QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page | ||||||||
Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 | ||||||||
Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 | ||||||||
Consolidated Statements of Equity for the three months ended March 31, 2023 and 2022 | ||||||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 | ||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Income taxes receivable | |||||||||||
Inventories | |||||||||||
Investment in affiliate | |||||||||||
Other | |||||||||||
Total current assets | |||||||||||
Oil and gas properties, using the successful efforts method of accounting: | |||||||||||
Proved properties | |||||||||||
Unproved properties | |||||||||||
Accumulated depletion, depreciation and amortization | ( | ( | |||||||||
Total oil and gas properties, net | |||||||||||
Other property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
$ | $ | ||||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable: | |||||||||||
Trade | $ | $ | |||||||||
Due to affiliates | |||||||||||
Interest payable | |||||||||||
Income taxes payable | |||||||||||
Current portion of long-term debt | |||||||||||
Derivatives | |||||||||||
Operating leases | |||||||||||
Other | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Derivatives | |||||||||||
Deferred income taxes | |||||||||||
Operating leases | |||||||||||
Other liabilities | |||||||||||
Equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock, at cost; December 31, 2022, respectively | ( | ( | |||||||||
Retained earnings | |||||||||||
Total equity | |||||||||||
Commitments and contingencies | |||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues and other income: | |||||||||||
Oil and gas | $ | $ | |||||||||
Sales of purchased commodities | |||||||||||
Interest and other income (loss), net | ( | ||||||||||
Derivative loss, net | ( | ( | |||||||||
Gain on disposition of assets, net | |||||||||||
Costs and expenses: | |||||||||||
Oil and gas production | |||||||||||
Production and ad valorem taxes | |||||||||||
Depletion, depreciation and amortization | |||||||||||
Purchased commodities | |||||||||||
Exploration and abandonments | |||||||||||
General and administrative | |||||||||||
Accretion of discount on asset retirement obligations | |||||||||||
Interest | |||||||||||
Other | |||||||||||
Income before income taxes | |||||||||||
Income tax provision | ( | ( | |||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Net income per share attributable to common stockholders: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Dividends declared per share | $ | $ | |||||||||
Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Convertible senior note conversions: | |||||||||||||||||||||||||||||||||||
Conversion premium | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Capped call proceeds | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance fees and deferred taxes | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Purchases of treasury stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation: | |||||||||||||||||||||||||||||||||||
Vested compensation awards, net | — | — | — | — | |||||||||||||||||||||||||||||||
Compensation costs included in net income | — | — | — | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of March 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total Equity | ||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Dividends declared ($ | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Exercise of long-term incentive stock options | — | — | — | ||||||||||||||||||||||||||||||||
Purchases of treasury stock | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation: | |||||||||||||||||||||||||||||||||||
Vested compensation awards, net | — | — | — | — | |||||||||||||||||||||||||||||||
Compensation costs included in net loss | — | — | — | — | |||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depletion, depreciation and amortization | |||||||||||
Exploration expenses | |||||||||||
Deferred income taxes | |||||||||||
Gain on disposition of assets, net | ( | ( | |||||||||
Loss on early extinguishments of debt | |||||||||||
Accretion of discount on asset retirement obligations | |||||||||||
Interest expense | |||||||||||
Derivative-related activity | |||||||||||
Amortization of stock-based compensation | |||||||||||
Investment valuation adjustments | ( | ||||||||||
Other | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Income taxes receivable | |||||||||||
Inventories | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Interest payable | ( | ( | |||||||||
Income taxes payable | |||||||||||
Other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from disposition of assets | |||||||||||
Proceeds from short-term investments | |||||||||||
Purchases of short-term investments, net | ( | ||||||||||
Additions to oil and gas properties | ( | ( | |||||||||
Additions to other assets and other property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings under credit facility | |||||||||||
Repayment of credit facility | ( | ||||||||||
Proceeds from issuance of senior notes, net of discount | |||||||||||
Repayment of long-term debt | ( | ( | |||||||||
Proceeds from capped call on convertible notes | |||||||||||
Payments of other liabilities | ( | ( | |||||||||
Payments of financing fees | ( | ||||||||||
Purchases of treasury stock | ( | ( | |||||||||
Exercise of long-term incentive plan stock options | |||||||||||
Dividends paid | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
As of March 31, 2023 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investment in affiliate | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan assets | |||||||||||||||||||||||
Conversion option derivatives | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Marketing derivatives | $ | $ | $ | $ | |||||||||||||||||||
As of December 31, 2022 | |||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Investment in affiliate | $ | $ | $ | $ | |||||||||||||||||||
Deferred compensation plan assets | |||||||||||||||||||||||
Conversion option derivatives | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Marketing derivatives | $ | $ | $ | $ | |||||||||||||||||||
As of March 31, 2023 | As of December 31, 2022 | ||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash and cash equivalents (a) | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Current portion of long-term debt: | |||||||||||||||||||||||
Convertible senior notes (b) | $ | $ | $ | $ | |||||||||||||||||||
Senior notes (b) | $ | $ | $ | $ | |||||||||||||||||||
Long-term debt: | |||||||||||||||||||||||
Convertible senior notes (b) | $ | $ | $ | $ | |||||||||||||||||||
Senior notes (b) | $ | $ | $ | $ | |||||||||||||||||||
As of March 31, 2023 | ||||||||||||||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Conversion option derivatives | Other - current | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Marketing derivatives | $ | $ | $ | |||||||||||||||||||||||
Marketing derivatives | $ | $ | $ | |||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||
Type | Consolidated Balance Sheet Location | Fair Value | Gross Amounts Offset in the Consolidated Balance Sheet | Net Fair Value Presented in the Consolidated Balance Sheet | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Conversion option derivatives | Other - current | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Marketing derivatives | $ | $ | $ | |||||||||||||||||||||||
Marketing derivatives | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Commodity price derivatives: | |||||||||||
Noncash derivative loss, net | $ | — | $ | ( | |||||||
Cash payments on settled derivatives, net | — | ( | |||||||||
Total commodity derivative loss, net | ( | ||||||||||
Marketing derivatives: | |||||||||||
Noncash derivative gain (loss), net | ( | ||||||||||
Cash payments on settled derivatives, net | ( | ( | |||||||||
Total marketing derivative gain (loss), net | ( | ||||||||||
Conversion option derivatives: | |||||||||||
