Expand Energy Financial Model
Oil and Gas Company Financials Example (Free Excel Download)
Expand Energy is the largest independent natural gas exploration and production company in the United States, focused on developing unconventional assets in premium basins.
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About this model
This model evaluates the equity valuation, free cash flow generation, and debt paydown capacity of Expand Energy (EXE) as the largest independent US natural gas producer following the transformational merger of Chesapeake Energy and Southwestern Energy.
Expand Energy is the largest independent natural gas exploration and production company in the United States, focused on developing unconventional assets in premium basins. The company operates an asset-heavy business model, acquiring leaseholds, drilling wells, and extracting hydrocarbons for sale to marketers and utility customers.
- Business segments: Natural Gas (approximately 85-90% of revenue), Oil (approximately 5-10%), and Natural Gas Liquids / NGL (approximately 5%).
- Key geographies: The Appalachian Basin (Marcellus and Utica shales) and the Haynesville Shale.
- Business model type: Asset-heavy exploration and production (E&P).
- Competitive position: The largest US natural gas producer, delivering over 7.4 Bcfe/d and benefiting from unmatched scale and proximity to Gulf Coast LNG export markets.
- Recent major events: Formed on 1 October 2024 through the merger of Chesapeake Energy and Southwestern Energy. The company is actively integrating operations to achieve a targeted $600 million in annual synergies by 2026 and was recently added to the S&P 500 index.
The downloadable Expand Energy financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsExpand Energy financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 (02-10–12-31, successor) | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $5.55B | $11.74B | $8.72B | $4.24B | $12.12B |
| Total operating expenses | $4.61B | $7.96B | $5.58B | $5.04B | $9.65B |
| Operating income | $938.0M | $3.78B | $3.14B | -$803.0M | $2.47B |
| Net income | $945.0M | $4.94B | $2.42B | -$714.0M | $1.82B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Expand Energy
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Natural Gas
- Segment name: Natural Gas Sales
- Revenue driver formula: Natural Gas Production Volume (Bcf) x Realised Natural Gas Price ($/Mcf)
- Historical growth rate: Production volumes doubled in late 2024 due to the Southwestern merger; organic growth is typically managed at 0-5% depending on commodity prices.
- Key growth levers and headwinds: Driven by LNG export terminal expansions, domestic power demand from AI data centres, and winter weather patterns. Headwinds include pipeline takeaway constraints and oversupply in the domestic market.
- Pricing dynamics: Spot market pricing based on the Henry Hub benchmark, adjusted for regional basis differentials (Appalachian gas often trades at a discount). Pricing volatility is heavily mitigated by an active hedging programme using swaps and collars.
- Revenue recognition notes: Recognised when control of the product transfers to the purchaser at the delivery point.
- Seasonality: Higher demand and pricing typically occur in the winter months (Q1 and Q4) due to residential and commercial heating demand.
Oil
- Segment name: Oil Sales
- Revenue driver formula: Oil Production Volume (MMBbls) x Realised Oil Price ($/Bbl)
- Historical growth rate: Stable to slightly declining as the combined company focuses capital allocation on gas-rich basins.
- Key growth levers and headwinds: Global macroeconomic conditions, OPEC+ production policies, and geopolitical events.
- Pricing dynamics: Priced against the WTI benchmark, adjusted for quality and location differentials.
- Revenue recognition notes: Recognised upon delivery to the purchaser.
- Seasonality: Minimal seasonality compared to natural gas.
Natural Gas Liquids (NGL)
- Segment name: Natural Gas Liquids Sales
- Revenue driver formula: NGL Production Volume (MMBbls) x Realised NGL Price ($/Bbl)
- Historical growth rate: Correlated with natural gas production in liquids-rich areas of the Appalachian basin.
- Key growth levers and headwinds: Petrochemical industry demand and export capacity.
- Pricing dynamics: Priced against Mont Belvieu benchmarks, typically realising a percentage of the WTI price.
- Revenue recognition notes: Recognised upon delivery after processing.
- Seasonality: Moderate seasonality driven by heating demand for propane and butane.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Lease operating expenses (LOE), Gathering, processing and transportation (GP&T), and Severance and ad valorem taxes.
- Gross margin range: E&P companies do not typically report traditional gross margin. Operating margins fluctuate wildly (15% to 45%) based entirely on commodity price cycles.
