The Company primarily utilizes commodity swap contracts, collar contracts, collar contracts with short puts and basis swap contracts to (i) reduce the effect of price volatility on the commodities the Company produces and sells or consumes, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) support the payment of contractual obligations and dividends.

Oil production derivatives. The Company sells its oil production at the lease and the sales contracts governing such oil production are tied directly to, or are correlated with, New York Mercantile Exchange ("NYMEX") West Texas Intermediate ("WTI") oil prices. The Company also enters into pipeline capacity commitments in order to secure available oil, NGL and gas transportation capacity from the Company's areas of production. The Company also enters into purchase transactions with third parties and separate sale transactions with third parties to diversify a portion of the Company's oil sales to Gulf Coast refineries or international export markets at prices that are highly correlated with Brent oil prices. As a result, the Company will generally use Brent derivative contracts to manage future oil price volatility.


	2021								Year Ending December 31, 2022
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Brent swap contracts:
Volume per day (Bbl)	85,000		85,000		—		—		—
Price per Bbl	$	46.88	$	46.88	$	—	$	—	$	—
Brent collar contracts with short puts:
Volume per day (Bbl)	90,000		90,000		90,000		90,000		20,000
Price per Bbl:
Ceiling	$	50.74	$	50.74	$	50.74	$	50.74	$	57.88
Floor	$	45.11	$	45.11	$	45.11	$	45.11	$	45.50
Short put	$	35.07	$	35.07	$	35.07	$	35.07	$	35.00
Brent call contracts sold:
Volume per day (Bbl) (a)	20,000		20,000		20,000		20,000		—
Price per Bbl:	$	69.74	$	69.74	$	69.74	$	69.74	$	—

NGL production derivatives. All material physical sales contracts governing the Company's NGL production are tied directly or indirectly to Mont Belvieu, Texas NGL component product prices. The Company uses derivative contracts to manage the NGL component product price volatility. As of December 31, 2020, the Company did not have any NGL derivative contracts outstanding.

Gas production derivatives. All material physical sales contracts governing the Company's gas production are tied directly or indirectly to NYMEX Henry Hub ("HH") gas prices or regional index prices where the gas is sold. To diversify the gas prices it receives to international market prices, the Company sells a portion of its gas production at Dutch Title Transfer Facility ("Dutch TTF") prices. The Company uses derivative contracts to manage gas price volatility and basis swap contracts to reduce basis risk between HH prices and actual index prices at which the gas is sold.


	2021
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
NYMEX swap contracts:
Volume per day (MMBtu)	127,222		100,000		100,000		100,000
Price per MMBtu	$	2.66	$	2.68	$	2.68	$	2.68
Dutch TTF swap contracts:
Volume per day (MMBtu)	30,000		30,000		30,000		30,000
Price per MMBtu	$	5.07	$	5.07	$	5.07	$	5.07
NYMEX collar contracts:
Volume per day (MMBtu)	150,000		150,000		150,000		150,000
Price per MMBtu:
Ceiling	$	3.15	$	3.15	$	3.15	$	3.15
Floor	$	2.50	$	2.50	$	2.50	$	2.50
Basis swap contracts:
Permian Basin index swap volume per day (MMBtu) (a)	10,000		—		—		—
Price differential ($/MMBtu)	$	(1.46)	$	—	$	—	$	—

(a)The referenced basis swap contracts fix the basis differential between the index price at which the Company sells its Permian Basin gas and the NYMEX index prices used in swap contracts.

Marketing derivatives. The Company's marketing derivatives reflect two long-term marketing contracts that were entered in October 2019. Under the contract terms, beginning on January 1, 2021, the Company agreed to purchase and simultaneously sell 50 thousand barrels of oil per day at an oil terminal in Midland, Texas for a six-year term that ends on December 31, 2026. The price the Company pays to purchase the oil volumes under the purchase contract is based on a Midland WTI price and the price the Company receives for the oil volumes sold is a WASP that a non-affiliated counterparty receives for selling oil through their Gulf Coast storage and export facility at prices that are highly correlated with Brent oil prices during the same month of the purchase. Based on the form of the marketing contracts, the Company determined that the marketing contracts should be accounted for as derivative instruments.

Contingent consideration. The Company's right to receive contingent consideration in conjunction with the South Texas Divestiture was determined to be a derivative financial instrument that is not designated as a hedging instrument. Prior to its settlement in July 2020, the contingent consideration was based on forecasted oil and NGL prices during each of the five years from 2020 to 2024. See Note 3 and Note 4 and Note 15 for additional information.


As of December 31, 2020
Type	Consolidated Balance Sheet Location	Fair Value		Gross Amounts Offset in the Consolidated Balance Sheet		Net Fair Value Presented in the Consolidated Balance Sheet
		(in millions)
Assets:
Commodity price derivatives	Derivatives - current	$	5	$	—	$	5
Commodity price derivatives	Derivatives - noncurrent	$	3	$	—	$	3


Liabilities:
Commodity price derivatives	Derivatives - current	$	198	$	—	$	198
Marketing derivatives	Derivatives - current	$	36	$	—	$	36
Commodity price derivatives	Derivatives - noncurrent	$	11	$	—	$	11
Marketing derivatives	Derivatives - noncurrent	$	55	$	—	$	55


As of December 31, 2019
Type	Consolidated Balance Sheet Location	Fair Value		Gross Amounts Offset in the Consolidated Balance Sheet		Net Fair Value Presented in the Consolidated Balance Sheet
		(in millions)
Assets:
Commodity price derivatives	Derivatives - current	$	32	$	—	$	32
Marketing derivatives	Derivatives - non current	$	21	$	—	$	21


Contingent consideration	Other assets - noncurrent	$	91	$	—	$	91
Liabilities:
Commodity price derivatives	Derivatives - current	$	12	$	—	$	12

Commodity price derivatives	Derivatives - noncurrent	$	8	$	—	$	8


Derivatives Not Designated as Hedging Instruments	Location of Gain/(Loss) Recognized in Earnings on Derivatives	Year Ended December 31,
		2020		2019		2018
		(in millions)
Commodity price derivatives	Derivative gain (loss), net	$	(147)	$	34	$	(292)
Marketing derivatives	Derivative gain (loss), net	$	(112)	$	21	$	—
Interest rate derivatives	Derivative gain (loss), net	$	(22)	$	—	$	—
Contingent consideration	Interest and other income (loss), net	$	(42)	$	(45)	$	—

The Company uses credit and other financial criteria to evaluate the credit standing of, and to select, counterparties to its derivative instruments. Although the Company does not obtain collateral or otherwise secure the fair value of its derivative instruments, associated credit risk is mitigated by the Company's credit risk policies and procedures.


	As of December 31, 2020

	(in millions)
Citibank	$	49
Scotia Bank	25
JP Morgan Chase	20
Merrill Lynch	18
Wells Fargo Bank	17
J Aron & Company	16
Morgan Stanley Capital Group	16
Bank of Montreal	15
Macquarie Bank	15
Royal Bank of Canada	9
Toronto-Dominion	1















	$	201