Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations:

In 2013, we met the criteria to classify our Malaysia business as held-for-sale and discontinued operations. In February 2014, Newfield International Holdings Inc., a wholly-owned subsidiary of the Company, closed the sale of our Malaysia business to SapuraKencana Petroleum Berhad (SapuraKencana), a Malaysian public company, for $898 million. As a result of the sale, we recorded a gain in the first quarter of 2014 of approximately $388 million ($252 million, after tax). As of the date of this report, the final post-close settlement is pending due to a dispute with the purchaser that arose subsequent to closing and could possibly go to arbitration. In the fourth quarter of 2014, we recorded an allowance against a receivable from SapuraKencana and reduced the previously recognized gain by $15 million ($10 million, after tax) due to uncertainty associated with collectability.

Results of Discontinued Operations

	Year Ended December 31,
	2014		2013		2012
	(In millions)
Oil and gas revenues (1)	$	90	$	823	$	1,005
Operating expenses	69		652		618
Income from discontinued operations	21		171		387
Other income (expense)	—		4		(1		)
Gain on sale of Malaysia business	373		—		—
Income from discontinued operations before income taxes	394		175		386
Income tax provision (benefit):
Current	12		88		179
Deferred	132		13		469
Total income tax provision (benefit)	144		101		648
Income (loss) from discontinued operations, net of tax	$	250	$	74	$	(262	)

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(1) Certain payments to foreign governments made on our behalf that are part of the revenue process are recorded as a reduction of the related oil and gas revenues.

Income Taxes

Historically, our effective tax rate in Malaysia was approximately 38%. As a result of our December 2012 decision to repatriate earnings from our international operations, we experienced higher international effective tax rates due to these earnings being taxed both in the U.S. and the local country. For the year ended 2014, our effective tax rate in Malaysia was 37% as the majority of our income from discontinued operations resulted from the gain on the sale of our Malaysia business, which was only taxable in the U.S. The effective tax rate for our discontinued operations for the years ended 2013 and 2012 was 58% and 168%, respectively, due to our international earnings being taxed both in the U.S and the local country.

Assets and Liabilities in the Consolidated Balance Sheet Attributable to Discontinued Operations

	December 31,
	2013
	(In millions)
Current assets:
Cash and cash equivalents	$	55
Accounts receivable	142
Inventories	121
Other current assets	29
Total current assets	347
Noncurrent assets:
Oil and gas properties, net of accumulated depreciation, depletion and amortization of $1,009 as of December 31, 2013	547
Deferred taxes	19
Other assets	3
Total noncurrent assets	569
Total assets	$	916
Current liabilities:
Accounts payable	$	34
Accrued liabilities	185
Asset retirement obligations	49
Other current liabilities	18
Total current liabilities	286
Noncurrent liabilities:
Asset retirement obligations	84
Deferred taxes	29
Other liabilities	11
Total noncurrent liabilities	124
Total liabilities	$	410

Inventories

At December 31, 2013, the crude oil inventory from our Malaysia operations consisted of approximately 1.1 million barrels of crude oil valued at cost of $89 million and is included in the "Inventories" line item in the preceding table and in our consolidated balance sheet. Cost for purposes of the carrying value of oil inventory is the sum of production costs and depletion expense.

Oil and Gas Properties

At December 31, 2013, we performed a fair value assessment of our discontinued operations, noting no indication of impairment based on the carrying value.

During 2012, when our Malaysia business was reported as continuing operations, we performed a ceiling test for the full cost pool. The ceiling value of our reserves was calculated based upon SEC pricing of $2.76 per MMBtu for natural gas and $94.84 per barrel for oil. Using these prices, the cost center ceiling with respect to our Malaysia full cost pool exceeded the net capitalized costs of the respective cost center at December 31, 2012 and as such, no ceiling test writedown was required.

The change in our ARO for our discontinued operations for each of the three years ended December 31, is set forth below:

	2014			2013			2012
	(In millions)
Balance at January 1	$	133		$	40		$	37
Accretion expense	1			3			3
Additions	—			4			4
Revisions	—			101			—
Settlements (1)	(134		)	(15		)	(4		)
Balance at December 31	—			133			40
Less: Current portion of ARO at December 31	—			(49		)	(5		)
Total long-term ARO at December 31	$	—		$	84		$	35

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(1) Obligations reduced as a result of the sale of our Malaysia business in February 2014.