EQUITY METHOD INTERESTS

3 Months Ended

Mar. 31, 2023

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INTERESTS

EQUITY METHOD INTERESTS

The Kinetik Class A Common Stock held by the Company is treated as an interest in equity securities measured at fair value. The Company elected the fair value option for measuring its equity method interest in Kinetik based on practical expedience, variances in reporting timelines, and cost-benefit considerations. The fair value of the Company’s interest in Kinetik is determined using observable share prices on a major exchange, a Level 1 fair value measurement. Fair value adjustments and dividends received are recorded as a component of “Other, net” under “Revenues and other” in the Company’s statement of consolidated operations.

The Company’s initial interest in Kinetik was measured at fair value based on the Company’s ownership of approximately 12.9 million shares of Kinetik Class A Common stock as of February 22, 2022. In March 2022, the Company sold four million of its shares of Kinetik Class A Common Stock for a loss, including underwriters fees, of $25 million, which was recorded as a component of “Gain on divestitures, net” under “Revenues and other” in the Company’s statement of consolidated operations. Refer to Note 3—Acquisitions and Divestitures for further detail.

During the second quarter of 2022, Kinetik issued a two-for-one split of its common stock. As of March 31, 2023, the Company’s ownership of 19.3 million shares represented approximately 13 percent of Kinetik’s outstanding Class A Common Stock.

During the first quarters of 2023 and 2022, the Company recorded changes in the fair value of its equity method interest in Kinetik totaling a loss of $19 million and a gain of $24 million, respectively, which were recorded as a component of “Revenues and other” in the Company’s statement of consolidated operations.

During the first quarters of 2023 and 2022, the Company recorded GPT costs for midstream services provided by Kinetik subsequent to the close of the BCP Business Combination transaction totaling $24 million and $10 million, respectively. As of March 31, 2023, the Company has recorded accrued GPT costs payable to Kinetik of approximately $17 million. In addition, the Company sold natural gas and NGLs to Kinetik during the first quarter of 2023 totaling $7 million. As of March 31, 2023, the Company has recorded receivables from Kinetik of approximately $4 million.