Thank you for standing by and welcome to Expand Energy's third quarter, 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Brittany Raiford, Vice President, Treasurer, and Investor Relations. Please go ahead.

Thank you. Good morning, everyone.

Good morning, and thanks for joining our call. So last quarter, I discussed my optimism about the future of Xpand. Today, that optimism continues to grow and is stronger than ever. You can feel momentum building across our organizations. Over the past nine months, we have transformed, expanded from an upstream gas producer into an integrated gas company that is a leading producer and marketer of gas coast-to-coast across North America. While our upstream business remains our foundation, this year we're focused on strengthening our commercial capabilities by adding key leaders in both the C-suite and across the organization. We've expanded our corporate and business development efforts to consider opportunities across the whole gas value chain to include upstream, marketing, and LNG. That decision proved to be a good one, as last quarter the team delivered Twin Eagle acquisition, bringing exceptional talent and valuable customer relationships to Xpand. With the transaction now closed, the Twin Eagle and Xpand teams are working side-by-side in one office to deliver the synergies we promised. We see significant opportunities ahead and look forward to sharing our progress and successes over the coming quarters. Today, we are demonstrating exactly why an integrated gas company matters. Low commodity prices are pressuring free cash flow margins for many of our peers. However, at Xpand, our marketing business is already making a difference. The combined Xpand and Twin Eagle marketing profits are expected to add 12 cents per MCFE to our fourth quarter margin. This is particularly impressive because the team is expecting to generate solid profits in an anticipated low price, low volatility period. As prices rise and volatility returns, we are well positioned to capture even more value. Through all this change, our team never took its eye off creating long-term shareholder value. We continue to deliver strong operational results, producing approximately 7.5 BCFE per day this quarter, and extended our drilling inventory through organic leasing, which remains one of the most accretive ways to add high-quality locations. We have allocated more to share repurchases this year than any of our peers, including $305 million in the third quarter. Our hedging program, which we see as a critical risk management tool, improved our realized prices by 46 cents per MCFE. And importantly, our balance sheet remained strong, with net debt of $4.7 billion and leverage of 0.8 times. Finally, we said we would name a permanent CEO within nine months, and we kept our promise. I'm excited to be joined today with our new CEO, Danny Brown. The board was deliberate in its choice. focused on finding the right leader to continue our momentum. First and foremost, we wanted a leader with a proven record of building a team-oriented culture that focuses on creating long-term shareholder value. Given our $3 billion annual capital plan, we wanted an upstream expert who has experience managing a large portfolio of assets, and we wanted a former public CEO who understands our shareholders' perspective and is a great allocator of capital and can consistently deliver. We found all that in Danny, and we believe our patience was rewarded. We do not consider our mission accomplished, but we have built the foundation. We now have a premier upstream business, a coast-to-coast marketing platform, a strong balance sheet and a team that plays to win. We attack opportunities to improve our business with urgency while maintaining our disciplined approach to value creation and above all else, we keep our promises. I could not be more impressed with this team nor more optimistic about Xpand's future. I'm excited to watch Danny and the team build on this momentum. With that, I'm pleased to turn the call over to Danny for a few brief remarks on what is the start of his third day leading our company.

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

And before we go into questions, I'd like to turn the call over to Brittany Raiford, Vice President, Treasurer and Investor Relations with Forward Looking Statements. Madam?

Good morning, everyone, and thanks for joining our call this morning to discuss Expand Energy's 2026 Third Quarter Financial and Operating Results. Hopefully, you've had a chance to review our press release and updated investor presentation that we posted to our website yesterday. During this morning's call, we will be making forward-looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections, and future performance, and the assumptions underlying such statements. Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our press release yesterday and other SEC filings. Please recognize that, except as required by law, we undertake no duty to update any forward-looking statements and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure that can be found on our website. With me today on the call are Mike Wisterich and Danny Brown, who you've already heard prepared remarks from, as well as Josh Viets and Marcel Teunissen. Operator, with that, you can please turn the line over for questions.

