Debt and Financing Costs

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Debt and Financing Costs

5. DEBT AND FINANCING COSTS

The following table presents the carrying amounts and estimated fair values of the Company’s outstanding debt:

	June 30, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Commercial paper and committed bank facilities		—		—		1,570		1,570
Notes and debentures		9,676		9,885		9,675		9,944
Total Debt	$	9,676	$	9,885	$	11,245	$	11,514

The Company’s debt is recorded at the carrying amount, net of unamortized discount, on its consolidated balance sheet. The carrying amount of the Company’s commercial paper, committed bank facilities and uncommitted bank lines, and overdraft lines approximates fair value because the interest rates are variable and reflective of market rates. Apache uses a market approach to determine the fair value of its notes and debentures using estimates provided by an independent investment financial data services firm (a Level 2 fair value measurement).

In June 2015, the Company entered into a $3.5 billion five-year revolving credit facility which matures in June 2020. Proceeds from borrowings may be used for general corporate purposes. Apache’s available borrowing capacity under this facility supports its commercial paper program. In connection with entry into the $3.5 billion facility, Apache terminated existing credit facilities totaling $5.3 billion.

The Company has available a $3.5 billion commercial paper program which generally enables Apache to borrow funds for up to 270 days at competitive interest rates. At June 30, 2015, the Company had no outstanding commercial paper.

On July 30, 2015, the Company gave notice to fully redeem its $500 million 5.625% notes due in 2017 and its $400 million 1.75% notes due in 2017 on September 1, 2015. The notes are being redeemed pursuant to the provisions of each respective note’s indenture using cash on hand.

Financing Costs, Net

The following table presents the components of Apache’s financing costs, net:

	For the Quarter Ended						For the Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(In millions)
Interest expense	$	123		$	124		$	251		$	248
Amortization of deferred loan costs		2			1			4			3
Capitalized interest		(59	)		(72	)		(117	)		(150	)
Interest income		(3	)		(1	)		(5	)		(4	)
Financing costs, net	$	63		$	52		$	133		$	97