Cash receipts on settled derivatives, net | — | ||||||||||
Derivative loss, net | $ | ( | $ | ( | |||||||
Three Months Ended March 31, 2023 | |||||
(in millions) | |||||
Beginning capitalized exploratory well and project costs | $ | ||||
Additions to exploratory well and project costs pending the determination of proved reserves | |||||
Reclassifications due to determination of proved reserves | ( | ||||
Ending capitalized exploratory well and project costs | $ |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
(in millions, except well counts) | |||||||||||
One year or less | $ | $ | |||||||||
More than one year | |||||||||||
$ | $ | ||||||||||
Number of projects with exploratory well costs that have been suspended for a period greater than one year |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
(in millions) | |||||||||||
Outstanding debt principal balances: | |||||||||||
$ | $ | ||||||||||
Issuance costs and discounts, net | ( | ( | |||||||||
Total debt | |||||||||||
Less current portion of long-term debt | |||||||||||
Long-term debt | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Contractual coupon interest | $ | $ | |||||||||
Amortization of capitalized loan fees | |||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash payments: | |||||||||||
Principal repayments | $ | $ | |||||||||
Conversion premiums | |||||||||||
Cash payments | $ | $ | |||||||||
Cash receipts: | |||||||||||
Capped Call proceeds | $ | $ | |||||||||
Conversion option derivative receipts, net | |||||||||||
Cash receipts, net | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Equity Awards | $ | $ | |||||||||
Liability Awards (a) | |||||||||||
Performance Awards | |||||||||||
ESPP | |||||||||||
$ | $ | ||||||||||
Capitalized stock-based compensation expense | $ | $ | |||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
Equity Awards | Liability Awards | Performance Awards | |||||||||||||||
Beginning awards | |||||||||||||||||
Awards granted | |||||||||||||||||
Awards forfeited | ( | ( | |||||||||||||||
Awards vested (a) | ( | ( | ( | ||||||||||||||
Ending awards |
Three Months Ended March 31, 2023 | |||||
(in millions) | |||||
Beginning asset retirement obligations | $ | ||||
New wells placed on production | |||||
Changes in estimates | ( | ||||
Liabilities settled | ( | ||||
Accretion of discount | |||||
Ending asset retirement obligations | |||||
Less current portion of asset retirement obligations | ( | ||||
Asset retirement obligations, long-term | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Pressure pumping related service charges | $ | $ |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
(in millions) | |||||||||||
Accounts payable - due to affiliate | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Oil sales | $ | $ | |||||||||
NGL sales | |||||||||||
Gas sales | |||||||||||
Total oil and gas revenues | |||||||||||
Sales of purchased oil | |||||||||||
Sales of purchased gas | |||||||||||
Total sales of purchased commodities | |||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
$ | $ | ||||||||||
Unoccupied facility expense (b) | |||||||||||
Water services net income (c) | ( | ||||||||||
Other | |||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Gross revenues | $ | $ | |||||||||
Gross costs and expenses | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Current tax provision | $ | ( | $ | ( | |||||||
Deferred tax provision | ( | ( | |||||||||
Income tax provision | $ | ( | $ | ( | |||||||
Effective tax rate | % | % |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions, except per share data) | |||||||||||
Net income attributable to common stockholders | $ | $ | |||||||||
Participating share-based earnings (a) | ( | ( | |||||||||
Basic net income attributable to common stockholders | |||||||||||
Adjustment to after-tax interest expense to reflect the dilutive impact attributable to Convertible Notes | |||||||||||
Diluted net income attributable to common stockholders | $ | $ | |||||||||
Basic weighted average shares outstanding | |||||||||||
Convertible Notes (b) | |||||||||||
Diluted weighted average shares outstanding | |||||||||||
Net income per share attributable to common stockholders: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ |
Base | Variable | Total | Total | ||||||||||||||||||||
(per share) | (per share) | (per share) | (in millions) | ||||||||||||||||||||
2023: | |||||||||||||||||||||||
First quarter | $ | $ | $ | $ | |||||||||||||||||||
2022: | |||||||||||||||||||||||
First quarter | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(in millions) | |||||||||||
Shares repurchased (a) | $ | $ |
Three Months Ending June 30, 2023 | |||||
Guidance | |||||
($ in millions, except per BOE amounts) | |||||
Average daily production (MBOE) | 674 - 702 | ||||
Average daily oil production (MBbls) | 357 - 372 | ||||
Production costs per BOE | $11.00 - $12.50 | ||||
DD&A per BOE | $10.50 - $12.00 | ||||
Exploration and abandonments expense | $10 - $20 | ||||
General and administrative expense | $78 - $88 | ||||
Interest expense | $39 - $44 | ||||
Other expense | $20 - $40 | ||||
Cash flow impact from firm transportation (a) | $(70) - $(30) | ||||
Current income tax provision | $200 - $275 | ||||
Effective tax rate | 22% - 27% |
Three Months Ended March 31, 2023 | |||||
Oil (Bbls) | 361,316 | ||||
NGLs (Bbls) | 167,486 | ||||
Gas (Mcf) | 909,831 | ||||
Total (BOE) | 680,440 |
Three Months Ended March 31, 2023 | |||||
( in millions) | |||||
Proved property acquisition costs (a) | $ | 170 | |||
Unproved property acquisitions (a) | 38 | ||||
Exploration/extension costs | 1,026 | ||||
Development costs | 168 | ||||
Asset retirement obligations | (20) | ||||
$ | 1,382 |
Three Months Ended March 31, 2023 | |||||||||||
Development | Exploration/Extension | ||||||||||
Beginning wells in progress | 11 | 292 | |||||||||
Wells spud | 2 | 144 | |||||||||
Successful wells | (5) | (123) | |||||||||
Ending wells in progress | 8 | 313 | |||||||||
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Oil and gas revenues | $ | 3,166 | $ | 3,930 | $ | (764) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
Oil (Bbls) | 361,316 | 355,270 | 2 | % | |||||||||||||
NGLs (Bbls) | 167,486 | 152,929 | 10 | % | |||||||||||||
Gas (Mcf) | 909,831 | 777,343 | 17 | % | |||||||||||||
Total (BOE) | 680,440 | 637,756 | 7 | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
Oil price per Bbl | $ | 75.15 | $ | 94.60 | (21 | %) | |||||||||||
NGL price per Bbl | $ | 27.30 | $ | 41.37 | (34 | %) | |||||||||||
Gas price per Mcf | $ | 3.79 | $ | 4.81 | (21 | %) | |||||||||||
Price per BOE | $ | 51.69 | $ | 68.48 | (25 | %) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Sales of purchased commodities | $ | 1,431 | $ | 2,217 | $ | (786) | |||||||||||
Purchased commodities expense | 1,485 | 2,152 | (667) | ||||||||||||||
$ | (54) | $ | 65 | $ | (119) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Interest and other income (loss), net | $ | (37) | $ | 126 | $ | (163) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Commodity price derivatives: | |||||||||||||||||
Noncash derivative loss, net | $ | — | $ | (111) | $ | 111 | |||||||||||
Cash payments on settled derivatives, net | — | (57) | 57 | ||||||||||||||
Total commodity derivative loss, net | — | (168) | 168 | ||||||||||||||
Marketing derivatives: | |||||||||||||||||
Noncash derivative gain (loss), net | (36) | 44 | (80) | ||||||||||||||
Cash payments on settled derivatives, net | (15) | (11) | (4) | ||||||||||||||
Total marketing derivative gain (loss), net | (51) | 33 | (84) | ||||||||||||||
Conversion option derivatives: | |||||||||||||||||
Cash receipts on settled derivatives, net | 7 | — | 7 | ||||||||||||||
Derivative loss, net | $ | (44) | $ | (135) | $ | 91 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Gain on disposition of assets, net | $ | 25 | $ | 34 | $ | (9) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Oil and gas production costs | $ | 455 | $ | 416 | $ | 39 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | % Change | |||||||||||||||
