Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Note 12. Commitments and Contingencies

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.

Colorado Air Matter In April 2015, we entered into a joint consent decree (Consent Decree) with the US Environmental Protection Agency (EPA), US Department of Justice, and State of Colorado to improve emission control systems at a number of our condensate storage tanks that are part of our upstream crude oil and natural gas operations within the Non-Attainment Area of the DJ Basin. Costs associated with the settlement consist of $5 million in civil penalties which were paid in 2015. Mitigation costs of $4 million and supplemental environmental project costs of $4 million are being expended in accordance with schedules established in the Consent Decree. Costs associated with the injunctive relief, including plugging and abandonment of certain wells and facilities, are also being expended in accordance with schedules established in the Consent Decree.

We have concluded that the penalties, injunctive relief and mitigation expenditures that result from this settlement, based on currently available information, will not have a material adverse effect on our financial position, results of operations or cash flows. See Note 7. Asset Retirement Obligations.

Colorado Water Quality Control Division Matter In October 2019, we resolved by Compliance Order on Consent (COC) with the Colorado Department of Public Health & Environment allegations of noncompliance with the Colorado Water Quality Act relating to our Colorado Discharge Permit System General Permit for construction activities associated with oil and gas exploration and/or production within our Wells Ranch Drilling and Production field located in Weld County, Colorado. The COC required us to pay a penalty of $57 thousand and to contribute $126 thousand toward a State-managed supplemental environmental project. We have concluded that the resolution of this action did not have a material adverse effect on our financial position, results of operations or cash flows.

Colorado Clean Water Act Referral Notice In September 2018, we received a letter from the US Department of Justice providing notification of referral from the EPA of alleged Clean Water Act violations at an upstream production facility and a midstream gathering facility in Weld County, Colorado. In April 2019, we met with the DOJ and Environmental Protection Agency enforcement personnel to discuss potential settlement of the alleged violations. Given the ongoing status of settlement discussions, we are currently unable to predict the ultimate outcome of this action, but believe the resolution will not have a material adverse effect on our financial position, results of operations or cash flows.

Marcellus Shale Firm Transportation Obligations As part of our Marcellus Shale upstream divestiture, we retained certain transportation obligations to flow Marcellus Shale natural gas production to various markets. See Note 11. Exit Cost – Transportation Commitments.

Other Gathering and Transportation Obligations As part of our normal course of business, we enter into agreements to transport minimum volumes in the US onshore and Eastern Mediterranean. In the US onshore, primarily in the DJ Basin, certain of these contracts require us to make payments for any shortfalls in delivering or transporting minimum volumes under the commitments. As properties are undergoing development activities, we may experience temporary shortfalls until production volumes increase to meet or exceed the minimum volume commitments and will incur expense related to volume deficiencies and/or unutilized commitments. We expect to continue to incur expense related to deficiency and/or unutilized commitments in the near-term. These amounts are recorded as marketing expense in our consolidated statements of operations. In the Eastern Mediterranean, regional export contracts contain minimum transportation commitments. For US onshore and Eastern Mediterranean agreements, which have remaining terms of one to 12 years, our total financial commitment is approximately $921 million, undiscounted. The commitments are included in the table below.

Mezzanine Equity Commitment In March 2019, Noble Midstream Partners obtained a $200 million preferred equity commitment. $100 million of the commitment funded immediately and the remaining $100 million is available for funding until March 2020, subject to certain conditions precedent. See Note 1. Summary of Significant Accounting Policies and Note 4. Acquisitions and Divestitures.

Minimum Commitments Minimum commitments as of December 31, 2019 consist of the following:



(millions)	Purchase and Service Obligations		Marcellus Shale Firm Transportation Obligations⁽¹⁾		Gathering, Transportation & Processing Obligations ⁽²⁾		Operating Lease Obligations ⁽³⁾		Finance Lease Obligations ⁽³⁾		Total
2020	$	135	$	143	$	174	$	100	$	52	$	604
2021	28		102		176		60		38		404
2022	14		85		156		41		27		323
2023	30		83		153		26		23		315
2024	2		92		149		15		21		279
2025 and Thereafter	72		675		334		37		86		1,204
Total	$	281	$	1,180	$	1,142	$	279	$	247	$	3,129


⁽¹⁾	Amount includes exit cost obligations resulting from permanent capacity assignments. See Note 11. Exit Cost – Transportation Commitments.


⁽²⁾	Amount includes US onshore and Eastern Mediterranean transportation obligations of $921 million, undiscounted, and Noble Midstream Partners obligations of $221 million, undiscounted.

⁽³⁾

See Note 9. Leases.