RANGE RESOURCES CORP

(1) SUMMARY OF ORGANIZATION AND NATURE OF BUSINESS

Range Resources Corporation ("Range") is a Fort Worth, Texas-based independent natural gas, natural gas liquids (NGLs) and oil (predominately condensate referred to herein as "oil") company engaged in the exploration, development and acquisition of natural gas and liquids properties in the Appalachian region of the United States. Our objective is to build stockholder value through returns-focused development of our properties. Range is a Delaware corporation with our common stock listed and traded on the New York Stock Exchange under the symbol "RRC."

(2) BASIS OF PRESENTATION

These consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the results for the periods reported. All adjustments are of a normal recurring nature unless otherwise disclosed. These consolidated financial statements, including selected notes, have been prepared in accordance with the applicable rules of the Securities Exchange Commission ("SEC") and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (U.S. GAAP) for complete financial statements.

These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K filed with the SEC on February 21, 2024. The results of operations for third quarter and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year. We make certain reclassifications to the prior year statements to conform with the current year presentation. These reclassifications have no impact on previously reported stockholders' equity, net income or cash flows.

(3) NEW ACCOUNTING STANDARDS

Not Yet Adopted

There were no issued or pending accounting standards in third quarter 2024 that are expected to have a material impact on our consolidated financial statements.

(4) REVENUES FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

We have three material revenue streams in our business: natural gas sales, NGLs sales and oil sales. Brokered revenue attributable to each product sales type is included here because the volume of product that we purchase is subsequently sold to separate counterparties in accordance with existing sales contracts under which we also sell our production. Other marketing revenue for the nine months ended September 30, 2023 includes the receipt of $5.1 million in make-whole payments. Accounts receivable attributable to our revenue contracts with customers was $177.1 million at September 30, 2024 and $263.9 million at December 31, 2023. Revenue attributable to each of our identified revenue streams is disaggregated below (in thousands):

(5) INCOME TAXES

We evaluate and update our annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. For the three and nine months ended September 30, 2024 and 2023, our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes, tax credits, equity compensation and the limitation of executive compensation expense. Current income taxes reflect estimated state and federal income taxes due for 2024 which are based on our estimated earnings, taking into account all applicable tax rates and laws.

(6) INCOME PER COMMON SHARE

Basic income or loss per share attributable to common shareholders is computed as (1) income or loss attributable to common shareholders (2) less income allocable to participating securities (3) divided by weighted average basic shares outstanding. Diluted income or loss per share attributable to common shareholders is computed as (1) basic income or loss attributable to common shareholders (2) plus diluted adjustments to income allocable to participating securities (3) divided by weighted average diluted shares outstanding. The following sets forth a reconciliation of income or loss to basic income or loss attributable to common shareholders to diluted income or loss attributable to common shareholders (in thousands, except per share amounts):

The following details weighted average common shares outstanding and diluted weighted average common shares outstanding (in thousands):

Weighted average common shares outstanding–basic for third quarter 2024 excludes 811,000 shares of restricted stock held in our deferred compensation plan compared to 3.1 million shares inthird quarter 2023 (although all awards are issued and outstanding upon grant). Weighted average common shares outstanding –basic for first nine months 2024 excludes 1.3 million shares of restricted stock held in our deferred compensation plan compared to 4.7 million shares forfirst nine months 2023. For the three months ended September 30, 2024, equity grants of 8,000 shares compared to 9,000 shares in the same period of the prior year were outstanding but not included in the computation of diluted net income because the grant prices were greater than the average market price of the common shares and would be anti-dilutive to the computation. For thenine months ended September 30, 2024 and in the same period of the prior year, equity grants of 3,000 shares were outstanding but not included in the computation of diluted net income because the shares would be anti-dilutive to the computation.

(7)Capitalized Costs and Accumulated Depreciation, Depletion and Amortization (a)

(a)

Includes capitalized asset retirement costs and the associated accumulated amortization.

(8) INDEBTEDNESS

We had the following debt outstanding as of the dates shown below (in thousands):

(a) As of September 30, 2024, current maturities include $618.1 million principal amount of our 4.875% senior notes due 2025 ($617.4 million net of deferred financing costs).