Lease operating expense (a) | $ | 4.10 | $ | 3.46 | 18 | % | |||||||||||
Gathering, processing and transportation expense (b) | 2.94 | 3.85 | (24 | %) | |||||||||||||
Workover costs (a) | 1.16 | 0.79 | 47 | % | |||||||||||||
Net natural gas plant income (c) | (0.77) | (0.86) | (10 | %) | |||||||||||||
$ | 7.43 | $ | 7.24 | 3 | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Production and ad valorem taxes | $ | 208 | $ | 224 | $ | (16) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | % Change | |||||||||||||||
Production taxes per BOE | $ | 2.46 | $ | 3.25 | (24 | %) | |||||||||||
Ad valorem taxes per BOE | 0.93 | 0.65 | 43 | % | |||||||||||||
$ | 3.39 | $ | 3.90 | (13 | %) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Depletion, depreciation and amortization | $ | 664 | $ | 614 | $ | 50 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | % Change | |||||||||||||||
DD&A per BOE | $ | 10.84 | $ | 10.69 | 1 | % | |||||||||||
Depletion expense per BOE | $ | 10.64 | $ | 10.48 | 2 | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Geological and geophysical | $ | 13 | $ | 9 | $ | 4 | |||||||||||
Leasehold abandonments and other | 2 | 5 | (3) | ||||||||||||||
$ | 15 | $ | 14 | $ | 1 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Cash general and administrative expense | $ | 71 | $ | 66 | $ | 5 | |||||||||||
Noncash general and administrative expense | 13 | 7 | 6 | ||||||||||||||
$ | 84 | $ | 73 | $ | 11 |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | % Change | |||||||||||||||
Cash general and administrative expense | $ | 1.15 | $ | 1.16 | (1 | %) | |||||||||||
Noncash general and administrative expense | 0.22 | 0.12 | 83 | % | |||||||||||||
$ | 1.37 | $ | 1.28 | 7 | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Cash interest expense | $ | 25 | $ | 34 | $ | (9) | |||||||||||
Noncash interest expense | 3 | 3 | — | ||||||||||||||
$ | 28 | $ | 37 | $ | (9) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Other expense | $ | 41 | $ | 77 | $ | (36) |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions, except percentages) | |||||||||||||||||
Income tax provision | $ | (335) | $ | (552) | $ | 217 | |||||||||||
Effective tax rate | 22 | % | 22 | % | — | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
(in millions) | |||||||||||||||||
Net cash provided by operating activities | $ | 2,314 | $ | 2,581 | $ | (267) | |||||||||||
Net cash used in investing activities | $ | (1,204) | $ | (1,310) | $ | (106) | |||||||||||
Net cash used in financing activities | $ | (950) | $ | (2,761) | $ | (1,811) | |||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Amount of Shares that May Yet Be Purchased under Plans or Programs (b) | ||||||||||||||||||||||
January 1-31, 2023 | 614,625 | $ | 221.50 | 570,384 | $ | 2,224,563,562 | ||||||||||||||||||||
February 1-28, 2023 | 613,001 | $ | 210.49 | 588,887 | $ | 2,100,597,610 | ||||||||||||||||||||
March 1-31, 2023 | 1,271,732 | $ | 196.61 | 1,271,582 | $ | 1,850,599,074 | ||||||||||||||||||||
2,499,358 | 2,430,853 |
Exhibit Number | Description | |||||||
10.1 H (a) | ||||||||
31.1 (a) | ||||||||
31.2 (a) | ||||||||
32.1 (b) | ||||||||
32.2 (b) | ||||||||
101.INS (a) | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH (a) | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL (a) | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF (a) | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB (a) | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE (a) | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
(a) | Filed herewith. | ||||
(b) | Furnished herewith. | ||||
H | Executive Compensation Plan or Arrangement. | ||||
* | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish to the SEC a copy of any omitted schedule upon request. |
PIONEER NATURAL RESOURCES COMPANY | ||||||||||||||
April 27, 2023 | By: | /s/ Neal H. Shah | ||||||||||||
Neal H. Shah | ||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||
April 27, 2023 | By: | /s/ Christopher L. Washburn | ||||||||||||
Christopher L. Washburn | ||||||||||||||
Vice President and Chief Accounting Officer |
Name: |
Title: |
Name: |
Title: |
/s/ Scott D. Sheffield | |||||
Scott D. Sheffield | |||||
Chief Executive Officer | |||||
Date: | April 27, 2023 |
/s/ Neal H. Shah | |||||
Neal H. Shah | |||||
Senior Vice President and Chief Financial Officer | |||||
Date: | April 27, 2023 |
/s/ Scott D. Sheffield | |||||
Scott D. Sheffield | |||||
Chief Executive Officer | |||||
Date: | April 27, 2023 |
/s/ Neal H. Shah | |||||
Neal H. Shah | |||||
Senior Vice President and Chief Financial Officer | |||||
Date: | April 27, 2023 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 244,902,719 | 244,703,342 |
Treasury stock, shares (in shares) | 11,167,182 | 8,667,824 |
Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared (usd per share) | $ 5.58 | $ 3.78 | $ 3.78 |
Organization and Nature Of Operations |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of OperationsPioneer is a Delaware corporation whose common stock is listed and traded on the NYSE. The Company is a large independent oil and gas exploration and production company that explores for, develops and produces oil, NGLs and gas in the Midland Basin in West Texas. |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Presentation. In the opinion of management, the unaudited interim consolidated financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with GAAP. The operating results for the three months ended March 31, 2023 are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the SEC. These unaudited interim consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Use of estimates in the preparation of financial statements. Preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the estimates and assumptions utilized.
|
Acquisition, Divestiture and Nonmonetary Activities |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisition, Divestiture and Nonmonetary Activities | Acquisition, Divestiture and Nonmonetary Activities Acquisitions. The Company regularly seeks to acquire or trade for acreage that complements its operations, provides exploration and development opportunities, increases the lateral length of future horizontal wells and provides superior returns on investment. Divestitures. The Company regularly reviews its asset base to identify nonstrategic assets, the disposition of which would increase capital resources available for other activities, create organizational and operational efficiencies and further the Company's objective of maintaining a strong balance sheet to ensure financial flexibility. •During the three months ended March 31, 2022, the Company divested certain undeveloped acreage and producing wells in the Midland Basin for (i) cash proceeds of $85 million and (ii) ownership interests in certain Midland Basin undeveloped acreage and producing wells valued at $8 million. The Company recorded a gain on these sales of $41 million, which is reflected in net gain on disposition of assets in the consolidated statements of operations. •In February 2022, the Company completed the sale of its equity interest in certain gas gathering and processing systems in northern Martin County for cash proceeds of $125 million (the "Martin County Gas Processing Divestiture"). The sale was treated as a recovery of investment from a partial sale of proved property resulting in no gain or loss being recognized. Nonmonetary transactions. During the three months ended March 31, 2023, the Company's nonmonetary transactions included exchanges of both proved and unproved oil and gas properties in the Midland Basin with unaffiliated third parties. Certain of these transactions were accounted for at fair value, resulting in the Company recording a gain of $24 million to net gain on disposition of assets in the consolidated statements of operations and $162 million of noncash investing activities.
