Revenues

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The majority of our revenues are derived from the sale of crude oil and condensate, NGLs and natural gas under spot and term agreements with our customers in the United States and various international locations.

As of December 31, 2021 and December 31, 2020, receivables from contracts with customers, included in receivables, less reserves for credit losses were $961 million and $572 million, respectively.

The following tables present our revenues from contracts with customers disaggregated by product type and geographic areas.

United States

	Year Ended December 31, 2021
(In millions)	Eagle Ford		Bakken		Oklahoma		Northern Delaware		Other U.S.		Total
Crude oil and condensate	$	1,435	$	1,777	$	299	$	314	$	100	$	3,925
Natural gas liquids	161		239		189		47		17		653
Natural gas	159		119		280		55		19		632
Other	8		—		—		—		116		124
Revenues from contracts with customers	$	1,763	$	2,135	$	768	$	416	$	252	$	5,334

	Year Ended December 31, 2020
(In millions)	Eagle Ford		Bakken		Oklahoma		Northern Delaware		Other U.S.		Total
Crude oil and condensate	$	830	$	984	$	235	$	204	$	69	$	2,322
Natural gas liquids	74		54		89		20		6		243
Natural gas	86		34		127		18		10		275
Other	6		—		—		—		78		84
Revenues from contracts with customers	$	996	$	1,072	$	451	$	242	$	163	$	2,924

	Year Ended December 31, 2019
(In millions)	Eagle Ford		Bakken		Oklahoma		Northern Delaware		Other U.S.		Total
Crude oil and condensate	$	1,358	$	1,686	$	425	$	316	$	102	$	3,887
Natural gas liquids	114		46		116		26		5		307
Natural gas	121		39		156		16		17		349
Other	7		—		—		—		52		59
Revenues from contracts with customers	$	1,600	$	1,771	$	697	$	358	$	176	$	4,602

International

	Year Ended December 31,
	2021		2020
(In millions)	E.G.		E.G.
Crude oil and condensate	$	240	$	140
Natural gas liquids	2		4
Natural gas	23		29
Other	2		—
Revenues from contracts with customers	$	267	$	173

	Year Ended December 31, 2019
(In millions)	E.G.		U.K.		Other International		Total
Crude oil and condensate	$	271	$	107	$	20	$	398
Natural gas liquids	4		1		—		5
Natural gas	32		12		—		44
Other	—		14		—		14
Revenues from contracts with customers	$	307	$	134	$	20	$	461

Customers and their respective affiliates who accounted for 10% or more of our total commodity sales were as follows:

	December 31,
	2021		2020		2019
Percentage of Total Commodity Sales
Marathon Petroleum Corporation	17	%	13	%	13	%
Valero Marketing and Supply	10	%	N/A		11	%
Koch Resources LLC	N/A		12	%	13	%
Shell Trading	N/A		N/A		10	%

The pricing in our hydrocarbon sales agreements are variable, determined using various published benchmarks which are adjusted for negotiated quality and location differentials. As a result, revenue collected under our agreements with customers is highly dependent on the market conditions and may fluctuate considerably as the hydrocarbon market prices rise or fall. Typically, our customers pay us monthly, within a short period of time after we deliver the hydrocarbon products. As such, we do not have any financing element associated with our contracts. We do not have any issues related to returns or refunds, as product specifications are standardized for the industry and are typically measured when transferred to a common carrier or midstream entity, and other contractual mechanisms (e.g., price adjustments) are used when products do not meet those specifications.

In limited cases, we may also collect advance payments from customers as stipulated in our agreements; payments in excess of recognized revenue are recorded as contract liabilities on our consolidated balance sheet.

Under our hydrocarbon sales agreements, the entire consideration amount is variable either due to pricing and/or volumes. We recognize revenue in the amount of variable consideration allocated to distinct units of hydrocarbons transferred to a customer. Such allocation reflects the amount of total consideration we expect to collect for completed deliveries of hydrocarbons and the terms of variable payment relate specifically to our efforts to satisfy the performance obligations under these contracts. Our performance obligations under our hydrocarbon sales agreements are to deliver either the entire production from the dedicated wells or specified contractual volumes of hydrocarbons.

We often serve as the operator for jointly owned oil and gas properties. As part of this role, we perform activities to explore, develop and produce oil and gas properties in accordance with the joint operating arrangements. Other working interest owners reimburse us for costs incurred based on our agreements. We determined that these activities are not performed as part of customer relationships and such reimbursements will continue to not be recorded as revenues within the scope of the revenue accounting standard.

In addition, we commonly market the share of production belonging to other working interest owners as the operator of jointly owned oil and gas properties. We concluded that those marketing activities are carried out as part of the collaborative arrangement. Therefore, we act as a principal only in regards to the sale of our share of production and recognize revenue for the volumes associated with our net production.

Crude oil and condensate

For the crude sales agreements, we satisfy our performance obligations and recognize revenue once customers take control of the crude at the designated delivery points, which include pipelines, trucks or vessels.

Natural gas and NGLs

When selling natural gas and NGLs, we engage midstream entities to process our production stream by separating natural gas from the NGLs. Frequently, these midstream entities also purchase our natural gas and NGLs under the same agreements.

In these situations, we determined the performance obligation is complete and satisfied at the tailgate of the processing plant when the natural gas and NGLs become identifiable and measurable products. We determined the plant tailgate is the point in time where control is transferred to midstream entities and they are entitled to significant risks and rewards of ownership of the natural gas and NGLs.

The amounts due to midstream entities for gathering and processing services are recognized as shipping and handling cost, since we make those payments in exchange for distinct services. Under some of our natural gas processing agreements, we have an option to take the processed natural gas and NGLs in-kind and sell to customers other than the processing company. In those circumstances, our performance obligations are complete after delivering the processed hydrocarbons to the customer at the designated delivery points, which may be the tailgate of the processing plant or an alternative delivery point requested by the customer.

We have “percentage-of-proceeds” arrangements with some midstream entities where they retain a percentage of the proceeds collected for selling our processed natural gas and NGLs as compensation for their processing and marketing services. We recognize revenue for the gross sales volumes and recognize the proceeds retained by midstream companies as shipping and handling cost.