance and emission guidelines for methane and volatile organic compound emissions from existing operations in the oil and gas sector, including the exploration and production, transmission, processing, and storage segments.
In November 2021, the Environmental Protection Agency (the “EPA”) proposed new regulations to establish comprehensive standards of performance and emission guidelines for methane and volatile organic compound emissions from new, modified, reconstructed and existing facilities in the oil and gas sector.
We consider the responsibility and costs of environmental protection and safety and health compliance fundamental parts of our business. To date, we have been able to plan for and comply with environmental, safety and health laws and regulations without materially altering our operating strategy or incurring significant unreimbursed expenditures.
To date, we have been able to plan for and comply with environmental, safety and health laws and regulations without materially altering our operating strategy or incurring significant unreimbursed expenditures.
As of December 31, 2023, approximately 222 Bcfe, or 2%, of our total proved reserves were non-producing. Our ownership interest used for calculating proved reserves and the associated estimated future net revenue assumes maximum participation by other parties to our farm-out and participation agreements.
As of December 31, 2024, approximately 1,606 Bcfe, or 8%, of our total proved reserves were developed and non-producing, primarily due to our deferred turn in line program. Our ownership interest used for calculating proved reserves and the associated estimated future net revenue assumes maximum participation by other parties to our farm-out and participation agreements.
We believe we have satisfactory title to substantially all of our active properties in accordance with standards generally accepted in the natural gas and oil industry. Nevertheless, we are involved in title disputes from time to time that may result in litigation.
We believe we have satisfactory title to substantially all of our active properties in accordance with standards generally accepted in the natural gas and oil industry.
The following are significant areas of government control and regulation affecting our operations. Exploration and Production, Environmental, Health and Safety and Occupational Laws and Regulations Our operations are subject to federal, tribal, state, and local laws and regulations.
Exploration and Production, Environmental, Health and Safety and Occupational Laws and Regulations Our operations are subject to federal, tribal, state, and local laws and regulations.
Dell'Osso served as our Vice President – Finance and Chief Financial Officer of our wholly owned midstream subsidiary, Chesapeake Midstream Development, L.P., from August 2008 to November 2010. Before joining Chesapeake, Mr. Dell’Osso was an energy investment banker with Jefferies & Co. from 2006 to 2008 and Banc of America Securities from 2004 to 2006. Mr.
Dell’Osso served as our Executive Vice President and Chief Financial Officer since November 2010. Mr. Dell'Osso served as our Vice President – Finance and Chief Financial Officer of our wholly owned midstream subsidiary, Chesapeake Midstream Development, L.P., from August 2008 to November 2010. Before joining Expand Energy, Mr.
Oil production is sold under short-to-long-term market-sensitive and spot price contracts. We have entered into long-term gathering, processing, and transportation contracts with various parties that require us to deliver fixed, determinable quantities of production over specified periods of time. Certain of our contracts require us to make payments for any shortfalls in delivering or transporting minimum volumes under these commitments.
Oil production is sold under short-to-long-term market-sensitive and spot price contracts using a differential to NYMEX WTI. We have entered into long-term gathering, processing, and transportation contracts with various parties that require us to deliver fixed, determinable quantities of production over specified periods of time.
Generally, our natural gas and NGL production are sold to purchasers under index contracts, percentage-of-index contracts, spot price contracts or percentage-of-proceeds contracts. Under our index and percentage-of-index contracts, the price we receive is tied to published indices. Under the terms of our percentage-of-proceeds contracts, we receive a percentage of the resale price received from the ultimate purchaser.
Generally, our natural gas and NGL production are sold to purchasers under index contracts or daily spot price contracts. Under our index contracts, the price we receive is tied to published indices. Under our daily spot price contracts, we receive the daily spot price at the location where the gas or NGL are sold.
Our insurance coverage may not be sufficient to cover every claim made against us or may not be commercially available for purchase in the future.
Our insurance coverage may not be sufficient to cover every claim made against us or may not be commercially available for purchase in the future. Facilities We own an office complex in Oklahoma City, Oklahoma and lease an office building in Spring, Texas.
None of our employees were covered by collective bargaining agreements, and our management works to maintain good relations with our employees. Our Culture, Our Core Values At Chesapeake, our employees are driven to create value every day in a safe and responsible manner.
None of our employees were covered by collective bargaining agreements, and our management works to maintain good relations with our employees. Values-Driven Culture At Expand Energy, our core values are the foundation of our company.
Singh worked as an investment banker focused on oil and gas transactions for RBC Capital Markets and Goldman Sachs. A chemical engineer by training, he began his career at Shell Exploration & Production Company where he held business planning, reservoir engineering and research engineering roles of increasing importance. Mr.
A chemical engineer by training, he began his career at Shell Exploration & Production Company where he held business planning, reservoir engineering and research engineering roles of increasing importance. Mr.
Operating Hazards and Insurance The natural gas and oil business involves a variety of operating risks, including the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as oil spills, natural gas leaks, ruptures or discharges of toxic gases.
Nevertheless, we are involved in title disputes from time to time that may result in litigation. 22 TABLE OF CONTENTS Operating Hazards and Insurance The natural gas and oil business involves a variety of operating risks, including the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as oil spills, natural gas leaks, ruptures or discharges of materials or pollutants.
In 2023, we invested approximately $674 million to convert 1,125 Bcfe of PUDs to proved developed reserves. We added 301 Bcfe of PUD reserves through extensions and discoveries primarily due to new PUDs added in the Upper Marcellus. We had a net upward revision in previous estimates of 236 Bcfe.
In 2024, we invested approximately $395 million to convert 1,050 Bcfe of PUDs to proved developed reserves. We added 55 Bcfe of PUD reserves through extensions and discoveries due to new PUDs added in Northeast Appalachia. We had a net downward revision in previous estimates of 1,625 Bcfe.
Failure to comply with these laws and regulations can lead to the imposition of remedial liabilities, administrative, civil or criminal fines or penalties or injunctions limiting our operations in affected areas. Moreover, multiple environmental laws provide for citizen suits, which allow environmental organizations to act in the place of the government and sue operators for alleged violations of environmental law.
Failure to comply with these laws and regulations can lead to the imposition of remedial liabilities, administrative, civil or criminal fines or penalties or injunctions limiting our operations in affected areas.
For the purpose of determining prices used in our reserve reports, we used the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2023. The price used in our PV-10 measure was $2.64 per Mcf of natural gas, before basis differential adjustments.
For the purpose of determining prices used in our reserve reports, we used the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2024.
Our core values are the foundation of our culture and the driving force behind our goal to achieve ESG excellence. Serving as the lens through which we evaluate every business decision, our commitment to these values, in both words and actions builds a stronger, healthier Chesapeake, benefiting all our stakeholders.
Serving as the lens through which we evaluate business decisions, our commitment to these values, in both words and actions builds a stronger, healthier Expand Energy, benefiting all our stakeholders.
On March 9, 2022, we completed our acquisition of Chief, Radler and associated non-operated interests held by affiliates of Tug Hill. Chief, Radler and Tug Hill held producing assets and an inventory of premium drilling locations in the Marcellus Shale in Northeast Pennsylvania.
Chief, Radler and Tug Hill held producing assets and an inventory of premium drilling locations in the Marcellus Shale in Northeast Pennsylvania.
These values were calculated assuming that we will expend approximately $2.0 billion to develop these reserves ($649 million in 2024, $326 million in 2025, $463 million in 2026, $292 million in 2027 and $221 million in 2028).
These values were calculated assuming that we will expend approximately $1.8 billion to develop these reserves ($739 million in 2025, $546 million in 2026, $530 million in 2027, $8 million in 2028 and $7 million in 2029).
The foundation of our safety training efforts is our Stay Accident Free Every day (S.A.F.E.) program, which encourages all workers on our locations to take personal responsibility for their safety and the safety of those around them.
The foundation of our safety culture is our Own Safety, Lead Safety motto, which encourages all workers on our locations to take personal responsibility for their safety and the safety of those around them.
Well Data As of December 31, 2023, we held an interest in approximately 5,000 gross productive gas wells, including 3,300 (1,900 net) wells in which we held a working interest and 1,700 wells in which we held an overriding or royalty interest.
Southwest Appalachia - Marcellus and Utica Shales in Ohio and West Virginia. Well Data As of December 31, 2024, we held an interest in approximately 8,000 gross productive wells, including 6,200 (4,300 net) wells in which we held a working interest and 1,800 wells in which we held an overriding or royalty interest.
Singh served for six years on the executive leadership team at BPX Energy, the United States onshore subsidiary of BP (NYSE: BP). He most recently led the M&A, corporate land and reserves functions, having previously served as Head of Business Development and Exploration and as Senior Vice President – North Business Unit. Prior to joining BPX, Mr.
He most recently led the M&A, corporate land and reserves functions, having previously served as Head of Business Development and Exploration and as Senior Vice President – North Business Unit. Prior to joining BPX, Mr. Singh worked as an investment banker focused on oil and gas transactions for RBC Capital Markets and Goldman Sachs.
Facilities We own an office complex in Oklahoma City and we own or lease various field offices in cities or towns in the areas where we conduct our operations. 24 TABLE OF CONTENTS Executive Officers Domenic J. Dell'Osso, Jr., President, Chief Executive Officer and Director Domenic J.
Additionally, we own or lease various field offices in cities or towns in the areas where we conduct our operations. 23 TABLE OF CONTENTS Executive Officers Domenic J. Dell'Osso, Jr., President, Chief Executive Officer and Director Domenic J. (“Nick”) Dell'Osso, Jr., 48, has served as President and Chief Executive Officer since October 2021. Prior to being named as CEO, Mr.
The net upward revision primarily consisted of 1,345 Bcfe from PUDs added in areas previously categorized as proved in both Marcellus and Haynesville, and 469 Bcfe of positive revisions on existing PUD locations primarily related to longer expected lateral lengths in both Marcellus and Haynesville, partially offset by 1,131 Bcfe of downward revisions due to lower natural gas, oil and NGL prices in 2023, and a downward revision of 447 Bcfe due to development plan and other changes in Marcellus and Haynesville.
The net downward revision primarily consisted of 2,022 Bcfe of downward revisions due to lower natural gas, oil and NGL prices in 2024, and a downward revision of 183 Bcfe due to development plan changes in Northeast Appalachia and Haynesville, partially offset by 462 Bcfe of positive revisions on existing PUD locations primarily related to increased production forecasts, increased ownership interest in the locations, and improved differentials in the Haynesville, as well as 118 Bcfe of PUDs added in areas previously categorized as proved in Northeast Appalachia and Haynesville.
For the 2021 Predecessor Period, sales to Valero Energy Corporation accounted for approximately 19% of total revenues (before the effects of hedging). No other purchasers accounted for more than 10% of our total revenues during the 2023 Successor Period, 2022 Successor Period, 2021 Successor Period or 2021 Predecessor Period.
For the year ended December 31, 2022, we had sales to two purchasers that accounted for approximately 13% and 10% of total revenues (before the effects of hedging). No other purchasers accounted for more than 10% of our total revenues during the years ended December 31, 2023 or 2022.
We added 40 Bcfe of PUDs through purchase of reserves-in-place in Haynesville. We divested 448 Bcfe of PUD reserves primarily related to our Eagle Ford divestitures. The future net revenue attributable to our estimated PUDs was $2.36 billion, and the present value was $843 million as of December 31, 2023.
We added 3,137 Bcfe of PUDs through purchase of reserves-in-place, primarily as a result of the Southwestern Merger. The future net revenue attributable to our estimated PUDs was $3.0 billion, and the present value was $1.0 billion as of December 31, 2024.
We operate approximately 98% of our current daily production volumes. 13 TABLE OF CONTENTS Drilling Activity The following table sets forth the wells we completed or participated in during the periods indicated.
We also completed 81 gross (62 net) wells as operator and participated in another 6 gross and less than one net well completed by other operators. We operate approximately 99% of our current daily production volumes. Drilling Activity The following table sets forth the wells we completed or participated in during the periods indicated.
Our safety culture is championed by our Board of Directors and executive leadership team, owned by every employee and contractor and managed by our Health, Safety, Environmental and Regulatory (HSER) team. Maintaining a safe work environment and promoting safe behaviors is a commitment that each of our employees and contractors own together.
We set and deliver robust safety standards, prioritizing the well-being of our employees and contractors. Our safety culture is championed by our Board of Directors and executive leadership team, owned by every employee and contractor and managed by our Health, Safety, Environmental and Regulatory (HSER) team.
To facilitate our discussion in this report, we refer to the post-emergence reorganized company as the “Successor” and the pre-emergence company as the “Predecessor.” See Note 2 and Note 3 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of our bankruptcy, the resulting reorganization and fresh start accounting. 12 TABLE OF CONTENTS Information About Us We make available, free of charge on our website at chk.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Information About Us We make available, free of charge on our website at expandenergy.com , our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We hold each other accountable to keeping our sites, our co-workers and our contractors safe. 26 TABLE OF CONTENTS One program that reinforces this philosophy of personal responsibility is Stop Work Authority. Through Stop Work Authority, every employee and contractor has the right, responsibility and authority to stop work if conditions are unsafe or could cause harm to the environment.
Maintaining a safe work environment and promoting safe behaviors is a commitment that each of our employees and contractors own together. We hold each other accountable to keeping our sites, our co-workers and our contractors safe. One program that reinforces this philosophy of personal responsibility is Stop Work Authority.
This price should not be interpreted as a prediction of future prices, nor does it reflect the value of our commodity derivative instruments in place as of December 31, 2023. The amounts shown do not give effect to non-property-related expenses, such as corporate general and administrative expenses and debt service, or to depreciation, depletion and amortization.
The amounts shown do not give effect to non-property-related expenses, such as corporate general and administrative expenses and debt service, or to depreciation, depletion and amortization.
Operating Areas We focus our acquisition, exploration, development and production efforts in the geographic operating areas described below. Marcellus - Northern Appalachian Basin in Pennsylvania. Haynesville - Haynesville/Bossier Shales in Northwestern Louisiana.
We also intend to continue to dedicate capital to projects designed to reduce the environmental impact of our production activities. 10 TABLE OF CONTENTS Operating Areas We focus our acquisition, exploration, development and production efforts in the geographic operating areas described below. Haynesville - Haynesville and Bossier Shales in Louisiana. Northeast Appalachia - Marcellus Shale in Pennsylvania.
If any of these should occur, we could incur legal defense costs and could suffer substantial losses due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, and suspension of operations.
Any of these events could adversely affect our ability to conduct operations or result in substantial loss to us as a result of defending against claims by government agencies or third parties, injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, and suspension of operations.
Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy sector.
In November 2021, at the 26th Conference of the Parties on the UN Framework Convention on Climate Change (“COP26”), the United States and the European Union jointly announced the Global Methane Pledge, an initiative committing to a collective goal of reducing global methane emissions by at least 30% from 2020 levels by 2030, including “all feasible reductions” in the energy sector.
December 31, 2023 Natural Gas Oil NGL Total (Bcf) (MMBbl) (MMBbl) (Bcfe) Proved developed 6,363 — — 6,363 Proved undeveloped 3,325 — — 3,325 Total proved (a) 9,688 — — 9,688 Proved Developed Proved Undeveloped Total Proved Standardized measure (b) $ 4,477 Estimated future net revenue (b) $ 6,194 $ 2,360 $ 8,554 Present value of estimated future net revenue (PV-10) (b) $ 3,728 $ 843 $ 4,571 ___________________________________________ (a) Marcellus and Haynesville accounted for approximately 73% and 27%, respectively, of our estimated proved reserves by volume as of December 31, 2023.
