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Leases

12 Months Ended

Dec. 31, 2023

As of December 31, 2023, the Company has one finance lease for its corporate headquarters office building. The Company's operating leases, as of December 31, 2023, are comprised of drilling rigs, storage tanks, field equipment and buildings.

The Company's finance lease balances are as follows:


		As of December 31,
Type	Consolidated Balance Sheet Location	2023		2022
		(in millions)
Assets:
Finance lease right-of-use asset	Other property and equipment, net	$	444	$	472
Liabilities:
Finance lease liability, current	Other liabilities - current	$	21	$	20
Finance lease liability, noncurrent	Other liabilities - noncurrent	$	481	$	501

The components of lease costs, including amounts recoverable from joint operating partners, are as follows:


	Year Ended December 31,
	2023		2022		2021
	(in millions)
Finance lease cost:
Amortization of right-of-use asset	$	28	$	28	$	28
Interest on lease liability	15		16		16
Operating lease cost (a)	179		151		162
Short-term lease cost (b)	331		211		107
Variable lease cost (c)	21		40		59
	$	574	$	446	$	372

_____________________

(a)Represents straight-line lease costs associated with the Company's operating lease right-of-use assets.

(b)Represents costs associated with short-term leases (those with a contractual term of 12 months or less) that are not included in the consolidated balance sheets.

(c)Variable lease costs are primarily comprised of the non-lease service component of drilling rig commitments above the minimum required payments. Both the minimum required payments and the non-lease service component of the drilling rig commitments are capitalized as additions to oil and gas properties.

The Company subleases to third parties certain office space acquired as part of business combinations that are no longer occupied by the Company. The subleases are classified as operating leases and the Company recognizes sublease income on a straight-line basis over the sublease term. During the years ended December 31, 2023, 2022 and 2021, the Company recorded $29 million, $20 million and $4 million, respectively, in net interest and other income in the consolidated statement of operations associated with the subleases.

Cash flow information related to leases is as follows:


	Year Ended December 31,
	2023		2022		2021
	(in millions)
Operating cash flows:
Cash payments for operating, short-term and variable leases	$	281	$	200	$	131
Cash payments for interest on finance lease	$	15	$	16	$	16
Investing cash flows:
Cash payments for operating, short-term and variable leases (a)	$	254	$	208	$	191
Financing cash flows:
Cash payments for principal on finance lease	$	19	$	18	$	17

_____________________

(a)Represents costs associated with drilling operations that are capitalized as additions to oil and gas properties.

The changes in lease liabilities are as follows:


	Year Ended December 31, 2023				Year Ended December 31, 2022
	Operating		Finance		Operating		Finance
	(in millions)
Beginning lease liabilities	$	361	$	521	$	364	$	539
Liabilities assumed in exchange for new right-of-use assets (a)	232		—		149		—


Contract modifications (b)	—		—		(6)		—

Liabilities settled	(182)		(19)		(153)		(18)
Straight-line rent expense adjustment	(1)		—		—		—
Accretion of discount on operating leases (c)	13		—		7		—
Ending lease liabilities (d)	$	423	$	502	$	361	$	521

______________________

(a)Represents noncash leasing activity. The weighted-average discount rate used to determine the present value of future operating lease payments was 3.6 percent and 2.5 percent for the year ended December 31, 2023 and 2022, respectively. The Company used a 3.0 percent discount rate to determine the present value of its future finance lease payments for its corporate headquarters office building that commenced in 2019.

(b)Represents changes in lease liabilities due to modifications of original contract terms.

(c)Represents imputed interest on discounted future cash payments of operating leases.

(d)As of December 31, 2023, the weighted-average remaining lease term of the Company's operating and finance leases is four and 16 years, respectively, as compared to five and 17 years as of December 31, 2022.

Maturities of lease liabilities are as follows:


	As of December 31, 2023
	Operating		Finance
	(in millions)
2024	$	187	$	35
2025	113		36
2026	51		37
2027	24		37
2028	19		38
Thereafter	58		453
Total lease payments	452		636
Less present value discount	(29)		(134)
Present value of lease liabilities	$	423	$	502

Leases

The Company's finance lease balances are as follows:


		As of December 31,
Type	Consolidated Balance Sheet Location	2023		2022
		(in millions)
Assets:
Finance lease right-of-use asset	Other property and equipment, net	$	444	$	472
Liabilities:
Finance lease liability, current	Other liabilities - current	$	21	$	20
Finance lease liability, noncurrent	Other liabilities - noncurrent	$	481	$	501

The components of lease costs, including amounts recoverable from joint operating partners, are as follows:


	Year Ended December 31,
	2023		2022		2021
	(in millions)
Finance lease cost:
Amortization of right-of-use asset	$	28	$	28	$	28
Interest on lease liability	15		16		16
Operating lease cost (a)	179		151		162
Short-term lease cost (b)	331		211		107
Variable lease cost (c)	21		40		59
	$	574	$	446	$	372

_____________________

(a)Represents straight-line lease costs associated with the Company's operating lease right-of-use assets.

(b)Represents costs associated with short-term leases (those with a contractual term of 12 months or less) that are not included in the consolidated balance sheets.

Cash flow information related to leases is as follows:


	Year Ended December 31,
	2023		2022		2021
	(in millions)
Operating cash flows:
Cash payments for operating, short-term and variable leases	$	281	$	200	$	131
Cash payments for interest on finance lease	$	15	$	16	$	16
Investing cash flows:
Cash payments for operating, short-term and variable leases (a)	$	254	$	208	$	191
Financing cash flows:
Cash payments for principal on finance lease	$	19	$	18	$	17

_____________________

(a)Represents costs associated with drilling operations that are capitalized as additions to oil and gas properties.

The changes in lease liabilities are as follows:


	Year Ended December 31, 2023				Year Ended December 31, 2022
	Operating		Finance		Operating		Finance
	(in millions)
Beginning lease liabilities	$	361	$	521	$	364	$	539
Liabilities assumed in exchange for new right-of-use assets (a)	232		—		149		—


Contract modifications (b)	—		—		(6)		—

Liabilities settled	(182)		(19)		(153)		(18)
Straight-line rent expense adjustment	(1)		—		—		—
Accretion of discount on operating leases (c)	13		—		7		—
Ending lease liabilities (d)	$	423	$	502	$	361	$	521

______________________

(b)Represents changes in lease liabilities due to modifications of original contract terms.

(c)Represents imputed interest on discounted future cash payments of operating leases.

Maturities of lease liabilities are as follows:


	As of December 31, 2023
	Operating		Finance
	(in millions)
2024	$	187	$	35
2025	113		36
2026	51		37
2027	24		37
2028	19		38
Thereafter	58		453
Total lease payments	452		636
Less present value discount	(29)		(134)
Present value of lease liabilities	$	423	$	502