- Key input costs: Labour, chemicals, water disposal, compression fuel, and pipeline tariffs.
- How COGS scales: LOE is semi-fixed per well but scales with the total active well count. GP&T scales linearly with production volume. Production taxes scale linearly with total revenue.
Operating Expenses
- R&D: Not applicable for this industry.
- SG&A: General and administrative expenses, typically running at $0.15 to $0.25 per Mcfe. This is largely headcount-driven and corporate overhead.
- Depreciation & Amortisation: Depreciation, depletion and amortisation (DD&A) is the largest expense, calculated on a unit-of-production basis. It typically runs at $1.00 to $1.30 per Mcfe.
- Stock-Based Compensation: Typically 1-2% of revenue, included within G&A.
- Restructuring / one-time charges: Significant merger integration and severance costs are expected through 2025 and 2026 as the company executes its $600 million synergy plan.
Margin Profile
- EBITDAX margin: 40% to 60%, highly dependent on Henry Hub prices. EBITDAX (EBITDA before exploration expense) is the standard industry metric.
- Margin trend: Expanding due to scale efficiencies and merger synergies, though vulnerable to natural gas price slumps.
- Segment-level margins: Not disclosed by product; margins are viewed on a consolidated basis per Mcfe of production.
Balance Sheet Structure
- Total assets: Approximately $30 billion to $35 billion post-merger.
- Key asset categories: Proved natural gas and oil properties (accounted for under the successful efforts method), unproved properties, and gathering systems.
- Goodwill & intangibles: Significant goodwill was generated from the Southwestern Energy merger.
- Working capital profile:
- Days Sales Outstanding (DSO): 30 to 45 days.
- Days Payable Outstanding (DPO): 45 to 60 days.
- Net working capital: Typically negative or near zero. The company uses extended payment terms with drilling contractors to fund operations.
- PP&E: Dominated by oil and natural gas properties. Subject to ceiling test impairments if commodity prices crash, which can result in massive non-cash write-downs.
- Right-of-use assets: Operating leases for drilling rigs and corporate offices are material but small relative to total PP&E.
Capital Expenditure & Investment
- Capex as % of revenue: 30% to 40%, though highly variable based on revenue fluctuations.
- Maintenance vs growth: The vast majority is maintenance capex required to offset the steep natural decline rates of shale wells.
- Major capex programmes: Drilling and completion (D&C) activities in the Marcellus, Utica, and Haynesville shales. 2025/2026 guidance is $2.75 billion to $2.95 billion.
- Capitalised software: Immaterial.
- M&A pattern: Transformational acquirer (Southwestern merger) combined with bolt-on acquisitions of adjacent leaseholds (e.g., Western Haynesville acquisitions).
Debt & Capital Structure
- Total debt: Approximately $12 billion post-merger.
- Debt/EBITDA ratio: Current and target leverage is between 1.0x and 1.5x.
- Credit rating: Investment grade (upgraded by Moody's in early 2025).
- Key debt instruments: A large revolving credit facility and multiple tranches of senior unsecured notes.
- Maturity profile: Staggered maturities over the next decade. The company prioritises using free cash flow to retire near-term maturities.
- Interest rate profile: Predominantly fixed-rate bonds, with floating rates on the revolving credit facility.
- Covenants: Standard leverage and interest coverage ratios on the credit facility.
- Share repurchase programme: Active capital return framework designed to return a percentage of free cash flow to shareholders via buybacks.
- Dividend policy: A base dividend combined with a variable dividend framework. The current yield is approximately 2.1%.
Cash Flow Characteristics
- Operating cash flow conversion: Very strong, often exceeding 1.5x net income due to massive non-cash DD&A charges.
- Free cash flow margin: 10% to 20%, highly sensitive to natural gas prices.
- Major non-cash items: DD&A, deferred income taxes, unrealised gains/losses on derivatives, and occasional property impairments.
- Working capital cash flow impact: Minor impact over the full year, though it can swing quarter-to-quarter based on the timing of drilling completions.
- Capex intensity: Extremely high. Continuous drilling is required to maintain the 7.4 Bcfe/d production base.
- Cash tax rate: Often lower than the GAAP effective tax rate due to accelerated depreciation and intangible drilling costs (IDCs) used for tax purposes.