December 31, 2024 Natural Gas Oil NGL Total (Bcf) (MMBbl) (MMBbl) (Bcfe) Proved developed 14,418 40.3 383.0 16,958 Proved undeveloped 2,506 27.6 195.1 3,842 Total proved (a) 16,924 67.9 578.1 20,800 Proved Developed Proved Undeveloped Total Proved Standardized measure (b) $ 7,531 Estimated future net revenue (b) $ 10,620 $ 3,049 $ 13,669 Present value of estimated future net revenue (PV-10) (b) $ 6,519 $ 1,048 $ 7,567 ___________________________________________ (a) Haynesville, Northeast Appalachia and Southwest Appalachia accounted for approximately 19%, 39% and 42%, respectively, of our estimated proved reserves by volume as of December 31, 2024.
Business Strategy Our business strategy is to create shareholder value through the responsible development of our significant resource plays, while continuing to be a leading provider of affordable, reliable, lower carbon energy to markets in need. Superior Capital Returns.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Expand Energy, that file electronically with the SEC. Business Strategy Our strategy is to create shareholder value through the responsible development of our significant resource plays while continuing to be a leading provider of natural gas to markets in need.
Prior to joining Chesapeake, Mr. Viets worked for 20 years in operational positions of increasing importance at ConocoPhillips Company (NYSE: COP). He most recently served as Vice President, Delaware Basin and previously held leadership positions in operations, engineering, subsurface, and capital project across the ConocoPhillips portfolio. Mr.
He most recently served as Vice President, Delaware Basin and previously held leadership positions in operations, engineering, subsurface, and capital project across the ConocoPhillips portfolio. Mr. Viets earned a Bachelor of Science in Petroleum Engineering from Colorado School of Mines. Christopher W. Lacy, Executive Vice President - General Counsel and Corporate Secretary Christopher W.
Failure to comply with applicable regulations or permit requirements could result in revocation of our permits, inability to obtain new permits and the imposition of fines and penalties. For further discussion, see Item 1A. Risk Factors - Natural gas and oil operations are uncertain and involve substantial costs and risks.
Delays in obtaining permits or an inability to obtain new permits or permit modifications or renewals could inhibit our ability to execute our drilling and production plans. Failure to comply with applicable regulations or permit requirements could result in revocation of our permits, inability to obtain new permits and the imposition of fines and penalties.
These laws and regulations increase the cost of doing business. Additionally, currently unforeseen environmental incidents may occur or past non-compliance with environmental laws or regulations may be discovered. We actively monitor regulatory developments applicable to our industry in order to anticipate, design and implement required compliance activities and systems.
We actively monitor regulatory developments applicable to our industry in order to anticipate, design and implement required compliance activities and systems. The following is a summary of the existing laws, rules and regulations to which our operations are subject.
During 2023, we completed our exit from Eagle Ford through three separate divestiture transactions, with aggregate proceeds from these transactions exceeding $3.5 billion, subject to customary post-closing adjustments. On March 25, 2022, we sold our Powder River Basin assets in Wyoming to Continental Resources, Inc. for approximately $450 million.
We believe that we are uniquely positioned to deliver affordable, lower-carbon energy to meet growing domestic and international demand while creating sustainable value for stakeholders. During 2023, we completed our exit from Eagle Ford through three separate divestiture transactions, with aggregate proceeds from these transactions exceeding $3.5 billion, subject to customary post-closing adjustments.
Dell’Osso graduated from Boston College in 1998 and from the University of Texas at Austin in 2003. Mohit Singh, Executive Vice President and Chief Financial Officer Mohit Singh, 47, has served as Executive Vice President and Chief Financial Officer since December 2021. Prior to joining Chesapeake, Mr.
Mohit Singh, Executive Vice President and Chief Financial Officer Mohit Singh, 48, has served as Executive Vice President and Chief Financial Officer since December 2021. Prior to joining Expand Energy, Mr. Singh served for six years on the executive leadership team at BPX Energy, the United States onshore subsidiary of BP plc (NYSE: BP).
Restrictions surrounding onshore drilling and restrictions on the ability to obtain required permits could have a material adverse impact on our operations. Permitting activities are also subject to frequent delays. Delays in obtaining permits or an inability to obtain new permits or permit renewals could inhibit our ability to execute our drilling and production plans.
Any future restrictions surrounding onshore drilling and restrictions on the ability to obtain required permits could have a material adverse impact on our operations. Obtaining environmental permits has the potential to delay the development and operation of natural gas and oil projects.
These rules and policy priorities may result in the development of additional regulations or changes to existing regulations, certain of which could negatively impact our financial position, results of operations and cash flows.
These rules and policy priorities could have a material adverse effect on our financial position, results of operations and cash flows.
Of the 3,300 wells in which we held a working interest, we operated 2,800 gross wells and held a non-operating working interest in 500 gross wells. We also completed 166 gross (108 net) wells as operator and participated in another 28 gross (1 net) wells completed by other operators.
Of the 6,200 (4,300 net) wells in which we held a working interest, substantially all were classified as productive natural gas wells. During 2024, we operated 5,500 gross wells and held a non-operating working interest in 700 gross wells.
See Note 7 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of commitments. As of December 31, 2023, we had delivery commitments for a total of approximately 3,100 Bcf over the next 10 years.
Certain of our contracts require us to make payments for any shortfalls in delivering or transporting minimum volumes under these commitments. See Note 5 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of commitments.
Developed Leasehold Undeveloped Leasehold Total Gross Acres Net Acres Gross Acres Net Acres Gross Acres Net Acres (in thousands) Marcellus 576 337 182 152 758 489 Haynesville 354 322 100 59 454 381 Other (a) 313 293 1,351 1,276 1,664 1,569 Total 1,243 952 1,633 1,487 2,876 2,439 ___________________________________________ (a) Includes 1.2 million net acres retained in the 2016 divestiture of our Devonian Shale assets, in which we retained all rights below the base of the Kope formation.
Developed Leasehold Undeveloped Leasehold Total Gross Acres Net Acres Gross Acres Net Acres Gross Acres Net Acres (in thousands) Haynesville 698 586 91 78 789 664 Northeast Appalachia 754 501 242 199 996 700 Southwest Appalachia 267 204 493 362 760 566 Other (a) 310 290 1,346 1,265 1,656 1,555 Total 2,029 1,581 2,172 1,904 4,201 3,485 ___________________________________________ (a) Includes 1.2 million net acres retained in the 2016 divestiture of our Devonian Shale assets, in which we retained all rights below the base of the Kope formation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSummary Risk Factors Risks Related to Operating our Business • Conservation measures and technological advances could reduce demand for natural gas and oil. • Negative public perception regarding us or our industry could have an adverse effect on our operations. • Risks related to potential acquisitions or dispositions may adversely affect our business. • The gas and oil exploration and production industry is very competitive; • Natural gas, oil and NGL prices fluctuate widely, and lower prices for an extended period of time are likely to have a material adverse effect on our business. • Regional epidemics or pandemics and related economic turmoil, including supply chain constraints, have affected, and could in future adversely affect us. • If commodity prices fall or drilling efforts are unsuccessful, we may be required to record write-downs of the carrying value of our natural gas and oil properties. • Significant capital expenditures are required to replace our reserves and conduct our business. • If we are not able to replace reserves, we may not be able to sustain production. • The actual quantities of and future net revenues from our proved reserves may be less than our estimates. • Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns. • Certain of our undeveloped properties are subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are renewed. • Our commodity price risk management activities may limit the benefit we would receive from increases in commodity prices, may require us to provide collateral for derivative liabilities and involve risk that our counterparties may be unable to satisfy their obligations to us. • Natural gas and oil operations are uncertain and involve substantial costs and risks. • Our ability to produce natural gas, oil and NGL economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our operations or are unable to dispose of or recycle the water we use economically and in an environmentally safe manner. • Our operations may be adversely affected by pipeline, trucking and gathering system capacity constraints and may be subject to interruptions that could adversely affect our cash flow. • Our business strategy is increasingly focused on capitalizing on the growing U.S.
Biggest changeSummary Risk Factors Risks Related to Operating our Business • Natural gas, oil and NGL prices fluctuate widely, and lower prices for an extended period of time are likely to have a material adverse effect on our business. • Conservation measures and technological advances could reduce demand for natural gas and oil. • Negative public perception regarding us or our industry could have an adverse effect on our operations. • The gas and oil exploration and production industry is very competitive; some of our competitors have greater financial and other resources than we do, and there is competition to attract and retain talent and competition over access to certain industry equipment. • Risks related to potential acquisitions or dispositions may adversely affect our business. • If commodity prices fall or drilling efforts are unsuccessful, we may be required to record write-downs of the carrying value of our natural gas and oil properties. • Significant capital expenditures are required to replace our reserves and conduct our business. • If we are not able to replace reserves, we may not be able to sustain production. • The actual quantities of and future net revenues from our proved reserves may be less than our estimates. • Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns. • Certain of our undeveloped properties are subject to leases that will expire over the next several years unless production is established on units containing the acreage or the leases are renewed. • Our commodity price risk management activities may limit the benefit we would receive from increases in commodity prices, may require us to provide collateral for derivative liabilities and involve risk that our counterparties may be unable to satisfy their obligations to us. • Natural gas and oil operations are uncertain and involve substantial costs and risks. • Our ability to produce natural gas, oil and NGLs economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our operations or are unable to dispose of or recycle the water we use economically and in compliance with environmental laws. • Our operations may be adversely affected by pipeline, trucking and gathering system capacity constraints and may be subject to interruptions that could adversely affect our cash flow. • Our business strategy is increasingly focused on participating in the global LNG value chain, which is dependent, in part, on the growing U.S.
Regulatory developments could, among other things, restrict production levels, impose price controls, change environmental protection requirements with respect to the treatment of hazardous waste, air emissions, or water discharges, and increase taxes, royalties and other amounts payable to the government.
Other regulatory developments could, among other things, restrict production levels, impose price controls, change environmental protection requirements with respect to the treatment of hazardous waste, air emissions, or water discharges, and increase taxes, royalties and other amounts payable to the government.
While we are not currently parties to any such litigation, the ultimate outcomes of such litigation and its impact to us are uncertain; we could incur substantial legal costs associated with defending against these or similar lawsuits in future.
While we are not currently parties to any such litigation, the ultimate outcomes of such litigation and its impact to us are uncertain; we could incur substantial legal costs associated with defending against these or similar lawsuits in the future.
Depending on the market conditions and our tax basis, an additional Section 382 Ownership Change may result in a net unrealized built-in loss. The annual limitation in such a case would additionally be applied to certain of our tax items other than just NOL carryforwards, disallowed business interest carryforwards and tax credits.
Depending on the market conditions and our tax basis, an additional Section 382 Ownership Change may result in a net unrealized built-in loss. The annual limitation in such a case would additionally be applied to certain of our tax items other than just net operating loss (NOL) carryforwards, disallowed business interest carryforwards and tax credits.
For example, while we are exploring initiatives related to various energy-related technologies, such as carbon capture and sequestration, this may require us to incur significant costs, and there is no guarantee that markets will develop, either in the manner we anticipate or at all, for the technologies we invest in.
For example, while we are exploring initiatives related to various energy-related technologies, such as carbon capture and sequestration, this may require us to incur significant costs, and there is no guarantee that markets will develop, either in the manner we anticipate or at all, for the technologies in which we invest.
However, achieving these benefits requires, among other things, realization of the targeted cost and commercial synergies expected from the merger. This growth and the anticipated benefits of the transaction may not be realized fully or at all or may take longer to realize than expected.
However, achieving these benefits requires, among other things, realization of the targeted cost and commercial synergies expected from the Southwestern Merger. This growth and the anticipated benefits of the transaction may not be realized fully or at all or may take longer to realize than expected.
Any such acquisition or disposition involves risks and we cannot assure you that: • any acquisition will be successfully integrated into our operations and internal controls; • the due diligence conducted prior to an acquisition will uncover situations that could result in financial or legal exposure, such as title defects and potential environmental and other liabilities; • post-closing purchase price adjustments will be realized in our favor; • our assumptions about, among other things, reserves, estimated production, revenues, capital expenditures, operating expenses and costs will be accurate; • there will not be delays in closing, lower than expected sales proceeds for the disposed assets or business, residual liabilities, or post-closing claims for indemnification; 30 TABLE OF CONTENTS • any investment, acquisition, or disposition will not divert management resources from the operation of our business; and • any investment, acquisition, or disposition will not have a material adverse effect on our financial condition, results of operations, cash flows or reserves.
Any such acquisition or disposition involves risks and we cannot assure you that: • any acquisition will be successfully integrated into our operations and internal controls; • the due diligence conducted prior to an acquisition will uncover situations that could result in financial or legal exposure, such as title defects and potential environmental and other liabilities; • post-closing purchase price adjustments will be realized in our favor; • our assumptions about, among other things, reserves, estimated production, revenues, capital expenditures, operating expenses and costs will be accurate; • there will not be delays in closing, lower than expected sales proceeds for the disposed assets or business, residual liabilities or post-closing claims for indemnification; • any investment, acquisition or disposition will not divert management resources from the operation of our business; and • any investment, acquisition or disposition will not have a material adverse effect on our financial condition, results of operations, cash flows or reserves.
While concerns over energy security have, in some situations, seen increased demand for natural gas, sustained concerns over energy security may result in an accelerated adoption of renewable energy and other alternative energy generation or storage, or energy efficiency, technologies.
Additionally, while concerns over energy security have, in some situations, seen increased demand for natural gas, sustained concerns over energy security may result in an accelerated adoption of renewable energy and other alternative energy generation or storage, or energy efficiency, technologies.
Regional epidemics or pandemics and related economic turmoil, including supply chain constraints, have affected, and could in future adversely affect our business, financial condition, results of operations and cash flows.
Regional epidemics or pandemics and related economic turmoil, including supply chain constraints, have affected, and could in the future adversely affect our business, financial condition, results of operations and cash flows.
For example, in late February 2022, Russia launched a military invasion against Ukraine. Sustained conflict and disruption in the region is likely in the near term, and the longer-term duration of the war is uncertain.
For example, in late February 2022, Russia launched a military invasion against Ukraine. Sustained conflict and disruption in the region are likely in the near term, and the longer-term duration of the war is uncertain.
Any failure to comply with investor, customer or other stakeholder expectations and standards, which are evolving, or if we are perceived to not have responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, could cause reputational harm to our business, increase our risk of litigation, and could have a material adverse effect on our results of operations.
Any failure to comply with investor, customer or other stakeholder expectations and standards, which are evolving and can conflict, or if we are perceived to not have responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, could cause reputational harm to our business, increase our risk of litigation, and could have a material adverse effect on our results of operations.
Continuing political and social attention to the issue of climate change has resulted in legislative, regulatory and other initiatives to reduce GHG emissions, such as carbon dioxide and methane.
Political and social attention to the issue of climate change has resulted in legislative, regulatory and other initiatives to reduce GHG emissions, such as carbon dioxide and methane.
In addition, trading in our New Common Stock, additional issuance of New Common Stock, and certain other stock transactions could lead to an additional, potentially more restrictive, annual limitation.
In addition, trading in our common stock, additional issuance of common stock, and certain other stock transactions could lead to an additional, potentially more restrictive, annual limitation.
Interest rates in effect from time to time and the risks associated with our business or the gas and oil industry in general will affect the appropriateness of the 10% discount factor. 33 TABLE OF CONTENTS Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.
Interest rates in effect from time to time and the risks associated with our business or the gas and oil industry in general will affect the appropriateness of the 10% discount factor. 32 TABLE OF CONTENTS Our development and exploratory drilling efforts and our well operations may not be profitable or achieve our targeted returns.
