Derivative and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments Included in Trading Activities [Table Text Block]

The estimated fair values of our natural gas and oil derivative instrument assets (liabilities) as of March 31, 2014 and December 31, 2013 are provided below. 

	March 31, 2014				December 31, 2013
	Volume	Fair Value			Volume	Fair Value
		($ in millions)				($ in millions)
Natural gas (tbtu):
Fixed-price swaps	394	$	(125	)	448	$	(23	)
Three-way collars	387	(48		)	288	(7		)
Call options	193	(202		)	193	(210		)
Call swaptions	—	—			12	—
Basis protection swaps	151	(14		)	68	3
Total natural gas	1,125	(389		)	1,009	(237		)
Oil (mmbbl):
Fixed-price swaps	22.8	(81		)	25.3	(50		)
Call options	41.9	(257		)	42.5	(265		)
Basis protection swaps	0.3	1			0.4	1
Total oil	65.0	(337		)	68.2	(314		)
Total estimated fair value		$	(726	)		$	(551	)

Schedule Of Derivative Instruments In Condensed Consolidated Balance Sheets [Table Text Block]

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of March 31, 2014 and December 31, 2013 on a gross basis and after same-counterparty netting: 

	March 31, 2014
Balance Sheet Classification	Gross Fair Value			Amounts Netted in Condensed Consolidated Balance Sheet			Net Fair Value Presented in Condensed Consolidated Balance Sheet
	($ in millions)
Commodity Contracts
Short-term derivative asset	$	13		$	(11	)	$	2
Long-term derivative asset	3			1			4
Short-term derivative liability	(425		)	11			(414		)
Long-term derivative liability	(317		)	(1		)	(318		)
Total commodity contracts	(726		)	—			(726		)
Interest Rate Contracts
Short-term derivative liability	(3		)	—			(3		)
Long-term derivative liability	(77		)	—			(77		)
Total interest rate contracts	(80		)	—			(80		)
Foreign Currency Contracts(a)
Long-term derivative asset	7			—			7
Total foreign currency contracts	7			—			7
Total Derivatives	$	(799	)	$	—		$	(799	)

	December 31, 2013
Balance Sheet Classification	Gross Fair Value			Amounts Netted in Condensed Consolidated Balance Sheet			Net Fair Value Presented in Condensed Consolidated Balance Sheet
	($ in millions)
Commodity Contracts
Short-term derivative asset	$	29		$	(29	)	$	—
Long-term derivative asset	11			(9		)	2
Short-term derivative liability	(231		)	29			(202		)
Long-term derivative liability	(362		)	9			(353		)
Total commodity contracts	(553		)	—			(553		)
Interest Rate Contracts
Short-term derivative liability	(6		)	—			(6		)
Long-term derivative liability	(92		)	—			(92		)
Total interest rate contracts	(98		)	—			(98		)
Foreign Currency Contracts(a)
Long-term derivative asset	2			—			2
Total foreign currency contracts	2			—			2
Total Derivatives	$	(649	)	$	—		$	(649	)

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(a) Designated as cash flow hedging instruments.

Schedule of Derivative Instruments [Table Text Block]

The components of natural gas, oil and NGL sales for the Current Quarter and the Prior Quarter are presented below. 

	Three Months Ended March 31,
	2014			2013
	($ in millions)
Natural gas, oil and NGL sales	$	2,148		$	1,595
Losses on undesignated natural gas, oil and NGL derivatives	(365		)	(123		)
Losses on terminated cash flow hedges	(17		)	(19		)
Total natural gas, oil and NGL sales	$	1,766		$	1,453

Interest Income And Interest Expense Disclosure [Table Text Block]

The components of interest expense for the Current Quarter and the Prior Quarter are presented below. 

	Three Months Ended March 31,
	2014			2013
	($ in millions)
Interest expense on senior notes	$	180		$	186
Interest expense on term loans	29			29
Amortization of loan discount, issuance costs and other	19			19
Interest expense on credit facilities	8			12
Gains on terminated fair value hedges	(1		)	—
(Gains) losses on undesignated interest rate derivatives	(18		)	4
Capitalized interest	(178		)	(229		)
Total interest expense	$	39		$	21

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

For the Current Quarter and the Prior Quarter, changes in accumulated other comprehensive income (loss) by component, net of tax, are detailed below.

