DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Commodity Derivative Positions

As of September 30, 2021, the Company had the following open crude oil derivative positions:

		Fixed-Price Swaps
Production Period	Settlement Index	Mbbls	Weighted Average Fixed Price
October—December 2021	NYMEX WTI	1,012	$58.59
October—December 2021	Dated Brent	828	$61.44

As of September 30, 2021, the Company had the following open crude oil financial basis swap contracts:

Production Period	Settlement Index	Mbbls	Weighted Average Price Differential
October—December 2021	Midland-WTI/Cushing-WTI	1,012	$0.70

As of September 30, 2021, the Company had the following open natural gas financial basis swap contracts:

		Basis Swap Purchased		Basis Swap Sold
Production Period	Settlement Index	MMBtu (in 000’s)	Weighted Average Price Differential	MMBtu (in 000’s)	Weighted Average Price Differential
October—December 2021	NYMEX Henry Hub/IF Waha	11,050	$(0.42)	—	—
October—December 2021	NYMEX Henry Hub/IF HSC	—	—	11,050	$(0.07)
January—December 2022	NYMEX Henry Hub/IF Waha	43,800	$(0.45)	—	—
January—December 2022	NYMEX Henry Hub/IF HSC	—	—	43,800	$(0.08)
January—December 2023	NYMEX Henry Hub/IF Waha	29,200	$(0.40)	—	—
January—December 2023	NYMEX Henry Hub/IF HSC	—	—	29,200	$0.02

Schedule of Derivative Assets Measured at Fair Value

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
September 30, 2021
Liabilities:
Commodity derivative instruments	—		32		—		32		—		32
Pipeline capacity embedded derivatives	—		47		—		47		—		47
Preferred Units embedded derivative	—		—		120		120		—		120
December 31, 2020
Assets:
Commodity derivative instruments	$	—	$	11	$	—	$	11	$	—	$	11
Liabilities:
Pipeline capacity embedded derivative	—		53		—		53		—		53
Preferred Units embedded derivative	—		—		139		139		—		139

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

Schedule of Derivative Liabilities Measured at Fair Value

The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Quoted Price in Active Markets (Level 1)		Significant Other Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value		Netting(1)		Carrying Amount
	(In millions)
September 30, 2021
Liabilities:
Commodity derivative instruments	—		32		—		32		—		32
Pipeline capacity embedded derivatives	—		47		—		47		—		47
Preferred Units embedded derivative	—		—		120		120		—		120
December 31, 2020
Assets:
Commodity derivative instruments	$	—	$	11	$	—	$	11	$	—	$	11
Liabilities:
Pipeline capacity embedded derivative	—		53		—		53		—		53
Preferred Units embedded derivative	—		—		139		139		—		139

(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.

Schedule of Fair Value Measurement Inputs

As of the September 30, 2021 valuation date, the Company used the forward B-rated Energy Bond Yield curve to develop the following key unobservable inputs used to value this embedded derivative:

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value as of September 30, 2021		Valuation Technique	Significant Unobservable Inputs	Range/Value
	(In millions)
Preferred Units embedded derivative	$	120	Option Model	Altus’ Imputed Interest Rate	5.53-11.54%
				Interest Rate Volatility	38.03%

Schedule of Derivative Instruments on Consolidated Balance Sheet and Statement of Consolidated Operations

The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet are as follows:

	September 30, 2021		December 31, 2020
	(In millions)
Current Assets: Other current assets	$	—	$	6
Other Assets: Deferred charges and other	—		5
Total derivative assets	$	—	$	11
Current Liabilities: Other current liabilities	$	31	$	—
Deferred Credits and Other Noncurrent Liabilities: Other	168		192
Total derivative liabilities	$	199	$	192

Derivative Activity Recorded in the Statement of Consolidated Operations

The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:

	For the Quarter Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
	(In millions)
Realized:
Commodity derivative instruments	$	(37)	$	(83)	$	63	$	(119)
Foreign currency derivative instruments	—		—		—		(1)
Realized gain (loss), net	(37)		(83)		63		(120)
Unrealized:
Commodity derivative instruments	29		91		(43)		(3)
Pipeline capacity embedded derivatives	3		8		6		(62)
Foreign currency derivative instruments	—		3		—		(1)
Preferred units embedded derivative	5		(3)		19		(76)
Unrealized loss, net	37		99		(18)		(142)
Derivative instrument gains (losses), net	$	—	$	16	$	45	$	(262)