Exit Costs - Transportation Commitments

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Note 9. Exit Cost – Transportation Commitments

In connection with the divestiture of Marcellus Shale upstream assets in 2017, we retained certain long-term financial commitments to pay transportation fees on certain pipelines in the Marcellus Basin. As of September 30, 2019, our undiscounted financial commitment for the remaining obligations under these agreements was approximately $1.0 billion, which excludes the impact of future mitigation activities. Our efforts to mitigate and thereby reduce these obligations primarily include permanent assignment of capacity, negotiation of capacity releases and utilization of capacity through purchase and

transport of third-party natural gas. Revenues and expenses associated with mitigation activities are recorded in sales of purchased oil and gas and cost of purchased oil and gas, respectively, in our consolidated statements of operations.

Leach Xpress and Rayne Xpress Permanent Assignment In January 2019, we executed agreements on the Leach Xpress and Rayne Xpress pipelines to permanently assign remaining capacity to a third-party effective January 1, 2021, extending through the end of the contract. The permanent assignment reduced our total financial commitment by approximately $350 million, undiscounted. As a result of the assignment, we recorded firm transportation exit cost of $92 million, discounted, related to future commitments to the third party. We will continue efforts to mitigate the remaining component of these transportation agreements through 2020.

Exit Costs Reconciliation of accrued costs at September 30, 2019 is as follows:



	Nine Months Ended September 30,
(millions)	2019			2018
Balance at Beginning of Period ⁽¹⁾	$	80		$	90
Firm Transportation Exit Cost Accrual	92			—
Payments, Net of Accretion	(6		)	(9		)
Balance at End of Period	166			81
Less: Current Portion Included in Other Current Liabilities	33			12
Long-term Portion Included in Other Noncurrent Liabilities	$	133		$	69

⁽¹⁾

Amounts include the current portion of $13 million which is included in other current liabilities in our consolidated balance sheets.