Additionally, we may choose to liquidate existing derivative positions prior to the expiration of their contractual maturities to monetize gain positions for the purpose of funding our capital program. 34 TABLE OF CONTENTS Most of our natural gas, oil and NGL derivative contracts are with counterparties under bilateral hedging arrangements.
Additionally, we may choose to liquidate existing derivative positions prior to the expiration of their contractual maturities to monetize gain positions for the purpose of funding our capital program. 33 TABLE OF CONTENTS Most of our natural gas, oil and NGL derivative contracts are with counterparties under bilateral hedging arrangements.
Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Both advocates and opponents to certain ESG initiatives are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business.
Our ability to generate operating cash flow is subject to a number of risks and variables, such as the level of production from existing wells, prices of natural gas, oil and NGL, our success in developing and producing new reserves and the other risk factors discussed herein.
Our ability to generate operating cash flow is subject to a number of risks and variables, such as the level of production from existing wells, prices of natural gas, oil and NGLs, our success in developing and producing new reserves and the other risk factors discussed herein.
If we are 32 TABLE OF CONTENTS unable to fund our capital expenditures as planned, we could experience a curtailment of our exploration and development activity, a loss of properties and a decline in our natural gas, oil and NGL reserves. If we are not able to replace reserves, we may not be able to sustain production.
If we are unable to fund our capital expenditures as planned, we could experience a curtailment of our exploration and development activity, a loss of properties and a decline in our natural gas, oil and NGL reserves. 31 TABLE OF CONTENTS If we are not able to replace reserves, we may not be able to sustain production.
In addition, wells that are profitable may not meet our internal return targets, which are dependent upon the current and future market prices for natural gas, oil and NGL, costs associated with producing natural gas, oil and NGL and our ability to add reserves at an acceptable cost.
In addition, wells that are profitable may not meet our internal return targets, which are dependent upon the current and future market prices for natural gas, oil and NGLs, costs associated with producing natural gas, oil and NGLs and our ability to add reserves at an acceptable cost.
For example, we are subject to various state privacy laws, such as the California Consumer Privacy Act (“CCPA”), which came into effect in January, 2020, and the California Privacy Rights Act (“CPRA”), which expands upon the CCPA and came into effect in January 2023 (with a lookback period until January 2022).
For example, we are subject to various state privacy laws, such as the California Consumer Privacy Act (“CCPA”), which came into effect in January 2020, and the California Privacy Rights Act (“CPRA”), which expands upon the CCPA and came into effect in January 2023 (with a lookback period beginning January 2022).
Environmental laws may impose strict, joint and several liability, and failure to comply with 48 TABLE OF CONTENTS environmental laws and regulations can result in the imposition of administrative, civil or criminal fines and penalties, as well as injunctions limiting operations in affected areas.
Environmental laws may impose strict, joint and several liability, and failure to comply with environmental laws and regulations can result in the imposition of administrative, civil or criminal fines and 47 TABLE OF CONTENTS penalties, as well as injunctions limiting operations in affected areas.
Increasing attention to ESG matters and our ability to achieve and maintain ESG certifications, goals and commitments may impact our business, financial results or stock price. In recent years, increasing attention has been given to corporate activities related to ESG matters in public discourse and the investment community.
Increasing attention to ESG matters and our ability to achieve and maintain ESG certifications, goals and commitments may impact our business, financial results or stock price. Increasing attention has been given to corporate activities related to ESG matters in public discourse and the investment community.
Further, legislation funding the PHMSA through 2023 requires the agency to engage in additional rulemaking to amend the integrity management program, emergency response plan, operation and maintenance manual, and pressure control recordkeeping requirements for gas distribution operators; to create new leak detection and repair program obligations; and to set new minimum federal safety standards for onshore gas gathering lines.
Further, legislation funding the PHMSA through 2023 requires the agency to engage in additional rulemaking (i) to amend the integrity management program, emergency response plan, operation and maintenance manual and pressure control recordkeeping requirements for gas distribution operators, (ii) to create new leak detection and repair program obligations and (iii) to set new minimum federal safety standards for onshore gas gathering lines.
At this time, we cannot predict the cost of these requirements or other potential new or amended regulations, but they could be significant. Moreover, violations of pipeline safety regulations can result in the imposition of significant penalties. Hydraulic Fracturing.
At this time, we cannot predict the cost of these requirements or other potential new or amended regulations, but they could be significant. Moreover, violations of pipeline safety regulations can result in the imposition of significant penalties.
In addition, we may seek to more directly participate in the LNG market through direct marketing arrangements with LNG export facilities and/or end users, which could expose us to additional commercial risks associated with the global LNG markets. As a domestic natural gas exploration and production company, we may be indirectly exposed to certain risks in the U.S.
In addition, we may seek to more directly participate in the LNG value chain through direct marketing arrangements with LNG export facilities and/or end users, which could expose us to additional commercial risks associated with the global LNG markets. As a domestic natural gas exploration and production company, we may be indirectly exposed to certain risks in the U.S.
We face evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our digital technologies and business data, including malicious attacks by third parties or insiders, social engineering/phishing and human error, as well as bugs, misconfigurations of hardware or software and other vulnerabilities that may exist in our or our third-party providers’ systems or technologies.
We face evolving cybersecurity risks that threaten the confidentiality, integrity 36 TABLE OF CONTENTS and availability of our digital technologies and business data, including malicious attacks by third parties or insiders, social engineering/phishing and human error, as well as bugs, misconfigurations of hardware or software and other vulnerabilities that may exist in our or our third-party providers’ systems or technologies.
Potential difficulties that Chesapeake and Southwestern may encounter as part of the integration process include the following: • the inability to successfully combine the business of Chesapeake and Southwestern in a manner that permits the combined company to achieve, on a timely basis, or at all, the enhanced revenue opportunities and cost savings and other benefits anticipated to result from the Southwestern Merger; • complexities associated with managing the combined businesses, including difficulty addressing possible differences in operational philosophies and the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; • the assumption of contractual obligations with less favorable or more restrictive terms; and • potential unknown liabilities and unforeseen increased expenses or delays associated with the Southwestern Merger.
Potential difficulties that we may encounter as part of the integration process include the following: • the inability to successfully combine the business of the Company and Southwestern in a manner that permits us to achieve, on a timely basis, or at all, the enhanced revenue opportunities and cost savings and other benefits anticipated to result from the Southwestern Merger; • complexities associated with managing the combined businesses, including difficulty addressing possible differences in operational philosophies and the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; • the assumption of contractual obligations with less favorable or more restrictive terms; and 42 TABLE OF CONTENTS • potential unknown liabilities and unforeseen increased expenses or delays following the Southwestern Merger.
If the economic or political climate in the United States or abroad deteriorates, worldwide demand for petroleum products could diminish, which could impact the price at which we can sell our production, affect the ability of our vendors, suppliers and customers to continue operations and materially adversely impact our results of operations, liquidity and financial condition.
If the economic or political climate in the United States or abroad deteriorates, worldwide demand for petroleum products could diminish, which could impact the price at which we can sell our production, affect the ability of our vendors, suppliers and customers 38 TABLE OF CONTENTS to continue operations and materially adversely impact our results of operations, liquidity and financial condition.
Certain financial institutions, funds and other sources of capital have also elected to restrict or eliminate their investment in certain fossil fuel-related activities. Even if capital providers have not generally restricted their investment in fossil fuel-related activities, they may still assess various ESG considerations in making voting and capital allocation decisions.
Certain financial institutions, funds and other sources of capital have also elected to restrict or eliminate their investment in certain fossil fuel-related activities, which may restrict our access to capital. Even if capital providers have not generally restricted their investment in fossil fuel-related activities, they may still assess various ESG considerations in making voting and capital allocation decisions.
The imposition of environmental initiatives and regulations could further restrict our ability to conduct certain operations such as hydraulic fracturing or disposal of waste, including, but not limited to, produced water, drilling fluids and other materials associated with the exploration, development or production of natural gas and oil.
The imposition of new or revised environmental regulations could further restrict our ability to conduct certain operations such as hydraulic fracturing or disposal of waste, including, but not limited to, produced water, drilling fluids and other materials associated with the exploration, development or production of natural gas and oil.
LNG export markets, including to the extent that we have entered into, or may in the future enter into, long-term natural gas supply agreements with LNG export facilities. The LNG export industry is a highly regulated and capital intensive industry that is subject to a number of risks.
LNG export markets, including to the extent that we have entered into, or may in the future enter into, 35 TABLE OF CONTENTS long-term natural gas supply agreements with LNG export facilities. The LNG export industry is a highly regulated and capital-intensive industry that is subject to a number of risks.
Additionally, such expectations and related activism may result in demand shifts for natural gas, oil and NGL in addition to potentially impacting our access to, and costs of, capital.
Additionally, such expectations and related activism may result in demand shifts for natural gas, oil and NGLs in addition to potentially impacting our access to, and costs of, capital.
The occurrence of these and other events permitting termination may be outside of our control and may expose us to unrecoverable losses. 36 TABLE OF CONTENTS Further, any future commercial agreement may expose us to commodity risks associated with differential pricing of natural gas in different markets.
The occurrence of these and other events permitting termination may be outside of our control and may expose us to unrecoverable losses. Further, any future commercial agreement may expose us to commodity risks associated with differential pricing of natural gas in different markets.
Additionally, challenges in the economy have led and could further lead to reductions in the demand for gas and oil, or further reductions in the prices of gas and oil, or both, which could have a negative impact on our financial position, results of operations and cash flows. 39 TABLE OF CONTENTS Restrictive covenants in certain of our debt agreements could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
Additionally, challenges in the economy have led and could further lead to reductions in the demand for gas and oil, or further reductions in the prices of gas and oil, or both, which could have a negative impact on our financial position, results of operations and cash flows. 39 TABLE OF CONTENTS Restrictive covenants in certain of our existing and future debt instruments may limit our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
As a result, we may be unable to anticipate, detect, prevent, investigate or contain future attacks, particularly as the methodologies utilized by attackers change frequently or are not recognized until launched, and we may be unable to investigate or remediate incidents because attackers are increasingly using techniques and 37 TABLE OF CONTENTS tools designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
As a result, we may be unable to anticipate, detect, prevent, investigate or contain future attacks, particularly as the methodologies utilized by attackers change frequently or are not recognized until launched, and we may be unable to investigate or remediate incidents because attackers are increasingly using techniques and tools designed to circumvent controls, to avoid detection and to remove or obfuscate forensic evidence.
A cyber-attack, or the perception thereof, involving our information systems and related infrastructure, or that of our business associates or third-party providers, could result in supply chain disruptions that delay or prevent the transportation and marketing of our production, non-compliance leading to regulatory fines or penalties, loss or disclosure of, or damage to, our or any of our customer’s or supplier’s data or confidential information that could harm our business by damaging our reputation, subjecting us to potential financial or legal liability, and requiring us to incur significant costs, including costs to repair or restore our systems and data or to take other remedial steps.
A cyber-attack, or the perception thereof, involving our information systems and related infrastructure, or that of our business associates or third-party providers, could result in supply chain disruptions that delay or prevent the transportation and marketing of our production, non-compliance leading to regulatory fines or penalties, loss or disclosure of, damage to, our or any of our customer’s or supplier’s data or confidential information that could harm our business by damaging our reputation, subjecting us to potential financial or legal liability and requiring us to incur significant costs, including expensive and time-consuming costs to repair or restore our systems and data or to take other remedial steps, disproportionate attention of management, or damage to our reputation.
These reserve estimates reflect our plans for capital expenditures to convert PUDs into proved developed reserves, including approximately $2.0 billion during the next five years. You should be aware that the estimated development costs may not equal our actual costs, development may not occur as scheduled and results may not be as estimated.
These reserve estimates reflect our plans for capital expenditures to convert PUDs into proved developed reserves, including approximately $1.8 billion during the next five years. You should be aware that the estimated development costs may not equal our actual costs, development may not occur as scheduled and results may not be as estimated.
In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development drilling, prevailing natural gas and oil prices and other factors, many of which are beyond our control. As of December 31, 2023, approximately 34% of our estimated proved reserves (by volume) were undeveloped.
In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development drilling, prevailing natural gas and oil prices and other factors, many of which are beyond our control. As of December 31, 2024, approximately 18% of our estimated proved reserves (by volume) were undeveloped.
In addition, subject to the limits contained in the documents governing such indebtedness, the combined company may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions or for other purposes.
In addition, subject to the limits contained in the documents governing such indebtedness, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions or for other purposes.
State and federal regulatory agencies have also recently focused on a possible connection between the operation of injection wells used for natural gas and oil waste disposal and seismic activity, which has caused some states, such 47 TABLE OF CONTENTS as New Mexico and Texas, to implement seismicity response programs that allow state regulators to modify, suspend, or terminate injection well permits if the state regulator determines that the injection well is contributing to seismic activity.
State and federal regulatory agencies have also recently focused on a possible connection between the operation of injection wells used for natural gas and oil waste disposal and seismic activity, which has caused some states, such as New 45 TABLE OF CONTENTS Mexico, Oklahoma and Texas, to implement seismicity response programs that allow state regulators to deny, modify, suspend or terminate injection well permits if the state regulator determines that the injection well is contributing or likely to contribute to seismic activity.
These actions may cause operational delays or restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation, as well as potentially reducing our ability to execute routine or strategic business partnerships.
These actions may cause operational delays or restrictions, increased operating and compliance costs, additional regulatory scrutiny and increased risk of litigation, as well as potentially reducing our ability to execute routine or strategic business partnerships.
Such ESG matters may also impact our suppliers or customers, which could 49 TABLE OF CONTENTS augment existing, or cause additional, impacts to our business or operations. To date, we have not incurred material ESG-related costs, but we cannot guarantee that we will not incur such costs in the future.
Such ESG matters may also impact our suppliers or customers, which could augment existing, or cause additional, impacts to our business or operations. To date, we have not incurred material ESG-related costs, but we cannot guarantee that we will not incur such costs in the future.
Our operations are subject to extensive federal, state, local and other laws, rules and regulations, including with respect to environmental matters, worker health and safety, wildlife conservation, the gathering and transportation of gas, oil and NGL, conservation policies, reporting obligations, royalty payments, unclaimed property and the imposition of taxes, and tribal laws for a minor portion of our acreage.
Our operations are subject to extensive federal, state, local and other laws, rules and regulations, including with respect to the environment, worker health and safety, wildlife conservation, the gathering and transportation of gas, oil and NGLs, conservation policies, reporting obligations, royalty payments, unclaimed property, the imposition of taxes and tribal laws for a minor portion of our acreage.
The combined company’s indebtedness and other financial commitments have important consequences to its business, including, but not limited to: • making it more difficult for the company to satisfy its obligations with respect to senior notes and other indebtedness due to the increased debt-service obligations, which could, in turn, result in an event of default on such other indebtedness or the senior notes; • requiring the combined company to dedicate a substantial portion of its cash flows from operations to debt service payments, thereby limiting its ability to fund working capital, capital expenditures, investments or acquisitions and other general corporate purposes; • increasing the combined company’s vulnerability to general adverse economic and industry conditions, including low commodity price environments; • limiting the combined company’s ability to obtain additional financing due to higher costs and more restrictive covenants; • limiting the combined company’s flexibility in planning for, or reacting to, changes in its business and the industry in which it operates; and • placing the combined company at a competitive disadvantage compared with its competitors that have proportionately less debt and fewer guarantee obligations.
