Related Party Transactions

9 Months Ended

Sep. 30, 2021

In December 2018, the Company completed the sale of its pressure pumping assets to ProPetro in exchange for 16.6 million shares of ProPetro common stock and $110 million of cash that was received during the first quarter of 2019. ProPetro is considered a related party as the shares received represent 16 percent of ProPetro's outstanding common stock. In addition to the sale of equipment and related facilities, the Company entered into a long-term agreement with ProPetro for it to provide pressure pumping and related services. The costs of these services are capitalized in oil and gas properties as incurred.

In October 2019, Phillip A. Gobe, a nonemployee member of the Company's board of directors, was appointed by the board of directors of ProPetro to serve as its Executive Chairman, and in March 2020 he was appointed as Chief Executive Officer and Chairman of the board of directors. In July 2021, ProPetro announced that, effective August 31, 2021, Mr. Gobe would transition from ProPetro's Chairman and Chief Executive Officer to Executive Chairman. Mark S. Berg, the Company's Executive Vice President, Corporate Operations, serves as a member of the ProPetro board of directors under the Company's right to designate a director to the board of directors of ProPetro so long as the Company owns five percent or more of ProPetro's outstanding common stock.

Transactions and balances with ProPetro are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(in millions)
Pressure pumping and related services charges (a)	$	130	$	21	$	297	$	163

____________________

(a)Includes no idle frac fleet fees for the three months ended September 30, 2021 and $5 million of idle frac fleet fees for the nine months ended September 30, 2021, as compared to $6 million and $35 million of idle frac fleet fees for the three and nine months ended September 30, 2020, respectively.


	As of September 30, 2021		As of December 31, 2020

	(in millions)

Accounts payable - due to affiliate (a)	$	97	$	45

____________________

(a)Represents amounts payable for pressure pumping and related services provided by ProPetro as part of a long-term agreement.

The Company discloses ProPetro's summarized financial information on a one-quarter lag as it enables the Company to report its quarterly results independent from the timing of when ProPetro reports its results. Summarized financial information for ProPetro is as follows:


	Six Months Ended June 30,
		2021		2020

	(in millions)
Revenue - Service revenue		$	378	$	501
Cost of services (exclusive of depreciation and amortization)		$	286	$	369
Net loss		$	(29)	$	(34)