Divestitures and Nonmonetary Transactions

9 Months Ended

Sep. 30, 2023

Business Combinations [Abstract]

Divestitures and Nonmonetary Transactions

Divestitures and Nonmonetary Transactions

Divestitures. The Company regularly reviews its asset base to identify nonstrategic assets, the disposition of which would increase capital resources available for other activities, create organizational and operational efficiencies and further the Company's objective of maintaining a strong balance sheet to ensure financial flexibility.

•The Company had no material asset divestitures during the three and nine months ended September 30, 2023.

•During the three and nine months ended September 30, 2022, the Company divested certain undeveloped acreage and producing wells in the Midland Basin for cash proceeds of $39 million and $165 million, respectively. The Company recorded a gain on these sales of $34 million and $110 million for the three and nine months ended

September 30, 2022, respectively, which is reflected in net gain on disposition of assets in the consolidated statements of operations.

•In February 2022, the Company completed the sale of its equity interest in certain gas gathering and processing systems in northern Martin County for cash proceeds of $125 million (the "Martin County Gas Processing Divestiture"). The sale was treated as a recovery of investment from a partial sale of proved property resulting in no gain or loss being recognized.

Nonmonetary transactions. During the nine months ended September 30, 2023, the Company's nonmonetary transactions included exchanges of both proved and unproved oil and gas properties in the Midland Basin with unaffiliated third parties. Certain of these transactions were determined to have commercial substance, which led to those transactions being accounted for at fair value, and resulted in the Company recording a gain of $20 million to net gain on disposition of assets in the consolidated statements of operations and $154 million of noncash investing activities for the nine months ended September 30, 2023. Nonmonetary transactions that did not have commercial substance were recorded at carryover basis.