|
Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value MeasurementsThe Company determines fair value based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The fair value input hierarchy level to which an asset or liability measurement in its entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three input levels of the fair value hierarchy are as follows: •Level 1 – quoted prices for identical assets or liabilities in active markets. •Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates) and inputs derived principally from or corroborated by observable market data by correlation or other means. •Level 3 – unobservable inputs for the asset or liability, typically reflecting management's estimate of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including discounted cash flow models. Assets and liabilities measured at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows:
Investment in affiliate. The Company elected the fair value option for measuring its equity method investment in ProPetro Holding Corp. ("ProPetro"). The fair value of the Company's investment in ProPetro common stock is determined using Level 1 inputs based on observable prices on a major exchange. The Company recorded a noncash loss of $53 million and a noncash gain of $96 million to net interest and other income (loss) in the consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively, representing the change in fair value of the Company's investment in ProPetro. See Note 11 for additional information. Deferred compensation plan assets. The Company's deferred compensation plan assets include investments in equity and mutual fund securities that are actively traded on major exchanges. The fair value of these investments is determined using Level 1 inputs based on observable prices on major exchanges. The Company recorded losses of $1 million and $3 million to net interest and other income (loss) in the consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively, representing the change in fair value of deferred compensation plan assets. Conversion option derivatives. In May 2020, the Company issued $1.3 billion principal amount of convertible senior notes due 2025 (the "Convertible Notes"). Certain holders of the Convertible Notes exercised their conversion option during the three months ended March 31, 2023 and December 31, 2022. Per the terms of the notes indenture, the Company elected to settle the conversions in cash, with settlement occurring 25 trading days from the notice of conversion (the "Settlement Period"). The Company's election to settle an exercised conversion option in cash results in a forward contract during the Settlement Period that is accounted for as a derivative instrument not designated as a hedge. The change in fair value of the conversion option derivatives during the Settlement Period is primarily determined based on Level 2 inputs related to the daily volumetric weighted average prices of the Company's common stock during the Settlement Period. See Note 5 and Note 7 for additional information. Commodity price derivatives. The asset and liability measurements for the Company's commodity price derivative contracts are determined using Level 2 inputs. The Company utilizes discounted cash flow and option-pricing models for valuing its commodity price derivatives. The values attributable to the Company's commodity price derivatives were determined based on inputs that include (i) the contracted notional volumes, (ii) independent active market price quotes, (iii) the applicable estimated credit-adjusted risk-free rate yield curve and (iv) the implied rate of volatility inherent in the swap contracts, which is based on active and independent market-quoted volatility factors. The Company's commodity price derivatives represent oil basis swap contracts as of March 31, 2023 and December 31, 2022. Commodity price derivative assets and liabilities recorded in the consolidated balance sheets were less than $1 million as of March 31, 2023 and December 31, 2022. See Note 5 for additional information. Marketing derivatives. The Company's marketing derivatives reflect long-term marketing contracts whereby the Company agreed to purchase and simultaneously sell barrels of oil at an oil terminal in Midland, Texas. The price the Company pays to purchase the oil volumes under the purchase contract is based on a Midland oil price and the price the Company receives for the oil volumes sold is the WASP that the non-affiliated counterparty receives for selling oil through a Gulf Coast storage and export facility at prices that are highly correlated with Brent oil prices during the same month of the purchase. Based on the form of the long-term marketing contracts, the Company accounts for the contracts as derivative instruments not designated as hedges. The asset and liability measurements for the long-term marketing contracts are determined using both Level 2 and 3 inputs. The Company utilizes a discounted cash flow model for valuing the marketing derivatives. The values attributable to the Company's marketing derivatives that are determined based on Level 2 inputs include (i) the contracted notional volumes, (ii) independent active market price quotes, (iii) the applicable estimated credit-adjusted risk-free rate yield curve and (iv) stated contractual rates. The Level 3 inputs attributable to the Company's marketing derivatives include the historical monthly differential between Brent oil prices and the corresponding WASP of the counterparty to the marketing derivatives ("WASP Differential Deduction") and, to a lesser extent, an estimated annual cost inflation rate. The average WASP Differential Deduction used in the fair value determination as of March 31, 2023 and December 31, 2022 was $1.81 per barrel and $1.67 per barrel, respectively. The WASP Differential Deduction and the estimated annual cost inflation rate reflects management's best estimate of future results utilizing historical performance, but these estimates are not observable inputs by a market participant and contain a high degree of uncertainty. The Company experiences mark-to-market fluctuations in the fair value of its marketing derivatives based on changes in the WASP Differential Deduction if it deviates from historical levels. For example, a 10 percent increase or decrease in the WASP Differential Deduction would impact the fair value of the Company's marketing derivatives recorded by $29 million as of March 31, 2023. See Note 5 for additional information. Short-term investment. In October 2021, the Company acquired 960 thousand shares of Laredo Petroleum, Inc. ("Laredo") as partial consideration for its divestiture of certain acreage in western Glasscock County to Laredo. During the three months ended March 31, 2022, the Company sold the 960 thousand shares of Laredo common stock held by the Company and recorded a gain of $18 million to net interest and other income (loss) in the consolidated statements of operations. The shares were treated as an investment in equity securities measured at fair value. The fair value of the Company's investment in Laredo common stock was determined using Level 1 inputs based on observable prices on a major exchange. Assets and liabilities measured at fair value on a nonrecurring basis. Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets and liabilities can include inventories, proved and unproved oil and gas properties, assets acquired and liabilities assumed in business combinations or through nonmonetary transactions, goodwill and other long-lived assets that are written down to fair value when they are determined to be impaired or held for sale. Nonmonetary transactions. Oil and gas properties acquired in nonmonetary transactions that have commercial substance are valued based on income and market based approaches utilizing Level 3 inputs, including internally generated development and production profiles and price and cost assumptions. As a result of these valuations, the Company recorded a gain of $24 million to net gain on disposition of assets in the consolidated statements of operations during the three months ended March 31, 2023. Other long-lived assets. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment charge is measured as the amount by which the carrying amount of the asset exceeds its estimated fair value determined using either a discounted future cash flow model or another appropriate fair value method. As a result of the Company's impairment assessments of other long-lived assets during the three months ended March 31, 2023, the Company recorded $11 million of noncash impairment charges to other expense in the consolidated statements of operations. See Note 13 for additional information. Financial instruments not carried at fair value. Carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheets are as follows:
______________________ (a)Fair value approximates carrying value due to the short-term nature of the instruments. (b)Fair value is determined using Level 2 inputs. The Company's senior notes are quoted, but not actively traded on major exchanges; therefore, fair value is based on periodic values as quoted on major exchanges. See Note 7 for additional information. The Company has other financial instruments consisting primarily of receivables, payables and other current assets and liabilities that approximate fair value due to the nature of the instrument and their relatively short maturities. Non-financial assets and liabilities initially measured at fair value include assets acquired and liabilities assumed in business combinations, goodwill and asset retirement obligations.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments The Company's derivatives are accounted for as non-hedge derivatives and all changes in the fair values of its derivative contracts are recognized as gains or losses in the earnings of the periods in which they occur. The Company uses credit and other financial criteria to evaluate the credit standing of, and to select, counterparties to its derivative instruments. Although the Company does not obtain collateral or otherwise secure the fair value of its derivative instruments, associated credit risk is mitigated by the Company's credit risk policies and procedures. Commodity derivatives. As of March 31, 2023, the Company has outstanding oil derivative contracts for three thousand Bbls per day of Brent/WTI basis swaps for January 2024 through December 2024. The basis swap contracts fix the basis differential between the WTI index price (the price at which the Company buys Midland Basin oil for transport to the Gulf Coast) and the Brent index price (the price at which a portion of the Midland Basin purchased oil is sold in the Gulf Coast market) at a weighted average differential of $4.33 in order to reduce the Company's basis risk. Marketing derivatives. The Company uses marketing derivatives to diversify its oil pricing to Gulf Coast and international markets. As of March 31, 2023, the Company's marketing derivatives reflect long-term marketing contracts with Occidental Energy Marketing, Inc. ("Oxy") whereby the Company agreed to purchase and simultaneously sell, at an oil terminal in Midland, Texas, (i) 50 thousand barrels of oil per day beginning January 1, 2021 and ending December 31, 2026, (ii) 40 thousand barrels of oil per day beginning May 1, 2022 and ending April 30, 2027 and (iii) 30 thousand barrels of oil per day beginning August 1, 2022 and ending July 31, 2027. Based on the form of the long-term marketing contracts, the Company accounts for the contracts as derivative instruments not designated as hedges. See Note 4 for additional information. Conversion option derivatives. The Company's conversion option derivatives represent the change in the cash settlement obligation that occurs during the Settlement Period related to conversion options exercised by certain holders of the Convertible Notes. As of March 31, 2023 and December 31, 2022, $65 million and $29 million, respectively, of the principal amount of the Convertible Notes remained in the Settlement Period. See Note 4 and Note 7 for additional information. Fair value. The fair value of derivative financial instruments not designated as hedging instruments are as follows:
Gains and losses recorded to net derivative loss in the consolidated statements of operations related to derivative financial instruments not designated as hedging instruments are as follows:
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Exploratory Well and Project Costs |
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Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exploratory Well and Project Costs | Exploratory Well and Project Costs The Company capitalizes exploratory well and project costs until a determination is made that the well or project has either found proved reserves, is impaired or is sold. The Company's capitalized exploratory well and project costs are included in proved properties in the consolidated balance sheets. If the exploratory well or project is determined to be impaired, the impaired costs are recorded in exploration and abandonments expense in the consolidated statements of operations. The changes in capitalized exploratory well and project costs are as follows:
Aging of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period of one year or less or more than one year, based on the date drilling was completed, are as follows:
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Long-term Debt and Interest Expense |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt and Interest Expense | Long-term Debt and Interest Expense The components of long-term debt, including the effects of issuance costs and net discounts, are as follows:
Credit facility. The Company maintains a revolving corporate credit facility (the "Credit Facility") with a syndicate of financial institutions and has aggregate loan commitments of $2.0 billion. The Credit Facility has a maturity date of January 12, 2026. As of March 31, 2023, the Company had no outstanding borrowings under the Credit Facility. The Credit Facility requires the maintenance of a ratio of total debt to book capitalization, subject to certain adjustments, not to exceed 0.65 to 1.0. As of March 31, 2023, the Company was in compliance with its debt covenants. Senior notes. In March 2023, the Company issued $1.1 billion of 5.100% senior notes that will mature March 29, 2026 (the "March 2023 Senior Notes Offering"). The Company received proceeds, net of $7 million of issuance costs and discounts, of $1.1 billion. Interest on the notes is payable on March 29 and September 29 of each year. The Company's 0.550% senior notes, with a debt principal balance of $750 million, will mature in May 2023. The 0.550% senior notes are recorded in the current portion of long-term debt in the consolidated balance sheets as of March 31, 2023. The Company's senior notes are general unsecured obligations ranking equally in right of payment with all other senior unsecured indebtedness of the Company and are senior in right of payment to all existing and future subordinated indebtedness of the Company. The Company is a holding company that conducts all of its operations through subsidiaries; consequently, the senior notes are structurally subordinated to all obligations of its subsidiaries. Interest on the Company's senior notes is payable semiannually. Convertible senior notes. The Convertible Notes bear a fixed interest rate of 0.250% per year, with interest payable on May 15 and November 15 of each year. The Convertible Notes will mature on May 15, 2025, unless earlier redeemed, repurchased or converted. The Convertible Notes are unsecured obligations ranking equally in right of payment with all other senior unsecured indebtedness of the Company. The Convertible Notes are convertible into shares of the Company's common stock at an adjusted conversion rate of 10.5356 shares of the Company's common stock per $1,000 principal amount of the Convertible Notes (subject to further adjustment pursuant to the terms of the notes indenture, the "Conversion Rate"), which represents an adjusted conversion price of $94.92 per share (subject to adjustment pursuant to the terms of the notes indenture, the "Conversion Price"). Upon conversion, the Convertible Notes will be settled in cash, shares of the Company's common stock or a combination thereof, at the Company's election. Holders of the Convertible Notes may convert their notes at their option prior to February 15, 2025 under the following circumstances: •during the quarter following any quarter during which the last reported sales price of the Company's common stock for at least 20 of the last 30 consecutive trading days of such quarter exceeds 130 percent of the Conversion Price; •during the five-business day period following any five consecutive trading day period when the trading price of the Convertible Notes is less than 98 percent of the product of the last reported sales price of the Company's common stock and the Conversion Rate; •upon notice of redemption by the Company; or •upon the occurrence of specified corporate events, including certain consolidations or mergers. On or after February 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time. The Company may not redeem the Convertible Notes prior to May 20, 2023, and after such date, may redeem the Convertible Notes only if the last reported sale price of the Company's common stock has been at least 130 percent of the Conversion Price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides the notice of redemption. The redemption price is equal to 100 percent of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest. In connection with the issuance of the Convertible Notes, the Company entered into privately negotiated capped call transactions with certain financial institution counterparties (the "Capped Call"), the purpose of which was to reduce the potential dilution to the Company's common stock upon conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such converted notes, with such reduction and offset subject to a capped price. The Capped Call transactions have an adjusted strike price of $94.92 per share of common stock and an adjusted capped price of $135.07 per share of common stock. The net cost of $113 million incurred to purchase the Capped Call transactions was recorded as a reduction to additional paid-in capital in the consolidated balance sheets. As of March 31, 2023, the Convertible Notes have unamortized issuance costs of $7 million. The effective annual interest rate on the Convertible Notes is 0.6 percent. Interest expense recognized on the Convertible Notes is as follows:
Convertible Note conversions. During the last 30 consecutive trading days subsequent to the third quarter of 2021 through the first quarter of 2023, the last reported sale price of the Company's common stock exceeded 130 percent of the Conversion Price for at least 20 trading days, causing the Convertible Notes to become convertible at the option of the holders from January 1, 2022 through June 30, 2023. Certain holders of the Convertible Notes exercised their conversion option resulting in the Company recognizing the following cash payments and cash receipts associated with the conversions:
The Company recorded the conversion premiums paid, Capped Call proceeds and $7 million of associated issuance fees and deferred taxes attributable to the principal amount of the Convertible Notes converted in additional paid-in-capital. As of March 31, 2023, $65 million of the principal amount of the Convertible Notes remains in the Settlement Period. These Convertible Notes are recorded in the current portion of long-term debt in the consolidated balance sheets as of March 31, 2023. The current portion of Convertible Notes will be cash settled at the end of their respective Settlement Periods during the second quarter of 2023.
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Incentive Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plans | Incentive Plans Long-Term Incentive Plan. The Company's Amended and Restated 2006 Long-Term Incentive Plan ("LTIP") provides for the granting of various forms of awards, including stock options, stock appreciation rights, performance units, restricted stock and restricted stock units to directors, officers and employees of the Company. Stock-based compensation expense for restricted stock awards and units expected to be settled in the Company's common stock ("Equity Awards"), restricted stock units expected to be settled in cash ("Liability Awards") and performance units ("Performance Awards") issued under both the LTIP and the Company's Employee Stock Purchase Plan ("ESPP") are as follows:
______________________ (a)Liability Awards are expected to be settled on their vesting date in cash. As of March 31, 2023 and December 31, 2022, accounts payable – due to affiliates included $9 million and $6 million, respectively, of liabilities attributable to Liability Awards. As of March 31, 2023, there was $107 million of unrecognized stock-based compensation expense related to unvested stock-based compensation awards of which $15 million is attributable to Liability Awards. The unrecognized compensation expense will be recognized on a straight-line basis over the remaining requisite service periods of the awards, which is a period of less than three years on a weighted average basis. Performance Awards granted to the Company’s officers in 2023 will vest upon the achievement of certain financial performance targets over a three year period. Expense for these awards is estimated based upon the achievement of the performance targets and will be reassessed periodically. The cumulative impact of any change in estimate will be reflected in the period of the change. Activity for Equity Awards, Liability Awards, and Performance Awards is as follows:
______________________ (a)Per the terms of award agreements and elections, the issuance of common stock may be deferred for certain Equity Awards that vest during the period.
