Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

CONSOL Carried Cost Obligation In accordance with our Marcellus Shale joint venture arrangement with a subsidiary of CONSOL Energy Inc. (CONSOL), we agreed to fund one-third of CONSOL's 50% working interest share of future drilling and completion costs, capped at $400 million each year, up to approximately $2.1 billion (CONSOL Carried Cost Obligation).

The CONSOL Carried Cost Obligation is suspended if average Henry Hub natural gas prices fall and remain below $4.00 per MMBtu in any three consecutive month period and remain suspended until average Henry Hub natural gas prices equal or exceed $4.00 per MMBtu for three consecutive months. Due to low natural gas prices, the CONSOL Carried Cost Obligation was suspended from the end of 2011 until February 28, 2014. We began funding a portion of CONSOL's working interest share of certain drilling and completion costs as of March 1, 2014. Based on the September 30, 2014 NYMEX Henry Hub natural gas price curve and current development plans, we forecast we will incur approximately $185 million under the CONSOL Carried Cost Obligation for the year ended December 31, 2014.

Marcellus Shale Firm Transportation Agreements During 2014, we signed Precedent Agreements for Firm Transportation (the Agreements) to flow 445,000 MMBtu per day of our Marcellus Shale natural gas production to various markets. The Agreements are for transportation services on new pipeline extensions to be constructed by, and connecting to, an existing third-party system. The pipeline extensions are expected to be complete and operational in 2017 and 2018. Our financial commitment totals approximately $1.2 billion, undiscounted, over a 15-year period. Final agreements are subject to various conditions, including regulatory approval of the pipeline extension projects.

Legal Proceedings  We are involved in various legal proceedings in the ordinary course of business.  These proceedings are subject to the uncertainties inherent in any litigation.  We are defending ourselves vigorously in all such matters and we believe that the ultimate disposition of such proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.