Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedges, Assets [Abstract]

Outstanding contracts that are not designated for hedge accounting

At March 31, 2018, we had outstanding derivative positions as set forth in the tables below.

Crude Oil

		NYMEX Contract Price Per Bbl
						Collars				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MBbls	Swaps (Weighted Average)		Puts (Weighted Average)		Floors (Weighted Average)		Ceilings (Weighted Average)
										(In millions)
2018:
Fixed-price swaps (1)	11,453	$	54.67	$	—	$	—	$	—	$	(100	)
Fixed-price swaps with sold puts:	644
Fixed-price swaps		56.78		—		—		—		(4		)
Sold puts		—		44.00		—		—		—
Collars	1,274	—		—		50.59		56.70		(11		)
Collars with sold puts:	1,932
Collars		—		—		48.34		56.60		(14		)
Sold Puts		—		39.48		—		—		(1		)
2019:
Collars with sold puts:	10,566
Collars		—		—		50.59		57.13		(51		)
Sold puts		—		40.60		—		—		(18		)
Total										$	(199	)

_________________

(1) During the first quarter of 2018, our counterparties exercised crude oil swaption contracts that protect 273,000 Bbls of second quarter 2018 production from future commodity price volatility.

Natural Gas

		NYMEX Contract Price Per MMBtu
						Collars				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MMMBtus	Swaps (Weighted Average)		Puts (Weighted Average)		Floors (Weighted Average)		Ceilings (Weighted Average)
										(In millions)
2018:
Fixed-price swaps	39,400	$	2.99	$	—	$	—	$	—	$	7
Fixed-price swaps with sold puts:	13,440
Fixed-price swaps		3.00		—		—		—		2
Sold puts		—		2.63		—		—		(2		)
Collars	5,500	—		—		2.88		3.24		1
Collars with sold puts:	6,420
Collars		—		—		2.87		3.32		1
Sold puts		—		2.30		—		—		—
2019:
Fixed-price swaps	3,650	2.91		—		—		—		—
Collars	9,000	—		—		3.00		3.47		1
Total										$	10

Natural Gas Liquids (Propane)

		Mont Belvieu Contract Price Per Gallon
				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MBbls	Swaps (Weighted Average)
				(In millions)
2018:
Fixed-price swaps	1,099	$	0.81	$	2
Total				$	2

Derivative financial instruments recorded in balance sheet

We had derivative financial instruments recorded in our consolidated balance sheet as assets (liabilities) at their respective estimated fair value, as set forth below.

	Derivative Assets									Derivative Liabilities
	Gross Fair Value		Offset in Balance Sheet			Balance Sheet Location				Gross Fair Value			Offset in Balance Sheet		Balance Sheet Location
						Current		Noncurrent							Current			Noncurrent
	(In millions)									(In millions)
March 31, 2018
Oil positions	$	139	$	(139	)	$	—	$	—	$	(338	)	$	139	$	(153	)	$	(46	)
Natural gas positions	16		(6		)	10		—		(6		)	6		—			—
NGL positions	2		—			2		—		—			—		—			—
Total	$	157	$	(145	)	$	12	$	—	$	(344	)	$	145	$	(153	)	$	(46	)
December 31, 2017
Oil positions	$	48	$	(48	)	$	—	$	—	$	(170	)	$	48	$	(96	)	$	(26	)
Natural gas positions	22		(6		)	15		1		(6		)	6		—			—
NGL positions	—		—			—		—		(2		)	—		(2		)	—
Total	$	70	$	(54	)	$	15	$	1	$	(178	)	$	54	$	(98	)	$	(26	)

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

Derivative Financial Instruments

Commodity Derivative Instruments

We utilize derivative strategies that consist of either a single derivative instrument or a combination of instruments to manage the variability in cash flows associated with the forecasted sale of our future domestic oil, natural gas and NGL production. While the use of derivative instruments may limit or partially reduce the downside risk of adverse commodity price movements, their use also may limit future income from favorable commodity price movements. Our derivative strategies are outlined in our Annual Report on Form 10-K for the year ended December 31, 2017.

Our oil and gas derivative contracts are settled based upon reported prices on the NYMEX, and our NGL derivative contracts are settled on posted prices at Mont Belvieu. The estimated fair value of these contracts is based upon various factors, including closing exchange prices on the NYMEX, over-the-counter quotations, estimated volatility, non-performance risk adjustments using counterparty rates of default and time to maturity. The calculation of the fair value of options requires the use of an option-pricing model. See Note 5, "Fair Value Measurements."

At March 31, 2018, we had outstanding derivative positions as set forth in the tables below.

Crude Oil

		NYMEX Contract Price Per Bbl
						Collars				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MBbls	Swaps (Weighted Average)		Puts (Weighted Average)		Floors (Weighted Average)		Ceilings (Weighted Average)
										(In millions)
2018:
Fixed-price swaps (1)	11,453	$	54.67	$	—	$	—	$	—	$	(100	)
Fixed-price swaps with sold puts:	644
Fixed-price swaps		56.78		—		—		—		(4		)
Sold puts		—		44.00		—		—		—
Collars	1,274	—		—		50.59		56.70		(11		)
Collars with sold puts:	1,932
Collars		—		—		48.34		56.60		(14		)
Sold Puts		—		39.48		—		—		(1		)
2019:
Collars with sold puts:	10,566
Collars		—		—		50.59		57.13		(51		)
Sold puts		—		40.60		—		—		(18		)
Total										$	(199	)

_________________

(1) During the first quarter of 2018, our counterparties exercised crude oil swaption contracts that protect 273,000 Bbls of second quarter 2018 production from future commodity price volatility.

