Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Carrying Amount and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of March 31, 2020 and December 31, 2019 were as follows:


	March 31, 2020									December 31, 2019
(in millions)	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Cash and cash equivalents	$	5		$	5		$	5		$	5
2018 revolving credit facility due April 2024	149			149			34			34
Senior notes⁽¹⁾	2,148			1,460			2,228			2,085
Derivative instruments, net	401		⁽²⁾	401		⁽²⁾	155		⁽²⁾	155		⁽²⁾

(1)Excludes unamortized debt issuance costs and debt discounts.

(2)Includes $9 million in premiums paid related to certain natural gas fixed price swaps recognized as a component of derivative assets within current assets on the consolidated balance sheet.

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:


	March 31, 2020
	Fair Value Measurements Using:
(in millions)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets (Liabilities) at Fair Value
Assets
Purchased fixed price swaps	$	—	$	1	$	—	$	1
Fixed price swaps ⁽¹⁾	—		384		—		384
Two-way costless collars	—		50		—		50
Three-way costless collars	—		325		—		325
Basis swaps	—		27		—		27
Purchased call options	—		4		—		4


Liabilities
Purchased fixed price swaps	—		(8)		—		(8)

Two-way costless collars	—		(25)		—		(25)
Three-way costless collars	—		(309)		—		(309)
Basis swaps	—		(22)		—		(22)
Sold call options	—		(24)		—		(24)
Purchased fixed price swaps – storage	—		(1)		—		(1)
Interest rate swaps	—		(1)		—		(1)
Total⁽²⁾	$	—	$	401	$	—	$	401

(1)Includes $9 million in premiums paid related to certain natural gas fixed price swaps recognized as a component of derivative assets within current assets on the consolidated balance sheet at March 31, 2020. As certain natural gas fixed price swaps settle, the premium will be amortized and recognized as a component of gain (loss) on derivatives on the consolidated statements of operations.

(2)Includes a net fair value reduction of less than $1 million related to estimated nonperformance risk.


	December 31, 2019
	Fair Value Measurements Using:
(in millions)	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Assets (Liabilities) at Fair Value
Assets

Fixed price swaps ⁽¹⁾	$	—	$	124	$	—	$	124
Two-way costless collars	—		21		—		21
Three-way costless collars	—		210		—		210
Basis Swaps	—		32		—		32
Purchased call options	—		3		—		3
Fixed price swaps - storage	—		1		—		1
Liabilities
Purchased fixed price swaps	—		(1)		—		(1)
Fixed price swaps	—		(9)		—		(9)
Two-way costless collars	—		(13)		—		(13)
Three-way costless collars	—		(168)		—		(168)
Basis Swaps	—		(26)		—		(26)
Sold call options	—		(19)		—		(19)


Total	$	—	$	155	$	—	$	155

(1)Includes $9 million in premiums paid related to certain natural gas fixed price swaps recognized as a component of derivative assets within current assets on the consolidated balance sheet at December 31, 2019. As certain natural gas fixed price swaps settle, the premium will be amortized and recognized as a component of gain (loss) on derivatives on the consolidated statements of operations.