Derivatives and Risk Management (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments Notional Amount, Weighted Average Contract Prices and Fair Value

The following tables provide information about the Company’s financial instruments that are sensitive to changes in commodity prices and that are used to protect the Company’s exposure. None of the financial instruments below are designated for hedge accounting treatment.  The tables present the notional amount, the weighted average contract prices and the fair value by expected maturity dates as of March 31, 2021:

Financial Protection on Production
		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Sold Puts		Purchased Puts		Sold Calls		Basis Differential		Fair Value at March 31, 2021 (in millions)
Natural Gas
2021
Fixed price swaps	176	$	2.79	$	—	$	—	$	—	$	—	$	14
Two-way costless collars	195	—		—		2.57		2.93		—		1
Three-way costless collars	218	—		2.17		2.50		2.84		—		(23)
Total	589											$	(8)
2022
Fixed price swaps	112	$	2.68	$	—	$	—	$	—	$	—	$	(2)
Two-way costless collars	63	—		—		2.52		3.03		—		(3)
Three-way costless collars	278	—		2.06		2.50		2.97		—		(13)
Total	453											$	(18)
2023
Three-way costless collars	103	$	—	$	2.05	$	2.46	$	3.01	$	—	$	(4)
Basis Swaps
2021	233	$	—	$	—	$	—	$	—	$	(0.49)	$	39
2022	220	—		—		—		—		(0.44)		24
2023	119	—		—		—		—		(0.56)		4
2024	24	—		—		—		—		(0.64)		1
2025	9	—		—		—		—		(0.64)		—
Total	605											$	68

	Volume (MBbls)	Weighted Average Strike Price per Bbl								Fair Value at March 31, 2021 (in millions)
		Swaps		Sold Puts		Purchased Puts		Sold Calls
Oil
2021
Fixed price swaps	3,272	$	49.27	$	—	$	—	$	—	$	(29)
Two-way costless collars	156	—		—		37.79		45.73		(2)
Three-way costless collars	1,498	—		37.86		47.70		53.10		(10)
Total	4,926									$	(41)
2022
Fixed price swaps	1,719	$	48.54	$	—	$	—	$	—	$	(10)
Three-way costless collars	1,380	—		39.89		50.23		57.05		(4)
Total	3,099									$	(14)
2023
Three-way costless collars	1,268	$	—	$	33.97	$	45.51	$	56.12	$	(4)
Ethane
2021
Fixed price swaps	4,429	$	7.17	$	—	$	—	$	—	$	(11)
Two-way costless collars	440	—		—		7.14		10.40		—
Total	4,869									$	(11)
2022
Fixed price swaps	1,758	$	8.68	$	—	$	—	$	—	$	(1)
Two-way costless collars	135	—		—		7.56		9.66		—
Total	1,893									$	(1)
Propane
2021
Fixed price swaps	5,443	$	20.84	$	—	$	—	$	—	$	(69)
2022
Fixed price swaps	2,723	$	21.83	$	—	$	—	$	—	$	(14)
Three-way costless collars	305	—		16.80		21.00		31.92		(1)
Total	3,028									(15)
Normal Butane
2021
Fixed price swaps	1,568	$	25.30	$	—	$	—	$	—	$	(19)
2022
Fixed price swaps	888	$	24.47	$	—	$	—	$	—	$	(5)
Natural Gasoline
2021
Fixed price swaps	1,513	$	37.91	$	—	$	—	$	—	$	(27)
2022
Fixed price swaps	857	$	40.48	$	—	$	—	$	—	$	(8)

Other Derivative Contracts
	Volume (Bcf)	Weighted Average Strike Price per MMBtu		Fair Value at March 31, 2021 (in millions)
Call Options – Natural Gas (Net)
2021	57	$	3.19	$	(4)
2022	77	3.00		(16)
2023	46	2.94		(10)
2024	9	3.00		(3)
Total	189			$	(33)
Put Options – Natural Gas
2021	14	$	2.00	$	—
2022	5	2.00		(1)
Total	19			$	(1)

	Volume (MBbls)	Weighted Average Strike Price per Bbl		Fair Value at March 31, 2021 (in millions)
Call Options – Oil
2021	171	$	60.00	$	(1)

	Volume (Bcf)	Weighted Average Strike Price per MMBtu		Fair Value at March 31, 2021 (in millions)
Swaptions – Natural Gas
2021 (1)	18	$	3.00	$	(1)

(1)The Company has sold swaptions with an underlying tenor of January 2022 to December 2022, with an exercise date of December 23, 2021.