No interest was capitalized during thenine months ended September 30, 2024 or the year ended December 31, 2023.

Bank Debt

In April 2022, we entered into an amended and restated revolving bank facility, which we refer to as our bank debt or our bank credit facility, which is secured by substantially all of our assets and has a maturity date of April 14, 2027. The bank credit facility provides for a maximum facility amount of$4.0 billion and an initial borrowing base of$3.0 billion. The bank credit facility also provides for a borrowing base subject to re-determinations, including event-driven unscheduled re-determinations. As of September 30, 2024, our bank group was composed ofseventeen financial institutions. The borrowing base may be increased or decreased based on our request and sufficient proved reserves, as determined by the bank group. The commitment amount may be increased to the borrowing base, subject to payment of a mutually acceptable commitment fee to those banks agreeing to participate in the facility increase. Borrowings under the bank credit facility can either be at the alternate base rate (ABR, as defined in the bank credit facility agreement) plus a spread ranging from 0.75% to 1.75% or at the secured overnight financing rate (SOFR, as defined in the bank credit facility agreement) plus a spread ranging from 1.75% to 2.75%. The applicable spread is dependent upon borrowings relative to the borrowing base. We may elect, from time to time, to convert all or any part of our SOFR loans to base rate loans or to convert all or any part of the base rate loans to SOFR loans. We hadno outstanding balance on our bank credit facility during first nine months 2024. The weighted average interest rate was 8.4% forfirst nine months 2023. A commitment fee is paid on the undrawn balance based on an annual rate of 0.375% to 0.50%. At September 30, 2024, the commitment fee was 0.375% and the interest rate margin was 0.75% on our ABR loans and 1.75% on our SOFR loans.

As part of our re-determination completed in October 2024, our borrowing base was reaffirmed at$3.0 billion and our bank commitment was also reaffirmed at$1.5 billion. On September 30, 2024, we hadno outstanding borrowings on our bank credit facility. We had$169.4 million of undrawn letters of credit, leaving$1.3 billion of committed borrowing capacity available under the facility.

Senior Note Redemptions

If we experience a change of control, noteholders may require us to repurchase all or a portion of our senior notes at 101% of the aggregate principal amount plus accrued and unpaid interest, if any. We currently intend to retire our outstanding long-term debt as it matures, is callable or when market conditions are favorable to repurchase through privately negotiated transactions, open market repurchases, redemptions or otherwise.

During the nine months ended September 30, 2024, we repurchased in the open market $70.2 million principal amount of our 4.875% senior notes due 2025 at a discount. We recognized a gain on early extinguishment of debt for these transactions of $254,000, net of remaining deferred financing costs on the repurchased debt. During thenine months ended September 30, 2023, we repurchased in the open market $61.6 million principal amount of our 4.875% senior notes due 2025 at a discount. We recognized a gain on early extinguishment of debt of $439,000, net of the remaining deferred financing costs on the repurchased debt.

Guarantees

Range is a holding company that owns no operating assets and has no significant operations independent of its subsidiaries. The guarantees by our subsidiaries, which are directly or indirectly owned by Range, of our senior notes and our bank credit facility are full and unconditional and joint and several, subject to certain customary release provisions. The assets, liabilities and results of operations of Range and our guarantor subsidiaries are not materially different than our consolidated financial statements. A subsidiary guarantor may be released from its obligations under the guarantee:

•

in the event of a sale or other disposition of all or substantially all of the assets of the subsidiary guarantor or a sale or other disposition of all the capital stock of the subsidiary guarantor, to any corporation or other person (including an unrestricted subsidiary of Range) by way of merger, consolidation, or otherwise; or

•

if Range designates any restricted subsidiary that is a guarantor to be an unrestricted subsidiary in accordance with the terms of the indenture.

