Asset Impairments

3 Months Ended

Mar. 31, 2016

5. Asset Impairments

The following table presents the asset impairments recognized by Devon in the first three months of 2016 and 2015, respectively.



	Three Months Ended March 31,
	2016		2015

	(Millions)
U.S. oil and gas assets	$	1,608	$	5,458
Canada oil and gas assets		554		-
EnLink goodwill		873		-
Other assets		-		2
Total asset impairments	$	3,035	$	5,460

Oil and Gas Impairments

Under the full cost method of accounting, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the full cost “ceiling” at the end of each quarter. The ceiling is calculated separately for each country and is based on the present value of estimated future net cash flows from proved oil and gas reserves, discounted at 10% per annum, net of related tax effects. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months.

The oil and gas impairments resulted from declines in the U.S. and Canada full cost ceilings. The lower ceiling values resulted primarily from significant decreases in the 12-month average trailing prices for oil, bitumen, gas and NGLs, which significantly reduced proved reserves values and, to a lesser degree, proved reserves.

EnLink Goodwill Impairments

In the first quarter of 2016, Devon recognized goodwill impairments related to EnLink’s business. Additional information regarding the impairments is discussed in Note 13.