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Derivatives
 6 Months Ended
Jun. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
For further information regarding the fair value measurement of derivative instruments, see Note 16. All of our commodity derivatives are subject to enforceable master netting arrangements or similar agreements under which we report net amounts. The following tables present the gross fair values of derivative instruments and the reported net amounts along with where they appear on the consolidated balance sheets.
June 30, 2020
(In millions)AssetLiabilityNet Asset (Liability)Balance Sheet Location
Not Designated as Hedges
Commodity$100  $21  $79  Derivative assets
Total Not Designated as Hedges$100  $21  $79  
Cash Flow Hedges
Interest Rate$—  $26  $(26) Deferred credits and other liabilities
Interest Rate2  —  2  Other noncurrent assets
Total Designated Hedges$2  $26  $(24) 
Total$102  $47  $55  
December 31, 2019
(In millions)AssetLiabilityNet Asset (Liability)Balance Sheet Location
Not Designated as Hedges
Commodity$9  $1  $8  Derivative assets
Commodity1  —  1  Other noncurrent assets
Commodity—  5  (5) Other current liabilities
Total Not Designated as Hedges$10  $6  $4  
Cash Flow Hedges
Interest Rate$2  $—  $2  Other noncurrent assets
Total Designated Hedges$2  $—  $2  
Total$12  $6  $6  
Derivatives Not Designated as Hedges
We have entered into multiple crude oil and natural gas derivatives indexed to the respective indices as noted in the table below, related to a portion of our forecasted United States sales through 2021. These derivatives consist of three-way collars, two-way collars, fixed price swaps, basis swaps and NYMEX roll basis swaps. Three-way collars consist of a sold call (ceiling), a purchased put (floor) and a sold put. The ceiling price is the maximum we will receive for the contract volumes; the floor is the minimum price we will receive, unless the market price falls below the sold put strike price. In this case, we receive the NYMEX WTI price plus the difference between the floor and the sold put price. Two-way collars only consist of a sold call (ceiling) and a purchased put (floor). These crude oil and natural gas derivatives were not designated as hedges.
The following table sets forth outstanding derivative contracts as of June 30, 2020, and the weighted average prices for those contracts:
20202021
Third QuarterFourth QuarterFull Year
Crude Oil
NYMEX WTI Three-Way Collars
Volume (Bbls/day)80,000  80,000  —  
Weighted average price per Bbl:
Ceiling$64.40  $64.40  $—  
Floor$55.00  $55.00  $—  
Sold put$48.00  $48.00  $—  
NYMEX WTI Two-Way Collars
Volume (Bbls/day)33,478  —  —  
Weighted average price per Bbl:
Ceiling$40.47  $—  $—  
Floor$30.98  $—  $—  
Fixed Price WTI Swaps
Volume (Bbls/day)10,000  —  —  
Weighted average price per Bbl$32.77  $—  $—  
Basis Swaps - Argus WTI Midland (a)
Volume (Bbls/day)15,000  15,000  —  
Weighted average price per Bbl$(0.94) $(0.94) $—  
Basis Swaps - NYMEX WTI / ICE Brent (b)
Volume (Bbls/day)5,000  5,000  808  
Weighted average price per Bbl$(7.24) $(7.24) $(7.24) 
NYMEX Roll Basis Swaps
Volume (Bbls/day)60,000  30,000  —  
Weighted average price per Bbl$(1.58) $(0.81) $—  
Natural Gas
Two-Way Collars
Volume (MMBtu/day)—  —  62,329  
Weighted average price per MMBtu:
Ceiling$—  $—  $3.07  
Floor$—  $—  $2.44  
Basis Swaps - WAHA / HH (c)
Volume (MMBtu/day)10,000  10,000  —  
Weighted average price per MMBtu$(0.37) $(0.37) $—  
(a)The basis differential price is indexed against Argus WTI Midland.
(b)The basis differential price is indexed against Intercontinental Exchange (“ICE”) Brent and NYMEX WTI.
(c)The basis differential price is indexed against Waha and NYMEX Henry Hub.
The following table sets forth outstanding derivative contracts entered into between July 1 and August 5, 2020, and the weighted average prices for those contracts:

20202021
Third QuarterFourth QuarterFull Year
Crude Oil
NYMEX WTI Two-Way Collars
Volume (Bbls/day)3,261  10,000  10,000  
Weighted average price per Bbl:
Ceiling$48.00  $48.65  $52.37  
Floor$36.50  $37.00  $35.00  
Natural Gas
Two-Way Collars
Volume (MMBtu/day)66,304  150,000  50,000  
Weighted average price per MMBtu:
Ceiling$2.49  $2.62  $2.93  
Floor$2.00  $2.13  $2.40  
NGL
Fixed Price Ethane Swaps
Volume (MMBtu/day)7,304  10,000  —  
Weighted average price per Bbl$8.78  $8.78  $—  
The mark-to-market impact and settlement of our commodity derivative instruments appears in the table below and is reflected in net gain (loss) on commodity derivatives in the consolidated statements of income.
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2020201920202019
Mark-to-market gain (loss)$(96) $11  $75  $(102) 
Net settlements of commodity derivative instruments$26  $5  $57  $27  
Derivatives Designated as Cash Flow Hedges
During 2020, we entered into forward starting interest rate swaps with a notional amount of $500 million to hedge variations in cash flows arising from fluctuations in the London Interbank Offered Rate (“LIBOR”) benchmark interest rate related to forecasted interest payments of a future debt issuance in 2022; and an additional $300 million of notional for our future debt issuance in 2025. We expect to refinance both of the debt maturities in 2022 and 2025. The swaps will terminate on or prior to the refinancing of the debt and the final value will be reclassified from accumulated other comprehensive income into earnings with each future interest payment. Subsequent to June 30, 2020, we entered into additional forward starting interest rate swaps with a notional amount of $50 million and a weighted average rate of 0.90% to hedge variations in cash flows related to the same LIBOR interest rate for our debt due in 2025.
During 2019, we entered into forward starting interest rate swaps with a total notional amount of $320 million to hedge variations in cash flows related to the 1-month LIBOR component of future lease payments of our future Houston office. These swaps will settle monthly on the same day the lease payment is made with the first swap settlement occurring in January 2022. We expect the first lease payment to commence sometime in the period from December 2021 to May 2022. The last swap will mature on September 9, 2026. See Note 13 for further details regarding the lease of the new Houston office.
The following table presents, by maturity date, information about our interest rate swap agreements, including the weighted average LIBOR-based, fixed rate.
June 30, 2020December 31, 2019
Maturity Date
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
November 1, 2022$500  0.99 %$—  — %
June 1, 2025$300  0.96 %$—  — %
September 9, 2026$320  1.51 %$320  1.51 %
At June 30, 2020, accumulated other comprehensive income included deferred losses of $24 million related to forward starting interest rate swaps. No amounts related to these swaps are expected to impact the consolidated statements of income in the next 12 months.