Debt Covenants

Our bank credit facility contains negative covenants that limit our ability, among other things, to pay cash dividends, incur additional indebtedness, sell assets, enter into certain hedging contracts, change the nature of our business or operations, merge, consolidate or make certain investments. We are required to maintain a maximum consolidated debt to EBITDAX ratio (as defined in the bank credit facility agreement) of 3.75 x and a minimum current ratio (as defined in the bank credit facility agreement) of 1.0 x. We were in compliance with applicable covenants under the bank credit facility at September 30, 2024.

(9) ASSET RETIREMENT OBLIGATIONS

Our asset retirement obligations primarily represent the estimated present value of the amounts we will incur to plug, abandon and remediate our producing properties at the end of their productive lives. Significant inputs used in determining such obligations include estimates of plugging and abandonment costs, estimated future inflation rates and well lives. The inputs are calculated based on historical data as well as current estimated costs. A reconciliation of our liability for plugging and abandonment costs for thenine months ended September 30, 2024 and the year ended December 31, 2023 is as follows (in thousands):

Accretion expense is recognized as a component of depreciation, depletion and amortization expense in the accompanying consolidated statements of income.

(10) DERIVATIVE ACTIVITIES

We use commodity-based derivative contracts to manage exposure to commodity price fluctuations. We do not enter into these arrangements for speculative or trading purposes. We utilize commodity swaps, collars, three-way collars or swaptions to (1) reduce the effect of price volatility of the commodities we produce and sell and (2) support our annual capital budget, fixed costs and investment plans. The fair value of our derivative contracts, represented by the estimated amount that would be realized upon termination, based on a comparison of the contract price and a reference price, generally the New York Mercantile Exchange (NYMEX) for natural gas and oil or Mont Belvieu for NGLs, approximated a net unrealized gain of$207.4 million at September 30, 2024. These contracts expire monthly through December 2027. The following table sets forth our commodity-based derivative volumes by year as of September 30, 2024, excluding our basis swaps which are discussed separately below:

Every derivative instrument is required to be recorded on the balance sheet as either an asset or a liability measured at its fair value. We recognize all changes in fair value of these derivatives as earnings in derivative fair value income or loss in the periods in which they occur.

Basis Swap Contracts

In addition to the commodity derivatives described above, at September 30, 2024, we had natural gas basis swap contracts which lock in the differential between NYMEX Henry Hub and certain of our physical pricing indices. These contracts settle through December 2028 and include a total volume of 257,470,000 Mmbtu. The fair value of these contracts was a loss of $16.9 million at September 30, 2024.

Derivative Assets and Liabilities

The combined fair value of derivatives included in the accompanying consolidated balance sheets as of September 30, 2024 and December 31, 2023 is summarized below. The assets and liabilities are netted where derivatives with both gain and loss positions are held by a single counterparty and we have master netting arrangements. The tables below provide additional information relating to our master netting arrangements with our derivative counterparties (in thousands):

Derivative Fair Value Income

The effects of our derivatives on our consolidated statements of income are summarized below (in thousands):

(11) FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There are three approaches for measuring the fair value of assets and liabilities: the market approach, the income approach and the cost approach, each of which includes multiple valuation techniques. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to measure fair value by converting future amounts, such as cash flows or earnings, into a single present value amount using current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace the service capacity of an asset. This is often referred to as current replacement cost. The cost approach assumes that the fair value would not exceed what it would cost a market participant to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence.

The fair value accounting standards do not prescribe which valuation technique should be used when measuring fair value and does not prioritize among the techniques. These standards establish a fair value hierarchy that prioritizes the inputs used in applying the various valuation techniques. Inputs broadly refer to the assumptions that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given the highest priority in the fair value hierarchy while Level 3 inputs are given the lowest priority. The three levels of the fair value hierarchy are as follows:

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Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

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Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

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Level 3 – Unobservable inputs for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect management’s best estimates of the assumptions market participants would use in determining fair value. Our Level 3 measurements consist of instruments using standard pricing models and other valuation methods that utilize unobservable pricing inputs that are significant to the overall fair value.

Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy.