Sheet Structure
- Assumptions: Macroeconomic drivers (Henry Hub, WTI, Mont Belvieu), production guidance, cost per Mcfe assumptions, capex guidance, and synergy targets.
- Production & Pricing: Detailed build of production volumes (Gas, Oil, NGL) and realised prices, including basis differentials and the impact of the hedging portfolio.
- Income Statement: Revenue by product, LOE, GP&T, production taxes, G&A, DD&A, exploration expense, interest expense, and taxes.
- Balance Sheet: Cash, accounts receivable, PP&E (oil and gas properties), goodwill, accounts payable, debt tranches, deferred taxes, and equity.
- Cash Flow Statement: Net income, non-cash adjustments (DD&A, deferred taxes, derivative mark-to-market), working capital changes, capex, debt repayment, and dividends.
- Debt Schedule: Revolver balance, senior notes tranches, interest expense calculation, and mandatory repayments.
- DCF Valuation: Unlevered free cash flow calculation, WACC build, and terminal value based on an EV/EBITDAX multiple.
Key Financial Relationships
- Natural Gas Revenue = Natural Gas Production (Bcf) x (Henry Hub Price + Basis Differential)
- Oil Revenue = Oil Production (MMBbls) x (WTI Price + Basis Differential)
- NGL Revenue = NGL Production (MMBbls) x Realised NGL Price
- Total Production (Bcfe) = Natural Gas (Bcf) + (Oil (MMBbls) x 6) + (NGL (MMBbls) x 6)
- Lease Operating Expense = Total Production (Bcfe) x LOE per Mcfe
- GP&T Expense = Total Production (Bcfe) x GP&T per Mcfe
- Production Taxes = Total Revenue x Severance Tax Rate
- DD&A Expense = Total Production (Bcfe) x DD&A Rate per Mcfe
- Adjusted EBITDAX = Net Income + Interest + Taxes + DD&A + Exploration Expense + Non-cash Derivative Losses
- Unlevered Free Cash Flow = Adjusted EBITDAX - Capex - Cash Taxes - Change in Net Working Capital
Cross-Sheet Dependencies
- The Production & Pricing sheet is the engine of the model; it feeds the revenue lines on the Income Statement.
- Total production volumes from Production & Pricing drive the variable costs (LOE, GP&T, DD&A) on the Income Statement.
- Net Income from the Income Statement flows to the top of the Cash Flow Statement.
- Capex from the Cash Flow Statement adds to PP&E on the Balance Sheet and updates the base for future DD&A calculations.
- Debt balances from the Debt Schedule flow to the Balance Sheet, and the resulting interest expense flows back to the Income Statement (creating a circularity that requires an iterative calculation or a circuit breaker).
- Free cash flow generated on the Cash Flow Statement determines revolver paydowns or drawdowns on the Debt Schedule.
Sign Convention
- Revenue, production volumes, and commodity prices are entered and displayed as positive numbers.
- Expenses (LOE, G&A, DD&A) are positive in their specific build schedules but subtracted in profitability totals on the Income Statement.
- Cash outflows (Capex, dividends, debt principal repayments) are negative on the Cash Flow Statement.
- Assets are positive; Liabilities and Equity are positive on the Balance Sheet.
Things Most Likely to Go Wrong
- Failing to convert barrels of oil and NGL to gas equivalents using the standard 6:1 ratio when calculating total Bcfe production.
- Ignoring the impact of the hedging portfolio. Realised prices will deviate significantly from spot prices because Expand Energy actively hedges a large portion of its production.
- Overlooking the $600 million synergy target from the Southwestern merger, which must be phased into G&A and LOE reductions over the 2025 and 2026 forecast periods.
- Miscalculating DD&A. It is driven by the unit-of-production method based on proved reserves, not straight-line depreciation over time.
- Forgetting that exploration expenses are excluded from EBITDAX, which is the standard valuation metric for E&P companies.
- Not accounting for basis differentials. Appalachian gas often trades at a notable discount to the Henry Hub benchmark.
- Misaligning historical data. Pre-Q4 2024 data represents standalone Chesapeake Energy and is not comparable to the post-merger Expand Energy figures.
- Double-counting gathering and transportation costs if they are netted against revenue in some disclosures instead of being reported as a separate operating expense.
Validation Checks
- Total production should be approximately 7.4 to 7.6 Bcfe/d based on 2025/2026 guidance; flag if the model strays outside this band.