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Asset Retirement Obligations |
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations The Company's asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. Market risk premiums associated with asset retirement obligations are estimated to represent a component of the Company's credit-adjusted risk-free rate that is utilized in the calculations of asset retirement obligations. Asset retirement obligations activity is as follows:
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Commitments and Contingencies |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Indemnifications. The Company has agreed to indemnify its directors and certain of its officers, employees and agents with respect to claims and damages arising from acts or omissions taken in such capacity, as well as with respect to certain litigation. Legal actions. The Company is party to various proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on the Company's consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated. Significant judgement is required in making these estimates and the Company's final liabilities may ultimately be materially different. Environmental. Environmental expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Environmental expenditures that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. Liabilities for expenditures that will not qualify for capitalization are recorded when environmental assessment and/or remediation is probable and the costs can be reasonably estimated. Such liabilities are undiscounted unless the timing of cash payments for the liability is fixed or reliably determinable. Environmental liabilities normally involve estimates that are subject to revision until settlement or remediation occurs. Obligations following divestitures. In connection with its divestiture transactions, the Company may retain certain liabilities and provide the purchaser certain indemnifications, subject to defined limitations, which may apply to identified pre-closing matters, including matters of litigation, environmental contingencies, royalties and income taxes. The Company does not recognize a liability if the fair value of the obligation is immaterial or the likelihood of making payments under these guarantees is remote.
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions In December 2018, the Company completed the sale of its pressure pumping assets to ProPetro in exchange for 16.6 million shares of ProPetro common stock and $110 million of cash. ProPetro is considered a related party as the shares received represent 14 percent of ProPetro's outstanding common stock. In addition to the sale of equipment and related facilities, the Company entered into a long-term agreement with ProPetro for it to provide pressure pumping and related services that ended on December 31, 2022. The Company continues to utilize ProPetro for pressure pumping and related services during 2023. Phillip A. Gobe, a nonemployee member of the Company's Board of Directors (the "Board"), was appointed by the board of directors of ProPetro to serve as its Executive Chairman in October 2019 and Chief Executive Officer in March 2020, and served as Chief Executive Officer and Chairman of the board of directors of ProPetro through August 31, 2021, at which point he continued as ProPetro's Executive Chairman. In March 2022, Mr. Gobe transitioned to non-executive Chairman of the board of directors of ProPetro. Mark S. Berg, the Company's Executive Vice President, Corporate Operations, serves as a member of the ProPetro board of directors under the Company's right to designate a director to the board of directors of ProPetro so long as the Company owns five percent or more of ProPetro's outstanding common stock. Based on the Company's ownership in ProPetro and representation on the ProPetro board of directors, ProPetro is considered an affiliate. Transactions for ProPetro pressure pumping related services were capitalized in oil and gas properties or charged to other expense as incurred. ProPetro pressure pumping related service charges are as follows:
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Revenue Recognition |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue RecognitionDisaggregated revenue from contracts with purchasers. Revenues on sales of oil, NGLs, gas and purchased oil and gas are recognized when control of the product is transferred to the purchaser and payment can be reasonably assured. Sales prices for oil, NGLs and gas are negotiated based on factors normally considered in the industry, such as an index or spot price, distance from the well to the pipeline or market, commodity quality and prevailing supply and demand conditions. Accordingly, the prices received by the Company for oil, NGLs and gas generally fluctuate similar to changes in the relevant market index prices. Disaggregated revenue from contracts with purchasers by product type is as follows:
Performance obligations and contract balances. The majority of the Company's product sale commitments are short-term in nature with a contract term of one year or less. The Company typically satisfies its performance obligations upon transfer of control as described above in Disaggregated revenue from contracts with purchasers and records the related revenue in the month production is delivered to the purchaser. Settlement statements for sales of oil, NGLs, gas and sales of purchased oil and gas may not be received for 30 to 60 days after the date the volumes are delivered, and as a result, the Company is required to estimate the amount of volumes delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. As of March 31, 2023 and December 31, 2022, the accounts receivable balance representing amounts due or billable under the terms of contracts with purchasers is $1.3 billion and $1.8 billion, respectively.
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Other Expense |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense | Other Expense The components of other expense are as follows:
____________________ (a)Impairment of long-lived assets primarily represents decreases in fair value of two unoccupied field offices to their expected sales prices. (b)Primarily represents facilities expense associated with certain offices acquired as part of business combinations that are no longer occupied by the Company. (c)Represents net margins (attributable to third party working interest owners) that result from the Company's water services business, which is ancillary to and supportive of the Company's oil and gas joint operating activities, and does not represent intercompany transactions. The components of the Company's water services business net margins are as follows:
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Income Taxes |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Enactment of the Inflation Reduction Act of 2022. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the "IRA"), which includes, among other things, a corporate alternative minimum tax (the "CAMT"). Under the CAMT, a 15 percent minimum tax will be imposed on certain adjusted financial statement income of "applicable corporations," which is effective for tax years beginning after December 31, 2022. The CAMT generally treats a corporation as an "applicable corporation" in any taxable year in which the "average annual adjusted financial statement income" of the corporation and certain of its subsidiaries and affiliates for a three-taxable-year period ending prior to such taxable year exceeds $1 billion. The Company will continue to monitor and assess any impacts of the IRA on the Company's current year tax provision or the Company's consolidated financial statements. The IRA also establishes a one percent excise tax on stock repurchases made by publicly traded U.S. corporations. The excise tax is effective for any stock repurchases after December 31, 2022. During the three months ended March 31, 2023, the Company recorded $5 million to treasury stock and other noncurrent liabilities in the consolidated balance sheets related to the IRA excise tax payable on stock repurchases. Income tax provision and effective tax rate are as follows:
The Company evaluates and updates its annual effective income tax rate on an interim basis based on current and forecasted earnings and tax laws. The mix and timing of the Company's actual earnings compared to annual projections can cause interim effective tax rate fluctuations. The Company's interim effective tax rate for the three months ended March 31, 2023 and 2022 differed from the U.S. statutory rate of 21 percent primarily due to forecasted state income taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of March 31, 2023, there are no proposed adjustments in any jurisdiction that would have a significant effect on the Company's future results of operations or financial position.
