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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Strategies
The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company may utilize various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values.
In December 2022, counterparty agreements for Apache’s commodity derivative instruments were transferred from Apache to APA Corporation. As of the dates of transfer, Apache’s consolidated balance sheet reflected derivative liabilities totaling $37 million, which represented the fair values of the commodity derivative instruments on those dates. The resulting impacts of the transfer to APA Corporation were the realization of the mark-to-market loss of $37 million on Apache’s statement of consolidated operation and the derecognition of open derivative positions on Apache’s consolidated balance sheet. Apache had no outstanding derivative positions as of December 31, 2022.
Embedded Derivatives
Altus Preferred Units Embedded Derivative
The Altus Preferred Units embedded derivative was deconsolidated as of March 31, 2022 as part of the BCP Business Combination. Refer to Note 3—Acquisitions and Divestitures for discussion of the BCP Business Combination and Note 14—Redeemable Noncontrolling Interest—Altus for a description of the Altus Preferred Units and associated embedded derivative.
Pipeline Capacity Embedded Derivatives
During the fourth quarter of 2019 and first quarter of 2020, the Company entered into agreements to assign a portion of its contracted capacity under an existing transportation agreement to third parties. Embedded in these agreements were arrangements under which the Company received payments calculated based on pricing differentials between Houston Ship Channel and Waha during the calendar years 2020 and 2021. This feature required bifurcation and measurement of the change in market value throughout 2020 and 2021. Unrealized gains and losses in the fair value of this feature were recorded as “Derivative instrument gains (losses), net” under “Revenues and Other” in the statement of consolidated operations, and the balance at the end of December 31, 2021 will be amortized into income over the original tenure of the host contract.
Fair Value Measurements
The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:
Fair Value Measurements Using
Quoted Price in Active Markets (Level 1)Significant Other Inputs (Level 2)Significant Unobservable Inputs
(Level 3)		Total Fair Value
Netting(1)
Carrying Amount
(In millions)
December 31, 2022
Assets:
Commodity derivative instruments$— $— $— $— $— $— 
Liabilities:
Commodity derivative instruments$— $— $— $— $— $— 
December 31, 2021
Liabilities:
Commodity derivative instruments$— $10 $— $10 $— $10 
Pipeline capacity embedded derivatives— 46 — 46 — 46 
Preferred Units embedded derivative— — 57 57 — 57 
(1)Derivative fair values were based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties and reclassifications between long-term and short-term balances.
The fair values of the Company’s derivative instruments were not actively quoted in the open market. The Company primarily used a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.
Derivative Activity Recorded in the Consolidated Balance Sheet
All derivative instruments were reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values were recorded by netting asset and liability positions where counterparty master netting arrangements contained provisions for net settlement. The carrying value of the Company’s derivative assets and liabilities and their locations on the consolidated balance sheet were as follows:
For the Year Ended December 31,
20222021
(In millions)
Current Assets: Other current assets$— $— 
Other Assets: Deferred charges and other— — 
Total derivative assets$— $— 
Current Liabilities: Other current liabilities$— $4 
Deferred Credits and Other Noncurrent Liabilities: Other— 109 
Total derivative liabilities$— $113 
Derivative Activity Recorded in the Statement of Consolidated Operations
The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:
 For the Year Ended December 31,
202220212020
 (In millions)
Realized:
Commodity derivative instruments$(72)$25 $(135)
Foreign currency derivative instruments(13)— (1)
Realized gain (loss), net(85)25 (136)
Unrealized:
Commodity derivative instruments9 (20)11 
Pipeline capacity embedded derivatives— 7 (61)
Foreign currency derivative instruments— — (1)
Preferred Units embedded derivative(31)82 (36)
Unrealized gain (loss), net(22)69 (87)
Derivative instrument gains (losses), net$(107)$94 $(223)
Derivative instrument gains and losses were recorded in “Derivative instrument gains (losses), net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized gains (losses) for derivative activity recorded in the statement of consolidated operations were reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument losses (gains), net” in “Adjustments to reconcile net income (loss) to net cash provided by operating activities.”