Derivative and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of estimated fair values of oil, natural gas and NGL derivative instruments

The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of September 30, 2019 and December 31, 2018 are provided below: 

	September 30, 2019				December 31, 2018
	Notional Volume	Fair Value			Notional Volume	Fair Value
		($ in millions)				($ in millions)
Oil (mmbbl):
Fixed-price swaps	22	$	152		12	$	157
Collars	3	33			8	98
Call swaptions	2	(1		)	—	—
Put options	1	(2		)	—	—
Basis protection swaps	2	4			7	5
Total oil	30	186			27	260
Natural gas (bcf):
Fixed-price swaps	383	139			623	26
Three-way collars	15	3			88	1
Collars	9	3			55	(3		)
Call options	28	—			44	—
Call swaptions	136	(7		)	106	(9		)
Basis protection swaps	54	(1		)	50	—
Total natural gas	625	137			966	15
Contingent consideration:
Utica divestiture		—				7
Total estimated fair value		$	323			$	282

Schedule of effect of derivative instruments, condensed consolidated balance sheets

The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 on a gross basis and after same-counterparty netting:

Balance Sheet Classification	Gross Fair Value			Amounts Netted in the Consolidated Balance Sheets			Net Fair Value Presented in the Consolidated Balance Sheet
	($ in millions)
As of September 30, 2019
Commodity Contracts:
Short-term derivative asset	$	294		$	(22	)	$	272
Long-term derivative asset	55			(4		)	51
Short-term derivative liability	(22		)	22			—
Long-term derivative liability	(4		)	4			—
Contingent Consideration:
Short-term derivative asset	—			—			—
Total derivatives	$	323		$	—		$	323
As of December 31, 2018
Commodity Contracts:
Short-term derivative asset	$	306		$	(104	)	$	202
Long-term derivative asset	117			(41		)	76
Short-term derivative liability	(107		)	104			(3		)
Long-term derivative liability	(41		)	41			—
Contingent Consideration:
Short-term derivative asset	7			—			7
Total derivatives	$	282		$	—		$	282

Schedule of effect of derivative instruments, condensed consolidated statements of operations

The components of oil, natural gas and NGL revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	($ in millions)
Oil, natural gas and NGL revenues	$	1,003		$	1,331		$	3,412		$	3,924
Gains (losses) on undesignated oil, natural gas and NGL derivatives	175			(124		)	167			(475		)
Losses on terminated cash flow hedges	(8		)	(8		)	(26		)	(25		)
Total oil, natural gas and NGL revenues	$	1,170		$	1,199		$	3,553		$	3,424

The components of marketing revenues for the Current Quarter, the Prior Quarter, the Current Period and the Prior Period are presented below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019			2018
	($ in millions)
Marketing revenues	$	889	$	1,219	$	3,042		$	3,738
Losses on undesignated marketing natural gas derivatives	—		—		(4		)	—
Total marketing revenues	$	889	$	1,219	$	3,038		$	3,738

Schedule of effect of derivative instruments, accumulated other comprehensive income (loss)

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 September 30,
	2019						2018
	Before  Tax			After  Tax			Before  Tax			After  Tax
	($ in millions)
Balance, beginning of period	$	(62	)	$	(5	)	$	(97	)	(40		)
Losses reclassified to income	8			8			8			8
Balance, end of period	$	(54	)	$	3		$	(89	)	$	(32	)

	Nine Months Ended September 30,
	2019						2018
	Before  Tax			After  Tax			Before  Tax			After  Tax
	($ in millions)
Balance, beginning of period	$	(80	)	$	(23	)	$	(114	)	(57		)
Losses reclassified to income	26			26			25			25
Balance, end of period	$	(54	)	$	3		$	(89	)	$	(32	)

Schedule of financial assets (liabilities)

The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: 

	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
			($ in millions)
As of September 30, 2019
Derivative Assets (Liabilities):
Commodity assets	$	—	$	307		$	40		$	347
Commodity liabilities	—		(16		)	(8		)	(24		)
Utica divestiture contingent consideration	—		—			—			—
Total derivatives	$	—	$	291		$	32		$	323
As of December 31, 2018
Derivative Assets (Liabilities):
Commodity assets	$	—	$	319		$	103		$	422
Commodity liabilities	—		(131		)	(16		)	(147		)
Utica divestiture contingent consideration	—		—			7			7
Total derivatives	$	—	$	188		$	94		$	282

A summary of the changes in the fair values of our financial assets (liabilities) classified as Level 3 during the Current Period and the Prior Period is presented below: 

	Commodity Derivatives			Utica Contingent Consideration
	($ in millions)
Balance, as of January 1, 2019	$	87		$	7
Total gains (losses) (realized/unrealized):
Included in earnings(a)	(47		)	(7		)
Total purchases, issuances, sales and settlements:
Settlements	(8		)	—
Balance, as of September 30, 2019	$	32		$	—
Balance, as of January 1, 2018	$	(15	)	$	—
Total gains (losses) (realized/unrealized):
Included in earnings(a)	(3		)	—
Total purchases, issuances, sales and settlements:
Settlements	13			—
Balance, as of September 30, 2018	$	(5	)	$	—

___________________________________________

(a)		Commodity Derivatives						Utica Contingent Consideration
		2019			2018			2019			2018
		($ in millions)
	Total gains (losses) included in earnings for the period	$	(47	)	$	(3	)	$	(7	)	$	—
	Change in unrealized gains (losses) related to assets still held at reporting date	$	(57	)	$	(3	)	$	(7	)	$	—

The following table provides fair value measurement information for the above-noted financial assets (liabilities) measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018:

	Quoted Prices in Active Markets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
	($ in millions)
As of September 30, 2019
Financial Assets (Liabilities):
Other current assets	$	46		$	—	$	—	$	46
Other current liabilities	(45		)	—		—		(45		)
Total	$	1		$	—	$	—	$	1
As of December 31, 2018
Financial Assets (Liabilities):
Other current assets	$	50		$	—	$	—	$	50
Other current liabilities	(51		)	—		—		(51		)
Total	$	(1	)	$	—	$	—	$	(1	)

Schedule of quantitative information about level 3 inputs used

The following table presents quantitative information about Level 3 inputs used in the fair value measurement of our commodity derivative contracts at fair value as of September 30, 2019:

Instrument Type	Unobservable Input	Range	Weighted Average	Fair Value September 30, 2019
				($ in millions)
Oil trades	Oil price volatility curves	24.62% – 48.77%	32.55%	$	33
Natural gas trades	Natural gas price volatility curves	13.37% – 145.37%	37.40%	$	(1	)