Derivatives and Risk Management (Tables)

3 Months Ended

Mar. 31, 2023

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, 2023:

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, 2023 (in millions)
Natural Gas
2023
Fixed price swaps	453	$	3.15	$	—	$	—	$	—	$	—	$	169
Two-way costless collars	116	—		—		2.86		3.21		—		30
Three-way costless collars	145	—		2.07		2.49		2.91		—		(31)
Total	714											$	168
2024
Fixed price swaps	528	$	3.54	$	—	$	—	$	—	$	—	$	(42)
Two-way costless collars	44	—		—		3.07		3.53		—		(15)
Three-way costless collars	11	—		2.25		2.80		3.54		—		(8)
Total	583											$	(65)
2025
Three-way costless collars	99	$	—	$	2.50	$	3.75	$	5.69	$	—	$	(8)
Basis Swaps
2023	220	$	—	$	—	$	—	$	—	$	(0.63)	$	(26)
2024	46	—		—		—		—		(0.71)		5
2025	9	—		—		—		—		(0.64)		2
Total	275											$	(19)

	Volume (MBbls)	Weighted Average Strike Price per Bbl								Fair Value at March 31, 2023 (in millions)
		Swaps		Sold Puts		Purchased Puts		Sold Calls
Oil
2023
Fixed price swaps	999	$	62.61	$	—	$	—	$	—	$	(11)
Two-way costless collars	294	—		—		70.00		80.58		—
Three-way costless collars	926	—		34.09		45.68		56.07		(18)
Total	2,219									$	(29)
2024
Fixed price swaps	1,571	$	71.06	$	—	$	—	$	—	$	—
Two-way costless collars	146	—		—		70.00		78.25		—
Total	1,717									$	—
2025
Fixed price swaps	41	$	77.66	$	—	$	—	$	—	$	—
Ethane
2023
Fixed price swaps	5,570	$	11.51	$	—	$	—	$	—	$	12
2024
Fixed price swaps	1,305	$	10.81	$	—	$	—	$	—	$	1
Propane
2023
Fixed price swaps	3,592	$	36.31	$	—	$	—	$	—	$	9
2024
Fixed price swaps	1,094	$	35.70	$	—	$	—	$	—	$	2
Normal Butane
2023
Fixed price swaps	591	$	40.96	$	—	$	—	$	—	$	1
2024
Fixed price swaps	329	$	40.74	$	—	$	—	$	—	$	1
Natural Gasoline
2023
Fixed price swaps	512	$	63.74	$	—	$	—	$	—	$	—
2024
Fixed price swaps	329	$	64.37	$	—	$	—	$	—	$	1

Other Derivative Contracts
	Volume (Bcf)	Weighted Average Strike Price per MMBtu		Fair Value at March 31, 2023 (in millions)
Call Options – Natural Gas (Net)
2023	36	$	2.95	$	(16)
2024	9	3.00		(11)
Total	45			$	(27)
	Volume (MBbls)	Weighted Average Strike Price per Bbl		Fair Value at March 31, 2023 (in millions)
Put Options – Oil (Net)
2023	127	$	73.50	$	—

Balance Sheet Classification of Derivative Financial Instruments

The balance sheet classification of the assets and liabilities related to derivative financial instruments are summarized below as of March 31, 2023 and December 31, 2022:

Derivative Assets
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2023		December 31, 2022
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative assets	$	227	$	—
Fixed price swaps – oil	Derivative assets	1		—
Fixed price swaps – ethane	Derivative assets	12		4
Fixed price swaps – propane	Derivative assets	11		9
Fixed price swaps – normal butane	Derivative assets	1		1
Fixed price swaps – natural gasoline	Derivative assets	1		1
Two-way costless collars – natural gas	Derivative assets	137		47
Two-way costless collars – oil	Derivative assets	2		—
Three-way costless collars – natural gas	Derivative assets	51		18
Three-way costless collars – oil	Derivative assets	—		1
Basis swaps – natural gas	Derivative assets	15		64
Put options – natural gas	Derivative assets	6		—
Fixed price swaps – natural gas	Other long-term assets	105		28
Fixed price swaps – oil	Other long-term assets	2		1
Fixed price swaps – ethane	Other long-term assets	1		1
Fixed price swaps – propane	Other long-term assets	1		1
Fixed price swaps – normal butane	Other long-term assets	1		—
Fixed price swaps – natural gasoline	Other long-term assets	1		—
Two-way costless collars – natural gas	Other long-term assets	16		18
Two-way costless collars – oil	Other long-term assets	1		—
Three-way costless collars – natural gas	Other long-term assets	66		3
Basis swaps – natural gas	Other long-term assets	9		17
Put options – natural gas	Other long-term assets	—		4
Total derivative assets		$	667	$	218

