Basis of Presentation (Tables)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Other statements of operations information is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(millions)	2018			2017			2018			2017
Income From Equity Method Investees and Other
Income from Equity Method Investees	$	49		$	38		$	96		$	80
Sales of Purchased Oil and Gas ⁽¹⁾	66			—			119			—
Midstream Services Revenues – Third Party	15			4			28			4
Total	$	130		$	42		$	243		$	84
Production Expense
Lease Operating Expense	$	132		$	124		$	287		$	263
Production and Ad Valorem Taxes	50			32			104			73
Gathering, Transportation and Processing Expense	100			121			195			240
Other Royalty Expense	10			6			27			10
Total	$	292		$	283		$	613		$	586
Exploration Expense
Leasehold Impairment and Amortization	$	—		$	—		$	—		$	18
Seismic, Geological and Geophysical	2			8			13			13
Staff Expense	13			16			27			29
Other	14			6			24			12
Total	$	29		$	30		$	64		$	72
Other Operating Expense, Net
Marketing Expense ⁽²⁾	$	7		$	14		$	12		$	33
Purchased Oil and Gas⁽¹⁾	71			—			128			—
Clayton Williams Energy Acquisition Expenses	—			90			—			94
Other, Net	(4		)	14			4			20
Total	$	74		$	118		$	144		$	147
Other Non-Operating Expense (Income), Net
Loss on Investment in Shares of Tamar Petroleum Ltd., Net⁽³⁾	$	11		$	—		$	26		$	—
Other	—			(5		)	(2		)	(6		)
Total	$	11		$	(5	)	$	24		$	(6	)

⁽¹⁾

As part of the Saddle Butte acquisition in first quarter 2018, we acquired certain contracts which include the purchase and sale of crude oil with third parties. In addition, we have entered into certain transactions beginning in first quarter 2018 for the purchase of third party natural gas and the subsequent sale of natural gas to other third parties. The natural gas is transported through firm transportation capacity we retained following the Marcellus Shale upstream divestiture in second quarter 2017 and is part of our mitigation efforts to utilize capacity and reduce our financial commitment. The cost to purchase natural gas includes transportation expense incurred of $6 million and $11 million for second quarter and the first six months of 2018, respectively. See Note 11. Segment Information and Note 12. Commitments and Contingencies.


⁽²⁾	Expense relates to unutilized firm transportation and shortfalls in delivering or transporting minimum volumes under certain commitments.

⁽³⁾

Amounts for second quarter and the first six months of 2018 include losses of $11 million and $40 million, respectively, related to the change in fair value. The loss for the six months ended June 30, 2018 is partially offset by dividend income of $14 million.

Balance Sheet Information Table

Other balance sheet information is as follows:



(millions)	June 30, 2018			December 31, 2017
Accounts Receivable, Net
Commodity Sales	$	460		$	455
Joint Interest Billings	210			207
Other	89			103
Allowance for Doubtful Accounts	(16		)	(17		)
Total	$	743		$	748
Other Current Assets
Inventories, Materials and Supplies	$	46		$	66
Inventories, Crude Oil	27			16
Commodity Derivative Assets	29			2
Assets Held for Sale⁽¹⁾	40			629
Restricted Cash ⁽²⁾	—			38
Prepaid Expenses and Other Current Assets	45			29
Total	$	187		$	780
Other Noncurrent Assets
Equity Method Investments ⁽³⁾	$	357		$	305
Customer-Related Intangible Assets ⁽⁴⁾	326			—
Investment in Shares of Tamar Petroleum Ltd. ⁽⁵⁾	150			—
Mutual Fund Investments	57			57
Net Deferred Income Tax Asset	25			25
Other Assets, Noncurrent	69			74
Total	$	984		$	461
Other Current Liabilities
Production and Ad Valorem Taxes	$	111		$	84
Commodity Derivative Liabilities	250			58
Income Taxes Payable	5			18
Asset Retirement Obligations	92			51
Interest Payable	64			67
Current Portion of Capital Lease Obligations	47			61
Liabilities Associated with Assets Held for Sale ⁽¹⁾	—			55
Compensation and Benefits Payable	66			98
Other Liabilities, Current	110			86
Total	$	745		$	578
Other Noncurrent Liabilities
Deferred Compensation Liabilities	$	180		$	197
Asset Retirement Obligations	543			824
Marcellus Shale Firm Transportation Commitment ⁽⁶⁾	71			76
Production and Ad Valorem Taxes	39			69
Commodity Derivative Liabilities	85			15
Other Liabilities, Noncurrent	77			64
Total	$	995		$	1,245

⁽¹⁾

Assets held for sale at June 30, 2018 include assets in the Greeley Crescent area of the DJ Basin. Assets held for sale at December 31, 2017 include assets in the Greeley Crescent area of the DJ Basin, a 7.5% interest in the Tamar field, offshore Israel, our interest in Southwest Royalties, Inc. acquired in the Clayton Williams Energy Acquisition, and the CONE investments. Liabilities associated with

assets held for sale primarily represent asset retirement obligations and other liabilities to be assumed by the purchaser. See Note 3. Acquisitions and Divestitures.


⁽²⁾	Balance at December 31, 2017 represents amount held in escrow pending closing of the Saddle Butte acquisition. See Note 3. Acquisitions and Divestitures.


⁽³⁾	Includes $49 million for our investment in shares of CNX Midstream Partners LP. At December 31, 2017, this investment was included in assets held for sale. See Note 3. Acquisitions and Divestitures and Note 6. Fair Value Measurements and Disclosures.


⁽⁴⁾	Amount relates to intangible assets acquired in the Saddle Butte acquisition and is net of $14 million of accumulated amortization. See Note 3. Acquisitions and Divestitures.


⁽⁵⁾	Amount relates to our investment in shares of Tamar Petroleum Ltd. See Note 3. Acquisitions and Divestitures and Note 6. Fair Value Measurements and Disclosures.

⁽⁶⁾

Amounts relate to the long-term portion of retained firm transportation agreements. At June 30, 2018 and December 31, 2017, we recorded $12 million and $14 million, respectively, associated with the current portion of the Marcellus Shale firm transportation commitment. See Note 12. Commitments and Contingencies.

Summary of Cash, Cash Equivalents and Restricted Cash

We define total cash as cash, cash equivalents and restricted cash. The following table provides a reconciliation of total cash:



	Six Months Ended June 30,
(millions)	2018		2017
Cash and Cash Equivalents at Beginning of Period	$	675	$	1,180
Restricted Cash at Beginning of Period	38		30
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	$	713	$	1,210
Cash and Cash Equivalents at End of Period	$	621	$	540
Restricted Cash at End of Period	—		—
Cash, Cash Equivalents, and Restricted Cash at End of Period	$	621	$	540

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction

The following table includes estimated revenues based upon those certain agreements with fixed minimum take-or-pay sales volumes. Our actual future sales volumes under these agreements may exceed future minimum volume commitments.



(millions)	July - Dec 2018		2019		2020		Total
Natural Gas Revenues ⁽¹⁾	$	107	$	137	$	169	$	413

⁽¹⁾The remaining performance obligations are estimated utilizing the contractual base or floor price provision in effect. Our future revenues from the sale of natural gas under these associated contracts will vary from the amounts presented above due to components of variable consideration above the contractual base or floor provision, such as index-based escalations and market price changes.