Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 17.Commitments and Contingencies

Legal Proceedings   We are involved in various legal proceedings in the ordinary course of business.  These proceedings are subject to the uncertainties inherent in any litigation.  We are defending ourselves vigorously in all such matters and we believe that the ultimate disposition of such proceedings will not have a material adverse effect on our financial position, results of operations or cash flows.

CONSOL Carried Cost Obligation  In accordance with our Marcellus Shale joint venture arrangement with a subsidiary of CONSOL Energy Inc. (CONSOL), we agreed to fund one-third of CONSOL's 50% working interest share of future drilling and completion costs, capped at $400 million each year (CONSOL Carried Cost Obligation). The remaining obligation totaled approximately $1.6 billion at December 31, 2014.

The CONSOL Carried Cost Obligation is suspended if average Henry Hub natural gas prices fall and remain below $4.00 per MMBtu in any three consecutive month period and remain suspended until average Henry Hub natural gas prices equal or exceed $4.00 per MMBtu for three consecutive months. Due to low natural gas prices, the CONSOL Carried Cost Obligation was suspended from the end of 2011 until February 28, 2014. We began funding a portion of CONSOL's working interest share of certain drilling and completion costs as of March 1, 2014; however, the funding was suspended again in November 2014 due to lower natural gas prices. Based on the December 31, 2014 NYMEX Henry Hub natural gas price curve, we forecast the CONSOL Carried Cost Obligation will be suspended in 2015.

Marcellus Shale Firm Transportation Agreements During 2014, we signed precedent agreements for firm transportation (the Agreements) to flow approximately 320 MMBtu per day of our Marcellus Shale natural gas production to various markets outside of the Marcellus Basin. The Agreements are for firm transportation services on new pipeline projects to be constructed by, and connecting to, existing and new interstate pipeline systems. The pipeline projects are expected to be complete and operational in 2017 and 2018. Our financial commitment for these Agreements is approximately $1.5 billion, undiscounted, over a 15-year period. Final agreements are subject to various conditions, including regulatory approval of the pipeline projects. The commitment is included in the table below.

Non-Cancelable Leases and Other Commitments   Wehold leases and other commitments for drilling rigs, buildings, equipment and other property. Rental expense for office buildings and oil and gas operations equipment was $69 million in 2014, $50 million in 2013, and $37 million in 2012.

Minimum commitments as of December 31, 2014 consist of the following:

(millions)	Drilling, Equipment, and Purchase Obligations		Transportation and Gathering Obligations		Operating Lease  Obligations		Capital  Lease and Other Obligations(1)		Total
2015	$	316	$	159	$	49	$	89	$	613
2016	137		185		40		78		440
2017	56		240		40		82		418
2018	11		277		31		86		405
2019	3		265		18		51		337
2020 and Thereafter	13		1,860		174		224		2,271
Total	$	536	$	2,986	$	352	$	610	$	4,484

⁽¹⁾  Annual lease payments, net to our interest, exclude regular maintenance and operational costs. See Note 9. Long-Term Debt.