DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Commodity Derivative Positions

As of June 30, 2020, Apache had the following open crude oil derivative positions:

		Fixed Price Swaps
Production Period	Settlement Index	Mbbls	Weighted Average Fixed Price
July—September 2020	NYMEX WTI	2,208	$26.65
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 June 30, 2020, Apache had the following open crude oil financial basis swap contracts:

		Basis Swap Purchased		Basis Swap Sold
Production Period	Settlement Index	Mbbls	Weighted Average Price Differential	Mbbls	Weighted Average Price Differential
July—December 2020	Midland-WTI/Cushing-WTI	—	—	13,432	$(2.15)
October—December 2020	Midland-WTI/Cushing-WTI	828	$0.20	—	—

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)
June 30, 2020
Liabilities:
Commodity Derivative Instruments	$	—	$	94	$	—	$	94	$	—	$	94
Pipeline Capacity Embedded Derivatives	—		63		—		63		—		63
Foreign Currency Derivative Instruments	—		3		—		3		—		3
Preferred Units Embedded Derivative	—		—		175		175		—		175
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 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)
June 30, 2020
Liabilities:
Commodity Derivative Instruments	$	—	$	94	$	—	$	94	$	—	$	94
Pipeline Capacity Embedded Derivatives	—		63		—		63		—		63
Foreign Currency Derivative Instruments	—		3		—		3		—		3
Preferred Units Embedded Derivative	—		—		175		175		—		175
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 Fair Value Measurement Inputs

As of the June 30, 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 June 30, 2020		Valuation Technique	Significant Unobservable Inputs	Range/Value
	(In millions)
Preferred Units Embedded Derivative	$	175	Option Model	Altus’ Imputed Interest Rate	14.16-15.57%
				Interest Rate Volatility	35.56%

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:

	June 30, 2020		December 31, 2019
	(In millions)
Current Assets: Other current assets	$	—	$	2
Other Assets: Deferred charges and other	—		7
Total Assets	$	—	$	9
Current Liabilities: Other current liabilities	$	97	$	—
Deferred Credits and Other Noncurrent Liabilities: Other	238		103
Total Liabilities	$	335	$	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 June 30,						For the Six Months Ended June 30,
	2020			2019			2020			2019
	(In millions)
Realized:
Commodity derivative instruments	$	(36	)	$	31		$	(36	)	$	46
Foreign currency derivative instruments	(1		)	—			(1		)	—
Treasury-lock	—			(18		)	—			(18		)
Realized gain (loss), net	(37		)	13			(37		)	28
Unrealized:
Commodity derivative instruments	(111		)	(27		)	(94		)	(66		)
Pipeline capacity embedded derivatives	(17		)	—			(70		)	—
Foreign currency derivative instruments	1			—			(4		)	—
Preferred units embedded derivative	(11		)	—			(73		)	—
Treasury-lock	—			6			—			—
Unrealized gain (loss), net	(138		)	(21		)	(241		)	(66		)
Derivative instrument losses, net	$	(175	)	$	(8	)	$	(278	)	$	(38	)