Our indebtedness and other financial commitments have important consequences to our business, including, but not limited to: 43 TABLE OF CONTENTS • making it more difficult for us to satisfy our obligations with respect to senior notes and other indebtedness due to the increased debt-service obligations, which could, in turn, result in an event of default on such other indebtedness or the senior notes; • requiring us to dedicate a substantial portion of our cash flows from operations to debt service payments, thereby limiting our ability to fund working capital, capital expenditures, investments or acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions, including low commodity price environments; • limiting our ability to obtain additional financing due to higher costs and more restrictive covenants; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and • placing us at a competitive disadvantage compared with our competitors that have proportionately less debt and fewer guarantee obligations.
Volatility in natural gas, oil and NGL prices may result from factors that are beyond our control, including: • domestic and worldwide supplies of natural gas, oil and NGL, including U.S. inventories of natural gas and oil reserves; • weather conditions; • changes in the level of consumer and industrial demand, including impacts from global or national health epidemics and concerns, such as the COVID-19 pandemic; • the price and availability of alternative fuels; • technological advances affecting energy consumption; • the effectiveness of worldwide conservation measures; • the availability, proximity and capacity of pipelines, other transportation facilities and processing facilities; • the level and effect of trading in commodity futures markets, including by commodity price speculators and others; • U.S. exports of natural gas, oil, liquefied natural gas and NGL; 31 TABLE OF CONTENTS • the price and level of foreign imports; • the nature and extent of domestic and foreign governmental regulations and taxes; • the ability of the members of the Organization of Petroleum Exporting Countries (OPEC) and others to agree to and maintain oil price and production controls; • increased use of competing energy products, including alternative energy sources; • political instability or armed conflict in natural gas and oil producing regions, including in connection with the continued armed conflict and instability in Europe and the Middle East; • acts of terrorism; and • domestic and global economic and political conditions.
Volatility in natural gas, oil and NGL prices may result from factors that are beyond our control, including: • domestic and worldwide supplies of natural gas, oil and NGL, including U.S. inventories of natural gas and oil reserves; • weather conditions; • changes in the level of consumer and industrial demand, including impacts from global or national health events and concerns, such as the COVID-19 pandemic; • the price and availability of alternative fuels; • technological advances affecting energy consumption; • the nature and extent of domestic and international conservation and sustainability initiatives; • the availability, proximity and capacity of pipelines, other transportation facilities and processing facilities; • the level and effect of trading in commodity futures markets, including by commodity price speculators and others; • U.S. exports of natural gas, oil, liquefied natural gas and NGL; • the price and level of foreign imports; • the nature and extent of domestic and foreign governmental regulations and taxes; • the ability of the members of OPEC+ and others to agree to and maintain oil price and production controls; • increased use of competing energy products, including alternative energy sources; • political instability or armed conflict in natural gas and oil producing regions, including in connection with the continued armed conflict and instability in Europe and the Middle East; • acts of terrorism; and • domestic and global economic and political conditions.
Additionally, environmental groups, landowners, local groups and other advocates may oppose our operations through organized protests, attempts to block or sabotage our operations or those of our midstream transportation providers, encourage capital providers to divest of their interests in us or our industry, intervene in regulatory or administrative proceedings involving our assets or those of our midstream transportation providers, or file lawsuits or other actions designed to prevent, disrupt or delay the development or operation of our assets and business or those of our midstream transportation providers.
Additionally, environmental groups, landowners, local groups and other advocates may oppose our operations or those of our midstream transportation providers, encourage capital providers to divest of their interests in us or our industry, intervene in regulatory or administrative proceedings involving our assets or those of our midstream transportation providers, or file lawsuits or other actions designed to prevent, disrupt or delay the development or operation of our assets and business or those of our midstream transportation providers.
If additional levels of regulation or permitting requirements were imposed on hydraulic fracturing operations, our business and operations could be subject to delays, increased operating and compliance costs and potential bans. Additional regulation could also lead to greater opposition to hydraulic fracturing, including litigation. Climate Change.
If additional levels of regulation or permitting requirements were imposed on hydraulic fracturing operations, our business and operations could be subject to delays, increased operating and compliance costs and potential bans. Additional regulation could also lead to greater opposition to hydraulic fracturing, including litigation. Climate Change and Regulation of Methane and Other Greenhouse Gas Emissions.
Legal and Regulatory Risks • We are subject to extensive governmental regulation, which can change and could adversely impact our business. • Environmental matters and related costs can be significant. • Increasing attention to ESG matters and our ability to achieve and maintain ESG certifications, goals and commitments may impact our business, financial results or stock price. • The taxation of independent producers is subject to change, and changes in tax law could increase our cost of doing business . • The completion of the Southwestern Merger is anticipated to trigger an annual limitation on the utilization of our tax attributes, reducing their ability to offset future taxable income, which may result in an increase to income tax liabilities.
Legal and Regulatory Risks • We are subject to extensive governmental regulation, which can change and could adversely impact our business. • Costs to comply with environmental, health and safety regulations and initiatives can be significant. • Increasing attention to ESG matters and our ability to achieve and maintain ESG certifications, goals and commitments may impact our business, financial results or stock price. • The taxation of independent producers is subject to change, and changes in tax law could increase our cost of doing business . • The completion of the Southwestern Merger triggered an annual limitation on the utilization of our tax attributes, reducing our ability to offset future taxable income, which may result in an increase to income tax liabilities.
These factors and the volatility of the energy markets make it extremely difficult to predict future natural gas, oil and NGL price movements. In addition, any prolonged period of lower prices could reduce the quantities of reserves that we may economically produce.
These factors and the volatility of the energy markets make it extremely difficult to predict future natural gas, oil and NGL price movements. In addition, any prolonged period of lower prices could reduce the quantities of reserves that we may economically produce. Conservation measures and technological advances could reduce demand for natural gas and oil.
If the combined company is not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Southwestern Merger within the anticipated timing or at all, the combined company’s business, financial condition and operating results may be adversely affected, the combined company’s earnings per share may be diluted, the accretive effect of the merger may decrease or be delayed and the share price of the combined company may be negatively impacted.
If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Southwestern Merger within the anticipated timing or at all, our business, financial condition and operating results may be adversely affected, our earnings per share may be diluted, the accretive effect of the Southwestern Merger may decrease or be delayed and our share price may be negatively impacted.
The IRA, signed by President Biden in August 2022, provides significant funding and incentives for research, development and implementation of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change.
The IRA, signed into law in August 2022, provides significant funding and incentives for research, development and implementation of low-carbon energy production methods, carbon capture, and other programs directed at addressing climate change.
Our operations are subject to disruption from natural or human causes beyond our control, including risks from extreme weather events, such as hurricanes, severe storms, floods, droughts, heat waves, winter storms, and ambient temperature, water level, or precipitation changes, as well as wildfires, war, accidents, civil unrest, political events, earthquakes, system failures, cyber threats, terrorist acts and epidemic or pandemic diseases, such as the COVID-19 pandemic, any of which could result in suspension of operations (including those of our customers or suppliers) or harm to people, our assets or the natural environment.
Our operations are subject to disruption from human causes beyond our control and natural disasters, including extreme weather events the scientific community has concluded are associated with climate change, such as hurricanes, severe storms, floods, droughts, heat waves, winter storms, wildfires and ambient temperature, water level or precipitation changes as well as war, accidents, civil unrest, political events, earthquakes, system failures, cyber threats, terrorist acts and epidemic or pandemic diseases, any of which could result in suspension of operations (including those of our customers or suppliers) or harm to people, our assets or the environment.
Moreover, certain of these events could result in environmental pollution and impact to third parties, including persons living in proximity to our operations, our employees and employees of our contractors, leading to possible injuries, death, significant damage to property and natural resources, or significant financial liabilities or penalties. 35 TABLE OF CONTENTS Our ability to produce natural gas, oil and NGL economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our operations or are unable to dispose of or recycle the water we use economically and in an environmentally safe manner.
Moreover, certain of these events could result in environmental contamination and impact to third parties, including persons living in proximity to our operations, our employees and employees of our contractors, leading to possible injuries, death, significant damage to property and natural resources or significant financial liabilities or penalties. 34 TABLE OF CONTENTS Our ability to produce natural gas, oil and NGL economically and in commercial quantities could be impaired if we are unable to acquire adequate supplies of water for our operations or are unable to dispose of or recycle the water we use economically and in compliance with environmental laws.
The combination of two independent businesses is complex, costly and time consuming, and each of Chesapeake and Southwestern will be required to devote significant management attention and resources to integrating the business practices and operations of Southwestern into Chesapeake.
The combination of two independent businesses is complex, costly and time consuming, and we will be required to continue to devote significant management attention and resources to integrating the business practices and operations of Southwestern into the Company.
The completion of the Southwestern Merger is anticipated to trigger an annual limitation on the utilization of our tax attributes, reducing their ability to offset future taxable income, which may result in an increase to income tax liabilities.
The completion of the Southwestern Merger triggered an annual limitation on the utilization of our tax attributes, reducing our ability to offset future taxable income, which may result in an increase to income tax liabilities.
Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours and ransomware payments within 24 hours. These new requirements will become effective once CISA promulgates rules pursuant to the Act. CISA is required to issue a notice of proposed rulemaking by March 2024 and issue a final rule within 18 months of issuing the proposed rule.
Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours and ransomware payments within 24 hours. These new requirements will become effective once CISA promulgates rules pursuant to the CIRCIA. CISA issued a notice of proposed rulemaking on April 4, 2024 and is required to issue a final rule within 18 months of issuing the proposed rule.
Negative public perception regarding us or our industry resulting from, among other things, concerns raised by advocacy groups about hydraulic fracturing, waste disposal, oil spills, seismic activity, climate change, explosions of natural gas transmission lines and the development and operation of pipelines and other midstream facilities may lead to generally increased political pressure and regulatory scrutiny, which may, in turn, lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations.
Negative public perception regarding us or our industry resulting from, among other things, concerns raised by advocacy groups about hydraulic fracturing, waste disposal, oil spills, seismic activity, climate change, explosions of natural gas transmission lines and the development and operation of pipelines and other midstream facilities may lead to new state and federal safety and environmental laws, regulations, guidelines and enforcement priorities.
If our information technology systems cease to function properly or our cybersecurity is breached (for example, due to ransomware), we could suffer disruptions to our normal operations, which may include disruptions to our drilling, completion, production and corporate functions.
If our information technology systems cease to function properly or our cybersecurity is breached or otherwise insufficient, we could suffer disruptions to our normal operations, which may include disruptions to our drilling, completion, production and corporate functions.
Limitations on GHG emissions could also adversely affect demand for gas and oil, which could lower the value of our reserves and have a material adverse effect on our profitability, financial condition and liquidity. Environmental matters and related costs can be significant.
Limitations on GHG emissions could also adversely affect demand for gas and oil, which could lower the value of our reserves and have a material adverse effect on our profitability, financial condition and liquidity.
The December 31, 2023 present value is based on the price of $2.64 per Mcf of natural gas, before basis differential adjustments. Actual future prices and costs may be materially higher or lower than the prices and costs as of the date of an estimate.
The December 31, 2024 present value is based on the price of $2.13 per Mcf of natural gas, $75.48 per bbl of oil and $75.48 per bbl of NGL, before basis differential adjustments. Actual future prices and costs may be materially higher or lower than the prices and costs as of the date of an estimate.
This and other rules may require us to incur additional costs or otherwise impact the economics of certain of our operations. Additionally, in November 2022, the BLM issued a proposed rule to reduce the methane waste from venting, flaring, and leaks during oil and gas production activities on Federal and Indian leases.
This and other rules may require us to incur additional costs or otherwise impact the economics of certain of our operations. Additionally, in April 2024, the BLM finalized a rule to reduce the methane waste from venting, flaring, and leaks during oil and gas production activities on federal and Indian leases. The final rule took effect in June 2024.
In May 2023, the PHMSA issued a proposed rule that would require pipelines, underground natural gas storage facilities, and liquefied natural gas facilities to update leak detection and repair programs to require companies to use commercially available technologies to find and fix methane leaks from pipelines and other facilities.
In January 2025, the PHMSA finalized a rule that requires pipelines, underground natural gas storage facilities, and liquefied natural gas facilities to update leak detection and repair programs to require companies to use commercially available technologies to find and fix methane leaks from pipelines and other facilities.
The development of a federal renewable energy standard, or the development of additional or more stringent renewable energy standards at the state level could reduce the demand for gas and oil, thereby adversely impacting our earnings, cash flows and financial position.
The development of a federal renewable energy standard, or the development of additional or more stringent renewable energy standards at the state level could reduce the demand for gas and oil, thereby adversely impacting our earnings, cash flows and financial position. In addition, federal or state carbon taxes or fees could directly increase our costs of operation.
In addition, we may seek to more directly participate in the LNG market through direct marketing arrangements with LNG export facilities and/or end users, which could expose us to additional commercial risks associated with the global LNG markets. • Cyber-attacks targeting systems and infrastructure used by the gas and oil industry and related regulations may adversely impact our operations and, if we or our third-party providers are unable to obtain and maintain adequate protection for our key systems and data, our business may be harmed. 28 TABLE OF CONTENTS • We collect, process, store and use personal information and other data, and our actual or perceived failure to protect such information and data or comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results. • Our operations could be disrupted by natural or human causes beyond our control. • A deterioration in general economic, political, business or industry conditions would have a material adverse effect on our results of operations, liquidity and financial condition. • Military and other armed conflicts, including terrorist activities, and related price volatility and geopolitical instability could materially and adversely affect our business and results of operations.
In addition, we may seek to more directly participate in the LNG value chain through direct marketing arrangements with LNG export facilities and/or end users, which could expose us to additional commercial risks associated with the global LNG markets. • Regional epidemics or pandemics and related economic turmoil, including supply chain constraints, have affected, and could in the future adversely affect our business, financial condition, results of operations and cash flows. 27 TABLE OF CONTENTS • Cyber-attacks targeting systems and infrastructure used by the gas and oil industry and related regulations may adversely impact our operations and, if we or our third-party providers are unable to obtain and maintain adequate protection for our key systems and data, our business may be harmed. • We collect, process, store and use personal information and other data, and our actual or perceived failure to protect such information and data or comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results. • A deterioration in general economic, political, business or industry conditions would have a material adverse effect on our results of operations, liquidity and financial condition.
Our forecasted 2024 capital expenditures, inclusive of capitalized interest, are $1.25 - $1.35 billion compared to our 2023 capital spending level of $1.8 billion. Management continues to review operational plans for 2024 and beyond, which could result in changes to projected capital expenditures and projected revenues from sales of natural gas, oil and NGL.
Our forecasted 2025 capital expenditures, inclusive of capitalized interest, are $2.9 - $3.1 billion compared to our 2024 capital spending level of $1.53 billion. Management continues to review operational plans for 2025 and beyond, which could result in changes to projected capital expenditures and projected revenues from sales of natural gas, oil and NGLs.
The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
As a result of the Southwestern Merger, the size of the Company’s business has increased significantly. Our future success will depend, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
During these periods, there is often a shortage of drilling rigs and other oilfield equipment and services, which could adversely affect our ability to execute our development plans on a timely basis and within budget.
During these periods, there is often a shortage of drilling rigs and other oilfield equipment and services, which could adversely affect our ability to execute our development plans on a timely basis and within budget. 30 TABLE OF CONTENTS Risks related to potential acquisitions or dispositions may adversely affect our business.
LNG exports have helped drive domestic demand for natural gas, and, as a natural-gas producer, we could be materially and adversely impacted by a deterioration in the U.S. LNG export industry, which could in turn reduce demand for natural gas.
LNG export market, a highly regulated and capital intensive industry with a number of inherent commercial risks. U.S. LNG exports have helped drive domestic demand for natural gas, and, as a natural gas producer, we could be materially and adversely impacted by a deterioration in the U.S. LNG export industry, which could in turn reduce demand for natural gas.
