Divestitures

9 Months Ended

Sep. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

DIVESTITURES

On August 30, 2018, the Company entered into an agreement with Flywheel Energy Operating, LLC to sell 100% of the equity in the Company’s subsidiaries that owned and operated its Fayetteville Shale E&P and related midstream gathering assets for $1,865 million in cash, subject to customary closing adjustments, with an economic effective date of July 1, 2018. On December 3, 2018, the Company closed on the Fayetteville Shale sale and received approximately $1,650 million, which included purchase price adjustments of approximately $215 million primarily related to the net cash flows from the economic effective date to the closing date.

The Company retained certain contractual commitments related to firm transportation, with the buyer obligated to pay the transportation provider directly for these charges. As of September 30, 2019, approximately $135 million of these contractual commitments remain of which the Company will reimburse the buyer for certain of these potential obligations up to approximately $70 million through 2020 depending on the buyer’s actual use. At September 30, 2019, the Company has recorded a $57 million liability for the estimated future payments.

In accordance with accounting guidance for Property, Plant and Equipment, assets held for sale are measured at the lower of the carrying value or fair value less costs to sell. Because the assets outside of the full cost pool included in the Fayetteville Shale sale met the criteria for held for sale accounting as of September 30, 2018, the Company determined the carrying value of certain non-full cost pool assets exceeded the fair value less costs to sell. As a result, an impairment charge of $161 million was recorded during the three and nine months ended September 30, 2018, of which $145 million related to midstream gathering assets held for sale and $15 million related to E&P assets held for sale. Additionally, the Company recorded a $1 million impairment related to other non-core assets that were not included in the sale.

From the proceeds received, $914 million was used to repurchase $900 million of the Company’s outstanding senior notes, including premiums and $9 million in accrued interest paid in December 2018. In addition, $201 million, including approximately $1 million in commissions, was used to repurchase approximately 44 million shares of the Company’s outstanding common stock, including $21 million during the first quarter of 2019. The Company earmarked the remaining net proceeds from the sale to supplement Appalachian Basin development and for general corporate purposes.

In June 2019, the Company sold non-core acreage for $25 million. There was no production or proved reserves associated with this acreage. In addition, during July 2019, the Company sold the land associated with its headquarters office building for $16 million, and recognized a $2 million gain on the sale. The Company also from time to time sells leases and other properties whose value, individually, is not material but is reflected in the Company’s financial statements.