Expand Energy Reports Strong Q1 2025 Earnings, Driven by Production Boom

Expand Energy Corporation (EXE) announced its first-quarter 2025 adjusted earnings per share at $2.02, exceeding the Zacks Consensus Estimate of $1.85. This represents a significant increase from last year’s adjusted profit of 56 cents, driven by robust production and improved sales prices.

Moreover, Expand Energy’s ‘natural gas, oil, and NGL’ revenues reached $2.3 billion, surpassing the Zacks Consensus Estimate of $2.2 billion and showing a remarkable rise from $589 million in the same quarter last year.

Production Insights and Price Realization

The company’s average daily production for the first quarter was 6,788 million cubic feet of gas equivalent (MMcfe/day), comprising 92% natural gas. This marks a 112% increase from last year’s level of 3,198 MMcfe/day and is above the Zacks Consensus Estimate of 6,774 MMcfe/day. During this period, natural gas volume stood at 6,254 MMcf/day, up 95.6% year-over-year, also beating the expected 6,212 MMcf/day.

Additionally, EXE produced 14 thousand barrels per day (MBbl/d) of oil and 75 MBbl/d of NGL. The average sales price for natural gas rose to $3.58 per Mcf, a 76% increase from last year’s $2.03 per Mcf, and exceeded the consensus estimate of $3.36. Oil prices averaged $63.40 per barrel, above the expected $61, while NGL prices averaged $30.54 per barrel, compared to an estimate of $27.48.

Operating Costs and Expenses

Total operating expenses for the quarter surged to $2.5 billion, up from $1 billion in the prior year. This increase is primarily attributed to a near tripling of costs related to gathering, processing, and transportation, which reached $563 million. Marketing costs rose significantly as well, increasing by 184% from last year’s levels to $919 million. Additionally, depreciation expenses rose by 78% compared to the first quarter of 2024.

Financial Position Overview

Cash flow from operations nearly doubled to $1.1 billion, and Capital expenditures totaled $563 million, generating a free cash flow of $533 million. The company allocated $142 million to dividends during this period.

At the end of the first quarter, Expand Energy had $349 million in cash and equivalents, with total long-term debt at $5.2 billion, reflecting a debt-to-capitalization ratio of 23.4%.

Guidance for Q2 and Full-Year 2025

Looking ahead, Expand Energy targets an average daily production range of 7,100 to 7,200 MMcfe for the second quarter, and 7,000 to 7,200 MMcfe for the full year of 2025. The budget for capital expenditures is set between $725 million and $800 million for the next quarter, with a full-year estimate ranging from $2.9 billion to $3.1 billion.

Earnings Snapshot from Other Companies

In addition to EXE’s performance, other companies in the sector also reported their first-quarter results. Oil and gas services provider TechnipFMC plc (FTI) reported adjusted earnings of 33 cents per share, falling short of the Zacks Consensus Estimate of 36 cents due to a 4.8% increase in costs. Revenues reached $2.2 billion but failed to meet the expected figures by 1.1%.

Another player, Core Laboratories Inc. (CLB), posted adjusted earnings of 8 cents per share, missing the consensus estimate of 15 cents. Operating revenues totaled $124 million, aligning with expectations but down 4.6% from the previous year.

Meanwhile, Baker Hughes (BKR) saw adjusted earnings of 51 cents per share, surpassing the Zacks Consensus Estimate of 47 cents. Their cash and equivalents reached $3.277 billion, with long-term debt at $5.969 billion, reflecting a debt-to-capitalization ratio of 25.9%.

Summary

Expand Energy’s Q1 performance showcases significant growth in both production and financial metrics. The outlook for the upcoming quarters appears optimistic, setting the stage for sustained growth within the energy sector.