Fair Values – Recurring

We use a market approach for our recurring fair value measurements and endeavor to use the best information available. The following tables present the fair value hierarchy for assets and liabilities measured at fair value, on a recurring basis (in thousands):

Our trading securities in Level 1 are exchange-traded and measured at fair value with a market approach using end of period market values. Derivatives in Level 2 are measured at fair value with a market approach using third-party pricing services which have been corroborated with data from active markets or broker quotes. Derivatives in Level 3 are also measured at fair value with a market approach using third-party pricing services which have been corroborated with data from active markets or broker quotes. However, the subjectivity in the volatility factors utilized can cause a significant change in the fair value measurement and is considered a significant unobservable input. As of September 30, 2024, a portion of our natural gas instruments contain swaptions where the counterparty has the right, but not the obligation, to enter into a fixed price swap on a pre-determined date. If exercised, the swaption contract becomes a swap treated consistently with our fixed-price swaps. At September 30, 2024, we used a weighted average implied volatility of 17% for natural gas swaptions. The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy (in thousands):

Trading securities. Our trading securities held in the deferred compensation plan are accounted for using the mark-to-market accounting method and are included in other assets in the accompanying consolidated balance sheets. We elected to adopt the fair value option to simplify our accounting for the investments in our deferred compensation plan. Interest, dividends, and mark-to-market gains or losses are included in deferred compensation plan expense in the accompanying consolidated statements of income. For third quarter 2024, interest and dividends were $261,000 and the mark-to-market adjustment was a gain of $3.2 million compared to interest and dividends of $331,000 and a mark-to-market loss of $3.5 million inthird quarter 2023. For first nine months 2024, interest and dividends were $739,000 and the mark-to-market adjustment was a gain of $8.1 million compared to interest and dividends of $945,000 and a mark-to-market gain of $2.2 million infirst nine months 2023.

Fair Values - Non-recurring

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. Our proved natural gas and oil properties are reviewed for impairment periodically as events or changes in circumstances indicate the carrying amount may not be recoverable. There were no proved property impairment charges in third quarter or first nine months 2024 or 2023.

Fair Values – Reported

The following presents the carrying amounts and the fair values of our financial instruments as of September 30, 2024 and December 31, 2023 (in thousands):

(a)

Marketable securities, which are held in our deferred compensation plans, are actively traded on major exchanges.

(b)

The book value of our bank debt approximates fair value because of its floating rate structure. The fair value of our senior notes is based on end of period market quotes which are Level 2 inputs.

(c)

The fair value of our deferred compensation plan is updated to the closing price on the balance sheet date, which is a Level 1 input.

Our current assets and liabilities include financial instruments, the most significant of which are trade accounts receivable and payable. We believe the carrying values of our current assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including (1) the short-term duration of the instruments and (2) our historical and expected incurrence of bad debt expense. Non-financial liabilities initially measured at fair value include asset retirement obligations, operating lease liabilities and the divestiture contract obligation that we incurred in conjunction with the sale of our North Louisiana assets.

Concentrations of Credit Risk

As of September 30, 2024, our primary concentrations of credit risk are the risks of not collecting accounts receivable and the risk of a counterparty’s failure to perform under derivative obligations. Most of our receivables are from a diverse group of companies, including major energy companies, pipeline companies, local distribution companies, financial institutions and end-users in various industries. Letters of credit or other appropriate assurances are obtained as deemed necessary to limit our risk of loss. Our allowance for uncollectible receivables was $308,000 at September 30, 2024 and $308,000 at December 31, 2023. Our derivative exposure to credit risk is diversified primarily among major investment grade financial institutions, where we have master netting agreements which provide for offsetting payables against receivables from separate derivative contracts. To manage counterparty risk associated with our derivatives, we select and monitor our counterparties based on our assessment of their financial strength and/or credit ratings. We may also limit the level of exposure with any single counterparty. Counterparty credit risk is considered when determining the fair value of our derivative contracts. While our counterparties are primarily major investment grade financial institutions, the fair value of our derivative contracts has been adjusted to account for the risk of non-performance by certain of our counterparties, which was immaterial. At September 30, 2024, our derivative counterparties include fifteen financial institutions, of whichten are secured lenders in our bank credit facility. At September 30, 2024, our net derivative position includes an aggregate net payable of $5.8 million from thefive counterparties not included in our bank credit facility.

