Company: EXEEZ
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000895126-25-000098
Chunk: 93

Company: EXPAND ENERGY Corp
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 93
---
 of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL, which have historically been volatile. To mitigate a portion of our exposure to adverse price changes, we enter into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the revenue we will receive. We believe our derivative instruments continue to be highly effective in achieving our risk management objectives.

We determine the fair value of our derivative instruments utilizing established index prices, volatility curves and discount factors. These estimates are compared to counterparty valuations for reasonableness. Derivative transactions are also subject to the risk that counterparties will be unable to meet their obligations. This non-performance risk is considered in the valuation of our derivative instruments, but to date has not had a material impact on the values of our derivatives. Future risk related to counterparties not being able to meet their obligations has been partially mitigated under our commodity hedging arrangements that require counterparties to post collateral if their obligations to us are in excess of defined thresholds. The values we report in our financial statements are as of a point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. See Note 11 of the notes to our condensed consolidated financial statements included in Item 1 of Part I of this report for further discussion of the fair value measurements associated with our derivatives.

Our natural gas, oil and NGL revenues during the Current Period, excluding any effect of our derivative instruments, were $5,371 million, $250 million and $550 million, respectively. Based on production, natural gas, oil and NGL revenue for the Current Period would have increased or decreased by approximately $537 million, $25 million and $55 million, respectively, for each 10% increase or decrease in prices. As of September 30, 2025, the fair value of natural gas and oil derivatives were net assets of $126 million and $3 million, respectively, and our NGL derivatives was a net nominal liability. A 10% fluctuation in forward natural gas prices would impact the valuation of natural gas derivatives by approximately $450 million. A 10% fluctuation in forward oil prices would impact the valuation of oil derivatives by approximately $1 million. A 10% fluctuation in forward NGL prices would impact the valuation of NGL derivatives by approximately $4 million. This fair value change assumes volatility based