Inventory, Linefill and Base Gas and Long-term Inventory

9 Months Ended

Sep. 30, 2015

Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, Linefill and Base Gas and Long-term Inventory

Note 5—Inventory, Linefill and Base Gas and Long-term Inventory

Inventory, linefill and base gas and long-term inventory consisted of the following as of the dates indicated (barrels and natural gas volumes in thousands and carrying value in millions):

	September 30, 2015						December 31, 2014
		Unit of	Carrying		Price/			Unit of	Carrying		Price/
	Volumes	Measure	Value		Unit (1)		Volumes	Measure	Value		Unit (1)
Inventory
Crude oil	11,796	barrels	$	475	$	40.27	6,465	barrels	$	304	$	47.02
NGL	18,461	barrels		272	$	14.73	13,553	barrels		454	$	33.50
Natural gas	17,923	Mcf		48	$	2.68	32,317	Mcf		102	$	3.16
Other	N/A			42		N/A	N/A			31		N/A
Inventory subtotal				837						891
Linefill and base gas
Crude oil	12,327	barrels		724	$	58.73	11,810	barrels		744	$	63.00
NGL	1,348	barrels		45	$	33.38	1,212	barrels		52	$	42.90
Natural gas	30,812	Mcf		141	$	4.58	28,612	Mcf		134	$	4.68
Linefill and base gas subtotal				910						930
Long-term inventory
Crude oil	3,434	barrels		143	$	41.64	2,582	barrels		136	$	52.67
NGL	1,652	barrels		23	$	13.92	1,681	barrels		50	$	29.74
Long-term inventory subtotal				166						186
Total			$	1,913					$	2,007

⁽¹⁾ Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.

At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Condensed Consolidated Statements of Operations. We recorded a charge of $25 million during the nine months ended September 30, 2015, which primarily related to the writedown of our NGL inventory due to declines in prices during the first quarter of 2015. The loss was substantially offset by a portion of the derivative mark-to-market gain that was recognized in the fourth quarter of 2014. See Note 8 for discussion of our derivative and risk management activities. During the nine months ended September 30, 2014, we recorded a charge of $37 million related to the writedown of our natural gas inventory that was purchased in conjunction with managing natural gas storage deliverability requirements during the extended period of severe cold weather in the first quarter of 2014.