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Expand Energy's profit beats expectations for the fourth quarter on higher production and prices

Expand Energy, a U.S. natural-gas producer, surpassed its fourth-quarter profit expectations on Wednesday after a slight rise in gas prices.

The natural gas price rose during the first quarter of this year, reaching a record high. This was due to an increase in gas flow to export plants for liquefied gas. Prices were also boosted by the forecast of continued cold weather in January which increased heating demands.

The Oklahoma City company that acquired Southwestern for $7.3 billion and became the largest independent U.S. natural gas producer reported a fourth-quarter production rate of 6.41 billion cubic foot equivalent per day (bcfepd), nearly double what it was last year.

The average realized gas price increased by 1.4%, to $2.91 per 1,000 cubic feet.

Expand Energy plans to invest $2.7 billion in order to produce 7.1 bcfepd this year. It also intends to operate 12 rigs.

As artificial intelligence data centres continue to increase energy demand in the U.S., natural gas producers will benefit.

Expand Energy has also announced that it will increase its target for 2025 synergies by $175,000,000 to approximately $400,000,000. Separately it announced that it would allocate approximately $500 million for net debt reduction.

The natgas manufacturer now expects capital spending of around $3 billion this year, which is above the Wall Street estimate of $2 billion.

According to LSEG, the company reported an adjusted net profit of 55 cents a share for the three-month period ended December 31. This was higher than the 48 cents analysts expected per share. Reporting by Tanay in Bengaluru, and editing by Alan Barona

(source: Reuters)