Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

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 June 30, 2013:



	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	$	84		$	—		$	—		$	84
Investments	13			—			—			13
Other current liabilities	(78		)	—			—			(78		)
Derivatives:
Commodity assets	—			209			11			220
Commodity liabilities	—			(40		)	(605		)	(645		)
Interest rate liabilities	—			(91		)	—			(91		)
Foreign currency liabilities	—			(27		)	—			(27		)
Total derivatives	—			51			(594		)	(543		)
Total	$	19		$	51		$	(594	)	$	(524	)

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	)

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

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



	Derivatives
	Commodity			Interest Rate
	($ in millions)
Beginning Balance as of January 1, 2013	$	(1,016	)	$	—
Total gains (losses) (realized/unrealized):
Included in earnings^(a)	362			(1		)
Total purchases, issuances, sales and settlements:
Sales	—			1
Settlements	60			—
Ending Balance as of June 30, 2013	$	(594	)	$	—

Beginning Balance as of January 1, 2012	$	(1,654	)	$	—
Total gains (losses) (realized/unrealized):
Included in earnings^(a)	548			2
Total purchases, issuances, sales and settlements:
Sales	—			(2		)
Settlements	42			—
Ending Balance as of June 30, 2012	$	(1,064	)	$	—

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(a)	Natural Gas, Oil and NGL Sales				Interest Expense
	Natural Gas, Oil and NGL Sales				Interest Expense
	2013		2012		2013			2012
	($ in millions)
Total gains (losses) included in earnings for the period	$	362	$	548	$	(1	)	$	2
Change in unrealized gains (losses) relating to assets still held at reporting date	$	353	$	430	$	—		$	—

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 June 30, 2013
						($ in millions)
Oil Trades^(a)	Oil price volatility curves	10.94% - 24.33%	17.22		%	$	(365	)
Oil Basis Swaps^(b)	Physical pricing point forward curves	$6.03 - $7.07	$	6.55		$	3
Natural Gas Trades^(a)	Natural gas price volatility curves	20.25% - 37.87%	22.94		%	$	(225	)
Natural Gas Basis Swaps^(b)	Physical pricing point forward curves	($1.68) - ($0.04)	$	(0.28	)	$	(7	)

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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.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

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



	June 30, 2013				December 31, 2012
	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)	$	10,678	$	11,479	$	9,759	$	10,457
Long-term debt (Level 2)	$	2,363	$	2,337	$	2,378	$	2,284

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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