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Net Income Per Share and Stockholders' Equity |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share and Stockholders' Equity | Net Income Per Share and Stockholders' Equity Net income per share. The components of basic and diluted net income per share attributable to common stockholders are as follows:
______________________ (a)Unvested Equity Awards represent participating securities because they participate in non-forfeitable dividends with the common equity owners of the Company. Participating share-based earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested Equity Awards do not participate in undistributed net losses as they are not contractually obligated to do so. The dilutive effect of the reallocation of participating share-based earnings to diluted net income attributable to common stockholders was negligible. (b)Diluted weighted average common shares outstanding includes the dilutive effect had the Company's Convertible Notes been converted as of the beginning of the three months ended March 31, 2023 and 2022, respectively. If converted by the holder, the Company may settle in cash, shares of the Company's common stock or a combination thereof, at the Company's election. See Note 7 for additional information. Stockholders' equity. The Company's return of capital strategies include payments of base and variable dividends and a stock repurchase program. The Board, at its sole discretion, may change its dividend practices and/or the Company's stock repurchase program based on the Company's outlook for commodity prices, liquidity, debt levels, capital resources, quarterly operating cash flows or other factors. Dividends declared by the Board and stock repurchased during the period are presented in the Company's consolidated statements of equity as dividends declared and purchases of treasury stock, respectively. Dividends paid and stock repurchased during the period are presented as cash used in financing activities in the Company's consolidated statements of cash flows. Dividends that are declared and have not been paid, if any, are included in other current liabilities in the consolidated balance sheets. Stock repurchases are included as treasury stock in the consolidated balance sheets. Dividends. Base and variable dividends declared by the Board during the three months ended March 31, 2023 and 2022 are as follows:
The Company can provide no assurance that dividends will be authorized or declared in the future or as to the amount of any future dividends. See Note 16 for additional information. Stock repurchase programs. In February 2022, the Board authorized a $4 billion common stock repurchase program. This authorization replaced the previously authorized $2 billion common stock repurchase program, which had $841 million remaining at the time it was replaced. Expenditures to acquire shares under the stock repurchase program are as follows:
______________________ (a)During the three months ended March 31, 2023, 2.4 million shares were repurchased under the stock repurchase program, as compared to 1.1 million shares repurchased during the three months ended March 31, 2022. Expenditures for share repurchases during the three months ended March 31, 2023 exclude the one percent excise tax on all stock repurchases after December 31, 2022. In April 2023, the Board authorized a new $4 billion common stock repurchase program to replace the aforementioned $4 billion common stock repurchase program, which had $1.9 billion remaining at the time it was replaced. As was the case with the aforementioned stock repurchase programs, the Company may repurchase shares in accordance with applicable securities laws or pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Act of 1934, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company's insider trading policy.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsDividends. On April 26, 2023, the Board declared a quarterly base dividend of $1.25 per share and a quarterly variable dividend of $2.09 per share on the Company's outstanding common stock, payable June 21, 2023 to shareholders of record at the close of business on June 1, 2023. |
Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Presentation | Presentation. In the opinion of management, the unaudited interim consolidated financial statements of the Company as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 include all adjustments and accruals, consisting only of normal, recurring adjustments and accruals necessary for a fair presentation of the results for the interim periods in conformity with GAAP. The operating results for the three months ended March 31, 2023 are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with the rules and regulations of the SEC. These unaudited interim consolidated financial statements should be read together with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
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Use of estimates in the preparation of financial statements | Use of estimates in the preparation of financial statements. Preparation of the Company's consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the estimates and assumptions utilized. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are as follows:
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Schedule of carrying values and financial instruments not carried at fair value | Carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheets are as follows:
______________________ (a)Fair value approximates carrying value due to the short-term nature of the instruments. (b)Fair value is determined using Level 2 inputs. The Company's senior notes are quoted, but not actively traded on major exchanges; therefore, fair value is based on periodic values as quoted on major exchanges. See Note 7 for additional information.
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Derivative Financial Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of offsetting asset and liability | The fair value of derivative financial instruments not designated as hedging instruments are as follows:
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Schedule of derivative gains and losses recognized on statement of operations | Gains and losses recorded to net derivative loss in the consolidated statements of operations related to derivative financial instruments not designated as hedging instruments are as follows:
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Exploratory Well and Project Costs (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of capitalized exploratory well costs, roll forward | The changes in capitalized exploratory well and project costs are as follows:
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Schedule of capitalized exploratory costs and the number of projects for which exploratory costs have been capitalized | Aging of capitalized exploratory costs and the number of projects for which exploratory well costs have been capitalized for a period of one year or less or more than one year, based on the date drilling was completed, are as follows:
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Long-term Debt and Interest Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of long-term debt | The components of long-term debt, including the effects of issuance costs and net discounts, are as follows:
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Schedule of convertible notes | Interest expense recognized on the Convertible Notes is as follows:
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Schedule of derivative instruments | Certain holders of the Convertible Notes exercised their conversion option resulting in the Company recognizing the following cash payments and cash receipts associated with the conversions:
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Incentive Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense | Stock-based compensation expense for restricted stock awards and units expected to be settled in the Company's common stock ("Equity Awards"), restricted stock units expected to be settled in cash ("Liability Awards") and performance units ("Performance Awards") issued under both the LTIP and the Company's Employee Stock Purchase Plan ("ESPP") are as follows:
______________________ (a)Liability Awards are expected to be settled on their vesting date in cash. As of March 31, 2023 and December 31, 2022, accounts payable – due to affiliates included $9 million and $6 million, respectively, of liabilities attributable to Liability Awards.
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Schedule of equity awards, liability awards, performance awards and stock options | Activity for Equity Awards, Liability Awards, and Performance Awards is as follows:
______________________ (a)Per the terms of award agreements and elections, the issuance of common stock may be deferred for certain Equity Awards that vest during the period.
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Asset Retirement Obligations (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of asset retirement obligations | Asset retirement obligations activity is as follows:
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Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions and balances | ProPetro pressure pumping related service charges are as follows:
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Revenue Recognition (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | Disaggregated revenue from contracts with purchasers by product type is as follows:
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Other Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other expense | The components of other expense are as follows:
____________________ (a)Impairment of long-lived assets primarily represents decreases in fair value of two unoccupied field offices to their expected sales prices. (b)Primarily represents facilities expense associated with certain offices acquired as part of business combinations that are no longer occupied by the Company. (c)Represents net margins (attributable to third party working interest owners) that result from the Company's water services business, which is ancillary to and supportive of the Company's oil and gas joint operating activities, and does not represent intercompany transactions.The components of the Company's water services business net margins are as follows:
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of income tax (provision) benefit and effective tax rate | Income tax provision and effective tax rate are as follows:
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Net Income Per Share and Stockholders' Equity (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of earnings attributable to common stockholders, basic and diluted | The components of basic and diluted net income per share attributable to common stockholders are as follows:
______________________ (a)Unvested Equity Awards represent participating securities because they participate in non-forfeitable dividends with the common equity owners of the Company. Participating share-based earnings represent the distributed and undistributed earnings of the Company attributable to the participating securities. Unvested Equity Awards do not participate in undistributed net losses as they are not contractually obligated to do so. The dilutive effect of the reallocation of participating share-based earnings to diluted net income attributable to common stockholders was negligible. (b)Diluted weighted average common shares outstanding includes the dilutive effect had the Company's Convertible Notes been converted as of the beginning of the three months ended March 31, 2023 and 2022, respectively. If converted by the holder, the Company may settle in cash, shares of the Company's common stock or a combination thereof, at the Company's election. See Note 7 for additional information.
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Dividends Declared | Base and variable dividends declared by the Board during the three months ended March 31, 2023 and 2022 are as follows:
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Class of Treasury Stock | Expenditures to acquire shares under the stock repurchase program are as follows:
______________________ (a)During the three months ended March 31, 2023, 2.4 million shares were repurchased under the stock repurchase program, as compared to 1.1 million shares repurchased during the three months ended March 31, 2022. Expenditures for share repurchases during the three months ended March 31, 2023 exclude the one percent excise tax on all stock repurchases after December 31, 2022.
