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Derivatives
 9 Months Ended
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
For further information regarding the fair value measurement of derivative instruments, see Note 16. All of our commodity derivatives are subject to enforceable master netting arrangements or similar agreements under which we report net amounts. The following tables present the gross fair values of derivative instruments and the reported net amounts along with where they appear on the consolidated balance sheets.
September 30, 2020
(In millions)AssetLiabilityNet Asset (Liability)Balance Sheet Location
Not Designated as Hedges
Commodity$59 $14 $45 Other current assets
Commodity— 2 (2)Deferred credits and other liabilities
Interest Rate1 — 1 Other noncurrent assets
Interest Rate— 3 (3)Deferred credits and other liabilities
Total Not Designated as Hedges$60 $19 $41 
Cash Flow Hedges
Interest Rate$9 $— $9 Other noncurrent assets
Interest Rate— 19 (19)Deferred credits and other liabilities
Total Designated Hedges$9 $19 $(10)
Total$69 $38 $31 
December 31, 2019
(In millions)AssetLiabilityNet Asset (Liability)Balance Sheet Location
Not Designated as Hedges
Commodity$9 $1 $8 Other current assets
Commodity1 — 1 Other noncurrent assets
Commodity— 5 (5)Other current liabilities
Total Not Designated as Hedges$10 $6 $4 
Cash Flow Hedges
Interest Rate$2 $— $2 Other noncurrent assets
Total Designated Hedges$2 $— $2 
Total$12 $6 $6 
Derivatives Not Designated as Hedges
Commodity Derivatives
We have entered into multiple crude oil, natural gas and NGL derivatives indexed to the respective indices as noted in the table below, related to a portion of our forecasted United States sales through 2021. These derivatives consist of three-way collars, two-way collars, fixed price swaps, basis swaps, and NYMEX roll basis swaps. Three-way collars 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 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. Two-way collars only consist of a sold call (ceiling) and a purchased put (floor). These crude oil, natural gas and NGL derivatives were not designated as hedges.
The following table sets forth outstanding derivative contracts as of September 30, 2020, and the weighted average prices for those contracts:
20202021 2021
Fourth QuarterFirst Half Second Half
Crude Oil
NYMEX WTI Three-Way Collars
Volume (Bbls/day)80,000 — — 
Weighted average price per Bbl:
Ceiling$64.40 $— $— 
Floor$55.00 $— $— 
Sold put$48.00 $— $— 
NYMEX WTI Two-Way Collars
Volume (Bbls/day)20,000 10,000 10,000 
Weighted average price per Bbl:
Ceiling$46.83 $52.37 $52.37 
Floor$37.00 $35.00 $35.00 
Basis Swaps - NYMEX WTI / Argus WTI Midland (a)
Volume (Bbls/day)15,000 — — 
Weighted average price per Bbl$(0.94)$— $— 
Basis Swaps - NYMEX WTI / ICE Brent (b)
Volume (Bbls/day)5,000 1,630 — 
Weighted average price per Bbl$(7.24)$(7.24)$— 
NYMEX Roll Basis Swaps
Volume (Bbls/day)30,000 — — 
Weighted average price per Bbl$(0.81)$— $— 
Natural Gas
Henry Hub (“HH”) Two-Way Collars
Volume (MMBtu/day)250,000 175,000 150,000 
Weighted average price per MMBtu:
Ceiling$2.82 $3.10 $3.03 
Floor$2.25 $2.46 $2.43 
Basis Swaps - WAHA / HH (c)
Volume (MMBtu/day)10,000 — — 
Weighted average price per MMBtu$(0.37)$— $— 
NGL
Fixed Price Ethane Swaps (d)
Volume (Bbls/day)10,000 — — 
Weighted average price per Bbl$8.78 $— $— 
(a)The basis differential price is indexed against Argus WTI Midland and NYMEX WTI.
(b)The basis differential price is indexed against Intercontinental Exchange (“ICE”) Brent and NYMEX WTI.
(c)The basis differential price is indexed against Waha and NYMEX Henry Hub.
(d)The fixed price ethane swap is priced at OPIS Mont Belvieu Purity Ethane.
The following table sets forth outstanding derivative contracts entered into between October 1 and November 3, 2020, and the weighted average prices for those contracts:

