Expand Energy Cuts Rigs to 10 as Gas Prices Weaken, Shares Fall 3.2%
EXE is trading near its 52-week low of $83.25 (11% above the low).
Summary
Expand Energy is pulling back activity because gas prices are too weak to justify the spend. The COO said on the Q3 call that the company dropped a rig in Northeast Appalachia and a completion crew in the Haynesville, taking the rig count from about 12 down to 10, with more curtailments possible late this year and into 2027. That is a direct admission the market is softening, and the stock closed down 3.2% even though Q3 adjusted earnings and revenue beat expectations. The quarter itself was solid: net income of $519M, revenue up 11% to $3.29B, adjusted EBITDA up nearly 14% to $1.23B, and free cash flow of $339M, down from $426M as capex rose to $838M. Management is betting the demand side bails out prices, pointing to an additional 13 Bcf/day of demand by year-end 2028 from Gulf LNG, power plants and data centers. Until that shows up, lower activity means less volume growth and tighter cash generation.
At the time of this announcement, EXE was trading at $92.20 on NASDAQ in the Energy & Transportation sector, with a market capitalization of approximately $21.2B. The 52-week trading range was $83.25 to $126.62. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.