Natural Gas

		NYMEX Contract Price Per MMBtu
						Collars				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MMMBtus	Swaps (Weighted Average)		Puts (Weighted Average)		Floors (Weighted Average)		Ceilings (Weighted Average)
										(In millions)
2018:
Fixed-price swaps	39,400	$	2.99	$	—	$	—	$	—	$	7
Fixed-price swaps with sold puts:	13,440
Fixed-price swaps		3.00		—		—		—		2
Sold puts		—		2.63		—		—		(2		)
Collars	5,500	—		—		2.88		3.24		1
Collars with sold puts:	6,420
Collars		—		—		2.87		3.32		1
Sold puts		—		2.30		—		—		—
2019:
Fixed-price swaps	3,650	2.91		—		—		—		—
Collars	9,000	—		—		3.00		3.47		1
Total										$	10

Natural Gas Liquids (Propane)

		Mont Belvieu Contract Price Per Gallon
				Estimated Fair Value Asset (Liability)
Period and Type of Instrument	Volume in MBbls	Swaps (Weighted Average)
				(In millions)
2018:
Fixed-price swaps	1,099	$	0.81	$	2
Total				$	2

Additional Disclosures about Derivative Financial Instruments

We had derivative financial instruments recorded in our consolidated balance sheet as assets (liabilities) at their respective estimated fair value, as set forth below.

	Derivative Assets									Derivative Liabilities
	Gross Fair Value		Offset in Balance Sheet			Balance Sheet Location				Gross Fair Value			Offset in Balance Sheet		Balance Sheet Location
						Current		Noncurrent							Current			Noncurrent
	(In millions)									(In millions)
March 31, 2018
Oil positions	$	139	$	(139	)	$	—	$	—	$	(338	)	$	139	$	(153	)	$	(46	)
Natural gas positions	16		(6		)	10		—		(6		)	6		—			—
NGL positions	2		—			2		—		—			—		—			—
Total	$	157	$	(145	)	$	12	$	—	$	(344	)	$	145	$	(153	)	$	(46	)
December 31, 2017
Oil positions	$	48	$	(48	)	$	—	$	—	$	(170	)	$	48	$	(96	)	$	(26	)
Natural gas positions	22		(6		)	15		1		(6		)	6		—			—
NGL positions	—		—			—		—		(2		)	—		(2		)	—
Total	$	70	$	(54	)	$	15	$	1	$	(178	)	$	54	$	(98	)	$	(26	)

The amount of gain (loss) recognized in "Commodity derivative income (expense)" in our consolidated statement of operations and comprehensive income related to our derivative financial instruments follows:

	Three Months Ended   March 31,
	2018			2017
	(In millions)
Derivatives not designated as hedging instruments:
Realized gain (loss) on oil positions	$	(38	)	$	26
Realized gain (loss) on natural gas positions	6			(6		)
Realized gain (loss) on NGL positions	—			—
Total realized gain (loss)	(32		)	20
Unrealized gain (loss) on oil positions	(76		)	1
Unrealized gain (loss) on natural gas positions	(7		)	32
Unrealized gain (loss) on NGL positions	4			—
Total unrealized gain (loss)	(79		)	33
Total	$	(111	)	$	53

The use of derivative transactions involves the risk that the counterparties, which generally are financial institutions, will be unable to meet the financial terms of such transactions. Our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty, and we have netting arrangements with all of our counterparties that provide for offsetting payables against receivables by counterparty. At March 31, 2018, 10of our 15counterparties accounted for approximately 80%of our contracted volumes, with the largest counterparty accounting for approximately 10%.

At March 31, 2018, approximately 77% of our volumes subject to derivative instruments are with lenders under our credit facility. Our credit facility, senior notes and substantially all of our derivative instruments contain provisions that provide for cross defaults and acceleration of those debt and derivative instruments in certain situations.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Operations [Table Text Block]

The amount of gain (loss) recognized in "Commodity derivative income (expense)" in our consolidated statement of operations and comprehensive income related to our derivative financial instruments follows:

	Three Months Ended   March 31,
	2018			2017
	(In millions)
Derivatives not designated as hedging instruments:
Realized gain (loss) on oil positions	$	(38	)	$	26
Realized gain (loss) on natural gas positions	6			(6		)
Realized gain (loss) on NGL positions	—			—
Total realized gain (loss)	(32		)	20
Unrealized gain (loss) on oil positions	(76		)	1
Unrealized gain (loss) on natural gas positions	(7		)	32
Unrealized gain (loss) on NGL positions	4			—
Total unrealized gain (loss)	(79		)	33
Total	$	(111	)	$	53