Derivative Liabilities
		Fair Value
(in millions)	Balance Sheet Classification	March 31, 2023		December 31, 2022
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative liabilities	$	97	$	581
Fixed price swaps – oil	Derivative liabilities	14		20
Fixed price swaps – ethane	Derivative liabilities	—		1
Fixed price swaps – propane	Derivative liabilities	1		—
Fixed price swaps – natural gasoline	Derivative liabilities	1		1
Two-way costless collars – natural gas	Derivative liabilities	112		235
Two-way costless collars – oil	Derivative liabilities	2		—
Three-way costless collars – natural gas	Derivative liabilities	91		311
Three-way costless collars – oil	Derivative liabilities	18		31
Basis swaps – natural gas	Derivative liabilities	41		69
Call options – natural gas	Derivative liabilities	27		70
Put options – natural gas	Derivative liabilities	6		—
Fixed price swaps – natural gas	Long-term derivative liabilities	108		281
Fixed price swaps – oil	Long-term derivative liabilities	—		4
Two-way costless collars – natural gas	Long-term derivative liabilities	26		56
Two-way costless collars – oil	Long-term derivative liabilities	1		—
Three-way costless collars – natural gas	Long-term derivative liabilities	73		20
Basis swap – natural gas	Long-term derivative liabilities	2		1
Call options – natural gas	Long-term derivative liabilities	—		18
Total derivative liabilities		$	620	$	1,699

Net Derivative Position
	March 31, 2023		December 31, 2022
(in millions)
Net current derivative asset (liability)	$	54	$	(1,174)
Net long-term derivative liabilities	(7)		(307)
Non-performance risk adjustment	(1)		3
Net total derivative asset (liability)	$	46	$	(1,478)

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, 2023 and 2022:

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		2023			2022
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	961		$	(1,853)
Fixed price swaps – oil	Gain (Loss) on Derivatives	12			(53)
Fixed price swaps – ethane	Gain (Loss) on Derivatives	9			(21)
Fixed price swaps – propane	Gain (Loss) on Derivatives	1			(49)
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	1			(20)
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	1			(28)
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	241			(342)
Two-way costless collars – ethane	Gain (Loss) on Derivatives	—			1
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	263			(724)
Three-way costless collars – oil	Gain (Loss) on Derivatives	12			(33)
Three-way costless collars – propane	Gain (Loss) on Derivatives	—			(2)
Basis swaps – natural gas	Gain (Loss) on Derivatives	(30)			36
Call options – natural gas	Gain (Loss) on Derivatives	61			(149)
Put options – natural gas	Gain (Loss) on Derivatives	(4)			—
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	—			(2)
Total gain (loss) on unsettled derivatives		$	1,528		$	(3,237)
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		2023			2022
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	(45)		$	(297)
Fixed price swaps – oil	Gain (Loss) on Derivatives	(4)			(33)
Fixed price swaps – ethane	Gain (Loss) on Derivatives	1			(8)
Fixed price swaps – propane	Gain (Loss) on Derivatives	1			(41)
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	—			(14)
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	—			(19)
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	—			(104)
Two-way costless collars – ethane	Gain (Loss) on Derivatives	—			(1)
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	(33)			(121)
Three-way costless collars – oil	Gain (Loss) on Derivatives	(7)			(13)
Three-way costless collars – propane	Gain (Loss) on Derivatives	—			(2)
Basis swaps – natural gas	Gain (Loss) on Derivatives	(29)			1
Index swaps – natural gas	Gain (Loss) on Derivatives	—			(1)
Call options – natural gas	Gain (Loss) on Derivatives	(7)			(39)
Fixed price swaps – natural gas storage	Gain (Loss) on Derivatives	—			(3)
Total loss on settled derivatives		$	(123)		$	(695)
Total gain (loss) on derivatives		$	1,401	(1)	$	(3,927)

(1)The Company calculates gain (loss) on derivatives, settled, as the summation of gains and losses on positions that settled within the period. Total gain (loss) on derivatives includes non-performance risk adjustments of $4 million in losses and $5 million in gains for three months ended March 31, 2023 and March 31, 2022, respectively.

Total Gain (Loss) on Derivatives Recognized in Earnings
	For the three months ended March 31,
	2023		2022
	(in millions)
Total gain (loss) on unsettled derivatives	$	1,528	$	(3,237)
Total loss on settled derivatives	(123)		(695)
Non-performance risk adjustment	(4)		5
Total gain (loss) on derivatives	$	1,401	$	(3,927)