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

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

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

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

Thanks, Neil, for the question. So we closed the Twin Eagle acquisition September 16th. So we had two weeks of that under our belt by the end of the quarter. Of course, we're a couple of weeks further down and very much focused on integrating the plumbing of that business with ours. As Mike already mentioned, the team from Twin Eagle has moved into our offices, which is a great start. The organizations have been aligned. and we're doing some of the work in the back office as you can imagine. The early opportunities there are really kind of pretty evident, you know, from customer feedback, whether they're on our side or on the original, the Twin Eagle side, we see lots of opportunities and that kind of supports the thesis that we've had and the synergies and the integration value. We've guided for Q4 to $80 million kind of in a low kind of volatility environment for our combined marketing and commercial business, including Twin Eagle. That translates to about 12 cents per MCF. What we've also laid out is with the synergies, you know, we have a good line of sight to get that total number for marketing commercial up to 500 million by 2028. That translates to about 20 cents per MCF. and as we continue to kind of look at the LNG opportunity we're very active in that as we said before we will be thoughtful about making sure that we get the right opportunities first in liquefaction but also how we structure our sales portfolio you know that will come a little bit after 2028 and that ultimately gets us to 750 million of additional EBITDA for our marketing and commercial business and that translates to about 30 cents per MCF on our current production. So we feel good about the progress we've made. The 20-year integration is going well. We'll provide more details once we have a real quarter under our belt after Q4.

Thanks, Marcel. And on that question about the logical end customers, LNG, data centers, or industrials, is there one that you're leaning into?

yeah now we're kind of all of the above of course LNG and we've laid it out that is kind of really where the demand step-up is coming from and we're already supplying a lot of LNG particularly out of our Hainesville assets of course today that is going to continue to grow as we get to the back end of 27 into 28 and up to the 2030s that's kind of providing that structural demand data centers numerous conversations with data centers and they're not just in Appalachia. They are throughout the country. We see them in the Midwest. We see them in Texas. We see them in Louisiana. And we have conversations with all of those as we go. And there's this piece around where we talked about industrial demand, which is ongoing. The Twin Eagle team has given us great access to it. They already have a pretty big CNI book where they have those relationships. And it is really a characteristic of a premium market, right? They pay some of these commercial and industrial customers they just pay more because they're often not on the beaten path of the beaten path they're not on a main pipeline and to them gas is just one factor into their overall production cost and it's a relationship business and that's what we have acquired with Twin Eagle and they're good at it.

Thanks Marcel. Thank you. Our next question comes from the line of Doug Leggett. of Wolf Research. Your line is open, Doug.

Thank you. Good morning, everyone. Danny, it's great to get you back, so congratulations on joining Xpand. I'm going to ask this question as delicately as I can, and it's probably to Mike, but Mike, you had talked about, you emphasized the need to be in the flow for trading, for AI, for LNG, for all the things that can be more of a commercial endeavor. Why does Danny the right fit to lead that? Whoever wants to offer their perspective, I'd appreciate that. My follow-up is related, if I may, and it really relates to the Twin Eagle organization and the contribution to Neil's question to the break-even. Where is it now? Where do you think it can get to with Twin Eagle as part of the portfolio? I'll leave it there. Thank you.

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

Yeah, let me follow your question on breakeven. So including dividends, right, our cash breakeven is about 280 or so per MCF. The 20 cents up to 30 cents as we kind of develop our marketing and commercial business will bring that number down. I think maybe the other way to also talk about the resiliency of that marketing and commercial cash flow. So if you look back over the last four quarters, our free cash flow or just a free cash flow per MCF was about a dollar. So think of that 20 to 30 cents as an addition to that rateable addition to that. And that makes that cash flow that we generate as a business a lot more resilient. So one, it's reducing the break even. And the other is it's make our free cash flow and our delivery just more resilient as well.

Sorry, Marcel, so where do you see the breakeven when you fully integrate it in terms of the synergies?

Yeah, so we go to 250 to 260. So the 250 is out when we deliver the 750 run rate on our marketing and commercial. And then the intermediate stop in 2028 will be around 260. And that includes dividend.

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

Thank you. Our next question. comes from the lineup of room, J.R.M., of J.P. Morgan Securities. Your line is open to room.

Yeah, good morning, Danny. Congratulations on your new role. I wanted to maybe with my first question is follow up on expand strategy kind of managing your upstream volumes and capital allocation in an environment where 2027 could have some Headwinds from Super El Nino, some of the Permian supply trends, as well as the fact that some of the LNG startups are a little bit more levered to the back end of the year versus what looks to be a much more robust demand picture between 28 and 2030.