- Natural gas should represent 85% to 92% of total production volumes.
- Annual capex should remain within the $2.75 billion to $2.95 billion guidance range for 2026.
- LOE per Mcfe should be between $0.25 and $0.35.
- GP&T per Mcfe should be between $0.60 and $0.75.
- Debt/EBITDAX should remain below 1.5x to align with the company's investment-grade credit rating targets.
- The balance sheet must balance: Total Assets = Total Liabilities + Equity in every period.
- DD&A per Mcfe should align with the historical average of $1.00 to $1.30.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Natural Gas Production | 6.8 | Bcf/d | Based on 2025/2026 guidance of ~92% of total 7.4 Bcfe/d |
| Oil Production | 35 | MBbls/d | Based on recent quarterly run rates |
| NGL Production | 65 | MBbls/d | Based on recent quarterly run rates |
| Henry Hub Gas Price | 3.00 | $/Mcf | Long-term mid-cycle assumption |
| WTI Oil Price | 75.00 | $/Bbl | Long-term mid-cycle assumption |
| Gas Basis Differential | -0.50 | $/Mcf | Typical Appalachian discount to Henry Hub |
| LOE per Mcfe | 0.30 | $/Mcfe | Historical average and management guidance |
| GP&T per Mcfe | 0.65 | $/Mcfe | Historical average and management guidance |
| G&A per Mcfe | 0.15 | $/Mcfe | Reflects post-merger synergy realisation |
| Production Tax Rate | 3.5 | % of Rev | Blended state severance tax rates |
| Annual Capex | 2,850 | $ Millions | Midpoint of 2025/2026 guidance |
| Effective Tax Rate | 23.0 | % | Statutory rate plus state taxes |
| Dividend Yield | 2.1 | % | Current annualised yield |
| WACC | 9.0 | % | Standard E&P discount rate |
Data Sources & Benchmarks
- SEC EDGAR: Expand Energy (CIK: 0000895126) 10-K and 10-Q filings.
- Investor Relations: expandenergy.com for earnings presentations, synergy updates, and production guidance.
- Key peers for benchmarking: EQT Corporation (EQT), Antero Resources (AR), Range Resources (RRC), and Coterra Energy (CTRA).
- Industry data sources: EIA (Energy Information Administration) for Henry Hub pricing, natural gas storage levels, and LNG export data.
- Consensus estimates: Bloomberg or FactSet for forward commodity curves and EBITDAX estimates.
Sources
Do more with the Expand Energy model
Frequently asked
What does Expand Energy (EXE) do as a company?+
Expand Energy is the largest independent natural gas exploration and production company in the United States. It focuses on developing unconventional assets in premium basins, extracting natural gas, oil, and natural gas liquids for sale to marketers and utility customers.
What are the primary revenue drivers for Expand Energy (EXE)?+
Expand Energy's revenue is predominantly driven by the sale of natural gas, which accounts for 85-90% of its total revenue, supplemented by oil and natural gas liquids. The company benefits from unmatched scale as the largest US natural gas producer and its strategic proximity to Gulf Coast LNG export markets.
What capital expenditure assumptions are used in the Expand Energy financial model?+
The Expand Energy financial model incorporates a Capex_Pct_Revenue assumption of approximately 20.9% for its forecast horizon. This reflects the company's asset-heavy business model, where a significant portion of capital expenditure is dedicated to maintenance activities to offset the natural decline rates of shale wells.
What growth assumptions are applied in the Expand Energy financial model?+
The Expand Energy financial model uses a Revenue_Growth assumption of approximately 0.55% for its forecast horizon, spanning from FY2026 to FY2030. This assumption helps project the company's future top-line performance following its recent transformational merger and integration efforts.
What is the purpose of the Expand Energy financial model and what does it evaluate?+
The Expand Energy financial model is designed to evaluate the company's equity valuation, its capacity for generating free cash flow, and its ability to pay down debt. It provides a comprehensive analytical framework for understanding the financial implications of its operations and strategic position.
Can I download an Excel financial model for Expand Energy (EXE)?+
Yes, an Excel financial model for Expand Energy (EXE) is available for download. This general corporate model provides a forecast horizon from FY2026 to FY2030, allowing users to analyze key financial metrics and assumptions for the company.
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