	Volume (Bcf)	Weighted Average Strike Price per MMBtu				Fair Value at March 31, 2021 (in millions)
		Swaps		Basis Differential
Storage (1)
2021
Purchased fixed price swaps	2	$	2.34	$	—	$	—
Purchased basis swaps	1	—		(0.88)		—
Fixed price swaps	—	2.23		—		—
Basis swaps	—	—		(0.57)		—
Total	3					$	—
2022
Purchased fixed price swaps	—	$	2.14	$	—	$	—
Fixed price swaps	2	2.82		—		—
Basis swaps	1	—		(0.57)		—
Total	3					$	—

(1)The Company has entered into certain derivatives to protect the value of volumes of natural gas injected into a storage facility that will be withdrawn and sold at a later date.

Purchased Fixed Price Swaps – Marketing (Natural Gas) (1)	Volume (Bcf)	Weighted Average Strike Price per MMBtu	Fair Value at March 31, 2021 (in millions)
2021	4	2.44	1

(1)The Company has entered into a limited number of derivatives to protect the value of certain long-term sales contracts.

Balance Sheet Classification of Derivative Financial Instruments

The balance sheet classification of the assets and liabilities related to derivative financial instruments (none of which are designated for hedge accounting treatment) is summarized below as of March 31, 2021 and December 31, 2020:

Derivative Assets
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2021		December 31, 2020
Derivatives not designated as hedging instruments:
Purchased fixed price swaps – natural gas	Derivative assets	$	1	$	1
Fixed price swaps – natural gas	Derivative assets	25		37
Fixed price swaps – oil	Derivative assets	—		13
Two-way costless collars – natural gas	Derivative assets	39		54
Three-way costless collars – natural gas	Derivative assets	39		57
Three-way costless collars – oil	Derivative assets	6		15
Basis swaps – natural gas	Derivative assets	46		60
Call options – natural gas	Derivative assets	1		4
Fixed price swaps – natural gas	Other long-term assets	—		7
Fixed price swaps – oil	Other long-term assets	—		2
Fixed price swaps – propane	Other long-term assets	1		—
Two-way costless collars – natural gas	Other long-term assets	2		20
Three-way costless collars – natural gas	Other long-term assets	82		87
Three-way costless collars – oil	Other long-term assets	14		15
Basis swaps – natural gas	Other long-term assets	39		15
Interest rate swaps	Other long-term assets	1		—
Total derivative assets		$	296	$	387

Derivative Liabilities
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2021		December 31, 2020
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative liabilities	$	12	$	7
Fixed price swaps – oil	Derivative liabilities	32		12
Fixed price swaps – ethane	Derivative liabilities	11		10
Fixed price swaps – propane	Derivative liabilities	76		36
Fixed price swaps – normal butane	Derivative liabilities	21		8
Fixed price swaps – natural gasoline	Derivative liabilities	30		13
Two-way costless collars – natural gas	Derivative liabilities	39		43
Two-way costless collars – oil	Derivative liabilities	2		1
Three-way costless collars – natural gas	Derivative liabilities	73		82
Three-way costless collars – oil	Derivative liabilities	17		15
Basis swaps – natural gas	Derivative liabilities	9		3
Call options – natural gas	Derivative liabilities	13		12
Call options – oil	Derivative liabilities	1		—
Put options – natural gas	Derivative liabilities	1		1
Swaptions – natural gas	Derivative liabilities	1		2
Fixed price swaps – natural gas	Long-term derivative liabilities	1		3
Fixed price swaps – oil	Long-term derivative liabilities	7		2
Fixed price swaps – ethane	Long-term derivative liabilities	1		—
Fixed price swaps – propane	Long-term derivative liabilities	8		2
Fixed price swaps – normal butane	Long-term derivative liabilities	3		1
Fixed price swaps – natural gasoline	Long-term derivative liabilities	5		2
Two-way costless collars – natural gas	Long-term derivative liabilities	4		21
Three-way costless collars – natural gas	Long-term derivative liabilities	88		102
Three-way costless collars – oil	Long-term derivative liabilities	21		15
Three-way costless collars – propane	Long-term derivative liabilities	1		—
Basis swap – natural gas	Long-term derivative liabilities	8		7
Call options – natural gas	Long-term derivative liabilities	21		28
Total derivative liabilities		$	506	$	428