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

Yep. And my follow-up is just starting to think about 2027. Your updated guidance outlines call it maybe a baseline for capital in calendar 26 at $3 billion or $750 million per quarter. I was wondering if you could comment on some of the inflationary pressures you're seeing in the Haynesville, obviously, where you compete maybe for OFS service capacity relative to the Permian. and the Appalachian Basin. And do you have any maybe soft commentary that you could provide on 2027 as we start to dial in some of these inflationary pressures such as diesel and OCTG?

Yeah, sure. I mean, you know, clearly for 2026, the majority of inflation has been centered around diesel for us. You know, we run a pretty large program. We've averaged around 12 rigs for the year, running five to six frack crews. A lot of that activity course gets centered in the Hainesville. Just as a point of reference, we end up burning about 25 million gallons of diesel each year. And so that definitely has added to some of the capital pressures this year. As we think about 2027, we do start to see a little bit of shift in where we see inflationary pressures. We'll actually see about a 50% reduction in our diesel usage heading into 2027 as we have more E-Fleets coming into the program. But the inflation does start to move around a little bit. Hainesville rate counts are up about 35% year over year. With the movement in oil prices, you see U.S. oil rate counts up around 10% to 12%. And so we do expect to see with that activity some tightening in the pressure pumping market. as well as OCTG. And so we think those are probably two of the factors that we're paying the most attention to. And based upon some of our early outlooks for 2027, we could anticipate kind of a low to mid single digit inflationary factor from heading from 2026 into 2027.

That's super helpful. Thanks.

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

I just wanted to kick it off on the marketing side of the portfolio. I saw an interesting project announcement from KMI where they'll be taking Northeast and Hainesville gas into the Southeast at the same time that we're seeing a ramp in LNG demand and potentially upside to LNG forecasts. on the Gulf Coast over the next few years.

Hey, Matt. I mean, I think what you're starting to see is the market is responding to the large LNG pool that's occurring in the U.S. Gulf Coast. And so people, especially get into the southeastern markets, are starting to think about supply security. And I think that's what you're seeing with the most recent announcement from Kinderv to move gas into the Georgia and Florida markets. And so this is just, I think, a good sign. of the strength and demand signals that we're seeing. And I think our presence in the U.S. Gulf Coast really positions us to take advantage of the demand pool that we see coming in front of us.

Perfect.

And then for my follow-up question, just wanted to get your latest thoughts on the Western Hainesville as we look at some of the state data. It appears that the industry is trending to around a 2 BCF per 1,000 lateral foot EUR for some of the more recent vintages of wells. But I'm curious how you all are seeing early time productivity trends in the basin, how you're thinking about break-evens for the asset, and then maybe any thoughts on your capital program as you head into 2027 and the long-term resource potential here. Obviously, you're in at a very low entry price, so just wanted to wrap all those things together for the Western Hainesville

Yeah, Matt, thanks for the question. You know, so if I just kind of recap, you know, what we've done this year, we have one horizontal production well online. We drilled a second appraisal well about 15 miles to the north. You know, what we have is a resource dense, you know, reservoir. It has a lot of the characteristics you would look for in a shale reservoir in terms of it being significantly overpressured at a really thick interval, but it's deep. And when it's deep, it means it's, you know, going to be more complex to develop. and so I still think there's a lot to be learned. And I think we've proven through the years with our experience in the Haynesville, the ability to go unlock value from these highly complex reservoirs. It is a high cost reservoir today. It does not compete within our portfolio in the near term, just given the strength of our inventory in Louisiana and really across the entire portfolio for that matter. In terms of how you might kind of peg a break even I think we think about it as this place is going to need greater than $4 gas right now in order to compete. And so we're happy to be very methodical about how we appraise it. We like the call option that it creates for us, especially in light of the growing demand that we see across the U.S. Gulf Coast, East Texas, whether that's LNG, it's data centers, industrial demand. We think there's going to be a call on gas for it. And so we'll be methodical. We expect to drill probably two wells and 2027 there. You know, the fact that we have the depth inventory that we do, you know, really affords us the flexibility to appraise it and be smart with how we allocate out, allocate capital in the business over the next couple years.