These transactions may not result in the anticipated benefits or efficiencies. In addition, acquisitions may be financed by borrowings, requiring us to incur more debt, or by the issuance of our common stock.
From time to time, we evaluate acquisitions and dispositions of assets, businesses and other investments. These transactions may not result in the anticipated benefits or efficiencies. In addition, acquisitions may be financed by borrowings, requiring us to incur more debt, or by the issuance of our common stock.
We cannot predict whether additional federal, state or local laws or regulations applicable to hydraulic fracturing will be enacted in the future and, if so, what actions any such laws or regulations would require or prohibit.
In addition to state laws, local land use restrictions, such as city ordinances, may restrict drilling in general and/or hydraulic fracturing in particular. We cannot predict whether additional federal, state or local laws or regulations applicable to hydraulic fracturing will be enacted in the future and, if so, what actions any such laws or regulations would require or prohibit.
We rely heavily on third parties to meet our natural gas, oil and NGL gathering needs. Capital constraints could limit the construction of new pipelines and gathering systems and the provision or expansion of trucking services by third parties. Until this new capacity is available, we may experience delays in producing and selling our natural gas, oil and NGL.
We rely heavily on third parties to meet our natural gas, oil and NGL gathering needs. Capital constraints or changes in laws or regulations could limit the construction of new pipelines and gathering systems and the provision or expansion of trucking services by third parties.
Our information systems and administrative and management processes are primarily provided to our various drilling projects and producing wells throughout the United States from this location, which could be disrupted if a catastrophic event, such as a tornado, power outage or act of terror, destroyed or severely damaged our headquarters.
Our information systems and administrative and management processes are primarily provided to our various drilling projects and producing wells throughout the United States from this location, which could be disrupted if a catastrophic event destroyed or severely damaged our headquarters. Any such catastrophic event could harm our ability to conduct normal operations and could adversely affect our business.
At both the federal and state level, for example, there are an increasing number of legislative initiatives and proposals that may lead to reduced demand for fossil fuels such as oil and gas.
In addition, changes in public policy have affected, and in the future could further affect, our operations. At both the federal and state level, for example, there are an increasing number of legislative initiatives and proposals that may lead to reduced demand for fossil fuels such as oil and gas.
Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to natural gas and oil, technological advances in fuel economy and energy generation devices could reduce demand for natural gas and oil. The impact of the changing demand for natural gas and oil could adversely impact our earnings, cash flows and financial position.
Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to natural gas and oil, technological advances in fuel economy and energy generation devices could reduce demand for natural gas and oil.
For more information see our risk factor titled “Negative public perception regarding us or our industry could have an adverse effect on our operations.” These various legislative, regulatory and other activities addressing GHG emissions could adversely affect our business, including by imposing reporting obligations on, or limiting emissions of GHGs from, our equipment and operations, which could require us to incur costs to reduce emissions of GHGs associated with our operations.
These various legislative, regulatory and other activities addressing GHG emissions could adversely affect our business, including by imposing reporting obligations on, or limiting emissions of GHGs from, our equipment and operations, which could require us to incur costs to reduce emissions of GHGs associated with our operations.
Chesapeake’s financial position may differ from its financial position before the completion of the Southwestern Merger, and the results of operations of the combined company may be affected by some factors that are different from those currently affecting the results of operations of Chesapeake and those currently affecting the results of operations of Southwestern.
Our financial position may differ from our financial position before the completion of the Southwestern Merger, and the results of operations of the combined company may be affected by some factors that are different from those factors that affected the results of operations of the Company prior to the Southwestern Merger or those factors that previously affected ours and Southwestern’s results of operations.
Additionally, failure to comply with the obligations of any cyber incident notification laws or regulations can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, and negative reputational impacts that could cause us to lose existing or future customers.
Additionally, rapidly evolving laws and regulations governing cybersecurity pose increasingly complex compliance obligations and technical challenges, and failure to comply with these obligations, including incident notification requirements, could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties and negative reputational impacts that could cause us to lose existing or future customers.
Financial Risks Related to our Business • We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by industry conditions. • Restrictive covenants in certain of our debt agreements could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. • Our actual financial results after emergence from bankruptcy may not be comparable to our historical financial information as a result of the implementation of the Plan and the transactions contemplated thereby.
Financial Risks Related to our Business • We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by industry conditions. • Restrictive covenants in certain of our existing and future debt instruments may limit our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests.
Military and other armed conflicts, including terrorist activities, and related price volatility and geopolitical instability, could materially and adversely affect our business and results of operations. Military and other armed conflicts, terrorist attacks and the threat of both, whether domestic or foreign, could cause further instability in the global financial and energy markets.
Military and other armed conflicts, terrorist attacks and the threat of both, whether domestic or foreign, could cause further instability in the global financial and energy markets.
Our inability to secure sufficient amounts of water, or to dispose of or recycle the water used in our operations, could adversely impact our operations in certain areas.
In these areas, water must be obtained from other sources and transported to the drilling site. Our inability to secure sufficient amounts of water, or to dispose of or recycle the water used in our operations, could adversely impact our operations in certain areas.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Cybersecurity Manager is responsible for reporting material incidents to our Cybersecurity Committee that includes our Chief Financial Officer, General Counsel and Corporate Secretary, and our Chief Information Officer. Our internal cybersecurity team has over 50 years of combined experience in information security and maintains several cybersecurity certificates including but not limited to CISSP, CISM, SRISC, GSEC, and GCFE.
Biggest changeOur Cybersecurity Manager has over 20 years of experience in information security and incident response and our internal cybersecurity team has over 50 years of combined experience in information security and maintains several cybersecurity certificates including but not limited to CISSP, CISM, SRISC, GSEC, and GCFE.
Risk Factors “ Cyber-attacks targeting systems and infrastructure used by the gas and oil industry and related regulations may adversely impact our operations and, if we or our third-party providers are unable to obtain and maintain adequate protection for our key systems and data, our business may be harmed. ” 51 TABLE OF CONTENTS Cybersecurity Governance Our Board of Directors considers cybersecurity risk as a critical part of the enterprise and its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
Risk Factors “ Cyber-attacks targeting systems and infrastructure used by the gas and oil industry and related regulations may adversely impact our operations and, if we or our third-party providers are unable to obtain and maintain adequate protection for our key systems and data, our business may be harmed. ” Cybersecurity Governance Our Board of Directors considers cybersecurity risk as a critical part of the enterprise and its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
Our cybersecurity risk management program includes, but is not limited to, the following key elements: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information; • a security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • systems for protecting information technology systems and monitoring for suspicious events, such as threat protection, firewall and anti-virus software; • cybersecurity awareness training of our employees and contractors, including incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, software, and vendors who access our data and/or systems.
Our cybersecurity risk management program includes, but is not limited to, the following key elements: • risk assessments designed to help identify and address material cybersecurity risks to our critical systems and information; • a security team principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • systems for protecting information technology systems and monitoring for suspicious events, such as threat protection, firewall and anti-virus software; • cybersecurity awareness training for all of our employees and contractors; • a cybersecurity incident response plan that includes procedures for responding to, escalating, and reporting cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, software, and vendors who access our data and/or systems.
Our Board of Directors also receives briefings from management on our cyber risk management program. Board members receive presentations on cybersecurity topics from information security management, internal security staff, our internal audit group and external experts as part of our Board of Director’s continuing education on topics that impact public companies.
Our Board of Directors also receives briefings from management on our cybersecurity risk 50 TABLE OF CONTENTS management program. Board members receive presentations on cybersecurity topics from information security management, internal security staff, our internal audit group and external experts as part of our Board of Director’s continuing education on topics that impact public companies.
Our Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee receives quarterly updates from management on our cybersecurity risks. In addition, management updates our Audit Committee, as necessary, regarding any material cybersecurity incidents. Our Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity.
Our Audit Committee oversees management’s implementation of our cybersecurity risk management program. Our Audit Committee receives bi-annual updates from management on our cybersecurity risks. In addition, management updates our Audit Committee, as necessary, regarding any significant cybersecurity incidents. Our Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our cybersecurity risk management program guided by the NIST Cybersecurity Framework.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our cybersecurity risk management program guided by the NIST Cybersecurity Framework to help us identify, assess and manage cybersecurity risks relevant to our business.
Our Cybersecurity Manager is responsible for assessing and managing risks from cybersecurity threats, our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Our Cybersecurity Manager leads our cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Removed
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use these as a guide to help us identify, assess and manage cybersecurity risks relevant to our business.
Added
Our Cybersecurity Manager is responsible for assessing and managing risks from cybersecurity threats and reporting significant incidents to our Cybersecurity Committee, which includes our Chief Financial Officer, General Counsel and Corporate Secretary, Chief Information Officer, Cybersecurity Manager and Director of Internal Audit.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Litigation and Regulatory Proceedings We are involved in various regulatory proceedings, lawsuits and disputes arising in the ordinary course of our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions.
Biggest changeItem 3. Legal Proceedings Litigation and Regulatory Proceedings We are involved in various regulatory proceedings, lawsuits and disputes arising in the ordinary course of our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. We are also party to the consolidated Chapter 11 Cases pending for the Debtors in the Bankruptcy Court.
See Note 7 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for information regarding our estimation and provision for potential losses related to litigation and regulatory proceedings.
See Note 5 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for information regarding our estimation and provision for potential losses related to litigation and regulatory proceedings.
The majority of the legal proceedings that were in existence prior to the Petition Date were settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court. Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan.
Legal proceedings that were in existence prior to the Petition Date and have not yet been settled as part of the Chapter 11 Cases will be resolved in connection with the claims reconciliation process before the Bankruptcy Court. Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan.
Added
Any legal proceeding pending against Southwestern and assumed by us in connection with the Southwestern Merger is not subject to discharge or resolution as part of the Chapter 11 Cases.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe declaration and payment of any future dividend is subject to the approval of our Board of Directors in its discretion. Since the initial base dividend declared during the second quarter of 2021, we have incrementally increased the base dividend per share.
Biggest changeEffective January 1, 2025, we updated our enhanced returns framework which prioritizes paying a base dividend per share and provides for annual net debt reduction prior to additional shareholder returns such as additional dividend payments or share repurchases. The declaration and payment of any future dividend is subject to the approval of our Board of Directors in its discretion.
In March 2022, we adopted a variable return program that resulted in the payment of an additional variable dividend equal to the sum of Adjusted Free Cash Flow from the prior quarter less the base quarterly dividend, multiplied by 50%.
Dividends In March 2022, we adopted a variable return program that resulted in the payment of an additional variable dividend equal to the sum of Adjusted Free Cash Flow from the prior quarter less the base quarterly dividend, multiplied by 50%.
For more information regarding our emergence from Chapter 11 bankruptcy and our Plan of Reorganization, see Note 2 of the notes to our consolidated financial statements included in Item 8 of Part II of this report.
For additional information on our dividends, see Note 1 0 of the notes to our consolidated financial statements included in Item 8 of Part II of this report.
The repurchase authorization permits repurchases on a discretionary basis as determined by management, subject to market conditions, applicable legal requirements, available liquidity, compliance with the Company’s debt agreements and other appropriate factors. The share repurchase program expired on December 31, 2023.
The repurchase authorization permits repurchases on a discretionary basis subject to market conditions, required internal approvals, applicable legal requirements, available liquidity, compliance with the Company’s debt agreements and other appropriate factors. We did not repurchase any shares of our common stock during the quarter ended December 31, 2024.
Additionally, more information on our New Common Stock and Warrants can be found in Note 12 of the notes to our consolidated financial statements included in Item 8 of Part II of this report. Dividends We declared the first quarterly dividend on our New Common Stock in the second quarter of 2021, which consisted of a base dividend per share.
The Warrants are immediately exercisable and will expire on February 9, 2026. More information on our common stock and Warrants can be found in Note 1 0 of the notes to our consolidated financial statements included in Item 8 of Part II of this report.
In June 2022, our Board of Directors authorized an increase in the size of the share repurchase program from $1.0 billion to $2.0 billion in aggregate value of our common stock and/or warrants.
Repurchases of Equity Securities; Unregistered Sales of Equity Securities and Use of Proceeds On October 22, 2024 our Board of Directors authorized repurchases of up to $1.0 billion, in the aggregate, of the Company’s common stock and/or warrants under a share repurchase program.
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Upon our emergence from Chapter 11 bankruptcy on February 9, 2021, our then-authorized common stock and preferred stock were canceled and released under the Plan without receiving any recovery on account thereof.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Subsequent to the completion of the Southwestern Merger on October 1, 2024, we changed our company name to Expand Energy Corporation and changed the NASDAQ trading symbol for our common stock from “CHK” to “EXE”.
Removed
In accordance with the Plan confirmed by the Bankruptcy Court on February 9, 2021, we issued 97,097,081 shares of New Common Stock of the Successor, which are listed on the Nasdaq Stock Market LLC under the symbol CHK.
Added
Additionally, our Class A Warrants, Class B Warrants and Class C Warrants trading symbols changed from “CHKEW”, “CHKEZ”, and “CHKEL”, respectively, to “EXEEW”, “EXEEZ” and “EXEEL”, respectively, following the completion of the Southwestern Merger. Our common shares and Warrants have been trading under the updated trading symbols on NASDAQ since October 2, 2024.
Removed
In addition, on February 9, 2021, we issued 11,111,111 Class A Warrants, 12,345,679 Class B Warrants and 9,768,527 Class C Warrants, each of which were exercisable for one share of common stock per warrant at the initial exercise prices of $27.63, $32.13 and $36.18 per share, respectively. The warrants are immediately exercisable and will expire on February 9, 2026.
Added
As of December 31, 2024, approximately $1.0 billion may yet be purchased under the share repurchase program described above. Stockholders As of February 19, 2025, there were approximately 1,226 holders of record of our common stock.
Removed
For additional information on our dividends, see Note 12 of the notes to our consolidated financial statements included in Item 8 of Part II of this report. 54 TABLE OF CONTENTS Repurchases of Equity Securities; Unregistered Sales of Equity Securities and Use of Proceeds On December 2, 2021, we announced that our Board of Directors authorized the repurchase of up to $1.0 billion in aggregate value of our common stock and/or warrants from time to time.
Removed
The following table provides information regarding purchases of our common stock made by us during the quarter ended December 31, 2023.
Removed
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1 - October 31 149,050 $ 85.95 149,050 $ 610 November 1 - November 30 348,600 $ 82.54 348,600 $ 581 December 1 - December 31 129,797 $ 76.13 129,797 $ — Total 627,447 $ 82.03 627,447 Stockholders As of February 15, 2024, there were approximately 141 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSources and (Uses) of Cash and Cash Equivalents The following table presents the sources and uses of our cash and cash equivalents for the periods presented: Successor Predecessor Year Ended December 31, 2023 Year Ended December 31, 2022 Period from February 10, 2021 through December 31, 2021 Period from January 1, 2021 through February 9, 2021 Cash provided by (used in) operating activities $ 2,380 $ 4,125 $ 1,809 $ (21) Proceeds from divestitures of property and equipment 2,533 407 13 — Proceeds from New Credit Facility, net — 1,050 — — Proceeds from issuance of senior notes, net — — — 1,000 Proceeds from issuance of common stock — — — 600 Proceeds from warrant exercise — 27 2 — Capital expenditures (1,829) (1,823) (669) (66) Business combination, net — (1,967) (194) — Contributions to investments (231) (18) — — Payments on New Credit Facility, net (1,050) — — — Payments on Exit Credit Facility, net — (221) (50) (479) Payments on DIP Facility borrowings — — — (1,179) Debt issuance and other financing costs — (17) (3) (8) Cash paid to repurchase and retire common stock (355) (1,073) — — Cash paid for common stock dividends (487) (1,212) (119) — Other — — (1) — Net increase (decrease) in cash, cash equivalents and restricted cash $ 961 $ (722) $ 788 $ (153) 61 TABLE OF CONTENTS Cash Flow from Operating Activities Cash provided by operating activities was $2.38 billion, $4.12 billion and $1.81 billion in the 2023 Successor Period, 2022 Successor Period and 2021 Successor Period, respectively.