20212021
First HalfSecond Half
Crude Oil
Basis Swaps - NYMEX WTI / UHC (a)
Volume (Bbls/day)14,000 — 
Weighted average price per Bbl$(1.80)$— 
Natural Gas
HH Two-Way Collars
Volume (MMBtu/day)50,000 50,000 
Weighted average price per MMBtu:
Ceiling$3.13 $3.13 
Floor$2.70 $2.70 
HH Fixed Price Swaps
Volume (MMBtu/day)50,000 50,000 
Weighted average price per MMBtu$2.88 $2.88 
(a)The basis differential price is indexed against U.S. Sweet Clearbrook (“UHC”) and NYMEX WTI.
The mark-to-market impact and settlement of our commodity derivative instruments appears in the table below and is reflected in net gain (loss) on commodity derivatives in the consolidated statements of income.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2020201920202019
Mark-to-market gain (loss)$(36)$33 $39 $(69)
Net settlements of commodity derivative instruments$35 $14 $92 $41 
Interest Rate Swaps
During 2020, we entered into forward starting interest rate swaps to hedge the variations in cash flows related to fluctuations in the London Interbank Offered Rate (“LIBOR”) benchmark interest rate related to forecasted interest payments of a future debt issuance in 2022. Each respective derivative contract can be tied to an anticipated underlying dollar notional amount. During the third quarter of 2020, we de-designated these forward starting interest rate swaps previously designated as cash flow hedges. At September 30, 2020, accumulated other comprehensive income included a net deferred loss of $2 million related to the de-designated forward starting interest rate swaps previously designated as cash flow hedges. No portion of this amount has been reclassified from accumulated other comprehensive income as of September 30, 2020. We expect to reclassify this amount into earnings as an adjustment to net interest and other upon the occurrence of the forecasted transactions.
The following table presents, by maturity date, information about our de-designated forward starting interest rate swap agreements, including the rate.
September 30, 2020December 31, 2019
Maturity Date
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
November 1, 2022$500 0.99 %$— — %

The following table sets forth the net impact of the forward starting interest rate swap derivatives de-designated as cash flow hedges on other comprehensive income (loss).
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)20202020
Interest Rate Swaps
    Beginning balance$(7)$— 
    Change in fair value recognized in other comprehensive income (loss)5 (2)
    Ending balance $(2)$(2)

Derivatives Designated as Cash Flow Hedges
During 2020, we entered into forward starting interest rate swaps with a notional amount of $350 million to hedge variations in cash flows arising from fluctuations in the LIBOR benchmark interest rate related to forecasted interest payments of a future debt issuance in 2025. We expect to refinance these debt maturities in 2025. The swaps will terminate on or prior to the refinancing of the debt and the final value will be reclassified from accumulated other comprehensive income into earnings with each future interest payment.
During 2019, we entered into forward starting interest rate swaps with a total notional amount of $320 million to hedge variations in cash flows related to the 1-month LIBOR component of future lease payments of our future Houston office. These swaps will settle monthly on the same day the lease payment is made with the first swap settlement occurring in January 2022. We expect the first lease payment to commence sometime in the period from December 2021 to May 2022. The last swap will mature on September 9, 2026. See Note 13 for further details regarding the lease of the new Houston office.
The following table presents, by maturity date, information about our interest rate swap agreements, including the weighted average LIBOR-based, fixed rate.
September 30, 2020December 31, 2019
Maturity Date
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
June 1, 2025$350 0.95 %$— — %
September 9, 2026$320 1.51 %$320 1.51 %
At September 30, 2020, accumulated other comprehensive income included deferred losses of $10 million related to forward starting interest rate swaps designated as cash flow hedges. No amounts related to these swaps are expected to impact the consolidated statements of income in the next 12 months.