Thank you. Our next question comes from the line of Josh Silverstein of UBS. Your line is open, Josh.

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

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

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

Thanks, Josh. So our capital allocation priorities are, number one, our DNC capital, number two, our dividend, number three, our balance sheet, and number four, what we have left goes to growth opportunities, which could include share buybacks if we see value in that. What we said on the second quarter call that after the 20-year acquisition, which put some additional debt on the balance sheet, we take a more balanced approach. We want to get our leverage down from where it is now. But at the same time, we keep the option open to be opportunistic and share buybacks if we see good value there. So you should expect us to continue doing that as we go to Q4 and into the early parts of next year.

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

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

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

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

Yeah, sure. You know, the way we like to talk about it inside the organization is, you know, round one of integration between Chesapeake and Southwestern was really centered around the Haynesville. And we made a ton of progress. If you think about our results from 24 and into 25, we've really doubled down on our continuous improvement efforts across our Appalachia business. In fact, when you look at our Southwest Appalachia drilling performance from 25 to 26, we've seen a 20% improvement. and our footage per day. It's about a 10% improvement in our cost per foot and our drilling performance. And it's really just about You know, leveraging the learnings across the entire portfolio and sticking it into that asset. And so I think you'll continue to see those, you know, continuous improvement efforts on the more traditional, you know, methods, drilling wells faster, completing wells more efficiently. You know, we continue to dial in our completion designs in the Hainesville as well. You know, we expect to see about a two to three percent improvement in well productivity year over year. that's really taken advantage of the investment that we made in our own sand supply, which again comes with a cost at about one third of what you pay for a commercial ton of sand. And so we think that is continue to open up opportunities and improve returns on our overall wells. We continue to find opportunities to exploit artificial intelligence within the business as well. And we see that unlocking additional value in the year to come. So we'll be excited to talk about that more in the future.

Great. Thanks so much.

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

Yeah, thanks. If I could maybe play a little bit off the M&A theme and talk about just sort of your, we'll call it ground game organic land acquisition activity. It's been a little bit more robust this year and Can you talk about the opportunity set with that you see next year and especially as it relates to how you think about the budget overall and where you want to be given the macro backdrop?

Yeah, sure, Scott. This is Josh. This past year in 2026, you'll spend about $250 million on organic lease acquisitions. We've had a lot of success. And, you know, what I love about it is, you know, we're seeing success across all of our operating units, Haynesville, Appalachia alike. We've added some incredibly valuable locations this year, highlighting roughly 3,000 acres that we were able to acquire in the state of Pennsylvania up in Bradford County. Those are some of our most competitive locations that we'll add. We spent around $15 million acquiring those leases. We had a rig sitting on the lease within a couple months of taking it. And those wells will come online likely early next year. And we'll end up delivering about a million cubic feet per foot of lateral productivity, some of the most productive wells in the region that we will probably see over the next several years. So highly, highly valuable and accretive locations that we brought in. That ground game is ingrained in us. It's something that we expect to carry on into next year. and what we love about our financial position and the strength of the balance sheet that we have is we can be opportunistic when others are struggling to find capital to support their development programs. And so we see that as a competitive advantage. The cross-basin reach that we have is the other advantage that we see. And so we'll be opportunistic as we head into 2027 with our leasing program.

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

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

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

Yeah, so as I kind of said, Scott, we are two weeks in at the end of the quarter with the integration, right? But we already see some early signs, so we can give you a more holistic update after we have done the fourth quarter, right? The Twin Eagle business, of course, is, you know, there's a lot of blocking and tackling and small wins there. So we won't announce every single deal as we go in there. But, you know, there's a portfolio with power customers. There's a portfolio, you know, with CNI customers, as I already talked about it. You add that to the portfolio that we already had as expand with LNG power and other portfolios. So all of that will continue to work that. But the integration value is already pretty obvious to us. We set for the fourth quarter $80 million of EBITDA of the combined marketing and commercial business, which was our kind of business with the Twin Eagle business. And then in 27 and 28, that synergy that we've talked about is primarily on the top line kind of growing business, both getting more money for our molecules out of the expense system, you know, extending customer relationships on the Twin Eagle side. and with the footprint that we have both in storage and transportation just to capture more value from volatility when it occurs and so that's what's driving that number ultimately and you should see that kind of rolling in as we are progressing.

