Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Operating Commitments and Contingencies

As of December 31, 2020, 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 $8.5 billion, $531 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 $923 million of that amount. As of December 31, 2020, future payments under non-cancelable firm transportation and gathering agreements are 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 (1)	$	8,013	$	860	$	1,532	$	1,286	$	1,813	$	2,522
Pending regulatory approval and/or construction (2)	531		2		30		37		88		374
Total transportation charges	$	8,544	$	862	$	1,562	$	1,323	$	1,901	$	2,896

(1)With the close of the Montage Merger the Company acquired firm transportation commitments of approximately $1,100 million. These commitments approximate $99 million within the next year, $197 million from 1 to 3 years, $196 million from 3 to 5 years, $284 million from 5 to 8 years and $324 million beyond 8 years.

(2)Based on the estimated in-service dates as of December 31, 2020.

The Company leases pressure pumping equipment for its E&P operations under a single lease that expires in 2021. The current aggregate annual payment under this lease is approximately $6 million. The Company has seven leases for drilling rigs for its E&P operations that expire through 2025 with a current aggregate annual payment of approximately $11 million. The lease payments for the pressure pumping equipment, as well as other operating expenses for the Company’s drilling operations, are capitalized to natural gas and oil properties and are partially offset by billings to third-party working interest owners.

The Company leases office space, vehicles and equipment under non-cancelable operating leases expiring through 2036. As of December 31, 2020, future minimum payments under these non-cancelable leases accounted for as operating leases (including short-term) are approximately $30 million in 2021, $21 million in 2022, $18 million in 2023, $14 million in 2024, $12 million in 2025 and $36 million thereafter.

The Company also has commitments for compression services and compression rentals related to its E&P segment. As of December 31, 2020, future minimum payments under these non-cancelable agreements (including short-term obligations) are approximately $20 million in 2021, $14 million in 2022, $3 million in 2022 and less than $1 million in 2024.

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.

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, most of which 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 litigation, claims and proceedings when a liability is both probable and the amount can be reasonably estimated. As of December 31, 2020, 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.

St. Lucie County Fire District Firefighters’ Pension Trust

On October 17, 2016, the St. Lucie County Fire District Firefighters’ Pension Trust filed a putative class action in the 61st District Court in Harris County, Texas, against the Company, certain of its former officers and current and former directors and the underwriters on behalf of itself and others that purchased certain depositary shares from the Company’s January 2015 equity offering, alleging material misstatements and omissions in the registration statement for that offering. The Company removed the case to federal court, but after a decision by the United States Supreme Court in an unrelated case that these types of cases are not subject to removal, the federal court remanded the case to the Texas state court. The Texas trial court denied the Company’s motion to dismiss, and in February 2020, the court of appeals declined to exercise discretion to reverse the trial court’s decision. The Company filed a petition to review the trial court’s decision with the Texas Supreme Court, and the Court requested a response from the plaintiff. The Court subsequently ordered full briefing on the merits of the case. The Company carries insurance for the claims asserted against it and the officer and director defendants, and the carrier has accepted coverage. The Company denies all allegations and intends to continue to defend this case vigorously. The Company does not expect this case to have a material adverse effect on the results of operations, financial position or cash flows of the Company. Additionally, it is not possible at this time to estimate the amount of any additional loss, or range of loss, that is reasonably possible.

Indemnifications

The Company has provided certain indemnifications to various third parties, including in relation to asset and entity dispositions, securities offerings and other financings, such as the St. Lucie County Fire District Firefighters’ Pension Trust case described above. 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.