Basis of Presentation

3 Months Ended

Mar. 31, 2013

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

Presentation   The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the US (US GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. The accompanying consolidated financial statements at March 31, 2013 and December 31, 2012 and for the three months ended March 31, 2013 and 2012 contain all normally recurring adjustments considered necessary for a fair presentation of our financial position, results of operations, cash flows and shareholders’ equity for such periods. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Certain reclassifications of amounts previously reported have been made to reflect the operations of our North Sea geographical segment as discontinued, as well as to conform to current year presentations. See Note 3. Divestitures.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Consolidation   Our consolidated accounts include our accounts and the accounts of our wholly-owned subsidiaries.  In addition, we use the equity method of accounting for investments in entities that we do not control but over which we exert significant influence. All significant intercompany balances and transactions have been eliminated upon consolidation.

Estimates   The preparation of consolidated financial statements in conformity with US GAAP requires us to make a number of estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Management evaluates estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment.

Statements of Operations Information   Other statements of operations information is as follows: 

	Three Months Ended March 31,
	2013			2012
(millions)
Production Expense
Lease Operating Expense	$	117		$	105
Production and Ad Valorem Taxes	43			38
Transportation and Gathering Expense	27			20
Total	$	187		$	163
Other Operating (Income) Expense, Net
Gain on Divestitures (1)	(15		)	—
Other, Net	7			12
Total	$	(8	)	$	12
Other Non-Operating (Income) Expense, Net
Deferred Compensation Expense (2)	$	10		$	3
Other (Income) Expense, Net	—			(4		)
Total	$	10		$	(1	)

⁽¹⁾  See Note 3. Divestitures.

⁽²⁾  Amounts represent increases in the fair value of shares of our common stock held in a rabbi trust.

Balance Sheet Information   Other balance sheet information is as follows:

	March 31, 2013			December 31, 2012
(millions)
Accounts Receivable, Net
Commodity Sales	$	266		$	349
Joint Interest Billings	395			486
Other	125			139
Allowance for Doubtful Accounts	(10		)	(10		)
Total	$	776		$	964
Other Current Assets
Inventories, Current	$	97		$	90
Commodity Derivative Assets	36			63
Deferred Income Taxes, Net	83			106
Probable Insurance Claims (1)	17			45
Assets Held for Sale (2)	63			45
Prepaid Expenses and Other Current Assets	74			71
Total	$	370		$	420
Other Noncurrent Assets
Equity Method Investments	$	423		$	367
Mutual Fund Investments	109			103
Commodity Derivative Assets	13			21
Other Assets, Noncurrent	87			106
Total	$	632		$	597
Other Current Liabilities
Production and Ad Valorem Taxes	$	107		$	113
Commodity Derivative Liabilities	44			7
Income Taxes Payable	202			203
Asset Retirement Obligations	69			69
Interest Payable	40			55
CONSOL Installment Payment (3)	325			324
Current Portion of FPSO Lease Obligation	49			48
Liabilities Associated with Assets Held for Sale (2)	14			12
Other	136			193
Total	$	986		$	1,024
Other Noncurrent Liabilities
Deferred Compensation Liabilities	$	247		$	229
Asset Retirement Obligations	330			333
Accrued Benefit Costs	118			116
Commodity Derivative Liabilities	9			3
Other	146			129
Total	$	850		$	810

⁽¹⁾  Amounts represent the costs incurred to date of the Leviathan-2 appraisal well and expected well abandonment costs in excess of the insurance deductible less insurance proceeds received to date.

⁽²⁾  Assets held for sale consist primarily of North Sea and onshore US oil and gas properties. Liabilities associated with assets held for sale consist primarily of asset retirement obligations related to these assets. See Note 3. Divestitures.

⁽³⁾  See Note 5. Debt.