Allowance for Expected Credit Losses. Each reporting period, we assess the recoverability of material receivables using historical data, current market conditions and reasonable and supported forecasts of future economic conditions to determine their expected collectability. The loss given default method is used when, based on management’s judgment, an allowance for expected credit losses should be accrued on a material receivable to reflect the net amount to be collected.

(12) STOCK-BASED COMPENSATION PLANS

Description of the Plans

We havetwo active equity-based stock plans: our Amended and Restated 2005 Equity-Based Incentive Compensation Plan and our Amended and Restated 2019 Equity-Based Compensation Plan. Under these plans, various awards may be issued to non-employee directors and employees pursuant to decisions of the Compensation Committee, which is composed of only non-employee, independent directors.

Total Stock-Based Compensation Expense

Stock-based compensation represents amortization of restricted stock and performance units. The following details the allocation of stock-based compensation to functional expense categories (in thousands):

The mark-to-market adjustment of the liability related to the vested restricted stock Liability Awards held in our deferred compensation plan is directly tied to the change in our stock price and not directly related to the functional expenses and, therefore, is not allocated to the functional categories above.

Restricted Stock – Equity Awards

We grant restricted stock units and restricted stock under our equity-based stock compensation plans to our employees, which we refer to as restricted stock Equity Awards. The Equity Awards generally vest over athree-year period and typically are contingent on the recipient’s continued employment. The grant date fair value of the Equity Awards is based on the fair market value of our common stock on the date of grant. In 2023, we began granting restricted stock (previously placed in our deferred compensation plan) that vests at the end of athree-year period for certain officer grants and at the end of aone-year period for non-employee directors. Vesting is also typically based upon the officer's continued employment with us. Prior to vesting, recipients of restricted stock typically earn dividends payable in cash upon vesting but they have no voting rights prior to vesting. The Equity Awards are not issued until such time as they are vested and grantees receive the awards in stock. We recorded compensation expense for these outstanding Equity Awards of $26.5 million infirst nine months 2024 compared to $23.4 million in the same period of 2023.

Restricted Stock – Liability Awards

The Compensation Committee also grants restricted stock to certain employees and non-employee directors of the board of directors as part of their compensation. Upon grant of these restricted shares, which we refer to as restricted stock Liability Awards, these shares are placed in our deferred compensation plan (see further discussion below) and, upon vesting, withdrawals are allowed in cash or in stock. Compensation expense is recognized over the vesting period, which is typically at the end of three years for employee grants and at the end of a one-year period for non-employee directors. In 2023, the number of shares granted into our deferred compensation plan was reduced in favor of restricted stock Equity Awards. All Liability Awards are issued at prevailing market prices at the time of the grant and the vesting is typically based upon an employee’s continued employment with us. Prior to vesting, Liability Award recipients typically earn dividends payable in cash upon vesting but they have no individual voting rights prior to vesting. These Liability Awards are classified as a liability and are re-measured at fair value each reporting period. This mark-to-market amount is reported in deferred compensation plan expense in the accompanying consolidated statements of income. We recorded compensation expense for these Liability Awards of $955,000 infirst nine months 2024 compared to $3.3 million infirst nine months 2023.

Stock-Based Performance Awards - (PSUs)

We have grantedtwo types of performance share awards: one based on performance conditions measured against internal performance metrics andone based on market conditions measured based on Range’s performance relative to a predetermined peer group (TSR Awards). Infirst nine months 2024, only TSR Awards were granted.

Each unit granted representsone share of our common stock. These units are settled in stock and the amount of the payout is based on the vesting percentage, which can range from zero to 200% and (1) the internal performance metrics achieved, which is determined by the Compensation Committee and (2) for our TSR Awards, the value of our common stock compared to our peers. Dividend equivalents accrue during the performance period and are paid in stock at the end of the performance period. The performance period isthree years.

