DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Commodity Derivative Positions

As of March 31, 2020, Apache had the following open crude oil derivative positions:

		Fixed Price Swaps
Production Period	Settlement Index	Mbbls	Weighted Average Fixed Price
April—June 2020	NYMEX WTI	7,917	$25.84
July—September 2020	NYMEX WTI	2,208	$26.65
April—June 2020	Dated Brent	5,597	$27.45
July—September 2020	Dated Brent	2,300	$29.75

		Collars
Production Period	Settlement Index	Mbbls	Weighted Average Floor Sold Price	Weighted Average Floor Purchased Price	Weighted Average Ceiling Price
July—September 2020	NYMEX WTI	2,208	$20.00	$25.00	$38.83
October—December 2020	NYMEX WTI	1,748	$15.00	$20.00	$45.55
July—September 2020	Dated Brent	874	$20.00	$25.00	$43.66
October—December 2020	Dated Brent	1,518	$15.00	$20.00	$51.63

As of March 31, 2020, Apache had the following open crude oil financial basis swap contracts:

Production Period	Settlement Index	Mbbls	Weighted Average Price Differential
April—December 2020	Midland-WTI/Cushing-WTI	19,835	$(2.10)

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)
March 31, 2020
Assets:
Commodity Derivative Instruments	$	—	$	28	$	—	$	28	$	(4	)	$	24
Liabilities:
Commodity Derivative Instruments	—		11		—		11		(4		)	7
Pipeline Capacity Embedded Derivatives	—		45		—		45		—			45
Foreign Currency Derivative Instruments	—		4		—		4		—			4
Preferred Units Embedded Derivative	—		—		165		165		—			165
December 31, 2019
Assets:
Pipeline Capacity Embedded Derivative	$	—	$	8	$	—	$	8	$	—		$	8
Foreign Currency Derivative Instruments	—		1		—		1		—			1
Liabilities:
Preferred Units Embedded Derivative	—		—		103		103		—			103

(1)

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

Fair Value Measurement Inputs

As of the March 31, 2020 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 at March 31, 2020		Valuation Technique	Significant Unobservable Inputs	Range/Value
	(In millions)
Preferred Units Embedded Derivative	$	165	Option Model	Altus’ Imputed Interest Rate	19.17-26.02%
				Interest Rate Volatility	33.22%

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)
March 31, 2020
Assets:
Commodity Derivative Instruments	$	—	$	28	$	—	$	28	$	(4	)	$	24
Liabilities:
Commodity Derivative Instruments	—		11		—		11		(4		)	7
Pipeline Capacity Embedded Derivatives	—		45		—		45		—			45
Foreign Currency Derivative Instruments	—		4		—		4		—			4
Preferred Units Embedded Derivative	—		—		165		165		—			165
December 31, 2019
Assets:
Pipeline Capacity Embedded Derivative	$	—	$	8	$	—	$	8	$	—		$	8
Foreign Currency Derivative Instruments	—		1		—		1		—			1
Liabilities:
Preferred Units Embedded Derivative	—		—		103		103		—			103

(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 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:

	March 31, 2020		December 31, 2019
	(In millions)
Current Assets: Other current assets	$	24	$	2
Other Assets: Deferred charges and other	—		7
Total Assets	$	24	$	9
Current Liabilities: Other current liabilities	$	54	$	—
Deferred Credits and Other Noncurrent Liabilities: Other	167		103
Total Liabilities	$	221	$	103

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 March 31,
	2020			2019
	(In millions)
Derivative settlements, realized gain	$	—		$	15
Unrealized loss	(103		)	(45		)
Derivative instrument losses, net	$	(103	)	$	(30	)