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Acquisition, Divestiture and Nonmonetary Activities - Narrative (Divestitures) (Details) - USD ($) |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Feb. 28, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from disposition of assets | $ 4,000,000 | $ 210,000,000 | |
Midland Basin | Sold | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from disposition of assets | 85,000,000 | ||
Interest received in sale | 8,000,000 | ||
Gain (loss) on sale | $ 41,000,000 | ||
Martin County Gas Processing | Sold | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of equity method investments | $ 125,000,000 | ||
Equity method investment, realized gain (loss) on disposal | $ 0 |
Acquisition, Divestiture and Nonmonetary Activities - Narrative (Acquisitions) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
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Business Acquisition [Line Items] | ||
Gain on disposition of assets, net | $ 25 | $ 34 |
Midland Basin | Underdeveloped Acres In Midland Basin | ||
Business Acquisition [Line Items] | ||
Gain on disposition of assets, net | 24 | |
Noncash acquisition related costs | $ 162 |
Derivative Financial Instruments - Schedule of Derivative Obligations Under Terminated Hedge Arrangements (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Derivative [Line Items] | ||
Noncash derivative gain (loss), net | $ (36) | $ (67) |
Derivative gain (loss), net | (44) | (135) |
0.250% convertible senior notes due 2025 | Convertible debt | ||
Derivative [Line Items] | ||
Cash receipts (payments/deferred obligations) on settled derivatives, net | 7 | 0 |
Commodity price derivatives | ||
Derivative [Line Items] | ||
Noncash derivative gain (loss), net | (111) | |
Cash receipts (payments/deferred obligations) on settled derivatives, net | (57) | |
Derivative gain (loss), net | 0 | (168) |
Marketing derivatives | ||
Derivative [Line Items] | ||
Noncash derivative gain (loss), net | (36) | 44 |
Cash receipts (payments/deferred obligations) on settled derivatives, net | (15) | (11) |
Derivative gain (loss), net | $ (51) | $ 33 |
Exploratory Well and Project Costs - Schedule of Capitalized Exploratory Well And Project Activity (Details) $ in Millions |
3 Months Ended |
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Mar. 31, 2023
USD ($)
| |
Increase (Decrease) in Capitalized Exploratory Well Costs that are Pending Determination of Proved Reserves [Roll Forward] | |
Beginning capitalized exploratory well and project costs | $ 834 |
Additions to exploratory well and project costs pending the determination of proved reserves | 1,071 |
Reclassifications due to determination of proved reserves | (878) |
Ending capitalized exploratory well and project costs | $ 1,027 |
Exploratory Well and Project Costs - Aging of Capitalized Exploratory Costs (Details) $ in Millions |
Mar. 31, 2023
USD ($)
Well
|
Dec. 31, 2022
USD ($)
Well
|
---|---|---|
Capitalized Exploratory Well Costs [Abstract] | ||
One year or less | $ 1,027 | $ 834 |
More than one year | 0 | 0 |
Total capitalized exploratory well costs | $ 1,027 | $ 834 |
Number of projects with exploratory well costs that have been suspended for a period greater than one year | Well | 0 | 0 |
Long-term Debt and Interest Expense - Interest Costs (Details) - 0.250% convertible senior notes due 2025 - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Debt Instrument [Line Items] | ||
Contractual coupon interest | $ 1 | $ 1 |
Amortization of capitalized loan fees | 1 | 1 |
Total interest expense on convertible notes | $ 2 | $ 2 |
Long-term Debt and Interest Expense - Convertible Notes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Derivative [Line Items] | ||
Principal repayments | $ 230 | $ 1,292 |
0.250% convertible senior notes due 2025 | Convertible debt | ||
Derivative [Line Items] | ||
Principal repayments | 92 | 0 |
Conversion premiums | 138 | 0 |
Cash payments | 230 | 0 |
Capped Call proceeds | 31 | 0 |
Conversion option derivative payments, net | 7 | 0 |
Cash receipts, net | $ 38 | $ 0 |
Incentive Plans - Schedule of Compensation Expense for Each Type of Incentive Award (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 26 | $ 28 | |
Capitalized stock-based compensation expense | 4 | 5 | |
Equity Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 13 | 11 | |
Liability Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 3 | 9 | |
Amount of liabilities attributable to liability awards included in accounts payable | 9 | $ 6 | |
Performance Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 9 | 7 | |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1 | $ 1 |
Incentive Plans - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 107 |
Vesting period | 3 years |
Liability Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 15 |
Performance Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Asset Retirement Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning asset retirement obligations | $ 477 | |
New wells placed on production | 1 | |
Changes in estimates | (20) | |
Liabilities settled | (16) | |
Accretion of discount | 4 | $ 4 |
Ending asset retirement obligations | 446 | |
Less current portion of asset retirement obligations | (125) | |
Asset retirement obligations, long-term | $ 321 |
Related Party Transactions (Details) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Dec. 31, 2018 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 01, 2023 |
Dec. 31, 2022 |
Mar. 31, 2019 |
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Related Party Transaction [Line Items] | ||||||
Right to designate director, ownership percent | 5.00% | |||||
Pressure pumping related service charges | $ (42) | $ (112) | ||||
Accounts payable - due to affiliate | $ 29 | $ 44 | ||||
ProPetro | ProPetro | ||||||
Related Party Transaction [Line Items] | ||||||
Percent ownership | 14.00% | |||||
ProPetro | Pressure pumping assets | Sale of assets | ||||||
Related Party Transaction [Line Items] | ||||||
Shares received (in shares) | 16.6 | |||||
Short-term receivables | $ 110 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Billions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable balance representing amounts due or billable | $ 1.3 | $ 1.8 |
Other Expense - Schedule of Components of Other Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Other Income and Expenses [Abstract] | ||
Legal and environmental contingencies (Note 10) | $ 16 | $ 2 |
Impairment of long-lived assets | 11 | 0 |
Unoccupied facility expense (b) | 9 | 16 |
Loss on early extinguishment of debt (Note 7) | 0 | 47 |
Water services net income (c) | (4) | 0 |
Other | 9 | 12 |
Total other expense | 41 | 77 |
Gross revenues included in third party loss from vertical integration services | 13 | 8 |
Gross expenses included in third party loss from vertical integration services | $ 9 | $ 8 |
Income Taxes - Schedule of Income Tax Provision (Expense) and Effective Tax Rate (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
IRS excise taxes payable | $ 5 | |
Current tax provision | (225) | $ (20) |
Deferred tax provision | (110) | (532) |
Income tax provision | $ (335) | $ (552) |
Effective tax rate | 22.00% | 22.00% |
Net Income (Loss) Per Share and Stockholders' Equity - Reconciliation of Earnings Attributable to Common Stockholders, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to common stockholders | $ 1,222 | $ 2,009 |
Participating share-based earnings | (3) | (5) |
Basic net income attributable to common stockholders | 1,219 | 2,004 |
Adjustment to after-tax interest expense to reflect the dilutive impact attributable to Convertible Notes | 1 | 1 |
Diluted net income attributable to common stockholders | $ 1,220 | $ 2,005 |
Basic weighted average shares outstanding (in shares) | 235 | 243 |
Convertible Notes dilution (in shares) | 9 | 13 |
Diluted weighted average shares outstanding (in shares) | 244 | 256 |
Basic (usd per share) | $ 5.19 | $ 8.25 |
Diluted (usd per share) | $ 5.00 | $ 7.85 |
Net Income (Loss) Per Share and Stockholders' Equity - Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | |||
Common stock, dividends, per share, declared, base (usd per share) | $ 1.10 | $ 0.78 | |
Common stock, dividends, per share, declared (usd per share) | 4.48 | 3.00 | |
Dividends declared (usd per share) | $ 5.58 | $ 3.78 | $ 3.78 |
Dividends, common stock, cash | $ 1,314 | $ 922 |
Net Income (Loss) Per Share and Stockholders' Equity - Narrative (Details) - Common stock repurchase program - USD ($) shares in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Apr. 27, 2023 |
Feb. 28, 2022 |
Dec. 31, 2021 |
|
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount | $ 4,000,000,000 | $ 2,000,000,000 | |||
Remaining authorized amount | $ 1,900,000,000 | $ 841,000,000 | |||
Purchases of treasury stock (in shares) | 500.0 | 250.0 | |||
Stock repurchased during period (in shares) | 2.4 | 1.1 | |||
Subsequent event | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Authorized amount | $ 4,000,000,000 |
Subsequent Events (Details) - $ / shares |
3 Months Ended | ||||
---|---|---|---|---|---|
Jun. 01, 2023 |
Apr. 26, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Subsequent Event [Line Items] | |||||
Dividends declared (usd per share) | $ 5.58 | $ 3.78 | $ 3.78 | ||
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Quarterly base dividend declared (usd per share) | $ 1.25 | ||||
Dividends declared (usd per share) | $ 2.09 |
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