Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Text Block [Abstract]

Fair Value Of Assets And Liabilities Measured On A Recurring Basis

The following table provides fair value measurement information for financial assets (liabilities) measured at fair value on a recurring basis as of December 31, 2012:

	Quoted Prices in Active Markets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
				($ in millions)
Financial Assets (Liabilities):
Other current assets	$	4		$	—		$	—		$	4
Investments	20			—			—			20
Other long-term assets	88			—			—			88
Other long-term liabilities	(87		)	—			—			(87		)
Derivatives:
Commodity assets	—			105			10			115
Commodity liabilities	—			(13		)	(1,026		)	(1,039		)
Interest rate liabilities	—			(35		)	—			(35		)
Foreign currency liabilities	—			(20		)	—			(20		)
Total derivatives	—			37			(1,016		)	(979		)
Total	$	25		$	37		$	(1,016	)	$	(954	)

The following table provides fair value measurement information for financial assets (liabilities) measured at fair value on a recurring basis as of December 31, 2011:

	Quoted Prices in Active Markets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
				($ in millions)
Financial Assets (Liabilities):
Investments	$	34		$	—		$	—		$	34
Other long-term assets	61			—			—			61
Other long-term liabilities	(62		)	—			—			(62		)
Derivatives:
Commodity assets	—			46			9			55
Commodity liabilities	—			(31		)	(1,663		)	(1,694		)
Interest rate liabilities	—			(42		)	—			(42		)
Foreign currency liabilities	—			(38		)	—			(38		)
Total derivatives	—			(65		)	(1,654		)	(1,719		)
Total	$	33		$	(65	)	$	(1,654	)	$	(1,686	)

Fair Value, Assets And Liabilities, Unobservable Input Reconciliation

A summary of the changes in Chesapeake’s financial assets (liabilities) classified as Level 3 measurements during 2012 and 2011 is presented below.

	Derivatives
	Commodity			Interest Rate			Foreign Currency			Debt
	($ in millions)
Beginning Balance as of January 1, 2012	$	(1,654	)	$	—		$	—		$	—
Total gains (losses) (realized/unrealized):
Included in earnings(a)	567			6			—			—
Total purchases, issuances, sales and settlements:
Sales	—			(6		)	—			—
Settlements	71			—			—			—
Ending Balance as of December 31, 2012	$	(1,016	)	$	—		$	—		$	—
Beginning Balance as of January 1, 2011	$	(1,954	)	$	(69	)	$	(43	)	$	(1,371	)
Total gains (losses) (realized/unrealized):
Included in earnings(a)	113			23			—			—
Total purchases, issuances, sales and settlements:
Sales	(1		)	(8		)	—			—
Settlements	188			—			—			—
Transfers in and out of Level 3(b)	—			54			43			1,371
Ending Balance as of December 31, 2011	$	(1,654	)	$	—		$	—		$	—

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(a)	Natural Gas, Oil and NGL Sales					Interest Expense
	2012		2011			2012		2011
	($ in millions)
Total gains (losses) included in earnings for the period	$	567	$	113		$	6	$	23
Change in unrealized gains (losses) relating to assets still held at reporting date	$	374	$	(263	)	$	—	$	—

(b) The values related to interest rate and cross currency swaps were transferred from Level 3 to Level 2 as a result of our ability to use data readily available in the public market to corroborate our estimated fair values.

Quantitative Disclosures About Unobservable Inputs For Level 3 Fair Value Measurements

Quantitative Disclosures about Unobservable Inputs for Level 3 Fair Value Measurements

Instrument Type	Unobservable Input	Range	Weighted Average			Fair Value December 31, 2012
						($ in millions)
Oil Trades(a)	Oil price volatility curve	15.79% - 28.74%	21.94		%	$	(761	)
Oil Basis Swaps(b)	Physical pricing point forward curves	$8.21 - $18.49	$	13.23		$	—
Natural Gas Trades(a)	Natural gas price volatility curve	20.93% - 39.44%	22.45		%	$	(240	)
Natural Gas Basis Swaps(b)	Physical pricing point forward curves	($1.73) - $0.02	$	(0.20	)	$	(15	)

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(a) Fair value is based on an estimate derived from option models.

(b) Fair value is based on an estimate of discounted cash flows.

Fair Value, By Balance Sheet Grouping

Fair value is compared to the carrying value, excluding the impact of interest rate derivatives, in the table below.

	December 31, 2012				December 31, 2011
	Carrying     Amount		Estimated     Fair Value		Carrying     Amount		Estimated     Fair Value
			($ in millions)
Current maturities of long-term debt (Level 1)	$	463	$	480	$	—	$	—
Long-term debt (Level 1)	$	9,759	$	10,457	$	8,849	$	9,709
Long-term debt (Level 2)	$	2,378	$	2,284	$	1,749	$	1,690