Asset Retirement Obligations

12 Months Ended

Dec. 31, 2020

Asset Retirement Obligation [Abstract]

The Company's asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. Market risk premiums associated with asset retirement obligations are estimated to represent a component of the Company's credit-adjusted risk-free rate that is utilized in the calculations of asset retirement obligations.

Asset retirement obligations activity is as follows:


	Year Ended December 31,
	2020		2019
	(in millions)
Beginning asset retirement obligations	$	191	$	183

New wells placed on production	5		5
Changes in estimates (a)	109		82
Dispositions	—		(37)
Liabilities settled	(32)		(52)
Accretion of discount	9		10


Ending asset retirement obligations	282		191
Less current portion of asset retirement obligations	42		73
Asset retirement obligations, long-term	$	240	$	118

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(a)Changes in estimates are determined based on several factors, including abandonment cost estimates based on recent actual costs incurred to abandon wells, credit-adjusted risk-free discount rates and well life estimates. The 2020 change in estimate is primarily due to decreases in commodity prices, which had the effect of shortening well life estimates and increasing the present value of the abandonment obligation. The 2019 change in estimate is primarily due to accelerating the forecasted timing of abandoning certain of the Company's vertical oil and gas wells, which had the effect of increasing the present value of the abandonment obligation attributable to those wells.