EQUITY METHOD INTERESTS

12 Months Ended

Dec. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

As of December 31, 2023 and 2022, the Company recorded $437 million and $624 million, respectively, for ownership of its Kinetik Shares. The Company’s Kinetik Shares are treated as an interest in equity securities measured at fair value. The Company elected the fair value option for measuring its equity method interest in Kinetik based on practical expedience, variances in reporting timelines, and cost-benefit considerations. The fair value of the Company’s interest in Kinetik is determined using observable share prices on a major exchange, a Level 1 fair value measurement. Fair value adjustments are recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The Company’s initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million Kinetik Shares as of February 22, 2022. In March 2022, the Company sold four million of its Kinetik Shares for cash proceeds of $224 million. Refer to Note 3–Acquisitions and Divestitures for further detail. During the second quarter of 2022, Kinetik issued a two-for-one split of its common stock, resulting in the Company owning approximately 17.7 million Kinetik Shares. In December 2023, the Company sold 7.5 million of its Kinetik Shares for cash proceeds of $228 million.

The Company has received approximately 2.9 million Kinetik Shares as paid-in-kind dividends through December 31, 2023. As of December 31, 2023, the Company owned 13.1 million Kinetik Shares, representing approximately 9 percent of Kinetik’s outstanding common stock.

The Company recorded changes in the fair value of its equity method interest in Kinetik totaling gains of $41 million and $72 million during 2023 and 2022, respectively. The balance of the Company’s equity method interest in Kinetik was also impacted by the sales of Kinetik Shares noted above during 2023 and 2022.

The following table represents related party sales and costs associated with Kinetik:


	For the Year Ended December 31,
	2023		2022

	(In millions)
Natural gas and NGLs sales	$	64	$	8
Purchased oil and gas sales	29		—
	$	93	$	8

Gathering, processing, and transmission costs	$	99	$	91
Purchased oil and gas costs	80		—
Lease operating expenses	7		—
	$	186	$	91

As of December 31, 2023 and 2022, the Company has recorded accrued costs payable to Kinetik of approximately $27 million and $17 million, respectively, and accrued receivables from Kinetik of approximately $13 million and $8 million, respectively.