	Net Gains (Losses) on Cash Flow Hedges			Net Gains (Losses) on Investments			Total
	($ in millions)
Balance, December 31, 2013	$	(167	)	$	5		$	(162	)
Other comprehensive income before reclassifications	3			—			3
Amounts reclassified from accumulated other comprehensive income	11			(5		)	6
Net other comprehensive income	14			(5		)	9
Balance, March 31, 2014	$	(153	)	$	—		$	(153	)

	Net Gains (Losses) on Cash Flow Hedges			Net Gains (Losses) on Investments			Total
	($ in millions)
Balance, December 31, 2012	$	(189	)	$	7		$	(182	)
Other comprehensive income before reclassifications	(1		)	(5		)	(6		)
Amounts reclassified from accumulated other comprehensive income	12			6			18
Net other comprehensive income	11			1			12
Balance, March 31, 2013	$	(178	)	$	8		$	(170	)

A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below.

	Three Months Ended March 31,
	2014						2013
	Before  Tax			After  Tax			Before  Tax			After  Tax
	($ in millions)
Balance, beginning of period	$	(269	)	$	(167	)	$	(304	)	$	(189	)
Net change in fair value	4			3			(2		)	(1		)
Losses reclassified to income	18			11			19			12
Balance, end of period	$	(247	)	$	(153	)	$	(287	)	$	(178	)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013:

As of March 31, 2014	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
			($ in millions)
Derivative Assets (Liabilities):
Commodity assets	$	—	$	10		$	6		$	16
Commodity liabilities	—		(229		)	(513		)	(742		)
Interest rate liabilities	—		(80		)	—			(80		)
Foreign currency assets	—		7			—			7
Total derivatives	$	—	$	(292	)	$	(507	)	$	(799	)

As of December 31, 2013	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
			($ in millions)
Derivative Assets (Liabilities):
Commodity assets	$	—	$	25		$	15		$	40
Commodity liabilities	—		(100		)	(493		)	(593		)
Interest rate liabilities	—		(98		)	—			(98		)
Foreign currency assets	—		2			—			2
Total derivatives	$	—	$	(171	)	$	(478	)	$	(649	)

The following table provides fair value measurement information for financial assets (liabilities) measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013:

As of March 31, 2014	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	$	78		$	—	$	—	$	78
Other current liabilities	(80		)	—		—		(80		)
Total	$	(2	)	$	—	$	—	$	(2	)

As of December 31, 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	$	80		$	—	$	—	$	80
Other current liabilities	(82		)	—		—		(82		)
Total	$	(2	)	$	—	$	—	$	(2	)

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

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

	Derivatives
	Commodity			Interest Rate
	($ in millions)
Beginning Balance as of January 1, 2014	$	(478	)	$	—
Total gains (losses) (realized/unrealized):
Included in earnings(a)	(80		)	—
Total purchases, issuances, sales and settlements:
Settlements	55			—
Transfers(b)	(4		)	—
Ending Balance as of March 31, 2014	$	(507	)	$	—
Beginning Balance as of January 1, 2013	$	(1,016	)	$	—
Total gains (losses) (realized/unrealized):
Included in earnings(a)	194			(1		)
Total purchases, issuances, sales and settlements:
Sales	—			(1		)
Settlements	37			—
Ending Balance as of March 31, 2013	$	(785	)	$	(2	)

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(a)	Natural Gas, Oil and NGL Sales					Interest Expense
	2014			2013		2014		2013
	($ in millions)
Total gains (losses) included in earnings for the period	$	(80	)	$	194	$	—	$	(1	)
Change in unrealized gains (losses) related to assets still held at reporting date	$	(57	)	$	191	$	—	$	(2	)

(b) The values related to basis swaps were transferred from Level 3 to Level 2 as a result of our ability to begin using data readily available in the public market to corroborate our estimated fair values.

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

Qualitative Disclosures about Unobservable Inputs for Level 3 Fair Value Measurements

The significant unobservable inputs for Level 3 derivative contracts include unpublished forward prices of natural gas and oil, market volatility and credit risk of counterparties. Changes in these inputs impact the fair value measurement of our derivative contracts. For example, an increase (decrease) in the forward prices and volatility of natural gas and oil prices decreases (increases) the fair value of natural gas and oil derivatives and adverse changes to our counterparties’ creditworthiness decreases the fair value of our derivatives.

Quantitative Disclosures about Unobservable Inputs for Level 3 Fair Value Measurements

Instrument Type	Unobservable Input	Range	Weighted Average		Fair Value March 31, 2014(a)
					($ in millions)
Oil trades	Oil price volatility curves	10.56% - 21.78%	15.43	%	$	(256	)
Natural gas trades	Natural gas price volatility curves	18.03% - 38.37%	24.32	%	$	(251	)

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