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Impairments (Note)
9 Months Ended
Sep. 30, 2015
Asset Impairment Charges [Abstract]  
Asset Impairment Charges Disclosure
Impairments
Impairments of Oil and Natural Gas Properties
On a quarterly basis, we analyze our unproved leasehold and transfer to proved properties leasehold that can be associated with proved reserves, leasehold that expired in the quarter and leasehold that is no longer part of our development strategy and will be abandoned. As commodity prices have decreased significantly over the past 12 months, we transferred, in the Current Quarter, unproved leasehold having a cost of approximately $1.0 billion that would not be a part of our development strategy going forward. The acreage is noncore and is spread out across most of our operating areas.
Our proved oil and natural gas properties are subject to quarterly full cost ceiling tests. Under the ceiling test, capitalized costs, less accumulated amortization and related deferred income taxes, may not exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted for cash flow hedges) less estimated future expenditures to be incurred in developing and producing the proved reserves, less any related income tax effects. Estimated future net revenues for the quarterly ceiling limit are calculated using the average of commodity prices on the first day of the month over the trailing 12-month period. In the Current Quarter and the Current Period, capitalized costs of oil and natural gas properties exceeded the ceiling, resulting in an impairment in the carrying value of our oil and natural gas properties of $5.416 billion and $15.407 billion, respectively. Cash flow hedges as of September 30, 2015, which related to future periods, increased the ceiling test impairment by $184 million. Based on the first-day-of the-month prices we have received over the 11 months ended November 1, 2015, we expect to record another material write-down in the carrying value of our oil and natural gas properties in the fourth quarter of 2015. Further material write-downs in subsequent quarters will occur if the trailing 12-month commodity prices continue to fall as compared to the commodity prices used in prior quarters.
Impairments of Fixed Assets and Other
Compressors. In the Current Period, we recorded a $21 million impairment related to 466 compressors that were sold in the Current Quarter for the difference between the aggregate sales price of $63 million and the carrying value.
Contract Termination Charges. In the Current Period, as a result of reductions in our planned drilling activity in response to declines in oil and natural gas prices, we terminated contracts with drilling contractors and incurred charges of $7 million. Further contract termination charges in subsequent quarters may occur if commodity prices remain low or continue to decline. The contract termination charges are included in our exploration and production operating segment.
Oilfield Services Equipment. In the Prior Period, we purchased 31 leased rigs and equipment from various lessors for an aggregate purchase price of $140 million. In connection with these purchases, we paid $8 million in early lease termination costs, which are included in impairments of fixed assets and other in the condensed consolidated statement of operations. In addition, we recognized an impairment loss of approximately $15 million related to leasehold improvements associated with these assets. The drilling rigs and equipment are included in our former oilfield services operating segment.
Other. In the Current Period, we recorded a $47 million loss contingency related to contract disputes. In the Current Quarter and the Current Period, we recorded a $9 million and $22 million impairment of a note receivable as a result of the increased credit risk associated with declining commodity prices. In addition, under the terms of our joint venture agreements (see Note 9), we are required to extend, renew or replace certain expiring joint leasehold, at our cost, to ensure that the net acreage is maintained in certain designated areas. In the Current Quarter, we entered into a settlement with Total regarding our acreage maintenance commitment in our Barnett Shale joint venture and accrued a $70 million charge. In the Prior Period, we revised our estimate of our net acreage shortfall with Total under the terms of our Barnett Shale joint venture agreement and recorded a $22 million charge. See Note 4 for additional discussion regarding our net acreage maintenance commitments.
Nonrecurring Fair Value Measurements. Fair value measurements for certain of the impairments discussed above were based on recent sales information for comparable assets. As the fair value was estimated using the market approach based on recent prices from orderly sales transactions for comparable assets between market participants, these values were classified as Level 2 in the fair value hierarchy. Other inputs used were not observable in the market; these values were classified as Level 3 in the fair value hierarchy.