Derivatives and Risk Management (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2023:

Financial Protection on Production
		Weighted Average Price per MMBtu
	Volume (Bcf)	Swaps		Sold Puts		Purchased Puts		Sold Calls		Basis Differential		Fair Value at September 30, 2023 (in millions)
Natural Gas
2023
Fixed price swaps	179	$	3.28	$	—	$	—	$	—	$	—	$	49
Two-way costless collars	32	—		—		2.88		3.29		—		1
Three-way costless collars	47	—		2.08		2.50		2.91		—		(11)
Total	258											$	39
2024
Fixed price swaps	528	$	3.54	$	—	$	—	$	—	$	—	$	82
Two-way costless collars	44	—		—		3.07		3.53		—		(5)
Three-way costless collars	77	—		2.46		3.19		3.99		—		(5)
Total	649											$	72
2025
Two-way costless collars	73	$	—	$	—	$	3.50	$	5.40	$	—	$	11
Three-way costless collars	106	—		2.50		3.75		5.69		—		16
Total	179											$	27
Basis Swaps
2023	71	$	—	$	—	$	—	$	—	$	(0.57)	$	24
2024	46	—		—		—		—		(0.71)		9
2025	9	—		—		—		—		(0.64)		3
Total	126											$	36

	Volume (MBbls)	Weighted Average Strike Price per Bbl								Fair Value at September 30, 2023 (in millions)
		Swaps		Sold Puts		Purchased Puts		Sold Calls
Oil
2023
Fixed price swaps	733	$	67.34	$	—	$	—	$	—	$	(15)
Two-way costless collars	147	—		—		70.00		80.58		(1)
Three-way costless collars	291	—		34.36		46.05		55.96		(10)
Total	1,171									$	(26)
2024
Fixed price swaps	1,571	$	71.06	$	—	$	—	$	—	$	(15)
Two-way costless collars	512	—		—		70.00		85.63		(2)
Total	2,083									$	(17)
2025
Fixed price swaps	41	$	77.66	$	—	$	—	$	—	$	—
Ethane
2023
Fixed price swaps	2,254	$	10.99	$	—	$	—	$	—	$	(1)
2024
Fixed price swaps	3,429	$	10.84	$	—	$	—	$	—	$	—
Propane
2023
Fixed price swaps	1,782	$	30.44	$	—	$	—	$	—	$	(1)
2024
Fixed price swaps	3,254	$	31.78	$	—	$	—	$	—	$	3
2025
Fixed price swaps	63	$	26.46	$	—	$	—	$	—	$	—
Normal Butane
2023
Fixed price swaps	198	$	40.96	$	—	$	—	$	—	$	1
2024
Fixed price swaps	329	$	40.74	$	—	$	—	$	—	$	1
Natural Gasoline
2023
Fixed price swaps	171	$	63.74	$	—	$	—	$	—	$	(1)
2024
Fixed price swaps	329	$	64.37	$	—	$	—	$	—	$	(1)

Other Derivative Contracts
	Volume (Bcf)	Weighted Average Strike Price per MMBtu		Fair Value at September 30, 2023 (in millions)
Call Options – Natural Gas (Net)
2023	15	$	2.97	$	(4)
2024	82	6.56		(9)
2025	73	7.00		(14)
2026	73	7.00		(20)
Total	243			$	(47)

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 September 30, 2023 and December 31, 2022:

Derivative Assets
		Fair Value
(in millions)	Balance Sheet Classification	September 30, 2023		December 31, 2022
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative assets	$	224	$	—
Fixed price swaps – ethane	Derivative assets	2		4
Fixed price swaps – propane	Derivative assets	10		9
Fixed price swaps – normal butane	Derivative assets	2		1
Fixed price swaps – natural gasoline	Derivative assets	—		1
Two-way costless collars – natural gas	Derivative assets	32		47
Two-way costless collars – oil	Derivative assets	1		—
Three-way costless collars – natural gas	Derivative assets	28		18
Three-way costless collars – oil	Derivative assets	—		1
Basis swaps – natural gas	Derivative assets	33		64
Put options – natural gas	Derivative assets	5		—
Fixed price swaps – natural gas	Other long-term assets	25		28
Fixed price swaps – oil	Other long-term assets	—		1
Fixed price swaps – ethane	Other long-term assets	—		1
Fixed price swaps – propane	Other long-term assets	—		1
Two-way costless collars – natural gas	Other long-term assets	43		18
Two-way costless collars – oil	Other long-term assets	1		—
Three-way costless collars – natural gas	Other long-term assets	77		3
Basis swaps – natural gas	Other long-term assets	8		17
Put options – natural gas	Other long-term assets	—		4
Total derivative assets		$	491	$	218

