Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Unsettled Derivative Instruments As of September 30, 2013, we had entered into the following crude oil derivative instruments:



				Swaps		Options		Collars
Settlement Period	Type of Contract	Index	Bbls Per Day	Weighted Average Fixed Price		Put Option Premium		Weighted Average Short Put Price		Weighted Average Floor Price		Weighted Average Ceiling Price
Instruments Entered Into as of September 30, 2013
2013	Swaps	NYMEX WTI ⁽¹⁾	9,000	$	90.16	$	—	$	—	$	—	$	—
2013	Swaps	Dated Brent	3,000	98.03		—		—		—		—
2013	Two-Way Collars	NYMEX WTI	5,000	—		—		—		95.00		115.00
2013	Three-Way Collars	NYMEX WTI	7,000	—		—		63.57		83.57		109.04
2013	Three-Way Collars	Dated Brent	13,000	—		—		81.15		100.75		124.68
2013	Put Options⁽²⁾	NYMEX WTI	11,000	—		5.97		—		97.60		—
2014	Swaps	NYMEX WTI	37,000	92.67		—		—		—		—
2014	Swaps	Dated Brent	13,000	103.21		—		—		—		—
2014	Three-Way Collars	NYMEX WTI	12,000	—		—		75.67		90.67		100.88
2014	Three-Way Collars	Dated Brent	8,000	—		—		84.38		98.25		121.56
2015	Swaps	NYMEX WTI	16,000	87.66		—		—		—		—
2015	Swaps	Dated Brent	5,000	99.04		—		—		—		—
2015	Three-Way Collars	NYMEX WTI	15,000	—		—		70.67		88.00		94.78
2015	Three-Way Collars	Dated Brent	8,000	—		—		75.00		95.00		109.71


⁽¹⁾	West Texas Intermediate

⁽²⁾

For put options, we typically pay a premium to the counterparty in exchange for the sale of the instrument. If the index price is below the floor price of the put option, we receive the difference between the floor price and the index price multiplied by the contract volumes less the option premium at the time of settlement. If the index price settles at or above the floor price of the put option, we pay only the put option premium at the time of settlement.

As of September 30, 2013, we had entered into the following natural gas derivative instruments:



				Swaps		Collars
Settlement Period	Type of Contract	Index	MMBtu Per Day	Weighted Average Fixed Price		Weighted Average Short Put Price		Weighted Average Floor Price		Weighted Average Ceiling Price
Instruments Entered Into as of September 30, 2013
2013	Swaps	NYMEX HH ⁽¹⁾	60,000	$	4.58	$	—	$	—	$	—
2013	Two-Way Collars	NYMEX HH	40,000	—		—		3.25		5.14
2013	Three-Way Collars	NYMEX HH	100,000	—		3.88		4.75		5.63
2014	Swaps	NYMEX HH	60,000	4.24		—		—		—
2014	Three-Way Collars	NYMEX HH	230,000	—		2.83		3.75		4.98
2015	Swaps	NYMEX HH	80,000	4.32		—		—		—
2015	Three-Way Collars	NYMEX HH	120,000	—		3.54		4.25		5.06


⁽¹⁾	Henry Hub

Fair Value of Derivative Instruments

Fair Value Amounts and Gains and Losses on Derivative Instruments The fair values of derivative instruments in our consolidated balance sheets were as follows:



Fair Value of Derivative Instruments
	Asset Derivative Instruments						Liability Derivative Instruments
	September 30, 2013			December 31, 2012			September 30, 2013			December 31, 2012
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
(millions)
Commodity Derivative Instruments	Current Assets	$	15	Current Assets	$	63	Current Liabilities ⁽¹⁾	$	39	Current Liabilities	$	7
	Noncurrent Assets	31		Noncurrent Assets	21		Noncurrent Liabilities	2		Noncurrent Liabilities	3
Total		$	46		$	84		$	41		$	10

⁽¹⁾Includes $6 million of deferred put option premium.

Effect of derivative instruments on consolidated statement of operations

The effect of derivative instruments on our consolidated statements of operations was as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
(millions)
Realized Mark-to-Market (Gain) Loss
Crude Oil	$	24		$	17		$	39		$	68
Natural Gas	(14		)	(13		)	(37		)	(40		)
Total Realized Mark-to-Market (Gain) Loss	10			4			2			28
Unrealized Mark-to-Market (Gain) Loss
Crude Oil	143			112			60			(97		)
Natural Gas	4			19			7			23
Total Unrealized Mark-to-Market (Gain) Loss	147			131			67			(74		)
Total (Gain) Loss on Commodity Derivative Instruments	$	157		$	135		$	69		$	(46	)

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

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- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

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- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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