Derivatives

For further information regarding the fair value measurement of derivative instruments, see Note 12. All of our interest rate and commodity derivatives are subject to enforceable master netting arrangements or similar agreements under which we may report net amounts. The following tables present the gross fair values of derivative instruments and the reported net amounts where they appear on the consolidated balance sheets as of June 30, 2015 and December 31, 2014.



	June 30, 2015
(In millions)	Asset		Liability		Net Asset		Balance Sheet Location
Fair Value Hedges
Interest rate	$	11	$	—	$	11	Other noncurrent assets
Total	$	11	$	—	$	11




	June 30, 2015
(In millions)	Asset		Liability		Net Liability		Balance Sheet Location
Not Designated as Hedges
Commodity	$	5	$	17	$	12	Other current liabilities
Commodity	—		9		9		Other noncurrent liabilities
Total	$	5	$	26	$	21



	December 31, 2014
(In millions)	Asset		Liability		Net Asset		Balance Sheet Location
Fair Value Hedges
Interest rate	$	8	$	—	$	8	Other noncurrent assets
Total	$	8	$	—	$	8

Derivatives Designated as Fair Value Hedges

The following table presents, by maturity date, information about our interest rate swap agreements as of June 30, 2015 and December 31, 2014, including the weighted average, London Interbank Offer Rate (“LIBOR”)-based, floating rate.



	June 30, 2015				December 31, 2014
	Aggregate Notional Amount		Weighted Average, LIBOR-Based,		Aggregate Notional Amount		Weighted Average, LIBOR-Based,
Maturity Dates	(in millions)		Floating Rate		(in millions)		Floating Rate
October 1, 2017	$	600	4.67	%	$	600	4.64	%
March 15, 2018	$	300	4.52	%	$	300	4.49	%

The pretax effects of derivative instruments designated as hedges of fair value in our consolidated statements of income are summarized in the table below. The foreign currency forwards were used to hedge the current Norwegian tax liability of our Norway business that was sold in the fourth quarter of 2014. Those instruments outstanding were transferred to the purchaser of the Norway business upon closing of the sale. There is no ineffectiveness related to the fair value hedges.



		Gain (Loss)
		Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	Income Statement Location	2015			2014			2015			2014
Derivative
Interest rate	Net interest and other	$	(2	)	$	4		$	3		$	3
Foreign currency	Discontinued operations	$	—		$	(14	)	$	—		$	(11	)
Hedged Item
Long-term debt	Net interest and other	$	2		$	(4	)	$	(3	)	$	(3	)
Accrued taxes	Discontinued operations	$	—		$	14		$	—		$	11

Derivatives not Designated as Hedges

During the first six months of 2015, we entered into multiple crude oil derivatives indexed to New York Mercantile Exchange ("NYMEX") West Texas Intermediate ("WTI"), related to a portion of our forecasted North America E&P sales through December 2016. These commodity derivatives primarily consist of call options and three way-collars which consist of a sold call (ceiling), a purchased put (floor) and a sold put. The ceiling price is the maximum we will receive for the contract crude oil volumes, the floor is the minimum price we will receive, unless the market price falls below the sold put strike price. In this case, we receive the NYMEX WTI price plus the difference between the floor and the sold put price. These commodity derivatives were not designated as hedges and are shown in the table below:



Financial Instrument	Weighted Average Price	Barrels per day	Remaining Term
Three-Way Collars
Ceiling	$70.34	35,000	July- December 2015 ^(a)
Floor	$55.57
Sold put	$41.29

Ceiling	$71.84	12,000	January- December 2016
Floor	$60.48
Sold put	$50.00

Ceiling	$73.13	2,000	January- June 2016 ^(b)
Floor	$65.00
Sold put	$50.00
Call Options	$72.39	10,000	January- December 2016 ^(c)


^(a)	Counterparties have the option to execute fixed-price swaps (swaptions) at a weighted average price of $71.67 per barrel indexed to NYMEX WTI, which is exercisable on October 30, 2015. If counterparties exercise, the term of the fixed price swaps would be for calendar year 2016 and, if all such are exercised, 25,000 barrels per day.


^(b)	Counterparty has the option, exercisable on June 30, 2016, to extend these collars through the remainder of 2016 at the same volume and weighted average price as the underlying three-way collars.


^(c)	Call options settle monthly.

The impact of these crude oil derivative instruments appears in sales and other operating revenues in our consolidated statements of income and was a net loss of $43 million and $17 million in the second quarter and first six months of 2015. There were no crude oil derivative instruments in the first six months of 2014.

On June 1, 2015, we entered into Treasury rate locks, which expired on the same day, to hedge against timing differences as it related to our Notes offering (see Note 15). Following the execution of the Treasury locks, corresponding interest rates increased during the day of June 1. As a result, the settlement of the Treasury rate locks resulted in a gain of $6 million, which was recognized in net interest and other in our consolidated statements of income.