Internal Performance Metric Awards. These awards are expensed ratably over the service period and vest at the end of thethree-year performance period. The performance metrics are set by the Compensation Committee. If the performance metric for the applicable performance period is not met, that portion is considered forfeited and there is an adjustment to the expense recorded. We recorded compensation expense associated with the prior year grants of $921,000 infirst nine months 2024 compared to expense of $1.8 million infirst nine months 2023.

TSR Awards. These awards are earned, or not earned, based on the comparative performance of Range’s common stock measured against a predetermined group of companies in the peer group over athree-year performance period. The fair value of the TSR Awards is estimated on the date of grant using a Monte Carlo simulation model which utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. The fair value is recognized as stock-based compensation expense over the three-year performance period. Expected volatilities utilized in the model were estimated using a combination of a historical period consistent with the remaining performance period of three years and option-implied volatilities. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the life of the grant. We recorded compensation expense of $2.9 million infirst nine months 2024 compared to $1.3 million in the same period of 2023. Fair value is amortized over the performance period with no adjustment to the expense recorded for actual targets achieved. The following assumptions were used to estimate the fair value of the TSR Awards granted during first nine months 2024 and 2023:

Equity and Liability Award Summary

The following is a summary of the activity for our restricted stock and performance awards for thenine months ended September 30, 2024 and 2023:

Deferred Compensation Plan

Our deferred compensation plan gives non-employee directors and officers the ability to defer all or a portion of their salaries, bonuses or director fees and invest in Range common stock or make other investments at the individual’s discretion. Range provides a partial matching contribution to participating officers which generally vests at the end ofthree years. The assets of the plan are held in a grantor trust, which we refer to as the Rabbi Trust, and are therefore available to satisfy the claims of our general creditors in the event of bankruptcy or insolvency. Our common stock held in the Rabbi Trust is treated as a liability award as employees are allowed to take withdrawals from the Rabbi Trust either in cash or in Range stock. The liability for the vested portion of the stock held in the Rabbi Trust is reflected as deferred compensation liability in the accompanying consolidated balance sheets and is adjusted to fair value each reporting period by a charge or credit to deferred compensation plan expense on our consolidated statements of income. The assets of the Rabbi Trust, other than our common stock, are invested in marketable securities and reported at their market value as other assets in the accompanying consolidated balance sheets. The deferred compensation liability reflects the vested market value of the marketable securities and Range stock held in the Rabbi Trust. Changes in the market value of the marketable securities and changes in the fair value ofthe deferred compensation plan liability are charged or credited to deferred compensation plan expense each quarter. We recorded a mark-to-market gain of $1.9 million inthird quarter 2024 compared to a mark-to-market loss of $9.0 million inthird quarter 2023. We recorded a mark-to-market loss of $5.7 million infirst nine months 2024 compared to a mark-to-market loss of $29.5 million infirst nine months 2023. The Rabbi Trust held 813,000 shares (778,000 vested shares) of Range common stock at September 30, 2024 compared to 1.6 million shares (1.5 million vested shares) at December 31, 2023.

(13) CAPITAL STOCK

We have authorized capital stock of 485.0 million shares, which includes 475.0 million shares of common stock and 10.0 million shares of preferred stock. We currently haveno preferred stock issued or outstanding. The following is a schedule of changes in the number of common shares outstanding since the beginning of 2023:

Stock Repurchase Program

In 2019, the board of directors approved a stock repurchase program which was increased in size in 2022. At September 30, 2024, we had a remaining authorization to repurchase up to approximately $1.0 billion of our common stock. Under this program, we may repurchase shares in open market transactions, from time to time, in accordance with applicable SEC rules and federal securities laws. Purchases under the program are made at our discretion and may change based upon market conditions. In third quarter 2024, we repurchased 1.1 million shares at an aggregate cost of $33.9 million, which includes the repurchase of $9.9 million (295,129 shares) traded in June, but settled in July. The following is a schedule of the change in treasury shares based on settlement date for thethree and nine months ended September 30, 2024:

(14) EXIT COSTS

In third quarter 2020, we sold our North Louisiana assets and retained certain gathering, transportation and processing obligations which extend into 2030. These are contracts where we will not realize any future benefit. The estimated obligations are included in current and long-term divestiture contract obligation in our consolidated balance sheets. In first nine months 2024, we recorded accretion expense of$30.0 million compared to $31.6 million in the same period of the prior year. In first nine months 2024, we also recorded a net adjustment of $2.1 million to decrease the obligation mainly due to a decrease in forecasted electricity costs. In first nine months 2023, we also recorded a net adjustment of $39.8 million to increase the obligation for an increase in forecasted rates due to inflation. The estimated discounted divestiture contract obligation was $356.1 million at September 30, 2024.

