Company: EXEEZ
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000895126-25-000084
Chunk: 23

Company: EXPAND ENERGY Corp
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 acquired$15,850 Fair Value of Liabilities Assumed:Current liabilities$1,955 Long-term debt3,305 Deferred tax liabilities479 Long-term contract liabilities1,287 Other long-term liabilities351 Amounts attributable to liabilities assumed$7,377 Total identifiable net assets$8,473 ____________________________________________(a)Reflects the repayment of $585 million outstanding on Southwestern's 2022 revolving credit facility including $2 million of accrued interest and fees, as the facility was repaid and retired upon close of the Southwestern Merger.(b)The fair value of our common stock is a Level 1 input, as our stock price is a quoted price in an active market as of the acquisition date.Natural Gas and Oil PropertiesFor the Southwestern Merger, we applied the business combination guidance, under which an acquirer should recognize the identifiable assets acquired and the liabilities assumed on the acquisition date at fair value. The fair value estimate of proved and unproved natural gas and oil properties as of the acquisition date was based on estimated natural gas and oil reserves and related future net cash flows discounted using a weighted average cost of capital, including estimates of future production rates and future development costs. We utilized NYMEX strip pricing adjusted for inflation to value the reserves. We then applied various discount rates depending on the classification of reserves and other risk characteristics. Management utilized the assistance of a third-party valuation expert to estimate the value of the natural gas and oil properties acquired. Additionally, the fair value estimate of proved and unproved natural gas and oil properties was corroborated by utilizing a market approach, which considers recent comparable transactions for similar assets.The inputs used to value natural gas and oil properties require significant judgment and estimates made by management and represent Level 3 inputs.

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Table of ContentsEXPAND ENERGY CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Unaudited)

As part of the Southwestern Merger, we assumed gathering, processing and transportation contracts, certain of which were deemed to be above or below current market rates. We recognized assets and liabilities for the difference in the contractual and market rates of these contracts, as of the date of the Southwestern Merger. The terms of the contracts extend through 2035.Pro Forma Financial InformationAs the Southwestern Merger closed on October 1, 2024, all activity in 2025 is included in our condensed consolidated statements of operations for the Current