Biggest changeWe may alter or change our plans with respect to our capital program and expected capital expenditures based on developments in our business, our financial position, our industry or any of the markets in which we operate. 58 TABLE OF CONTENTS Sources and (Uses) of Cash and Cash Equivalents The following table presents the sources and uses of our cash and cash equivalents for the periods presented: Years Ended December 31, 2024 2023 2022 Cash provided by operating activities $ 1,565 $ 2,380 $ 4,125 Proceeds from divestitures of property and equipment 21 2,533 407 Proceeds from Credit Facility, net — — 1,050 Receipts of deferred consideration 166 — — Proceeds from issuance of senior notes, net 747 — — Proceeds from warrant exercise 3 — 27 Capital expenditures (1,557) (1,829) (1,823) Contributions to investments (75) (231) (18) Payments on Credit Facility, net — (1,050) — Payments on Exit Credit Facility, net — — (221) Business combination, net (459) — (1,967) Cash paid to purchase debt (767) — — Debt issuance and other financing costs (11) — (17) Cash paid to repurchase and retire common stock — (355) (1,073) Cash paid for common stock dividends (388) (487) (1,212) Other (3) — — Net increase (decrease) in cash, cash equivalents and restricted cash $ (758) $ 961 $ (722) Cash Flow from Operating Activities Cash provided by operating activities was $1.57 billion, $2.38 billion and $4.12 billion during the years ended December 31, 2024, 2023 and 2022, respectively.
Payments on Exit Credit Facility, net In December 2022, we entered into the New Credit Facility and terminated the Exit Credit Facility, repaying all amounts outstanding and extinguishing all commitments thereunder.
Payments on Exit Credit Facility, net In December 2022, we entered into the Credit Facility and terminated the Exit Credit Facility, repaying all amounts outstanding and extinguishing all commitments thereunder.
Our judgement regarding the realizability of deferred tax assets is thus partially affected by estimates of future financial condition. 77 TABLE OF CONTENTS We also routinely assess potential uncertain tax positions and, if required, establish accruals for such positions.
Our judgement regarding the realizability of deferred tax assets is thus partially affected by estimates of future financial condition. 68 TABLE OF CONTENTS We also routinely assess potential uncertain tax positions and, if required, establish accruals for such positions.
Proceeds from Divestitures of Property and Equipment In the 2023 Successor Period, we sold our Eagle Ford assets through three separate transactions resulting in total cash proceeds of $2.5 billion after customary post-closing adjustments. In the 2022 Successor Period, we sold our Powder River Basin assets to Continental Resources, Inc. for approximately $400 million after customary closing adjustments.
Proceeds from Divestitures of Property and Equipment In 2023, we sold our Eagle Ford assets through three separate transactions resulting in total cash proceeds of $2.5 billion after customary post-closing adjustments. In 2022, we sold our Powder River Basin assets to Continental Resources, Inc. for approximately $400 million after customary closing adjustments.
See Note 11 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a discussion of income tax expense (benefit). 76 TABLE OF CONTENTS Critical Accounting Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States require us to make estimates and assumptions.
See Note 9 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a discussion of income tax expense (benefit). 67 TABLE OF CONTENTS Critical Accounting Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States require us to make estimates and assumptions.
See Note 6 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 18 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for additional information.
See Note 15 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for additional information.
In addition, we have contractual commitments with midstream companies and pipeline carriers for future gathering, processing and transportation of natural gas to move certain of our production to market. The estimated gross undiscounted future commitments under these agreements were approximately $2.1 billion as of December 31, 2023.
In addition, we have contractual commitments with midstream companies and pipeline carriers for future gathering, processing and transportation of natural gas to move certain of our production to market. The estimated gross undiscounted future commitments under these agreements were approximately $9.9 billion as of December 31, 2024.
On February 17, 2023, we entered into an agreement to sell a portion of our remaining Eagle Ford assets to INEOS Energy for approximately $1.4 billion, subject to post-closing adjustments. This transaction closed on April 28, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $470 million.
This transaction closed on March 20, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $337 million. On February 17, 2023, we entered into an agreement to sell a portion of our remaining Eagle Ford assets to INEOS Energy for approximately $1.4 billion, subject to post-closing adjustments.
We currently plan to fund our 2024 capital program through cash on hand, expected cash flow from our operations and borrowings under our New Credit Facility.
We currently plan to fund our 2025 capital program through cash on hand, expected cash flow from our operations and borrowings under our Credit Facility.
Level 3 inputs associated with the calculation of discounted cash flows used in the impairment analysis include our estimate of future natural gas and crude oil prices, production costs, development expenditures, anticipated production of proved reserves and other relevant data. Additionally, we utilize NYMEX strip pricing, adjusted for differentials, to value the reserves. Reorganization and Fresh Start Accounting.
Level 3 inputs associated with the calculation of discounted cash flows used in the impairment analysis include our estimate of future natural gas and crude oil prices, production costs, development expenditures, anticipated production of proved reserves and other relevant data. Additionally, we utilize NYMEX strip pricing, adjusted for differentials, to value the reserves. 69 TABLE OF CONTENTS
Capital Expenditures Our capital expenditures during the 2023 Successor Period were in line with the 2022 Successor Period, primarily as a result of increased drilling and completion activity within our Haynesville operating area, partially offset by reduced activity due to our Eagle Ford divestitures.
Our capital expenditures during the year ended December 31, 2023 were in line with the capital expenditures during the year ended December 31, 2022, primarily as a result of increased drilling and completion activity within our Haynesville operating area, partially offset by reduced activity due to our Eagle Ford divestitures.
Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices escalated by an inflationary rate after five years, adjusted for differentials, and (v) a market-based weighted average cost of capital by operating area.
Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) future production volumes based on estimated reserves, (ii) future operating and development costs, (iii) future commodity prices escalated by an inflationary rate after three years, adjusted for differentials, and (iv) a market-based weighted average cost of capital by operating area.
Our strategy is to create shareholder value through the responsible development of our significant resource plays while continuing to be a leading provider of affordable, reliable, lower carbon energy to markets in need. We continue to focus on improving margins through operating efficiencies and financial discipline and improving our ESG performance.
Our strategy is to create shareholder value through the responsible development of our significant resource plays while continuing to be a leading provider of natural gas to markets in need. We continue to focus on improving margins through operating efficiencies and financial discipline and improving our ESG performance.
As discussed above, we believe our existing sources of liquidity will be sufficient to fund our near and long-term contractual obligations. See Notes 6 , 7 , 9 , 15 , 18 and 20 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
As discussed above, we believe our existing sources of liquidity will be sufficient to fund our near and long-term contractual obligations. See Notes 4 , 5 , 7 , 13 and 16 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
The discount rates utilized are derived using a weighted average cost of capital computation, which includes an estimated cost of debt and equity for market participants with similar geographies and asset development type by operating area. Income Taxes. Income taxes are accounted for using the asset and liability method as required by GAAP.
The discount rates utilized are derived using a weighted average cost of capital computation, which includes an estimated cost of debt and equity for market participants with similar geographies and asset development type by operating area.
See Note 12 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion. 63 TABLE OF CONTENTS Results of Operations Year ended December 31, 2023 compared to the year ended December 31, 2022 Below is a discussion of changes in our results of operations for the 2023 Successor Period compared to the 2022 Successor Period.
See Note 1 0 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion. 61 TABLE OF CONTENTS Results of Operations Year ended December 31, 2024 compared to the year ended December 31, 2023 Below is a discussion of changes in our results of operations for 2024 compared to 2023.
Payments on New Credit Facility, net During the 2023 Successor Period, we made net repayments of $1.05 billion on the New Credit Facility, utilizing a portion of the proceeds from the Eagle Ford divestitures and also internally generated cash provided by operating activities.
Payments on Credit Facility, net During the year ended December 31, 2023, we made net repayments of $1.05 billion on the Credit Facility, utilizing a portion of the proceeds from the Eagle Ford divestitures and internally generated cash provided by operating activities.
See Note 6 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of our debt obligations, including principal and carrying amounts of our senior notes.
The amounts involved in such financing transactions may be material. See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of our debt obligations, including principal and carrying amounts of our senior notes.
For additional discussion regarding risks associated with price volatility and economic deterioration, see Item 1A Risk Factors in this report. 58 TABLE OF CONTENTS Liquidity and Capital Resources Liquidity Overview For the 2023 Successor Period, our primary sources of capital resources and liquidity have consisted of internally generated cash flows from operations, proceeds from the divestitures of our Eagle Ford assets and borrowings under our New Credit Facility, and our primary uses of cash have been for the development of our natural gas and oil properties, and return of value to stockholders through dividends and equity repurchases.
For additional discussion regarding risk associated with price volatility and economic uncertainty, see Item 1A Risk Factors in this report. 56 TABLE OF CONTENTS Liquidity and Capital Resources Liquidity Overview Our primary sources of capital resources and liquidity are internally generated cash flows from operations and borrowings under our Credit Facility, and our primary uses of cash are for the development of our natural gas and oil properties, acquisitions of additional natural gas and oil properties and return of value to stockholders through dividends and equity repurchases.
Income Tax Expense (Benefit) We recorded income tax expense of $698 million in the 2023 Successor Period. Of this amount, $270 million is related to current federal and state income taxes, and the remainder is related to deferred federal and state income taxes. We recorded an income tax benefit of $1.3 billion in the 2022 Successor Period.
Of this amount, $4 million is related to current federal and state income tax benefit, and the remainder is related to deferred federal and state income taxes. We recorded income tax expense of $698 million in 2023.
Cash Paid for Common Stock Dividends As part of our dividend program, we paid common stock dividends of $487 million, $1.2 billion and $119 million during the 2023, 2022 and 2021 Successor Periods, respectively.
Cash Paid for Common Stock Dividends As part of our dividend program, we paid common stock dividends of $388 million, $487 million and $1.2 billion during the years ended December 31, 2024, 2023 and 2022, respectively.
Cash used in operating activities was $21 million for the 2021 Predecessor Period. The decrease in the 2023 Successor Period is primarily due to lower prices for the natural gas, oil and NGL we sold as well as decreased sales volumes related to our Eagle Ford divestitures.
The decrease in 2024 is primarily due to lower prices for the natural gas, oil and NGL we sold. The decrease in 2023 is primarily due to lower prices for the natural gas, oil and NGL we sold as well as decreased sales volumes related to our Eagle Ford divestitures.
The pipeline is expected to have an initial capacity of 1.7 Bcf/d expandable to 2.2 Bcf/d. The carbon capture portion of the project anticipates capturing and permanently sequestering up to 2.0 million tons per annum of CO2.
The pipeline is expected to have an initial capacity of 1.7 Bcf/d expandable to 2.2 Bcf/d. The carbon capture portion of the project anticipates capturing approximately 1.0 million tons per annum of CO2 and delivering the CO2 to ExxonMobil Low Carbon Solutions Onshore Storage, LLC for additional transportation and storage.
Subject to the satisfaction of certain commodity price triggers, we may receive up to an additional $50 million cash consideration shortly following the first anniversary of the transaction close date. This transaction closed on November 30, 2023 (with an effective date of February 1, 2023) and resulted in the recognition of a gain of approximately $140 million.
This transaction closed on November 30, 2023 (with an effective date of February 1, 2023) and resulted in the recognition of a gain of approximately $140 million. Due to the satisfaction of certain commodity price triggers, we received an additional $25 million cash consideration during the fourth quarter of 2024.
As of December 31, 2023, we had $3.1 billion of liquidity available, including $1.1 billion of cash on hand and $2.0 billion of aggregate unused borrowing capacity available under the New Credit Facility. As of December 31, 2023, we had no outstanding borrowings under our New Credit Facility and $7 million utilized for various letters of credit.
As of December 31, 2024, we had $2.8 billion of liquidity available, including $317 million of cash on hand and $2.5 billion of aggregate unused borrowing capacity available under the Credit Facility. As of December 31, 2024, we had no outstanding borrowings under our Credit Facility.
Southwestern is an independent energy company engaged in development, exploration and production activities, including related marketing activities, within its operating areas in the Marcellus and Haynesville shale plays.
Southwestern was an independent energy company engaged in development, exploration and production activities, including related marketing activities, within its operating areas in the Appalachia and Haynesville shale plays. Our Board of Directors and the Board of Directors of Southwestern both approved the Merger Agreement.
We enter into various derivative instruments to mitigate a portion of our exposure to commodity price declines, but these transactions may also limit our cash flows in periods of rising commodity prices.
Derivative and Hedging Activities Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. We enter into various derivative instruments to mitigate a portion of our exposure to commodity price declines, but these transactions may also limit our cash flows in periods of rising commodity prices.
In the 2021 Successor Period, we divested certain non-core assets for approximately $13 million. See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion. Proceeds from New Credit Facility, net In the 2022 Successor Period, we borrowed a net $1.05 billion under the New Credit Facility.
See Note 2 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion. Proceeds from Credit Facility, net In 2022, we borrowed a net $1.05 billion under the Credit Facility. We utilized these borrowings to terminate the Exit Credit Facility.
On August 11, 2023, we entered into an agreement to sell the final portion of our remaining Eagle Ford assets to SilverBow Resources, Inc. (“SilverBow”) for approximately $700 million, subject to post-closing adjustments.
This transaction closed on April 28, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $470 million. On August 11, 2023, we entered into an agreement to sell the final portion of our remaining Eagle Ford assets to SilverBow Resources, Inc. (“SilverBow”) for approximately $700 million, subject to post-closing adjustments.
The natural gas gathering pipeline is projected for a potential in-service date in 2025, and the carbon sequestration portion of the project is subject to regulatory approvals. Through the end of the 2023 Successor Period, we have made total capital contributions of $238 million to the project.
The natural gas gathering pipeline is projected for a potential in-service date in the fourth quarter of 2025. Through the end of 2024, we have made total capital contributions of $296 million to the project.
In the 2023 Successor Period, our average operated rig count was 11 rigs and 193 spud wells, compared to an average operated rig count of 14 rigs and 217 spud wells in the 2022 Successor Period and 7 rigs and 110 spud wells in the 2021 Successor Period.
During the year ended December 31, 2024, our average operated rig count was 9 rigs and 133 spud wells, compared to an average operated rig count of 11 rigs and 193 spud wells in the year ended December 31, 2023 and 14 rigs and 217 spud wells in the year ended December 31, 2022.
The repurchased shares of common stock were retired and recorded as a reduction to common stock and retained earnings. See Note 12 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
Separation and Other Termination Costs During both the 2023 and 2022 Successor Periods, we recognized $5 million of separation and other termination costs related to one-time termination benefits for certain employees.
Additionally, compensation and other corporate expenses increased following the Southwestern Merger. Separation and Other Termination Costs During 2024 and 2023, we recognized $23 million and $5 million, respectively, of separation and other termination costs related to one-time termination benefits for certain employees.
In December 2022, we entered into a New Credit Facility and terminated the Exit Credit Facility, repaying all amounts outstanding and extinguishing all commitments thereunder. We believe our cash flow from operations, cash on hand and borrowing capacity under the New Credit Facility, as discussed below, will provide sufficient liquidity during the next 12 months and the foreseeable future.
