Impairment

9 Months Ended

Sep. 30, 2024

Asset Impairment Charges [Abstract]

Impairment

8. Impairment

In the third quarter of 2024, we recorded a pre-tax charge of $92 million ($92 million after income taxes) to fully impair the net book value of our interests in Conger, a mature field in the Gulf of Mexico, due to a mechanical issue on one of the main producing wells. Significant inputs used in determining future net cash flows include future prices, estimated expenditures to remedy the mechanical issue, and projected production volumes using risk adjusted oil and gas reserves. Future pricing assumptions were based on forward strip crude oil prices as of September 30, 2024 to the end of field life. Estimated expenditures to remedy the mechanical issue reflect the use of a deepwater drilling rig, and the nature and scope of the work required to return the well to production. A pre-tax charge of $40 million ($38 million after income taxes) was also recorded in the third quarter of 2024 resulting from revisions to our estimated abandonment liabilities for uneconomic properties, primarily in the Gulf of Mexico.

In the second quarter of 2023, we recognized a pre-tax charge of $82 million ($82 million after income taxes) that resulted from revisions to estimated costs to abandon certain wells, pipelines and production facilities in the West Delta field in the Gulf of Mexico. These abandonment obligations were assigned to us as a former owner after they were discharged from Fieldwood Energy LLC as part of its approved bankruptcy plan in 2021.