Summary of Before Tax Effect of Fair Value Hedges not Designated for Hedge Accounting

The following tables summarize the before-tax effect of the Company’s derivative instruments on the consolidated statements of operations for the three months ended March 31, 2021 and 2020:

Unsettled Gain (Loss) on Derivatives Recognized in Earnings
	Consolidated statement of Operations Classification of Gain (Loss) on Derivatives, Unsettled	For the three months ended March 31,
Derivative Instrument		2021			2020
		(in millions)
Purchased fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	—		$	(1)
Purchased fixed price swaps – oil	Gain (Loss) on Derivatives	—			(5)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	(22)			103
Fixed price swaps – oil	Gain (Loss) on Derivatives	(40)			118
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(2)			12
Fixed price swaps – propane	Gain (Loss) on Derivatives	(45)			36
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	(15)			—
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	(20)			—
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	(12)			(4)
Two-way costless collars – oil	Gain (Loss) on Derivatives	(1)			19
Two-way costless collars – propane	Gain (Loss) on Derivatives	—			2
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	—			(51)
Three-way costless collars – oil	Gain (Loss) on Derivatives	(18)			25
Three-way costless collars – propane	Gain (Loss) on Derivatives	(1)			—
Basis swaps – natural gas	Gain (Loss) on Derivatives	3			(1)
Call options – natural gas	Gain (Loss) on Derivatives	3			(5)
Call options – oil	Gain (Loss) on Derivatives	(1)			1
Swaptions – natural gas	Gain (Loss) on Derivatives	1			—
Purchased fixed price swap – natural gas storage	Gain (Loss) on Derivatives	—			(1)
Fixed price swap – natural gas storage	Gain (Loss) on Derivatives	—			(1)
Interest rate swaps	Gain (Loss) on Derivatives	1			(1)
Total gain (loss) on unsettled derivatives		$	(169)		$	246
Settled Gain (Loss) on Derivatives Recognized in Earnings (1)
	Consolidated statement of Operations Classification of Gain (Loss) on Derivatives, Settled	For the three months ended March 31,
Derivative Instrument		2021			2020
		(in millions)
Purchased fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	—		$	(1)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	5			5
Fixed price swaps – oil	Gain (Loss) on Derivatives	(17)			9
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(4)			6
Fixed price swaps – propane	Gain (Loss) on Derivatives	(30)			10
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	(7)			—
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	(9)			—
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	2			6
Two-way costless collars – oil	Gain (Loss) on Derivatives	(1)			3
Two-way costless collars – propane	Gain (Loss) on Derivatives	—			1
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	1			36
Three-way costless collars – oil	Gain (Loss) on Derivatives	(1)			1
Basis swaps – natural gas	Gain (Loss) on Derivatives	41			16
Put options – natural gas	Gain (Loss) on Derivatives	(2)		(2)	—
Fixed price swaps – natural gas storage	Gain (Loss) on Derivatives	—			1
Total gain (loss) on settled derivatives		$	(22)		$	93
Total gain (loss) on derivatives		$	(191)		$	339

(1)The Company calculates gain (loss) on derivatives, settled, as the summation of gains and losses on positions that settled within the period.

(2)Includes $2 million amortization of premiums paid related to certain natural gas put options for the three months ended March 31, 2021 which is included in gain (loss) on derivatives on the consolidated statements of operations.