We believe our cash flow from operations, including from the acquired Southwestern business, cash on hand and unused borrowing capacity under the Credit Facility, as discussed below, will provide sufficient liquidity during the next 12 months and the foreseeable future.
Under the SPAs, we will purchase approximately 0.5 million tonnes of LNG per annum from Delfin LNG LLC at a Henry Hub price with a contract targeted start date in 2028, then deliver to Gunvor Group Ltd on a free on board basis with the sales price linked to the Japan Korea Market for a period of 20 years. 57 TABLE OF CONTENTS Investments - Momentum Sustainable Ventures LLC During the fourth quarter of 2022, we entered into an agreement with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture and sequestration project, which will gather natural gas produced in the Haynesville Shale for re-delivery to Gulf Coast markets, including LNG export.
Under the SPAs, we will purchase approximately 0.5 million tonnes of LNG per annum from Delfin LNG LLC at a Henry Hub price with a contract targeted start date in 2028, then deliver to Gunvor Group Ltd on a free on board basis with the sales price linked to the Japan Korea Market for a period of 20 years.
Capital Expenditures For the year ending December 31, 2024, we currently expect to drill approximately 95 to 115 gross wells across 7 to 9 rigs and plan to invest between approximately $1.25 – $1.35 billion in capital expenditures.
Capital Expenditures For the year ending December 31, 2025, we currently expect to complete and turn in line 240 to 270 gross wells utilizing approximately 11 to 15 rigs and plan to invest between approximately $2.9 – $3.1 billion in capital expenditures.
Contractual Obligations and Off-Balance Sheet Arrangements As of December 31, 2023, our material contractual obligations include repayment of senior notes, derivative obligations, asset retirement obligations, lease obligations, capital commitments relating to our investments, undrawn letters of credit and various other commitments we enter into in the ordinary course of business that could result in future cash obligations.
See Item 7A Quantitative and Qualitative Disclosures About Market Risk included in Part II of this report for further discussion on the impact of commodity price risk on our financial position. 57 TABLE OF CONTENTS Contractual Obligations and Off-Balance Sheet Arrangements As of December 31, 2024, our material contractual obligations include repayment of senior notes, derivative obligations, asset retirement obligations, lease obligations, undrawn letters of credit and various other commitments we enter into in the ordinary course of business that could result in future cash obligations.
During the 2023 Successor Period, we repurchased 4.4 million shares of our common stock for an aggregate cost of approximately $355 million. During the 2022 Successor Period, we repurchased 11.7 million shares of our common stock for an aggregate cost of $1.1 billion.
During 2022, we repurchased 11.7 million shares of our common stock for an aggregate cost of $1.1 billion. The repurchased shares of common stock were retired and recorded as a reduction to common stock and retained earnings.
Depreciation, Depletion and Amortization Successor Year Ended December 31, 2023 2022 DD&A $ 1,527 $ 1,753 DD&A per Mcfe $ 1.14 $ 1.20 The absolute and per Mcfe decreases in depreciation, depletion and amortization for the 2023 Successor Period compared to the 2022 Successor Period are primarily related to our Eagle Ford divestitures.
Depreciation, Depletion and Amortization Years Ended December 31, 2024 2023 DD&A $ 1,729 $ 1,527 DD&A per Mcfe $ 1.26 $ 1.14 The absolute increase in depreciation, depletion and amortization for 2024 compared to 2023 is primarily related to the Southwestern Merger.
The decrease was primarily due to a $102 million decrease due to the Eagle Ford and Powder River Basin divestitures, partially offset by an increase of $30 million in Haynesville due to legislative action that led to changes in the Haynesville severance and ad valorem tax rates. 66 TABLE OF CONTENTS Natural Gas and Oil Derivatives Successor Year Ended December 31, 2023 2022 Natural gas derivatives - realized gains (losses) $ 488 $ (2,998) Natural gas derivatives - unrealized gains 1,199 611 Total gains (losses) on natural gas derivatives $ 1,687 $ (2,387) Oil derivatives - realized losses $ (38) $ (576) Oil derivatives - unrealized gains 88 283 Total gains (losses) on oil derivatives $ 50 $ (293) Contingent consideration unrealized losses $ (9) $ — Total gains (losses) on natural gas and oil derivatives $ 1,728 $ (2,680) See Note 15 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a complete discussion of our derivative activity.
These decreases were partially offset by an increase of $5 million in Haynesville and an increase of $22 million in Southwest Appalachia due to the Southwestern Merger. 64 TABLE OF CONTENTS Natural Gas, Oil and NGL Derivatives Years Ended December 31, 2024 2023 Natural gas derivatives - realized gains $ 919 $ 488 Natural gas derivatives - unrealized gains (losses) (951) 1,199 Total gains (losses) on natural gas derivatives $ (32) $ 1,687 Oil derivatives - realized gains (losses) $ 1 $ (38) Oil derivatives - unrealized gains (3) 88 Total gains (losses) on oil derivatives $ (2) $ 50 NGL derivatives - realized losses $ (4) $ — NGL derivatives - unrealized losses (13) — Total losses on NGL derivatives $ (17) $ — Contingent consideration - realized gains $ 25 $ — Contingent consideration - unrealized losses (12) (9) Total gains (losses) on contingent consideration $ 13 $ (9) Total gains (losses) on natural gas, oil and NGL derivatives $ (38) $ 1,728 See Note 1 3 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a complete discussion of our derivative activity.
On January 17, 2023, we entered into an agreement to sell a portion of our Eagle Ford assets to WildFire Energy I LLC for approximately $1.425 billion, subject to post-closing adjustments. This transaction closed on March 20, 2023 (with an effective date of October 1, 2022) and resulted in the recognition of a gain of approximately $337 million.
The remaining free cash flow would be maintained on the balance sheet. 55 TABLE OF CONTENTS Divestitures On January 17, 2023, we entered into an agreement to sell a portion of our Eagle Ford assets to WildFire Energy I LLC for approximately $1.425 billion, subject to post-closing adjustments.
During the 2022 Successor Period, exploration expense charges of $23 million were primarily the result of non-cash impairment charges in unproved properties of $8 million, $6 million of charges related to dry hole expense and $6 million of geological and geophysical expense.
Exploration Expenses During 2024, exploration expense of $10 million was primarily the result of $6 million of non-cash impairment charges on unproved properties and $3 million of geological and geophysical expense.
Under this base and variable dividend approach, we paid dividends of $487 million, in aggregate, on our common stock in the 2023 Successor Period. See Note 12 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
Severance and Ad Valorem Taxes Successor Year Ended December 31, 2023 2022 $/Mcfe $/Mcfe Marcellus $ 14 0.02 $ 17 0.03 Haynesville 105 0.19 75 0.13 Eagle Ford 48 0.48 139 0.71 Powder River Basin — — 11 1.09 Total severance and ad valorem taxes $ 167 0.13 $ 242 0.17 Severance and ad valorem taxes in the 2023 Successor Period decreased $75 million compared to the 2022 Successor Period.
Severance and Ad Valorem Taxes Years Ended December 31, 2024 2023 $/Mcfe $/Mcfe Haynesville $ 60 0.11 $ 105 0.19 Northeast Appalachia 15 0.02 14 0.02 Southwest Appalachia 22 0.14 — — Eagle Ford — — 48 0.48 Total severance and ad valorem taxes $ 97 0.07 $ 167 0.13 Severance and ad valorem taxes in 2024 decreased $70 million compared to 2023.
We completed 166 operated wells in the 2023 Successor Period compared to 216 in the 2022 Successor Period and 112 in the 2021 Successor Period. Business Combination, net In the 2022 Successor Period, we completed the Marcellus Acquisition for approximately $2 billion and 9.4 million shares of our common stock.
During the year ended December 31, 2022, we completed the Marcellus Acquisition for approximately $2 billion and 9.4 million shares of our common stock.
The Company’s ability to pay dividends to its stockholders is restricted by (i) Oklahoma corporate law, (ii) its Certificate of Incorporation, (iii) the terms and provisions of the credit agreement governing its New Credit Facility and (iv) the terms and provisions of the indentures governing its 5.50% Senior Notes due 2026, 5.875% Senior Notes due 2029 and 6.75% Senior Notes due 2029. 59 TABLE OF CONTENTS Derivative and Hedging Activities Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL.
The Company’s ability to pay dividends to its stockholders is restricted by (i) Oklahoma corporate law, (ii) its Certificate of Incorporation, (iii) the terms and provisions of the Credit Agreement governing the Credit Facility and (iv) the terms and provisions of the indentures governing its 5.500% Senior Notes due 2026, 5.875% Senior Notes due 2029, 6.750% Senior Notes due 2029, and 5.70% Senior Notes due 2035 as well as the senior notes assumed from Southwestern, including the 5.375% Senior Notes due 2029, 5.375% Senior Notes due 2030 and 4.750% Senior Notes due 2032.
Natural Gas, Oil and NGL Production and Average Sales Prices Successor Year Ended December 31, 2023 Natural Gas Oil NGL Total MMcf per day $/Mcf MBbl per day $/Bbl MBbl per day $/Bbl MMcfe per day $/Mcfe Marcellus 1,834 2.22 — — — — 1,834 2.22 Haynesville 1,551 2.30 — — — — 1,551 2.30 Eagle Ford 85 2.25 21 77.80 10 25.62 274 7.64 Total 3,470 2.25 21 77.80 10 25.62 3,659 2.66 Average NYMEX Price 2.74 77.63 Average Realized Price (including realized derivatives) 2.64 72.89 25.62 2.99 Successor Year Ended December 31, 2022 Natural Gas Oil NGL Total MMcf per day $/Mcf MBbl per day $/Bbl MBbl per day $/Bbl MMcfe per day $/Mcfe Marcellus 1,836 6.03 — — — — 1,836 6.03 Haynesville 1,611 5.92 — — — — 1,611 5.92 Eagle Ford 127 5.64 51 96.10 16 36.76 529 11.76 Powder River Basin 10 5.45 2 95.18 1 53.96 26 10.66 Total 3,584 5.96 53 96.07 17 37.48 4,002 6.77 Average NYMEX Price 6.64 94.23 Average Realized Price (including realized derivatives) 3.67 66.36 37.48 4.32 64 TABLE OF CONTENTS Natural Gas, Oil and NGL Sales Successor Year Ended December 31, 2023 Natural Gas Oil NGL Total Marcellus $ 1,483 $ — $ — $ 1,483 Haynesville 1,300 — — 1,300 Eagle Ford 70 596 98 764 Total natural gas, oil and NGL sales $ 2,853 $ 596 $ 98 $ 3,547 Successor Year Ended December 31, 2022 Natural Gas Oil NGL Total Marcellus $ 4,041 $ — $ — $ 4,041 Haynesville 3,481 — — 3,481 Eagle Ford 261 1,798 212 2,271 Powder River Basin 20 66 13 99 Total natural gas, oil and NGL sales $ 7,803 $ 1,864 $ 225 $ 9,892 Natural gas, oil and NGL sales in the 2023 Successor Period decreased $6.345 billion compared to the 2022 Successor Period.
Natural Gas, Oil and NGL Production and Average Sales Prices Year Ended December 31, 2024 Natural Gas Oil NGL Total MMcf per day $/Mcf MBbl per day $/Bbl MBbl per day $/Bbl MMcfe per day $/Mcfe Haynesville 1,532 2.14 — — — — 1,532 2.14 Northeast Appalachia 1,809 1.88 — — — — 1,809 1.88 Southwest Appalachia 270 2.42 3 60.41 21 27.44 417 3.42 Total 3,611 2.03 3 60.41 21 27.44 3,758 2.16 Average NYMEX Price 2.27 75.72 Average Realized Price (including realized derivatives) 2.75 61.04 26.91 2.84 Year Ended December 31, 2023 Natural Gas Oil NGL Total MMcf per day $/Mcf MBbl per day $/Bbl MBbl per day $/Bbl MMcfe per day $/Mcfe Haynesville 1,551 2.30 — — — — 1,551 2.30 Northeast Appalachia 1,834 2.22 — — — — 1,834 2.22 Eagle Ford 85 2.25 21 77.80 10 25.62 274 7.64 Total 3,470 2.25 21 77.80 10 25.62 3,659 2.66 Average NYMEX Price 2.74 77.63 Average Realized Price (including realized derivatives) 2.64 72.89 25.62 2.99 62 TABLE OF CONTENTS Natural Gas, Oil and NGL Sales Year Ended December 31, 2024 Natural Gas Oil NGL Total Haynesville $ 1,205 $ — $ — $ 1,205 Northeast Appalachia 1,242 — — 1,242 Southwest Appalachia 239 69 214 522 Total natural gas, oil and NGL sales $ 2,686 $ 69 $ 214 $ 2,969 Year Ended December 31, 2023 Natural Gas Oil NGL Total Haynesville $ 1,300 $ — $ — $ 1,300 Northeast Appalachia 1,483 — — 1,483 Eagle Ford 70 596 98 764 Total natural gas, oil and NGL sales $ 2,853 $ 596 $ 98 $ 3,547 Natural gas, oil and NGL sales in 2024 decreased $578 million compared to 2023.
Interest Expense Successor Year Ended December 31, 2023 2022 Interest expense on debt $ 143 $ 181 Other — 13 Amortization of premium, issuance costs and other (9) (3) Capitalized interest (30) (31) Total interest expense $ 104 $ 160 The decrease in total interest expense in the 2023 Successor Period compared to the 2022 Successor Period, was primarily due to lower average debt outstanding during the 2023 Successor Period.
Interest Expense Years Ended December 31, 2024 2023 Interest expense on debt $ 181 $ 143 Amortization of premium, discount, issuance costs and other (7) (9) Capitalized interest (51) (30) Total interest expense $ 123 $ 104 The increase in total interest expense 2024 compared to 2023, was primarily due to our assumption of Southwestern’s Senior Notes as a result of the Southwestern Merger, which resulted in an increase in interest expense on debt.
A portion of the borrowings under the New Credit Facility were repaid with internally generated cash provided by operating activities.
A portion of the borrowings under the Credit Facility were repaid with internally generated cash provided by operating activities. 59 TABLE OF CONTENTS Receipts of Deferred Consideration During 2024, we received $166 million in deferred consideration associated with our Eagle Ford divestiture transactions.
The decrease was primarily due to the Eagle Ford and Powder River Basin divestitures, partially offset by an increase of $30 million in Haynesville, primarily due to an increase in saltwater disposal expenses. 65 TABLE OF CONTENTS Gathering, Processing and Transportation Expenses (“GP&T”) Successor Year Ended December 31, 2023 2022 $/Mcfe $/Mcfe Marcellus $ 433 0.65 $ 381 0.57 Haynesville 263 0.46 313 0.53 Eagle Ford 157 1.57 343 1.78 Powder River Basin — — 22 2.32 Total GP&T $ 853 0.64 $ 1,059 0.73 Gathering, processing and transportation expenses in the 2023 Successor Period decreased $206 million compared to the 2022 Successor Period.
Northeast Appalachia increased $16 million due to an additional $22 million of expense related to the Southwestern Merger, partially offset by a $6 million decrease related to lower workover expense, saltwater disposal and repairs and maintenance. 63 TABLE OF CONTENTS Gathering, Processing and Transportation Expenses (“GP&T”) Years Ended December 31, 2024 2023 $/Mcfe $/Mcfe Haynesville $ 326 0.58 $ 263 0.46 Northeast Appalachia 507 0.77 433 0.65 Southwest Appalachia 202 1.33 — — Eagle Ford — — 157 1.57 Total GP&T $ 1,035 0.75 $ 853 0.64 Gathering, processing and transportation expenses in 2024 increased $182 million compared to 2023.
