Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Operating Commitments and Contingencies

As of September 30, 2019, the Company’s contractual obligations for demand and similar charges under firm transportation and gathering agreements to guarantee access capacity on natural gas and liquids pipelines and gathering systems totaled approximately $8.2 billion, $752 million of which related to access capacity on future pipeline and gathering infrastructure projects that still require the granting of regulatory approvals and additional construction efforts. The Company also had guarantee obligations of up to $323 million of that amount. As of September 30, 2019, future payments under non-cancelable firm transportation and gathering agreements were as follows:


	Payments Due by Period
(in millions)	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		5 to 8 Years		More than 8 Years
Infrastructure currently in service	$	7,442	$	681	$	1,272	$	1,075	$	1,528	$	2,886
Pending regulatory approval and/or construction ⁽¹⁾	752		19		73		75		139		446
Total transportation charges	$	8,194	$	700	$	1,345	$	1,150	$	1,667	$	3,332

(1)Based on estimated in-service dates as of September 30, 2019.

In December 2018, the Company closed the Fayetteville Shale sale. 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 December 2020 depending on the buyer’s actual use, and has recorded a $57 million liability for the estimated future payments, down from $88 million recorded at December 31, 2018.

In the first quarter of 2019, the Company agreed to purchase firm transportation with pipelines in the Appalachian Basin starting in 2021 and running through 2032 totaling $357 million in total contractual commitments, which is presented in the table above; the seller has agreed to reimburse $133 million of these commitments.

In July 2019, the Company terminated its existing lease agreement and entered into a new lease agreement for a smaller portion of the headquarters office building, resulting in a contractual commitment totaling $87 million over the next ten years as of September 30, 2019.

Environmental Risk

The Company is subject to laws and regulations relating to the protection of the environment. Environmental and cleanup related costs of a non-capital nature are accrued when it is both probable that a liability has been incurred and when the amount can be reasonably estimated. Management believes any future remediation or other compliance related costs will not have a material effect on the financial position, results of operations or cash flows of the Company.

Litigation

The Company is subject to various litigation, claims and proceedings that have arisen in the ordinary course of business, such as for alleged breaches of contract, miscalculation of royalties, employment matters, traffic accidents, pollution, contamination, encroachment on others’ property or nuisance. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. As of September 30, 2019, the Company does not currently have any material amounts accrued related to litigation matters. For any matters not accrued for, it is not possible at this time to estimate the amount of any additional loss, or range of loss, that is reasonably possible, but, based on the nature of the claims, management believes that current litigation, claims and proceedings, individually or in aggregate and after taking into account insurance, are not likely to have a material adverse impact on the Company’s financial position, results of operations or cash flows, for the period in which the effect of that outcome becomes reasonably estimable. Many of these matters are in early stages, so the allegations and the damage theories have not been fully developed, and are all subject to inherent uncertainties; therefore, management’s view may change in the future.

As of September 30, 2019, all certified class actions against the Company regarding royalty payments in Arkansas have been resolved favorably to the Company or settled. Some actions filed on behalf of mineral interest owners who opted out of the class actions remain pending, but the Company does not expect these cases to have a material impact on its financial position, results of operations, or cash flows.

Indemnifications

The Company has provided certain indemnifications to various third parties, including in relation to asset and entity dispositions, securities offerings and other financings. In the case of asset dispositions, these indemnifications typically relate to disputes, litigation or tax matters existing at the date of disposition. The Company likewise obtains indemnification for future matters when it sells assets, although there is no assurance the buyer will be capable of performing those obligations. In the case of equity offerings, these indemnifications typically relate to claims asserted against underwriters in connection with an offering. No material liabilities have been recognized in connection with these indemnifications.