Understood.

Thank you.

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

Hey, good morning. Maybe we can start with an update on the hedge strategy, which has been very successful this year. With the potential for demand to pick up in late 2027 and 2028, how do you guys kind of think about adding on hedges for that part, you know, for those out-quarters? And are you done hedging for the early part of 2027?

It's a great question. So I think just on the purpose of our hedge strategy, right, we're really trying to protect against the downside while we leave ourselves open to participate in the upside. And that's been our consistent hedging strategy. you know the way that we've looked at the market earlier in 2026 where we saw the fundamentals kind of being misaligned with the forward strip we decided to hedge more aggressively both in 26 as well as into 2027 and you kind of see the result of that in Q3 you know where prices on strip have been weak you know and a hedge program paid over 300 million dollars relative to that and that's kind of the sign of that protection then you look into 2027 we already 55 percent hedged for all of 2027 with a 365 kind of price on average. So, you know, that gives us a downside protection and it gives us the option to choose what we do with production during that year. The way that we roll in the hedges, that's a bit more tactical. We take a combination of swaps and colors and three ways to kind of roll that in. And we roll those in progressively so that we don't pick a price point at any particular point in time and kind of bet that the market won't move. So we continue to kind of roll that in and align our view of hedging relative to our view on the fundamentals, but always kind of with an eye on protecting against the downside and leaving the upside open.

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

Yeah, now let me start with that, and I'll ask Josh to maybe add. So we have a good line of sight, and that just comes from kind of obviously the work that we did during due diligence as we were framing the acquisition itself, as well as the first couple of weeks. It gives us a lot of confidence just from customer feedback from the teams on the ground that are kind of hearing that. and as well as what we see. So we feel confident about that number. Maybe, Josh, it's good to get some additional color from your side.

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

I appreciate that answer. Thank you.

Thank you. Our next question comes from the line of Charles Mead of Johnson Rice. Your question, please, Charles.

Yes, good morning, Danny and Mike, and to the rest of the Xpand team there. Danny, I want to kind of go back to, I think, the first question you fielded, and I recognize that this is, you know, day three on the job, but I'm thinking about you. You've had a window, a non-op window in to look in on Marcellus operations for at least the last two years as your former seat. So when I think about your assets in your former seat and expand assets, obviously they're both U.S. onshore unconventional, but within that framework, they seem to me like they're at opposite ends of the spectrum on maturity, runway, macro dynamics, that sort of thing. So I'm curious, are there any – Can you identify any kind of practices or philosophies that you developed and found useful in the Bakken that would be new or different for the expand team?

Well, it's good to hear from you, Charles, and thanks for the question. You know, I'd say as I think about my experience over at Cord and, you know, what might be transferable from there and my time at that organization over here, you know, I'd say there's lots of things, maybe the most significant of which is, you know, just foundationally challenging assumptions on how you do business and looking to improve. And so I think about, you know, what we did over my time at Cord and Thank you for joining us. Both organizations are producing a commodity. Now, there's different macro associated with that commodity, but in a commodity business, I think there's lots of similarities. And so I think I'll bring those similarities to bear over at Xpand and look forward to working with the team to leverage our platform here.

Got it. That is helpful, Danny. Thank you. And then a follow-up perhaps for Josh. Josh, I think you addressed some of this in response to an earlier question, but regarding the curtailments and tills in 4Q, I mean, the Are there any things you're looking at beyond, I'd say, the two big ones, which are weather and pipeline maintenance, that could affect how your curtailments and tills progress over 4Q? And what do you have contemplated right now in your guide in those two dimensions?

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

Thank you. Our next question comes from the line of Betty Zhang of Barclays. Your line is open, Betty.

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

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

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

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

Got it. Thank you.

Thank you. Our final question comes from the line of Philip Jungwirth of BMO. Your line is open, Philip.

Thanks, and also wanted to extend my congrats to Danny. When you think through the gas supply or data center opportunity and how Twin Eagle increases your scope across much of North America, is there a good way to think about the ultimate And then just separately, we've seen fewer projects in northeast PA, but you do have a large acreage footprint here. So just wondering if you see much potential in this area. Yeah.

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

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

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

Thank you.

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

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

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