Debt Issuance and Other Financing Costs During the 2022 Successor Period, we paid $17 million of one-time fees to lenders to establish the New Credit Facility. Cash Paid to Repurchase and Retire Common Stock In March 2022, we commenced our share repurchase program.
During 2022, we paid $17 million of one-time fees to lenders to establish the Credit Facility. Cash Paid to Repurchase and Retire Common Stock We did not repurchase any shares during 2024. During 2023, we repurchased 4.4 million shares of our common stock for an aggregate cost of approximately $355 million.
Additionally, upon emergence from Chapter 11, we issued 62,927,320 shares of New Common Stock in exchange for $600 million of cash, as agreed upon in the Plan. See Note 6 and Note 2 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 1 0 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of these acquisitions. 62 TABLE OF CONTENTS Contributions to Investments During the 2023 Successor Period and 2022 Successor Period, contributions to investments were $231 million and $18 million, respectively, which primarily consisted of contributions to our investment with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture project.
Contributions to Investments During the years ended December 31, 2024, 2023 and 2022, contributions to investments primarily consisted of contributions to our investment with Momentum Sustainable Ventures LLC to build a new natural gas gathering pipeline and carbon capture project.
Marketing Revenues and Expenses Successor Year Ended December 31, 2023 2022 Marketing revenues $ 2,500 $ 4,231 Marketing expenses 2,499 4,215 Marketing margin $ 1 $ 16 Marketing revenues and expenses decreased in the 2023 Successor Period as a result of decreased natural gas, oil and NGL prices received in our marketing operations.
Marketing Revenues and Expenses Years Ended December 31, 2024 2023 Marketing revenues $ 1,290 $ 2,500 Marketing expenses 1,310 2,499 Marketing margin $ (20) $ 1 Marketing revenues and expenses decreased in 2024 compared to 2023 as a result of decreased oil marketing activities, primarily as a result of the Eagle Ford divestitures in 2023.
Other Operating Expense , Net Successor Year Ended December 31, 2023 2022 Other operating expense, net $ 18 $ 49 During the 2022 Successor Period, we recognized approximately $41 million of costs related to our Marcellus Acquisition, which included integration costs, consulting fees, financial advisory fees, legal fees and change in control expense in accordance with Chief’s existing employment agreements.
Other Operating Expense , Net Years Ended December 31, 2024 2023 Other operating expense, net $ 332 $ 18 During 2024, we recognized approximately $312 million of costs related to the Southwestern Merger, which included $148 million related to employee expenses and the remainder of the costs relating to transaction fees, consulting and legal fees and other fees related to the transaction.
See Note 2 and Note 3 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a discussion of the Chapter 11 Cases and for discussion of adoption of fresh start accounting. We did not have any reorganization items, net for the 2022 Successor Period or the 2021 Successor Period.
See Note 1 0 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion.
Production Expenses Successor Year Ended December 31, 2023 2022 $/Mcfe $/Mcfe Marcellus $ 81 0.12 $ 76 0.11 Haynesville 185 0.33 155 0.26 Eagle Ford 90 0.91 234 1.22 Powder River Basin — — 10 0.94 Total production expenses $ 356 0.27 $ 475 0.33 Production expenses in the 2023 Successor Period decreased $119 million compared to the 2022 Successor Period.
Production Expenses Years Ended December 31, 2024 2023 $/Mcfe $/Mcfe Haynesville $ 170 0.30 $ 185 0.33 Northeast Appalachia 97 0.15 81 0.12 Southwest Appalachia 49 0.32 — — Eagle Ford — — 90 0.91 Total production expenses $ 316 0.23 $ 356 0.27 Production expenses in 2024 decreased $40 million compared to 2023.
The decrease was primarily due to a $208 million decrease due to divestitures in Eagle Ford and Powder River Basin. Additionally, Haynesville decreased $50 million, primarily due to lower rates driven by decreased prices. These decreases were partially offset by a $52 million increase in Marcellus, primarily due to the Marcellus Acquisition in March 2022.
The decrease was primarily related to a $48 million decrease due to the Eagle Ford divestitures and a $50 million decrease in Haynesville, which was driven by a decrease in the statutory severance tax rates.
The independent certification of our production as responsibly sourced provides a verified approach to tracking our progress towards our commitment to reduce our methane intensity, as well as supporting our overall objective of achieving net-zero Scope 1 and 2 GHG emissions by 2035. 56 TABLE OF CONTENTS Recent Developments Merger Agreement On January 10, 2024, Chesapeake and Southwestern entered into an all-stock merger agreement.
Additionally, we aim to be conscientious in our efforts and how they will shape our approach to sustainability for the future and have established the following goals: • Net zero (Scope 1 and 2) greenhouse gas emissions by 2035. • Maintain 100% responsibly sourced gas (RSG) certification across our portfolio. 54 TABLE OF CONTENTS Recent Developments Southwestern Merger On January 10, 2024, Chesapeake and Southwestern entered into an all-stock agreement and plan of merger (the “Merger Agreement”).
We also intend to continue to dedicate capital to projects that reduce the environmental impact of our natural gas and oil producing activities. We continue to seek opportunities to reduce cash costs (production, gathering, processing and transportation and general and administrative), through operational efficiencies and improving our production volumes from existing wells.
We also intend to continue to dedicate capital to projects designed to reduce the environmental impact of our production activities.
The New Credit Facility provides for a $200 million sublimit available for the issuance of letters of credit and a $50 million sublimit available for swingline loans. Borrowings under the credit agreement may be alternate base rate loans or term SOFR loans, at the Company’s election.
The Credit Facility provides for aggregate commitments of $2.5 billion, with a $500 million sublimit available for the issuance of letters of credit and a $50 million sublimit available for swingline loans. As of December 31, 2024, we had approximately $2.5 billion available for borrowings under the Credit Facility.
General and Administrative Expenses Successor Year Ended December 31, 2023 2022 Total G&A, net $ 127 $ 142 G&A, net per Mcfe $ 0.09 $ 0.10 67 TABLE OF CONTENTS Total general and administrative expenses, net during the 2023 Successor Period decreased $15 million compared to the 2022 Successor Period, primarily due to a decrease in compensation and other corporate expenses.
During 2023, exploration expense of $27 million was primarily the result of $12 million of non-cash impairment charges on unproved properties and $11 million of geological and geophysical expense. 65 TABLE OF CONTENTS General and Administrative Expenses Years Ended December 31, 2024 2023 Total G&A, net $ 186 $ 127 G&A, net per Mcfe $ 0.14 $ 0.09 Total general and administrative expenses, net during 2024 increased $59 million compared to 2023, primarily due to a decrease in our producing well count following the Eagle Ford divestitures, which reduced our allocations and reimbursements of G&A.
We continue to monitor these situations and assess their impact on our business, including business partners and customers.
Higher commodity prices in 2025 could lead to increased rig activity across the industry resulting in modest levels of inflation. We continue to monitor these situations, including the recently enacted tariff on steel by the current Presidential Administration, and assess their impact on our business, including business partners and customers.
Other Income Successor Year Ended December 31, 2023 2022 Other income $ 79 $ 36 68 TABLE OF CONTENTS The increase in other income during the 2023 Successor Period compared to the 2022 Successor Period was primarily due to a $28 million increase in interest income, related to our higher average cash balance during the 2023 Successor Period, as well as a $24 million increase in deferred consideration amortization.
The increase in 2024 compared to 2023 was primarily due to increased interest income related to our higher average cash balance in 2024. Income Tax Expense (Benefit) We recorded an income tax benefit of $127 million in 2024.
Economic and Market Conditions Instability and conflict in Europe and the Middle East has caused, and could intensify, volatility in natural gas, oil and NGL prices, and may further impact on global growth prospects, which could in turn affect supply and demand for natural gas and oil.
Economic and Market Conditions Geopolitical risk and policy uncertainty continue to drive volatility in natural gas, oil and NGL prices, while macroeconomic headwinds in key consuming countries could impact global growth prospects, potentially affecting supply and demand for energy commodities.
See Note 11 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for a discussion of income tax expense (benefit). 69 TABLE OF CONTENTS Year ended December 31, 2022 compared to the period from February 10, 2021 through December 31, 2021 Below is a discussion of changes in our results of operations for the 2022 Successor Period compared to the 2021 Successor Period.
See Note 4 and Note 15 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for additional discussion. 66 TABLE OF CONTENTS Other Income, net Years Ended December 31, 2024 2023 Other income, net $ 86 $ 79 Other income during the time periods presented above primarily consists of interest income and deferred consideration amortization.
In addition, a mild winter in 2023 and historically higher inventory levels have resulted in an observed decline in natural gas pricing in 2023 and at the beginning of 2024. Our 2024 estimated cash flow is partially protected from commodity price volatility due to our current hedge positions that cover approximately 60% of our projected natural gas volumes for 2024.
Our future estimated cash flow is partially protected from commodity price volatility due to our current hedge positions that provide a floor price on over half of our projected gas volumes through the end of 2025 with significant upside participation via costless collars.
Our capital expenditures significantly increased in the 2022 Successor Period compared to the 2021 Successor Period, primarily as a result of increased drilling and completion activity in Haynesville and Marcellus, following the Vine Acquisition and Marcellus Acquisition, respectively.
Capital Expenditures Our capital expenditures during the year ended December 31, 2024 decreased compared to the year ended December 31, 2023, primarily as a result of decreased drilling and completion activity within our Northeast Appalachia and Haynesville operating areas, as well as reduced activity in Eagle Ford due to our Eagle Ford divestitures.
Pursuant to the terms of the merger agreement, at the effective time of the Southwestern Merger, each eligible share of Southwestern common stock issued and outstanding immediately prior to the effective time will be automatically converted into the right to receive 0.0867 of a share of Chesapeake’s common stock.
Under the terms of the Merger Agreement, subject to certain exceptions, each share of Southwestern common stock was converted into the right to receive 0.0867 of a share of the Company’s common stock. Based on the closing price of our common stock, the total value of such shares of our common stock issued to Southwestern’s shareholders was approximately $7.9 billion.
Repurchases of Equity Securities and Dividends In June 2022, our Board of Directors authorized an increase in the size of our share repurchase program from $1.0 billion to up to $2.0 billion in aggregate value of our common stock and/or warrants.
Repurchase Program and Enhanced Returns Framework In October 2024, our Board of Directors authorized the Company to repurchase up to $1.0 billion, in aggregate, of the Company’s common stock and/or warrants. Additionally, we also announced our enhanced capital returns framework which is designed to more effectively return cash to shareholders and reduce net debt.
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Introduction We are an independent exploration and production company engaged in the acquisition, exploration and development of properties to produce natural gas, oil and NGL from underground reservoirs. We own a large portfolio of onshore U.S. unconventional natural gas assets, including interests in approximately 5,000 natural gas wells as of December 31, 2023.
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Introduction On October 1, 2024, we completed the Southwestern Merger, creating a premier energy company that we believe is underpinned by a leading natural gas portfolio adjacent to the highest demand markets, premium inventory, a resilient financial foundation and an investment grade balance sheet.
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Our natural gas resource plays are the Marcellus Shale in the northern Appalachian Basin in Pennsylvania (“Marcellus”) and the Haynesville/Bossier Shales in northwestern Louisiana (“Haynesville”). Our liquids-rich resource play was in the Eagle Ford Shale in South Texas (“Eagle Ford”).
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We believe that this new company is uniquely positioned to deliver affordable, lower-carbon energy to meet growing domestic and international demand while creating sustainable value for stakeholders. In conjunction with the closing of the Southwestern Merger, Chesapeake Energy Corporation changed its name to Expand Energy Corporation.
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During 2023, we completed our exit from Eagle Ford through three separate divestiture transactions, with aggregate proceeds from these three transactions exceeding $3.5 billion, subject to customary post-closing adjustments.
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Expand Energy is the largest independent natural gas producer in the U.S., based on net daily production, and is focused on responsibly developing an abundant supply of natural gas, oil and NGL to expand energy access for all.
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Leading a responsible energy future is foundational to Chesapeake's success. Our core values and culture demand we continuously evaluate the environmental impact of our operations and work diligently to improve our ESG performance across all facets of our Company.
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Our operations are located in Louisiana in the Haynesville and Bossier Shales (“Haynesville”), in Pennsylvania in the Marcellus Shale (“Northeast Appalachia”) and in West Virginia and Ohio in the Marcellus and Utica Shales (“Southwest Appalachia”).
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Our path to answering the call for affordable, reliable, lower carbon energy begins with our goal to achieve net zero GHG emissions (Scope 1 and 2) by 2035.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, we did not have any open oil or NGL derivative positions. A 10% increase in forward natural gas prices would decrease the valuation of natural gas derivatives by approximately $188 million, while a 10% decrease would increase the valuation by $191 million.
Biggest changeA 10% increase in forward gas prices would decrease the valuation of natural gas derivatives by approximately $493 million, while a 10% decrease would increase the valuation by approximately $482 million. A 10% fluctuation in forward oil prices would impact the valuation of oil derivatives by approximately $4 million.
Interest is payable on borrowings under each respective credit facility based on floating rates. See Note 6 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for additional information. As of December 31, 2023, we did not have any outstanding borrowings under our New Credit Facility. 79 TABLE OF CONTENTS
See Note 4 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for additional information. As of December 31, 2024, we did not have any outstanding borrowings under our Credit Facility. 70 TABLE OF CONTENTS
Based on production, natural gas, oil and NGL revenue for the 2023 Successor Period would have increased or decreased by approximately $285 million, $60 million, and $10 million, respectively, for each 10% increase or decrease in prices. As of December 31, 2023, the fair value of our natural gas derivatives was a net asset of $687 million.
Based on production, natural gas, oil and NGL revenue for the year ended December 31, 2024 would have increased or decreased by approximately $269 million, $7 million, and $21 million, respectively, for each 10% increase or decrease in prices.
See Note 15 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of the fair value measurements associated with our derivatives. For the 2023 Successor Period, natural gas, oil and NGL revenues, excluding any effect of our derivative instruments, were $2,853 million, $596 million, and $98 million, respectively.
See Note 1 3 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further discussion of the fair value measurements associated with our derivatives.
See Note 15 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further information on our open derivative positions, including information about the contingent consideration arrangement.
See Note 1 3 of the notes to our consolidated financial statements included in Item 8 of Part II of this report for further information on our open derivative positions. Interest Rate Risk Our exposure to interest rate changes relates primarily to borrowings under our Credit Facility. Interest is payable on borrowings under the Credit Facility based on floating rates.
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This fair value change assumes volatility based on prevailing market parameters at December 31, 2023. Additionally, should oil prices not meet the average target prices specified with the contingent payment from SilverBow, we may not receive any payment from the up to $50 million contingent consideration arrangement.
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For the year ended December 31, 2024, natural gas, oil and NGL revenues, excluding any effect of our derivative instruments, were $2,686 million, $69 million, and $214 million, respectively.
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Interest Rate Risk Our exposure to interest rate changes relates primarily to borrowings under our New Credit Facility for the 2023 Successor Period, our New Credit Facility and Exit Credit Facility for the 2022 Successor Period, the Exit Credit Facility for the 2021 Successor Period and the DIP Facility for the 2021 Predecessor Period.
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As of December 31, 2024, the fair value of our natural gas and NGL derivatives were net liabilities of $49 million and $9 million, respectively. As of December 31, 2024, the fair value of our oil derivatives was a net asset of $4 million.
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A 10% fluctuation in forward NGL prices would impact the valuation of NGL derivatives by $18 million. This fair value change assumes volatility based on prevailing market parameters at December 31, 2024.

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