Derivative Liabilities
		Fair Value
(in millions)	Balance Sheet Classification	September 30, 2023		December 31, 2022
Derivatives not designated as hedging instruments:
Fixed price swaps – natural gas	Derivative liabilities	$	73	$	581
Fixed price swaps – oil	Derivative liabilities	29		20
Fixed price swaps – ethane	Derivative liabilities	3		1
Fixed price swaps – propane	Derivative liabilities	7		—
Fixed price swaps – natural gasoline	Derivative liabilities	2		1
Two-way costless collars – natural gas	Derivative liabilities	31		235
Two-way costless collars – oil	Derivative liabilities	4		—
Three-way costless collars – natural gas	Derivative liabilities	39		311
Three-way costless collars – oil	Derivative liabilities	10		31
Basis swaps – natural gas	Derivative liabilities	5		69
Call options – natural gas	Derivative liabilities	11		70
Put options – natural gas	Derivative liabilities	5		—
Fixed price swaps – natural gas	Long-term derivative liabilities	45		281
Fixed price swaps – oil	Long-term derivative liabilities	1		4
Fixed price swaps – propane	Long-term derivative liabilities	1		—
Two-way costless collars – natural gas	Long-term derivative liabilities	37		56
Two-way costless collars – oil	Long-term derivative liabilities	1		—
Three-way costless collars – natural gas	Long-term derivative liabilities	66		20
Basis swap – natural gas	Long-term derivative liabilities	—		1
Call options – natural gas	Long-term derivative liabilities	36		18
Total derivative liabilities		$	406	$	1,699

Net Derivative Position
	September 30, 2023		December 31, 2022
(in millions)
Net current derivative asset (liability)	$	118	$	(1,174)
Net long-term derivative asset (liability)	(33)		(307)
Non-performance risk adjustment	(1)		3
Net total derivative asset (liability)	$	84	$	(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 and nine months ended September 30, 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 September 30,				For the nine months ended September 30,
Derivative Instrument		2023		2022		2023		2022
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	28	$	(140)	$	965	$	(1,654)
Fixed price swaps – oil	Gain (Loss) on Derivatives	(29)		73		(7)		39
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(5)		24		(5)		(3)
Fixed price swaps – propane	Gain (Loss) on Derivatives	(37)		67		(8)		74
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	(6)		24		1		24
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	(9)		28		(2)		29
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	3		(99)		233		(432)
Two-way costless collars – oil	Gain (Loss) on Derivatives	(4)		—		(3)		—
Two-way costless collars – ethane	Gain (Loss) on Derivatives	—		—		—		1
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	20		(26)		310		(520)
Three-way costless collars – oil	Gain (Loss) on Derivatives	(1)		38		20		10
Three-way costless collars – propane	Gain (Loss) on Derivatives	—		3		—		4
Basis swaps – natural gas	Gain (Loss) on Derivatives	(43)		4		25		12
Call options – natural gas	Gain (Loss) on Derivatives	14		(8)		41		(114)
Put options – natural gas	Gain (Loss) on Derivatives	—		—		(4)		—
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		$	(69)	$	(12)	$	1,566	$	(2,531)
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 September 30,				For the nine months ended September 30,
Derivative Instrument		2023		2022		2023		2022
		(in millions)
Fixed price swaps – natural gas	Gain (Loss) on Derivatives	$	112	$	(1,082)	$	227	$	(2,249)
Fixed price swaps – oil	Gain (Loss) on Derivatives	(11)		(30)		(18)		(104)
Fixed price swaps – ethane	Gain (Loss) on Derivatives	(3)		(15)		3		(42)
Fixed price swaps – propane	Gain (Loss) on Derivatives	9		(21)		21		(96)
Fixed price swaps – normal butane	Gain (Loss) on Derivatives	1		(7)		2		(33)
Fixed price swaps – natural gasoline	Gain (Loss) on Derivatives	—		(9)		1		(45)
Two-way costless collars – natural gas	Gain (Loss) on Derivatives	13		(152)		44		(386)
Two-way costless collars – ethane	Gain (Loss) on Derivatives	—		—		—		(1)
Three-way costless collars – natural gas	Gain (Loss) on Derivatives	1		(491)		(15)		(1,008)
Three-way costless collars – oil	Gain (Loss) on Derivatives	(7)		(12)		(20)		(43)
Three-way costless collars – propane	Gain (Loss) on Derivatives	—		(1)		—		(4)
Basis swaps – natural gas	Gain (Loss) on Derivatives	47		40		11		64
Index swaps – natural gas	Gain (Loss) on Derivatives	—		—		—		(1)
Call options – natural gas	Gain (Loss) on Derivatives	—		(109)		(7)		(235)
Purchased fixed price swaps – natural gas	Gain (Loss) on Derivatives	—		—		—		1
Fixed price swaps – natural gas storage	Gain (Loss) on Derivatives	—		—		—		(3)
Total gain (loss) on settled derivatives		$	162	$	(1,889)	$	249	$	(4,185)
Total gain (loss) on derivatives (2)		$	93	$	(1,903)	$	1,811	$	(6,709)

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

(2)Total gain (loss) on derivatives includes non-performance risk adjustments of $2 million in losses for the three months ended September 30, 2022 and $4 million in losses and $7 million in gains for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Total Gain (Loss) on Derivatives Recognized in Earnings
	For the three months ended September 30,				For the nine months ended September 30,
	2023		2022		2023		2022
	(in millions)
Total gain (loss) on unsettled derivatives	$	(69)	$	(12)	$	1,566	$	(2,531)
Total gain (loss) on settled derivatives	162		(1,889)		249		(4,185)
Non-performance risk adjustment	—		(2)		(4)		7
Total gain (loss) on derivatives	$	93	$	(1,903)	$	1,811	$	(6,709)