Divestitures

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Divestitures

In 2018, the Company sold its non-core production and related midstream assets located in the Huron play and Permian Basin (the 2018 Divestitures). For the year ended December 31, 2018, as a result of the 2018 Divestitures, the Company recorded an impairment/loss on sale of long-lived assets of $2.4 billion due to the carrying value of the properties and related pipeline assets exceeding the amounts received for the 2018 Divestitures.

The fair value of the impaired assets was based on significant inputs that are not observable in the market and, as such, are considered to be Level 3 fair value measurements. See Note 5 for a description of the fair value hierarchy and Note 1 for the Company's policy on impairment of proved and unproved properties. Key assumptions included in the calculation of the fair value of the impaired assets included the following: reserves, including risk adjustments for probable and possible reserves; future commodity prices; to the extent available, market-based indicators of fair value including estimated proceeds that could be realized upon a potential disposition; production rates based on the Company's experience with similar properties it operates; estimated future operating and development costs; and a market-based weighted average cost of capital.

In connection with the closing of the 2018 Divestitures, the Company recorded a loss of $259.3 million during the third quarter of 2018 related to certain capacity contracts that the Company no longer has existing production to satisfy and does not plan to

use in the future. The loss was recorded in impairment/loss on sale/exchange of long-lived assets in the Statement of Consolidated Operations. The fair value of the loss for the initial measurement was based on significant inputs that are not observable in the market and, as such, is considered a Level 3 fair value measurement. The key unobservable input in the calculation is the amount of potential future economic benefit from the contracts. See Note 5 for a description of the fair value hierarchy.