In second quarter 2020, we negotiated capacity releases on certain transportation pipelines in Pennsylvania effective May 31, 2020 and extending through the remainder of the contract. The estimated remaining discounted obligation for these transportation capacity releases as of September 30, 2024 was $495,000.

The following summarizes our exit costs (including accretion of discount and any adjustments) for thethree and nine months ended September 30, 2024 and 2023 (in thousands):

The following details the accrued exit cost liability activity for thenine months ended September 30, 2024 (in thousands):

(a) Includes the divestiture contract obligation and the transportation contract capacity release obligation.

(15) SUPPLEMENTAL CASH FLOW INFORMATION

(16) COMMITMENTS AND CONTINGENCIES

Litigation

We are the subject of, or party to, various pending or threatened legal actions, administrative proceedings or investigations arising in the ordinary course of our business including, but not limited to, royalty claims, contract claims and environmental claims. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these actions, proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations.

When deemed necessary, we establish reserves for certain legal proceedings. The establishment of a reserve is based on an estimation process that includes the advice of legal counsel and subjective judgment of management. While management believes these reserves to be adequate, it is reasonably possible we could incur additional losses with respect to those matters in which reserves have been established. We will continue to evaluate our litigation on a quarterly basis and will establish and adjust any litigation reserves as appropriate to reflect our assessment of the then current status of litigation.

We have incurred and will continue to incur capital, operating and remediation expenditures as a result of environmental laws and regulations. As of September 30, 2024, liabilities for remediation were not material. We are not aware of any environmental claims existing as of September 30, 2024 that have not been provided for or would otherwise have a material impact on our financial position or results of operations. Environmental liabilities normally involve estimates that are subject to revision until final resolution, settlement or remediation occurs.

Transportation, Gathering and Processing Contracts

In first quarter 2024, our transportation and gathering commitments over the next twelve years increased by approximately $580.0 million from December 31, 2023, primarily due to contract extensions and certain agreements that were contingent on facility construction as of the end of 2023 and are now in service. There wereno significant changes to firm transportation, gathering and processing minimum commitments in the second orthird quarter 2024.

In addition to the above, we entered into amendments of existing contracts that will expand gathering and processing capacity by 300,000 Mmcf/day and transportation capacity by 250,000 Mmbtu/day, contingent on the completion of construction of the relevant facilities and expected to be in service in 2026. We have a related contingent minimum commitment for the de-ethanization capacity associated with this processing expansion. Beginning on the in-service date this capacity will total 40,000 bbls/day, increasing by 5,000 bbls/day after one year of service, and continues through the end of the agreement. We also entered into a new contract for propane export terminal capacity that is contingent on the completion of construction of the relevant facilities and is expected to be in service in 2026. This capacity will be 10,000 bbls/day for the first year and increases to 20,000 bbls/day for the remainder of the term.

(17) SUSPENDED EXPLORATORY WELL COSTS

We capitalize exploratory well costs until a determination is made that the well has either found proved reserves or that it is impaired. Capitalized exploratory well costs are presented in natural gas and oil properties in the accompanying consolidated balance sheets. If an exploratory well is determined to be impaired, the well costs are charged to exploration expense in the accompanying consolidated statements of income. There wereno capitalized exploratory well costs in 2023. The following table reflects the changes in capitalized exploratory well costs for thenine months ended September 30, 2024 (in thousands):

(18)Costs Incurred for Property Acquisition, Exploration and Development (a)

(a) Includes costs incurred whether capitalized or expensed.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANA